Pediatrix Medical Group, Inc.

What they do

Pediatrix staffs and manages hospital clinical units, primarily neonatal intensive care units, through affiliated physicians who contract with hospitals. At December 31, 2025 the network comprised approximately 2,295 affiliated physicians, including 1,350 providing neonatal care at over 360 NICUs in 32 states, 475 in maternal-fetal and obstetrical care, over 230 in pediatric intensive care, 220 in hospital-based pediatric care and 20 in pediatric surgery. During 2024 the company exited almost all affiliated office-based practices other than maternal-fetal medicine, and exited the primary and urgent care service line.

Revenue drivers

• Neonatal care — Hospital-based NICU staffing by 1,350 affiliated physicians at over 360 NICUs; the largest physician group and the primary source of patient service revenue.
• Maternal-fetal and obstetrical care — Inpatient and office-based care by 475 affiliated physicians, practiced mainly in metropolitan areas where affiliated neonatologists also practice to coordinate high-risk pregnancies.
• Other pediatric subspecialty care — Over 230 pediatric intensivists, 220 hospital-based pediatric physicians and 20 pediatric surgeons providing intensive, hospitalist and surgical services.
• Non-patient revenue — Contract and administrative fees from hospital clients, excluded from the same-unit volume statistics disclosed for patient services.

Recent performance

For the second quarter of 2026, net revenue was $487.8 million, up $19.0 million or 4.0% from $468.8 million a year earlier, with non-same-unit growth of 2.1% from recent acquisitions partly offset by practice dispositions and same-unit growth of 1.9%. Net income was $40 million, or $0.49 per diluted share, and Adjusted EPS was $0.63; Adjusted EBITDA was $76.4 million versus $73.2 million. Same-unit reimbursement-related revenue rose 4.0% on improved cash collections, favorable payor mix and higher neonatology acuity, while same-unit volume fell 2.1%, with hospital-based patient services down 2.8% and NICU days down 3.2%. Practice salaries and benefits rose to $336.1 million from $323.5 million, and general and administrative expense rose to $61.3 million from $55.7 million. Full-year revenue declined to $1.91 billion in 2025 from $2.01 billion in 2024, while net income was $165.4 million and operating cash flow was $271.1 million.

Strategy

Management has narrowed the portfolio, having completed the exit of nearly all office-based practices other than maternal-fetal medicine and the primary and urgent care line during 2024. Growth is described as coming from recent acquisitions and same-unit reimbursement metrics, with the CEO citing a strong balance sheet and exceptional financial flexibility to fund organic growth initiatives while pursuing potential high-value strategic opportunities. The company repurchased 2.9 million shares in the fourth quarter of 2025 at an average price of $22.09 under three programs, including a $250.0 million authorization adopted August 18, 2025 with a three-year term, of which $83.8 million had been used as of December 31, 2025. Transformational and restructuring spending in the 2026 second quarter was $8.5 million, primarily for revenue cycle management transition activities.

Risks

• Government payor mix — Payments from government-sponsored or government-funded programs are substantially less than commercial payments for equivalent services, so a shift toward those programs would lower net revenue.
• No Surprises Act and surprise billing laws — The NSA limits balance billing for out-of-network care and sets patient cost-sharing by reference to qualifying payment amounts, constraining reimbursement for out-of-network services.
• Volume declines — Same-unit patient volume fell 2.1% in the 2026 second quarter, with hospital-based services down 2.8% and NICU days down 3.2%, pressuring revenue growth.
• Payor and collection risk — Rising managed care premiums and patient responsibility amounts could increase bad debt if patients cannot pay, and results depend on continued improved cash collections.

Outlook

The CEO said second-quarter results were in line with expectations and reflected continued favorable trends in recent acquisitions and same-unit reimbursement metrics. Management highlighted a strong balance sheet as providing flexibility to fund organic growth and pursue potential strategic opportunities. No specific revenue or earnings guidance figures are provided in the excerpts.