Regarding the contract, covered membership count, revenue per member, utilization, and product costs are all meeting our expectations. As for Q1 financial results, first quarter revenue of $819.8 million grew 5.4% versus the prior year quarter and exceeded the midpoint of our guidance range by approximately $22 million. On an organic basis, adjusting for the impact of acquisitions and dispositions, we delivered 9.1% year-over-year growth. Of that, about 500 basis points came from the new capitated contract.

The other 400 basis points came from the base business, with each of our four segments delivering positive organic growth in the quarter. Sleep Health net revenue of $358.5 million grew 13.3% versus the prior year, and PAP new starts set another new record. We anticipate that as accumulating evidence highlights the significance of sleep in overall health, there will be corresponding increase in demand for therapies aimed at improving sleep quality. Despite a very mild flu season, Respiratory Health net revenue of $178.1 million grew 7.6% versus the prior year, and oxygen new starts grew 12.8%.

Diabetes Health net revenue of $142.2 million grew 2.4% versus the prior year. Wellness at Home net revenue of $141 million declined 10.3% on a reported basis, reflecting $35.8 million of disposed revenue from non-core assets exited during 2025. Over the past two years, we have carefully pruned our portfolio to product categories that support growth in our Sleep and Respiratory Health segments. After adjusting for these dispositions, Wellness at Home delivered 11% organic growth.

What went well
  • Q1 net revenue of $819.8M, up 5.4% YoY and ~$22M above the guidance midpoint; 9.1% organic growth with all four segments positive
  • Completed the largest patient transition in HME history, standing up 35 de novo locations and becoming exclusive HME provider for 10M+ new members ahead of the planned first-half timeline
  • Sleep Health revenue of $358.5M grew 13.3% YoY with PAP new starts setting another record
  • Respiratory Health revenue of $178.1M grew 7.6% YoY (oxygen new starts +12.8%) despite a very mild flu season
  • Capitated revenue of $74.9M outperformed expectations; capitated membership grew 7x YoY to ~15M and was 9.2% of consolidated revenue
  • April refinancing of the $1.1B senior secured credit facility on improved terms, aided by credit upgrades from both S&P and Moody's
  • Conversational AI moved out of pilot to live calls, scheduling now 25% touchless, and myAPP patient portal crossed 412,000 users
What went wrong
  • Adjusted EBITDA of $121.2M missed guidance by ~$7M, driven by elevated labor and benefit costs
  • $12M of elevated labor expense in Q1 ($8M variable labor to accelerate the transition, $4M elevated wages/benefits)
  • Duplication in onboarding labor across staggered go-live phases/regions inflated transition costs
  • Free cash flow of -$27.5M (though in line with expectations) driven by $121.2M of CapEx for capitated startup inventory
  • Net leverage rose to 3.0x from 2.75x in Q4 2025 after drawing $100M on the revolver to fund an $84.7M asset acquisition
  • Wellness at Home revenue declined 10.3% reported (though +11% organic) reflecting $35.8M of disposed non-core revenue

Guidance Changes

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Performance Breakdown

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Earnings Call Themes & Trends

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Reported 2026-05-05 · figures from the AdaptHealth Corp. Q1 2026 earnings call.

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