AdaptHealth (AHCO) Q1 2026 Earnings Transcript

Motley Fool Transcribing, The Motley Fool

Wed, May 6, 2026 astatine 8:28 AM CDT 24 min read

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DATE

Tuesday, May 5, 2026, astatine 8:30 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Suzanne Foster

• Chief Financial Officer — Jason Clemens

• Operator

Full Conference Call Transcript

Suzanne Foster: Good morning, everyone. Thank you for joining america today. The opening months of 2026 has acceptable the signifier for what volition beryllium a defining twelvemonth for AdaptHealth. We made important advancement successful 3 areas this past quarter. First, we successfully completed the modulation of hundreds of thousands of progressive patients to our level nether our caller capitated agreement. The 2nd item of the 4th was the advancement we are making connected infrastructure investments arsenic our AI-enabled initiatives and patient-facing integer level reached meaningful milestones, and we are opening to thrust betterment successful our operating metrics. And third, successful April, we refinanced our recognition installation with improved terms, further strengthening our equilibrium expanse and providing fiscal and strategical flexibility.

Starting with our caller capitated agreement, we navigated done 1 of the astir ambitious operational undertakings by completing the largest diligent modulation successful the past of location aesculapian equipment. No HME institution had ever taken connected a capitated declaration of this standard from an incumbent. Over the past mates of months, we established 35 de novo locations and are present the exclusive HME supplier for much than 10 cardinal caller members. We had planned to enactment done this modulation implicit the archetypal a effect of completing this modulation connected a much assertive clip enactment and delivering beardown show crossed our bequest business, we delivered gross importantly up of our guidance with coagulated integrated maturation crossed each 4 segments.

Regarding the contract, covered rank count, gross per member, utilization and merchandise costs are each gathering our expectations. However, we maintained heavier-than-planed labour costs to guarantee a liable transition. In the archetypal quarter, that amounted to $12 cardinal of elevated labour expense, of which $8 cardinal was adaptable labour to accelerate the transition, and that should normalize by the extremity of the 2nd quarter. The $4 cardinal of elevated wages and benefits that volition diminution arsenic we rightsize and operating -- rightsize to the operating exemplary and to conscionable the work requirements. Given that this is simply a 5-year declaration with a perchance longer horizon, the other implementation walk was the close determination for the narration and the patients.

As for Q1 fiscal results, archetypal 4th gross of $819.8 cardinal grew 5.4% versus the anterior twelvemonth 4th and exceeded the midpoint of our guidance scope by astir $22 million. On an integrated basis, adjusting for the interaction of acquisitions and dispositions, we delivered 9.1% year-over-year growth. Of that, astir 500 ground points came from the caller capitated contract. The different 400 ground points came from the basal concern with each of our 4 segments delivering affirmative integrated maturation successful the quarter. Sleep Health nett gross of $358.5 cardinal grew 13.3% versus the anterior twelvemonth and PAP caller starts acceptable different caller record.