AdaptHealth Q3 Revenue Rises on Capitated Growth as Impairment Drives Loss

AdaptHealth Corp. (NASDAQ: AHCO) reported higher third-quarter revenue as capitated arrangements expanded across its healthcare segments, but profitability weakened from a year earlier and non-cash goodwill impairment charges pushed the company to a substantial GAAP loss.

For the three months ended Sept. 30, 2026, net revenue from continuing operations rose 10.9% to $745.6 million from $672.4 million a year earlier. Organic revenue growth was 12.8%, while acquisitions added 0.3% and dispositions reduced reported growth by 2.2%.

The company recorded a net loss attributable to AdaptHealth from continuing operations of $168.2 million, or $1.23 per share, compared with net income of $10.2 million, or $0.07 per share, in the prior-year quarter. The latest results included $184.8 million of non-cash goodwill impairment charges related to the Respiratory Health and Wellness at Home reporting units, partly offset by a $12 million pre-tax gain from the deconsolidation of a former wholly owned e-commerce subsidiary.

Operating loss was $155.9 million, compared with operating income of $43.4 million a year earlier. Adjusted EBITDA, which excludes the impairment and certain other items, declined to $141.9 million from $146.1 million. Adjusted EBITDA margin narrowed to 19% from 21.7%, indicating that the increase in revenue did not translate into comparable growth in adjusted earnings.

Capitated revenue drives growth

Capitated revenue more than tripled to $110.3 million from $31.5 million and accounted for 14.8% of total revenue, up from 4.7% a year earlier. Under these arrangements, AdaptHealth receives fixed payments associated with covered patient populations rather than generating revenue solely from individual product sales or equipment reimbursements.

Rental revenue edged up to $281.1 million from $279.2 million, representing 37.7% of total revenue. Sales revenue declined to $354.3 million from $361.6 million and fell to 47.5% of the revenue mix from 53.8%.

Insurance payors generated 64.2% of third-quarter revenue, government programs represented 23.8%, and patient payments accounted for the remaining 12%.

All three segments post revenue growth

Sleep Health remained AdaptHealth’s largest segment, with revenue rising 11% to $393.9 million. Growth included a sharp increase in capitated revenue to $41.1 million from $7 million, while equipment sales were broadly stable at $267.6 million. Segment adjusted EBITDA decreased to $70.7 million from $77.1 million, and margin narrowed to 18% from 21.7%.

Respiratory Health revenue increased 7.8% to $190.8 million. Adjusted EBITDA rose to $56.2 million from $51.2 million, lifting the segment margin to 29.5% from 29%. Fixed monthly equipment reimbursements remained the largest component of the segment’s revenue at $152.2 million.

Wellness at Home revenue climbed 14.5% to $161 million, despite lower product sales. Capitated revenue increased to $38.5 million from $10.7 million, more than offsetting a decline in sales revenue to $78.7 million from $86.6 million. Segment adjusted EBITDA fell to $14.9 million from $17.8 million, while margin contracted to 9.3% from 12.7%.

For the first nine months of 2026, AdaptHealth generated adjusted EBITDA of $378.5 million, down from $395.2 million in the comparable 2025 period. The nine-month adjusted EBITDA margin was 17.5%, compared with 20% a year earlier.

Cash flow turns positive sequentially

Free cash flow was $51.1 million in the third quarter, compared with $66.8 million a year earlier and negative $20.9 million in the second quarter of 2026. Net cash provided by operating activities totaled $156.6 million, while purchases of equipment and other fixed assets were $105.5 million. Unlike the presentation’s other operating figures, the free-cash-flow calculation includes both continuing and discontinued operations.

AdaptHealth ended the quarter with $1.93 billion of long-term debt and $80.7 million of unrestricted cash, resulting in net debt of $1.85 billion. Its consolidated total leverage ratio was 3.05 under the terms of its credit agreement.

The presentation identified the impairment charges, lower adjusted margins and debt load as important features of the quarter’s financial position. It also cautioned that forward-looking statements remain subject to business, economic and other uncertainties described in AdaptHealth’s regulatory filings.