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AHCO Nasdaq· AdaptHealth Corporation
Earnings report Q4 2023

AdaptHealth Corp. Reports Strong Revenue Growth in Latest Quarter

Segments of Revenue

AdaptHealth Corp. reported total net revenue of $3.20 billion for the year ended December 31, 2023, representing a 7.7% increase compared to the previous year. The company's revenue is divided into two main segments: net sales revenue and net revenue from fixed monthly equipment reimbursements.

In terms of net sales revenue, the breakdown by core product lines for the year ended December 31, 2023, is as follows:

  • Sleep: $897.1 million
  • Diabetes: $647.4 million
  • Supplies to the home: $192.5 million
  • Respiratory: $32.4 million
  • HME: $110.2 million
  • Other: $251.7 million

Net revenue from fixed monthly equipment reimbursements for the same period is as follows:

  • Sleep: $344.0 million
  • Diabetes: $12.6 million
  • Respiratory: $566.5 million
  • HME: $96.3 million
  • Other: $49.4 million

Strengths

AdaptHealth Corp. demonstrated strong revenue growth in the latest quarter, with a 7.7% increase compared to the previous year. This growth can be attributed to the company's diverse product lines, including sleep, diabetes, supplies to the home, respiratory, HME, and other categories. The company's focus on providing home medical equipment and related supplies positions it well in the growing healthcare industry. Management comments indicate that AdaptHealth Corp. continues to expand its customer base and enhance its service offerings, contributing to the revenue growth.

Challenges

Despite the overall revenue growth, there are some challenges for AdaptHealth Corp. The company experienced a significant increase in costs and expenses, particularly in the form of goodwill impairment, which amounted to $830.8 million. This impairment negatively impacted the company's operating income, resulting in a loss of $598.4 million. Additionally, general and administrative expenses increased by 17.2%, which could indicate potential inefficiencies in the company's operations.

Noteworthy

It is worth noting that AdaptHealth Corp. follows a revenue recognition policy that recognizes revenues when control of the promised goods or services is transferred to customers. This policy ensures accurate and timely recognition of revenue based on the delivery of services and related products. The company also highlights its participation in at-risk capitation arrangements, which contribute to its revenue recognition process.

Summary

AdaptHealth Corp. delivered strong revenue growth in the latest quarter, driven by its diverse product lines and focus on home medical equipment and related supplies. The company's net revenue increased by 7.7% compared to the previous year. However, challenges such as significant costs and expenses, including goodwill impairment, and increased general and administrative expenses, impacted the company's operating income. Overall, AdaptHealth Corp. remains well-positioned in the healthcare industry, with opportunities for further expansion and service enhancement.

Source documents

Form 10-K  filed on Feb 27, 2024
25 pages scanned

Reference data

Company financials Q4 revenue 858M
Analyst estimates Q4 EPS beat by 170.52%
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