Ardent Health Inc (NYSE:ARDT) Plummets 26% on Lowered 2025 Guidance Despite Q3 Earnings Beat

Ardent Health Inc (NYSE:ARDT) reported financial results for the third quarter of 2025, delivering a mixed performance that featured a significant earnings beat but was overshadowed by a sharp downward revision to full-year guidance, triggering a substantial sell-off in the stock.

Earnings and Revenue Versus Estimates

The healthcare provider posted a strong outperformance on profitability for the quarter ended September 30, 2025, though it narrowly missed on the top line.

• Earnings Per Share (EPS): The company reported a non-GAAP EPS of $0.52, significantly surpassing the analyst consensus estimate of $0.42.
• Revenue: Total revenue reached $1.58 billion, falling just short of the $1.58 billion analysts had projected.

Market Reaction

The market's response was decisively negative despite the earnings beat. In after-hours trading, the stock plummeted approximately 26%. This sharp decline indicates that investors are focusing less on the quarterly outperformance and more on the company's revised outlook for the remainder of the year, which fell short of expectations.

Key Takeaways from the Quarterly Report

The earnings press release highlighted several important operational and financial developments beyond the headline EPS and revenue figures.

Operational Strength:

• Admissions grew 5.8% year-over-year.
• Adjusted Admissions increased 2.9%.
• Net Patient Service Revenue per Adjusted Admission rose 5.8%.
• The company generated strong operating cash flow of $154 million, up from $90 million in the prior year period.

Financial Performance and Headwinds:

• Adjusted EBITDA saw substantial growth, increasing 46.3% to $143 million.
• However, the company reported a net loss attributable to Ardent Health of $23 million, or $0.17 per diluted share, a reversal from the net income of $26 million in the same quarter last year. This was primarily driven by two significant, non-recurring items: a $43 million reduction to revenue from a change in accounting estimate and a $54 million increase to professional liability reserves related to legacy claims in New Mexico. Both items were excluded from the adjusted EBITDA calculation.

Revised 2025 Guidance and Analyst Estimates

A primary driver of the negative market sentiment was the company's decision to lower its full-year 2025 Adjusted EBITDA guidance.

• Previous Guidance: Adjusted EBITDA of $575 - $615 million
• New Guidance: Adjusted EBITDA of $530 - $555 million

This updated range, with a midpoint of $542.5 million, represents a reduction of nearly 9% from the previous midpoint and implies full-year growth of 9%, down from prior expectations. Management attributed the revision to persistent industry headwinds, including higher-than-anticipated Professional Fee expenses and increased payor denials.

The company reaffirmed its full-year revenue guidance of $6.2 - $6.45 billion. The midpoint of this range, $6.33 billion, sits slightly below the analyst consensus estimate of $6.47 billion for full-year 2025 sales.

Balance Sheet and Liquidity

Ardent Health maintains a solid financial position. As of September 30, 2025, the company held $609 million in cash and cash equivalents with total debt of $1.1 billion. Its lease-adjusted net leverage ratio improved to 2.5x from 2.7x at the end of the second quarter.

Conclusion

Ardent Health's third-quarter results present a tale of two stories: robust operational execution and profitability in the quarter, countered by emerging cost pressures that have forced a meaningful reduction to its full-year earnings outlook. While the company demonstrated strong patient volume and cash flow generation, the market's severe reaction underscores the weight investors are placing on the lowered future earnings potential. The focus now shifts to the company's ability to mitigate these industry headwinds through its ongoing IMPACT cost-efficiency program.

For a detailed look at Ardent Health's historical earnings and future estimates, you can review the data here.

Disclaimer: This article is for informational purposes only and does not constitute financial advice or a recommendation to buy or sell any security.