With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Industries included in the sector are insurance and managed care, medical products and facilities, pharmacy services, and pharmaceutical companies.

Fortune Sector Leaders: Health Care

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

This year’s Fortune 500 marks the 68th running of the list.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-345-Owens & Minor

The medical and surgical equipment maker is based in Richmond, Va., and was founded in 1882. Owens &amp; Minor designs and manufactures an expansive range of PPE and other surgical products including surgical drapes and gowns, facial protection products, protective apparel, and medical exam gloves. It also offers services to health care providers, such as analytics and inventory management. Owens &amp; Minor's sales slid 10% last year to $8.7 billion. But its stock soared after the company said it expects revenues to surpass $12 billion by 2026.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-332-Owens-&-Minor

Founded in 1882 in Richmond, Va.—which it still calls home today—Owens &amp; Minor distributes health and medical supplies to doctors' offices and hospitals around the globe.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

World's Most Admired Companies

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

Key Financials (last Fiscal Year)

Revenues ($M)

Profits ($M)

Assets ($M)

Total Stockholder Equity ($M)

Profit Ratios

Profit as % of Revenues

Profits as % of Assets

Profits as % of Stockholder Equity

Earnings Per Share (last Fiscal Year)

Earnings Per Share ($)

EPS % Change (from prior fiscal year)

EPS % Change (5 year annual rate)

EPS % Change (10 year annual rate)

Total Return

Total Return to Investors (last year)

Total Return to Investors (5 year, annualized)

Total Return to Investors (10 year, annualized)

Owens &amp; Minor manufactures, distributes, and manages medical and surgical supplies. Founded in 1882, it went public in 1988 and today operates through two segments: Its products and health care services segment works with health care providers and manufacturers, while its Patient Direct segment offers in-home care and delivery services in areas including diabetes treatment, home respiratory therapy, and obstructive sleep apnea treatment, along with ostomy, wound care, and urology and incontinence services. The company also offers services including supplier and inventory management.

Q2 2026

Q1 2026

Q4 2025

Q3 2025

Q2 2025

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Q4 2024

Q3 2024

Accendra Health (ACH): Company Profile, Stock Price, News, Rankings

legacy

Accendra Health

accendra health

Hello, good day, and thank you for standing by. Welcome to the Accendra Health fourth quarter 2025 earnings conference call. After the speakers' remarks, there will be a question and answer session. To ask a question, press star one on your telephone keypad. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Will Parrish, Vice President, Strategy, Corporate Development, and Investor Relations.

Thank you, operator. Good afternoon, everyone, and welcome to Accendra Health's fourth quarter earnings call. Our comments on the call will be focused on the financial results of the fourth quarter of 2025, all of which are included in today's press release. The press release, along with the fourth quarter 2025 supplemental slides, are posted on the Investor Relations section of our website. Please note that during this call, we will make forward-looking statements that reflect the current views of Accendra Health about our business, financial performance, and future events. The matters addressed in these statements are subject to risks and uncertainties, which could cause actual results to differ materially from those projected or implied here today. Our expectations, beliefs, and projections are expressed in good faith, and we believe there is a reasonable basis for them.

However, there can be no assurance that our expectations, beliefs, and projections will result or be achieved. Please refer to our SEC filings for a full description of these risks and uncertainties, including the Risk Factors section of our annual report on Form 10-K and quarterly reports on Form 10-Q. Any forward-looking statements that we make on this call or in our earnings press release are as of today, and we undertake no obligation to update these statements as a result of new information or future events, except to the extent required by applicable law. In our discussion today, we will refer to non-GAAP financial measures and believe they might help investors to better understand our performance or business trends. Information about these measures and reconciliation to the most comparable GAAP financial measures are included in our press release.

Today, I am joined by Ed Pesicka, Accendra Health's President and Chief Executive Officer; Jonathan Leon, the company's Chief Financial Officer; and Perry Bernocchi, the company's Chief Operating Officer. I will now turn the call over to Ed. Ed?

Thank you, Will. Good afternoon, everyone, and thank you for joining us on the call today. I am pleased to welcome all of you to our very first earnings call as Accendra Health. I'd like to begin by giving you my thoughts related to the strengths of Accendra Health and why we are so excited for our future and where we are going. First, it is important to understand the size of the market that we serve or the size of the pie. Our expansive payer relationship gives us access to approximately 300 million Americans, of which the CDC estimates that three out of four adults are living with some type of chronic condition, and our nationwide footprint makes Accendra Health a premier choice for all constituents involved in the administration of care in the home-based setting.

In this expansive market, we have developed high brand recognition and customer support and reliance on both Byram and Apria, our two primary go-to-market brands. We have established this through leading service, consistency, and reliability. This continues to be validated by Net Promoter Score that have exceeded the industry average for the last several years. We also have a broad range of growing product offerings and capabilities, which provides us the ability to serve patients in the home in many of the largest and fastest-growing chronic condition categories. As a result of the foregoing, we are a national leader in home-based care for numerous chronic conditions which afflict millions of Americans, and our strengths are differentiators compared to the vast majority of the thousands of other participants in the industry. As we look forward, we have a bullish outlook on the long-term demand for our unique offerings.

Economic pressures continue to push care to the home-based setting, while the country's aging population is afflicted with a rising number of chronic conditions. We are also optimistic about the strong long-term demand due to increasing awareness about proactive health management amongst a population which is still meaningfully underdiagnosed, specifically in the sleep category. Another area of opportunity for us is in the anticipated competitive bidding, specifically in diabetes, urology, and ostomy, all categories of strength for Accendra Health. As CMS, along with ourselves and other industry leaders, work to drive fraud, waste, and abuse out of the system, we believe that we are well positioned for Medicare's competitive bidding process, considering our footprint, our efficient service model, and broad existing referral source recognition.

To capitalize on the overall favorable backdrop, we are leveraging technology and automation to ensure that we provide an industry-leading home-based care offering built on, one, being a trusted, reliable, and easy-to-understand partner for our patients and their clinicians. Two, an integrated, streamlined, and compliant reimbursement process for our payers, while at the same time maintaining a best-in-class revenue cycle management capabilities. And three, providing a streamlined and cost-efficient channel to market for our manufacturing partners. Just a few examples of the use of technology to both improve the customer experience while also lowering our cost to serve, include the use of technology to automate payer qualifications, enabling faster and more accurate order validation and improving revenue capture.

Another example, building on the strength of our myByram app, is the expected launch of our new myApria app in Q2 of this year, which is expected to enhance the customer experience while also increasing operational efficiency and supporting patient therapy adherence. Finally, in a practical application of leveraging technology, enhancing the customer experience and overall focus, we continue to see success in the fourth quarter with our sleep journey initiative. I'm happy to highlight continued success in our sale of sleep supplies, which grew in the range of 8%-9% for both the quarter and full year. Finally, we are pleased to finish the fourth quarter with the completion of the sale of our former Products & Healthcare Services business, Owens & Minor, to Platinum Equity on December 31.

I'd like to thank and commend all parties involved for working so diligently to complete the transaction in such a quick timeframe. With the transaction now closed and final separation work well underway, Accendra Health is now devoting all of its focus and energy to strengthening our core home-based care businesses to achieve reliable and growing free cash flow, stable growth, and debt reduction. We're entering 2026 as a much leaner and more nimble business with a much higher margin profile post-P&HS divestiture. We have already taken actions to lean out our business and expect to continue taking actions to eliminate costs to address the loss of a large commercial payer, as well as stranded costs. Despite never wanting to lose a customer, we maintained our financial discipline during the process.

Since that time, our focus has been to ensure smooth transition of patient care and minimize our cost of transitioning the relationship related to this contract. Finally, now that we have the sales proceeds in hand, we are well positioned to take a thoughtful approach to optimizing our capital structure, taking into consideration all stakeholders. We are committed to deleveraging, combined with metered investments, as we move forward. This will be a continuation of what we did in Q4 with investments in technology, while also paying down debt by $65 million from ordinary free cash flow. Before I turn it over to John, let me reiterate my excitement about the strength of Accendra Health, the growing market that we participate in, and where we are going as a business.

With that, I will now turn the call over to John to discuss our financial performance in the fourth quarter and our outlook for 2026. John?

Thanks, Ed, and good afternoon. I want to start by reminding you that despite the closing of the divestiture at the end of 2025, we will continue to report our results on a continuing operations, discontinued operations basis for as long as the accounting rules require us to show comparable results. Like the last couple of quarters, unless otherwise stated, my remarks today will focus on the continuing operations. The continuing operations financial statements are what you should expect from Accendra Health. I am sure we all look forward to much reduced business complexity post-divestiture as we move through 2026. Also, please note that any discussion about the financial results and outlook for the company will cover only non-GAAP financial measures. You can find GAAP to non-GAAP financial reconciliations in the press release filed a short time ago and residing on our website at accendrahealth.com.

Fourth quarter results were largely aligned with much improved cash flow and lower debt compared to the third quarter. In the fourth quarter, there was decent year-over-year growth in the key categories of sleep therapy, ostomy, and urology, as we have seen in recent quarters. Diabetes grew by almost 2% versus last year, an improvement as compared to flat year-over-year results in Q3, and insulin pumps led to quarterly diabetes category growth. The fourth quarter saw the initial impact of a previously discussed contract loss and price impact of a large commercial payer. Overall, this payer's impact on quarterly revenue was approximately 1% of what would have been over 3% growth. This impact on revenue will significantly increase throughout 2026 in aggregate to approximately $300 million in 2026 versus 2025, and approximately an additional $40 million in 2027.

We anticipate that we will have completely lapped the impact of this revenue loss by the end of the first quarter of 2027. We are on our way to replacing this lost revenue margin. For all of 2025, revenue was nearly $2.8 billion, up a little more than 3%. Throughout the year, growth in the large sleep category, as well as ostomy and urology, led the way. A somewhat weaker collection rate compared to a strong 2024 also inhibited top-line growth. Fourth quarter adjusted EBITDA was $90 million, compared to $102.5 million in last year's fourth quarter. The change was driven by lower payer prices, inflationary product cost increases, higher health benefit costs, and stranded costs that were only partially offset by lower other teammate benefit costs.

For the full year, adjusted EBITDA was $375 million, up slightly from 2024. The same factors impacting the fourth quarter drove the full-year results. Adjusted EBITDA results include $12 million of stranded costs in the quarter from the pre-divestiture business and $36.5 million for the full year. Beginning with our Q1 2026 results, we will no longer be specifically breaking out stranded costs, because with the finalization of the divestiture, these costs will now be part of the operating expenses of Accendra Health. Expense reduction, including former stranded costs, is a key component of our 2026 expectations. As I mentioned, we saw much improved cash flow in the fourth quarter and related debt reduction.

For the fourth quarter of 2025, operating cash flow was $68 million, which includes $67 million of cash used by the former discontinued Products & Healthcare Services business. So the continuing operations business generated $135 million of cash from operating activities. For the full year, while the consolidated business of both continuing and discontinued operations had a use of cash from operating activities of over $100 million, the continuing operations, the going-forward Accendra, generated $154 million in cash from operating activities. As a reminder, the full year cash flow from continuing operations includes $98 million in cash costs to terminate the Rotech acquisition in the summer of 2025.

For the continuing operations, free cash flow in the fourth quarter, defined as adjusted EBITDA, with patient equipment, capital expenditures, net of non-cash convert-to-sale write-off expense, and after consolidated interest paid, was $18 million in the fourth quarter, and for the year was $98 million. This reinforces the strong cash generation profile of Accendra compared to the legacy business. At December 31, net debt was $1.8 billion, down $315 million from September 30th, and down $46 million since year-end 2024. Prior to the closing of the divestiture, we had already reduced debt by $65 million from September 30. The net proceeds received from the divestiture of the Products & Healthcare Services business of $342 million are included in the December 31 cash balance.

Also, as a result of customary final purchase price adjustments, including a working capital true-up, we expect to receive approximately $12 million-$15 million of additional proceeds in the spring. At divestiture closed, we used $66 million of proceeds to settle bank debt obligations under the AR securitization program that were entirely related to P&HS. This is all detailed in slides filed via Form 8-K, just after today's market close, and also residing on our website. In addition to the $282 million of cash on the balance sheet at December 31, we had nearly $220 million of available capacity under our committed revolving credit facility and $16 million available under a newly amended accounts receivable securitization program. The bottom line is that we believe there's ample liquidity available for the business. Also, we ended the year comfortably in compliance with our debt covenants.

As we've been saying for months, all net proceeds from the divestiture will be used to reduce our debt balance. We have a long-range leverage target of 3x adjusted EBITDA, which we believe is very achievable, and debt reduction continues to be a top priority for 2026 and beyond. We are also committed to maintaining a capital structure that supports the transformation of the business into a pure-play, cash-generative, home-based care company. We are actively evaluating all options to optimize our capital structure and are engaging stakeholders to help ensure we come away with a structure that is the most appropriate for the new, higher profit, better cash flow Accendra, while protecting the interest of our shareholders. We believe this process will conclude in the near term. Turning now to the 2026 outlook.

The slides I referenced earlier also include pages to assist with 2026 guidance and depict the key drivers from our 2025 results and our 2026 full year guidance. I'll begin by walking through the net revenue slide. We expect annual revenue to be between $2.55 billion and $2.65 billion. As you will see, the greatest impact results from the changes with the single large commercial payer discussed earlier. Of the $300+ million impact in 2026 compared to 2025, approximately 15% of the reduction versus prior year will occur in Q1, and 25%-30% in each of the second to fourth quarters. This will be partially offset by volume growth and improved collection rates.

Looking at the adjusted EBITDA slide that follows, we expect 2026 adjusted EBITDA to be in a range of $335 million-$355 million. Unsurprisingly, the large commercial payer change again has an outsized impact and will be somewhat mitigated by cost reduction directly related to this payer, other expense takeout and volume growth. The 2026 expense reductions have been identified for some time, and a number of actions have been taken or slated to be taken on a rigid timeframe. Finally, we included a levered free cash flow walk, which again shows the strong cash flow from the Accendra business. At the midpoint, we expect at least $100 million of free cash flow in 2026.

Much of the cash flow projected in 2026 is spoken for due to the costs throughout the year to separate Accendra from Owens & Minor and cash outlays related to certain expense reduction activity that I mentioned earlier. This is only a 2026 issue, and future free cash flow is expected to be comparable or better and will help drive further debt reduction. In thinking about quarterly cadence, between cost reduction ramping throughout the year to a full run rate benefit, the replacement of the previously discussed impact of the large commercial payer, the time needed to reduce stranded costs and effectively separate from Owens & Minor and the business's normal seasonality, we expect about 60% of the adjusted EBITDA to be realized in the second half of the year, with the first quarter of the year being the weakest and Q4 the strongest.

In conclusion, Accendra Health is a very different company than the pre-divestiture Owens & Minor. The investment thesis is much improved, and we are proud to be among market leaders in a growing and dynamic space, and look forward to demonstrating consistent earnings and strong cash flow. With that, I'll now turn the call back to the operator for Q&A. Operator?

Thank you. If you would like to ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, simply press star one again. We ask that you please limit yourself to one question and one follow-up. Thank you. Your first question comes from Michael Cherny of Leerink Partners. Your line is open.

Good evening, and thanks for taking the question. Maybe if I can just dive in on some of the commentary you made, Ed, on investments. Fully understand, I think we all do, the dynamics around debt paydown, but you talked about targeted investments. As you think about the business, especially with the Rotech deal being in the background, what do you see targeted investments looking like for the remain co going forward?

Yeah, I, I think there's a couple different ways to look at this. And, you know, when I, when I talked about the metered investments, you know, primarily in 2026, we're looking at, you know, investment in technology, as I talked about, to continue to lower our cost to serve, as well as, you know, improve the customer experience. I think on the M&A side, if you, if you're looking specifically around the M&A side, you know, there may be an opportunity to do some tuck-ins, but again, I think our primary focus in 2026 is gonna be around debt reduction, and then those metered investments would be around technology to improve customer experience as well as lower our cost to serve. And we would consider, if appropriate, you know, some small little tuck-ins.

Thanks. That's helpful. Just one more: you talked about the rebuild of revenue recapture opportunity as you have the large customer rolling off. You signed the preferred agreement with Optum. How's that going so far?

Look, we're still early in the process. We're starting to gain some traction, but as John talked, even in his prepared remarks, you know, the opportunity for us to fill in the gaps, you know, maybe we won't completely fill in the gaps, you can see from our walk-on revenue, but it does create opportunity for us to redeploy resources to start to, you know, backfill that revenue with other revenue, whether it be a preferred provider agreement or just expansion of existing contracts and relationships that we have.

Your next question comes from Kevin Caliendo with UBS. Your line is open.

Thanks for taking my question, guys. Just wanted to talk, one, just a numbers question. John, how much was patient CapEx in the fourth quarter? And how should we think about patient CapEx as a percentage of overall CapEx in 2026?

Yeah, Kevin, it was $45 million in the quarter, about $189 million for the year. You think about 2026, as we've talked about, these payer customers that we're losing had a disproportionate amount of CapEx relative-

... to the size of that agreement. So, as you saw in our guidance numbers coming down by some, you know, $25 million-$30 million, but I think about patient CapEx is gonna run roughly 95% of the total going forward.

Okay. That's, that's helpful. Just wondering if there's been talk of a manufacturer coming back to market, who had been sort of out of the market for a while. Wondering if you have any update on that. And I was wondering if that could actually maybe provide a little relief on cost if another manufacturer were to come in, you know, in CPAPs or vents or the like?

Yeah, you know, I obviously can't comment on what other companies are planning on doing, but, you know, should another manufacturer come back into the space, I think it would create a different competitive dynamic in the market.

Great. I'll jump back in the queue. Thanks, guys.

The next question comes from Daniel Grosslight with Citi. Your line is open.

Hi, guys. Thanks for taking the question. Really appreciate all the detail that you've provided in your presentation. If I could just go to the adjusted EBITDA bridge for the 2026 guide. I'm curious if you can kind of maybe break down for us how much of that volume improvement, I guess it will largely come through volume improvement, but how much of that is driven by Optum and perhaps other contracts that you haven't announced publicly yet? And how much is kind of non-Optum and non-contracted at the moment?

Yeah, Daniel, it's John. I would say, I would not say there's a lot of preferred provider agreement built into that volume growth, and it's fairly well-spread across all therapy categories. So, you know, as Ed mentioned earlier, that these contracts are attractive. They're, it takes a while to ramp them up. So yeah, we have some upside built into the volume growth, but it is by no means the bulk of that, and it's pretty well spread across customers and therapy categories.

Got it. Okay, and then on your, on your CapEx guidance, you're no longer guiding to a net CapEx number, and I see in a footnote that's because I guess I don't know, it just says it doesn't include sales patient CapEx. What are your expectations now on a net basis for CapEx? And you know, is the delta gonna be reduced significantly because of that contract rolling off?

So overall, I would still expect about 30% of the growth to be the number that you're gonna see in the sales of patient CapEx. Remember, when calculating any cash flow off of that, that number, that 30% is already in your adjusted EBITDA number. So we wanted to be clear that we're not double counting, so that's why we've presented the way we have today. But when you think about the dollars coming back, it's roughly 30% of the total.

The next question comes from John Stansel with JPMorgan. Your line is open.

Great. Thanks for taking my question. Just wanna touch on in the adjusted EBITDA bridge, the manufacturer cost increases in inflation seems like it's outpacing pricing growth. Is that concentrated to a particular category or area, or, and how should we think about that as a kind of durable trend?

Yeah, I would tell you, John, it's certainly I wouldn't call it a trend. I'd call it more of an opportunity for us. And I would not particularly tell you it's linked to any one supplier. It's a trend we, I mean, we have seen it for a while, but it's clearly a focal point for us as we go enter 2026 and beyond. And we view it as an opportunity to really grow the EBITDA from where we are today.

Great. Then you mentioned that you're kind of considering all options to kind of optimize the balance sheet. Can you just spend a little more time talking about your levers around balance sheet optimization? It sounds like there's kind of imminent changes you think you could be making.

Yeah, you know, the way we think about this is, you know, obviously, you know, with the sale of the P&HS business and with the cash on hand on the balance sheet, plus with the improvement in net debt in the fourth quarter beyond that, anytime you have a major transaction like this, it creates the opportunity for us to step back and really assess our capital structure. You know, it gives us the opportunity to assess our capital structure holistically. And I think we have to, and we will look at it, you know, based on, you know, the business set that we have, what Accendra is. You know, it's a business today that has a much different working capital requirement than what the legacy business was.

It's a business that we do have relatively predictable, you know, PSE or CapEx on it, and it's a business that has much stronger margins than the legacy business. So I think that's important to understand that as the backdrop of, as you know, we have the transaction that's closed, we have the cash on hand, you know, it gives us an opportunity to really step back and reassess.

Daniel, I think I would add to Ed's comments, which I fully agree with, is, you know, we obviously have some things we have to address, and we have some maturities that are in 2027, so debt coming current, later this quarter, which is we have to. But to Ed's point, everything else will be opportunistic in making sure we have a capital structure that fits the ongoing, the new business model.

The next question comes from Eric Coldwell with Baird. Your line is open.

Thanks very much. I wanted to go back to that recent question on manufacturer cost increases and inflation. I wanna be, if we can, I wanna be clear on this. Are you seeing broad-based cost increases across multiple manufacturers and categories? And is that so, is it general market environment? Are they passing tariffs on to you guys? Trying to figure out what it actually is. Is it related to a specific, primarily a specific manufacturer, a specific product line? And then, how does that compare to the past? Because this is a, obviously, this is a new chart for us. Thanks for giving it to us, but we don't really have the historical context on it.

And then, finally, Jonathan, you said you, you saw some opportunity there to improve upon it. What, what, what's in your control? What opportunities are in your control? How do you improve upon it?

Yes. I guess, you know, I'll add a little more color on it. So, Eric, it is not across every single category that we participate in. You know, it's in some of the more major categories where there's the, "This is normal process we see every year," to some extent, and we have the ability to offset it with a couple different areas. You know, we have the opportunity to potentially offset it with, you know, mid-year. You know, all these contracts aren't locked in for the full year. There's ones that are phasing out, phasing in during the year, and I think it creates opportunity for us to work closer with various manufacturing partners to look at different pricing models and growth incentives and other things like that.

You know, so that's where we think about it and where we're gonna be able to go after it and attack it. So I think that hopefully frames it out. It's not necessarily tariff related. You know, it is more related to normal inflation that we've seen historically, and then, you know, our ability now to work that down as the year progresses.

I think that's what John... I don't wanna speak for you, John, but I think you probably meant that as the year progresses, you know, this is the number we have right now. There's opportunity for us to continue to work with our manufacturing partners to mitigate and reduce some of that.

Yeah, that's super helpful. Could I do one follow-up?

Yeah, collection rate also on that same chart. I-- You mentioned in the prepared commentary that collection rate was a bit of a, I think you said it was a bit of a headwind in 2025, which impacted growth, but clearly that would have been a, a big drop through to EBIT, to profit. You're looking for some improvement in 2026. What gives confidence? What are the drivers of the improvement? Basically, what happened, and how do you... It's not a huge number, but how do you fix it?

Yeah, Eric, I'm actually very confident in that rebound in 2026 because the pullback we saw was largely due to some of the technology investments we made in 2024 and 2025. It just, you know, you make the investments, there's a learning curve, things have to get worked out. We worked out the kinks, so that just really set us back a little bit. The technology we put in place will certainly, very confident, be additive to our collection rate going forward. So I'll tell you, the pullback that you saw is minor, but does fall through. You're correct about that, but really related to the onboarding of the implementation of new investments to improve in the future.

So, still really happy with where the rate is overall, but it, I mean, came off a very strong 2024, had some investments we had to work through, and it's gonna get better in 2026.

What, what is your bad debt rate? Now that you're a standalone pure play, maybe you could talk about that a little bit.

We had not contemplated talking about that. It's not disclosed, but I'll tell you, I'll put it up against anybody else's in the business.

You wanna give us a, a, you know, breadbasket, Volkswagen kind of ratio here?

I'll respectfully pass on that opportunity to do so.

Your next question comes from Alan Lutz with Bank of America Securities. Your line is open.

Hey, thanks for taking the question. This is Devon for Alan. Maybe just to kick it off, just more on the revenue side. You know, sleep group was 89%. Looks to be a slight step up quarter-over-quarter. Just would love to know what's driving that. And then, we'd just also love to get a sense of the underlying health of the market across some of the other categories outside of sleep and diabetes. And, you know, what's contemplated in guidance here for drivers and codes, you know, I guess from a volume and pricing perspective, specifically for, you know, home respiratory therapy, ostomy, wound care. Thank you.

Yeah, so, you know, I think talk about the sleep category and what's been driving it. We've talked a lot about it over the last year, was our sleep journey. You know, and, and Perry and the team across the business have spent a significant amount of time understanding that sleep journey from patient capture up front, but as important, if not more importantly, the residual reoccurring revenues associated with sleep. You know, making sure that it's easy for our easy for the customers, that being the patient, to get their reorders and that revenue cycle continuing. So, you know, that's helped out tremendously with it. I think overall, too, I think you've got to be cognizant in the sleep category. It's a growing category. You know, more and more people continue to get diagnosed with sleep apnea.

You know, that continues to expand, and, and it creates, you know, opportunity for additional growth there. I think in diabetes, too, it's a little bit of a mix. You know, we, we saw in, in the fact that with diabetes, we saw volume go up slightly more than what our overall growth rate was. You know, and that's, you know, we got a little bit of the pharmacy, DME mix in there that's driving that. And, and I guess, you know, overall, the anticipation is, you know, you've got low single digit growth in most of these categories on average, some of, some of them above that, some of them lower than that, you know, expected in 2026. And, and the growth plan is that plus several other initiatives we have in various categories to expand beyond that.

So hopefully that frames it out, what we're seeing right now.

Yeah. Thanks, Ed. I guess just real quick, one clarification point. I think you mentioned some of the benefits from the pharmacy DME mix. I guess, is that now a tailwind on the diabetes side? Is that what you're mentioning, or at least was-

Yeah, no, no tailwind at all. That's kinda... It's just a one channel versus the other channel approach.

... we're still seeing the shift from pharma to DME.

Got it. Yep, just want to clarify that. And then, yeah, I think there was a lot of, obviously, great quality that's provided on the various drivers of cash flow here, but I just want to, you know, take a step back and would just love to get an understanding of what the biggest swing factors are here for the year on cash flow. You know, your—from your standpoint, where you sit, where you have visibility into and, you know, maybe ones that are less so. Just, you know, what are the biggest swing factors we should think through here?

I think the biggest standalone single item there is, you know, if you're looking at the slides we've provided, is the transaction break fee and the transaction financing fee. That's $98 million. It's probably the biggest one-timer there.

Yeah, it's important to realize also, Dev, that, you know, Accendra Health compared to legacy Owens & Minor, the working capital business, it's, it's completely different. This is a business that runs with very little, if any, working capital consumption. So, and we've opportunities for approval on that as well. So it's, you know, it's cash generative, it's recurring revenue business, with really strong working capital dynamics behind it. So very, very different than what you guys are used to in the past.

This concludes the question and answer session. I'll turn the call to Ed Pesicka for closing remarks.

Thank you, operator, for that. Look, this is an extremely exciting period in the history of Accendra Health. You know, we, myself, personally, we're all extremely excited about what the future has as a pure play supplier in the home-based care space, and I look forward to continuing to providing updates and sharing our progress with you, you know, as we continue through the year. So thank you.

This concludes today's conference call. Thank you for joining. You may now disconnect.

Accendra Health (ACH) Q4 2025 Earnings Call Transcript

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