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Equity
 12 Months Ended
Dec. 31, 2024
Equity [Abstract]  
Equity Equity
Prior to the Corporate Conversion, the Company issued membership units that represented limited liability company interest in the entity and granted unit-based equity incentive awards to members of management as incentive compensation. As discussed in Note 1, as a result of the Corporate Conversion, the outstanding limited liability company membership units and vested incentive awards were converted into shares of common stock while the unvested incentive awards were converted into shares of unvested restricted common stock in the form of RSAs. The Company now issues shares of common stock under its certificate of incorporation and grants share-based equity awards under its 2024 Omnibus Incentive Award Plan (the "Equity Plan"), which provides for the issuance of up to
15,750,000 shares of common stock. At December 31, 2024, there were 10,435,186 shares of common stock available for future grants under the Equity Plan.


Modification of Awards

Although the Company modified the legal form of all of its incentive awards in the Corporate Conversion, not all of the modifications to awards were considered a modification for accounting purposes. Modification accounting is required only if (1) the fair value, (2) the vesting conditions, or (3) the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. All holders of Class C units were impacted by the Corporate Conversion. A summary of the accounting modifications (or lack thereof) as a result of the Corporate Conversion is as follows:

•The unvested Class C-1 units that converted into unvested RSAs were not considered modifications for accounting purposes. There was no incremental fair value, and the Company is continuing to recognize the original grant-date fair value over the remaining requisite service period associated with the original award.

•The unvested Class C-1 units that did not convert into any common shares or unvested RSAs, which were subsequently cancelled and replaced with new awards, were considered modifications for accounting purposes since the Company issued a concurrent grant of RSUs upon cancellation. In addition to the original grant-date fair value, the Company is recognizing incremental fair value, from the cancellation date through the end of the requisite service period.

•The unvested Class C-2 units that converted into unvested RSAs were considered modifications for accounting purposes because the performance-related vesting conditions were removed. The Company is recognizing the fair value of the modified award as of the modification date prospectively through the end of the requisite service period.


Capital Stock and Equity-Based Compensation

As described in Note 1 "Description of the Business and Basis of Presentation—Initial Public Offering and Corporate Conversion", the Company completed the Corporate Conversion, whereby all outstanding limited liability company membership units were converted into shares of common stock. The Company's certificate of incorporation authorizes the Company to issue 750,000,000 shares of common stock and 50,000,000 shares of preferred stock, each with a $0.01 par value per share. Shares of preferred stock, none of which were outstanding as of December 31, 2024, may be issued in one or more class or series having such rights, voting powers, preferences and other provisions as determined by the Company's Board of Directors without approval by the holders of common stock.

In conjunction with the IPO, the Company’s Equity Plan became effective. The Equity Plan authorizes the issuance of up to 15,750,000 shares of common stock associated with its awards. Eligible award recipients under the Equity Plan include the Company's directors, employees and consultants. The Equity Plan provides for the grant of incentive stock options intended to qualify under Section 422 of the Internal Revenue Code ("incentive stock options") and stock options which do not so qualify ("non-qualified stock options"), stock appreciation rights, RSAs, RSUs, PRSUs and other share awards. As of December 31, 2024, the Company had only RSAs, RSUs and PRSUs outstanding under the Equity Plan. Generally, service-based awards vest in three substantially equal one-third increments on each of the first three anniversaries of the grant date, predicated on the holder's continued employment or service. Performance-based awards vest according to the achievement of certain Company-wide profitability metrics in addition to a service-based vesting component, which is generally three years of continued employment.

For performance-based awards, a target number of awards are granted representing the Company's target level of performance. The number of shares earned may be higher or lower than the shares granted depending on the Company's level of achievement, which can range from 0% to 200% of target. Performance goals are measured cumulatively over a two-year performance period. If the applicable target performance goal is met at the end of the two-year performance period, then the award subject to such performance goal will vest in full at the applicable percentage specified in the award agreement once the holder provides one additional year of service. Awards issued to Company directors contain only service-based vesting requirements and vest in full on the first anniversary of the grant date, predicated on their continued service as a board member.
A summary of all RSU and PRSU activity for the period July 17, 2024 to December 31, 2024 is as follows:

RSUsPRSUsTotal RSUs and PRSUsWeighted Average Grant Date Fair Value
Outstanding, July 17, 2024— — — $— 
Granted1,425,541 1,105,632 2,531,173 $16.56 
Vested(32,227)— (32,227)$17.02 
Forfeited(16,800)(41,870)(58,670)$16.00 
Outstanding, December 31, 20241,376,514 1,063,762 2,440,276 $16.56 


A summary of all RSA activity for the period July 17, 2024 to December 31, 2024 is as follows:

RSAsWeighted Average Grant Date Fair Value
Outstanding, July 17, 20242,848,027 $15.78 
Granted— $— 
Vested(14,464)$5.41 
Forfeited(39,537)$15.43 
Outstanding, December 31, 20242,794,026 $15.84 

The Company recognized equity-based compensation expense of $17.3 million during the period from July 17, 2024 to December 31, 2024 related to these awards, which is included in salaries and benefits within the income statement. The compensation expense recorded represents the estimated grant date fair value of the portion of RSUs, PRSUs and RSAs that vested during the period. The fair value of RSUs that vested during the period from July 17, 2024 to December 31, 2024 was $0.6 million.

Unrecognized equity-based compensation expense associated with service-based awards, which consisted of unvested RSAs and RSUs, as of December 31, 2024 was $54.3 million. Unrecognized equity-based compensation expense associated with performance-based awards, which consisted of unvested PRSUs, as of December 31, 2024 was $13.9 million. The weighted-average remaining recognition period for service-based awards and performance-based awards, respectively, was approximately 2.5 and 2 years as of December 31, 2024.


Member Units and Equity-Based Compensation

The Company’s original operating agreement dated July 3, 2015, (the "Original Operating Agreement"), and the Company’s amended operating agreement dated June 21, 2017, (the "Amended Operating Agreement"), provided for various levels of membership. Pursuant to both the Original Operating Agreement and Amended Operating Agreement, the capital interests were transferable; however, transfers were subject to obtaining the prior written consent of the Company, with certain exceptions for transfers to affiliated parties. An investor's capital interest was comprised of Class A and B units. The Class A units entitled the holder to receive an amount up to their investment amount in the event of a distribution, and the Class B units entitled the holder to the amount of appreciation in Ardent Health Partners, LLC. Members’ liability was limited to the capital account balance. The members’ units did not entitle their holders to any conversion rights or redemption rights. Distributions are reflected in the consolidated statements of changes in equity when declared by the board of managers.

The Company issued units of membership interest in the Company to members of management as incentive compensation. These units, once vested, represented the right to receive a fractional part of the profits, losses and distributions of the Company. These membership units were issued in the form of Class C units. Class C units were issued in the form of Class C-1 units and Class C-2 units. Class C-1 units were subject to quarterly vesting over a five-year time horizon (“Time Vesting Incentive Units”). The unvested Time Vesting Incentive Units were subject to forfeiture under certain limited circumstances and unvested units were also able to receive accelerated vesting under certain circumstances. Once the Class C-1 units vested, they were considered equity interests in the Company. Class C-2 units were subject to performance-based measures and could vest upon certain events such as a qualifying liquidation event. No expense was recognized for these Class C-2 units since there was not a qualifying liquidation event prior to their conversion into RSAs.

The Company employed an OPM that included highly subjective, complex assumptions to determine the grant date fair value of its Class C units. The OPM was used to allocate the estimated equity value of the Company to the various unit classes. The equity value of the Company was estimated using income and market valuation approaches, including recent sales of the Company’s common
units. The fair value of Class C units granted in 2023 and 2024 did not materially change from the fair value of Class C units granted in 2022, and the impact of a change on the Company’s financial statements was not material given the number of Class C units granted during 2023 and 2024. The assumptions used by the Company within the OPM to estimate the grant date fair value of Class C units were as follows:

Period from January 1, 2024 to July 16, 2024 and Years ended December 31, 2023 and 2022
Expected volatility (1)
60.0 %
Risk-free interest rate (2)
2.3 %
Dividend yield—%
Average expected term (years) (3)
2.5
(1)    Expected volatility is based on a group of industry peers with sufficient history.
(2)    The risk-free interest rate is the approximate yield on United States Treasury Strips having a life equal to the average expected term.
(3)    The average expected term is an estimate of the number of years until a liquidity event.


A summary of all class C unit activity for the period from January 1, 2024 to July 16, 2024 and the years ended December 31, 2023 and 2022 is as follows:
Unvested Time-Based C UnitsUnvested Performance-Based C UnitsTotal Unvested C UnitsWeighted Average Grant Date Fair Value
Outstanding, December 31, 20213,901,869 20,670,528 24,572,397 $0.34 
Granted1,543,093 178,907 1,722,000 $0.72 
Vested(1,394,682)— (1,394,682)$0.44 
Forfeited(183,198)(5,421,212)(5,604,410)$0.19 
Outstanding, December 31, 20223,867,082 15,428,223 19,295,305 $0.33 
Granted4,069,646 — 4,069,646 $0.82 
Vested(2,196,284)— (2,196,284)$0.41 
Forfeited(624,266)(2,292,063)(2,916,329)$0.38 
Outstanding, December 31, 20235,116,178 13,136,160 18,252,338 $0.41 
Granted95,247 53,300 148,547 $0.82 
Vested(1,759,698)— (1,759,698)$0.51 
Forfeited(425,066)(504,455)(929,521)$0.52 
Outstanding, July 16, 20243,026,661 12,685,005 15,711,666 $0.40 

The Company recognized equity-based compensation expense of $0.7 million, $0.9 million, and $0.6 million during the period from January 1, 2024 to July 16, 2024 and the years ended December 31, 2023 and 2022, respectively, related to these units, which is included in salaries and benefits within the income statements. The compensation expense recorded represents the estimated grant date fair value of the portion of Time Vesting Incentive Units that vested during the respective period.