AdaptHealth (AHCO) Canaccord Genuity's 46th Annual Growth Conference summary

Strategic transformation and portfolio focus

• Completed a two-year portfolio rationalization, exiting diabetes and e-commerce businesses to focus on sleep, respiratory, and home medical equipment.

• Sale of the diabetes business to Cardinal Health enables debt reduction and capital redeployment to core growth areas.

• Overhead costs of $60 million remain post-transaction, with half targeted for removal in the first year and the rest through growth and M&A.

• Integration efforts have shifted the company from a collection of acquisitions to a more unified operation.

Operational performance and growth drivers

• Achieved 16% top-line growth, with 10% from West Coast expansion and 5% from the base business.

• Sleep segment saw 15% growth, driven by increased awareness, wearables, and GLP therapies.

• Respiratory business continues steady growth, supported by demographic trends and strong clinical value.

• Record referral volumes and breaking new records in core segments.

Capitated contract and West Coast expansion

• Onboarded a major capitated contract covering 13 million members, requiring 40 new locations and significant investment.

• Initial onboarding challenges impacted profitability, but ongoing adjustments are expected to stabilize costs.

• Capitation model provides exclusive relationships, administrative efficiency, and a halo effect for further growth.

• Awaiting potential expiration of a DME moratorium, which could unlock additional fee-for-service growth in new geographies.