AdaptHealth(AHCO) - 2025 Q1 - Quarterly Results

Q1 2025 Performance Overview Financial & Operational Highlights AdaptHealth reported decreased Q1 2025 net revenue and Adjusted EBITDA, a wider net loss, but significantly improved cash flow from operations, alongside strategic asset dispositions Q1 2025 Key Financial Metrics (vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Revenue | $777.9M | $792.5M | -1.8% | | Net Loss | $7.2M | $2.1M | Widened | | Adjusted EBITDA | $127.9M | $158.5M | -19.3% | | Cash Flow from Operations | $95.5M | $49.0M | +94.9% | | Free Cash Flow | -$0.1M | -$38.9M | Improved | - The company closed an agreement to sell certain incontinence assets and signed a definitive agreement to sell certain infusion assets, both within the Wellness at Home segment[4] Management Commentary Management emphasized a focus on business improvement, debt reduction, and patient service, noting solid results, Diabetes Health segment improvement, and plans to leverage scale for organic growth - Management emphasized a focus on business improvement, debt reduction, and providing service to its 4.2 million patients[5] - The Diabetes Health segment showed signs of improvement for the second consecutive quarter[5] - The company aims to leverage its geographic reach and operational scale to capture market share and drive sustainable organic growth across all four segments[5] Financial Outlook Updated Fiscal Year 2025 Guidance The company updated its full-year 2025 guidance, lowering net revenue and slightly reducing Adjusted EBITDA due to asset dispositions, while maintaining unchanged free cash flow guidance - Financial guidance for fiscal year 2025 was updated to account for the disposition of certain incontinence assets[6] Fiscal Year 2025 Guidance Update | Metric | Previous Guidance | Updated Guidance | | :--- | :--- | :--- | | Net Revenue | $3.22B - $3.36B | $3.18B - $3.32B | | Adjusted EBITDA | $670M - $710M | $665M - $705M | | Free Cash Flow | $180M - $220M | $180M - $220M (Unchanged) | Consolidated Financial Statements (Unaudited) Statements of Operations AdaptHealth reported a Q1 2025 net revenue decrease to $777.9 million, a significant drop in operating income to $23.2 million due to higher costs, and a widened net loss of $7.2 million Q1 2025 Statement of Operations Highlights (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Revenue | $777,882 | $792,497 | | Operating Income | $23,170 | $50,531 | | Net Loss Attributable to AdaptHealth | $(7,207) | $(2,134) | | Diluted Net Loss Per Share | $(0.05) | $(0.02) | - Cost of net revenue increased to $657.4 million from $635.0 million in the prior year quarter[25] Balance Sheets As of March 31, 2025, AdaptHealth reported total assets of $4.44 billion and liabilities of $2.86 billion, with cash decreasing to $53.7 million and assets held for sale significantly increasing to $101.4 million Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash | $53,650 | $109,747 | | Assets held for sale | $101,449 | $52,748 | | Total Assets | $4,437,350 | $4,486,947 | | Total Liabilities | $2,863,496 | $2,908,829 | | Total Stockholders' Equity | $1,573,854 | $1,578,118 | Statements of Cash Flows The company generated $95.5 million in cash from operating activities in Q1 2025, significantly offsetting $95.6 million used in investing activities and $56.0 million in financing activities, resulting in a net cash decrease of $56.1 million Q1 2025 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $95,527 | $49,035 | | Net cash used in investing activities | $(95,585) | $(87,891) | | Net cash (used in) provided by financing activities | $(56,039) | $41,290 | | Net (decrease) increase in cash | $(56,097) | $2,434 | Non-GAAP Financial Measures The company uses non-GAAP measures like Adjusted EBITDA and Free Cash Flow to analyze financial results, believing they supplement U.S. GAAP for performance evaluation, internal compensation, and acquisition analysis Reconciliation of Net Loss to Adjusted EBITDA Q1 2025 Adjusted EBITDA decreased to $127.9 million (16.4% margin) from $158.5 million (20.0% margin) in Q1 2024, with reconciliation from net loss primarily adjusted for depreciation, interest, and equity-based compensation Adjusted EBITDA Reconciliation (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss attributable to AdaptHealth Corp. | $(7,207) | $(2,134) | | EBITDA | $117,515 | $130,849 | | Adjusted EBITDA | $127,938 | $158,485 | | Adjusted EBITDA Margin | 16.4% | 20.0% | Reconciliation to Free Cash Flow Free cash flow significantly improved to a near break-even negative $0.1 million in Q1 2025, driven by a substantial increase in cash from operations ($95.5 million) that nearly offset capital expenditures Free Cash Flow Reconciliation (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $95,527 | $49,035 | | Purchases of equipment and other fixed assets | $(95,585) | $(87,891) | | Free cash flow | $(58) | $(38,856) | Company Overview Business Description AdaptHealth is a national provider of healthcare-at-home solutions, operating through four segments (Sleep, Respiratory, Diabetes, Wellness at Home) and serving approximately 4.2 million patients annually across 50 states via 660 locations - The company operates through four reportable segments: Sleep Health, Respiratory Health, Diabetes Health, and Wellness at Home[9] - Serves approximately 4.2 million patients annually in all 50 states via a network of approximately 660 locations in 47 states[10] - Partners with a diverse network of referral sources, including acute care hospitals, sleep labs, pulmonologists, and skilled nursing facilities[10]