GMRS 10-Q
GMR Solutions Inc. (GMRS)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(MARK ONE)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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As of August 10, 2026, there were
GMR SOLUTIONS INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2026
TABLE OF CONTENTS
i
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, our operations and financial performance. Forward-looking statements include all statements that are not historical facts. These forward-looking statements may relate to matters which include, but are not limited to, industries, business strategy, goals and expectations concerning our market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources and other financial and operating information. In some cases, you can identify these forward-looking statements by the use of words such as “anticipate,” “assume,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “foreseeable,” “future,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will,” “would,” the negative version of these words, or similar terms and phrases. The forward-looking statements are based on management’s current expectations and are not guarantees of future performance. The forward-looking statements are subject to various risks and uncertainties. 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 management’s expectations, beliefs, and projections will result or be achieved. Actual results may differ materially from these expectations due to changes in global, regional or local economic, business, competitive, market, regulatory and other factors, many of which are beyond our control. Information concerning these and other factors can be found in the Company’s filings with the U.S. Securities and Exchange Commission (the “SEC”), including those set forth in the “Risk Factors” section in our final prospectus (the “IPO Prospectus”) filed with the SEC on May 14, 2026 pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended, relating to our Registration Statement on Form S-1 (File No. 333-295169) (the “Registration Statement”). Copies are available on the SEC’s website, www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included herein. In light of the significant uncertainties in forward-looking statements, you should not regard such statements as a representation or warranty that the Company will achieve its objectives and plans in any specified timeframe, or at all, and you should not place undue reliance on any forward-looking statements. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.
WEBSITE AND SOCIAL MEDIA DISCLOSURE
We may use our website (www.globalmedicalresponse.com), Facebook page (www.facebook.com/GlobalMedicalResponse), X (Twitter) (www.x.com/GMR_Social), LinkedIn (www.linkedin.com/company/Global-Medical-Response), and Instagram (www.instagram.com/Global_Medical_Response), accounts as channels of distribution of company information. The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive email alerts and other information about the Company when you enroll your email address by visiting the “Investor Email Alerts” section of our website at https://investors.globalmedicalresponse.com/resources/investor-email-alerts/default.aspx. The contents of our website, any alerts and social media channels are not, however, a part of this report.
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Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
GMR Solutions Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and par value amounts)
June 30, | December 31, | |||||
| 2026 | | 2025 | |||
(unaudited) | ||||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | | $ | | ||
Insurance collateral | | | ||||
Accounts receivable, net | | | ||||
Spare parts, medical supplies and fuel | | | ||||
Prepaid expenses | | | ||||
Other current assets | | | ||||
Total current assets | | | ||||
Property and equipment, net of accumulated depreciation of $ | | | ||||
Operating right-of-use assets | | | ||||
Finance right-of-use assets | | | ||||
Intangible assets, net | | | ||||
Goodwill | | | ||||
Other assets | | | ||||
Total assets | $ | | $ | | ||
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable | | | ||||
Accrued wages, benefits and taxes | | | ||||
Accrued interest | | | ||||
Other accrued liabilities | | | ||||
Current portion of lease obligations | | | ||||
Current portion of long-term debt | | | ||||
Total current liabilities | | | ||||
Operating lease obligations | | | ||||
Finance lease obligations | | | ||||
Long-term debt | | | ||||
Deferred income taxes | | | ||||
Tax receivable agreement liability | | — | ||||
Insurance reserves | | | ||||
Other long-term liabilities | | | ||||
Total liabilities | | | ||||
Commitments and contingencies | ||||||
Mezzanine equity: | ||||||
Redeemable preferred stock | — | | ||||
Total mezzanine equity | — | | ||||
Stockholders' equity: | ||||||
Class A Common stock, $ | | | ||||
Class B Common stock, $ | ||||||
Additional paid-in capital | | | ||||
Retained earnings (deficit) | ( | ( | ||||
Accumulated other comprehensive income (loss) | | | ||||
Total stockholders' equity (deficit) | | | ||||
Total liabilities, mezzanine equity and stockholders' equity | $ | | $ | | ||
The accompanying notes to Condensed Consolidated Financial Statements are an integral part of these statements.
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GMR Solutions Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per share amounts, unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| 2026 | | 2025 | | 2026 | | 2025 | |||||
Net revenue | $ | | $ | | $ | | $ | | ||||
Operating expenses: | ||||||||||||
Employee wages, benefits and taxes | | | | | ||||||||
Maintenance, fuel and other direct expenses | | | | | ||||||||
Insurance expense | | | | | ||||||||
Other operating expenses | | | | | ||||||||
Depreciation and amortization | | | | | ||||||||
Impairment of assets held for sale and other investments | — | — | — | | ||||||||
Acquisition, integration and other charges | | | | | ||||||||
Total operating expenses | | | | | ||||||||
Operating income | | | | | ||||||||
Interest expense, net | | | | | ||||||||
Equity in (earnings) losses of unconsolidated affiliates | ( | ( | ( | ( | ||||||||
Other (income) loss, net | ( | | ( | | ||||||||
Net income (loss) before income taxes | ( | | | | ||||||||
Income tax (benefit) expense | | | | | ||||||||
Net income (loss) | $ | ( | $ | | $ | | $ | | ||||
Net income (loss) available to common stockholders per share: | ||||||||||||
Basic | $ | ( | $ | | $ | ( | $ | | ||||
Diluted | $ | ( | $ | | $ | ( | $ | | ||||
Weighted-average common shares outstanding: | ||||||||||||
Basic | | | | | ||||||||
Diluted | | | | | ||||||||
Comprehensive income (loss): | ||||||||||||
Net income (loss) | ( | | | | ||||||||
Other comprehensive income (loss) | ||||||||||||
Unrealized holding gains (losses) on investments | | | | | ||||||||
Deferred income tax benefit (expense), net | ( | ( | ( | ( | ||||||||
Total other comprehensive income (loss), net of income tax | | | | | ||||||||
Comprehensive income (loss) | $ | ( | $ | | $ | | $ | | ||||
The accompanying notes to Condensed Consolidated Financial Statements are an integral part of these statements.
3
GMR Solutions Inc.
CONDENSED CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY
(Amounts in thousands, except share amounts, unaudited)
Accumulated | Redeemable | |||||||||||||||||||||
Class A | Additional | Other | Total | Preferred | ||||||||||||||||||
Common Stock | Paid-in | Retained | Comprehensive | Stockholders' | Stock | |||||||||||||||||
| Shares | | Amount | | Capital | | Earnings | | Income (Loss) | | Equity | | Shares | | Amount | |||||||
Balance at December 31, 2024 | | $ | | $ | | $ | ( | $ | | $ | | | $ | | ||||||||
Stock-based compensation expense | — | | | — | — | | — | — | ||||||||||||||
Issuance of shares under stock award plan, net of shares withheld for cash taxes paid | | | | — | — | | — | — | ||||||||||||||
Net income (loss) | — | | — | | — | | — | — | ||||||||||||||
Other comprehensive income (loss), net of tax benefit (expense) of ($ | — | | — | — | | | — | — | ||||||||||||||
Balance at March 31, 2025 | | $ | | $ | | $ | ( | $ | | $ | | | $ | | ||||||||
Stock-based compensation expense | — | | | — | — | | — | — | ||||||||||||||
Repurchase of common stock | ( | | ( | — | — | ( | — | — | ||||||||||||||
Issuance of shares under stock award plan, net of shares withheld for cash taxes paid | — | | | — | — | | — | — | ||||||||||||||
Net income (loss) | — | | — | | — | | — | — | ||||||||||||||
Other comprehensive income (loss), net of tax benefit (expense) of ($ | — | | — | — | | | — | — | ||||||||||||||
Balance at June 30, 2025 | | $ | | $ | | $ | ( | $ | | $ | | | $ | | ||||||||
Balance at December 31, 2025 | | $ | | $ | | $ | ( | $ | | $ | | | $ | | ||||||||
Redemption of redeemable preferred stock | — | | ( | — | — | ( | ( | ( | ||||||||||||||
Stock-based compensation expense | — | | ( | — | — | ( | — | — | ||||||||||||||
Net income (loss) | — | | — | | — | | — | — | ||||||||||||||
Other comprehensive income (loss), net of tax benefit (expense) of $ | — | | — | — | ( | ( | — | — | ||||||||||||||
Balance at March 31, 2026 | | $ | | $ | | $ | ( | $ | | $ | | | $ | | ||||||||
Redemption of redeemable preferred stock | — | | ( | — | — | ( | ( | ( | ||||||||||||||
Stock-based compensation expense | — | | | — | — | | — | — | ||||||||||||||
Issuance of shares under stock award plan, net of shares withheld for cash taxes paid | | | | — | — | | — | — | ||||||||||||||
Issuance of warrants to purchase common stock | — | | | — | — | | — | — | ||||||||||||||
Issuance of common stock on initial public offering, net of underwriting discounts and commissions, and offering-related expenses of $ | | | | — | — | | — | — | ||||||||||||||
Execution of tax receivable agreement | — | | ( | — | — | ( | — | — | ||||||||||||||
Net income (loss) | — | | — | ( | — | ( | — | — | ||||||||||||||
Other comprehensive income (loss), net of tax benefit (expense) of ($ | — | | — | — | | | — | — | ||||||||||||||
Balance at June 30, 2026 | | $ | | $ | | $ | ( | $ | | $ | | | $ | — | ||||||||
The accompanying notes to Condensed Consolidated Financial Statements are an integral part of these statements.
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GMR Solutions Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands, unaudited)
Six Months Ended June 30, | ||||||
| 2026 | | 2025 | |||
Cash flows from operating activities: | ||||||
Net income (loss) | $ | | $ | | ||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | ||||||
Depreciation and amortization | | | ||||
Amortization of deferred financing costs and debt discount | | | ||||
Paid-in-kind interest on long-term debt | — | | ||||
Impairment of assets held for sale and other investments | — | | ||||
(Gain) loss on divestiture of businesses | — | | ||||
Stock-based compensation expense | | | ||||
Liability classified stock awards | — | | ||||
Loss (gain) on disposal of property and equipment | | | ||||
Unrealized loss (gain) on marketable equity securities | | | ||||
Deferred income taxes | ( | ( | ||||
Other, net | ( | | ||||
Changes in assets and liabilities, net of effects of acquisitions | ||||||
Accounts receivable, net | ( | ( | ||||
Accounts payable | | | ||||
Accrued wages, benefits and taxes | ( | ( | ||||
Accrued interest | ( | | ||||
Accrued liabilities | | ( | ||||
Other assets and liabilities, net | ( | ( | ||||
Net cash provided by (used in) operating activities | | | ||||
Cash flows from investing activities: | ||||||
Proceeds from divestiture of businesses | — | | ||||
Proceeds from asset disposals related to sales and insurance recoveries | | | ||||
Purchases of property and equipment | ( | ( | ||||
Net change in investments held as insurance collateral | ( | ( | ||||
Purchases of marketable securities | ( | ( | ||||
Sales and maturities of marketable securities | | | ||||
Other investing activities, net | | ( | ||||
Net cash provided by (used in) investing activities | ( | ( | ||||
Cash flows from financing activities: | ||||||
Payments on finance lease obligations | ( | ( | ||||
Principal payments on long-term debt | ( | ( | ||||
Proceeds from issuance of long-term debt | | | ||||
Issuance of common stock, net | | — | ||||
Repurchase of common stock | — | ( | ||||
Issuance of warrants to purchase common stock | | — | ||||
(Redemption) issuance of redeemable preferred stock | ( | — | ||||
Proceeds from issuance of shares under stock award plan, net of cash taxes paid | | | ||||
Net cash provided by (used in) financing activities | ( | ( | ||||
(Decrease) increase in cash, cash equivalents, restricted cash and restricted cash equivalents | ( | | ||||
Cash and cash equivalents, beginning of period (including restricted cash and restricted cash equivalents of $ | | | ||||
Cash and cash equivalents, end of period (including restricted cash and restricted cash equivalents of $ | $ | | $ | | ||
Supplemental disclosure of cash flow information | ||||||
Equipment (primarily aircraft) additions financed with the issuance of debt | $ | | $ | | ||
Cash paid (received) during the period for: | ||||||
Interest | $ | | $ | | ||
Income taxes, net of refunds received | $ | | $ | | ||
The accompanying notes to Condensed Consolidated Financial Statements are an integral part of these statements.
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GMR SOLUTIONS INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
NOTE 1 –DESCRIPTION OF COMPANY
GMR Solutions Inc. is organized as a holding company, operating through its various subsidiaries (collectively, “GMR” or the “Company”). GMR delivers compassionate, quality medical care, meeting a patient’s unplanned and planned care needs. GMR provides emergent, non-emergent, disaster response and event medical services across the healthcare ecosystem, serving local communities, health systems, payors, public health and local, state, and federal agencies primarily within the United States.
These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial reporting. In the opinion of management, the unaudited interim condensed consolidated financial statements contained in this report reflect all normal recurring adjustments, which are necessary for a fair presentation of the financial position and the results of operations for the interim periods presented. The results of operations for any interim period are not necessarily indicative of results for the full year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s filings with the U.S. Securities and Exchange Commission (the “SEC”), including those set forth in our final prospectus (the “IPO Prospectus”) filed with the SEC on May 14, 2026 pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended, relating to our Registration Statement on Form S-1 (File No. 333-295169).
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported and related disclosures. Management relies on historical experience and on various other assumptions believed to be reasonable under the circumstances to make judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Significant estimates are involved in the valuation of accounts receivable and the estimation of revenue, intangible assets, derivatives, contingent consideration, income taxes, tax receivable agreement liability, insurance reserves, share-based compensation and goodwill. Actual amounts may differ from those estimates.
Restricted Cash
As of June 30, 2026 and December 31, 2025, the Company held restricted cash and cash equivalents of $
As of June 30, 2026 and December 31, 2025, the Company held restricted cash and cash equivalents of $
Recently Issued Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standards setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed, the impact of any other recently issued standards that are not yet effective are either not applicable to the Company at this time or will not have a material impact on the Company’s condensed consolidated financial statements upon adoption.
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In November 2024, the FASB issued Accounting Standards Update 2024-03, “Income Statement — Reporting Comprehensive Income — Expense disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”, which expands disclosures about specific expense categories at interim and annual reporting periods. The standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is in the process of evaluating the impact of the new standard on the related disclosures.
NOTE 3 – BASIC AND DILUTED NET INCOME (LOSS) PER SHARE
The Company has two classes of common stock authorized: Class A common stock and Class B common stock. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to
During each of the three and six months ended June 30, 2026 and 2025,
Basic earnings per share (“EPS”) excludes dilution and is computed by dividing net income (loss) available to common stockholders by the weighted-average shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised, resulting in the issuance of shares of common stock that would then share in the earnings of the Company. The potential dilution from stock awards is accounted for using the treasury stock method and average market prices during the period. During the three and six months ended June 30, 2026, there were
7
Presented below is basic and diluted EPS for the three and six months ended June 30, 2026 and 2025 (in thousands, except share and per share amounts):
Three Months Ended | | Six Months Ended | |||||||||
June 30, | June 30, | ||||||||||
(in thousands, except share and per share amounts) | 2026 | | 2025 | | 2026 | | 2025 | ||||
Net income (loss) | $ | ( | | $ | | | $ | | | $ | |
Undeclared dividends on redeemable preferred stock | ( | ( | ( | ( | |||||||
Loss on redemption of redeemable preferred stock | ( | — | ( | — | |||||||
Net income (loss) available to common stockholders | ( | | ( | | |||||||
Weighted-average common shares outstanding: | |||||||||||
Basic |
| |
| |
| |
| | |||
Dilutive impact of stock awards outstanding | — | | — | | |||||||
Dilutive impact of warrants to purchase common stock outstanding |
| — |
| |
| — |
| | |||
Diluted |
| |
| |
| |
| | |||
Net income (loss) available to common stockholders per share: | |||||||||||
Basic | $ | ( | $ | | $ | ( | $ | | |||
Diluted | $ | ( | $ | | $ | ( | $ | | |||
There were
NOTE 4 – REVENUE RECOGNITION
Net revenue for the three and six months ended June 30, 2026 and 2025 consisted of the following (in thousands):
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| 2026 | | 2025 | | 2026 | | 2025 | |||||
Medicare | $ | | $ | | $ | | $ | | ||||
Medicaid | | | | | ||||||||
Commercial insurance and managed care (excluding Medicare and Medicaid managed care) | | | | | ||||||||
Other third-party payors | | | | | ||||||||
Self-pay | | | | | ||||||||
Net transport revenue | | | | | ||||||||
Complementary Revenue | | | | | ||||||||
Net revenue | $ | | $ | | $ | | $ | | ||||
Net transport revenue includes fee for service patient revenue, in addition to revenue earned from our membership programs and community subsidies. Complementary revenue primarily includes medical standby, special events and revenue earned from our contract with FEMA and other federal and state agencies to coordinate emergency medical services responses.
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NOTE 5 – LEASE COMMITMENTS
Variable lease payments were $
The components of lease expense were as follows (in thousands):
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| 2026 | | 2025 | | 2026 | | 2025 | |||||
Operating lease cost | $ | | | $ | | | $ | | | $ | | |
Short-term lease cost | | | | | | | | |||||
| | | ||||||||||
Finance lease cost: | | | | |||||||||
Amortization of right-of-use assets | | | | | | | | |||||
Interest on lease liabilities | | | | | | | | |||||
Total finance lease cost | | | | | | | | |||||
Total lease costs | $ | | | $ | | $ | | | $ | | ||
Supplemental cash flow information related to leases was as follows (in thousands):
Six Months Ended June 30, | ||||||
| 2026 | | 2025 | |||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||
Operating cash flows for operating leases | $ | | $ | | ||
Operating cash flows for finance leases | $ | | $ | | ||
Finance cash flows for finance leases | $ | | $ | | ||
Right-of-use assets obtained in exchange for lease obligations: | ||||||
Operating leases | $ | | $ | | ||
Finance leases | $ | | $ | — | ||
9
Supplemental balance sheet information related to leases was as follows (in thousands):
| June 30, 2026 | December 31, 2025 | ||||
Operating Leases: | ||||||
Operating right-of-use assets | $ | | $ | | ||
Current portion of operating lease obligations | $ | | $ | | ||
Operating lease obligations | | | ||||
Total operating lease liabilities | $ | | $ | | ||
Finance Leases: | ||||||
Finance right-of-use assets | $ | | $ | | ||
Accumulated amortization | ( | ( | ||||
Finance right-of-use assets, net | $ | | $ | | ||
Current portion of finance lease obligations | $ | | $ | | ||
Finance lease obligations | | | ||||
Total finance lease liabilities | $ | | $ | | ||
Weighted Average Remaining Lease Term (in years): | ||||||
Operating leases | ||||||
Finance leases | ||||||
Weighted Average Discount Rate: | ||||||
Operating leases | ||||||
Finance leases | ||||||
Future commitments as of June 30, 2026 for lease liabilities related to premises, equipment and other recurring commitments are as follows (in thousands):
Maturities of Lease Liabilities | |||||||||
Year Ending December 31, | | Operating Leases | | Finance Leases | | Total | |||
2026 | $ | | $ | | $ | | |||
2027 |
| | |
| | ||||
2028 |
| | |
| | ||||
2029 |
| | |
| | ||||
2030 |
| | |
| | ||||
Thereafter |
| | |
| | ||||
Total lease payments | $ | | $ | | $ | | |||
Less: Amount representing interest |
| ( | ( |
| ( | ||||
Total |
| |
| |
| | |||
Less: Current lease obligation payments |
| ( |
| ( |
| ( | |||
Total long-term lease obligations | $ | | $ | | $ | | |||
10
NOTE 6 – GOODWILL AND INTANGIBLE ASSETS
Intangible assets consist primarily of customer relationships and trade names. The table below illustrates the useful lives of each class of intangible assets and the remaining weighted average amortization period.
Weighted Average | ||||||
Amortizable Intangible Assets | Estimated Useful Life | Amortization Period | ||||
Membership lists | ||||||
Customer relationships | ||||||
Trade names | ||||||
Non-compete and other |
Intangible assets consisted of the following at June 30, 2026 and December 31, 2025 (in thousands):
June 30, 2026 | | December 31, 2025 | ||||||||||||||||
Gross | Net | Gross | Net | |||||||||||||||
carrying | Accumulated | carrying | carrying | Accumulated | carrying | |||||||||||||
| amount | | amortization | | amount | amount | | amortization | | amount | ||||||||
Amortizable intangible assets | ||||||||||||||||||
Customer relationships | $ | | $ | ( | $ | | $ | | $ | ( | $ | | ||||||
Membership lists | | ( | | | ( | | ||||||||||||
Trade names | | ( | | | ( | | ||||||||||||
Non-compete and other | | ( | | | ( | | ||||||||||||
Total amortizing intangible assets | | ( | | | ( | | ||||||||||||
Non-amortizable intangible assets | ||||||||||||||||||
Trade names | | — | | | — | | ||||||||||||
Certificates of need | | — | | | — | | ||||||||||||
Total non-amortizing intangible assets | | — | | | — | | ||||||||||||
Total intangibles, net | $ | | $ | ( | $ | | $ | | $ | ( | $ | | ||||||
Aggregate amortization of intangible assets was $
NOTE 7 – OTHER ACCRUED LIABILITIES
Other accrued liabilities were as follows as of June 30, 2026 and December 31, 2025 (in thousands):
June 30, | December 31, | |||||
| 2026 | | 2025 | |||
Insurance reserves | $ | | $ | | ||
Deferred membership revenue | | | ||||
Quality assurance fee programs | | | ||||
Accrued aircraft engines and parts | | | ||||
Patient refunds | | | ||||
Accrued legal fees and settlements | | | ||||
Other | | | ||||
Total other accrued liabilities | $ | | $ | | ||
Deferred membership revenue, or contract liabilities, are primarily related to cash payments recorded in advance of satisfying the Company’s performance obligations related to sales of air and ground memberships. Deferred membership revenue balances of a long-term nature were $
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respectively, classified under other long-term liabilities on the condensed consolidated balance sheets. As of June 30, 2026, the Company recognized $
NOTE 8 –REDEEMABLE PREFERRED STOCK
In May 2024, the Company entered into a Series B Preferred Stock and Warrant purchase agreement with certain investors, pursuant to which such investors agreed to purchase
On September 19, 2025, the Company redeemed
On March 6, 2026, the Company redeemed
On May 12, 2026, the Company exchanged
On May 14, 2026, the Company redeemed
As of June 30, 2026 and December 31, 2025, there were
NOTE 9 – COMMON STOCK
On May 14, 2026, the Company completed its initial public offering (“IPO”), of
Upon completion of the IPO, the Company’s Amended and Restated Certificate of Incorporation (the “Charter”) and the Company’s Second Amended and Restated Bylaws became effective. The Charter, among other things, provides that the Company’s authorized capital stock consists of
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NOTE 10 – WARRANTS
The Company has issued warrants to purchase shares of Class A and Class B common stock with an exercise price equal to $
In May 2024, the Company issued
In connection with the March 6, 2026 redemption of Preferred Stock, the Company exchanged the outstanding 2024 Warrants for 2026 Voting Warrants to purchase
On May 12, 2026, the Company exchanged warrants exercisable for
On May 12, 2026, the Company issued
On May 15, 2026, the Company issued approximately
As of June 30, 2026 and December 31, 2025, total warrants issued and outstanding were
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NOTE 11 – LONG-TERM DEBT
Long-term debt consisted of the following as of June 30, 2026 and December 31, 2025 (in thousands):
Rate Terms | ||||||||||||
as of | ||||||||||||
June 30, | Maturity | June 30, | December 31, | |||||||||
| Type | | 2026 | | Date | | 2026 | | 2025 | |||
Senior secured term loans ( | Variable | | October 1, 2032 | $ | | $ | | |||||
Senior secured notes ( | Fixed | Fixed | October 1, 2032 | | | |||||||
Other long-term debt, including promissory notes related to aircraft purchases | Fixed | Various | Various | | | |||||||
Total | $ | | $ | | ||||||||
Less current portion of long-term debt | ( | ( | ||||||||||
Less unamortized deferred financing costs and debt discount | ( | ( | ||||||||||
Long-term debt | $ | | $ | | ||||||||
As of June 30, 2026, the maximum available under the asset-based revolving credit facility (the “ABL Facility”) was $
As part of the IPO on May 14, 2026, the Company paid down approximately $
On May 18, 2026, Moody’s upgraded GMR’s corporate family rating to B1 from B2. Pursuant to the terms of the Company’s senior secured term loan due 2032, the ratings upgrade resulted in a
NOTE 12 – FAIR VALUE MEASUREMENTS
The Company classifies its financial instruments that are reported at fair value based on a hierarchal framework which ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is impacted by a number of factors, including the type of instrument and the characteristics specific to the instrument. Instruments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.
Financial instruments measured and reported at fair value are classified and disclosed in one of the following categories:
Level 1—Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. The Company does not adjust the quoted price for these assets or liabilities, which include marketable securities held in connection with the Company’s captive insurance program.
Level 2—Pricing inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which
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all significant inputs are observable in the market or can be corroborated by observable market data. Balances in this category include derivatives and marketable securities held in connection with the Company’s captive insurance program.
Level 3—Pricing inputs are unobservable as of the reporting date and reflect the Company’s own assumptions about the fair value of the asset or liability. Balances in this category include the Company’s estimate, using a combination of internal and external fair value analyses, of contingent consideration for historical acquisitions, and the Company’s estimate of achievement of performance targets, including targeted enterprise value, related to cash-settled performance stock units. The Company uses a third-party valuation specialist to determine estimated enterprise value using discounted cash flow and market approaches, weighted equally. The assumptions utilized in the discounted cash flow model include a discount rate of
The following table summarizes the valuation of the Company’s financial instruments by the above fair value hierarchy levels as of June 30, 2026 and December 31, 2025 (in thousands):
June 30, 2026 | ||||||||||||
Description | | Level 1 | | Level 2 | | Level 3 | | Total | ||||
Assets: | ||||||||||||
Available-for-sale securities | $ | | $ | — | $ | — | $ | | ||||
Marketable equity securities | | — | — | | ||||||||
Interest rate swap | — | | — | | ||||||||
Liabilities: | ||||||||||||
Contingent consideration |
| — | — | | | |||||||
Cash-settled performance stock unit liability | — | — | | | ||||||||
December 31, 2025 | ||||||||||||
Description | | Level 1 | | Level 2 | | Level 3 | | Total | ||||
Assets: | ||||||||||||
Available-for-sale securities | $ | | $ | | $ | — | $ | | ||||
Marketable equity securities | | — | — | | ||||||||
Interest rate swap | — | | — | | ||||||||
Liabilities: |
| |||||||||||
Contingent consideration |
| — | — | | | |||||||
Cash-settled performance stock unit liability | — | — | | | ||||||||
Interest rate swap |
| — | | — | | |||||||
The contingent consideration balance classified as a Level 3 liability remained consistent during the six months ended June 30, 2026, and is primarily related to contingent consideration associated with a prior acquisition.
Insurance Collateral
Insurance collateral is comprised of investments in U.S. Treasuries and marketable equity and debt securities held by the Company’s wholly-owned captive insurance subsidiary that support the Company’s insurance programs and reserves, as well as cash deposits with third parties. Certain of these investments, if sold or otherwise liquidated, would have to be replaced by other suitable financial assurances and are, therefore, considered restricted. All debt securities are designated as available-for-sale and reported at fair value with the related temporary unrealized gains and losses related to changes in market conditions of marketable debt securities reported as a separate component of accumulated other comprehensive income (loss), net of deferred income tax. Changes in the fair value of debt securities which are determined to be company specific credit losses are recognized in the statements of operations, thus establishing a new cost basis for such investment. All equity securities are carried at fair value with changes in fair value reported as a component other income (loss), net in the condensed consolidated statements of operations. Investment income earned on these investments is reported as a
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component of other income, net in the accompanying condensed consolidated statements of operations. Realized gains and losses are determined based on an average cost basis.
Investments are generally classified within Level 1 or Level 2 of the fair value hierarchy because they are valued using quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency.
Insurance collateral consisted of the following as of June 30, 2026 and December 31, 2025 (in thousands):
June 30, 2026 | | December 31, 2025 | |||
Available-for-sale securities: |
|
| |||
U.S. Treasuries | $ | | $ | | |
Corporate and municipal bonds | | | |||
Preferred or fixed rate cap securities |
| — |
| | |
Total available-for-sale securities |
| |
| | |
Marketable equity securities | | | |||
Cash deposits and other |
| |
| | |
Insurance Collateral | $ | | $ | | |
Amortized cost basis and aggregate fair value of the Company’s marketable securities as of June 30, 2026 and December 31, 2025 were as follows (in thousands):
June 30, 2026 | |||||||||||
Cost Basis | | Gross Unrealized Gains | | Gross Unrealized Losses | | Fair Value | |||||
Description: | |
| |
| |
| | ||||
U.S. Treasuries | $ | | $ | — | $ | ( | $ | | |||
Corporate and municipal bonds | | | ( | | |||||||
Total available-for-sale securities | | | ( | | |||||||
Marketable equity securities | | | ( | | |||||||
Total securities | $ | | $ | | $ | ( | $ | | |||
December 31, 2025 | |||||||||||
Cost Basis | | Gross Unrealized Gains | | Gross Unrealized Losses | | Fair Value | |||||
Description: | |
| |
| |
| | ||||
U.S. Treasuries | $ | | $ | — | $ | — | $ | | |||
Corporate and municipal bonds | | | ( | $ | | ||||||
Preferred or fixed rate cap securities | | — | ( |
| | ||||||
Total available-for-sale securities | | | ( | | |||||||
Marketable equity securities |
| | | ( | | ||||||
Total securities | $ | | $ | | $ | ( | $ | | |||
As of June 30, 2026, available-for-sale securities included U.S. Treasuries, corporate bonds and fixed income securities of $
The Company evaluates the marketable debt securities portfolio to determine whether declines in fair value of these securities are related to credit loss. Management estimates credit losses on marketable debt securities utilizing a credit loss
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impairment model on a quarterly basis. We estimate expected credit losses, measured over the contractual life of debt securities, considering relevant issue specific factors, including, but not limited to, a decrease in credit ratings or an entity’s ability to pay. The Company is not aware of any specific factors indicating that the underlying issuers of the debt securities would not be able to pay interest as it becomes due or repay the principal amount at maturity. Therefore, the Company believes that the changes in the estimated fair values of these debt securities are related to market fluctuations, as such, there were
The Company realized net gains on the sales and maturities of available-for-sale securities of less than $
Debt
Based on management’s estimates, the carrying value of the other long-term debt approximates fair value as of June 30, 2026 and December 31, 2025. The estimated fair value of the Company’s senior secured term loans and senior secured notes was approximately $
Other financial instruments
For all other financial instruments including cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses, the carrying amounts approximate fair value due to the short maturity of those instruments.
NOTE 13 – DERIVATIVE INSTRUMENTS
In August 2024, the Company entered into
In March 2025, the Company entered into an interest rate swap agreement with the effective date of November 28, 2025. The swap agreement was with a major financial institution and effectively converted a total of $
In December 2025, the Company entered into an interest rate swap agreement with the effective date of November 30, 2026. The swap agreement was with a major financial institution and effectively converted a total of $
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million as of June 30, 2026. The Company recorded a noncurrent asset in the amount of $
In February 2026, the Company entered into an interest rate swap agreement with the effective date of November 30, 2026. The swap agreement was with a major financial institution and effectively converted a total of $
Changes in fair value were recorded as interest expense in the condensed consolidated statements of operations. During the three months ended June 30, 2026 and 2025, the Company recorded a reduction of interest expense of $
NOTE 14 – OTHER COMPREHENSIVE INCOME (LOSS)
The following table presents the tax effect on each component of “Other comprehensive income (loss)” for the three months ended June 30, 2026 and 2025 (in thousands):
| For the Three Months Ended | | For the Three Months Ended | |||||||||||||||
June 30, 2026 | June 30, 2025 | |||||||||||||||||
Before Tax Amount | Tax Benefit (Expense) | Net of Tax Amount | Before Tax Amount | Tax Benefit (Expense) | Net of Tax Amount | |||||||||||||
Unrealized holding gains (losses) on investments | $ | | $ | ( | $ | | $ | | $ | ( | $ | | ||||||
Other comprehensive income (loss) | $ | | $ | ( | $ | | $ | | $ | ( | $ | | ||||||
The following table presents the tax effect on each component of “Other comprehensive income (loss)” for the six months ended June 30, 2026 and 2025 (in thousands):
| For the Six Months Ended | | For the Six Months Ended | |||||||||||||||
June 30, 2026 | June 30, 2025 | |||||||||||||||||
Before Tax Amount | Tax Benefit (Expense) | Net of Tax Amount | Before Tax Amount | Tax Benefit (Expense) | Net of Tax Amount | |||||||||||||
Unrealized holding gains (losses) on investments | $ | | $ | ( | $ | | $ | | $ | ( | $ | | ||||||
Other comprehensive income (loss) | $ | | $ | ( | $ | | $ | | $ | ( | $ | | ||||||
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The “Accumulated other comprehensive income (loss)” is detailed in the following table, net of tax (in thousands).
Accumulated Other Comprehensive Income (Loss) | Unrealized holding gains (losses) on investments | Defined benefit pension plan net gains (loss) | Total | ||||||
Balance at December 31, 2024 | $ | ( | $ | | $ | | |||
Other comprehensive income (loss) before reclassification | ( | — | ( | ||||||
Amounts reclassified from accumulated other comprehensive income (loss) | | — | | ||||||
Balance at March 31, 2025 | $ | ( | $ | | $ | | |||
Other comprehensive income (loss) before reclassification | ( | — | ( | ||||||
Amounts reclassified from accumulated other comprehensive income (loss) | | — | | ||||||
Balance at June 30, 2025 | $ | ( | $ | | $ | | |||
Balance at December 31, 2025 | $ | ( | $ | | $ | | |||
Other comprehensive income (loss) before reclassification | ( | — | ( | ||||||
Amounts reclassified from accumulated other comprehensive income (loss) | | — | | ||||||
Balance at March 31, 2026 | $ | ( | $ | | $ | | |||
Other comprehensive income (loss) before reclassification | | — | | ||||||
Amounts reclassified from accumulated other comprehensive income (loss) | | — | | ||||||
Balance at June 30, 2026 | $ | | $ | | $ | | |||
NOTE 15 – STOCK COMPENSATION PROGRAM
On July 26, 2024, the Company’s Board of Directors approved and adopted the Second Amended and Restated GMR Solutions Inc. 2015 Stock Incentive Plan (the “2015 Equity Plan”). The 2015 Equity Plan authorizes equity awards to be granted to management and other personnel and key service providers. Awards granted under the plan include restricted and performance stock units, in addition to both time-based and performance-based stock option awards. The total number of shares of common stock authorized for issuance under the 2015 Equity Plan is
Effective May 12, 2026, the Company’s Board of Directors and its majority stockholder adopted and approved the GMR Solutions Inc. 2026 Equity Incentive Plan (the “2026 Equity Plan”). The 2026 Equity Plan authorizes equity awards to be granted to management and other personnel and key service providers. Awards granted under the plan include restricted stock units and time-based stock option awards. The total number of shares of common stock authorized for issuance under the 2026 Equity Plan is
Under the 2015 Equity Plan, restricted stock units generally vest based on the satisfaction of both a liquidity event requirement, as defined in the 2015 Amended Equity Plan, and continued service over
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condensed consolidated balance sheets for cash-settled performance stock units based on current estimates of achievement of performance targets.
Under the 2026 Equity Plan, restricted stock units and time-vested stock option awards generally vest based on continued service over
Stock-based employee compensation expense was $
NOTE 16 – INSURANCE RESERVES
The table below summarizes the non-health and welfare insurance reserves included in the accompanying condensed consolidated balance sheets at June 30, 2026 and December 31, 2025 (in thousands):
June 30, 2026 | December 31, 2025 | |||||||||||||||||
Other Accrued | Insurance | Total | Other Accrued | Insurance | Total | |||||||||||||
| Liabilities | | Reserves | | Liability | | Liabilities | | Reserves | | Liability | |||||||
Automobile | $ | | | $ | | | $ | | $ | | $ | | $ | | ||||
Workers' compensation | | | | | | | | | ||||||||||
General/ Professional Liability | | | | | | | | | ||||||||||
$ | | | $ | | $ | | $ | | $ | | $ | | ||||||
The changes to the Company’s estimated losses under insurance programs, including those covered by commercial insurance programs with offsetting assets, as of June 30, 2026 and December 31, 2025 were as follows (in thousands):
June 30, | December 31, | |||||
| 2026 | | 2025 | |||
Balance, beginning of period | $ | | $ | | ||
Expense for current period reserves | | | ||||
Unfavorable (favorable) changes to prior reserves | | | ||||
Change in losses covered by commercial insurance programs | | | ||||
Payments for claims | ( | ( | ||||
Balance, end of period | $ | | $ | | ||
NOTE 17 – LEGAL MATTERS
The Company is involved in certain litigation arising in the ordinary course of business. Management believes the outcome of these legal proceedings will not have a material adverse impact on its financial condition, results of operations or liquidity.
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NOTE 18 – RELATED-PARTY TRANSACTIONS
On April 28, 2015, investment funds affiliated with Kohlberg Kravis Roberts & Co. L.P. (“KKR”) acquired
Pursuant to the monitoring agreement, the Company incurred an advisory fee equal to
Additionally, KKR Capital Markets LLC (“KCM”), an affiliate of KKR, provided for the arrangement and syndication of the exchange of its then-outstanding
In connection with the acquisition of AMR in 2018, we entered into an indemnification agreement with KKR North America Fund XI (AMG) LLC pursuant to which we agreed to indemnify affiliates of KKR that at any time hold our common equity (and their affiliates and certain other persons) against liabilities that may arise out of any breach by us of a consent decree we entered into with the Federal Trade Commission, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified.
NOTE 19 – INCOME TAXES
Three Months Ended | | Six Months Ended | |||||||||
June 30, | June 30, | ||||||||||
(in thousands, except percentages) | 2026 | | 2025 | | 2026 | | 2025 | ||||
Income tax (benefit) expense | $ | | $ | | $ | | $ | | |||
Effective tax rate | |||||||||||
The effective tax rate for the three months ended June 30, 2026 differed from the Federal statutory rate primarily due to state and local income taxes, non-deductible executive compensation, and a current year benefit related to a decrease in the valuation allowance. The effective tax rate for the three months ended June 30, 2025 differed from the Federal statutory rate primarily due to a decrease to state and local income taxes and an increase in the valuation allowance.
The effective tax rate for the six months ended June 30, 2026 differed from the Federal statutory rate primarily due to state and local income taxes, non-deductible executive compensation and a current year benefit related to a decrease in the valuation allowance. The effective tax rate for the six months ended June 30, 2025 differed from the Federal statutory rate primarily due to state and local income taxes and an increase to the valuation allowance.
NOTE 20 – TAX RECEIVABLE AGREEMENT
The Company expects to utilize certain pre-IPO tax assets including federal net operating losses, deferred interest deductions, tax basis in amortizable or depreciable assets, and certain deductible expenses attributable to the transactions related to the IPO (the “Pre-IPO Tax Benefits”) that arose prior to or in connection with the IPO, which tax benefits are expected to reduce the Company’s future income tax payments.
In connection with the IPO, we entered into a Tax Receivable Agreement ( “TRA”) with certain stockholders and members of management that elected to become parties to the TRA (“Management party participants”) (collectively, “TRA parties”). The TRA will provide for the payment by the Company of
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actually realize, or are deemed to realize, as a result of savings in U.S. federal, state, and local income taxes attributable to the Company’s and its subsidiaries’ utilization of the Pre-IPO Tax Benefits. The Company expects to benefit from the remaining
Management party participants are entitled to receive TRA payments on their management TRA interests only if they satisfy the service condition set forth in the agreement, which requires employment with the Company for at least
At the IPO date, the Company recorded a TRA liability for the estimated future payments expected to be made under the agreement. The initial liability was measured using a mirror approach based on the tax benefits expected to be realized from the covered tax attributes and was recorded on an undiscounted basis. Because the TRA results in a non-income tax related liability resulting from a transaction with stockholders, the offsetting entry was recorded to additional paid-in-capital.
The TRA liability is remeasured at each reporting date based on management’s estimate of future tax benefits expected to be realized from the covered tax attributes. Changes in the estimated liability may result from changes in anticipated taxable income, tax rates, utilization of tax attributes, valuation allowance assessments, or other factors affecting the realization of the underlying tax benefits.
Subsequent changes in the estimated TRA liability attributable to participating stockholders are recognized within operating expenses. Changes attributable to management party participants are recognized within compensation expense. During the service period, management evaluates the probability of satisfaction of the service condition by management party participants when determining the allocation of future payments between stockholder and management party participant interests.
The associated deferred tax assets are computed by applying the applicable statutory tax rates to the underlying tax attributes. As of June 30, 2026, these deferred tax assets are estimated to be $
Beginning with the 2026 taxable year, annual TRA payments are generally determined following the filing of the applicable income tax returns based on the tax benefits actually utilized by the Company during the taxable year. For purposes of the TRA, the cash tax benefits will be computed by comparing the Company’s actual income tax liability to the amount of such taxes that the Company would have been required to pay had it not been able to utilize the Pre-IPO Tax Benefits.
Payments under the TRA bear interest from the original due date of the applicable tax return, generally April 15, through the payment date at a rate equal to SOFR plus
The term of the TRA will continue until all Pre-IPO Tax Benefits have been utilized, or deemed utilized, or expired. In the event of certain changes of control, certain material breaches of the TRA by the Company, or an insolvency event, the calculation of certain future payments made under the TRA will utilize certain valuation assumptions, including that the Company will have sufficient taxable income to fully utilize Pre-IPO Tax Benefits.
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NOTE 21 – SEGMENTS
Business segments are defined as components of an enterprise about which discrete financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing operating performance. Based on the way the Company manages its business, as a nationally integrated air and ground mobile patient care provider, the Company has determined that it currently operates with
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion analyzes our financial condition and results of operations and should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q (our “Form 10-Q”). This discussion contains forward-looking statements that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements.” When reviewing the discussion below, you should keep in mind the substantial risks and uncertainties that characterize our business. Known material factors that could affect our financial performance and actual results, and could cause actual results to differ materially from those expressed or implied in any forward-looking statements included in this discussion or otherwise made by our management, are described in our final prospectus (the “IPO Prospectus”) dated May 12, 2026 and filed on May 14, 2026 with the U.S. Securities and Exchange Commission (the “SEC”) pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended (the “Act”) relating to our Registration Statement on Form S-1, in the section therein entitled “Risk Factors” and the section entitled “Cautionary Note Regarding Forward-Looking Statements” included herein. Factors that could cause or contribute to such difference are not limited to those identified in “Risk Factors.”
Overview
We are the largest provider of emergency medical services (“EMS”) and one of the largest providers of essential alternate-site, out-of-hospital care in the U.S. with more than 100 years of operating history. With approximately 34,000 employees as of June 30, 2026, we deliver compassionate, quality medical care, meeting a patient’s unplanned and planned care needs. We provide emergent, non-emergent, disaster response and event medical services, utilizing our more than 24,000 clinicians, fleets of air and ground assets for medical transportation and offer innovative solutions such as Nurse Navigation to provide comprehensive care to our patients in their time of need. We maintain longstanding relationships across the healthcare ecosystem, serving local communities, health systems, payors, public health and local, state and federal agencies.
Executive Summary
| ● | Largest provider of EMS and one of the largest providers of essential alternate-site, out-of-hospital care in the U.S. |
| ● | The only national, fully-integrated air and ground EMS provider with operations spanning approximately 1,400 U.S. counties, covering both rural and urban communities which are home to more than 60% of the U.S. population. |
| ● | At the front line of the healthcare continuum, encountering approximately 15,000 patients per day or approximately 5.5 million patients annually and our clinicians perform a critical care intervention every 88 seconds. |
| ● | Data set of more than 80 million patient records. |
| ● | Team of more than 24,000 clinicians serves as the first line of care, providing lifesaving treatment at crucial moments. |
| ● | In the three months ended June 30, 2026, revenue increased by $48.3 million, or 3.3%, to $1,490.3 million year-over-year. In the six months ended June 30, 2026, revenue increased by $138.5 million, or 4.9%, to $2,947.9 million year-over-year. |
| ● | In the three months ended June 30, 2026, net income decreased by $109.1 million, or 135.0%, to a net loss of $28.3 million year-over-year. In the six months ended June 30, 2026, net income decreased by $40.7 million, or 34.3%, to $78.1 million year-over-year. |
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| ● | In the three months ended June 30, 2026, Adjusted EBITDA decreased by $38.1 million, or 11.8%, to $284.5 million year-over-year. In the six months ended June 30, 2026, Adjusted EBITDA decreased by $11.0 million, or 1.8%, to $589.6 million year-over-year. |
Initial Public Offering
On May 14, 2026, we completed our initial public offering (“IPO”), in which we issued and sold 31,914,893 shares of our Class A common stock, par value $0.0001 per share, at an initial public offering price of $15.00 per share. The Company received net proceeds of $446.8 million for the Class A common stock, after deducting underwriting discounts and commissions, and other offering-related expenses of $31.9 million. See Note 9 of our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.
Long-Term Trends and Other Factors Affecting Our Results of Operations
Rural Hospital Closures
Across our core markets - emergent and non-emergent medical services - we have seen an increasing trend in the closure of rural hospitals, leading to increased demand for our emergent and non-emergent services. Since 2010, over 150 rural hospitals have closed or no longer provide in-patient services, with more than 300 additional rural hospitals at immediate risk of closing due to financial distress. As the population continues to age, communities face a greater need for frequent and specialized medical attention alongside a growing chronic disease burden. Consolidation of rural hospitals and hospital service lines has accelerated reliance on extended distance services, particularly our air medical services.
Aging Population
The U.S. population is undergoing significant demographic shifts marked by both aging and growth, which are driving increased demand for healthcare and specifically for emergent care. For example, by 2030, the number of Americans age 65 (or older) is expected to reach 69 million, which is a more than 10% increase compared to 2025. As the baby boomer generation ages, there is a rising proportion of older adults who are more likely to experience acute health episodes, necessitating emergent care interventions. Additionally, overall population growth contributes to higher EMS utilization rates, as more individuals require immediate medical attention for accidents, sudden illnesses and other emergencies.
Increasing Prevalence of Chronic Conditions
Approximately 45% of the U.S. population is living with at least one chronic condition. The increasing prevalence of chronic conditions such as chronic obstructive pulmonary disease, heart disease, diabetes, and hypertension are driving heightened demand for emergent care in the U.S. These conditions often lead to acute exacerbations and complications that require emergent care interventions. As the incidence of these chronic diseases continues to rise, EMS providers are increasingly called upon to deliver critical care in urgent situations, ensuring that patients receive timely and effective treatment during medical emergencies.
Overburdened Emergency Departments
EMS providers have also experienced increasing demand due to a confluence of factors impacting the healthcare landscape. A widespread provider shortage across the healthcare system has exacerbated barriers to accessing healthcare and has resulted in an increased reliance on emergency departments and EMS to treat low-acuity cases. The provider shortage also exacerbates gaps in routine patient care, which drives a further increase in acute situations which require emergent care. Socioeconomic pressures, such as rising homelessness and ongoing immigration are putting further strain on emergency departments and EMS resources, as vulnerable populations have more barriers to access regular healthcare and are in turn more likely to seek emergency care as their primary point of contact.
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Healthcare Reimbursement
Our operations depend upon third-party reimbursement programs, including government-sponsored and private insurance programs, to pay for most of the services rendered to patients. For the three months ended June 30, 2026 and 2025, we derived approximately 54% and 59% of our net transport revenue, respectively, from commercial insurance and managed care, 35% and 32%, respectively, from government-sponsored healthcare programs, primarily Medicare and Medicaid, and 2% and 2%, respectively, from self-pay patients. For the six months ended June 30, 2026 and 2025, we derived approximately 56% and 58% of our net transport revenue, respectively, from commercial insurance and managed care, 34% and 33%, respectively, from government-sponsored healthcare programs, primarily Medicare and Medicaid, and 2% and 2%, respectively, from self-pay patients.
Commercial Healthcare Reimbursement
When patients require emergent care, we respond without consideration for who the ultimate payor of care will be to meet the urgent needs of individuals in the community. For patients with commercial insurance, we seek reimbursement from the group health plan or health insurer that the patient is attributed to. We bill the health insurer for services provided for any relevant ground or air EMS. Ground EMS rates are generally set by the county or similar government body. Air EMS rates are generally set by the service provider. For health insurers that we have pre-established billing agreements with, referred to as ‘in-network’, we typically receive reimbursement for covered services based on negotiated terms, which are generally paid in a timely manner pursuant to such contracts. For health insurers where we do not have pre-established billing agreement, referred to as ‘out of network’, we will submit an invoice for payment, which may be challenged by the health insurer. The resolution process for out of network air ambulance claims is dictated by the No Surprises Act, which prohibits patient balance billing and creates an Independent Dispute Resolution (“IDR”) process to handle payment disputes that cannot be resolved through direct negotiation between the provider and the insurer.
Since the implementation of the No Surprises Act in 2022, we have won more than 90% of IDR rulings, highlighting the defensibility of our commercial air reimbursement. Our experience with the IDR process to date has contributed to greater predictability in air reimbursement and has informed our approach to strategically enter into in-network contracts that holistically reflect the value of our services and optimize reimbursement. The federal No Surprises Act is limited in scope to air emergency services, however certain state governments have enacted or may pass future legislation that affects both our air and ground emergency ambulance services. See “Business - Healthcare Regulation” and “Risk Factors — Risks Related to Our Business” in the IPO Prospectus for more information.
Medicare and Medicaid Healthcare Reimbursement
The Medicare and Medicaid programs currently reimburse us for medical transportation services based on national and state-based fee schedules for transports, respectively. The fee schedule amounts are determined using a base rate, which includes all items and services furnished within the service benefit, subject to applicable adjustments, plus a separate payment for mileage (including any other geographic adjustments). Medicare transport fee schedule payment rates are updated annually through the Ambulance Inflation Factor (“AIF”), which incorporates updates to the consumer price index and a productivity adjustment and mileage rates. Since 2020, the AIF has grown consistently, ranging from 0.2% to 8.7% without any decreases in reimbursement rate. Medicaid fee schedule rate updates vary by state.
Weather, Seasonality and Volume Considerations
Weather conditions impact our overall patient air emergency transport volume. For example, air medical helicopters operating under visual flight rules, and in many cases, those operating under Instrument Flight Rules, cannot complete a patient transport request during periods of inclement weather. In addition, inclement weather typically reduces human activity levels (such as driving, recreational activities and farming) that are associated with requests for medical services. For the three months ended June 30, 2026 and 2025, patient air transport requests cancelled due to poor weather conditions were 15.5% and 18.5% of total patient air transport requests, respectively. For the six months ended June 30, 2026 and 2025, patient air transport requests cancelled due to poor weather conditions were 16.3% and 18.2% of total patient air transport requests, respectively. In certain instances of inclement weather, our integrated operations may allow us to shift our air clinical crews to our ground ambulance fleet to continue to meet patients’ needs. Historically, we have observed
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higher air services demand in the summer months and higher ground services demand during the winter flu season, which contributes to the seasonality of our operations.
Ground transport volume is largely influenced by shifts in overall community conditions. These conditions may encompass: (i) demographic changes specific to communities, such as population fluctuations; (ii) the timing, location, and intensity of influenza, allergens, and other annually recurring viruses; (iii) pandemics that affect human activity, hospital census, and the frequency of elective surgeries; and (iv) severe weather events that impact regional health status or infrastructure. Typically, adverse weather reduces activities like driving, recreation, and farming, which are correlated with requests for emergency ground services.
Our complementary revenue is subject to variations over time depending on a number of factors, including but not limited to, the timing of events and other emergency response services, the number of natural disasters we respond to, and any pandemic-related or other one-time services we provide. Pandemic-related services were last provided in the first quarter of 2022.
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Key Performance Metrics
We review a number of operating and financial metrics, including the key performance metrics presented in the table below, to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions:
Three Months Ended |
| | Six Months Ended |
| |||||||||
June 30, | June 30, | ||||||||||||
2026 | | 2025 |
| | 2026 | | 2025 |
| |||||
Patient encounters | |
| |
| |
| | ||||||
Emergent transports | 845,805 |
| 824,170 |
| 1,683,248 |
| 1,656,043 | ||||||
Non emergent transports | 202,529 |
| 208,864 |
| 407,238 |
| 429,448 | ||||||
Total ambulance transports | 1,048,334 |
| 1,033,034 |
| 2,090,486 |
| 2,085,491 | ||||||
of which, Ground transports | 1,012,182 | 999,220 | 2,019,992 | 2,017,716 | |||||||||
of which, Flights | 36,152 | 33,814 | 70,494 | 67,775 | |||||||||
Wheelchair transports | 6,855 | 16,138 | 14,683 | 32,715 | |||||||||
Nurse Navigation encounters | 28,909 | 19,308 | 57,031 | 38,479 | |||||||||
Non-transport | 278,480 |
| 281,395 |
| 552,400 |
| 551,672 | ||||||
Total patient encounters | 1,362,578 |
| 1,349,875 |
| 2,714,600 |
| 2,708,357 | ||||||
Net transport revenue per ambulance transport | $ | 1,370 | $ | 1,351 | $ | 1,365 | $ | 1,305 | |||||
Other key performance indicators: |
| |
| |
| |
| | |||||
Emergent air transport requests |
| 80,577 |
| 76,933 |
| 155,790 |
| 152,774 | |||||
Air base count | 385 | 381 | 385 | 381 | |||||||||
Weather cancellation rate for emergent air transports |
| 15.5 | % |
| 18.5 | % |
| 16.3 | % |
| 18.2 | % | |
Same market revenue growth |
| 3.8 | % |
| 12.1 | % |
| 5.7 | % |
| 13.4 | % | |
Net cash capital expenditures (in thousands) | $ | 66,400 | $ | 40,303 | $ | 120,411 | $ | 78,931 | |||||
Cash used in aircraft financing arrangements (in thousands) | $ | 27,486 | $ | 24,405 | $ | 52,478 | $ | 49,500 | |||||
Payor mix (as a percentage of net transport revenue): |
| |
| |
| |
| | |||||
Medicare |
| 26 | % |
| 24 | % |
| 25 | % |
| 25 | % | |
Medicaid |
| 9 | % |
| 8 | % |
| 9 | % |
| 8 | % | |
Commercial insurance and managed care |
| 54 | % |
| 59 | % |
| 56 | % |
| 58 | % | |
Other third-party payors |
| 9 | % |
| 7 | % |
| 8 | % |
| 7 | % | |
Self-pay |
| 2 | % |
| 2 | % |
| 2 | % |
| 2 | % | |
Net transport revenue |
| 100 | % |
| 100 | % |
| 100 | % |
| 100 | % | |
Patient Encounters: We calculate patient encounters as the number of interactions with a patient during a given period for the purpose of providing medical care or assessing a patient’s health. Patient Encounters exclude patients treated during event medical activities that did not result in a transport, or any patient encountered during a disaster response deployment.
Nurse Navigation Encounters: Represents the number of 911 calls that are addressed through our Nurse Navigation offering during a given period. In a typical Nurse Navigation encounter, evidence-based clinical protocols are used to screen a patient’s current condition, providing an appropriate resource to meet the patient’s unique healthcare needs, whether that is dispatching a ride-share to urgent care, an appointment at a Federally Qualified Health Center, or virtual care with a physician on the spot. The five-level screening system ensures patients receive the right resource at the right time, in the right setting to achieve the right outcome at the right cost.
Net Transport Revenue per Ambulance Transport: Net transport revenue per ambulance transport is defined as net transport revenue, which includes fee-for-service patient revenue, in addition to income earned from membership programs and community subsidies, divided by total ambulance transports within a given period.
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Emergent Air Transport Requests: We calculate the number of emergent air transport requests as the volume of requests we receive for emergent air transports within a given period, excluding non-emergent air transport requests. Not all transport requests result in a patient transport due to factors such as weather and other uncontrollable cancellations, in addition to staffing availability, maintenance and other controllable cancellations. 36.4% and 39.0% of cancellations of emergent air requests were attributable to weather and other uncontrollable factors for the three months ended June 30, 2026 and 2025, respectively. 19.2% and 17.5% of cancellations of emergent air requests were attributable to staffing availability, maintenance and other controllable factors for the three months ended June 30, 2026 and 2025, respectively. 36.8% and 38.4% of cancellations of emergent air requests were attributable to weather and other uncontrollable factors for the six months ended June 30, 2026 and 2025, respectively. 18.4% and 17.7% of cancellations of emergent air requests were attributable to staffing availability, maintenance and other controllable factors for the six months ended June 30, 2026 and 2025, respectively.
Weather Cancellation Rate for Emergent Air Transports: Corresponds to the number of cancellations attributable to weather conditions that prohibit an emergent air care team from deploying in response to an emergent air transport request divided by the number of emergent air transport requests within a given period.
Same Market Revenue Growth: For a given period, same market revenue growth is calculated as the revenue growth within our markets that we have operated in for at least 12 consecutive months as of period end, excluding any divested or exited markets.
Net cash capital expenditures: Represents net cash outlay for capital expenditures within a given period, including proceeds from any disposed property, and excluding any capital expenditures associated with financing arrangements.
Cash used in aircraft financing arrangements: Represents cash outlay associated with financing arrangements supporting capital expenditures.
Components of Results of Operations
Revenues
Our revenue is composed of net transport revenue and complementary revenue. Patients are generally billed for services provided, and we receive payments for these services from patients or their third-party payors. Payments for services provided are generally less than billed charges. Net transport revenue includes fee-for-service patient revenue, subsidies and membership revenue. We recognize fee-for-service revenue, net of contractual adjustments and discounts for uninsured patients, at the time transport services are provided. Net transport revenue is dependent upon reimbursement per transport and patient transport volume.
| ● | Reimbursement per patient transport is driven by amounts we are able to collect from private insurance, Medicare, Medicaid and other governmental fee schedules and reimbursements, and self-pay patients. We respond to calls for medical services without pre-screening third-party payor coverage or creditworthiness of the patient and are subject to collection risk for services provided to insured and uninsured patients. |
| ● | Patient transport revenue is recorded net of provisions for contractual adjustments and discounts for uninsured patients. Both provisions are estimated during the period the related services are performed based on historical collection rates and any known trends or changes in reimbursement rate schedules and payor mix. The provisions are adjusted as required based on actual collections in subsequent periods. Net reimbursement per patient transport is primarily a function of collection rate, payor mix and timely and effective collection efforts. Both the pace of collections and the ultimate collection rate are affected by the overall health of the U.S. economy, which impacts the number of indigent patients and funding for state-run programs, such as Medicaid. |
Complementary revenue primarily includes revenue earned from our medical standby, special events and wheelchair transports and revenue from our contract with FEMA and other federal and state agencies to coordinate EMS responses.
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Operating Expenses
Our expenses consist primarily of (i) employee wages, benefits and taxes for crews and support personnel, (ii) maintenance, fuel and other direct expenses to provide EMS and non-emergent transportation services, (iii) insurance expenses related to accident and insurance premiums and claims, (iv) other operating expenses, primarily consisting of outside services expense and general and administrative expenses, (v) depreciation and amortization and (vi) acquisition, integration and other charges.
Results of Operations
The following table sets forth the various components of our condensed consolidated statements of operations for the periods indicated.
Three Months Ended | |
| | Six Months Ended | |
| |||||||||||
June 30, | 2026 v. | June 30, | 2026 v. | ||||||||||||||
2026 | | 2025 | | 2025 Change |
| | 2026 | | 2025 | | 2025 Change |
| |||||
Statement of Operations Data (in thousands other than percentages): | |||||||||||||||||
Net revenue | $ | 1,490,286 | $ | 1,442,011 | 3.3 | % | $ | 2,947,862 | $ | 2,809,418 | 4.9 | % | |||||
Operating expenses: |
|
| |||||||||||||||
Employee wages, benefits and taxes | 924,522 | 742,617 | 24.5 | % | 1,694,528 | 1,477,375 | 14.7 | % | |||||||||
Maintenance, fuel and other direct expenses | 136,417 | 112,617 | 21.1 | % |
| 255,037 | 224,428 | 13.6 | % | ||||||||
Insurance expense | 50,877 | 51,301 | (0.8) | % |
| 93,856 | 84,953 | 10.5 | % | ||||||||
Other operating expenses | 231,900 | 220,908 | 5.0 | % |
| 459,994 | 436,714 | 5.3 | % | ||||||||
Depreciation and amortization | 76,956 | 72,507 | 6.1 | % |
| 152,323 | 147,634 | 3.2 | % | ||||||||
Impairment of assets held for sale and other investments | — | — | nm |
| — | 14,100 | nm | ||||||||||
Acquisition, integration and other charges | 12,925 | 1,055 | 1,125.1 | % |
| 16,537 | 5,356 | 208.8 | % | ||||||||
Total operating expenses | 1,433,597 | 1,201,005 | 19.4 | % |
| 2,672,275 | 2,390,560 | 11.8 | % | ||||||||
Operating income | 56,689 |
| 241,006 |
| (76.5) | % |
| 275,587 |
| 418,858 |
| (34.2) | % | ||||
Interest expense, net | 76,848 |
| 108,516 |
| (29.2) | % |
| 160,022 |
| 222,201 |
| (28.0) | % | ||||
Equity in (earnings) losses of unconsolidated affiliates | (436) |
| (272) |
| 60.3 | % |
| (899) |
| (2,574) |
| (65.1) | % | ||||
Other (income) loss, net | (425) |
| 10,468 |
| (104.1) | % |
| (6,769) |
| 9,546 |
| (170.9) | % | ||||
Net income (loss) before income taxes | (19,298) |
| 122,294 |
| (115.8) | % |
| 123,233 |
| 189,685 |
| (35.0) | % | ||||
Income tax (benefit) expense | 8,980 |
| 41,533 |
| (78.4) | % |
| 45,175 |
| 70,900 |
| (36.3) | % | ||||
Net income (loss) | $ | (28,278) | $ | 80,761 |
| (135.0) | % | $ | 78,058 | $ | 118,785 |
| (34.3) | % | |||
nm – Not meaningful
Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
Revenue
Total revenue for the three months ended June 30, 2026 was $1,490.3 million compared to $1,442.0 million for the three months ended June 30, 2025. Net transport revenue increased $40.3 million, or 2.9%, to $1,435.9 million for the
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three months ended June 30, 2026, compared to $1,395.6 million for the same prior year period. The increase in net transport revenue was attributable to a 1.4% increase in net revenue per transport, driven by a favorable mix shift from non-emergent to emergent transports and improvements in net revenue per transport on a comparable basis. In addition, air transport volume increased 6.9%, primarily due to strong demand and improved capture rate compared to the prior-year period, while ground transport volume increased 1.3%. Comparability between periods was affected by changes in estimates related to revenues subject to the No Surprises Act ("NSA"). Favorable changes in revenue estimates recognized during the three months ended June 30, 2026 were approximately $74.3 million lower than those recognized in the prior-year period. The prior-year period benefited from favorable developments in estimated collections associated with claims from earlier dates of service. As a result, the year-over-year growth in net transport revenue was partially offset by a less favorable contribution from changes in revenue estimates related to NSA claims. Complementary revenue increased $8.0 million, or 17.2%, to $54.4 million for the three months ended June 30, 2026, compared to $46.4 million for the same prior year period due primarily to increased standby and special events.
Operating Expenses
Employee wages, benefits and taxes. Employee wages, benefits and taxes expense increased $181.9 million, or 24.5%, to $924.5 million for the three months ended June 30, 2026, compared to $742.6 million for the same prior year period. The increase period-over-period was primarily driven by increased stock award expense of $129.6 million driven by the vesting of restricted stock units and non-cash settled performance stock units triggered upon the consummation of the IPO on May 14, 2026 and achievement of certain performance targets on such date, as applicable. Additionally, during the three months ended June 30, 2026, there were merit and other wage adjustments to attract and retain staff of approximately $26.0 million and increased health insurance expense of $11.2 million, driven by premium costs and claims volume year-over-year.
Maintenance, fuel and other direct expenses. Maintenance, fuel and other direct expenses increased $23.8 million, or 21.1%, to $136.4 million for the three months ended June 30, 2026, compared to $112.6 million for the same prior year period. The increase was primarily driven by increased fuel unit and volume costs period-over-period of $10.1 million and $1.6 million, respectively, and increased aircraft maintenance expense of $9.2 million primarily related to timing of scheduled maintenance events.
Insurance expense. Insurance expense decreased $0.4 million, or 0.8%, to $50.9 million for the three months ended June 30, 2026, compared to $51.3 million for the same prior year period.
Other operating expenses. Other operating expenses increased $11.0 million, or 5.0%, to $231.9 million for the three months ended June 30, 2026, compared to $220.9 million for the same prior year period. Other operating expenses primarily consist of outside services expense and general and administrative expense. Outside services expense remained consistent at $42.4 million for the three months ended June 30, 2026 and 2025, respectively. General and administrative expense increased $11.0 million, or 6.2%, to $189.5 million for the three months ended June 30, 2026, compared to $178.5 million for the same prior year period, primarily driven by increased systems integration and enhancement expenses of $2.0 million, software licensing and development of $2.6 million and travel expenses of $2.7 million.
Depreciation and amortization. Depreciation and amortization expenses increased $4.5 million, or 6.1%, to $77.0 million for the three months ended June 30, 2026, compared to $72.5 million for the same prior year period. Depreciation expense of property and equipment increased $5.6 million, or 10.8%, to $57.4 million for the three months ended June 30, 2026, compared to $51.8 million for the same prior year period. Depreciation and amortization of finance right-of-use assets decreased $0.5 million, or 12.8%, to $3.4 million for the three months ended June 30, 2026, compared to $3.9 million for the same prior year period. Amortization expense decreased $0.6 million, or 3.6%, to $16.2 million for the three months ended June 30, 2026, compared to $16.8 million for the same prior year period, driven by acceleration of amortization related to a prior period acquisition no longer in operation.
Impairment of assets held for sale and other investments. There was no impairment of assets held for sale or strategic cost investments for the three months ended June 30, 2026 or 2025, respectively.
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Acquisition, integration and other charges. Acquisition, integration and other charges increased $11.8 million, or 1,125.1%, to $12.9 million for the three months ended June 30, 2026, compared to $1.1 million for the same prior year period. The period-over-period increase was driven by $12.7 million in fees associated with the IPO on May 14, 2026.
Interest expense, net. Interest expense, net decreased $31.7 million, or 29.2%, to $76.8 million for the three months ended June 30, 2026, compared to $108.5 million for the same prior year period. The decrease was driven by lower interest rates achieved in conjunction with 2025 debt refinancing transaction, the $670.0 million paydown of the term loans outstanding during the three months ended June 30, 2026, and mark-to-market changes on our interest rate swap agreements.
Other (income) loss, net. Other (income) loss, net increased $10.9 million, or 104.1%, to income of $0.4 million for the three months ended June 30, 2026, compared to a loss of $10.5 million for the same prior year period. There was a loss on divestiture of businesses of $5.3 million for the three months ended June 30, 2025, mainly driven by the net working capital finalization for the divestiture of our fire services business. Additionally, there was a loss on a strategic cost investment of $6.2 million for the three months ended June 30, 2025.
Income Tax (benefit) expense. Income tax expense decreased $32.6 million, or 78.4%, to an expense of $9.0 million for the three months ended June 30, 2026, compared to an expense of $41.5 million for the same prior year period. Our effective tax rate was 46.5% for the three months ended June 30, 2026, compared to an effective tax rate of 34.0% for the same prior year period. The difference in our effective tax rate was primarily driven by the amount of 2026 net income before income taxes, current year non-deductible executive compensation, and a current year benefit related to a decrease in the valuation allowance.
Results of Operations
We reported net loss of $28.3 million for the three months ended June 30, 2026, compared to net income of $80.8 million for the same prior year period. Operating income for the three months ended June 30, 2026 was $56.7 million, a decrease of $184.3 million, or 76.5%, over the same prior year period. The year-over-year decrease in net income and operating income was primarily due to increased operating expenses primarily associated with employee wages, benefits and taxes of $181.9 million, and certain other operating expenses, partially offset by $48.3 million of increased net revenues.
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Revenue
Total revenue for the six months ended June 30, 2026 was $2,947.9 million compared to $2,809.4 million for the six months ended June 30, 2025. Net transport revenue increased $131.0 million, or 4.8%, to $2,852.8 million for the six months ended June 30, 2026, compared to $2,721.8 million for the same prior year period. The increase in net transport revenue was attributable to a 4.5% increase in net revenue per transport, driven by a favorable mix shift from non-emergent to emergent transports and improvements in net revenue per transport on a comparable basis. In addition, air transport volume increased 4.0%, primarily due to strong demand and improved capture rate compared to the prior-year period, while total ground transports increased 0.1% as increased emergent ground volumes were partially offset by non-emergent ground contract exits. Comparability between periods was affected by changes in estimates related to revenues subject to the NSA. Favorable changes in revenue estimates recognized during the six months ended June 30, 2026 were approximately $113.5 million lower than those recognized in the prior-year period. The prior-year period benefited from favorable developments in estimated collections associated with claims from earlier dates of service. As a result, the year-over-year growth in net transport revenue was partially offset by a less favorable contribution from changes in revenue estimates related to NSA claims. Complementary revenue increased $7.5 million, or 8.6%, to $95.1 million for the six months ended June 30, 2026, compared to $87.6 million due to standby and special event and other non-transport related revenue.
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Operating Expenses
Employee wages, benefits and taxes. Employee wages, benefits and taxes expense increased $217.1 million, or 14.7%, to $1,694.5 million for the six months ended June 30, 2026, compared to $1,477.4 million for the same prior year period. The increase period-over-period was primarily driven by increased stock award expense of $126.9 million driven by vesting of restricted stock units and non-cash settled performance stock units triggered upon the consummation of the IPO on May 14, 2026 and achievement of certain performance targets on such date, as applicable. Additionally, during the six months ended June 30, 2026, there were merit and other wage adjustments to attract and retain staff of approximately $51.7 million and increased health insurance expense of $20.1 million, driven by premium costs and claims volume year-over-year.
Maintenance, fuel and other direct expenses. Maintenance, fuel and other direct expenses increased $30.6 million, or 13.6%, to $255.0 million for the six months ended June 30, 2026, compared to $224.4 million for the same prior year period. The increase was primarily driven by increased fuel unit and volume costs period-over-period of $12.8 million and $1.3 million, respectively, increased aircraft maintenance expense of $9.9 million, and increased costs related to medical supplies of $3.9 million.
Insurance expense. Insurance expense increased $8.9 million, or 10.5%, to $93.9 million for the six months ended June 30, 2026, compared to $85.0 million for the same prior year period, primarily driven by increased professional liability related claims and third-party premium expenses.
Other operating expenses. Other operating expenses increased $23.3 million, or 5.3%, to $460.0 million for the six months ended June 30, 2026, compared to $436.7 million for the same prior year period. Other operating expenses primarily consist of outside services expense and general and administrative expense. Outside services expense increased $1.2 million, or 1.4%, to $85.8 million for the six months ended June 30, 2026, compared to $84.6 million for the same prior year period. General and administrative expense increased $22.1 million, or 6.3%, to $374.2 million for the six months ended June 30, 2026, compared to $352.1 million for the same prior year period, primarily driven by increased systems integration and enhancement expenses of $5.4 million, software licensing and development of $5.1 million, travel expenses of $4.3 million, and freight of $2.0 million.
Depreciation and amortization. Depreciation and amortization expenses increased $4.7 million, or 3.2%, to $152.3 million for the six months ended June 30, 2026, compared to $147.6 million for the same prior year period. Depreciation expense of property and equipment increased $9.8 million, or 9.5%, to $113.0 million for the six months ended June 30, 2026, compared to $103.2 million for the same prior year period. Depreciation and amortization of finance right-of-use assets decreased $0.9 million, or 11.4%, to $7.0 million for the six months ended June 30, 2026, compared to $7.9 million for the same prior year period. Amortization expense decreased $4.2 million, or 11.5%, to $32.3 million for the six months ended June 30, 2026, compared to $36.5 million for the same prior year period, driven by acceleration of amortization related to a prior period acquisition no longer in operation.
Impairment of assets held for sale and other investments. There was no impairment of assets held for sale or strategic cost investments for the six months ended June 30, 2026. For the six months ended June 30, 2025, impairment charges of $14.1 million were recorded related to a strategic cost investment.
Acquisition, integration and other charges. Acquisition, integration and other charges increased $11.2 million, or 208.8%, to $16.5 million for the six months ended June 30, 2026, compared to $5.4 million for the same prior year period. The period-over-period increase was driven by fees associated with the IPO on May 14, 2026.
Interest expense, net. Interest expense, net decreased $62.2 million, or 28.0%, to $160.0 million for the six months ended June 30, 2026, compared to $222.2 million for the same prior year period. The decrease was driven by lower interest rates achieved in conjunction with 2025 debt refinancing transaction, the $670.0 million paydown of term loans outstanding during the six months ended June 30, 2026, in addition to mark-to-market changes on our interest rate swap agreements.
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Other (income) loss, net. Other (income) loss, net increased $16.3 million, or 170.9%, to income of $6.8 million for the six months ended June 30, 2026, compared to a loss of $9.5 million for the same prior year period. There was market volatility on investments held by our captive insurance program for each of the six months ended June 30, 2026 and 2025. There was a loss on divestiture of businesses of $3.8 million for the six months ended June 30, 2025, mainly driven by the net working capital finalization for the divestitures of businesses during 2024. Additionally, there was a loss on a strategic cost investment of $6.2 million for the six months ended June 30, 2025.
Income Tax (benefit) expense. Income tax expense decreased $25.7 million, or 36.3%, to an expense of $45.2 million for the six months ended June 30, 2026, compared to an expense of $70.9 million for the same prior year period. Our effective tax rate was 36.7% for the six months ended June 30, 2026, compared to an effective tax rate of 37.4% for the same prior year period. The difference in our effective tax rate was primarily driven by the amount of 2026 net income before taxes, current year non-deductible executive compensation, and a current year benefit related to a decrease in the valuation allowance.
Results of Operations
We reported net income of $78.1 million for the six months ended June 30, 2026, compared to net income of $118.8 million for the same prior year period. Operating income for the six months ended June 30, 2026 was $275.6 million, a decrease of $143.3 million, or 34.2%, over the same prior year period. The year-over-year decrease in net income and operating income was primarily due to increased operating expenses primarily associated with employee wages, benefits and taxes of $217.1 million, and certain other operating expenses, partially offset by $138.5 million of increased net revenues and decreased interest expense of $62.2 million.
Non-GAAP Measures and Reconciliation
We provide non-GAAP financial information to enhance the understanding of our GAAP financial information and it should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP. Each non-GAAP financial measure is presented along with the corresponding GAAP measure so as not to imply that more emphasis should be placed on the non-GAAP measure. We believe that providing these non-GAAP measures in addition to the GAAP measures allows management, investors and other users of our financial information to more fully and accurately assess performance. The non-GAAP financial information presented may be determined or calculated differently by other companies and may not be directly comparable to that of other companies.
We define EBITDA as net income (loss) before interest expense, net, income tax provision (benefit), and depreciation and amortization. We define Adjusted EBITDA as EBITDA, as further adjusted to exclude management fees, non-cash stock-based compensation, professional fees and other expenses for non-recurring matters, debt financing fees paid to (received from) third parties and certain other items that we do not consider indicative of our ongoing operating performance. Pursuant to the credit agreements that govern our credit facilities and the indenture that governs our notes, we define Lender Defined Adjusted EBITDA as Adjusted EBITDA, as further adjusted to exclude certain additional non-cash and other adjustment items permitted in calculating covenant compliance under our debt documents.
Management uses EBITDA and Adjusted EBITDA to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, to establish and award discretionary annual incentive compensation, to report compliance with certain covenants in our debt agreements and to compare our performance against that of peer companies using similar measures. Moreover, we present EBITDA and Adjusted EBITDA because we believe that investors consider them to be important supplemental measures of our performance and believe these measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry.
Adjusted EBITDA is an analytical indicator used by management and the healthcare industry to evaluate company performance and allocate resources. Adjusted EBITDA should not be considered in isolation or as an alternative to net income (loss), cash flows from operations, investing or financing activities, or other financial statement data presented in the unaudited condensed consolidated financial statements as indicators of financial performance. Because Adjusted EBITDA is not a measure determined in accordance with GAAP and is thus susceptible to varying calculations, Adjusted
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EBITDA as presented may not be comparable to other similarly titled measures of other companies and may not be comparable to similarly titled measures used in debt compliance calculations. Net income (loss) is the financial measure calculated and presented in accordance with GAAP that is most comparable to Adjusted EBITDA, as defined.
Below is a reconciliation of net income (loss) to EBITDA, Adjusted EBITDA, and Lender Defined Adjusted EBITDA for the periods presented:
Three Months Ended |
| | Six Months Ended |
| |||||||||||||
June 30, | 2026 v. | June 30, | 2026 v. | ||||||||||||||
(in thousands) | 2026 | | 2025 | | 2025 Change |
| | 2026 | | 2025 | | 2025 Change |
| ||||
Net income (loss) | $ | (28,278) | $ | 80,761 | (135.0) | % | $ | 78,058 | $ | 118,785 | (34.3) | % | |||||
Interest expense, net | 76,848 | 108,516 | (29.2) | % | 160,022 | 222,201 | (28.0) | % | |||||||||
Income tax provision (benefit) | 8,980 | 41,533 | (78.4) | % | 45,175 | 70,900 | (36.3) | % | |||||||||
Depreciation and amortization | 76,956 |
| 72,507 |
| 6.1 | % |
| 152,323 |
| 147,634 |
| 3.2 | % | ||||
EBITDA | $ | 134,506 | $ | 303,317 |
| (55.7) | % | $ | 435,578 | $ | 559,520 |
| (22.2) | % | |||
Management fees(1) |
| 1,744 |
| 2,705 |
| (35.5) | % |
| 4,721 |
| 5,410 |
| (12.7) | % | |||
Stock-based compensation(2) |
| 132,602 |
| 2,987 |
| 4,339.3 | % |
| 132,511 |
| 5,592 |
| 2,269.7 | % | |||
Professional fees and other expenses for non-recurring matters(3) |
| 16,234 |
| 2,821 |
| 475.5 | % |
| 23,145 |
| 7,375 |
| 213.8 | % | |||
Debt refinancing fees paid to (received from) third parties(4) |
| 239 |
| (10) |
| (2,490.0) | % |
| 559 |
| 373 |
| 49.9 | % | |||
Impairment of assets held for sale and other investments(5) |
| — |
| — |
| nm |
| — |
| 14,100 |
| nm | |||||
(Gain) loss on divestiture of businesses(6) |
| — |
| 5,259 |
| nm |
| — |
| 3,837 |
| nm | |||||
Realized and unrealized (gain) loss, net(7) |
| (353) |
| 5,767 |
| (106.1) | % |
| (6,027) |
| 7,002 |
| (186.1) | % | |||
Equity method investment (income) loss(8) |
| (436) |
| (272) |
| 60.3 | % |
| (899) |
| (2,574) |
| (65.1) | % | |||
Adjusted EBITDA | $ | 284,536 | $ | 322,574 |
| (11.8) | % | $ | 589,588 | $ | 600,635 |
| (1.8) | % | |||
Loss (gain) on disposal of assets (non-cash)(9) | 779 | 1,186 | (34.3) | % | 1,855 | 5,291 | (64.9) | % | |||||||||
Membership adjustment(10) | (937) | (1,088) | (13.9) | % | 1,829 | (271) | (774.9) | % | |||||||||
Newly opened locations(11) | 3,696 | 1,011 | 265.6 | % | 7,184 | 3,971 | 80.9 | % | |||||||||
Lender Defined Adjusted EBITDA | $ | 288,074 | $ | 323,683 | (11.0) | % | $ | 600,456 | $ | 609,626 | (1.5) | % | |||||
nm – Not meaningful
| (1) | Represents management/director fees paid to directors and KKR in connection with the ownership and financial management of the Company and procurement diagnostics and operational support provided by KKR and its affiliates, including under the Monitoring Agreement (as defined in the IPO Prospectus). The Monitoring Agreement was terminated upon completion of the IPO. |
| (2) | Represents the stock compensation expense associated with the vesting of stock options and other equity awards, related primarily to the vesting of certain awards based on the consummation of the IPO and achievement of certain performance targets on such date, as applicable, as well as the estimate of achievement of the cash-settled performance stock units as discussed in Note 15 of our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q. |
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| (3) | Represents fees and expenses incurred in connection with certain business combinations and divestitures, as well as other fees and expenses incurred in connection with distinct transactions and matters unrelated to our normal and continued business operations, as further described below: |
Three Months Ended June 30, | | Six Months Ended June 30, | |||||||||
(in thousands) | 2026 | | 2025 | | 2026 | | 2025 | ||||
Acquisition and divestiture fees paid to (received from) third parties(i) | 455 |
| 1,190 |
| 1,861 |
| 3,204 | ||||
Executive management severance fees(ii) | 124 |
| (65) |
| 1,326 |
| 717 | ||||
Legal settlements and government affairs(iii) | 500 |
| (1,748) |
| 1,507 |
| (894) | ||||
Initial public offering related fees paid to third parties(iv) | 12,715 | — | 12,715 | — | |||||||
Other(v) | 2,440 |
| 3,444 |
| 5,736 |
| 4,348 | ||||
Total professional fees and other expenses for non-recurring matters | $ | 16,234 | $ | 2,821 | $ | 23,145 | $ | 7,375 | |||
| (i) | Represents fees incurred in connection with potential and completed business combinations and divestitures of certain asset groups. These costs primarily represent diligence costs, transaction costs, and integration costs, and consist primarily of third party financial advisory, legal, and consulting fees. Such costs are specific to acquisition and divestiture activity that would not have otherwise been incurred in connection with our ordinary course business operations. |
| (ii) | Fees incurred in the three and six months ended June 30, 2026 and 2025 primarily related to severance costs in connection with our targeted market exit strategies executed during such periods, in each case, to optimize our cost structure and enhance our operating effectiveness. These activities were undertaken to meet specific business objectives. In addition, these amounts represent discrete costs outside the ordinary course of business that are distinct from normal, recurring operating expenses. |
| (iii) | For the periods presented, amounts primarily relate to certain regulatory initiatives in California that are non-routine and not expected to continue. |
| (iv) | Represents third party fees and expenses incurred in connection with the IPO, which was consummated on May 14, 2026. |
| (v) | Represents other third-party fees and expenses incurred in connection with distinct transactions and matters unrelated to our normal and continued business operations, including major system implementation and enhancements relating to the integration of our timekeeping and electronic patient care charting systems. |
| (4) | Represents fees associated with our long-term debt refinancing consummated during fiscal year 2025, which primarily consisted of fees incurred for third party legal, accounting and tax consulting in connection with the debt refinancing. |
| (5) | Impairment of assets held for sale and other investments includes impairment charges of $14.1 million related to a strategic cost investment for the six months ended June 30, 2025. There was no impairment on assets held for sale or strategic cost investments for the three and six months ended June 30, 2026. |
| (6) | (Gain) loss on divestiture of businesses for the three and six months ended June 30, 2025 was $5.3 million and $3.8 million, respectively, related to net working capital finalization for the divestiture of our coordinated care and fire businesses. There was no (gain) loss on divestiture of businesses recorded for the three and six months ended June 30, 2026. |
| (7) | Realized and unrealized (gain) loss, net represents changes in the fair value of equity securities for the three and six months ended June 30, 2026 and 2025, respectively. Additionally, during the six months ended June 30, 2026, a certain cost method investment was sold for a (gain) of ($6.9) million. There was a loss on a strategic cost investment of $6.2 million for the six months ended June 30, 2025. |
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| (8) | We use the equity method of accounting to recognize our proportionate share of net income (loss) generated by our noncontrolling interest in Banner health system emergency air joint venture in Arizona. |
| (9) | Represents non-cash losses associated with the disposal of non-core, non-revenue generating assets and aircraft, including vehicles and other assets. |
| (10) | Membership program revenue and expenses are recorded over the estimated duration for each membership for GAAP purposes. This item represents an adjustment to reflect membership program revenue and expenses on a cash basis. |
| (11) | The amount of any loss attributable to a new plant, facility or base until the date that is 24 months after the date of commencement of construction or the date of acquisition, may be added back to EBITDA. As such, the amount represents any losses incurred in the months preparing and opening the new base, and any losses incurred in the 24 months subsequent to the base opening. |
Liquidity and Capital Resources
As of June 30, 2026, we had cash and cash equivalents totaling $420.0 million. As of June 30, 2026, the maximum amount available under the A&R ABL Facility (as defined below) was $800.0 million, with $103.7 million of letters of credit outstanding, which impact the available credit under the A&R ABL Facility and a maximum amount available to draw under the A&R ABL Facility of $696.3 million. These letters of credit primarily secure the obligations of AMR’s operations and the Company’s captive insurance program. As of June 30, 2026, we had $348.0 million of purchase commitments for aircraft, of which $147.9 million were scheduled to be payable during the year ending December 31, 2026.
Liquidity Arrangements
Our primary source of liquidity is cash flows provided by operating activities of our subsidiaries. The Company and its subsidiaries also have the ability to use the A&R ABL Facility to supplement cash flows provided by operating activities, for strategic or operating reasons. Our primary liquidity requirements are to reduce our debt, to fund potential acquisitions and for other general corporate purposes. Our significant uses of cash and capital funding needs are capital expenditures, including purchases of new aircraft and vehicles, acquisitions, working capital, operating expenses and amounts due on our debt obligations.
For all other financial instruments including cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, insurance collateral, capital lease obligations, and other long-term liabilities, the carrying amounts approximate fair value due to the short maturity of those instruments.
We expect operating cash flows and borrowings under the A&R ABL Facility will provide sufficient working capital to operate our business, to make expected capital expenditures and to meet foreseeable liquidity requirements, including debt service on our long-term debt, in the next twelve months. We expect to use cash provided by operations in excess of amounts needed for capital expenditures and required debt repayments to reduce our debt, to fund potential acquisitions or for other general corporate purposes. Our ability to meet future working capital, capital expenditure and debt service requirements will depend on our future financial performance, which will be affected by a range of economic, competitive and business factors, particularly interest rates and changes in our industry and general economic factors, many of which are outside of our control. Additionally, we will continue to monitor the capital markets, including equity capital markets, for additional sources of liquidity and fundraising opportunities across the capital structure.
Tax Receivable Agreement
The Company is party to a Tax Receivable Agreement ("TRA") under which it is generally required to make payments to participating stockholders and certain management party participants based on a specified percentage of tax benefits realized from certain tax attributes existing as of the IPO date. The amount and timing of future payments under the TRA depend on a number of factors, including the generation of future taxable income, the utilization of covered tax attributes, applicable tax rates, and changes in the Company's assessment of the realizability of related deferred tax assets.
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As of June 30, 2026, the Company had a TRA liability of $468.4 million. Future payments under the TRA are expected to be funded through cash flows from operations. Because payments are generally based on tax benefits actually realized by the Company, management believes the associated tax savings will provide a source of liquidity to satisfy these obligations. However, actual payments may differ from current estimates as a result of changes in taxable income, tax laws, tax rates, utilization of tax attributes, valuation allowance assessments, or other factors affecting the realization of the underlying tax benefits. Accordingly, the TRA may have a material impact on the Company's future liquidity and capital resources.
Beginning with the 2026 taxable year, annual TRA payments are generally determined upon the filing of the applicable income tax returns and bear interest from the original due date of the return through the payment date at a rate equal to SOFR plus 1.0%. Management believes that existing cash balances, cash generated from operations, and available borrowing capacity will be sufficient to meet anticipated obligations under the TRA as they become due.
Indebtedness
Long-term borrowings as of the dates shown consisted of the following:
| June 30, | December 31, | ||||
| 2026 | | 2025 | |||
(in thousands) | | | ||||
2032 First Lien Term Loan (as defined below) | $ | 2,912,000 | $ | 3,600,000 | ||
2032 Secured Notes (as defined below) |
| 1,000,000 |
| 1,000,000 | ||
A&R ABL Facility(1) |
| — |
| — | ||
Other long-term debt, including promissory notes related to aircraft purchases |
| 559,296 |
| 503,886 | ||
Finance leases |
| 96,417 |
| 96,767 | ||
Total long-term debt (inclusive of finance lease obligations) | $ | 4,567,713 | $ | 5,200,653 | ||
| (1) | Excludes $103.7 million of letters of credit outstanding as of June 30, 2026. |
We were in compliance with all applicable financial covenants as of June 30, 2026.
2032 First Lien Term Loan
On September 19, 2025, in connection with the 2025 Refinancing (as defined in the IPO Prospectus), Global Medical Response, Inc., a wholly-owned subsidiary of the Company (“GMR, Inc.”), entered into the A&R First Lien Credit Agreement and borrowed first lien term loans (the “2032 First Lien Term Loans”) in an aggregate principal amount of $3,600 million thereunder. The 2032 First Lien Term Loan will mature on October 1, 2032.
Borrowings of 2032 First Lien Term Loans under the A&R First Lien Credit Agreement bear interest at a rate per annum equal to, at GMR, Inc.’s option, (a) the forward-looking term SOFR rate published by CME Group Benchmark Administration Limited for the interest period relevant to such borrowing (“Term SOFR”) plus an additional margin equal to 3.50% or (b) a base rate (the “Base Rate”) determined by reference to the highest of (1) the prime lending rate, (2) the federal funds effective rate plus 0.50% and (3) Term SOFR for a one-month interest period plus 1.00%, in each case, plus an additional margin equal to 2.50%, in each case of clauses (a) and (b) above, subject to a 0.25% reduction following achievement of a public corporate family rating by Moody’s equal to or higher than B1. On May 18, 2026, Moody’s upgraded GMR’s corporate family rating to B1 from B2. Pursuant to the terms of the Company’s senior secured term loan due 2032, the ratings upgrade resulted in a 25 basis point reduction in the applicable interest rate, effective upon the upgrade.
Interest payments under the 2032 First Lien Term Loan are due (i) for loans bearing interest determined by reference to Term SOFR, on the last day of the applicable interest period and, in the case of an interest period in excess of three months, on each date occurring at three-month intervals after the first day of such interest period and (ii) for loans bearing interest based on the Base Rate, quarterly. Additionally, a payment of a principal amount of 2032 First Lien Term Loan
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equal to the aggregate outstanding principal amount of the initial borrowing multiplied by 0.25% is required quarterly, commencing March 31, 2026.
A&R ABL Facility
On September 19, 2025, GMR, Inc. entered into the Third A&R ABL Credit Agreement with a syndicate of lenders and Bank of America, N.A. as administrative agent and collateral agent, that provides for a credit facility (the “A&R ABL Facility”) of up to $800.0 million. The A&R ABL Facility will mature on September 19, 2030.
The A&R ABL Facility is subject to customary borrowing base limitations and is reduced by loans and letter of credit utilization. The borrowing base available to GMR, Inc. under the terms of the A&R ABL Facility is a function of eligible receivables of GMR, Inc. Borrowings of loans under the A&R ABL Facility bear interest at a rate per annum equal to, at GMR, Inc.’s option, (a) Term SOFR plus an additional margin that ranges from 1.75% to 1.25% based on average excess liquidity or (b) the Base Rate plus an additional margin that ranges from 0.75% to 0.25% based on average excess liquidity. Interest payments for loans under the A&R ABL Facility are due (i) for loans bearing interest determined by reference to Term SOFR, on the last day of the applicable interest period and, in the case of an interest period in excess of three months, on each date occurring at three-month intervals after the first day of such interest period and (ii) for loans bearing interest based on the Base Rate, quarterly. GMR, Inc. is also required to pay a commitment fee of 0.375% per annum in respect of any unutilized commitments, which fee is reduced to 0.25% if the average daily used portion of the A&R ABL Facility exceeds 50%. Under the Third A&R ABL Credit Agreement, if excess liquidity is less than the greater of (i) $49.0 million and (ii) 10.0% of the lesser of (x) the aggregate commitments and (y) the then applicable borrowing base, GMR, Inc. must maintain a minimum fixed charge coverage ratio of 1.0:1.0 until such thresholds are exceeded for 20 consecutive calendar days.
2032 Secured Notes
On September 19, 2025, in connection with the 2025 Refinancing, GMR, Inc. issued $1,000 million aggregate principal amount of 7.375% senior secured notes due 2032 (the “2032 Secured Notes”). The 2032 Secured Notes bear interest payable semi-annually in arrears on October 1 and April 1 of each year, commencing April 1, 2026. The 2032 Secured Notes will mature on October 1, 2032.
Historical Cash Flow Information
The following summarizes our primary sources (uses) of cash in the periods presented (in thousands):
Six Months Ended June 30, | ||||||
| 2026 | | 2025 | |||
Cash flows provided by (used in) operating activities | $ | 217,326 | $ | 218,673 | ||
Cash flows provided by (used in) investing activities | (126,448) | (107,696) | ||||
Cash flows provided by (used in) financing activities | (286,141) | (6,134) | ||||
Total | $ | (195,263) | $ | 104,843 | ||
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Operating activities. Cash provided by operating activities decreased $1.4 million to $217.3 million for the six months ended June 30, 2026, compared to $218.7 million for the same prior year period.
Investing activities. Cash used in investing activities increased $18.7 million to $126.4 million for the six months ended June 30, 2026, compared to $107.7 million for the same prior year period. The increase was primarily driven by increased purchases of property and equipment during the six months ended June 30, 2026, partially offset by the sale of a cost investment during 2026.
Financing activities. Cash used in financing activities increased $280.0 million to $286.1 million for the six months ended June 30, 2026, compared to $6.1 million for the same prior year period. The increase was primarily driven by the
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paydown of approximately $670.0 million outstanding borrowings under the 2032 First Lien Term Loan, and cash redemptions of Series B Preferred Stock of $549.5 million during 2026, offset by proceeds received from the issuance of common stock of $446.8 million in our IPO, and proceeds received from the issuance of private placement warrants of $500.0 million.
Contractual Obligations and Other Commitments
As of June 30, 2026, there have been no significant changes to our contractual obligations and other commitments as disclosed in the IPO Prospectus, other than as described elsewhere in this Form 10-Q and other payments made in the ordinary course of business.
Off-Balance Sheet Arrangements
We do not have any off-balance-sheet arrangements not reflected in our financial statements and footnotes.
We provide indemnification provisions in certain of our agreements with customers and our leases of real estate in the ordinary course of our business. With respect to customer agreements, these provisions may obligate us to indemnify and hold harmless the customer against losses, expenses, liabilities, and damages that are awarded against the customer in the event our operations cause certain losses, including as a result of medical malpractice and environmental issues.
Tax Receivable Agreement
Following the IPO, we expect to utilize certain pre-IPO tax assets (including federal net operating losses, deferred interest deductions, tax basis in amortizable or depreciable assets, and certain deductible expenses attributable to the transactions related to the IPO) that arose prior to or in connection with the IPO, which tax benefits are expected to reduce our future tax payments.
In connection with the IPO, we entered into a Tax Receivable Agreement with the TRA parties that will provide for the payment by the Company to such TRA parties of 85% of the benefits, if any, that the Company or our subsidiaries actually realize, or are deemed to realize (calculated using certain assumptions), as a result of savings in U.S. federal, state and local income taxes attributable to the Company’s and our subsidiaries’ utilization of the Pre-IPO Tax Benefits. Under the terms of the Tax Receivable Agreement, the TRA parties’ entitlements to payments will take into account their holdings of warrants. In addition, if any members of management holding outstanding equity awards that had the opportunity to elect to participate in the Tax Receivable Agreement in connection with the IPO (each, a “Management TRA party”) elects to participate, he or she will receive up to their allocated share of 6% of any such payments to the extent made pursuant to the Tax Receivable Agreement. To the extent a member of management elects not to participate, such member’s allocation will be reallocated to all Management TRA parties. Each of our Named Executive Officers (as defined in the IPO Prospectus) is eligible to participate in the Tax Receivable Agreement as a Management TRA party and each of our Named Executive Officers, other than Nick Loporcaro, is eligible to participate in the Tax Receivable Agreement as a pre-IPO holder of our common stock. As disclosed in the IPO Prospectus, the estimated portion of payments under the Tax Receivable Agreement that each Named Executive Officer would be entitled to receive, assuming that all eligible TRA parties elect to participate in the Tax Receivable Agreement, are as follows: for Nick Loporcaro, 0.35%, representing approximately $1.64 million and $1.82 million of the expected future payments under the Tax Receivable Agreement; for Brian Tierney, 0.21%, representing approximately $1.01 million and $1.12 million of the expected future payments under the Tax Receivable Agreement; for Edward Van Horne, 0.23%, representing approximately $1.09 million and $1.21 million of the expected future payments under the Tax Receivable Agreement; for Thomas Cook, 0.27%, representing approximately $1.29 million and $1.43 million of the expected future payments under the Tax Receivable Agreement; and for Lisa Jacoba, 0.16%, representing approximately $0.77 million and $0.85 million of the expected future payments under the Tax Receivable Agreement. The Pre-IPO Tax Benefits may reduce the amount of tax that the Company would otherwise be required to pay in the future. Actual tax benefits realized by the Company and our subsidiaries may differ from tax benefits calculated under the Tax Receivable Agreement as a result of the use of certain assumptions in the Tax Receivable Agreement, including the use of an assumed weighted-average state and local income tax rate to calculate tax benefits. The payment obligation under the Tax Receivable Agreement is an obligation of the Company and not of our
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subsidiaries. The Company expects to benefit from the remaining 15% of cash tax benefits, if any, it realizes from the Pre-IPO Tax Benefits.
For purposes of the Tax Receivable Agreement, the cash tax benefits will be computed by comparing our actual income tax liability to the amount of such taxes that we would have been required to pay had we not been able to utilize the Pre-IPO Tax Benefits. The terms of the Tax Receivable Agreement will continue until all Pre-IPO Tax Benefits have been utilized (or deemed utilized) or expired. Payments under the Tax Receivable Agreement do not accelerate and become due and payable upon a change of control or material breach, and there is no right of the Company to terminate the Tax Receivable Agreement early. As a result, except due to the use of an assumed weighted-average state and local income tax rate or in the case of a change of control, material breach, or certain events, in which case certain valuation assumptions apply as discussed below, the requirement to make payments under the Tax Receivable Agreement is triggered by the actual realization of savings in U.S. federal, state and local income taxes attributable to the Company’s and our subsidiaries’ utilization of the Pre-IPO Tax Benefits. However, actual tax benefits realized by the Company and our subsidiaries may differ from tax benefits used to determine payments under the Tax Receivable Agreement as a result of the use of certain assumptions in the Tax Receivable Agreement, including the use of an assumed weighted-average state and local income tax rate to calculate tax benefits. The actual and hypothetical tax liabilities determined in the Tax Receivable Agreement will be calculated using the actual U.S. federal income tax rate in effect for the applicable period and an assumed, weighted-average state and local income tax rate based on apportionment factors for the applicable period (along with the use of certain other assumptions). Payments under the Tax Receivable Agreement are based in part on the tax savings that the Company and its subsidiaries are deemed to realize as a result of the use of the assumed weighted-average state and local income tax rate, which may differ from the actual state and local income tax rate. In the event of certain changes of control, certain material breaches of the Tax Receivable Agreement by the Company, or an insolvency event, the calculation of certain future payments made under the Tax Receivable Agreement will utilize certain valuation assumptions, including that the Company will have sufficient taxable income to fully utilize Pre-IPO Tax Benefits. As a result, even though payments under the Tax Receivable Agreement do not accelerate and become due and payable in these situations, the Company could be required to make payments under the Tax Receivable Agreement that are greater than the specified percentage of the actual cash tax benefits that we realize in respect of the Pre-IPO Tax Benefits, or that are prior to the actual realization, if any, of such future tax benefits. Estimating the amount of payments that may be made under the Tax Receivable Agreement is by its nature imprecise, insofar as the calculation of amounts payable depends on a variety of factors.
We expect that the payments that we may make under the Tax Receivable Agreement will be material. See “Certain Relationships and Related Person Transactions — Tax Receivable Agreement” in the IPO Prospectus.
Critical Accounting Policies and Estimates
In preparing our unaudited condensed consolidated financial statements in conformity with GAAP, we must use estimates and assumptions that affect the reported amounts of assets and liabilities and related disclosures and the reported amounts of revenue and expenses. In general, our estimates are based on historical experience and various other assumptions we believe are reasonable under the circumstances. We evaluate our estimates on an ongoing basis and make changes to the estimates and related disclosures as experience develops or new information becomes known. Actual results could differ from those estimates.
We consider our critical accounting policies and estimates to be those that involve significant judgments and uncertainties and may potentially result in material different results under different assumptions and conditions. There have been no material changes to our critical accounting policies and estimates from those disclosed in the IPO Prospectus which is hereby incorporated by reference, except as discussed below.
Income Taxes and Tax Receivable Agreement Liability
The Company is also party to a TRA, under which future payments are based on the realization of certain tax benefits. As a result, the estimated TRA liability is dependent upon many of the same assumptions used in assessing the realizability of the related deferred tax assets. Changes in management’s assessment of the valuation allowance may have a corresponding impact on the estimated TRA liability. For example, increases in the
41
valuation allowance may reduce the amount of tax benefits expected to be realized and therefore decrease the estimated TRA liability, while decreases in the valuation allowance may increase expected future tax benefit realization and result in an increase in the estimated TRA liability. Accordingly, the measurement of both deferred tax assets and the TRA liability requires significant judgment and is sensitive to changes in assumptions regarding future operating results, taxable income, tax rates, and other factors affecting the realizability of deferred tax assets.
Recent Accounting Pronouncements
Refer to Note 2 of our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are subject to market risk primarily from exposure to changes in interest rates based on our financing, investing and cash management activities. We utilize a balanced mix of maturities along with both fixed rate and variable rate debt and interest rate swaps to manage our exposures to changes in interest rates. Our variable rate debt instruments are primarily indexed to SOFR. Interest rate changes would result in gains or losses in market value of our fixed rate debt portfolio due to differences in market interest rate and the rates at the inception of the debt agreements. Based upon our indebtedness at June 30, 2026, a 100 basis point interest rate change would impact our net earnings and cash flow by approximately $29.5 million annually.
Our cost of operations is affected by changes in the price and availability of fuel. The average cost of aircraft fuel per gallon for the three and six months ended June 30, 2026 increased 28.8% and 22.6%, respectively, compared to the same prior year period. The average cost of vehicle fuel per transport for the three and six months ended June 30, 2026 increased 33.9% and 20.9%, respectively, compared to the same prior year period. Patient transport volume for our operations can vary due to weather conditions and other factors. Therefore, the impact of a change in fuel cost based on current period volume is not necessarily indicative of the impact on subsequent years.
A 10% change in the fuel commodity price would impact our net earnings and cash flow by approximately $8.0 million annually.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer, the Company has evaluated the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective.
Changes in Internal Control over Financial Reporting
There were no changes to our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Part II - OTHER INFORMATION
Item 1. Legal Proceedings
The information required with respect to this Part II, Item 1 can be found under Note 17, “Legal Matters” to the unaudited condensed consolidated financial statements included in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q.
Item 1A. Risk Factors
There have been no material changes to the risk factors disclosed in the IPO Prospectus.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Initial Public Offering
On May 14, 2026, we completed our IPO, in which we issued and sold 31,914,893 shares of our Class A common stock, par value $0.0001 per share, at an initial public offering price of $15.00 per share. All of the shares issued and sold in our IPO were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-295169), as amended, which was declared effective by the SEC on May 12, 2026. In our Quarterly Report on Form 10-Q for the three months ended March 31, 2026 (the “1Q26 Form 10-Q”), we disclosed that the Company received net proceeds of $454.8 million for the Class A common stock, after deducting underwriting discounts and commissions of $23.9 million. Subsequent to filing the 1Q26 Form 10-Q, we determined that the offering-related expenses totaled $31.9 million and, accordingly, the Company received net proceeds of $446.8 million for the Class A common stock, after deducting underwriting discounts and commissions and such other offering-related expenses. For further information regarding the use of proceeds from the IPO, please refer to Part II, Item 2. of the 1Q26 Form 10-Q.
Purchases of Equity Securities
During the three months ended June 30, 2026, we did not repurchase any shares registered pursuant to Section 12 of the Exchange Act.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
Trading Plans
On
Other than set forth above, during the quarter ended June 30, 2026, no directors or officers, as defined in Rule 16a-1(f), adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” each as defined in Regulation S-K Item 408.
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Item 6. Exhibits
Incorporation by Reference | ||||
Exhibit No. | Description of Exhibits | Form | Exhibit | Filing Date |
3.1 | Amended and Restated Certificate of Incorporation of GMR Solutions Inc. | 8-K | 3.1 | May 18, 2026 |
3.2 | 8-K | 3.2 | May 18, 2026 | |
4.1 | Form of 2026 Warrant to Purchase Shares of Class A Common Stock of the Registrant. | S-1/A | 4.5 | May 4, 2026 |
4.2 | Form of 2026 Warrant to Purchase Shares of Class B Common Stock of the Registrant. | S-1/A | 4.6 | May 4, 2026 |
4.3 | 8-K | 4.1 | May 18, 2026 | |
10.1 | 8-K | 10.1 | May 18, 2026 | |
10.2 | 8-K | 10.2 | May 18, 2026 | |
10.3 | 8-K | 10.3 | May 18, 2026 | |
10.4 | 8-K | 10.4 | May 18, 2026 | |
10.5† | S-8 | 4.4 | May 13, 2026 | |
10.6† | Form of Director Restricted Stock Unit Agreement under the 2026 Equity Incentive Plan. | S-1/A | 10.22 | May 4, 2026 |
10.7† | Form of Employee Restricted Stock Unit Agreement under the 2026 Equity Incentive Plan. | S-1/A | 10.23 | May 4, 2026 |
10.8† | Form of Option Agreement under the 2026 Equity Incentive Plan. | S-1/A | 10.24 | May 4, 2026 |
10.9† | S-1/A | 10.25 | April 28, 2026 | |
10.10† | S-8 | 4.5 | May 13, 2026 | |
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10.11 | S-1/A | 10.43 | April 28, 2026 | |
31.1* | ||||
31.2* | ||||
32.1* | ||||
32.2* | ||||
101.INS* | XBRL Instance Document - the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document. | |||
101.SCH* | Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents | |||
104* | Cover page formatted as Inline XBRL and contained in Exhibit 101 |
* | Filed herewith. |
† | Management contract or compensatory plan or arrangement. |
The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by the Company in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.
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SIGNATURES
Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
GMR Solutions Inc. | ||
Date: August 12, 2026 | /s/ Nicola (Nick) Loporcaro | |
Name: | Nicola (Nick) Loporcaro | |
Title: | Chairman of the Board of Directors and Chief Executive Officer (Authorized Signatory) | |
Date: August 12, 2026 | /s/ Brian Tierney | |
Name: | Brian Tierney | |
Title: | Executive Vice President and Chief Financial Officer (Principal Financial Officer) | |
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