CONSHOHOCKEN, PA — AdaptHealth Corp. (NASDAQ: AHCO) cut its 2026 earnings outlook after costs tied to a large West Coast capitated contract and a manufacturer price increase pressured margins, even as second-quarter organic revenue climbed 15.9% and the company moved to sell its Diabetes Health business for $235 million.
The healthcare-at-home provider now expects full-year revenue of $2.85 billion to $2.89 billion and adjusted EBITDA of $490 million to $520 million from continuing operations. Free cash flow is projected at $80 million to $120 million.
AdaptHealth’s previous adjusted EBITDA guidance was $680 million to $730 million. The revised range reflects about $100 million from treating Diabetes Health as discontinued operations, a $55 million impact from the West Coast capitated contract, $30 million from a manufacturer price increase and $15 million from other portfolio actions.
The discontinued-operations adjustment includes approximately $60 million of corporate overhead previously allocated to Diabetes Health that will remain with continuing operations. AdaptHealth expects to eliminate roughly half of that amount within 12 months.
Second-quarter net revenue increased 12.7% to $740.3 million from $657.1 million a year earlier. Organic revenue rose 15.9%, with growth across each of the company’s reportable segments.
Adjusted EBITDA declined 3.2% to $132 million from $136.4 million.
AdaptHealth recorded a net loss attributable to the company of $145.3 million, compared with net income of $4.2 million a year earlier. The quarter included a $144.2 million pretax goodwill write-down.
Chief Executive Officer Suzanne Foster attributed the weaker profitability partly to the transition of AdaptHealth’s West Coast capitated partnership to full scale.
“The complexity of that transition has impacted our margins,” Foster stated. “Together with an unexpected price increase from one of our manufacturers, this has led us to lower our full-year outlook.”
The company completed its first full quarter under the exclusive capitated agreement with a large national integrated delivery network, with the contract reaching its full run rate.
AdaptHealth also signed a capitated agreement with Humana OneHome covering South Florida and Texas and completed the transition of approximately 478,000 members.
The company’s portfolio is also being narrowed around Sleep Health, Respiratory Health and supporting Wellness-at-Home operations. After the quarter ended, AdaptHealth entered into a definitive agreement to sell its Diabetes Health business for $235 million in cash, subject to customary purchase-price adjustments.
The Diabetes Health operation will be classified as discontinued operations.
AdaptHealth also entered into a joint venture after quarter-end combining its ecommerce asset with a sleep-focused ecommerce retailer and adding a home sleep-testing capability.
Digital enrollment continued to expand during the quarter, with registered users of AdaptHealth’s myAPP platform exceeding 512,000, up 56% from the end of 2025. The company also launched an artificial intelligence-based mask-fitting tool.
AdaptHealth completed a workforce restructuring that it expects to generate $19 million in annualized savings.
Year-to-date operating cash flow declined to $239 million from $257.5 million a year earlier. Free cash flow was negative $48.4 million, compared with positive $73.3 million during the same period in 2025.
After quarter-end, AdaptHealth redeemed its 6.125% senior notes due in 2028 using proceeds from a $325 million delayed-draw term loan obtained as part of its April refinancing.
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