AdaptHealth Corp. (AHCO): Business Model Canvas [Dec-2025 Updated]

You're digging into how a national leader in home medical equipment actually makes its money, and honestly, the model for this company is a masterclass in scale and contract leverage. They aren't just dropping off CPAP machines; they're locking in massive, predictable revenue streams through exclusive capitated agreements with payors covering over 10 million members, aiming for $3.18 billion to $3.26 billion in net revenue for fiscal year 2025 while serving about 4.2 million patients annually. It's all about operational excellence across their 630 locations and digital engagement via their app. This canvas shows you exactly where the value is created and captured. Dive in below to see the nine blocks that build this business.

AdaptHealth Corp. (AHCO) - Canvas Business Model: Key Partnerships

Major national healthcare systems for exclusive HME provision

• A definitive 5-year agreement was announced to be the exclusive provider of home medical equipment and supplies for a major national healthcare system, covering over 10 million members.
• This agreement is structured primarily as a capitation payment model.
• The expected revenue from this 5-year agreement is more than $1 billion over the term.
• Another new capitated agreement was signed to be the exclusive HME provider for a payor serving approximately 170,000 members.

Extensive network of acute care hospitals and clinics for patient referrals

• AdaptHealth services beneficiaries through a network of approximately 640 locations in 47 states as of November 2025.
• The company services approximately 4.3 million patients annually across all 50 states.
• Referral sources include:
  • Acute care hospitals
  • Sleep labs
  • Pulmonologists
  • Skilled nursing facilities
  • Clinics

Manufacturers for home medical equipment and supplies

The company maintains relationships with leading national manufacturers.

Medicare, Medicaid, and commercial insurance payors

AdaptHealth services beneficiaries of Medicare, Medicaid, and commercial insurance payors. The major national partnership covers Medicare Advantage, Medicaid Managed Care, and privately insured patients. Historically, for the year ended December 31, 2022, Medicare and various state-based Medicaid programs accounted for approximately 26% of net revenue.

The company is making considerable infrastructure investments, including opening new locations and buying new vehicles, to fulfill the largest contract.

AdaptHealth plans to recruit 1,000 new employees to support the forthcoming capitated arrangement.

Registered myApp users grew to 271,000 in Q3 2025, up from 118,000 in Q3 2024.

Net debt stood at $1.8 billion at the end of Q2 2025, with a net leverage ratio of 2.81x.

Year-to-date debt reduction through Q3 2025 was $225.0 million, resulting in a net leverage ratio of 2.68x at quarter end.

AdaptHealth Corp. (AHCO) - Canvas Business Model: Key Activities

You're looking at the core actions AdaptHealth Corp. takes to deliver its home healthcare value proposition. These activities are where the rubber meets the road, turning strategy into delivered care and revenue.

Delivering and servicing home medical equipment (HME) and supplies

This is the physical backbone of AdaptHealth Corp.'s operations. The company services beneficiaries of Medicare, Medicaid, and commercial insurance payors, reaching approximately 4.2 million patients annually in all 50 states. The service footprint includes a network of approximately 660 locations in 47 states. While older data, the scale involved making more than 36,000 home deliveries per day on average.

The revenue generation from this activity in the third quarter of 2025 broke down as follows:

The company's segment focus for Q3 2025 showed the primary equipment areas:

• Sleep Health: 43.3%
• Respiratory Health: 21.6%
• Diabetes Health: 18.3%
• Wellness at Home: 16.8%

Managing complex billing and reimbursement processes with payors

Handling the back-office complexity of healthcare billing is a critical activity. AdaptHealth Corp. is actively shifting toward value-based models. In the third quarter of 2025, the company signed another new capitated agreement to be the exclusive HME provider for a payor serving approximately 170,000 members. This aligns with the trend where capitated revenue arrangements accounted for 3.9% of total revenue in Q3 2025. The company also utilizes a proprietary payor portal to allow payors to seamlessly monitor and order patient services.

Executing the One Adapt initiative for operational efficiency

The One Adapt initiative is one of the five stated areas of focus for AdaptHealth Corp. to drive long-term success. The company is advancing multiple initiatives to boost operating efficiency. The 2025 financial guidance reflects the expected outcome of these efficiency drives:

• Fiscal Year 2025 Net Revenue Guidance: $3.18 billion to $3.26 billion.
• Fiscal Year 2025 Adjusted EBITDA Guidance: $642 million to $682 million.
• Fiscal Year 2025 Free Cash Flow Guidance: $170 million to $190 million.

Debt reduction is also tied to financial strength, with a $50.0 million reduction in Q3 2025, bringing year-to-date debt reduction to $225.0 million. This resulted in a net leverage ratio of 2.68x at the end of Q3 2025.

Advancing digital patient engagement via the myApp

Digital engagement is a key operational lever. AdaptHealth Corp. advanced digital patient engagement and expanded self-service capabilities through its mobile application, myApp. Registered myApp users grew to 271,000 in the third quarter of 2025, a significant increase from 118,000 in the third quarter of 2024. The application is designed for patient communication, billing, and ordering.

AdaptHealth Corp. (AHCO) - Canvas Business Model: Key Resources

The foundation of AdaptHealth Corp. (AHCO)'s business model rests on several tangible and intangible assets that enable its national healthcare-at-home service delivery.

The physical footprint is substantial, comprising a national network of approximately 670 locations across 47 states as of June 30, 2025. This scale supports the delivery of home medical equipment (HME), medical supplies, and related services to a large patient base.

Financial capital is actively deployed toward balance sheet strength. AdaptHealth Corp. achieved a year-to-date debt reduction of $225.0 million as of September 30, 2025. This reduction was supported by proceeds from asset dispositions, including a prepayment of $65.0 million on the term loan in June 2025, following a $70.0 million prepayment in May 2025.

A large inventory of patient equipment and medical supplies is necessary to support operations across segments like Sleep Health, Respiratory Health, and Diabetes Health. The company serves approximately 4.3 million patients annually.

The proprietary technology platform is a growing asset, evidenced by digital engagement metrics. Here's a look at the scale of their digital patient management:

• Registered myApp users reached 271,000 as of the third quarter of 2025.
• This represents a significant increase from 118,000 registered users in the third quarter of 2024.
• The company also launched a new national contact center to enhance patient service.

The operational structure and resulting revenue streams are key resources that define the business capacity. For the third quarter of 2025, the revenue mix highlights where these resources are deployed:

Furthermore, the segment breakdown shows the concentration of resources across core areas:

The company's ability to generate cash flow from operations is a critical resource for funding working capital and capital expenditures. Cash flow from operations year-to-date 2025 was $418.6 million. Free cash flow year-to-date 2025 was $140.1 million.

AdaptHealth Corp. (AHCO) - Canvas Business Model: Value Propositions

You're looking at how AdaptHealth Corp. delivers unique value to its customers, and the numbers coming out of late 2025 really show a pivot toward large, predictable contracts.

Patient-centered, comprehensive healthcare-at-home solutions

AdaptHealth Corp. structures its offerings across four reportable segments, providing a broad set of home medical equipment, supplies, and related services.

• Sleep Health: 43.3% of Q3 2025 revenue
• Respiratory Health: 21.6% of Q3 2025 revenue
• Diabetes Health: 18.3% of Q3 2025 revenue
• Wellness at Home: 16.8% of Q3 2025 revenue

The company is actively enhancing patient interaction through technology; registered myApp users reached 271,000 in the third quarter of 2025, a significant jump from 118,000 in the third quarter of 2024. They serve approximately 4.3 million patients annually.

Exclusive HME provision for a payor covering over 10 million members

A major value driver is the recent, definitive 5-year agreement to become the exclusive provider of home medical equipment and supplies for a major national healthcare system. This arrangement covers over 10 million members. This single contract is projected to total more than $1 billion of revenue over its 5-year term. This partnership covers patients under Medicare Advantage, Medicaid Managed Care, and private insurance plans.

Here's a look at the scale of AdaptHealth Corp.'s national footprint as of late 2025:

Predictable costs for payors through capitation payment models

The large exclusive contract is structured primarily as a capitation payment model, designed to offer predictable healthcare costs for the payor. This shift is strategic; management noted that once fully ramped, this new arrangement will elevate capitated revenue to at least 10% of total revenue. For context, existing capitated contracts with Humana already account for 4% of total revenue. The company expressed confidence that they will deliver enterprise margins on this new contract.

Scale and operational excellence for consistent national service

The company's national reach is a core component of its value proposition, enabling it to service large, complex contracts consistently. They are focused on operational discipline to support these arrangements, having recently completed a field operating model consolidation from six to four regions. This scale allows them to improve service speed; for example, they cut the lag time from patient diagnosis to CPAP delivery by one week in the Sleep Health segment.

The financial commitment to this scale is evident in their guidance; for fiscal year 2025, they project net revenue between $3.18 billion and $3.26 billion. Finance: draft 13-week cash view by Friday.

AdaptHealth Corp. (AHCO) - Canvas Business Model: Customer Relationships

AdaptHealth Corp. supports patients navigating complex disease states through its high-touch clinical support model.

Digital self-service and engagement are driven via the myApp, which has grown its registered users to 271,000 as of the third quarter of 2025. This platform offers features to simplify supply management.

Contractual, long-term relationships with major payors are a cornerstone, evidenced by recent wins. AdaptHealth Corp. signed another new capitated agreement to be the exclusive HME provider for a payor serving approximately 170,000 members. Furthermore, a definitive agreement with a major national healthcare system will see AdaptHealth Corp. serve as the exclusive provider of home medical equipment and supplies, covering all of the system's more than 10 million members under a 5-year agreement structured primarily as a capitation payment model.

Dedicated account management supports an extensive and highly diversified network of referral sources. AdaptHealth Corp. services beneficiaries of Medicare, Medicaid, and commercial insurance payors, reaching approximately 4.2 million patients annually in all 50 states through its network of approximately 630 locations in 47 states as of mid-2025, or approximately 4.3 million patients annually through approximately 640 locations in 47 states as of late 2025.

Here's a quick look at the scale of these key relationship metrics as of late 2025:

The support structure for these relationships includes:

• Clinical support for complex disease states.
• Digital self-service via myApp.
• Contractual relationships with major payors.
• Dedicated account management for referral sources.

The company is focused on leveraging its national scale and technology to deepen these ties.

AdaptHealth Corp. (AHCO) - Canvas Business Model: Channels

You're looking at how AdaptHealth Corp. gets its home medical equipment, supplies, and services to the people who need them, which is a big part of their value proposition in the healthcare-at-home space. This is all about logistics and relationships.

Direct-to-patient delivery and setup from local service centers

AdaptHealth Corp. relies on a physical footprint to execute the final mile of care delivery. This channel involves setting up equipment and providing ongoing support directly in the patient's home. The scale of this operation is significant, supporting millions of patients across the country.

The company's physical presence is spread across the nation to facilitate this direct service model. They are making a high volume of daily touches to keep patients set up correctly.

Here's a look at the scale of their physical channel as of the third quarter of 2025:

They are focused on improving operating efficiency, which directly impacts the cost and speed of these in-home setups.

Referral network from hospitals, sleep labs, and clinics

The front end of the channel relies heavily on professional relationships to get the patient order in the door. AdaptHealth Corp. partners with a wide array of healthcare providers to secure referrals for their home medical equipment and supplies.

This network is highly diversified, covering various points of care where a patient might transition to home care. They service beneficiaries across the major payor types, which is key to their revenue stability.

The reach and new partnership activity show this channel is actively expanding its footprint:

• Services beneficiaries of Medicare, Medicaid, and commercial insurance payors.
• Reaches approximately 4.3 million patients annually in all 50 states.
• Partners include acute care hospitals, sleep labs, pulmonologists, skilled nursing facilities, and clinics.
• Signed a new capitated agreement to be the exclusive HME provider for a payor serving approximately 170,000 members.

The company is also building out infrastructure to support a capitated partnership with a major national healthcare system. That's a big shift toward value-based care arrangements.

Digital patient portal and mobile application (myApp)

AdaptHealth Corp. is pushing hard on digital channels to enhance patient engagement and streamline administrative tasks. The mobile application, known as myApp, is central to this strategy, moving patients toward self-service capabilities.

The growth in registered users shows a clear adoption trend for their digital tools, which helps in managing chronic conditions and supply replenishment.

Here is the user growth data for the myApp platform:

This represents a significant increase in digitally engaged patients over one year. The app supports patient communication, billing, and ordering supplies. They are also leveraging technology for electronic prescribing and mobile documentation, establishing themselves as tech-enabled in patient engagement. If onboarding takes 14+ days, churn risk rises, so digital speed matters.

AdaptHealth Corp. (AHCO) - Canvas Business Model: Customer Segments

You're looking at who AdaptHealth Corp. (AHCO) serves directly, which is a diverse group spanning patients, payers, and large healthcare providers. This segment definition is key because it dictates how they structure their service delivery across all 50 states.

The core patient base is made up of individuals managing long-term, chronic conditions that require ongoing home medical equipment (HME) and supplies. This focus is clearly segmented across their operational structure.

• Patients needing support for Sleep Apnea (via the Sleep Health segment).
• Patients requiring care for conditions like COPD and chronic respiratory failure (via the Respiratory Health segment).
• Patients managing Diabetes through devices like CGMs and insulin pumps (via the Diabetes Health segment).

AdaptHealth Corp. (AHCO) manages a massive patient load, reaching approximately 4.3 million patients annually as of the third quarter of 2025. This scale is supported by a physical footprint of about 640 locations across 47 states.

Here's a quick look at the patient census data we have for two of the major condition-based segments as of Q3 2025:

The financial relationship is heavily tied to the payer mix. AdaptHealth Corp. (AHCO) services beneficiaries across the three major U.S. payment systems. This diversification helps manage risk, though the shift toward capitation is changing the dynamic.

• Beneficiaries of Medicare.
• Beneficiaries of Medicaid.
• Beneficiaries of commercial insurance payors.

The company is actively moving to secure relationships with larger entities, which represents a significant strategic customer segment shift. These are not just individual patient claims; these are large-scale contracts that drive volume and service model changes. For instance, they recently signed a new capitated agreement to be the exclusive HME provider for a payor serving approximately 170,000 members. They are also supporting a previously announced capitated partnership with a major national healthcare system. This focus on large integrated delivery networks (IDNs) and payors is a key part of their near-term growth strategy, aiming for revenue from these new contracts to accelerate in 2026.

The required outline point for patient volume is:

• Approximately 4.2 million patients served annually.

Finance: draft 13-week cash view by Friday.

AdaptHealth Corp. (AHCO) - Canvas Business Model: Cost Structure

You're looking at the major drains on AdaptHealth Corp.'s operating cash flow as of late 2025. The cost structure is heavily weighted toward the direct costs of the equipment and supplies they manage, plus the people needed to deliver and bill for those services.

Here's a look at the key financial figures from the latest full-year results and the current year guidance.

The Cost of Goods Sold (COGS) is captured within the Total Cost of Revenue, which was $2,580 million for the full year 2024. AdaptHealth defines EBITDA as including depreciation and amortization, including patient equipment depreciation. For the full year 2024, total Depreciation Expense was $45 million.

You won't find a direct line item for personnel costs broken down by clinical staff, delivery drivers, and billing, but these are absorbed into the Selling, General & Administrative Expense (SG&A) line. For fiscal year 2024, SG&A totaled $359 million.

The company is actively working on its 'One Adapt' initiative, which involves AI and automation. Specific financial figures isolating the administrative and technology costs tied only to the One Adapt platform are not explicitly itemized in the high-level financial releases I can access. However, the overall focus on efficiency is reflected in the 2025 Adjusted EBITDA guidance range of $670 million to $710 million, compared to $688.7 million achieved in 2024.

Here are some other relevant operational cost indicators:

• Cost of Revenue as a percentage of Net Revenue for FY2024 was approximately 79.1% ($2,580M / $3,261M).
• The company reduced debt by $50.0 million year-to-date Q3 2025, which impacts interest expense, a component of EBITDA.
• Personnel cost management is a focus; the Chief Business Officer's base salary was amended to reduce from $500,000 to $125,000 starting January 1, 2025.
• The company reported 10.5K employees as of Q3 2025.

If onboarding takes 14+ days, churn risk rises; that means the efficiency of your delivery and clinical staff-part of your personnel cost-directly impacts revenue retention.

Finance: draft 13-week cash view by Friday.

AdaptHealth Corp. (AHCO) - Canvas Business Model: Revenue Streams

You're looking at the core ways AdaptHealth Corp. brings in cash as of late 2025. The company is actively managing a transition in how it gets paid, moving toward more predictable, value-based arrangements while still relying on traditional fee structures.

For the full fiscal year 2025, AdaptHealth Corp. projects its net revenue to land between $3.18 billion and $3.26 billion. This guidance was updated following the sale of certain non-core assets, like incontinence and infusion businesses, which directly impacted the top line but is intended to sharpen focus on core offerings.

A significant part of the revenue picture involves the shift toward capitation. AdaptHealth Corp. is securing exclusive payor contracts, which means they receive a fixed payment per member per month (PMPM) to manage all or a portion of a patient's home medical equipment (HME) needs, regardless of the volume of services used. This is a move away from the older fee-for-service model. For instance, the company announced a new capitated agreement in Q3 2025 to be the exclusive HME provider for a payor serving approximately 170,000 members, building on a previously announced partnership with a major national healthcare system.

The remaining revenue, which still includes substantial fee-for-service reimbursement from government payors like Medicare/Medicaid and commercial insurance companies, comes from the direct sales and rental income of HME and supplies. The most recent quarterly data gives you a look at the revenue contribution by the four main operating segments as of the third quarter ended September 30, 2025:

This segment revenue breakdown shows where the core HME and supplies business stands right now. The Sleep Health segment, for example, saw Sleep new starts up nearly 7% from the prior year quarter in Q3 2025, marking its highest quarter in two years.

You can see the recurring nature of the business through the patient census figures, which directly support ongoing supply and service revenue:

• Sleep Health patient census: 1.72 million patients as of Q3 2025.
• Respiratory Health patient census: 330,000 patients as of Q3 2025.
• Registered myApp users grew to 271,000, up from 118,000 in Q3 2024, supporting patient engagement and resupply.

The company is executing on operational improvements, like process automations in CPAP order conversions, to make the revenue generated from these services more efficient. Finance: draft 13-week cash view by Friday.