Pediatrix Medical Group (NYSE:MD) executives said fourth-quarter results “capped an equally strong 2025,” highlighting strong volume, patient acuity, payer mix, and tighter financial controls as key contributors to performance. On the company’s Q4 2025 earnings call, management also provided an early outlook for 2026, introduced new physician alignment programs, and discussed capital allocation priorities including share repurchases and potential—but not assumed—M&A activity.
Quarterly performance and 2025 wrap-up
CEO Mark Ordan said adjusted EBITDA was $66 million in the fourth quarter, “in line with our upwardly adjusted guidance.” For the full year 2025, Pediatrix reported adjusted EBITDA of $276 million, which Ordan said reflected strong operating trends alongside “record practice bonuses” and investments in leadership focused on care quality.
Rossi attributed pricing strength to several factors, including:
- Solid revenue cycle management (RCM) cash collections
- Favorable payer mix
- Increased patient acuity in neonatology
- An increase in contract administrative fees
She added that volumes declined across all service lines in the quarter, including NICU days down about 2%, and noted the company was “up against a tough comp.” In the Q&A, Ordan similarly said the year-over-year volume decline was primarily due to comparison with a strong fourth quarter in the prior year.
Cost trends, cash flow, and balance sheet
On expenses, Rossi said practice-level salaries, wages and benefits (SW&B) declined slightly year over year, reflecting portfolio restructuring activity, partially offset by same-unit increases. On a same-unit basis, Pediatrix experienced increases in variable practice incentive compensation and salary and benefits, though Rossi noted salary growth in Q4 was “modestly below” the ranges seen over the prior six quarters, which averaged around 3%.
General and administrative expense increased year over year, which Rossi attributed to a modest increase in salary expense and travel expenses. Depreciation and amortization expense declined due to lower capital expenditures and an increase in fully depreciated assets. Other non-operating expense decreased year over year, driven by higher interest income on cash balances and lower interest expense from modestly lower average borrowings at slightly lower rates.
Pediatrix generated $115 million in operating cash flow in the fourth quarter, compared to $135 million in the prior year, which Rossi said was primarily due to decreases in cash flow from accounts payable and accrued and other liabilities.
The company also deployed $64 million during the quarter to repurchase 2.9 million shares, ending the period with about 83 million shares outstanding. Pediatrix finished the quarter with $375 million in cash and net debt of just over $220 million, which management said equated to net leverage of just under 1x.
Rossi also cited improvement in collections: accounts receivable days sales outstanding were 42.8 days at December 31, down slightly from September 30 and down nearly five days year over year, driven by improved cash collections at existing units.
2026 outlook: flat revenue, EBITDA growth, and seasonality
Management guided to 2026 adjusted EBITDA in the range of $280 million to $300 million, which Ordan noted is about 5% above 2025 at the midpoint. The outlook assumes “steady metrics,” including volume, acuity, and payer mix, and Ordan said recent or early results support that view.
Rossi said the preliminary 2026 outlook contemplates full-year revenue of approximately $1.9 billion, in line with 2025, and full-year G&A expense of $230 million to $240 million, compared to $241 million in 2025. She added that the middle of the range would reduce G&A by about 20 basis points as a percentage of revenue.
In response to an analyst question about revenue drivers, Ordan said the 2026 revenue outlook “overall assumes that we are going to be flat, both in volume and in pricing,” acknowledging there may be “ups and downs” within pricing components while expecting the total to remain flat.
Rossi also addressed quarterly seasonality, saying the company expects first-quarter 2026 adjusted EBITDA to represent about 17% to 19% of the annual range, compared with historical first-quarter performance of 17% to 21% of the full year.
Policy uncertainty and payer mix assumptions
Ordan reiterated that management believes payer mix in 2025 benefited to some extent from Affordable Care Act subsidies, and that if subsidies lapse without an effective remedy, the company would expect “some effect,” though he emphasized it is difficult to quantify due to many possible outcomes.
During the Q&A, Ordan said the company is not yet seeing a change, but noted uncertainty around enrollment behavior, payment follow-through, possible government stopgaps, and whether patients shift to commercial insurance. He said Pediatrix’s guidance assumes the same metrics as in 2025.
Physician alignment programs and growth priorities
Ordan detailed two new physician alignment initiatives introduced in the fourth quarter. The first provides a portion of physicians’ cash bonus along with a stock price tracking element paid over multiple years. Ordan said more than 500 physicians are participating in the first year, describing the intent as greater alignment and shared responsibility for delivering best-in-class care.
The company also announced Pediatrix Partners, a group of 46 physicians across specialties who received a stock price tracking grant to recognize leadership and support guidance on areas including quality, hospital relations, recruiting and retention, and growth. Ordan said Pediatrix anticipates adding physicians annually to the group.
Looking ahead, Ordan pointed to potential growth opportunities in the company’s core footprint, including advanced telemedicine, additional opportunities in NICUs and maternal-fetal medicine, and expansion in OB hospital medicine (OBH), where he said Pediatrix sees strong demand and believes existing hospital relationships provide an advantage.
On capital deployment, Ordan said the 2026 guidance does not include any contribution from M&A and that the company will update investors on timing and magnitude if additions occur. He also said Pediatrix expects a “much smaller amount of stock buyback” than in 2025, emphasizing an opportunistic approach. Ordan added that the company receives inbound interest from potential acquisition targets, including private equity-owned businesses, but said Pediatrix intends to protect balance sheet strength and avoid opportunities that would detract from its pediatrics and obstetrics core.
About Pediatrix Medical Group (NYSE:MD)
Pediatrix Medical Group, Inc (NYSE:MD) is a national physician-led medical group specializing in high-acuity newborn, maternal-fetal and pediatric subspecialty care. Headquartered in Sunrise, Florida, the company delivers clinical services through hospital-based physician staffing, advanced practitioner support and telemedicine programs. Its core specialties include neonatology, maternal-fetal medicine, pediatric cardiology, pediatric critical care, pediatric emergency medicine and anesthesiology.
Founded in 1979 and formerly known as MEDNAX, the company rebranded as Pediatrix Medical Group in 2022 to align its corporate identity with its primary clinical offerings.
