MD earnings analysis
What we found in MD's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Pediatrix delivered $487.8 million of Q2 revenue, up 4.0% year over year and above the $477.9 million consensus estimate, with GAAP EPS of $0.49 and adjusted EPS of $0.63. The earnings trend improved sequentially—revenue rose $11.8 million and operating margin improved to 11.7% from 8.8% in Q1—but operating margin remained 110 basis points below the prior-year quarter as clinical, malpractice, executive-transition, and restructuring costs rose. Reimbursement and acquisition contributions offset falling patient volumes, while the principal financial offset was a shift to $3.2 million of operating cash outflow in the first half and a $146.0 million reduction in working capital.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue grew 4.0% year over year
- Q2 net revenue was $487.8 million, up $19.0 million (4.0%) year over year from $468.8 million and up $11.8 million (2.5%) sequentially from $476.0 million in Q1 2026. Same-unit revenue increased $8.5 million (1.9%), while acquisitions net of dispositions supplied the remaining growth.
- EPS increased year over year and sequentially
- GAAP diluted EPS rose to $0.49 from $0.46 a year earlier and $0.36 in Q1 2026. Adjusted EPS increased to $0.63 from $0.53, while the diluted share count fell to 81.4 million from 85.5 million.
- Adjusted EBITDA expanded despite cost pressure
- Adjusted EBITDA increased $3.2 million to $76.4 million from $73.2 million in Q2 2025. Reimbursement, collections, payor mix, and neonatal acuity contributed $18.1 million (4.0%) of same-unit revenue improvement.
- Margins recovered sequentially but lagged prior year
- Operating margin was 11.7%, down 1.1 percentage points from 12.8% a year ago but up 2.9 percentage points from 8.8% in Q1 2026. Excluding restructuring costs, operating margin was 13.4%, versus 13.6% a year earlier.
- Receivables collection efficiency improved
- Collections improved: DSO declined to 42.5 days at June 30, 2026 from 42.8 days at December 31, 2025 and 46.4 days a year earlier.
- Share repurchases reduced share count
- The company repurchased $64.2 million of stock in the first six months of 2026; $104.5 million remained under the $250.0 million August 2025 authorization after $145.5 million of purchases through June 30.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Patient volumes remain a growth headwind
- Patient-service volumes reduced same-unit revenue by $9.6 million (2.1%) in Q2, primarily in neonatology, partially offsetting the $18.1 million reimbursement-related benefit. For the first six months, volume declines reduced same-unit revenue by $16.9 million (1.9%) across all service lines.
- Working-capital needs turned cash flow negative
- Cash used in operating activities was $3.2 million in the first six months, versus $22.0 million generated a year earlier; after $7.6 million of capex, calculated free cash flow was negative $10.8 million. Cash declined to $288.9 million from $375.2 million at year-end.
- 2027 loan maturity and debt exposure
- Working capital fell $146.0 million to $158.6 million because the Term A Loan becomes current ahead of its February 2027 maturity. The company had $184.4 million outstanding on that loan and $400.0 million of 2030 Notes at June 30, 2026; a 1% interest-rate change affects pretax income by about $1.8 million annually.
- No formal risk update; reimbursement risk persists
- Item 1A states there were no material changes to risks disclosed in the 2025 Form 10-K. However, CMS's July 2026 proposed 2027 physician fee schedule would reduce the Medicare conversion factor by 1.19%, while the Congressional Budget Office estimated the One Big Beautiful Bill Act could reduce Medicaid and CHIP spending by $900 billion through 2034.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $0.49
- Operating margin
- 11.7%
What they said about what is next.
The 10-Q provides no numeric revenue or EPS outlook. Management said it anticipates that operating cash generation and current cash will fund working capital, acquisitions, capital expenditures, restructuring costs, repurchases, and contractual obligations for at least the next 12 months.
The filing reads about the same as the one before it.
What came before.
- 10-Q · May 5, 2026
- Pediatrix Medical Group, Inc. reported a revenue increase of 3.9% year-over-year for Q1 2026, totaling $476.2 million, driven by improved collection activity and acquisitions. Net income rose substantially to $29.6…
- 10-K · February 19, 2026
- Pediatrix (MD) remains a large, hospital-focused provider of neonatal, maternal-fetal and pediatric subspecialty physician services with a national network of approximately 2,295 affiliated physicians and operating…
- 10-Q · August 5, 2025
- Pediatrix reported Q2 net revenue of $468.8M (three months ended June 30, 2025) down from $504.3M a year ago, but delivered a sharp operating turn as income from operations was $59.9M versus an operating loss of $157.7M…
- 10-Q · May 6, 2025
- Pediatrix reported Q1 net revenue of $458,359 (as reported in the filing) versus $495,101 in the prior-year quarter, a decline, but delivered materially higher operating profit and net income. Income from operations…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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