Accendra Health Q2 2026 earnings: Revenue and adjusted EBITDA decline

Accendra Health (NYSE: ACH) reported Q2 2026 revenue of $613.2 million, down about 10.1% from $681.9 million, while its GAAP diluted loss from continuing operations widened to $1.16 per share from $1.09. Adjusted EBITDA fell to $60.1 million from $96.6 million, and free cash flow moved to negative $25.1 million as lower gross profit outweighed operating expense reductions. The company also said it reduced outstanding debt by $385 million during the quarter and reset its debt maturity profile.

Core earnings data

Revenue contraction translated into a larger decline in adjusted profitability. Calculated gross profit fell by about 18.9%, faster than revenue, while adjusted net income moved from a $20.5 million profit to a $14.3 million loss.

The GAAP operating loss narrowed slightly despite weaker gross profit, mainly because the prior-year quarter included an $80.0 million transaction breakage fee that did not recur. Q2 2026 still included $29.2 million of acquisition-related charges and intangible amortization, $25.8 million of exit and realignment charges, and a $17.3 million loss on debt modification and extinguishment.

Gross profit and margin figures are calculated from reported revenue and cost of revenue. Unless otherwise noted, the results reflect continuing operations, representing the former Patient Direct segment and certain functional operations.

Cost cuts have not yet offset lower revenue and gross margin

Management said Accendra Health eliminated more than $125 million of annualized operating expenses over six months directly associated with the exit of a large commercial payer. In Q2, selling, general and administrative expenses declined by $24.3 million, or about 9.1%, to $243.6 million.

Those savings were not enough to preserve adjusted profitability because gross profit fell by $61.2 million. This helps explain why adjusted EBITDA declined by $36.5 million even as reported operating expenses decreased. The modest improvement in the GAAP operating loss primarily reflected the absence of the prior-year transaction breakage fee rather than an improvement in the underlying adjusted earnings trend.

Cash flow and balance sheet

Free cash flow deteriorated despite lower patient service equipment capital expenditures, which declined to $43.8 million from $57.3 million. The benefit was outweighed by lower adjusted EBITDA and an increase in interest paid to $49.9 million from $38.4 million.

Reported operating cash flow was negative $26.0 million, compared with positive $37.6 million a year earlier. The comparison is limited because the prior-year amount included $97.2 million of cash provided by discontinued operations.

Cash and cash equivalents fell from $336.9 million at the beginning of the quarter to $7.7 million at June 30. Financing activities used $272.0 million, including net revolving credit repayments and $16.8 million of financing costs. Accendra Health said it reduced outstanding debt by $385 million during Q2; at quarter-end, the balance sheet showed $1.72 billion of long-term debt and no current portion. Interest expense nevertheless increased to $34.5 million from $26.0 million, while the refinancing generated the $17.3 million debt modification and extinguishment loss.

2026 guidance

Accendra Health updated its full-year outlook for continuing operations, although the release did not provide the previous ranges. Based on first-half results, the guidance requires substantially higher adjusted EBITDA and positive free cash flow during the second half.

At the guidance midpoint, second-half revenue would be about $1.26 billion, roughly in line with the first half, while second-half adjusted EBITDA would need to reach about $191.5 million versus $118.5 million in the first half. The outlook therefore depends more heavily on improved margins and cash generation than on a large sequential increase in revenue.

Management priorities and leadership transition

Management described the large commercial payer exit and continuing separation from Owens & Minor as key parts of the current operating reset. The company expects contributions from the nationwide rollout of its Sleep Center of Excellence, new commercial agreements, and additional expense rationalization to begin emerging in late 2026 and accelerate in 2027, but it did not quantify their expected financial impact.

President and CEO Edward A. Pesicka also intends to retire and leave the board by the end of 2026. The board has begun the process of selecting a successor, while Pesicka is expected to continue overseeing current strategic priorities during the transition.

Recent insider transactions

The provided two-year transaction data identifies one purchase with a stated value among the latest 10 records. The more recent entries consisted primarily of zero-value stock awards or a stock gift.

This transaction alone does not establish the insider’s current view of Accendra Health’s outlook.

Risks investors need to watch

• Revenue and margin pressure: Revenue declined about 10.1%, but gross profit fell about 18.9%, pushing calculated gross margin down approximately 4.7 percentage points.
• Second-half guidance execution: Meeting the adjusted EBITDA outlook requires approximately $181.5 million to $201.5 million in the second half, well above the first-half result of $118.5 million.
• Cash generation and interest costs: Free cash flow remained negative, quarter-end cash was $7.7 million, and interest expense increased despite the debt reduction and maturity reset.
• Operational and leadership transitions: The separation from Owens & Minor, the commercial payer exit, and the planned CEO succession all require execution while newer growth initiatives are not expected to contribute meaningfully until late 2026 and 2027.

Summary

Accendra Health’s Q2 2026 results showed lower revenue, a sharp decline in adjusted EBITDA, and negative free cash flow despite expense reductions and substantial debt repayment. The absence of a prior-year breakage fee helped narrow the GAAP operating loss, but gross margin and adjusted profitability weakened. The main issues ahead are whether further cost actions can rebuild margins, whether cash flow turns positive, and whether the company can deliver the significant second-half EBITDA improvement embedded in its 2026 guidance.