AdaptHealth (AHCO) Q2 Revenue Falls 1%

Core Insights - AdaptHealth reported Q2 2025 results with GAAP revenue of $800.4 million, missing analyst expectations by 0.4% and down 0.7% from Q2 2024 [1][2] - Adjusted EBITDA declined by 5.9% to $155.5 million, with an adjusted EBITDA margin of 19.4%, down from 20.5% in the previous year [2][5] - Free cash flow for the first half of 2025 was $73.3 million, a decrease of 37.2% year-over-year [2] Business Overview - AdaptHealth specializes in home medical equipment, serving over 4 million patients with products like CPAP devices, respiratory equipment, and diabetes management supplies [3] - The company focuses on operational efficiency, technology integration, and managing reimbursements from federal programs [4] Quarterly Performance - Revenue and profits declined in Q2 2025 due to sluggish growth in core segments and the sale of non-core assets [5] - The Diabetes Health segment showed signs of recovery with improved retention rates, while the Sleep Health segment faced localized market share losses [6] Key Developments - The divestiture of certain Wellness at Home assets resulted in a pre-tax gain of $32.2 million, impacting forward adjusted EBITDA guidance for FY2025 [7] - Operating cash flow increased to $257.5 million for the first half of 2025, while long-term debt decreased to $1.81 billion [8] Future Guidance - Full-year net revenue for FY2025 is expected to be between $3.18 billion and $3.26 billion, with adjusted EBITDA guidance reduced to $642 million to $682 million [9] - Management indicated that guidance changes are linked to asset sales, with no major mergers or acquisitions announced [9] Areas of Focus - Key areas for investors include recovery in the Diabetes Health segment, strategies for improvement in Sleep Health, ongoing debt reduction, and organic revenue growth [10]