Pediatrix Medical Group, Inc.

Previous wording

Pediatrix is a leading provider of physician services including newborn, maternal-fetal, and other pediatric subspecialty care. Our national network is comprised of affiliated physicians who provide clinical care in 36 states. Our affiliated physicians provide neonatal clinical care, primarily within hospital-based neonatal intensive care units (“NICUs”), to babies born prematurely or with medical complications and maternal-fetal and obstetrical medical care to expectant mothers experiencing complicated pregnancies, primarily in areas where our affiliated neonatal physicians practice. We also provide services across multiple other pediatric subspecialties.

Current wording

Pediatrix is a leading provider of physician services including newborn, maternal-fetal, and other pediatric subspecialty care. Our national network is comprised of affiliated physicians who provide clinical care in 37 states. Our affiliated physicians provide neonatal clinical care, primarily within hospital-based neonatal intensive care units (“NICUs”), to babies born prematurely or with medical complications and maternal-fetal and obstetrical medical care to expectant mothers experiencing complicated pregnancies, primarily in areas where our affiliated neonatal physicians practice. We also provide services across multiple other pediatric subspecialties.

Previous wording

Our operations and performance depend significantly on economic conditions. During the three months ended June 30, 2025, the percentage of our patient service revenue being reimbursed under government-sponsored healthcare programs (“GHC Programs”) remained stable as compared to the three months ended June 30, 2024. However, we could experience shifts toward GHC Programs if changes occur in economic behaviors or population demographics within geographic locations in which we provide services, including an increase in unemployment and underemployment as well as losses of commercial health insurance. Payments received from GHC Programs are substantially less for equivalent services than payments received from commercial insurance payors. In addition, costs of managed care premiums and patient responsibility amounts continue to rise, and accordingly, we may experience lower net revenue resulting from increased bad debt due to patients’ inability to pay for certain services.

Current wording

Our operations and performance depend significantly on economic conditions. During the three months ended September 30, 2025, the percentage of our patient service revenue being reimbursed under government-sponsored healthcare programs (“GHC Programs”) decreased slightly as compared to the three months ended September 30, 2024. However, we could experience shifts toward GHC Programs if changes occur in economic behaviors or population demographics within geographic locations in which we provide services, including an increase in unemployment and underemployment as well as losses of commercial health insurance. Payments received from GHC Programs are substantially less for equivalent services than payments received from commercial insurance payors. In addition, costs of managed care premiums and patient responsibility amounts continue to rise, and accordingly, we may experience lower net revenue resulting from increased bad debt due to patients’ inability to pay for certain services.

Previous wording

In our analysis of our results of operations, we use various GAAP and certain non-GAAP financial measures. We have incurred certain expenses that we do not consider representative of our underlying operations, including transformational and restructuring related expenses. Accordingly, we report adjusted earnings before interest, taxes and depreciation and amortization (“Adjusted EBITDA”), defined as net income before interest, taxes, depreciation and amortization, and transformational and restructuring related expenses. Earnings per share has also been adjusted (“Adjusted EPS”) and consists of diluted net income per common and common equivalent share adjusted for amortization expense, stock-based compensation expense, transformational and restructuring related expenses and impacts from discrete tax events. For the three and six months ended June 30, 2024, both Adjusted EBITDA and Adjusted EPS are being further adjusted to exclude loss on disposal of businesses and impairment losses.

Current wording

In our analysis of our results of operations, we use various GAAP and certain non-GAAP financial measures. We have incurred certain expenses that we do not consider representative of our underlying operations, including transformational and restructuring related expenses. Accordingly, we report adjusted earnings before interest, taxes and depreciation and amortization (“Adjusted EBITDA”), defined as net income before interest, taxes, depreciation and amortization, and transformational and restructuring related expenses. Earnings per share has also been adjusted (“Adjusted EPS”) and consists of diluted net income per common and common equivalent share adjusted for amortization expense, stock-based compensation expense, transformational and restructuring related expenses and impacts from discrete tax events. For the three and nine months ended September 30, 2025 and 2024, both Adjusted EBITDA and Adjusted EPS are being further adjusted to exclude net gain on investments in divested businesses, loss on disposal of businesses and impairment losses, as relevant.

Previous wording

For a reconciliation of each of Adjusted EBITDA and Adjusted EPS to the most directly comparable GAAP measures for the three and six months ended June 30, 2025 and 2024, refer to the tables below (in thousands, except per share data).

Current wording

For a reconciliation of each of Adjusted EBITDA and Adjusted EPS to the most directly comparable GAAP measures for the three and nine months ended September 30, 2025 and 2024, refer to the tables below (in thousands, except per share data).

Previous wording

A blended tax rate of 25% was used to calculate the tax effects of the adjustments for the six months ended June 30, 2025 and 2024, other than for impairment losses, due to a portion of the expense being non-deductible.

Current wording

A blended tax rate of 25% was used to calculate the tax effects of the adjustments for the three months ended September 30, 2025 and 2024, other than for tax effects of goodwill impairment for the three months ended September 30, 2024. Tax effects of goodwill impairment relate to the goodwill impairment recognized in the second quarter of 2024.

Previous wording

A blended tax rate of 25% was used to calculate the tax effects of the adjustments for the three months ended June 30, 2025 and 2024, other than for impairment losses, due to a portion of the expense being non-deductible.

Current wording

A blended tax rate of 25% was used to calculate the tax effects of the adjustments for the nine months ended September 30, 2025 and 2024, other than for impairment losses, due to a portion of the expense being non-deductible.

Previous wording

Our net revenue was $468.8 million for the three months ended June 30, 2025, as compared to $504.3 million for the same period in 2024. The decrease in net revenue of $35.5 million, or 7.0%, was primarily attributable to non-same unit activity, primarily from practice dispositions, partially offset by an increase in same-unit revenue. Same units are those units at which we provided services for the entire current period and the entire comparable period. Same-unit net revenue increased by $27.9 million, or 6.4%. The increase in same-unit revenue was comprised of an increase of $15.0 million, or 3.5%, from net reimbursement-related factors and $12.9 million, or 2.9%, related to patient service volumes. The net increase in revenue related to net reimbursement-related factors was primarily due to an increase in revenue resulting from increased patient acuity, primarily in neonatology, improved collection activity and an increase in administrative fees from our hospital partners. The increase in revenue from patient service volumes was primarily related to increases in our neonatology and maternal-fetal medicine services.

Current wording

Our net revenue was $492.9 million for the three months ended September 30, 2025, as compared to $511.2 million for the same period in 2024. The decrease in net revenue of $18.3 million, or 3.6%, was primarily attributable to non-same unit activity, primarily from practice dispositions, partially offset by an increase in same-unit revenue. Same units are those units where we provided services for the entire current period and the entire comparable period. Same-unit net revenue increased by $35.6 million, or 8.0%. The increase in same-unit revenue was comprised of an increase of $33.9 million, or 7.6%, from net reimbursement-related factors and $1.7 million, or 0.4%, related to patient service volumes. The net increase in revenue related to net reimbursement-related factors was primarily due to an increase in revenue resulting from improved collection activity, increased patient acuity, primarily in neonatology, an increase in administrative fees from our hospital partners and a slightly favorable shift in payor mix. The net increase in revenue from patient service volumes was primarily related to increases in our neonatology services.

Previous wording

Practice salaries and benefits decreased $34.3 million, or 9.6%, to $323.5 million for the three months ended June 30, 2025, as compared to $357.8 million for the same period in 2024. The decrease of $34.3 million was primarily attributable to non-same unit activity, primarily from practice dispositions, partially offset by an increase in clinical compensation expense, including incentive compensation based on practice results, at our existing units.

Current wording

Practice salaries and benefits decreased $32.6 million, or 8.9%, to $332.3 million for the three months ended September 30, 2025, as compared to $364.9 million for the same period in 2024. The decrease of $32.6 million was primarily attributable to non-same unit activity, primarily from practice dispositions, partially offset by an increase in clinical compensation expense, driven by benefits and incentive compensation based on practice results, at our existing units.

Previous wording

Practice supplies and other operating expenses decreased $11.8 million, or 36.3%, to $20.6 million for the three months ended June 30, 2025, as compared to $32.4 million for the same period in 2024. The decrease was primarily attributable to non-same unit activity, primarily from practice dispositions.

Current wording

Practice supplies and other operating expenses decreased $9.2 million, or 31.4%, to $20.2 million for the three months ended September 30, 2025, as compared to $29.4 million for the same period in 2024. The decrease was primarily attributable to non-same unit activity, primarily from practice dispositions.

Previous wording

General and administrative expenses primarily include all billing and collection functions and all other salaries, benefits, supplies and operating expenses not specifically related to the day-to-day operations of our affiliated physician practices and services. General and administrative expenses were $55.7 million for the three months ended June 30, 2025, as compared to $56.6 million for the same period in 2024. The net decrease of $0.9 million was primarily related to net staffing reductions and lower other expenses, including professional services and legal fees, partially offset by increases in incentive compensation expense based on financial results. General and administrative expenses as a percentage of net revenue was 11.9% for the three months ended June 30, 2025, as compared to 11.2% for the same period in 2024.

Current wording

General and administrative expenses primarily include all billing and collection functions and all other salaries, benefits, supplies and operating expenses not specifically related to the day-to-day operations of our affiliated physician practices and services. General and administrative expenses were $60.8 million for the three months ended September 30, 2025, as compared to $58.1 million for the same period in 2024. The net increase of $2.7 million was primarily related to increases in incentive compensation expense based on financial results. General and administrative expenses as a percentage of net revenue was 12.3% for the three months ended September 30, 2025, as compared to 11.4% for the same period in 2024.

Previous wording

Depreciation and amortization expense was $10.6 million for the six months ended June 30, 2025, as compared to $19.1 million for the same period in 2024. The net decrease of $8.5 million was primarily related to non-same unit activity, primarily practice dispositions.

Current wording

Depreciation and amortization expense was $5.6 million for the three months ended September 30, 2025, as compared to $6.3 million for the same period in 2024. The net decrease of $0.7 million was primarily related to lower capital expenditures at our existing units.

Previous wording

Transformational and restructuring related expenses were $3.8 million for the three months ended June 30, 2025 as compared to $13.6 million for the same period in 2024. The expenses during 2025 and 2024 primarily related to position eliminations across various shared services departments and revenue cycle management transition activities.

Current wording

Transformational and restructuring related expenses were $6.0 million for the three months ended September 30, 2025 as compared to $18.6 million for the same period in 2024. The expenses during 2025 primarily related to position eliminations across various shared services departments and to a lesser extent revenue cycle management transition activities. The expenses during 2024 primarily related to revenue cycle management transition activities, position eliminations across various shared services and operations departments and impairment of various right-of-use lease assets resulting from practice dispositions.

Previous wording

Loss on disposal of businesses was $10.9 million for the three months ended June 30, 2024, resulting from the disposals of our primary and urgent care practices.

Current wording

Loss on disposal of businesses was $0.1 million for the three months ended September 30, 2024, resulting from the disposals of our primary and urgent care practices.

Previous wording

Income from operations increased $233.8 million, or 164.8%, to $92.0 million for the six months ended June 30, 2025, as compared to loss from operations of $141.8 million for the same period in 2024. Our operating margin was 9.9% for the six months ended June 30, 2025, as compared to (14.2)% for the same period in 2024. The increase in our operating margin was primarily due to the impact from practice disposition activity and favorable same-unit results, primarily related to same-unit revenue growth. Excluding impairment activity, transformation and restructuring related expenses and loss on disposal of businesses, our income from operations was $102.4 million and $73.2 million, and our operating margin was 11.0% and 7.3% for the six months ended June 30, 2025 and 2024, respectively. We believe excluding the impacts from impairment activity, transformational and restructuring related activity and loss on disposal of businesses provides a more comparable view of our operating income and operating margin.

Current wording

Income from operations increased $34.3 million, or 101.2%, to $68.1 million for the three months ended September 30, 2025, as compared to $33.8 million for the same period in 2024. Our operating margin was 13.8% for the three months ended September 30, 2025, as compared to 6.6% for the same period in 2024. The increase in our operating margin was primarily due to favorable same-unit results, primarily related to same-unit revenue growth, and the impact from practice disposition activity. Excluding transformation and restructuring related expenses and loss on disposal of businesses, our income from operations was $74.1 million and $52.4 million, and our operating margin was 15.0% and 10.3% for the three months ended September 30, 2025 and 2024, respectively. We believe excluding the impacts from transformational and restructuring related activity and loss on disposal of businesses provides a more comparable view of our operating income and operating margin.

Previous wording

Total non-operating expenses were $4.9 million for the three months ended June 30, 2025, as compared to $10.0 million for the same period in 2024. The net decrease in non-operating expenses was primarily related to an increase in interest income due to higher cash balances and a decrease in interest expense from modestly lower interest rates and borrowings.

Current wording

Total non-operating income was $19.7 million for the three months ended September 30, 2025, as compared to total non-operating expenses of $8.6 million for the same period in 2024. The net increase in non-operating income was primarily related to a net gain on investments in divested businesses of $20.9 million, an increase in interest income due to higher cash balances and a decrease in interest expense from modestly lower interest rates and borrowings.

Previous wording

Our effective income tax rate (“tax rate”) was 28.6% for the three months ended June 30, 2025 as compared to 8.8% for the three months ended June 30, 2024. The tax rate for the three months ended June 30, 2025 and 2024 includes net discrete tax expense of $0.7 million and $0.3 million, respectively. After excluding discrete tax impacts during the three months ended June 30, 2025 and 2024, our tax rate was 27.2% and 9.0%, respectively. We believe excluding discrete tax impacts provides a more comparable view of our tax rate. The tax rate for the three months ended June 30, 2024 reflects the effects of the non-cash goodwill impairment charge and the pre-tax loss generated excluding the impairment charge.

Current wording

Our effective income tax rate (“tax rate”) was 18.3% for the three months ended September 30, 2025 as compared to 23.0% for the three months ended September 30, 2024. The tax rate for the three months ended September 30, 2025 and 2024 includes a net discrete tax benefit of $7.0 million and tax expense of $6.5 million, respectively. After excluding discrete tax impacts during the three months ended September 30, 2025 and 2024, our tax rate was 26.8% and (2.6)%, respectively. We believe excluding discrete tax impacts provides a more comparable view of our tax rate. The tax rate for the three months ended September 30, 2024 reflects the tax effects of the non-cash goodwill impairment charge.

Previous wording

Net income was $39.3 million for the three months ended June 30, 2025, as compared to net loss of $153.0 million for the same period in 2024. Adjusted EBITDA was $73.2 million for the three months ended June 30, 2025, as compared to $57.9 million for the same period in 2024. The increase in our Adjusted EBITDA was primarily due to net favorable impacts from our same-unit results and practice disposition activity.

Current wording

Net income was $71.7 million for the three months ended September 30, 2025, as compared to $19.4 million for the same period in 2024. Adjusted EBITDA was $87.3 million for the three months ended September 30, 2025, as compared to $60.2 million for the same period in 2024. The increase in our Adjusted EBITDA was primarily due to net favorable impacts from our same-unit results and practice disposition activity.

Previous wording

Diluted net income per common and common equivalent share was $0.70 on weighted average shares outstanding of 85.5 million for the six months ended June 30, 2025, as compared to diluted net loss per common and common equivalent share of $1.79 on weighted average shares outstanding of 83.1 million for the same period in 2024. Adjusted EPS was $0.87 for the six months ended June 30, 2025, as compared to $0.54 for the same period in 2024.

Current wording

Diluted net income per common and common equivalent share was $0.84 on weighted average shares outstanding of 85.6 million for the three months ended September 30, 2025, as compared to $0.23 on weighted average shares outstanding of 84.5 million for the same period in 2024. Adjusted EPS was $0.67 for the three months ended September 30, 2025, as compared to $0.44 for the same period in 2024.

Previous wording

Our net revenue was $927.2 million for the six months ended June 30, 2025, as compared to $999.4 million for the same period in 2024. The decrease in net revenue of $72.2 million, or 7.2%, was primarily attributable to non-same unit activity, primarily from practice dispositions, partially offset by an increase in same-unit revenue. Same units are those units at which we provided services for the entire current period and the entire comparable period. Same-unit net revenue increased by $52.9 million, or 6.2%. The increase in same-unit net revenue was comprised of an increase of $34.9 million, or 4.1%, from net reimbursement-related factors and an increase of $18.0 million, or 2.1%, related to patient service volumes. The net increase in revenue related to net reimbursement-related factors was primarily due to an increase in revenue resulting from increased patient acuity, primarily in neonatology, an increase in administrative fees from our hospital partners, a favorable shift in payor mix and modest improvements in managed care contracting. The increase in revenue from patient service volumes was primarily related to increases in our neonatology and maternal-fetal medicine services.

Current wording

Our net revenue was $1.42 billion for the nine months ended September 30, 2025, as compared to $1.51 billion for the same period in 2024. The decrease in net revenue of $90.5 million, or 6.0%, was primarily attributable to non-same unit activity, primarily from practice dispositions, partially offset by an increase in same-unit revenue. Same units are those units where we provided services for the entire current period and the entire comparable period. Same unit net revenue increased by $88.4 million, or 6.9%. The increase in same-unit net revenue was comprised of an increase of $68.5 million, or 5.4%, from net reimbursement-related factors and an increase of $19.9 million, or 1.5%, related to patient service volumes. The net increase in revenue related to net reimbursement-related factors was primarily due to an increase in revenue resulting from improved collection activity, increased patient acuity, primarily in neonatology, an increase in administrative fees from our hospital partners, a favorable shift in payor mix and modest improvements in managed care contracting. The increase in revenue from patient service volumes was primarily related to increases in our neonatology and maternal-fetal medicine services.

Previous wording

Practice salaries and benefits decreased $66.4 million, or 9.1%, to $660.5 million for the six months ended June 30, 2025, as compared to $726.9 million for the same period in 2024. The decrease of $66.4 million was primarily attributable to non-same unit activity, primarily from practice dispositions, partially offset by an increase in clinical compensation expense, including incentive compensation based on practice results, at our existing units.

Current wording

Practice salaries and benefits decreased $99.0 million, or 9.1%, to $992.9 million for the nine months ended September 30, 2025, as compared to $1.09 billion for the same period in 2024. The decrease of $99.0 million was primarily attributable to non-same unit activity, primarily from practice dispositions, partially offset by an increase in clinical compensation expense, driven by incentive compensation based on practice results and benefits, at our existing units.

Previous wording

Practice supplies and other operating expenses decreased $24.2 million, or 38.1%, to $39.3 million for the six months ended June 30, 2025, as compared to $63.5 million for the same period in 2024. The decrease was primarily attributable to non-same unit activity, primarily from practice dispositions.

Current wording

Practice supplies and other operating expenses decreased $33.4 million, or 36.0%, to $59.5 million for the nine months ended September 30, 2025, as compared to $92.9 million for the same period in 2024. The decrease was primarily attributable to non-same unit activity, primarily from practice dispositions.

Previous wording

General and administrative expenses primarily include all billing and collection functions and all other salaries, benefits, supplies and operating expenses not specifically identifiable to the day-to-day operations of our physician practices and services. General and administrative expenses were $114.3 million for the six months ended June 30, 2025, as compared to $116.8 million for the same period in 2024. The net decrease of $2.5 million was primarily related to net staffing reductions, partially offset by increases in other expenses, including billing and collection fees and information technology. General and administrative expenses as a percentage of net revenue were 12.3% for the six months ended June 30, 2025, as compared to 11.7% for the same period in 2024.

Current wording

General and administrative expenses primarily include all billing and collection functions and all other salaries, benefits, supplies and operating expenses not specifically identifiable to the day-to-day operations of our physician practices and services. General and administrative expenses were $175.1 million for the nine months ended September 30, 2025, as compared to $174.9 million for the same period in 2024. The net increase of $0.2 million was primarily related to higher incentive-based compensation based on financial results offset by net staffing reductions. General and administrative expenses as a percentage of net revenue were 12.3% for the nine months ended September 30, 2025, as compared to 11.6% for the same period in 2024.

Previous wording

Depreciation and amortization expense was $5.3 million for the three months ended June 30, 2025, as compared to $8.8 million for the same period in 2024. The net decrease of $3.5 million was primarily related to non-same unit activity, primarily practice dispositions.

Current wording

Depreciation and amortization expense was $16.2 million for the nine months ended September 30, 2025, as compared to $25.4 million for the same period in 2024. The net decrease of $9.2 million was primarily related to non-same unit activity, primarily practice dispositions, and lower capital expenditures at existing units.

Previous wording

Transformational and restructuring related expenses were $10.4 million for the six months ended June 30, 2025 as compared to $22.1 million for the same period in 2024. The expenses during 2025 and 2024 primarily related to position eliminations across various shared services departments and revenue cycle management transition activities.

Current wording

Transformational and restructuring related expenses were $16.4 million for the nine months ended September 30, 2025 as compared to $40.6 million for the same period in 2024. The expenses during 2025 primarily related to position eliminations across various shared services departments and revenue cycle management transition activities. The expenses during 2024 primarily related to the impairment of various right-of-use lease assets resulting from our practice portfolio management activities, position eliminations across various shared services and operations departments and revenue cycle management transition activities.

Previous wording

Goodwill impairment was $154.2 million for the six months ended June 30, 2024, resulting from the triggering event during the second quarter based on a sustained stock price decline.

Current wording

Goodwill impairment was $154.2 million for the nine months ended September 30, 2024, resulting from the triggering event during the second quarter based on a sustained stock price decline.

Previous wording

Long-lived asset impairments were $27.8 million for the three months ended June 30, 2024, resulting from the practice portfolio management plan.

Current wording

Long-lived asset impairments were $27.8 million for the nine months ended September 30, 2024, resulting from the practice portfolio management plan.

Previous wording

Loss on disposal of businesses was $10.9 million for the six months ended June 30, 2024, resulting from the disposals of our primary and urgent care practices.

Current wording

Loss on disposal of businesses was $10.9 million for the nine months ended September 30, 2024, resulting from the disposals of our primary and urgent care practices.

Previous wording

Income from operations increased $217.6 million, or 138.0%, to $59.9 million for the three months ended June 30, 2025, as compared to loss from operations of $157.7 million for the same period in 2024. Our operating margin was 12.8% for the three months ended June 30, 2025, as compared to (31.3)% for the same period in 2024. The increase in our operating margin was primarily due to favorable same-unit results, primarily related to same-unit revenue growth, and the impact from practice disposition activity. Excluding impairment activity, transformation and restructuring related expenses and loss on disposal of businesses, our income from operations was $63.7 million and $48.8 million, and our operating margin was 13.6% and 9.7% for the three months ended June 30, 2025 and 2024, respectively. We believe excluding the impacts from impairment activity, transformational and restructuring related activity and loss on disposal of businesses provides a more comparable view of our operating income and operating margin.

Current wording

Income from operations increased $268.0 million, or 248.2%, to $160.0 million for the nine months ended September 30, 2025, as compared to loss from operations of $108.0 million for the same period in 2024. Our operating margin was 11.3% for the nine months ended September 30, 2025, as compared to (7.1)% for the same period in 2024. The increase in our operating margin was primarily due to the impact from practice disposition activity and favorable same-unit results, primarily related to same-unit revenue growth. Excluding impairment activity, transformation and restructuring related expenses and loss on disposal of businesses, our income from operations was $176.4 million and $125.5 million, and our operating margin was 12.4% and 8.3% for the nine months ended September 30, 2025 and 2024, respectively. We believe excluding the impacts from impairment activity, transformational and restructuring related activity and loss on disposal of businesses provides a more comparable view of our operating income and operating margin.

Previous wording

Total non-operating expenses were $8.9 million for the six months ended June 30, 2025, as compared to $18.1 million for the same period in 2024. The net decrease in non-operating expenses was primarily related to an increase in interest income due to higher cash balances and a decrease in interest expense from modestly lower borrowings and interest rates.

Current wording

Total non-operating income was $10.8 million for the nine months ended September 30, 2025, as compared to net non-operating expenses of $26.7 million for the same period in 2024. The net increase in non-operating income was primarily related to a net gain on investments in divested businesses of $20.9 million, an increase in interest income due to higher cash balances and interest rates and a decrease in interest expense from modestly lower interest rates and borrowings.

Previous wording

Our tax rate was 27.8% for the six months ended June 30, 2025 as compared to 6.8% for the six months ended June 30, 2024. The tax rates for the six months ended June 30, 2025 and 2024 include net discrete tax expense of $0.6 million and $2.0 million, respectively. After excluding discrete tax impacts during the six months ended June 30, 2025 and 2024, our tax rate was 27.1% and 8.1%, respectively. We believe excluding discrete tax impacts provides a more comparable view of our tax rate. The tax rate for the six months ended June 30, 2024 reflects the effects of the non-cash goodwill impairment charge and the pre-tax loss generated excluding the impairment charge.

Current wording

Our tax rate was 22.9% for the nine months ended September 30, 2025 as compared to 3.8% for the nine months ended September 30, 2024. The tax rates for the nine months ended September 30, 2025 and 2024 include a net discrete tax benefit of $6.4 million and tax expense $8.5 million, respectively. After excluding discrete tax impacts during the nine months ended September 30, 2025 and 2024, our tax rate was 27.0% and 10.1%, respectively. We believe excluding discrete tax impacts provides a more comparable view of our tax rate. The tax rate for the nine months ended September 30, 2024 reflects the tax effects of the non-cash goodwill impairment charge.

Previous wording

Net income was $60.0 million for the six months ended June 30, 2025, as compared to net loss of $149.0 million for the same period in 2024. Adjusted EBITDA was $122.4 million for the six months ended June 30, 2025, as compared to $95.1 million for the same period in 2024. The increase in our Adjusted EBITDA was primarily due to net favorable impacts from our same-unit results and practice disposition activity.

Current wording

Net income was $131.7 million for the nine months ended September 30, 2025, as compared to net loss of $129.5 million for the same period in 2024. Adjusted EBITDA was $209.7 million for the nine months ended September 30, 2025, as compared to $155.3 million for the same period in 2024. The increase in our Adjusted EBITDA was primarily due to net favorable impacts from our same-unit results and practice disposition activity.

Previous wording

Diluted net income per common and common equivalent share was $0.46 on weighted average shares outstanding of 85.5 million for the three months ended June 30, 2025, as compared to diluted net loss per common and common equivalent share of $1.84 on weighted average shares outstanding of 83.3 million for the same period in 2024. Adjusted EPS was $0.53 for the three months ended June 30, 2025, as compared to $0.34 for the same period in 2024.

Current wording

Diluted net income per common and common equivalent share was $1.54 on weighted average shares outstanding of 85.6 million for the nine months ended September 30, 2025, as compared to diluted net loss per common and common equivalent share of $1.56 on weighted average shares outstanding of 83.2 million for the same period in 2024. Adjusted EPS was $1.54 for the nine months ended September 30, 2025, as compared to $0.99 for the same period in 2024.

Previous wording

As of June 30, 2025, we had $224.7 million of cash and cash equivalents as compared to $229.9 million at December 31, 2024. Additionally, we had working capital of $272.0 million at June 30, 2025, an increase of $66.5 million from working capital of $205.5 million at December 31, 2024. The net increase in working capital is primarily due to net favorable impacts in our same-unit results, primarily related to an increase in revenue.

Current wording

As of September 30, 2025, we had $340.1 million of cash and cash equivalents as compared to $229.9 million at December 31, 2024. Additionally, we had working capital of $324.6 million at September 30, 2025, an increase of $119.2 million from working capital of $205.5 million at December 31, 2024. The net increase in working capital is primarily due to net favorable impacts in our same-unit results, primarily related to an increase in revenue.

Previous wording

During the six months ended June 30, 2025, our net cash provided by operating activities from continuing operations was $22.0 million, compared to net cash used in operating activities from continuing operations of $13.3 million for the same period in 2024. The net increase in cash provided of $35.3 million was primarily due to higher earnings and increases in cash flow from accounts receivable.

Current wording

During the nine months ended September 30, 2025, our net cash provided by operating activities from continuing operations was $160.1 million, compared to $82.4 million for the same period in 2024. The net increase in cash provided of $77.7 million was primarily due to higher earnings and increases in cash flow from accounts receivable.

Previous wording

During the six months ended June 30, 2025, cash inflow from accounts receivable was $21.2 million, as compared to a cash outflow of $0.9 million for the same period in 2024. The increase in cash flow from accounts receivable for the six months ended June 30, 2025 as compared to the prior year period was primarily due to a decrease in days sales outstanding (“DSO”).

Current wording

During the nine months ended September 30, 2025, cash inflow from accounts receivable was $29.1 million, as compared to $0.6 million for the same period in 2024. The increase in cash flow from accounts receivable for the nine months ended September 30, 2025 as compared to the prior year period was primarily due to a decrease in days sales outstanding (“DSO”).

Previous wording

DSO is one of the key factors that we use to evaluate the condition of our accounts receivable and the related allowances for contractual adjustments and uncollectibles. DSO reflects the timeliness of cash collections on billed revenue and the level of reserves on outstanding accounts receivable. Our DSO was 46.4 days at June 30, 2025 as compared to 47.6 days at December 31, 2024 and 49.5 days at June 30, 2024. The decrease in our DSO from December 31, 2024 and June 30, 2024 was primarily related to improved cash collections at our existing units.

Current wording

DSO is one of the key factors that we use to evaluate the condition of our accounts receivable and the related allowances for contractual adjustments and uncollectibles. DSO reflects the timeliness of cash collections on billed revenue and the level of reserves on outstanding accounts receivable. Our DSO was 43.1 days at September 30, 2025 as compared to 47.6 days at December 31, 2024 and 51.6 days at September 30, 2024. The decrease in our DSO from December 31, 2024 and September 30, 2024 was primarily related to improved cash collections at our existing units.

Previous wording

During the six months ended June 30, 2025, our net cash used in investing activities of $14.6 million consisted of capital expenditures of $7.8 million, $3.6 million of other activity, primarily related to practice dispositions, and net purchases of investments of $3.1 million.

Current wording

During the nine months ended September 30, 2025, our net cash used in investing activities of $8.0 million consisted of acquisition payments of $19.2 million, capital expenditures of $13.2 million, $3.6 million of other activity, primarily related to practice dispositions, and net purchases of investments of $2.1 million. These activities were partially offset by proceeds from an investment in a divested business of $30.0 million.

Previous wording

During the six months ended June 30, 2025, our net cash used in financing activities of $10.3 million consisted primarily of payments on our Term A Loan (as defined below).

Current wording

During the nine months ended September 30, 2025, our net cash used in financing activities of $38.9 million consisted primarily of stock repurchases of $22.6 million, payments on our Term A Loan (as defined below) of $14.1 million, and a contingent consideration payment of $3.2 million.

Previous wording

At June 30, 2025, we had an outstanding principal balance on the Amended Credit Agreement of $206.3 million, composed of the Term A Loan. There was no balance outstanding under the Revolving Credit Line. We had $450.0 million available on the Revolving Credit Line at June 30, 2025.

Current wording

At September 30, 2025, we had an outstanding principal balance on the Amended Credit Agreement of $201.6 million, composed of the Term A Loan. There was no balance outstanding under the Revolving Credit Line. We had $450.0 million available on the Revolving Credit Line at September 30, 2025.

Previous wording

We maintain professional liability insurance policies with third-party insurers, subject to self-insured retention, exclusions and other restrictions. We self-insure our liabilities to pay self-insured retention amounts under our professional liability insurance coverage through a wholly owned captive insurance subsidiary. We record liabilities for self-insured amounts and claims incurred but not reported based on an actuarial valuation using historical loss information, claim emergence patterns and various actuarial assumptions. Our total liability related to professional liability risks at June 30, 2025 was $274.8 million, of which $30.6 million is classified as a current liability within accounts payable and accrued expenses in the Consolidated Balance Sheet. In addition, there is a corresponding insurance receivable of $23.8 million recorded as a component of other assets for certain professional liability claims that are covered by insurance policies.

Current wording

We maintain professional liability insurance policies with third-party insurers, subject to self-insured retention, exclusions and other restrictions. We self-insure our liabilities to pay self-insured retention amounts under our professional liability insurance coverage through a wholly owned captive insurance subsidiary. We record liabilities for self-insured amounts and claims incurred but not reported based on an actuarial valuation using historical loss information, claim emergence patterns and various actuarial assumptions. Our total liability related to professional liability risks at September 30, 2025 was $269.2 million, of which $29.5 million is classified as a current liability within accounts payable and accrued expenses in the Consolidated Balance Sheet. In addition, there is a corresponding insurance receivable of $20.2 million recorded as a component of other assets for certain professional liability claims that are covered by insurance policies.