10-Q · May 5, 2026
AdaptHealth Corp. reported Q1 2026 results with revenue of $819.8 million, exceeding expectations of $796.9 million. However, the company's EPS was a loss of $0.05, missing estimates by 4%. Despite a reduction in…
Earnings analysis · 10-Q
AHCO earnings analysis
Filed August 4, 2026 · Our reading of the company's report
The latest report
AdaptHealth delivered 12.7% year-over-year continuing-operations revenue growth to $740.307 million, but profitability and cash conversion deteriorated: gross margin fell to 14.1% from 20.7%, operating margin swung to…
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AdaptHealth delivered 12.7% year-over-year continuing-operations revenue growth to $740.307 million, but profitability and cash conversion deteriorated: gross margin fell to 14.1% from 20.7%, operating margin swung to negative 18.6% from positive 10.0%, and diluted EPS was a loss of $0.99. Sequentially, revenue improved from the implied first-quarter continuing-operations level of $679.873 million, but the Q2 $144.236 million goodwill impairment drove a substantially larger operating loss. Growth from the 2025 capitated contract supported all three segment revenue lines, while elevated labor, distribution, patient-equipment depreciation, and other operating costs impaired segment profitability outside Respiratory Health.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $-0.99
What stood out
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Revenue growth led by capitation
Continuing-operations revenue rose $83.207 million, or 12.7%, year over year to $740.307 million, led by $104.369 million of organic growth (15.9%). Capitated-revenue arrangements increased to $103.337 million, or 13.9% of revenue, from $31.070 million, or 4.7%.
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Respiratory segment expanded profitably
Respiratory Health was the sole segment with both revenue and profit expansion: revenue rose 14.1% to $194.402 million and Adjusted EBITDA increased 17.2% to $53.089 million; margin improved to 27.3% from 26.6%.
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Cost actions target $26.8M annual savings
Management approved a restructuring plan expected to produce approximately $26.8 million of annual savings for approximately $7.0 million of total costs. Headcount actions were substantially complete by June 30, 2026.
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Diabetes divestiture targets $235M cash
The planned Diabetes Health divestiture is for $235.0 million in cash, subject to customary adjustments, and is expected to close in the first quarter of 2027. The business is now reported as discontinued operations, sharpening the continuing-operations focus.
What to watch
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Goodwill impairment drove substantial GAAP loss
GAAP profitability deteriorated sharply: operating income swung from $65.694 million (10.0% margin) to an operating loss of $137.802 million (-18.6% margin), while net loss attributable to AdaptHealth was $145.316 million versus $4.227 million of income. The result included a $144.236 million non-cash goodwill impairment in Respiratory Health and Wellness at Home.
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Capitation investment turned free cash flow negative
Cash conversion weakened as Q2 free cash flow fell to negative $20.942 million from positive $73.329 million, because equipment and fixed-asset purchases rose to $166.244 million from $88.665 million. First-half capex was $287.456 million, or about 20.2% of first-half revenue, largely to support capitated arrangements.
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Diabetes sale carries closing and value-realization risk
New risk factors address execution of the $235.0 million Diabetes Health sale, which is subject to regulatory review and is expected in Q1 2027 but may not close. If completed, the company may not realize anticipated debt reduction and higher-growth/higher-margin capital deployment benefits, and a portion of purchase consideration will be escrowed for indemnification obligations.
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Cash decline and negative working capital
Liquidity tightened: cash ended June 30 at $43.289 million, down from $106.136 million at year-end, and continuing-operations working capital was negative $79.3 million versus negative $19.3 million. The company also had $1.425 billion of senior notes outstanding and $475.0 million drawn under its term loan and revolver at June 30.
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Cost growth materially compressed margins
Margins were pressured despite revenue growth. Cost of net revenue increased 22.0% to $636.101 million, faster than the 12.7% revenue increase, reducing gross margin to 14.1% from 20.7%; Sleep Health Adjusted EBITDA margin fell to 18.2% from 22.0% and Wellness at Home fell to 5.4% from 11.5%.
Management's outlook
The 10-Q does not provide numeric FY2026 revenue or EPS guidance. Management states that the Diabetes Health sale is expected to close in Q1 2027 for $235.0 million in cash, subject to adjustments and closing conditions; its June restructuring plan is expected to cost approximately $7.0 million and generate approximately $26.8 million of annual savings.
Earlier filings 4
10-K · February 24, 2026
AdaptHealth positions itself as a national, technology-enabled HME provider operating four segments (Sleep Health, Respiratory Health, Diabetes Health, Wellness at Home) and servicing ~4.3 million patients through ~640…
10-Q · November 4, 2025
AdaptHealth reported Q3 net revenue of $820.3M (three months ended September 30, 2025) versus $805.9M in Q3 2024 and $800.0M in Q2 2025, with diluted EPS of $0.16. Gross margin compressed slightly to ~19.7% and…
10-Q · May 6, 2025
AdaptHealth reported Q1 2025 net revenue of $777,882,000 and GAAP diluted loss per share of $(0.05). Gross margin compressed to 15.5% and operating income fell to $23,170,000, while operating cash flow remained strong…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.