Ardent Health (NYSE:ARDT) raised the lower end of its full-year adjusted EBITDA forecast after reporting $1.62 billion in third-quarter revenue and $138 million in adjusted EBITDA, as lower labor costs and improving patient volumes supported results.
The hospital operator now expects 2026 adjusted EBITDA of $500 million to $535 million, up from its prior range of $485 million to $535 million. The revised midpoint is approximately 1.5% higher. Chief Financial Officer Alfred Lumsdaine said the company remained biased toward the lower end of its $6.4 billion to $6.7 billion revenue outlook.
President and CEO Dave Caspers said Ardent was making progress on operational execution and its portfolio review. During the quarter, the company announced an agreement to sell its Kansas hospital ownership to its joint venture partner, a transaction it expects to close in the fourth quarter.
Volumes Improve, Though Surgeries Remain Lower
Adjusted admissions rose 2.9% year over year in the third quarter, compared with 2.3% growth in the first half of 2026. Emergency room visits increased 1.7%, reversing a 1.5% decline in the first half, while admissions were up slightly after falling 1% in the second quarter, Lumsdaine said.
Surgical volumes fell 1.9% year over year, an improvement of 100 basis points from the second quarter. About half of the decline reflected Ardent’s intentional rationalization of some lower-margin service lines, according to Lumsdaine. He said the effect of those actions should diminish over the next several quarters, although the company will continue to optimize its surgical offerings.
Caspers said Ardent was working to make it easier for patients to move from initial visits to procedures by improving specialist availability, referral speed and assistance with financial responsibilities. Third-quarter urgent care visits increased 9%, imaging visits rose 4% and physician visits grew 1% from a year earlier.
Physician referral leakage declined by 400 basis points during the quarter, while self-scheduled appointments grew 15%, compared with 5% in the second quarter, Caspers said.
Labor Savings Support Earnings
Salaries, wages and benefits expense declined 4.3% year over year and represented 39.9% of revenue, down 300 basis points from a year earlier. Contract labor spending fell 45%, with contract labor accounting for 2% of salaries, wages and benefits expense, compared with 3.5% a year earlier.
Professional fee expense growth moderated to 7.4% year over year, from 10.4% in the second quarter and 12.9% in the first. Lumsdaine said Ardent expects to sustain the improvement in the fourth quarter. For 2027, he expects the overall rate of professional fee growth to remain above inflation but to be lower than in 2026.
Ardent reiterated its target of at least $70 million in savings this year from its multiyear IMPACT program. Lumsdaine estimated that the carryover benefit from this year’s initiatives would be $20 million to $25 million in 2027, before any benefit from new initiatives. He cautioned that it was too early to quantify the full range of next year’s headwinds and tailwinds.
Portfolio Sale and Capital Plans
Caspers said Ardent’s portfolio review determined that its Kansas hospital ownership was not the right long-term fit. The company agreed to sell the asset at 11 times EBITDA, and expects the transaction to improve its margin profile by 40 basis points.
Ardent generated $122 million in operating cash flow during the third quarter. Year-to-date operating cash flow was $258 million, up from $247 million a year earlier, despite a $37 million New Mexico supplemental access payment that was delayed until early October.
The company ended the quarter with $766 million in cash and $1.1 billion in debt. It repurchased $11 million of stock during the quarter, bringing its year-to-date total to $24 million. After the board authorized an additional $25 million, $48 million remained available under the repurchase program at quarter-end.
Ardent lowered its 2026 capital expenditure guidance to $210 million to $250 million from $225 million to $265 million. Lumsdaine said the change would not affect maintenance spending or the company’s commitment to growth activities already underway.
Coverage and Contracting Outlook
Exchange admissions declined 7% year over year, while self-pay admissions increased similarly. Lumsdaine said the trends were manageable and largely contemplated in guidance. He added that Ardent was performing in line with its initial estimate of a $35 million exchange-related impact for the year.
Looking ahead, Lumsdaine identified Medicaid work requirements and higher premiums, deductibles and copays among potential industry headwinds. He said many patients previously covered through exchanges who returned to Ardent in 2026 had found other coverage, including commercial insurance or Medicaid.
On payer contracting, Lumsdaine said Ardent was 85% contracted for 2027 and 75% contracted for 2028. He described negotiations as more contentious as the company used transparency data to seek appropriate reimbursement, but said results from other renewals had been consistent with a previously cited New Mexico agreement.
About Ardent Health (NYSE:ARDT)
Ardent Health is a U.S. healthcare services company that operates hospitals, outpatient facilities and physician practices. Its services include emergency and acute care, surgery, cardiology, orthopedics, oncology, women’s health, behavioral health, rehabilitation, imaging and other specialty and primary care offerings.
The company serves patients through regional health networks and hospital campuses primarily in Texas, Oklahoma, New Mexico and other U.S. markets. In addition to hospital-based care, Ardent operates outpatient clinics, urgent care locations and other facilities designed to provide services across different stages of the patient-care process.
Ardent Health was founded in 2001 and became a publicly traded company on the New York Stock Exchange in 2024.
