Acadia Healthcare Company UBS Global Healthcare Conference

Thank you for having us. I think in the first nine or 10 months, I guess it is about 10 now.

Right I think we have made significant progress.

We have exceeded our internal expectations, and we have real momentum going into 2027. My focus, since I have come back as CEO, has really been to strengthen the team, and I think we have been able to do that, ensuring we have the right people in the right position. I took a look at the operational structure and looked at just how we could speed up decision-making. I looked at geography and scope of responsibility, so we made some changes there. I think the team right now has a very strong sense of urgency as you think about where we are entering 2027. We have been able to build the occupancy at the new facilities, but also improve some of the legacy facilities that have been part of Acadia. So, I feel very good.

I think the third quarter, we had strong results, and we put out the $60 million of incremental EBITDA for next year, just based on where we see as we end the year, but also just a detailed plan for each of those new facilities that we brought on since 2023.

Yeah, I don't see a significant change in our strategy. I've always believed that both parties are important to what we do, and I think both, over my years of being in the behavioral part of the healthcare industry, both Democrats and Republicans have really worked with us. I don't think that's going to change. We're going to continue to work constructively with them, and in states where we think there may be possibility to improve access, that's what we're going to do.

Yeah. For 2027, normal for the company, we'll provide our outlook as part of our fourth quarter call, which will be in February. We'll provide more detail at that point. But as Debbie mentioned, we have made tremendous progress this year, momentum as we've moved throughout the year. Expect that to continue going into next year. The most significant tailwind that we would highlight would be the incremental EBITDA contribution from our new facilities. The capacity that we've added as a company over the last four years has already started to translate into incremental earnings, but the real meaningful time that that really begins to happen is as we look ahead into 2027.

Have made a lot of progress on our new facilities and have a $60 million, as Debbie mentioned, EBITDA contribution from those new facilities relative to the earnings of those facilities as a group in 2026. There is a number of other tailwinds that we expect just from the ongoing momentum that our other facilities have, but that is the tailwind that we highlighted last week on our earnings call related to the new facilities. Then in terms of headwinds, the only item that we would highlight, more of a mathematical headwind, so to speak, is just thinking about out-of-period state directed payment programs that the company has received in 2026. We received $11 million in the first quarter from Ohio and $26 million in the second quarter from Florida, both of those related to 2025 program years. So, $37 million there that related to the previous year.

I will say we have some upside in both of those states for the 2026 potential approval. Those have not been approved yet at the CMS level for Ohio and Florida for 2026. The way we think about and quantify the headwind might change a little bit as we get more clarity on the timing of those 2026 approvals. But there is $20 million of upside there, and not certain at this point whether that is a fourth quarter item or whether that will stretch into the beginning part of 2027.

Yeah, I mean, I think the acute service line performed extremely well. You mentioned the momentum we are seeing as the volumes have ramped. If you take the 2023 to 2025 cohort, occupancy is up 60%. So it has come up quite a bit from when we started the year. I do think part of it is the strong demand in the market, but also just the execution by the team. Our referral relationships are strong, but also you have to factor in our partners, which a good portion of the cohort beds from 2023, 2024, and 2025 really were partnerships. Many of them had either a unit or a facility. As we have been able to work with them to provide access to those patients, that has really made a big difference in just the acute volumes. You want to add anything, David?

I think that's right. Obviously, we've added a tremendous amount of bed capacity to the company. As Debbie mentioned, many of those are with partners that have moved beds over to our new partnerships. Also, we're in a better position to meet the demand in the markets that were in need of new beds. I think the geographic expansion that we're seeing, we're in more acute markets and better able to meet the already strong demand that was there.