Revenue Growth - Revenue for Q2 2024 increased by $563.5 million, or 26.0%, reaching $2.7 billion compared to Q2 2023[70] - Pharmacy Solutions segment revenue grew by $517.7 million, or 32.4%, to $2.1 billion, while Provider Services segment revenue increased by $45.8 million, or 8.0%, to $615.7 million[70] - Total revenues for the three months ended June 30, 2024, were $2,730.2 million, an increase of $563.5 million or 26.0% compared to $2,166.7 million for the same period in 2023[93] - Total revenues for the six months ended June 30, 2024, were $5,306.8 million, an increase of $1,111.7 million or 26.5% compared to $4,195.1 million for the same period in 2023[103] - Revenues for the Pharmacy Solutions segment for the three months ended June 30, 2024, were $2,114.5 million, an increase of $517.7 million or 32.4% compared to $1,596.8 million in 2023[111] - Revenues for the six months ended June 30, 2024, were $4,091.5 million, an increase of $1,027.7 million or 33.5% compared to the same period in 2023[117] Profitability and Income - Net income rose by $15.9 million to $19.9 million; excluding a $30 million quality incentive payment from Q2 2023, net income increased by $46.8 million[70] - Income per share increased from $0.03 to $0.10, reflecting a $0.07 increase[70] - Net income for the three months ended June 30, 2024, was $19.4 million, a significant increase of $16.7 million from $2.8 million in the same period of 2023[99] - Adjusted EBITDA decreased by $10.3 million, or 6.9%, to $139.1 million; excluding the $30 million quality incentive payment, it increased by $19.9 million, or 16.7%[70] - Adjusted EBITDA for the six months ended June 30, 2024, was $269.6 million, an increase of $4.9 million or 1.9% from $264.7 million in 2023[108] Costs and Expenses - Cost of goods for the three months ended June 30, 2024, was $1,931.8 million, reflecting an increase of $522.5 million or 37.1% from $1,409.2 million in the prior year[94] - Cost of services increased to $409.4 million for the three months ended June 30, 2024, up $24.0 million or 6.2% from $385.4 million in the same period of 2023[95] - Selling, general, and administrative expenses rose to $326.6 million for the three months ended June 30, 2024, an increase of $34.2 million or 11.7% compared to $292.5 million in 2023[96] - The cost of goods for the six months ended June 30, 2024, was $3,738.9 million, an increase of $1,022.6 million or 37.6% from $2,716.2 million in 2023[104] - Selling, general, and administrative expenses for the six months ended June 30, 2024, were $687.9 million, an increase of $112.3 million or 19.5% from $575.6 million in 2023[105] Acquisitions and Growth Initiatives - The company completed three acquisitions within its Pharmacy Solutions and Provider Services segments[70] - The company opened four de novo offices in the second fiscal quarter of 2024, expanding its geographic footprint in pharmacy and provider services[81] - The company serves over 400,000 patients daily through over 10,000 clinical providers and pharmacists across all 50 states[69] - The company serves approximately 20,000 patients today, with significant opportunities for delivering integrated care across its pharmacy and provider services[80] Debt and Financing - The initial public offering (IPO) raised net proceeds of $656.5 million from common stock and $389.0 million from tangible equity units, totaling $1.045 billion[83] - Approximately $343.3 million of the IPO proceeds were used to repay outstanding debt under the First Lien Facility[83] - Total long-term debt as of June 30, 2024, was $2,563.5 million, down from $3,331.9 million as of December 31, 2023, reflecting a leverage ratio of 4.51x[150] - The company incurred a loss on extinguishment of debt of $12.7 million related to the repayment of the Second Lien Facility using IPO proceeds[145] - The company issued 8,000,000 Tangible Equity Units (TEUs) with a stated amount of $50.00 per unit, which will yield quarterly cash installments equivalent to 6.75% per year[149] Operational Challenges - The company faces challenges in passing on increased costs associated with providing services to Medicare and Medicaid patients due to fixed reimbursement rates established by federal and state laws[152] - Labor shortages in the healthcare industry are expected to impact the company's operations, particularly in homecare services[153] - The company is experiencing rising costs in pharmaceutical drug prices, which are passed along from suppliers[153] - Inflationary impacts in the supply chain are anticipated, but the company cannot predict its ability to manage and mitigate future cost increases[153] - The company has limited ability to pass on increased costs to customers due to the nature of its service agreements[153] - Managing labor costs remains a significant priority for the company amid ongoing inflationary pressures[153] - The market risks associated with the company's debt obligations have not changed from those reported in the previous annual report[152] - The company continues to monitor the effects of inflation on its operations and financial performance[153]

Financial Performance - Net revenue for Q2 2024 was $2,730 million, representing a 26.0% increase from $2,167 million in Q2 2023[2] - Net income for Q2 2024 was $19.4 million, compared to $2.8 million in Q2 2023[2] - Adjusted EBITDA for Q2 2024 was $139 million, down 6.9% from $149 million in Q2 2023; however, excluding a $30 million Quality Incentive Payment in 2023, it increased by 16.7% compared to $119 million in Q2 2023[2][3] - The company reported a gross profit of $389 million for Q2 2024, up 4.6% from $372 million in Q2 2023; excluding the QIP, the growth rate was 13.8%[3] - Total revenues for Q2 2024 reached $2,730,210, a 26% increase from $2,166,724 in Q2 2023[33] - Product revenues were $2,114,491 in Q2 2024, up 32% from $1,596,839 in Q2 2023[33] - Gross profit for Q2 2024 was $389,033, compared to $372,070 in Q2 2023, reflecting a gross margin improvement[33] - Operating income decreased to $62,414 in Q2 2024 from $79,616 in Q2 2023, indicating challenges in managing operating expenses[33] - Net income for Q2 2024 was $19,441, a significant recovery from a net loss of $2,766 in Q2 2023[33] - Adjusted EBITDA for Q2 2024 was $139,142 thousand, compared to $149,427 thousand in Q2 2023[35] Revenue Guidance - Full year 2024 revenue guidance was increased to between $10,450 million and $10,900 million, indicating growth of 18.4% to 23.5% over 2023[7] - Adjusted EBITDA guidance for 2024 was raised to between $570 million and $580 million, reflecting a growth of 12.2% to 14.2% over 2023[7] - The Pharmacy Segment is expected to generate revenue between $8,000 million and $8,400 million, representing a growth of 22.7% to 28.8% over 2023[7] - The Provider Segment is projected to achieve revenue between $2,450 million and $2,500 million, indicating growth of 6.3% to 8.5% over 2023[7] Cash and Liquidity - Cash and cash equivalents increased to $25,027 as of June 30, 2024, from $13,071 at the end of 2023, indicating improved liquidity[28] - Cash and cash equivalents at the end of Q2 2024 were $25,027 thousand, compared to $11,256 thousand at the end of Q2 2023[34] - Cash used in operating activities for Q2 2024 was $(15,225) thousand, an improvement from $(25,204) thousand in Q2 2023[34] - The company experienced a net cash provided by financing activities of $39,907 thousand in Q2 2024, down from $70,581 thousand in Q2 2023[34] Debt Management - Long-term debt decreased to $2,563,536 as of June 30, 2024, down from $3,331,941 at the end of 2023, showing improved debt management[31] - Long-term debt borrowings in Q2 2024 were $2,566,000 thousand, with no new borrowings reported in Q2 2023[34] Earnings Per Share - The company reported a basic income per share of $0.10 for Q2 2024, compared to $0.03 in Q2 2023, indicating improved profitability per share[33] - For the three months ended June 30, 2024, the diluted EPS was $0.10, compared to $0.03 for the same period in 2023, representing a 233% increase[38] - The adjusted EPS for the six months ended June 30, 2024, was $0.22, compared to $0.04 for the same period in 2023, indicating a 450% increase[38] - The adjusted EPS for the six months ended June 30, 2024, was $0.22, reflecting a significant improvement compared to $(0.15) in 2023[38] Costs and Expenses - Total adjustments to reconcile net income to Adjusted EBITDA amounted to $26,657 thousand for Q2 2024[35] - The company incurred $5,022 thousand in acquisition-related costs during Q2 2024[35] - Depreciation and amortization expenses for Q2 2024 were $50,071 thousand, slightly down from $50,205 thousand in Q2 2023[35] - Ransomware attack response costs for the first half of 2023 amounted to $0.5 million for the three months and $2.5 million for the six months ended June 30, 2023[36] Shareholder Information - The weighted average common shares outstanding used in calculating diluted EPS for the three months ended June 30, 2024, was 208,987 thousand, up from 126,449 thousand in 2023[38] - The income tax impact on adjustments for the three months ended June 30, 2024, was $(0.12), compared to $(0.04) in 2023[39] - The total management fees resulting from the Monitoring Agreement were $22.7 million, which ceased following the completion of the IPO[36]

Revenue and Growth - Revenue for Q1 2024 increased by $548.3 million, or 27.0%, to $2.6 billion compared to Q1 2023[78] - Pharmacy Solutions segment revenue grew by $510.0 million, or 34.8%, to $2.0 billion, while Provider Services segment revenue increased by $38.2 million, or 6.8%, to $599.6 million[78] - Total revenues for Q1 2024 were $2,576.6 million, a 27.0% increase from $2,028.4 million in Q1 2023[100] - Revenues for the Pharmacy Solutions segment reached $1,977.0 million in Q1 2024, a $510.0 million or 34.8% increase from $1,467.0 million in Q1 2023[108] - Home Health Care revenue was $242.0 million, up $19.1 million or 8.6% from $222.9 million in the prior year[113] - Community and Rehab Care revenue increased to $357.6 million, reflecting a $19.1 million or 5.6% rise from $338.5 million in the previous year[113] Financial Performance - Adjusted EBITDA for Q1 2024 increased by $15.2 million, or 13.2%, to $130.5 million[78] - Adjusted EBITDA for Q1 2024 was $130.5 million, up 13.2% from $115.3 million in Q1 2023[100] - Segment EBITDA for the Pharmacy Solutions segment was $88.2 million for Q1 2024, a $5.9 million or 7.1% increase from $82.3 million in Q1 2023[111] - Gross profit for Q1 2024 was $169.9 million, an increase of $9.9 million or 6.2% from $160.0 million in Q1 2023[109] - Gross profit reached $199.5 million, up $24.8 million or 14.2% from $174.7 million in the prior year[114] - The company reported a net loss of $46.4 million for Q1 2024, compared to a net loss of $22.3 million in Q1 2023[100] - The diluted EPS for the three months ended March 31, 2024, was $(0.26), compared to $(0.18) for the same period in 2023, reflecting a decline[123] - Adjusted EPS improved to $0.12 for the three months ended March 31, 2024, from $(0.10) in the same period of 2023[123] Expenses and Costs - The cost of goods for Q1 2024 was $1,807.1 million, reflecting a 38.3% increase from $1,306.9 million in Q1 2023[100] - Selling, general, and administrative expenses rose to $361.3 million in Q1 2024, a 27.6% increase from $283.2 million in Q1 2023[100] - Cost of services increased to $400.1 million for Q1 2024, up $13.5 million or 3.5% from $386.7 million in Q1 2023[102] - Selling, general, and administrative expenses were $134.4 million, reflecting a $7.2 million or 5.7% increase from $127.2 million in the previous year[115] Operational Highlights - The company serves over 400,000 patients daily through approximately 10,000 clinical providers and pharmacists across all 50 states[77] - Pharmacy services patient census and prescriptions grew by 11% and 9%, respectively, in Q1 2024 compared to Q1 2023[84] - In Q1 2024, the company opened 14 de novo offices and clinics, enhancing its presence in targeted markets[89] - Average daily census for Home Health Care increased to 42,928, up 4,103 or 10.6% from 38,825[113] - Prescriptions dispensed increased to 9,854,495 in Q1 2024, a growth of 826,584 or 9.2% from 9,027,911 in Q1 2023[108] Cash Flow and Liquidity - Net cash used in operating activities was $78.9 million for the three months ended March 31, 2024, compared to net cash provided of $39.9 million in the same period in 2023, a variance of $118.8 million[126] - Net cash used in investing activities increased to $30.9 million for the three months ended March 31, 2024, from $17.5 million in the same period of 2023, primarily due to $9.4 million paid for acquisitions[129] - Net cash provided by financing activities was $154.8 million for the three months ended March 31, 2024, primarily due to net proceeds from IPO offerings of $1,045.5 million[130] - The ending cash balance as of March 31, 2024, was $58.0 million, compared to $13.1 million at the end of December 31, 2023[127] - Total liquidity at the end of the period was $525.9 million, an increase from $431.5 million at the end of December 31, 2023[127] Debt and Financing - The company completed its IPO on January 30, 2024, raising net proceeds of $656.5 million from common stock and $389.0 million from tangible equity units[92] - Total outstanding debt as of March 31, 2024, was $2.639 billion, down from $3.414 billion as of December 31, 2023[135] - The company's leverage ratios were 4.33x and 5.86x under the First Lien and Second Lien Credit Agreements, respectively, as of March 31, 2024, and December 31, 2023[137] - The company incurred a loss on extinguishment of debt of $12.7 million related to the write-off of unamortized debt issuance costs following the IPO offerings[132] Challenges and Risks - The company faces challenges from inflation, particularly in labor costs, which are expected to rise due to a shortage of qualified caregivers[140] - The company anticipates continued growth in demand for homecare services, which may impact operational costs[140] - The company has not experienced significant impacts from inflation to date, but future cost increases remain a concern[140] - A hypothetical 1% increase in interest rates would decrease the company's cash flows by $6.4 million annually based on the debt level as of March 31, 2024[141]

Acquisitions and Market Expansion - The company acquired Abode Healthcare in April 2021, enhancing its service offerings in the healthcare sector[6]. - The company is actively expanding its market presence through new branch and facility openings, referred to as "de novo" locations[6]. - The company anticipates future growth driven by strategic acquisitions and market expansion initiatives[9]. - The company has completed 59 acquisitions since 2018, with a total purchase consideration exceeding $1.7 billion since January 2020, enhancing its market position[43]. - The company has expanded to 143 new locations since 2018, generating total revenue of $226.8 million in 2023, representing an 18.1% growth compared to the previous year[91]. Financial Performance and Metrics - Revenue grew from $6,698.1 million in 2021 to $8,826.2 million in 2023, primarily from organic growth and strategic acquisitions[24]. - Adjusted EBITDA increased from $493.1 million in 2021 to $537.8 million in 2023[24]. - Pharmacy Solutions segment revenue totaled $6,522.5 million in 2023, accounting for 73.9% of total revenue[23]. - Provider Services segment revenue totaled $2,303.7 million in 2023, accounting for 26.1% of total revenue[23]. - The company has a substantial indebtedness of approximately $3.4 billion as of December 31, 2023[13]. Patient Care and Satisfaction - The Medication Possession Ratio (MPR) is a key performance metric, with a compliance threshold set at over 80% under contracts with payors[7]. - The Net Promoter Score (NPS) is utilized to gauge patient satisfaction, with scores above 50 considered "excellent" and above 80 classified as "world class"[7]. - The overall patient satisfaction is measured through various quality metrics, reflecting the company's commitment to high standards of care[7]. - The company achieved 99.99% order accuracy and 98.20% order completeness across its pharmacies[27]. - The company has achieved a 98% satisfaction score for outpatient rehab services and 95% for home infusion patients, indicating strong customer satisfaction across its services[30]. Market Trends and Opportunities - The market for Senior and Specialty patients is over $1.0 trillion, with these patients accounting for 40% of total healthcare spending[17]. - The company is positioned for long-term growth due to its complementary pharmacy and provider services that address multiple patient needs[19]. - The total addressable market opportunity is estimated to be over $1.0 trillion, with complex populations driving the highest growth within healthcare services[85]. - Home health patient expenditures are expected to increase by approximately 7% over the next five years, while hospice patient expenditures are projected to grow by 8%[48]. - The U.S. population aged 65 and older is expected to grow by an average of 3% annually over the next five years, driving demand for the company's services[47]. Regulatory and Compliance Risks - The company is subject to various risks, including governmental inquiries and regulatory actions that could adversely affect operating results[13]. - The company must adhere to HIPAA regulations, which govern the security and confidentiality of personal health information, with potential penalties for violations[180]. - The company is subject to audits by federal, state, and commercial payors, which could lead to substantial repayments if overpayments are identified[176]. - The company faces increased competition due to local competitors developing strategic relationships with payors and referral sources, which may limit the ability to retain referrals and payors in local markets[202]. - The company is required to establish new policies to comply with proposed amendments to HIPAA regulations affecting the handling of personal health information[1]. Employee Relations and Workforce - The company has increased employee compensation by 50% over the last three years to attract and retain talent[145]. - As of December 31, 2023, the company employed over 35,000 full-time equivalent employees, with approximately 6,500 represented by labor unions[148]. - The company actively supports veterans and their families through various programs, including partnerships with Soldier's Angels[147]. - The company is committed to creating higher-paying jobs through career pathways and talent pipeline programs[145]. - The company has received numerous awards for its human resources and employee relations practices[148]. Technology and Innovation - Investments in technology and information systems have been made to improve overall efficiency and workflow, including new EMR and ERP systems[77]. - The company has developed innovative technology solutions that allow employees to access their pay daily[145]. - Significant investments have been made into technology resources and systems to drive continuous improvement and reflect leading infrastructure standards[141]. - The company maintains a 99.9% generic efficiency rate, saving an average of $58 per therapeutic interchange[63]. - The company’s integrated care management model is supported by home-based primary care, transitional care management, and clinical care coordination[105]. Strategic Partnerships and Relationships - The company currently has 360 formal strategic partnerships with health systems, including approximately 20 home health partnerships, enhancing its service delivery network[35]. - The company has a diversified payor mix, with 50% of revenues from Medicare, 23% from Medicaid, and 21% from commercial sources, positioning it well for evolving reimbursement models[41]. - The company has developed new relationships with healthcare stakeholders, focusing on patient experiences and quality, including ACOs and MCOs that contract with CMS and state programs[120]. - Maintaining strong relationships with pharmaceutical manufacturers, wholesalers, and distributors is crucial for the company's business and financial condition[205]. - The company provides services to pharmaceutical manufacturers for patient access to specialty pharmaceuticals, and failure to maintain optimal service levels could result in loss of access to products[205].