Acadia Healthcare Company, Inc. (ACHC)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations with our unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include any statements that address future results or occurrences. In some cases, you can identify forward-looking statements by terminology such as “may,” “might,” “will,” “would,” “should,” “could” or the negative thereof. Generally, the words “anticipate,” “believe,” “continue,” “expect,” “intend,” “estimate,” “project,” “plan” and similar expressions identify forward-looking statements. In particular, statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance are forward-looking statements.

We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks, uncertainties and other factors, many of which are outside of our control, which could cause our actual results, performance or achievements to differ materially from any results, performance or achievements expressed or implied by such forward-looking statements. These risks, uncertainties and other factors include, but are not limited to:

•
the impact of internal or governmental investigations, regulatory actions, whistleblower lawsuits and other legal proceedings;

•
our dependence on key management personnel, key executive and local facility management personnel, the failure to attract and retain such personnel, including our Chief Executive Officer and Chief Financial Officer, and the impact of any disruptions from the recent transition of various executives;

•
the impact of competition for staffing, labor shortages and higher turnover rates on our labor costs and profitability;

•
the impact of inflationary pressure and interest rate volatility;

•
compliance with laws and government regulations;

•
our indebtedness, our ability to meet our debt obligations, and our ability to incur substantially more debt;

•
the impact of payments received from the government and third-party payors on our revenue and results of operations;

•
the impact of volatility in the global capital and credit markets, as well as significant developments in macroeconomic and

political conditions that are out of our control, including any effects that ongoing global conflicts, tariffs, or trade disputes may have on financial markets and macroeconomic conditions;

•
the impact of general economic and employment conditions on our business and future results of operations, including increased construction and other costs due to inflation, the imposition of tariffs or trade disputes;

•
the impact from changes in expectations resulting from actuarial and other reviews of our liability reserves and other aspects of our business;

•
difficulties in successfully integrating the operations of acquired facilities or realizing the potential benefits and synergies of our acquisitions and joint ventures;

•
our ability to recruit and retain quality psychiatrists and other physicians, nurses, counselors and other medical support personnel;

•
the occurrence of patient incidents, which could result in negative media coverage, adversely affect the price of our

securities and result in incremental regulatory burdens and governmental investigations;

•
the impact of class action and other claims brought against us or our facilities including claims for damages for personal injuries, medical malpractice, overpayments, breach of contract, securities law violations, tort and employee related claims;

•
the outcome of pending litigation;

•
the impact of carrying a large self-insured retention, the possibilities of being responsible for significant amounts not covered by insurance, premium increases and insurance not being available on acceptable terms because of our claims experience;

•
the impact of the enactment, amendment or expiration of statutes and regulations affecting the healthcare industry, and potential reductions to Medicare and Medicaid payment rates, changes in reimbursement practices or funding levels, or modification of Medicaid supplemental payment programs;

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•
the impact of the restructuring, consolidation, and elimination of federal agencies that regulate the healthcare industry, which could result in changes to federal agency reviews and enforcement activities, priorities, and guidance, and has the potential to cause delays in obtaining necessary or desired reviews and approvals for our facilities;

•
our acquisition, joint venture and wholly-owned de novo strategies, which expose us to a variety of operational and financial risks, as well as legal and regulatory risks;

•
the impact of state efforts to regulate the construction or expansion of healthcare facilities on our ability to operate and expand our operations;

•
our ability to implement our business strategies;

•
the potential impact of activist stockholder actions or tactics;

•
the impact of disruptions on our inpatient and outpatient volumes caused by pandemics, epidemics or outbreaks of infectious diseases;

•
our restrictive covenants, which may restrict our business and financing activities;

•
the impact of adverse weather conditions and climate change, including the effects of hurricanes, wildfires and other natural

disasters, and any resulting outmigration;

•
we have experienced, and may in the future experience, cybersecurity incidents that could have an adverse impact on our operations, could result in the unauthorized access or acquisition of data we maintain, and/or could result in disclosures and/or investigations under the laws and regulations regarding information privacy;

•
the impact on our business if our information systems fail or our databases are destroyed or damaged;

•
our ability to access capital on acceptable terms;

•
our future cash flow and earnings;

•
the impact of our highly competitive industry on patient volumes;

•
our ability to cultivate and maintain relationships with referral sources;

•
the impact of the trend for insurance companies and managed care organizations to enter into sole source contracts on our

ability to obtain patients;

•
the impact of value-based purchasing programs on our revenue;

•
our potential inability to extend leases at expiration;

•
the impact of controls designed to reduce inpatient services on our revenue;

•
the impact of different interpretations of accounting principles on our results of operations or financial condition;

•
the impact of environmental, health and safety laws and regulations, especially in locations where we have concentrated operations;

•
the impact of laws and regulations relating to privacy and security of patient health information and standards for electronic transactions;

•
the impact of a change in the mix of our earnings, adverse changes in our effective tax rate and adverse developments in tax laws generally;

•
changes in interpretations, assumptions and expectations regarding tax legislation and policy, including provisions that may be issued by federal and state taxing authorities;

•
failure to maintain effective internal control over financial reporting;

•
the impact of fluctuations in our operating results, quarter to quarter earnings and other factors on the price of our securities;

•
the impact of various executive orders affecting the broader healthcare industry; and

•
those risks and uncertainties described from time to time in our filings with the SEC.

Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. These risks and uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking

22

statements. These forward-looking statements are made only as of the date of this Quarterly Report on Form 10-Q. We do not undertake and specifically decline any obligation to update any such statements or to publicly announce the results of any revisions to any such statements to reflect future events or developments.

Overview

Our business strategy is to become the indispensable behavioral healthcare provider for the high-acuity and complex needs patient population. We are committed to providing the communities we serve with quality, cost-effective behavioral healthcare services, while growing our business, increasing profitability and creating long-term value for our stockholders. This strategy includes five growth pathways: expansions of existing facilities, joint venture partnerships, de novo facilities, acquisitions and expansion across our continuum of care. At June 30, 2026, we operated 279 behavioral healthcare facilities with approximately 12,600 beds in 40 states and Puerto Rico. During the six months ended June 30, 2026, we added 322 beds, consisting of 42 beds added to existing facilities and 280 beds added through the opening of one wholly-owned facility and three joint venture facilities. The three joint venture facilities opened during the six months ended June 30, 2026, were through partnerships with Tufts Medicine, Orlando Heath, and Methodist Jennie Edmundson. During the six months ended June 30, 2026, we opened two CTCs.

We are the leading publicly traded pure-play provider of behavioral healthcare services in the U.S. Management believes that we are positioned as a leading platform in a highly fragmented industry under the direction of an experienced management team that has significant industry expertise. Management expects to take advantage of several strategies that are more accessible as a result of our increased size and geographic scale, including continuing a national marketing strategy to attract new patients and referral sources, increasing our volume of out-of-state referrals, providing a broader range of services to new and existing patients and clients and selectively pursuing opportunities to expand our facility and bed count through acquisitions, wholly-owned de novo facilities, joint ventures and bed additions in existing facilities.

Recent Legislative Developments

On July 4, 2025, Congress passed the One Big Beautiful Bill Act (the “OBBBA”), its budget reconciliation act for fiscal year 2025. The OBBBA includes provisions that may impact our financial performance and may substantially modify certain state and federal statutes and regulations to which our operations are subject. The OBBBA provisions that may impact us have varying effective dates. We are unable to predict whether or how future legislation, rulemaking, or judicial action will impact implementation of the OBBBA. Of particular relevance to us, the OBBBA reduces the federal government’s overall Medicaid expenditures and tightens Medicaid eligibility requirements. The law limits eligibility for Medicaid by imposing work or community engagement requirements for adults under 65 years old in Medicaid expansion states, including states with waiver-based expansions, subject to limited exceptions, and requires eligibility redeterminations at least every six months for the Medicaid expansion state population. The potential for mid-year loss of coverage increases financial uncertainty and may disrupt ongoing treatment services, complicate eligibility and coverage verification, prior authorization processes, and exposure to uncompensated care or bad debt on patient accounts. State compliance is required by December

[Excerpt truncated for page length; source filing is linked above.]

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and notes thereto included elsewhere in this Annual Report on Form 10-K.

Cautionary Note Regarding Forward-Looking Statements

This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include any statements that address future results or occurrences. In some cases you can identify forward-looking statements by terminology such as “may,” “might,” “will,” “would,” “should,” “could” or the negative thereof. Generally, the words “anticipate,” “believe,” “continue,” “expect,” “intend,” “estimate,” “project,” “plan” and similar expressions identify forward-looking statements. In particular, statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance are forward-looking statements.

We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks, uncertainties and other factors, many of which are outside of our control, which could cause our actual results, performance or achievements to differ materially from any results, performance or achievements expressed or implied by such forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, the following:

•
the impact of internal or governmental investigations, regulatory actions, whistleblower lawsuits and other legal proceedings;

•
our dependence on key management personnel, key executive and local facility management personnel, the failure to attract and retain such personnel, including our Chief Executive Officer, and the impact of any disruptions from the recent transition of various executives;

•
the impact of competition for staffing, labor shortages and higher turnover rates on our labor costs and profitability;

•
the impact of inflationary pressure and interest rate volatility;

•
compliance with laws and government regulations;

•
our indebtedness, our ability to meet our debt obligations, and our ability to incur substantially more debt;

•
the impact of payments received from the government and third-party payors on our revenue and results of operations;

•
the impact of volatility in the global capital and credit markets, as well as significant developments in macroeconomic and political conditions that are out of our control, including any effects that a U.S. government shutdown, tariffs or trade disputes may have on financial markets and macroeconomic conditions;

•
the impact of general economic and employment conditions on our business and future results of operations, including increased construction and other costs due to inflation, the imposition of tariffs or trade disputes;

•
the impact from changes in expectations resulting from actuarial and other reviews of our liability reserves and other aspects of our business;

•
difficulties in successfully integrating the operations of acquired facilities or realizing the potential benefits and synergies of our acquisitions and joint ventures;

•
our ability to recruit and retain quality psychiatrists and other physicians, nurses, counselors and other medical support personnel;

•
the occurrence of patient incidents, which could result in negative media coverage, adversely affect the price of our securities and result in incremental regulatory burdens and governmental investigations;

•
the impact of class action and other claims brought against us or our facilities including claims for damages for personal injuries, medical malpractice, overpayments, breach of contract, securities law violations, tort and employee related claims;

•
the outcome of pending litigation;

•
the impact of carrying a large self-insured retention, the possibilities of being responsible for significant amounts not covered by insurance, premium increases and insurance not being available on acceptable terms because of our claims experience;

39

•
the impact of the enactment, amendment or expiration of statutes and regulations affecting the healthcare industry, and potential reductions to Medicare and Medicaid payment rates, changes in reimbursement practices or funding levels, or modification of Medicaid supplemental payment programs;

•
the impact of the restructuring, consolidation, and elimination of federal agencies that regulate the healthcare industry, which could result in changes to federal agency reviews and enforcement activities, priorities, and guidance, and has the potential to cause delays in obtaining necessary or desired reviews and approvals for our facilities;

•
our acquisition, joint venture and wholly-owned de novo strategies, which expose us to a variety of operational and financial risks, as well as legal and regulatory risks;

•
the impact of state efforts to regulate the construction or expansion of healthcare facilities on our ability to operate and expand our operations;

•
our ability to implement our business strategies;

•
the potential impact of activist stockholder actions or tactics;

•
the impact of disruptions on our inpatient and outpatient volumes caused by pandemics, epidemics or outbreaks of infectious diseases;

•
our restrictive covenants, which may restrict our business and financing activities;

•
the impact of adverse weather conditions and climate change, including the effects of hurricanes, wildfires and other natural disasters, and any resulting outmigration;

•
the risk of a cybersecurity incident and any resulting adverse impact on our operations or violation of laws and regulations regarding information privacy;

•
the impact of our business if our information systems fail or our databases are destroyed or damaged;

•
our ability to access capital on acceptable terms;

•
our future cash flow and earnings;

•
the impact of our highly competitive industry on patient volumes;

•
our ability to cultivate and maintain relationships with referral sources;

•
the impact of the trend for insurance companies and managed care organizations to enter into sole source contracts on our ability to obtain patients;

•
the impact of value-based purchasing programs on our revenue;

•
our potential inability to extend leases at expiration;

•
the impact of controls designed to reduce inpatient services on our revenue;

•
the impact of different interpretations of accounting principles on our results of operations or financial condition;

•
the impact of environmental, health and safety laws and regulations, especially in locations where we have concentrated operations;

•
the impact of laws and regulations relating to privacy and security of patient health information and standards for electronic transactions;

•
the impact of a change in the mix of our earnings, adverse changes in our effective tax rate and adverse developments in tax laws generally;

•
changes in interpretations, assumptions and expectations regarding tax legislation and policy, including provisions that may be issued by federal and state taxing authorities;

•
failure to maintain effective internal control over financial reporting;

•
the impact of fluctuations in our operating results, quarter to quarter earnings and other factors on the price of our securities;

•
the impact of various executive orders affecting the broader healthcare industry; and

•
those risks and uncertainties described from time to time in our filings with the SEC.

40

Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. These risks and uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. These forward-looking statements are made only as of the date of this Annual Report on Form 10-K. We do not undertake and specifically decline any obligation to update any such statements or to publicly announce the results of any revisions to any such statements to reflect future events or developments.

Overview

Our business strategy is to become the indispensable behavioral healthcare provider for the high-acuity and complex needs patient population. We are committed to providing the communities we serve with high-quality, cost-effective behavioral healthcare services, while growing our business, increasing profitability and creating long-term value for our stockholders. This strategy includes five growth pathways: expansions of existing facilities, joint venture partnerships, de novo facilities, acquisitions and expansion across our continuum of care. At December 31, 2025, we operated 277 behavioral healthcare facilities with over 12,500 beds in 40 states and Puerto Rico. During the year ended December 31, 2025, we added 1,089 beds, consisting of 311 added to existing facilities and 778 added through the opening of one wholly-owned facility and five joint venture facilities, and we closed five facilities totaling 382 beds. The five joint venture facilities opened during the year ended December 31, 2025, were through partnerships with Henry Ford Health, Geisinger Health, Ascension Seton, Fairview Health Services, and ECU Health. During the year ended December 31, 2025, we opened 15 CTCs.

We are the leading publicly traded pure-play provider of behavioral healthcare services in the U.S. Management believes that we are positioned as a leading platform in a highly fragmented industry under the direction of an experienced management team that has significant industry expertise. Management expects to take advantage of several strategies that are more accessible as a result of our increased size and geographic scale, including continuing a national marketing strategy to attract new patients and referral sources, increasing our volume of out-of-state referrals, providing a broader range of services to new and existing patients and clients and selectively pursuing opportunities to expand our facility and bed count through acquisitions, wholly-owned de novo facilities, joint ventures and bed additions in existing facilities.

Acquisitions

On February 22, 2024, we acquired substantially all of the assets of Turning Point, a 76-bed specialty provider of substance use disorder and primary mental health treatment services that supports the Salt Lake City, Utah, metropolitan market. Turning Point provides a full continuum of treatment services, including residential, partial hospitalization and intensive outpatient services.

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Results of Operations

The following table illustrates our consolidated results of operations for the respective periods shown (dollars in thousands):

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]