AdaptHealth swings to $154M loss in Q3 2026
The Diabetes Health sale is expected to close in the first quarter of 2027 for $235.0 million in cash, subject to regulatory approvals and customary conditions.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
10-Q
AdaptHealth Corp. reported third-quarter 2026 continuing-operations revenue of $745.648 million, versus $672.367 million a year earlier; nine-month revenue was $2,165.828 million, versus $1,974.014 million. Net loss attributable to AdaptHealth was $153.987 million for the quarter, compared with net income of $24.509 million, and $303.956 million for nine months, compared with net income of $31.976 million. Goodwill impairment charges were $184.751 million in the third quarter and $328.987 million for nine months.
AdaptHealth agreed to sell its Diabetes Health business for $235.0 million in cash, subject to customary purchase-price adjustments; closing is expected in the first quarter of 2027, subject to regulatory approvals and other customary conditions. The business is reported as discontinued operations. Nine-month operating cash flow was $395.613 million versus $418.587 million in 2025. In July, AdaptHealth contributed its equity ownership in its former eCommerce subsidiary, along with $2.0 million, to a newly formed joint venture in exchange for a minority equity interest; it recorded a $12.0 million pre-tax deconsolidation gain.
1 point · 0 major1 major · 3 points
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointThird-quarter continuing-operations revenue was $745.648 million, versus $672.367 million a year earlier.
Negative
- Major pointAttributable results shifted to a third-quarter $153.987 million loss from $24.509 million income.
- Moderate pointNine-month operating cash flow was $395.613 million, versus $418.587 million in 2025.
- Minor pointNine-month goodwill impairment charges totaled $328.987 million.
Filing Explained
The goodwill impairment reduced reported earnings and goodwill, but was not a cash payment.
AdaptHealth completed a refinancing in April 2026; at
The agreement includes a
The company says a sustained stock-price decline triggered its third-quarter goodwill test; it recorded a
Key Figures
Continuing-operations revenue: $745.648 million
Net loss attributable to AdaptHealth: $153.987 million
Goodwill impairment: $328.987 million
+3 more
6 metrics
Continuing-operations revenue
$745.648 million
Three months ended September 30, 2026; $672.367 million in 2025.
Net loss attributable to AdaptHealth
$153.987 million
Three months ended September 30, 2026; net income was $24.509 million in 2025.
Goodwill impairment
$328.987 million
Nine months ended September 30, 2026.
Operating cash flow
$395.613 million
Nine months ended September 30, 2026; $418.587 million in 2025.
Diabetes Health sale price
$235.0 million in cash
Sale agreement; closing expected in the first quarter of 2027, subject to conditions.
Long-term debt
$1,883.857 million
Debt summary as of September 30, 2026, before the current portion is deducted.
Key Terms
goodwill impairment, discontinued operations, at-risk capitation arrangements, equity method of accounting, +1 more
5 terms
goodwill impairment financial
"non-cash goodwill impairment charges"
Goodwill impairment occurs when a company’s valued reputation or brand strength, known as goodwill, is found to be worth less than previously recorded on its financial statements. This usually happens when the company's performance declines or market conditions change, signaling that the expected benefits from acquisitions or brand value are no longer as strong. It matters to investors because it can indicate that a company's assets are less valuable than initially thought, potentially affecting its overall financial health.
discontinued operations financial
"reported as discontinued operations"
Discontinued operations are parts of a company that it has decided to sell or shut down, and no longer plans to run in the future. This matters to investors because it helps them understand which parts of the business are ongoing and which are being phased out, providing a clearer picture of the company’s current performance and future prospects. Think of it like a store closing a department—it no longer contributes to sales or profits.
at-risk capitation arrangements financial
"certain at-risk capitation arrangements"
equity method of accounting financial
"accounted for under the equity method of accounting"
An equity method of accounting is the way a company reports its financial interest in another business when it has significant influence but not full control, typically owning between about 20% and 50% of the voting stock. Instead of listing the investment at purchase cost or consolidating every line item, the investor records its proportional share of the other company’s profits or losses and adjusts the investment value for dividends or impairments, so investors see the economic impact of that stake. This matters because it changes reported earnings and asset values in a way that reflects ongoing performance—similar to showing your share of a small business’s monthly profit on your own books rather than just the amount you originally paid for your share—and helps gauge how much influence that stake has on the investor’s financial health.
springing maturity date financial
"subject to a springing maturity date"
A springing maturity date is a contractual maturity that does not apply immediately but becomes the effective repayment date only if a specified trigger event occurs. Loan agreements, bonds, or notes will name a primary maturity date and one or more springing maturities that 'spring' into effect on triggers such as covenant breaches, defaults, failure to meet certain financial tests, change of control, or non‑renewal of a facility; when the trigger happens, the outstanding obligation becomes due on the springing maturity date or is accelerated to that date. The term has no standalone legal effect outside the written contract — the exact triggers and timing must be defined in the governing agreement.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much revenue did AHCO report in the third quarter of 2026?
AdaptHealth's third-quarter 2026 continuing-operations revenue was $745.648 million, compared with $672.367 million for the three months ended September 30, 2025. For the nine months ended September 30, 2026, continuing-operations revenue was $2,165.828 million, compared with $1,974.014 million a year earlier.
What are the terms of AHCO's Diabetes Health sale?
AdaptHealth agreed to sell its Diabetes Health business for $235.0 million in cash, subject to customary purchase-price adjustments. Closing is expected in the first quarter of 2027, subject to certain regulatory approvals and other customary closing conditions. The applicable Hart-Scott-Rodino waiting period expired before September 30, 2026.
AI-generated analysis. How Rhea-AI works. Not financial advice.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
For the quarterly period ended September 30, 2026
OR
Commission file number: 001-38399
(Exact name of registrant as specified in its charter)
| (State of Other Jurisdiction of incorporation or Organization) | (I.R.S. Employer Identification No.) | ||||
| (Address of principal executive offices) | (Zip code) | ||||
Registrant’s telephone number, including area code: (610 ) 424-4515
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name Of Each Exchange On Which Registered | ||||||||||||
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.0405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Accelerated filer o | Non-accelerated filer o | ||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
As of October 30, 2026, there were 136,525,348 shares of the Registrant’s Common Stock issued and outstanding.
ADAPTHEALTH CORP.
FORM 10-Q
TABLE OF CONTENTS
| Page Number | |||||
PART I FINANCIAL INFORMATION | |||||
Item 1. Interim Consolidated Financial Statements (Unaudited) | |||||
Consolidated Balance Sheets as of September 30, 2026 and December 31, 2025 | 3 | ||||
Consolidated Statements of Operations for the three and nine months ended September 30, 2026 and 2025 | 4 | ||||
Consolidated Statements of Comprehensive (Loss) Income for the three and nine months ended September 30, 2026 and 2025 | 5 | ||||
Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2026 and 2025 | 6 | ||||
Consolidated Statements of Cash Flows for the nine months ended September 30, 2026 and 2025 | 8 | ||||
Notes to Interim Consolidated Financial Statements | 9 | ||||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 43 | ||||
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 69 | ||||
Item 4. Controls and Procedures | 69 | ||||
PART II OTHER INFORMATION | 70 | ||||
Item 1. Legal Proceedings | 70 | ||||
Item 1A. Risk Factors | 70 | ||||
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 71 | ||||
Item 3. Defaults upon Senior Securities | 71 | ||||
Item 4. Mine Safety Disclosure | 71 | ||||
Item 5. Other Information | 71 | ||||
Item 6. Exhibits | 72 | ||||
Signatures | 73 | ||||
1
Table of Contents
CAUTIONARY STATEMENT
In this Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part I Item 2, and the documents incorporated by reference herein, we make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to expectations for future financial performance, business strategies or expectations for our business. These statements may be preceded by, followed by or include the words “may,” “might,” “will,” “will likely result,” “should,” “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “continue,” “target” or similar expressions.
These forward-looking statements are based on information available to us as of the date they were made, and involve a number of risks and uncertainties which may cause them to turn out to be wrong. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:
•competition and the ability of our business to grow and manage profitable growth;
•our ability to successfully complete the divestiture of our Diabetes Health business;
•fluctuations in the U.S. and/or global stock markets;
•the possibility that we may be adversely affected by other economic, business, and/or competitive factors;
•changes in applicable laws or regulations;
•failure to consummate or realize the expected benefits of acquisitions; and
•other risks and uncertainties set forth in this Form 10-Q.
Investors should carefully consider the foregoing factors and the other risks and uncertainties that may affect our business including those outlined under Item 1A, Risk Factors, in our most recent annual report on Form 10-K and our quarterly reports on Form 10-Q.
2
Table of Contents
PART I – FINANCIAL INFORMATION
Item 1. Interim Consolidated Financial Statements
ADAPTHEALTH CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
| September 30, 2026 | December 31, 2025 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash | $ | $ | |||||||||
| Accounts receivable | |||||||||||
| Inventory | |||||||||||
| Prepaid and other current assets | |||||||||||
| Current assets held for sale - discontinued operations | |||||||||||
| Total current assets | |||||||||||
| Equipment and other fixed assets, net | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Finance lease right-of-use assets | |||||||||||
| Goodwill | |||||||||||
| Identifiable intangible assets, net | |||||||||||
| Deferred income taxes, net | |||||||||||
| Other assets | |||||||||||
| Noncurrent assets held for sale - discontinued operations | |||||||||||
| Total Assets | $ | $ | |||||||||
| Liabilities and Stockholders' Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable and accrued expenses | $ | $ | |||||||||
| Current portion of long-term debt | |||||||||||
| Current portion of operating lease obligations | |||||||||||
| Current portion of finance lease obligations | |||||||||||
| Contract liabilities | |||||||||||
| Other liabilities | |||||||||||
| Liabilities held for sale - discontinued operations | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt, less current portion | |||||||||||
| Operating lease obligations, less current portion | |||||||||||
| Finance lease obligations, less current portion | |||||||||||
| Other long-term liabilities | |||||||||||
| Total Liabilities | |||||||||||
Commitments and contingencies (note 17) | |||||||||||
| Stockholders' Equity: | |||||||||||
Common Stock, par value of $ | |||||||||||
Preferred Stock, par value of $ | |||||||||||
Treasury stock, at cost ( | ( | ( | |||||||||
| Additional paid-in capital | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
| Accumulated other comprehensive income | |||||||||||
| Total stockholders' equity attributable to AdaptHealth Corp. | |||||||||||
| Noncontrolling interest in subsidiary | |||||||||||
| Total Stockholders' Equity | |||||||||||
| Total Liabilities and Stockholders' Equity | $ | $ | |||||||||
See accompanying notes to unaudited interim consolidated financial statements.
3
Table of Contents
ADAPTHEALTH CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
| Three Months Ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net revenue | $ | $ | $ | $ | |||||||||||||||||||
| Costs and expenses: | |||||||||||||||||||||||
| Cost of net revenue | |||||||||||||||||||||||
| General and administrative expenses | |||||||||||||||||||||||
| Depreciation and amortization, excluding patient equipment depreciation | |||||||||||||||||||||||
| Goodwill impairment (note 8) | |||||||||||||||||||||||
| Total costs and expenses | |||||||||||||||||||||||
| Gain on sale of businesses (note 4) | ( | ( | |||||||||||||||||||||
| Gain on deconsolidation of subsidiary (note 1) | ( | ( | |||||||||||||||||||||
| Operating (loss) income | ( | ( | |||||||||||||||||||||
| Interest expense, net | |||||||||||||||||||||||
| Loss on extinguishment of debt | |||||||||||||||||||||||
| (Loss) income from continuing operations before income taxes | ( | ( | |||||||||||||||||||||
| Income tax (benefit) expense | ( | ( | |||||||||||||||||||||
| Net (loss) income from continuing operations | ( | ( | |||||||||||||||||||||
| Net income from discontinued operations, net of tax | |||||||||||||||||||||||
| Net (loss) income | ( | ( | |||||||||||||||||||||
| Income attributable to noncontrolling interest | |||||||||||||||||||||||
| Net (loss) income attributable to AdaptHealth Corp. | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| Weighted average common shares outstanding - basic | |||||||||||||||||||||||
| Weighted average common shares outstanding - diluted | |||||||||||||||||||||||
| Basic net (loss) income per share (note 14): | |||||||||||||||||||||||
| Continuing operations | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| Discontinued operations | |||||||||||||||||||||||
| Basic net (loss) income per share | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| Diluted net (loss) income per share (note 14): | |||||||||||||||||||||||
| Continuing operations | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| Discontinued operations | |||||||||||||||||||||||
| Diluted net (loss) income per share | $ | ( | $ | $ | ( | $ | |||||||||||||||||
See accompanying notes to unaudited interim consolidated financial statements.
4
Table of Contents
ADAPTHEALTH CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(IN THOUSANDS)
(UNAUDITED)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net (loss) income from continuing operations | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| Other comprehensive income: | |||||||||||||||||||||||
| Change in fair value of interest rate swaps, inclusive of reclassification adjustment, net of tax | ( | ( | ( | ||||||||||||||||||||
| Comprehensive (loss) income | ( | ( | |||||||||||||||||||||
| Income attributable to noncontrolling interest | |||||||||||||||||||||||
| Comprehensive (loss) income attributable to AdaptHealth Corp. | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
See accompanying notes to unaudited interim consolidated financial statements.
5
Table of Contents
ADAPTHEALTH CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(IN THOUSANDS)
(UNAUDITED)
| Common Stock | Preferred Stock | Treasury Stock | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive income | Noncontrolling interest in subsidiary | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | ( | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Exercise of stock options | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Payments for tax withholdings from vesting of restricted stock units and stock option exercises | — | — | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock issued in connection with employee stock purchase plan | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distribution to non-controlling interest | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net (loss) income | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Change in fair value of interest rate swaps, inclusive of reclassification adjustment, net of tax | — | — | — | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2026 | $ | $ | $ | ( | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Exercise of stock options | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Payments for tax withholdings from vesting of restricted stock units and stock option exercises | — | — | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock issued in connection with employee stock purchase plan | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distribution to non-controlling interest | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net (loss) income | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | ( | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Exercise of stock options | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Payments for tax withholdings from vesting of restricted stock units and stock option exercises | — | — | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distribution to non-controlling interest | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock issued in connection with employee stock purchase plan | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net (loss) income | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2026 | $ | $ | $ | ( | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
6
Table of Contents
| Common Stock | Preferred Stock | Treasury Stock | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive income | Noncontrolling interest in subsidiary | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | ( | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Payments for tax withholdings from vesting of restricted stock units | — | — | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock issued in connection with employee stock purchase plan | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distribution to non-controlling interest | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net (loss) income | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Change in fair value of interest rate swaps, inclusive of reclassification adjustment, net of tax | — | — | — | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | ( | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Payments for tax withholdings from vesting of restricted stock units | — | — | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distribution to non-controlling interest | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Change in fair value of interest rate swaps, inclusive of reclassification adjustment, net of tax | — | — | — | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | ( | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Payments for tax withholdings from vesting of restricted stock units | — | — | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distribution to non-controlling interest | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Capital contribution by non-controlling interest | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock issued in connection with employee stock purchase plan | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Change in fair value of interest rate swaps, inclusive of reclassification adjustment, net of tax | — | — | — | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2025 | $ | $ | $ | ( | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
See accompanying notes to unaudited interim consolidated financial statements.
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ADAPTHEALTH CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net (loss) income | $ | ( | $ | ||||||||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization, including patient equipment depreciation | |||||||||||
| Goodwill impairment | |||||||||||
| Equity-based compensation | |||||||||||
| Reduction in the carrying amount of operating lease right-of-use assets | |||||||||||
| Reduction in the carrying amount of finance lease right-of-use assets | |||||||||||
| Deferred income tax (benefit) expense | ( | ||||||||||
| Loss on extinguishment of debt | |||||||||||
| Amortization of deferred financing costs | |||||||||||
| Gain on deconsolidation of subsidiary | ( | ||||||||||
| Gain on sale of businesses | ( | ( | |||||||||
| Other | |||||||||||
| Changes in operating assets and liabilities, net of effects from acquisitions: | |||||||||||
| Accounts receivable | ( | ||||||||||
| Inventory | ( | ( | |||||||||
| Prepaid and other assets | ( | ||||||||||
| Operating lease obligations | ( | ( | |||||||||
| Operating liabilities | |||||||||||
| Net cash provided by operating activities | |||||||||||
| Cash flows from investing activities: | |||||||||||
| Purchases of equipment and other fixed assets | ( | ( | |||||||||
| Payments for business acquisitions, net of cash acquired | ( | ( | |||||||||
| Proceeds from the sale of businesses, net of cash disposed | |||||||||||
| Proceeds from the sale of assets | |||||||||||
| Investment in joint venture | ( | ||||||||||
| Receipt of contingent consideration from the sale of assets | |||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from borrowings on long-term debt and lines of credit | |||||||||||
| Repayments on long-term debt and lines of credit | ( | ( | |||||||||
| Repayments of finance lease obligations | ( | ( | |||||||||
| Proceeds received in connection with employee stock purchase plan | |||||||||||
| Payments relating to the Tax Receivable Agreement | ( | ( | |||||||||
| Payments of debt financing costs | ( | ||||||||||
| Distributions to noncontrolling interests | ( | ( | |||||||||
| Payments for tax withholdings from vesting of restricted stock units and stock option exercises | ( | ( | |||||||||
| Payments of deferred purchase price from acquisitions | ( | ( | |||||||||
| Net cash provided by (used in) financing activities | ( | ||||||||||
| Net decrease in cash | ( | ( | |||||||||
| Cash at beginning of period | |||||||||||
| Cash at end of period | $ | $ | |||||||||
| Supplemental disclosures: | |||||||||||
| Cash paid for interest | $ | $ | |||||||||
| Cash (refunded) paid for income taxes | ( | ||||||||||
| Noncash investing and financing activities: | |||||||||||
| Unpaid equipment and other fixed asset purchases at end of period | $ | $ | |||||||||
| Assets subject to operating lease obligations | |||||||||||
| Operating lease obligations | ( | ( | |||||||||
| Write-off of assets subject to operating lease obligations | ( | ( | |||||||||
| Write-off of operating lease obligations | |||||||||||
| Assets subject to finance lease obligations | |||||||||||
| Finance lease obligations | ( | ( | |||||||||
| Write-off of assets subject to finance lease obligations | ( | ( | |||||||||
| Write-off of finance lease obligations | |||||||||||
See accompanying notes to unaudited interim consolidated financial statements.
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ADAPTHEALTH CORP. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements (Unaudited)
(1) General Information
AdaptHealth Corp. and subsidiaries ("AdaptHealth" or "the Company") is a national leader in providing patient-centered, healthcare-at-home solutions including home medical equipment ("HME"), medical supplies, and related services. AdaptHealth services beneficiaries of Medicare, Medicaid and commercial insurance payors. The Company operates under three reportable segments that align with its product categories: (i) Sleep Health, (ii) Respiratory Health, and (iii) Wellness at Home. The Sleep Health segment provides sleep therapy equipment, supplies and related services (including continuous positive airway pressure and BiLevel services) to individuals for the treatment of obstructive sleep apnea. The Respiratory Health segment provides oxygen and home mechanical ventilation equipment and supplies and related chronic therapy services to individuals for the treatment of respiratory diseases, such as chronic obstructive pulmonary disease and chronic respiratory failure. The Wellness at Home segment provides home medical equipment and services to patients in their homes including those who have been discharged from acute care and other facilities. The segment tailors a service model to patients who are adjusting to new lifestyles or navigating complex disease states by providing essential medical supplies and durable medical equipment.
The interim consolidated financial statements are unaudited, but reflect all normal recurring adjustments that are, in the opinion of management, necessary to fairly present the information set forth herein. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Interim results are not necessarily indicative of the results for a full year.
Except for the additions of discontinued operations within Note 1, General Information - Held for Sale and Discontinued Operations, and equity method investments within Note 1, General Information - Equity Method Investments, there have been no material changes in the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
As a result of the Company's plan to divest the Diabetes Health business, as further discussed in Note 5, Held for Sale and Discontinued Operations, the Diabetes Health business met the criteria to be reported as discontinued operations. Therefore, the Company has reported the results of the Diabetes Health business, including the results of operations, and related assets and liabilities, as discontinued operations for all periods presented herein. The Diabetes Health business provides medical devices, including continuous glucose monitors and insulin pumps, and related services to patients for the treatment of diabetes. Unless otherwise noted, all activities and amounts reported in the accompanying notes to the interim consolidated financial statements relate to the continuing operations of the Company and exclude activities and amounts related to the Diabetes Health business.
(a) Basis of Presentation
The interim consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). In the opinion of management, the interim consolidated financial statements include all necessary adjustments for a fair presentation of the financial position and results of operations for the periods presented. With the exception of Note 5, the notes to the interim consolidated financial statements reflect the continuing operations of AdaptHealth unless otherwise noted. See Note 5, Held for Sale and Discontinued Operations, for additional information regarding discontinued operations and assets and liabilities held for sale.
(b) Basis of Consolidation
The accompanying interim consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
(c) Business Segments
Operating segments are defined as components of a public entity for which discrete financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”) for purposes of allocating resources and evaluating financial performance. The Company’s CODM is its Chief Executive Officer. The Company is organized
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ADAPTHEALTH CORP. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
(d) Concentration of Credit Risk
Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash.
(e) Accounting Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and reported amounts of revenues and expenses during the reporting period. Management bases these estimates and assumptions upon historical experience, existing and known circumstances, authoritative accounting pronouncements and other factors that management believes to be reasonable. Significant areas requiring the use of management estimates relate to revenue recognition and the valuation of accounts receivable (implicit price concession), income taxes and the tax receivable agreement, equity-based compensation, long-lived assets, including goodwill and identifiable intangible assets, business combinations, equity method investments and contingencies. Actual results could differ from those estimates.
(f) Business Combinations
The Company applies the acquisition method of accounting for business acquisitions. The results of operations of the businesses acquired by the Company are included as of the respective acquisition date. The acquisition-date fair value of the consideration transferred, including the fair value of any contingent consideration, is allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition. To the extent the acquisition-date fair value of the consideration transferred exceeds the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed, such excess is allocated to goodwill. Upon initial recognition, the Company allocates goodwill to reportable units based on the reportable unit expected to benefit from the business combination. Patient relationships, medical records and patient lists are not reported as separate intangible assets due to regulatory requirements and lack of contractual agreements but are part of goodwill. Customer-related relationships are not reported as separate intangible assets but are part of goodwill as authorizing physicians are under no obligation to refer the Company’s services to their patients, who are free to change physicians and service providers at any time. The Company may adjust the preliminary purchase price allocation, as necessary, as it obtains more information regarding asset valuations and liabilities assumed that existed but were not available at the acquisition date, which is generally up to one year after the acquisition closing date. Acquisition related expenses are recognized separately from the business combination and are expensed as incurred.
(g) Recoverability of Goodwill
The Company has a significant amount of goodwill on its balance sheet that resulted from the business acquisitions the Company has made. Goodwill is not amortized, rather, it is assessed at the reporting unit level for impairment annually and also upon the occurrence of a triggering event or change in circumstances indicating that the carrying value of goodwill may be impaired. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such triggering events potentially warranting an annual or interim goodwill impairment assessment include, among other factors, declines in historical or projected reporting unit revenue, operating results or cash flows, and sustained decreases in the Company’s stock price or market capitalization. Such changes in circumstance can include, among others, changes in the legal environment, reimbursement environment, operating performance, and/or future prospects. In addition, if applicable, a goodwill impairment test is also performed immediately before and after a reorganization of the Company’s reporting structure when the reorganization would affect the composition of one or more of the Company’s reporting units.
The Company performs its annual impairment assessment of goodwill during the fourth quarter of each year. The impairment assessment can be performed on either a qualitative or quantitative basis. The Company first assesses qualitative factors to determine whether it is necessary to perform a quantitative goodwill impairment test. Under the qualitative assessment, the Company is not required to calculate the fair value of a reporting unit unless the Company determines that it
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ADAPTHEALTH CORP. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
is more likely than not that its fair value is less than its carrying amount. If determined necessary, the Company applies the quantitative impairment test to identify and measure the amount of impairment, if any, by comparing the fair value of a reporting unit to its carrying amount, including goodwill. If under the quantitative test the fair value of a reporting unit is less than its carrying amount, then the amount of the impairment loss, if any, is determined based on the amount by which the carrying amount exceeds the fair value up to the total value of goodwill assigned to the reporting unit.
Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors, such as estimates of a reporting unit's fair value, and judgment about impairment triggering events. Fair values of the reporting units are estimated using a weighted methodology considering the output from both the income and market approaches. The income approach incorporates the use of a discounted cash flow (“DCF”) analysis. A number of significant assumptions and estimates are involved in the application of the DCF model to forecast operating cash flows, including revenue growth rates and discount rates. Several of these assumptions could vary among reporting units. The market approach is performed using the Guideline Public Companies method which is based on earnings multiple data. The Company performs a reconciliation between its market capitalization and its estimate of the aggregate fair value of the reporting units, including consideration of an estimated control premium. As a result, there can be no assurance that the estimates and assumptions made for purposes of the annual or interim goodwill impairment test will prove to be accurate predictions of the future.
(h) Gain or Loss on Disposals
From time to time, the Company may sell individual businesses when doing so aligns with its strategic priorities. When a business is sold, goodwill along with identified tangible and intangible assets and liabilities are netted against the sales proceeds to determine the associated gain or loss on disposal. Goodwill is allocated to the disposed business using the relative fair value of the disposed business to the associated reporting unit in which it was included. These transactions may include potential future payments that are contingent upon the achievement of certain conditions. The Company recognizes these future payments at the settlement amount as a gain when the condition for achievement is satisfied and the amounts are realized or realizable.
(i) Long-Lived Assets
The Company’s long-lived assets, such as equipment and other fixed assets, operating lease right-of-use assets, finance lease right-of-use assets and definite-lived identifiable intangible assets, are assessed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. The Company's tangible long-lived assets are located within the U.S.
Definite-lived identifiable intangible assets are comprised of tradenames. Tradenames are amortized using the straight-line method over their estimated useful lives, which reflects the pattern in which the economic benefits of the tradenames are expected to be consumed. In addition to consideration of impairment upon the events or changes in circumstances described above, management regularly evaluates the remaining useful lives of its long-lived assets. The Company's tradenames have useful lives ranging from five to ten years.
The Company did not
(j) Equity-based Compensation
The Company accounts for its equity-based compensation in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 718, Compensation - Stock Compensation, which establishes accounting for share-based awards exchanged for employee services and requires companies to expense the estimated fair value of these awards over the requisite employee service period. Equity-based compensation expense related to these grants is included within general and administrative expenses and cost of net revenue in the accompanying consolidated statements of operations. The Company measures and recognizes equity-based compensation expense for such awards based on their estimated fair values on the date of grant. For share-based awards with service only or service and performance conditions,
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ADAPTHEALTH CORP. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
(k) Accounting for Leases
The Company accounts for its leases in accordance with FASB ASC Topic 842, Leases ("ASC 842"). ASC 842 requires the Company to recognize a lease liability, which represents the discounted obligation to make future minimum lease payments, and a corresponding right-of-use ("ROU") asset on its consolidated balance sheet for most leases, and disclose key information about leasing arrangements. ASC 842 applies to a number of arrangements to which the Company is a party.
Generally, upon the commencement of a lease, the Company will record a lease liability and a ROU asset. However, the Company has elected, for all underlying leases with initial terms of twelve months or less (known as short-term leases), to not recognize a lease liability or ROU asset. Lease liabilities are initially recorded at lease commencement as the present value of future lease payments. ROU assets are initially recorded at lease commencement as the initial amount of the lease liability, together with the following, if applicable: (i) initial direct costs incurred by the lessee and (ii) lease payments made to the lessor net of lease incentives received, prior to lease commencement.
See Note 15, Leases, for additional information.
(l) Equity Method Investments
The Company uses the equity method of accounting under FASB ASC Topic 323, Investments—Equity Method and Joint Ventures, to account for an investment in an entity that it does not control, but in which it has the ability to exercise significant influence over the entity's operating and financial policies. Under the equity method of accounting, the Company recognizes the investment initially at cost, which is subsequently adjusted for its proportionate share of the investee’s net income or loss, additional contributions made, dividends or distributions received, and impairment losses. Losses are only recognized to the extent the Company has positive carrying value related to the investee. Carrying values are only reduced below zero if the Company has an obligation to provide funding to the investee. The Company’s share of net income or loss of its equity method investments is included other income (loss), net in the consolidated statements of operations. The Company’s equity method investments are required to be reviewed for impairment whenever events or changes in circumstance indicate that a decline in value has occurred that is other than temporary.
On July 29, 2026, the Company contributed its equity ownership in its former wholly-owned eCommerce subsidiary, which operates a direct-to-consumer sleep-health business, along with $2.0 million, to a newly formed joint venture (the "JV") in exchange for a minority equity interest in the JV (the "JV Transaction"). As a result, the Company deconsolidated its eCommerce subsidiary, effective July 29, 2026, in accordance with ASC Topic 810, Consolidation ("ASC 810"). The
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ADAPTHEALTH CORP. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
accompanying interim consolidated financial statements include the Company's former eCommerce subsidiary's results of operations through the date of the JV Transaction. Following the JV Transaction, the Company's noncontrolling interest in the JV is accounted for under the equity method of accounting in accordance with ASC Topic 323, Investments—Equity Method and Joint Ventures. As a result of the JV Transaction, the assets, liabilities, revenues, expenses, and cash flows of the Company's former eCommerce subsidiary are no longer included in the Company's consolidated financial statements after July 29, 2026. Upon deconsolidation, the Company recognized its retained minority equity interest in the JV at fair value in accordance with ASC 810-10-40. The resulting fair value became the initial carrying amount of the Company’s equity method investment. The fair value of the retained investment was determined using a combination of an income approach and market approach, including consideration of a discounted cash flow analysis, market multiples of comparable publicly traded companies, recent sales of comparable business entities, and other relevant market data. Significant unobservable inputs utilized in the valuation included assumptions on the projected future cash flows, a discount rate, long-term growth rates, a discount for lack of control, and others. Due to the valuation incorporating significant unobservable inputs and management estimates, the fair value measurement was classified as a Level 3 fair value measurement as described in Note 9, Fair Value of Assets and Liabilities. The fair value of the equity consideration received in the JV in connection with the JV Transaction was $40.5 million and the net assets of the Company's eCommerce subsidiary that were derecognized was $28.5 12.0
The Company evaluated the JV Transaction under ASC 205-20, Presentation of Financial Statements - Discontinued Operations, and concluded the transaction does not represent a strategic shift that has, or will have, a major effect on the Company's operations or financial results. Accordingly, the historical operating results of the Company's former eCommerce subsidiary are included within continuing operations through July 29, 2026 and have not been presented as discontinued operations.
The Company's share of the net income from its equity method investment in the JV was immaterial for the three months ended September 30, 2026. As of September 30, 2026, the carrying value of the Company’s equity method investment in the JV was $42.5 million, which is included in other assets in the accompanying consolidated balance sheets. As of September 30, 2026, the Company had a $2.8 million receivable from the JV for the reimbursement of inventory purchased on its behalf prior to the completion of the JV transaction, which is included in prepaid and other current assets in the accompanying consolidated balance sheets.
(m) Held for Sale and Discontinued Operations
Assets and liabilities are classified as held for sale when all of the held for sale criteria as defined in FASB ASC Topic 360, Property, Plant and Equipment, have been met. When all of the criteria have been met, the assets and liabilities are classified as held for sale in the Company’s consolidated balance sheets. Assets classified as held for sale are reported at the lower of their carrying value or fair value less costs to sell. Depreciation and amortization of assets ceases upon designation as held for sale. The Company assesses the recoverability of assets classified as held for sale each reporting period it remains classified as held for sale and if its carrying value exceeds its fair value, less an estimated cost to sell, an impairment charge is recorded for the excess.
In accordance with FASB ASC Subtopic 205-20, Discontinued Operations, a business is classified as held for sale when management having the authority to approve the action, commits to a plan to sell a business, the business is available for immediate sale in its present condition and an active program to locate a buyer has been initiated. Additionally, the sale must be probable to occur during the next 12 months at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate it is unlikely significant changes to the plan will be made or the plan will be withdrawn.
The results of operations of businesses classified as held for sale are reported as discontinued operations if the disposal represents a strategic shift that will have a major effect on the entity’s operations and financial results. When a business is identified for discontinued operations reporting: (i) results for prior periods are retrospectively reclassified as discontinued operations; (ii) results of operations are reported in a single line, net of tax, in the consolidated statements of operations; and (iii) assets and liabilities are reported as held for sale in the consolidated balance sheets in the period in which the business is classified as held for sale.
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ADAPTHEALTH CORP. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
(n) Recently Adopted Accounting Pronouncements
In July 2025, the FASB issued Accounting Standards Update ("ASU") No. 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments provide a practical expedient permitting an entity to assume that conditions at the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current accounts receivable and current contract assets. The amendments are effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The Company adopted this standard during the first quarter of 2026, which did not have a material impact on its consolidated financial statements or disclosures.
(o) Recently Issued Accounting Pronouncements Not Yet Adopted
In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. This ASU improves the navigability of the required interim disclosures, clarifies when the guidance in Topic 270 is applicable, and provides additional guidance on what disclosures should be provided in interim reporting periods. The amendments also require entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The FASB does not intend to change the fundamental nature of interim reporting or expand or reduce current interim disclosure requirements, but rather intends to provide clarity on the current interim reporting requirements. This ASU will be effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact that this standard will have on its consolidated financial statements and related disclosures.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This amendment modernizes the accounting for internal-use software costs by increasing the operability of the recognition guidance considering different methods of software development related to accounting for internal-use software costs. The amendment is effective for annual periods beginning after December 15, 2027, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact that this standard will have on its consolidated financial statements and related disclosures.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires new financial statement disclosures in tabular format, in the notes to the financial statements, of specified information about certain costs and expenses. This ASU will be effective for annual periods beginning after December 15, 2026. Early adoption is permitted and is effective on either a prospective basis or retrospective basis. The Company is currently evaluating the impact that this standard will have on its consolidated financial statements and related disclosures.
In March 2024, the SEC issued its final climate disclosure rule, which requires registrants to provide climate-related disclosures in their annual reports and registration statements. The new disclosure requirements would have been effective for the Company beginning with its annual report for the year ending December 31, 2025. In April 2024, the SEC stayed its final climate rule to allow for a judicial review of pending legal challenges, and in March 2025, the SEC voted to end its defense of the rules and withdrew from the litigation. In May 2026, the SEC proposed to rescind the climate-related disclosure rules. The Company will continue to monitor the formal administrative outcomes of the proposal but does not anticipate any impact on its consolidated financial statements or disclosures.
(2) Revenue Recognition and Accounts Receivable
Revenue Recognition
The Company generates revenues for services and related products that the Company provides to patients for home medical equipment, related supplies, and other items. The Company’s revenues are recognized in the period in which services and related products are provided to customers and are recorded either at a point in time for the sale of supplies and consumables, over the fixed monthly service period for equipment, or in the month in which eligible members are entitled to receive healthcare services in connection with at-risk capitation arrangements.
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ADAPTHEALTH CORP. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
Revenues are recognized when control of the promised good or service is transferred to customers, in an amount that reflects the consideration the Company expects to receive from patients or under reimbursement arrangements with Medicare, Medicaid and third-party payors, in exchange for those goods and services.
The Company determines the transaction price based on contractually agreed-upon amounts or rates, referred to as explicit price concessions, adjusted for estimates of variable consideration, such as implicit price concessions, based on historical reimbursement experience. The Company utilizes the expected value method to determine the amount of variable consideration, including implicit and explicit price concessions, that should be included to arrive at the transaction price, using contractual agreements and historical reimbursement experience. The Company applies a constraint to the transaction price, such that net revenue is recorded only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in the future. If actual amounts of consideration ultimately received differ from the Company’s estimates, the Company adjusts these estimates, which would affect net revenue in the period such adjustments become known.
Sales revenue is recognized upon transfer of control of products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. Revenues for the sale of sleep therapy equipment supplies (including positive airway pressure ("PAP") resupply products), home medical equipment and related supplies (including wheelchairs, hospital beds and infusion pumps), and other HME products and supplies are recognized when control of the promised good or service is transferred to customers, which is generally upon shipment for direct to consumer medical devices and supplies and upon delivery to the home for home medical equipment.
The Company provides certain equipment to patients which is reimbursed periodically in fixed monthly payments for as long as the patient is using the equipment and medical necessity continues (in certain cases, the fixed monthly payments are capped at a certain amount). The equipment provided to the patient is based upon medical necessity as documented by prescriptions and other documentation received from the patient’s physician. The patient generally does not select the manufacturer or model of the equipment prescribed by their physician and delivered by the Company. Once initial delivery of this equipment is made to the patient for initial setup, a monthly billing process is established based on the initial setup service date. The Company recognizes the fixed monthly revenue ratably over the service period as earned, less estimated adjustments, and defers revenue for the portion of the monthly bill that is unearned. No separate revenue is earned from the initial setup process. Included in fixed monthly revenue are unbilled amounts for which the revenue recognition criteria had been met as of period-end but were not yet billed to the payor. The estimate of net unbilled fixed monthly revenue recognized is based on historical trends and estimates of future collectability.
The Company receives a per member per month (“PMPM”) fee under certain at-risk capitation arrangements, which refers to a model in which the Company receives a PMPM fee from the third-party payor, and is responsible for managing a range of healthcare services and associated costs of its members. In at-risk capitation arrangements, the Company is responsible for the cost of contracted healthcare services required by those members in accordance with the terms of each agreement. Capitated revenue contracts with payors are generally multi-year arrangements and have a single monthly stand ready performance obligation to provide specific aspects of necessary medical care to members for the contracted period in accordance with the scope of the agreements. The Company recognizes revenue in the month in which eligible members are entitled to receive healthcare services during the contract term.
The Company’s billing system contains payor-specific price tables that reflect the fee schedule amounts in effect or contractually agreed upon by various government and commercial insurance payors for each item of equipment or supply provided to a customer. Revenues are recorded based on the applicable fee schedule. The Company has established a contractual allowance, referred to as an explicit price concession, to account for adjustments that result from differences between the payment amount received and the expected realizable amount. If the payment amount received differs from the net realizable amount, an adjustment is recorded to revenues in the period that these payment differences are determined. The Company reports revenues in its consolidated financial statements net of such adjustments.
The Company recognizes revenue in the consolidated statements of operations and contract assets on the consolidated balance sheets only when services have been provided. Since the Company has performed its obligation under the contract, it has unconditional rights to the consideration recorded as contract assets and therefore classifies those billed and unbilled contract assets as accounts receivable.
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ADAPTHEALTH CORP. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
Fixed monthly payments that the Company receives from customers in advance of providing services represent contract liabilities. Such payments primarily relate to patients who are billed monthly in advance and are recognized over the period as earned.
The Company disaggregates net revenue from contracts with customers by payor type and by segment. The Company believes that disaggregation of net revenue into these categories depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The payment terms and conditions within the Company’s revenue-generating contracts vary by payor type and payor source. All of the Company's net revenues are derived from within the U.S.
The composition of net revenue by payor type for the three and nine months ended September 30, 2026 and 2025 are as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Insurance | $ | $ | $ | $ | |||||||||||||||||||
| Government | |||||||||||||||||||||||
| Patient pay | |||||||||||||||||||||||
| Net revenue | $ | $ | $ | $ | |||||||||||||||||||
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ADAPTHEALTH CORP. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
The composition of net revenue by segment for the three and nine months ended September 30, 2026 and 2025 are as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net sales revenue: | |||||||||||||||||||||||
| Sleep Health | $ | $ | $ | $ | |||||||||||||||||||
| Respiratory Health | |||||||||||||||||||||||
| Wellness at Home | |||||||||||||||||||||||
| Total net sales revenue | $ | $ | $ | $ | |||||||||||||||||||
| Net revenue from fixed monthly equipment reimbursements: | |||||||||||||||||||||||
| Sleep Health | $ | $ | $ | $ | |||||||||||||||||||
| Respiratory Health | |||||||||||||||||||||||
| Wellness at Home | |||||||||||||||||||||||
| Total net revenue from fixed monthly equipment reimbursements | $ | $ | $ | $ | |||||||||||||||||||
| Net revenue from capitated revenue arrangements: | |||||||||||||||||||||||
| Sleep Health | $ | $ | $ | $ | |||||||||||||||||||
| Respiratory Health | |||||||||||||||||||||||
| Wellness at Home | |||||||||||||||||||||||
| Total net revenue from capitated revenue arrangements | $ | $ | $ | $ | |||||||||||||||||||
| Total net revenue: | |||||||||||||||||||||||
| Sleep Health | $ | $ | $ | $ | |||||||||||||||||||
| Respiratory Health | |||||||||||||||||||||||
| Wellness at Home | |||||||||||||||||||||||
| Total net revenue | $ | $ | $ | $ | |||||||||||||||||||
Accounts Receivable
Due to the continuing changes in the healthcare industry and third-party reimbursement environment, certain estimates are required in order to record accounts receivable at their net realizable values. Inherent in these estimates is the risk that they will have to be revised or updated as additional information becomes available. The complexity of third-party billing arrangements and laws and regulations governing Medicare and Medicaid may result in adjustments to amounts originally recorded.
The Company performs a periodic analysis to review the valuation of accounts receivable and collectability of outstanding balances. Management’s evaluation takes into consideration such factors as historical cash collections experience, business and economic conditions, trends in healthcare coverage, other collection indicators and information about specific receivables. The Company’s evaluation also considers the age and composition of the outstanding amounts in determining their estimated net realizable value.
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Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
Receivables are considered past due when not collected by established due dates. Specific patient balances are written off after collection efforts have been followed and the account has been determined to be uncollectible. Revisions in receivable estimates are considered implicit price concession adjustments and are recognized as an adjustment to net revenue in the period of revision. The Company does not have any material bad debt expense.
Included in accounts receivable are earned but unbilled accounts receivable. Billing delays, ranging from several days to several weeks, can occur due to the Company’s policy of compiling required payor specific documentation prior to billing for its services rendered. As of September 30, 2026 and December 31, 2025, the Company’s unbilled accounts receivable was $27.7 million and $44.7 million, respectively.
(3) Acquisitions
The Company’s acquisitions are accounted for using the acquisition method pursuant to the requirements of FASB ASC Topic 805, Business Combinations ("ASC 805"), and are included in the Company’s consolidated financial statements since the respective acquisition date. See Note 1, General Information - Business Combinations, for more information on the Company's use of the acquisition method of accounting for business acquisitions.
During the nine months ended September 30, 2026, the Company acquired certain assets from two previous providers in four separate transactions solely to facilitate the transition and servicing of the patients related to newly awarded at-risk capitated contracts which were earned organically. The goodwill generated from these transactions is attributable to the operating efficiencies and expanded infrastructure needed to transition and serve the patients related to the newly awarded at-risk capitated contracts. These transactions were accounted for as business combinations under ASC 805. The goodwill recognized during the nine months ended September 30, 2026 is expected to be deductible for tax purposes. The total consideration paid for these transactions consisted of cash payments of $127.3 million.
The Company allocated the consideration paid to the net assets acquired based on their estimated acquisition date fair values. Based upon management’s evaluation, the consideration paid for these transactions during the nine months ended September 30, 2026 was allocated as follows during the period (in thousands):
| Inventory | $ | ||||
| Prepaid and other current assets | |||||
| Equipment and other fixed assets | |||||
| Other long term assets | |||||
| Deferred tax assets | |||||
| Operating lease right-of-use assets | |||||
| Goodwill | |||||
| Accounts payable and accrued expenses | ( | ||||
| Operating lease liabilities | ( | ||||
| Net assets acquired | $ | ||||
During the nine months ended September 30, 2025, the Company acquired certain assets of two HME providers, each of which was accounted for as a business combination under ASC 805. The goodwill generated from these acquisitions is attributable to expected growth and cost synergies, as well as the expected contribution of each acquisition to the Company’s overall strategy. The goodwill recognized during the nine months ended September 30, 2025 is deductible for tax purposes. The total consideration paid for these two acquisitions consisted of cash payments of $18.6 million at closing.
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ADAPTHEALTH CORP. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
The Company allocated the consideration paid to the net assets acquired based on their estimated acquisition date fair values. Based upon management’s evaluation, the consideration paid for all acquisitions during the nine months ended September 30, 2025 was allocated as follows during the period (in thousands):
| Inventory | $ | ||||
| Equipment and other fixed assets | |||||
| Other long term assets | |||||
| Goodwill | |||||
| Operating lease liabilities | ( | ||||
| Net assets acquired | $ | ||||
(4) Disposals
On May 1, 2025, the Company closed the disposition of an incontinence business that was included in its Wellness at Home segment. In connection with the closing, the Company received gross proceeds of $69.1 million.
On June 9, 2025, the Company closed the disposition of an infusion business that was included in its Wellness at Home segment. In connection with this transaction, the Company received gross proceeds of $53.5 million and was entitled to potential contingent payments of up to $12.5 million based upon the achievement of certain conditions in accordance with the terms of the sale agreement. In June 2026, the Company received $6.3 million related to the contingent payments, which is included in gain on sale of businesses recognized in the consolidated statements of operations for the nine months ended September 30, 2026. The Company does not expect to receive the remaining contingent payments.
The dispositions described above did not represent a strategic shift for the Company. As such, they did not meet the requirements to be classified and presented as discontinued operations.
The following table presents the pre-tax gain recognized during the nine months ended September 30, 2025 associated with the dispositions described above (in thousands):
| Gross sales proceeds | $ | ||||
| Net assets sold | ( | ||||
| Total | $ | ||||
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ADAPTHEALTH CORP. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
The carrying value of the net assets sold at their respective closing dates associated with the dispositions described above were as follows (in thousands):
| Cash | $ | ||||
| Accounts receivable | |||||
| Inventory | |||||
| Prepaid and other current assets | |||||
| Equipment and other fixed assets, net | |||||
| Operating lease right-of-use assets | |||||
| Goodwill | |||||
| Identifiable intangible assets, net | |||||
| Other assets | |||||
| Accounts payable and accrued expenses | ( | ||||
| Operating lease liabilities | ( | ||||
| Other liabilities | ( | ||||
| Total | $ | ||||
(5) Held for Sale and Discontinued Operations
On July 19, 2026, the Company entered into a definitive agreement to sell the Diabetes Health business for $235.0 million in cash, subject to customary purchase price adjustments. The transaction is expected to close in the first quarter of 2027, subject to certain regulatory approvals and other customary closing conditions, including the expiration of termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, which expired prior to September 30, 2026. The Diabetes Health business provides medical devices, including continuous glucose monitors and insulin pumps, and related services to patients for the treatment of diabetes. As a result of this transaction, the Diabetes Health business met the criteria to be reported as discontinued operations. Therefore, the Company has reported the results of the Diabetes Health business, including the results of operations, and related assets and liabilities, as discontinued operations for all periods presented herein.
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ADAPTHEALTH CORP. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
The following table summarizes the major classes of assets and liabilities classified as held for sale (in thousands):
| September 30, 2026 | December 31, 2025 | ||||||||||
| Assets | |||||||||||
| Inventory | $ | $ | |||||||||
| Equipment and other fixed assets, net | |||||||||||
| Goodwill | |||||||||||
| Identifiable intangible assets, net | |||||||||||
| Total assets held for sale - discontinued operations | $ | $ | |||||||||
| Liabilities | |||||||||||
| Contract liabilities | $ | $ | |||||||||
| Total liabilities held for sale - discontinued operations | $ | $ | |||||||||
The following table summarizes the results of discontinued operations (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net revenue | $ | $ | $ | $ | |||||||||||||||||||
| Costs and expenses: | |||||||||||||||||||||||
| Cost of net revenue | |||||||||||||||||||||||
| General and administrative expenses | |||||||||||||||||||||||
| Depreciation and amortization, excluding patient equipment depreciation | |||||||||||||||||||||||
| Income from discontinued operations before income taxes | $ | $ | $ | $ | |||||||||||||||||||
| Income tax expense | |||||||||||||||||||||||
| Net income from discontinued operations, net of tax | $ | $ | $ | $ | |||||||||||||||||||
The following table provides significant non-cash operating and investing cash flow information for the Company's discontinued operations:
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Operating activities: | |||||||||||
| Depreciation and amortization, including patient equipment depreciation | $ | $ | |||||||||
| Reduction in the carrying amount of operating lease right-of-use assets | |||||||||||
| Equity-based compensation | |||||||||||
| Investing activities: | |||||||||||
| Purchases of equipment and other fixed assets | $ | $ | |||||||||
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ADAPTHEALTH CORP. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
(6) Equipment and Other Fixed Assets
Equipment and other fixed assets as of September 30, 2026 and December 31, 2025 are as follows (in thousands):
| September 30, 2026 | December 31, 2025 | ||||||||||
| Patient medical equipment | $ | $ | |||||||||
| Computers and software | |||||||||||
| Delivery vehicles | |||||||||||
| Other | |||||||||||
| Gross carrying value | $ | $ | |||||||||
| Less accumulated depreciation | ( | ( | |||||||||
| Equipment and other fixed assets, net | $ | $ | |||||||||
For the three months ended September 30, 2026 and 2025, the Company recognized depreciation expense of $114.9 million and $90.1 million, respectively. For the nine months ended September 30, 2026 and 2025, the Company recognized depreciation expense of $326.6 million and $261.8 million, respectively.
(7) Segment Information
The Company operates its business through three reportable segments that align to the Company’s product categories: Sleep Health, Respiratory Health, and Wellness at Home. A description of the products and services provided within each of the Company’s three reportable segments is provided below.
Sleep Health
The Sleep Health segment provides sleep therapy equipment, supplies and related services (including continuous positive airway pressure and BiLevel services) to individuals for the treatment of obstructive sleep apnea.
Respiratory Health
The Respiratory Health segment provides oxygen and home mechanical ventilation equipment and supplies and related chronic therapy services to individuals for the treatment of respiratory diseases, such as chronic obstructive pulmonary disease and chronic respiratory failure.
Wellness at Home
The Wellness at Home segment provides home medical equipment and services to patients in their homes including those who have been discharged from acute care and other facilities. The segment tailors a service model to patients who are adjusting to new lifestyles or navigating complex disease states by providing essential medical supplies and durable medical equipment.
The CODM evaluates performance of the reportable segments based on Adjusted EBITDA, which is the primary measure of segment profitability. The CODM uses Adjusted EBITDA to evaluate segment operating performance, generate future operating plans, and to assist with the evaluation of strategic business decisions, including potential acquisitions or divestitures, and whether to invest in certain products or services. Adjusted EBITDA excludes interest expense, net, income tax expense (benefit), depreciation and amortization, including patient equipment depreciation, equity-based compensation expense, litigation settlement expense, and certain other non-recurring items of expense or income that the Company does not consider part of its reportable segments’ core operating results. Adjusted EBITDA includes certain centrally incurred corporate and shared function costs, which are allocated to the reportable segments based on methodologies designed to correlate with each segment’s consumption of the related cost. Segment assets are not regularly provided to the CODM and therefore have not been disclosed.
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Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
In connection with the Company's plan to divest the Diabetes Health business, as further discussed in Note 5, Held for Sale and Discontinued Operations, the Diabetes Health business met the criteria to be reported as discontinued operations and the Company no longer reports Diabetes Health as a reportable segment. Accordingly, the Company's historical segment results were recast to exclude the results of the discontinued operations, as well as to reallocate certain shared costs, primarily related to the general and administrative functions, among the three remaining reportable segments.
The following tables present segment net revenue, significant segment expenses, and other segment items that are included in the Company’s reported measure of segment profit or loss for the three and nine months ended September 30, 2026 and 2025 (in thousands):
| Three Months Ended September 30, 2026 | ||||||||||||||||||||||||||
| Sleep Health | Respiratory Health | Wellness at Home | Total | |||||||||||||||||||||||
| Net revenue | $ | $ | ||||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||
| Cost of product and supplies (a) | ||||||||||||||||||||||||||
| Labor cost (a) (b) | ||||||||||||||||||||||||||
| Other operating expenses (a) (c) | ||||||||||||||||||||||||||
| Other segment items (d) | ||||||||||||||||||||||||||
| Adjusted EBITDA | $ | $ | $ | $ | ||||||||||||||||||||||
| Three Months Ended September 30, 2025 | ||||||||||||||||||||||||||
| Sleep Health | Respiratory Health | Wellness at Home | Total | |||||||||||||||||||||||
| Net revenue | $ | $ | $ | $ | ||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||
| Cost of product and supplies (a) | ||||||||||||||||||||||||||
| Labor cost (a) (b) | ||||||||||||||||||||||||||
| Other operating expenses (a) (c) | ||||||||||||||||||||||||||
| Other segment items (d) | ||||||||||||||||||||||||||
| Adjusted EBITDA | $ | $ | $ | $ | ||||||||||||||||||||||
| Nine Months Ended September 30, 2026 | ||||||||||||||||||||||||||
| Sleep Health | Respiratory Health | Wellness at Home | Total | |||||||||||||||||||||||
| Net revenue | $ | $ | ||||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||
| Cost of product and supplies (a) | ||||||||||||||||||||||||||
| Labor cost (a) (b) | ||||||||||||||||||||||||||
| Other operating expenses (a) (c) | ||||||||||||||||||||||||||
| Other segment items (d) | ||||||||||||||||||||||||||
| Adjusted EBITDA | $ | $ | $ | $ | ||||||||||||||||||||||
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ADAPTHEALTH CORP. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
| Nine Months Ended September 30, 2025 | ||||||||||||||||||||||||||
| Sleep Health | Respiratory Health | Wellness at Home | Total | |||||||||||||||||||||||
| Net revenue | $ | $ | $ | $ | ||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||
| Cost of product and supplies (a) | ||||||||||||||||||||||||||
| Labor cost (a) (b) | ||||||||||||||||||||||||||
| Other operating expenses (a) (c) | ||||||||||||||||||||||||||
| Other segment items (d) | ||||||||||||||||||||||||||
| Adjusted EBITDA | $ | $ | $ | $ | ||||||||||||||||||||||
(a)These expense categories align with the segment-level information that is regularly provided to the CODM and are considered significant to the segment in accordance with ASU No. 2023-07, Segment Reporting ("Topic 280"). The expense categories included in the tables above exclude amounts for patient equipment depreciation since these amounts are not reflected in the segment measure of profit or loss. Refer to the section below, titled Patient Equipment Depreciation, for discussion of such amounts.
(b)Excludes salaries, labor and benefits for corporate employees. Salaries, labor and benefits for corporate employees are included within Other segment items.
(c)Other operating expenses primarily include costs relating to rent and occupancy, facilities, fleet, and other operating costs.
(d)Other segment items include allocated costs related to various general and administrative functions, including revenue cycle management, customer service, technology and communications, sales and marketing, billings and collections, accounting and finance, executive administration, human resources, information technology and legal and compliance.
The following table presents a reconciliation of total Adjusted EBITDA to income (loss) from continuing operations before income taxes for the three and nine months ended September 30, 2026 and 2025 (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Total Adjusted EBITDA | $ | $ | $ | $ | |||||||||||||||||||
| Interest expense, net | ( | ( | ( | ( | |||||||||||||||||||
| Depreciation and amortization, including patient equipment depreciation | ( | ( | ( | ( | |||||||||||||||||||
| Equity-based compensation expense (a) | ( | ( | ( | ( | |||||||||||||||||||
| Goodwill impairment (b) | ( | ( | |||||||||||||||||||||
| Gain on deconsolidation of subsidiary (c) | |||||||||||||||||||||||
| Gain on sale of businesses (d) | |||||||||||||||||||||||
| Restructuring expense (e) | ( | ||||||||||||||||||||||
| Loss on debt extinguishment (f) | ( | ||||||||||||||||||||||
| Litigation settlement expense (g) | ( | ||||||||||||||||||||||
| Other non-recurring expenses, net (h) | ( | ( | ( | ( | |||||||||||||||||||
| (Loss) income from continuing operations before income taxes | $ | ( | $ | $ | ( | $ | |||||||||||||||||
(a)Represents equity-based compensation expense for awards granted to employees and non-employee directors.
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ADAPTHEALTH CORP. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
(b)Represents non-cash goodwill impairment charges as a result of the fair values of the Company's Respiratory Health and Wellness at Home reporting units being less than their respective carrying values. See Note 8, Goodwill and Identifiable Intangible Assets, for additional information.
(c)Represents a pre-tax gain associated with the deconsolidation of the Company's former wholly-owned eCommerce subsidiary. See Note 1, General Information - Equity Method Investments, for additional information.
(d)Represents the pre-tax gains associated with the dispositions of two businesses within the Company's Wellness at Home segment.
(e)Represents expenses related to a cost savings plan that was implemented in June 2026. See Note 19, Restructuring Charges, for additional information.
(f)Represents third-party fees and the write-off of unamortized deferred financing costs in connection with the refinancing of the Company's credit agreement. See Note 12, Debt, for additional discussion of the refinancing.
(g)Represents an expense to settle a shareholder derivative complaint.
(h)The expense for the nine months ended September 30, 2026 consists of $9.3 million of consulting expenses associated with asset dispositions, $2.1 million of transaction costs associated with acquisitions, $1.6 million of severance related to the Company's former Chief Financial Officer, and $2.1 million of other net non-recurring expenses. The expense for the nine months ended September 30, 2025 consists of $9.8 million of consulting expenses associated with asset dispositions (of which $5.1 million relates to contingent success fees from the sales of businesses), $2.3 million of consulting expenses associated with systems implementation activities, $1.7 million of consulting expenses associated with a reorganization project, $1.4 million of transaction costs associated with acquisitions, $1.2 million write-off of assets, and $4.0 million of other non-recurring expenses.
Patient Equipment Depreciation
The following table presents the amounts of patient equipment depreciation by reportable segment for the three and nine months ended September 30, 2026 and 2025 (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Patient equipment depreciation: | |||||||||||||||||||||||
| Sleep Health | $ | $ | $ | $ | |||||||||||||||||||
| Respiratory Health | |||||||||||||||||||||||
| Wellness at Home | |||||||||||||||||||||||
| Total patient equipment depreciation (1) | $ | $ | $ | $ | |||||||||||||||||||
(1)Patient equipment depreciation is included in Cost of net revenue in the accompanying consolidated statements of operations. Patient equipment depreciation is not reflected in the segment measure of profit or loss but the CODM regularly reviews this information by reportable segment.
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ADAPTHEALTH CORP. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
(8) Goodwill and Identifiable Intangible Assets
Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.
The change in the carrying amount of goodwill by reportable segment for the nine months ended September 30, 2026 was as follows (in thousands):
| Sleep Health | Respiratory Health | Wellness at Home | Total Goodwill | ||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | $ | |||||||||||||||||||
| Goodwill from acquisitions (note 3) | |||||||||||||||||||||||
| Write-off from deconsolidation of subsidiary (note 1) | ( | ( | |||||||||||||||||||||
| Goodwill impairment | ( | ( | ( | ||||||||||||||||||||
| Other | |||||||||||||||||||||||
| Balance at September 30, 2026 | $ | $ | $ | $ | |||||||||||||||||||
Management is required to perform an assessment of the recoverability of goodwill on an annual basis and upon the occurrence of a triggering event. Triggering events potentially warranting an interim goodwill impairment assessment include, among other factors, declines in historical or projected reporting unit revenue, operating results or cash flows, and sustained decreases in the Company’s stock price or market capitalization. While management cannot predict if or when future goodwill impairments may occur, a non-cash goodwill impairment charge could have a material adverse effect on the Company’s operating results, net assets and the Company’s cost of, or access to, capital.
In connection with the Company's plan to divest the Diabetes Health business, as further discussed in Note 5, Held for Sale and Discontinued Operations, and corresponding revisions to the Company's financial projections, management performed a quantitative goodwill impairment test for each of the Company's reporting units as of June 30, 2026. As part of these revisions, the Company reallocated certain shared corporate support costs that were previously attributed to the Diabetes Health business among the remaining reporting units. The fair value of the Company’s reporting units were computed using (1) a discounted cash flow method which includes assumptions on the projected future cash flows, earnings, discount rates, working capital adjustments, long-term growth rates, and others, and (2) a market approach method to estimate value through the analysis of recent sales of comparable assets or business entities. The inputs used to determine the fair value of the Company’s reporting units fall within Level 3 of the fair value hierarchy as described in Note 9, Fair Value of Assets and Liabilities; as such, the fair value measurement was classified as a Level 3 fair value measurement. The impairment test indicated that the estimated fair values of the Company's Respiratory Health and Wellness at Home reporting units were less than their respective carrying values, and as such, the Company recognized non-cash goodwill impairment charges of $79.1 million and $65.1 million, respectively, during the three months ended June 30, 2026.
During the third quarter of 2026, the Company experienced a decline in its market capitalization as a result of a sustained decrease in its stock price, which represented a triggering event. As a result, management performed a quantitative goodwill impairment test consistent with the approach used in the second quarter for each of the Company's reporting units. The impairment test indicated that the estimated fair values of the Company's Respiratory Health and Wellness at Home reporting units were less than their respective carrying values, and as such, the Company recognized non-cash goodwill impairment charges of $149.4 million and $35.4 million, respectively, during the three months ended September 30, 2026.
While the Company's quantitative goodwill impairment test performed during the third quarter of 2026 did not result in an impairment charge of the Company's Sleep Health reporting unit, based on the result of such test, the excess of the estimated fair value of the Sleep Health reporting unit over its carrying value was less than 20%. If, in future periods, the Company were to identify events that indicate a potential impairment of goodwill, the Company may be required to perform a goodwill impairment test at an interim or annual period and could be required to recognize a non-cash goodwill impairment charge at that time, which could be material.
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Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
Identifiable intangible assets that are separable and have determinable useful lives are valued separately and amortized over the period which reflects the pattern in which the economic benefits of the assets are expected to be consumed.
Identifiable intangible assets consisted of the following at September 30, 2026 and December 31, 2025 (in thousands):
| September 30, 2026 | |||||||||||
| Weighted-Average Remaining Life (Years) | |||||||||||
Tradenames, net of accumulated amortization of $ | $ | ||||||||||
| Identifiable intangible assets, net | $ | ||||||||||
| December 31, 2025 | |||||||||||
| Weighted-Average Remaining Life (Years) | |||||||||||
Tradenames, net of accumulated amortization of $ | $ | ||||||||||
| Identifiable intangible assets, net | $ | ||||||||||
Amortization expense related to identifiable intangible assets, which is included in depreciation and amortization, excluding patient equipment depreciation, in the accompanying statements of operations was $1.9 million and $5.9 million for the three and nine months ended September 30, 2026, respectively, and was $2.1 million and $6.3 million for the three and nine months ended September 30, 2025, respectively.
Future amortization expense related to identifiable intangible assets is estimated to be as follows (in thousands):
| Twelve months ending September 30, | ||||||||
| 2027 | $ | |||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| 2031 | ||||||||
| Thereafter | ||||||||
| Total | $ | |||||||
The Company did no
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ADAPTHEALTH CORP. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
(9) Fair Value of Assets and Liabilities
FASB ASC Topic 820, Fair Value Measurements and Disclosures ("ASC 820"), creates a single definition of fair value, establishes a framework for measuring fair value in U.S. GAAP and expands disclosures about fair value measurements. Assets and liabilities adjusted to fair value in the balance sheet are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Level inputs, as defined by ASC 820, are as follows:
| Level input | Input Definition | |||||||
| Level 1 | Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date. | |||||||
| Level 2 | Inputs, other than quoted prices included in Level 1 that are observable for the asset or liability through corroboration with market data at the measurement date. | |||||||
| Level 3 | Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. | |||||||
There were no financial assets that are measured at fair value on a recurring basis as of September 30, 2026. The following table presents the valuation of the Company’s financial assets as of December 31, 2025 measured at fair value on a recurring basis. The fair value estimates presented herein are based on information available to management as of December 31, 2025. These estimates are not necessarily indicative of the amounts the Company could have ultimately realized.
| (in thousands) | Level 1 | Level 2 | Level 3 | |||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||
| Assets | ||||||||||||||||||||
| Interest rate swap agreements - short term | $ | $ | $ | |||||||||||||||||
| Total assets measured at fair value | $ | $ | $ | |||||||||||||||||
Interest Rate Swaps
The Company has historically used interest rate swap agreements to manage interest rate risk by converting a portion of its variable rate borrowings to a fixed rate and recognized these derivative instruments as either assets or liabilities in the accompanying consolidated balance sheets at fair value. The valuation of these derivative instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair value of the Company’s interest rate swaps is determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash payments receipts. The variable cash receipts are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. To comply with the provisions of FASB ASC Topic 820, Fair Value Measurement, the Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees.
Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with the Company’s derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and the respective counterparties. The Company has determined that the significance of the impact of the credit valuation adjustments made to its derivative contracts, which determination was based on the fair value of each individual contract, was not significant to the overall valuation. As a result, all of the Company’s derivatives held as of December 31, 2025 were classified as Level 2 of the fair value hierarchy. In January 2026, the Company's interest rate swaps matured and were not renewed. See Note 10, Derivative Instruments and Hedging Activities, for additional information regarding the Company’s derivative instruments.
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ADAPTHEALTH CORP. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
Non-Financial Assets Measured at Fair Value on a Non-Recurring Basis
During the nine months ended September 30, 2026 and 2025, other than the non-cash goodwill impairment charges as discussed in Note 8, Goodwill and Identifiable Intangible Assets, there were no fair value measurements on a non-recurring basis for the Company’s non-financial assets.
(10) Derivative Instruments and Hedging Activities
The Company records all derivatives on its consolidated balance sheet at fair value. As of December 31, 2025, the Company had outstanding interest rate derivatives with third parties in which the Company pays a fixed interest rate and receives a rate equal to the one-month Secured Overnight Financing Rate ("Term SOFR"). The notional amount associated with the Company's interest rate swap agreements that were outstanding as of December 31, 2025 was $250 million. The Company has designated its swaps as effective cash flow hedges of interest rate risk. Accordingly, changes in the fair value of the interest rate swaps were recognized as a component of accumulated other comprehensive income within stockholders’ equity and subsequently reclassified into interest expense in the same period during which the hedged transaction affected earnings. In January 2026, the Company's interest rate swaps matured and were not renewed. In October 2026, the Company entered into interest rate derivatives with third parties in which the Company will pay a fixed interest rate and receive a rate equal to the one-month Secured Overnight Financing Rate ("Term SOFR"). The notional amount associated with these interest rate swap agreements was $100 million and have a maturity date in October 2028.
The table below presents the fair value of the Company’s derivatives related to its interest rate swap agreements, which are designated as hedging instruments, as well as their classification in the consolidated balance sheets at December 31, 2025 (in thousands):
| December 31, 2025 | ||||||||
| Balance Sheet Location | ||||||||
| Prepaid and other current assets | $ | |||||||
| Total | $ | |||||||
During the three months ended September 30, 2025, as a result of the effect of cash flow hedge accounting, the Company recognized a loss, net of tax, of $0.6 million in other comprehensive income (loss). During the nine months ended September 30, 2026 and 2025, as a result of the effect of cash flow hedge accounting, the Company recognized a loss, net of tax, of $0.1 million and $1.7 million, respectively, in other comprehensive income (loss).
(11) Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses as of September 30, 2026 and December 31, 2025 consisted of the following (in thousands):
| September 30, 2026 | December 31, 2025 | ||||||||||
| Accounts payable | $ | $ | |||||||||
| Employee-related accruals | |||||||||||
| Litigation reserves | |||||||||||
| Accrued interest | |||||||||||
| Other | |||||||||||
| Total | $ | $ | |||||||||
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ADAPTHEALTH CORP. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
(12) Debt
The following is a summary of long term-debt as of September 30, 2026 and December 31, 2025 (in thousands):
| September 30, 2026 | December 31, 2025 | ||||||||||
| Secured term loans | $ | $ | |||||||||
| Revolving credit facility | |||||||||||
| Senior unsecured notes | |||||||||||
| Unamortized deferred financing fees | ( | ( | |||||||||
| Current portion | ( | ( | |||||||||
| Long-term portion | $ | $ | |||||||||
On April 10, 2026, the Company refinanced its debt borrowings under its then existing credit agreement and entered into a new credit agreement (the "2026 Credit Agreement"). The 2026 Credit Agreement consists of a $325.0 million term loan (the "2026 Term Loan"), a $325.0 million delayed draw term loan (the "2026 Delayed Draw Term Loan"), and $450.0 million in commitments for revolving credit loans with a $75.0 million letter of credit sublimit and a $45.0 million swing line sublimit (the "2026 Revolver", and together with the 2026 Term Loan and the 2026 Delayed Draw Term Loan, the "2026 Credit Facility"). At closing, the Company borrowed $100.0 million under the 2026 Revolver. Borrowings under the 2026 Term Loan and the 2026 Revolver at closing were used in part to repay existing amounts outstanding under the prior credit agreement, and to pay related fees and expenses. On July 27, 2026, the Company borrowed $325.0 million under the 2026 Delayed Draw Term Loan; such proceeds, together with cash on hand, were used to repay the outstanding principal amount of the 6.125 % Senior Notes, plus accrued and unpaid interest (see discussion below). The 2026 Credit Facility has a maturity in April 2031. However, the maturity of the 2026 Credit Facility is subject to a springing maturity date that is 91 days prior to the stated maturity dates of the Company's 4.625 % Senior Notes and 5.125 % Senior Notes (each as defined below), in each case if more than $150.0 million aggregate principal amount of such senior unsecured notes remains outstanding on such springing maturity date. The borrowings under the 2026 Term Loan requires quarterly principal repayments of $2.0 million beginning September 30, 2026 through June 30, 2028, increasing to $4.1 million beginning September 30, 2028 through March 31, 2031, and the unpaid principal balance is due at maturity in April 2031. Borrowings under the 2026 Delayed Draw Term Loan requires quarterly principal repayments of $2.0 million beginning December 31, 2026 through September 30, 2028, increasing to $4.1 million beginning December 31, 2028 through March 31, 2031, and the unpaid principal balance is due at maturity in April 2031. Borrowings under the 2026 Revolver may be used for working capital and other general corporate purposes, including for capital expenditures and acquisitions permitted under the 2026 Credit Agreement. At the option of the Company, amounts borrowed under the 2026 Credit Facility bear interest at variable rates based upon either the Base Rate (as defined in the 2026 Credit Agreement), payable quarterly, or Term SOFR (as defined in the 2026 Credit Agreement), payable monthly or every three months depending on the interest period selected. Interest periods for Term SOFR loans are available for one, three, or six months at the option of the Company. Base Rate loans accrue interest at a fluctuating rate per annum equal to the sum of (a) the Base Rate determined on each day (subject to a zero percent floor), plus (b) an applicable margin ranging from 0.125 % to 1.0 % per annum based on the Company's Consolidated Total Leverage Ratio (as defined in the 2026 Credit Agreement). Term SOFR loans accrue interest at a fluctuating rate per annum equal to the sum of (a) Term SOFR for the applicable interest period (subject to a zero percent floor), plus (b) an applicable margin ranging from 1.125 % to 2.0 % per annum based on the Company's Consolidated Total Leverage Ratio. The 2026 Revolver carries a commitment fee during the term of the 2026 Credit Agreement ranging from 0.15 % to 0.30 % per annum of the actual daily undrawn portion of the 2026 Revolver depending upon the Company's Consolidated Total Leverage Ratio. In addition, the 2026 Delayed Draw Term Loan carries a commitment fee during the term of the 2026 Credit Agreement ranging from 0.15 % to 0.30 % per annum of the actual daily undrawn portion of the 2026 Delayed Draw Term Loan depending upon the Company's Consolidated Total Leverage Ratio beginning 45 days after closing. In connection with the 2026 Credit Agreement, the Company paid financing costs of $5.4 million. Further, in connection with executing the 2026 Credit Agreement, the Company recognized a loss on debt extinguishment of $1.3 million consisting of third-party fees and the write off of unamortized deferred financing costs related to the Company's prior credit agreement, which is included in Loss on extinguishment of debt in the accompanying consolidated statements of operations for the nine months ended September 30, 2026.
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ADAPTHEALTH CORP. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
Under the 2026 Credit Agreement, the Company is subject to a number of restrictive covenants that, among other things, impose operating and financial restrictions on the Company. Financial covenants include a Consolidated Total Leverage Ratio and a Consolidated Interest Coverage Ratio, both as defined in the 2026 Credit Agreement. The 2026 Credit Agreement also contains certain customary events of default, including, among other things, failure to make payments when due thereunder, failure to observe or perform certain covenants, cross-defaults, bankruptcy and insolvency-related events, and non-compliance with healthcare laws. The Company was in compliance with the applicable covenants in the 2026 Credit Agreement as of September 30, 2026.
Any borrowing under the 2026 Credit Agreement may be repaid, in whole or in part, at any time and from time to time without premium or penalty, other than customary breakage costs, and any amounts repaid under the 2026 Revolver may be reborrowed. Mandatory prepayments are required under the 2026 Revolver when borrowings and letter of credit usage exceed the total commitments for revolving credit loans. Mandatory prepayments are also required in connection with certain dispositions of assets and receipt of certain insurance proceeds or condemnation awards to the extent proceeds thereof are not reinvested, and unpermitted debt transactions.
Secured Term Loans
At September 30, 2026, there were $323.0 million and $325.0 million outstanding under the 2026 Term Loan and 2026 Delayed Draw Term Loan, respectively. The interest rate applicable to the 2026 Term Loan and 2026 Delayed Draw Term Loan was 5.06 % at September 30, 2026.
Revolving Credit Facility
At September 30, 2026, there was $147.0 million outstanding under the 2026 Revolver. The Company borrowed $100.0 million under the 2026 Revolver at the time of closing of the 2026 Credit Agreement, and subsequent to closing, the Company borrowed an additional $50.0 million and repaid $3.0 million under the 2026 Revolver. At September 30, 2026, there was $34.3 million outstanding under letters of credit. At September 30, 2026, based on the financial debt covenants under the 2026 Credit Agreement, the maximum amount the Company could borrow under the 2026 Revolver and remain in compliance with the financial debt covenants under the agreement was $268.7 million.
Senior Unsecured Notes
In August 2021, the Company issued $600.0 million aggregate principal amount of 5.125 % senior unsecured notes (the "5.125 % Senior Notes"). The 5.125 % Senior Notes will mature on March 1, 2030. Interest on the 5.125 % Senior Notes is payable on March 1st and September 1st of each year. The 5.125 % Senior Notes are redeemable at the Company’s option, in whole or in part, and the redemption price for the 5.125 % Senior Notes if redeemed during the 12 months beginning (i) March 1, 2026 is 101.281 % and (ii) March 1, 2027 and thereafter is 100.000 %, in each case together with accrued and unpaid interest. In addition, the Company may be required to make an offer to purchase the 5.125 % Senior Notes upon the sale of certain assets or upon specific kinds of changes of control. On May 28, 2026, the Company, the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee, executed and delivered a Supplemental Indenture, amending and supplementing the indenture providing for the issuance of the 5.125 % Senior Notes, pursuant to which each of the guarantors party thereto unconditionally guaranteed all of the Company’s obligations under the 5.125 % Senior Notes and the indenture on the terms and conditions set forth therein.
In January 2021, the Company issued $500.0 million aggregate principal amount of 4.625 % senior unsecured notes (the "4.625 % Senior Notes"). The 4.625 % Senior Notes will mature on August 1, 2029. Interest on the 4.625 % Senior Notes is payable on February 1st and August 1st of each year. The 4.625 % Senior Notes are redeemable at the Company’s option, in whole or in part, and the redemption price for the 4.625 % Senior Notes is 100.000 %, in each case together with accrued and unpaid interest. In addition, the Company may be required to make an offer to purchase the 4.625 % Senior Notes upon the sale of certain assets or upon specific kinds of changes of control. On May 28, 2026, the Company, the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee, executed and delivered a Supplemental Indenture, amending and supplementing the indenture providing for the issuance of the 4.625 % Senior Notes, pursuant to which each of the guarantors party thereto unconditionally guaranteed all of the Company’s obligations under the 4.625 % Senior Notes and the indenture on the terms and conditions set forth therein.
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ADAPTHEALTH CORP. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
In July 2020, the Company issued $350.0 million aggregate principal amount of 6.125 % senior unsecured notes (the "6.125 % Senior Notes"). In November 2025 and January 2026, the Company repurchased $15.0 million and $10.0 million aggregate principal amount of the 6.125 % Senior Notes at an average price of 100.253 % and 100.800 % of such principal amounts, respectively, through open market transactions. Interest on the 6.125 % Senior Notes was payable on February 1st and August 1st of each year. On July 6, 2026, the Company issued a notice of redemption for all of its outstanding 6.125 % Senior Notes in an aggregate principal amount of $325.0 million at a redemption price equal to 100.000 % of the aggregate principal amount of the 6.125 % Senior Notes, plus accrued and unpaid interest to the redemption date (the "Redemption Price"). The redemption date was August 1, 2026. The Company used the proceeds from the borrowings under the 2026 Delayed Draw Term Loan plus cash on hand to redeem the notes and pay the Redemption Price on August 3, 2026.
(13) Stockholders' Equity
Under the Company's Fourth Amended and Restated Certificate of Incorporation, there are 300,000,000 shares of authorized Common Stock and 5,000,000 shares of authorized Preferred Stock. Holders of Common Stock are entitled to one vote for each share. The shares of Preferred Stock shall be issued with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors.
Equity-based Compensation
In connection with the Company’s 2019 Stock Incentive Plan (the "2019 Plan"), the Company provides equity-based compensation to attract and retain employees while also aligning employees’ interest with the interests of its stockholders. The 2019 Plan permits the grant of various equity-based awards to selected employees and non-employee directors. As of September 30, 2026, the Company is permitted to grant up to 18,350,000 shares of Common Stock under the 2019 Plan, subject to certain adjustments and limitations. At September 30, 2026, 7,058,209 shares of the Company’s Common Stock were available for issuance under the 2019 Plan.
Stock Options
There were no
The following table provides the activity for outstanding stock options during the nine months ended September 30, 2026 (in thousands, except per share data):
| Number of Options | Weighted-Average Exercise Price per Share | Weighted-Average Remaining Contractual Term | |||||||||||||||
| Outstanding, December 31, 2025 | $ | ||||||||||||||||
| Exercised | ( | $ | |||||||||||||||
| Outstanding, September 30, 2026 | $ | ||||||||||||||||
During the nine months ended September 30, 2026, 245,991 stock options were exercised on a cashless basis resulting in the issuance of 96,203 shares of the Company’s Common Stock. There were no stock option exercises during the nine months ended September 30, 2025.
Restricted Stock Units
During the nine months ended September 30, 2026, the Company granted the following shares of restricted stock units:
•1,869,357 shares of restricted stock units to various employees which vest ratably over the three-year period following the vesting commencement dates, subject to the employees’ continuous employment through the applicable vesting date. The grant-date fair value of these awards was $18.2 million.
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ADAPTHEALTH CORP. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
•205,012 shares of restricted stock units to various employees and certain of the Company's non-employee directors which vest within one year following the grant date. The grant-date fair value of these awards was $2.0 million.
•821,890 shares of performance-vested restricted stock units ("Performance RSUs") to senior executive management of the Company which vest on the third anniversary of the vesting commencement date subject to the achievement of specified goals relative to the Company’s three-year relative total shareholder return ("Relative TSR") performance versus the Company’s defined peer group (the "Peer Group"), which is considered a market condition, and is also subject to the employees’ continuous employment through the vesting date. The grant-date fair value of these awards, using a Monte-Carlo simulation analysis, was $12.9 million. The payout of shares on the vesting date are as follows based on the Company’s Relative TSR versus the Peer Group (for performance between the stated goals noted below, straight-line interpolation will be applied):
•Less than 25th Percentile – No payout
•Greater than or equal to 25th Percentile – 50 % of Performance RSUs
•Equal to 50th Percentile – 100 % of Performance RSUs
•Greater than or equal to 75th Percentile – 200 % of Performance RSUs
Activity related to the Company’s non-vested restricted stock units for the nine months ended September 30, 2026 is presented below (in thousands, except per share data):
| Number of Shares | Weighted-Average Grant Date Fair Value per Share | ||||||||||
| Non-vested balance, December 31, 2025 | $ | ||||||||||
| Granted | $ | ||||||||||
| Vested | ( | $ | |||||||||
| Forfeited | ( | $ | |||||||||
| Non-vested balance, September 30, 2026 | $ | ||||||||||
Equity-Based Compensation Expense
The Company recognized equity-based compensation expense of $1.0 million during the three months ended September 30, 2026, of which $0.6 million and $0.4 million is included in general and administrative expenses and cost of net revenue, respectively, in the accompanying consolidated statements of operations. The Company recognized equity-based compensation expense of $5.2 million during the three months ended September 30, 2025, of which $4.6 million and $0.6 million is included in general and administrative expenses and cost of net revenue, respectively, in the accompanying consolidated statements of operations.
The Company recognized equity-based compensation expense of $12.7 million during the nine months ended September 30, 2026, of which $11.7 million and $1.0 million is included in general and administrative expenses and cost of net revenue, respectively, in the accompanying consolidated statements of operations. The Company recognized equity-based compensation expense of $16.4 million during the nine months ended September 30, 2025, of which $13.2 million and $3.2 million is included in general and administrative expenses and cost of net revenue, respectively, in the accompanying consolidated statements of operations.
In connection with the separation of the Company's former Chief Financial Officer, the Company reversed $4.0 million of previously recognized equity-based compensation expense relating to the forfeiture of outstanding unvested restricted stock units. The reversal was recognized as a reduction to general and administrative expenses in the accompanying consolidated statements of operations for the three and nine months ended September 30, 2026.
At September 30, 2026, there was $31.9 million of unrecognized compensation expense related to equity-based compensation awards, which is expected to be recognized over a weighted-average period of 1.9 years.
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ADAPTHEALTH CORP. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
(14) Earnings (Loss) Per Share
Earnings (loss) per share ("EPS") for continuing operations and discontinued operations is computed by dividing net income (loss) from continuing operations and discontinued operations by the weighted average number of common shares outstanding during the period, respectively, on a basic and diluted basis. The Company computes diluted net income (loss) per share for continuing operations and discontinued operations using the more dilutive of the treasury stock method and the two-class method after giving effect to all potential dilutive Common Stock.
The Company’s potentially dilutive securities include potential common shares related to unvested restricted stock units, outstanding stock options and outstanding preferred stock. See Note 13, Stockholders' Equity, for additional discussion of these potential dilutive securities.
Diluted net income (loss) per share for continuing operations and discontinued operations considers the impact of potentially dilutive securities except when the potential common shares have an antidilutive effect. The Company’s outstanding preferred stock are considered participating securities, thus requiring the two-class method of computing diluted net income (loss) per share for continuing operations and discontinued operations. Computation of diluted net income (loss) per share for continuing operations and discontinued operations under the two-class method excludes from the numerator any dividends paid or owed on participating securities and any undistributed earnings considered to be attributable to participating securities. The related participating securities are similarly excluded from the denominator.
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ADAPTHEALTH CORP. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
Computations of basic and diluted net income (loss) per share from continuing operations and discontinued operations were as follows (in thousands, except per share data):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Numerator | |||||||||||||||||||||||
| Net (loss) income from continuing operations | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| Less: Income attributable to noncontrolling interest | |||||||||||||||||||||||
| Net (loss) income from continuing operations attributable to AdaptHealth Corp. | ( | ( | |||||||||||||||||||||
Less: Earnings allocated to participating securities (1) | |||||||||||||||||||||||
| Net (loss) income from continuing operations for basic and diluted EPS | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| Net income from discontinued operations | $ | $ | $ | $ | |||||||||||||||||||
Less: Earnings allocated to participating securities (1) | |||||||||||||||||||||||
| Net income from discontinued operations for basic and diluted EPS | $ | $ | $ | $ | |||||||||||||||||||
Denominator | |||||||||||||||||||||||
| Basic weighted-average common shares outstanding | |||||||||||||||||||||||
Add: Stock options (2) | |||||||||||||||||||||||
Add: Unvested restricted stock units (2) | |||||||||||||||||||||||
| Diluted weighted-average common shares outstanding | |||||||||||||||||||||||
| Basic net income (loss) per share: | |||||||||||||||||||||||
| Continuing operations | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| Discontinued operations | |||||||||||||||||||||||
| Net income (loss) per share | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| Diluted net income (loss) per share: | |||||||||||||||||||||||
| Continuing operations | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| Discontinued operations | |||||||||||||||||||||||
| Net income (loss) per share | $ | ( | $ | $ | ( | $ | |||||||||||||||||
(1)The Company’s preferred stock are considered participating securities. Computation of EPS under the two-class method excludes from the numerator any dividends paid or owed on participating securities and any undistributed earnings considered to be attributable to participating securities. The related participating securities are similarly excluded from the denominator. There were no amounts allocated to the participating securities during the three and nine months ended September 30, 2026 due to the consolidated net loss reported in those periods.
(2)Due to the Company reporting net loss from continuing operations attributable to AdaptHealth Corp. for the three and nine months ended September 30, 2026, all potentially dilutive securities related to outstanding stock options and unvested restricted stock units were excluded from the computation of diluted net loss per share for those periods as their inclusion would have been anti-dilutive.
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ADAPTHEALTH CORP. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
The table below provides the weighted-average number of potential common shares associated with outstanding securities not included in the Company’s computation of diluted net income (loss) per share for continuing operations and discontinued operations for the three and nine months ended September 30, 2026 and 2025 because to do so would be anti-dilutive (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Preferred Stock | |||||||||||||||||||||||
| Stock options | |||||||||||||||||||||||
| Unvested restricted stock units | |||||||||||||||||||||||
| Total | |||||||||||||||||||||||
(15) Leases
The Company leases its operating locations and office facilities under noncancelable lease agreements which expire at various dates through July 2036. Some of these lease agreements include an option to renew at the end of the term. The Company also leases certain office facilities on a month-to-month basis. In some instances, the Company is also required to pay its pro rata share of real estate taxes and utility costs in connection with the premises. Some of the leases contain fixed annual increases of minimum rent.
The Company’s leases frequently allow for lease payments that could vary based on factors such as inflation and the incurrence of contractual charges such as those for common area maintenance or utilities.
Renewal and/or early termination options are common in the lease arrangements, particularly with respect to real estate leases. The Company’s right-of-use ("ROU") assets and lease liabilities generally include periods covered by renewal options and exclude periods covered by early termination options (based on the conclusion that it is reasonably certain that the Company will exercise such renewal options and not exercise such early termination options).
The Company is also party to certain sublease arrangements related to real estate leases, where the Company acts as the lessee and intermediate lessor.
The Company leases certain of its vehicles through finance leases. The finance lease obligations represent the present value of minimum lease payments under the respective agreement, payable monthly at various interest rates.
The following table presents information about lease costs and expenses and sublease income for the three and nine months ended September 30, 2026 and 2025 (in thousands). The amounts below, with the exception of interest on lease liabilities, are included in cost of net revenue in the accompanying consolidated statements of operations for the periods presented. The interest on lease liabilities is included in interest expense, net in the accompanying consolidated statements of operations for the periods presented.
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ADAPTHEALTH CORP. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Operating lease costs | $ | $ | $ | $ | |||||||||||||||||||
| Finance lease costs: | |||||||||||||||||||||||
| Amortization of ROU assets | $ | $ | $ | $ | |||||||||||||||||||
| Interest on lease liabilities | $ | $ | $ | $ | |||||||||||||||||||
| Other lease costs and income: | |||||||||||||||||||||||
Variable leases costs (1) | $ | $ | $ | $ | |||||||||||||||||||
| Sublease income | $ | $ | $ | $ | |||||||||||||||||||
(1)Amounts represent variable costs incurred that were not included in the initial measurement of the lease liability such as common area maintenance and utilities costs associated with leased real estate.
The following table provides the weighted average remaining lease terms and weighted average discount rates for the Company’s leases as of September 30, 2026 and December 31, 2025:
| September 30, 2026 | December 31, 2025 | ||||||||||
| Weighted average remaining lease term, weighted based on lease liability balances: | |||||||||||
| Operating leases | |||||||||||
| Finance leases | |||||||||||
| Weighted average discount rate, weighted based on remaining balance of lease payments: | |||||||||||
| Operating leases | % | % | |||||||||
| Finance leases | % | % | |||||||||
The following table provides the undiscounted amount of future cash flows related to the Company’s operating and finance leases, as well as a reconciliation of such undiscounted cash flows to the amounts included in the Company’s lease liabilities as of September 30, 2026 (in thousands):
| Operating Leases | Finance Leases | ||||||||||
| 2026 | $ | $ | |||||||||
| 2027 | |||||||||||
| 2028 | |||||||||||
| 2029 | |||||||||||
| 2030 | |||||||||||
| Thereafter | |||||||||||
| Total future undiscounted lease payments | $ | $ | |||||||||
| Less: amount representing interest | ( | ( | |||||||||
| Present value of future lease payments (lease liability) | $ | $ | |||||||||
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ADAPTHEALTH CORP. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
The following table provides certain cash flow and supplemental non-cash information related to the Company’s lease liabilities for the nine months ended September 30, 2026 and 2025, respectively (in thousands):
| Nine Months Ended September 30, | |||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | 2026 | 2025 | |||||||||
| Operating cash payments for operating leases | $ | $ | |||||||||
| Financing cash payments for finance leases | $ | $ | |||||||||
| Lease liabilities arising from obtaining right-of-use assets: | |||||||||||
| Operating leases | $ | $ | |||||||||
| Finance leases | $ | $ | |||||||||
(16) Income Taxes
The Company's tax provision for interim periods was historically determined using an estimated annual effective tax rate ("estimated AETR"), adjusted for discrete events arising in each respective fiscal quarter. When forecasted ordinary annual pre‑tax income is near breakeven, small changes in estimated annual results may result in significant volatility in the annual effective income tax rate that is not considered reliable and meaningful. In such circumstances, the income tax effects are recognized discretely in the interim period ("discrete ETR"). During the three and nine months ended September 30, 2026, the Company utilized the discrete ETR method to compute its income tax provision as the estimated AETR method would not provide a reliable and meaningful estimate of its tax provision.
The Company is subject to U.S. federal, state, and local income taxes. For the three months ended September 30, 2026 and 2025, the Company recognized an income tax benefit of $17.5 million and income tax expense of $6.5 million, respectively. For the nine months ended September 30, 2026 and 2025, the Company recognized an income tax benefit of $45.9 million and income tax expense of $36.8 million, respectively. For the three months ended September 30, 2026, the Company recognized a $17.4 million discrete income tax benefit, and corresponding increase to net deferred tax assets, related to non-cash goodwill impairment charges totaling $184.8 million. For the nine months ended September 30, 2026, the Company recognized a $32.8 million discrete income tax benefit, and corresponding increase to net deferred tax assets, related to non-cash goodwill impairment charges totaling $329.0 million. Refer to Note 8, Goodwill and Identifiable Intangible Assets, for additional details. For the nine months ended September 30, 2025, the Company recognized a $27.4 million discrete income tax expense related to the dispositions of two businesses within the Wellness at Home segment.
The effective tax rates for the three and nine months ended September 30, 2026 are primarily driven by the effects of permanent differences and discrete items.
As of September 30, 2026 and December 31, 2025, the Company had an unrecognized tax benefit of $2.7
Tax Receivable Agreement
AdaptHealth Corp. is party to a Tax Receivable Agreement ("TRA") with certain current and former members of AdaptHealth Holdings LLC, a Delaware limited liability company ("AdaptHealth Holdings"). The TRA provides for the payment by AdaptHealth Corp. of 85 % of the tax savings, if any, that AdaptHealth Corp. realizes (or is deemed to realize in certain circumstances) as a result of (i) certain tax attributes of the corresponding sellers existing prior to the Business Combination; (ii) certain increases in tax basis resulting from exchanges of New AdaptHealth Units and shares of Class B Common Stock; (iii) imputed interest deemed to be paid by the Company as a result of payments it makes under the TRA; and (iv) certain increases in tax basis resulting from payments the Company makes under the TRA. Under the TRA, the benefits deemed realized by the Company as a result of the increase in tax basis attributable to the AdaptHealth Holdings members generally will be computed by comparing the actual income tax liability of the Company to the amount of such taxes that the Company would have been required to pay had there been no such increase in tax basis.
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ADAPTHEALTH CORP. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
At September 30, 2026, the Company's liability relating to the TRA was $238.9 million, which is included in other long-term liabilities in the accompanying consolidated balance sheets. At December 31, 2025, the Company’s liability relating to the TRA was $265.7 million, of which $26.8 million and $238.9 million is included in other liabilities and other long-term liabilities, respectively, in the accompanying consolidated balance sheets.
A $16.7 million income tax receivable is included in prepaid and other current assets in the accompanying consolidated balance sheets as of September 30, 2026. The majority of the Company’s income tax receivable relates to federal corporate income tax refunds, which are expected to be received later in 2026.
(17) Commitments and Contingencies
From time to time and in the normal course of business, the Company is subject to loss contingencies, arising from legal proceedings, claims, and governmental and other investigations under or with respect to various governmental programs and state and federal laws relating to its business, including as a result of or following acquisitions and other business activities, that cover a wide range of matters. In accordance with FASB ASC Topic 450, Accounting for Contingencies, the Company records accruals for such loss contingencies when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. If there is no probable estimate within a range of reasonably possible outcomes, the Company’s policy is to record at the low end of the range of such reasonably possible outcomes. Judgment is required to determine both probability and the estimated amount. The Company reviews its accruals quarterly and adjusts accordingly to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and updated information. At this time, the Company has no material accruals related to lawsuits, claims, investigations or proceedings, except as disclosed. While there can be no assurance, based on the Company’s evaluation of information currently available, the Company’s management believes any liability that may ultimately result from resolution of such loss contingencies will not have a material adverse effect on the Company’s financial condition or results of operations. However, the Company’s assessment may change in the future based upon availability of new information and further developments in the proceedings of such matters. The results of legal proceedings, claims and investigations are inherently uncertain, and material adverse outcomes are possible. Professional legal fees associated with any such legal proceedings, claims and investigations are expensed as they are incurred.
On October 24, 2023, Allegheny County Employees’ Retirement System, a purported shareholder of the Company, filed a purported class action complaint against the Company and certain of its current and former officers, and certain underwriters in the United States District Court for the Eastern District of Pennsylvania. On January 23, 2024, the Court entered an order appointing Allegheny County Employees' Retirement System, International Union of Operating Engineers, Local No. 793, Members Pension Benefit Trust of Ontario, and City of Tallahassee Pension Plan as Lead Plaintiffs (the "Allegheny Lead Plaintiffs"). On May 14, 2024, the Allegheny Lead Plaintiffs filed a consolidated complaint against the Company and certain of its current and former officers and directors, and certain underwriters, on behalf of shareholders that purchased or otherwise acquired the Company’s stock between August 4, 2020 and November 7, 2023 (as to the complaint the “Allegheny County Consolidated Complaint”; as to the action, the “Allegheny County Consolidated Class Action”). The Allegheny County Consolidated Complaint alleged, among other things, that the defendants violated federal securities laws by making allegedly false and misleading statements and/or failing to disclose material information regarding (i) the Company’s billing practices with respect to its diabetes product category, and (ii) the Company’s compliance programs and integration with respect to acquired companies. The Allegheny County Consolidated Complaint sought unspecified damages. On July 23, 2024, the defendants filed a motion to dismiss the Allegheny County Consolidated Complaint. The Allegheny Lead Plaintiffs filed their opposition brief on October 1, 2024, and defendants filed their reply brief on November 15, 2024.
On May 28, 2025, the parties jointly filed a letter requesting that the Court hold the motion to dismiss in abeyance pending the outcome of a private mediation between the parties. On October 8, 2025, the parties attended a private mediation. After subsequent settlement discussions, the parties reached an agreement in principle to settle the litigation.
On December 19, 2025, the parties filed for Preliminary Approval of Proposed Settlement and Approval of Notice to the Settlement Class and the preliminary approval order was granted by the Court on February 2, 2026. On June 10, 2026, the Court fully and finally approved the proposed settlement, the plan of allocation, and the Allegheny Lead Plaintiffs' counsel's request for attorneys' fees and expenses. The Court also entered the final judgment, dismissing the Allegheny County Consolidated Class Action with prejudice, which became effective in July 2026. The settlement was funded during the nine months ended September 30, 2026 as follows: (i) $34.0 million of cash from the Company’s insurance carriers and (ii) $1.0 million of cash from the Company. The Company and its directors and officers as well as the other defendants named in the
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ADAPTHEALTH CORP. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
Allegheny County Consolidated Complaint were released from the claims that were asserted or could have been asserted in the Allegheny County Consolidated Class Action, with certain limitations, by class members participating in the settlement. The Company has always maintained, and continues to believe, that it did not engage in any wrongdoing or otherwise commit any violation of federal or state securities laws or other laws. The settlement includes no admission of liability or wrongdoing.
On March 20, 2024, a putative shareholder of the Company, Weiding Wu, filed a shareholder derivative complaint related to the allegations in the Allegheny County Consolidated Complaint, and against certain current and former directors and officers of the Company in the United States District Court for the Eastern District of Pennsylvania (as to the complaint, the “Wu Derivative Complaint”; as to the action, the “Wu Derivative Action”). The Wu Derivative Complaint alleges, among other things, that the defendants breached their fiduciary duties and violated federal securities laws by making allegedly false and misleading statements and/or failing to disclose material information regarding (i) the Company’s billing practices with respect to its diabetes product category, and (ii) the Company’s compliance programs and integration with respect to acquired companies. The Wu Derivative Complaint also alleges claims for unjust enrichment, waste of corporate assets, abuse of control, and gross mismanagement. The Wu Derivative Complaint seeks, among other things, an award of money damages.
On July 25, 2024, the parties to the Wu Derivative Action stipulated to stay the Wu Derivative Action pending final resolution of the Allegheny County Consolidated Class Action. On July 26, 2024, the court so-ordered the parties’ stipulation.
The Company intends to vigorously defend against the allegations contained in the Wu Derivative Complaint, but there can be no assurance that the defense will be successful.
On December 9, 2025, a putative shareholder, Aaron Frankel, filed under seal a shareholder derivative complaint against certain current and former directors and officers of the Company in the United States District Court for the Eastern District of Pennsylvania (as to the complaint, the “Frankel Derivative Complaint”; as to the action, the “Frankel Derivative Action”). On January 7, 2026, the Court unsealed the Frankel Derivative Action, and Frankel notified the Company of the Frankel Derivative Action. On January 28, 2026, Frankel filed a redacted amended complaint on the public docket.
The Frankel Derivative Complaint is related to the allegations in the Allegheny County Consolidated Complaint and Wu Derivative Complaint. It alleges, among other things, that the defendants breached their fiduciary duties and violated federal securities laws by making allegedly false and misleading statements and/or failing to disclose material information regarding (i) the Company’s billing practices with respect to its diabetes product category, and (ii) the Company's compliance programs and integration with respect to acquired companies. The Frankel Derivative Complaint also alleges claims for unjust enrichment and waste of corporate assets. The Frankel Derivative Complaint seeks, among other things, an award of money damages.
The Company intends to vigorously defend against the allegations contained in the Frankel Derivative Complaint, but there can be no assurance that the defense will be successful.
On March 19, 2026, the parties to the Wu Derivative Action and the Frankel Derivative Action filed a stipulation to consolidate the actions. On March 24, 2026, the parties to the Wu Derivative Action and the Frankel Derivative Action filed a notice informing the Court that they had reached an agreement in principle to settle both actions. On May 13, 2026, the Court consolidated the Wu Derivative Action and the Frankel Derivative Action.
On June 24, 2025, a putative shareholder of the Company, Blake T. Myers, filed against the Company a complaint in the Court of Chancery of the State of Delaware seeking to compel an inspection of books and records under 8 Del. C. § 220 (“Section 220”) (as to the complaint, the “Myers Section 220 Complaint”; as to the action, the “Myers Section 220 Action”). The Myers Section 220 Complaint asserted the putative shareholder’s right to inspect certain corporate books and records relevant to the issues in the Allegheny County Consolidated Class Action for the purported purposes of (i) investigating potential wrongdoing by the current and/or former members of the Board and the Company’s current and/or former executive officers, (ii) supporting appropriate action in the event current and/or former directors or executive officers did not properly discharge their fiduciary duties, and (iii) evaluating whether members of the current Board have a conflict of interest such that making a demand upon the Board to bring a derivative action on behalf of the Company would be futile.
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ADAPTHEALTH CORP. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
The Company completed its production on November 19, 2025. On December 3, 2025, Myers voluntarily dismissed the action.
On February 6, 2026, Myers filed a shareholder derivative complaint under seal related to the allegations in the Allegheny County Consolidated Complaint against certain current and former directors and officers of the Company in the Delaware Court of Chancery (as to the Complaint, the “Myers Derivative Complaint;” as to the action, the “Myers Derivative Action”). The Myers Derivative Complaint alleges claims for breach of fiduciary duty, insider trading, and unjust enrichment under Delaware law. On February 12, 2026, Myers filed a redacted complaint on the public docket.
On March 10, 2026, the parties to the Myers Derivative Action stipulated to stay the action pending final resolution of the Allegheny County Consolidated Class Action. The parties' stipulation was so-ordered by the Court on the same date. The parties to the Myers Derivative Action subsequently reached an agreement in principle to settle that action on the same terms as the Wu Derivative Action and the Frankel Derivative Action.
The Company intends to vigorously defend against the allegations contained in the Myers Derivative Complaint, but there can be no assurance that the defense will be successful.
In October 2022, a former customer of the Company, Mr. Ray (“Plaintiff”), filed an individual action against the Company and a collection agency for violation of North Carolina’s Debt Collection Practices Act (the "Act”) based on allegations that the Company failed to address Mr. Ray’s billing concerns and issue a refund in a timely manner related to his return of medical equipment. Plaintiff was permitted to amend his individual complaint to a class action complaint on behalf of similarly situated North Carolina residents who allegedly experienced improper billing issues after the asserted return of medical equipment. Over continued objection, and after withdrawing a motion for class certification, Plaintiff amended his class action complaint again in May 2025 to assert violations of the Act related to three classes of North Carolinians: (a) a class of patients who were allegedly improperly billed after returning equipment, (b) a class of patients who were allegedly improperly charged a late fee after assertedly returning their equipment, and (c) a class of patients who received collection letters that allegedly violated the Act. Plaintiff has argued that the claims are meritorious, and the classes could be certified up to and including approximately 130,000 North Carolina patients. The Company has vigorously defended the case; believes the claims lack merit; and, believes that none of the three classes could be certified. Neither the merits of the case nor the certification of these classes have been reviewed by the Court. While nonetheless strongly defending the case, to minimize exposure and risk under the Act, and reduce further litigation expenses, the Company has also pursued settlement options. In January 2026, the Company and the Plaintiff, a proposed class representative, agreed to inform the Court that the parties have agreed to certify the classes and settle the case as to Class A, Class B and Class C members for a total settlement payment to be made by the Company of $14.5 million in consideration for full releases of the Company. This outcome, while considered likely by the Company, is not fixed and is contingent on factors not wholly within the Company’s control, including obtaining final approval of the settlement by the Court, for which the Court has scheduled a hearing on January 20, 2027. Should this pathway for resolution fail, the Company will continue its robust defense of the case. In September 2026, the Company paid $0.4 million towards the settlement amount. The Company's remaining liability of $14.1 million is included in accounts payable and accrued expenses in the accompanying consolidated balance sheets as of September 30, 2026.
On July 29, 2024, the U.S. Attorney’s Office for the District of South Carolina issued a civil investigative demand to the Company pursuant to the FCA regarding whether the Company submitted false claims in violation of the FCA related to its billing of, and reimbursements from, federal health care programs for humidifiers that are integrated with PAP devices and provided to patients from January 1, 2017 to the present. The Company is fully cooperating with the investigation. Given the stage of the investigation, it is not possible to determine whether it will have a material adverse effect on the Company.
On March 8, 2025, the U.S. Attorney’s Office for the Eastern District of Pennsylvania issued a civil investigative demand to the Company pursuant to the FCA surrounding whether the Company submitted false claims in violation of the FCA related to its billing of, and reimbursements from, federal health care programs for respiratory devices and related supplies provided to patients from January 1, 2018 to the present. The Company is fully cooperating with the investigation. Given the stage of the investigation, it is not possible to determine whether it will have a material adverse effect on the Company.
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Notes to Interim Consolidated Financial Statements (Unaudited) (Continued)
(18) Related Party Transactions
The Company owns an equity interest in a vendor that provides automated order intake software. The expense related to this vendor was $5.1 million and $4.9 million for the three months ended September 30, 2026 and 2025, respectively, and $15.6 million and $13.3 million for the nine months ended September 30, 2026 and 2025, respectively. The Company accounts for this investment under the cost method of accounting based on its level of equity ownership. As of September 30, 2026 and December 31, 2025, the Company had an immaterial outstanding accounts payable balance to this vendor.
A director of the Company serves on the board of directors of a third-party payor that does business with the Company in the normal course of providing services to patients. Net revenue from this third-party payor was approximately 1.0
(19) Restructuring Charges
(20) Subsequent Events
The Company evaluated subsequent events for the period from September 30, 2026 through the date that the Company’s consolidated financial statements were available to be issued. There were no subsequent events requiring adjustment to the Company’s consolidated financial statements or additional disclosure, other than as discussed in Note 10, Derivative Instruments and Hedging Activities.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with AdaptHealth Corp.’s (“AdaptHealth” or the “Company”) consolidated financial statements and the accompanying notes included in this report. All amounts presented are in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), except as noted. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from management’s expectations. Factors that could cause such differences include, but are not limited to, those discussed in Item 1A, “Risk Factors”, in our 2025 Annual Report on Form 10-K filed with the SEC on February 24, 2026 and in our Quarterly Reports on Form 10-Q for the three months ended March 31, 2026 and June 30, 2026 filed with the SEC on May 5, 2026 and August 4, 2026, respectively. Certain amounts that appear in this section may not sum due to rounding.
AdaptHealth Corp. Overview
AdaptHealth is a national leader in providing patient-centered, healthcare-at-home solutions including home medical equipment ("HME"), medical supplies, and related services. The Company operates under three reportable segments that align with its product categories: (i) Sleep Health, (ii) Respiratory Health, and (iii) Wellness at Home. A description of the products and services provided within each of the Company’s three reportable segments is provided below.
Sleep Health
The Sleep Health segment provides sleep therapy equipment, supplies and related services (including continuous positive airway pressure and BiLevel services) to individuals for the treatment of obstructive sleep apnea.
Respiratory Health
The Respiratory Health segment provides oxygen and home mechanical ventilation equipment and supplies and related chronic therapy services to individuals for the treatment of respiratory diseases, such as chronic obstructive pulmonary disease and chronic respiratory failure.
Wellness at Home
The Wellness at Home segment provides home medical equipment and services to patients in their homes including those who have been discharged from acute care and other facilities. The segment tailors a service model to patients who are adjusting to new lifestyles or navigating complex disease states by providing essential medical supplies and durable medical equipment.
The Company services beneficiaries of Medicare, Medicaid and commercial insurance payors. As of September 30, 2026, AdaptHealth serviced approximately 4.8 million patients annually in all 50 states through its network of approximately 660 locations in 48 states. The Company’s principal executive offices are located at 555 East North Lane, Suite 5075, Conshohocken, Pennsylvania 19428.
Pending Sale of Diabetes Health Business
On July 19, 2026, the Company entered into a definitive agreement to sell the Diabetes Health business for $235.0 million in cash, subject to customary purchase price adjustments. The transaction is expected to close in the first quarter of 2027, subject to certain regulatory approvals and other customary closing conditions, including the expiration of termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, which expired prior to September 30, 2026. The Diabetes Health business provides medical devices, including continuous glucose monitors and insulin pumps, and related services to patients for the treatment of diabetes. As a result of this transaction, the Diabetes Health business met the criteria to be reported as discontinued operations. Therefore, the Company has reported the results of the Diabetes Health business, including the results of operations, and related assets and liabilities, as discontinued operations for all periods presented herein. Accordingly, the Company no longer reports Diabetes Health as a reportable segment.
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In accordance with U.S. GAAP, the financial position and results of operations of the Diabetes Health business are presented as assets and liabilities held for sale and discontinued operations and, as such, have been excluded from continuing operations for all periods presented. All discussion, unless otherwise noted, reflects the continuing operations of AdaptHealth. See Note 5, Held for Sale and Discontinued Operations, in the accompanying notes to the interim consolidated financial statements, for additional information regarding discontinued operations and assets and liabilities held for sale.
Restructuring Plan
In June 2026, management approved a plan aimed at reducing costs, streamlining operations, and optimizing resources, which included headcount reductions and the wind down of an immaterial business. The total costs associated with this plan were $6.1 million, and the Company expects to realize annual savings of approximately $26.8 million as a result of these actions. The actions regarding the headcount reductions were complete as of September 30, 2026.
Impact of Inflation
The cost to manufacture and distribute the equipment and products that AdaptHealth purchases from vendors and provides to patients is influenced by the cost of materials, labor, shipping, and transportation, including fuel costs. Current and future inflationary effects may be driven by, among other things, general inflationary cost increases, supply chain disruptions and governmental stimulus or fiscal policies, as well as the impact of the war with Iran on fuel prices. Increases in inflation could impact the overall demand for AdaptHealth’s products and services, availability of materials, its costs for labor, equipment and products, shipping, fuel, warehousing and other operational overhead and the margins it is able to realize on its products, all of which could have an adverse impact on AdaptHealth’s business, financial position, results of operations and cash flows. Additionally, it is not certain whether AdaptHealth would be able to pass increased costs onto customers to offset inflationary pressures. AdaptHealth has experienced inflationary pressure and higher costs as a result of increased cost of materials, labor, shipping and transportation. Although there have been increases in inflation and costs, AdaptHealth cannot predict whether these trends will continue. AdaptHealth’s mitigation efforts relating to these inflationary pressures and costs include utilizing AdaptHealth’s purchasing power in negotiations with vendors and the increased use of technology to drive operating efficiencies and control costs, such as AdaptHealth’s digital platform for prescriptions, orders and delivery.
Cybersecurity Incident
As previously disclosed in the Company’s Current Report on Form 8-K filed with the SEC on July 2, 2026, the Company experienced a security incident whereby a threat actor gained unauthorized access to Company systems and exfiltrated certain data therefrom. On June 15, 2026, the Company received a communication from a threat actor claiming to have obtained certain data from the Company's systems. Upon learning of the incident, the Company promptly activated its incident response procedures, launched an investigation with the support of external advisors and cybersecurity experts to assess and contain the threat, and notified law enforcement.
Based on the investigation, the Company learned that a threat actor gained unauthorized access to certain of the Company’s cloud-based business applications, including certain internal patient management systems and document storage platforms. The incident was the result of a successful social engineering attack that compromised a single Company user session. The Company has confirmed that certain data was exfiltrated from its systems, including patient information and a stored password file associated with insurance billing.
The Company does not collect Social Security numbers in the affected systems and does not store individual financial account information or payment card information in those systems. The Company is not aware of any actual or attempted identity theft, fraud, or other misuse of the affected information as a result of this incident.
Following detection, the Company promptly terminated the unauthorized access and implemented containment measures, including disabling the compromised user account, resetting affected credentials, and implementing additional security measures. The Company continues to review and enhance its safeguards, policies, procedures, training, and internal access controls. The Company has notified affected individuals and others as required by law. The Company has also taken steps intended to mitigate the risk of dissemination of the exfiltrated data.
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As of the date of this report, the incident has not had a material impact on the Company’s operations and has not affected the Company’s ability to service its patients. The Company has not yet been able to determine the full financial impact of the incident, including remediation and response costs, legal, regulatory and notification-related matters, and possible effects on patients, counterparties and the Company’s reputation, but currently believes the incident is not reasonably likely to have a material impact on its financial condition or results of operations. The Company maintains cybersecurity insurance that may cover certain losses associated with the incident.
Key Components of Operating Results
Net Revenue. Net revenue is recognized for services and related products that AdaptHealth provides to patients for healthcare-at-home solutions including HME, medical supplies and related services. Revenues are recognized either at a point in time for the sale of supplies and consumables, over the service period for equipment rental (including, but not limited to, positive airway pressure ("PAP") machines, hospital beds, wheelchairs and other equipment), net of implicit price concessions for amounts estimated to be received from patients or under reimbursement arrangements with Medicare, Medicaid and other third-party payors, including private insurers, or in the month in which eligible members are entitled to receive healthcare services in connection with at-risk capitation arrangements. Certain trends or uncertainties that may have a material impact on revenue growth and operating results include the Company's ability to obtain new at-risk capitation arrangements, new patient starts and to generate referrals from patient referral sources and the ability to meet the increased demand considering inflationary pressures.
Cost of Net Revenue. Cost of net revenue primarily includes the cost of non-capitalized medical equipment and supplies, distribution expenses, labor costs, facilities and vehicle rental costs, and depreciation for capitalized patient equipment. Distribution expenses represent the cost incurred to coordinate and deliver products and services to the patients. Included in distribution expenses are leasing, maintenance, licensing and fuel costs for the vehicle fleet; salaries, benefits and other costs related to drivers and dispatch personnel; and amounts paid to couriers.
General and Administrative Expenses. General and administrative expenses consist of corporate support costs including revenue cycle management costs, information technology, human resources, finance, contracting, legal, compliance, equity-based compensation, and other administrative costs.
Depreciation and Amortization, Excluding Patient Equipment Depreciation. Depreciation expense includes depreciation charges for capital assets other than patient equipment (which is included as part of the cost of net revenue). Amortization expense includes amortization of identifiable intangible assets.
Factors Affecting AdaptHealth’s Operating Results
AdaptHealth’s operating results and financial performance are influenced by certain unique events during the periods discussed herein, including the following:
Seasonality
AdaptHealth’s business experiences some seasonality. Its patients are generally responsible for a greater percentage of the cost of their treatment or therapy during the early months of the year due to co-insurance, co-payments and deductibles, and therefore may defer treatment and services of certain therapies until meeting their annual deductibles. In addition, changes to employer insurance coverage often go into effect at the beginning of each calendar year which may impact eligibility requirements and delay or defer treatment. These factors may lead to lower net revenue and cash flow in the early part of the year versus the latter half of the year. Additionally, the increased incidence of respiratory infections during the winter season may result in initiation of additional respiratory services such as oxygen therapy for certain patient populations, which could impact the timing of revenue generated by AdaptHealth's Respiratory Health segment. AdaptHealth’s quarterly operating results may fluctuate significantly in the future depending on these and other factors.
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Key Business Metrics
AdaptHealth focuses on Net revenue, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and free cash flow as it reviews its performance. Refer to EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and free cash flow included in the non-GAAP measures section below.
Total net revenue is comprised of net sales revenue, net revenue from fixed monthly equipment reimbursements, and net revenue from capitated revenue arrangements. Net sales revenue consists of revenue recognized at a point in time for the sale of supplies and consumables. Net revenue from fixed monthly equipment reimbursements consists of revenue recognized over the service period for equipment (including, but not limited to, PAP machines, oxygen concentrators, ventilators, hospital beds, wheelchairs and other equipment). Net revenue from capitated revenue arrangements consists of revenue recognized in the month in which eligible members are entitled to receive healthcare services in connection with at-risk capitation arrangements.
| Three Months Ended | ||||||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | |||||||||||||||||||||||||
| Net Revenue (in thousands, except revenue percentages) | Dollars | Revenue Percentage | Dollars | Revenue Percentage | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| Net sales revenue: | ||||||||||||||||||||||||||
| Sleep Health | $ | 267,617 | 35.9 | % | $ | 265,994 | 39.6 | % | ||||||||||||||||||
| Respiratory Health | 7,966 | 1.1 | % | 8,997 | 1.3 | % | ||||||||||||||||||||
| Wellness at Home | 78,682 | 10.5 | % | 86,600 | 12.9 | % | ||||||||||||||||||||
| Total net sales revenue | $ | 354,265 | 47.5 | % | $ | 361,591 | 53.8 | % | ||||||||||||||||||
| Net revenue from fixed monthly equipment reimbursements: | ||||||||||||||||||||||||||
| Sleep Health | $ | 85,103 | 11.4 | % | $ | 81,792 | 12.2 | % | ||||||||||||||||||
| Respiratory Health | 152,228 | 20.4 | % | 154,228 | 22.9 | % | ||||||||||||||||||||
| Wellness at Home | 43,754 | 5.9 | % | 43,213 | 6.4 | % | ||||||||||||||||||||
| Total net revenue from fixed monthly equipment reimbursements | $ | 281,085 | 37.7 | % | $ | 279,233 | 41.5 | % | ||||||||||||||||||
| Net revenue from capitated revenue arrangements: | ||||||||||||||||||||||||||
| Sleep Health | $ | 41,140 | 5.5 | % | $ | 7,049 | 1.0 | % | ||||||||||||||||||
| Respiratory Health | 30,614 | 4.1 | % | 13,771 | 2.1 | % | ||||||||||||||||||||
| Wellness at Home | 38,544 | 5.2 | % | 10,723 | 1.6 | % | ||||||||||||||||||||
| Total net revenue from capitated revenue arrangements | $ | 110,298 | 14.8 | % | $ | 31,543 | 4.7 | % | ||||||||||||||||||
| Total net revenue: | ||||||||||||||||||||||||||
| Sleep Health | $ | 393,860 | 52.8 | % | $ | 354,835 | 52.8 | % | ||||||||||||||||||
| Respiratory Health | 190,808 | 25.6 | % | 176,996 | 26.3 | % | ||||||||||||||||||||
| Wellness at Home | 160,980 | 21.6 | % | 140,536 | 20.9 | % | ||||||||||||||||||||
| Total net revenue | $ | 745,648 | 100.0 | % | $ | 672,367 | 100.0 | % | ||||||||||||||||||
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| Nine Months Ended | ||||||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | |||||||||||||||||||||||||
| Net Revenue (dollars in thousands) | Dollars | Revenue Percentage | Dollars | Revenue Percentage | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| Net sales revenue: | ||||||||||||||||||||||||||
| Sleep Health | $ | 787,134 | 36.3 | % | $ | 761,758 | 38.5 | % | ||||||||||||||||||
| Respiratory Health | 25,409 | 1.2 | % | 25,084 | 1.3 | % | ||||||||||||||||||||
| Wellness at Home | 235,962 | 10.9 | % | 304,157 | 15.5 | % | ||||||||||||||||||||
| Total net sales revenue | $ | 1,048,505 | 48.4 | % | $ | 1,090,999 | 55.3 | % | ||||||||||||||||||
| Net revenue from fixed monthly equipment reimbursements: | ||||||||||||||||||||||||||
| Sleep Health | $ | 250,752 | 11.6 | % | $ | 222,625 | 11.3 | % | ||||||||||||||||||
| Respiratory Health | 450,671 | 20.8 | % | 445,229 | 22.5 | % | ||||||||||||||||||||
| Wellness at Home | 127,338 | 5.9 | % | 119,723 | 6.1 | % | ||||||||||||||||||||
| Total net revenue from fixed monthly equipment reimbursements | $ | 828,761 | 38.3 | % | $ | 787,577 | 39.9 | % | ||||||||||||||||||
| Net revenue from capitated revenue arrangements: | ||||||||||||||||||||||||||
| Sleep Health | $ | 100,930 | 4.7 | % | $ | 21,492 | 1.1 | % | ||||||||||||||||||
| Respiratory Health | 87,270 | 4.0 | % | 42,614 | 2.2 | % | ||||||||||||||||||||
| Wellness at Home | 100,362 | 4.6 | % | 31,332 | 1.5 | % | ||||||||||||||||||||
| Total net revenue from capitated revenue arrangements | $ | 288,562 | 13.3 | % | $ | 95,438 | 4.8 | % | ||||||||||||||||||
| Total net revenue: | ||||||||||||||||||||||||||
| Sleep Health | $ | 1,138,816 | 52.6 | % | $ | 1,005,875 | 50.9 | % | ||||||||||||||||||
| Respiratory Health | 563,350 | 26.0 | % | 512,927 | 26.0 | % | ||||||||||||||||||||
| Wellness at Home | 463,662 | 21.4 | % | 455,212 | 23.1 | % | ||||||||||||||||||||
| Total net revenue | $ | 2,165,828 | 100.0 | % | $ | 1,974,014 | 100.0 | % | ||||||||||||||||||
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Consolidated Results of Operations
Comparison of Three Months Ended September 30, 2026 and Three Months Ended September 30, 2025.
The following table summarizes AdaptHealth’s results of operations for the three months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||||||||||||||
| Dollars | Revenue Percentage | Dollars | Revenue Percentage | Increase/(Decrease) | ||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | Dollars | Percentage | ||||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||||||
| Net revenue | $ | 745,648 | 100.0% | $ | 672,367 | 100.0% | $ | 73,281 | 10.9% | |||||||||||||||||||||||||||||
| Costs and expenses: | ||||||||||||||||||||||||||||||||||||||
| Cost of net revenue | 630,841 | 84.6% | 533,849 | 79.4% | 96,992 | 18.2% | ||||||||||||||||||||||||||||||||
| General and administrative expenses | 88,661 | 11.9% | 88,143 | 13.1% | 518 | 0.6% | ||||||||||||||||||||||||||||||||
| Depreciation and amortization, excluding patient equipment depreciation | 9,316 | 1.2% | 7,002 | 1.0% | 2,314 | 33.0% | ||||||||||||||||||||||||||||||||
| Goodwill impairment | 184,751 | 24.8 | % | — | —% | 184,751 | 100.0 | % | ||||||||||||||||||||||||||||||
| Total costs and expenses | 913,569 | 122.5% | 628,994 | 93.5% | 284,575 | 45.2% | ||||||||||||||||||||||||||||||||
| Gain on deconsolidation of subsidiary | (12,002) | (1.6) | % | — | — | % | (12,002) | 100.0% | ||||||||||||||||||||||||||||||
| Operating (loss) income | (155,919) | (20.9)% | 43,373 | 6.5% | (199,292) | (459.5) | % | |||||||||||||||||||||||||||||||
| Interest expense, net | 28,600 | 3.8% | 25,380 | 3.8% | 3,220 | 12.7% | ||||||||||||||||||||||||||||||||
| (Loss) income before income taxes | (184,519) | (24.7)% | 17,993 | 2.7% | (202,512) | NM | ||||||||||||||||||||||||||||||||
| Income tax (benefit) expense | (17,494) | (2.3)% | 6,519 | 1.0% | (24,013) | (368.4)% | ||||||||||||||||||||||||||||||||
| Net (loss) income | (167,025) | (22.4)% | 11,474 | 1.7% | (178,499) | NM | ||||||||||||||||||||||||||||||||
| Income attributable to noncontrolling interest | 1,221 | 0.2% | 1,241 | 0.2% | (20) | (1.6)% | ||||||||||||||||||||||||||||||||
| Net (loss) income attributable to AdaptHealth Corp. | $ | (168,246) | (22.6)% | $ | 10,233 | 1.5% | $ | (178,479) | NM | |||||||||||||||||||||||||||||
Net Revenue.
The comparability of AdaptHealth's net revenue between periods was impacted by certain factors as described below. The table below presents the items that impacted the change in AdaptHealth's net revenue between periods.
| Three Months Ended September 30, | ||||||||||||||
| Variance 2026 vs. 2025 | ||||||||||||||
| (in thousands, except percentages) | $ | % | ||||||||||||
| Revenue change driver: | (Unaudited) | |||||||||||||
| Organic revenue (a) | $ | 86,268 | 12.8 | % | ||||||||||
| Acquisition (b) | 2,068 | 0.3 | % | |||||||||||
| Disposition (c) | (15,055) | (2.2) | % | |||||||||||
| Total change in net revenue | $ | 73,281 | 10.9 | % | ||||||||||
(a) All changes in reported net revenue from the comparable period presented excluding the impacts from acquisition (b) and disposition (c).
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(b) The change in net revenue attributable to businesses and/or assets AdaptHealth has owned for less than one year based on the month of acquisition. This excludes the acquisition of assets from previous providers to facilitate the transition of patients related to newly awarded at-risk capitated contracts, since the revenue related to these agreements is earned organically.
(c) Net revenue generated in the comparative prior year period from divested product lines, services, and/or businesses for which there is no revenue recognized in the comparative months within the current period presented.
Net revenue from AdaptHealth's Sleep Health segment increased by $39.0 million, or 11.0%, for the three months ended September 30, 2026 compared to the prior year period, primarily due to timing of the transition of patients related to a capitated revenue contract that was entered into in the third quarter of 2025. Net revenue from AdaptHealth's Respiratory Health segment increased by $13.8 million, or 7.8%, for the three months ended September 30, 2026 compared to the prior year period, primarily due to the capitated revenue contract discussed above. Net revenue from AdaptHealth's Wellness at Home segment increased by $20.4 million, or 14.5% for the three months ended September 30, 2026 compared to the prior year period, primarily due to the capitated revenue contract discussed above, partially offset by decreased net sales revenues from the disposition of an immaterial business during the first quarter of 2026.
For the three months ended September 30, 2026, net sales revenue comprised 47.5% of total net revenue, compared to 53.8% of total net revenue for the three months ended September 30, 2025. For the three months ended September 30, 2026, net revenue from fixed monthly equipment reimbursements comprised 37.7% of total net revenue, compared to 41.5% of total net revenue for the three months ended September 30, 2025. For the three months ended September 30, 2026, net revenue from capitated revenue arrangements comprised 14.8% of total net revenue, compared to 4.7% of total net revenue for the three months ended September 30, 2025.
Cost of Net Revenue.
The following table summarizes cost of net revenue for the three months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||||||||||||||
| Dollars | Revenue Percentage | Dollars | Revenue Percentage | Increase/(Decrease) | ||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | Dollars | Percentage | ||||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||||||
| Costs of net revenue: | ||||||||||||||||||||||||||||||||||||||
| Cost of products and supplies | $ | 241,006 | 32.3 | % | $ | 211,840 | 31.5 | % | $ | 29,166 | 13.8 | % | ||||||||||||||||||||||||||
| Salaries, labor and benefits | 203,950 | 27.4 | % | 176,208 | 26.2 | % | 27,742 | 15.7 | % | |||||||||||||||||||||||||||||
| Patient equipment depreciation | 107,484 | 14.4 | % | 85,226 | 12.7 | % | 22,258 | 26.1 | % | |||||||||||||||||||||||||||||
| Rent and occupancy | 21,647 | 2.9 | % | 17,914 | 2.7 | % | 3,733 | 20.8 | % | |||||||||||||||||||||||||||||
| Other operating expenses | 56,754 | 7.6 | % | 42,661 | 6.3 | % | 14,093 | 33.0 | % | |||||||||||||||||||||||||||||
| Total cost of net revenue | $ | 630,841 | 84.6 | % | $ | 533,849 | 79.4 | % | $ | 96,992 | 18.2 | % | ||||||||||||||||||||||||||
Cost of net revenue for the three months ended September 30, 2026 and 2025 was $630.8 million and $533.8 million, respectively, an increase of $97.0 million or 18.2%. Refer to the section below titled “Segment Results of Operations” for a discussion of the changes in cost of products and supplies, salaries, labor and benefits, rent and occupancy, and other operating expenses. Patient equipment depreciation increased by $22.3 million, primarily due to an increase in patient medical equipment acquired during 2026 to support capitated revenue arrangements.
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General and Administrative Expenses. General and administrative expenses for the three months ended September 30, 2026 and 2025 were $88.7 million and $88.1 million respectively, an increase of $0.5 million or 0.6%. This slight increase is primarily due to higher software costs, consulting costs, and insurance-related costs, offset by lower equity-based compensation, legal fees, and marketing expenses.
Depreciation and amortization, excluding patient equipment depreciation. Depreciation and amortization, excluding patient equipment depreciation, for the three months ended September 30, 2026 and 2025 was $9.3 million and $7.0 million, respectively, an increase of $2.3 million, primarily related to higher depreciation attributable to delivery vehicles and software.
Goodwill impairment. AdaptHealth performed a quantitative goodwill impairment test for each of its reporting units during the third quarter of 2026. The impairment test indicated that the estimated fair values of AdaptHealth's Respiratory Health and Wellness at Home reporting units were less than their respective carrying values, and as such, AdaptHealth recognized non-cash goodwill impairment charges totaling $184.8 million during the three months ended September 30, 2026. See Note 8, Goodwill and Identifiable Intangible Assets, for additional details.
Gain on deconsolidation of subsidiary. Represents a pre-tax gain associated with the deconsolidation of AdaptHealth's former wholly-owned eCommerce subsidiary as discussed in Note 1, General Information - Equity Method Investments.
Interest expense, net. Interest expense, net for the three months ended September 30, 2026 and 2025 was $28.6 million and $25.4 million, respectively, an increase of $3.2 million. Interest expense related to AdaptHealth's debt increased by $0.1 million in 2026 compared to 2025 as a result of higher average outstanding borrowings in 2026 compared to 2025, partially offset by lower interest rates. The increase was also due to the impact from AdaptHealth's interest rate swap agreements, which reduced interest expense by $0.9 million in 2025.
Income Tax (Benefit) Expense. Income tax benefit and income tax expense for the three months ended September 30, 2026 and 2025 was $17.5 million and $6.5 million, respectively. Income tax expense on ordinary income decreased due to lower pre-tax income. For the three months ended September 30, 2026, AdaptHealth recognized a $17.4 million discrete income tax benefit, and corresponding increase to net deferred tax assets, related to non-cash goodwill impairment charges totaling $184.8 million. Additionally, for the three months ended September 30, 2025, AdaptHealth recognized a $27.4 million discrete income tax expense related to the dispositions of two businesses within the Wellness at Home segment.
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Comparison of Nine Months Ended September 30, 2026 and Nine Months Ended September 30, 2025.
The following table summarizes AdaptHealth’s results of operations for the nine months ended September 30, 2026 and 2025:
| Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||||||||||||||
| Dollars | Revenue Percentage | Dollars | Revenue Percentage | Increase/(Decrease) | ||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | Dollars | Percentage | ||||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||||||
| Net revenue | $ | 2,165,828 | 100.0 | % | $ | 1,974,014 | 100.0 | % | $ | 191,814 | 9.7 | % | ||||||||||||||||||||||||||
| Costs and expenses: | ||||||||||||||||||||||||||||||||||||||
| Cost of net revenue | 1,851,183 | 85.5 | % | 1,594,130 | 80.8 | % | 257,053 | 16.1 | % | |||||||||||||||||||||||||||||
| General and administrative expenses | 278,638 | 12.9 | % | 268,301 | 13.6 | % | 10,337 | 3.9 | % | |||||||||||||||||||||||||||||
| Depreciation and amortization, excluding patient equipment depreciation | 24,433 | 1.1 | % | 21,330 | 1.0 | % | 3,103 | 14.5 | % | |||||||||||||||||||||||||||||
| Goodwill impairment | 328,987 | 15.2 | % | — | — | % | 328,987 | 100.0 | % | |||||||||||||||||||||||||||||
| Total costs and expenses | 2,483,241 | 114.7 | % | 1,883,761 | 95.4 | % | 599,480 | 31.8 | % | |||||||||||||||||||||||||||||
| Gain on sale of businesses | (6,269) | (0.3) | % | (32,225) | (1.6) | % | 25,956 | (80.5) | % | |||||||||||||||||||||||||||||
| Gain on deconsolidation of subsidiary | (12,002) | (0.6) | % | — | — | % | (12,002) | 100.0 | % | |||||||||||||||||||||||||||||
| Operating (loss) income | (299,142) | (13.8) | % | 122,478 | 6.2 | % | (421,620) | (344.2) | % | |||||||||||||||||||||||||||||
| Interest expense, net | 80,403 | 3.7 | % | 81,312 | 4.1 | % | (909) | (1.1) | % | |||||||||||||||||||||||||||||
| Loss on extinguishment of debt | 1,322 | 0.1 | % | — | — | % | 1,322 | 100.0 | % | |||||||||||||||||||||||||||||
| (Loss) income before income taxes | (380,867) | (17.6) | % | 41,166 | 2.1 | % | (422,033) | NM | ||||||||||||||||||||||||||||||
| Income tax (benefit) expense | (45,886) | (2.1) | % | 36,813 | 1.9 | % | (82,699) | (224.6) | % | |||||||||||||||||||||||||||||
| Net (loss) income | (334,981) | (15.5) | % | 4,353 | 0.2 | % | (339,334) | NM | ||||||||||||||||||||||||||||||
| Income attributable to noncontrolling interest | 3,598 | 0.1 | % | 3,523 | 0.2 | % | 75 | 2.1 | % | |||||||||||||||||||||||||||||
| Net (loss) income attributable to AdaptHealth Corp. | $ | (338,579) | (15.6) | % | $ | 830 | — | % | $ | (339,409) | NM | |||||||||||||||||||||||||||
Net Revenue.
The comparability of AdaptHealth's net revenue between periods was impacted by certain factors as described below. The table below presents the items that impacted the change in AdaptHealth's net revenue between periods.
| Nine Months Ended September 30, | ||||||||||||||
| Variance 2026 vs. 2025 | ||||||||||||||
| (in thousands, except percentages) | $ | % | ||||||||||||
| Revenue change driver: | (Unaudited) | |||||||||||||
| Organic revenue (a) | $ | 255,168 | 12.9 | % | ||||||||||
| Acquisition (b) | 13,587 | 0.7 | % | |||||||||||
| Disposition (c) | $ | (76,941) | (3.9) | % | ||||||||||
| Total change in net revenue | $ | 191,814 | 9.7 | % | ||||||||||
(a) All changes in reported net revenue from the comparable period presented excluding the impacts from acquisition (b) and disposition (c).
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(b) The change in net revenue attributable to businesses and/or assets AdaptHealth has owned for less than one year based on the month of acquisition. This excludes the acquisition of assets from previous providers to facilitate the transition of patients related to newly awarded at-risk capitated contracts, since the revenue related to these agreements is earned organically.
(c) Net revenue generated in the comparative prior year period from divested product lines, services, and/or businesses for which there is no revenue recognized in the comparative months within the current period presented.
Net revenue from AdaptHealth's Sleep Health segment increased by $132.9 million, or 13.2%, for the nine months ended September 30, 2026 compared to the prior year period, primarily due to a capitated revenue contract that was entered into in the third quarter of 2025. The increase was also attributable to increased net revenue from fixed monthly equipment reimbursements from higher sleep rental products, as well as increased net sales revenue primarily from higher patient census from sales of PAP resupply products. Net revenue from AdaptHealth's Respiratory Health segment increased by $50.4 million, or 9.8%, for the nine months ended September 30, 2026 compared to the prior year period, primarily due to a capitated revenue contract that was entered into in the third quarter of 2025, and to a lesser extent, higher fixed monthly equipment reimbursements from higher patient census for oxygen equipment products. Net revenue from AdaptHealth's Wellness at Home segment increased by $8.5 million, or 1.9% for the nine months ended September 30, 2026 compared to the prior year period, primarily due to an increase in net revenues from a capitated revenue contract that was entered into in the third quarter of 2025, and to a lesser extent, higher fixed monthly equipment reimbursements, partially offset by decreased net sales revenues from the disposition of certain incontinence and infusion businesses during 2025.
For the nine months ended September 30, 2026, net sales revenue comprised 48.4% of total net revenue, compared to 55.3% of total net revenue for the nine months ended September 30, 2025. For the nine months ended September 30, 2026, net revenue from fixed monthly equipment reimbursements comprised 38.3% of total net revenue, compared to 39.9% of total net revenue for the nine months ended September 30, 2025. For the nine months ended September 30, 2026, net revenue from capitated revenue arrangements comprised 13.3% of total net revenue, compared to 4.8% of total net revenue for the nine months ended September 30, 2025.
Cost of Net Revenue.
The following table summarizes cost of net revenue for the nine months ended September 30, 2026 and 2025:
| Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||||||||||||||
| Dollars | Revenue Percentage | Dollars | Revenue Percentage | Increase/(Decrease) | ||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | Dollars | Percentage | ||||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||||||
| Costs of net revenue: | ||||||||||||||||||||||||||||||||||||||
| Cost of products and supplies | $ | 692,554 | 32.0 | % | $ | 645,730 | 32.7 | % | $ | 46,824 | 7.3 | % | ||||||||||||||||||||||||||
| Salaries, labor and benefits | 606,991 | 28.0 | % | 520,271 | 26.4 | % | 86,720 | 16.7 | % | |||||||||||||||||||||||||||||
| Patient equipment depreciation | 308,050 | 14.2 | % | 246,764 | 12.5 | % | 61,286 | 24.8 | % | |||||||||||||||||||||||||||||
| Rent and occupancy | 64,399 | 3.0 | % | 54,757 | 2.8 | % | 9,642 | 17.6 | % | |||||||||||||||||||||||||||||
| Other operating expenses | 179,189 | 8.3 | % | 126,608 | 6.4 | % | 52,581 | 41.5 | % | |||||||||||||||||||||||||||||
| Total cost of net revenue | $ | 1,851,183 | 85.5 | % | $ | 1,594,130 | 80.8 | % | $ | 257,053 | 16.1 | % | ||||||||||||||||||||||||||
Cost of net revenue for the nine months ended September 30, 2026 and 2025 was $1,851.2 million and $1,594.1 million, respectively, an increase of $257.1 million or 16.1%. Refer to the section below titled “Segment Results of Operations” for a discussion of the changes in cost of products and supplies, salaries, labor and benefits, rent and occupancy, and other operating expenses. Patient equipment depreciation increased by $61.3 million, primarily due to an increase in patient medical equipment acquired during 2026 to support capitated revenue arrangements.
General and Administrative Expenses. General and administrative expenses for the nine months ended September 30, 2026 and 2025 were $278.6 million and $268.3 million, respectively, an increase of $10.3 million or 3.9%.
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This increase is primarily due to higher software costs, salaries, labor and benefits, insurance-related costs, and restructuring expenses, partially offset by lower consulting costs, marketing expenses, legal fees, and equity-based compensation.
Depreciation and amortization, excluding patient equipment depreciation. Depreciation and amortization, excluding patient equipment depreciation, for the nine months ended September 30, 2026 and 2025 was $24.4 million and $21.3 million, respectively, an increase of $3.1 million, primarily related to higher depreciation attributable to delivery vehicles.
Goodwill impairment. AdaptHealth performed quantitative goodwill impairment tests for each of its reporting units during the second and third quarters of 2026. The impairment tests indicated that the estimated fair values of AdaptHealth's Respiratory Health and Wellness at Home reporting units were less than their respective carrying values, and as such, AdaptHealth recognized non-cash goodwill impairment charges totaling $329.0 million during the nine months ended September 30, 2026. See Note 8, Goodwill and Identifiable Intangible Assets, for additional details.
Gain on deconsolidation of subsidiary. Represents a pre-tax gain associated with the deconsolidation of AdaptHealth's former wholly-owned eCommerce subsidiary as discussed in Note 1, General Information - Equity Method Investments.
Loss on extinguishment of debt. The loss on extinguishment of debt for the nine months ended September 30, 2026 relates to third-party fees and the write-off of unamortized deferred financing costs in connection with the refinancing of the Company's credit agreement. See Note 12, Debt, for additional discussion of the refinancing.
Gain on sale of businesses. The gain for the nine months ended September 30, 2026 relates to the receipt of a contingent payment from the disposition of a business that occurred in 2025. The gain for the nine months ended September 30, 2025 relates to the disposition of two businesses within AdaptHealth's Wellness at Home segment.
Interest expense, net. Interest expense, net for the nine months ended September 30, 2026 and 2025 was $80.4 million and $81.3 million, respectively, a decrease of $0.9 million. Interest expense related to AdaptHealth's debt decreased by $4.9 million in 2026 compared to 2025 primarily as a result of lower average interest rates. This decrease was partially offset by the impact from AdaptHealth's interest rate swap agreements, which reduced interest expense by $0.1 million and $2.7 million in 2026 and 2025, respectively.
Income Tax (Benefit) Expense. Income tax benefit and income tax expense for the nine months ended September 30, 2026 and 2025 was $45.9 million and $36.8 million, respectively. Income tax expense on ordinary income decreased due to lower pre-tax income, net of gains recognized on the disposition of two businesses within the Wellness at Home segment. For the nine months ended September 30, 2026, AdaptHealth recognized a $32.8 million discrete income tax benefit, and corresponding increase to net deferred tax assets, related to non-cash goodwill impairment charges totaling $329.0 million. Additionally, for the nine months ended September 30, 2025, AdaptHealth recognized a $27.4 million discrete income tax expense related to the dispositions of two businesses within the Wellness at Home segment.
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Organic Revenue
AdaptHealth uses organic revenue (as defined below), which is a financial measure that is not in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, to analyze its financial results and believes that it is useful to investors, as a supplement to U.S. GAAP measures. The change in net revenue from organic revenue is reported as organic revenue as a percentage of prior period total reported net revenue. Management believes organic revenue is meaningful to investors as it provides appropriate visibility into how AdaptHealth changes organically—that is, within its existing operations using its own resources.
Organic revenue is defined as all changes in reported net revenues from the comparable period presented, excluding: (1) increases in net revenue in the current period from acquisitions attributable to businesses and/or assets AdaptHealth has owned for less than one year based on the month of acquisition. This excludes the acquisition of assets from previous providers to facilitate the transition of patients related to newly awarded at-risk capitated contracts, since the revenue related to these agreements is earned organically (“Acquisition”); and (2) decreases in net revenue from dispositions existing in the prior period from divested product lines, services, and/or businesses for which there is no revenue recognized in the current period (“Disposition”).
EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin
AdaptHealth uses EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin, which are financial measures that are not in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, to analyze its financial results and believes that they are useful to investors, as a supplement to U.S. GAAP measures. In addition, AdaptHealth’s ability to incur additional indebtedness and make investments under its existing credit agreement is governed, in part, by its ability to satisfy tests based on a variation of Adjusted EBITDA.
AdaptHealth defines EBITDA as net income (loss) from continuing operations, plus interest expense, net, income tax expense (benefit), and depreciation and amortization, including patient equipment depreciation.
AdaptHealth defines Adjusted EBITDA as EBITDA (as defined above), plus equity-based compensation expense, goodwill impairment, gain on deconsolidation of subsidiary, gain on sale of businesses, restructuring expenses, loss on extinguishment of debt, litigation settlement expense, and certain other non-recurring items of expense or income.
AdaptHealth defines Adjusted EBITDA Margin as Adjusted EBITDA (as defined above) as a percentage of net revenue.
AdaptHealth believes Adjusted EBITDA and Adjusted EBITDA Margin are useful to investors in evaluating AdaptHealth’s financial performance. AdaptHealth uses Adjusted EBITDA as the profitability measure in its incentive compensation plans that have a profitability component and to evaluate acquisition opportunities, where it is most often used for purposes of contingent consideration arrangements.
EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin should not be considered as measures of financial performance under U.S. GAAP, and the items excluded from EBITDA and Adjusted EBITDA are significant components in understanding and assessing financial performance. Accordingly, these key business metrics have limitations as an analytical tool. They should not be considered as an alternative to net income or any other performance measures derived in accordance with U.S. GAAP or as an alternative to cash flows from operating activities as a measure of AdaptHealth’s liquidity.
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The following unaudited table presents the reconciliation of net income (loss) from continuing operations to EBITDA and Adjusted EBITDA, and the reconciliation of net income (loss) from continuing operations as a percentage of net revenue to Adjusted EBITDA Margin, for the three months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | ||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||
| (in thousands, except percentages) | Dollars | Revenue Percentage | Dollars | Revenue Percentage | ||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Net (loss) income from continuing operations | $ | (167,025) | (22.4)% | $ | 11,474 | 1.7% | ||||||||||||||
| Interest expense, net | 28,600 | 3.8% | 25,380 | 3.8% | ||||||||||||||||
| Income tax (benefit) expense | (17,494) | (2.3)% | 6,519 | 1.0% | ||||||||||||||||
| Depreciation and amortization, including patient equipment depreciation | 116,800 | 15.7% | 92,228 | 13.7% | ||||||||||||||||
| EBITDA | (39,119) | (5.2)% | 135,601 | 20.2% | ||||||||||||||||
| Equity-based compensation expense (a) | 986 | 0.1% | 5,191 | 0.8% | ||||||||||||||||
| Goodwill impairment (b) | 184,751 | 24.8% | — | —% | ||||||||||||||||
| Gain on deconsolidation of subsidiary (c) | (12,002) | (1.6)% | — | —% | ||||||||||||||||
| Other non-recurring expenses, net (d) | 7,288 | 0.9% | 5,298 | 0.7% | ||||||||||||||||
| Adjusted EBITDA | $ | 141,904 | 19.0% | $ | 146,090 | 21.7% | ||||||||||||||
| Adjusted EBITDA Margin | 19.0% | 21.7% | ||||||||||||||||||
(a)Represents equity-based compensation expense for awards granted to employees and non-employee directors.
(b)Represents non-cash goodwill impairment charges as a result of the fair values of the Company's Respiratory Health and Wellness at Home reporting units being less than their respective carrying values. See Note 8, Goodwill and Identifiable Intangible Assets, for additional information.
(c)Represents a pre-tax gain associated with the deconsolidation of the Company's former wholly-owned eCommerce subsidiary. See Note 1, General Information - Equity Method Investments, for additional information.
(d)The 2026 period consists of $5.1 million of consulting expenses associated with asset dispositions, $1.6 million of severance related to the Company's former Chief Financial Officer, and $0.6 million of other non-recurring expenses. The 2025 period consists of $1.7 million of consulting expenses associated with a reorganization project, $1.2 million write-off of assets, $0.6 million of consulting expenses associated with asset dispositions, and $1.8 million of other non-recurring expenses.
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The following unaudited table presents the reconciliation of net loss from continuing operations to EBITDA and Adjusted EBITDA, and the reconciliation of net loss from continuing operations as a percentage of net revenue to Adjusted EBITDA Margin, for the nine months ended September 30, 2026 and 2025:
| Nine Months Ended September 30, | ||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||
| (in thousands, except percentages) | Dollars | Revenue Percentage | Dollars | Revenue Percentage | ||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Net (loss) income from continuing operations | $ | (334,981) | (15.5)% | $ | 4,353 | 0.2% | ||||||||||||||
| Interest expense, net | 80,403 | 3.7% | 81,312 | 4.1% | ||||||||||||||||
| Income tax (benefit) expense | (45,886) | (2.1)% | 36,813 | 1.9% | ||||||||||||||||
| Depreciation and amortization, including patient equipment depreciation | 332,483 | 15.4% | 268,094 | 13.6% | ||||||||||||||||
| EBITDA | 32,019 | 1.5% | 390,572 | 19.8% | ||||||||||||||||
| Equity-based compensation expense (a) | 12,750 | 0.6% | 16,393 | 0.8% | ||||||||||||||||
| Goodwill impairment (b) | 328,987 | 15.2% | — | —% | ||||||||||||||||
| Gain on deconsolidation of subsidiary (c) | (12,002) | (0.6)% | — | —% | ||||||||||||||||
| Gain on sale of businesses (d) | (6,269) | (0.3)% | (32,225) | (1.6)% | ||||||||||||||||
| Restructuring expenses (e) | 6,070 | 0.3% | — | —% | ||||||||||||||||
| Loss on extinguishment of debt (f) | 1,322 | 0.1% | — | —% | ||||||||||||||||
| Litigation settlement expense (g) | 500 | —% | — | —% | ||||||||||||||||
| Other non-recurring expenses, net (h) | 15,085 | 0.7% | 20,439 | 1.0% | ||||||||||||||||
| Adjusted EBITDA | $ | 378,462 | 17.5% | $ | 395,179 | 20.0% | ||||||||||||||
| Adjusted EBITDA Margin | 17.5% | 20.0% | ||||||||||||||||||
(a)Represents equity-based compensation expense for awards granted to employees and non-employee directors.
(b)Represents non-cash goodwill impairment charges as a result of the fair values of the Company's Respiratory Health and Wellness at Home reporting units being less than their respective carrying values. See Note 8, Goodwill and Identifiable Intangible Assets, for additional information.
(c)Represents a pre-tax gain associated with the deconsolidation of the Company's former wholly-owned eCommerce subsidiary. See Note 1, General Information - Equity Method Investments, for additional information.
(d)Represents pre-tax gains associated with the dispositions of two businesses within the Company's Wellness at Home segment.
(e)Represents expenses related to a cost savings plan that was implemented in June 2026. See Note 19, Restructuring Charges, for additional information.
(f)Represents third-party fees and the write-off of unamortized deferred financing costs in connection with the refinancing of the Company's credit agreement. See Note 12, Debt, for additional discussion of the refinancing.
(g)Represents an estimated expense to settle a shareholder derivative complaint.
(h)The 2026 period consists of $9.3 million of consulting expenses associated with asset dispositions, $2.1 million of transaction costs associated with acquisitions, $1.6 million of severance related to the Company's former Chief Financial Officer, and $2.1 million of other net non-recurring expenses. The 2025 period consists of $9.8 million of consulting expenses associated with asset dispositions (of which $5.1 million relates to contingent success fees from the sales of businesses), $2.3 million of consulting expenses associated with systems implementation activities,
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$1.7 million of consulting expenses associated with a reorganization project, $1.4 million of transaction costs associated with acquisitions, $1.2 million write-off of assets, and $4.0 million of other non-recurring expenses.
Segment Results of Operations
Operating segments are defined as components of a public entity for which discrete financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”) for purposes of allocating resources and evaluating financial performance. AdaptHealth’s CODM is its Chief Executive Officer. AdaptHealth operates under three reportable segments that align with its product categories: (i) Sleep Health, (ii) Respiratory Health, and (iii) Wellness at Home.
The CODM evaluates performance of the reportable segments based on Adjusted EBITDA. Refer to the section above titled “EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin” for the Company’s definition of Adjusted EBITDA.
Comparison of Three Months Ended September 30, 2026 and Three Months Ended September 30, 2025.
The following table summarizes the performance of the Company’s reportable segments for the three months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| (in thousands) | Net Revenue | Adjusted EBITDA | Net Revenue | Adjusted EBITDA | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| Sleep Health | $ | 393,860 | $ | 70,741 | $ | 354,835 | $ | 77,061 | ||||||||||||||||||
| Respiratory Health | 190,808 | 56,230 | 176,996 | 51,247 | ||||||||||||||||||||||
| Wellness at Home | 160,980 | 14,933 | 140,536 | 17,782 | ||||||||||||||||||||||
| Consolidated Totals (a) | $ | 745,648 | $ | 141,904 | $ | 672,367 | $ | 146,090 | ||||||||||||||||||
(a) See Note 7, Segment Information, in the accompanying notes to the interim consolidated financial statements for the three and nine months ended September 30, 2026 and 2025 for a reconciliation of consolidated Adjusted EBITDA to consolidated (loss) income from continuing operations before income taxes.
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Sleep Health Segment
The following table summarizes the Sleep Health segment’s performance for the three months ended September 30, 2026 and 2025:
| Increase/(Decrease) | ||||||||||||||||||||||||||
| Three Months Ended September 30, | 2026 vs. 2025 | |||||||||||||||||||||||||
| (in thousands, except percentages) | 2026 | 2025 | Dollars | Percentage | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| Net revenue | $ | 393,860 | $ | 354,835 | $ | 39,025 | 11.0 | % | ||||||||||||||||||
| Less: | ||||||||||||||||||||||||||
| Cost of products and supplies (1) | 131,241 | 115,675 | 15,566 | 13.5 | % | |||||||||||||||||||||
| Labor cost (1) | 108,215 | 86,998 | 21,217 | 24.4 | % | |||||||||||||||||||||
| Other operating expenses (1) | 42,132 | 34,649 | 7,483 | 21.6 | % | |||||||||||||||||||||
| Other segment items (2) | 41,531 | 40,452 | 1,079 | 2.7 | % | |||||||||||||||||||||
| Adjusted EBITDA | 70,741 | 77,061 | (6,320) | (8.2) | % | |||||||||||||||||||||
| Adjusted EBITDA Margin | 18.0% | 21.7% | ||||||||||||||||||||||||
| Patient equipment depreciation | $ | 50,374 | $ | 38,250 | $ | 12,124 | 31.7 | % | ||||||||||||||||||
(1) Represents the significant segment expense categories disclosed in Note 7, Segment Information, in the accompanying notes to the interim consolidated financial statements for the three and nine months ended September 30, 2026 and 2025.
(2) Other segment items include allocated costs related to various general and administrative functions, such as revenue cycle management (including billing and collections), customer service, technology and communications, sales and marketing, accounting and finance, executive administration, human resources, information technology and legal and compliance.
Net Revenue
Net revenue from the Sleep Health segment increased by $39.0 million, or 11.0%, for the three months ended September 30, 2026 compared to the prior year period, primarily due to timing of the transition of patients related to a capitated revenue contract that was entered into in the third quarter of 2025.
Adjusted EBITDA
Adjusted EBITDA from the Sleep Health segment decreased by $6.3 million or 8.2%, for the three months ended September 30, 2026 compared to the prior year period, primarily due to increased costs and expenses, partially offset by higher net revenue (as discussed above). The increase in the cost of products and supplies was primarily due to an increase in capitated revenue as well as the increased prices from a key supplier. The increase in labor cost was primarily due to increased headcount, including variable labor to support a capitated revenue agreement entered into in the third quarter of 2025, as well as increases from merit and benefits costs, and inflationary increases. The increase in other operating expenses was primarily due to higher distribution-related expenses and facilities costs. The increase in other segment items was due to an increase in general and administrative expenses that were allocated to the segment.
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Respiratory Health Segment
The following table summarizes the Respiratory Health segment’s performance for the three months ended September 30, 2026 and 2025:
| Increase/(Decrease) | ||||||||||||||||||||||||||
| Three Months Ended September 30, | 2026 vs. 2025 | |||||||||||||||||||||||||
| (in thousands, except percentages) | 2026 | 2025 | Dollars | Percentage | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| Net revenue | $ | 190,808 | $ | 176,996 | $ | 13,812 | 7.8 | % | ||||||||||||||||||
| Less: | ||||||||||||||||||||||||||
| Cost of products and supplies (1) | 37,930 | 32,718 | 5,212 | 15.9 | % | |||||||||||||||||||||
| Labor cost (1) | 55,641 | 56,761 | (1,120) | (2.0) | % | |||||||||||||||||||||
| Other operating expenses (1) | 19,923 | 15,670 | 4,253 | 27.1 | % | |||||||||||||||||||||
| Other segment items (2) | 21,084 | 20,600 | 484 | 2.3 | % | |||||||||||||||||||||
| Adjusted EBITDA | 56,230 | 51,247 | 4,983 | 9.7 | % | |||||||||||||||||||||
| Adjusted EBITDA Margin | 29.5% | 29.0% | ||||||||||||||||||||||||
| Patient equipment depreciation | $ | 37,235 | $ | 35,883 | $ | 1,352 | 3.8 | % | ||||||||||||||||||
(1) Represents the significant segment expense categories disclosed in Note 7, Segment Information, in the accompanying notes to the interim consolidated financial statements for the three and nine months ended September 30, 2026 and 2025.
(2) Other segment items include allocated costs related to various general and administrative functions, such as revenue cycle management (including billing and collections), customer service, technology and communications, sales and marketing, accounting and finance, executive administration, human resources, information technology and legal and compliance.
Net Revenue
Net revenue from the Respiratory Health segment increased by $13.8 million, or 7.8%, for the three months ended September 30, 2026 compared to the prior year period, primarily due to timing of the transition of patients related to a capitated revenue contract that was entered into in the third quarter of 2025.
Adjusted EBITDA
Adjusted EBITDA from the Respiratory Health segment increased by $5.0 million or 9.7%, for the three months ended September 30, 2026 compared to the prior year period, due to higher net revenue (as discussed above), partially offset by increased costs and expenses. The increase in cost of products and supplies was primarily due to higher patient census for oxygen equipment products and general inflationary cost increases. The increase in other operating expenses was primarily due to higher distribution-related expenses and facilities costs.
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Wellness at Home Segment
The following table summarizes the Wellness at Home segment’s performance for the three months ended September 30, 2026 and 2025:
| Increase/(Decrease) | ||||||||||||||||||||||||||
| Three Months Ended September 30, | 2026 vs. 2025 | |||||||||||||||||||||||||
| (in thousands, except percentages) | 2026 | 2025 | Dollars | Percentage | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| Net revenue | $ | 160,980 | $ | 140,536 | $ | 20,444 | 14.5 | % | ||||||||||||||||||
| Less: | ||||||||||||||||||||||||||
| Cost of products and supplies (1) | 71,835 | 63,447 | 8,388 | 13.2 | % | |||||||||||||||||||||
| Labor cost (1) | 39,690 | 31,882 | 7,808 | 24.5 | % | |||||||||||||||||||||
| Other operating expenses (1) | 16,395 | 10,333 | 6,062 | 58.7 | % | |||||||||||||||||||||
| Other segment items (2) | 18,127 | 17,092 | 1,035 | 6.1 | % | |||||||||||||||||||||
| Adjusted EBITDA | 14,933 | 17,782 | (2,849) | (16.0) | % | |||||||||||||||||||||
| Adjusted EBITDA Margin | 9.3% | 12.7% | ||||||||||||||||||||||||
| Patient equipment depreciation | $ | 19,875 | $ | 11,093 | $ | 8,782 | 79.2 | % | ||||||||||||||||||
(1) Represents the significant segment expense categories disclosed in Note 7, Segment Information, in the accompanying notes to the interim consolidated financial statements for the three and nine months ended September 30, 2026 and 2025.
(2) Other segment items include allocated costs related to various general and administrative functions, such as revenue cycle management (including billing and collections), customer service, technology and communications, sales and marketing, accounting and finance, executive administration, human resources, information technology and legal and compliance.
Net Revenue
Net revenue from the Wellness at Home segment increased by $20.4 million, or 14.5%, for the three months ended September 30, 2026 compared to the prior year period, primarily due to timing of the transition of patients related to a capitated revenue contract that was entered into in the third quarter of 2025, partially offset by decreased net sales revenues from the disposition of an immaterial business during the first quarter of 2026.
Adjusted EBITDA
Adjusted EBITDA from the Wellness at Home segment decreased by $2.8 million or 16.0%, for the three months ended September 30, 2026 compared to the prior year period, due to higher costs and expenses, partially offset by higher net revenue (as discussed above). The increase in the cost of products and supplies was primarily due to an increase in costs from a capitated revenue contract entered into in the third quarter of 2025. The increase in labor cost was primarily due to increased headcount to support a capitated revenue agreement entered into in the third quarter of 2025, and to a lesser extent, increased merits and benefits costs. The increase in other operating expenses was primarily due to higher distribution-related expenses and facilities costs.
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Comparison of Nine Months Ended September 30, 2026 and Nine Months Ended September 30, 2025.
The following table summarizes the performance of the Company’s reportable segments for the nine months ended September 30, 2026 and 2025:
| Nine Months Ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| (in thousands) | Net Revenue | Adjusted EBITDA | Net Revenue | Adjusted EBITDA | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| Sleep Health | $ | 1,138,816 | $ | 196,100 | $ | 1,005,875 | $ | 208,390 | ||||||||||||||||||
| Respiratory Health | 563,350 | 155,483 | 512,927 | 138,731 | ||||||||||||||||||||||
| Wellness at Home | 463,662 | 26,879 | 455,212 | 48,058 | ||||||||||||||||||||||
| Consolidated Totals (a) | $ | 2,165,828 | $ | 378,462 | $ | 1,974,014 | $ | 395,179 | ||||||||||||||||||
(a) See Note 7, Segment Information, in the accompanying notes to the interim consolidated financial statements for the three and nine months ended September 30, 2026 and 2025 for a reconciliation of consolidated Adjusted EBITDA to consolidated (loss) income from continuing operations before income taxes.
Sleep Health Segment
The following table summarizes the Sleep Health segment’s performance for the nine months ended September 30, 2026 and 2025:
| Increase/(Decrease) | ||||||||||||||||||||||||||
| Nine Months Ended September 30, | 2026 vs. 2025 | |||||||||||||||||||||||||
| (in thousands, except percentages) | 2026 | 2025 | Dollars | Percentage | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| Net revenue | $ | 1,138,816 | $ | 1,005,875 | $ | 132,941 | 13.2 | % | ||||||||||||||||||
| Less: | ||||||||||||||||||||||||||
| Cost of products and supplies (1) | 369,022 | 329,763 | 39,259 | 11.9 | % | |||||||||||||||||||||
| Labor cost (1) | 316,289 | 250,082 | 66,207 | 26.5 | % | |||||||||||||||||||||
| Other operating expenses (1) | 130,268 | 100,463 | 29,805 | 29.7 | % | |||||||||||||||||||||
| Other segment items (2) | 127,137 | 117,177 | 9,960 | 8.5 | % | |||||||||||||||||||||
| Adjusted EBITDA | 196,100 | 208,390 | (12,290) | (5.9) | % | |||||||||||||||||||||
| Adjusted EBITDA Margin | 17.2% | 20.7% | ||||||||||||||||||||||||
| Patient equipment depreciation | $ | 144,019 | $ | 115,047 | $ | 28,972 | 25.2 | % | ||||||||||||||||||
(1) Represents the significant segment expense categories disclosed in Note 7, Segment Information, in the accompanying notes to the interim consolidated financial statements for the three and nine months ended September 30, 2026 and 2025.
(2) Other segment items include allocated costs related to various general and administrative functions, such as revenue cycle management (including billing and collections), customer service, technology and communications, sales and marketing, accounting and finance, executive administration, human resources, information technology and legal and compliance.
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Net Revenue
Net revenue from the Sleep Health segment increased by $132.9 million, or 13.2%, for the nine months ended September 30, 2026 compared to the prior year period, primarily due to a capitated revenue contract that was entered into in the third quarter of 2025. The increase was also attributable to increased net revenue from fixed monthly equipment reimbursements from higher sleep rental products, as well as increased net sales revenue primarily from higher patient census from sales of PAP resupply products.
Adjusted EBITDA
Adjusted EBITDA from the Sleep Health segment decreased by $12.3 million or 5.9%, for the nine months ended September 30, 2026 compared to the prior year period, primarily due to increased costs and expenses, partially offset by higher net revenue (as discussed above). The increase in the cost of products and supplies was primarily due to an increase in sales revenue and capitated revenue as well as increased prices from a key supplier. The increase in labor cost was primarily due to increased headcount, including variable labor to support a capitated revenue contract entered into in the third quarter of 2025, as well as increases from merit and benefits costs, and inflationary increases. The increase in other operating expenses was primarily due to higher distribution-related expenses and facilities costs. The increase in other segment items was due to an increase in general and administrative expenses that were allocated to the segment.
Respiratory Health Segment
The following table summarizes the Respiratory Health segment’s performance for the nine months ended September 30, 2026 and 2025:
| Increase/(Decrease) | ||||||||||||||||||||||||||
| Nine Months Ended September 30, | 2026 vs. 2025 | |||||||||||||||||||||||||
| (in thousands, except percentages) | 2026 | 2025 | Dollars | Percentage | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| Net revenue | $ | 563,350 | $ | 512,927 | $ | 50,423 | 9.8 | % | ||||||||||||||||||
| Less: | ||||||||||||||||||||||||||
| Cost of products and supplies (1) | 110,058 | 98,491 | 11,567 | 11.7 | % | |||||||||||||||||||||
| Labor cost (1) | 170,358 | 167,840 | 2,518 | 1.5 | % | |||||||||||||||||||||
| Other operating expenses (1) | 61,859 | 46,000 | 15,859 | 34.5 | % | |||||||||||||||||||||
| Other segment items (2) | 65,592 | 61,865 | 3,727 | 6.0 | % | |||||||||||||||||||||
| Adjusted EBITDA | 155,483 | 138,731 | 16,752 | 12.1 | % | |||||||||||||||||||||
| Adjusted EBITDA Margin | 27.6% | 27.0% | ||||||||||||||||||||||||
| Patient equipment depreciation | $ | 108,399 | $ | 96,799 | $ | 11,600 | 12.0 | % | ||||||||||||||||||
(1) Represents the significant segment expense categories disclosed in Note 7, Segment Information, in the accompanying notes to the interim consolidated financial statements for the three and nine months ended September 30, 2026 and 2025.
(2) Other segment items include allocated costs related to various general and administrative functions, such as revenue cycle management (including billing and collections), customer service, technology and communications, sales and marketing, accounting and finance, executive administration, human resources, information technology and legal and compliance.
Net Revenue
Net revenue from the Respiratory Health segment increased by $50.4 million, or 9.8%, for the nine months ended September 30, 2026 compared to the prior year period, primarily due to a capitated revenue contract that was entered into in
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the third quarter of 2025, and to a lesser extent, higher fixed monthly equipment reimbursements from higher patient census for oxygen equipment products.
Adjusted EBITDA
Adjusted EBITDA from the Respiratory Health segment increased by $16.8 million or 12.1%, for the nine months ended September 30, 2026 compared to the prior year period, due to higher net revenue (as discussed above), partially offset by increased costs and expenses. The increase in cost of products and supplies was primarily due to higher patient census for oxygen equipment products and general inflationary cost increases. The increase in labor cost was primarily due to increased headcount, including variable labor to support a capitated revenue contract entered into in the third quarter of 2025, as well as increases from merit and benefits costs, and inflationary increases. The increase in other operating expenses was primarily due to higher distribution-related expenses and facilities costs. The increase in other segment items was due to an increase in general and administrative expenses that were allocated to the segment.
Wellness at Home Segment
The following table summarizes the Wellness at Home segment’s performance for the nine months ended September 30, 2026 and 2025:
| Increase/(Decrease) | ||||||||||||||||||||||||||
| Nine Months Ended September 30, | 2026 vs. 2025 | |||||||||||||||||||||||||
| (in thousands, except percentages) | 2026 | 2025 | Dollars | Percentage | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| Net revenue | $ | 463,662 | $ | 455,212 | $ | 8,450 | 1.9 | % | ||||||||||||||||||
| Less: | ||||||||||||||||||||||||||
| Cost of products and supplies (1) | 213,474 | 217,476 | (4,002) | (1.8) | % | |||||||||||||||||||||
| Labor cost (1) | 119,323 | 99,167 | 20,156 | 20.3 | % | |||||||||||||||||||||
| Other operating expenses (1) | 49,036 | 34,842 | 14,194 | 40.7 | % | |||||||||||||||||||||
| Other segment items (2) | 54,950 | 55,669 | (719) | (1.3) | % | |||||||||||||||||||||
| Adjusted EBITDA | 26,879 | 48,058 | (21,179) | (44.1) | % | |||||||||||||||||||||
| Adjusted EBITDA Margin | 5.8% | 10.6% | ||||||||||||||||||||||||
| Patient equipment depreciation | $ | 55,632 | $ | 34,918 | $ | 20,714 | 59.3 | % | ||||||||||||||||||
(1) Represents the significant segment expense categories disclosed in Note 7, Segment Information, in the accompanying notes to the interim consolidated financial statements for the three and nine months ended September 30, 2026 and 2025.
(2) Other segment items include allocated costs related to various general and administrative functions, such as revenue cycle management (including billing and collections), customer service, technology and communications, sales and marketing, accounting and finance, executive administration, human resources, information technology and legal and compliance.
Net Revenue
Net revenue from the Wellness at Home segment increased by $8.5 million, or 1.9%, for the nine months ended September 30, 2026 compared to the prior year period, primarily due to an increase in net revenues from a capitated revenue contract that was entered into in the third quarter of 2025, and to a lesser extent, higher fixed monthly equipment reimbursements, partially offset by decreased net sales revenues from the disposition of certain incontinence and infusion businesses during 2025.
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Adjusted EBITDA
Adjusted EBITDA from the Wellness at Home segment decreased by $21.2 million or 44.1%, for the nine months ended September 30, 2026 compared to the prior year period, due to higher costs and expenses, partially offset by higher net revenue (as discussed above). The decrease in the cost of products and supplies was primarily due to the disposition of certain incontinence and infusion businesses during 2025, partially offset by an increase in costs from a capitated revenue agreement entered into in the third quarter of 2025. The increase in labor cost was primarily due to increased headcount to support a capitated revenue agreement entered into in the third quarter of 2025, and to a lesser extent, increased merits and benefits costs, partially offset by a reduction in labor cost due to the disposition of certain incontinence and infusion businesses during 2025. The increase in other operating expenses was primarily due to higher distribution-related expenses and facilities costs.
Free Cash Flow
AdaptHealth uses free cash flow, which is a financial measure that is not in accordance with U.S. GAAP, in its operational and financial decision-making and believes free cash flow is useful to investors because similar measures are frequently used by securities analysts, investors, ratings agencies and other interested parties to evaluate AdaptHealth's competitors and to measure the ability of companies to service their debt. AdaptHealth's presentation of free cash flow should not be construed as a measure of liquidity or discretionary cash available to AdaptHealth to fund its cash needs, including investing in the growth of its business and meeting its obligations.
Free cash flow should not be considered as a measure of financial performance under U.S. GAAP. Accordingly, this key business metric has limitations as an analytical tool. It should not be considered as an alternative to any performance measures derived in accordance with U.S. GAAP or as an alternative to cash flows from operating activities as a measure of AdaptHealth’s liquidity.
AdaptHealth defines free cash flow as net cash provided by operating activities less cash paid for purchases of equipment and other fixed assets. For further discussion on free cash flow, including a reconciliation from cash flows provided by operating activities, see Liquidity and Capital Resources - Free Cash Flow below.
Liquidity and Capital Resources
AdaptHealth’s principal sources of liquidity are its operating cash flows, borrowings under its credit agreements and other debt arrangements. AdaptHealth has used these funds to meet its capital requirements, which primarily consist of capital expenditures including patient equipment, product and supply costs, salaries, labor, benefits and other employee-related costs, third-party customer service, billing and collections and logistics costs, acquisitions, debt service, and to fund share repurchases. AdaptHealth’s future capital expenditure requirements will depend on many factors, including its patient volume and revenue growth rates.
AdaptHealth’s capital expenditures are made in advance of patients beginning service. Certain operating costs are incurred at the beginning of the equipment service period and during initial patient set-up.
AdaptHealth believes that its expected operating cash flows, together with its existing cash and amounts available under its existing credit agreement, will continue to be sufficient to fund its operations and growth strategies for at least the next twelve months.
AdaptHealth may seek additional equity or debt financing in connection with the growth of its business, primarily for acquisitions. In addition, economic conditions may cause disruption in the capital markets, which could make financing more difficult and/or expensive. In the event that additional financing is required from outside sources, AdaptHealth may not be able to raise it on acceptable terms or at all. If additional capital is unavailable when desired, AdaptHealth’s business, results of operations, and financial condition could be materially adversely affected.
As of September 30, 2026, AdaptHealth had $80.7 million of cash.
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On April 10, 2026, AdaptHealth refinanced its debt borrowings under its then existing credit agreement and entered into a new credit agreement (the "2026 Credit Agreement"). The 2026 Credit Agreement consists of a $325.0 million term loan (the "2026 Term Loan"), a $325.0 million delayed draw term loan (the "2026 Delayed Draw Term Loan"), and $450.0 million in commitments for revolving credit loans with a $75.0 million letter of credit sublimit and a $45.0 million swing line sublimit (the "2026 Revolver", and together with the 2026 Term Loan and the 2026 Delayed Draw Term Loan, the "2026 Credit Facility"). At closing, the Company borrowed $100.0 million under the 2026 Revolver. Borrowings under the 2026 Term Loan and the 2026 Revolver at closing were used in part to repay existing amounts outstanding under its prior credit agreement, and to pay related fees and expenses. On July 27, 2026, the Company borrowed $325.0 million under the 2026 Delayed Draw Term Loan; such proceeds, along with cash on hand, were used to repay the outstanding principal amount of the 6.125% Senior Notes, plus accrued and unpaid interest (see discussion below). The 2026 Credit Facility has a maturity in April 2031. However, the maturity of the 2026 Credit Facility is subject to a springing maturity date that is 91 days prior to the stated maturity dates of the Company's 4.625% Senior Notes and 5.125% Senior Notes (each as defined below), in each case if more than $150.0 million aggregate principal amount of such senior unsecured notes remains outstanding on such springing maturity date. The borrowings under the 2026 Term Loan requires quarterly principal repayments of $2.0 million beginning September 30, 2026 through June 30, 2028, increasing to $4.1 million beginning September 30, 2028 through March 31, 2031, and the unpaid principal balance is due at maturity in April 2031. Borrowings under the 2026 Delayed Draw Term Loan requires quarterly principal repayments of $2.0 million beginning December 31, 2026 through September 30, 2028, increasing to $4.1 million beginning December 31, 2028 through March 31, 2031, and the unpaid principal balance is due at maturity in April 2031. Borrowings under the 2026 Revolver may be used for working capital and other general corporate purposes, including for capital expenditures and acquisitions permitted under the 2026 Credit Agreement. At September 30, 2026, there was $147.0 million outstanding under the 2026 Revolver. In October 2026, the Company repaid $10.0 million, and as of the date of this filing, there were $137.0 million in outstanding borrowings under the 2026 Revolver. At the option of the Company, amounts borrowed under the 2026 Credit Facility bear interest at variable rates based upon either the Base Rate (as defined in the 2026 Credit Agreement), payable quarterly, or Term SOFR (as defined in the 2026 Credit Agreement), payable monthly or every three months depending on the interest period selected. Interest periods for Term SOFR loans are available for one, three, or six months at the option of the Company. Base Rate loans accrue interest at a fluctuating rate per annum equal to the sum of (a) the Base Rate determined on each day (subject to a zero percent floor), plus (b) an applicable margin ranging from 0.125% to 1.0% per annum based on the Company's Consolidated Total Leverage Ratio (as defined in the 2026 Credit Agreement). Term SOFR loans accrue interest at a fluctuating rate per annum equal to the sum of (a) Term SOFR for the applicable interest period (subject to a zero percent floor), plus (b) an applicable margin ranging from 1.125% to 2.0% per annum based on the Company's Consolidated Total Leverage Ratio. The 2026 Revolver carries a commitment fee during the term of the 2026 Credit Agreement ranging from 0.15% to 0.30% per annum of the actual daily undrawn portion of the 2026 Revolver depending upon the Company's Consolidated Total Leverage Ratio. In addition, the 2026 Delayed Draw Term Loan carries a commitment fee during the term of the 2026 Credit Agreement ranging from 0.15% to 0.30% per annum of the actual daily undrawn portion of the 2026 Delayed Draw Term Loan depending upon the Company's Consolidated Total Leverage Ratio beginning 45 days after closing. At September 30, 2026, there was $323.0 million outstanding under the 2026 Term Loan and $325.0 million outstanding under the 2026 Delayed Draw Term Loan. At September 30, 2026, there was $34.3 million outstanding under letters of credit. At September 30, 2026, based on the financial debt covenants under the 2026 Credit Agreement, the maximum amount the Company could borrow under the 2026 Revolver and remain in compliance with the financial debt covenants under the agreement was $268.7 million.
Under the 2026 Credit Agreement, AdaptHealth is subject to a number of restrictive covenants that, among other things, impose operating and financial restrictions on AdaptHealth. Financial covenants include a Consolidated Total Leverage Ratio and a Consolidated Interest Coverage Ratio, both as defined in the 2026 Credit Agreement. The 2026 Credit Agreement also contains certain customary events of default, including, among other things, failure to make payments when due thereunder, failure to observe or perform certain covenants, cross-defaults, bankruptcy and insolvency-related events, and non-compliance with healthcare laws. AdaptHealth was in compliance with the applicable covenants in the 2026 Credit Agreement as of September 30, 2026.
Any borrowing under the 2026 Credit Agreement may be repaid, in whole or in part, at any time and from time to time without premium or penalty, other than customary breakage costs, and any amounts repaid under the 2026 Revolver may be reborrowed. Mandatory prepayments are required under the 2026 Revolver when borrowings and letter of credit usage exceed the total commitments for revolving credit loans. Mandatory prepayments are also required in connection with certain dispositions of assets and receipt of certain insurance proceeds or condemnation awards to the extent proceeds thereof are not reinvested, and unpermitted debt transactions.
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At September 30, 2026, AdaptHealth LLC had $1,100.0 million aggregate principal amount of unsecured senior notes outstanding. In August 2021, AdaptHealth issued $600.0 million aggregate principal amount of 5.125% senior unsecured notes (the “5.125% Senior Notes”). The 5.125% Senior Notes will mature on March 1, 2030. Interest on the 5.125% Senior Notes is payable on March 1st and September 1st of each year. The 5.125% Senior Notes are redeemable at AdaptHealth’s option, in whole or in part, and the redemption price for the 5.125% Senior Notes if redeemed during the 12 months beginning (i) March 1, 2026 is 101.281% and (ii) March 1, 2027 and thereafter is 100.000%, in each case together with accrued and unpaid interest. In addition, AdaptHealth may be required to make an offer to purchase the 5.125% Senior Notes upon the sale of certain assets or upon specific kinds of changes of control. On May 28, 2026, the Company, the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee, executed and delivered a Supplemental Indenture, amending and supplementing the indenture providing for the issuance of the 5.125% Senior Notes, pursuant to which each of the guarantors party thereto unconditionally guaranteed all of the Company’s obligations under the 5.125% Senior Notes and the indenture on the terms and conditions set forth therein.
In January 2021, AdaptHealth issued $500.0 million aggregate principal amount of 4.625% senior unsecured notes (the “4.625% Senior Notes”). The 4.625% Senior Notes will mature on August 1, 2029. Interest on the 4.625% Senior Notes is payable on February 1st and August 1st of each year. The 4.625% Senior Notes are redeemable at AdaptHealth’s option, in whole or in part, and the redemption price for the 4.625% Senior Notes is 100.000%, in each case together with accrued and unpaid interest. In addition, AdaptHealth may be required to make an offer to purchase the 4.625% Senior Notes upon the sale of certain assets or upon specific kinds of changes of control. On May 28, 2026, the Company, the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee, executed and delivered a Supplemental Indenture, amending and supplementing the indenture providing for the issuance of the 4.625% Senior Notes, pursuant to which each of the guarantors party thereto unconditionally guaranteed all of the Company’s obligations under the 4.625% Senior Notes and the indenture on the terms and conditions set forth therein.
In July 2020, the Company issued $350.0 million aggregate principal amount of 6.125% senior unsecured notes (the "6.125% Senior Notes"). In November 2025 and January 2026, the Company repurchased $15.0 million and $10.0 million aggregate principal amount of the 6.125% Senior Notes at an average price of 100.253% and 100.800% of such principal amounts, respectively, through open market transactions. Interest on the 6.125% Senior Notes was payable on February 1st and August 1st of each year. On July 6, 2026, the Company issued a notice of redemption for all of its outstanding 6.125% Senior Notes in an aggregate principal amount of $325.0 million at a redemption price equal to 100.000% of the aggregate principal amount of the 6.125% Senior Notes, plus accrued and unpaid interest to the redemption date (the "Redemption Price"). The redemption date was August 1, 2026. The Company used the proceeds from the 2026 Delayed Draw Term Loan plus cash on hand to redeem the notes and pay the Redemption Price on August 3, 2026.
A $16.7 million income tax receivable is included in prepaid and other current assets in the accompanying consolidated balance sheets as of September 30, 2026. The majority of the Company’s income tax receivable relates to federal corporate income tax refunds, which are expected to be received later in 2026.
As of September 30, 2026 and December 31, 2025, AdaptHealth had negative working capital for continuing operations of $82.3 million and $19.3 million, respectively. A significant portion of AdaptHealth’s current assets consists of accounts receivable from third-party payors that are responsible for payment for the products and services that AdaptHealth provides.
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Cash Flow. The following table presents selected data from AdaptHealth’s consolidated statements of cash flows, which includes the cash flows from continuing operations and discontinued operations, for the nine months ended September 30, 2026 and 2025:
| Nine Months Ended September 30, | ||||||||||||||
| (in thousands) | 2026 | 2025 | ||||||||||||
| (Unaudited) | ||||||||||||||
| Net cash provided by operating activities | $ | 395,613 | $ | 418,587 | ||||||||||
| Net cash used in investing activities | (514,695) | (178,722) | ||||||||||||
| Net cash provided by (used in) financing activities | 93,633 | (269,255) | ||||||||||||
| Net decrease in cash | (25,449) | (29,390) | ||||||||||||
| Cash at beginning of period | 106,136 | 109,747 | ||||||||||||
| Cash at end of period | $ | 80,687 | $ | 80,357 | ||||||||||
Net cash provided by operating activities for the nine months ended September 30, 2026 and 2025 was $395.6 million and $418.6 million, respectively, decrease of $23.0 million. The decrease was the result of a $335.9 million increase in net loss, a net increase of $331.9 million in non-cash charges, primarily from goodwill impairment, depreciation and amortization, and the reduction in the carrying amount of operating and finance lease right-of-use assets, partially offset by a decrease in deferred income taxes and equity-based compensation, and a net $19.0 million decrease resulting from the change in operating assets and liabilities, primarily from the change in accounts receivable, inventory and accounts payable and accrued expenses.
Net cash used in investing activities for the nine months ended September 30, 2026 and 2025 was $514.7 million and $178.7 million, respectively. The net use of funds in 2026 consisted of $393.0 million for equipment and other fixed asset purchases, $127.4 million for business acquisitions, and a $2.0 million investment in a joint venture, partially offset by $6.3 million received related to a contingent payment from the disposition of a business that occurred in 2025, and $1.4 million of proceeds from the sale of assets. The net use of funds for the 2025 period primarily consisted of $278.5 million for equipment and other fixed asset purchases and $18.6 million for business acquisitions, partially offset by $117.2 million of proceeds from the sale of businesses.
For the nine months ended September 30, 2026 and 2025, net cash provided by financing activities was $93.6 million and net cash used in financing activities was $269.3 million, respectively. The net cash provided by financing activities for the 2026 period primarily consisted of borrowings on long-term debt and lines of credit of $900.0 million and proceeds of $1.3 million in connection with the employee stock purchase plan, partially offset by repayments of $768.0 million on long-term debt, lines of credit and finance lease liabilities, payments of $26.8 million in connection with the Company's liability relating to the TRA, payments of $5.4 million for debt financing costs, payments of $3.8 million for distributions to the noncontrolling interest, and payments of $3.4 million for tax withholdings associated with equity-based compensation and stock option exercises. Net cash used in financing activities for the 2025 period primarily consisted of repayments of $237.2 million on long-term debt and finance lease liabilities, payments of $25.0 million in connection with the Company's liability relating to the TRA, a payment of $5.4 million for a distribution to the noncontrolling interest, and payments of $2.6 million for tax withholdings associated with equity-based compensation, partially offset by proceeds of $1.2 million in connection with the employee stock purchase plan.
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Free Cash Flow
The following table reconciles net cash provided by operating activities to free cash flow, which includes the cash flows from continuing operations and discontinued operations, for the three and nine months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| Net cash provided by operating activities | $ | 156,589 | $ | 161,066 | $ | 395,613 | $ | 418,587 | ||||||||||||||||||
| Purchases of equipment and other fixed assets | (105,525) | (94,242) | (392,981) | (278,492) | ||||||||||||||||||||||
| Free cash flow | $ | 51,064 | $ | 66,824 | $ | 2,632 | $ | 140,095 | ||||||||||||||||||
Free cash flow was $51.1 million for the three months ended September 30, 2026 compared to $66.8 million for the three months ended September 30, 2025. Free cash flow was $2.6 million for the nine months ended September 30, 2026 compared to $140.1 million for the nine months ended September 30, 2025. The decrease in free cash flow for both periods was mainly due to an increase in purchases of patient medical equipment primarily to support capitated revenue arrangements.
Critical Accounting Policies and Estimates
The discussion and analysis of the Company’s financial condition and results of operations is based upon the Company’s consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of the Company’s consolidated financial statements requires its management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosures of contingent assets and liabilities. The Company’s management bases its estimates, assumptions and judgments on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Different assumptions and judgments would change the estimates used in the preparation of the Company’s consolidated financial statements which, in turn, could change the results from those reported. In addition, actual results may differ from these estimates and such differences could be material to the Company’s financial position and results of operations.
Critical estimates are those that the Company’s management considers the most important to the portrayal of the Company’s financial condition and results of operations because they require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. The Company’s critical estimates in relation to its consolidated financial statements include those related to revenue recognition and valuation of goodwill. There have been no material changes in the Company’s critical accounting policies and critical estimates as compared to the critical accounting policies and critical estimates described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
Our exposure to market risk relates to fluctuations in interest rates from borrowings under the 2026 Credit Agreement. As of September 30, 2026, there was $323.0 million outstanding under the 2026 Term Loan, $325.0 million outstanding under the 2026 Delayed Draw Term Loan, $147.0 million of outstanding borrowings under the 2026 Revolver, $34.3 million outstanding under letters of credit, and based on the financial debt covenants under the 2026 Credit Agreement, the maximum amount the Company could borrow under the 2026 Revolver and remain in compliance with the financial debt covenants under the agreement was $268.7 million. Amounts borrowed under the 2026 Credit Agreement bear interest at variable rates determined in relation to the Base Rate (as defined) or Term SOFR (as defined), at our option. Due to the interest rates being variable, fluctuations in interest rates may impact our earnings. Based on our level of debt as of September 30, 2026, we estimate that a 100 basis point change in interest rates would have a $8.2 million annual impact on our net income (loss) before income taxes.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of September 30, 2026. Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, during the period covered by this Quarterly Report, our internal control over financial reporting was effective.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting that occurred during the quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time and in the normal course of business, the Company is involved in legal proceedings relating to its business. While there can be no assurance, based on the Company’s evaluation of information currently available, the Company's management, following consultation with legal counsel, does not expect the ultimate disposition of any or a combination of any such legal proceedings to have a material adverse effect on our business, financial condition or operating results. However, the Company’s assessment may change in the future based upon availability of new information and further developments in such legal proceedings. The results of legal proceedings are inherently uncertain, and material adverse outcomes are possible. Regardless of the outcome of any particular legal proceedings and the merits of any particular claim, litigation can have a material adverse impact on the Company due to, among other reasons, any injunctive relief granted which could inhibit the Company’s ability to operate its business, amounts paid as damages or in settlement of any such matter, diversion of management resources and defense costs. See Note 17, Commitments and Contingencies, included in the accompanying notes to the interim consolidated financial statements for the three and nine months ended September 30, 2026 and 2025 in this report for information concerning other potential contingent liabilities matters that do not rise to the level of materiality for purposes of disclosure hereunder.
Item 1A. Risk Factors
Except as set forth below, there have been no material changes to the Company's risk factors disclosed under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 24, 2026 and in our Quarterly Reports on Form 10-Q for the three months ended March 31, 2026 and June 30, 2026 filed with the SEC on May 5, 2026 and August 4, 2026, respectively. Any of those factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.
Reliance on relatively few suppliers for the majority of AdaptHealth's patient service equipment and supplies could adversely affect its ability to operate.
AdaptHealth currently relies on a relatively small number of suppliers to provide it with the majority of its patient service equipment and supplies. Significant price increases, product recalls or other disruptions in the ability to obtain such equipment and supplies from existing suppliers, may force AdaptHealth to use alternative suppliers. Additionally, trade policy developments, including ongoing investigations, could result in new tariffs on imported medical equipment or components, which could increase the costs of manufacturing or procuring patient service equipment and supplies. Such tariffs or any new excise taxes imposed on manufacturers of certain medical equipment could be passed on to customers, such as AdaptHealth. Such manufacturers may be forced to make other changes to their products or manufacturing processes that are unacceptable to AdaptHealth, resulting in a need to change suppliers. Any change in suppliers AdaptHealth uses could cause delays in the delivery of such products and possible losses in revenue, which could adversely affect AdaptHealth’s results of operations. In addition, alternative suppliers may not be available, or may not provide their products and services at similar or favorable prices. If AdaptHealth cannot obtain the patient service equipment and supplies it currently uses, or alternatives at similar or favorable prices, AdaptHealth’s ability to provide such products may be severely impacted, which could have an adverse effect on its business, financial condition, results of operations, cash flow, capital resources and liquidity.
For example, in October 2026, AdaptHealth received notice from Medline Industries, LP (“Medline”) that Medline has initiated a voluntary field action involving the removal, repair, discontinuation, and market exit of all Medline Brand beds, including homecare beds, bariatric beds, and long-term-care beds, and their associated pendants, accessories, replacement parts, and bed-containing order packages. Medline has stated that the field action relates to potential electrical system safety risks that may result in fire and entrapment risk from the use of bed accessories. As a result, AdaptHealth is no longer able to purchase these products from Medline. AdaptHealth may be unable to obtain sufficient quantities of replacement beds and related products from alternative supplies on a timely basis or on similar or favorable terms, which could limit AdaptHealth’s ability to meet patient demand for these products and for other products that are ordered together with them. This field action may also cause AdaptHealth to incur significant costs, some or all of which may not be recoverable from the product manufacturer. Any of these effects could materially and adversely affect AdaptHealth's business, financial condition and results of operations.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
We had no sales of unregistered equity securities during the period covered by this report that were not previously reported in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K.
There were no purchases of our Common Stock made during the three months ended September 30, 2026 by us or any of our “affiliated purchasers” as defined in Rule 10b-18(a)(3) under the Exchange Act.
Item 3. Defaults upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
During the three months ended September 30, 2026, none of the Company's directors or officers adopted terminated
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Item 6. Exhibits
See Exhibit Index for documents filed or furnished herewith and incorporated herein by reference.
EXHIBIT INDEX
| Exhibit Number | Description | |||||||
| 2.1 | Asset Purchase Agreement, dated as of July 19, 2026, by and between AdaptHealth Corp. and RGH Enterprises, LLC (incorporated by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K, filed with the SEC on July 20, 2026). | |||||||
| 3.1 | Fourth Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K, filed with the SEC on June 21, 2024). | |||||||
| 3.2 | Second Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 of the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 6, 2024). | |||||||
| 3.3 | Certificate of Designation of Preferences, Rights and Limitations of Series B-1 Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 26, 2020). | |||||||
| 10.1† | Employment Agreement, dated September 7, 2026, by and between AdaptHealth Corp. and Harriss Currie (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on September 8, 2026). | |||||||
| 31.1* | Certification of Chief Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
| 31.2* | Certification of Chief Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
| 32** | Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
| 101.INS*** | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
| 101.SCH*** | XBRL Taxonomy Extension Schema Document | |||||||
| 101.CAL*** | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| 101.DEF*** | XBRL Taxonomy Extension Definition Linkbase Document | |||||||
| 101.LAB*** | XBRL Taxonomy Extension Label Linkbase Document | |||||||
| 101.PRE*** | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
| Exhibit 104*** | Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||
* Filed herewith.
** Furnished herewith.
*** XBRL (eXtensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
† Management contract or compensatory plan or arrangement.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| AdaptHealth Corp. | ||||||||
| November 3, 2026 | By: | /s/ Suzanne Foster | ||||||
| Suzanne Foster | ||||||||
| Chief Executive Officer and Director | ||||||||
| (Principal Executive Officer) | ||||||||
| November 3, 2026 | By: | /s/ Harriss T. Currie | ||||||
| Harriss T. Currie | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Financial Officer) | ||||||||
| November 3, 2026 | By: | /s/ Christine E. Archbold | ||||||
| Christine E. Archbold | ||||||||
| Chief Accounting Officer | ||||||||
| (Principal Accounting Officer) | ||||||||
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