v3.26.1
Segment Information
 6 Months Ended
Jun. 30, 2026
Segment Reporting [Abstract]  
Segment Information Segment Information
The Company operates its business through three reportable segments that align to the Company’s product categories: Sleep Health, Respiratory Health, and Wellness at Home. A description of the products and services provided within each of the Company’s three 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.

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.
In connection with the Company's plan to divest the Diabetes Health business, as further discussed in Note 5, Held for Sale and Discontinued Operations, the Diabetes Health business met the criteria to be reported as discontinued operations and the Company no longer reports Diabetes Health as a reportable segment. Accordingly, the segment results for the three months ended March 31, 2026 and the three and six months ended June 30, 2025 were recast to exclude the results of the discontinued operations, as well as to reallocate certain shared costs, primarily related to the general and administrative functions, among the three remaining reportable segments.
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 and six months ended June 30, 2026 and 2025 (in thousands):

Three Months Ended June 30, 2026
Sleep HealthRespiratory HealthWellness at HomeTotal
Net revenue$386,461 194,402 159,444 $740,307 
Less:
Cost of product and supplies (a)123,473 37,288 74,084 234,845 
Labor cost (a) (b)104,486 58,968 39,897 203,351 
Other operating expenses (a) (c)46,751 23,422 18,615 88,788 
Other segment items (d)41,503 21,635 18,192 81,330 
Adjusted EBITDA$70,248 $53,089 $8,656 $131,993 

Three Months Ended June 30, 2025
Sleep HealthRespiratory HealthWellness at HomeTotal
Net revenue$334,689 $170,450 $151,961 $657,100 
Less:
Cost of product and supplies (a)105,915 31,719 72,030 209,664 
Labor cost (a) (b)81,863 56,746 32,489 171,098 
Other operating expenses (a) (c)32,840 15,411 10,854 59,105 
Other segment items (d)40,399 21,293 19,122 80,814 
Adjusted EBITDA$73,672 $45,281 $17,466 $136,419 

Six Months Ended June 30, 2026
Sleep HealthRespiratory HealthWellness at HomeTotal
Net revenue$744,956 372,542 302,682 $1,420,180 
Less:
Cost of product and supplies (a)237,781 72,128 141,639 451,548 
Labor cost (a) (b)208,074 114,717 79,633 402,424 
Other operating expenses (a) (c)88,136 41,936 32,641 162,713 
Other segment items (d)85,606 44,508 36,823 166,937 
Adjusted EBITDA$125,359 $99,253 $11,946 $236,558 
Six Months Ended June 30, 2025
Sleep HealthRespiratory HealthWellness at HomeTotal
Net revenue$651,040 $335,931 $314,676 $1,301,647 
Less:
Cost of product and supplies (a)214,088 65,773 154,029 433,890 
Labor cost (a) (b)163,084 111,079 67,285 341,448 
Other operating expenses (a) (c)65,814 30,330 24,509 120,653 
Other segment items (d)76,725 41,265 38,577 156,567 
Adjusted EBITDA$131,329 $87,484 $30,276 $249,089 

(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 income (loss) from continuing operations before income taxes for the three and six months ended June 30, 2026 and 2025 (in thousands):

Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Total Adjusted EBITDA$131,993 $136,419 $236,558 $249,089 
Interest expense, net(26,209)(27,533)(51,803)(55,932)
Depreciation and amortization, including patient equipment depreciation(114,766)(86,925)(215,683)(175,865)
Equity-based compensation expense (a)(5,398)(6,010)(11,764)(11,202)
Gain on sale of businesses (b)6,269 32,225 6,269 32,225 
Loss on debt extinguishment (c)(1,322)— (1,322)— 
Litigation settlement expense (d)— — (500)— 
Restructuring expense (e)(6,070)— (6,070)— 
Goodwill impairment (f)(144,236)— (144,236)— 
Other non-recurring expenses, net (g)(5,594)(10,015)(7,797)(15,142)
(Loss) income from continuing operations before income taxes$(165,333)$38,161 $(196,348)$23,173 

(a)Represents equity-based compensation expense for awards granted to employees and non-employee directors.
(b)Represents the pre-tax gains associated with the dispositions of two businesses within the Company's Wellness at Home segment.
(c)Represents third-party fees and the write-off of unamortized deferred financing costs in connection with the refinancing of the Company's credit agreement. See Note 12, Debt, for additional discussion of the refinancing.
(d)Represents an expense to settle a shareholder derivative complaint.
(e)Represents expenses related to a cost savings plan that was implemented in June 2026. See Note 19, Restructuring Charges, for additional information.
(f)Represents non-cash goodwill impairment charges as a result of the fair values of the Company's Respiratory Health and Wellness at Home reporting units being less than their respective carrying values. See Note 8, Goodwill and Identifiable Intangible Assets, for additional information.
(g)The expense for the six months ended June 30, 2026 consists of $4.3 million of consulting expenses associated with asset dispositions, $2.2 million of transaction costs associated with acquisitions, and $1.3 million of other net non-recurring expenses. The expense for the six months ended June 30, 2025 consists of $9.2 million of consulting expenses associated with asset dispositions (of which $5.1 million relates to contingent success fees from the sales of businesses), $2.0 million of consulting expenses associated with systems implementation activities, $1.1 million of transaction costs associated with acquisitions, and $2.8 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 and six months ended June 30, 2026 and 2025 (in thousands):

Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Patient equipment depreciation:
Sleep Health$49,185 $38,592 $93,645 $76,797 
Respiratory Health38,107 29,800 71,164 60,916 
Wellness at Home19,526 11,477 35,757 23,825 
Total patient equipment depreciation (1)$106,818 $79,869 $200,566 $161,538 

(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.