Acadia Healthcare (Nasdaq: ACHC) reported diminished earnings and revenue growth in 2024.

During Friday’s Q4 earnings call, company executives said they expect to see its [growth/efficiency?] efforts pay off in 2026. In 2022, CEO Chris Hunter vowed to double Acadia Healthcare’s revenue by 2028.

The markets did not respond well to the news of the company’s financial performance in 2024 and what Acadia Healthcare executives called conservative guidance for the coming year.

“Nothing has changed with how we’re thinking about the opportunity here,” Heather Dixon, Acadia Healthcare CFO, said of the company’s long-term outlook. “The strategy that we have in terms of meeting that significant unmet demand is the same. We’ll continue to expand capacity and continue to meet that need. But what we’re doing today is taking a more balanced approach that balances capex, bed growth and free cash flow.”

On the last company earnings call, Acadia Healthcare executives were also eager to cast the minds of observers to the future and prepare the public for further elevated costs potentially impacting the company’s profitability.

Acadia Healthcare’s revenue increased by 7.7% to $3.15 billion. That is the smallest revenue increase since 2020, a 4.1% increase, according to a review of public financial filings. Similarly, quarterly revenue of $774 million represented a 4.2% increase year over year. That’s the smallest increase since the first quarter of 2020.

On the profitability side, net income shrank by 17.9% to $264 million in 2024. Last year, the company posted a $15.7 million loss. For an apples-to-apples comparison, net income was down about 5.6% compared to 2022’s $280 million. Year over year, net income was down 43.9% in the fourth quarter to $33.5 million. 

Acadia Healthcare’s share price is down 25% as of the writing of this article. 

Looking forward, Acadia Healthcare will add an effort to improve the performance of a “handful of underperforming facilities,” Dixon said. However, the company does not expect a material improvement during 2025.

During the first half of the year, startup costs will elevate relative to the previous year given the company’s progress in bringing new facilities and beds at existing facilities online. In 2024, Acadia Healthcare added 776 beds to its footprint: 312 were added to existing facilities, and 464 were added through four wholly-owned facilities and one joint venture facility opened during the year. Acadia completed construction across its various expansion projects, which included the addition of 1,100 to-be-opened beds in the fourth quarter. Building efforts added about 1,300 beds to the company’s footprint for 2024.

In 2024, capital expenditures totaled $690 million, up 78.7% compared to 2023. Acadia Healthcare projects that capex will be between $630 million and $690 million in 2025.

“The high water mark for capex came at the end of ’24 and will continue at that rate in the beginning of ’25 as we continue to have that high pace of beds opening,” Dixon said. “That should moderate and then start to decline in the back half of 25 and then continue to decline in 2026.”

Dixon declined to discuss what that company projects for 2026.

Hunter spent a good portion of his prepared comments talking about the company’s focus on quality and safety, highlighting the company’s use of technology to better enable Acadia Healthcare’s staff. This includes remote patient monitoring, staff safety alert tech and an expanding electronic health record.

He also said that the impact of bad press for alleged wrongs by some of the company’s facilities is lessening with time and as its engagement effort with key referral sources continues.

“When you just look across our entire facility base, the referral issue continues to be less and less of a challenge,” Hunter said.