v3.26.1
Segment Information
 3 Months Ended
Mar. 31, 2026
Segment Reporting [Abstract]  
Segment Information Segment Information
The Company operates its business through four reportable segments that align to the Company’s product categories: Sleep Health, Respiratory Health, Diabetes Health, and Wellness at Home. A description of the products and services provided within each of the Company’s four reportable segments is provided below.

Sleep Health

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

Respiratory Health

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

Diabetes Health

The Diabetes Health segment provides medical devices, including continuous glucose monitors and insulin pumps, and related services to patients for the treatment of diabetes.

Wellness at Home

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

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

The following tables present segment net revenue, significant segment expenses, and other segment items that are included in the Company’s reported measure of segment profit or loss for the three months ended March 31, 2026 and 2025 (in thousands):

Three Months Ended March 31, 2026
Sleep HealthRespiratory HealthDiabetes HealthWellness at HomeTotal
Net revenue$358,495 178,140 142,166 140,998 $819,799 
Less:
Cost of product and supplies (a)114,337 34,921 106,957 67,948 324,163 
Labor cost (a) (b)102,671 55,238 14,468 39,329 211,706 
Other operating expenses (a) (c)41,060 18,302 2,132 13,616 75,110 
Other segment items (d)37,730 19,638 14,468 15,791 87,627 
Adjusted EBITDA$62,697 $50,041 $4,141 $4,314 $121,193 

Three Months Ended March 31, 2025
Sleep HealthRespiratory HealthDiabetes HealthWellness at HomeTotal
Net revenue$316,351 165,481 138,844 157,206 $777,882 
Less:
Cost of product and supplies (a)108,199 34,054 104,069 80,554 326,876 
Labor cost (a) (b)80,720 54,059 12,977 34,547 182,303 
Other operating expenses (a) (c)32,805 14,826 1,856 13,569 63,056 
Other segment items (d)31,000 17,064 13,554 16,091 77,709 
Adjusted EBITDA$63,627 $45,478 $6,388 $12,445 $127,938 


(a)These expense categories align with the segment-level information that is regularly provided to the CODM and are considered significant to the segment in accordance with ASU No. 2023-07, Segment Reporting ("Topic 280"). The expense categories included in the tables above exclude amounts for patient equipment depreciation since these amounts are not reflected in the segment measure of profit or loss. Refer to the section below, titled Patient Equipment Depreciation, for discussion of such amounts.
(b)Excludes salaries, labor and benefits for corporate employees. Salaries, labor and benefits for corporate employees are included within Other segment items.
(c)Other operating expenses primarily include costs relating to rent and occupancy, facilities, fleet, and other operating costs.
(d)Other segment items include allocated costs related to various general and administrative functions, including revenue cycle management, customer service, technology and communications, sales and marketing, billings and collections, accounting and finance, executive administration, human resources, information technology and legal and compliance.
The following table presents a reconciliation of total Adjusted EBITDA to consolidated loss before income taxes for the three months ended March 31, 2026 and 2025 (in thousands):

Three Months Ended March 31,
20262025
Total Adjusted EBITDA$121,193 $127,938 
Interest expense, net(25,594)(28,399)
Depreciation and amortization, including patient equipment depreciation(106,469)(94,345)
Equity-based compensation expense (a)(6,532)(5,296)
Litigation settlement expense (b)(500)— 
Other non-recurring expenses, net (c)(2,203)(5,127)
Loss before income taxes$(20,105)$(5,229)

(a)Represents equity-based compensation expense for awards granted to employees and non-employee directors.
(b)Represents an expense to settle a shareholder derivative complaint.
(c)The expense for the three months ended March 31, 2026 consists of $1.6 million of consulting expenses associated with asset dispositions and $0.9 million of transaction costs associated with acquisitions, partially offset by $0.3 million of other net non-recurring income. The expense for the three months ended March 31, 2025 consists of $2.3 million of consulting expenses associated with asset dispositions, $1.6 million of consulting expenses associated with systems implementation activities, and $1.2 million of other non-recurring expenses.
Patient Equipment Depreciation
The following table presents the amounts of patient equipment depreciation by reportable segment for the three months ended March 31, 2026 and 2025 (in thousands):

Three Months Ended March 31,
20262025
Patient equipment depreciation:
Sleep Health$44,460 $38,205 
Respiratory Health33,057 31,116 
Diabetes Health2,634 2,270 
Wellness at Home16,214 12,340 
Total patient equipment depreciation (1)$96,365 $83,931 

(1)Patient equipment depreciation is included in Cost of net revenue in the accompanying consolidated statements of operations. Patient equipment depreciation is not reflected in the segment measure of profit or loss but the CODM regularly reviews this information by reportable segment.