Ardent Health (ARDT) investor relations material

Strategic initiatives and growth outlook

• Announced a $50 million share repurchase program, reflecting strong liquidity and modest leverage, with over $800 million available.

• Growth strategy centers on expanding outpatient footprint, opportunistic M&A in mid-size urban markets, and margin expansion through impact initiatives.

• Added 27 urgent care centers in the past year and a half, driving new patient inflow and downstream services.

• Outpatient and ASC (ambulatory surgery center) development prioritized, with more de novo ASC builds planned for 2025–2026.

• Joint venture model remains a key approach for market entry and expansion, with disciplined M&A focus.

Financial performance and margin initiatives

• $40 million in annualized savings achieved, mainly from labor optimization and contract renegotiation, with further opportunities in revenue integrity, supply chain, and productivity.

• Margins expected to expand to mid-teens over time, despite persistent headwinds from professional fees and payer denials.

• Impact initiatives include workforce optimization, supply chain improvements, and technology investments such as ambient listening and AI for documentation.

• No rural health funding included in current savings; any future benefit would be incremental.

Industry headwinds and payer dynamics

• Facing industry-wide challenges from payer denials, especially in managed Medicare, Medicaid, and exchange products, with denials nearly double those in traditional plans.

• Proactive renegotiation of payer contracts, including terminating and improving rates on underperforming agreements.

• Denial management enhanced by forming a revenue integrity team and changing cash flow mechanisms in contracts.

• Professional fee pressures peaked in 2023, especially in radiology and anesthesiology, with moderation expected in 2024–2025.