Right. We're gonna go ahead and get started. Well, with us today, we have Jason Clemens, CFO of AdaptHealth. We're just gonna jump right into the questions 'cause we do have a lot. I guess maybe let's talk with Sleep Apnea. We get a lot of questions in terms of how the CPAP process works. Can you walk us through the CPAP rental and sales process, and then just also just the trial period and how that works and flows into the system? Sure. Sure, I'd be happy to. Morning, everybody. Thanks for having us. For the Sleep Apnea patient, I mean, I guess I'd probably start at the top. I mean, there's somewhere around 33 million-34 million Americans, per the American Academy of Sleep Medicine that have obstructive Sleep Apnea. The problem is only 20% actually know it and are getting treatment for their Sleep Apnea. There's a massive underdiagnosed patient population. Now, the future seems bright due to the wearables, right? The Oura Ring and the Apple Watch and everything else that it seems that all these wearables are promising some sort of detection for a patient that might have Sleep Apnea. That's resulting in what we're seeing as record wait times to get into sleep centers. It's also resulting in several at-home sleep test companies servicing these patients and helping them identify that they have Sleep Apnea. Once the patient's determined to have OSA, we'll get a referral from that patient's physician. If we take Medicare as an example to maybe walk through your detailed question, patient will come see us. They'll get the CPAP. Typically a respiratory therapist is gonna set them up on that device. Additionally, they're gonna get their first supply, which will typically include a mask, heated tubes, cushions, things like that. For the next 13 months, if the patient's adherent, we'll get paid, again, for Medicare, about $60 a month. You can kinda think of that as you're kinda paying back your device. In the meantime, you know, we'll work with that patient to qualify him for a resupply order. Now, those resupply orders can come with another mask, typically the, you know, tubes, cushions. I mean, it's kind of a razor blade model, if you will. There's a recurring revenue that comes with that patient. You know, that'll recur as long as that patient's on service with us. Now, within the first 3 months, there are very specific guidelines for the patient to be adherent. We stay very close on the 30 and 90-day adherence programs. We've got hundreds of sleep coaches that, essentially, you know, come to work in the morning, and they follow the algorithms of who they're gonna call next. They'll work with those patients to figure out why they might not be adherent. Oftentimes, it's a setting on the machine. More often than you might believe, the machine's not plugged in, so we'll help them with that. There's other reasons. Maybe the mask isn't a good fit for that patient. It might be too big. It might be too small. It might be too heavy or light. Often that patient will come back in and we'll get them refit and get them back on adherence. We know that we are head and shoulders above anybody in the industry in terms of driving adherence. We run a best-in-class operation there. What is adherence like, you know. Obviously not the first day, is it close to 90%, 95%? Where is it? No. The industry runs, a touch over 70%. Okay. We run over 80%- Okay ...With that adherence. I mean, it gets detailed within the first 30 days, or within a 30-day period in that first 3 months. The patient's gotta be adherent, you know, essentially 4 hours a night or more, for 20 days within that 30-day period. Okay. That $60 that you're receiving, does that cover for all the other consumables that come or attached to the CPAP machine? No. I mean, the consumables. The average reorder is about $200. You know, that'll happen again when the patient gets set up on the CPAP. Again, we'll work ideally every three months. Now, we don't resupply every patient four times a year, but we do on average resupply patients just under three times a year. The industry is closer to two times per year. That is mostly associated with the adherence aspect of it. It is. Okay. It's the adherence, it's the monitoring. It's also the technology that is hardwired to each payer's contract. For that patient, we know specifically what they're eligible for when. Our teams are all over that. As they provide that outreach to the patient either, you know, through physical mail or phone call or text or email. Ideally for us through our app. I mean, we've got hundreds of thousands of patients that are registered on our app. We'll conduct outreach that way as well to get in touch with that patient and advise them that they're eligible for a new resupply. You've been at this, obviously, for a long time. You've seen and figured out, you know, okay, maybe we could do these little things, make a few tweaks to increase adherence. That's right. How has that shifted over the years? Has it materially increased, how do you think about getting or capturing that incremental 10%, 20%? We have folks that wake up every day, trying to get just that little bit better. I will say over the last couple of years, it has somewhat, leveled out. Mm-hmm. I mean, we do drive improved adherence. Maybe surprisingly, patients that are coming in for CPAP that are on a GLP-1 are adhering better than patients that are not on GLP-1. That, that's also helping a bit in terms of adherence. Again, I mean, we've got hundreds and hundreds of people. This is, this is all they do. They follow the algorithms and the, you know, the success that we've seen with setups even. I mean, That can drive a lot more adherence than you might think. We have a best-in-class setup. Again, we have workflows when that respiratory therapist is setting up the patient that they'll follow those guidelines, and that also results in better adherence. What happens after 13 months? Well, for that Medicare patient in that example, the rental payment will stop, and it'll go into basically a capped period until month 60. If that patient's still with us at that time, they become eligible for a new CPAP. We know that down to every detail and every day. We again outreach to the patient, let them know that they're eligible for a new CPAP, and we'll work to fulfill them there as well. That just rotates, sets them that next- That's right. Some patients are on service for well over a decade. Yeah. AdaptHealth. Yep. Okay. As you think about just in that 13-month period, what is the average rental or revenue per patient during that period with including the consumables? Yeah. I mean, for Medicare, it's about $60. Okay. You get $60 a month for 13 months. Yeah. On that resupply, it's about $200 on each resupply. The commercial side? Well, it depends. I mean, I'm using that as an example. Yeah. That's more or less how it works. Okay. You talked about GLP-1s, like, can you just talk through the source of your prescriptions? You know, is it mostly all from direct sleep studies? Is it from docs that are prescribing or meeting patients and prescribing GLP-1s, and then they come in? How is that mixed? I know it's shifted from a GLP-1 standpoint, how has that mix changed? A patient can come to us, a sleep patient, many ways. Certainly sleep centers, that's a big referral point, as are pulmonology groups, sleep specialist doctors, and then, of course, primary care. Primary care is a huge source of referrals. That's why we've got 700 sales folks all over the country that all day long, they're visiting these offices and making sure that we're doing a good job for the referrers so we continue to get patients. Okay. As you know, the product, if I'm not mistaken, ResMed, you know, you have competitors that use the same product. Can you just talk about the core differentials between Adapt and your competitors as it relates to the product that they're all selling? Sure. As it relates to sleep, really as it relates to all of our products. I mean, the name of the game is to be the easy button for the referring provider. I mean, you do that by taking great care of that patient, you know, by driving patient satisfaction. Because if the patient's not happy, typically, they're not gonna tell you. They are gonna tell their doctor next time they're in to see their physician. Over time, if you're not doing a good job, and you're not preventing that physician office phone from ringing, you'll get less referrals. Speed to set up is very important. You know, last year at this time in the first quarter, we were struggling with time to set up. The national average is about 17 days, we were actually starting to peak above that. Today, that's cut in half. As Suzanne reported in the last earnings call, I mean, we're down to 9 days on average to get a patient set up on a CPAP. You might ask, "Well, what takes so long?" Typically, it is the insurance requirements, prior authorization. It, you know, takes time when needed. Getting in touch with the patient. You know, we've cut that time down because now as you arrive at the patient's office, they'll have a placard with the AdaptHealth QR code that they can download our app. We've now got AI chatbots that are available when patients call in for setup that reach into our capacity, and the chatbot knows the time at each location of our almost 700 locations across the country. You know, it'll provide for that patient. We know they're dialing in and what their home address is, we'll provide the nearest facilities. Again, we're taking more humans out of that loop and that interface, which is also increasing the patient satisfaction, but back to that point of referral and their satisfaction. The TAM for Sleep Apnea is pretty high, and it's increasing. How should we think-? Yeah. We Yeah. We think it's 33 million-34 million Americans. Okay. How should we think about just the natural growth? With everything that you're doing, how should we think about the growth within the Sleep Apnea business? Well, You know, we believe that the Sleep Apnea market in the U.S. is poised to grow, low single digit up to mid-single digit. Mm-hmm. You know, we are by far the largest operator in the business. We represent about a quarter of the United States' CPAP usage is coming from AdaptHealth. you know, no other competitor is anywhere near that. you know, we are continuing to grow share. I mean, every 6 months, we look at the claims data, and we're continuing to validate that we're growing share. again, on this last quarterly update, we reported record numbers in census, and we're within just a couple of 100 patients for a record setup quarter. we think that that's gonna happen in 2026. In terms of the share that you have, I mean, 25% of the U.S. market, are there any particular regions where you have a higher amount of market share, and where are those regions? What is it about those regions where it is to why you may have? Yeah. You know, I'd say that, I mean, Adapt across the board, I mean, we're large, and deep. Historically, you know, the one area of the country that we didn't have a huge presence was the West Coast. Now, what's so unique about this new capitated contract that we announced that has started in earnest, there will be further start dates throughout the course of the year as we stand up these new markets, are that most of these hospital systems are in areas that we've never operated in before. We're setting up de novo locations, about 30 in total, all up and down the West Coast. We just made an acquisition in Hawaii, December 1st. We entered that state, and with a terrific operator out there. As we get this capitated contract stood up and really humming, the next thing we're gonna do is drop in more salespeople into those markets and go compete head to head with the local folks and with the nationals as well. I, you know, the West Coast is really the only spot that we're not deep, and that's changing here in 2026. We'll get to that, the West Coast in a second and also, the capitated contracts. Let's just go back to respiratory. You know, I know it has a similar rental and sales process. Can you just walk us through that process? Sure. Depending on the product, I mean, oxygen concentrators, both stationary and portable are the largest products within that category. We also provide non-invasive ventilation, non-invasive ventilation for patients at home. For oxygen it follows a similar structure. Instead of a 13-month period, it's 36. Mm-hmm. There is still that 60-month cycle that a patient then qualifies for new equipment if they're still on the device. It's a very similar revenue structure. Now, there is resupply that comes with respiratory products, but it's not nearly as much or as important as the resupply for sleep. What is the, you know, rate that you're getting with on respiratory and the resupply rates? Well, for Medicare, it's it can range. It's about $120 a month. Again, that'll go for 36 months. Then on resupply, I mean, we're talking dollars. These are cannulas, typically- Yeah. That are there to make the concentrator effective for the patient. We'll go through the other segments. But before we do that, let's talk about the large contract that you have in California. Yeah. The stand up, just the process. How deep is this gonna go, and when do you think you'll have it fully stood up then? Sure. I guess I'd start by saying that just the magnitude of the contract and what's required in terms of infrastructure, I mentioned the 30 locations, all new, all de novo. You know, we're standing up, outfitting, and filling with patient equipment. Hundreds and hundreds of vehicles. You know, again, newly acquired from the OEMs, outfitted, you know, and on the road. 1,200 employees, you know, onshore. These are 1,200 employees that we're hiring very, very rapidly. We're actually at our peak. We're about to hit the goal of having all the people we need in place to support the contract. A little bit of revenue did start in December, as we reported during earnings. We then made an acquisition of patient equipment to secure the February 1 start dates. We feel great about that. There are start dates further in the year, as indicated in our guidance, I mean, we actually brought our revenue up for this new contract versus what we provided as an outlook in November. The reason for that is we've secured all this infrastructure, and we're in place ready to go day one to take care of these patients. This contract, is it mostly all sleep and respiratory, or does it touch on other areas? Also DME. Okay. Like beds, wheelchairs, walkers, things like that. Okay. We'll get to the DME stuff in a, in a, in a bit. Just, you know. We'll come back to Kaiser. On Humana, have you maxed the opportunities on Humana, and if not, what are those additional opportunities? No, I mean, Humana's a massive organization. We'd love to do more with them. You know, we think we're doing a pretty good job as we got our contract extension there, as we reported last year, early in 2025. The contract today that we've got capitated, it is for HMO Medicare Advantage patients in 33 states, plus the District of Columbia. You know, certainly Humana has grown their share of MA this year, that'll help us out in terms of membership and, you know, another growth vector for our capitated business. The PPO business, I mean, we are a preferred provider. You know, and we do get a halo effect of being the only provider for HMO. That's been great for us. Of course, there's states that we've not capped. There's products that we haven't capped. You know, so I mean, we're here to take care of as many Humana patients as Humana's got. You know, we do continue to develop that relationship. In those 33 states, what percentage of those Humana patients do you currently have in your system? One, one, one hundred percent- 100%. Okay. Of the HMO population. They're all ready. Okay. Yep. The additional states that you're referring to, walk us through that process of maybe capturing those additional states. Is it just more continued conversations with Humana, or is Humana using another service? Are you gonna have to displace a service? Yeah. There were eight other states awarded a cap agreement back when we secured Humana. That went to a regional privately held DME company. Mm-hmm. Now, those states were primarily out west, where, you know, back to the infrastructure comments I made earlier, we didn't have a lot of depth. We priced that accordingly, that it would've cost us, you know, substantial investment to stand that up. We didn't win there at that time. You know, again, we're loading up infrastructure out west, and we'll see, you know, we'll see what happens here in the future. You know, our view is that if we continue to do the job we're doing with Humana, that there's more opportunity. What have you learned from Humana that you think you could actually use as part of your Kaiser project? Well, I mean, we learned a lot. I'd say the most impactful lesson was around the transition of patients that were with an incumbent provider. You know, it's not easy to change out patient by patient. I mean, there's a lot to that. You need to get in touch with the patient's physician. You gotta get documentation on record. You've gotta schedule time to enter the patient's home, in some cases, and exchange equipment. I mean, there we did a lot of that with Humana. We've structured, you know, the Kaiser business very differently. I mean, we talked about an acquisition that, several acquisitions that we've already made, to secure that equipment and prevent the friction of having to change that patient out, you know, one at a time. You know, we also spoke in our call of drawing on our revolver, subsequent to the end of the quarter, in the anticipation of closing the remaining deals, that we wanna do to secure the patients on day one for Kaiser. I'd say that's the biggest lesson. Separately, you know, the daily, weekly, and monthly measures that we signed up for with Humana, you know, we've signed up for many of those with Kaiser. We've hardwired our technology to produce that data automatically. You know, we've got the Adapt Business System team around those measures and continuously improving those measures. Everything from patient experience when they call into the call center, to patient satisfaction when we enter the home for new equipment, to various SLAs for getting equipment on patients sometimes in just 4 hours or less from the point of discharge from the hospital. That cost to capture those patients, was that all figured into, with Humana specifically, into the capitated amount that you're receiving, or did you go over? Meaning were margins pretty thin, and how are margins now within those capitated patients? Yeah. So we've said that margin is at, for better, the enterprise. Okay. For both adjusted EBITDA margin as well as free cash flow margin. We've said the same for Kaiser, that as this business gets stood up, that is our expectation and that that's how we price these deals. You know, certainly we're happy to stand up investment to secure these contracts. I mean, versus the M&A dollars that you deploy to attempt to acquire this amount of business. I mean, the ROIC on these investments is incredible. Yep. You've, you have another capitated contract in Southern California. Clearly, it's expanding your reach in terms of what you're doing. It's a small contract relative to what you probably have with Kaiser. The one we announced in the third quarter. Yeah. Yes. What do you think this contract will allow you to do? Is this more of a competitive replacement of over time? How do you view that contract and that opportunity? Sure. I mean, we took that contract also from an incumbent operator in that market. You know, that payer is part of a very large national payer that we do believe that there's more opportunity with that payer if we prove to do a good job in Southern California. You know, the timing was great as we're standing up, you know, new sites everywhere in California, but particularly Southern Cal as it relates to Kaiser. You know, we're deepening our presence and our ability to take more share, and we think we will. Shifting over to diabetes, can you just walk us through... I mean, obviously, there's been some challenges in the past with the shift from DME to pharmacy? Mm-hmm. You know, some of Omnipods even talk or Insulet's talking about introducing another faster version of what they have today. How do you think about that space? I know you're also looking to develop your pharmacy channel. Where do you stand there on that front? Yeah. Pharmacy as a percent of diabetes revenue is now just a touch under 10%. I mean, that's up from half that, just about 5-6 quarters ago. You know, fueling some of that growth, I mean, we do distribute CGMs. You know, but the real growth is in Omnipod, as you suggested. You know, Tandem, you know, recently spoke of the Mobi tubeless coming much faster than I think the market had originally anticipated. They're making some progress securing pharmacy contracts for Mobi. Well, that's all eligible for us to distribute through our 50-state mail order pharmacy. That's been a good growth engine for us. I mean, pumps are actually up double digit the last, the last couple of quarters. Mm-hmm. On the CGM side, now we do offer CGMs through pharmacy, not so much because we wanna grow that aggressively, because the margins for CGM on pharmacy are quite thin. What it allows us to do is back to that easy button for the referring provider. You know, we don't want that office to worry about whether we accept a pharmacy order or we don't accept a pharmacy order, or we accept this payer and not that payer. We wanna accept everything, and that's part of the strategy of growing the pharmacy is to ensure that our sales folks, when they're out there fighting for each order, that we're not restricting them in any way, which should help growth on the new starts. Just on the durable equipment side, there's obviously a lot of eyes on this just given Dr. Oz's comments in terms of what's happening in Florida and California. Obviously, it has little to do with you guys, but are there repercussions in terms of them looking at this, whether it's, you know, isolated to those groups or more holistically? How do you think this affects just the DME side of your business? Well, I think for the scaled players, particularly public companies with control environments Mm-hmm. Those kind of things, look, we're pleased to be involved with the CMS as they continue to look at DME. From an operational perspective, though, for us, it's a little bit of a shoulder shrug in terms of impact. Now, there is some nuance on the moratorium. This is a six-month moratorium that the CMS has put in for new licensing. In terms of acquisition activity, it, you know, we don't think much will change. I mean, targets are, you know, as long as they haven't changed majority ownership in the last three years, you can still buy the DMEs and transfer those license. We think for newer DME businesses, I mean, frankly, those aren't businesses that we'd likely be entertaining acquiring anyway. You know, I mean, our stance on this is it's all kind of part of the industry we're in. On the DME front, have you quantified what the rulings in 2027, 2028, how that could actually affect you on the competitive bidding? Oh, for competitive bidding? Yeah, yeah. Yeah. We commented a fair amount on this a couple quarters ago. You know, we'd say that we were pleased to see that the CMS clarified the final rule that was published in late 2025. They have excluded kind of our core categories of sleep, respiratory, and DME from the competitive bid round that'll be pushed out to 2028. The products that'll be in include diabetes as well as ostomy and urology, which are very small categories for us. In terms of the impact, look, there's almost 2,000 DMEs today that are distributing CGMs to Medicare patients. The CMS has been clear that will be 10 or less is what will happen. There's a lot of market share that will be up for grabs. You know, Adapt is the number two player in terms of CGM distribution to Medicare. As we learn more about the process, you know, we're leaning in and we see the competitive bid as an opportunity to continue to grow our revenue. On that 10 or less, that obviously is a clear opportunity for you guys and maybe taking share, but is that leading to consolidation, and how does that work from just an FTC standpoint? Yeah, I mean, competitive bid over the years, frankly was part of AdaptHealth's origins. As DMEs that may not win contracts, you know, there's really two options. You either sell your business, and again, you don't have a Medicare contract, so that's gonna be at a depressed multiple, or you close the doors. Over the years, following competitive bid, I mean, you know, it's been good for acquisition. Yeah. It's been great for consolidation. Your largest competitor or one of your competitors has noted that they have a preferred status with Optum. Can you just walk us through as to what that means and how does that affect Adapt? Well, well, you know, to our knowledge, that competitor has not stated the value of that contract or the importance of the contract. For us, it's business as usual. We have seen zero impact from the situation. When you say zero impact, meaning that you're still- No, no change in volumes. Same as this. Okay. this. Okay. No change in referral patterns. Okay. We have not seen any impact. Just from a competitive standpoint, obviously given that competitor's challenges, what are the opportunities that you're seeing there, the opportunity set? What are you doing to try to maximize on those opportunities? Well, I, you know, I wouldn't say that the competitive landscape is really any different. I mean, you have to remember, I mean, healthcare is local. You know, the folks that are seeing referrals, you know, every day, you know, going to see referral offices, I mean, they're fighting with the same salesperson at the company down the street as they were, you know, last year or as they will next year. You know, if things are changing at the top of the house in these big companies, it's really not an impact locally and it doesn't change, it doesn't change anything that we're doing to continue to grow market share. You know, just from a regulatory front end, and we talked about the competitive bidding, but you know, over the last decade, I think, and correct me if I'm wrong, one of the more major ones was the public health emergency and then the reversal of that 75/25. Yep. What are you seeing today in D.C. outside of, again, of competitive bidding and the stuff with Dr. Oz? Are you seeing any other movement on that could either be beneficial, just something that we all as investors have to be aware of and track? Well, sure. I guess firstly I'd call out that as usual in December, the CMS published the 2026 fee schedule. There were increases. I mean, this is largely an inflation-based fee schedule. With inflation up, the fee schedule was up. Right. Just over 2% across the product catalog. That was good news for the industry. On the regulatory front and the lobbying front. Mm-hmm. You know, there's the SOAR Act, S-O-A-R, that is working through Congress. I mean, it's really working to increase reimbursement levels for respiratory, which is a large and important category for Adapt. Also working to simplify, reduce restrictions, in terms of setting patients up, and so kind of increasing that patient access. So we're, you know, we're of course part of that the industry consortium that's lobbying for that act, and we're hopeful. You know, certainly haven't accounted for any of this in our guidance. With the capitated contracts you have today, obviously it's very clear as to what that covers, sleep, respiratory, and some of the DME stuff. Mm-hmm. As you look at the spectrum of opportunities, even with some of these contracts, are there any tuck-ins or areas of opportunities that you might consider looking at just to kinda enhance your product offering today? Meaning like outside of our core products? Yeah, outside of your core products. No, I can't say that, for now, we're spending much time thinking about that. I mean. The reason is that the underdiagnosed nature of Sleep Apnea, COPD, you know, and diabetes, frankly, I mean, it's just so significant that the TAM within the segments that we operate in is just so large and continues to grow. We're very focused on continuing to win market share within those categories. You know, similar to, I mean, obviously, Kaiser is a big one, Humana is a big one. You have the relationship in Southern California. How many more of those types of capitated relationships are there? Can you just quantify that opportunity? I'll answer that two ways. Firstly, you know, we do have a pipeline of capitated contracts. You know, we have a dedicated payer team that is working to structure price contracts, you know, get competitive. There's been a little more RFP activity from the payers recently, which makes sense based on, I think, the headlines that the payer community is dealing with, and finding ways to be more efficient and lower cost. Sorry, just on that, what are they looking for? Just reducing the prices that they pay or is it something different? Well, you know, every one of these RFPs, I mean, some can be different, some can be pure DME, some of them can kinda be all-encompassing for home health. I mean, they're looking for the same thing I think that Humana and Kaiser was looking for is a single operator. You know, in most states, I mean, there's hundreds of DMEs. So administratively for a payer to handle that versus one, you know, one scaled player, I mean, that's a big deal. The pricing, I mean, we're always happy to offer, you know, modest discounts to reimbursement rates in exchange for a whole lot of volume. You know, so Adapt's happy to do that. And then the consistency of the per member per month. I mean, the payer knows their membership and those rates per member are locked in. It's just a very predictable, you know, cost stream for the payer and a revenue stream for Adapt. We have about 2 minutes left. Does anyone in the audience have any questions, that they wanna ask? Matt. Curious on the margin, when you talk about the equipment fee versus resupply, specifically on CPAP, just, you know, the importance of adherence, just putting that in the margin resupply. Yeah, I'd say for adjusted EBITDA margins, which of course exclude the CapEx, it excludes the patient equipment, you know, that runs in the high 20% for sleep and respiratory. You know, when you get down to the kind of the gross margins on those sales, you know, we do report segment financials for sleep. That's around a 60% of cost for that resupply. At the end of the day, it's a high 20 digit, 20% adjusted EBITDA margin and both businesses' free cash flow and about the 6%-7% of revenue. Any other questions? Just on the ability to take market share, is that also, I mean, it's the service office offerings and everything else, but how much of that is also, some of these folks just coming to you just being upset or annoyed with what they're currently using today? Oh, from a competitor? Yeah, competitors standpoint. Well, sure. I mean, we'll take share any way we can get it. Certainly, we're happy to take on patients. Yeah. That are maybe frustrated with their current provider. You know, for us, in terms of retention, I mean, we continue to set records. You know, we think we're doing a pretty good job taking care of the patients that we have, and certainly, we're looking to grow that. Great. We've come to the end of our panel. Thank you so much, Jason. Thanks for having us. Yeah. Thank you. Very much. Appreciate it. Thank you.