VIEMED HEALTHCARE, INC.

Results of Operations

Comparison of the Three Months Ended March 31, 2026 and 2025:

The following table summarizes our results of operations for the three months ended March 31, 2026 and 2025:

Revenue

The following table summarizes our revenue for the three months ended March 31, 2026 and 2025:

For the three months ended March 31, 2026, total revenue was $75.4 million, an increase of $16.3 million, or 27.5%, compared to the three months ended March 31, 2025. The increase reflects broad-based growth across both our rental and sales and services revenue streams, driven by continued execution of our geographic expansion strategy and the ongoing diversified growth of our product and service offerings.

Ventilator rentals, non-invasive and invasive, revenues increased by $3.2 million, or 10.0%, to $35.4 million for the three months ended March 31, 2026, reflecting higher period-over-period patient volumes attributable to sustained demand for our ventilation services. Rental revenue from other home medical equipment increased by $3.2 million, or 25.0%, to $16.2 million. This increase was driven by broad-based growth across our PAP therapy, oxygen therapy, and percussion vest service lines, each benefiting from an expanding patient base and the continued development of our sleep and respiratory programs, as well as the inclusion of maternal health equipment rentals from the Lehan acquisition completed on July 1, 2025.

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Equipment and supply sales increased by $10.0 million, or 132.6%, to $17.5 million, for the three months ended March 31, 2026. The increase was primarily attributable to growth in our women's health product offerings, including breast pumps and related accessories, driven largely by the inclusion of revenues from the Lehan acquisition, as well as the continued scaling of our sleep resupply program, which drove higher volumes of PAP-related supplies and equipment. Service revenues, which primarily reflect our healthcare staffing operations, decreased by $0.1 million, or 1.9%, to $6.4 million for the three months ended March 31, 2026.

The composition of our revenue continues to evolve in a manner consistent with our long-term strategic objectives. Ventilator rentals remain the largest contributor to total revenue; however, PAP-related rental and resupply revenue, oxygen therapy, and maternal health offerings each represented a growing proportion of our overall revenue mix.

Cost of revenue and gross profit

For the three months ended March 31, 2026, cost of revenue totaled $32.6 million, an increase of $6.7 million, or 26.1%, from the comparable period in 2025. Gross profit margin improved to 56.8% for the three months ended March 31, 2026 from 56.3% for the three months ended March 31, 2025.

The margin improvement reflects disciplined cost management and the favorable operating leverage in our rental revenue base. While the significant growth in equipment and supply sales introduced a higher proportion of direct product costs relative to rental revenue, these were more than offset by the efficiency and scale benefits realized across our broader operations. As our sleep resupply program and other sales-oriented service lines continue to scale, we expect gross margins to gradually improve as fulfillment efficiencies are realized and the cost structure of these programs matures, though the continued diversification of our revenue mix may partially moderate the pace of that expansion.

Selling, general and administrative expense

Selling, general and administrative expenses as a percentage of revenue improved to 46.1% for the three months ended March 31, 2026 compared to 48.1% for the three months ended March 31, 2025. Selling, general and administrative expenses totaled $34.8 million for the three months ended March 31, 2026, an increase of $6.4 million (or 22.4%) from the comparable period in 2025.

The improvement in selling, general and administrative expenses as a percentage of revenue reflects continued operating leverage and efficiency gains as our revenue base has grown. The overall increase in selling, general and administrative expenses as compared to the prior period is primarily attributable to additional employee-related expenses to support the Company's overall growth and the inclusion of operating expenses from the Lehan acquisition completed on July 1, 2025. Our full-time employee count increased from 1,222 as of March 31, 2025 to 1,387 as of March 31, 2026, an increase of 14%, reflecting both organic expansion and acquired operations. As a result, employee related costs increased by $4.5 million, or 22%, compared to the prior year period.

We expect selling, general and administrative expenses to continue to increase in absolute dollars as we invest in personnel, infrastructure, and integration activities to support our growth initiatives. However, over time we expect these expenses to decline as a percentage of revenue as we continue to realize operating leverage from the scaling of our platform, although period-to-period fluctuations may occur based on the timing of hiring, integration efforts, and other strategic investments.

Research and development

For the three months ended March 31, 2026, research and development expense totaled $0.6 million, a decrease of $0.2 million, or 27.4%, from $0.8 million in the comparable period in 2025. We expect research and development costs to remain consistent throughout the remainder of 2026 as we continue to invest in technology initiatives to support our clinical operations and service delivery capabilities.

Stock-based compensation

For the three months ended March 31, 2026, stock-based compensation totaled $2.5 million, an increase of 6.1% from the comparable period in 2025. The increase reflects our continued investment in employee retention and long-term incentive programs, including the broader integration of equity-based awards into our compensation structure. In recent years, we have increased the use of equity-based awards as part of our overall compensation programs, and the higher expense recognized during the three months ended March 31, 2026 reflects the cumulative impact of awards granted in both the current and prior years, as those awards continue to vest over their respective service periods.

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Loss (gain) on disposal of property and equipment

For the three months ended March 31, 2026, loss on disposal of property and equipment totaled $0.4 million compared to a gain on disposal of property and equipment of $2.4 million for the three months ended March 31, 2025. The gain recognized in the prior year period was primarily attributable to proceeds received from the sale of recalled ventilators back to the manufacturer in excess of their net book value.

The ventilator buyback program was substantially completed in 2025, and accordingly we do not expect additional material gains from these transactions in future periods. We may, however, continue to recognize gains or losses from the disposal of equipment in the ordinary course of business, including losses related to damaged or destroyed equipment.

Provision for income taxes

For the three months ended March 31, 2026, the provision for income taxes was a $1.3 million expense, compared to a $1.0 million expense during the 2025 period. Our annual estimated effective tax rate for 2026 is 29.7%.

Net income

For the three months ended March 31, 2026, net income was $2.7 million, consistent with the comparable period in 2025. Net income as a percentage of net revenue decreased from 4.6% for the three months ended March 31, 2025 to 3.6% for the three months ended March 31, 2026. The prior year period benefited from gains recognized from the ventilator buyback program, which did not recur in the current period, resulting in a lower net income margin despite growth in underlying operating performance.

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