Summary of Accendra Health Q2 2026 Earnings Call

1Key Financial Results and Metrics

Revenue: Q2 revenue growth was 2% (excluding the impact of a large commercial payor exit), with notable growth in the sleep category (5.5%) and diabetes (4%).

Adjusted EBITDA: Reported at just over $60 million, with a slight margin improvement from Q1.

Free Cash Flow: Expected to be breakeven to slightly positive for the full year 2026, impacted by higher cash interest payments and lower-than-anticipated adjusted EBITDA.

Debt: Total debt reduced to $1.72 billion following a successful balance sheet optimization, with net debt down by over $55 million.

2Strategic Updates and Business Highlights

Leadership Transition: CEO Ed Pesicka announced his intention to retire by the end of 2026, emphasizing a planned succession process.

Cost Reductions: Over $125 million in annualized costs eliminated following the separation from Owens & Minor, with additional cost reduction initiatives planned for Q3 and Q4.

Operational Improvements: Continued rollout of the Sleep Center of Excellence expected to enhance growth and profitability starting late 2026.

New Contracts: Secured a renewal of a major soft goods contract and signed new agreements with regional health systems and payors.

3Forward Guidance and Outlook

2026 Revenue Guidance: Revised to between $2.45 billion and $2.55 billion, with adjusted EBITDA expected between $300 million and $320 million.

Q4 Expectations: Anticipated to be the strongest quarter, setting a positive trajectory for 2027.

Future Cash Flow: Confidence in generating around $100 million in annual free cash flow in a normalized year, with expectations for improvements in 2027.

4Bad News, Challenges, or Points of Concern

Underperformance: Q2 results did not meet internal expectations, primarily due to lower revenue growth and slower-than-expected recovery in collection rates.

Collection Issues: Approximately $20 million impact on revenue and adjusted EBITDA due to inefficiencies in collections from payors, exacerbated by increased audit activities.

Operational Challenges: The timing of cost reductions and ongoing issues with accounts receivable have hindered financial performance.

5Notable Q&A Insights

Payor Collection Dynamics: Increased audit activity from payors has led to delays in payments and resource allocation away from other projects, impacting cash flow.

Supplier Relationships: Management emphasized strong relationships with suppliers and no current disruptions in contracts, contrasting with competitor experiences.

NOL Rights Plan: The decision to implement a net operating loss rights plan was driven by recent shareholder activity and the need to protect valuable tax attributes. Overall, while Accendra Health is navigating several challenges, including collection inefficiencies and a leadership transition, there are strategic initiatives in place aimed at driving future growth and operational improvements. The company remains cautiously optimistic about the second half of 2026 and beyond.