AdaptHealth (AHCO) Q2 2024 earnings summary

Executive summary

• Net revenue for Q2 2024 was $806 million, up 1.6% year-over-year, driven by growth in sleep and respiratory businesses, offset by a decline in diabetes revenue.

• Net income attributable to Q2 2024 was $19.4 million, a 39% increase compared to Q2 2023.

• Adjusted EBITDA for Q2 2024 was $165.3 million (20.5% margin), down from $171.0 million (21.6% margin) in Q2 2023.

• Free cash flow for Q2 2024 was $116.7 million, a significant increase from $3.7 million in Q2 2023, aided by resolution of claims processing delays.

• Leadership changes included the appointment of Suzanne Foster as CEO and Dr. Philip Parks as EVP of Strategy and Healthcare Innovation.

Financial highlights

• Six-month net revenue was $1.60 billion, up 3.9% year-over-year; Q2 net income was $19.4 million.

• Sleep revenue grew 6.5% to $322.4 million; respiratory revenue increased 4.6% to $161.2 million; diabetes revenue declined 10.5% to $151.2 million.

• Adjusted EBITDA margin for Q2 2024 was 20.5%, down from 21.6% in Q2 2023.

• Free cash flow was $116.7 million, exceeding the $94 million target.

• Basic and diluted EPS for Q2 were $0.13, compared to $0.10 and $0.09 in Q2 2023.

Outlook and guidance

• FY 2024 net revenue guidance updated to $3.255–$3.315 billion, reflecting asset dispositions.

• Adjusted EBITDA guidance maintained at $660–$700 million midpoint; free cash flow guidance increased to $160–$180 million.

• Q3 revenue expected to be flat sequentially, with adjusted EBITDA margin at 20.0% and free cash flow of at least $30 million.

• Diabetes revenue expected to rebound in the second half, with a strong Q4 due to seasonality.

• Management expects operating cash flows, existing cash, and available credit to be sufficient for at least the next twelve months.