Overall, Acadia delivered solid results in the second quarter that were consistent with our expectations across our key financial and operating metrics, including revenue, adjusted EBITDA, adjusted EPS, and free cash flow. We delivered revenue that was above the high end of our guidance range, as well as adjusted EBITDA and adjusted EPS that were near the high end of our guidance. We generated $124 million of free cash flow and reduced our debt by $113 million. We are taking a disciplined approach to capital deployment, including CapEx, and we expect to generate additional free cash flow in the second half of the year.
For the second quarter, our total revenue was flat compared with the prior year period. Our specialty business delivered solid performance in the second quarter, including a $5 million sequential increase in revenue. Our RTC business delivered strong revenue growth in the second quarter, driven by volume growth and capacity expansions that were completed last year. In our CTC service line, revenue was flat on a year-over-year basis.
Adjusted EBITDA includes two items that were not included in our guidance. A benefit related to the Florida Supplemental Payment Program, and an expense related to an increase in our professional and general liability reserves for prior years. The combined impact of these two items was a $2.5 million reduction to adjusted EBITDA in the second quarter. During the second quarter, we made further progress with that group, including revenue and facility-level EBITDA results for those 2023 to 2026 cohorts that were ahead of our expectations.
| Metric | Period | Current guidance |
|---|---|---|
| Revenue | FY2026 | $3.4B-$3.45B |
| Adjusted EBITDA | FY2026 | $590M-$615M |
| Adjusted EPS | FY2026 | $1.45-$1.60 |
| Operating cash flow | FY2026 | $350M-$400M |
| Capital expenditures | FY2026 | $235M-$255M ($120M-$140M in H2), revised down on capital discipline and timing |
| Bed additions | FY2026 | 500-600 beds on track (300+ added in H1; de novo near Jacksonville, FL in Q3) |
| New-facility cohort EBITDA | vs 2025 | $200M incremental reaffirmed, with high confidence |
| Supplemental payment upside | FY2026 | Florida and Ohio 2026-program-year reviews could add more than $20M incremental EBITDA if approved (only a $5M Florida baseline is in Q3) |
| Metric | YoY | Note |
|---|---|---|
| Total revenue | Flat at $866M (+2.8% normalized) | Prior-year included $48.7M of Tennessee supplemental payments; this year included $22.3M of Florida supplemental payments; New York Medicaid changes cut same-facility growth ~1 point. |
| Acute revenue | Flat at $495M (+6% normalized) | Strong volume and admissions growth from existing and new JV/de novo facilities, masked by prior-period supplemental payments. |
| Specialty revenue | $134M (+4% sequential) | Absorbed a full quarter of the New York Medicaid decision; team building referral sources in Pennsylvania and other states. |
| RTC revenue | +12% to $97M | Solid volume growth plus growth in revenue per day from prior-year capacity expansions. |
| CTC revenue | Flat at $141M | Steady demand but slightly behind expectations; six new clinics opened year-to-date. |
| Adjusted EBITDA | $149.2M | Included a $26.1M Florida supplemental benefit offset by a $28.6M PLGL reserve increase (net -$2.5M vs guidance); same-facility adjusted EBITDA of $200.9M. |
| Free cash flow | $124M | $162M operating cash flow less $39M capex; supported $113M of debt repayment and improved AR days to 49. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Operational turnaround under returning CEO | Managed-care, litigation, and JV-pacing challenges over prior years | Six months into Debbie Osteen's return, a 'back to basics' focus on an experienced operations team, flattened acute-service-line structure, removed middle-management layer, new dashboards, and faster licensing/accreditation/payer contracting (approval timelines cut in half) is driving cohort outperformance. | — |
| New-facility cohort ramp | Slower, sometimes delayed ramps in 2025 | 2023-2026 cohorts outperformed startup targets two quarters running; example Coachella Valley (2024 de novo) is above 90% occupancy and considering bed additions; management reaffirmed $200M of incremental EBITDA versus 2025. | — |
| Professional and general liability reserves | Multi-year PLGL step-ups; 2025 broad frequency-driven adjustment | A proactively added mid-year actuarial review drove a $28.6M adjustment on higher severity of specific 2025 policy-year claims moving toward settlement; full-year PLGL now ~$130-$135M, with current-year forecast unchanged. | — |
| Capacity growth over new de novos | Pipeline of de novo/JV projects | With one de novo left in 2026 (Jacksonville) and no new de novo/JV starting in Q4 or early 2027, the best return on capital is adding beds at existing facilities above ~75% occupancy that are turning away patients; capex guidance was reduced accordingly. | — |
| Payer relationships and revenue cycle | Friction and denials pressure with payers | Relationships described as generally strong and market-specific; a three-pronged revenue-cycle approach stabilized bad debts/denials sequentially, cut the year-over-year bad-debt headwind to $7M from $9M, and improved AR days to 49; rate increases running low-to-mid single digits. | — |
| Medicaid work requirements | — | Management expects no material impact from January work requirements (which apply only to Medicaid-expansion states), believing behavioral-health and substance-use patients will qualify for the exemptions provided for severe mental illness and substance use. | — |