Executive Summary & Business Update BrightSpring reports strong Q2 2025 results, updates full-year guidance, and announces a planned divestiture [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) BrightSpring Health Services reported strong Q2 2025 financial results, with significant revenue and Adjusted EBITDA growth, while net income from continuing operations remained flat. All figures exclude the Community Living business | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | YoY Change | | :-------------------------------- | :----------------- | :----------------- | :--------- | | Net Revenue | $3,148 | $2,438 | +29.1% | | Gross Profit | $375 | $312 | +20.1% | | Net Income from Continuing Operations | $8.5 | $8.5 | Flat | | Adjusted EBITDA | $143 | $111 | +28.8% | [Full Year 2025 Guidance Update](index=1&type=section&id=Full%20Year%202025%20Guidance%20Update) The company increased its full-year 2025 guidance for both Revenue and Adjusted EBITDA, which excludes the Community Living business and the effects of any future closed acquisitions | Metric | Revised FY 2025 Guidance (Millions) | | :---------------- | :-------------------------------- | | Revenue | $12,200 - $12,600 | | Adjusted EBITDA | $590 - $605 | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Jon Rousseau highlighted the company's strong overall business performance, attributing it to a focus on high-quality care, operational excellence, and strategic investments. He emphasized the commitment to delivering coordinated services and excellent care to complex patient populations in the Pharmacy and Provider businesses - CEO Jon Rousseau stated that **strong business performance** is underpinned by a focus on high-quality care, operational excellence, and investment in best practices across prioritized markets and services[2](index=2&type=chunk) - The company is committed to delivering coordinated services and excellent care to complex patient populations in its Pharmacy and Provider businesses, providing significant value to the healthcare system[2](index=2&type=chunk) [Planned Divestiture](index=1&type=section&id=Planned%20Divestiture) BrightSpring announced the planned divestiture of its Community Living business to Sevita, which is expected to close in Q4 2025 - Planned divestiture of Community Living business to Sevita, announced on January 20, 2025, is expected in **Q4 2025**[5](index=5&type=chunk) Company Information BrightSpring provides integrated home- and community-based pharmacy and provider health solutions for complex populations [About BrightSpring Health Services](index=3&type=section&id=About%20BrightSpring%20Health%20Services) BrightSpring Health Services is a leading provider of complementary home- and community-based pharmacy and provider health solutions for complex populations, offering integrated care across various service lines in all 50 states - BrightSpring provides complementary home- and community-based pharmacy and provider health solutions for complex populations needing specialized and/or chronic care[12](index=12&type=chunk) - The company offers comprehensive and integrated care and clinical solutions in all 50 states to over **460,000 customers, clients, and patients daily**, across service lines including pharmacy, home health care, primary care, rehabilitation, and behavioral health[12](index=12&type=chunk) - BrightSpring consistently demonstrates **strong quality metrics**, improving quality of life for high-need individuals and reducing overall healthcare system costs[12](index=12&type=chunk) Detailed Financial Performance This section details BrightSpring's Q2 2025 consolidated results and updated full-year 2025 guidance [Second Quarter 2025 Consolidated Results](index=1&type=section&id=Second%20Quarter%202025%20Consolidated%20Results) BrightSpring reported robust revenue growth and improved profitability metrics for Q2 2025, driven by strong performance in both Pharmacy Solutions and Provider Services segments. All figures exclude the Community Living business [Revenue Breakdown by Segment](index=2&type=section&id=Revenue%20Breakdown%20by%20Segment) Pharmacy Solutions and Provider Services segments contributed to significant year-over-year revenue growth in Q2 2025 | Revenue Segment | Q2 2025 (Millions) | Q2 2024 (Millions) | YoY Growth | | :---------------------- | :----------------- | :----------------- | :--------- | | Pharmacy Solutions | $2,790 | $2,114 | 32% | | Provider Services | $358 | $324 | 11% | | Total Revenue | $3,148 | $2,438 | 29% | [Segment EBITDA](index=2&type=section&id=Segment%20EBITDA) Both Pharmacy Solutions and Provider Services segments demonstrated strong EBITDA growth in Q2 2025 | EBITDA Segment | Q2 2025 (Millions) | Q2 2024 (Millions) | YoY Growth | | :-------------------------- | :----------------- | :----------------- | :--------- | | Pharmacy Solutions segment EBITDA | $125 | $94 | 32% | | Provider Services segment EBITDA | $56 | $51 | 11% | | Total Segment Adjusted EBITDA | $181 | $145 | 25% | | Total Company Adjusted EBITDA | $143 | $111 | 29% | [Full Year 2025 Financial Guidance Details](index=2&type=section&id=Full%20Year%202025%20Financial%20Guidance%20Details) BrightSpring increased its full-year 2025 financial guidance, projecting substantial growth in both total revenue and Adjusted EBITDA, with specific targets for each operating segment. This guidance excludes the Community Living business and the effects of any future closed acquisitions [Revenue Guidance by Segment](index=2&type=section&id=Revenue%20Guidance%20by%20Segment) BrightSpring projects substantial full-year 2025 revenue growth across both Pharmacy and Provider segments | Revenue Segment | FY 2025 Guidance (Millions) | Growth Rate (YoY) | | :---------------------- | :-------------------------- | :---------------- | | Net Revenue (Total) | $12,200 - $12,600 | 21.1% - 25.1% | | Pharmacy Segment Revenue | $10,750 - $11,100 | 22.8% - 26.8% | | Provider Segment Revenue | $1,450 - $1,500 | 10.0% - 13.8% | [Adjusted EBITDA Guidance](index=2&type=section&id=Adjusted%20EBITDA%20Guidance) The company anticipates significant growth in full-year 2025 Adjusted EBITDA | Metric | FY 2025 Guidance (Millions) | Growth Rate (YoY) | | :-------------- | :-------------------------- | :---------------- | | Adjusted EBITDA | $590 - $605 | 28.2% - 31.5% | Consolidated Financial Statements This section presents BrightSpring's consolidated balance sheets, statements of operations, and cash flows [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, BrightSpring reported an increase in total assets, primarily driven by a significant rise in current assets held for sale, while total liabilities slightly decreased, leading to an increase in total shareholders' equity | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :-------------- | :---------------- | :----- | | Total assets | $5,943,597 | $5,926,140 | +$17,457 | | Current assets held for sale | $850,455 | $131,447 | +$719,008 | | Total current assets | $2,647,959 | $1,893,054 | +$754,905 | | Total liabilities | $4,198,174 | $4,274,555 | -$76,381 | | Total shareholders' equity | $1,742,890 | $1,647,855 | +$95,035 | [Consolidated Statements of Operations](index=8&type=section&id=Consolidated%20Statements%20of%20Operations) For the three months ended June 30, 2025, BrightSpring experienced substantial revenue growth, leading to increased gross profit and operating income, with net income from continuing operations remaining stable. For the six months, the company turned a net loss into a net income | Metric (in thousands) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------------------------ | :------ | :------ | :------- | :------- | | Total revenues | $3,147,698 | $2,438,254 | $6,025,827 | $4,724,020 | | Gross profit | $374,852 | $312,176 | $713,221 | $604,667 | | Operating income | $48,557 | $38,653 | $99,296 | $23,318 | | Income (loss) from continuing operations, net of income taxes | $8,541 | $8,486 | $17,757 | $(47,541) | | Net income (loss) | $27,542 | $19,441 | $56,552 | $(26,944) | | Basic EPS (Continuing operations) | $0.05 | $0.05 | $0.09 | $(0.25) | | Diluted EPS (Continuing operations) | $0.04 | $0.04 | $0.09 | $(0.25) | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) In Q2 2025, BrightSpring generated positive net cash from operating activities, a significant improvement from a net cash outflow in the prior year, while investing activities remained a net cash outflow | Metric (in thousands) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------------------------ | :------ | :------ | :------- | :------- | | Net cash provided by (used in) operating activities | $49,076 | $(15,225) | $150,674 | $(94,084) | | Net cash used in investing activities | $(23,243) | $(57,692) | $(47,434) | $(88,630) | | Net cash (used in) provided by financing activities | $(8,243) | $39,907 | $(94,261) | $194,670 | | Net increase (decrease) in cash and cash equivalents | $17,590 | $(33,010) | $8,979 | $11,956 | | Cash and cash equivalents at end of period | $70,232 | $25,027 | $70,232 | $25,027 | Non-GAAP Financial Measures This section defines BrightSpring's non-GAAP financial measures and provides reconciliations for key metrics [Definition and Rationale](index=5&type=section&id=Definition%20and%20Rationale) BrightSpring uses non-GAAP financial measures like EBITDA and Adjusted EBITDA to provide supplemental insights into its operating performance, believing they assist investors and analysts by excluding items not indicative of core operations and highlighting performance trends - Non-GAAP measures like EBITDA and Adjusted EBITDA are used as supplemental measures to assist investors and analysts in comparing operating performance across reporting periods consistently[19](index=19&type=chunk) - Management uses these measures to evaluate business strategies, make budgeting decisions, award incentive compensation, and compare performance against peers[21](index=21&type=chunk) - EBITDA is defined as net income (loss) from continuing operations before income tax expense (benefit), interest expense, net, and depreciation and amortization. Adjusted EBITDA further excludes non-cash share-based compensation, acquisition/integration/transaction-related costs, restructuring/divestiture-related costs, legal costs, significant projects, and management fees[23](index=23&type=chunk) [Reconciliation of EBITDA and Adjusted EBITDA](index=10&type=section&id=Reconciliation%20of%20EBITDA%20and%20Adjusted%20EBITDA) The reconciliation shows a significant increase in Adjusted EBITDA for both the three and six months ended June 30, 2025, compared to the prior year, after adjusting for various non-cash and non-recurring items | Metric (in thousands) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------- | :------ | :------ | :------- | :------- | | Net income (loss) | $8,541 | $8,486 | $17,757 | $(47,541) | | Income tax expense (benefit) | $1,238 | $(13,115) | $998 | $(39,619) | | Interest expense, net | $38,778 | $43,282 | $80,541 | $97,752 | | Depreciation and amortization | $41,839 | $39,700 | $82,671 | $78,936 | | EBITDA | $90,396 | $78,353 | $181,967 | $89,528 | | Total adjustments | $52,121 | $32,284 | $91,612 | $123,324 | | Adjusted EBITDA | $142,517 | $110,637 | $273,579 | $212,852 | - Key adjustments for Q2 2025 included **$19.5 million** for non-cash share-based compensation and **$19.8 million** for acquisition, integration, and transaction-related costs[33](index=33&type=chunk) [Reconciliation of Adjusted EPS](index=11&type=section&id=Reconciliation%20of%20Adjusted%20EPS) Adjusted EPS for Q2 2025 significantly increased to $0.22 from $0.06 in Q2 2024, and for the six months, it rose to $0.42 from $0.16, reflecting the impact of various non-GAAP adjustments | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :---------------------------------------------------------------- | :------ | :------ | :------- | :------- | | Diluted EPS | $0.04 | $0.04 | $0.09 | $(0.25) | | Non-cash share-based compensation (adjustment) | $0.09 | $0.06 | $0.15 | $0.19 | | Acquisition, integration, and transaction-related costs (adjustment) | $0.09 | $0.02 | $0.14 | $0.07 | | Restructuring and divestiture-related and other costs (adjustment) | $0.06 | $0.05 | $0.14 | $0.18 | | Adjusted EPS | $0.22 | $0.06 | $0.42 | $0.16 | Other Information This section covers BrightSpring's webcast, forward-looking statements, risk factors, and contact information [Webcast and Conference Call](index=3&type=section&id=Webcast%20and%20Conference%20Call) BrightSpring hosted a conference call on August 1, 2025, to discuss the Q2 2025 results, with a live and archived webcast available on its investor relations website - BrightSpring hosted a conference call on **August 1, 2025, at 8:30 a.m. Eastern Time**, for investors to discuss the second quarter 2025 financial results[10](index=10&type=chunk) - A live and archived webcast, along with supplemental financial information, is available on the 'Events & Presentations' section of the BrightSpring investor relations website[11](index=11&type=chunk) [Forward-Looking Statements and Risk Factors](index=3&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) The press release contains forward-looking statements subject to various risks and uncertainties, including competitive industry, changes in healthcare rates, reliance on personnel, and regulatory compliance, which could cause actual results to differ materially from expectations - The press release contains 'forward-looking statements' regarding operations and financial performance, identified by words such as 'anticipate,' 'expect,' 'guidance,' etc[13](index=13&type=chunk) - These statements are based on management's current expectations but are subject to various risks, uncertainties, assumptions, or changes in circumstances that are difficult to predict or quantify[14](index=14&type=chunk) - Key risk factors include operating in a **highly competitive industry**, changes to **Medicare and Medicaid rates**, cost containment initiatives, reliance on federal and state spending, changes in drug pricing, and the ability to recruit and retain qualified personnel[14](index=14&type=chunk)[15](index=15&type=chunk) [Investor and Media Contacts](index=6&type=section&id=Investor%20and%20Media%20Contacts) Contact information for investor relations and media inquiries is provided for BrightSpring Health Services - Investor Relations contact: **David Deuchler, CFA, Gilmartin Group LLC, ir@brightspringhealth.com**[25](index=25&type=chunk) - Media Contact: **Leigh White, leigh.white@brightspringhealth.com, 502.630.7412**[25](index=25&type=chunk)

Core Viewpoint - BrightSpring Health Services, Inc. reported strong financial results for Q2 2025, with significant increases in revenue and adjusted EBITDA, and has raised its full-year guidance for both metrics [1][6]. Financial Highlights - Net Revenue reached $3,148 million, a 29.1% increase from $2,438 million in Q2 2024 [3][6]. - Gross Profit was $375 million, up 20.1% from $312 million in Q2 2024 [3][6]. - Adjusted EBITDA rose to $143 million, reflecting a 28.8% increase compared to $111 million in Q2 2024 [3][6]. - Net Income from Continuing Operations was $8.5 million, unchanged from Q2 2024 [3][6]. Segment Performance - Pharmacy Solutions Revenue was $2,790 million, a 32% increase from $2,114 million in Q2 2024 [5]. - Provider Services Revenue reached $358 million, an 11% increase from $324 million in Q2 2024 [5]. Guidance Update - The company increased its 2025 Revenue guidance to between $12,200 million and $12,600 million, representing a growth of 21.1% to 25.1% [6][14]. - Adjusted EBITDA guidance for 2025 was raised to between $590 million and $605 million, indicating a growth of 28.2% to 31.5% [6][14]. Strategic Focus - The company emphasizes its commitment to high-quality care and operational excellence, particularly in its Pharmacy and Provider businesses, which are crucial for serving complex patient populations [2][12].

Core Viewpoint - BrightSpring Health Services, Inc. (BTSG) is expected to report a year-over-year increase in earnings and revenues for the quarter ended June 2025, with a consensus EPS estimate of $0.19, reflecting a 90% increase, and revenues projected at $2.99 billion, up 9.4% from the previous year [1][3]. Earnings Expectations - The stock price may rise if the actual earnings exceed expectations in the upcoming report, scheduled for August 1, while a miss could lead to a decline [2]. - The consensus EPS estimate has been revised 3.68% higher in the last 30 days, indicating a positive reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive or negative Earnings ESP reading indicates the likely deviation of actual earnings from the consensus estimate, with a positive reading being a strong predictor of an earnings beat [9][10]. - For BrightSpring, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -8.11%, suggesting a bearish outlook [12]. Historical Performance - BrightSpring has beaten consensus EPS estimates in two out of the last four quarters, with a notable surprise of +137.50% in the last reported quarter [14][15]. Industry Comparison - CVS Health, a competitor in the Zacks Medical Services industry, is expected to report an EPS of $1.47, reflecting a year-over-year decrease of 19.7%, with revenues projected at $93.72 billion, up 2.7% [20]. - CVS Health has a positive Earnings ESP of +2.06% and a Zacks Rank of 2, indicating a likely earnings beat, having surpassed consensus EPS estimates in the last four quarters [20][21].

Company Overview - BrightSpring Health Services, Inc. (BTSG) is part of the Medical group, which consists of 986 companies and currently ranks 8 within the Zacks Sector Rank [2] - The company is categorized under the Medical Services industry, which includes 58 companies and is ranked 91 in the Zacks Industry Rank [6] Performance Metrics - Year-to-date, BTSG has returned approximately 17.8%, significantly outperforming the Medical sector's average return of -4.6% [4] - Over the past three months, the Zacks Consensus Estimate for BTSG's full-year earnings has increased by 23.3%, indicating improved analyst sentiment and earnings outlook [4] Zacks Rank - BrightSpring Health Services, Inc. currently holds a Zacks Rank of 2 (Buy), suggesting it is poised to outperform the broader market in the next one to three months [3] - In comparison, another Medical sector stock, Incyte (INCY), also has a Zacks Rank of 2 (Buy) and has returned 0.2% year-to-date [5][7]

Core Viewpoint - BrightSpring Health Services, Inc. (BTSG) has faced significant selling pressure, resulting in a 10.4% decline in stock price over the past four weeks, but analysts anticipate improved earnings in the near future [1] Group 1: Technical Indicators - The Relative Strength Index (RSI) for BTSG is currently at 23.81, indicating that the stock may be oversold and could experience a price rebound as selling pressure exhausts [5] - RSI is a momentum oscillator that helps identify whether a stock is overbought or oversold, with readings below 30 typically indicating an oversold condition [2][3] Group 2: Fundamental Indicators - There has been a strong consensus among sell-side analysts to raise earnings estimates for BTSG, leading to a 3.2% increase in the consensus EPS estimate over the last 30 days, which often correlates with price appreciation [7] - BTSG holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, suggesting a potential turnaround [8]

Market Overview - Volatility in the U.S. stock market is expected to continue due to uncertainty regarding interest rate cuts, new tariffs, and geopolitical tensions, complicating portfolio management for individual investors [1] Investment Strategy - Selecting inappropriate stocks can negatively affect returns, undermining investment goals; adhering to broker advice is suggested as brokers possess extensive knowledge of stocks and the broader economy [2] Recommended Stocks - Broker-friendly stocks identified for potential healthy returns include BrightSpring Health Services (BTSG), GXO Logistics (GXO), BrightView Holdings (BV), Bloomin' Brands (BLMN), and Archer Daniels Midland Company (ADM) [3][9] Screening Methodology - A screening strategy was developed to identify stocks based on improving broker recommendations and upward revisions in earnings estimates over the past four weeks, incorporating the price/sales ratio as a valuation metric [4] Screening Criteria - The screening criteria include: - Top 75 companies with net upgrades in broker ratings over the last four weeks [5] - Top 10 stocks with positive earnings estimate revisions for the upcoming quarter [5] - Bottom 10% of stocks based on price/sales ratio [5] - Stocks priced above $5 to attract investor interest [5] - Average daily volume exceeding 100,000 shares over the last 20 trading days [6] - Top 3000 stocks by market capitalization [6] Company Highlights - **BrightSpring Health Services (BTSG)**: Expected earnings growth rate of 55.4% for 2025, with a projected revenue increase of 9.1% over 2024; currently holds a Zacks Rank 2 (Buy) [7][9] - **GXO Logistics (GXO)**: Benefits from increased e-commerce and cost-cutting efforts; projected revenue growth of 9.9% for 2025; currently holds a Zacks Rank 3 (Hold) [10][11] - **BrightView Holdings (BV)**: Largest commercial landscaper in the U.S., with expected earnings growth of 10.5% for 2025; currently holds a Zacks Rank 3 [12][13] - **Bloomin' Brands (BLMN)**: Performance driven by off-premise channels and technology upgrades; Zacks Consensus Estimate for 2025 earnings revised upward by 1.7% [14][15] - **Archer Daniels Midland Company (ADM)**: Focus on flexitarian diets and sustainable materials; currently holds a Zacks Rank 3 [16][17]

Company Overview - BrightSpring Health Services, Inc. provides home- and community-based pharmacy and provider health solutions for complex populations requiring specialized and chronic care [3] - The company operates across all 50 states, serving over 450,000 customers, clients, and patients daily [3] - BrightSpring has shown strong quality metrics across its service lines, improving the quality of life for high-need individuals while reducing overall healthcare costs [3] Financial Results Announcement - BrightSpring plans to release its second quarter 2025 financial results on August 1, 2025, prior to its earnings conference call [1] - The earnings conference call is scheduled for 8:30 a.m. ET on the same day [1] Conference Call Participation - Interested participants must register before the conference call starts at 8:30 a.m. ET [2] - A live and archived webcast of the call will be available on the company's investor relations website [2]

Core Insights - The healthcare industry is transitioning towards decentralized, patient-centric care models, with home infusion and specialty pharmacy services emerging as key growth areas [1] - BrightSpring Health Services (BTSG) and Option Care Health (OPCH) are two notable players capitalizing on the demand for cost-effective, high-quality treatment options [1] BrightSpring Health Services (BTSG) - BTSG achieved a remarkable 33% year-over-year growth in its infusion and specialty pharmacy segment in Q1 2025, driven by a 20% increase in prescription volumes and the launch of 127 limited distribution drugs [2][6] - The company reported operational excellence with a dispense accuracy of 99.999%, 95% infusion satisfaction, and over 90% home health satisfaction [7] - Adjusted EBITDA improved by 28% in Q1, with Pharmacy Solutions contributing 31% growth, supported by rising script volumes and operational initiatives [8] - Management raised the 2025 revenue guidance to between $12.0 billion and $12.5 billion, with adjusted EBITDA projected to be between $570 million and $585 million, indicating a potential growth of up to 27% [9][10] - The Zacks Consensus Estimate suggests an 82.1% improvement in BTSG's 2025 earnings per share (EPS) compared to 2024 [14] Option Care Health (OPCH) - OPCH reported a 16% year-over-year revenue growth in Q1, with mid-teens growth in acute therapies and high-teens growth in chronic, rare, and orphan therapies [11] - The company is leveraging AI and robotic process automation (RPA) to enhance operational efficiency and margin expansion [12] - Adjusted EBITDA improved by 13.7% year-over-year, leading to an 8.4% EBITDA margin, while the company repurchased $100 million in stock in Q1 [13] - OPCH's full-year 2025 revenue guidance is set between $5.4 billion and $5.6 billion, with EBITDA projected at $455 million to $470 million [13] - The Zacks Consensus Estimate indicates a 36.6% improvement in OPCH's 2025 EPS over the previous fiscal year [16] Comparative Analysis - BTSG is trading at a forward price-to-sales ratio of 0.31X, above its one-year median of 0.25X, while OPCH is at 0.90X, below its 5-year median of 0.97X, indicating that BTSG is more attractively valued relative to its growth [17] - Recommendations suggest buying BTSG due to its faster revenue and EBITDA growth, while holding OPCH as it makes strategic advancements [18]

Core Insights - BrightSpring Health Services, Inc. (BTSG) has raised its full-year 2025 financial outlook, expecting total revenues between $12.0-$12.5 billion, up from $11.6-$12.1 billion, indicating year-over-year growth of 19.1-24.1% [1][7] - Adjusted EBITDA is projected to be in the range of $570-$585 million, an increase from $545-$560 million, reflecting a robust growth of 23.9-27.2% [1][7] - The Pharmacy Solutions segment is anticipated to generate revenues of $10.55-$11.0 billion, while the Provider Services segment is forecasted to bring in $1.45-$1.50 billion [1] Financial Performance - The revenue growth in the Pharmacy Solutions segment is driven by a 33% year-over-year increase in revenues and a 20% rise in prescription volume, particularly in specialty and infusion services [2] - The Provider care segment is experiencing double-digit growth, supported by quality-driven outcomes and broader payer contracts [2] - BrightSpring is investing in advanced technologies to enhance operational efficiency across both pharmacy and provider segments [2] Margin Expansion - Margin expansion initiatives, including procurement improvements and operational efficiencies, are expected to support margin gains starting in the second quarter of 2025 [3] - Disciplined cost management through lean initiatives and optimized purchasing is enhancing gross profit and EBITDA margins [3] - The company's strategic focus on home and community-based care is driving both volume and profitability [3] Competitor Performance - Cardinal Health, Inc. (CAH) has raised its full-year fiscal 2025 guidance, anticipating adjusted earnings per share between $8.05 and $8.15, up from $7.85-$8.00, benefiting from strong specialty and pharmaceutical sales [4] - Addus HomeCare Corporation (ADUS) has reaffirmed its long-term goal of 10% annual revenue growth, with adjusted EBITDA margin expected to remain above 12% for the full year [5] Stock Performance and Valuation - BrightSpring's shares have gained 114.8% over the past year, contrasting with a 17.8% decline in the industry and a 9.8% rise in the S&P 500 [6] - The company trades at a 12-month forward price-to-earnings ratio of 20.77, compared to the industry's 14.24 [8] - The Zacks Consensus Estimate for BTSG's earnings has increased over the past 60 days, indicating positive market sentiment [10]

Core Insights - BrightSpring Health Services (BTSG) reported strong financial results for Q1 2025, with total revenues increasing by 26% year over year to $2.9 billion and adjusted EBITDA rising by 28% to $131 million, despite facing operational and macroeconomic challenges [3][8] - The company raised its full-year guidance, expecting total revenues between $12 billion and $12.5 billion, which represents a year-over-year growth of 19.1% to 24.1%, and adjusted EBITDA guidance increased to $570 million to $585 million, marking a growth of 23.9% to 27.2% [4][8] Financial Performance - Total revenues for Q1 2025 were $2.9 billion, with Pharmacy Solutions and Provider Services segments growing by 28% and 12% respectively [3][8] - Adjusted EBITDA for the same period was $131 million, supported by operational efficiency initiatives and volume leverage [3][8] Operational Challenges - The company faced a negative impact of $3.7 million on EBITDA due to fewer business days in Q1 2025 compared to Q1 2024 [2] - 10% of the company's revenues are derived from Medicaid, which poses reimbursement risks due to potential federal or state-level cuts [2] - The gross margin was modestly impacted by a revenue mix shift towards the lower-margin specialty pharmacy segment [2] Market Position and Valuation - BrightSpring's shares have gained 114.8% over the past year, significantly outperforming the industry, which saw a decline of 16.2% [7] - The company currently trades at a 12-month forward price-to-earnings ratio of 20.36, compared to the industry's 14.25 [9] Peer Comparison - Option Care Health (OPCH) and Amedisys (AMED) also reported strong financial performances in Q1 2025, with OPCH seeing revenue and margin growth driven by infusion therapy demand, and AMED experiencing consistent growth in hospice and home health services [5][6]