Q1 2026 GMR Solutions Inc Earnings Call

Speaker #1: Hello, everyone. Thank you for joining us, and welcome to GMR Solutions Q1 2026 earnings call. After today's prepared remarks, we will host a question-and-answer session.

Speaker #1: If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. I will now hand the conference over to Krister Sorensen, Vice President of Investor Relations, Krister, please go ahead.

Speaker #2: Thank you. Good morning, and welcome to the GMR Solutions Q1 2026 earnings conference call. Joining me today are Nick Lopacaro, our board chair and CEO; Ted Van Horn, our president and COO; and Brian Tierney, our executive vice president and CFO.

Speaker #2: Before we begin, note that during this call we may make forward-looking statements, and that actual results may differ materially from those statements because of various risks and uncertainties.

Speaker #2: Including those described in our most recent earnings report posted on our Investor Relations website and in the Risk Factors section in our IPO Perspectives.

Speaker #2: Today's remarks also include certain non-GAAP financial measures, including adjusted EBITDA. You can find a reconciliation of these measures in our earnings release that is available on our website at investors.globalmedicalresponse.com.

Speaker #2: Unless otherwise noted, references to the quarter will be for the first quarter of 2026. I will now turn the call over to Nick.

Speaker #3: Thanks, Krister, and thank you all for joining us today. This is our first earnings call since the successful completion of our IPO a few weeks ago.

Speaker #3: An incredible accomplishment I could not have been possible but for the dedication of our frontline and support staff as we refocused our energy on our core competency of emergency care for the past few years.

Speaker #3: With this, we saw profitability grow in our financial profile strengthen, which led us to the IPO. Now we can more publicly, and no pun intended, demonstrate and educate the masses on what is that we deliver healthcare.

Speaker #3: We are the frontline of the frontline. We are the tip of the spear. There is no one further upstream than we are in the emergency situation.

Speaker #3: GMR is the largest provider of emergency medical services, serving 5.5 million patients annually, covering markets that represent over 60% of the U.S. population, with one or more of our solutions.

Speaker #3: Our 24,000 highly trained clinicians and fleet of ambulances and aircraft are rapidly deployed to navigate and provide essential alternate site out-of-hospital care for patients, when they need us most.

Speaker #3: As a national leader of EMS, this puts us in an exceptional position to be the innovators of the practice, and raise the tide for the entire industry.

Speaker #3: We accomplished this through our 911 nurse navigation offering, our concierge platform, and our online ordering system, transport.net. Each of these innovations helped take the friction out of the traditional, run EMS systems, and ultimately provide better patient care more efficient operations and better hospital throughput while delivering savings to the payers in turn.

Speaker #3: With that, we are pleased to report strong financial and operational results in the first quarter of 2026. Q1 revenues were $1.46 billion, which represents 6.6% year-over-year growth, and continues to highlight strong demand for the mission-critical services that GMR provides and our strong competitive position.

Speaker #3: Q1 adjusted EBITDA was $305 million, a year-over-year improvement of 9.7%, and EBITDA margin increase of 59 basis points, versus the prior-year quarter to 20.9%.

Speaker #3: These results reflect the continued emphasis on improving the efficiency of our integrated operating model and shared services infrastructure designed to effectively support our operators in the markets we serve.

Speaker #3: I'll note that both revenue and adjusted EBITDA came in at the top of the range we provided in the flash of the quarter in the S1.

Speaker #3: Q1 cash CapEx and cash used in aircraft financing combined was $5.4% of total revenue, compared to $4.7% in Q1 2025. GMR completed approximately $1.4 million patient encounters during the quarter.

Speaker #3: We provided ground medical services to over 1.3 million patients, which includes more than 1 million transports, along with over 28,000 calls to our 911 nurse navigation office.

Speaker #3: The remaining approximately $270,000 ground patient encounters consist of interventions on scene that did not result in a transport. During the quarter, we provided air medical services to over 34,000 patients.

Speaker #3: Our strong performance was driven by continued same-market revenue growth, revenue from cross-selling, and new markets, disciplined cost management, continued optimization of our clinical and operational platforms, and an unwavering focus on service to our communities by keeping care at the center of what we do.

Speaker #3: Ted and Brian would elaborate further on the detailed drivers of the performance later in the call. I now want to provide an overview on regulatory matters.

Speaker #3: We've engaged with Congress to request that it enact new legislation requiring CMS to modernize air and ground ambulance reimbursement based on cost data that CMS is authorized to collect.

Speaker #3: GMR has highlighted to Congress and the administration the inadequate reimbursement we received from Medicare. I also raised this issue when I met with the CMS administrator, Dr. Mehmet Oz, in February.

Speaker #3: As the leader in EMS, we feel an obligation to raise our hand and move the whole industry forward. We are optimistic that bipartisan legislation will be introduced in the House soon.

Speaker #3: Last week, CMS released a proposed rule that would substantially overhaul the use of state-directed payments and supplemental payments, including intergovernmental transfers or IGT, with respect to Medicaid funding.

Speaker #3: Under the proposed rule, a state's fee-for-service Medicaid payments would be limited to between $100 and $110% of Medicare rates, if the state's total payment is targeted to a subset of providers within a broader provider group.

Speaker #3: The proposed rule includes ground and air medical groups, both private and municipally run. Notably, if the payment is not targeted to a subset of providers, a type of parity analysis within a broader provider group, then the Medicare rate cap does not apply.

Speaker #3: State plans that are impacted by the proposed rule will have a transition period until 2029. Albeit not common that ground or air Medicaid payments exceed Medicare rates, we are evaluating the potential impacts of the proposed rule from all perspectives.

Speaker #3: Early analysis suggests a less than $5 million negative annual impact to GMR from the proposed rule. We are also evaluating the proposed rule's impact on select municipal run systems and the sustainability of their model versus our private provider model.

Speaker #3: Overall, we remain encouraged by the progress made in both the federal and state issues and will keep you updated as we learn more. I'll now turn it over to Ted to dive deeper into our performance within the quarter.

Speaker #1: Thanks, Nick. GMR's focus remains growing our core emergency services, completing non-emergency services where they make fiscal sense, and realizing efficiency through the use of innovative offerings like 911 nurse navigation.

Speaker #1: During the quarter, patient encounters related to emergent transports and nurse navigation increased 1.7%, while low-to-no-reimbursing patient encounters related to non-emergent and wheelchair transports and those encounters that did not result in a transport decreased 5.2%.

Speaker #1: More specifically, total transports increased 0.7% during the quarter, same market emergent ground increased 0.5% despite a less severe shorter-than-average and much shorter-than-prior-year flu season.

Speaker #1: Same market emergent flights increased 1.9%. Our weather cancellation rate in the quarter was 17.1%, 81 basis points lower than the prior-year quarter, and 220 basis points lower than the previous three-year average for the quarter.

Speaker #1: Our 911 nurse navigation solution continues to expand, currently serving 29 communities across the U.S. We have additional 13 markets currently in the implementation phase, which will bring our total covered lives to over 22 million.

Speaker #1: In the quarter, our nurses navigated over 28,000 911 calls. Which was nearly a 47% increase over the prior-year quarter. In the 911 markets, we have historically served where we implement nurse navigation.

Speaker #1: We have seen on average a 15% reduction in dry runs, effectively reserving ALS resources for the highest acuity patients. We have also seen a 2.5% reduction in total transports.

Speaker #1: These are transports that we would likely receive little to no reimbursement for. Our nurses navigate these calls to care options and other transport modalities that are better for the patient, better for our crews, and better for the hospital systems that are plagued with overcrowded emergency departments.

Speaker #1: Together with these stakeholders, 911 nurse navigation allows us to find a better way to improve patient outcomes. Patient encounters that did not result in a transport decreased 0.8%.

Speaker #1: Lower reimbursing non-emergent and wheelchair patient encounters decreased 7.2% and 52.8%, respectively, when compared to the prior-year quarter. This is consistent with remaining focus on our core emergency services and maintaining contracts that provide appropriate reimbursement.

Speaker #1: Solutions like concierges, which create guaranteed reimbursement from partner hospital systems for non-emergent transports, are part of this strategy. With respect to labor, our crew staffing metrics continue to show trends in line with expectations.

Speaker #1: Total crew wages in the first quarter increased 3.0% year over year, predominantly tied to wage increases and filling open positions. Base unit cost, which reflects the year-over-year inflation in our base wages, was up 3.8% per payroll hour, as expected.

Speaker #1: Our crew vacancy rate declined by 77 basis points as positive hiring continued in the quarter. We will continue to invest in our crews to ensure we can hire and retain our pilots, mechanics, and clinical staff critical to the sustainability of our operations.

Speaker #1: As for new business growth, we remain bullish about our ability to win new business opportunities in our core areas of emergency medical services, growth of 911 nurse navigation, and expanded municipal ambulance contracting.

Speaker #1: During the quarter, our revenue included approximately $20 million in new market growth. Also in the quarter, we executed new agreements totaling nearly $47 million in incremental annualized revenue.

Speaker #1: Last year's federal budget reconciliation law created rural health transformation program that will direct $50 billion over the next five years toward state-led efforts to transform how they deliver and finance healthcare in rural areas.

Speaker #1: Since passage of the law, we've engaged with officials from nearly every state to share ideas about how GMR and the EMS community can play an even bigger role in ensuring access to quality healthcare in rural and frontier areas.

Speaker #1: We are responding to active RFPs from several states and engaging directly in contracting discussions with others. With rural healthcare under pressure as a result of hospital closures, providers can and should be part of the solution to these challenges across the country.

Speaker #1: We stand ready to help states solve these challenges as part of our national growth strategy. I'll now turn it over to Brian, who will provide more detail on the financials.

Speaker #2: Thanks, Ted. As Nick mentioned, we had strong performance in the first quarter. In the first quarter of 2026, GMR reported net revenue of $1.46 billion, which is a 6.6% increase year over year.

Speaker #2: Compared to the same quarter in 2025, Q1 emergent air volumes were up 1.1%, emergent ground transports increased 0.6%, while non-emergent ground transports were down 7.2%.

Speaker #2: Overall, emergent air requests decreased 0.8%, but flights were impacted by favorable weather, resulting in a capture rate increase of approximately 87 basis points to 45.1%.

Speaker #2: We estimate that the favorable weather impacted revenue by approximately $11 million, compared to the prior-year quarter. Net revenue per transport increased 7.9% compared to the prior-year quarter.

Speaker #2: Revenue performance was driven by a positive mixed shift from non-emergent to emergent transports and strong underlying air and ground NRT improvements and a like-for-like basis.

Speaker #2: Driven by strong collections performance, in our normal collection cycle. As expected, we saw a decrease in collections from older dates of service, associated with the initial implementation of the No Surprises Act, independent dispute resolution process, or IDR.

Speaker #2: During the quarter, we collected about $7 million from IDR-related transports performed in 2022 through 2024. A decrease of nearly 24 million from similarly mature dates of service during the prior year.

Speaker #2: Separately, during the quarter, we did benefit from roughly $16 million in collections from 2024 dates of service related to the implementation of California's state surprise medical billing legislation.

Speaker #2: Recall that the federal IDR process applies to air transports, while state balanced billing laws generally require payers or fully insured state plans to pay either the locally set ground ambulance rate or a multiple of Medicare.

Speaker #2: Following the implementation of the California bill on January 1, 2024, select payers underpaid the required local rates. While it took us time, we were successful in collecting on the correct rates in the first quarter of 2026.

Speaker #2: In the first quarter, we did not see the expected negative impact on payer mix, as the percentage of transports from the implementation of the One Big Beautiful Bill Act, which was expected to decrease Medicaid mix.

Speaker #2: Or the expiration of the Affordable Care Act exchange subsidies, which were expected to decrease commercial mix. However, when closing April, we did start to see some of these impacts appear perhaps as a result of the timing of recognition by the payers of member exchange premiums.

Speaker #2: We will continue to closely monitor payer mix and have included some degradation in our guidance going forward. Our DSO for the quarter decreased three days to 76 days from 79 days in the same quarter last year.

Speaker #2: We continue to monitor our DSO metric to ensure the reasonableness of our estimates of revenue and AR. Regarding payer mix, payer mix by net transport revenue for the quarter was $57% commercial, $25% Medicare, 9% Medicaid, 7% from other third-party payers, and 2% self-pay.

Speaker #2: Payer mix by net transport revenue for Q1 2025 was $56% commercial, $26% Medicare, 9% Medicaid, 7% from other third-party payers, and 2% self-pay. Contributing to the mid-shift are the higher rates that we are able to drive for growth out of network and in-network payers as a result of the No Surprises Act.

Speaker #1: Of the California bill on January 1, 2024, select payers under Paid that required local rates. While it took us time, we were successful in collecting on the correct rates in the first quarter of 2026.

Speaker #2: We are winning IDR disputes at a rate over 90%, and we utilize the amounts we are winning through the No Surprises Act adjudication process as reference points when renegotiating expiring air contracts with lower reimbursing in network payers.

Speaker #1: In the first quarter, we did not see the expected negative impact on payer mix, as the percentage of transports from the implementation of the One Big Beautiful Bill Act—which was expected to decrease Medicaid mix—did not materialize.

Speaker #2: Or when bringing new payers in network. During the quarter, effective February 1, we signed an agreement that brought our largest out-of-network payer in network at reasonable rates and terms.

Speaker #1: Or the expiration of the Affordable Care Act exchange subsidies, which were expected to decrease commercial mix. However, when closing April, we did start to see some of these impacts appear, perhaps as a result of the timing of recognition by the payers of member exchange premiums.

Speaker #2: Which is expected to reduce our IDR adjudications by roughly 12%. This helps bring the percentage of our commercial air transports that are in network to nearly 70%.

Speaker #1: We will continue to closely monitor payer mix and have included some degradation in our guidance going forward. Our DSO for the quarter decreased three days to 76 days, from 79 days in the same quarter last year.

Speaker #2: Complementary revenue decreased 1.2% or roughly 0.5 million. Primarily driven by a small FEMA deployment last year for floods in Kentucky. Excluding this, our complementary revenue grew 4.7%.

Speaker #1: We continue to monitor our DSO metric to ensure the reasonableness of our estimates of revenue and AR. Regarding payer mix, payer mix by net transport revenue for the quarter was 57% commercial, 25% Medicare, 9% Medicaid, 7% from other third-party payers, and 2% self-pay.

Speaker #2: Now, turning to expenses, total operating expense increased 4.1% to 1.24 billion in the quarter compared to 1.19 billion for the same period in 2025.

Speaker #2: Employee wages benefits and taxes increased by 4.8% to $770 million. Crew wages increased 3.0%, driven primarily by expected wage increases. Maintenance, fuel, and other direct expenses increased by 6.1% to $119 million.

Speaker #1: Payer mix by net transport revenue for Q1 2025 was 56% commercial, 26% Medicare, 9% Medicaid, 7% from other third-party payers, and 2% self-pay. Contributing to the mix shift are the higher rates that we are able to drive for out-of-network and in-network payers as a result of the No Surprises Act.

Speaker #2: The increase was primarily driven by fuel and the timing of medical supplies purchases. Fuel costs began to rise in early March due to the Iran conflict.

Speaker #1: We are winning IDR disputes at a rate over 90%, and we utilize the amounts we are winning through the no surprises act adjudication process as reference points when renegotiating expiring air contracts with lower reimbursing in-network payers.

Speaker #2: Historically, our fuel expense is about 2% of total revenue, and only about 1% is tied to the commodity price. With fuel being a small portion of our total expense and managed through bulk purchase and fuel card discount programs, we have historically not hedged our commodity exposure.

Speaker #1: Or when bringing new payers in-network. During the quarter, effective February 1, we signed an agreement that brought our largest out-of-network payer in-network at reasonable rates and terms.

Speaker #2: On a go-forward basis, we may consider paying for the certainty that fuel hedging provides, as a potential option to further limit our exposure, and we will keep you informed on our progress in this area.

Speaker #1: Which is expected to reduce our IDR adjudications by roughly 12%. This helps bring the percentage of our commercial air transports that are in-network to nearly 70%.

Speaker #2: Insurance expense, which increased by 9.3 million, or $27.6% to $43 million, driven primarily by increased professional liability-related claims and third-party premium expenses. Other operating expenses, which include outside services and general and administrative expenses, increased 5.7% to $228.1 million.

Speaker #1: Complementary revenue decreased 1.2% or roughly 0.5 million dollars, primarily driven by a small FEMA deployment last year for floods in Kentucky. Excluding this, our complementary revenue grew 4.7%.

Speaker #1: Now, turning to expenses, total operating expense increased 4.1% to $1.24 billion in the quarter, compared to $1.19 billion for the same period in 2025.

Speaker #2: Outside services increased 1.3 million, or $3.1%. General and administrative expenses increased 11.0 million, or $6.3%, primarily driven by increased system integration and enhancement expenses, software licensing, and development, and freight expense.

Speaker #1: Employee wages, benefits, and taxes increased by 4.8% to $770 million. Crew wages increased 3.0%, driven primarily by expected wage increases. Maintenance, fuel, and other direct expenses increased by 6.1% to $119 million.

Speaker #2: Depreciation and amortization expense was relatively flat versus prior year, and acquisition, integrations, and other charges decreased to 3.6 million, compared to 4.3 million, for the same prior-year period due to reduced fees associated with previously divested business units.

Speaker #1: The increase was primarily driven by fuel and the timing of medical supplies purchases. Fuel costs began to rise in early March due to the Iran conflict.

Speaker #1: Historically, our fuel expense is about 2% of total revenue, and only about 1% is tied to the commodity price. With fuel being a small portion of our total expense, and managed through bulk purchase and fuel card discount programs, we have historically not hedged our commodity exposure.

Speaker #2: Interest expense decreased 26.8% to 83.2 million, as a result of the refinancing completed in September 2025. The net result is that net income increased 179.9% to $106.3 million, compared to $38 million, and adjusted EBITDA increased 9.7% to $305 million, compared to $278 million, for the same prior-year period.

Speaker #1: On a go-forward basis, we may consider paying for the certainty that fuel hedging provides, as a potential option to further limit our exposure, and we will keep you informed on our progress in this area.

Speaker #1: Insurance expense which increased by 9.3 million dollars or 27.6% to 43 million dollars, driven primarily by increased professional liability-related claims and third-party premium expenses.

Speaker #2: Adjusted EBITDA margin finished the quarter at 20.9%. Shifting to CapEx cash flows and liquidity, cash used for CapEx and aircraft financing was $5.4% of revenue for the first quarter of 2026, compared to 4.7% of revenue for the first quarter of 2025.

Speaker #1: Other operating expenses which include outside services and general and administrative expenses increased 5.7% to $228.1 million. Outside services increased 1.3 million dollars or 3.1%.

Speaker #2: The increase was primarily driven by the timing of CapEx purchases in the prior year. GMR finished the first quarter with $426.1 million, in cash and cash equivalents, and an undrawn ABL with $692 million, of cash borrowing capacity after letters of credit.

Speaker #1: General and administrative expenses increased $11.0 million, or 6.3%, primarily driven by increased system integration and enhancement expenses, software licensing and development, and freight expense.

Speaker #2: On March 6th, we reduced the preferred equity holdings by $250 million, using cash. Through the proceeds of our IPO and cash on hand, we improved our leverage position by more than 1.15 billion in total debt reduction and preferred equity redemption, resulting in an approximately 46 million reduction in an annualized term loan interest expense and a 73 million reduction in annualized preferred equity dividend accrual.

Speaker #1: Depreciation and amortization expense was relatively flat versus prior year. And acquisition, integrations, and other charges decreased to 3.6 million dollars compared to 4.3 million dollars for the same prior year period due to reduced fees associated with previously divested business units.

Speaker #1: Interest expense decreased 26.8% to 83.2 million dollars as a result of the refinancing completed in September 2025. The net result is that net income increased 179.9% to 106.3 million dollars compared to 38 million dollars and adjusted EBITDA increased 9.7% to 305 million dollars compared to 278 million dollars for the same prior year period.

Speaker #2: Following the IPO, Moody's and S&P upgraded our credit ratings from B, B2, to B+, B1, respectively. The upgrade by Moody's triggered a 25 basis point interest rate step down on GMR's existing term loan facility.

Speaker #2: This results in a 7.4 million reduction in annualized interest expense after considering the debt reductions I just mentioned. All credit enhancements combined result in a more than 125 million reduction in annualized financing costs.

Speaker #1: Adjusted EBITDA margin finished the quarter at 20.9%. Shifting to CapEx, cash flows, and liquidity, cash used for CapEx and aircraft financing was 5.4% of revenue for the first quarter of 2026, compared to 4.7% of revenue for the first quarter of 2025.

Speaker #2: Net leverage after the IPO was approximately 3.5 times. We expect strong cash flows to drive this below 3.3 times by year-end, and have line of sight to 3.0 times in 2027.

Speaker #1: The increase was primarily driven by the timing of CapEx purchases in the prior year. GMR finished the first quarter with $426.1 million in cash and cash equivalents, and an undrawn ABL with $692 million of cash borrowing capacity after letters of credit.

Speaker #2: Moving on to our full-year 2026 guidance, which includes actual results through Q1. We have set our revenue target at a range of 5.89 billion, to 6.18 billion, our adjusted EBITDA target at a range of 1.135 billion, to 1.195 billion, and the target for our total cash used for CapEx and aircraft financing between 5.1 and 5.3% of total revenue.

Speaker #1: On March 6th, we reduced the preferred equity holdings by 250 million dollars using cash. Through the proceeds of our IPO and cash on hand, we improved our leverage position by more than 1.15 billion dollars in total debt reduction and preferred equity redemption resulting in an approximately 46 million dollar reduction in an annualized term loan interest expense and a 73 million dollar reduction in annualized preferred equity dividend accrual.

Speaker #2: This 2026 guidance reflects a return to more normal collection timing, following the IDR-related collections on older dates of service in 2025. It also includes expectations of a degraded payer mix by volume from the implementation of the one-week vehicle bill act, and elimination of the ACA exchange subsidies that we saw start to appear in April.

Speaker #1: Following the IPO, Moody's and S&P upgraded our credit ratings from B, B2 to B+, B1, respectively. The upgrade by Moody's triggered a 25 basis point interest rate step-down on GMR's existing term loan facility.

Speaker #2: We have also incorporated higher fuel costs as a result of the Iran conflict, and lower interest expense resulting from the new capital structure and lower upgraded rate.

Speaker #2: Adjusting for these items, and in the long term, we expect GMR to grow top-line revenue at mid-single-digit plus, resulting from same market low single-digit volume, and low to mid-single-digit rate growth.

Speaker #1: This results in a $7.4 million reduction in annualized interest expense after considering the debt reductions I just mentioned. All credit enhancements combined result in a more than $125 million reduction in annualized financing costs.

Speaker #2: Our ability to cross-sell an existing markets and opportunities to expand in new markets. We anticipate high single-digit plus adjusted EBITDA growth, adjusted EBITDA margins around 20%, and cash for CapEx and aircraft financing to be just above 5% of revenue.

Speaker #1: Net leverage after the IPO was approximately 3.5 times. We expect strong cash flows to drive this below 3.3 times by year-end and have line of sight to 3.0 times in 2027.

Speaker #2: And now I will turn it over to the operator to open for any questions. Thank you.

Speaker #1: Moving on to our full year 2026 guidance, which includes actual results through Q1. We have set our revenue target at a range of 5.89 billion dollars to 6.18 billion dollars.

Speaker #1: We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press *1 to raise your hand.

Speaker #1: To withdraw your question, press *1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality.

Speaker #1: Our adjusted EBITDA target at a range of 1.135 billion dollars to 1.195 billion dollars. And the target for our total cash used for CapEx and aircraft financing between 5.1 and 5.3% of total revenue.

Speaker #1: If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Benjamin Rossi with JPMorgan.

Speaker #1: This 2026 guidance reflects a return to more normal collection timing following the IDR-related collections on older dates of service in 2025. It also includes expectations of a degraded payer mix by volume from the implementation of the One Big Beautiful Bill Act and elimination of the ACA exchange subsidies that we saw start to appear in April.

Speaker #1: Benjamin, your line is now open.

Speaker #2: Hi, good morning. Thanks for taking my questions here. Can you just unpack the ACA attrition impact that you experienced during one Q, and then give us some of the details on some of the benefits that you got from ACA-related volumes during 2025?

Speaker #1: We have also incorporated higher fuel costs as a result of the Iran conflict and lower interest expense resulting from the new capital structure and lower upgraded rate.

Speaker #2: And then as you think about that expected embedded growth within your initial guidance, what are you factoring for ACA volumes for 2026 next?

Speaker #1: Adjusting for these items and in the long term, we expect GMR to grow top-line revenue at mid-single-digit plus, resulting from same market low single-digit volume and low to mid-single-digit rate growth.

Speaker #3: Hey, Benjamin, it's Nick. Thanks for the question. I'll hand it over to Brian in a second. So in first Q, we actually saw a little, if no impact, on ACA and the one big beautiful bill act on even on the Medicaid.

Speaker #1: Our ability to cross-sell an existing markets and opportunities to expand in new markets. We anticipate high single digit plus adjusted EBITDA growth, adjusted EBITDA margins around 20%, and cash for CapEx and aircraft financing to be just above 5% of revenue.

Speaker #3: I think what Brian's alluding to is we were we factored in some, but I'll let him expand on that as well.

Speaker #1: And now, I will turn it over to the operator to open for any questions. Thank you.

Speaker #2: Yeah, thanks, Ben. Yeah, we saw about a 1% mixed shift out of commercial into other payers during the as we closed April. So now 1 month is not a trend make, but we had expected to see some of this really in the first quarter.

Speaker #2: We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand.

Speaker #2: To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality.

Speaker #2: And so we've baked that into our guidance as we go forward. Total exchange and one big beautiful bill act impact that's in our guidance for the year really for the last nine months is in that 25 to 30 million total range.

Speaker #2: If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Benjamin Rossi with JPMorgan.

Speaker #2: Benjamin, your line is now open.

Speaker #2: So that's what we had expected. As we think about '25 and before, again, we had not really seen any movement, even as in the run-up across the end of '25, as folks were trying to figure out where they were going to get their health insurance.

Speaker #3: Hi, good morning. Thanks for taking my questions here. Can you just unpack the ACA attrition impact that you experienced during one Q and then give us some of the details on some of the benefits that you got from ACA-related volumes during 2025?

Speaker #3: And then, as you think about that expected embedded growth within your initial guidance, what are you factoring in for ACA volumes for 2026 next?

Speaker #3: Yeah, and Benjamin, we're still digging into this, but there's two indicators that we've noticed. One, in-house, is that we had a significant increase of our employee base join our own benefits plan, which we suspect may have been on ACA exchange type plans.

Speaker #4: Hey, Benjamin, it's Nick. Thanks for the question. I'll hand it over to Brian in a second. So in first Q, we actually saw a little if no impact on ACA and the One Big Beautiful Bill Act on even on the Medicaid.

Speaker #3: The other is, and we experienced this in the past as well, where if you're on a gold plan, on an exchange plan, and you go down to a bronze plan, that doesn't impact our reimbursement or our billing.

Speaker #4: I think what Brian's alluding to is we were we factored in some, but I'll let him expand on that as well.

Speaker #3: So again, more to dig in there as we get through two Q2. And probably more to provide once we get to our Q2 report out.

Speaker #3: Yeah, thanks, Ben. Yeah, we saw about a 1% mixed shift out of commercial into other payers during the as we closed April. So now 1 month is not a trend make, but we had expected to see some of this really in the first quarter.

Speaker #2: Great. I appreciate the added details there. I guess just flipping topics to fuel impact during one Q. When thinking about the macro impact to oil prices and fuel, can you quantify the dollar impact in one Q from higher prices versus your initial budgeted expectations coming into the year, and maybe explain how fuel procurement mechanics flow through your P&L?

Speaker #3: And so we baked that into our guidance as we go forward. Total exchange and One Big Beautiful Bill Act impact that's in our guidance for the year really for the last nine months is in that 25 to 30 million dollar total range.

Speaker #2: Thanks.

Speaker #3: Sure. For January/February, we were actually slightly better on a rate perspective. It really wasn't until March that we saw the increased fuel prices. I guess they started things and ran right at the very, very end of February.

Speaker #3: So that's what we had expected. As we think about '25 and before, again, we had not really seen any movement, even in the run-up across the end of '25, as folks were trying to figure out where they were going to get their health insurance.

Speaker #3: It was about $3 million total for March, based on what flowed through the P&L. As we look forward within our guidance, we've used the latest well, we used at the time it was was about WTI was about $98.

Speaker #4: Yeah, and Benjamin, we're still digging into this, but there's two indicators that we've noticed. The one in-house is that we had a significant increase of our employee base join our own benefits plan, which we suspect may have been on ACA exchange type plans.

Speaker #3: I think WTI this morning is about $92. But we've built our forecast at $98. It added about 25 or 30 million dollars to the P&L from an expense perspective as well.

Speaker #3: From how it flowed through our P&L, just normally, I mean, we've got you can think of fuel in two parts. There's the commodity exposure, which is kind of what we've talked about.

Speaker #4: The other is, and we experienced this in the past as well, where if you're on a gold plan on an exchange plan and you go down to a bronze plan, that doesn't impact our reimbursement or our billing.

Speaker #3: And then there's the cost from the to our vehicles in some way, shape, or form. Roughly half of our expense is associated with commodity price, and roughly half is associated with what we call in-the-plane, getting it from the refinery to the vehicles.

Speaker #4: So again, more to dig in there as we get through two Q2. And probably more to provide once we get to our Q2 report out.

Speaker #3: Great. I appreciate the added details there. I guess just flipping topics to fuel impact during one Q. When thinking about the macro impact to oil prices and jet fuel, can you quantify the dollar impact in one Q from higher prices versus your initial budgeted expectations coming into the year, and maybe explain how fuel procurement mechanics flow through your P&L?

Speaker #3: As we think we've put in our S1, as well as I think I mentioned on this call, it's roughly 1% of revenue is associated with commodity price.

Speaker #3: Thanks.

Speaker #4: Sure. For January/February, we were actually slightly better on a rate perspective. Really wasn't until March that we saw the increased fuel prices. I guess they started things in Iran right at the very, very end of February.

Speaker #1: Our next question comes from the line of Elizabeth Anderson with Evercore. Elizabeth, your line is now open.

Speaker #4: Hi, guys. Good morning, and thank you so much for the question. I was curious about your IDR commentary. I think you said $7 million impacted maybe 24 million dollar difference versus last year.

Speaker #4: It was about $3 million total for March, based on what flowed through the P&L. As we look forward within our guidance, we used the latest—well, we used, at the time, it was about WTI was about $98.

Speaker #4: For those who are trying to sort of understand how that flows through the rest of the year, would you say that that magnitude is sort of similar in terms of how you would estimate we should think about the future quarters in 2026?

Speaker #4: Thank you.

Speaker #2: Yeah, thanks, Elizabeth. So we saw a little bit more of the collections from the early dates of service. Related to IDR, really hit across second, third, and fourth quarter.

Speaker #4: I think WTI this morning is about $92. But we built our forecast at $98. It added about 25 or 30 million dollars to the P&L from an expense perspective as well.

Speaker #2: So it'll be probably an order of magnitude maybe 50 to 100 percent higher than what we saw in the first quarter from a delta perspective.

Speaker #4: From how it flows through our P&L just normally, I mean, we've got you can think of fuel in two parts. There's the commodity exposure, which is kind of what we've talked about.

Speaker #2: We have really not seen those collections from those really old dates of service flow through here in 2026, most of it got cleared out in 2025.

Speaker #4: And then there's the cost to get it from the refinery through a distribution network to our vehicles in some way, shape, or form. Roughly half of our expense is associated with commodity price and roughly half is associated with what we call in the plane getting it from the refinery to the vehicles.

Speaker #2: And we're really back to more our normal IDR collection cycle.

Speaker #4: Got it. That's very helpful. And can you tell us, at that point, does that sort of mean that sort of the can you clarify if that impetus means that you would expect more commercial additional commercial payers who sort of come on network as a result of that, that's just sort of smoothed out going forward?

Speaker #4: As we think we've put in our S1 as well as I think I mentioned on this call, it's roughly 1% of revenue is associated with commodity price.

Speaker #4: Are you still seeing continued interest from those payers going in network, given your high win rates in the IDR process? Or do you think that we should just sort of view that as roughly stable going forward?

Speaker #2: Our next question comes from the line of Elizabeth Anderson with Evercore. Elizabeth, your line is now open.

Speaker #2: So we've got two different things here. The comments, the previous comments were really on cash collections from those really old dates of service. From an in-network perspective, we continue to have really good conversations with a lot of payers.

Speaker #5: Hi guys. Good morning and thank you so much for the question. I was curious about your IDR commentary. I think you said $7 million impacted maybe 24 million dollar difference versus last year.

Speaker #2: We did bring our largest out-of-network payer in network during the first quarter. We have signed a number of agreements both with some very small out-of-network payers, but then re-opt with some other payers as well in the quarter.

Speaker #5: For those that were trying to sort of understand how that flows through the rest of the year, would you say that that magnitude is similar in terms of how you would estimate we should think about the future quarters in 2026?

Speaker #5: Thank you.

Speaker #3: Yeah. Thanks, Elizabeth. So we saw a little bit more of the collections from the early dates of service. Related to IDR, really hit across second, third, and fourth quarter.

Speaker #2: I think it's really comes down to the approach of the payers. We'd love to get them all in network at appropriate rates and terms.

Speaker #2: Many we have great conversations with. Some are more challenged in those are probably the same payers that are challenged with others as well. But I think we're going to continue to drive the in-network payers or the payers in network as much as we possibly can.

Speaker #3: So it'll be probably an order of magnitude—maybe 50% to 100% higher than what we saw in the first quarter from a delta perspective.

Speaker #3: We have really not seen those collections from those really old dates of service flow through here in 2026. Most of it got cleared out in 2025.

Speaker #2: Again, in-network, out-of-network is really only an emergent air ambulance rate component. And we're just under 70 percent in network on the commercial air ambulance flights.

Speaker #3: And we're really back to more our normal IDR collection cycle.

Speaker #5: Got it. That's very helpful. And can you tell us, at that point, does that sort of mean that sort of the can you clarify if that impetus means that you would expect more commercial additional commercial payers who sort of come on network as a result of that, that's just sort of smoothed out going forward?

Speaker #2: And we look forward to driving that further up.

Speaker #3: Yeah. Elizabeth, this is Nick. Just a couple of things to maybe provide more clarity around IDR. As Brian said, we're hovering right now on that 70 percent in network.

Speaker #5: Are you still seeing continued interest from those payers going in network given your high win rates in the IDR process? Or do you think that we should just sort of view that as roughly stable going forward?

Speaker #3: We think if you look at the current commercial payer mix, we have over 600 payers. There's a long tail of smaller ones there. We probably top out at 80 percent when we'll be successful at bringing on a couple of larger ones.

Speaker #3: So we've got two different things here. The comments the previous comments were really on cash collections from those really old dates of service. From an in-network perspective, we continue to have really good conversations with a lot of payers.

Speaker #3: In network, what a mystery is or one of the things I'll demystify is just because you're out of network doesn't mean you automatically go to IDR.

Speaker #3: We settle with a lot of the smaller ones that may only have four claims a year with us. On air, intervention. So one, we continue to bring down the IDR volume, the IDR amount that we need to settle.

Speaker #3: We did bring our largest out-of-network payer in network during the first quarter. We have signed a number of agreements both with some very small out-of-network payers, but then re-opt with some other payers as well in the quarter.

Speaker #3: The other is there's a lot of scrutiny around NSA we believe when you look at our business and is one of the items I spoke to Dr. Oz about.

Speaker #3: I think it really comes down to the approach of the payers. We’d love to get them all in-network at appropriate rates and terms.

Speaker #3: Many we have great conversations with. Some are more challenged, and those are probably the same payers that are challenged with others as well. But I think we're going to continue to drive the in-network payers, or the payers in network, as much as we possibly can.

Speaker #3: There's a reason we win north of 90 percent consistently. It's pretty clear-cut. When it comes to medical necessities. So I anticipate we'll get further positive momentum around this item.

Speaker #4: Great. Thank you very much.

Speaker #3: Again, in-network, out-of-network is really only an emergent air ambulance rate component. And we're just under 70 percent in network on the commercial air ambulance flights.

Speaker #1: Your next question comes from the line of Andrew Mock with Barclays. Andrew, your line is now open.

Speaker #5: Hi. Good morning. Can you walk us through the underlying assumptions on air transport volumes embedded in guidance, including same-base growth as well as the pace and contribution from new air bases?

Speaker #3: And we look forward to driving that further up.

Speaker #4: Yeah. Elizabeth, this is Nick. Just a couple of things to maybe provide more clarity around IDR. As Brian said, we're hovering right now at that 70 percent in-network.

Speaker #5: Thanks.

Speaker #2: Yeah. Thanks, Andrew. From a same-base volume perspective, I think as we've mentioned, we expect in the long term to be that low single digit 1 to 2 percent range.

Speaker #4: We think if you look at the current commercial payer mix, we have over 600 payers. There's a long tail of smaller ones there. We probably top out at 80 percent when we'll be successful at bringing on a couple of larger ones.

Speaker #2: Both across all of our transport volumes, specifically for air, as we thought about 2026. We're towards the top end of that range from just a normal core growth in the business.

Speaker #4: In network, one of the mysteries or one of the things I'll demystify is just because you're out of network doesn't mean you automatically go to IDR.

Speaker #2: But on top of that, we also do have weather normalization for the year, if you recall. We had a really poor weather across really all of 2020, all of the certainly the back half of 2025.

Speaker #4: We settle with a lot of the smaller ones that may only have four claims a year with us—on-air intervention. So, one, we continue to bring down the IDR volume, the IDR amount that we need to settle.

Speaker #2: And have really expected to see and have seen thus far more normal weather. So that drives that percentage up a little bit higher. From a rate perspective, again, across all of GMR, we expect that low to mid single digit 2, 3, 4 percent rate growth to continue we've seen that for a while.

Speaker #4: The other is there's a lot of scrutiny around NSA we believe when you look at our business and this is one of the items I spoke to Dr. Oz about.

Speaker #4: There's a reason we win north of 90% consistently. It's pretty clear-cut when it comes to medical necessities. So I anticipate we'll get further positive momentum around this item.

Speaker #2: We continue to see that. We actually outpaced that in the first quarter so we will expect to see some mix shift. That includes air and ground as we just talked about.

Speaker #2: We do have a little bit of headwind from the OBBA and exchanges. But feel really good sitting in that low to mid single digit rate growth overall.

Speaker #5: Great. Thank you very much.

Speaker #2: Your next question comes from the line of Andrew Mock with Barclays. Andrew, your line is now open.

Speaker #6: Hi. Good morning. Can you walk us through the underlying assumptions on air transport volumes embedded in guidance, including same base growth as well as the pace and contribution from new air bases?

Speaker #5: Great. On the regular front, there's been a few developments in recent weeks. First, CMS expanded Medicaid supplemental payment reform to include emergency transport and air ambulance.

Speaker #6: Thanks.

Speaker #3: Yeah. Thanks, Andrew. From a same base volume perspective, I think as we've mentioned, we expect in the long term to be that low single digit.

Speaker #5: And second, CMS finalized some operational changes to the IDR process. Can you walk us through your preliminary thinking on both and help size any impact to the business?

Speaker #5: Thanks.

Speaker #3: One to two percent range. Both across all of our transport volumes, specifically for air, as we thought about 2026. We're towards the top end of that range from just a normal core growth in the business.

Speaker #3: Yeah. Craig, it's Nick. And I'll let Brian again add some extra color. I think what we've mentioned in the script here 5 million impact.

Speaker #3: On the applicable, the flip side of that, and we've nuanced it a little bit, is we actually think there's potential for share look at the public provider model versus our model, we believe there's going to be significant pressure placed on them.

Speaker #3: But on top of that, we also do have weather normalization for the year, if you recall. We had a really poor weather across really all of 2020, all of the certainly the back half of 2025.

Speaker #3: And have really expected to see, and have seen thus far, more normal weather. So that drives that percentage up a little bit higher. From a rate perspective, again, across all of GMR, we expect that low to mid-single-digit, two, three, four percent rate growth to continue. We've seen that for a while.

Speaker #3: So we think there's some share opportunities

Speaker #2: Thanks, Nick. Yeah. That's on the Medicaid capped it Medicare rate. From the IDR stuff that just came out, we're actually I think this is going to be very positive for us.

Speaker #2: From a processing perspective, we don't know that it's going to have a material impact on the financials, but the processing will certainly be easier.

Speaker #3: We continue to see that. We actually outpaced that in the first quarter. So we will expect to see some mix shift. That includes air and ground as we just talked about.

Speaker #2: It also does require the payers to go through a few more steps as they go through the process to make sure they hit those on time.

Speaker #3: We do have a little bit of headwind from the OBBA and exchanges. But feel really good sitting in that low to mid single digit rate growth overall.

Speaker #2: The administrative fee does go from $150 to $15. And so that will have a small impact on us overall. But feel very good about the structural direction that they're taking this.

Speaker #6: Great. On the regular front, there's been a few developments in recent weeks. First, CMS expanded Medicaid supplemental payment reform to include emergency transport and air ambulance.

Speaker #3: And it is only a proposed rule right now. Just for clarity. So I think it'll be open to further debate.

Speaker #2: That's on the Medicaid side. Yeah.

Speaker #6: And second, CMS finalized some operational changes to the IDR process. Can you walk us through your preliminary thinking on both and help size any impact to the business?

Speaker #5: Great. Thank you.

Speaker #1: Our next question comes from the line of Craig Huttenbach with Morgan Stanley. Craig. The line is now open.

Speaker #6: Thanks.

Speaker #3: Yeah. Craig, it's Nick. And I'll let Brian again add some extra color. I think what we've mentioned in the script here right now, we're looking at less than $5 million impact.

Speaker #3: Can we just. That was Craig.

Speaker #5: Thank you. Good morning. So Nick, just give me your operating experience across several leading healthcare service organizations? What are some of the key attributes that distinguish global medical response solutions and kind of where the company's positioned in the market to provide care?

Speaker #3: On the states where this is applicable, the flip side of that, and we've nuanced it a little bit, is we actually think there's potential for share gains for us.

Speaker #3: When you look at the public provider model versus our model, we believe there's going to be significant pressure placed on them. So we think there's some share opportunities for us.

Speaker #3: Thanks, Daniel. Look, a couple of things. One, if you think about some of the data points we put out here, we currently offer a service in communities that represent over 60% of the US population.

Speaker #6: Thanks, Nick. Yeah. That's on the Medicaid capped it Medicare rate. From the IDR stuff that just came out, we're actually I think this is going to be very positive for us.

Speaker #3: So think about that as approximately 200 million Americans that all dial 911 when they have a perceived medical emergency. And more often than not, we're at the other end of that call or the ability to catch that call and navigate those individuals not only to the right site of care, but the right type of care and a lot of times we can administer that care.

Speaker #6: From a processing perspective, we don't know that it's going to have a material impact on the financials, but the processing will certainly be easier.

Speaker #6: It also does require the payers to go through a few more steps as they go through the process to make sure they hit those on time.

Speaker #3: So that in and of itself, in a prior life. I led a value-based care company. One of the limitations of those models is you have to get a payer contract, get lives attributed to you, and then build volume.

Speaker #6: The administrative fee does go from $150 to $15. And so that will have a small impact on us overall. But feel very good about the structural direction that they're taking this.

Speaker #3: In this case, we already have 200 million Americans residing in those communities that we serve. Two, the underpinnings of this is we're an essential service.

Speaker #4: And it is only a proposed rule right now. Just for clarity. So I think it'll be open to further debate.

Speaker #3: That's on the Medicaid side. Yeah.

Speaker #3: People don't only want what we do. They need it. Our positioning and what we've been able to do, GMR, and representing EMS, is be able to demonstrate that when you look at the clinical strength and the individuals we have in delivering that care, what we've embarked on over the last several years is tying what we do from a clinical protocols perspective to the clinical outcomes.

Speaker #6: Great. Thank you.

Speaker #2: Our next question comes from the line of Craig Huttenbach with Morgan Stanley. Craig, your line is now open.

Speaker #4: Can we just.

Speaker #3: That was Craig.

Speaker #4: Oh, Daniel.

Speaker #6: All right. Good morning. So, Nick, just give me your operating experience across several leading healthcare service organizations. What are some of the key attributes that distinguish Global Medical Response Solutions and kind of where the company's positioned in the market to provide care?

Speaker #3: And this information loop that's tied to the health systems we work with, how we. Translate that back to the payer community. And today, I would tell you we get a modest reimbursement for payers with some of these innovative models.

Speaker #4: Thanks, Daniel. Look, a couple of things. One, if you think about some of the data points, we put out here we currently offer a service in communities that represent over 60% of the US population.

Speaker #3: There's a lot more benefit that I think we can capture in sharing where the overall value of that is. So I think that's a significant differentiator on how we're positioned.

Speaker #4: So think about that as

Speaker #3: We talk about our size and our scale. How we can continue to innovate, which comes with the ability to invest there. I've mentioned in the past, we have a full-time government affairs team.

Speaker #3: On the Hill, from a state perspective, so we can continue to educate lawmakers and payers. One, as we continue to iterate on what it is we're delivering.

Speaker #3: Does that help with your question, Daniel?

Speaker #5: It does. Thank you. And then just a follow-up question for Brian. You kind of walked through some puts and takes around whether and different impacts to the business.

Speaker #5: Just more broadly where you sit today in the year, how do you think the year is shaping up relative to prior years in terms of just confidence level of your full-year targets?

Speaker #3: Feel good. We're very we were from a volume perspective, we were really right where we expected. Flu was a little bit softer in the first quarter.

Speaker #3: Then historical, but a few just for that, everything else is pretty good. We continue to see a little bit of shift away from non-emergent where if the contract doesn't make sense, then we will not continue to do that.

Speaker #3: But that's a pretty minor shift. The emergent ground business continues to do well. The air business did very well. Up 1.9%, same base growth in the first quarter.

Speaker #3: A little bit of that was weather. Again, we had mentioned weather. Expected to just a more normalized for the year. All expenses are pretty much where we had expected them to be or slightly better.

Speaker #3: Outside of the fuel and then fuel-related things like our freight charges, I think we mentioned in the first quarter were up. That's where we move aircraft parts around.

Speaker #3: Those were up. Again, it's related to fuel. But feel good about where we sit today. Relative to our expectations, and then relative to our guidance.

Speaker #5: Helpful. Thank you.

Speaker #1: Our last question comes from the line of Daniel Groslight with Citi. Daniel, your line is now open.

Speaker #6: Hi guys. Thanks for taking the question. Post your IPO, you're now levered at around 3.5 times. I'm curious how this changes your capacity and appetite for acquisitions.

Speaker #6: I think you ranked it as number three in terms of priorities behind debt repayment. But I guess the question is, when do you get more comfortable making acquisitions?

Speaker #6: And how does your M&A pipeline currently look? Thanks.

Speaker #3: So from a high-level healthy pipeline, we've probably got what I would call a dozen or so viable targets. One of the commitments we've made to ourselves and to the investor community is if we are to pursue any M&A, one, it'll be very focused.

Speaker #3: Disciplined around our core offering. Would need to be highly accretive. And we're looking for some arbitrage value there as well. So still testing the market.

Speaker #3: An example would be where it either complements a ground services area where there's a good air operator and we could scale up and integrate quickly or vice versa.

Speaker #3: Some adjacent markets where we could use the current established team to expand in geographies and close proximity. So we've got a couple of those targets.

Speaker #1: relative to our expectations, and then relative to our guidance.

Operator: Hello, everyone. Thank you for joining us, and welcome to GMR Solutions' Q1 2026 earnings call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Krister Sorensen, Vice President of Investor Relations. Krister, please go ahead.

Speaker #3: I'll let Brian expand on our comfort level as we mentioned feeling really good about where we are and our ability to continue to deleverage and if the right opportunities pop up, take advantage of that M&A as well.

Speaker #2: That's helpful. Thank you.

Speaker #3: Our last question comes from the line of Daniel Groslight with Citi. Daniel, your line is now open.

Speaker #4: Hi guys. Thanks for taking the question. post your your IPO. You're now levered at around three and a half times. I'm I'm curious how this changes your capacity and and appetite for for acquisitions.

Speaker #2: So in our guidance, there is no M&A. So we'll start there. Although we do have a really good pipeline. Really good conversations. In our history, we both legacy air and legacy ground business had done a ton of M&A.

Speaker #4: I think you ranked it as number three in terms of priorities, behind debt repayment. But I guess the question is, when do you get more comfortable making acquisitions, and how does your M&A pipeline currently look?

Krister Sorensen: Thank you. Good morning. Welcome to the GMR Solutions Q1 2026 earnings conference call. Joining me today are Nick Loporcaro, our Board Chair and CEO, Ted Van Horne, our President and COO, and Brian Tierney, our Executive Vice President and CFO. Before we begin, note that during this call, we may make forward-looking statements, and that actual results may differ materially from those statements because of various risks and uncertainties, including those described in our most recent earnings report posted on our investor relations website and in the Risk Factors section in our IPO prospectus. Today's remarks also include certain non-GAAP financial measures, including adjusted EBITDA. You can find a reconciliation of these measures in our earnings release that is available on our website, investors.globalmedicalresponse.com. Unless otherwise noted, references to the quarter will be for the Q1 of 2026. I will now turn the call over to Nick.

Speaker #2: That's really how we grew. Back pre-merger in 2018. And so feel very comfortable doing it with the right, as Nick just mentioned. We're going to do the right stuff, the stuff that's accretive.

Speaker #4: Thanks.

Speaker #1: So from a high level a healthy pipeline we've we've probably got what I would call a dozen or so you know viable targets. one of the commitments you know we've made to ourselves and to the investor community is if we are to pursue any M&A one it'll be very focused.

Speaker #2: So we'll see as we work through these 10 or 12 targets that we have. And I think the other piece is as we've signaled to the market, we're interested in doing this.

Speaker #2: So this market's kind of been frozen really since COVID. But it's now started to thaw in part because I think we've said that, "Hey, we're open to this at this point in time." So what we've got strong free cash flow, feel very good about our ability to use that cash to delever and then in the right opportunity a lot of these are going to be small tuck-in opportunities.

Speaker #1: Disciplined around our core offering would need to be highly accretive and we're looking you know for some arbitrage value there as well. So still testing the market.

Speaker #1: An examples would be you know where it either complements a ground services area where there's a good air operator and we could scale up and integrate quickly or vice versa.

Speaker #2: We'll see how that makes sense. But feel good about it.

Speaker #3: Yeah. Makes sense. And Brian, on the $16 million from the California state legislation catch-up, I'm curious if you can help us think through how much of that is air versus ground catch-up.

Speaker #1: Some adjacent markets where we could use the current established team to expand, and, you know, geographies in close proximity. So, we've got a couple of those targets.

Nick Loporcaro: Thanks, Krister. Thank you all for joining us today. This is our first earnings call since the successful completion of our IPO a few weeks ago. An incredible accomplishment that could not have been possible but for the dedication of our frontline and support staff as we refocused our energy on our core competency of emergency care over the past few years. With this, we saw profitability grow and our financial profile strengthen, which led us to the IPO. Now we can more publicly, no pun intended, demonstrate and educate the masses on what EMS actually delivers, and that is that we deliver healthcare. We are the front line of the front line. We are the tip of the spear. There's no one further upstream than we are in an emergency situation.

Speaker #3: And then as we look forward for the rest of the year, how should we think about potential additional catch-up payments and what's baked into your guidance for that?

Speaker #1: I'll let Brian expand on our comfort level you know as we mentioned feeling really good about where we are and our ability to continue to deleverage and if the right opportunities pop up take advantage of that M&A as well.

Speaker #3: Thanks.

Speaker #2: Yeah. So that is 100% ground. The federal has the air for the surprise medical billing IDR process. The states have gone in and put in that's they're filling in with ground.

Speaker #2: Yeah, so in our guidance, there is no M&A, so we'll start there. Although we do have a really good pipeline, really good conversations.

Speaker #2: And you know, in our history, both our legacy air and legacy ground businesses had done a ton of M&A. That's really how we grew.

Speaker #2: What that we'd like these state bills because they require the payers to pay the locally published rates. This is this California bill started in January of 2024.

Speaker #2: back you know pre pre-merger in twenty eighteen. and so feel very comfortable doing it with the right as Nick just mentioned. We're gonna do the right stuff.

Nick Loporcaro: GMR is the largest provider of emergency medical services, serving 5.5 million patients annually, covering markets that represent over 60% of the US population with one or more of our solutions. Our 24,000 highly trained clinicians and fleet of ambulances and aircraft are rapidly deployed to navigate and provide essential alternate site out-of-hospital care for patients when they need us most. As a national leader of EMS, this puts us in an exceptional position to be the innovators of the practice and raise the tide for the entire industry. We accomplish this through our 911 Nurse Navigation offering, our Concierge platform, and our online ordering system, Transport.Net. Each of these innovations help take the friction out of the traditional run EMS systems and ultimately provide better patient care, more efficient operations, and better hospital throughput while delivering savings to the payers in turn.

Speaker #2: The stuff that's accretive. So we'll see as we work through, you know, these ten or twelve targets that we have. And I think the other piece is, you know, as we've signaled to the market, we're interested in doing this.

Speaker #2: And the state of California was supposed to publish all of the local rates. At that time. And to this date, they have yet to do that.

Speaker #2: So the payers picked a I guess a rate that they liked or a lower rate took us a while to get them to pay the right rates.

Speaker #2: So this market's kind of been frozen really since COVID. but it's now started to thaw in part because I think we've we've we've you know said that hey we're we're we're open to this at this point in time.

Speaker #2: We've got that process down. So really the first quarter was this big catch-up of about $16 million from those older periods. That's baked into our go-forward NRTs, but that's just a minor or a small increase overall.

Speaker #2: So we've got strong free cash flow. Feel very good about our ability to to use that cash to delever and then in the right opportunity you know a lot of these are gonna be small tuck-in opportunities.

Speaker #2: So you're really not going to see kind of this big lump that you like you saw in the first quarter.

Speaker #2: w+we'll see we'll see how that makes sense but feel good about it.

Speaker #4: Yeah, makes sense. And Brian, on the $16 million from the California state legislation catch-up, I'm curious if you can help us think through how much of that is air versus ground catch-up.

Speaker #3: Got it. Thank you.

Speaker #1: We have reached the end of the Q&A session. I will now turn the call back to Nick for closing remarks.

Speaker #3: Thank you, Christine. So thank you again for joining our inaugural public company earnings call today. We really appreciate it. As you can see, we remain excited to see how our continued focus operational discipline and execution over the past several quarters have positioned us to continue to be the innovators of EMS, which will drive our future growth and success.

Speaker #4: And then as we look for forward for the rest of the year how should we think about potential additional catch-up payments and what's baked into your guidance for that?

Nick Loporcaro: With that, we are pleased to report strong financial and operational results in Q1 2026. Q1 revenues were $1.46 billion, which represents 6.6% year-over-year growth and continues to highlight the strong demand for the mission-critical services that GMR provides and our strong competitive position. Q1 adjusted EBITDA was $305 million, a year-over-year improvement of 9.7%, an EBITDA margin increase of 59 basis points versus the prior year quarter to 20.9%. These results reflect the continued emphasis on improving the efficiency of our integrated operating model and shared services infrastructure designed to effectively support our operators in the markets we serve. I'll note that both revenue and adjusted EBITDA came into the top of the range we provided in the flash of the quarter in the S1. Q1 cash CapEx and cash used in aircraft financing combined was 5.4% of total revenue, compared to 4.7% in Q1 2025.

Speaker #4: Thanks.

Speaker #1: Yeah. So that is a hundred percent ground. the the federal has the air for the surprise medical billing IDR process. the states have gone in and put and that's their part they're filling in with ground.

Speaker #3: We remain highly confident in our path forward, our ability to achieve this would not be possible without our exceptional frontline staff, support personnel, and regional leaders.

Speaker #1: What that we like these these state bills because they require the payers to pay the locally published rates. this is you know this this California bill started in January of twenty twenty-four.

Speaker #3: I'd like to thank you all for your continued support and wish you a wonderful day.

Speaker #1: And the state of California was supposed to publish all of the local rates at that time, and to this date, they have yet to do that.

Speaker #1: So the payers picked a I guess a a l a a rate that they liked or a lower rate took us a while to get them to pay the right rates.

Speaker #1: we've got that process down. So really the first quarter was this big catch-up of about sixteen million bucks from the those older periods. that's baked into our our go forward NRTs but that's just a a minor or a small perc increase overall.

Nick Loporcaro: GMR completed approximately 1.4 million patient encounters during the quarter. We provided ground medical services to over 1.3 million patients, which includes more than one million transports, along with over 28,000 calls through our 911 Nurse Navigation office. The remaining approximately 270,000 ground patient encounters consists of interventions on scene that did not result in a transport. During the quarter, we provided air medical services to over 34,000 patients. Our strong performance was driven by continued same-market revenue growth, revenue from cross-selling and new markets, disciplined cost management, continued optimization of our clinical and operational platforms, and an unwavering focus on service to our communities by keeping care at the center of what we do. Ted and Brian will elaborate further on the detailed drivers of the performance later in the call. I now want to provide an overview on regulatory matters.

Speaker #1: so you're really not gonna see kind of this big lump that you like you saw in the first quarter.

Speaker #4: Got it. Thank you.

Speaker #3: We have reached the end of the Q&A session. I will now turn the call back to Nick for closing remarks.

Speaker #1: Thank you, Christine. So thank you again for joining our inaugural public company earnings call today. We really appreciate it. As you can see, we remain excited to see how our continued focus, operational discipline, and execution over the past several quarters have positioned us to continue to be the innovators of EMS, which will drive our future growth and success.

Speaker #1: We remain highly confident in our path forward. Our ability to achieve this would not be possible without our exceptional frontline staff, support personnel, and regional leaders.

Speaker #1: I'd like to thank you all for your continued support and wish you a wonderful day.

Nick Loporcaro: We've engaged with Congress to request that it enact new legislation requiring CMS to modernize air and ground ambulance reimbursement based on cost data that CMS is authorized to collect. GMR has highlighted to Congress and the administration the inadequate reimbursement we receive from Medicare. I also raised this issue when I met with the CMS Administrator, Dr. Mehmet Oz, in February. As a leader in EMS, we feel an obligation to raise our hand and move the whole industry forward. We are optimistic that bipartisan legislation will be introduced in the House soon. Last week, CMS released a proposed rule that would substantially overhaul the use of state-directed payments and supplemental payments, including intergovernmental transfers, or IGT, with respect to Medicaid funding.

Nick Loporcaro: Under the proposed rule, a state's fee-for-service Medicaid payments would be limited to between 100% and 110% of Medicare rates if the state's total payment is targeted to a subset of providers within a broader provider group. The proposed rule includes ground and air medical groups, both private and municipally-run. Notably, if the payment is not targeted to a subset of providers, a type of parity analysis within a broader provider group, then the Medicare rate cap does not apply. State plans that are impacted by the proposed rule will have a transition period until 2029. Albeit not common that ground or air Medicaid payments exceed Medicare rates, we are evaluating the potential impacts of the proposed rule from all perspectives. Early analysis suggests a less than $5 million negative annual impact to GMR from the proposed rule.

Nick Loporcaro: We are also evaluating the proposed rule's impact on select municipal-run systems and the sustainability of their model versus our private provider model. Overall, we remain encouraged by the progress made in both the federal and state issues. We'll keep you updated as we learn more. I'll now turn it over to Ted to dive deeper into our performance within the quarter.

Ted Van Horne: Thanks, Nick. GMR's focus remains growing our core emergent services, completing non-emergent services where they make fiscal sense, and realizing efficiency through the use of innovative offerings like 911 Nurse Navigation. During the quarter, patient encounters related to emergent transports and nurse navigation increased 1.7%, while low to no reimbursing patient encounters related to non-emergent and wheelchair transports and those encounters that did not result in a transport decreased 5.2%. More specifically, total emergent transports increased 0.7% during the quarter. Same market emergent ground increased 0.5%, despite a less severe, shorter than average, and much shorter than prior year flu season. Same market emergent flights increased 1.9%. Our weather cancellation rate in the quarter was 17.1%, 81 basis points lower than the prior year quarter, and 220 basis points lower than the previous three-year average for the quarter.

Ted Van Horne: Our 911 Nurse Navigation solution continues to expand, currently serving 29 communities across the US. We have additional 13 markets currently in the implementation phase, which will bring our total covered lives to over 22 million. In the quarter, our nurses navigated over 28,000 911 calls, which was nearly a 47% increase over the prior year quarter. In the 911 markets we have historically served where we implement nurse navigation, we have seen on average a 15% reduction in dry runs, effectively reserving ALS resources for the highest acuity patients. We have also seen a 2.5% reduction in total transports. These are transports that we would likely receive little to no reimbursement for. Our nurses navigate these calls to care options and other transport modalities that are better for the patient, better for our crews, and better for the hospital systems that are plagued with overcrowded emergency departments.

Ted Van Horne: Together with these stakeholders, 911 Nurse Navigation allows us to find a better way to improve patient outcomes. Patient encounters that did not result in a transport decreased 0.8%. Lower reimbursing non-emergent and wheelchair patient encounters decreased 7.2% and 52.8% respectively when compared to the prior year quarter. This is consistent with remaining focused on our core emergent services and maintaining contracts that provide appropriate reimbursement. Solutions like Concierge, which create guaranteed reimbursement from partner hospital systems for non-emergent transports, are part of this strategy. With respect to labor, our crew staffing metrics continue to show trends in line with expectations. Total crew wages in the Q1 increased 3.0% year over year, predominantly tied to wage increases and filling open positions. Base unit cost, which reflects the year over year inflation in our base wages, was up 3.8% per payroll hour, as expected.

Ted Van Horne: Our crew vacancy rate declined by 77 basis points as positive hiring continued in the quarter. We will continue to invest in our crews to ensure we can hire and retain our pilots, mechanics, and clinical staff, critical to the sustainability of our operations. As for new business growth, we remain bullish about our ability to win new business opportunities in our core areas of emergency medical services, growth of 911 Nurse Navigation, and expanded municipal ambulance contracts. During the quarter, our revenue included approximately $20 million in new market growth. Also in the quarter, we executed new agreements totaling nearly $47 million in incremental annualized revenue. Last year's federal budget reconciliation law created a Rural Health Transformation Program that will direct $50 billion over the next five years toward state-led efforts to transform how they deliver and finance healthcare in rural areas.

Ted Van Horne: Since passage of the law, we've engaged with officials from nearly every state to share ideas about how GMR and the EMS community can play an even bigger role in ensuring access to quality healthcare in rural and frontier areas. We are responding to active RFPs from several states and engaging directly in contracting discussions with others. With rural healthcare under pressure as a result of hospital closures, EMS providers can and should be part of the solution to these challenges across the country. We stand ready to help states solve these challenges as part of our national growth strategy. I will now turn it over to Brian, who will provide more detail on the financials.

Brian Tierney: Thanks, Ted. As Nick mentioned, we had strong performance in Q1. In Q1 2026, GMR reported net revenue of $1.46 billion, which is a 6.6% increase year-over-year. Compared to the same quarter in 2025, Q1 emergent air volumes were up 1.1%. Emergent ground transports increased to 0.6%, while non-emergent ground transports were down 7.2%. Overall emergent air requests decreased to 0.8%, flights were impacted by favorable weather, resulting in a capture rate increase of approximately 87 basis points to 45.1%. We estimate that the favorable weather impacted revenue by approximately $11 million compared to the prior year quarter. Net revenue per transport increased 7.9% compared to the prior year's quarter.

Brian Tierney: Revenue performance was driven by a positive mix shift from non-emergent to emergent transports and strong underlying air and ground NRT improvements on a like-for-like basis, driven by strong collections performance in our normal collection cycle. As expected, we saw a decrease in collections from older dates of service associated with the initial implementation of the No Surprises Act, Independent Dispute Resolution process, or IDR. During the quarter, we collected about $7 million from IDR-related transports performed in 2022 through 2024, a decrease of nearly $24 million from similarly mature dates of service during the prior year. Separately, during the quarter, we did benefit from roughly $16 million in collections from 2024 dates of service related to the implementation of California's state surprise medical billing legislation.

Brian Tierney: Recall that the federal IDR process applies to air transports, while state balance billing laws generally require payers or fully insured state plans to pay either the locally set ground ambulance rate or a multiple of Medicare. Following the implementation of the California bill on 1 January 2024, select payers underpaid the required local rates. While it took us time, we were successful in collecting on the correct rates in Q1 2026. In Q1, we did not see the expected negative impact on payer mix as a percentage of transports from the implementation of the One Big Beautiful Bill Act, which was expected to decrease Medicaid mix, or the expiration of the Affordable Care Act exchange subsidies, which were expected to decrease commercial mix.

Brian Tierney: However, when closing April, we did start to see some of these impacts appear, perhaps as a result of the timing of recognition by the payers of member exchange premiums. We will continue to closely monitor payer mix and have included some degradation in our guidance going forward. Our DSO for the quarter decreased 3 days to 76 days from 79 days in the same quarter last year. We continue to monitor our DSO metric to ensure the reasonableness of our estimates of revenue and AR. Regarding payer mix, payer mix by net transport revenue for the quarter was 57% commercial, 25% Medicare, 9% Medicaid, 7% from other third-party payers, and 2% self-pay. Payer mix by net transport revenue for Q1 2025 was 56% commercial, 26% Medicare, 9% Medicaid, 7% from other third-party payers, and 2% self-pay.

Brian Tierney: Contributing to the midshift are the higher rates that we are able to drive for out-of-network and in-network payers as a result of the No Surprises Act. We are winning IDR disputes at a rate over 90%, and we utilize the amounts we are winning through the No Surprises Act adjudication process as reference points when renegotiating expiring air contracts with lower reimbursing in-network payers or when bringing new payers in-network. During the quarter, effective February 1, we signed an agreement that brought our largest out-of-network payer in-network at reasonable rates and terms, which is expected to reduce our IDR adjudications by roughly 12%. This helps bring the percentage of our commercial air transports that are in-network to nearly 70%. Complementary revenue decreased 1.2%, or roughly $0.5 million, primarily driven by a small FEMA deployment last year for floods in Kentucky. Excluding this, our complementary revenue grew 4.7%.

Brian Tierney: Now, turning to expenses. Total operating expense increased 4.1% to $1.24 billion in the quarter compared to $1.19 billion for the same period in 2025. Employee wages, benefits, and taxes increased by 4.8% to $770 million. Crew wages increased 3.0%, driven primarily by expected wage increases. Maintenance, fuel, and other direct expenses increased by 6.1% to $119 million. The increase was primarily driven by fuel and the timing of medical supplies purchased. Fuel costs began to rise in early March due to the Iran conflict. Historically, our fuel expense is about 2% of total revenue, and only about 1% is tied to the commodity price. With fuel being a small portion of our total expense and managed through bulk purchase and fuel card discount programs, we have historically not hedged our commodity exposure.

Brian Tierney: On a go-forward basis, we may consider paying for the certainty that fuel hedging provides as a potential option to further limit our exposure, and we will keep you informed on our progress in this area. Insurance expense, which increased by $9.3 million, or 27.6%, to $43 million, driven primarily by increased professional liability-related claims and third-party premium expenses. Other operating expenses, which include outside services and general and administrative expenses, increased 5.7% to $228.1 million. Outside services increased $1.3 million or 3.1%. General and administrative expenses increased $11.0 million or 6.3%, primarily driven by increased system integration and enhancement expenses, software licensing and development, and freight expense. Depreciation and amortization expense was relatively flat versus prior year, and acquisition integrations and other charges decreased to $3.6 million compared to $4.3 million for the same prior year period due to reduced fees associated with previously divested business units.

Brian Tierney: Interest expense decreased 26.8% to $83.2 million as a result of the refinancing completed in September 2025. The net result is that net income increased 179.9% to $106.3 million compared to $38 million, and adjusted EBITDA increased 9.7% to $305 million compared to $278 million for the same prior year period. Adjusted EBITDA margin finished the quarter at 20.9%. Shifting to CapEx, cash flows, and liquidity, cash used for CapEx and aircraft financings was 5.4% of revenue for Q1 2026, compared to 4.7% of revenue for Q1 2025. The increase was primarily driven by the timing of CapEx purchases in the prior year. GMR finished Q1 with $426.1 million in cash and cash equivalents and undrawn ABL with $692 million of cash borrowing capacity after letters of credit. On 06 March, we reduced the preferred equity holdings by $250 million using cash.

Brian Tierney: Through the proceeds of our IPO and cash on hand, we improved our leverage position by more than $1.15 billion in total debt reduction and preferred equity redemption, resulting in an approximately $46 million reduction in annualized term loan interest expense and a $73 million reduction in annualized preferred equity dividend accrual. Following the IPO, Moody's and S&P upgraded our credit ratings from B, B2 to B-plus, B1, respectively. The upgrade by Moody's triggered a 25-basis-point interest rate step-down on GMR's existing term loan facility. This results in a $7.4 million reduction in annualized interest expense after considering the debt reductions I just mentioned. All credit enhancements combined resulted in more than $125 million reduction in annualized financing costs. Net leverage after the IPO was approximately 3.5 times.

Brian Tierney: We expect strong cash flows to drive this below 3.3 times by year-end and have line of sight to 3.0 times in 2027. Moving on to our full year 2026 guidance, which includes actual results through Q1. We have set our revenue target at a range of $5.89 billion to $6.18 billion. Our adjusted EBITDA target at a range of $1.135 billion to $1.195 billion and the target for our total cash used for CapEx and aircraft financing between 5.1% and 5.3% of total revenue. This 2026 guidance reflects a return to more normal collection timing following the IDR-related collections on older dates of service in 2025. It also includes expectations of a degraded payer mix by volume from the implementation of the One Big Beautiful Bill Act and elimination of the ACA exchange subsidies that we saw start to appear in April.

Brian Tierney: We have also incorporated higher fuel costs as a result of the Iran conflict and lower interest expense resulting from the new capital structure and lower upgraded rate. Adjusting for these items, in the long term, we expect GMR to grow top-line revenue at mid-single-digit plus, resulting from same market low single-digit volume and low to mid-single-digit rate growth, our ability to cross-sell in existing markets, and opportunities to expand in new markets. We anticipate high single-digit plus adjusted EBITDA growth, adjusted EBITDA margins around 20%, and cash for CapEx and aircraft financing to be just above 5% of revenue. Now I will turn it over to the operator to open for any questions. Thank you.

Operator: We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Benjamin Rossi with JPMorgan. Benjamin, your line is now open.

Benjamin Rossi: Hi. Good morning. Thanks for taking my questions here. Can you just unpack the ACA attrition impact that you experienced during Q1, give us some of the details on some of the benefits that you got from ACA-related volumes during 2025? As you think about that expected embedded growth within your initial guidance, what are you factoring for ACA volumes for 2026? Thanks.

Nick Loporcaro: Hey, Benjamin. It's Nick. Thanks for the question. I'll hand it over to Brian in a second. In Q1, we actually saw little, if no impact, on ACA and the One Big Beautiful Bill Act on even on the Medicaid. I think what Brian's alluding to is we factored in some, but I'll let him expand on that as well.

Brian Tierney: Yeah. Thanks, Ben. Yeah, we saw about a 1% mix shift out of commercial into other payers as we closed April. Now one month is not a trend make, but we had expected to see some of this really in Q1. We've baked that into our guidance as we go forward. Yeah, total exchange, and One Big Beautiful Bill Act impact that's in our guidance for the year, really for the last nine months is in that $25 to 30 million total range. That's what we had expected. As we think about 2025 and before, again, we had not really seen any movement, even as in the run-up across the end of 2025 as folks were trying to figure out where they were going to get their health insurance.

Nick Loporcaro: Yeah. Benjamin, we're still digging into this, but there's two indicators that we've noticed. One in-house is that we had a significant increase of our employee base join our own benefits plan, which we suspect may have been on ACA exchange type plans. The other is, we experienced this in the past as well, where if you're on a gold plan on an exchange plan and you go down to a bronze plan, that doesn't impact our reimbursement or our billing. Again, more to dig in there as we get through to Q2, and probably more to provide once we get to our Q2 report out.

Benjamin Rossi: Great. I appreciate the added details there. I guess, just flipping topics to fuel impact during Q1. When thinking about the macro impact of oil prices and jet fuel, can you quantify the dollar impact in Q1 from higher prices versus your initial budgeted expectations coming into the year? Maybe explain how fuel procurement mechanics flow through your P&L. Thanks.

Brian Tierney: Sure. For January, February, we were actually slightly better on a rate perspective. Really wasn't until March that we saw the increased fuel prices. I guess they started things in Iran right at the very, very end of February. It was about $3 million total for March, based on what flowed through the P&L. As we look forward, within our guidance, Well, we used at the time was about, WTI was about $98. I think WTI this morning is about $92. When we built our forecast at $98, it added about $25 or $30 million to the P&L from an expense perspective as well. From how it flows through our P&L, just normally, you can think of fuel in two parts.

Brian Tierney: There's the commodity exposure, which is kind of what we've talked about, and then there's the cost to get it from the refinery, through a distribution network to our vehicles in some way, shape, or form. Roughly half of our expense is associated with commodity price, and roughly half is associated with, what we call in the plan, getting it from the refinery to the vehicles. As we think we've put in our S1 as well as I think I mentioned on this call, it's roughly 1% of revenue is associated with commodity price.

Operator: Our next question comes from the line of Elizabeth Anderson with Evercore. Elizabeth, your line is now open.

Elizabeth Anderson: Hi, guys. Good morning. Thank you so much for the question. I was curious about your IDR commentary. I think you said $7 million impact and maybe $24 million difference versus last year. For those who are trying to sort of understand how that flows through the rest of the year, would you say that that magnitude is sort of similar in terms of how you would estimate we should think about the future quarters in 2026? Thank you.

Brian Tierney: Yeah. Thanks, Elizabeth. We saw a little bit more of the collections from the early dates of service related to IDR really hit across Q2, Q3, and Q4. It'll be probably an order of magnitude, maybe 50% to 100% higher than what we saw in Q1 from a delta perspective. We've really not seen those collections from those really old dates of service flow through here in 2026. Most of it got cleared out in 2025. We're really back to more our normal IDR collection cycle.

Elizabeth Anderson: Got it. That's very helpful. Can you tell us at that point, can you clarify if that impetus means that you would expect the additional commercial payers to sort of come on network as a result of that? Does that sort of smooth out going forward? Are you still seeing continued interest from those payers going in-network, given your high win rates in the IDR process? Do you think that we should just view that as roughly stable going forward?

Brian Tierney: We've got two different things here. The previous comments were really on cash collections from those really old dates of service. From an in-network perspective, we continue to have really good conversations with a lot of payers. We did bring our largest out-of-network payer in-network during Q1. We have signed a number of agreements, both with some very small out-of-network payers, but then re-upped with some other payers as well in the quarter. I think it really comes down to the approach of the payers. We'd love to get them all in-network at appropriate rates and terms. Many we have great conversations with. Some are more challenged, and those are probably the same payers that are challenged with others as well. I think we're going to continue to drive the in-network payers or the payers in-network as much as we possibly can.

Brian Tierney: Again, in-network, out-of-network is really only an emergent air ambulance rate component, and we're just under 70% in-network on the commercial air ambulance flights. We look forward to driving that further up.

Nick Loporcaro: Yeah, Elizabeth, this is Nick. Just a couple of things to maybe provide more clarity around IDR. As Brian said, we're hovering right now around that 70% in-network. We think if you look at the current commercial payer mix, we have over 600 payers. There's a long tail of smaller ones there. We probably top out at 80%, when we'll be successful bringing on a couple of larger ones in-network. One of the mysteries or one of the things I'll demystify is just because you're out-of-network doesn't mean you automatically go to IDR. We settle with a lot of the smaller ones that may only have four claims a year with us on error intervention. One, we continue to bring down the IDR volume, the IDR amount that we need to settle. The other is, there's a lot of scrutiny around NSA.

Nick Loporcaro: We believe when we look at our business, and this is one of the items I spoke to Dr. Oz about, there's a reason we win north of 90% consistently. It's pretty clear-cut when it comes to medical necessity. I anticipate we'll get further positive momentum around this item.

Elizabeth Anderson: Great. Thank you very much.

Operator: Your next question comes from the line of Andrew Mok with Barclays. Andrew, your line is now open.

Andrew Mok: Hi. Good morning. Can you walk us through the underlying assumptions on air transport volumes embedded in guidance, including same-base growth as well as the pace and contribution from new air bases? Thanks.

Brian Tierney: Yeah, thanks, Andrew. From a same-base volume perspective, I think as we've mentioned, we expect in the long term to be that low single digit, 1% to 2% range, both across all of our transport volumes, specifically for air, as we thought about 2026. We're towards the top end of that range from just a normal core growth in the business. On top of that, we also do have weather normalization for the year. If you recall, we had really poor weather across really all of, certainly the back H2 of 2025, and have really expected to see and have seen thus far, more normal weather. That drives that percentage up a little bit higher. From a rate perspective, again, across all of GMR, we expect that low to mid single digit 2%, 3%, 4% rate growth to continue. We've seen that for a while.

Brian Tierney: We continue to see that. We actually outpaced that in Q1. We will expect to see some mix shift. That includes air and ground. As we just talked about, we do have that little bit of headwind from the OBBA and exchanges. Feel really good sitting in that low to mid single-digit rate growth overall.

Andrew Mok: On the regu front, there's been a few developments in recent weeks. First, CMS expanded Medicaid supplemental payment reform to include emergency transport and air ambulance. Second, CMS finalized some operational changes to the IDR process. Can you walk us through your preliminary thinking on both and help size any impact to the business? Thanks.

Nick Loporcaro: Yeah, Craig, it's Nick, and I'll let Brian again add some extra color. I think what we've mentioned in the script here, right now we're looking at less than $5 million impact on the states where this is applicable. The flip side of that, and we've nuanced it a little bit, is we actually think there's potential for share gains for us. When you look at the public provider model versus our model, we believe there's going to be significant pressure placed on them. We think there's some share opportunities for us.

Brian Tierney: Thanks, Nick. Yeah, that's on the Medicaid capped at Medicare rate. From the IDR stuff that just came out, we actually think this is going to be very positive for us from a processing perspective. We don't know that it's going to have a material impact on the financials, but the processing will certainly be easier. It also does require the payers to go through a few more steps as they go through the process to make sure they hit those on time. The administrative fee does go from $150 to $15. So, that will have a small impact on us overall. Feel very good about the structural direction that they're taking this.

Nick Loporcaro: It is only a proposed rule right now, just for clarity. I think it'll be open to further debate.

Brian Tierney: That's on the Medicaid side, yeah.

Nick Loporcaro: Yeah.

Andrew Mok: Great. Thank you.

Operator: Our next question comes from the line of Craig Hettenbach with Morgan Stanley. Craig, your line is now open.

Nick Loporcaro: That was Craig.

Craig Hettenbach: Great. Thank you.

Craig Hettenbach: I think that was Daniel.

Craig Hettenbach: Oh, Daniel, sorry.

Craig Hettenbach: Hi, good morning. Nick, just given your operating experience across several leading healthcare service organizations, what are some of the key attributes that distinguish Global Medical Response Solutions in where the company's positioned in the market to provide care?

Nick Loporcaro: Thanks, Daniel. Look, a couple of things. One, if you think about some of the data points we put out here, we currently offer a service in communities that represent over 60% of the US population. Think about that as approximately 200 million Americans that all dial 911 when they have a perceived medical emergency. More often than not, we're at the other end of that call, or the ability to catch that call and navigate those individuals not only to the right site of care, but the right type of care, and a lot of times we can administer that care. That in and of itself, in a prior life when I led a value-based care company, one of the limitations of those models is you have to get a payer contract, get lives attributed to you, and then build volume.

Nick Loporcaro: In this case, we already have 200 million Americans residing in those communities that we serve. Two, the underpinnings of this is we're an essential service. People don't only want what we do, they need it. Our positioning and what we've been able to do, GMR, in representing EMS, is be able to demonstrate that, when you look at the clinical strength and the individuals we have in delivering that care, what we've embarked on over the last several years is tying what we do from a clinical protocols perspective to the clinical outcomes. This information loop that's tied to the health systems we work with, how we translate that back to the payer community. Today, I would tell you, we get a modest reimbursement for payers with some of these innovative models.

Nick Loporcaro: There's a lot more benefit that I think we can capture in sharing where the overall value of that is. I think that's a significant differentiator on how we're positioned. We talk about our size and our scale, how we can continue to innovate, which comes with the ability to invest there. I've mentioned in the past, we have a full-time government affairs team on the Hill from a state perspective. We can continue to educate lawmakers and payers, one, as we continue to iterate on what it is we're delivering. Does that help with your question, Daniel?

Craig Hettenbach: It does, thank you. Just a follow-up question for Brian. You kind of walked through some puts and takes around weather and different impacts to the business. Just more broadly, where you sit today in the year, how you think the year is shaping up relative to prior years in terms of just confidence level of your full-year targets?

Brian Tierney: Feel good. From a volume perspective, we're really right where we expected. Flu was a little bit softer in Q1 than historical, if you adjust for that, everything else is pretty good. We continue to see a little bit of shift away from non-emergent, where if the contract doesn't make sense, then we will not continue to do that. That's a pretty minor shift. The emergent ground business continues to do well. The air business did very well, up 1.9% same base growth in Q1. A little bit of that was weather. Again, we had mentioned weather expected to just more normalize for the year. All expenses are pretty much where we had expected them to be or slightly better, outside of the fuel. Fuel-related things like our freight charges, I think we mentioned in Q1, were up.

Brian Tierney: That's where we move aircraft parts around. Those were up. Again, it's related to fuel. Feel good about where we sit today relative to our expectations and then relative to our guidance.

Craig Hettenbach: Helpful. Thank you.

Operator: Our last question comes from the line of Daniel Grosslight with Citi. Daniel, your line is now open.

Daniel Grosslight: Hi, guys. Thanks for taking the question. Post your IPO, you're now levered at around 3.5x. I'm curious how this changes your capacity and appetite for acquisitions. I think you ranked it as number three in terms of priorities behind debt repayment. I guess the question is, when do you get more comfortable making acquisitions, and how does your M&A pipeline currently look? Thanks.

Nick Loporcaro: From a high level, a healthy pipeline. We've probably got what I would call 12 or so viable targets. One of the commitments we've made to ourselves and to the investor community is if we are to pursue any M&A, 1, it'll be very focused, disciplined around our core offering, would need to be highly accretive and we're looking for some arbitrage value there as well. Still testing the market and examples would be, where it either complements a ground services area where there's a good air operator and we could scale up and integrate quickly or vice versa. Some adjacent markets where we could use the current established team to expand in geographies in close proximity. We've got a couple of those targets. I'll let Brian expand on our comfort level.

Nick Loporcaro: As we mentioned, feeling really good about where we are and our ability to continue to deleverage and, if the right opportunities pop up, take advantage of that M&A as well.

Brian Tierney: In our guidance, there is no M&A. We'll start there. Although we do have a really good pipeline, really good conversations. In our history, we both, legacy air and legacy ground business, had done a ton of M&A. That's really how we grew back pre-merger in 2018. Feel very comfortable doing it with the right, as Nick just mentioned, we're going to do the right stuff, the stuff that's accretive. We'll see as we work through these 10 or 12 targets that we have. I think the other piece is, as we've signaled to the market, we're interested in doing this. This market's kind of been frozen really since COVID.

Brian Tierney: It's now started to thaw in part because I think we've said that, Hey, we're open to this at this point in time. We've got strong free cash flow, feel very good about our ability to use that cash to delever. In the right opportunity, a lot of these are going to be small tuck-in opportunities. We'll see how that makes sense, but feel good about it.

Daniel Grosslight: Yep, makes sense. Brian, on the $16 million from the California state legislation catch-up, I'm curious if you can help us think through how much of that is air versus ground catch-up. As we look forward for the rest of the year, how should we think about potential additional catch-up payments and what's baked into your guidance for that? Thanks.

Brian Tierney: Yep. That is 100% ground. The federal has the air for the surprise medical billing IDR process. The states have gone in and put a nest. They're filling in with ground. We like these state bills because they require the payers to pay the locally published rates. This California bill started in January 2024, the state of California was supposed to publish all of the local rates at that time. To this date, they have yet to do that. The payers picked, I guess, a rate that they liked or a lower rate. It took us a while to get them to pay the right rates. We've got that process down. Really the Q1 was this big catch-up of about $16 million from those older periods. That's baked into our go-forward NRTs, that's just a minor or a small increase overall.

Brian Tierney: You're really not going to see this big lump like you saw in Q1.

Daniel Grosslight: Got it. Thank you.

Operator: We have reached the end of the Q&A session. I will now turn the call back to Nick for closing remarks.

Nick Loporcaro: Thank you, Christine. Thank you again for joining our inaugural public company earnings call today. We really appreciate it. As you can see, we remain excited to see how our continued focus, operational discipline, and execution over the past several quarters have positioned us to continue to be the innovators of EMS, which will drive our future growth and success. We remain highly confident in our path forward. Our ability to achieve this would not be possible without our exceptional frontline staff, support personnel, and regional leaders. I'd like to thank you all for your continued support and wish you a wonderful day.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.