AdaptHealth Corp.

Notes to Interim Consolidated Financial Statements (Unaudited)

(1)General Information

AdaptHealth Corp. and subsidiaries ("AdaptHealth" or "the Company") is a national leader in providing patient-centered, healthcare-at-home solutions including home medical equipment ("HME"), medical supplies, and related services. AdaptHealth services beneficiaries of Medicare, Medicaid and commercial insurance payors. The Company operates under three reportable segments that align with its product categories: (i) Sleep Health, (ii) Respiratory Health, and (iii) Wellness at Home. The Sleep Health segment provides sleep therapy equipment, supplies and related services (including continuous positive airway pressure and BiLevel services) to individuals for the treatment of obstructive sleep apnea. The Respiratory Health segment provides oxygen and home mechanical ventilation equipment and supplies and related chronic therapy services to individuals for the treatment of respiratory diseases, such as chronic obstructive pulmonary disease and chronic respiratory failure. The Wellness at Home segment provides home medical equipment and services to patients in their homes including those who have been discharged from acute care and other facilities. The segment tailors a service model to patients who are adjusting to new lifestyles or navigating complex disease states by providing essential medical supplies and durable medical equipment.

The interim consolidated financial statements are unaudited, but reflect all normal recurring adjustments that are, in the opinion of management, necessary to fairly present the information set forth herein. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Interim results are not necessarily indicative of the results for a full year.

Except for the addition of discontinued operations within Note 1(l)General Information - Held for Sale and Discontinued Operations, there have been no material changes in the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

As a result of the Company's plan to divest the Diabetes Health business, as further discussed in Note 5, Held for Sale and Discontinued Operations, the Diabetes Health business met the criteria to be reported as discontinued operations. Therefore, the Company has reported the results of the Diabetes Health business, including the results of operations, and related assets and liabilities, as discontinued operations for all periods presented herein. The Diabetes Health business provides medical devices, including continuous glucose monitors and insulin pumps, and related services to patients for the treatment of diabetes. Unless otherwise noted, all activities and amounts reported in the accompanying notes to the interim consolidated financial statements relate to the continuing operations of the Company and exclude activities and amounts related to the Diabetes Health business.

(a)Basis of Presentation

The interim consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). In the opinion of management, the interim consolidated financial statements include all necessary adjustments for a fair presentation of the financial position and results of operations for the periods presented. With the exception of Note 5, the notes to the interim consolidated financial statements reflect the continuing operations of AdaptHealth unless otherwise noted. See Note 5, Held for Sale and Discontinued Operations, for additional information regarding discontinued operations and assets and liabilities held for sale.

(b)Basis of Consolidation

The accompanying interim consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

(c)Business Segments

Operating segments are defined as components of a public entity for which discrete financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”) for purposes of allocating resources and evaluating financial performance. The Company’s CODM is its Chief Executive Officer. The Company is organized under three reportable segments that align to the Company’s product categories: Sleep Health, Respiratory Health, and Wellness at Home. See Note 7, Segment Information, for more information on the Company’s segments.

(d)Concentration of Credit Risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash.

(e)Accounting Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and reported amounts of revenues and expenses during the reporting period. Management bases these estimates and assumptions upon historical experience, existing and known circumstances, authoritative accounting pronouncements and other factors that management believes to be reasonable. Significant areas requiring the use of management estimates relate to revenue recognition and the valuation of accounts receivable (implicit price concession), income taxes and the tax receivable agreement, equity-based compensation, long-lived assets, including goodwill and identifiable intangible assets, business combinations and contingencies. Actual results could differ from those estimates.

(f)Business Combinations

The Company applies the acquisition method of accounting for business acquisitions. The results of operations of the businesses acquired by the Company are included as of the respective acquisition date. The acquisition-date fair value of the consideration transferred, including the fair value of any contingent consideration, is allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition. To the extent the acquisition-date fair value of the consideration transferred exceeds the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed, such excess is allocated to goodwill. Upon initial recognition, the Company allocates goodwill to reportable units based on the reportable unit expected to benefit from the business combination. Patient relationships, medical records and patient lists are not reported as separate intangible assets due to regulatory requirements and lack of contractual agreements but are part of goodwill. Customer-related relationships are not reported as separate intangible assets but are part of goodwill as authorizing physicians are under no obligation to refer the Company’s services to their patients, who are free to change physicians and service providers at any time. The Company may adjust the preliminary purchase price allocation, as necessary, as it obtains more information regarding asset valuations and liabilities assumed that existed but were not available at the acquisition date, which is generally up to one year after the acquisition closing date. Acquisition related expenses are recognized separately from the business combination and are expensed as incurred.

(g)Recoverability of Goodwill

The Company has a significant amount of goodwill on its balance sheet that resulted from the business acquisitions the Company has made. Goodwill is not amortized, rather, it is assessed at the reporting unit level for impairment annually and also upon the occurrence of a triggering event or change in circumstances indicating that the carrying value of goodwill may be impaired. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such triggering events potentially warranting an annual or interim goodwill impairment assessment include, among other factors, declines in historical or projected reporting unit revenue, operating results or cash flows, and sustained decreases in the Company’s stock price or market capitalization. Such changes in circumstance can include, among others, changes in the legal environment, reimbursement environment, operating performance, and/or future prospects. In addition, if applicable, a goodwill impairment test is also performed immediately before and after a reorganization of the Company’s reporting structure when the reorganization would affect the composition of one or more of the Company’s reporting units.

The Company performs its annual impairment assessment of goodwill during the fourth quarter of each year. The impairment assessment can be performed on either a qualitative or quantitative basis. The Company first assesses qualitative factors to determine whether it is necessary to perform a quantitative goodwill impairment test. Under the qualitative assessment, the Company is not required to calculate the fair value of a reporting unit unless the Company determines that it is more likely than not that its fair value is less than its carrying amount. If determined necessary, the Company applies the quantitative impairment test to identify and measure the amount of impairment, if any, by comparing the fair value of a reporting unit to its carrying amount, including goodwill. If under the quantitative test the fair value of a reporting unit is less than its carrying amount, then the amount of the impairment loss, if any, is determined based on the amount by which the carrying amount exceeds the fair value up to the total value of goodwill assigned to the reporting unit.

Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors, such as estimates of a reporting unit's fair value, and judgment about impairment triggering events. Fair values of the reporting units are estimated using a weighted methodology considering the output from both the income and market approaches. The income approach incorporates the use of a discounted cash flow (“DCF”) analysis. A number of significant assumptions and estimates are involved in the application of the DCF model to forecast operating cash flows, including revenue growth rates and discount rates. Several of these assumptions could vary among reporting units. The market approach is performed using the Guideline Public Companies method which is based on earnings multiple data. The Company performs a reconciliation between its market capitalization and its estimate of the aggregate fair value of the reporting units, including consideration of an estimated control premium. As a result, there can be no assurance that the estimates and assumptions made for purposes of the annual or interim goodwill impairment test will prove to be accurate predictions of the future.

(h)Gain or Loss on Disposals

From time to time, the Company may sell individual businesses when doing so aligns with its strategic priorities. When a business is sold, goodwill along with identified tangible and intangible assets and liabilities are netted against the sales proceeds to determine the associated gain or loss on disposal. Goodwill is allocated to the disposed business using the relative fair value of the disposed business to the associated reporting unit in which it was included. These transactions may include potential future payments that are contingent upon the achievement of certain conditions. The Company recognizes these future payments at the settlement amount as a gain when the condition for achievement is satisfied and the amounts are realized or realizable.

(i)Long-Lived Assets

The Company’s long-lived assets, such as equipment and other fixed assets, operating lease right-of-use assets, finance lease right-of-use assets and definite-lived identifiable intangible assets, are assessed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. The Company's tangible long-lived assets are located within the U.S.

Definite-lived identifiable intangible assets are comprised of tradenames. Tradenames are amortized using the straight-line method over their estimated useful lives, which reflects the pattern in which the economic benefits of the tradenames are expected to be consumed. In addition to consideration of impairment upon the events or changes in circumstances described above, management regularly evaluates the remaining useful lives of its long-lived assets. The Company's tradenames have useful lives ranging from five toten years.

The Company didnot recognize any impairment charges on long-lived assets for the three and six months ended June 30, 2026 and 2025.

(j)Equity-based Compensation

The Company accounts for its equity-based compensation in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 718, Compensation - Stock Compensation, which establishes accounting for share-based awards exchanged for employee services and requires companies to expense the estimated fair value of these awards over the requisite employee service period. Equity-based compensation expense related to these grants is included within general and administrative expenses and cost of net revenue in the accompanying consolidated statements of operations. The Company measures and recognizes equity-based compensation expense for such awards based on their estimated fair values on the date of grant. For share-based awards with service only or service and performance conditions, the value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service period in the Company’s consolidated financial statements. For share-based awards with only a service condition, equity-based compensation expense is recognized on a straight-line basis over the requisite service period. For awards with performance conditions, equity-based compensation expense is recognized straight-line on a tranche-by-tranche basis over the employees’ requisite service period subject to management’s estimation of the probability of vesting of such awards. If management determines that the performance conditions are no longer probable of achievement, the Company will reverse the previously recognized equity-based compensation expense in the period of determination. For awards with market conditions, the grant-date fair value is estimated using a monte-carlo simulation analysis, which is recognized straight-line on a tranche-by-tranche basis over the employees’ requisite service period regardless of whether or the extent to which the awards ultimately vest. The Company does not estimate forfeitures in connection with its accounting for equity-based compensation, and instead accounts for forfeitures as they occur. See Note 13, Stockholders’ Equity, for additional information regarding the Company’s equity-based compensation expense.

(k)Accounting for Leases

The Company accounts for its leases in accordance with FASB ASC Topic 842, Leases ("ASC 842"). ASC 842 requires the Company to recognize a lease liability, which represents the discounted obligation to make future minimum lease payments, and a corresponding right-of-use ("ROU") asset on its consolidated balance sheet for most leases, and disclose key information about leasing arrangements. ASC 842 applies to a number of arrangements to which the Company is a party.

Generally, upon the commencement of a lease, the Company will record a lease liability and a ROU asset. However, the Company has elected, for all underlying leases with initial terms of twelve months or less (known as short-term leases), to not recognize a lease liability or ROU asset. Lease liabilities are initially recorded at lease commencement as the present value of future lease payments. ROU assets are initially recorded at lease commencement as the initial amount of the lease liability, together with the following, if applicable: (i) initial direct costs incurred by the lessee and (ii) lease payments made to the lessor net of lease incentives received, prior to lease commencement.

Over the lease term, the Company generally increases its lease liabilities using the effective interest method and decreases its lease liabilities for lease payments made. For finance leases, amortization and interest expense are recognized separately in the consolidated statements of operations, with amortization expense generally recorded on a straight-line basis over the lease term and interest expense recorded using the effective interest method. For operating leases, a single lease cost is generally recognized in the consolidated statements of operations on a straight-line basis over the lease term unless an impairment has been recorded with respect to a leased asset. Lease costs for short-term leases not recognized in the consolidated balance sheets are recognized in the consolidated statements of operations on a straight-line basis over the lease term. Variable lease costs not initially included in the lease liability and ROU asset impairment charges are expensed as incurred. ROU assets are assessed for impairment, similar to other long-lived assets.

See Note 15, Leases, for additional information.

(l)Held for Sale and Discontinued Operations

Assets and liabilities are classified as held for sale when all of the held for sale criteria as defined in FASB ASC Topic 360, Property, Plant and Equipment, have been met. When all of the criteria have been met, the assets and liabilities are classified as held for sale in the Company’s consolidated balance sheets. Assets classified as held for sale are reported at the lower of their carrying value or fair value less costs to sell. Depreciation and amortization of assets ceases upon designation as held for sale. The Company assesses the recoverability of assets classified as held for sale each reporting period it remains classified as held for sale and if its carrying value exceeds its fair value, less an estimated cost to sell, an impairment charge is recorded for the excess.

In accordance with FASB ASC Subtopic 205-20, Discontinued Operations, a business is classified as held for sale when management having the authority to approve the action, commits to a plan to sell a business, the business is available for immediate sale in its present condition and an active program to locate a buyer has been initiated. Additionally, the sale must be probable to occur during the next 12 months at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate it is unlikely significant changes to the plan will be made or the plan will be withdrawn.

The results of operations of businesses classified as held for sale are reported as discontinued operations if the disposal represents a strategic shift that will have a major effect on the entity’s operations and financial results. When a business is identified for discontinued operations reporting: (i) results for prior periods are retrospectively reclassified as discontinued operations; (ii) results of operations are reported in a single line, net of tax, in the consolidated statements of operations; and (iii) assets and liabilities are reported as held for sale in the consolidated balance sheets in the period in which the business is classified as held for sale.

(m)Recently Adopted Accounting Pronouncements

In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments provide a practical expedient permitting an entity to assume that conditions at the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current accounts receivable and current contract assets. The amendments are effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The Company adopted this standard during the first quarter of 2026, which did not have a material impact on its consolidated financial statements or disclosures.

(n) Recently Issued Accounting Pronouncements Not Yet Adopted

In September 2025, the FASB issued Accounting Standards Update (ASU) No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This amendment modernizes the accounting for internal-use software costs by increasing the operability of the recognition guidance considering different methods of software development related to accounting for internal-use software costs. The amendment is effective for annual periods beginning after December 15, 2027, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact that this standard will have on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires new financial statement disclosures in tabular format, in the notes to the financial statements, of specified information about certain costs and expenses. This ASU will be effective for annual periods beginning after December 15, 2026. Early adoption is permitted and is effective on either a prospective basis or retrospective basis. The Company is currently evaluating the impact that this standard will have on its consolidated financial statements and related disclosures.

In March 2024, the SEC issued its final climate disclosure rule, which requires registrants to provide climate-related disclosures in their annual reports and registration statements. The new disclosure requirements would have been effective for the Company beginning with its annual report for the year ending December 31, 2025. In April 2024, the SEC stayed its final climate rule to allow for a judicial review of pending legal challenges, and in March 2025, the SEC voted to end its defense of the rules and withdrew from the litigation. In May 2026, the SEC proposed to rescind the climate-related disclosure rules. The Company will continue to monitor the formal administrative outcomes of the proposal but does not anticipate any impact on its consolidated financial statements or disclosures.

(2)Revenue Recognition and Accounts Receivable

Revenue Recognition

The Company generates revenues for services and related products that the Company provides to patients for home medical equipment, related supplies, and other items. The Company’s revenues are recognized in the period in which services and related products are provided to customers and are recorded either at a point in time for the sale of supplies and consumables, over the fixed monthly service period for equipment, or in the month in which eligible members are entitled to receive healthcare services in connection with at-risk capitation arrangements.

Revenues are recognized when control of the promised good or service is transferred to customers, in an amount that reflects the consideration the Company expects to receive from patients or under reimbursement arrangements with Medicare, Medicaid and third-party payors, in exchange for those goods and services.

The Company determines the transaction price based on contractually agreed-upon amounts or rates, referred to as explicit price concessions, adjusted for estimates of variable consideration, such as implicit price concessions, based on historical reimbursement experience. The Company utilizes the expected value method to determine the amount of variable consideration, including implicit and explicit price concessions, that should be included to arrive at the transaction price, using contractual agreements and historical reimbursement experience. The Company applies a constraint to the transaction price, such that net revenue is recorded only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in the future. If actual amounts of consideration ultimately received differ from the Company’s estimates, the Company adjusts these estimates, which would affect net revenue in the period such adjustments become known.

Sales revenue is recognized upon transfer of control of products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. Revenues for the sale of sleep therapy equipment supplies (including positive airway pressure ("PAP") resupply products), home medical equipment and related supplies (including wheelchairs, hospital beds and infusion pumps), and other HME products and supplies are recognized when control of the promised good or service is transferred to customers, which is generally upon shipment for direct to consumer medical devices and supplies and upon delivery to the home for home medical equipment.

The Company provides certain equipment to patients which is reimbursed periodically in fixed monthly payments for as long as the patient is using the equipment and medical necessity continues (in certain cases, the fixed monthly payments are capped at a certain amount). The equipment provided to the patient is based upon medical necessity as documented by prescriptions and other documentation received from the patient’s physician. The patient generally does not select the manufacturer or model of the equipment prescribed by their physician and delivered by the Company. Once initial delivery of this equipment is made to the patient for initial setup, a monthly billing process is established based on the initial setup service date. The Company recognizes the fixed monthly revenue ratably over the service period as earned, less estimated adjustments, and defers revenue for the portion of the monthly bill that is unearned. No separate revenue is earned from the initial setup process. Included in fixed monthly revenue are unbilled amounts for which the revenue recognition criteria had been met as of period-end but were not yet billed to the payor. The estimate of net unbilled fixed monthly revenue recognized is based on historical trends and estimates of future collectability.

The Company receives a per member per month (“PMPM”) fee under certain at-risk capitation arrangements, which refers to a model in which the Company receives a PMPM fee from the third-party payor, and is responsible for managing a range of healthcare services and associated costs of its members. In at-risk capitation arrangements, the Company is responsible for the cost of contracted healthcare services required by those members in accordance with the terms of each agreement. Capitated revenue contracts with payors are generally multi-year arrangements and have a single monthly stand ready performance obligation to provide all aspects of necessary medical care to members for the contracted period in accordance with the scope of the agreements. The Company recognizes revenue in the month in which eligible members are entitled to receive healthcare services during the contract term.

The Company’s billing system contains payor-specific price tables that reflect the fee schedule amounts in effect or contractually agreed upon by various government and commercial insurance payors for each item of equipment or supply provided to a customer. Revenues are recorded based on the applicable fee schedule. The Company has established a contractual allowance, referred to as an explicit price concession, to account for adjustments that result from differences between the payment amount received and the expected realizable amount. If the payment amount received differs from the net realizable amount, an adjustment is recorded to revenues in the period that these payment differences are determined. The Company reports revenues in its consolidated financial statements net of such adjustments.

The Company recognizes revenue in the consolidated statements of operations and contract assets on the consolidated balance sheets only when services have been provided. Since the Company has performed its obligation under the contract, it has unconditional rights to the consideration recorded as contract assets and therefore classifies those billed and unbilled contract assets as accounts receivable.

Fixed monthly payments that the Company receives from customers in advance of providing services represent contract liabilities. Such payments primarily relate to patients who are billed monthly in advance and are recognized over the period as earned.

The Company disaggregates net revenue from contracts with customers by payor type and by segment. The Company believes that disaggregation of net revenue into these categories depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The payment terms and conditions within the Company’s revenue-generating contracts vary by payor type and payor source. All of the Company's net revenues are derived from within the U.S.

The composition of net revenue by payor type for the three and six months ended June 30, 2026 and 2025 are as follows (in thousands):

The composition of net revenue by segment for the three and six months ended June 30, 2026 and 2025 are as follows (in thousands):

Accounts Receivable

Due to the continuing changes in the healthcare industry and third-party reimbursement environment, certain estimates are required to record accounts receivable at their net realizable values. Inherent in these estimates is the risk that they will have to be revised or updated as additional information becomes available. The complexity of third-party billing arrangements and laws and regulations governing Medicare and Medicaid may result in adjustments to amounts originally recorded.

The Company performs a periodic analysis to review the valuation of accounts receivable and collectability of outstanding balances. Management’s evaluation takes into consideration such factors as historical cash collections experience, business and economic conditions, trends in healthcare coverage, other collection indicators and information about specific receivables. The Company’s evaluation also considers the age and composition of the outstanding amounts in determining their estimated net realizable value.

Receivables are considered past due when not collected by established due dates. Specific patient balances are written off after collection efforts have been followed and the account has been determined to be uncollectible. Revisions in receivable estimates are considered implicit price concession adjustments and are recognized as an adjustment to net revenue in the period of revision. The Company does not have any material bad debt expense.

Included in accounts receivable are earned but unbilled accounts receivable. Billing delays, ranging from several days to several weeks, can occur due to the Company’s policy of compiling required payor specific documentation prior to billing for its services rendered. As of June 30, 2026 and December 31, 2025, the Company’s unbilled accounts receivable was $35.6 million and $44.7 million, respectively.

(3)Acquisitions

The Company’s acquisitions are accounted for using the acquisition method pursuant to the requirements of FASB ASC Topic 805, Business Combinations ("ASC 805"), and are included in the Company’s consolidated financial statements since the respective acquisition date. See Note 1, General Information - Business Combinations, for more information on the Company's use of the acquisition method of accounting for business acquisitions.

During the six months ended June 30, 2026, the Company acquired certain assets fromtwo previous providers infour separate transactions solely to facilitate the transition and servicing of the patients related to newly awarded at-risk capitated contracts which were earned organically. The goodwill generated from these transactions is attributable to the operating efficiencies and expanded infrastructure needed to transition and serve the patients related to the newly awarded at-risk capitated contracts. These transactions were accounted for as business combinations under ASC 805. The goodwill recognized during the six months ended June 30, 2026 is expected to be deductible for tax purposes. The total consideration paid for these transactions consisted of cash payments of $127.3 million.

The Company allocated the consideration paid to the net assets acquired based on their estimated acquisition date fair values. Based upon management’s evaluation, the consideration paid for these transactions during the six months ended June 30, 2026 was allocated as follows during the period (in thousands):

Net revenue and operating income since the respective acquisition date for the acquisitions described above were immaterial for the three and six months ended June 30, 2026.

During the six months ended June 30, 2025, the Company acquired certain assets oftwo HME providers, each of which was accounted for as a business combination under ASC 805. The goodwill generated from these acquisitions is attributable to expected growth and cost synergies, as well as the expected contribution of each acquisition to the Company’s overall strategy. The goodwill recognized during the six months ended June 30, 2025 is deductible for tax purposes. The total consideration paid for these two acquisitions consisted of cash payments of $18.6 million at closing.

The Company allocated the consideration paid to the net assets acquired based on their estimated acquisition date fair values. Based upon management’s evaluation, the consideration paid for all acquisitions during the six months ended June 30, 2025 was allocated as follows during the period (in thousands):

(4)Disposals

On May 1, 2025, the Company closed the disposition of an incontinence business that was included in its Wellness at Home segment. In connection with the closing, the Company received gross proceeds of $69.1 million.

On June 9, 2025, the Company closed the disposition of an infusion business that was included in its Wellness at Home segment. In connection with this transaction, the Company received gross proceeds of $53.5 million and was entitled to potential contingent payments of up to $12.5 million based upon the achievement of certain conditions in accordance with the terms of the sale agreement. In June 2026, the Company received $6.3 million related to the contingent payments, which is included in gain on sale of businesses recognized in the consolidated statements of operations for the three and six months ended June 30, 2026. The Company does not expect to receive the remaining contingent payments.

The dispositions described above did not represent a strategic shift for the Company. As such, they did not meet the requirements to be classified and presented as discontinued operations.

The following table presents the pre-tax gain recognized during the three and six months ended June 30, 2025 associated with the dispositions described above (in thousands):

The carrying value of the net assets sold at their respective closing dates associated with the dispositions described above were as follows (in thousands):

(5)Held for Sale and Discontinued Operations

In June 2026, the Company's board of directors approved the divestiture of the Company's Diabetes Health business. On July 19, 2026, the Company entered into a definitive agreement to sell the Diabetes Health business for $235.0 million in cash, subject to customary purchase price adjustments. The transaction is expected to close in the first quarter of 2027, subject to regulatory review under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other customary closing conditions. The Diabetes Health business provides medical devices, including continuous glucose monitors and insulin pumps, and related services to patients for the treatment of diabetes. As a result of this transaction, the Diabetes Health business met the criteria to be reported as discontinued operations. Therefore, the Company has reported the results of the Diabetes Health business, including the results of operations, and related assets and liabilities, as discontinued operations for all periods presented herein.

The following table summarizes the major classes of assets and liabilities classified as held for sale (in thousands):

The following table summarizes the results of discontinued operations (in thousands):

The following table provides significant non-cash operating and investing cash flow information for the Company's discontinued operations:

(6)Equipment and Other Fixed Assets

Equipment and other fixed assets as of June 30, 2026 and December 31, 2025 are as follows (in thousands):

For the three months ended June 30, 2026 and 2025, the Company recognized depreciation expense of $112.8 million and $84.8 million, respectively. For the six months ended June 30, 2026 and 2025, the Company recognized depreciation expense of $211.7 million and $171.6 million, respectively.

(7)Segment Information

The Company operates its business through three reportable segments that align to the Company’s product categories: Sleep Health, Respiratory Health, and Wellness at Home. A description of the products and services provided within each of the Company’s three reportable segments is provided below.

Sleep Health

The Sleep Health segment provides sleep therapy equipment, supplies and related services (including continuous positive airway pressure and BiLevel services) to individuals for the treatment of obstructive sleep apnea.

Respiratory Health

The Respiratory Health segment provides oxygen and home mechanical ventilation equipment and supplies and related chronic therapy services to individuals for the treatment of respiratory diseases, such as chronic obstructive pulmonary disease and chronic respiratory failure.

Wellness at Home

The Wellness at Home segment provides home medical equipment and services to patients in their homes including those who have been discharged from acute care and other facilities. The segment tailors a service model to patients who are adjusting to new lifestyles or navigating complex disease states by providing essential medical supplies and durable medical equipment.

The CODM evaluates performance of the reportable segments based on Adjusted EBITDA, which is the primary measure of segment profitability. The CODM uses Adjusted EBITDA to evaluate segment operating performance, generate future operating plans, and to assist with the evaluation of strategic business decisions, including potential acquisitions or divestitures, and whether to invest in certain products or services. Adjusted EBITDA excludes interest expense, net, income tax expense (benefit), depreciation and amortization, including patient equipment depreciation, equity-based compensation expense, litigation settlement expense, and certain other non-recurring items of expense or income that the Company does not consider part of its reportable segments’ core operating results. Adjusted EBITDA includes certain centrally incurred corporate and shared function costs, which are allocated to the reportable segments based on methodologies designed to correlate with each segment’s consumption of the related cost. Segment assets are not regularly provided to the CODM and therefore have not been disclosed.

In connection with the Company's plan to divest the Diabetes Health business, as further discussed in Note 5, Held for Sale and Discontinued Operations, the Diabetes Health business met the criteria to be reported as discontinued operations and the Company no longer reports Diabetes Health as a reportable segment. Accordingly, the segment results for the three months ended March 31, 2026 and the three and six months ended June 30, 2025 were recast to exclude the results of the discontinued operations, as well as to reallocate certain shared costs, primarily related to the general and administrative functions, among the three remaining reportable segments.

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 three and six months ended June 30, 2026 and 2025 (in thousands):

(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 income (loss) from continuing operations before income taxes for the three and six months ended June 30, 2026 and 2025 (in thousands):

(b)Represents the pre-tax gains associated with the dispositions oftwo businesses within the Company's Wellness at Home segment.

(c)Represents third-party 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.

(d)Represents an expense to settle a shareholder derivative complaint.

(e)Represents expenses related to a cost savings plan that was implemented in June 2026. See Note 19, Restructuring Charges, for additional information.

(f)Represents non-cash goodwill impairment charges as a result of the fair values of the Company's Respiratory Health and Wellness at Home reporting units being less than their respective carrying values. See Note 8, Goodwill and Identifiable Intangible Assets, for additional information.

(g)The expense for the six months ended June 30, 2026 consists of $4.3 million of consulting expenses associated with asset dispositions, $2.2 million of transaction costs associated with acquisitions, and $1.3 million of other net non-recurring expenses. The expense for the six months ended June 30, 2025 consists of $9.2 million of consulting expenses associated with asset dispositions (of which $5.1 million relates to contingent success fees from the sales of businesses), $2.0 million of consulting expenses associated with systems implementation activities, $1.1 million of transaction costs associated with acquisitions, and $2.8 million of other non-recurring expenses.

Patient Equipment Depreciation

The following table presents the amounts of patient equipment depreciation by reportable segment for the three and six months ended June 30, 2026 and 2025 (in thousands):

(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.

(8)Goodwill and Identifiable Intangible Assets

Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

The change in the carrying amount of goodwill by reportable segment for the six months ended June 30, 2026 was as follows (in thousands):

Management is required to perform an assessment of the recoverability of goodwill on an annual basis and upon the occurrence of a triggering event. Triggering events potentially warranting an interim goodwill impairment assessment include, among other factors, declines in historical or projected reporting unit revenue, operating results or cash flows, and sustained decreases in the Company’s stock price or market capitalization. While management cannot predict if or when future goodwill impairments may occur, a non-cash goodwill impairment charge could have a material adverse effect on the Company’s operating results, net assets and the Company’s cost of, or access to, capital.

In connection with the Company's plan to divest the Diabetes Health business, as further discussed in Note 5, Held for Sale and Discontinued Operations, and corresponding revisions to the Company's financial projections, management performed a quantitative goodwill impairment test for each of the Company's reporting units as of June 30, 2026. As part of these revisions, the Company reallocated certain shared corporate support costs that were previously attributed to the Diabetes Health business among the remaining reporting units. The fair value of the Company’s reporting units were computed using (1) a discounted cash flow method which includes assumptions on the projected future cash flows, earnings, discount rates, working capital adjustments, long-term growth rates, and others, and (2) a market approach method to estimate value through the analysis of recent sales of comparable assets or business entities. The impairment test indicated that the estimated fair values of the Company's Respiratory Health and Wellness at Home reporting units were less than their respective carrying values, and as such, the Company recognized non-cash goodwill impairment charges totaling $144.2 million during the three and six months ended June 30, 2026. If, in future periods, the Company were to identify events that indicate a potential impairment of goodwill, the Company may be required to perform a goodwill impairment test at an interim or annual period and could be required to recognize a non-cash goodwill impairment charge at that time, which could be material.

Identifiable intangible assets that are separable and have determinable useful lives are valued separa tely and amortized over the period which reflects the pattern in which the economic benefits of the assets are expected to be consumed.

Identifiable intangible assets consisted of the following at June 30, 2026 and December 31, 2025 (in thousands):

Amortization expense related to identifiable intangible assets, which is included in depreciation and amortization, excluding patient equipment depreciation, in the accompanying statements of operations was $2.0 million and $4.0 million for the three and six months ended June 30, 2026, respectively, and was $2.1 million and $4.3 million for the three and six months ended June 30, 2025, respectively.

Future amortization expense related to identifiable intangible assets is estimated to be as follows (in thousands):

The Company didnot recognize any impairment charges related to identifiable intangible assets during the six months ended June 30, 2026 and 2025.

(9)Fair Value of Assets and Liabilities

FASB ASC Topic 820, Fair Value Measurements and Disclosures ("ASC 820"), creates a single definition of fair value, establishes a framework for measuring fair value in U.S. GAAP and expands disclosures about fair value measurements. Assets and liabilities adjusted to fair value in the balance sheet are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Level inputs, as defined by ASC 820, are as follows:

There were no financial assets that are measured at fair value on a recurring basis as of June 30, 2026. The following table presents the valuation of the Company’s financial assets as of December 31, 2025 measured at fair value on a recurring basis. The fair value estimates presented herein are based on information available to management as of December 31, 2025. These estimates are not necessarily indicative of the amounts the Company could have ultimately realized.

Interest Rate Swaps

The Company has historically used interest rate swap agreements to manage interest rate risk by converting a portion of its variable rate borrowings to a fixed rate and recognized these derivative instruments as either assets or liabilities in the accompanying consolidated balance sheets at fair value. The valuation of these derivative instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair value of the Company’s interest rate swaps is determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash payments receipts. The variable cash receipts are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. To comply with the provisions of FASB ASC Topic 820, Fair Value Measurement, the Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with the Company’s derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and the respective counterparties. The Company has determined that the significance of the impact of the credit valuation adjustments made to its derivative contracts, which determination was based on the fair value of each individual contract, was not significant to the overall valuation. As a result, all of the Company’s derivatives held as of December 31, 2025 were classified as Level 2 of the fair value hierarchy. In January 2026, the Company's interest rate swaps matured and were not renewed. See Note 10, Derivative Instruments and Hedging Activities, for additional information regarding the Company’s derivative instruments.

Non-Financial Assets Measured at Fair Value on a Non-Recurring Basis

During the six months ended June 30, 2026 and 2025, other than the non-cash goodwill impairment charges as discussed in Note 8, Goodwill and Identifiable Intangible Assets, there were no fair value measurements on a non-recurring basis for the Company’s non-financial assets.

(10)Derivative Instruments and Hedging Activities

The Company records all derivatives on its consolidated balance sheet at fair value. As of December 31, 2025, the Company had outstanding interest rate derivatives with third parties in which the Company pays a fixed interest rate and receives a rate equal to the one-month Secured Overnight Financing Rate ("Term SOFR"). The notional amount associated with the Company's interest rate swap agreements that were outstanding as of December 31, 2025 was $250 million. The Company has designated its swaps as effective cash flow hedges of interest rate risk. Accordingly, changes in the fair value of the interest rate swaps are recognized as a component of accumulated other comprehensive income within stockholders’ equity and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings. In January 2026, the Company's interest rate swaps matured and were not renewed.

The table below presents the fair value of the Company’s derivatives related to its interest rate swap agreements, which are designated as hedging instruments, as well as their classification in the consolidated balance sheets at December 31, 2025 (in thousands):

During the three months ended June 30, 2025, as a result of the effect of cash flow hedge accounting, the Company recognized a loss, net of tax, of $0.4 million in other comprehensive income (loss). During the six months ended June 30, 2026 and 2025, as a result of the effect of cash flow hedge accounting, the Company recognized a loss, net of tax, of $0.1 million and $1.1 million respectively, in other comprehensive income (loss).

(11)Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses as of June 30, 2026 and December 31, 2025 consisted of the following (in thousands):

(12)Debt

The following is a summary of long term-debt as of June 30, 2026 and December 31, 2025 (in thousands):

On April 10, 2026, the Company refinanced its debt borrowings under its then existing credit agreement and entered into a new credit agreement (the "2026 Credit Agreement"). The 2026 Credit Agreement consists of a $325.0 million term loan (the "2026 Term Loan"), a $325.0 million delayed draw term loan (the "2026 Delayed Draw Term Loan"), and $450.0 million in commitments for revolving credit loans with a $75.0 million letter of credit sublimit and a $45.0 million swing line sublimit (the "2026 Revolver", and together with the 2026 Term Loan and the 2026 Delayed Draw Term Loan, the "2026 Credit Facility"). At closing, the Company borrowed $100.0 million under the 2026 Revolver. Borrowings under the 2026 Term Loan and the 2026 Revolver at closing were used in part to repay existing amounts outstanding under the prior credit agreement, and to pay related fees and expenses. The 2026 Credit Facility has a maturity in April 2031. However, the maturity of the 2026 Credit Facility is subject to a springing maturity date that is 91 days prior to the stated maturity dates of the Company's 4.625% Senior Notes and 5.125% Senior Notes (each as defined below), in each case if more than $150.0 million aggregate principal amount of such senior unsecured notes remains outstanding on such springing maturity date. The borrowings under the 2026 Term Loan requires quarterly principal repayments of $2.0 million beginning September 30, 2026 through June 30, 2028, increasing to $4.1 million beginning September 30, 2028 through March 31, 2031, and the unpaid principal balance is due at maturity in April 2031. Borrowings under the 2026 Revolver may be used for working capital and other general corporate purposes, including for capital expenditures and acquisitions permitted under the 2026 Credit Agreement. At the option of the Company, amounts borrowed under the 2026 Credit Facility bear interest at variable rates based upon either the Base Rate (as defined in the 2026 Credit Agreement), payable quarterly, or Term SOFR (as defined in the 2026 Credit Agreement), payable monthly or every three months depending on the interest period selected. Interest periods for Term SOFR loans are available for one, three, or six months at the option of the Company. Base Rate loans accrue interest at a per annum rate equal to the sum of (a) the Base Rate determined on each day (subject to a zero percent floor), plus (b) an applicable margin ranging from 0.125% to 1.0% per annum based on the Company's Consolidated Total Leverage Ratio (as defined in the 2026 Credit Agreement). Term SOFR loans accrue interest at a per annum rate equal to the sum of (a) Term SOFR for the applicable interest period (subject to a zero percent floor), plus (b) an applicable margin ranging from 1.125% to 2.0% per annum based on the Company's Consolidated Total Leverage Ratio. The 2026 Revolver carries a commitment fee during the term of the 2026 Credit Agreement ranging from 0.15% to 0.30% per annum of the actual daily undrawn portion of the 2026 Revolver depending upon the Company's Consolidated Total Leverage Ratio. In addition, the 2026 Delayed Draw Term Loan carries a commitment fee during the term of the 2026 Credit Agreement ranging from 0.15% to 0.30% per annum of the actual daily undrawn portion of the 2026 Delayed Draw Term Loan depending upon the Company's Consolidated Total Leverage Ratio beginning 45 days after closing. In connection with the 2026 Credit Agreement, the Company paid financing costs of $5.0 million. Further, in connection with executing the 2026 Credit Agreement, the Company recognized a loss on debt extinguishment of $1.3 million consisting of third-party fees and write off of unamortized deferred financing costs related to the Company's prior credit agreement, which is included in Loss on extinguishment of debt in the accompanying consolidated statements of operations for the three and six months ended June 30, 2026.

Under the 2026 Credit Agreement, the Company is subject to a number of restrictive covenants that, among other things, impose operating and financial restrictions on the Company. Financial covenants include a Consolidated Total Leverage Ratio and a Consolidated Interest Coverage Ratio, both as defined in the 2026 Credit Agreement. The 2026 Credit Agreement also contains certain customary events of default, including, among other things, failure to make payments when due thereunder, failure to observe or perform certain covenants, cross-defaults, bankruptcy and insolvency-related events, and non-compliance with healthcare laws. The Company was in compliance with the applicable covenants in the 2026 Credit Agreement as of June 30, 2026.

Any borrowing under the 2026 Credit Agreement may be repaid, in whole or in part, at any time and from time to time without premium or penalty, other than customary breakage costs, and any amounts repaid under the 2026 Revolver may be reborrowed. Mandatory prepayments are required under the 2026 Revolver when borrowings and letter of credit usage exceed the total commitments for revolving credit loans. Mandatory prepayments are also required in connection with certain dispositions of assets and receipt of certain insurance proceeds or condemnation awards to the extent proceeds thereof are not reinvested, and unpermitted debt transactions.

Secured Term Loan

At June 30, 2026, there was $325.0 million outstanding under the 2026 Term Loan. The per annum interest rate under the 2026 Term Loan was 5.00% at June 30, 2026.

Revolving Credit Facility

The Company borrowed $100.0 million under the 2026 Revolver at the time of closing of the 2026 Credit Agreement. During the second quarter of 2026, the Company borrowed an additional $50.0 million under the 2026 Revolver, bringing the total outstanding as of June 30, 2026 to $150.0 million. At June 30, 2026, there was $34.3 million outstanding under letters of credit. At June 30, 2026, based on the financial debt covenants under the 2026 Credit Agreement, the maximum amount the Company could borrow under the 2026 Revolver and remain in compliance with the financial debt covenants under the agreement was $265.7 million.

Senior Unsecured Notes

In August 2021, the Company issued $600.0 million aggregate principal amount of 5.125% senior unsecured notes (the "5.125% Senior Notes"). The 5.125% Senior Notes will mature on March 1, 2030. Interest on the 5.125% Senior Notes is payable on March 1st and September 1st of each year. The 5.125% Senior Notes are redeemable at the Company’s option, in whole or in part, and the redemption price for the 5.125% Senior Notes if redeemed during the 12 months beginning (i) March 1, 2026 is 101.281% and (ii) March 1, 2027 and thereafter is 100.000%, in each case together with accrued and unpaid interest. In addition, the Company may be required to make an offer to purchase the 5.125% Senior Notes upon the sale of certain assets or upon specific kinds of changes of control. On May 28, 2026, the Company, the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee, executed and delivered a Supplemental Indenture, amending and supplementing the indenture providing for the issuance of the 5.125% Senior Notes, pursuant to which each of the guarantors party thereto unconditionally guaranteed all of the Company’s obligations under the 5.125% Senior Notes and the indenture on the terms and conditions set forth therein.

In January 2021, the Company issued $500.0 million aggregate principal amount of 4.625% senior unsecured notes (the "4.625% Senior Notes"). The 4.625% Senior Notes will mature on August 1, 2029. Interest on the 4.625% Senior Notes is payable on February 1st and August 1st of each year. The 4.625% Senior Notes are redeemable at the Company’s option, in whole or in part, and the redemption price for the 4.625% Senior Notes is 100.000%, in each case together with accrued and unpaid interest. In addition, the Company may be required to make an offer to purchase the 4.625% Senior Notes upon the sale of certain assets or upon specific kinds of changes of control. On May 28, 2026, the Company, the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee, executed and delivered a Supplemental Indenture, amending and supplementing the indenture providing for the issuance of the 4.625% Senior Notes, pursuant to which each of the guarantors party thereto unconditionally guaranteed all of the Company’s obligations under the 4.625% Senior Notes and the indenture on the terms and conditions set forth therein.

In July 2020, the Company issued $350.0 million aggregate principal amount of 6.125% senior unsecured notes (the "6.125% Senior Notes"). In November 2025 and January 2026, the Company repurchased $15.0 million and $10.0 million aggregate principal amount of the 6.125% Senior Notes at an average price of 100.253% and 100.800% of such principal amounts, respectively, through open market transactions. As of June 30, 2026, the outstanding balance under the 6.125% Senior Notes was scheduled to mature on August 1, 2028. Interest on the 6.125% Senior Notes was payable on February 1st and August 1st of each year. On May 28, 2026, the Company, the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee, executed and delivered a Supplemental Indenture, amending and supplementing the indenture providing for the issuance of the 6.125% Senior Notes, pursuant to which each of the guarantors unconditionally guaranteed all of the Company’s obligations under the 6.125% Senior Notes and the indenture on the terms and conditions set forth therein. On July 6, 2026, the Company issued a notice of redemption for all of its outstanding 6.125% Senior Notes in an aggregate principal amount of $325.0 million at a redemption price equal to 100.000% of the aggregate principal amount of the 6.125% Senior Notes, plus accrued and unpaid interest to the redemption date (the "Redemption Price"). The redemption date was August 1, 2026. On July 27, 2026, the Company borrowed $325.0 million under the 2026 Delayed Draw Term Loan. The Company used the proceeds from the 2026 Delayed Draw Term Loan plus cash on hand to redeem the notes and pay the Redemption Price on August 3, 2026.

(13)Stockholders' Equity

Under the Company's Third Amended and Restated Certificate of Incorporation, there are 300,000,000 shares of authorized Common Stock and 5,000,000 shares of authorized Preferred Stock. Holders of Common Stock are entitled toone vote for each share. The shares of Preferred Stock shall be issued with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors.

Equity-based Compensation

In connection with the Company’s 2019 Stock Incentive Plan (the "2019 Plan"), the Company provides equity-based compensation to attract and retain employees while also aligning employees’ interest with the interests of its stockholders. The 2019 Plan permits the grant of various equity-based awards to selected employees and non-employee directors. As of June 30, 2026, the Company is permitted to grant up to 18,350,000 shares of Common Stock under the 2019 Plan, subject to certain adjustments and limitations. At June 30, 2026,6,047,934 shares of the Company’s Common Stock were available for issuance under the 2019 Plan.

Stock Options

There wereno stock options granted during the six months ended June 30, 2026 and 2025.

The following table provides the activity for outstanding stock options during the six months ended June 30, 2026 (in thousands, except per share data):

During the six months ended June 30, 2026,178,902 stock options were exercised on a cashless basis resulting in the issuance of 66,285 shares of the Company’s Common Stock. There wereno stock option exercises during the six months ended June 30, 2025.

Restricted Stock Units

During the six months ended June 30, 2026, the Company granted the following shares of restricted stock units:

•1,708,506 shares of restricted stock units to various employees which vest ratably over thethree-year period following the vesting commencement dates, subject to the employees’ continuous employment through the applicable vesting date. The grant-date fair value of these awards was $17.2 million.

•183,578 shares of restricted stock units to certain of the Company's non-employee directors which vest withinone year following the grant date. The grant-date fair value of these awards was $1.9 million.

•821,890 shares of performance-vested restricted stock units ("Performance RSUs") to senior executive management of the Company which vest on the third anniversary of the vesting commencement date subject to the achievement of specified goals relative to the Company’sthree-year relative total shareholder return ("Relative TSR") performance versus the Company’s defined peer group (the "Peer Group"), which is considered a market condition, and is also subject to the employees’ continuous employment through the vesting date. The grant-date fair value of these awards, using a Monte-Carlo simulation analysis, was $12.9 million. The payout of shares on the vesting date are as follows based on the Company’s Relative TSR versus the Peer Group (for performance between the stated goals noted below, straight-line interpolation will be applied):

•Less than 25 th Percentile –No payout

•Greater than or equal to 25 th Percentile –50% of Performance RSUs

•Equal to 50 th Percentile –100% of Performance RSUs

•Greater than or equal to 75 th Percentile –200% of Performance RSUs

Activity related to the Company’s non-vested restricted stock units for the six months ended June 30, 2026 is presented below (in thousands, except per share data):

Equity-Based Compensation Expense

The Company recognized equity-based compensation expense of $5.4 million during the three months ended June 30, 2026, of which $5.5 million is included in general and administrative expenses and a net reduction to expense of $0.1 million is included in cost of net revenue in the accompanying consolidated statements of operations. The Company recognized equity-based compensation expense of $6.0 million during the three months ended June 30, 2025, of which $4.5 million and $1.5 million is included in general and administrative expenses and cost of net revenue, respectively, in the accompanying consolidated statements of operations.

The Company recognized equity-based compensation expense of $11.8 million during the six months ended June 30, 2026, of which $11.2 million and $0.6 million is included in general and administrative expenses and cost of net revenue, respectively, in the accompanying consolidated statements of operations. The Company recognized equity-based compensation expense of $11.2 million during the six months ended June 30, 2025, of which $8.6 million and $2.6 million is included in general and administrative expenses and cost of net revenue, respectively, in the accompanying consolidated statements of operations.

At June 30, 2026, there was $42.5 million of unrecognized compensation expense related to equity-based compensation awards, which is expected to be recognized over a weighted-average period of 2.0 years.

(14)Earnings (Loss) Per Share

Earnings (loss) per share ("EPS") for continuing operations and discontinued operations is computed by dividing net income (loss) from continuing operations and discontinued operations by the weighted average number of common shares outstanding during the period, respectively, on a basic and diluted basis. The Company computes diluted net income (loss) per share for continuing operations and discontinued operations using the more dilutive of the treasury stock method and the two-class method after giving effect to all potential dilutive Common Stock.

The Company’s potentially dilutive securities include potential common shares related to unvested restricted stock units, outstanding stock options and outstanding preferred stock. See Note 13, Stockholders' Equity, for additional discussion of these potential dilutive securities.

Diluted net income (loss) per share for continuing operations and discontinued operations considers the impact of potentially dilutive securities except when the potential common shares have an antidilutive effect. The Company’s outstanding preferred stock are considered participating securities, thus requiring the two-class method of computing diluted net income (loss) per share for continuing operations and discontinued operations. Computation of diluted net income (loss) per share for continuing operations and discontinued operations under the two-class method excludes from the numerator any dividends paid or owed on participating securities and any undistributed earnings considered to be attributable to participating securities. The related participating securities are similarly excluded from the denominator.

Computations of basic and diluted net income (loss) per share from continuing operations and discontinued operations were as follows (in thousands, except per share data):

(1)The Company’s preferred stock are considered participating securities. Computation of EPS under the two-class method excludes from the numerator any dividends paid or owed on participating securities and any undistributed earnings considered to be attributable to participating securities. The related participating securities are similarly excluded from the denominator. There were no amounts allocated to the participating securities during the three and six months ended June 30, 2026 due to the consolidated net loss reported in those periods.

(2)Due to the Company reporting net loss from continuing operations attributable to AdaptHealth Corp. for the three and six months ended June 30, 2026 and the six months ended June 30, 2025, all potentially dilutive securities related to outstanding stock options and unvested restricted stock units were excluded from the computation of diluted net loss per share for those periods as their inclusion would have been anti-dilutive.

The table below provides the weighted-average number of potential common shares associated with outstanding securities not included in the Company’s computation of diluted net income (loss) per share for continuing operations and discontinued operations for the three and six months ended June 30, 2026 and 2025 because to do so would be anti-dilutive (in thousands):

(15)Leases

The Company leases its operating locations and office facilities under noncancelable lease agreements which expire at various dates through May 2038. Some of these lease agreements include an option to renew at the end of the term. The Company also leases certain office facilities on a month-to-month basis. In some instances, the Company is also required to pay its pro rata share of real estate taxes and utility costs in connection with the premises. Some of the leases contain fixed annual increases of minimum rent.

The Company’s leases frequently allow for lease payments that could vary based on factors such as inflation and the incurrence of contractual charges such as those for common area maintenance or utilities.

Renewal and/or early termination options are common in the lease arrangements, particularly with respect to real estate leases. The Company’s right-of-use ("ROU") assets and lease liabilities generally include periods covered by renewal options and exclude periods covered by early termination options (based on the conclusion that it is reasonably certain that the Company will exercise such renewal options and not exercise such early termination options).

The Company is also party to certain sublease arrangements related to real estate leases, where the Company acts as the lessee and intermediate lessor.

The Company leases certain of its vehicles through finance leases. The finance lease obligations represent the present value of minimum lease payments under the respective agreement, payable monthly at various interest rates.

The following table presents information about lease costs and expenses and sublease income for the three and six months ended June 30, 2026 and 2025 (in thousands). The amounts below, with the exception of interest on lease liabilities, are included in cost of net revenue in the accompanying consolidated statements of operations for the periods presented. The interest on lease liabilities is included in interest expense, net in the accompanying consolidated statements of operations for the periods presented.

(1)Amounts represent variable costs incurred that were not included in the initial measurement of the lease liability such as common area maintenance and utilities costs associated with leased real estate.

The following table provides the weighted average remaining lease terms and weighted average discount rates for the Company’s leases as of June 30, 2026 and December 31, 2025:

The following table provides the undiscounted amount of future cash flows related to the Company’s operating and finance leases, as well as a reconciliation of such undiscounted cash flows to the amounts included in the Company’s lease liabilities as of June 30, 2026 (in thousands):

The following table provides certain cash flow and supplemental non-cash information related to the Company’s lease liabilities for the six months ended June 30, 2026 and 2025, respectively (in thousands):

(16)Income Taxes

The Company's tax provision for interim periods was historically determined using an estimated annual effective tax rate ("estimated AETR"), adjusted for discrete events arising in each respective fiscal quarter. When forecasted ordinary annual pre‑tax income is near breakeven, small changes in estimated annual results may result in significant volatility in the annual effective income tax rate that is not considered reliable and meaningful. In such circumstances, the income tax effects are recognized discretely in the interim period ("discrete ETR"). During the three and six months ended June 30, 2026, the Company utilized the discrete ETR method to compute its income tax provision as the estimated AETR method would not provide a reliable and meaningful estimate of its tax provision.

The Company is subject to U.S. federal, state, and local income taxes. For the three months ended June 30, 2026 and 2025, the Company recognized an income tax benefit of $21.2 million and income tax expense of $32.8 million, respectively. For the six months ended June 30, 2026 and 2025, the Company recognized an income tax benefit of $28.4 million and income tax expense of $30.3 million, respectively. For the three and six months ended June 30, 2026, the Company recognized a $15.5 million discrete income tax benefit, and corresponding increase to net deferred tax assets, related to non-cash goodwill impairment charges totaling $144.2 million. Refer to Note 8, Goodwill and Identifiable Intangible Assets, for additional details. For the three and six months ended June 30, 2025, the Company recognized a $27.4 million discrete income tax expense related to the dispositions oftwo businesses within the Wellness at Home segment.

The effective tax rates for the three and six months ended June 30, 2026 are primarily driven by the effects of permanent differences and discrete items.

As of June 30, 2026 and December 31, 2025, the Company had an unrecognized tax benefit of $2.7 million.

Tax Receivable Agreement

AdaptHealth Corp. is party to a Tax Receivable Agreement ("TRA") with certain current and former members of AdaptHealth Holdings LLC, a Delaware limited liability company ("AdaptHealth Holdings"). The TRA provides for the payment by AdaptHealth Corp. of 85% of the tax savings, if any, that AdaptHealth Corp. realizes (or is deemed to realize in certain circumstances) as a result of (i) certain tax attributes of the corresponding sellers existing prior to the Business Combination; (ii) certain increases in tax basis resulting from exchanges of New AdaptHealth Units and shares of Class B Common Stock; (iii) imputed interest deemed to be paid by the Company as a result of payments it makes under the TRA; and (iv) certain increases in tax basis resulting from payments the Company makes under the TRA. Under the TRA, the benefits deemed realized by the Company as a result of the increase in tax basis attributable to the AdaptHealth Holdings members generally will be computed by comparing the actual income tax liability of the Company to the amount of such taxes that the Company would have been required to pay had there been no such increase in tax basis.

At June 30, 2026, the Company's liability relating to the TRA was $238.9 million, which is included in other long-term liabilities in the accompanying consolidated balance sheets. At December 31, 2025, the Company’s liability relating to the TRA was $265.7 million, of which $26.8 million and $238.9 million is included in other liabilities and other long-term liabilities, respectively, in the accompanying consolidated balance sheets.

A $17.4 million income tax receivable is included in prepaid and other current assets in the accompanying consolidated balance sheets as of June 30, 2026. The majority of the Company’s income tax receivable relates to federal corporate income tax refunds, which are expected to be received later in 2026.

(17)Commitments and Contingencies

From time to time and in the normal course of business, the Company is subject to loss contingencies, arising from legal proceedings, claims, and governmental and other investigations under or with respect to various governmental programs and state and federal laws relating to its business, including as a result of or following acquisitions and other business activities, that cover a wide range of matters. In accordance with FASB ASC Topic 450, Accounting for Contingencies, the Company records accruals for such loss contingencies when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. If there is no probable estimate within a range of reasonably possible outcomes, the Company’s policy is to record at the low end of the range of such reasonably possible outcomes. Judgment is required to determine both probability and the estimated amount. The Company reviews its accruals quarterly and adjusts accordingly to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and updated information. At this time, the Company has no material accruals related to lawsuits, claims, investigations or proceedings, except as disclosed. While there can be no assurance, based on the Company’s evaluation of information currently available, the Company’s management believes any liability that may ultimately result from resolution of such loss contingencies will not have a material adverse effect on the Company’s financial condition or results of operations. However, the Company’s assessment may change in the future based upon availability of new information and further developments in the proceedings of such matters. The results of legal proceedings, claims and investigations are inherently uncertain, and material adverse outcomes are possible. Professional legal fees associated with any such legal proceedings, claims and investigations are expensed as they are incurred.

On October 24, 2023, Allegheny County Employees’ Retirement System, a purported shareholder of the Company, filed a purported class action complaint against the Company and certain of its current and former officers, and certain underwriters in the United States District Court for the Eastern District of Pennsylvania. On January 23, 2024, the court entered an order appointing Allegheny County Employees' Retirement System, International Union of Operating Engineers, Local No. 793, Members Pension Benefit Trust of Ontario, and City of Tallahassee Pension Plan as Lead Plaintiffs (the "Allegheny Lead Plaintiffs"). On May 14, 2024, Allegheny Lead Plaintiffs filed a consolidated complaint against the Company and certain of its current and former officers and directors, and certain underwriters, on behalf of shareholders that purchased or otherwise acquired the Company’s stock between August 4, 2020 and November 7, 2023 (as to the complaint the “Allegheny County Consolidated Complaint”; as to the action, the “Allegheny County Consolidated Class Action”). The Allegheny County Consolidated Complaint alleged, among other things, that the defendants violated federal securities laws by making allegedly false and misleading statements and/or failing to disclose material information regarding (i) the Company’s billing practices with respect to its diabetes product category, and (ii) the Company’s compliance programs and integration with respect to acquired companies. The Allegheny County Consolidated Complaint sought unspecified damages. On July 23, 2024, the defendants filed a motion to dismiss the Allegheny County Consolidated Complaint. The Allegheny Lead Plaintiffs filed their opposition brief on October 1, 2024, and defendants filed their reply brief on November 15, 2024.

On May 28, 2025, the parties jointly filed a letter requesting that the Court hold the motion to dismiss in abeyance pending the outcome of a private mediation between the parties. On October 8, 2025, the parties attended a private mediation. After subsequent settlement discussions, the parties reached an agreement in principle to settle the litigation.

On December 19, 2025, the parties filed for Preliminary Approval of Proposed Settlement and Approval of Notice to the Settlement Class and the preliminary approval order was granted by the Court on February 2, 2026. On June 10, 2026, the Court fully and finally approved the proposed settlement, the plan of allocation, and the Allegheny Lead Plaintiffs' counsel's request for attorneys' fees and expenses. The Court also entered the final judgment dismissing the Allegheny County Consolidated Class Action with prejudice. The settlement is to be funded as follows: (i) $34.0 million of cash from the Company’s insurance carriers and (ii) $1.0 million of cash from the Company. The $1.0 million was paid by the Company during the three months ended March 31, 2026. The Company's remaining liability of $34.0 million, consisting of the cash payment to be funded by the Company's insurance carriers, is included in accounts payable and accrued expenses in the accompanying consolidated balance sheets as of June 30, 2026. The Company also has a corresponding receivable of $34.0 million, representing the amount to be received from the Company’s insurance carriers, which is included in prepaid expenses and other current assets in the accompanying consolidated balance sheets as of June 30, 2026. Upon the effectiveness of the proposed settlement, the Company and its directors and officers as well as the other defendants named in the Allegheny County Consolidated Complaint were released from the claims that were asserted or could have been asserted in the Consolidated Class Action, with certain limitations, by class members participating in the settlement. The Company has always maintained, and continues to believe, that it did not engage in any wrongdoing or otherwise commit any violation of federal or state securities laws or other laws. The settlement includes no admission of liability or wrongdoing.

On March 20, 2024, a putative shareholder of the Company, Weiding Wu, filed a shareholder derivative complaint related to the allegations in the Allegheny County Complaint, and against certain current and former directors and officers of the Company in the United States District Court for the Eastern District of Pennsylvania (as to the complaint, the “Wu Derivative Complaint”; as to the action, the “Wu Derivative Action”). The Wu Derivative Complaint alleges, among other things, that the defendants breached their fiduciary duties and violated federal securities laws by making allegedly false and misleading statements and/or failing to disclose material information regarding (i) the Company’s billing practices with respect to its diabetes product category, and (ii) the Company’s compliance programs and integration with respect to acquired companies. The Wu Derivative Complaint also alleges claims for unjust enrichment, waste of corporate assets, abuse of control, and gross mismanagement. The Wu Derivative Complaint seeks, among other things, an award of money damages.

On July 25, 2024, the parties to the Wu Derivative Action stipulated to stay the Wu Derivative Action pending final resolution of the Allegheny County Consolidated Class Action. On July 26, 2024, the court so-ordered the parties’ stipulation.

The Company intends to vigorously defend against the allegations contained in the Wu Derivative Complaint, but there can be no assurance that the defense will be successful.

On December 9, 2025, a putative shareholder, Aaron Frankel, filed under seal a shareholder derivative complaint against certain current and former directors and officers of the Company in the United States District Court for the Eastern District of Pennsylvania (as to the complaint, the “Frankel Derivative Complaint”; as to the action, the “Frankel Derivative Action”). On January 7, 2026, the Court unsealed the Frankel Derivative Action, and Frankel notified the Company of the Frankel Derivative Action. On January 28, 2026, Frankel filed a redacted amended complaint on the public docket.

The Frankel Derivative Complaint is related to the allegations in the Allegheny County Complaint and Wu Derivative Complaint. It alleges, among other things, that the defendants breached their fiduciary duties and violated federal securities laws by making allegedly false and misleading statements and/or failing to disclose material information regarding (i) the Company’s billing practices with respect to its diabetes product category, and (ii) the Company's compliance programs and integration with respect to acquired companies. The Frankel Derivative Complaint also alleges claims for unjust enrichment and waste of corporate assets. The Frankel Derivative Complaint seeks, among other things, an award of money damages.

The Company intends to vigorously defend against the allegations contained in the Frankel Derivative Complaint, but there can be no assurance that the defense will be successful.

On March 19, 2026, the parties to the Wu Derivative Action and the Frankel Derivative Action filed a stipulation to consolidate the actions. On March 24, 2026, the parties to the Wu Derivative Action and the Frankel Derivative Action filed a notice informing the Court that they had reached an agreement in principle to settle both actions. On May 13, 2026, the Court consolidated the Wu Derivative Action and the Frankel Derivative Action.

On June 24, 2025, a putative shareholder of the Company, Blake T. Myers, filed against the Company a complaint in the Court of Chancery of the State of Delaware seeking to compel an inspection of books and records under 8 Del. C. § 220 (“Section 220”) (as to the complaint, the “Myers Section 220 Complaint”; as to the action, the “Myers Section 220 Action”). The Myers Section 220 Complaint asserted the putative shareholder’s right to inspect certain corporate books and records relevant to the issues in the Allegheny County Consolidated Class Action for the purported purposes of (i) investigating potential wrongdoing by the current and/or former members of the Board and the Company’s current and/or former executive officers, (ii) supporting appropriate action in the event current and/or former directors or executive officers did not properly discharge their fiduciary duties, and (iii) evaluating whether members of the current Board have a conflict of interest such that making a demand upon the Board to bring a derivative action on behalf of the Company would be futile.

The Company completed its production on November 19, 2025. On December 3, 2025, Myers voluntarily dismissed the action.

On February 6, 2026, Myers filed a shareholder derivative complaint under seal related to the allegations in the Allegheny County Consolidated Complaint against certain current and former directors and officers of the Company in the Delaware Court of Chancery (as to the Complaint, the “Myers Derivative Complaint;” as to the action, the “Myers Derivative Action”). The Myers Derivative Complaint alleges claims for breach of fiduciary duty, insider trading, and unjust enrichment under Delaware law. On February 12, 2026, Myers filed a redacted complaint on the public docket.

On March 10, 2026, the parties to the Myers Derivative Action stipulated to stay the action pending final resolution of the Allegheny County Consolidated Class Action. The parties' stipulation was so-ordered by the Court on the same date. The parties to the Myers Derivative Action subsequently reached an agreement in principle to settle that action on the same terms as the Wu Derivative Action and the Frankel Derivative Action.

The Company intends to vigorously defend against the allegations contained in the Myers Derivative Complaint, but there can be no assurance that the defense will be successful.

In October 2022, a former customer of the Company, Mr. Ray (“Plaintiff”), filed an individual action against the Company and a collection agency for violation of North Carolina’s Debt Collection Practices Act (the "Act”) based on allegations that the Company failed to address Mr. Ray’s billing concerns and issue a refund in a timely manner related to his return of medical equipment. Plaintiff was permitted to amend his individual complaint to a class action complaint on behalf of similarly situated North Carolina residents who allegedly experienced improper billing issues after the asserted return of medical equipment. Over continued objection, and after withdrawing a motion for class certification, Plaintiff amended his class action complaint again in May 2025 to assert violations of the Act related tothree classes of North Carolinians: (a) a class of patients who were allegedly improperly billed after returning equipment, (b) a class of patients who were allegedly improperly charged a late fee after assertedly returning their equipment, and (c) a class of patients who received collection letters that allegedly violated the Act. Plaintiff has argued that the claims are meritorious, and the classes could be certified up to and including approximately 130,000 North Carolina patients. The Company has vigorously defended the case; believes the claims lack merit; and, believes that none of thethree classes could be certified. Neither the merits of the case nor the certification of these classes have been reviewed by the Court. While nonetheless strongly defending the case, to minimize exposure and risk under the Act, and reduce further litigation expenses, the Company has also pursued settlement options. The Company and the Plaintiff, a proposed class representative, recently agreed to inform the Court that the parties have agreed to certify the classes and settle the case as to Class A, Class B and Class C members for a total settlement payment to be made by the Company of $14.5 million in consideration for full releases of the Company. The Company recorded a liability of $14.5 million, which is included in accounts payable and accrued expenses in the accompanying consolidated balance sheets as of June 30, 2026 and December 31, 2025. This outcome, while considered likely by the Company, is not fixed and is contingent on factors not wholly within the Company’s control, including finalizing additional material terms with Plaintiff, seeking and achieving preliminary approval by the Court, an administrative process, and obtaining final approvals from the Court. Should this pathway for resolution fail, the Company will continue its robust defense of the case.

On July 29, 2024, the U.S. Attorney’s Office for the District of South Carolina issued a civil investigative demand to the Company pursuant to the FCA regarding whether the Company submitted false claims in violation of the FCA related to its billing of, and reimbursements from, federal health care programs for humidifiers that are integrated with PAP devices and provided to patients from January 1, 2017 to the present. The Company is fully cooperating with the investigation. Given the stage of the investigation, it is not possible to determine whether it will have a material adverse effect on the Company.

On March 8, 2025, the U.S. Attorney’s Office for the Eastern District of Pennsylvania issued a civil investigative demand to the Company pursuant to the FCA surrounding whether the Company submitted false claims in violation of the FCA related to its billing of, and reimbursements from, federal health care programs for respiratory devices and related supplies provided to patients from January 1, 2018 to the present. The Company is fully cooperating with the investigation. Given the stage of the investigation, it is not possible to determine whether it will have a material adverse effect on the Company.

(18)Related Party Transactions

The Company owns an equity interest in a vendor that provides automated order intake software. The expense related to this vendor was $5.3 million and $7.7 million for the three months ended June 30, 2026 and 2025, respectively, and $10.5 million and $10.2 million for the six months ended June 30, 2026 and 2025, respectively. The Company accounts for this investment under the cost method of accounting based on its level of equity ownership. As of June 30, 2026 and December 31, 2025, the Company had an immaterial outstanding accounts payable balance to this vendor.

A director of the Company serves on the board of directors of a third-party payor that does business with the Company in the normal course of providing services to patients. Net revenue from this third-party payor was approximately 1.0% of the Company’s consolidated net revenue during the three and six months ended June 30, 2026 and 2025. As of June 30, 2026 and December 31, 2025, the Company had an immaterial outstanding accounts receivable balance from this third-party payor.

A director of the Company is an employee of a beneficial owner of more than 5% of the Company’s Common Stock as of June 30, 2026. This beneficial owner is also a minority shareholder of a vendor that provides medical equipment and supplies to the Company in the normal course of business. Payments to this vendor were approximately $17.5 million and $11.5 million for the three months ended June 30, 2026 and 2025, respectively, and $37.7 million and $31.3 million for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026 and December 31, 2025, the Company had an immaterial outstanding accounts payable balance to this vendor.

(19)Restructuring Charges

In June 2026, management approved a plan aimed at reducing costs, streamlining operations, and optimizing resources, which included headcount reductions and the wind down of an immaterial business. The total costs associated with this plan are expected to be approximately $7.0 million. During the three and six months ended June 30, 2026, the Company recognized restructuring charges, primarily consisting of severance, totaling $6.1 million, of which $3.4 million and $2.7 million is included in general and administrative expenses and cost of net revenue, respectively, in the accompanying consolidated statements of operations. A $5.7 million liability related to this plan is included in accounts payable and accrued expenses in the accompanying consolidated balance sheets as of June 30, 2026. The actions regarding the headcount reductions were substantially complete as of June 30, 2026. The Company expects the actions related to the wind down of an immaterial business to be completed by the fourth quarter of 2027.

(20)Subsequent Events

The Company evaluated subsequent events for the period from June 30, 2026 through the date that the Company’s consolidated financial statements were available to be issued. There were no subsequent events requiring adjustment to the Company’s consolidated financial statements or additional disclosure, other than as described below and as discussed in Note 5, Held for Sale and Discontinued Operations, and Note 12, Debt.

Subsequent to June 30, 2026, the Company entered into a joint venture combining the Company's eCommerce asset with a leading eCommerce sleep retailer. In connection with this transaction, the Company contributed its eCommerce asset and $2.0 million to acquire a minority interest in the joint venture, and also paid $2.0 million in transaction costs.