[Company Announcement & Highlights](index=1&type=section&id=Company%20Announcement%20%26%20Highlights) AdaptHealth Corp. announced Q2 2025 results, management commentary, and updated financial outlook [Second Quarter Results and Highlights](index=1&type=section&id=Second%20Quarter%20Results%20and%20Highlights) AdaptHealth Corp. announced its second quarter 2025 financial results, reporting a slight decrease in net revenue and Adjusted EBITDA compared to the prior year, while cash flow from operations increased year-to-date. The company also completed the sale of certain assets in its Wellness at Home segment Second Quarter 2025 Financial Highlights (YoY Comparison) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :--------- | | Net revenue | $800.4 | $806.0 | -0.7% | | Net income attributable to AdaptHealth Corp. | $14.7 | $19.4 | -24.3% | | Adjusted EBITDA | $155.5 | $165.3 | -5.9% | | Cash flow from operations (YTD) | $257.5 | $247.0 | +4.2% | | Free cash flow (YTD) | $73.3 | $77.9 | -5.9% | - The Company closed on its previously disclosed sales of certain incontinence assets and certain infusion assets in its Wellness at Home segment[5](index=5&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO Suzanne Foster highlighted continued momentum, solid Q2 results, and strategic advancements including a new capitated partnership, initiatives to boost operating efficiency, elevate patient experience, expand profit margins, and rapid progress in debt reduction - AdaptHealth is driving revenue growth, underscored by a new capitated partnership with a major national healthcare system[3](index=3&type=chunk) - The company is advancing multiple initiatives to boost operating efficiency, elevate the patient experience, and expand profit margins[3](index=3&type=chunk) - Rapid progress is being made in reducing debt and fortifying the financial position[3](index=3&type=chunk) [Financial Outlook](index=1&type=section&id=Financial%20Outlook) AdaptHealth updated its financial guidance for fiscal year 2025, adjusting net revenue and Adjusted EBITDA ranges while maintaining its free cash flow outlook Updated Fiscal Year 2025 Financial Guidance | Metric | Previous Guidance (Millions) | Updated Guidance (Millions) | Change | | :---------------- | :-------------------------- | :------------------------- | :----- | | Net revenue | $3.15 - $3.29 | $3.18 - $3.26 | Adjusted | | Adjusted EBITDA | $662 - $702 | $642 - $682 | Adjusted | | Free cash flow | $170 - $190 | $170 - $190 | Unchanged | [About AdaptHealth Corp.](index=2&type=section&id=About%20AdaptHealth%20Corp.) AdaptHealth is a national leader in patient-centered healthcare-at-home solutions, serving millions of patients through a diverse referral network [Company Description and Segments](index=2&type=section&id=Company%20Description%20and%20Segments) AdaptHealth is a national leader in providing patient-centered, healthcare-at-home solutions, operating through four reportable segments: Sleep Health, Respiratory Health, Diabetes Health, and Wellness at Home, each focusing on specific medical equipment, supplies, and related services - AdaptHealth is a national leader in providing patient-centered, healthcare-at-home solutions, including home medical equipment, medical supplies, and related services[7](index=7&type=chunk) - The company operates under four reportable segments: Sleep Health (CPAP, BiLevel services), Respiratory Health (oxygen, home mechanical ventilation), Diabetes Health (continuous glucose monitors, insulin pumps), and Wellness at Home (general home medical equipment and services)[7](index=7&type=chunk) [Referral Network and Patient Reach](index=2&type=section&id=Referral%20Network%20and%20Patient%20Reach) The company partners with a diverse network of referral sources and serves approximately 4.2 million patients annually across all 50 states through its extensive network of locations - AdaptHealth partners with an extensive and highly diversified network of referral sources, including acute care hospitals, sleep labs, pulmonologists, skilled nursing facilities, and clinics[8](index=8&type=chunk) - The company services beneficiaries of Medicare, Medicaid, and commercial insurance payors, reaching approximately **4.2 million patients annually** in all 50 states through approximately 630 locations in 47 states[8](index=8&type=chunk) [Financial Statements (Unaudited)](index=4&type=section&id=Financial%20Statements) This section presents AdaptHealth's unaudited condensed consolidated balance sheets, statements of operations, and cash flows for recent periods [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) As of June 30, 2025, AdaptHealth reported a decrease in total assets and liabilities compared to December 31, 2024, while total stockholders' equity saw a slight increase Condensed Consolidated Balance Sheet Highlights (June 30, 2025 vs. December 31, 2024) | Metric | June 30, 2025 (Thousands) | December 31, 2024 (Thousands) | Change (Thousands) | | :-------------------------------- | :------------------------- | :--------------------------- | :----------------- | | Total Assets | $4,350,825 | $4,486,947 | -$136,122 | | Total Liabilities | $2,756,699 | $2,908,829 | -$152,130 | | Total Stockholders' Equity | $1,594,126 | $1,578,118 | +$16,008 | | Cash | $68,630 | $109,747 | -$41,117 | | Assets held for sale | — | $52,748 | -$52,748 | | Long-term debt, less current portion | $1,792,741 | $1,964,921 | -$172,180 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20(Unaudited)) For the three months ended June 30, 2025, net revenue slightly decreased, while operating income significantly increased due to a gain on the sale of businesses. Net income attributable to AdaptHealth Corp. decreased both for the quarter and year-to-date Consolidated Statements of Operations Highlights (YoY Comparison) | Metric | Three Months Ended June 30, 2025 (Thousands) | Three Months Ended June 30, 2024 (Thousands) | Six Months Ended June 30, 2025 (Thousands) | Six Months Ended June 30, 2024 (Thousands) | | :----------------------------------- | :------------------------------------------ | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | | Net revenue | $800,372 | $805,975 | $1,578,254 | $1,598,472 | | Operating income | $79,252 | $52,047 | $102,422 | $102,578 | | Gain on sale of businesses | ($32,225) | — | ($32,225) | — | | Net income attributable to AdaptHealth Corp. | $14,674 | $19,435 | $7,467 | $17,301 | | Basic net income per share | $0.10 | $0.13 | $0.05 | $0.12 | | Diluted net income per share | $0.10 | $0.13 | $0.05 | $0.12 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) For the six months ended June 30, 2025, net cash provided by operating activities increased, while net cash used in investing activities decreased significantly due to proceeds from business sales. Net cash used in financing activities substantially increased, leading to a larger net decrease in cash Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30, YoY Comparison) | Metric | 2025 (Thousands) | 2024 (Thousands) | Change (Thousands) | | :-------------------------------- | :---------------- | :---------------- | :----------------- | | Net cash provided by operating activities | $257,521 | $247,019 | +$10,502 | | Net cash used in investing activities | ($85,981) | ($169,163) | +$83,182 | | Net cash used in financing activities | ($212,657) | ($85,156) | -$127,501 | | Net decrease in cash | ($41,117) | ($7,300) | -$33,817 | | Cash at end of period | $68,630 | $69,832 | -$1,202 | - Proceeds from the sale of businesses, net of cash disposed, contributed **$115.7 million** to investing activities in 2025[26](index=26&type=chunk) - Repayments on long-term debt and lines of credit increased to **$175.0 million** in 2025 from **$145.0 million** in 2024[26](index=26&type=chunk) [Non-GAAP Financial Measures](index=7&type=section&id=Non-GAAP%20Financial%20Measures) This section details AdaptHealth's non-GAAP financial measures, including EBITDA, Adjusted EBITDA, and Free Cash Flow, with reconciliations and definitions [EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin](index=7&type=section&id=EBITDA%2C%20Adjusted%20EBITDA%20and%20Adjusted%20EBITDA%20Margin) AdaptHealth uses non-GAAP financial measures like EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin to evaluate financial performance and for incentive compensation plans, providing a supplementary view to U.S. GAAP measures - EBITDA is defined as net income (loss) attributable to AdaptHealth Corp., plus net income (loss) attributable to noncontrolling interests, interest expense, net, income tax expense (benefit), and depreciation and amortization, including patient equipment depreciation[28](index=28&type=chunk) - Adjusted EBITDA is defined as EBITDA plus equity-based compensation expense, change in fair value of the warrant liability, goodwill impairment, litigation settlement expense (gain), gain on sale of businesses, and certain other non-recurring items of expense or income[29](index=29&type=chunk) - Adjusted EBITDA Margin is defined as Adjusted EBITDA as a percentage of net revenue[30](index=30&type=chunk) [Three Months Ended June 30, 2025 and 2024](index=7&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20and%202024%20(EBITDA)) For the three months ended June 30, 2025, Adjusted EBITDA decreased by 5.9% year-over-year, and Adjusted EBITDA Margin also saw a decline, primarily impacted by a significant gain on the sale of businesses in 2025 Adjusted EBITDA and Margin (Three Months Ended June 30, YoY Comparison) | Metric | 2025 (Thousands) | Revenue Percentage (2025) | 2024 (Thousands) | Revenue Percentage (2024) | | :--------------- | :---------------- | :------------------------- | :---------------- | :------------------------- | | Adjusted EBITDA | $155,544 | 19.4% | $165,315 | 20.5% | | Adjusted EBITDA Margin | - | 19.4% | - | 20.5% | - A gain on sale of businesses of **$32.2 million** negatively impacted Adjusted EBITDA in Q2 2025, compared to no such gain in Q2 2024[30](index=30&type=chunk)[31](index=31&type=chunk) - Other non-recurring expenses, net, were **$10.0 million** in Q2 2025, including consulting expenses associated with asset dispositions and transaction costs for acquisitions[30](index=30&type=chunk)[31](index=31&type=chunk) [Six Months Ended June 30, 2025 and 2024](index=8&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20and%202024%20(EBITDA)) For the six months ended June 30, 2025, Adjusted EBITDA decreased by 12.4% year-over-year, and Adjusted EBITDA Margin also declined, influenced by the gain on sale of businesses in 2025 and goodwill impairment in 2024 Adjusted EBITDA and Margin (Six Months Ended June 30, YoY Comparison) | Metric | 2025 (Thousands) | Revenue Percentage (2025) | 2024 (Thousands) | Revenue Percentage (2024) | | :--------------- | :---------------- | :------------------------- | :---------------- | :------------------------- | | Adjusted EBITDA | $283,482 | 18.0% | $323,800 | 20.3% | | Adjusted EBITDA Margin | - | 18.0% | - | 20.3% | - A gain on sale of businesses of **$32.2 million** was recognized in the first six months of 2025, compared to none in 2024[32](index=32&type=chunk)[34](index=34&type=chunk) - Goodwill impairment of **$13.1 million** was recorded in the first six months of 2024, with no such charge in 2025[32](index=32&type=chunk)[33](index=33&type=chunk) - Other non-recurring expenses, net, were **$15.2 million** in 2025, including consulting expenses for asset dispositions and systems implementation[32](index=32&type=chunk)[34](index=34&type=chunk) [Free Cash Flow](index=9&type=section&id=Free%20Cash%20Flow) AdaptHealth defines free cash flow as net cash provided by operating activities less cash paid for purchases of equipment and other fixed assets. For the six months ended June 30, 2025, free cash flow slightly decreased compared to the prior year - Free cash flow is defined as net cash provided by operating activities less cash paid for purchases of equipment and other fixed assets[35](index=35&type=chunk) Free Cash Flow (YoY Comparison) | Metric | Three Months Ended June 30, 2025 (Thousands) | Three Months Ended June 30, 2024 (Thousands) | Six Months Ended June 30, 2025 (Thousands) | Six Months Ended June 30, 2024 (Thousands) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | | Net cash provided by operating activities | $161,994 | $197,984 | $257,521 | $247,019 | | Purchases of equipment and other fixed assets | ($88,665) | ($81,272) | ($184,250) | ($169,163) | | Free cash flow | $73,329 | $116,712 | $73,271 | $77,856 | [Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) This section provides a standard disclaimer regarding forward-looking statements, emphasizing that they are not historical facts but predictions based on current expectations, subject to various risks and uncertainties that could cause actual results to differ materially. The company disclaims any obligation to update these statements - Forward-looking statements are not historical facts but predictions of future events, often identified by words like 'believe,' 'may,' 'will,' 'expect,' and 'plan'[9](index=9&type=chunk) - These statements are based on current management expectations and assumptions, but actual events and circumstances are difficult to predict and subject to numerous risks and uncertainties, including judicial proceedings, governmental investigations, and changes in competitive conditions[9](index=9&type=chunk)[10](index=10&type=chunk) - The company specifically disclaims any obligation to update these forward-looking statements, and undue reliance should not be placed upon them as representing assessments as of any date subsequent to the press release[12](index=12&type=chunk) [Use of Non-GAAP Financial Information and Financial Guidance](index=3&type=section&id=Use%20of%20Non-GAAP%20Financial%20Information%20and%20Financial%20Guidance) This section explains AdaptHealth's use of non-GAAP financial measures such as EBITDA, Adjusted EBITDA, and free cash flow, highlighting their utility for analyzing financial results and evaluating performance, while also acknowledging their limitations as analytical tools and the difficulty in reconciling non-GAAP guidance to GAAP measures - The Company uses non-GAAP measures (EBITDA, Adjusted EBITDA, free cash flow) to analyze financial results and believes they are useful to investors as a supplement to U.S. GAAP measures[13](index=13&type=chunk) - These non-GAAP measures have limitations as analytical tools and should not be considered alternatives to net income, other GAAP performance measures, or cash flows from operating activities[15](index=15&type=chunk)[17](index=17&type=chunk) - Reconciliation of non-GAAP financial guidance to the most directly comparable GAAP measure is not available without unreasonable effort due to the variability and unpredictable impact of certain items[18](index=18&type=chunk) [Contacts](index=9&type=section&id=Contacts) This section provides the contact information for AdaptHealth Corp.'s investor relations - Investor Relations contact: Luke Montgomery, Senior Vice President, Investor Relations, IR@adapthealth.com[36](index=36&type=chunk) - Chief Financial Officer: Jason Clemens, CFA[36](index=36&type=chunk)

Company Overview - AdaptHealth Corp. (AHCO) is experiencing significant attention from investors due to high implied volatility in its options market, particularly the Jan 16, 2026 $2.5 Call option [1] - The company currently holds a Zacks Rank of 5 (Strong Sell) within the Medical – Products industry, which is positioned in the top 36% of the Zacks Industry Rank [3] Analyst Sentiment - Over the past 60 days, no analysts have increased earnings estimates for AdaptHealth for the current quarter, while one analyst has decreased the estimates, resulting in a consensus estimate drop from 16 cents per share to 15 cents [3] Market Expectations - The high implied volatility suggests that options traders are anticipating a significant price movement for AdaptHealth shares, potentially indicating an upcoming event that could lead to a major rally or sell-off [2][4] - Options traders often seek to capitalize on high implied volatility by selling premium, aiming for the underlying stock to not move as much as expected by expiration [4]

Group 1 - U.S. stock futures are higher, with Dow futures gaining over 100 points [1] - Concentrix Corporation reported quarterly earnings of $2.70 per share, missing the analyst consensus estimate of $2.75, while quarterly revenue was $2.42 billion, exceeding the Street estimate of $2.38 billion [1] - Concentrix shares fell 8% to $50.70 in pre-market trading [1] Group 2 - CorMedix Inc. declined 14.2% to $12.83 after announcing an $85 million public offering [4] - Critical Metals Corp. fell 14.2% to $3.14 after a previous surge of over 32% [4] - AdaptHealth Corp. decreased 8.6% to $8.61 after gaining around 5% on the previous day [4] - USA Rare Earth, Inc. declined 8.4% to $11.65 [4] - Gold Fields Limited fell 5.1% to $22.60 [4] - OMS Energy Technologies Inc. decreased 4.6% to $6.80 [4]

Group 1 - Seeking Alpha welcomes Matthew J Smith as a new contributing analyst, encouraging others to share investment ideas for publication and potential earnings [1] - The platform offers opportunities for contributors to unlock exclusive access to SA Premium by submitting articles [1] Group 2 - The article does not provide any specific company or industry analysis, nor does it include any financial data or performance metrics [2][3]

Summary of Conference Call Company and Industry Overview - The conference call discusses the performance and strategic initiatives of a company operating in the diabetes and sleep health sectors, specifically focusing on its diabetes segment and overall health management equipment (HME) industry dynamics [2][41]. Key Points on Diabetes Segment - **Revenue Decline**: Diabetes revenue declined by 8%, which was largely anticipated. The company had initially projected a 10% decline but performed slightly better than expected [2][5]. - **Retention Metrics**: Retention rates are crucial, with resupply representing approximately 85% of diabetes revenue. The company achieved the best retention rates in over two years in Q4 and Q1 [2][4][5]. - **New Patient Starts**: There has been sequential growth in new patient starts for two consecutive quarters, indicating a positive trend in patient acquisition [5][6]. - **Management Overhaul**: A significant management change occurred mid-Q3 last year, bringing in new leadership to enhance the diabetes segment's performance [3][12]. - **Integration with Sleep Platform**: The diabetes segment has been integrated into the sleep resupply center, leveraging existing processes to improve efficiency [3][7][8]. Key Points on Sleep Segment - **Operational Challenges**: The company faced challenges in the sleep segment, particularly in the speed of patient setups, which could impact revenue. This was highlighted as a significant concern due to its size as the largest business segment [17][18]. - **AI and Automation**: The company is investing in AI and automation to improve operational efficiency, aiming to reduce the time taken to process patient data significantly [19][20][22]. Respiratory and Capitated Business Insights - **Record Flu Season Impact**: A record flu season has driven increased diagnoses of respiratory conditions, benefiting the respiratory segment by bringing more patients into the funnel [28][29]. - **Capitated Business Growth**: The company has successfully established a capitated business model with Humana, which is expected to grow significantly from 4% to potentially 10% of revenue in the coming years [31][39][40]. Industry Dynamics and Consolidation - **Market Consolidation**: The HME industry is experiencing significant consolidation, with the number of operators decreasing from over 10,000 in 2016 to under 5,500 recently. The company anticipates this number could drop to around 2,000 in the next few years [41][42]. - **Competitive Pressures**: The company is aware of competitive pressures that could drive further consolidation in the market, particularly due to reimbursement cuts and operational challenges faced by smaller operators [43][44]. Strategic Focus and Portfolio Management - **Divestitures**: The company has conducted a thorough portfolio review, resulting in the sale of non-core businesses to focus on its primary segments: sleep, respiratory, and diabetes [53][58]. - **Debt Reduction**: Proceeds from divestitures are being used to reduce debt, with gross debt decreasing from $1.9975 billion to $1.905 billion [56][57]. Financial Outlook - **Cash Flow Expectations**: The company expects a similar cash flow pattern as last year, with one-third of free cash flow generated in the first half and the remainder in the second half of the year [61]. This summary encapsulates the key insights and strategic directions discussed during the conference call, highlighting the company's performance, challenges, and future outlook in the healthcare sector.

Financial Performance - Net revenue for the three months ended March 31, 2025, was $777,882, a decrease of 1% from $792,497 in the same period of 2024[20]. - Operating income decreased to $23,170 for Q1 2025, down 54% from $50,531 in Q1 2024[20]. - Net loss attributable to AdaptHealth Corp. was $7,207 for Q1 2025, compared to a net loss of $2,134 in Q1 2024, representing a significant increase in losses[20]. - The company reported a comprehensive loss of $6,754 for Q1 2025, compared to a comprehensive loss of $253 in Q1 2024[22]. - The net loss for the three months ended March 31, 2025, was $6,079,000, compared to a net loss of $1,109,000 for the same period in 2024[26]. - Adjusted EBITDA for the three months ended March 31, 2025, was $127,938,000, down from $158,485,000 in the same period of 2024, indicating a decline of about 19.3%[100]. - The diluted net loss per share for the three months ended March 31, 2025, was $(0.05), consistent with the diluted net loss per share for the same period in 2024[154]. Revenue Breakdown - For the three months ended March 31, 2025, total net revenue was $777.9 million, a decrease of 1.8% from $792.5 million in the same period of 2024[73]. - Insurance revenue for the three months ended March 31, 2025, was $454.2 million, down 6.0% from $483.4 million in 2024[73]. - Patient pay revenue increased by 14.0% to $126.2 million in Q1 2025, compared to $110.7 million in Q1 2024[73]. - Net sales revenue from Sleep Health segment was $241.2 million in Q1 2025, slightly up from $237.6 million in Q1 2024[75]. - Revenue from fixed monthly equipment reimbursements totaled $249.5 million in Q1 2025, down from $254.3 million in Q1 2024[75]. - The Sleep Health segment generated net revenue of $316,351,000 for the three months ended March 31, 2025, compared to $325,334,000 in 2024, a decrease of approximately 2.9%[95]. - The Wellness at Home segment reported net revenue of $157,206,000 for the three months ended March 31, 2025, slightly up from $156,044,000 in 2024[95]. Assets and Liabilities - Total assets as of March 31, 2025, were $4,437,350, a decrease from $4,486,947 as of December 31, 2024[18]. - Total liabilities decreased to $2,863,496 as of March 31, 2025, down from $2,908,829 at the end of 2024[18]. - The company’s accumulated deficit increased to $569,385 as of March 31, 2025, from $562,178 as of December 31, 2024[18]. - As of March 31, 2025, the assets held for sale amounted to $101,449,000, an increase from $52,748,000 as of December 31, 2024[84]. - The total liabilities held for sale increased to $17,514,000 as of March 31, 2025, from $7,043,000 as of December 31, 2024[84]. - Long-term debt as of March 31, 2025, totaled $1.941 billion, down from $1.965 billion as of December 31, 2024[124]. Cash Flow and Liquidity - Cash and cash equivalents decreased to $53,650 as of March 31, 2025, from $109,747 as of December 31, 2024, indicating a liquidity contraction[18]. - Net cash provided by operating activities increased to $95,527,000 in Q1 2025, up from $49,035,000 in Q1 2024, representing a 95% increase[26]. - Cash at the end of the period was $53,650,000, down from $79,566,000 at the end of Q1 2024, indicating a decrease of approximately 32.6%[26]. - The company’s cash paid for interest was $45,969,000 in Q1 2025, down from $50,259,000 in Q1 2024, indicating a decrease of 8.6%[26]. Expenses - General and administrative expenses were $86,854 for Q1 2025, slightly down from $89,041 in Q1 2024[20]. - The company reported depreciation and amortization expenses of $94,345,000 for Q1 2025, slightly up from $92,876,000 in Q1 2024[26]. - The company incurred equity-based compensation expenses of $5,296,000 in Q1 2025, compared to $4,533,000 in Q1 2024, reflecting a 16.9% increase[26]. - The company recognized depreciation expense of $89.2 million for the three months ended March 31, 2025, compared to $87.3 million for the same period in 2024[85]. - The company incurred finance lease costs of $3,374,000 for amortization of right-of-use (ROU) assets in Q1 2025, which is an increase of 49.8% compared to $2,255,000 in Q1 2024[164]. - The company recorded an income tax expense of $0.9 million for the three months ended March 31, 2025, a significant decrease from $6.6 million in the same period of 2024[167]. Compliance and Legal Matters - The company has no material accruals related to lawsuits, claims, or investigations at this time, indicating a stable legal standing[171]. - The company is fully cooperating with multiple investigations regarding potential violations of the False Claims Act, but the impact on financial conditions remains uncertain[172][179][181]. Debt and Financing - The Company issued $600.0 million aggregate principal amount of 5.125% senior unsecured notes in August 2021, maturing on March 1, 2030[132]. - The Company recognized a loss of $0.7 million in other comprehensive income due to cash flow hedge accounting for the three months ended March 31, 2025[121]. - The Company made a voluntary repayment of $20.9 million on the 2024 Term Loan during the three months ended March 31, 2025[130]. - As of March 31, 2025, the outstanding borrowings under the 2024 Term Loan were $525.0 million, with a quarterly principal repayment requirement of $4.1 million through September 30, 2026, increasing to $8.1 million from December 31, 2026, through June 30, 2029[130]. - The maximum amount the Company could borrow under the 2024 Revolver while remaining compliant with financial debt covenants was $277.6 million[131].

Financial Data and Key Metrics Changes - First quarter revenue was $777.9 million, a decline of 1.8% from the prior year quarter, but exceeded the midpoint of guidance by $13.1 million [19][4] - Adjusted EBITDA for the first quarter was $127.9 million, down 19.3% year-over-year, with an adjusted EBITDA margin of 16.4% [5][22] - Free cash flow was negative $100,000, an improvement from negative $38.9 million in the prior year quarter [5][23] Business Line Data and Key Metrics Changes - **Sleep Health Segment**: Revenue decreased by 2.8% to $316.4 million, with new setups at approximately 113,000, slightly below expectations [20] - **Respiratory Health Segment**: Revenue increased by 3.3% to $165.5 million, driven by stronger oxygen new setups [21] - **Diabetes Health Segment**: Revenue declined by 8% to $138.8 million, but showed signs of recovery with improved new starts and the lowest attrition rate in two years [21][12] - **Wellness at Home Segment**: Revenue increased by 0.7% to $157.2 million, offsetting revenue lost from disposed assets [22] Market Data and Key Metrics Changes - The addressable markets within the four segments are growing in aggregate by mid-single digits, driven by an aging U.S. population and increasing prevalence of chronic conditions [8][6] - The company serves 4.2 million patients across over 660 locations in all 50 states, indicating a strong geographic footprint [8] Company Strategy and Development Direction - The company aims to deliver consistent, sustainable organic growth by focusing on its four core segments and enhancing patient service excellence [6][10] - There is a commitment to improving operational workflows and patient experience, particularly in the Diabetes Health segment [10][12] - The company is reducing debt and exiting non-core product lines to sharpen strategic focus [14][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to manage potential tariff impacts, indicating that current exposure is contained and manageable [15][16] - The company remains optimistic about the growth potential in the Diabetes Health segment and overall business despite current challenges [12][30] Other Important Information - The company has reduced its debt balance by $25 million in the first quarter, totaling $195 million over the last five quarters [13][24] - Full-year revenue expectations have been reduced by $40 million due to the sale of certain incontinence assets [25] Q&A Session Summary Question: Can you provide additional color on the improvement in the diabetes business? - Management noted positive movement in the pump business and sequential growth in new starts for continuous glucose monitors (CGMs) [28][29] Question: What is the situation with new starts in the sleep segment? - Management acknowledged a slight decline in new starts but emphasized confidence in addressing the issue through detailed plans [32][33] Question: Can you clarify the guidance changes related to asset sales? - The guidance change is exclusively for the incontinence asset sale, with no comments on the infusion asset sale until it is closed [29] Question: Are there opportunities for acquisitions in troubled markets? - Management confirmed ongoing M&A discussions and the potential for modest tuck-in acquisitions [60][59] Question: What is the company's exposure to tariffs for fiscal 2026? - Management indicated that they are feeling better about tariff exposure based on recent clarifications regarding product classifications [46][47] Question: How is the company positioned in the sleep market? - Management stated that improvements are needed in certain states to regain market share, with plans in place to address these challenges [54][55]

Group 1: Earnings Performance - AdaptHealth Corp. reported quarterly earnings of $0.01 per share, matching the Zacks Consensus Estimate, compared to $0.02 per share a year ago [1] - The company posted revenues of $777.88 million for the quarter, exceeding the Zacks Consensus Estimate by 1.72%, but down from $792.5 million year-over-year [2] - Over the last four quarters, AdaptHealth has surpassed consensus EPS estimates three times [1][2] Group 2: Stock Performance and Outlook - AdaptHealth shares have declined approximately 8.6% since the beginning of the year, while the S&P 500 has decreased by 3.9% [3] - The company's earnings outlook will be crucial for future stock movements, with current consensus EPS estimates at $0.28 for the coming quarter and $1.12 for the current fiscal year [4][7] - The current Zacks Rank for AdaptHealth is 3 (Hold), indicating expected performance in line with the market in the near future [6] Group 3: Industry Context - The Medical - Products industry, to which AdaptHealth belongs, is currently ranked in the bottom 26% of over 250 Zacks industries, which may impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that investors should monitor these revisions closely [5]

Financial Performance - Q1 2025 - Total net revenue for Q1 2025 was $777882 thousand, a decrease compared to $856645 thousand in Q1 2024[6] - Net loss attributable to AdaptHealth Corp was $(7207) thousand in Q1 2025, compared to a net income of $50262 thousand in Q1 2024[6] - Adjusted EBITDA for Q1 2025 was $127938 thousand, with an Adjusted EBITDA Margin of 164%, compared to $158485 thousand and 200% respectively in Q1 2024[6] - Non-Acquired Net Revenue Growth was (21)% in Q1 2025[13] Revenue by Segment - Q1 2025 - Net sales revenue totaled $495522 thousand, representing 637% of total net revenue[11] - Net revenue from fixed monthly equipment reimbursements was $249535 thousand, accounting for 321% of total net revenue[11] - Net revenue from capitated revenue arrangements reached $32825 thousand, which is 42% of total net revenue[12] Debt and Share Information - Q1 2025 - Total long-term debt amounted to $2017434 thousand, with net debt at $1963784 thousand[22] - The Consolidated Total Leverage Ratio was 298[22] - The number of common shares outstanding as of March 31, 2025, was 134941 thousand[23]

Financial Data and Key Metrics Changes - First quarter revenue was $777.9 million, a decline of 1.8% from the prior year quarter, but exceeded the midpoint of guidance by $13.1 million [18][4] - Adjusted EBITDA for the first quarter was $127.9 million, down 19.3% year-over-year, with an adjusted EBITDA margin of 16.4% [21][5] - Free cash flow was negative $100,000, an improvement from negative $38.9 million in the prior year quarter [5][22] Business Line Data and Key Metrics Changes - **Sleep Health Segment**: Revenue decreased 2.8% to $316.4 million, with new setups at approximately 113,000, slightly below expectations [19][18] - **Respiratory Health Segment**: Revenue increased 3.3% to $165.5 million, driven by stronger oxygen new setups during a severe flu season [20][18] - **Diabetes Health Segment**: Revenue declined 8% to $138.8 million, but showed signs of recovery with improved new starts and the lowest attrition rate in two years [20][12] - **Wellness at Home Segment**: Revenue increased 0.7% to $157.2 million, offsetting revenue lost from disposed assets [21] Market Data and Key Metrics Changes - The addressable markets within the four segments are believed to be growing in aggregate by mid-single digits, driven by an aging U.S. population and increasing prevalence of chronic conditions [6][7] - The company serves 4.2 million patients across over 660 locations in all 50 states, indicating a broad geographic footprint [7] Company Strategy and Development Direction - The company aims to deliver consistent, sustainable organic growth by focusing on its four core segments and enhancing patient service excellence [6][10] - There is a commitment to improving operational workflows and patient experience, particularly in the Diabetes Health segment [10][12] - The company is reducing debt and exiting non-core product lines to sharpen strategic focus [14][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to manage potential impacts from international trade policies and tariffs, indicating that current exposure is contained [15][16] - The company remains optimistic about the future of its Diabetes Health segment, citing improvements in processes and patient service [12][30] Other Important Information - The company has reduced its debt balance by $25 million in the first quarter, totaling $195 million over the last five quarters [13][23] - Full-year revenue expectations have been reduced by $40 million due to the sale of certain incontinence assets [24] Q&A Session Summary Question: Can you provide additional color on the improvement in the diabetes business? - Management noted positive movement in the pump business and a second consecutive quarter of growth in new starts for continuous glucose monitors (CGMs) [28][30] Question: What is the situation with new starts in the sleep segment? - Management acknowledged a slight decline in new starts but emphasized that it is not due to external factors, and plans are in place to address performance in certain geographies [32][34] Question: Can you clarify the guidance changes related to asset sales? - The guidance change is exclusively for the incontinence asset sale, with no comments on the infusion asset sale until it is closed [29][30] Question: What are the expectations for the second quarter? - Management expects flat revenue year-over-year with adjusted EBITDA margins between 18.3% and 19.3%, impacted by previous revenue mix shifts [36][38] Question: Are there opportunities for acquisitions in troubled markets? - Management confirmed ongoing M&A discussions and the potential for modest tuck-in acquisitions to enhance market position [62][63]