Segment Information (Tables)

12 Months Ended

Dec. 31, 2025

Schedule of Segment Reporting Information, by Segment

The following tables present segment net revenue, significant segment expenses, and other segment items that are included in the Company’s reported measure of segment profit or loss for the years ended December 31, 2025, 2024, and 2023 (in thousands):


	Year Ended December 31, 2025
	Sleep Health		Respiratory Health		Diabetes Health		Wellness at Home		Total
Net revenue	$	1,378,147	$	691,160	$	592,413	$	583,137	$	3,244,857
Less:
Cost of product and supplies (a)	445,098		132,534		442,435		274,356		1,294,423
Labor cost (a) (b)	347,356		216,002		52,849		130,003		746,210
Other operating expenses (a) (c)	134,734		60,621		8,387		44,868		248,610
Other segment items (d)	140,400		72,254		62,669		63,610		338,933
Adjusted EBITDA	$	310,559	$	209,749	$	26,073	$	70,300	$	616,681


	Year Ended December 31, 2024
	Sleep Health		Respiratory Health		Diabetes Health		Wellness at Home		Total
Net revenue	$	1,349,213	$	651,150	$	614,410	$	646,202	$	3,260,975
Less:
Cost of product and supplies (a)	424,388		119,865		434,808		309,101		1,288,162
Labor cost (a) (b)	321,194		210,701		50,776		144,335		727,006
Other operating expenses (a) (c)	126,761		54,300		9,588		47,767		238,416
Other segment items (d)	128,126		66,172		58,713		65,723		318,734
Adjusted EBITDA	$	348,744	$	200,112	$	60,525	$	79,276	$	688,657


	Year Ended December 31, 2023
	Sleep Health		Respiratory Health		Diabetes Health		Wellness at Home		Total
Net revenue	$	1,291,714	$	614,563	$	660,039	$	633,861	$	3,200,177
Less:
Cost of product and supplies (a)	391,206		132,013		467,566		319,428		1,310,213
Labor cost (a) (b)	320,370		198,476		48,908		143,976		711,730
Other operating expenses (a) (c)	120,021		49,560		7,126		45,397		222,104
Other segment items (d)	111,414		57,481		56,823		59,617		285,335
Adjusted EBITDA	$	348,703	$	177,033	$	79,616	$	65,443	$	670,795

(a)These expense categories align with the segment-level information that is regularly provided to the CODM and are considered significant to the segment in accordance with ASU No. 2023-07, Segment Reporting ("Topic 280"). The expense categories included in the tables above exclude amounts for patient equipment depreciation since

these amounts are not reflected in the segment measure of profit or loss. Refer to the section below, titled Patient Equipment Depreciation, for discussion of such amounts.

(b)Excludes salaries, labor and benefits for corporate employees. Salaries, labor and benefits for corporate employees are included within Other segment items.

(c)Other operating expenses primarily include costs relating to rent and occupancy, facilities, fleet, and other operating costs.

(d)Other segment items include allocated costs related to various general and administrative functions, including revenue cycle management, customer service, technology and communications, sales and marketing, billings and collections, accounting and finance, executive administration, human resources, information technology and legal and compliance.

The following table presents a reconciliation of total Adjusted EBITDA to consolidated income (loss) before income taxes (in thousands):


	Year Ended December 31,
	2025		2024		2023
Total Adjusted EBITDA	$	616,681	$	688,657	$	670,795
Interest expense, net	(105,753)		(126,668)		(130,299)
Depreciation and amortization, including patient equipment depreciation	(381,927)		(365,334)		(382,783)
Equity-based compensation expense (a)	(21,876)		(14,880)		(22,468)
Change in fair value of warrant liability (b)	—		4,021		34,482
Goodwill impairment (c)	(127,995)		(13,078)		(830,787)
Gain on sale of businesses (d)	32,602		—		—
Loss on extinguishment of debt (e)	—		(2,273)		—
Litigation settlement expense (f)	(1,000)		(3,338)		(25,140)
Other non-recurring expenses, net (g)	(25,886)		(31,088)		(37,584)
(Loss) income before income taxes	$	(15,154)	$	136,019	$	(723,784)

(a)Represents equity-based compensation expense for awards granted to employees and non-employee directors.

(b)Represents non-cash gains for the changes in the estimated fair value of the warrant liability. See Note 13, Stockholders' Equity – Warrants for additional discussion of such non-cash gains. The warrants expired on November 8, 2024.

(c)The 2025 period includes a non-cash goodwill impairment charge as a result of the fair value of the Company's Diabetes Health reporting unit being less than its carrying value. The 2024 period includes non-cash goodwill impairment charges relating to an immaterial business disposal during 2024. The 2023 period includes non-cash goodwill impairment charges as a result of the fair value of the Company’s reporting unit at that time being less than its carrying value. See Note 7, Goodwill and Identifiable Intangible Assets, for additional discussion of such impairment charges.

(d)Represents pre-tax gains primarily associated with the disposition of certain incontinence and infusion businesses within the Company's Wellness at Home segment. See Note 4, Disposals, for additional discussion of such gains.

(e)Represents lender fees and the write-off of unamortized deferred financing costs in connection with the refinancing of the Company's credit agreement. See Note 12, Debt, for additional discussion of the refinancing.

(f)The expense in 2025 represents the estimated amount expected to be funded by the Company relating to a previously disclosed securities settlement. See Note 18, Commitments and Contingencies, for additional details. The expense in 2024 includes a $2.4 million charge for the change in fair value of shares of Common Stock of the Company that were issued in July 2024 following final court approval of a previously disclosed securities settlement, as well as an expense of $0.9 million to settle a shareholder derivative complaint. The expense in 2023 includes a charge relating to a previously disclosed securities settlement, net of contributions from the Company’s insurers.

(g)The 2025 period consists of $10.7 million of consulting expenses associated with asset dispositions (of which $5.1 million relates to contingent success fees from the sales of businesses), $2.6 million of transaction costs associated with acquisitions, $2.6 million of consulting expenses associated with a reorganization project, $2.4 million of consulting expenses associated with systems implementation activities, $1.6 million of expenses associated with securities litigation, $1.2 million write-off of assets, $1.2 million of severance charges, and $3.6 million of other non-recurring expenses. The 2024 period consists of $13.9 million of consulting expenses associated with systems implementation activities, $4.5 million of consulting expenses associated with asset dispositions, $4.2 million of expenses associated with litigation, $3.9 million of severance charges (primarily related to the separation of the Company's former President), $2.7 million write-down of assets, and $1.9 million of other non-recurring expenses. The 2023 period consists of $13.9 million of expenses associated with litigation, $7.1 million of severance charges (of which $2.9 million relates to the separation of the Company's former CEO), $5.6 million of consulting expenses associated with systems implementation activities, $5.2 million of consulting expenses associated with cost savings initiatives, $4.8 million of lease termination costs associated with a cost management program, $1.0 million of transaction costs and expenses related to integration efforts related to acquisitions, $0.9 million of net impairments of operating lease right-of-use assets as a result of vacating the leased facilities, and $1.6 million of other non-recurring expenses, offset by income of $2.5 million related to changes in the Company's estimated TRA liability.

The following table presents the amounts of patient equipment depreciation by reportable segment (in thousands):


	Year Ended December 31,
	2025		2024		2023
Patient equipment depreciation:
Sleep Health	$	157,868	$	161,911	$	175,975
Respiratory Health	127,415		95,546		71,002
Diabetes Health	9,540		8,185		10,182
Wellness at Home	46,464		54,647		68,537
Total patient equipment depreciation (1)	$	341,287	$	320,289	$	325,696

(1)Patient equipment depreciation is included in Cost of net revenue in the accompanying consolidated statements of operations. Patient equipment depreciation is not reflected in the segment measure of profit or loss but the CODM regularly reviews this information by reportable segment. Refer to Note 2, Summary of Significant Accounting Policies, for a breakout of Cost of net revenue by category.

AdaptHealth Corp. 10-K