Heather Dixon has navigated Acadia Healthcare through one of the largest capital investment periods in the company’s history since joining as CFO in July 2023. Capital expenditures totaled $690 million in 2024, representing a 78.7% increase compared to 2023 levels.
These elevated capital expenditures reflect Acadia Healthcare’s aggressive bed expansion strategy. The company completed construction on approximately 1,300 beds during 2024, with 776 of these new beds becoming operational during the year. This expansion included opening four new acute inpatient hospitals and adding capacity at existing facilities.
Dixon has emphasized that 2024 and early 2025 represent the high-water mark for capital spending. “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 stated. “That should moderate and then start to decline in the back half of 25 and then continue to decline in 2026.”
Acadia Healthcare projects capital expenditures between $630 million and $690 million for 2025. This continued elevated spending reflects the completion of facilities already under construction and the licensing process for beds built in 2024. As of early 2025, Acadia Healthcare had received state licenses for 800 of the 1,300 beds constructed in 2024, with the remaining 500 licenses expected early in the year.
Heather Dixon has articulated a financial strategy focused on balancing growth with cash flow generation. “We can still grow faster, even if we moderate that pace of growth; we will see the benefits of the beds we’ve added,” Dixon explained during the J.P. Morgan Healthcare Conference. “We have an opportunity here to moderate the pace and smooth out the bed growth a little bit so that we can unlock some free cash flow and be more opportunistic with capital allocation.”
The financial impact of this expansion includes elevated startup costs as new facilities ramp operations. Startup costs for new facilities are expected to double in 2025 compared to 2024 as the company brings a significant volume of new beds online. Dixon noted that startup costs represent approximately $20 million of incremental expense in the first quarter of 2025 alone.
Once facilities reach operational maturity, they contribute positively to earnings and cash flow. Dixon anticipates that startup costs will decline in the second half of 2025 and continue falling in 2026, creating tailwinds for profitability. “Tailwinds will certainly come through from a bed-ramping perspective,” Heather Dixon noted. “As those startup costs decline, that’ll lead to better cash flow for both of those reasons as well.”
Acadia Healthcare maintains a strong balance sheet to support these growth investments. As of December 31, 2024, the company had $76.3 million in cash and cash equivalents and $226.5 million available under its $600 million revolving credit facility, with a net leverage ratio of approximately 2.7x.
Dixon’s financial management also addresses operational challenges. She identified a handful of underperforming facilities requiring attention, representing approximately $20 million in year-over-year EBITDA decline during the fourth quarter of 2024. These facilities span both acute and specialty service lines.