Q1 2025 AdaptHealth Corp Earnings Call

25 earnings release, today's speakers will be Susanne Foster Chief Executive officer of adapt health and Jason <unk>, Chief Financial Officer of Ed upheld before we begin I'd like to remind everyone that statements included in this conference call and in the press release issued today may constitute forward looking statements within the meaning of private.

Securities Litigation Reform Act. These statements include but are not limited to comments regarding our financial results for 2025 and beyond.

Actual results could differ materially from those projected in forward looking statements because of a number of risk factors and uncertainties, which are discussed at length in the company's annual and quarterly SEC filings.

<unk> Corp has no obligation to update the information provided on this call to reflect such subsidy sequent events. Additionally on this morning's call. The company will reference certain financial measures such as EBITDA, adjusted EBITDA and adjusted EBITDA margin and free cash flow all of which are non-GAAP financial measures you can find them.

More information about these non-GAAP measures in the presentation materials accompanying today's call, which are posted on the company's website. This mornings call is being recorded and a replay of the call will be available later today I am now pleased to introduce the Chief Executive officer of at upheld Suzanne Foster.

Okay.

Suzanne Foster: Good morning, everyone and welcome to our call.

Suzanne Foster: Elevated uncertainty in the external environment, we had adapt tiles have stayed the course with our relentless focus on improving our business and providing exceptional service to the $4 2 million patients that depend on us.

Suzanne Foster: Reflecting that focus in Q1 2025, we delivered another quarter of solid results and we continue to make progress on several areas of focus.

Suzanne Foster: Starting with our results.

Suzanne Foster: First quarter revenue exceeded the midpoint of our guidance range by $13 1 million despite declining one 8% from the prior year quarter.

Suzanne Foster: This was driven by stronger than anticipated revenues in our respiratory health segment as well as in our diabetes health segment, which while still contracting continued to demonstrate signs of improvement.

Suzanne Foster: First quarter adjusted EBITDA was in the upper half of our guidance range. Despite declining 19, 3% from the prior year quarter, while our adjusted EBITDA margin was in line with our expectations at 16, 4%.

Suzanne Foster: Free cash flow was negative 0.1 million in the first quarter compared to negative $38 9 million in the prior year quarter.

Suzanne Foster: Importantly, we remain on track to achieve our free cash flow guidance for the full year.

Suzanne Foster: Over the last several months, we have been reviewing and refining our long range growth plan. This.

Suzanne Foster: This work confirms that we have a tremendous opportunity to deliver consistent sustainable organic growth by simply staying on course with our current strategy.

Suzanne Foster: Our plan has been and will continue to be to remain focused on our four core segments and to combine our geographic reach and operational scale with industry, leading patient service excellence to capture market share.

Suzanne Foster: The addressable markets within our four segments are large and we believe our growing in aggregate by mid single digits driven by meaningful tailwind.

Suzanne Foster: These include an aging U S population, increasing prevalence and diagnosis of the chronic conditions, our services and products helped tree.

Suzanne Foster: And the ongoing shift to home health care, which is expected to outstrip growth of overall healthcare spending by roughly 200 basis points over the next decade.

Suzanne Foster: Even as the industry leader in our markets, we still have a significant untapped opportunity for organic growth.

Suzanne Foster: We are addressing this opportunity from a position of competitive strength.

Suzanne Foster: Have the broadest geographic footprint in the industry with over 660 locations, serving $4 2 million patients across all 50 states.

Suzanne Foster: Our expansive geographic reach and operational scale uniquely position us to lead the transformation of the home health industry.

Suzanne Foster: This is most clearly demonstrated in the opportunities we are addressing in managed care and with large health systems.

Suzanne Foster: We believe payors and providers will increasingly turn to adopt health to leverage our scale and industry, leading adherence programs as part of their efforts to better protect and manage health care cost and drive better health outcomes for patients.

Suzanne Foster: These dynamics are fueling our growing pipeline of active discussions around new capitation arrangements.

Suzanne Foster: Especially as payers look to adopt health for help managing utilization inside their expanding Medicare advantage businesses.

Suzanne Foster: Despite our competitive advantages, we havent, yet realized our full organic growth potential, but that is well within our grasp. We've brought together a group of exceptional leaders, we have scrutinized our workflows to pinpoint our most meaningful organic growth levers and we are enabling the organization to active.

Suzanne Foster: These levers through the discipline of our adapt operating system.

Suzanne Foster: Set of targeted initiatives.

Suzanne Foster: The common thread running through these initiatives is our commitment to patient service excellence, which means delivering superior quality with speed at a competitive cost to serve.

Suzanne Foster: One example is the process improvement we are introducing to improve CPAP order conversion.

Suzanne Foster: Our operations team has been working hard to automate intake streamline referral documentation optimized scheduling capacity to reduce setup delays and enhanced patient communications.

Suzanne Foster: These initiatives will help us convert more referrals to orders. They will also meaningfully improve the patient experience by expediting their access to the critical therapies they need.

Suzanne Foster: And ultimately a better patient experience will help us drive increased fences and revenue growth.

Suzanne Foster: Delivering patient service excellence at scale is how we will win our.

Suzanne Foster: Our industry remains highly fragmented with service levels that vary widely and often fall short of expectations.

Suzanne Foster: We have an immense opportunity to take market share.

Suzanne Foster: Capturing that opportunity doesn't require major incremental investments. It also doesn't require capital intensive M&A it simply requires being the best operator in the markets we already serve.

Suzanne Foster: Which brings me to our diabetes health segment.

Suzanne Foster: We cannot deliver enterprise level organic growth that meets or exceeds market growth if our diabetes health segment is underperforming.

Suzanne Foster: I'm pleased to say the diabetes health team has continued to execute on its plan to enhance our processes and we continue to see positive signs at the steps they've taken are yielding results.

Suzanne Foster: Notably we had a second consecutive quarter of sequential improvement in new starts.

Suzanne Foster: And our resupply attrition rate was the best we have experienced in two years.

Suzanne Foster: Amid a period of significant supply chain disruption.

Suzanne Foster: I would like to take a moment to commend the entire diabetes team for ensuring that our patients continue to receive their diabetes supplies during this disruption and for exceeding our internal forecast.

Suzanne Foster: It's still early but the dedication of our diabetes health team and the progress they've made or increasing our confidence that the segment will return to growth removing a key obstacle to delivering accelerated consistent and sustainable organic growth across our overall business.

Suzanne Foster: Moving onto another core focus we continued to strengthen our financial position.

Suzanne Foster: During Q1, we reduced our debt balance by another $25 million, bringing total debt repayments to $195 million over the last five quarters.

Suzanne Foster: Further we continue to exit noncore product lines Jenna.

Suzanne Foster: <unk> generated additional proceeds that are earmarked for debt reduction.

Suzanne Foster: While enabling us to sharpen our strategic focus.

Suzanne Foster: Typically in May we completed a transaction to sell certain incontinence assets to a third party.

Suzanne Foster: And we signed a definitive agreement to sell certain infusion assets to a third party.

Suzanne Foster: Before I close let me take a moment to address the concerns surrounding the potential impact of international trade policy on operators and the health care industry, including adapt health.

Suzanne Foster: Clearly the situation is fluid, but based on what we know today, we believe our exposure to tariffs is contained and the impact on our business is likely to be very manageable.

Suzanne Foster: We have consulted with each of our major manufacturing partners to verify their production locations and to gather their perspectives on the potential impact of tariffs.

Suzanne Foster: There have been no indications from these discussions that tariffs are likely to pose a significant issue and several of our large partners have referenced tariff exemptions in their public remarks.

Suzanne Foster: To date, we have not experienced any tariff surcharges nor have we initially initiated any contract renegotiations because of tariffs.

Suzanne Foster: Given our current inventory levels, we do not anticipate any potential impact from tariffs to materialize before the second half of the year at the earliest.

Suzanne Foster: Given these considerations and our current assessment of the risks we do not currently believe it is necessary to adjust our 2025 guidance for any potential impact of tariffs.

Suzanne Foster: In summary, the team delivered another quarter of solid results.

Suzanne Foster: We continue to improve our financial position by paying off our debt.

Suzanne Foster: The organization is laser focused on driving service excellence at scale to deliver consistent sustainable organic growth.

Suzanne Foster: And our diabetes business demonstrated further signs of improvement.

Suzanne Foster: While we are monitoring the risks of government policy. We believe these risks will be manageable and Moreover, we won't let them distract us from the critical work, we are doing to organize and execute improve day after day and quarter after quarter.

Jason: With that I will turn it over to Jason.

Jason: Thank you Suzanne and thank you everyone for joining our call today I'm going to cover our first quarter 2025 results.

Jason: All of that with a review of our balance sheet and our plans for capital allocation before finishing with guidance for 2025.

We continue to improve our financial position by paying off our debt.

Jason: For first quarter 2025, net revenue of $777 9 million declined one 8% versus the prior year quarter, which had one additional business day.

The organization is laser focused on driving service excellence at scale to deliver consistent sustainable organic growth.

And our diabetes business demonstrated further signs of improvement.

Jason: Net revenue was $13 1 million above the midpoint of our Q1 guidance range.

While we are monitoring the risks of government policy. We believe these risks will be manageable and Moreover, we won't let them distract us from the critical work, we are doing to organize and execute and improve day after day and quarter after quarter.

Jason: By the combination of strong volumes in our respiratory health segment and stronger than anticipated diabetes health segment revenues.

Jason: More than offsetting sleep health segment revenues that fell modestly shy of our expectations.

With that I will turn it over to Jason.

Jason: First quarter sleep health segment net revenue decreased two 8% versus the prior year quarter to $316 4 million.

Jason: Thank you Suzanne and thank you everyone for joining our call.

Jason: Today I'm going to cover our first quarter 2025 results I'll follow that with a review of our balance sheet and our plans for capital allocation before finishing with guidance for 2025.

Jason: We previously referenced $30 million full year headwind related to the noncash impact of changes in the mix of purchase revenue versus rental revenue.

Jason: For first quarter 2025, net revenue of $777 9 million declined one 8% versus the prior year quarter, which had one additional business day.

Jason: As anticipated approximately half of that impact came in the first quarter.

Jason: Rebuilds, new setups, which are typically seasonally lower in the first quarter of the year were approximately 113000 slightly behind our expectations.

Jason: Net revenue was $13 1 million above the midpoint of our Q1 guidance range driven by the combination of strong volumes in our respiratory health segment and stronger than anticipated diabetes held segment revenues.

Jason: Despite the lighter new setups are sleep health census grew to $1 $6 8 million patients.

Jason: More than offsetting sleep health segment revenues that fell modestly shy of our expectations.

Jason: Another 19000 sequentially.

Jason: Our Q1 2025 C. Fab survey indicates that the percentage of respondents using <unk> to manage diabetes for weight loss was up slightly to 15, 7% in Q1 2025 from 15, 3% in Q4 2024.

Jason: First quarter sleep health segment net revenue decreased two 8% versus the prior year quarter to $316 4 million.

Jason: We previously referenced a $30 million full year headwind related to the noncash impact of changes in the mix of purchase revenue versus rental revenue.

Jason: Our survey continues to show an immaterial difference in adherence and resupply ordinary patterns between <unk>, one patients and non GOP one patients.

Jason: As anticipated approximately half of that impact came in the first quarter.

Jason: <unk>, new setups, which are typically seasonally lower in the first quarter of the year were approximately 113000 slightly behind our expectations.

Jason: First quarter respiratory health segment net revenue increased three 3% versus the prior year quarter to $165 5 million.

Jason: We saw stronger than anticipated oxygen, new setups fueled by stronger field sales during an especially severe flu season.

Jason: Despite the later new setups are sleep health census grew to $1 $6 8 million patients up another 19 sequentially.

Jason: Our oxygen sensors of 325000 patients with a new first quarter record.

Jason: Our Q1 2025, CPAP survey indicates that the percentage of respondents using GOP ones to manage diabetes for weight loss was up slightly to 15, 7% in Q1 2025 from 15, 3% in Q4 2024.

Jason: First quarter diabetes health segment, net revenue declined 8.0% versus the prior year quarter to $138 8 million.

Speaker Change: While revenue contracted as Suzanne mentioned, we continued to see signs segment is recovering.

Jason: Our survey continues to show an immaterial difference in adherence and resupply ordinary patterns between GOP one patients in non <unk> patients.

Jason: New starts improved sequentially for the second consecutive quarter.

Jason: And our first quarter attrition rate was the lowest we experienced in two years.

Jason: First quarter respiratory health segment net revenue increased three 3% versus the prior year quarter to $165 5 million.

Jason: For the wellness at home segment, which includes all other product categories first quarter net revenue increased <unk>, 7% over the prior year quarter to $157 2 million as growth in volumes offset revenue disposed with the sale of certain cost of rehab assets in the third quarter of 2024.

Jason: We saw stronger than anticipated oxygen, new setups fueled by stronger field sales during an especially severe flu season.

Jason: Our oxygen sensors of 325000 patients was a new first quarter record.

Jason: Turning to profitability first quarter 2025, adjusted EBITDA was $127 9 million.

Jason: First quarter diabetes health segment, net revenue declined 8.0% versus the prior year quarter to $138 8 million.

Jason: Lately above the midpoint of our Q1 guidance range.

Jason: Adjusted EBITDA margin of 16, 4% declined from 20.0% in Q1 2024.

Jason: While revenue contracted as Suzanne mentioned, we continued to see signs.

Jason: But was within our Q1 guidance range.

Jason: This reflected the combination of lower revenue and gross margins in our diabetes health segment.

The anticipated impact of changes in the mix of purchase revenue versus Russell revenue at our sleep health segment.

Jason: All of which fell to the bottom line.

Jason: Moving to cash flow balance sheet and capital allocation.

Jason: For Q1, 2025 cash flow from operations was $95 5 million.

Jason: Capex of $95 6 million was 12, 3% of revenue in line with our expectations.

Jason: Free cash flow was negative <unk> 1 million.

Jason: Certain cash collections anticipated in the first quarter were pushed into the second quarter.

Jason: Unrestricted cash stood at $53 7 million at the end of the quarter.

Jason: As of quarter end of 2025 first quarter net debt stood at 196 billion and our net leverage ratio was 298 times up from $2 seven nine times at the end of last quarter as a result of lower adjusted EBITDA.

Jason: We've been using free cash to reduce debt and we've reduced our GLA bounds by $25 million in Q1 2025.

Suzanne Foster: As Suzanne mentioned in early May we completed a transaction to sell certain incontinence assets to a third party.

Suzanne Foster: And we signed a definitive agreement to sell certain infusion assets to a third party.

It was negative <unk> $1 million of certain cash collections anticipated in the first quarter were pushed into the second quarter.

Unknown Executive: Today's speakers will be Suzanne Foster, Chief Executive Officer of Adapthealth, and Jason Clemens, Chief Financial Officer of Adapthealth.

Suzanne Foster: Between these sales, which will generate further proceeds for debt reduction and our expectations for free cash flow generation. In 2025, we are steadily tracking toward achieving our target of two five times net leverage.

Unrestricted cash stood at $53 7 million at the end of the quarter.

Unknown Executive: Before we begin, I'd like to remind everyone that statements included in this conference call and in the press release issued today, they constitute forward-looking statements within the meaning of Private Securities Litigation Reform Act. These statements include, but are not limited to, comments regarding financial results for 2025 and beyond. Actual results could differ materially from those projected in forward-looking statements because of a number of risk factors and uncertainties which are discussed at length in the company's annual and quarterly SEC filings.

As of quarter end of 2025 first quarter net debt stood at 196 billion and our net leverage ratio was 298 times up from $2 seven nine times at the end of last quarter as a result of lower adjusted EBITDA.

Suzanne Foster: Our capital allocation priorities remain unchanged, our highest priorities are investing to accelerate organic growth and reducing our debt to further strengthen our financial position followed by strategic acquisitions of home medical equipment providers to round out our geographic footprint and increased patient access.

We've been using free cash to reduce debt and we've reduced our GLA balanced by $25 million in Q1 2025.

Suzanne Foster: Turning to guidance, we are reducing our full year revenue expectations by $40 million and our full year adjusted EBITDA expectations by $5 million to reflect the disposition of certain continents assets in early may.

Jason: As Suzanne mentioned in early May we completed a transaction to sell certain incontinence assets to a third party.

Unknown Executive: Adapthealth Corp. has no obligation to update the information provided on this call to reflect such subsequent events.

Jason: And we signed a definitive agreement to sell certain infusion assets to a third party.

Suzanne Foster: There are no other changes to our guidance.

Unknown Executive: Additionally, on this morning's call, the company will reference certain financial measures such as EBITDA, an adjusted EBITDA margin, and free cash flow, all of which are non-GAAP financial measures. You can find more information about these non-GAAP measures in the presentation materials accompanying today's call, which are posted on the company's website.

Jason: Between these sales, which will generate further proceeds for debt reduction and our expectations for free cash flow generation. In 2025, we are steadily tracking toward achieving our target of two five times net leverage.

Suzanne Foster: Suzanne discussed earlier, given our current understanding of tariff policy and based on the indications provided by our manufacturers, we expect that any impact of tariffs on our 2025 results is likely to be manageable and we do not currently believe it is necessary to adjust our full year guidance for tariffs.

Jason: Our capital allocation priorities remain unchanged, our highest priorities are investing to accelerate organic growth and reducing our debt to further strengthen our financial position followed by strategic acquisitions of home medical equipment providers to round out our geographic footprint and increased patient access.

Unknown Executive: This morning's call is being recorded and a replay of the call will be available later today.

Suzanne Foster: For full year 2025, we now expect revenue of $3, one 8 billion to $3, three 2 billion and adjusted EBITDA of 665 million to $705 million.

Suzanne Foster: I am now pleased to introduce the Chief Executive Officer of Adapthealth, Suzanne Foster. Good morning, everyone, and welcome to our call. Amid elevated uncertainty in the external environment, we at Adapthealth have stayed the course with a relentless focus on improving our business and providing exceptional service to the 4.2 million patients that depend on us. Reflecting that focus in Q1 2025, we delivered another quarter of solid results, and we continue to make progress on several areas of focus. Starting with our results, first quarter revenue exceeded midpoint of our guidance range by 13.1 million, despite declining 1.8% from the prior year quarter.

Suzanne Foster: Our revised revenue and adjusted EBITDA guidance implies an adjusted EBIT margin of approximately 21% in line with our prior expectations.

Jason: Turning to guidance, we are reducing our full year revenue expectations by $40 million and our full year adjusted EBIT expectations by $5 million to reflect the disposition of certain continents assets in early may.

Suzanne Foster: Our free cash flow guidance range remains unchanged at 180 million to $220 million.

Jason: There are no other changes to our guidance.

Suzanne Foster: For Q2, 2025, we expect revenue to be largely flat versus Q2 2020 for revenue of $806 million.

Jason: As Suzanne discussed earlier, given our current understanding of tariff policy and based on the indications provided by our manufacturers, we expect that any impact of tariffs on our 2005 results is likely to be manageable and we do not currently believe it is necessary to adjust our full year guidance for tariffs.

Suzanne Foster: Notably the prior year quarter included approximately $22 million of revenue from certain disposed assets as well as approximately $8 million from the noncash impact of the revenue mix shift from purchases to rental and our sleep health segment.

Jason: For full year 2025, we now expect revenue of $3 8 billion to $3, three 2 billion and adjusted EBITDA of 665 million to $705 million.

Suzanne Foster: This was driven by stronger than anticipated revenues in our respiratory health segment, as well as in our diabetes health segment, which, while still contracting, continue to demonstrate signs of improvement. First quarter adjusted EBITDA was in the upper half of our guidance range, despite declining 19.3% from the prior year quarter, while our adjusted EBITDA margin was in line with our expectations at 16.4%. Pre-cash flow was negative $0.1 million in the first quarter, compared to negative $38.9 million in the prior year quarter. Importantly, we remain on track to achieve our free cash flow guidance for the full year.

Suzanne Foster: We expect an adjusted EBIT margin of 18, 3% to 19, 3%.

Suzanne Foster: From 25% in Q2 2024.

Jason: Our revised revenue and adjusted EBITDA guidance implies an adjusted EBITDA margin of approximately 21% in line with our prior expectations.

Suzanne Foster: I think the flow through to the bottom line of the items just discussed.

Suzanne Foster: Lower revenues and diabetes health.

Suzanne Foster: We continue to expect to generate approximately a third of our full year free cash flow in the first half.

Jason: Our free cash flow guidance range remains unchanged at $180 million to $220 million.

Suzanne Foster: In summary, we are on track to achieve our revenue adjusted EBITDA and free cash flow guidance for 2025, So we're making good progress on our balance sheet as.

Jason: For Q2, 2025, we expect revenue to be largely flat versus Q2 2020 for revenue of $806 million.

Jason: Notably the prior year quarter included approximately $22 million of revenue from certain disposed assets as well as approximately $8 million from the noncash impact of the revenue mix shift from purchases to rental and our sleep health segment.

Suzanne Foster: As we enhance operational effectiveness and advanced key initiatives. We are confident that we are building momentum in the business.

Suzanne Foster: That brings me to the end of my remarks, operator would you finally open up the call for questions.

Suzanne Foster: Over the last several months, we have been reviewing and refining our long range growth plan. This work confirms that we have a tremendous opportunity to deliver consistent, sustainable, organic growth by simply staying on course with our current strategy. Our plan has been and will continue to be to remain focused on our four core segments and to combine our geographic reach and operational scale with industry leading patient service excellence to capture market share. The addressable markets within our four segments are large, and we believe are growing in aggregate by mid-single digits, driven by meaningful tailwinds. These include an aging US population, increasing prevalence and diagnosis of the chronic conditions our services and products help treat, and the ongoing shift to home health care, which is expected to outstrip growth of overall health care spending by roughly 200 basis points over the next decade.

Suzanne Foster: Thank you very much at this time, if he would like to ask a question. Please press star one on your telephone keypad, you may remove yourself from the queue at any time by pressing star two.

Jason: We expect an adjusted EBIT margin of 18, 3% to 19, 3% down from 25% in Q2 2024, reflecting the flow through to the bottom line of the items, just discussed and lower revenues in diabetes health.

Operator: Once again that is star one we'll take our first question from Brian Tranquility with Jefferies. Please go ahead.

Operator: Good morning. This is meghan hold on for Brian. Thank you for taking my question can you guys. Just provide some additional color in terms of improvement that you're seeing in the diabetes business. You mentioned you were going to potentially see modest growth in the pumps did that come through and then some signs of improvement in CGM.

Jason: We continue to expect to generate approximately a third of our full year free cash flow in the first half.

Jason: In summary, we are on track to achieve our revenue adjusted EBITDA and free cash flow guidance for 2025.

Jason: We're making good progress on our balance sheet.

Operator: And then just a quick follow up to your comments on guidance is the change in guidance only for the incontinence asset sale and not the infusion asset sale.

Jason: As we enhance operational effectiveness and advanced key initiatives. We are confident that we are building momentum in the business.

Jason: Hey, Megan this is Jason good morning.

Jason: That brings me to the end of my remarks, operator would you kindly open up the call for questions.

Operator: I'll take the second one first.

Operator: The guidance change is exclusively for the disposal of certain incontinence assets.

Jason: Thank you very much at this time, if you would like to ask a question. Please press star one on your telephone keypad, you may remove yourself from the queue at any time by pressing star two.

Operator: Although we expect to close the infusion deal in the second quarter, we're going to withhold any any comments on that until the deal is closed similar to our previous policy on all M&A and dispositions.

Suzanne Foster: Even as the industry leader in our markets, we still have a significant untapped opportunity for organic growth. We are addressing this opportunity from a position of competitive strength. We have the broadest geographic footprint in the industry, with over 660 locations serving 4.2 million patients across all 50 states. Our expansive geographic reach and operational scale uniquely position us to lead the transformation of the home health industry. This is most clearly demonstrated in the opportunities we are addressing in managed care and with large health systems. We believe payers and providers will increasingly turn to Adapthealth to leverage our scale and industry-leading adherence programs as part of their efforts to better predict and manage health care costs and drive better health outcomes for patients.

Speaker Change: And once again that is star one we'll take our first question from Brian Tranquility with Jefferies. Please go ahead.

Speaker Change: Good morning. This is meghan hold on for Brian. Thank you for taking my question can you guys. Just provide some additional color in terms of improvement that youre seeing in the diabetes business, you mentioned youre going to potentially see modest growth in the pumps did that come through and then some signs of improvement in CGM and then just a quick follow up to your comments on guidance is the change in guidance.

Operator: Regarding diabetes, you asked about pumps, we did see positive movement in our pump business.

Operator: So that was that was great news showing showing some growth over the first quarter of 2024, and then addition.

Operator: Within CGM.

Operator: We spoke of of.

Speaker Change: Only for the incontinence asset sale and not the infusion asset sale.

Operator: Second sequential growth quarter in new starts.

Jason: Hey, Megan this is Jason good morning, I'll take the second one first yes. The guidance change is exclusively for the disposal of certain incontinence assets.

Operator: Which is very good news as.

Operator: As we start stringing those together and as we manage our retention rates at record levels, we are confident that.

Operator: The turnaround of diabetes is happening.

Jason: Although we expect to close the infusion deal in the second quarter, we're going to withhold any any comments on that until the deal is closed similar to our previous policy on all M&A and dispositions.

Operator: Thank you.

Operator: We'll go next to Peter Chickering with Deutsche Bank. Please go ahead.

Suzanne Foster: These dynamics are fueling our growing pipeline of active discussions around new capitated arrangements, especially as payers look to Adapthealth for help managing utilization inside their expanding Medicare Advantage businesses. Despite our competitive advantages, we haven't yet realized our full organic growth potential. But that is well within our grasp.

Speaker Change: Thank you guys.

Speaker Change: First question here is looking at the new starts to sleep I guess, you sort of dig in more into sort of what youre seeing there.

Jason: Regarding diabetes, you asked about pumps, we did see positive movement in our pump business.

Speaker Change: Is this a market issue or is it a market share issue or are you guys losing share.

Jason: So that was that was great news showing showing some growth over the first quarter of 2024, and then addition.

Speaker Change: If so is there anything that you can do to pivot in order to fix those issues.

Jason: Within <unk>.

Peter Chickering: Sure Peter.

Jason: We spoke of of.

Speaker Change: Morning. So firstly starts were off a couple of thousand so we're not talking huge numbers. However, we thought it was appropriate to call it out being our biggest business obviously.

Suzanne Foster: We have brought together a group of exceptional leaders, we have scrutinized our workflows to pinpoint our most meaningful organic growth levers. And we are enabling the organization to activate these levers through the discipline of our ADAPT operating system, and a set of targeted initiatives. The common thread running through these initiatives is a commitment to patient service excellence, which means delivering superior quality with speed at a competitive cost to service. One example is the process improvement we are introducing to improve CPAP order conversion. Our operations team has been working hard to automate intake, streamline referral documentation, optimize scheduling capacity to reduce setup delays, and enhance patient communication.

Jason: Second sequential growth quarter in new starts.

Jason: Which is very good news as.

Jason: As we start stringing those together and as we manage our retention rates at record levels, we're confident that.

Speaker Change: Is this is not some kind of exogenous factor, we are quite confident of that.

Jason: The turnaround of diabetes is happening.

Speaker Change: Various data points.

Jason: Thank you.

Speaker Change: We are in certain geographies.

Speaker Change: We'll go next to Peter Chickering with Deutsche Bank. Please go ahead.

Speaker Change: Losing.

Speaker Change: We need to set up faster, we need to when you do better in these certain geographies, we've got detailed plans and our commercial team as well as our ops team to to close that gap and we're still very confident in the full year guidance that we put out.

Speaker Change: Thank you guys.

Speaker Change: First question here is looking at the new starts to sleep I guess, you sort of dig in more into sort of what youre seeing there.

Speaker Change: Is this a market issue or is this a market share issue or are you guys losing share.

Speaker Change: Last quarter so.

Speaker Change: Generally going according to plan I think in our portfolio. Some assets are up a little down a little but we feel very good about the full year.

Speaker Change: So is there anything you can do to pivot in order to fix those issues.

Sure Peter.

Speaker Change: Okay, Great and then the follow up is just on the <unk> guidance just to make sure that I heard that right Youre talking about flat revenue year over year margins of 18, 3% to 19, three so that will get just for $18 eight at the midpoint, which is about $155 million.

Peter Chickering: Morning. So firstly starts were off a couple of thousand so we're not talking huge numbers. However, we thought it was appropriate to call it out being our biggest business obviously.

Suzanne Foster: These initiatives will help us convert more referrals to orders. They will also meaningfully improve the patient experience by expediting their access to the critical therapies they need. And ultimately, a better patient experience will help us drive increased census and revenue growth. Delivering patient service excellence at scale is how we will win. Our industry remains highly fragmented with service levels that vary widely and often fall short of expectations. We have an immense opportunity to take market share. Capturing that opportunity doesn't require major incremental investments. It also doesn't require capital intensive M&A. It simply requires being the best operator in the markets we already serve.

Peter Chickering: Is this is not some kind of exogenous factor, we are quite confident of that.

Speaker Change: On EBITDA I think for <unk> I guess.

Peter Chickering: Various data points.

Speaker Change: Is that what I heard right and if so as you think about sort of the back half ramp on the new implied guidance just for how how do we start to transition from <unk> and how do we get into sort of the back half of the year ramps.

Peter Chickering: We are in certain geographies.

Peter Chickering: Losing.

Peter Chickering: We need to set up faster, we need to we need to do better in these certain geographies. We've got detailed plans and our commercial team as well as our ops team to to close that gap and we're still very confident in the full year guidance that we put out.

Peter Chickering: Sure Peter.

Speaker Change: So I guess I'd say firstly that.

Speaker Change: Keep in mind that Q2 of last year.

Peter Chickering: Quarter so.

Speaker Change: Included.

Peter Chickering: Generally going according to plan I think in our portfolio. Some assets are up a little some are down a little but we feel very good about the full year.

Speaker Change: Almost almost $30 million of revenue.

Speaker Change: That was either disposed or.

Speaker Change: Okay, Great and then the follow up is just on the <unk> guidance just to make sure that I heard that right Youre talking about flat revenue year over year margins of 18, 3% to 19 three.

Speaker Change: Was was not impacted by the shift of purchase to rental revenue and so I think the underlying growth rate of 3% to 4% is really an important factor to keep in mind.

Suzanne Foster: Which brings me to our diabetes health segment. We cannot deliver enterprise level organic growth that meets or exceeds market growth if our diabetes health segment is underperforming. I'm pleased to say the diabetes health team has continued to execute on its plan to enhance our processes, and we continue to see positive signs that the steps they've taken are yielding results. Notably, we had a second consecutive quarter of sequential improvement in new starts, and our resupply attrition rate was the best we have experienced in two years, amid a period of significant supply chain disruption.

Speaker Change: So that will get just for $18 eight at the midpoint, which is about $150 million.

Speaker Change: That said the $8 million that we called out.

Speaker Change: So I think for two Q I guess is.

Speaker Change: The change from purchase to rental revenue I mean, that's all bottom line impact.

Speaker Change: Is that what I heard right and if so as you think about sort of the back half ramp on the new implied guidance just for how how do we start to transition from <unk> and how do we get into sort of the back half of the year ramps. Thank you.

Speaker Change: And so thats.

Speaker Change: Pushing a point.

Speaker Change: Adjusted EBITDA compression year over year, and then secondly, we're going to we're going to continue to see lower diabetes revenue and so that's impacting us there to the tune of a couple of million dollars as well.

Speaker Change: Sure.

Speaker Change: So I guess I'd say firstly that.

Speaker Change: Keep in mind that Q2 of last year.

Speaker Change: Although we are feeling pretty hopeful about above.

Speaker Change: Included.

Speaker Change: About the future diabetes.

Speaker Change: Almost almost $30 million of revenue.

Speaker Change: In the short term as we think about the rest of the year. There is an implied ramp in our guidance now a lot of that ramp.

Suzanne Foster: I would like to take a moment to commend the entire diabetes team for ensuring that our patients continue to receive their diabetes supplies during this disruption and for exceeding our internal forecast. It's still early, but the dedication of our diabetes health team and the progress they've made are increasing our confidence that the segment will return to growth, removing a key obstacle to delivering accelerated, consistent, and sustainable organic growth across our overall business.

Speaker Change: That was either disposed or.

Speaker Change: Yeah.

Speaker Change: Is the $30 million of top and bottom line impact in our sleep business that we've talked about the change of a purchase to rental revenue and all of that is bottom line impact.

Speaker Change: <unk> was not impacted by the shift of purchase to rental revenue.

Speaker Change: So I think the underlying growth rate of 3% to 4% is really an important factor to keep in mind now that said the $8 million that we called out of the change from purchase to rental revenue I mean, that's all bottom line impact.

Speaker Change: We said that about half of that we'd experienced in Q1, and then that would compress in Q2 to the tune of about $8 million in Q3.

Speaker Change: It will come down quite a bit further and run out in Q4 so.

Speaker Change: And so thats <unk>.

Speaker Change: Pushing our point.

Speaker Change: That is something that is just unusual.

Speaker Change: Adjusted EBITDA compression year over year, and then secondly, we're going to we're going to continue to see lower diabetes revenue and so thats impacting us there to the tune of a couple of million dollars as well.

Suzanne Foster: Moving on to another core focus, we continue to strengthen our financial position. During Q1, we reduced our debt balance by another $25 million, bringing total debt repayment to $195 million over the last five quarters.

Speaker Change: In the year, but it is contributing to a second half ramp.

Speaker Change: Alright, and then the last quick one here.

Speaker Change: Refresh us on the Adobe protocols sort of are there any any products you guys sell that don't fit within their own protocols from a tariff perspective. Thank you.

Speaker Change: So we're feeling pretty hopeful about about.

Speaker Change: About the future of diabetes.

Speaker Change: In the short term as we think about the rest of the year that there is an implied ramp in our guidance now a lot of that ramp.

Suzanne Foster: Further, we continue to exit non-core product lines, generating additional proceeds that are earmarked for debt reduction, while enabling us to sharpen our strategic focus. Specifically, in May, we completed a transaction to sell certain incontinence assets to a third party and we signed a definitive agreement to sell certain infusion assets to a third party.

Speaker Change: Yeah sure so.

Speaker Change: It gets pretty nuanced.

Speaker Change: Their IV protocol in the definition of.

Speaker Change: Is the $30 million of top and bottom line impact in our sleep business that we've talked about the change of purchase to rental revenue and all of that is bottom line impact.

Speaker Change: Products intended to treat.

Speaker Change: The chronically disabled.

Speaker Change: And so many products I mean, you've heard from some of our public manufacturers, whether it be <unk> or sleep devices as well of oxygen and ventilation.

Speaker Change: We said that about half of that we'd experienced in Q1, and then that would compress in Q2 to the tune of about $8 million in Q3.

Speaker Change: It will come down quite a bit further and run out in Q4.

Speaker Change: As well as <unk> I mean, many of these products are.

Suzanne Foster: Before I close, let me take a moment to address the concerns surrounding the potential impact of international trade policy on operators in the healthcare industry, including Adapthealth. Clearly, the situation is fluid, but based on what we know today, we believe our exposure to tariffs is contained and the impact on our business is likely to be very manageable. We have consulted with each of our major manufacturing partners to verify their production locations and to gather their perspectives on the potential impact of tariffs. There have been no indications from these discussions that tariffs are likely to pose a significant issue, and several of our large partners have referenced tariff exemptions in their public remarks.

Speaker Change: Our part of that our IP protocol and are excluded from tariffs.

That is something that is just unusual.

Speaker Change: In the year, but it is contributing to a second half ramp.

Speaker Change: <unk>.

Speaker Change: As it relates to our diabetes products again, the nuances in the treatment of diseases as opposed to.

Speaker Change: Alright, and then the last quick one here.

Speaker Change: Refresh us on the aerobic protocols and sort of are there any any products you guys sell that don't fit within their own protocols from a tariff perspective. Thank you.

Speaker Change: Being more diagnostic in nature, and so when a CGM use with the pump as an example, it that's really part of that for delivery system to treat diabetes for CGM that are not used with pumps I mean, our understanding is that that's more of a diagnostic and therapeutic devices.

Speaker Change: Yeah sure so.

Speaker Change: It gets pretty nuanced.

Speaker Change: Their IV protocol in the definition of.

Speaker Change: Products intended to treat.

Speaker Change: Is not accounted for in our protocol however, both of our public CGM manufacturers.

Speaker Change: The chronically disabled.

Speaker Change: And so many products I mean, you've heard from some of our public manufacturers, whether it be <unk> or sleep devices as well as oxygen and ventilation.

Speaker Change: We have reported here over the last two weeks or so and Bose.

Speaker Change: Talked about significant manufacturing onshore here in the United States and very manageable tariff expectations on there and we've had open dialogue with all of these manufacturers and we're feeling very comfortable with no tariff impact in our guidance for 'twenty five.

Speaker Change: As well as <unk> I mean, many of these products are.

Suzanne Foster: To date, we have not experienced any tariff surcharges, nor have we initiated any contract renegotiations because of tariffs. Given our current inventory levels, we do not anticipate any potential impact from tariffs to materialize before the second half of the year at the earliest. Given these considerations and our current assessment of the risks, we do not currently believe it is necessary to adjust our 2025 guidance for any potential impact of tariff.

Speaker Change: Our part of our IP protocol and are excluded from tariffs.

Speaker Change: <unk>.

Speaker Change: As it relates to our diabetes products again, the nuances in the treatment of diseases as opposed to.

Speaker Change: Great. Thanks, so much.

Eric Coldwell: Thank you and next we'll go to Eric Coldwell with Baird. Please go ahead.

Speaker Change: Being more diagnostic in nature, and so cgm's used with a pump as an example, that's really part of that for delivery system to treat diabetes for CGM that are not used with pumps I mean, our understanding is that thats more of a diagnostic and therapeutic devices.

Eric Coldwell: Thanks, I have a couple and I'll I'll just start with following on that last line of the Q&A.

Eric Coldwell: At a conference in March you highlighted the 10 million potential AOI impact in fiscal 'twenty six for tariffs and then of course Liberation day head and that might have changed the outlook. There's been a lot of moving pieces, but I'm curious if you have any updated thoughts on what you think your exposure maybe in fiscal 'twenty six.

Speaker Change: Is not accounted for in our protocol however, both of our public CGM manufacturers.

Suzanne Foster: In summary, the team delivered another quarter of solid results. We continue to improve our financial position by paying off our debt. The organization is laser focused on driving service excellence at scale to deliver consistent, sustainable, organic growth. And our diabetes business demonstrated further signs of improvement. While we are monitoring the risks of government policy, we believe these risks will be manageable and moreover, we won't let them distract us from the critical work we are doing to organize, execute, and improve day after day and quarter after quarter.

Speaker Change: We have reported here over the last two weeks or so and both of them.

Speaker Change: Talked about significant manufacturing onshore here in United States, and very manageable tariff expectations on there and we've had open dialogue with all of these manufacturers and we're feeling very comfortable with no tariff impact in our guidance for 'twenty five.

Speaker Change: And then I'll follow up with one or two others. Thanks.

Speaker Change: Yeah Eric.

Eric Coldwell: No.

Speaker Change: In a decision to change that number today I mean, if anything we could probably take it down.

Speaker Change: Based on the clarification of Nairobi and who's covered.

Speaker Change: Great. Thanks, so much.

Speaker Change: There were many manufacturers that receive letters from homeland security and customs.

Speaker Change: Thank you and next we'll go to Eric Coldwell with Baird. Please go ahead.

Eric Coldwell: Thanks, I have a couple and I'll I'll just start with following on that last line of the Q&A.

Speaker Change: That.

Jason Clemens: With that, I will turn it over to Jason. Thank you, Suzanne. And thank you, everyone, for joining our call. Today, I'm going to cover our first quarter 2025 results. I'll follow that with a review of our balance sheet and our plans for capital allocation before finishing with guidance for 2025.

Speaker Change: Clarified their Nairobi classification, a lot of those hit in early April which is after we made the comments in March.

Eric Coldwell: At a conference in March you highlighted the 10 million potential AOI impact in fiscal 'twenty six for tariffs and then of course Liberation day head and that might have changed the outlook. There's been a lot of moving pieces, but I'm curious if you have any updated thoughts on what you think your exposure maybe in fiscal 'twenty six.

Speaker Change: So again I don't know.

Speaker Change: I don't know, we'd say much about 26 at this point other than we're feeling a little better than we did back when we made those comments.

Speaker Change: That sounds great I'm happy to hear it on the the next question is did I hear you say that this quarter's revenue also faced a year over year headwind from selling days.

Jason Clemens: For first quarter 2025, net revenue of $777.9 million declined 1.8% versus the prior year quarter, which had one additional business day. Net revenue was $13.1 million, above the midpoint of our Q1 guidance range, driven by the combination of strong volumes in our respiratory health segment and stronger than anticipated diabetes health segment revenue. more than offsetting sleep health segment revenues that fell modestly shy of our expectations. First quarter sleep health segment net revenue decreased 2.8% versus the prior year quarter to $316.4 million. We previously referenced a $30 million full-year headwind related to the non-cash impact of changes in the mix of purchase revenue versus rental revenue.

Speaker Change: And then I'll follow up with one or two others. Thanks.

Eric Coldwell: Yeah Eric.

Speaker Change: Don't know that.

Speaker Change: In a decision to change that number today I mean, if anything we could probably take it down.

Speaker Change: Yes, correct.

Speaker Change: Got it.

Speaker Change: Based on the clarification of Nairobi and who's covered.

Speaker Change: And we had that we had that pegged at about $8 million.

Speaker Change: There were many manufacturers that receive letters from homeland security and customs.

Speaker Change: The rental revenue, we earn as well as the <unk> for <unk>.

Speaker Change: Capitation revenue isn't really going to be impacted by number of days in the month. It's the sales revenue. So if you take roughly half of $1 billion of sales revenue in the first quarter.

Speaker Change: That.

Speaker Change: Clarified their Nairobi classification, a lot of those hit in early April which is after we made the comments in March.

Speaker Change: Therefore, the impact is about $8 million.

Speaker Change: So again I don't know.

Speaker Change: I don't know that we'd say much about 26 at this point other than we're feeling a little better than we did back when we made those comments.

Speaker Change: Perfect and are there any other selling day comps to be aware of in.

Speaker Change: Fiscal year to next.

Speaker Change: That sounds great happy to hear it on the the next question is did I hear you say that this quarter's revenue also faced a year over year headwind from selling days.

Speaker Change: The next three quarters.

Speaker Change: Not from a day perspective, Theres, a little in and out in terms of when weekend falling when holidays fall, but nothing that we'd call out where it.

Jason Clemens: As anticipated, approximately half of that impact came in the first quarter. Sleep Health new setups, which are typically seasonally lower in the first quarter of the year, were approximately $113,000, slightly behind our expectations. Despite the lighter new setups, our sleep health census grew to 1.68 million patients of another 19,000 sequentially. Our Q1 2025 CPAP survey indicates that the percentage of respondents using GOP1s to manage diabetes or weight loss was up slightly to 15.7% in Q1 2025 from 15.3% in Q4 2024. Our survey continues to show an immaterial difference in adherence and resupply ordering patterns between GLP-1 patients and non-GLP-1 patients.

Speaker Change: Perfect. Thanks, so much I'll jump back in if needed.

Speaker Change: Thank you and next we'll go to Kevin Kelly Endo with UBS. Please go ahead.

Speaker Change: Yes, correct.

Speaker Change: Arthur.

Speaker Change: And we had that we had that pegged at about $8 million.

Speaker Change: Good morning, Thanks for taking my question.

Speaker Change: There was a bit of a step up in capex in the quarter is that related to tariffs or was that you now have machines expected ramp.

Speaker Change: The rental revenue, we earned as well as the <unk> or per capita revenue isn't really going to be impacted by number of days in the month. It's the sales revenue. So if you take roughly half a billion of sales revenue in the first quarter.

Speaker Change: It's respiratory Kevin.

Speaker Change: We had outperformance in respiratory on account of increased sales during a heavy flu season, and then we've got those patients that will continue on census, if they've been diagnosed with underlying COPD or other advanced respiratory conditions.

Speaker Change: That full day impact is about $8 million.

Speaker Change: Perfect and are there any other selling day comps to be aware of in the fiscal year. The next.

Speaker Change: It's really a function of profile.

Speaker Change: The next three quarters.

Speaker Change: Okay.

Speaker Change: It's helpful to know on the sleep side the numbers were disappointing I hear your comments about it.

Speaker Change: Not from a day perspective, Theres, a little in and out in terms of when weekend falling when holidays fall, but nothing that we'd call out for it.

Speaker Change: Perfect. Thanks, so much I'll jump back in if needed.

Jason Clemens: First quarter respiratory health segment net revenue increased 3.3% versus the prior year quarter to $165.5 million. We saw stronger-than-anticipated oxygen news setups fueled by stronger field sales during an especially severe flu season. Our oxygen census of 325,000 patients was a new first quarter record.

Speaker Change: Is there any change in the competitive dynamics. There do you think you lost market share or anything like that like what's happening in the sleep market right now.

Speaker Change: Thank you and next we'll go to Kevin Kelly Endo with UBS. Please go ahead.

Speaker Change: Good morning, Thanks for taking my question.

Speaker Change: Broadly and how are you positioned within it relative to how you were six months ago or a year ago.

Speaker Change: There was a bit of a step up in capex in the quarter.

Speaker Change: And equity related to tariffs or was that a machine.

Speaker Change: Yes, I'd say in a handful of states.

Speaker Change: We need to do a better job.

Speaker Change: It ramped.

Speaker Change: It's really as simple as that it's not the big picture that's happening.

Speaker Change: It's respiratory Kevin we've had outperformance in respiratory on account of increased sales during a heavy flu season, and then we've got those patients that will continue on census, if they've been diagnosed with underlying COPD or other advanced respiratory conditions.

Jason Clemens: First quarter, diabetes health segment net revenue declined 8.0% versus the prior year quarter to $138.8 million. While revenue contracted, as Suzanne mentioned, we continue to see signs the segment is recovering. New starts improved sequentially for the second consecutive quarter. and our first quarter nutrition rate was the lowest we experienced in two years. For the wellness at home segment, which includes all other product categories, first quarter net revenue increased 0.7% over the prior year quarter to $157.2 million, as growth in volumes offset revenue disposed with the sale of certain custom rehab assets in the third quarter of 2024.

Speaker Change: It's really within a handful of states competitors are getting an edge on us we need to be faster, we need to sell a little more and more through and conversion.

Speaker Change: We got detailed plans to address that.

Speaker Change: It's really a function of profile.

Speaker Change: Fantastic Thanks, Scott.

Speaker Change: Okay. That's helpful to know on the sleep side the numbers were disappointing.

Ben Hendrix: Next we'll go to Ben Hendrix with RBC capital markets. Please go ahead.

Speaker Change: Here Youre your comments about it but is there any change in the competitive dynamics. There do you think you lost market share or anything like that like what's happening in the fleet market right now.

Ben Hendrix: Yes. Thank you very much just to follow up on the fleet question are there opportunities in some of those troubled market too.

Ben Hendrix: To deploy capital and acquire competitors.

Speaker Change: Broadly and how are you positioned within it relative to how you were six months ago or a year ago.

Ben Hendrix: It's maybe kind of head off some of that.

Ben Hendrix: Some of those headwinds and as competitive pressures.

Speaker Change: Yes, I'd say in a handful of states.

Speaker Change: We need to do a better job.

Ben Hendrix: Yes, Ben.

Speaker Change: Really as simple as that it's not the big picture that's happening.

Ben Hendrix: I guess, we we qualify that as an astute question.

Jason Clemens: Turning to profitability, first quarter 2025 adjusted EBITDA was $127.9 million, slightly above the midpoint of our Q1 guidance range. adjusted even a margin of 16.4%, declined from 20.0% in Q1 2024, but was within our Q1 guidance range. This reflected the combination of lower revenue and gross margins in our diabetes health segment and the anticipated impact of changes in the mix of purchase revenue versus rental revenue in our sleep health segment, all of which fell to the bottom line.

Speaker Change: It's really within a handful of states competitors are getting an edge on us.

Speaker Change: We do have we do have some M&A under LOI.

Speaker Change: We need to be faster, we need to sell a little more and put a little more through and conversion. We got we got detailed plans to address that.

Speaker Change: Again, if we're if we're able to close those deals we'll talk about it when we when we execute on that.

Scott: Fantastic Thanks, Scott.

Speaker Change: And if we close those deals we'll update guidance accordingly.

Speaker Change: Next we'll go to Ben Hendrix with RBC capital markets. Please go ahead.

Speaker Change: But certainly in the markets, where we are.

Falling a little short on sleep as well as all other markets I mean, there's plenty of opportunity out there, but as we said there is no change to our capital allocation priorities, we're going to stay focused on some modest tuck in activity. So you would expect to continue to see that throughout the course of the year.

Ben Hendrix: Yes. Thank you very much just to follow up on the fleet question are there opportunities in some of those troubled market too.

Speaker Change: To deploy capital and acquire competitors.

Ben Hendrix: It's maybe kind of head off some of that.

Jason Clemens: Moving to Cashflow, Balance Sheet, and Capital Allocation. For Q1 2025, cash flow from operations was $95.5 million. CapEx of $95.6 million was 12.3% of revenue, in line with our expectations. Free cash flow was negative $0.1 million, as certain cash collections anticipated in the first quarter were pushed into the second quarter. Unrestricted cash stood at $53.7 million at the end of the quarter. As of quarter end 2025, first quarter, net debt stood at $1.96 billion, and our net leverage ratio was 2.98 times, up from 2.79 times at the end of last quarter as a result of lower adjusted EBITDA.

Speaker Change: Great. Thanks for that and just a quick follow up also on the tariff commentary in your conversations with.

Speaker Change: Those headwinds and as competitive pressures.

Ben Hendrix: Yes, Ben.

Speaker Change: With some of your suppliers.

Ben Hendrix: Again, we qualify that as an astute question.

Speaker Change: Are you or are they doing anything preemptively in order to kind of pull forward any kind of any.

Ben Hendrix: We do have we do have some M&A under LOI.

Speaker Change: Inventory to kind of preemptively manage than you had expected headwinds or is it just kind of business as usual from a supply perspective. Thanks.

Ben Hendrix: Again, if we're if we're able to close those deals we'll talk about it when we when we execute on that.

Ben Hendrix: And if we close on those deals we'll update guidance accordingly.

Speaker Change: Business as usual.

Ben Hendrix: But certainly in the markets, where we are.

Speaker Change: Thank you.

Mathew Blackman: Next we'll go to Mathew Blackman with Stifel. Please go ahead.

Ben Hendrix: Falling a little short on sleep as well as all other markets I mean, there's plenty of opportunity out there, but as we said there is no change to our capital allocation priorities, we're going to stay focused on some modest tuck in activity. So you would expect to continue to see that throughout the course of the year.

Mathew Blackman: Hey, guys you had a really strong quarter in diabetes I was just wondering where exactly the strength is coming from you guys talk to a bit of pump growth, but curious on the CGM side. If you did see any uptick in basal adoption and going forward. What your expectations are for the supply environment in that business given we heard.

Jason Clemens: We've been using free cash to reduce debt, and we've reduced our TLA balance by $25 million in Q1 2025. As Suzanne mentioned, in early May, we completed a transaction to sell certain incontinence assets to a third party and we signed a definitive agreement to sell certain infusion assets to a third party. between these sales, which will generate further proceeds for debt reduction and our expectations for pre-cash flow generation in 2025, we are steadily tracking toward achieving our target of 2.5 times net leverage.

Speaker Change: Great. Thanks for that and just a quick follow up also on the tariff commentary in your conversations with.

Ben Hendrix: With some of your suppliers.

Some of.

Ben Hendrix: Are you or are they doing anything preemptively in order to kind of pull forward any kind of any.

Speaker Change: <unk> comments earlier is there any season thanks.

Mathew Blackman: Hey, co insured.

Mathew Blackman: Pumps I mean.

Ben Hendrix: Inventory to kind of preemptively manage any had any expected headwinds or is it just kind of business as usual from a supply perspective. Thanks.

Mathew Blackman: We call that as a pretty small part of our diabetes business, but we did see some growth there.

Mathew Blackman: So that helped to the tune of a couple of million dollars.

Mathew Blackman: Within the quarter regarding your basal question.

Ben Hendrix: Business as usual.

Ben Hendrix: Thank you.

Mathew Blackman: We're not seeing any big bend in the trends.

Speaker Change: Next we'll go to Mathew Blackman with Stifel. Please go ahead.

Jason Clemens: Our capital allocation priorities remain unchanged. Our highest priorities are investing to accelerate organic growth, and reducing our debt to further strengthen our financial position, followed by strategic acquisitions of home medical equipment providers to round out our geographic footprint and increase patient access.

Mathew Blackman: Basil.

Speaker Change: Either setups or utilization.

Mathew Blackman: Hey, guys you had a really strong quarter in diabetes I was just wondering where exactly the strength is coming from you guys talk to a bit of pump growth, but curious on the CGM side, if you see any uptick in basal adoption and going forward what your.

Speaker Change: In terms of kind of what we've focused on and where we're pressing our energy I mean, Susan may weigh in with a few comments there.

Speaker Change: In terms of the diabetes team I mean, it just goes back to good old fashion leadership and execution I think we have a really good team in place that has.

Jason Clemens: Turning to guidance, we are reducing our full year revenue expectations by $40 million and our full year adjusted EBITDA expectations by $5 million to reflect the disposition of certain incontinence assets in early May. There are no other changes to our guidance. As Suzanne discussed earlier, given our current understanding of tariff policy, and based on the indications provided by our manufacturers, we expect that any impact of tariffs on our 2025 results is likely to be manageable, and we do not currently believe it is necessary to adjust our full year guidance for tariffs. For full year 2025, we now expect revenue of $3.18 billion to $3.32 billion and adjusted EBITDA of $665 million to $705 million.

Speaker Change: <unk> are for the supply environment in that business given we heard.

Speaker Change: Some of.

Speaker Change: <unk> comments earlier is there any season thanks.

Speaker Change: Doug and understood the business and has gotten things organized and theyre executing much better than they were a few quarters ago. We're also appropriately leveraging technology, where it matters, we still have human in the loop, but we're we're definitely deploying technology that is helping and then in terms of our commercial team.

Collyn: Hey, Collyn sure.

Speaker Change: Pumps I mean.

Speaker Change: Yes.

Speaker Change: We call that is a pretty small part of our diabetes business, but we did see some growth there.

Speaker Change: So that helped to the tune of a couple of million dollars.

Speaker Change: Within the quarter regarding your basal question no.

Speaker Change: We're not seeing any big bend in the trends.

Speaker Change: I've just been out there and doing a much better job with with better focus not only at the diabetes sales team, but they're leveraging our entire HMA salesforce. So it's just more people out there talking about when adapted our approach to patient service.

Speaker Change: Basil.

Speaker Change: Either setups or utilization.

Speaker Change: In terms of kind of what we've focused on and where we're pressing our energy I mean, Susan may weigh in with a few comments there.

Speaker Change: Got you. Thank you.

Speaker Change: In terms of the diabetes team I mean, it just goes back ticket old fashion leadership and execution I think we have a really good team in place that has.

Speaker Change: Thank you and next we'll go to Whit Mayo with Leerink partners. Please go ahead.

Jason Clemens: Our revised revenue and adjusted EBITDA guidance implies an adjusted EBITDA margin of approximately 21% in line with our prior expectations. Our free cash flow guidance range remains unchanged at $180 million to $220 million.

Whit Mayo: Hey, Thanks, Good morning, Suzanne just on that topic, one held our one adaptive.

Speaker Change: Dug in and understood the business and has gotten things organized and theyre executing much better than they were a few quarters ago. We're also appropriately leveraging technology, where it matters, we still have human in the loop, but we're we're definitely deploying technology that is helping and then in terms of our commercial team.

Whit Mayo: The various initiatives you have any new elements of that strategy you'd care to share as you think about 2025.

Jason Clemens: For Q2 2025, we expect revenue to be largely flat versus Q2 2024 revenue of $806 million. Notably, the prior year quarter included approximately $22 million of revenue from certain disposed assets, as well as approximately $8 million from the non-cash impact of the revenue mix shift from purchases to rental in our sleep health segment. We expect an adjusted EBITDA margin of 18.3% to 19.3%, down from 20.5% in Q2 2024, reflecting the flow through to the bottom line of the items just discussed and lower revenues in diabetes health. We continue to expect to generate approximately a third of our full-year free cash flow in the first half.

Whit Mayo: Any improvement we may see in operations as a result of that focus.

Duane: Yes, Thanks Duane.

Whit Mayo: So in terms of.

Speaker Change: They have just been out there and doing a much better job with better focus not only at the diabetes sales team, but they're leveraging our entire sales force. So it's just more people out there talking about adapting our approach to patient service.

Whit Mayo: And at the high level here for anyone that's new to the story is that fair.

Whit Mayo: Its organization came together.

Whit Mayo: As a result of one hundreds of acquisitions and so we clearly the strategy of driving size really was successful over the last couple of years and the entire leadership team now is focused on delivering scale.

Speaker Change: Got you. Thank you.

Whit Mayo: Thank you and next we'll go to Whit Mayo with Leerink partners. Please go ahead.

Whit Mayo: So that starts with the most obvious stuff.

Speaker Change: Brandon in terms of who we are so getting out there is adapt health and not 100 different names we have a lot of.

Whit Mayo: Hey, Thanks, Good morning, Suzanne just on that topic, one held our one adapt and just the various initiatives you have any new elements of that strategy you care to share as you think about 2025.

Speaker Change: Legal and tax work to make sure that our entity structure is simplified that will obviously reduce cost in operating the business. So there is there's a lot of internal organization.

Jason Clemens: In summary, we are on track to achieve our Revenue Adjusted EBITDA and Free Cash Flow Guidance for 2025, and we are making good progress on our balance sheet. As we enhance operational effectiveness and advance key initiatives, we are confident that we are building momentum in the business.

Whit Mayo: Any improvement we may see in operations as a result of.

Speaker Change: In terms of going forward into 2000, 22025 and 2026, we're looking at the business about how do we.

Whit Mayo: That focus.

Speaker Change: Yes, Thanks Duane.

Whit Mayo: So in terms of warning that the high level here for anyone that's new to the story is that.

Speaker Change: How do we reach the most amount of patients so our commercial team really leveraging each other.

Unknown Executive: That brings me to the end of my remarks. Operator, would you kindly open up the call for questions? Thank you very much. At this time, if you would like to ask a question, please press the star one on your telephone keypad. You may remove yourself from the queue at any time by pressing star two. And once again, that is star one.

Speaker Change: This organization came together.

Speaker Change: Going to our big accounts, including me.

Speaker Change: As a result of one hundreds of acquisitions and so we clearly the strategy of driving.

Speaker Change: Managed care and big health systems, showing our full portfolio and capabilities.

Speaker Change: It's really with successful over the last couple of years and the entire leadership team now is focused on delivering scale and.

Speaker Change: That is getting traction and so we believe that will deliver additional growth in the back half and especially going into 2026.

Unknown Executive: We'll take our first question from Brian Tranquillet with Jeffries. Please go ahead. Good morning.

Speaker Change: No that's helpful.

Megan Holton: This is Megan Holton for Brian. Thank you for taking my question. Can you guys just provide some additional color in terms of improvement that you're seeing in the diabetes business? You mentioned you were going to potentially see modest growth in the pumps. Did that come through? And then some signs of improvement in CGM?

Speaker Change: Maybe just.

Speaker Change: Spend a second on Humana, and just sort of how that's tracking versus your.

Speaker Change: Assumptions and.

Speaker Change: It felt like you were referencing maybe.

Speaker Change: This level of confidence on expanding some new payer relationships. So just wanted to unpack that a little bit more.

Megan Holton: And then just a quick follow up to your comments on guidance. Is the change in guidance only for the incontinence asset sale and not the infusion asset sale? Thank you.

Speaker Change: Sure So our humana relationship in the B.

Speaker Change: Performance is as expected continues to be a bright spot for us.

Jason Clemens: Hey, Megan, this is Jason. Good morning. I'll take the second one first. Yes, the guidance change is exclusively for the disposal of certain incontinence assets. You know, although we expect to close the infusion deal in the second quarter, we're going to withhold any, any comments on that until the deal is closed, similar to our previous policy on all M&A and disposition.

Speaker Change: We're very very happy with that relationship and our performance under that contract and yes. We are like I said last quarter in this quarter our pipeline of additional.

Speaker Change: <unk>.

Speaker Change: Opportunities is growing and not only growing but moving down the pipeline.

Speaker Change: So we are optimistic that we're going to continue to move in that direction. We think it's the right thing for patient service and for overall healthcare economics. So.

Jason Clemens: Regarding diabetes, you asked about pumps. We did see positive movement in our pump business. So that was great news, showing some growth over the first quarter of 2024. And in addition, within CGMs, we spoke of a second sequential growth quarter in new starts, which is very good news.

Speaker Change: Making great progress we expect to have.

Speaker Change: <unk>.

Speaker Change: Continued good news on that front.

Speaker Change: Thanks.

Speaker Change: And our last question comes from John <unk> with Canaccord Genuity. Please go ahead.

Speaker Change: Alright, yes, John <unk> on for Richard close Thanks for the question.

Jason Clemens: You know, as we start stringing those together, and as we manage our retention rates at record levels, we're confident that, you know, the turnaround of diabetes is happening. Thank you.

Speaker Change: Just one quick one from me.

Speaker Change: So I got the incontinence asset so that's the only thing thats factored into guidance as far as change just from the divestitures can you just give us a sense of you've called out a $100 million annualized revenue last quarter for things to be divested.

Peter Chickering: We'll go next to Peter Chickering with Deutsche Bank. Please go ahead. Hey, thank you guys.

Speaker Change: So I guess what percentage of that is the incontinence asset and is there anything still left to be considered or to be divested. This year or is it really just in Ghana assets and the infusion.

Peter Chickering: So first question here is looking at the new starts to sleep, you know, I guess you start digging more into sort of what you're seeing there. Is this a market issue? Or is this a market share issue? Are you guys losing share?

Speaker Change: Hey, John This is Jason So if you annualize the guide down for the common sale when you get to about $60 million. So I think that answers your question on the approximate revenues.

Jason Clemens: And if so, is there anything that you can do to pivot in order to fix those issues? Sure, Peter. Good morning. So, firstly, I mean, starts were off a couple thousand, so we're not talking huge numbers. However, we thought it was appropriate to call it out being, you know, it's our biggest business, obviously. You know, this is not some kind of exogenous factor. We're quite confident in that via various data points.

Speaker Change: Again, if we get to the point that we're able to sell.

Speaker Change: Certain home infusion assets, we'll update the full guide accordingly.

Speaker Change: In terms of are there other assets. We're working on the answer is no I mean, certainly we'll continue to manage the portfolio as you would expect.

Jason Clemens: We are in certain geographies losing. You know, we need to set up faster. We need to do better in these certain geographies. We've got detailed plans and our commercial team as well as our ops team to close that gap. And, you know, we're still very confident in the full year guidance that we put out last quarter. So, you know, generally going according to plan, I think in a portfolio, some assets are up a little, some are down a little, but we feel very good about the full year.

Speaker Change: Investing to grow margins everywhere, we can and investing to grow topline everywhere, we can but for now we feel after we get through these <unk>.

Speaker Change: Physicians that we've got a great Tam in each of the four segments that we operate in and a lot of opportunity in front of us both organically and Inorganically.

Speaker Change: Great. Thank you.

Speaker Change: And that concludes our question and answer session and concludes today's program. We thank you for your participation you may disconnect at any time.

Peter Chickering: Okay, great. And then the follow up is just all the TQ guidance, just make sure that I heard that right. You're talking about flat revenue year over year margins of 18.3 to 19.3. So that would get to 18.8 at the midpoint, which is about 150 plus million dollars of EBITDA, I think for TQ. I guess, is that what I heard right?

Speaker Change: Hello.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Jason Clemens: And if so, as you think about sort of the back half ramp on the new applied guidance, just for how, how do we sort of transition from one Q to Q? And how do we get into sort of the back half of your ramp? Sure. You know, so I guess I'd say, firstly, that, you know, keep in mind that Q2 of last year included, you know, almost almost $30 million of revenue that was either disposed or, you know, was not impacted by the shift of purchase to rental revenue. And so I think the underlying growth rate of, you know, 3% to 4% is really an important fact to keep in mind.

Speaker Change: Uh huh.

Speaker Change: Hum.

Speaker Change: Yeah.

Jason Clemens: Now, that said, the $8 million that we called out of the change from purchase to rental revenue, I mean, that's all bottom line impact. And so that's, you know, pushing a point of adjusted EBITDA compression year over year. And then secondly, we're going to continue to see lower diabetes revenue. And so that's impacting us there to the tune of a couple of million dollars as well.

Jason Clemens: Although we're feeling pretty hopeful about the future diabetes in the short term. As we think about the rest of the year, there is an implied ramp in our guidance. Now, a lot of that ramp is the $30 million of top and bottom line impact in our sleep business that we talked about, the change of purchase to rental revenue, and all that is bottom line impact. You know, we said that about half of that we'd experience in Q1. And then that would compress in Q2 to the tune of about $8 million. Q3, you know, it'll come down quite a bit further and run out in Q4.

Jason Clemens: So like, you know, that is something that is just unusual in the year, but it is contributing to a second half ramp.

Jason Clemens: All right, and then the last quick one here, can you just refresh us on the Nairobi protocols and sort of are there any products you guys sell that don't fit within Nairobi protocols from a tariff perspective? Thank you. Yeah, sure. So, you know, it gets pretty nuanced. You know, the Nirobi protocol and the definition of, you know, products intended to treat the chronically disabled. And so, many products, I mean, you've heard from some of our public manufacturers, whether it be CPAPs or sleep devices, as well as oxygen and ventilation, as well as DME. I mean, many of these products are are part of the Nirobi protocol and are excluded from tariffs.

Jason Clemens: You know, as it relates to our diabetes products, again, the nuances in the treatment of diseases, as opposed to being more diagnostic in nature. And so, you know, when a CGM is used with a pump, as an example, you know, that's really part of that full delivery system to treat diabetes. For CGMs that are not used with pumps, I mean, our understanding is that that's more of a diagnostic or therapeutic device that is not accounted for in the Nirobi protocol. However, both of our public CGM manufacturers have reported here over the last two weeks or so.

Jason Clemens: And, you know, both have talked about significant manufacturing onshore here in the United States, and very manageable tariff expectations on their end. We've had open dialogue with all these manufacturers, and we're feeling very comfortable with no tariff impact in our guidance for 2025. Great. Thanks so much.

Eric Coldwell: Thank you and next we'll go to Eric Coldwell with Baird. Please go ahead. Thanks, I have a have a couple and I'll, I'll just start with following on that last line of Q&A.

Jason Clemens: At a conference in March, you highlighted the 10 million potential AOI impact in fiscal 26 for tariffs, and then, of course, Liberation Day ahead, and that might have changed the outlook. There's been a lot of moving pieces, but I'm curious if you have any updated thoughts on what you think your exposure may be in fiscal 26. And then I'll follow up with one or two others. Thanks.

Jason Clemens: Yeah, Eric, you know, I don't know that we're in a position to change that number today. I mean, if anything, it's, you know, we should probably take it down based on the clarification of Nairobi and who's covered. There were many manufacturers that received letters from Homeland Security and Customs that clarified their Nairobi classification. A lot of those hit in early April, which is after we made the comments in March. So, you know, again, I don't know that we'd say much about 26 at this point, other than we're feeling a little better than we did back when we made those comments.

Unknown Executive: That sounds great. Happy to hear it.

Jason Clemens: On the next question is, did I hear you say that this quarter's revenue also faced a year-over-year headwind from selling days? Yes, correct. And are there any other... Oh, and we had that, we had that pegged at about $8 million. You know, the the rental revenue we earn as well as the PMPM for per capita revenue isn't really going to be impacted by number of days in the month. It's the sales revenue. So if you take roughly half a billion of sales revenue in the first quarter, you know, that full day impact is about 8 million.

Jason Clemens: Perfect.

Unknown Executive: And are there any other selling day comps to be aware of in the fiscal year, the next, the next three quarters? Not from a day perspective, there's a little in and out in terms of when weekends fall and when holidays fall, but but nothing that we call out for it. Perfect. Thanks so much. I'll jump back in if needed. Thank you.

Kevin Caliendo: And next we'll go to Kevin Caliendo with UBS. Please go ahead. Good morning. Thanks for taking my question. Um, there was a bit of a step up in CapEx in the quarter. Is that in any way related to tariffs? Or was that you buying machines and expected ramp?

Jason Clemens: It's respiratory, Kevin, so we've had outperformance in respiratory on account of increased sales during a heavy flu season, and then we've got those patients that will continue on census if they've been diagnosed with underlying C or BD or other advanced respiratory conditions, so it's really a function of profile. Okay. That's helpful to know.

Jason Clemens: On the sleep side, the numbers were disappointing. I hear your comments about it. Is there any change in the competitive dynamics there? Do you think you lost market share or anything like that?

Jason Clemens: What's happening in the sleep market right now broadly, and how are you positioned within it relative to how you were six months ago or a year ago? Yeah, I'd say in a handful of states, you know, we need we need to do a little better job. I mean, it's really as simple as that. It's not the big picture that's happening. You know, it's really within a handful of states, competitors are getting an edge on us, we need to be faster, we need to sell a little more and pull a little more through on conversion.

Unknown Executive: We got we got detailed plans to address that. Fantastic. Thanks, guys.

Ben Hendrix: Next, we'll go to Ben Hendrix with RBC Capital Markets. Please go ahead. Yes, thank you very much.

Ben Hendrix: Just to follow up on the sleep question, are there opportunities in some of those troubled markets to deploy capital and acquire competitors, to maybe kind of head off some of that, some of those headwinds and those competitive pressures? Thanks. Yeah, Ben, I guess we qualify that as an astute question. You know, we do have, we do have some M&A under LOI. You know, again, if we're able to close those deals, we'll talk about it when we execute on that. And if we close those deals, we'll take guidance accordingly. But you know, certainly in the markets where we're falling a little short on sleep, as well as all other markets.

Jason Clemens: I mean, there's plenty of opportunity out there. But as we said, there's no change to our capital allocation priorities. We're going to stay focused on some modest tuck-in activities. So you'll expect to continue to see that throughout the course of the year. and business as usual. Thank you.

Matthew Blackman: Next, we'll go to Matthew Blackman with Stiefel. Please go ahead. Hey guys, you had a really strong quarter in diabetes. I was just wondering where exactly the strength is coming from. You guys talked to a bit of pump growth, but curious on the CGM side, if you did see any uptick in basal adoption and going forward, what your expectations are for the supply environment in that business, given we heard some of Dexcom's comments earlier this evening.

Jason Clemens: Hey, Colin, sure. You know, pumps, I mean, recall, that's a pretty small part of our diabetes business. But we did see some growth there. You know, so that helped to the tune of a couple million dollars within the quarter. Regarding your basal question, you know, we're not seeing any big bend in the trend for basal, either setups or utilization.

Suzanne Foster: You know, in terms of kind of what we've focused on and where we're pressing our energy, I mean, Suzanne may weigh in with a few comments there. Yeah, in terms of the diabetes team, I mean, it just goes back to good old fashioned leadership and execution. I think we have a really good team in place that has dug in, understood the business and have gotten things organized and they're executing much better than they were a few quarters ago. We're also appropriately leveraging technology where it matters. We still have human in the loop, but we're definitely deploying technology that's helping.

Suzanne Foster: And then in terms of our commercial team, they have just been out there and doing a much better job with better focus, not only as a diabetes sales team, but they're leveraging our entire HME sales force. So it's just more people out there talking about want to adapt in our approach to patient service.

Matthew Blackman: Gotcha, thank you.

Whit Mayo: Thank you. And next we'll go to Whit Mayo with Lee Rink Partners. Please go ahead. Hey, thanks. Good morning.

Whit Mayo: Suzanne, just on the topic of One Health or One Adapt and just the various initiatives, you have any new elements of that strategy you care to share as you think about 2025? And, you know, any improvement we may see in operations as a result of that focus? Yeah, thanks, Whit. So in terms of, you know, wanting to add the high level here for anyone new to the story is that this organization came together, you know, as a result of hundreds of acquisitions. And so we clearly the strategy of driving size really was successful over the last couple of years, and the entire leadership team now is focused on delivering scale.

Suzanne Foster: And so that starts with the most obvious stuff of, you know, brand and, in terms of who we are. So getting out there as Adapthealth and not 100 different names, we have a lot of legal and tax work to make sure that our entity structure is simplified, that will obviously reduce costs and operating the business. So there's, there's a lot of internal organization.

Suzanne Foster: But in terms of going forward into 2025, 2025, and 2026, we're looking at the business about how do we, how do we reach the most amount of patients. And so our commercial team really leveraging each other, going to our big accounts, including managed care and big health systems, showing our full portfolio and capabilities, that is getting traction. And so we believe that will deliver additional growth in the back half, especially going into 2026. No, that's helpful.

Suzanne Foster: And maybe just spend a second on Humana and just sort of how that's tracking versus your assumptions. And it felt like you were referencing maybe an increased level of confidence on expanding some new payer relationships. So just wanted to unpack that a little bit more. Sure. So our Humana relationship and the performance is as expected, continues to be a bright spot for us. We're very, very happy with that relationship and our performance under that contract. And yes, we are, like I said, last quarter in this quarter, our pipeline of additional opportunities is growing and not only growing, but moving down the pipeline.

Suzanne Foster: So we are optimistic that we're going to continue to move in that direction. We think it's the right thing for patient service and for overall healthcare economics. So we're, we're making great progress and we, we expect to have, you know, continued good news on that front.

John Piney: And our last question comes from John Piney with Canaccord Genuity. Please go ahead.

John Piney: Hi, yeah, John Penny on for Richard Close. Thanks for the question. I guess one quick one from me. So I get the incontinence assets sold. That's the only thing that's factored into guidance as far as change changes from the divestitures. Can you just give us a sense of you called out 100 million annualized revenue last quarter for things to be divested. So I guess what percentage of that is the incontinence assets? And is there anything still left to be considered or to be divested this year? Or is it really just the incontinence assets and the infusion?

Jason Clemens: Thanks.

Jason Clemens: Hey, John, this is Jason. So if you annualize the guide down for the incontinence sale, you get to about $60 million. So I think that answers your question on the approximate revenues. Again, if we get to the point that we're able to sell certain home infusion assets, we'll update the full guide accordingly. In terms of, you know, are there other assets we're working on, the answer is no. I mean, certainly, we'll continue to, you know, manage the portfolio, as you'd expect. You know, investing to grow margins everywhere we can and investing to grow top line everywhere we can.

Jason Clemens: But for now, we feel, after we get through these dispositions, that, you know, we've got great TAM in each of the four segments that we operate in and a lot of opportunity in front of us, both organically and inorganically.

Unknown Executive: Great, thank you. And that concludes our question and answer session and concludes today's program. We thank you for your participation. You may disconnect at any time.