AdaptHealth (AHCO) Q4 2025 earnings summary

Executive summary

• 2025 was a year of transition with a new operating model, major contract wins, and portfolio optimization through divestitures and acquisitions.

• Patient census reached record highs across Sleep Health, Respiratory Health, and Wellness at Home, with strong retention in Diabetes Health.

• Expanded to 48 states with the acquisition of a Hawaii-based HME provider.

• Operational improvements included centralized workflows, technology pilots, and enhanced digital engagement, supporting large-scale contract onboarding.

• Received credit upgrades from S&P and Moody’s; reduced debt by $250 million in 2025.

Financial highlights

• Full-year 2025 net revenue was $3.245 billion, down 0.5% year-over-year; Q4 revenue was $846.3 million, down 1.2% year-over-year but up 1.7% organically.

• Adjusted EBITDA for 2025 was $616.7 million (19.0% margin); Q4 Adjusted EBITDA was $163.1 million (19.3% margin), both impacted by a $14.5 million legal settlement and $10 million in accelerated contract costs.

• Full-year 2025 net loss attributable to the company was $70.8 million; Q4 net loss was $102.8 million, both impacted by a $128 million goodwill impairment in Diabetes Health.

• Free cash flow for 2025 was $219.4 million, exceeding guidance; Q4 free cash flow was $79.3 million.

• Net debt at year-end was $1.694 billion, with a net leverage ratio of 2.75x.

Outlook and guidance

• 2026 revenue guidance: $3.44–$3.51 billion (6–8% growth); Adjusted EBITDA: $680–$730 million; free cash flow: $175–$225 million.

• Organic growth expected at 7.5–9.5%, offset by 1.5% net compression from M&A/dispositions.

• Capitated contract to drive 5–6% revenue growth; Sleep and Respiratory Health expected to outpace other segments.

• Adjusted EBITDA margin expected to improve to ~20.3% for 2026, with margin ramping through the year as contract revenue builds.

• Underlying earnings power remains intact despite legal settlement and strategic investments.