Behavioral health company Acadia Healthcare NASDAQ:ACHC announced better-than-expected revenue in Q2 CY2026, but sales were flat year on year at $865.8 million. The company expects the full year’s revenue to be around $3.43 billion, close to analysts’ estimates. Its non-GAAP profit of $0.38 per share was 9.7% above analysts’ consensus estimates.
Acadia Healthcare (ACHC) Q2 CY2026 Highlights:
- Revenue: $865.8 million vs analyst estimates of $849.3 million (flat year on year, 2% beat)
- Adjusted EPS: $0.38 vs analyst estimates of $0.35 (9.7% beat)
- Adjusted EBITDA: $200.9 million vs analyst estimates of $148.1 million (23.2% margin, 35.7% beat)
- The company slightly lifted its revenue guidance for the full year to $3.43 billion at the midpoint from $3.41 billion
- Management raised its full-year Adjusted EPS guidance to $1.53 at the midpoint, a 3.4% increase
- EBITDA guidance for the full year is $602.5 million at the midpoint, in line with analyst expectations
- Free Cash Flow was $123.5 million, up from -$34.24 million in the same quarter last year
- Market Capitalization: $2.99 billion
Company Overview
With a network of over 250 facilities serving patients in 38 states and Puerto Rico, Acadia Healthcare NASDAQ:ACHC operates facilities providing mental health and substance use disorder treatment services across the United States.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Acadia Healthcare grew its sales at a decent 8.7% compounded annual growth rate. Its growth was slightly above the average healthcare company and shows its offerings resonate with customers.
Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Acadia Healthcare’s recent performance shows its demand has slowed as its annualized revenue growth of 5% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs.
We can dig further into the company’s revenue dynamics by analyzing its number of admissions, which reached 54,141 in the latest quarter. Over the last two years, Acadia Healthcare’s admissions averaged 4.5% year-on-year growth. Because this number is in line with its revenue growth, we can see the company kept its prices fairly consistent.
This quarter, Acadia Healthcare’s $865.8 million of revenue was flat year on year but beat Wall Street’s estimates by 2%.
Looking ahead, sell-side analysts expect revenue to grow 4.2% over the next 12 months, similar to its two-year rate. This projection doesn’t excite us and implies its newer products and services will not catalyze better top-line performance yet.
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Operating Margin
Acadia Healthcare was profitable over the last five years but held back by its large cost base. Its average operating margin of 2.1% was weak for a healthcare business.
Analyzing the trend in its profitability, Acadia Healthcare’s operating margin decreased by 57.3 percentage points over the last five years. The company’s two-year trajectory also shows it failed to get its profitability back to the peak as its margin fell by 38.4 percentage points. This performance was poor no matter how you look at it - it shows its expenses were rising and it couldn’t pass those costs onto its customers.
in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.
Sadly for Acadia Healthcare, its EPS declined by 12.4% annually over the last five years while its revenue grew by 8.7%. This tells us the company became less profitable on a per-share basis as it expanded.
Diving into the nuances of Acadia Healthcare’s earnings can give us a better understanding of its performance. As we mentioned earlier, Acadia Healthcare’s operating margin declined by 57.3 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.
In Q2, Acadia Healthcare reported adjusted EPS of $0.38, down from $0.83 in the same quarter last year. Despite falling year on year, this print beat analysts’ estimates by 9.7%. Over the next 12 months, Wall Street expects Acadia Healthcare’s full-year EPS to grow 7.3% from $1.54 to $1.65.
Key Takeaways from Acadia Healthcare’s Q2 Results
It was encouraging to see Acadia Healthcare beat analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. Investors were likely hoping for more, and shares traded down 1.3% to $32.18 immediately after reporting.
Big picture, is Acadia Healthcare a buy here and now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. .