Ardent Health, Inc 10-Q for FY2026 Q3
Ardent Health, Inc. (ARDT)
10-Q
2026-11-05
For: 2026-09-30
View Original
Added on
November 05, 2026
About this 10-Q
Ardent Health, Inc filed this 10-Q on November 5, 2026, covering the quarter ended September 30, 2026 (FY2026 Q3).
Ardent Health, Inc. agreed to sell its 70.5% equity interest in St. Francis to the University of Kansas Hospital Authority for $58.4 million; the sale is expected to close in the fourth quarter of 2026. AI summary
Headline figures
Quarter ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $1.62B
- up 3.1% from $1.58B a year earlier
- Net income
- $44.52M
- compared with a net loss of $23.48M a year earlier
- Diluted EPS
- $0.31
- compared with -$0.17 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________________
FORM 10-Q
_______________________________________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the quarterly period ended | |
or | |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to | |
Commission File Number: | |
(Exact name of Registrant as specified in its charter) |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
(Address of principal executive offices) | (Zip Code) | |
( | ||
(Registrant’s telephone number, including area code) | ||
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | |||
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days. Yes ☒ No ☐
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging
growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the
Exchange Act.
Large accelerated filer | ☐ | ☒ | Smaller reporting company | ||||
Non-accelerated filer | ☐ | Emerging growth company |
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of November 2, 2026, the Registrant had 140,936,393 shares of common stock outstanding.
i
Page | ||
PART I. | FINANCIAL INFORMATION | |
Item 1. | Financial Statements | |
Condensed Consolidated Income Statements for the three and nine months ended September 30, 2026 and 2025 (Unaudited) | ||
2025 (Unaudited) | ||
Condensed Consolidated Statements of Changes in Equity for the three and nine months ended September | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II. | OTHER INFORMATION | |
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
1
ARDENT HEALTH, INC.
CONDENSED CONSOLIDATED INCOME STATEMENTS
Unaudited
(Dollars in thousands, except per share amounts)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
Total revenue | $ | $ | $ | $ | |||
Expenses: | |||||||
Salaries and benefits | |||||||
Professional fees | |||||||
Supplies | |||||||
Rents and leases | |||||||
Rents and leases, related party | |||||||
Other operating expenses | |||||||
Interest expense | |||||||
Depreciation and amortization | |||||||
Loss on extinguishment and modification of debt | |||||||
Other non-operating gains | ( | ( | ( | ( | |||
Total operating expenses | |||||||
Income (loss) before income taxes | ( | ||||||
Income tax expense (benefit) | ( | ||||||
Net income | |||||||
Net income attributable to noncontrolling interests | |||||||
Net income (loss) attributable to Ardent Health, Inc. | $ | $( | $ | $ | |||
Net income (loss) per share: | |||||||
Basic | $ | $( | $ | $ | |||
Diluted | $ | $( | $ | $ | |||
Weighted-average common shares outstanding: | |||||||
Basic | |||||||
Diluted | |||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
2
ARDENT HEALTH, INC.
CONDENSED CONSOLIDATED COMPREHENSIVE INCOME (LOSS) STATEMENTS
Unaudited
(In thousands)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
Net income | $ | $ | $ | $ | |||
Other comprehensive income (loss) | |||||||
Change in fair value of interest rate swaps | ( | ( | |||||
Other comprehensive income (loss) before income taxes | ( | ( | |||||
Income tax expense (benefit) related to other comprehensive income (loss) items | ( | ( | |||||
Other comprehensive income (loss), net of income taxes | ( | ( | |||||
Comprehensive income (loss) | ( | ||||||
Comprehensive income attributable to noncontrolling interests | |||||||
Comprehensive income (loss) attributable to Ardent Health, Inc. | $ | $( | $ | $ | |||
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
ARDENT HEALTH, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited
(Dollars in thousands, except per share amounts)
September 30, 2026 (1) | December 31, 2025 (1) | ||
Assets | |||
Current assets: | |||
Cash and cash equivalents | $ | $ | |
Accounts receivable | |||
Inventories | |||
Prepaid expenses | |||
Other current assets | |||
Assets held for sale | |||
Total current assets | |||
Property and equipment, net | |||
Operating lease right of use assets | |||
Operating lease right of use assets, related party | |||
Goodwill | |||
Other intangible assets | |||
Deferred income taxes | |||
Other assets | |||
Total assets | $ | $ | |
Liabilities and Equity | |||
Current liabilities: | |||
Current installments of long-term debt | $ | $ | |
Accounts payable | |||
Accrued salaries and benefits | |||
Other accrued expenses and liabilities | |||
Liabilities held for sale | |||
Total current liabilities | |||
Long-term debt, less current installments | |||
Long-term operating lease liability | |||
Long-term operating lease liability, related party | |||
Self-insured liabilities | |||
Other long-term liabilities | |||
Total liabilities | |||
Commitments and contingencies (see Note 9) | |||
Redeemable noncontrolling interests | ( | ( | |
Equity: | |||
Preferred stock, par value $ | |||
Common stock, par value $ shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively | |||
Additional paid-in capital | |||
Accumulated other comprehensive income (loss) | ( | ||
Retained earnings | |||
Equity attributable to Ardent Health, Inc. | |||
Noncontrolling interests | |||
Total equity | |||
Total liabilities and equity | $ | $ |
(1) As of September 30, 2026 and December 31, 2025, the unaudited condensed consolidated balance sheets included total liabilities of consolidated variable interest entities of
$301.7 million and $335.1 million, respectively. Refer to Note 2, Summary of Significant Accounting Policies, for further discussion.
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
ARDENT HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
(In thousands)
Nine Months Ended September 30, | |||
2026 | 2025 | ||
Cash flows from operating activities: | |||
Net income | $ | $ | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | |||
Other non-operating (gains) losses | ( | ||
Loss on extinguishment and modification of debt | |||
Amortization of deferred financing costs and debt discounts | |||
Deferred income taxes | |||
Equity-based compensation | |||
Income from non-consolidated affiliates | ( | ( | |
Changes in operating assets and liabilities, net of effect of acquisitions and divestitures: | |||
Accounts receivable | ( | ||
Inventories | ( | ||
Prepaid expenses and other current assets | ( | ||
Accounts payable and other accrued expenses and liabilities | ( | ( | |
Accrued salaries and benefits | ( | ( | |
Net cash provided by operating activities | |||
Cash flows from investing activities: | |||
Purchases of property and equipment | ( | ( | |
Other | ( | ||
Net cash used in investing activities | ( | ( | |
Cash flows from financing activities: | |||
Proceeds from insurance financing arrangements | |||
Payments of principal on insurance financing arrangements | ( | ( | |
Payments of principal on long-term debt | ( | ( | |
Debt issuance costs | ( | ||
Distributions to noncontrolling interests | ( | ( | |
Repurchase of common stock | ( | ||
Other | ( | ( | |
Net cash used in financing activities | ( | ( | |
Net increase in cash and cash equivalents | |||
Cash and cash equivalents at beginning of period | |||
Cash and cash equivalents at end of period | $ | $ | |
Supplemental Cash Flow Information: | |||
Non-cash purchases of property and equipment | $ | $ | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
ARDENT HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Unaudited
(Dollars in thousands)
Equity Attributable to Ardent Health, Inc. | Non- controlling Interests | Total Equity | ||||||
Redeemable Noncontrolling Interests | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | ||||
Shares | Amount | |||||||
Balance at December 31, 2024 | $ | $ | $ | $ | $ | $ | $ | |
Net income attributable to Ardent Health, Inc. | — | — | — | — | — | — | ||
Net income attributable to noncontrolling interests | — | — | — | — | — | — | ||
Net loss attributable to redeemable noncontrolling interests | ( | — | — | — | — | — | — | — |
Other comprehensive loss | — | — | — | — | ( | — | — | ( |
Distributions to noncontrolling interests | — | — | — | — | — | — | ( | ( |
Vesting of restricted stock unit awards | — | ( | — | — | — | ( | ||
Equity-based compensation | — | — | — | — | — | — | ||
Balance at March 31, 2025 | $( | $ | $ | $ | $ | $ | $ | |
Net income attributable to Ardent Health, Inc. | — | — | — | — | — | — | ||
Net income attributable to noncontrolling interests | — | — | — | — | — | — | ||
Net loss attributable to redeemable noncontrolling interests | ( | — | — | — | — | — | — | — |
Other comprehensive loss | — | — | — | — | ( | — | — | ( |
Distributions to noncontrolling interests | — | — | — | — | — | — | ( | ( |
Issuance of common stock | — | — | — | — | — | — | — | |
Vesting of restricted stock unit awards | — | ( | — | — | — | ( | ||
Forfeitures of restricted stock awards | — | ( | — | — | — | — | — | — |
Equity-based compensation | — | — | — | — | — | — | ||
Balance at June 30, 2025 | $( | $ | $ | $( | $ | $ | $ | |
Net loss attributable to Ardent Health, Inc. | — | — | — | — | — | ( | — | ( |
Net income attributable to noncontrolling interests | — | — | — | — | — | — | ||
Net income attributable to redeemable noncontrolling interests | — | — | — | — | — | — | — | |
Other comprehensive loss | — | — | — | — | ( | — | — | ( |
Distributions to noncontrolling interests | — | — | — | — | — | — | ( | ( |
Vesting of restricted stock unit awards | — | ( | — | — | — | ( | ||
Forfeitures of restricted stock awards | — | ( | — | — | — | — | — | — |
Equity-based compensation | — | — | — | — | — | — | ||
Balance at September 30, 2025 | $( | $ | $ | $( | $ | $ | $ | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
ARDENT HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Unaudited
(Dollars in thousands)
Equity Attributable to Ardent Health, Inc. | Non- controlling Interests | Total Equity | ||||||
Redeemable Noncontrolling Interests | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | ||||
Shares | Amount | |||||||
Balance at December 31, 2025 | $( | $ | $ | $( | $ | $ | $ | |
Net income attributable to Ardent Health, Inc. | — | — | — | — | — | — | ||
Net income attributable to noncontrolling interests | — | — | — | — | — | — | ||
Net loss attributable to redeemable noncontrolling interests | ( | — | — | — | — | — | — | — |
Other comprehensive income | — | — | — | — | — | — | ||
Distributions to noncontrolling interests | — | — | — | — | — | — | ( | ( |
Vesting of restricted stock unit awards | — | ( | — | — | — | ( | ||
Forfeiture of restricted stock awards | — | ( | — | — | — | — | — | — |
Equity-based compensation | — | — | — | — | — | — | ||
Balance at March 31, 2026 | $( | $ | $ | $( | $ | $ | $ | |
Net income attributable to Ardent Health, Inc. | — | — | — | — | — | — | ||
Net income attributable to noncontrolling interests | — | — | — | — | — | — | ||
Net loss attributable to redeemable noncontrolling interests | ( | — | — | — | — | — | — | — |
Other comprehensive income | — | — | — | — | — | — | ||
Proceeds from the sale of noncontrolling interest | — | — | — | — | — | |||
Distributions to noncontrolling interests | — | — | — | — | — | — | ( | ( |
Repurchase of common stock | — | ( | ( | ( | — | — | — | ( |
Vesting of restricted stock unit awards | — | ( | — | — | — | ( | ||
Forfeiture of restricted stock awards | — | ( | ( | — | — | — | — | ( |
Equity-based compensation | — | — | — | — | — | — | ||
Balance at June 30, 2026 | $( | $ | $ | $( | $ | $ | $ | |
Net income attributable to Ardent Health, Inc. | — | — | — | — | — | — | ||
Net income attributable to noncontrolling interests | — | — | — | — | — | — | ||
Net loss attributable to redeemable noncontrolling interests | ( | — | — | — | — | — | — | — |
Other comprehensive income | — | — | — | — | — | — | ||
Distributions to noncontrolling interests | — | — | — | — | — | — | ( | ( |
Repurchase of common stock | — | ( | ( | ( | — | — | — | ( |
Vesting of restricted stock unit awards | — | ( | — | — | — | ( | ||
Forfeiture of restricted stock awards | — | ( | ( | — | — | — | — | ( |
Equity-based compensation | — | — | — | — | — | — | ||
Balance at September 30, 2026 | $( | $ | $ | $ | $ | $ | $ | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
7
ARDENT HEALTH, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2026
(Unaudited)
1. Description of the Business and Basis of Presentation
Reporting Entity
Ardent Health, Inc. was initially formed in Delaware in 2015 as Ardent Health Partners, LLC. On July 17, 2024, Ardent
Health Partners, LLC converted from a Delaware limited liability company into a Delaware corporation in connection with its
initial public offering and changed its name to Ardent Health Partners, Inc. On June 3, 2025, Ardent Health Partners, Inc.
changed its name to Ardent Health, Inc. Ardent Health, Inc. is a holding company that has affiliates that operate acute care
hospitals and other healthcare facilities and employ physicians. The terms "Ardent," the "Company," "we," "our" and "us," as
used in these notes to the unaudited condensed consolidated financial statements, refer to Ardent Health, Inc. and its affiliates
unless stated otherwise or indicated by context. The term "affiliates" includes direct and indirect subsidiaries of Ardent and
partnerships and joint ventures in which such subsidiaries are equity owners. At September 30, 2026, the Company operated
The financial statements include the unaudited condensed consolidated balance sheets, income statements, comprehensive
income (loss) statements, statements of cash flows and statements of changes in equity of the Company and its affiliates,
which are controlled by the Company through the Company's direct or indirect ownership of a majority equity interest and
rights granted to the Company through certain variable interests. All intercompany balances and transactions have been
eliminated in consolidation. In the opinion of management, all adjustments, which consist of normal recurring adjustments,
and disclosures considered necessary for a fair presentation have been included.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S.
generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-Q
and Rule 10-01 of Regulation S-X. Certain information and disclosures normally included in annual financial statements
presented in accordance with GAAP have been omitted in these interim financial statements pursuant to rules and regulations
of the Securities and Exchange Commission ("SEC"). Accordingly, these unaudited condensed consolidated financial
statements and related notes should be read in conjunction with the Company's audited consolidated financial statements and
notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 (the "Annual
The majority of the Company's expenses are "cost of revenue" items. Costs that could be classified as general and
administrative by the Company include its corporate office costs and centralized corporate services, such as human resources,
information technology, and finance, which were $42.4 million and $36.5 million for the three months ended September 30,
2026 and 2025, respectively, and $152.2 million and $104.0 million for the nine months ended September 30, 2026 and 2025,
respectively. The increase in general and administrative costs for the nine months ended September 30, 2026 compared to the
prior year period was primarily attributable to increased salaries and benefits expense related to non-recurring severance costs
incurred for workforce reductions in connection with enterprise restructuring activity and transition of the Company's former
chief executive officer during the current period.
2. Summary of Significant Accounting Policies
In November 2024, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU")
2024-03, Disaggregation of Income Statement Expenses ("ASU 2024-03"), which requires the disclosure of certain
disaggregated expenses within the notes to the financial statements. ASU 2024-03 is effective for annual periods beginning
after December 15, 2026, and interim reporting periods within fiscal years beginning after December 15, 2027. Adoption of
ASU 2024-03 can either be applied prospectively to consolidated financial statements issued for reporting periods after the
8
effective date of this standard or retrospectively to any or all prior periods presented in the consolidated financial statements.
Early adoption is also permitted. The Company is currently evaluating the standard to determine its impact on the Company’s
disclosures.
In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Topic 350):
Targeted Improvements to the Accounting for Internal-Use Software ("ASU 2025-06"), which modernizes the current
internal-use software accounting guidance by removing all references to software project development stages. Under ASU
2025-06, an entity begins capitalizing software costs when (i) management has implicitly or explicitly authorized and
committed to funding a computer software project and (ii) it is probable the project will be completed and the software will
be used to perform the function intended (referred to as the "probable-to-complete recognition threshold"). This ASU is
effective for annual reporting periods beginning after December 15, 2027, and interim periods within those annual reporting
periods, with early adoption permitted. The Company is currently evaluating the standard to determine its impact on the
Variable interest entities ("VIEs") must be consolidated if an entity’s interest in the VIE is a controlling financial interest.
Under the variable interest model, a controlling financial interest is determined based on which entity, if any, has (i) the
power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the
obligation to absorb the losses, or the right to receive the benefits, from the VIE that could potentially be significant to the
VIE.
The Company performs ongoing reassessments of whether changes in the facts and circumstances regarding the Company's
involvement with a VIE could cause the Company's consolidation conclusion to change. The consolidation status of the VIEs
with which the Company is involved may change as a result of such reassessments. Changes in consolidation status are
applied prospectively.
The Company, through its wholly-owned subsidiaries, owns majority interests in certain limited liability companies
("LLCs"), with each LLC owning and operating one or more hospitals. The noncontrolling interest is typically owned by a
not-for-profit medical system, university, academic medical center or foundation or combination thereof (individually or
collectively referred to as "minority member"). The employees that work for the LLC and the related hospital(s) are
employees of the Company, and the Company manages the day-to-day operations of the LLC and the hospital(s) pursuant to
a management services agreement ("MSA").
The LLCs are VIEs due to their structure as LLCs and the control that resides with the Company through the MSA. The
Company consolidates each of these LLCs as it is considered the primary beneficiary due to the MSA providing the
Company the right to direct the day-to-day operating and capital activities of the LLC and the respective hospital(s) that most
significantly impact the LLC’s economic performance. Additionally, the Company would absorb a majority of the entity's
expected losses, receive a majority of the entity's expected residual returns, or both, as a result of its majority ownership,
contractual or other financial interests in the entity. The MSAs are subject to termination only by mutual agreement of the
Company and minority member, except in the case of gross negligence, fraud or bankruptcy of the Company, in which case
the minority member can force termination of the MSA.
All of the Company's VIEs meet the definition of a business, and the Company holds a majority of their issued voting equity
interests. Their assets are not required to be used only for the settlement of VIE obligations as the Company has the ability to
The governance rights of the minority members are restricted to those that protect their financial interests and do not preclude
consolidation of the LLCs. The rights of minority members generally are limited to such items as the right to approve the
issuance of new ownership interests, calls for additional cash contributions, the acquisition or divestiture of significant assets
and the incurrence of debt in excess of levels not expected to be incurred in the normal course of business.
As of September 30, 2026 and December 31, 2025, nine
that have been determined to be VIEs and were consolidated by the Company. Consolidated assets at September 30, 2026 and
December 31, 2025 included total assets of VIEs equal to $1.3
recourse to the Company. As the structure and nature of business are very similar for each of the LLCs, they are discussed
and presented herein on a combined basis.
9
thousands):
September 30, 2026 | December 31, 2025 | ||
Current liabilities: | |||
Current installments of long-term debt | $ | $ | |
Accounts payable | |||
Accrued salaries and benefits | |||
Other accrued expenses and liabilities | |||
Liabilities held for sale | |||
Total current liabilities | |||
Long-term debt, less current installments | |||
Long-term operating lease liability | |||
Long-term operating lease liability, related party | |||
Self-insured liabilities | |||
Other long-term liabilities | |||
Total liabilities | $ | $ |
Income from operations before income taxes attributable to VIEs was $61.3 million and $75.7 million for the three months
ended September 30, 2026 and 2025, respectively, and $181.9 million and $206.3 million for the nine months ended
September 30, 2026 and 2025, respectively.
The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments
that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. On
an ongoing basis, the Company evaluates its estimates. The Company bases its estimates on historical experience and on
various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual
results may differ from these estimates.
Overview
The Company's revenue generally relates to contracts with patients in which its performance obligations are to provide
healthcare services to the patients. Revenue is recorded during the period the Company's obligations to provide healthcare
services are satisfied. Revenue for performance obligations satisfied over time is recognized based on charges incurred in
relation to total expected charges. The Company's performance obligations for inpatient services are generally satisfied over
periods that average approximately five days . The Company's performance obligations for outpatient services are generally
satisfied over a period of less than one day . As the Company's performance obligations relate to contracts with a duration of
one year or less, the Company elected the optional exemption and, therefore, is not required to disclose the transaction price
for the remaining performance obligations at the end of the reporting period or when the Company expects to recognize
revenue. Additionally, the Company is not required to adjust the consideration for the existence of a significant financing
component when the period between the transfer of the services and the payment for such services is one year or less.
Change in Accounting Estimate
During the three months ended September 30, 2025, a change in accounting estimate resulting from a modification to the
technique used to estimate the collectability of accounts receivable and new information provided by recently completed
hindsight evaluations of historical collection trends resulted in a decrease in revenue of $42.6 million. During the three
months ended September 30, 2025, the Company implemented a new revenue accounting system that provided management
with additional information to more precisely estimate the collectability of accounts receivable, particularly with respect to
more timely consideration of payor denial and payment trends. The detailed information provided by the new system during
the three months ended September 30, 2025, along with the Company's recently completed analysis of historical collection
10
trends, indicated the current collection estimate differed from historical collection estimates thereby resulting in a change in
accounting estimate in accordance with ASC 250-10, Accounting Changes and Error Corrections, to be accounted for during
the three months ended September 30, 2025 (the period of change).
Contractual Adjustments, Discounts and Cost Report Settlements
Contractual relationships with patients, in most cases, involve a third party payor (Medicare, Medicaid and managed care
health plans), and the transaction prices for services provided are dependent upon the terms provided by (Medicare and
Medicaid) or negotiated with (managed care health plans) the third party payors. The payment arrangements with third party
payors for the services provided to the related patients typically specify payments at amounts less than the Company's
standard charges.
The Company's revenue is based upon the estimated amounts the Company expects to be entitled to receive from patients and
third party payors. Estimates of contractual adjustments under managed care insurance plans are based upon the contractual
payment terms specified in the related contractual agreements and the historical collection experience of each payor. Revenue
related to uninsured patients and copayment and deductible amounts for patients who have healthcare coverage may have
discounts applied (uninsured discounts and other discounts). The Company also records estimated implicit price concessions
(based primarily on historical collection experience) related to uninsured accounts to record self-pay revenue at the estimated
amounts expected to be collected.
Medicare and Medicaid regulations and various managed care contracts, under which the discounts from the Company's
standard charges must be calculated, are complex and subject to interpretation and adjustment. The classification and
documentation of healthcare services, as well as the medical necessity of the services authorized and provided, are also often
subject to interpretation. The Company estimates contractual adjustments on a payor-specific basis based on its interpretation
of the applicable regulations or contract terms and the historical collection experience of each payor, and these
interpretations may result in payments that differ from the Company's estimates. Because updated regulations and contract
renegotiations occur frequently, management continually reviews and assesses these estimates.
Final determination of amounts earned under Medicare, Medicaid and other third party payor programs often occurs in
subsequent years because of audits by the programs, rights of appeal, and the application of technical provisions. Estimated
reimbursement amounts, which are recorded within net patient service revenue in the period in which the related services are
rendered, are adjusted in subsequent periods as determined (in relation to certain government programs, primarily Medicare,
this is generally referred to as the "cost report" filing and settlement process). Differences between original estimates and
subsequent revisions, including final settlements, are recorded as adjustments to net patient service revenue in the period in
million and $4.5 million for the three months ended September 30, 2026 and 2025, respectively, and an increase to net patient
service revenue of $18.0 million and $13.7 million for the nine months ended September 30, 2026 and 2025, respectively.
At September 30, 2026 and December 31, 2025, the Company's settlements under reimbursement agreements with third party
payors were a net receivable of $13.3 million and a net payable of $7.8 million, respectively, reflecting a receivable of $29.8
million and $21.1 million, respectively, included in other current assets and a payable of $16.5 million and $28.9 million,
respectively, included in other accrued expenses and liabilities in the unaudited condensed consolidated balance sheets.
Amounts earned under prospective payment and other reimbursement activities remain subject to review by appropriate
governmental authorities or their agents. In the opinion of the Company's management, adequate provision has been made for
any adjustments that may result from such reviews.
Subsequent adjustments that are determined to be the result of an adverse change in the patient's or the payor's ability to pay
are recognized as bad debt expense. Bad debt expense for the three and nine months ended September 30, 2026 and 2025 was
not material to the Company.
Currently, several states in which the Company operates utilize Medicaid supplemental payment programs for the purpose of
providing reimbursement to providers to offset a portion of the cost of providing care to Medicaid and indigent patients.
These programs, which are designed with input from and are subject to approval and periodic renewal by the Centers for
Medicare & Medicaid Services ("CMS"), are funded by a combination of state and federal resources, including, in certain
instances, fees or taxes levied on the providers. Under these supplemental programs, the Company recognizes revenue in the
period in which amounts are estimable and collection is reasonably assured such that a significant reversal of cumulative
revenue is not probable in the future. The Company recognizes supplemental program expenses in the period to which they
relate. Reimbursements under these programs are reflected in total revenue, and taxes or other program-related costs are
included in other operating expenses.
11
Payor Mix
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2026 | 2025 | 2026 | 2025 | ||||||||||||
Amount | % of Total | Amount | % of Total | Amount | % of Total Revenue | Amount | % of Total Revenue | ||||||||
Medicare | $ | $ | $ | $ | |||||||||||
Medicaid | |||||||||||||||
Other managed care | |||||||||||||||
Self-pay and other | |||||||||||||||
Net patient service revenue | $ | $ | $ | $ | |||||||||||
Other revenue | |||||||||||||||
Total revenue | $ | $ | $ | $ | |||||||||||
Charity Care
The Company provides care without charge to certain patients who qualify under the local charity care policy of the hospital
where the patient receives services. The Company estimates that its costs of care provided under its charity care programs
approximated $7.4 million and $6.4 million for the three months ended September 30, 2026 and 2025, respectively, and
$22.7 million and $50.2 million for the nine months ended September 30, 2026 and 2025, respectively. The Company does
not report a charity care patient's charges in revenue as it is the Company's policy not to pursue collection of amounts related
to these patients, and therefore contracts with these patients do not exist.
The Company's management estimates its costs of care provided under its charity care programs utilizing a calculated ratio of
costs to gross charges multiplied by the Company's gross charity care charges provided. The Company's gross charity care
charges include only services provided to patients who are unable to pay and qualify under the Company's local charity care
policies. To the extent the Company receives reimbursement through the various governmental assistance programs in which
it participates to subsidize its care of indigent patients, the Company does not include these patients' charges in its cost of care
provided under its charity care program.
The Company's revenue is subject to potential regulatory and economic changes in certain states where the Company
generates significant revenue. The following is an analysis by state of revenue as a percentage of the Company's total revenue
for those states in which the Company generates significant revenue:
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
Oklahoma | |||||||
New Mexico | |||||||
Texas | |||||||
New Jersey | |||||||
Other | |||||||
Total | |||||||
Acquisitions are accounted for using the acquisition method of accounting and the results of operations are included in the
unaudited condensed consolidated income statement from the respective dates of acquisition. The purchase price of these
transactions is allocated to the assets acquired, liabilities assumed, and, if applicable, noncontrolling interests based upon
their respective fair values as of the acquisition date. Provisional amounts may be adjusted during the measurement period as
12
additional information is obtained about facts and circumstances that existed as of the acquisition date. The measurement
period ends when the Company receives the information necessary to finalize the accounting, but may not exceed one year
goodwill.
On September 28, 2026, the Company entered into a definitive agreement to sell its 70.5 % equity interest in The University
of Kansas Health System – St. Francis Campus ("St. Francis") to the University of Kansas Hospital Authority for
$58.4 million. The sale is expected to close in the fourth quarter of 2026, subject to customary closing conditions. The results
of operations for St. Francis until the effective date of the sale are classified as part of continuing operations as the disposal
group did not meet the criteria for reporting as a discontinued operation.
The assets and liabilities of St. Francis were classified as held for sale within current assets and current liabilities on the
condensed consolidated balance sheet at September 30, 2026. Prior period amounts were not reclassified. The following table
presents the major classes of assets and liabilities of the held for sale disposal group (in thousands):
September 30, 2026 | |
Accounts receivable | $ |
Other current assets | |
Property and equipment, net | |
Operating lease right of use assets | |
Operating lease right of use assets, related party | |
Goodwill | |
Other classes of assets that are not major | |
Total assets held for sale | $ |
Accounts payable | |
Accrued salaries and benefits | |
Other accrued expenses and liabilities | |
Long-term operating lease liability | |
Long-term operating lease liability, related party | |
Other classes of liabilities that are not major | |
Total liabilities held for sale | $ |
The Company holds an option to acquire equity securities of a privately held company (the "Investment"), and the Investment
does not have a readily determinable fair value. The Company has elected to account for the Investment using the
measurement alternative. Under the measurement alternative, an investment is recorded at cost, less impairment, if any, and
adjusted for observable price changes in orderly transactions involving identical or similar equity securities of the same
issuer. The Investment is measured at fair value on a non-recurring basis as of the date observable price changes occur. Its
fair value is categorized as Level 2 within the fair value hierarchy because the valuation methods use inputs that are primarily
observable, such as the transaction price, and any unobservable inputs are not considered significant. Recording upward or
downward adjustments to the carrying value of the Investment as a result of observable price changes requires quantitative
assessments of the fair value using various valuation methodologies and involves the use of estimates.
During the first quarter of 2026, the Company recorded an upward adjustment of $10.9 million to the carrying value of the
Investment based on observable price changes in the form of equity financings of the privately held company. During the
third quarter of 2026, the Company acquired equity in the privately held company by partially exercising approximately 44 %
of the option and concurrently sold the acquired equity for net proceeds of $9.6 million. The Company has not recognized
any impairments or downward adjustments related to the Investment.
13
ended September 30, 2026 and 2025 (in thousands):
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
Net gain recognized during the period on equity securities | $ | $ | $ | $ | |||
Less: Net gain recognized during the period on equity securities sold during the period | $ | $ | $ | $ | |||
Unrealized gains recognized during the period on equity securities still held at the reporting date | $ | $ | $ | $ | |||
Unrealized and realized gains and losses on the Investment are recorded within other operating expenses on the condensed
consolidated income statements, and the carrying value of the Investment is recorded within other assets on the condensed
consolidated balance sheets. As of September 30, 2026, the carrying value of the remaining Investment was $13.6 million,
inclusive of $9.2 million of cumulative upward adjustments. As of December 31, 2025, the carrying value of the Investment
was $7.9 million.
Cash and cash equivalents, accounts receivable, inventories, prepaid expenses, other current assets, accounts payable, accrued
salaries and benefits, accrued interest and other accrued expenses and current liabilities (other than those pertaining to lease
liabilities) are reflected in the accompanying unaudited condensed consolidated financial statements at amounts that
approximate fair value because of the short-term nature of these instruments. The fair value of the Company’s revolving
credit facility also approximates its carrying value as it bears interest at current market rates. Refer to Note 5, Interest Rate
Swap Agreements, for discussion of the fair value measurement of the Company’s derivative instruments.
2029 (the "5.75 % Senior Notes") were as follows (in thousands):
Carrying Amount | Fair Value | ||||||
September 30, 2026 | December 31, 2025 | September 30, 2026 | December 31, 2025 | ||||
Senior secured term loan facility | $ | $ | $ | $ | |||
$ | $ | $ | $ | ||||
The estimated fair values of the Company’s senior secured term loan facility and the 5.75 % Senior Notes were based upon
quoted market prices at that date and are categorized as Level 2 within the fair value hierarchy.
The financial statements include the financial position and results of operations of hospital and healthcare operations in which
the Company owned less than 100% of the equity interests, but maintained a controlling interest during the presented periods.
Earnings or losses attributable to the noncontrolling interests are presented separately in the consolidated income statements.
Holders of noncontrolling interests are considered to be equity holders in the consolidated company, pursuant to which
noncontrolling interests are classified as part of equity, unless the noncontrolling interests are redeemable. Certain redemptive
features associated with the noncontrolling interests for St. Francis could require the Company to deliver cash if the
redemptive features are exercised. These redemptive features could be exercised upon, among other things, the Company's
exclusion or suspension from participation in any federal or state government healthcare payor program. Therefore, the
noncontrolling interests balance for St. Francis is classified outside the permanent equity section of the Company's unaudited
condensed consolidated balance sheets.
14
The redeemable noncontrolling interests related to St. Francis have not been subsequently measured at fair value since the
acquisition date in 2017. The noncontrolling interests are not currently redeemable and it is not probable that the
noncontrolling interests will become redeemable as the possibility of the Company being excluded or suspended from
participation in any federal or state government healthcare payor program is remote.
Basic net income (loss) per share is computed by dividing net income (loss) available to common stockholders by the
weighted-average common shares outstanding during the period. Diluted net income (loss) per share takes into account the
potential dilution that could occur if securities or other contracts to issue shares, such as unvested restricted stock units, were
exercised and converted into shares. Diluted net income (loss) per share is computed by dividing net income (loss) available
to common stockholders by the weighted-average common shares outstanding during the period, increased by the number of
additional shares that would have been outstanding if the potential shares had been issued and were dilutive.
3. Related Party Transactions
Effective August 4, 2015, Ventas, Inc. ("Ventas"), through certain wholly-owned affiliates, acquired ownership of the
Company's real estate in exchange for a $1.4 billion payment from Ventas and the Company's agreement to lease the acquired
real estate back from Ventas (the "Ventas Master Lease"). The Ventas Master Lease is a 20-year master lease agreement
(with a renewal option for an additional 10 years) with certain subsidiaries of Ventas, pursuant to which the Company
currently leases 10 of the Company's hospitals. The Ventas Master Lease includes an annual rent escalator equal to the lesser
of four times the Consumer Price Index or 2.5 %. Variable lease payments are excluded from the Company's minimum rental
payments used to determine the right-of-use assets and lease obligations and are recognized as expense when incurred. The
Ventas Master Lease includes a number of operating and financial restrictions on the Company. Management believes the
Company was in compliance with all financial covenants as of September 30, 2026.
The Company recorded rent expense related to the Ventas Master Lease and other lease agreements with Ventas for certain
medical office buildings of $39.0 million and $38.1 million for the three months ended September 30, 2026 and 2025,
4. Long-Term Debt and Financing Matters
September 30, 2026 | December 31, 2025 | ||
Senior secured term loan facility | $ | $ | |
Finance leases | |||
Other debt | |||
Deferred financing costs | ( | ( | |
Total debt | |||
Less current maturities | ( | ( | |
Long-term debt, less current maturities | $ | $ |
5. Interest Rate Swap Agreements
Market risks relating to the Company's operations result primarily from changes in interest rates. The Company's exposure to
interest rate risk results from the entry into financial debt instruments that arose from transactions entered into during the
normal course of business. As part of an overall risk management program, the Company evaluates and manages exposure to
changes in interest rates on an ongoing basis. The Company has no intention of entering into financial derivative contracts,
other than to hedge a specific financial risk. To mitigate the Company's exposure to fluctuations in interest rates, the
Company uses pay-fixed interest rate swaps, which are designated as cash flow hedges of interest payments on floating rate
borrowings. Pay-fixed swaps effectively convert floating-rate borrowings to fixed-rate borrowings. Unrealized gains or losses
from the designated cash flow hedges and related tax effects are deferred in accumulated other comprehensive income
("AOCI") and recognized in earnings as the interest payments occur. The Company performs assessments of effectiveness for
15
its cash flow hedges on a quarterly basis to confirm that the hedges continue to meet the highly effective criteria required to
apply hedge accounting. Hedges and derivative financial instruments may continue to be used in the future in order to
manage interest rate exposure.
The valuation of these interest rate swap instruments is determined using widely accepted valuation techniques, including
discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of
the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and
implied volatilities. The Company has determined the inputs used to value its derivatives fall within Level 2 of the fair value
hierarchy.
On February 5, 2025, the Company executed interest rate swap agreements (the "February 2025 Agreements") with Truist
Bank and Royal Bank of Canada, as counterparties, with an effective date of June 30, 2025 and expiring June 26, 2029.
Under the February 2025 Agreements, the Company is required to make monthly fixed rate payments at annual rates ranging
from 3.97 % to 3.98 % and the counterparties are required to make monthly floating rate payments to the Company based on
one-month Term SOFR, each subject to a floor of 0.50 %. During each of the income statement periods presented, the
notional amounts under the Company's active swap agreements totaled approximately $400 million.
The February 2025 Agreements are designated as cash flow hedges and recorded at fair value on the Company's unaudited
condensed consolidated balance sheets with changes in fair value included in AOCI as a component of equity and reclassified
into interest expense in the same periods during which the hedge transactions affect earnings.
earnings (in thousands):
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
Classification | 2026 | 2025 | 2026 | 2025 | ||||
Unrealized income (loss) recognized | AOCI | $ | $( | $ | $( | |||
Reclassification from AOCI into earnings | Interest expense | ( | ( | ( | ||||
Net change in AOCI | $ | $( | $ | $( | ||||
In the 12 months following September 30, 2026, the Company estimates that an additional $1.8 million will be reclassified as
a reduction to interest expense.
As of September 30, 2026 and December 31, 2025, the fair value of the Company's interest rate swap agreements reflected a
net asset balance of $7.4 million and a net liability balance of $4.9 million, respectively. The following table presents the fair
value of the Company's interest rate swap agreements as recorded in the unaudited condensed consolidated balance sheets (in
thousands):
Classification | September 30, 2026 | December 31, 2025 | ||
Assets: | ||||
Other current assets | $ | $ | ||
Other assets | ||||
Total interest rate swap assets | ||||
Liabilities: | ||||
Other accrued expenses and liabilities | ||||
Other long-term liabilities | ||||
Total interest rate swap liabilities | ||||
Fair value of interest rate swap agreements | $ | $( |
16
6. Income Taxes
The Company's income tax provision was an expense of $17.6 million, which equates to an effective tax rate of 21.8 %, and
benefit of $3.4 million, which equates to an effective tax rate of 154.8 %, for the three months ended September 30, 2026 and
2025, respectively. The decrease in the effective tax rate was driven by the pre-tax loss for the three months ended September
30, 2025 and the increase in noncontrolling interest earnings as a percentage of the pre-tax loss. The Company's income tax
provision was an expense of $42.3 million, which equates to an effective tax rate of 21.3 %, and $38.1 million, which equates
to an effective tax rate of 19.6 %, for the nine months ended September 30, 2026 and 2025, respectively.
At September 30, 2026 and December 31, 2025, the Company had no
As of September 30, 2026, the Company had no ongoing or pending federal examinations for prior years. The Company has
outstanding federal income tax refund claims for the 2016 and 2018 tax years. On June 2, 2026, the Company was notified
that the Joint Committee on Taxation had completed its review of the refund claims and no changes were made to the refund
amounts claimed. In September 2026, the Company received $11.6 million related to the outstanding federal tax refunds plus
interest. The Company's tax years from 2022 through 2025 remain open to examination by federal and state taxing
7. Self-Insured Liabilities
The liabilities for professional, general, workers' compensation and occupational injury liability risks are based on actuarially
determined estimates. Liabilities for professional, general, workers' compensation and occupational injury liability risks
represent the estimated ultimate cost of all reported and unreported losses incurred through the respective balance sheet dates.
The Company provides an accrual for actuarially determined claims reported but not paid and estimates of claims incurred
but not reported.
Professional and General Liability
The total costs for professional and general liability losses are based on the Company's premiums and retention costs and
were $30.5 million and $64.2 million for the three months ended September 30, 2026 and 2025, respectively, and $91.1
million and $105.5 million for the nine months ended September 30, 2026 and 2025, respectively. During the three and nine
months ended September 30, 2025, the Company recorded an accrual for loss contingencies of $47.2 million for adverse prior
period claim developments, particularly with respect to its New Mexico market, combined with increased social inflationary
pressures, contributing to higher professional and general liability losses in the prior year periods.
Workers' Compensation and Occupational Injury Liability
The total costs for workers' compensation liability insurance are based on the Company's premiums and retention costs and
were $2.3 million and $2.4 million for the three months ended September 30, 2026 and 2025, respectively, and $5.5 million
and $2.9 million for the nine months ended September 30, 2026 and 2025, respectively.
8. Employee Benefit Plans
Defined Contribution Plan
The Company maintains defined contribution retirement plans that cover its eligible employees. The Company incurred total
costs related to the retirement plans of $12.5
$41.4 million and $40.3 million for the nine months ended September 30, 2026 and 2025, respectively.
Employee Health Plan
The Company maintains a self-insured medical and dental plan for substantially all of its employees. The Company's reserve
for employee health costs includes amounts for reported claims, which are accrued upon occurrence, as well as a provision
for incurred but not reported claims, which are estimated based on an average lag time and experience. Accruals are based on
the estimated ultimate cost of settlement, including claim settlement expenses.
17
The total costs of employee health coverage were $46.3 million and $49.7 million for the three months ended September 30,
2026 and 2025, respectively, and $134.5 million and $139.7 million for the nine months ended September 30, 2026 and 2025,
respectively.
9. Commitments and Contingencies
Professional Liability Claims
On or about August 29, 2026, the Company reached a settlement on a professional liability suit involving four plaintiffs. The
settlement calls for $40.0 million to be paid to the plaintiffs prior to the end of 2026. Typically, depending on the insurance
carrier involved, the carriers either pay their portion of the settlement directly to the plaintiff(s) or reimburse the Company for
covered amounts paid to the plaintiff(s). In this situation, in reliance on the carriers’ agreement to fund the settlement, the
Company agreed to settle the case; however, certain carriers have subsequently refused to fund their portion of the settlement.
Management of the Company believes that this matter is fully covered by the Company's insurance and that any amounts paid
by the Company that exceed its self-insured retention are collectible. Management intends to pursue all available remedies to
receive full funding of the insured amount. At September 30, 2026, the Company's professional and general liability accrual
included $40.0 million related to the settlement in other accrued expenses and liabilities on the condensed consolidated
balance sheet and $34.0 million in other current assets that represents an estimate of the amounts above the Company's self-
insured retention that it expects to recover under its professional liability insurance policies. Although management believes
that the $34.0 million is recoverable, the timing and ultimate amount of such recovery will depend, in part, on the resolution
of the disputes with the applicable carriers.
Litigation and Regulatory Matters
From time to time, claims and suits arise in the ordinary course of the Company's business. The Company has been, is
currently, and may in the future be subject to claims, lawsuits, qui tam actions, civil investigative demands, subpoenas,
investigations, audits and other inquiries related to its operations. In certain of these actions, plaintiffs request punitive or
other damages against the Company that may not be covered by insurance. These claims, lawsuits, and proceedings are in
various stages of adjudication or investigation and involve a wide variety of claims and potential outcomes. Depending on
whether the underlying conduct in these or future inquiries or investigations could be considered systemic, their resolution
could have a material adverse effect on the Company's results of operations, financial position or liquidity.
The Company records accruals for such contingencies to the extent that the Company concludes it is probable that a liability
has been incurred and the amount of the loss can be reasonably estimated. Apart from ongoing litigation associated with
unresolved professional liability claims as described in Note 7 above, management does not believe that the Company is
party to any proceeding that, either individually or in the aggregate, could have a material adverse effect on its business,
financial condition, results of operations or liquidity. However, in light of the inherent uncertainties involved, it is possible
that the settlement of these unresolved claims could have a material adverse impact on the Company’s future results of
operations, financial position, or liquidity.
Securities Litigation
On January 7, 2026, a purported stockholder filed a putative securities class action against the Company and certain current
officers in the lawsuit styled Postiwala v. Ardent Health, Inc., et al., Case No. 3:26-cv-00022, which is pending in the United
States District Court for the Middle District of Tennessee, Nashville Division. An amended complaint was filed August 12,
2026. The complaint is brought on behalf of a putative class consisting of all persons (other than defendants) who purchased
Company securities between July 18, 2024 and November 12, 2025, and alleges that defendants violated Sections 11 and 15
of the Securities Act of 1933, as amended (the "Securities Act"), and Sections 10(b) and 20(a) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and Rule 10b-5 promulgated thereunder based on allegedly false and misleading
statements and omissions. Specifically, the complaint alleges that the Company made material misstatements and omissions
in the Company’s initial public offering registration statement on Form S-1 and incorrectly accounted for and reported on
certain accounts receivable and certain insurance reserves during 2024 and 2025 which caused its stock price to be inflated.
The complaint seeks unspecified monetary damages, recovery of fees and costs, and other relief that the court may find
appropriate.
18
The Company intends to vigorously defend the claims made; however, currently no assessment can be made as to the likely
outcome. At this time, the Company is not able to reasonably estimate the amount or range of the ultimate liability, if any, in
connection with this case.
On July 31, 2026, the Company received a letter from the Atlanta regional office of the SEC in connection with a non-public,
fact-finding inquiry, requesting that the Company voluntarily provide information regarding the $42.6 million decrease in
revenue related to the collectability of accounts receivable as reported in the Company's Form 10-Q filed on November 14,
2025. The Company is cooperating with the SEC's request. At this time, the Company cannot predict the timing or outcome
of this inquiry.
Derivative Action
On February 26, 2026, a stockholder derivative action styled Thompson v. Sotir, et al., Case No. 3:26-cv-00219 was filed in
the United States District Court for Middle District of Tennessee, Nashville Division, against certain current officers and
directors. The Company is named as a nominal defendant only. The factual basis of the complaint is largely the same as in the
Postiwala case mentioned above but includes some additional allegations. The complaint alleges breaches of fiduciary duties,
gross mismanagement, waste of corporate assets, unjust enrichment, and violation of Section 14(a) of the Exchange Act. The
complaint seeks unspecified monetary damages, restitution, the adoption of certain governance reforms, recovery of fees and
costs, and other relief that the court may find appropriate.
The Company intends to vigorously defend the claims made; however, currently no assessment can be made as to the likely
outcome. At this time, the Company is not able to reasonably estimate the amount or range of the ultimate liability, if any, in
connection with this case.
Cybersecurity Incident Litigation
In November 2023, the Company determined that a ransomware cybersecurity incident had impacted and disrupted a number
of the Company's operational and information technology systems (the "Cybersecurity Incident"). During this time, the
Company's hospitals remained operational and continued to deliver patient care utilizing established downtime procedures.
The Company immediately suspended user access to impacted information technology applications, executed cybersecurity
protection protocols, and took steps to restrict further unauthorized activity. Additionally, because of the time taken to contain
and remediate the Cybersecurity Incident, online electronic billing systems were not functioning at their full capacities and
certain billing, reimbursement and payment functions were delayed, which had an adverse impact on the Company's results
of operations and cash flows for 2023 and the first quarter of 2024.
As a result of the Cybersecurity Incident, three putative class actions were filed against the Company in the U.S. District
Court for the Middle District of Tennessee: Burke v. AHS Medical Holdings LLC, No. 3:23-cv-01308; Redd v. AHS Medical
Holdings, LLC, No. 3:23-cv-01342; and Epperson v. AHS Management Company, Inc., No. 3:24-cv-00396. These cases
were consolidated by the District Court on April 24, 2024, under the caption Hodge v. AHS Management Company, Inc., No.
3:23-cv-01308 (M.D. Tenn.). The complaint for the consolidated class action, filed on behalf of approximately 38,000
individuals who alleged their personal information and protected health information were affected by the Cybersecurity
Incident, generally asserted state common law claims of negligence, breach of implied contract, unjust enrichment, breach of
fiduciary duty, and invasion of privacy with respect to how the Company managed sensitive data. On October 4, 2024, the
Company executed a settlement agreement to resolve the consolidated class action litigation. On October 9, 2024, the District
Court preliminarily approved the settlement. Plaintiffs filed a Motion for Final Approval of the Settlement ("Motion for Final
Approval"), which the Company did not oppose. Following a hearing on the Motion for Final Approval that was conducted
on August 1, 2025, the Court ordered class counsel, the settlement administrator and the Company to implement the agreed
upon settlement of the consolidated case. Pursuant to the settlement, the Company made settlement payments, the total of
which did not have a material impact on the Company's results of operations, financial position or liquidity. Upon entry of the
Final Order, the clerk was ordered to close the case.
During the nine months ended September 30, 2025, the Company received $21.5 million of business insurance recovery
proceeds related to the Cybersecurity Incident, all of which was included in other non-operating gains on the Company's
condensed consolidated income statement. No business insurance recovery proceeds related to the Cybersecurity Incident
were received during the nine months ended September 30, 2026.
19
Acquisitions
The Company has acquired, and plans to continue to acquire, businesses with prior operating histories. Acquired companies
may have unknown or contingent liabilities, including liabilities for failure to comply with healthcare laws and regulations,
such as billing and reimbursement, fraud and abuse and anti-kickback laws. The Company has from time to time identified
certain past practices of acquired companies that do not conform to its standards. Although the Company institutes policies
designed to conform such practices to its standards following completion of acquisitions, there can be no assurance that the
Company will not become liable for the past activities of these acquired facilities that may later be asserted to be improper by
private plaintiffs or government agencies. Although the Company generally seeks to obtain indemnification from prospective
sellers covering such matters, there can be no assurance that any such matter will be covered by indemnification or, if
covered, that such indemnification will be adequate to cover potential losses and fines.
10. Segments
The Company has one
by delivering care to its customers, or patients, through its integrated network of hospitals, ambulatory facilities, and
physician practices. The Company's Chief Operating Decision Maker ("CODM") is its President and Chief Executive Officer,
who regularly reviews financial operating results on a consolidated basis for purposes of allocating resources and evaluating
financial performance. The Company's CODM manages the operations on a consolidated basis to make decisions about
overall Company resource allocation and to assess overall Company performance.
The CODM's assessment of segment performance and allocation of segment resources is based on consolidated net income
attributable to Ardent Health, Inc. The CODM uses this consolidated profitability measure to monitor budget versus actual
results, compare Company profitability period-over-period and make capital investment decisions.
healthcare services segment, including significant expenses that are regularly provided to and reviewed by the CODM (in
thousands):
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
2026 | 2025 | 2026 | 2025 | |||||
Total revenue | $ | $ | $ | $ | ||||
Less: | ||||||||
Employee salaries and benefits | ||||||||
Contract labor | ||||||||
Supplies | ||||||||
Medical professional fees | ||||||||
Contract services | ||||||||
Other segment items (1) | ||||||||
Net income (loss) attributable to Ardent Health, Inc. | $ | $( | $ | $ | ||||
(1) | Other segment items included in net income (loss) attributable to Ardent Health, Inc. for each of the periods presented primarily consists of rent expense, interest expense, depreciation and amortization, income tax expense (benefit), other operating expenses, loss on extinguishment and modification of debt, other non-operating gains and net income attributable to noncontrolling interests. | |||||||
The measure of segment assets is reported on the unaudited condensed consolidated balance sheets as total assets. The
accounting policies for the segment are consistent with the consolidated accounting policies provided in Note 2.
As of September 30, 2026 and December 31, 2025, all of the Company's long-lived assets were located in the United States,
and for the three and nine months ended September 30, 2026 and 2025, all revenue was earned in the United States.
11. Earnings Per Share
Basic net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the
weighted-average number of common shares outstanding. Diluted net income (loss) per share is computed by dividing net
income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding plus the
dilutive effect of outstanding securities, and such dilutive effect is computed using the treasury stock method.
20
and per share amounts):
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
Basic: | |||||||
Net income (loss) attributable to common stockholders | $ | $( | $ | $ | |||
Weighted-average number of common shares | |||||||
Net income (loss) per common share | $ | $( | $ | $ | |||
Diluted: | |||||||
Net income (loss) attributable to common stockholders | $ | $( | $ | $ | |||
Weighted-average number of common shares | |||||||
Net income (loss) per common share | $ | $( | $ | $ | |||
per share for net income (loss) attributable to Ardent Health, Inc. stockholders:
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||
2026 | 2025 | 2026 | 2025 | ||||||
Weighted-average number of common shares - basic | |||||||||
Effect of dilutive securities(1) | |||||||||
Weighted-average number of common shares - diluted | |||||||||
(1) | The effect of dilutive securities does not reflect weighted-average potential common shares from restricted stock and restricted stock units of ended September 30, 2026 and 2025, respectively, because their effect was antidilutive as calculated under the treasury stock method. | ||||||||
21
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Management's discussion and analysis of financial condition and results of operations should be read in conjunction with our
interim unaudited condensed consolidated financial statements and related notes contained elsewhere in this Quarterly
Report on Form 10-Q for the quarter ended September 30, 2026 (this "Quarterly Report") and our audited consolidated
financial statements for the year ended December 31, 2025 and related notes contained in our Annual Report. The following
discussion includes forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never
materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-
looking statements. When reviewing the discussion below, you should keep in mind the substantial risks and uncertainties
that could impact our business. In particular, we encourage you to review the risks and uncertainties described in the section
titled "Risk Factors" included in the Annual Report.
Unless otherwise indicated, all relevant financial and statistical information included herein relates to our consolidated
operations. Additionally, unless the context indicates otherwise, Ardent Health, Inc. and its affiliates are referred to in this
section as "we," "our," or "us."
Forward-Looking Statements
This Quarterly Report, including the following discussion, may contain certain "forward-looking statements," as that term is
defined in the U.S. federal securities laws. These forward-looking statements include, but are not limited to, statements other
than statements of historical facts, including, among others, statements relating to our future financial performance, our
business prospects and strategy, anticipated financial position, liquidity and capital needs, the industry in which we operate
and other similar matters. Words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks,"
"estimates," "could," "would," "will," "may," "can," "continue," "potential," "should" and the negative of these terms or other
comparable terminology often identify forward-looking statements. When reviewing the discussion below, you should keep
in mind the risks and uncertainties that could impact our business. These forward-looking statements are not guarantees of
future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the
results contemplated by the forward-looking statements, including the risk factors and other cautionary statements described
under the heading "Risk Factors" included in the Annual Report. These risks and uncertainties could cause actual results to
differ materially from those projected in forward-looking statements contained in this Quarterly Report or implied by past
results and trends. Our historical results are not necessarily indicative of the results that may be expected for any period in the
future.
Factors, risks, and uncertainties that could cause actual outcomes and results to be materially different from those
contemplated include, among others: (1) general economic and business conditions, both nationally and in the regions in
which we operate, including the impact of challenging macroeconomic conditions and inflationary pressures, current
geopolitical instability, and impacts from the imposition of, or changes in, tariffs, as well as the potential impact on us of
uncertain political, financial, credit and capital conditions; (2) possible reductions or other changes in Medicare, Medicaid
and other state programs, including Medicaid supplemental payment programs, Medicaid waiver programs or state directed
payments, that could have an adverse effect on our revenues and business; (3) reduction in the reimbursement rates paid by
commercial payors, increased reimbursement denials or payment delays by commercial payors, our inability to retain and
negotiate favorable contracts with private third party payors, or an increasing volume of uninsured or underinsured patients;
(4) effects of changes in healthcare policy or legislation, including the One Big Beautiful Bill Act (the "OBBBA") and any
other reforms that have or may be undertaken by the current presidential administration, and legal and regulatory restrictions
on our hospitals that have physician owners; (5) the ability to achieve operating and financial targets, develop and execute
mitigation plans to offset to the extent possible impacts from the OBBBA, the expiration of temporary enhanced subsidies for
individuals eligible to purchase insurance coverage through health insurance marketplaces and imposition of tariffs, attain
expected levels of patient volumes and revenues, and control the costs of providing services; (6) security threats, catastrophic
events and other disruptions affecting our, our service providers’ or our joint venture ("JV") partners’ information technology
and related systems, which have adversely affected, and could in the future adversely affect, our relationships with patients
and business partners and subject us to legal claims and liabilities, reputational harm and business disruption and adversely
affect our financial condition; (7) the highly competitive nature of the healthcare industry and continued industry trends
towards clinical transparency and value-based purchasing may impact our competitive position; (8) inability to recruit and
retain quality physicians and increased labor costs resulting from increased competition for staffing or a continued or
increased shortage of experienced nurses, as well as the loss of key personnel, including key members of our management
team; (9) changes to physician utilization practices and treatment methodologies and other factors outside our control that
impact demand for medical services and may reduce our revenues and ability to grow profitability; (10) continued industry
trends toward value-based purchasing, third party payor consolidation and care coordination among healthcare providers;
(11) inability to successfully complete acquisitions, divestitures or strategic JVs or inability to realize all of the anticipated
22
benefits; (12) liabilities because of professional liability and other claims brought against our hospitals, physician practices,
outpatient facilities or other business operations; (13) exposure to certain risks and uncertainties by the JVs through which we
conduct a significant portion of our operations, including anticipated synergies of past acquisitions and the risk that
transactions may not receive necessary government clearances; (14) failure to obtain drugs and medical supplies at favorable
prices or sufficient volumes; (15) operational, legal and financial risks associated with outsourcing functions to third parties;
(16) our facilities are heavily concentrated in Texas and Oklahoma, which makes us sensitive to regulatory, economic and
competitive conditions and changes in those states; (17) negative impact of severe weather, climate change, and other factors
beyond our control, which could restrict patient access to care or cause one or more facilities to close temporarily or
permanently; (18) risks related to the Master Lease with Ventas ("Ventas Master Lease") and its restrictions and limitations
on our business; (19) the impact of our significant indebtedness and the ability to refinance such indebtedness on acceptable
terms; (20) our failure to comply with complex laws and regulations applicable to the healthcare industry or to adjust our
operations in response to changing laws and regulations; (21) the impact of governmental claims or governmental
investigations, payor audits and litigation brought against our hospitals, physician practices, outpatient facilities or other
business operations; (22) actual or perceived failures to comply with applicable data protection, privacy and security laws,
regulations, standards and other requirements; (23) the impact of a deterioration of public health conditions associated with a
future pandemic, epidemic or outbreak of infectious disease; (24) inability to or delay in building, acquiring, selling,
renovating or expanding our healthcare facilities; (25) failure to comply with federal and state laws relating to Medicare and
Medicaid enrollment, permit, licensing and accreditation requirements; (26) the results of our efforts to use technology,
including artificial intelligence ("AI") and machine learning, to drive efficiencies, better outcomes and an enhanced patient
experience; (27) our status as a controlled company; (28) conflicts of interest between our controlling stockholder and other
holders of our common stock; and (29) other risk factors described in our filings with the SEC, including the Annual Report.
We caution you that the foregoing list may not contain all of the risks and uncertainties that may affect the forward-looking
statements made in this Quarterly Report. You should not rely upon forward-looking statements as predictions of future
events.
The forward-looking statements in this Quarterly Report are based on management's current beliefs, expectations, and
projections about future events and trends affecting our business, results of operations, financial condition, and prospects.
These statements are subject to risks, uncertainties, and other factors described in the "Risk Factors" section of the Annual
Report. We operate in a competitive and rapidly changing environment where new risks and uncertainties can emerge,
making it impossible to predict all potential impacts on our forward-looking statements. Consequently, actual results may
differ materially from those described. The forward-looking statements pertain only to the date they are made, and we do not
undertake any obligation to update them to reflect new information or events unless required by law. You are advised not to
place undue reliance on these statements and to consult any additional disclosures we may provide through our other filings
with the SEC, such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Overview
We are a leading provider of healthcare services in the United States, operating in eight growing mid-sized urban markets
across six states: Texas, Oklahoma, New Mexico, New Jersey, Idaho and Kansas. As of September 30, 2026, we deliver care
through a system of 30 acute care hospitals and more than 280 sites of care with over 2,000 employed and affiliated
providers. Affiliated providers are physicians and advanced practice providers with whom we contract for services through a
professional services agreement or other independent contractor agreement. We hold a leading position in a majority of our
markets, and we believe we are one of the leading healthcare systems based on market share and our integrated network of
hospitals, ambulatory facilities, and physician practices. We operate either independently or in partnership with premier
academic medical centers, large not-for-profit hospital systems, community physicians, and a community foundation through
our well-established and differentiated JV model. Collectively, we operate as a unified organization with a consumer-centric
approach to caring for our patients and our communities. Our strategic JV partners offer us significant advantages, including
expanded access points, clinical talent availability, local brand recognition, and scale that enable us to accelerate market
penetration. We believe that we help our partners enhance their network and regional presence through our operational
acumen. We strive to strengthen clinical services, drive operating improvements, and centrally manage operations to optimize
hospital performance and enhance patient care. In each of these partnerships, we are the majority owner and serve as the day-
to-day operator.
23
Recent Developments
Sale of Interest in Kansas JV
On September 28, 2026, the Company entered into a definitive agreement to sell its 70.5% equity interest in St. Francis to the
University of Kansas Hospital Authority for $58.4 million. The sale is expected to close in the fourth quarter of 2026, subject
to customary closing conditions.
Regulatory Update
On July 4, 2025, the OBBBA, a budget reconciliation act for fiscal year 2025, was signed into law. The OBBBA includes
provisions that may impact our financial performance and may substantially modify certain federal statutes and regulations to
which our operations are subject. The OBBBA provisions that may impact us have varying effective dates, and we are unable
to predict whether or how future legislation, rulemaking, or judicial action will impact implementation of the OBBBA. Of
particular relevance to us, the OBBBA may reduce the federal government's overall Medicaid expenditures and tighten
Medicaid eligibility requirements. The law limits eligibility for Medicaid by imposing work or community engagement
requirements for adults under 65 years old in Medicaid expansion states, including states with waiver-based expansions,
subject to limited exceptions, and requires eligibility redeterminations at least every six months for the Medicaid expansion
state population. State compliance is required by December 31, 2026.
In addition, the OBBBA includes significant changes to Medicaid funding mechanisms by restricting federal matching funds
received by state Medicaid programs. Effective upon enactment, the law prohibits states from establishing new provider
assessments or taxes, or increasing the rates of existing provider assessments, and, beginning in the federal fiscal year 2028,
phases down the safe harbor threshold for existing provider taxes in Medicaid expansion states, while also limiting the
structure and application of such assessments. The OBBBA also directs the U.S. Department of Health and Human Services
to revise regulations governing state directed payment ("SDP") arrangements to cap total payment rates paid by Medicaid
managed care organizations for certain services at Medicare payment rates instead of average commercial rates and imposes
lower caps in Medicaid expansion states. The revised regulations apply to SDP arrangements established on or after July 4,
2025 unless the program meets certain grandfathering criteria. The OBBBA provides that payments under grandfathered
programs will be reduced beginning January 1, 2028.
The OBBBA also made significant changes to the U.S. federal tax law. Significant tax provisions of the OBBBA that will
impact us include (i) the return to the EBITDA formula used to calculate the business interest expense limitation under
Internal Revenue Code Section 163(j) and (ii) the allowance of 100% bonus depreciation for qualifying property placed in
service after January 19, 2025. The provisions of the OBBBA are not expected to have a material impact on our effective tax
rate.
Because our facilities rely in part on reimbursement from federal health care programs, including Medicaid, for the
reimbursement of services rendered, these changes may have a negative impact on our financial performance. Ongoing
budgetary uncertainties and continued efforts to reduce the federal deficit may result in further payment reductions to both
Medicaid and Medicare programs. For example, legislation that increases the federal deficit in the future could result in
automatic sequestration under the Pay-As-You-Go Act of 2010, which could result in cuts to Medicare reimbursement of up
to 4% if Congress does not take action to waive the sequestration.
In addition to changes made to federal healthcare programs, the OBBBA contains policy changes that are expected to
decrease the number of individuals who obtain health insurance from Affordable Care Act ("ACA") marketplace exchanges.
For example, beginning with plan year 2028, the OBBBA effectively ends automatic renewals of coverage by requiring pre-
enrollment verification of eligibility. In addition, the federal enhanced subsidies of ACA marketplace exchange-based plans
expired at the end of 2025 and were not extended by the OBBBA, which is likely to result in significant cost increases for
ACA plans. We expect the expiration of the enhanced subsidies to adversely impact results in 2026, and the OBBBA reforms
to ACA marketplace exchange-based plans to adversely impact results in future periods, partially offset by our ongoing
resiliency and cost reduction initiatives.
In September 2025, the Centers for Medicare & Medicaid Services ("CMS") began implementing the Rural Health
Transformation Program ("RHTP"), a federal initiative established by the OBBBA to support the stabilization and
modernization of healthcare delivery in rural communities nationwide. The RHTP authorizes total federal funding of $50
billion to be distributed over five federal fiscal years, with $10 billion available annually from federal fiscal years 2026
through 2030. In December 2025, CMS awarded funding allocations to all 50 states. Each state is responsible for determining
the structure and timing of distributions to eligible healthcare participants. Funding may be awarded by states through
subawards, subcontracts, or other arrangements, including payments for qualifying healthcare items and services, subject to
24
program requirements, funding policies, and other limitations. All authorized funds must be expended by October 1, 2032.
While the RHTP is intended, in part, to mitigate the impact of certain Medicaid funding reductions enacted as part of the
OBBBA, the total funding available under the program is significantly less than the aggregate Medicaid spending reductions
included in the legislation, and there can be no assurance regarding the amount or timing of any RHTP funding that may
ultimately be available to providers. We are eligible to participate in the RHTP in all of the states in which we operate, and
we will continue to monitor state‑level program development and funding opportunities as implementation progresses.
During the nine months ended September 30, 2026, we received no RHTP funds.
Key Factors Impacting Our Results of Operations
Staffing and Labor
Our operations are dependent on the efforts, abilities and experience of our management and medical support personnel, such
as nurses, pharmacists and lab technicians, as well as our physicians. We compete with other healthcare providers in
recruiting and retaining qualified management and support personnel responsible for the daily operations of each of our
hospitals and other facilities, including nurses and other non-physician healthcare professionals. At times, the availability of
nurses and other medical support personnel has been a significant operating issue for healthcare providers, including at
certain of our facilities. The impact of labor shortages across the healthcare industry may result in other healthcare facilities,
such as nursing homes, limiting admissions, which may constrain our ability to discharge patients to such facilities and
further exacerbate the demand on our resources, supplies and staffing.
We contract with various third parties who provide hospital-based physicians. Third party providers of hospital-based
physicians, including those with whom we contract, have experienced significant disruption in the form of regulatory
changes, including those stemming from enactment of the No Surprises Act, challenging labor market conditions resulting
from a shortage of physicians and inflationary wage-related pressures, as well as increased competition through consolidation
of physician groups. In some instances, providers of outsourced medical specialists have become insolvent and unable to
fulfill their contracts with us for providing hospital-based physicians. The success of our hospitals depends in part on the
adequacy of staffing, including through contracts with third parties. If we are unable to adequately contract with providers, or
the providers with whom we contract become unable to fulfill their contracts, our admissions may decrease, and our operating
performance, capacity and growth prospects may be adversely affected. Further, our efforts to mitigate the potential impact
on our business from third party providers who are unable to fulfill their contracts to provide hospital-based physicians,
including through acquisitions of outsourced medical specialist businesses, employment of physicians and re-negotiation or
assumption of existing contracts, may be unsuccessful. These developments with respect to providers of outsourced medical
specialists, and our inability to effectively respond to and mitigate the potential impact of such developments, may disrupt our
ability to provide healthcare services, which may adversely impact our business, financial condition and results of operations.
We also depend on the available labor pool of semi-skilled and unskilled employees in each of the markets in which we
operate. In some of our markets, employers across various industries have increased minimum wages, which has created
more competition and, in some cases, higher labor costs for this sector of employees.
Supplemental Payments
We receive a significant portion of our revenues from Medicare and Medicaid, and these programs are subject to extensive
regulation and frequent changes. Several states in which we operate utilize Medicaid supplemental payment programs
requiring periodic CMS approval to provide funding that is separate from base rates. These payments help offset shortfalls in
Medicaid reimbursement but generally do not cover the full cost of providing care, particularly after considering state and
local provider taxes used to fund the non‑federal share of Medicaid spending. States and federal agencies continue to review
and adjust supplemental payment structures, and some states have proposed modifications as part of their annual renewal
process with CMS. Recent federal legislation also introduces new limits on the financing and payment levels for certain
programs, which may result in decreased revenue from certain Medicaid supplemental payment programs in future periods
once program changes take effect.
During the three months ended September 30, 2026 and 2025, we recorded revenue of $156.9 million and $186.5 million,
respectively, related to Medicaid supplemental payment programs. During the nine months ended September 30, 2026 and
2025, we recorded revenue of $541.8 million and $550.3 million, respectively, related to Medicaid supplemental payment
programs.
25
Seasonality
We typically experience higher patient volumes and revenue in the fourth quarter of each year in our acute care facilities. We
typically experience such seasonal volume and revenue peaks because more people generally become ill during the winter
months, which in turn results in significant increases in the number of patients we treat during those months. In addition,
revenue in the fourth quarter is also impacted by increased utilization of services due to annual deductibles, which are not
usually met until later in the year, and patient utilization of their healthcare benefits before they expire at year-end.
Inflation
The healthcare industry is labor intensive. Wages and other expenses increase during periods of inflation and when labor
shortages occur in the marketplace. In addition, our suppliers pass along rising costs to us in the form of higher prices. We
have implemented cost control measures in an attempt to curb increases in operating costs and expenses. We have generally
offset increases in operating costs by increasing reimbursement for services, expanding services and reducing costs in other
areas. However, we cannot predict our ability to cover or offset future cost increases, particularly any increases in our cost of
providing health insurance benefits to our employees.
Geographic Concentration
The information below provides an overview of our operations in certain markets as of September 30, 2026.
Texas. We operated 13 acute care hospital facilities (including one managed hospital that is owned by The University of
Texas Health Science Center at Tyler, an affiliate of The University of Texas System) with 1,436 licensed beds that serve the
areas of Tyler, Amarillo and Killeen, Texas. For the nine months ended September 30, 2026, we generated 35.5% of our total
revenue in the Texas market.
Oklahoma. We operated eight acute care hospital facilities with 1,173 licensed beds that serve the area of Tulsa, Oklahoma.
For the nine months ended September 30, 2026, we generated 23.1% of our total revenue in the Oklahoma market.
New Mexico. We operated five acute care hospital facilities with 619 licensed beds that serve the areas of Albuquerque and
Roswell, New Mexico. For the nine months ended September 30, 2026, we generated 17.5% of our total revenue in the New
Mexico market.
New Jersey. We operated two acute care hospital facilities with 476 licensed beds that serve the areas of Montclair and
Westwood, New Jersey. For the nine months ended September 30, 2026, we generated 10.3% of our total revenue in the New
Jersey market.
Other Industry Trends
The demand for healthcare services continues to be impacted by the following trends:
•A growing focus on healthcare spending by consumers, employers and insurers, who are actively seeking lower-cost
care solutions;
•A shift in patient volumes from inpatient to outpatient settings due to technological advancements and demand for
care that is more convenient, affordable and accessible;
•The growing aged population, which requires greater chronic disease management and higher-acuity treatment; and
•Ongoing consolidation of providers and insurers across the healthcare industry.
Additionally, the healthcare industry, particularly acute care hospitals, continues to be subject to ongoing regulatory
uncertainty. Changes in federal or state healthcare laws, regulations, funding policies or reimbursement practices, especially
those involving reductions to government payment rates or limitations on what providers may charge, could significantly
impact future revenue and operations. For example, the No Surprises Act prohibits providers from charging patients an
amount beyond the in-network cost sharing amount for services rendered by out-of-network providers, subject to limited
exceptions. For services for which balance billing is prohibited, the No Surprises Act includes provisions that may limit the
amounts received by out-of-network providers from health plans. Any reduction in the rates that we can charge or amounts
we can receive for our services will reduce our total revenue and our operating margins.
26
Results of Operations
Revenue and Volume Trends
Our revenue depends upon inpatient occupancy levels, ancillary services and therapy programs ordered by physicians and
provided to patients, the volume of outpatient procedures and the charges and negotiated payment rates for such services.
Total revenue is comprised of net patient service revenue and other revenue. We recognize patient service revenue in the
period in which we provide services. Patient service revenue includes amounts we estimate to be reimbursable by Medicare,
Medicaid and other payors under provisions of cost or prospective reimbursement formulas in effect. The amounts we receive
from these payors are generally less than the established billing rates, and we report patient service revenue net of these
differences (contractual adjustments) at the time we render the services. We also report patient service revenue net of the
effects of other arrangements where we are reimbursed for services at less than established rates, including certain self-pay
adjustments provided to uninsured patients. We also record estimated implicit price concessions (based primarily on
historical collection experience) related to uninsured accounts to record self-pay revenue at the estimated amount expected to
be collected.
Total revenue for the three months ended September 30, 2026 increased $48.1 million, or 3.1%, compared to the same prior
year period. The increase in total revenue for the three months ended September 30, 2026 was driven by an increase in
adjusted admissions of 2.9% and an increase in net patient service revenue per adjusted admission of 0.7%. The increase in
adjusted admissions was primarily attributable to a growth in outpatient service revenue resulting from a combination of
increases in physician and urgent care clinic visits compared to the prior year period and the continued shift in care delivery
from inpatient to outpatient sites of care. The increase in adjusted admissions was also attributable to increases in admissions
and emergency room visits of 0.1% and 1.7%, respectively, and partially offset by a decrease in total surgeries of 1.9%
compared to the prior year period.
During the three months ended September 30, 2025, a change in accounting estimate resulting from a modification to the
technique used to estimate the collectability of accounts receivable and new information provided by recently completed
hindsight evaluations of historical collection trends resulted in a decrease in revenue of $42.6 million. When total revenue for
the three months ended September 30, 2025 is adjusted to exclude the $42.6 million reduction to revenue attributable to the
change in accounting estimate, net patient service revenue per adjusted admission was $17,730 for the three months ended
September 30, 2025, resulting in a decrease in net patient service revenue per adjusted admission of 2.0% for the three
months ended September 30, 2026 compared to the adjusted prior year period. This decrease was primarily attributable to a
decrease in revenue from Medicaid supplemental payment programs of $29.6 million compared to the same prior year period.
Total revenue for the nine months ended September 30, 2026 increased $129.7 million, or 2.7%, compared to the same prior
year period. The increase in total revenue for the nine months ended September 30, 2026 was driven by an increase in
adjusted admissions of 2.5% and an increase in net patient service revenue per adjusted admission of 0.6%. The increase in
adjusted admissions was primarily attributable to an increase in outpatient service revenue resulting from a combination of
increases in physician and urgent care clinic visits compared to the prior year period and the continued shift in care delivery
from inpatient to outpatient sites of care. The increase in adjusted admissions was partially offset by decreases in admissions,
total surgeries, and emergency room visits of 0.7%, 1.2%, and 0.4%, respectively, compared to the prior year period.
When total revenue for the nine months ended September 30, 2025 is adjusted to exclude the $42.6 million reduction to
revenue attributable to the change in accounting estimate, net patient service revenue per adjusted admission was $17,908 for
the nine months ended September 30, 2025, resulting in a decrease in net patient service revenue per adjusted admission of
0.3% for the nine months ended September 30, 2026 compared to the adjusted prior year period. This decrease was primarily
attributable to a decrease in revenue from Medicaid supplemental payment programs of $8.5 million compared to the prior
year period.
A key competitive strength and a significant component of our growth strategy has been our well-established and
differentiated JV model, which has resulted in partnerships with premier academic medical centers, large not-for-profit
hospital systems, community physicians, and a community foundation. During the three months ended September 30, 2026
and 2025, total revenue related to these entities was $463.1 million and $468.0 million, respectively, which represented
28.5% and 29.7%, respectively, of our total revenue for such periods. During the nine months ended September 30, 2026 and
2025, total revenue related to these entities was $1,398.0 million and $1,356.6 million, respectively, which represented 28.8%
and 28.7%, respectively, of our total revenue for such periods.
27
The following table provides the sources of our total revenue by payor:
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
Medicare | 39.5% | 38.0% | 40.5% | 38.9% | |||
Medicaid | 9.4% | 9.8% | 9.7% | 9.9% | |||
Other managed care | 44.1% | 44.5% | 43.1% | 43.9% | |||
Self-pay and other | 5.3% | 5.4% | 5.2% | 5.5% | |||
Net patient service revenue | 98.3% | 97.7% | 98.5% | 98.2% | |||
Other revenue | 1.7% | 2.3% | 1.5% | 1.8% | |||
Total revenue | 100.0% | 100.0% | 100.0% | 100.0% | |||
Operating Results Summary for the Three Months Ended September 30, 2026 and 2025
The following table sets forth, for the periods indicated, the consolidated results of our operations expressed in dollars and as
a percentage of total revenue.
Three Months Ended September 30, | |||||||
(Unaudited, dollars in thousands) | 2026 | 2025 | |||||
Amount | % | Amount | % | ||||
Total revenue | $1,624,856 | 100.0% | $1,576,746 | 100.0% | |||
Expenses: | |||||||
Salaries and benefits | 647,940 | 39.9% | 676,962 | 42.9% | |||
Professional fees | 327,805 | 20.2% | 305,083 | 19.3% | |||
Supplies | 283,127 | 17.4% | 275,881 | 17.5% | |||
Rents and leases | 27,785 | 1.7% | 26,386 | 1.7% | |||
Rents and leases, related party | 38,984 | 2.4% | 38,106 | 2.4% | |||
Other operating expenses | 162,814 | 10.1% | 198,714 | 12.6% | |||
Interest expense | 15,317 | 0.9% | 13,914 | 0.9% | |||
Depreciation and amortization | 41,059 | 2.5% | 39,156 | 2.5% | |||
Loss on extinguishment and modification of debt | — | 0.0% | 7,344 | 0.5% | |||
Other non-operating gains | (1,000) | (0.1%) | (2,597) | (0.2%) | |||
Total operating expenses | 1,543,831 | 95.0% | 1,578,949 | 100.1% | |||
Income (loss) before income taxes | 81,025 | 5.0% | (2,203) | (0.1%) | |||
Income tax expense (benefit) | 17,638 | 1.1% | (3,410) | (0.2%) | |||
Net income | 63,387 | 3.9% | 1,207 | 0.1% | |||
Net income attributable to noncontrolling interests | 18,871 | 1.2% | 24,685 | 1.6% | |||
Net income (loss) attributable to Ardent Health, Inc. | $44,516 | 2.7% | $(23,478) | (1.5%) | |||
28
Operating Results Summary for the Nine Months Ended September 30, 2026 and 2025
The following table sets forth, for the periods indicated, the consolidated results of our operations expressed in dollars and as
a percentage of total revenue.
Nine Months Ended September 30, | |||||||
(Unaudited, dollars in thousands) | 2026 | 2025 | |||||
Amount | % | Amount | % | ||||
Total revenue | $4,848,971 | 100.0% | $4,719,260 | 100.0% | |||
Expenses: | |||||||
Salaries and benefits | 1,985,557 | 40.9% | 2,006,311 | 42.5% | |||
Professional fees | 972,718 | 20.1% | 882,952 | 18.7% | |||
Supplies | 831,301 | 17.1% | 805,375 | 17.1% | |||
Rents and leases | 82,823 | 1.7% | 81,972 | 1.7% | |||
Rents and leases, related party | 116,356 | 2.4% | 113,975 | 2.4% | |||
Other operating expenses | 502,803 | 10.4% | 493,179 | 10.5% | |||
Interest expense | 40,097 | 0.8% | 42,819 | 0.9% | |||
Depreciation and amortization | 125,387 | 2.6% | 114,666 | 2.4% | |||
Loss on extinguishment and modification of debt | — | 0.0% | 7,344 | 0.2% | |||
Other non-operating gains | (6,890) | (0.1%) | (23,320) | (0.5%) | |||
Total operating expenses | 4,650,152 | 95.9% | 4,525,273 | 95.9% | |||
Income before income taxes | 198,819 | 4.1% | 193,987 | 4.1% | |||
Income tax expense | 42,255 | 0.9% | 38,114 | 0.8% | |||
Net income | 156,564 | 3.2% | 155,873 | 3.3% | |||
Net income attributable to noncontrolling interests | 55,299 | 1.1% | 65,018 | 1.4% | |||
Net income attributable to Ardent Health, Inc. | $101,265 | 2.1% | $90,855 | 1.9% | |||
29
The following table provides information on certain drivers of our total revenue:
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2026 | % Change | 2025 | 2026 | % Change | 2025 | ||
Operating Statistics | |||||||
Total revenue (in thousands) | $1,624,856 | 3.1% | $1,576,746 | $4,848,971 | 2.7% | $4,719,260 | |
Hospitals operated (at period end) (1) | 30 | 0.0% | 30 | 30 | 0.0% | 30 | |
Licensed beds (at period end) (2) | 4,281 | 0.0% | 4,281 | 4,281 | 0.0% | 4,281 | |
Utilization of licensed beds (3) | 49% | 0.0% | 49% | 50% | 0.0% | 50% | |
Admissions (4) | 41,899 | 0.1% | 41,862 | 123,935 | (0.7)% | 124,786 | |
Adjusted admissions (5) | 91,933 | 2.9% | 89,328 | 267,503 | 2.5% | 261,031 | |
Inpatient surgeries (6) | 9,250 | (5.0)% | 9,732 | 27,612 | (4.2)% | 28,822 | |
Outpatient surgeries (7) | 22,684 | (0.6)% | 22,813 | 67,419 | 0.1% | 67,385 | |
Total surgeries | 31,934 | (1.9)% | 32,545 | 95,031 | (1.2)% | 96,207 | |
Emergency room visits (8) | 163,909 | 1.7% | 161,198 | 476,973 | (0.4)% | 479,069 | |
Patient days (9) | 193,773 | 0.1% | 193,558 | 580,125 | (0.8)% | 584,510 | |
Total encounters (10) | 1,627,839 | 3.2% | 1,577,281 | 4,773,160 | 5.6% | 4,519,815 | |
Average length of stay (11) | 4.62 | 0.0% | 4.62 | 4.68 | 0.0% | 4.68 | |
Net patient service revenue per adjusted admission (12) | $17,370 | 0.7% | $17,252 | $17,857 | 0.6% | $17,745 | |
(a)"Hospitals operated (at period end)." This metric represents the total number of hospitals operated by us at the end of the applicable period, irrespective of
whether the hospital real estate is (i) owned by us, (ii) leased by us or (iii) held through a controlling interest in a JV. This metric includes the managed clinical
operations of the hospital at UT Health North Campus in Tyler, Texas ("UT Health North Campus Tyler"), a hospital owned by The University of Texas Health
Science Center at Tyler, an affiliate of The University of Texas System. Since we only manage the clinical operations of UT Health North Campus Tyler, the
financial results of such entity are not consolidated by us.
(b)"Licensed beds (at period end)." This metric represents the total number of beds for which the appropriate state agency licenses a facility, regardless of whether
the beds are actually available for patient use.
(c)"Utilization of licensed beds." This metric represents a measure of the actual utilization of our inpatient facilities, computed by (i) dividing patient days by the
number of days in each period, and (ii) further dividing that number by average licensed beds, which is calculated by dividing total licensed beds (at period end)
by the number of days in the period, multiplied by the number of days in the period the licensed beds were in existence.
(d)"Admissions." This metric represents the number of patients admitted for inpatient treatment during the applicable period.
(e)"Adjusted admissions." This metric is used by management as a general measure of combined inpatient and outpatient volume. Adjusted admissions provides
management with a key performance indicator that considers both inpatient and outpatient volumes by applying an inpatient volume measure (admissions) to a
ratio of gross inpatient and outpatient revenue to gross inpatient revenue. Gross inpatient and outpatient revenue reflect gross inpatient and outpatient charges
prior to estimated contractual adjustments, uninsured discounts, implicit price concessions, and other discounts. The calculation of adjusted admissions is
summarized as follows:
Adjusted Admissions = Admissions x (Gross Inpatient Revenue + Gross Outpatient Revenue)
Gross Inpatient Revenue
(f)"Inpatient surgeries." This metric represents the number of surgeries performed on patients who have been admitted to our hospitals. Pain management, c-
sections, and certain diagnostic procedures are excluded from inpatient surgeries.
(g)"Outpatient surgeries." This metric represents the number of surgeries performed on patients who have not been admitted to our hospitals. Pain management, c-
sections, and certain diagnostic procedures are excluded from outpatient surgeries.
(h)"Emergency room visits." This metric represents the total number of patients provided with emergency room treatment during the applicable period.
(i)"Patient days." This metric represents the total number of days of care provided to patients admitted to our hospitals during the applicable period.
(j)"Total encounters." This metric represents the total number of events where healthcare services are rendered resulting in a billable event during the applicable
period. This includes both hospital and ambulatory patient interactions.
(k)"Average length of stay." This metric represents the average number of days admitted patients stay in our hospitals.
(l)"Net patient service revenue per adjusted admission." This metric represents net patient service revenue divided by adjusted admissions for the applicable
period. Net patient service revenue reflects gross inpatient and outpatient charges less estimated contractual adjustments, uninsured discounts, implicit price
concessions, and other discounts.
30
Overview of the Three Months Ended September 30, 2026
Total revenue for the three months ended September 30, 2026 increased $48.1 million, or 3.1%, compared to the same prior
year period. The increase in total revenue for the three months ended September 30, 2026 was driven by an increase in
adjusted admissions of 2.9% and an increase in net patient service revenue per adjusted admission of 0.7%. The increase in
adjusted admissions was primarily attributable to a growth in outpatient service revenue resulting from a combination of
increases in physician and urgent care clinic visits compared to the prior year period and the continued shift in care delivery
from inpatient to outpatient sites of care. The increase in adjusted admissions was also attributable to increases in admissions
and emergency room visits of 0.1% and 1.7%, respectively, and partially offset by a decrease in total surgeries of 1.9%
compared to the prior year period.
During the three months ended September 30, 2025, a change in accounting estimate resulting from a modification to the
technique used to estimate the collectability of accounts receivable and new information provided by recently completed
hindsight evaluations of historical collection trends resulted in a decrease in revenue of $42.6 million. When total revenue for
the three months ended September 30, 2025 is adjusted to exclude the impact of the $42.6 million reduction to revenue
attributable to the change in accounting estimate, net patient service revenue per adjusted admission was $17,730 for the three
months ended September 30, 2025, resulting in a decrease in net patient service revenue per adjusted admission of 2.0% for
the three months ended September 30, 2026 compared to the adjusted prior year period. This decrease was primarily
attributable to a decrease in revenue from Medicaid supplemental payment programs of $29.6 million compared to the same
prior year period.
Total operating expenses decreased $35.1 million, and 5.1% as a percentage of total revenue, for the three months ended
September 30, 2026 compared to the same prior year period. When total revenue for the three months ended September 30,
2025 is adjusted to exclude the impact of the $42.6 million reduction to revenue attributable to the change in accounting
estimate, total operating expenses represented 97.5% of total revenue compared to 95.0% for the three months ended
September 30, 2026. The decrease in total operating expenses as a percentage of total revenue for the three months ended
September 30, 2026 was primarily driven by decreases in salaries and benefits and other operating expenses compared to the
same prior year period. During the three months ended September 30, 2026, salaries and benefits decreased $29.0 million
compared to the same prior year period as a result of the ongoing execution of strategic productivity initiatives, including a
reduction in contract labor of 44.8%. Other operating expenses decreased $35.9 million during the three months ended
September 30, 2026 compared to the same prior year period due to an increase in professional liability reserves of $47.2
million recorded in the prior year for adverse prior period claim developments, particularly with respect to our New Mexico
market, combined with increased social inflationary pressures. The decreases in salaries and benefits and other operating
expenses were partially offset by increases in professional fees as a result of increases in amortized software costs and third
party consulting fees.
Comparison of the Three Months Ended September 30, 2026 and 2025
Total revenue — Total revenue for the three months ended September 30, 2026 increased $48.1 million, or 3.1%, compared
to the same prior year period. The increase in total revenue for the three months ended September 30, 2026 was driven by an
increase in adjusted admissions of 2.9% and an increase in net patient service revenue per adjusted admission of 0.7%. The
increase in adjusted admissions was primarily attributable to a growth in outpatient service revenue resulting from a
combination of increases in physician and urgent care clinic visits compared to the prior year period and the continued shift in
care delivery from inpatient to outpatient sites of care. The increase in adjusted admissions was also attributable to increases
in admissions and emergency room visits of 0.1% and 1.7%, respectively, and partially offset by a decrease in total surgeries
of 1.9% compared to the prior year period.
During the three months ended September 30, 2025, a change in accounting estimate resulting from a modification to the
technique used to estimate the collectability of accounts receivable and new information provided by recently completed
hindsight evaluations of historical collection trends resulted in a decrease in revenue of $42.6 million. When total revenue for
the three months ended September 30, 2025 is adjusted to exclude the impact of the $42.6 million reduction to revenue
attributable to the change in accounting estimate, net patient service revenue per adjusted admission was $17,730 for the three
months ended September 30, 2025, resulting in a decrease in net patient service revenue per adjusted admission of 2.0% for
the three months ended September 30, 2026 compared to the adjusted prior year period. This decrease was primarily
attributable to a decrease in revenue from Medicaid supplemental payment programs of $29.6 million compared to the same
prior year period.
Salaries and benefits — Salaries and benefits as a percentage of total revenue were 39.9% for the three months ended
September 30, 2026 compared to 42.9% for the same prior year period. When total revenue for the three months ended
September 30, 2025 is adjusted to exclude the impact of the $42.6 million reduction to revenue attributable to the change in
31
accounting estimate, salaries and benefits represented 41.8% of total revenue for the three months ended September 30, 2025.
The decrease in salaries and benefits as a percentage of total revenue for the three months ended September 30, 2026 was
primarily attributable to the ongoing execution of strategic productivity initiatives, including a reduction in contract labor of
44.8% compared to the prior year period.
Professional fees — Professional fees as a percentage of total revenue were 20.2% for the three months ended September 30,
2026 compared to 19.3% for the same prior year period. When total revenue for the three months ended September 30, 2025
is adjusted to exclude the impact of the $42.6 million reduction to revenue attributable to the change in accounting estimate,
professional fees represented 18.8% of total revenue for the three months ended September 30, 2025. The increase in
professional fees as a percentage of total revenue for the three months ended September 30, 2026 was primarily attributable
to increases in amortized software costs and third party consulting fees.
Supplies — Supplies as a percentage of total revenue were 17.4% for the three months ended September 30, 2026 compared
to 17.5% for the same prior year period. When total revenue for the three months ended September 30, 2025 is adjusted to
exclude the impact of the $42.6 million reduction to revenue as a result of a change in accounting estimate, supplies
represented 17.0% of total revenue for the three months ended September 30, 2025.
Rents and leases — Rents and leases were $27.8 million and $26.4 million for the three months ended September 30, 2026
and 2025, respectively.
Rents and leases, related party — Rents and leases, related party, consisted of lease expense related to the Ventas Master
Lease, under which we lease 10 of our facilities, and other lease agreements with Ventas for certain medical office buildings.
Rents and leases, related party, were $39.0 million and $38.1 million for the three months ended September 30, 2026 and
2025, respectively.
Other operating expenses — Other operating expenses are comprised primarily of repairs and maintenance, utilities,
insurance (including professional liability insurance) and provider assessments. Other operating expenses as a percentage of
total revenue were 10.1% for the three months ended September 30, 2026 compared to 12.6% for the same prior year period.
When total revenue for the three months ended September 30, 2025 is adjusted to exclude the impact of the $42.6 million
reduction to revenue attributable to the change in accounting estimate, other operating expenses represented 12.3% of total
revenue for the three months ended September 30, 2025. The decrease in other operating expenses as a percentage of total
revenue for the three months ended September 30, 2026 was primarily attributable to an increase in professional liability
reserves of $47.2 million recorded in the prior year period for adverse prior period claim developments, particularly with
respect to our New Mexico market, combined with increased social inflationary pressures.
Interest expense — Interest expense was $15.3 million and $13.9 million for the three months ended September 30, 2026 and
2025, respectively.
Loss on extinguishment and modification of debt — During the three months ended September 30, 2025, we incurred a loss
on debt extinguishment of $0.5 million related to the write-off of existing deferred financing costs and original issue
discounts and transaction costs of $6.8 million related to the modification of debt associated with the refinancing of our Term
Loan B Credit Agreement on September 18, 2025.
Other non-operating gains — Other non-operating gains were $1.0 million and $2.6 million for the three months ended
September 30, 2026 and 2025, respectively.
Income tax expense — We recorded income tax expense of $17.6 million, which equates to an effective tax rate of 21.8%, for
the three months ended September 30, 2026 compared to income tax benefit of $3.4 million, which equates to an effective tax
rate of 154.8%, for the same prior year period. The decrease in the effective tax rate was driven by the pre-tax loss for the
three months ended September 30, 2025 and the increase in noncontrolling interest earnings as a percentage of the pre-tax
loss.
Net income attributable to noncontrolling interests — During the three months ended September 30, 2026 and 2025, net
income attributable to noncontrolling interests was $18.9 million and $24.7 million, respectively, which consisted of net
income attributable to minority partners’ interests in hospitals and ambulatory services that are owned and operated through
limited liability companies ("LLCs") and consolidated by us. Income from operations before income taxes related to these
LLCs was $61.3 million and $75.7 million for the three months ended September 30, 2026 and 2025, respectively.
32
Overview of the Nine Months Ended September 30, 2026
Total revenue for the nine months ended September 30, 2026 increased $129.7 million, or 2.7%, compared to the same prior
year period. The increase in total revenue for the nine months ended September 30, 2026 was driven by an increase in
adjusted admissions of 2.5% and an increase in net patient service revenue per adjusted admission of 0.6%. The increase in
adjusted admissions was primarily attributable to an increase in outpatient service revenue resulting from a combination of
increases in physician and urgent care clinic visits compared to the prior year period and the continued shift in care delivery
from inpatient to outpatient sites of care. The increase in adjusted admissions was partially offset by decreases in admissions,
total surgeries, and emergency room visits of 0.7%, 1.2%, and 0.4%, respectively, compared to the prior year period.
When total revenue for the nine months ended September 30, 2025 is adjusted to exclude the $42.6 million reduction to
revenue attributable to the change in accounting estimate, net patient service revenue per adjusted admission was $17,908 for
the nine months ended September 30, 2025, resulting in a decrease in net patient service revenue per adjusted admission of
0.3% for the nine months ended September 30, 2026 compared to the adjusted prior year period. This decrease was primarily
attributable to a decrease in revenue from Medicaid supplemental payment programs of $8.5 million compared to the prior
year period.
Total operating expenses increased $124.9 million, and were flat as a percentage of total revenue, for the nine months ended
September 30, 2026 compared to the same prior year period. When total revenue for the nine months ended September 30,
2025 is adjusted to exclude the impact of the $42.6 million reduction to revenue attributable to the change in accounting
estimate, total operating expenses represented 95.0% of total revenue compared to 95.9% for the nine months ended
September 30, 2026. The increase in total operating expenses as a percentage of total revenue was primarily driven by an
increase in professional fees as a result of higher costs for hospital-based providers due to rising physician-related expenses
and increases in amortized software costs and third party consulting fees compared to the same prior year period. The
increase in professional fees was partially offset by decreases in salaries and benefits as a result of the ongoing execution of
strategic productivity initiatives, including a reduction in contract labor of 42.6%.
Comparison of the Nine Months Ended September 30, 2026 and 2025
Total revenue — Total revenue for the nine months ended September 30, 2026 increased $129.7 million, or 2.7%, compared
to the same prior year period. The increase in total revenue for the nine months ended September 30, 2026 was driven by an
increase in adjusted admissions of 2.5% and an increase in net patient service revenue per adjusted admission of 0.6%. The
increase in adjusted admissions was primarily attributable to an increase in outpatient service revenue resulting from a
combination of increases in physician and urgent care clinic visits compared to the prior year period and the continued shift in
care delivery from inpatient to outpatient sites of care. The increase in adjusted admissions was partially offset by decreases
in admissions, total surgeries, and emergency room visits of 0.7%, 1.2%, and 0.4%, respectively, compared to the prior year
period.
When total revenue for the nine months ended September 30, 2025 is adjusted to exclude the $42.6 million reduction to
revenue attributable to the change in accounting estimate, net patient service revenue per adjusted admission was $17,908 for
the nine months ended September 30, 2025, resulting in a decrease in net patient service revenue per adjusted admission of
0.3% for the nine months ended September 30, 2026 compared to the adjusted prior year period. This decrease was primarily
attributable to a decrease in revenue from Medicaid supplemental payment programs of $8.5 million compared to the prior
year period.
Salaries and benefits — Salaries and benefits as a percentage of total revenue were 40.9% for the nine months ended
September 30, 2026 compared to 42.5% for the same prior year period. When total revenue for the nine months ended
September 30, 2025 is adjusted to exclude the impact of the $42.6 million reduction to revenue attributable to the change in
accounting estimate, salaries and benefits represented 42.1% of total revenue for the nine months ended September 30, 2025.
The decrease in salaries and benefits as a percentage of total revenue for the nine months ended September 30, 2026 was
primarily attributable to the ongoing execution of strategic productivity initiatives, including a reduction in contract labor of
42.6% compared to the same prior year period.
Professional fees — Professional fees as a percentage of total revenue were 20.1% for the nine months ended September 30,
2026 compared to 18.7% for the same prior year period. When total revenue for the nine months ended September 30, 2025 is
adjusted to exclude the impact of the $42.6 million reduction to revenue attributable to the change in accounting estimate,
professional fees represented 18.5% of total revenue for the nine months ended September 30, 2025. The increase in
professional fees as a percentage of total revenue for the nine months ended September 30, 2026 was primarily attributable to
higher costs for hospital-based providers due to rising physician-related expenses and increases in amortized software costs
and third party consulting fees compared to the same prior year period.
33
Supplies — Supplies as a percentage of total revenue were 17.1% for each of the nine months ended September 30, 2026 and
2025. When total revenue for the nine months ended September 30, 2025 is adjusted to exclude the impact of the $42.6
million reduction to revenue attributable to the change in accounting estimate, supplies represented 16.9% of total revenue for
the nine months ended September 30, 2025.
Rents and leases — Rents and leases were $82.8 million and $82.0 million for the nine months ended September 30, 2026
and 2025, respectively.
Rents and leases, related party — Rents and leases, related party, consisted of lease expense related to the Ventas Master
Lease and other lease agreements with Ventas for certain medical office buildings. Rents and leases, related party, were
$116.4 million and $114.0 million for the nine months ended September 30, 2026 and 2025, respectively.
Other operating expenses — Other operating expenses as a percentage of total revenue were 10.4% for the nine months ended
September 30, 2026 compared to 10.5% for the same prior year period. When total revenue for the nine months ended
September 30, 2025 is adjusted to exclude the impact of the $42.6 million reduction to revenue attributable to the change in
accounting estimate, other operating expenses represented 10.4% of total revenue for the nine months ended September 30,
2025.
Interest expense — Interest expense was $40.1 million and $42.8 million for the nine months ended September 30, 2026 and
2025, respectively.
Loss on extinguishment and modification of debt — During the nine months ended September 30, 2025, we incurred a loss on
debt extinguishment of $0.5 million related to the write-off of existing deferred financing costs and original issue discounts
and transaction costs of $6.8 million related to the modification of debt associated with the refinancing of our Term Loan B
Credit Agreement on September 18, 2025.
Other non-operating gains — Other non-operating gains were $6.9 million and $23.3 million for the nine months ended
September 30, 2026 and 2025, respectively. During the nine months ended September 30, 2025, other non-operating gains
included a gain on business interruption insurance proceeds of $21.5 million related to a cybersecurity incident that impacted
our operations and information technology systems in November 2023 (the "Cybersecurity Incident").
Income tax expense — We recorded income tax expense of $42.3 million, which equates to an effective tax rate of 21.3%, for
the nine months ended September 30, 2026 compared to income tax expense of $38.1 million, which equates to an effective
tax rate of 19.6%, for the same prior year period.
Net income attributable to noncontrolling interests — During the nine months ended September 30, 2026 and 2025, net
income attributable to noncontrolling interests was $55.3 million and $65.0 million, respectively, which consisted of net
income attributable to minority partners’ interests in hospitals and ambulatory services that are owned and operated through
LLCs and consolidated by us. Income from operations before income taxes related to these LLCs was $181.9 million and
$206.3 million for the nine months ended September 30, 2026 and 2025, respectively.
34
Supplemental Non-GAAP Information
We have included certain financial measures that have not been prepared in a manner that complies with U.S. generally
accepted accounting principles ("GAAP"), including Adjusted EBITDA and Adjusted EBITDAR. We define these terms as
follows:
Performance Measure
•"Adjusted EBITDA" is defined as net income plus (i) provision for income taxes, (ii) interest expense and (iii)
depreciation and amortization expense (or EBITDA), as adjusted to deduct noncontrolling interest earnings, and
excludes the effects of loss on extinguishment and modification of debt; other non-operating losses; Cybersecurity
Incident recoveries, net of incremental information technology and litigation costs; certain legal matters and related
costs; enterprise restructuring costs; exit and acquisition-related costs; enterprise resource planning system
conversion costs; equity-based compensation expense; and loss (income) from disposed operations. See
"Supplemental Non-GAAP Performance Measure."
Valuation Measure
•"Adjusted EBITDAR" is defined as Adjusted EBITDA further adjusted to add back rent expense payable to real
estate investment trusts ("REITs"), which consists of rent expense pursuant to the Ventas Master Lease, lease
agreements with Ventas for 18 medical office buildings and a lease arrangement with Medical Properties Trust, Inc.
("MPT") for Hackensack Meridian Mountainside Medical Center. See "Supplemental Non-GAAP Valuation
Measure."
Supplemental Non-GAAP Performance Measure
Adjusted EBITDA is a non-GAAP performance measure used by our management and external users of our financial
statements, such as investors, analysts, lenders, rating agencies and other interested parties, to evaluate companies in our
industry.
Adjusted EBITDA is a performance measure that is not prepared in accordance with GAAP and is presented in this Quarterly
Report because our management considers it an important analytical indicator that is commonly used within the healthcare
industry to evaluate financial performance and allocate resources. Further, our management believes that Adjusted EBITDA
is a useful financial metric to assess our operating performance from period to period by excluding certain material non-cash
items and unusual or non-recurring items that we do not expect to continue in the future and certain other adjustments we
believe are not reflective of our ongoing operations and our performance.
Because not all companies use identical calculations, our presentation of the non-GAAP measure may not be comparable to
other similarly titled measures of other companies.
While we believe this is a useful supplemental performance measure for investors and other users of our financial
information, you should not consider the non-GAAP measure in isolation or as a substitute for net income or any other items
calculated in accordance with GAAP. Adjusted EBITDA has inherent material limitations as a performance measure, because
it adds back certain expenses to net income, resulting in those expenses not being taken into account in the performance
measure. We have borrowed money, so interest expense is a necessary element of our costs. Because we have material capital
and intangible assets, depreciation and amortization expense are necessary elements of our costs. Likewise, the payment of
taxes is a necessary element of our operations. Because Adjusted EBITDA excludes these and other items, it has material
limitations as a measure of our performance.
35
The following table presents a reconciliation of Adjusted EBITDA, a performance measure, to net income, determined in
accordance with GAAP:
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
(in thousands) | 2026 | 2025 | 2026 | 2025 | |||
Net income | $63,387 | $1,207 | $156,564 | $155,873 | |||
Adjusted EBITDA Addbacks: | |||||||
Income tax expense (benefit) | 17,638 | (3,410) | 42,255 | 38,114 | |||
Interest expense | 15,317 | 13,914 | 40,097 | 42,819 | |||
Depreciation and amortization | 41,059 | 39,156 | 125,387 | 114,666 | |||
Noncontrolling interest earnings | (18,871) | (24,685) | (55,299) | (65,018) | |||
Loss on extinguishment and modification of debt | — | 7,344 | — | 7,344 | |||
Other non-operating losses (a) | — | 353 | — | 1,130 | |||
Cybersecurity Incident recoveries, net (b) | (1,000) | (2,950) | (1,000) | (22,655) | |||
Certain legal matters and related costs | — | — | 2,464 | — | |||
Enterprise restructuring costs (c) | 5,360 | 2,846 | 32,160 | 6,043 | |||
Exit and acquisition-related costs (d) | 1,614 | 1,122 | 4,071 | 3,486 | |||
Enterprise resource planning system conversion costs (e) | 5,913 | 692 | 11,651 | 1,319 | |||
Equity-based compensation | 7,313 | 9,674 | 24,194 | 30,183 | |||
Loss (income) from disposed operations | 17 | (11) | (5,860) | 22 | |||
Adjusted EBITDA | $137,747 | $45,252 | $376,684 | $313,326 | |||
(a)Other non-operating losses include losses realized on certain non-recurring events or events that are non-operational in nature.
(b)Cybersecurity Incident recoveries, net primarily represent gains on insurance recovery proceeds associated with the Cybersecurity Incident, net of
incremental information technology and litigation costs. During the three and nine months ended September 30, 2026, the Company recognized a gain
of $1.0 million associated with the release of an accrual for expected litigation-related costs.
(c)Enterprise restructuring costs represent expenses related to employee termination benefits of $0.2 million and $2.8 million for the three months ended
September 30, 2026 and 2025, respectively, and $21.5 million and $6.0 million for the nine months ended September 30, 2026 and 2025, respectively,
for position eliminations and executive leadership departures as part of strategic organizational changes, and third-party professional fees and expenses
for advisory services related to enterprise restructuring activities of $5.2 million and $10.7 million for the three and nine months ended September 30,
2026, respectively. Employee termination benefit costs reflect severance and related employee benefit expenses associated with a discrete enterprise
restructuring program designed to streamline and improve the Company's organizational structure.
(d)Exit and acquisition-related costs represent penalties and costs incurred for terminating pre-existing contracts at acquired facilities of $0.8 million and
$0.2 million for the three months ended September 30, 2026 and 2025, respectively, and $0.9 million and $0.5 million for the nine months ended
September 30, 2026 and 2025, respectively, third-party professional fees and expenses incurred in connection with potential and completed
acquisitions of $0.6 million for the three months ended September 30, 2026, and $2.6 million and $0.8 million for the nine months ended September
30, 2026 and 2025, respectively, and system integration costs for completed acquisitions of $0.2 million and $0.9 million for the three months ended
September 30, 2026 and 2025, respectively, and $0.6 million and $2.2 million for the nine months ended September 30, 2026 and 2025, respectively.
(e)Enterprise resource planning system conversion costs represent various costs incurred related to a single system conversion project to implement a new
enterprise resource planning system. These costs include third-party professional fees and expenses incurred in connection with the conversion project
of $5.2 million and $0.6 million for the three months ended September 30, 2026 and 2025, respectively, and $10.7 million and $1.2 million for the nine
months ended September 30, 2026 and 2025, respectively, and contract labor expense directly related to the conversion project of $0.8 million and $0.1
million for the three months ended September 30, 2026 and 2025, respectively, and $1.0 million and $0.1 million for the nine months ended September
30, 2026 and 2025, respectively. These costs do not include post-implementation licensing, maintenance and operating costs associated with the new
enterprise resource planning system.
36
Liquidity and Capital Resources
Liquidity
Our primary sources of liquidity are available cash and cash equivalents, cash flows from our operations and available
borrowings under our ABL Facilities (as defined below). Our primary cash requirements are our operating expenses, the
service of our debt, capital expenditures on our existing properties, acquisitions of hospitals and other healthcare facilities,
and distributions to noncontrolling interests. We believe the combination of cash flow from operations and available cash and
borrowings will be adequate to meet our short-term liquidity needs. Our ability to make scheduled payments of principal, pay
interest on, or refinance, our indebtedness, pay distributions or fund planned capital expenditures will depend on our ability to
generate cash in the future. This ability is, to a certain extent, subject to general economic, financial, competitive, legislative,
regulatory and other factors that are beyond our control.
On or about August 29, 2026, we reached a settlement on a professional liability suit involving four plaintiffs. The settlement
calls for $40.0 million to be paid to the plaintiffs prior to the end of 2026. We may be required to fund portions of the
settlement before receiving corresponding insurance recoveries. We expect to fund any temporary difference using cash on
hand. Please refer to Note 9, Commitments and Contingencies, to our accompanying condensed consolidated financial
statements included elsewhere in this Quarterly Report for more information.
At September 30, 2026, we had total cash and cash equivalents of $766.2 million and available liquidity of $1,009.8 million.
Our available liquidity was comprised of $766.2 million of total cash and cash equivalents plus $243.6 million in available
capacity under the ABL Credit Agreement, which is reduced by outstanding borrowings and outstanding letters of credit. At
September 30, 2026, our net leverage ratio was 0.8x, and our lease-adjusted net leverage ratio was 2.5x. Our lease-adjusted
net leverage is calculated as net debt, plus 8.0x trailing twelve month REIT rent expense, divided by the trailing twelve
month Adjusted EBITDAR as of September 30, 2026.
Cash Flows
The following table summarizes certain elements of the statements of cash flows (in thousands):
Nine Months Ended September 30, | |||
2026 | 2025 | ||
Net cash provided by operating activities | $258,440 | $247,075 | |
Net cash used in investing activities | (107,219) | (128,001) | |
Net cash used in financing activities | (94,584) | (66,418) | |
Operating Activities
Cash flows provided by operating activities for the nine months ended September 30, 2026 totaled $258.4 million compared
to $247.1 million for the same prior year period. The increase in operating cash flows during the nine months ended
September 30, 2026 was primarily attributable to positive changes in net working capital of $26.3 million. The changes in net
working capital primarily consisted of decreases in prepaid expenses and other current assets partially offset by decreases in
accounts payable and other accrued expenses and liabilities primarily driven by the timing of Medicaid supplemental program
funding and assessments. Working capital during the nine months ended September 30, 2026 was further impacted by
differences in the timing of cash collections of accounts receivable.
Investing Activities
Cash flows used in investing activities for the nine months ended September 30, 2026 totaled $107.2 million compared to
$128.0 million for the same prior year period. Capital expenditures for property and equipment were $115.6 million and
$127.9 million for the nine months ended September 30, 2026 and 2025, respectively.
Financing Activities
Cash flows used in financing activities for the nine months ended September 30, 2026 totaled $94.6 million compared to
$66.4 million for the same prior year period. During the nine months ended September 30, 2026, cash flows used in financing
37
activities included distributions paid to noncontrolling interests of $68.4 million, payments of principal on long-term debt of
$10.8 million, net proceeds from insurance financing arrangements of $9.1 million, and repurchases of common stock of
$24.0 million.
Cash flows used in financing activities for the nine months ended September 30, 2025 included distributions paid to
noncontrolling interests of $62.4 million, payments of principal on long-term debt of $4.5 million, payment of debt issuance
costs of $2.6 million, and net proceeds from insurance financing arrangements of $4.9 million.
Capital Expenditures
We make significant, targeted investments to maintain and modernize our facilities, introduce new technologies, and expand
our service offerings. We expect to finance future capital expenditures with internally generated and borrowed funds. Capital
expenditures for property and equipment were $115.6 million and $127.9 million for the nine months ended September 30,
2026 and 2025, respectively.
Ventas Master Lease
Effective August 4, 2015, we sold the real property for 10 of our hospitals to Ventas, which is a related party as, prior to our
initial public offering ("IPO"), it was a common unit holder of Ardent Health Partners, LLC and owned shares of common
stock of AHP Health Partners and had a representative serving on our board of managers. Concurrent with this transaction,
we entered into a 20-year master lease agreement that expires in August 2035 (with a renewal option for an additional ten
years) to lease back the real estate. We lease 10 of our hospitals pursuant to the Ventas Master Lease. As of September 30,
2026, Ventas beneficially owned approximately 6.6% of our outstanding common stock.
The Ventas Master Lease includes a number of significant operating and financial restrictions, including requirements that we
maintain a minimum portfolio coverage ratio of 2.2x and a guarantor fixed charge coverage ratio of 1.2x and do not exceed a
guarantor net leverage ratio of 6.75x. In addition, the Relative Rights Agreement entered into by and among Ventas, the
5.75% Senior Notes trustee and the administrative agents under our Senior Secured Credit Facilities (as defined below) in
connection with the series of debt transactions completed during the year ended December 31, 2021 to refinance our then-
existing debt, among other things, (i) sets forth the relative rights of Ventas and the administrative agents with respect to the
properties and collateral related to the Ventas Master Lease and securing our Senior Secured Credit Facilities, (ii) caps the
amount of indebtedness incurred or guaranteed by our subsidiaries that are tenants under the Ventas Master Lease ("Tenants")
(together with such Tenants' guarantees of the notes and the Senior Secured Credit Facilities and all other indebtedness
incurred or guaranteed by such Tenants) at $375.0 million and (iii) imposes certain incurrence tests on the incurrence of
additional indebtedness by such Tenants and by us.
We recorded rent expense of $39.0 million and $38.1 million for the three months ended September 30, 2026 and 2025,
respectively, and $116.4 million and $114.0 million for the nine months ended September 30, 2026 and 2025, respectively,
related to the Ventas Master Lease and other lease agreements with Ventas for certain medical office buildings.
Senior Secured Credit Facilities
Effective August 24, 2021, we entered into a senior secured term loan facility (the "Term Loan B Facility"). The credit
agreement governing the Term Loan B Facility (the "Term Loan B Credit Agreement") provided funding up to a principal
amount of $900.0 million with a seven-year maturity. Principal under the Term Loan B Facility was due in quarterly
installments of 0.25% of the initial $900.0 million principal amount as of the execution of the credit agreement (subject to
certain reductions from time to time as a result of the application of prepayments), with the remaining balance due upon
maturity of the Term Loan B Facility. Effective June 8, 2023, we amended the Term Loan B Credit Agreement to replace the
London Interbank Offered Rate ("LIBOR") with the Term Secured Overnight Financing Rate ("SOFR") and Daily Simple
SOFR (each as defined in the amended Term Loan B Credit Agreement) as the reference interest rate. On June 26, 2024, we
prepaid $100.0 million of the $877.5 million outstanding borrowings under the Term Loan B Facility using cash on hand,
which prepaid all remaining required quarterly principal payments; no modification was made to the Term Loan B Credit
Agreement as a result of this prepayment. Effective July 19, 2024, pursuant to the terms of the Term Loan B Credit
Agreement and as a result of the IPO, the applicable margin was automatically reduced by 25 basis points to 3.25% over
Term SOFR and 2.25% over the base rate. On September 18, 2024, we executed an amendment to reprice our Term Loan B
Credit Agreement. The repricing reduced the applicable interest rate by 50 basis points from Term SOFR plus 3.25% to Term
SOFR plus 2.75% and from the base rate plus 2.25% to the base rate plus 1.75%, and it eliminated the credit spread
adjustment. No modifications were made to the maturity of the loans as a result of the repricing, and all other terms of the
38
Term Loan B Credit Agreement were substantially unchanged. On September 18, 2025, we executed an amendment to the
Term Loan B Credit Agreement to refinance the outstanding term loans under the Term Loan B Facility. The amendment (i)
reduced the applicable interest rate by 50 basis points from Term SOFR (as defined in the amended Term Loan B Credit
Agreement) plus 2.75% to Term SOFR plus 2.25% and from the base rate plus 1.75% to the base rate plus 1.25%, (ii)
extended the maturity date to September 18, 2032, (iii) increased the baskets for certain fixed dollar negative covenants and
(iv) reestablished principal payments under the amended Term Loan B Facility, which are due in consecutive equal quarterly
installments of 0.25% of the refinanced $777.5 million principal amount beginning on December 31, 2025 (subject to certain
reductions from time to time as a result of the application of prepayments), with the remaining balance due upon the new
maturity date in September 2032.
Effective July 8, 2021, we entered into a $225.0 million senior secured asset based revolving credit facility (the "ABL Credit
Agreement"), which was amended to extend the maturity and increase the revolving commitment on June 26, 2024. The ABL
Credit Agreement (as so amended) consists of a $325.0 million senior secured asset-based revolving credit facility with a five
year maturity, comprised of (i) a $275.0 million non-UT Health East Texas borrowers tranche (the "non-UT Health East
Texas ABL Facility") and (ii) a $50.0 million UT Health East Texas borrowers tranche available to our AHS East Texas
Health System, LLC subsidiary and certain of its subsidiaries (the "UT Health East Texas ABL Facility" and, together with
the non-UT Health East Texas ABL Facility, the "ABL Facilities"), each subject to a borrowing base. The ABL Facilities
mature on June 26, 2029. On September 18, 2025, we further amended the ABL Credit Agreement to align its covenants to
those in the amended Term Loan B Credit Agreement.
We refer to the Term Loan B Facility and the ABL Facilities collectively herein as the "Senior Secured Credit Facilities."
Subject to certain exceptions, the ABL Facilities are secured by first priority liens over substantially all of our and each
guarantor's accounts and other receivables, chattel paper, deposit accounts and securities accounts, general intangibles,
instruments, investment property, commercial tort claims and letters of credit relating to the foregoing, along with books,
records and documents, and proceeds thereof (the "ABL Priority Collateral"), and a second priority lien over substantially all
of our and each guarantor's other assets (including all of the capital stock of the domestic guarantors and first priority
mortgage liens on any fee-owned real property valued in excess of $5,000,000) (the "Term Priority Collateral"). The
obligations of the UT Health East Texas ABL Facility are not secured by the assets of the subsidiaries that are also Tenants
and certain other subsidiaries related to the Tenants. The obligations under the Term Loan B Facility and the ABL Facilities
in excess of the maximum aggregate dollar cap amount permitted to be guaranteed by the Tenants are not secured by the
assets of the Tenants.
The Term Loan B Facility is secured by a first priority lien on the Term Priority Collateral and a second priority lien on the
ABL Priority Collateral. Certain excluded assets are not included in the Term Priority Collateral or the ABL Priority
Collateral. The obligations under the Term Loan B Facility and the ABL Facilities in excess of the maximum aggregate dollar
cap amount permitted to be guaranteed by the Tenants are not secured by the assets of the Tenants.
Borrowings under the Term Loan B Facility bear interest at a rate per annum equal to, at our option, either (i) a base rate
determined by reference to the highest of (a) the federal funds effective rate plus 0.50%, (b) the rate last quoted by Bank of
America as the "Prime Rate" in the United States for U.S. dollar loans, and (c) Term SOFR applicable for an interest period
of one month (not to be less than 0.50% per annum), plus 1.00% per annum, in each case, plus an applicable margin, or (ii)
Term SOFR (not to be less than 0.50% per annum) for the interest period selected, in each case, plus an applicable margin.
The current applicable margin under the Term Loan B Credit Agreement is equal to 1.25% for base rate borrowings and
2.25% for Term SOFR borrowings.
As amended and refinanced on September 18, 2025, the Term Loan B Facility requires quarterly installment payments of
0.25% of the refinanced balance of $777.5 million, with the remaining principal balance due upon maturity. The ABL
Facilities do not require installment payments.
At the election of the borrowers under the applicable ABL Facility loan, the interest rate per annum applicable to loans under
the ABL Facilities is based on a fluctuating rate of interest determined by reference to either (i) the base rate plus an
applicable margin or (ii) Term SOFR (not to be lower than 0.00% per annum) for the interest period selected, plus an
applicable margin. The applicable margin is determined based on the percentage of the average daily availability of the
applicable ABL Facility. For the non-UT Health East Texas ABL Facility loan, the applicable margin ranges from 0.50% to
1.00% for base rate borrowings and 1.50% to 2.00% for Term SOFR borrowings. The applicable margin for the UT Health
East Texas ABL Facility loan ranges from 1.50% to 2.00% for base rate borrowings and 2.50% to 3.00% for Term SOFR
borrowings.
Subject to certain exceptions (including with regard to the ABL Priority Collateral), thresholds and reinvestment rights, the
Term Loan B Facility is subject to mandatory prepayments with respect to:
39
•net cash proceeds of issuances of debt by AHP Health Partners or any of its restricted subsidiaries that are not
permitted by the Term Loan B Facility;
•subject to certain thresholds, reinvestment permissions and carve-outs, 100% (with step-downs to 50% and 0%,
based upon achievement of specified senior secured net leverage ratio levels) of net cash proceeds of certain asset
sales;
•subject to certain thresholds, reinvestment permissions and carve-outs, 100% (with step-downs to 50% and 0%,
based upon achievement of specified senior secured net leverage ratio levels) of net cash proceeds of certain
insurance and condemnation events;
•50% (with step-downs to 25% and 0%, based upon achievement of specified senior secured net leverage ratio levels)
of annual excess cash flow, net of certain voluntary prepayments of secured indebtedness, of AHP Health Partners
and its subsidiaries commencing with the fiscal year ending December 31, 2022; and
•net cash proceeds received in connection with any exercise of the purchase option of the loans by Ventas under the
Relative Rights Agreement.
5.75% Senior Notes due 2029
AHP Health Partners (the "Issuer") issued the 5.75% Senior Notes in an exempt offering pursuant to Rule 144A and
Regulation S under the Securities Act of 1933, as amended, that was completed on July 8, 2021. The terms of the 5.75%
Senior Notes, which mature on July 15, 2029, are governed by an indenture, dated as of July 8, 2021 (the "2029 Notes
Indenture"), among the Issuer, us and certain of the Issuer's wholly-owned domestic subsidiaries, as guarantors, and U.S.
Bank, National Association, as trustee. The 2029 Notes Indenture provides that the 5.75% Senior Notes are general senior
unsecured obligations of the Issuer, which are unconditionally guaranteed on a senior unsecured basis by us and certain
subsidiaries of the Issuer.
The 5.75% Senior Notes bear interest at a rate of 5.75% per annum, which is payable semi-annually, in cash in arrears, on
January 15 and July 15 of each year.
The Issuer may redeem the 5.75% Senior Notes, in whole or in part, at any time and from time to time, at a redemption price
equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, subject to
compliance with certain conditions.
If the Issuer experiences certain change of control events, the Issuer must offer to repurchase all of the 5.75% Senior Notes
(unless otherwise redeemed) at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if
any, to the repurchase date. If the Issuer sells certain assets and does not reinvest the net proceeds or repay senior debt in
compliance with the 2029 Notes Indenture, it must offer to repurchase the 5.75% Senior Notes at 100% of the principal
amount thereof, plus accrued and unpaid interest, if any, to the repurchase date.
Contractual Obligations and Contingencies
The following table provides a summary of our commitments and contractual obligations for debt, minimum lease payment
obligations under non-cancelable leases and other obligations as of September 30, 2026 (in thousands):
Payments Due by Period | |||||
Total | Less than 1 Year | 1-3 Years | 3-5 Years | After 5 Years | |
Long-term debt obligations, with interest | $1,445,405 | $27,063 | $166,405 | $423,186 | $828,751 |
Deferred financing obligations, with interest | 41,026 | 5,999 | 20,274 | 13,644 | 1,109 |
Operating leases | 2,790,819 | 51,365 | 397,530 | 360,410 | 1,981,514 |
Estimated self-insurance liabilities | 204,558 | 28,351 | 26,517 | 99,053 | 50,637 |
Total | $4,481,808 | $112,778 | $610,726 | $896,293 | $2,862,011 |
40
Outstanding letters of credit are required principally by certain insurers and states to collateralize our workers' compensation
programs and self-insured retentions associated with our professional and general liability insurance programs. As of
September 30, 2026, we maintained outstanding letters of credit of approximately $29.7 million, which included interest of
$2.4 million.
Supplemental Non-GAAP Valuation Measure
Adjusted EBITDAR is a commonly used non-GAAP valuation measure used by our management, research analysts,
investors and other interested parties to evaluate and compare the enterprise value of different companies in our industry.
Adjusted EBITDAR excludes: (1) certain material non-cash items and unusual or non-recurring items that we do not expect
to continue in the future; (2) certain other adjustments that do not impact our enterprise value; and (3) rent expense payable to
REITs. We operate 30 acute care hospitals, 12 of which we lease from two REITs, Ventas and MPT, pursuant to long-term
lease agreements. Additionally, we lease 18 medical office buildings from Ventas pursuant to lease agreements with initial
terms of 12 years and eight options to renew for additional five-year terms. Our management views the long-term lease
agreements with Ventas and MPT as more like financing arrangements than true operating leases, with the rent payable to
such REITs being similar to interest expense. As a result, our capital structure is different than many of our competitors,
especially those whose real estate portfolio is predominately owned and not leased. Excluding the rent payable to such REITs
allows investors to compare our enterprise value to those of other healthcare companies without regard to differences in
capital structures, leasing arrangements and geographic markets, which can vary significantly among companies. Our
management also uses Adjusted EBITDAR as one measure in determining the value of prospective acquisitions or
divestitures. Finally, financial covenants in certain of our lease agreements, including the Ventas Master Lease, use Adjusted
EBITDAR as a measure of compliance. Adjusted EBITDAR does not reflect our cash requirements for leasing commitments.
As such, our presentation of Adjusted EBITDAR should not be construed as a performance or liquidity measure.
Because not all companies use identical calculations, our presentation of the non-GAAP measure may not be comparable to
other similarly titled measures of other companies.
While we believe this is a useful supplemental valuation measure for investors and other users of our financial information,
you should not consider the non-GAAP measure in isolation or as a substitute for net income or any other items calculated in
accordance with GAAP. Adjusted EBITDAR has inherent material limitations as a valuation measure, because it adds back
certain expenses to net income, resulting in those expenses not being taken into account in the valuation measure. The
payment of rent is a necessary element of our valuation. Because Adjusted EBITDAR excludes this and other items, it has
material limitations as a measure of our valuation.
41
The following table presents a reconciliation of Adjusted EBITDAR, a valuation measure, to net income, determined in
accordance with GAAP:
Three Months Ended September 30, | Nine Months Ended September 30, | ||
(in thousands) | 2026 | 2026 | |
Net income | $63,387 | $156,564 | |
Adjusted EBITDAR Addbacks: | |||
Income tax expense | 17,638 | 42,255 | |
Interest expense | 15,317 | 40,097 | |
Depreciation and amortization | 41,059 | 125,387 | |
Noncontrolling interest earnings | (18,871) | (55,299) | |
Cybersecurity Incident recoveries, net (a) | (1,000) | (1,000) | |
Certain legal matters and related costs | — | 2,464 | |
Enterprise restructuring costs (b) | 5,360 | 32,160 | |
Exit and acquisition-related costs (c) | 1,614 | 4,071 | |
Enterprise resource planning system conversion costs (d) | 5,913 | 11,651 | |
Equity-based compensation | 7,313 | 24,194 | |
Loss (income) from disposed operations | 17 | (5,860) | |
Rent expense payable to REITs (e) | 41,875 | 125,010 | |
Adjusted EBITDAR | $179,622 | $501,694 |
(a)Cybersecurity Incident recoveries, net primarily represent gains on insurance recovery proceeds associated with the Cybersecurity Incident, net of
incremental information technology and litigation costs. During the three and nine months ended September 30, 2026, the Company recognized a
gain of $1.0 million associated with the release of an accrual for expected litigation-related costs.
(b)Enterprise restructuring costs represent expenses related to employee termination benefits of $0.2 million and $21.5 million for the three and nine
months ended September 30, 2026, respectively, for position eliminations and executive leadership departures as part of strategic organizational
changes, and third-party professional fees and expenses for advisory services related to enterprise restructuring activities of $5.2 million and
$10.7 million for the three and nine months ended September 30, 2026, respectively. Employee termination benefit costs reflect severance and
related employee benefit expenses associated with a discrete enterprise restructuring program designed to streamline and improve the Company's
organizational structure.
(c)Exit and acquisition-related costs represent penalties and costs incurred for terminating pre-existing contracts at acquired facilities of $0.8 million
and $0.9 million for the three and nine months ended September 30, 2026, respectively, third-party professional fees and expenses incurred in
connection with potential and completed acquisitions of $0.6 million and $2.6 million for the three and nine months ended September 30, 2026,
respectively, and system integration costs for completed acquisitions of $0.2 million and $0.6 million for the three and nine months ended
September 30, 2026, respectively.
(d)Enterprise resource planning system conversion costs represent various costs incurred related to a single system conversion project to implement
a new enterprise resource planning system. These costs include third-party professional fees and expenses incurred in connection with the
conversion project of $5.2 million and $10.7 million for the three and nine months ended September 30, 2026, respectively, and contract labor
expense directly related to the conversion project of $0.8 million and $1.0 million for the three and nine months ended September 30, 2026,
respectively. These costs do not include post-implementation licensing, maintenance and operating costs associated with the new enterprise
resource planning system.
(e)Rent expense payable to REITs for the three and nine months ended September 30, 2026 consists of rent expense of $39.0 million and $116.4
million, respectively, related to the Ventas Master Lease and other lease agreements with Ventas for medical office buildings and rent expense of
$2.9 million and $8.6 million, respectively, related to a lease arrangement with MPT for the lease of Hackensack Meridian Mountainside Medical
Center.
Critical Accounting Policies and Estimates
The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect
reported amounts and related disclosures. We regularly evaluate the accounting policies and estimates we use. In general, we
base the estimates on historical experience and on assumptions that we believe to be reasonable, given the particular
circumstances in which we operate. Actual results may vary from those estimates. We consider our critical accounting
estimates to be those that (i) involve significant judgments and uncertainties, (ii) require estimates that are more difficult for
management to determine, and (iii) may produce materially different outcomes under different conditions or when using
different assumptions.
Our critical accounting estimates include revenue recognition, risk management and self-insured liabilities, and income taxes.
There have been no changes to our critical accounting policies and estimates or their application since the date of the Annual
Report. Refer to the Annual Report for a complete and comprehensive discussion of these policies and estimates.
42
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are subject to market risk from exposure to changes in interest rates based on our financing, investing and cash
management activities. We do not, however, hold or issue financial instruments or derivatives for trading or speculative
purposes. At September 30, 2026, the following components of our Senior Secured Credit Facilities bore interest at variable
rates at specified margins above either the agent bank's alternate base rate or Term SOFR: (i) a $777.5 million, seven-year
term loan; and (ii) a $325.0 million, five-year asset-based revolving credit facility. As of September 30, 2026, we had
outstanding variable rate debt of $760.7 million.
At September 30, 2026, we had interest rate swap agreements with notional amounts totaling $400.4 million, expiring June
26, 2029. Please refer to Note 5, Interest Rate Swap Agreements, to our accompanying condensed consolidated financial
statements included elsewhere in this Quarterly Report for more information on the interest rate swap agreements. Under the
February 2025 Agreements, expiring June 26, 2029, we are required to make monthly fixed rate payments at annual rates
ranging from 3.97% to 3.98% and the counterparties are required to make monthly floating rate payments to us based on one-
month Term SOFR, each subject to a floor of 0.50%.
Although changes in the alternate base rate or Term SOFR would affect the cost of funds borrowed in the future, we believe
the effect, if any, of reasonably possible near-term changes in interest rates on our variable rate debt on our consolidated
financial position, results of operations or cash flows would not be material. Based on the outstanding borrowings and impact
of the interest rate swaps in place at September 30, 2026, a one percent change in the interest rate would result in a $3.8
million increase or decrease in our annual interest expense.
We currently believe we have adequate liquidity to fund operations during the near term through the generation of operating
cash flows, cash on hand and access to our ABL Facilities. Our ability to borrow funds under our ABL Facilities is subject to,
among other things, the financial viability of the participating financial institutions. While we do not anticipate any of our
current lenders defaulting on their obligations, we are unable to provide assurance that any particular lender will not default at
a future date.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and our principal financial officer, evaluated, as of
the end of the period covered by this Quarterly Report, the effectiveness of our disclosure controls and procedures. Based on
this evaluation of our disclosure controls and procedures as of September 30, 2026, our principal executive officer and
principal financial officer concluded that our disclosure controls and procedures as of such date were effective at the
reasonable assurance level. The term "disclosure controls and procedures," as defined in Rules 13a-15(e) and 15d-15(e) under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), means controls and other procedures of a company
that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under
the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and
forms. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide
only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the
cost-benefit relationship of possible controls and procedures.
Changes in Internal Control over Financial Reporting
During the three months ended September 30, 2026, there have been no changes in our internal control over financial
reporting, as such term is defined in Rules 13a-15(f) and 15(d)-15(f) promulgated under the Exchange Act, that have
materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
43
PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Because we provide healthcare services in a highly regulated industry, we have been, are, and expect to continue to be, party
to various lawsuits and regulatory investigations from time to time. Refer to the "Litigation and Regulatory Matters" section
of Note 9, Commitments and Contingencies, in the notes to the condensed consolidated financial statements contained
elsewhere in this Quarterly Report, which is incorporated by reference herein.
ITEM 1A. RISK FACTORS
There have been no material changes to the risk factors previously disclosed in the section entitled "Risk Factors" included in
the Annual Report, which are incorporated by reference herein.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
In November 2025, our Board of Directors authorized a stock repurchase program pursuant to which we may repurchase an
aggregate of up to $50.0 million of our common stock through open market purchases, privately negotiated transactions,
block trades or other transactions in accordance with applicable securities laws, subject to market conditions and other
factors. Subsequently, in September 2026, our Board of Directors authorized a $25.0 million increase to the stock repurchase
program, increasing the aggregate amount of common stock we may repurchase under the program to $75.0 million. The
program has no expiration date. At September 30, 2026, there was approximately $48.0 million of stock repurchase
authorization remaining under the stock repurchase program. All repurchases under the program during the three months
ended September 30, 2026, as shown below, were made in the open market.
During the three months ended September 30, 2026, we made the following purchases of our equity securities that are
registered pursuant to Section 12(b) of the Exchange Act (dollars in millions, except per share amounts):
Period | Total Number of Shares Purchased(1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Dollar Value That May Yet Be Purchased Under Publicly Announced Plans or Programs | |||||
July 1, 2026 - July 31, 2026 | 717,336 | $10.33 | 715,000 | $26.2 | |||||
August 1, 2026 - August 31, 2026 | 156,500 | $10.89 | 156,500 | $24.5 | |||||
September 1, 2026 - September 30, 2026 | 187,356 | $10.96 | 168,000 | $48.0 | |||||
Total | 1,061,192 | $10.52 | 1,039,500 | ||||||
(1) | Includes 21,692 shares withheld by us to satisfy the payment of tax obligations related to the vesting of restricted stock unit awards. | ||||||||
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
During the three months ended September 30, 2026, none of our directors or officers (as defined in Rule 16a-1(f) under the
Exchange Act) adopted terminated
each term is defined in Item 408(a) of Regulation S-K.
44
ITEM 6. EXHIBITS
Exhibit Number | Description | |
2.1 | ||
3.1 | ||
3.2 | ||
31.1* | ||
31.2* | ||
32.1** | ||
32.2** | ||
101.INS* | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | |
101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* Filed herewith |
** This certification will not be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent specifically incorporated by reference into such filing. |
45
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
ARDENT HEALTH, INC. | |||||
Date: November 5, 2026 | By: | /s/ Alfred Lumsdaine | ||
Alfred Lumsdaine | ||||
Executive Vice President, Chief Financial Officer | ||||
(Principal Financial Officer) |
Exhibit 31.1
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, David Caspers, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Ardent Health, Inc. (the
“Registrant”);
2.Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the
period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results of operations
and cash flows of the Registrant as of, and for, the periods presented in this report;
4.The Registrant's other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act
Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information
relating to the Registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being
prepared;
(b)Designed such internal control over financial reporting, or caused such internal control
over financial reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting
principles;
(c)Evaluated the effectiveness of the Registrant's disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this report based on such
evaluation; and
(d)Disclosed in this report any change in the Registrant's internal control over financial
reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's
fourth fiscal quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the Registrant's internal control over financial
reporting; and
5.The Registrant's other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the Registrant's auditors and the
audit committee of the Registrant's board of directors (or persons performing the equivalent
functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal
control over financial reporting which are reasonably likely to adversely affect the
Registrant's ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who
have a significant role in the Registrant's internal control over financial reporting.
Date: | November 5, 2026 | |||
By: | /s/ David Caspers | |||
Name: | David Caspers | |||
Title: | President and Chief Executive Officer | |||
(Principal Executive Officer) | ||||
Exhibit 31.2
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Alfred Lumsdaine, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Ardent Health, Inc. (the
“Registrant”);
2.Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the
period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results of operations
and cash flows of the Registrant as of, and for, the periods presented in this report;
4.The Registrant's other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act
Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information
relating to the Registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being
prepared;
(b)Designed such internal control over financial reporting, or caused such internal control
over financial reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting
principles;
(c)Evaluated the effectiveness of the Registrant's disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this report based on such
evaluation; and
(d)Disclosed in this report any change in the Registrant's internal control over financial
reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's
fourth fiscal quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the Registrant's internal control over financial
reporting; and
5.The Registrant's other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the Registrant's auditors and the
audit committee of the Registrant's board of directors (or persons performing the equivalent
functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal
control over financial reporting which are reasonably likely to adversely affect the
Registrant's ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who
have a significant role in the Registrant's internal control over financial reporting.
Date: | November 5, 2026 | |||
By: | /s/ Alfred Lumsdaine | |||
Name: | Alfred Lumsdaine | |||
Title: | Executive Vice President, Chief Financial Officer | |||
(Principal Financial Officer) | ||||
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Ardent Health, Inc. (the “Company”) on Form 10-Q
for the quarterly period ended September 30, 2026, as filed with the Securities and Exchange
Commission on the date hereof (the “Report”), I, David Caspers, President and Chief Executive
Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that:
1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and
2.The information contained in the Report fairly presents, in all material respects,
the financial condition and results of operations of the Company.
Date: | November 5, 2026 | |||
By: | /s/ David Caspers | |||
Name: | David Caspers | |||
Title: | President and Chief Executive Officer | |||
(Principal Executive Officer) | ||||
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Ardent Health, Inc. (the “Company”) on Form 10-Q
for the quarterly period ended September 30, 2026, as filed with the Securities and Exchange
Commission on the date hereof (the “Report”), I, Alfred Lumsdaine, Executive Vice President,
Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and
2.The information contained in the Report fairly presents, in all material respects,
the financial condition and results of operations of the Company.
Date: | November 5, 2026 | |||
By: | /s/ Alfred Lumsdaine | |||
Name: | Alfred Lumsdaine | |||
Title: | Executive Vice President, Chief Financial Officer | |||
(Principal Financial Officer) | ||||