XML 26 R14.htm IDEA: XBRL DOCUMENT v3.25.4
Segment Information
 12 Months Ended
Dec. 31, 2025
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, change in fair value of the warrant liability, goodwill impairment, loss on extinguishment of debt, litigation
settlement expense (gain), gain on sale of businesses, and 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 years ended December 31, 2025, 2024, and 2023 (in thousands):
Year Ended December 31, 2025
Sleep HealthRespiratory HealthDiabetes HealthWellness at HomeTotal
Net revenue$1,378,147 $691,160 $592,413 $583,137 $3,244,857 
Less:
Cost of product and supplies (a)445,098 132,534 442,435 274,356 1,294,423 
Labor cost (a) (b)347,356 216,002 52,849 130,003 746,210 
Other operating expenses (a) (c)134,734 60,621 8,387 44,868 248,610 
Other segment items (d)140,400 72,254 62,669 63,610 338,933 
Adjusted EBITDA$310,559 $209,749 $26,073 $70,300 $616,681 
Year Ended December 31, 2024
Sleep HealthRespiratory HealthDiabetes HealthWellness at HomeTotal
Net revenue$1,349,213 $651,150 $614,410 $646,202 $3,260,975 
Less:
Cost of product and supplies (a)424,388 119,865 434,808 309,101 1,288,162 
Labor cost (a) (b)321,194 210,701 50,776 144,335 727,006 
Other operating expenses (a) (c)126,761 54,300 9,588 47,767 238,416 
Other segment items (d)128,126 66,172 58,713 65,723 318,734 
Adjusted EBITDA$348,744 $200,112 $60,525 $79,276 $688,657 
Year Ended December 31, 2023
Sleep HealthRespiratory HealthDiabetes HealthWellness at HomeTotal
Net revenue$1,291,714 $614,563 $660,039 $633,861 $3,200,177 
Less:
Cost of product and supplies (a)391,206 132,013 467,566 319,428 1,310,213 
Labor cost (a) (b)320,370 198,476 48,908 143,976 711,730 
Other operating expenses (a) (c)120,021 49,560 7,126 45,397 222,104 
Other segment items (d)111,414 57,481 56,823 59,617 285,335 
Adjusted EBITDA$348,703 $177,033 $79,616 $65,443 $670,795 
(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 income (loss) before income taxes (in thousands):
Year Ended December 31,
202520242023
Total Adjusted EBITDA$616,681 $688,657 $670,795 
Interest expense, net(105,753)(126,668)(130,299)
Depreciation and amortization, including patient equipment depreciation(381,927)(365,334)(382,783)
Equity-based compensation expense (a)(21,876)(14,880)(22,468)
Change in fair value of warrant liability (b)— 4,021 34,482 
Goodwill impairment (c)(127,995)(13,078)(830,787)
Gain on sale of businesses (d)32,602 — — 
Loss on extinguishment of debt (e)— (2,273)— 
Litigation settlement expense (f)(1,000)(3,338)(25,140)
Other non-recurring expenses, net (g)(25,886)(31,088)(37,584)
(Loss) income before income taxes$(15,154)$136,019 $(723,784)
(a)Represents equity-based compensation expense for awards granted to employees and non-employee directors.
(b)Represents non-cash gains for the changes in the estimated fair value of the warrant liability. See Note 13, Stockholders' Equity – Warrants for additional discussion of such non-cash gains. The warrants expired on November 8, 2024.
(c)The 2025 period includes a non-cash goodwill impairment charge as a result of the fair value of the Company's Diabetes Health reporting unit being less than its carrying value. The 2024 period includes non-cash goodwill impairment charges relating to an immaterial business disposal during 2024. The 2023 period includes non-cash goodwill impairment charges as a result of the fair value of the Company’s reporting unit at that time being less than its carrying value. See Note 7, Goodwill and Identifiable Intangible Assets, for additional discussion of such impairment charges.
(d)Represents pre-tax gains primarily associated with the disposition of certain incontinence and infusion businesses within the Company's Wellness at Home segment. See Note 4, Disposals, for additional discussion of such gains.
(e)Represents lender 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.
(f)The expense in 2025 represents the estimated amount expected to be funded by the Company relating to a previously disclosed securities settlement. See Note 18, Commitments and Contingencies, for additional details. The expense in 2024 includes a $2.4 million charge for the change in fair value of shares of Common Stock of the Company that were issued in July 2024 following final court approval of a previously disclosed securities settlement, as well as an expense of $0.9 million to settle a shareholder derivative complaint. The expense in 2023 includes a charge relating to a previously disclosed securities settlement, net of contributions from the Company’s insurers.
(g)The 2025 period consists of $10.7 million of consulting expenses associated with asset dispositions (of which $5.1 million relates to contingent success fees from the sales of businesses), $2.6 million of transaction costs associated with acquisitions, $2.6 million of consulting expenses associated with a reorganization project, $2.4 million of consulting expenses associated with systems implementation activities, $1.6 million of expenses associated with securities litigation, $1.2 million write-off of assets, $1.2 million of severance charges, and $3.6 million of other non-recurring expenses. The 2024 period consists of $13.9 million of consulting expenses associated with systems implementation activities, $4.5 million of consulting expenses associated with asset dispositions, $4.2 million of expenses associated with litigation, $3.9 million of severance charges (primarily related to the separation of the Company's former President), $2.7 million write-down of assets, and $1.9 million of other non-recurring expenses. The 2023 period consists of $13.9 million of expenses associated with litigation, $7.1 million of severance charges (of which $2.9 million relates to the separation of the Company's former CEO), $5.6 million of consulting expenses associated with systems implementation activities, $5.2 million of consulting expenses associated with cost savings initiatives, $4.8 million of lease termination costs associated with a cost management program, $1.0 million of transaction costs and expenses related to integration efforts related to acquisitions, $0.9 million of net impairments of operating lease right-of-use assets as a result of vacating the leased facilities, and $1.6 million of other non-recurring expenses, offset by income of $2.5 million related to changes in the Company's estimated TRA liability.
Patient Equipment Depreciation
The following table presents the amounts of patient equipment depreciation by reportable segment (in thousands):
Year Ended December 31,
202520242023
Patient equipment depreciation:
Sleep Health$157,868 $161,911 $175,975 
Respiratory Health127,415 95,546 71,002 
Diabetes Health9,540 8,185 10,182 
Wellness at Home46,464 54,647 68,537 
Total patient equipment depreciation (1)$341,287 $320,289 $325,696 
(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. Refer to Note 2, Summary of Significant Accounting Policies, for a breakout of Cost of net revenue by category.