GMR Solutions NYSE: GMRS reported higher third-quarter revenue and earnings as demand for emergency medical services grew, but lowered the top end of its full-year revenue outlook amid unfavorable flying conditions and limited hurricane deployment activity.
The company maintained its 2026 adjusted EBITDA guidance, saying a shift toward emergency transports and cost management would help offset higher fuel and other inflationary expenses.
Revenue rose 5.9% from a year earlier to $1.6 billion, while adjusted EBITDA increased 4.2% to $357 million. Net income was $135.6 million, up from $74.6 million in the prior-year quarter. Adjusted diluted earnings per share, a metric the company began reporting this quarter, were $0.64.
CEO Nick Loporcaro began the call by acknowledging the deaths of two team members and a patient in a rotor accident off Catalina Island on Sept. 30. One team member and the patient’s attendant survived. Loporcaro said GMR is cooperating with the Federal Aviation Administration and National Transportation Safety Board as they investigate the cause.
Emergency demand and new markets support growth
GMR completed approximately 1.4 million patient encounters during the quarter, including more than 1 million ground transports and nearly 38,000 air medical patients. Its 911 Nurse Navigation service supported more than 32,000 calls, an increase of 51% from a year earlier, across 30 communities.
Emergent ground transports increased 3.4%, while non-emergent ground transports declined 1%, reflecting the company’s strategy of redirecting resources toward higher-acuity responses, CFO Brian Tierney said. Air demand rose 2.8%, but air transports were essentially flat as worse weather reduced the proportion of requests GMR could fulfill.
President and COO Ted Van Horne said GMR launched three 911 systems, two air bases and one inter-facility market during the quarter. The company also signed agreements representing more than $50 million in incremental annualized revenue. Revenue from existing markets rose $88.7 million, or 6%, and new markets contributed $28.2 million.
Net transport revenue per ambulance transport increased 3%, helped by a shift toward emergency transports and underlying improvements on a like-for-like basis. Tierney said the increase was partly offset by an approximately $16 million impact from patients moving from commercial insurance to self-pay following the expiration of Affordable Care Act exchange subsidies.
Revenue outlook narrowed as costs rise
GMR now expects 2026 revenue of $5.9 billion to $6.05 billion, with a midpoint of $5.975 billion. Tierney attributed the revision to less favorable flying conditions during the third quarter and into the fourth quarter, as well as minimal hurricane deployment activity.
The company maintained its adjusted EBITDA forecast of $1.135 billion to $1.195 billion. It expects cash used for capital expenditures and aircraft financing to equal 5.2% to 5.4% of revenue.
Maintenance, fuel and other direct expenses rose 25.1% to $150 million in the third quarter, driven primarily by aircraft maintenance timing and approximately $11 million in higher fuel unit costs associated with the Iran conflict. Tierney said fuel and related supplier costs are expected to remain elevated into 2027, though most contracts include consumer-price-index-related rate increases next year.
GMR plans to address those pressures through procurement, operating efficiencies, resource deployment and service mix, Tierney said, adding that those measures may not fully offset the near-term impact.
Collections and leverage remain in focus
Third-quarter revenue included $18 million in changes to estimates, predominantly related to No Surprises Act claims, about $37 million less than in the prior-year quarter. Tierney said those changes related to older dates of service, generally 18 to 24 months old, and that such adjustments should move closer to zero over time.
Loporcaro said GMR continues to pursue in-network agreements with insurers while seeking payment for eligible out-of-network emergency services. Tierney said some payers have not paid within No Surprises Act timelines since the law’s inception, and that GMR renewed contracts with several large multistate payers during the quarter.
Free cash flow increased to approximately $110 million from $79 million a year earlier. GMR ended the quarter with $298 million in cash and $701 million of available borrowing capacity under its undrawn asset-based lending facility after letters of credit.
The company used approximately $200 million of cash to repay term loan borrowings and repriced the facility by 50 basis points. Tierney said the actions are expected to save approximately $28 million in annual cash interest expense. Net leverage fell to 3.4 times from 4.3 times a year earlier, and management said it has a path to approximately 3.0 times before the end of 2027.
Loporcaro identified deleveraging as GMR’s top capital-allocation priority, followed by operating investments. He said the company is also considering smaller acquisitions in adjacent markets, but will scrutinize their expected returns.
About GMR Solutions (NYSE:GMRS)
GMR Solutions Inc. is a provider of emergency medical services delivering EMS and other essential out-of-hospital care in rural and urban communities. GMR Solutions Inc. is based in Lewisville, Texas.
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