Ardent Health, Inc.

Hello, and thank you for standing by. My name is Lacey, and I will be your conference operator today. At this time, I would like to welcome everyone to the Ardent Health Second Quarter 2026 Earnings Conference Call. Our lines have been placed on mute to prevent any background noise. After the speakers, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Please limit yourself to one question and one follow-up. Thank you. I would now like to turn the call over to Dave Styblo, Senior Vice President of Investor Relations. You may go ahead.

Thank you, Operator, and welcome to Arden Health's second quarter 2026 earnings conference call. Joining me today is Arden President and Chief Executive Officer, Dave Caspers. and Chief Financial Officer Alfred Lumsdaine. Dave and Alfred will provide prepared remarks and then we will open the line to questions. Before I turn the call over to Dave, I want to remind everyone that today's discussion contains forward-looking statements about future business and financial expectations. Actual results may differ significantly from those projected in today's forward-looking statements due to various risks and uncertainties, including the risks described in our periodic reports filed with the Securities and Exchange Commission. Except as required by law, we undertake no obligation to update our forward-looking statements. Further, this call will include the discussion of certain non-GAAP financial measures, including adjusted EBITDA. Reconciliation of these measures to the closest GAAP financial measure is included in our quarterly earnings press release and supplemental earnings presentation, which were both issued yesterday evening after the market closed and are available at ardenthealth.com.

With that, I'll turn the call over to Dave. Thank you and good morning. I want to begin by thanking our 25,000 team members for the way they continue to adapt, improve how we operate, and deliver high quality care to our patients and communities we serve. To frame today's discussion, I'll focus my comments on three areas. First, where we stand, including the strength of our current platform. Second, where we're going, including my priorities and the opportunities ahead. and third, what you can expect from me. Let's start with where we stand. The Arden platform is built on a strong foundation with clear opportunities to improve our performance. With 30 hospitals and over 280 sites of care, attractive markets growing two to three times faster than the U.S. average and strong joint venture partners, we are well positioned to capture market share. Over the past two years, we have broadened our access points and strengthened partnerships. by acquiring and or building over 25 urgent care and ASC facilities. These investments expand our ability to care for patients across the most appropriate care setting while also targeting volume growth. In addition, strategic partnerships specifically with Ensembl and Epic are strengthening our revenue cycle and clinical capabilities. In short, we are well positioned, but there is more work ahead. Since transitioning into this role, I've leaned into areas where I see the greatest opportunity to optimize and accelerate performance, and I want to share the progress already underway. I'm encouraged by the momentum of our impact program. On the cost side, I'm pleased with improvements in SWB, which grew just 0.7% year over year as we reduced contract labor spend by 42%. We have taken deliberate action to build a more efficient enterprise by intentionally redesigning our structure and standardizing how we operate. Impact is more than a savings program. It's also designed to increase our agility and transform care. We accomplished that in part by leveraging technology with our strong clinical engine. That engine is a strategic collection of assets, including our partnership with Epic and Ensemble. Our virtual care platform and our growing AI capabilities. It's the backbone that makes standardization and efficiency possible while empowering our people to deliver consistent, high quality personalized care across the network. Our virtual care rollout with HelloCare AI is an early proof point. In Texas and Idaho, our first markets to go live, virtual nurses completed 58% of discharge in June. and we reduced the hours spent monitoring patients by 18%. Looking ahead, it positions us to capture additional volume and better manage capacity so we can deliver the right care at the right time in the right setting. In supplies, we are beginning to harvest gains by consolidating vendors, renegotiating contracts and streamlining physician preference items. On the IT front, We are rationalizing our application portfolio to eliminate any redundancy and reduce waste. Turning to revenue, we are taking a more disciplined, data-driven approach to payer contracting, using price transparency data to identify where our rates lag the market as we work through our contract portfolio. In many instances, our rates rank below the 50th percentile, and we believe we can drive them higher given our strong market positions while improving contract terms and yield. We're already seeing evidence this strategy is creating meaningful improvement. An early proof point is a June renewal with a key payer in one market where outpatient payments were materially below market benchmarks. The new contract improved both rate and terms, and we now expect stronger economics from this agreement. We estimate this will add between $5 and $10 million to this year's adjusted EBITDA that wasn't in our previous guidance. We've also brought greater structure and dedicated leadership to how we grow, organizing around our highest value service lines, such as cardiology and women's and children's. This work is guided by Capacity IQ, the framework we introduced last quarter to match demand with capacity across our system, directing capital, physician recruitment, and assets to where we see the strongest growth and returns. It's an area you'll hear more about going forward. That's where we stand. Now this is where we're going. My focus is on delivering more consistent financial results, growing EBITDA, deploying capital effectively, and executing against our targets in a way that supports long-term shareholder value. At a high level, our three-part growth strategy is unchanged. It remains focused on number one, strengthening EBITDA margins through operational excellence. Two, accelerating strategic growth in core markets and services, including new ways to optimize how we reach and engage customers at scale. And three, pursuing disciplined M&A. Within this strategy, sharper operational execution is my highest priority. We will continue to manage through the healthcare head and tailwinds. But as an operator, I am laser focused on the performance that we can directly influence. How we staff, how we contract, how we allocate capital, how we standardize, and how we hold ourselves accountable. As part of that, we are building a culture that works as one team aligned around one plan and delivering with one standard. While we have made meaningful progress standardizing operations across the enterprise, I see additional opportunity to reduce variation and strengthen consistency in our execution. As such, I am keenly focused on the executive level KPI driven decision making, reducing unwanted variation and strengthening our accountability. Carrying forward our impact savings momentum is a top priority. Impact is not a one year project. It's a multi-year strategic imperative and it is building momentum. We have increased our 2026 savings target twice from $40 million originally to the $55 million target established in the fourth quarter of 2025 earnings call to now over $70 million expected to be realized this year. We will continue to evaluate our portfolio and take action where we see opportunities to sharpen our focus and improve our margins. That will entail assessing and evaluating all aspects of our operations and If an asset or service line is not the right long-term fit, we will act thoughtfully and with discipline. An example of this is our intentional service line rationalization work in the second quarter. We moved lower margin procedures, including ENT and ophthalmology, out of the hospital to free up capacity for higher margin service lines. As we wrap up, I want to be clear about what you can expect from me. First, we will push Arden to be more nimble and faster while maintaining our strong commitment to patient care, quality, and safety. We will measure what matters, focus on fewer but more important priorities, and pivot quickly as necessary when circumstances change. Our response to the second quarter volumes is a testament to this approach. We quickly flexed staffing and implemented additional non-clinical actions. That support our confidence to reaffirm our 2026 adjusted EBITDA guidance. That agility reflects the strength of our team and our ability to execute consistently with speed. Secondly, I recognize the importance of delivering on our financial commitments to the investment community. Consistency and credibility matter, and you can expect us to remain focused on disciplined execution and accountability. and third, you can expect me to bring steady leadership and rigorous operational discipline with consistency, which ultimately supports long term shareholder value creation. We have the right leadership team, operating model and market positions to advance our strategy. And now our focus is delivering consistency over time. I'm enthusiastic about the opportunity ahead and look forward to working with our team members, providers, partners, and the investment community. With that, I'll turn the call over to Alfred.