Results from St. Louis-based Ascension’s fiscal third quarter of 2026 show a system that, after nearly three years of financial turnaround, is starting to turn the tide. Ascension reported a $64 million operating loss (-1.1% margin) for the quarter ending March 31, an improvement from a $101 million operating loss (-1.7% margin) during the same period in fiscal 2025.
Ascension reported $13 million in net income for the quarter, up from an $81.5 million loss during the same period in fiscal 2025. For the nine months ending March 31, 2026, that momentum translated to $621 million in net income, a 218% year-over-year improvement.
“In the last two and a half years, we have seen almost $2.6 billion of financial turnaround, and this last quarter wasn’t any surprise either,” Saurabh Tripathi, executive vice president and CFO of Ascension, said on Becker’s “CFO+Revenue Cycle Podcast.” “We saw a $426 million improvement in our net income, almost a 218% year-over-year improvement. This is frankly driven by consistent operational improvement to all our operating metrics, as well as mission-focused clinical care that our clinicians offer to our patients every single day.”
Mr. Tripathi, who has been with Ascension for two and a half years, broke down the nine-month net income improvement, including a $262 million boost in operating income that was driven by higher volume, increased acute patients at Ascension facilities, favorable commercial mix shifts, and meaningful operational productivity in contract labor, length of stay and supply and drug cost efficiency. Strong investment markets contributed additional tailwinds.
Ascension’s total operating revenue for the nine months ending March 31 was $18.1 billion, down from $19.5 billion during the same period in fiscal 2025, a reflection of Ascension’s portfolio reduction from 139 hospitals to roughly 90 fully-owned facilities and 29 joint venture hospitals.
“We have been really intentional in the last two and a half years of our turnaround in making sure our acute hospital portfolio is focused on the best legacy structure and finding the right partners in the states where we divested our facilities,” Mr. Tripathi said.
Mr. Tripathi pointed to examples such as Ascension’s sale of eight hospitals in Illinois to Ontario, Calif.-based Prime Healthcare in March 2025 and Birmingham, Ala.-based UAB Medicine’s $450 million acquisition of Ascension St. Vincent Health System in late 2024.
“By rightsizing our footprint, we have been able to build a predictable and consistent operating performance and focus our capital deployment in those facilities,” he said.
The results reflect a strategy Mr. Tripathi has been articulating for more than a year. At Becker’s Annual Meeting in April 2025, he outlined three internal principles driving the system’s turnaround: CTC (Control the Controllables), BTB (Break the Bracket, or using data-driven strategies to lift underperforming ministries) and EMS (Every Ministry should be Sustainable, or the idea that each hospital must stand on its own financially rather than rely on system subsidies). “That level of strategic thinking has evolved over the past 36 months, and now we’re seeing the fruits of that work,” he said at the time.
Ascension’s balance sheet remains solid despite the revenue decline. The system has $44.6 billion in total assets and carries $9 billion in long-term debt, with a debt service coverage ratio of 10.4x, meaning the system can service its debt interest almost 10 times more. It also maintains a double-A rating from all three major agencies: Moody’s, S&P and Fitch.
Ascension is now pivoting toward ambulatory care, a shift Mr. Tripathi said is an important growth lever.
“When we think about smart growth, we think about how we take care of patients holistically, when they need it, where they need it, in the most efficient care setting,” he said. “Not necessarily in the number of hospitals and brick-and-mortar settings.”
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