AdaptHealth Corp.AHCO
AdaptHealth Corp. Goodwill & Intangibles Disclosure
Goodwill and Identifiable Intangible Assets
Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.
The change in the carrying amount of goodwill by reportable segment for the years ended December 31, 2025 and 2024 was as follows (in thousands):
| Sleep Health | Respiratory Health | Diabetes Health | Wellness at Home | Total | |||||||||||||||||||||||||
| Balance at December 31, 2023 | $ | 2,724,958 | |||||||||||||||||||||||||||
| Goodwill impairment | (13,078) | ||||||||||||||||||||||||||||
| Write-off from sale of assets | (4,598) | ||||||||||||||||||||||||||||
| Reallocation adjustment (1) | 1,581,039 | 676,747 | 211,796 | 237,700 | 2,707,282 | ||||||||||||||||||||||||
| Goodwill classified as assets held for sale | — | — | — | (41,211) | (41,211) | ||||||||||||||||||||||||
| Goodwill from acquisitions (note 3) | — | — | — | 9,095 | 9,095 | ||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | 1,581,039 | $ | 676,747 | $ | 211,796 | $ | 205,584 | $ | 2,675,166 | |||||||||||||||||||
| Goodwill from acquisitions (note 3) | 12,893 | 5,039 | — | 15,328 | 33,260 | ||||||||||||||||||||||||
| Write-off from dispositions (note 4) | — | — | — | (41,319) | (41,319) | ||||||||||||||||||||||||
| Other (2) | 1,151 | 225 | — | 940 | 2,316 | ||||||||||||||||||||||||
| Goodwill impairment | — | — | (127,995) | — | (127,995) | ||||||||||||||||||||||||
| Balance at December 31, 2025 (3) | $ | 1,595,083 | $ | 682,011 | $ | 83,801 | $ | 180,533 | $ | 2,541,428 | |||||||||||||||||||
(1) Represents the reallocation of goodwill from one reportable segment to the Sleep Health, Respiratory Health, Diabetes Health, and Wellness at Home reportable segments, using a relative fair value approach, as a result of the change in reportable segments in the fourth quarter of 2024.
(2) The Company is a member of a joint venture subsidiary which includes another member who has a noncontrolling interest in such subsidiary. During the year ended December 31, 2025, the noncontrolling interest member contributed certain assets to the joint venture totaling $3.0 million, of which $2.3 million was attributed to goodwill. This transaction was treated as a business combination under ASC 805.
(3) On a consolidated basis, gross and net goodwill as of December 31, 2025 was $3.5 billion and $2.5 billion, respectively. The total amount of accumulated impairment charges as of December 31, 2025 was $1.0 billion.
Management is required to perform an assessment of the recoverability of goodwill on an annual basis and upon the occurrence of a triggering event. Triggering events potentially warranting an interim goodwill impairment assessment include, among other factors, declines in historical or projected reporting unit revenue, operating results or cash flows, and sustained decreases in the Company’s stock price or market capitalization. While management cannot predict if or when future goodwill impairments may occur, a non-cash goodwill impairment charge could have a material adverse effect on the Company’s operating results, net assets and the Company’s cost of, or access to, capital.
In the fourth quarter of 2025, in connection with the Company's annual assessment of the recoverability of goodwill, management performed a quantitative goodwill impairment test for each of the Company's reporting units. The fair value of the Company’s reporting units were computed using (1) a discounted cash flow method which includes assumptions on the projected future cash flows, earnings, discount rates, working capital adjustments, long-term growth rates, and others, and (2) a market approach method to estimate value through the analysis of recent sales of comparable assets or business entities. The impairment test indicated that the estimated fair value of the Company's Diabetes Health reporting unit was less than its carrying value, and as such, the Company recognized a non-cash goodwill impairment
charge of $128.0 million during the year ended December 31, 2025. The impairment charge was primarily driven by revisions to the Company's financial projections.
While the Company's quantitative goodwill impairment test did not result in an impairment charge of the Company's Wellness at Home or Respiratory Health reporting units, based on the results of such test, the excess of the estimated fair value of the Wellness at Home reporting unit over its carrying value was less than 10%, and the excess of the estimated fair value of the Respiratory Health reporting unit over its carrying value was less than 20%. If, in future periods, the Company were to identify events that indicate a potential impairment of goodwill, the Company may be required to perform a goodwill impairment test at an interim or annual period and could be required to recognize a non-cash goodwill impairment charge at that time, which could be material.
The goodwill impairment charge recognized during the year ended December 31, 2024 related to the disposition of certain immaterial custom rehab technology assets.
Identifiable intangible assets that are separable and have determinable useful lives are valued separately and amortized over the period which reflects the pattern in which the economic benefits of the assets are expected to be consumed. Identifiable intangible assets consisted of the following at December 31, 2025 and 2024 (in thousands):
| December 31, 2025 | |||||||||||
| Weighted-Average Remaining Life (Years) | |||||||||||
Tradenames, net of accumulated amortization of $61,564 | $ | 47,737 | 4.9 | ||||||||
Payor contracts, net of accumulated amortization of $44,616 | 37,384 | 4.6 | |||||||||
| Identifiable intangible assets, net | $ | 85,121 | |||||||||
| December 31, 2024 | |||||||||||
| Weighted-Average Remaining Life (Years) | |||||||||||
Tradenames, net of accumulated amortization of $49,736 | $ | 59,964 | 5.6 | ||||||||
Payor contracts, net of accumulated amortization of $36,416 | 45,584 | 5.6 | |||||||||
| Identifiable intangible assets, net | $ | 105,548 | |||||||||
Amortization expense related to identifiable intangible assets, which is included in depreciation and amortization, excluding patient equipment depreciation, in the accompanying statements of operations was $20.3 million, $22.3 million and $32.6 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Future amortization expense related to identifiable intangible assets is estimated to be as follows (in thousands):
| Twelve months ending December 31, | |||||
| 2026 | $ | 18,913 | |||
| 2027 | 17,650 | ||||
| 2028 | 17,626 | ||||
| 2029 | 17,626 | ||||
| 2030 | 12,728 | ||||
| Thereafter | 578 | ||||
| Total | $ | 85,121 | |||
The Company did not recognize any impairment charges related to identifiable intangible assets during the years ended December 31, 2025, 2024 and 2023.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 16, 2021 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.