Investor Presentation May 6, 2025 Forward-Looking Statements This presentation contains "forward-looking statements" within the meaning of federal securities laws. These forward-looking statements include statements with respect to 2025 guidance, strategic and growth opportunities, other expectations and other non-historical information. Without limiting the foregoing, statements including the words "expect," "intend," "may," "will," "should," "would," "could," "plan," "potential," "anticipate," "believe," ...

Financial Performance - Total revenues for Q1 2025 were $270 million, an increase of $24 million or 10% compared to Q1 2024, driven by growth in the XT Amplify program and SaaS services [3]. - Non-GAAP net income for Q1 2025 was $12 million, or $0.26 per diluted share, compared to $1 million, or $0.03 per diluted share in Q1 2024 [4]. - Non-GAAP EBITDA for Q1 2025 was $24 million, up from $11 million in Q1 2024 [5]. - Total revenues for Q1 2025 reached $269.7 million, a 9.5% increase from $246.2 million in Q1 2024 [29]. - Gross profit for Q1 2025 was $110.9 million, compared to $92.6 million in Q1 2024, reflecting a gross margin improvement [29]. - Net loss for Q1 2025 was $7.0 million, a reduction from a net loss of $15.7 million in Q1 2024, indicating improved operational efficiency [29]. - Non-GAAP net income for Q1 2025 was $12,354,000, significantly higher than $1,220,000 in Q1 2024 [39]. - Non-GAAP EBITDA for Q1 2025 reached $23,593,000, compared to $10,837,000 in Q1 2024, reflecting a non-GAAP EBITDA margin of 8.7% versus 4.4% [39]. - The company generated $25,924,000 in net cash from operating activities in Q1 2025, down from $49,953,000 in Q1 2024 [41]. - Non-GAAP free cash flow for Q1 2025 was $10,185,000, a decrease from $37,613,000 in Q1 2024 [41]. - The company reported a net loss of $7,023,000 for Q1 2025, an improvement from a net loss of $15,676,000 in Q1 2024 [35]. Balance Sheet and Cash Flow - As of March 31, 2025, cash and cash equivalents totaled $387 million, with total debt of $341 million and total assets of $2.2 billion [6]. - Cash and cash equivalents increased to $386.8 million as of March 31, 2025, up from $369.2 million at the end of 2024 [31]. - Total assets grew to $2.15 billion as of March 31, 2025, compared to $2.12 billion at the end of 2024, indicating solid asset management [31]. - Total stockholders' equity increased to $1.26 billion as of March 31, 2025, from $1.24 billion at the end of 2024, reflecting positive shareholder value [33]. - Omnicell has $350 million available under its revolving credit facility with no outstanding balance as of March 31, 2025 [7]. - The company’s total cash, cash equivalents, and restricted cash at the end of Q1 2025 was $414,402,000, down from $549,962,000 at the end of Q1 2024 [35]. Operational Efficiency and Cost Management - The company is focusing on mitigating potential tariff impacts on its supply chain while maintaining strong free cash flow [2]. - Omnicell plans to maintain its focus on operational efficiency and cost management while pursuing growth opportunities in the market [24]. - Research and development expenses decreased to $20.5 million in Q1 2025 from $22.1 million in Q1 2024, showing a focus on cost management [29]. - The company’s GAAP operating expenses were $122,555,000 in Q1 2025, representing 45.4% of total revenues, compared to 46.5% in Q1 2024 [37]. - Share-based compensation expense increased to $10,786,000 in Q1 2025 from $8,641,000 in Q1 2024 [39]. Future Guidance and Investments - The company updated its full-year 2025 guidance, projecting total revenues between $1.105 billion and $1.155 billion [10]. - Annual recurring revenue is expected to be between $610 million and $630 million for 2025 [10]. - The company continues to invest in research and development to enhance product offerings and market competitiveness [23]. - The company plans to open the Austin Innovation Lab on May 14, 2025, to enhance product development and innovation [15].

Core Insights - Zacks Premium provides various tools to enhance investor confidence and market engagement, including daily updates on Zacks Rank and Industry Rank, Equity Research reports, and Premium stock screens [1][2] Zacks Style Scores - Zacks Style Scores rate stocks based on value, growth, and momentum, serving as complementary indicators to the Zacks Rank, helping investors identify securities likely to outperform the market in the next 30 days [3][4] - Stocks are rated from A to F, with A indicating the highest potential for outperformance [4] Value Score - The Value Score identifies attractive and discounted stocks using ratios like P/E, PEG, Price/Sales, and Price/Cash Flow, appealing to value investors [4] Growth Score - The Growth Score focuses on a company's financial strength and future outlook, analyzing projected and historical earnings, sales, and cash flow to find stocks with sustainable growth [5] Momentum Score - The Momentum Score capitalizes on price trends, using factors like one-week price change and monthly earnings estimate changes to identify favorable times for investment [6] VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive indicator that evaluates stocks based on value, growth, and momentum [7] Zacks Rank - The Zacks Rank is a proprietary model based on earnings estimate revisions, with 1 (Strong Buy) stocks achieving an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [8][9] - There are over 800 top-rated stocks available, making it essential for investors to utilize Style Scores to narrow down choices [10] Stock Highlight: Omnicell Inc. (OMCL) - Omnicell Inc. specializes in end-to-end automation solutions for the medication-use process, including dispensing systems and decision support applications [13] - Currently rated 3 (Hold) with a VGM Score of A and a Value Style Score of B, OMCL has a forward P/E ratio of 17.19, indicating attractive valuation [14] - Recent upward revisions in earnings estimates for fiscal 2025 have increased the Zacks Consensus Estimate to $1.78 per share, with an average earnings surprise of 99.5% [14][15]

Core Insights - Zacks Premium provides various tools for investors to enhance their stock market strategies and confidence [1] - The Zacks Style Scores are designed to help investors select stocks with the highest potential to outperform the market in the short term [2] Zacks Style Scores Overview - Stocks are rated based on value, growth, and momentum characteristics, with scores ranging from A to F, where A indicates the highest potential for outperformance [3] - The Style Scores are categorized into four types: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [3][4][5][6] Value Score - The Value Score identifies attractive stocks using various financial ratios, helping value investors find undervalued opportunities [3] Growth Score - The Growth Score emphasizes a company's financial health and future growth potential, analyzing projected and historical earnings, sales, and cash flow [4] Momentum Score - The Momentum Score assists investors in capitalizing on price trends, utilizing metrics like short-term price changes and earnings estimate revisions [5] VGM Score - The VGM Score combines the three Style Scores to highlight stocks with the best overall value, growth, and momentum characteristics [6] Zacks Rank Integration - The Zacks Rank, based on earnings estimate revisions, is a key tool for stock selection, with 1 (Strong Buy) stocks historically yielding an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [7][8] - Investors are encouraged to focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal investment potential [9] Stock Highlight: Omnicell Inc. (OMCL) - Omnicell Inc. specializes in automation solutions for the medication-use process, offering a range of products from dispensing systems to decision support applications [11] - Currently rated 3 (Hold) with a VGM Score of B, OMCL has a forward P/E ratio of 19.8, making it attractive for value investors [12] - Recent earnings estimates for fiscal 2025 have been revised upward, with the Zacks Consensus Estimate now at $1.78 per share, and an impressive average earnings surprise of 99.5% [12][13]

Core Viewpoint - Omnicell, Inc. has demonstrated strong performance with a 41.6% increase in share price over the past year, significantly outperforming the industry and the S&P 500, indicating solid growth potential and healthy fundamentals for investors [1]. Company Overview - Omnicell specializes in developing and marketing end-to-end automation solutions for the medication-use process, aimed at improving patient safety and increasing efficiency while lowering costs [2]. - The company's offerings are categorized into Product revenues, which include software-enabled devices and consumables, and Service and other revenues, which encompass technical support and SaaS services [3]. Factors Favoring Share Price Growth - The introduction of the XT Amplify program has gained significant market acceptance, contributing to the upward trend in Omnicell's share price [4]. - Recent product launches, including OmniSphere and Central Med Automation Service, have bolstered investor confidence and positively impacted stock performance [5][6]. - The company aims to achieve $1.9-$2 billion in revenues by 2025, with a non-GAAP gross margin target of 52-53% and a non-GAAP EBITDA margin of approximately 23%. In Q4 2024, Omnicell reported a non-GAAP EBITDA of $46 million, exceeding guidance [7]. - Omnicell's strong liquidity position is highlighted by cash and cash equivalents of $369.2 million and no short-term debt, indicating a solid solvency status [8]. Challenges and Risks - In Q4 2024, product revenues declined by 25.1% year-over-year due to supply chain disruptions, labor shortages, and inflationary pressures, which may affect future performance [10]. - The company faces intense competition in the medication management market, which could lead to pricing pressure and reduced margins [11]. - The Zacks Consensus Estimate for 2025 EPS has decreased by 3.3% to $1.74, indicating potential challenges ahead [12].

Core Viewpoint - Omnicell's fourth-quarter 2024 performance reflects its long-term development strategy, including innovative solutions, market expansion, strategic partnerships, and technology procurement, while facing macroeconomic challenges and competitive pressures [1][8]. Financial Performance - Omnicell's stock has increased by 47.1% over the past year, outperforming the industry, which declined by 7.9%, and the S&P 500, which rose by 18.5% [2]. - The company has a market capitalization of $1.84 billion and has consistently exceeded earnings estimates, achieving an average surprise of 99.53% over the last four quarters [2][7]. - In Q4 2024, Omnicell reported a non-GAAP EBITDA of $46 million, significantly above its guidance of $14-$20 million, and non-GAAP earnings per share of 60 cents, exceeding the pre-announced guidance of 10-20 cents [7]. Growth Drivers - Omnicell is focused on strategic imperatives such as offering innovative solutions, expanding into new markets, forming strategic partnerships, and acquiring new technologies to meet the evolving needs of healthcare institutions [3]. - The XT Amplify program is gaining market acceptance, with positive early feedback supporting enhanced clinical and operational outcomes [4]. - The Advanced Services offering, including Central Pharmacy Dispensing Services and IV Compounding Service, is gaining recognition, with notable wins in Q4, including service renewals and new contracts [5]. 2025 Financial Roadmap - Omnicell aims to achieve revenues of $1.9-$2 billion by 2025, representing a CAGR of 14-15% from 2021 to 2025, with targets for a non-GAAP gross margin of 52-53% and a non-GAAP EBITDA margin of approximately 23% [6]. Challenges - The company faces macroeconomic challenges, including elevated inflation, supply-chain disruptions, labor shortages, and geopolitical instability, which have impacted its Point-of-Care product line and led to a 25.1% year-over-year decrease in Q4 product revenues [8]. - Intense competition in the medication management and supply-chain solutions market poses threats, as major competitors continue to expand, potentially leading to pricing pressure and reduced margins [9]. Earnings Estimates - The Zacks Consensus Estimate for 2025 earnings per share remains at $1.78, while the revenue estimate is $1.13 billion, indicating a 1.4% increase from the previous year [10].

Prescription Drug Spending - In 2023, the United States spent $723 billion on prescription drugs, marking a 13.6% increase from 2022, the largest annual spending increase in 20 years [21]. - Annual prescription drug expenditures in the United States were approximately $723 billion in 2023, accounting for 39% of the total increase in annual spending per person from 2018 to 2022 [46]. - The average prices of physician-administered drugs grew by 47% between 2018 and 2022, while the cumulative growth in the average price of professional services was only 7% [47]. - Medication non-adherence costs the healthcare system an estimated $528 billion annually due to related morbidity and mortality [50]. Healthcare Industry Trends - The healthcare industry is projected to see specialty medications account for nearly 60% of total U.S. medication spending, with total spending expected to reach approximately $420 billion by 2025 [28]. - Retail pharmacies are anticipated to fill 4.98 billion prescriptions in 2025, growing at a compound annual growth rate of around 7.1%, leading to an approximate $1.2 trillion market valuation by 2032 [28]. Automation and Technology in Pharmacy - Omnicell's XT Amplify program aims to enhance the capabilities of existing XT Series automated dispensing systems, focusing on improving clinical and operational outcomes [28]. - The Central Pharmacy and IV Compounding market represents a significant automation opportunity, addressing high volumes of manual, repetitive, and error-prone processes [23]. - Omnicell's Inventory Optimization Service is designed to provide greater medication inventory visibility and reduce medication waste, expirations, stockouts, and shortages [33]. - The company is focused on delivering solutions that help healthcare institutions realize the vision of the Autonomous Pharmacy, which targets zero-error medication management [22]. - The Central Med Automation Service integrates advanced robotics and smart devices to help health systems establish a scalable and standardized medication distribution environment [30]. - Omnicell's patient engagement solutions aim to improve adherence to prescriptions and enhance the patient-pharmacy experience through digital tools [34]. Challenges in Pharmacy Practice - The company recognizes significant challenges in pharmacy practice, including labor shortages and budget constraints, which are expected to drive demand for increased automation and improved medication management outcomes [21]. - Approximately 73% of pharmacist activities are non-clinical, indicating inefficiencies in medication management processes [48]. - The demand for registered nurses is expected to exceed supply by 9% by 2036, highlighting a potential nursing shortage [51]. - Over 90% of hospitals faced shortages of experienced pharmacy technicians, with a turnover rate of 25% reported in 2023 [51]. Financial Performance and Revenue - Approximately 91% of the company's revenue was generated in the United States for the year ended December 31, 2024 [72]. - Sales to members of the ten largest Group Purchasing Organizations (GPOs) and federal agencies accounted for approximately 65% of total consolidated revenues during the fiscal year ended December 31, 2024 [76]. - The company recorded approximately $922.2 million in goodwill and intangible assets as of December 31, 2024, net of accumulated amortization [192]. Backlog and Sales Cycle - Total backlog as of December 31, 2024, is $1,201,296,000, an increase from $1,142,686,000 in 2023 [100]. - Product backlog is $646,508,000, up from $610,832,000 in 2023 [102]. - The sales cycle for automation systems can take in excess of 12 to 24 months due to the complexity and cost of the systems [74]. Employee and Organizational Development - As of December 31, 2024, the company had approximately 3,670 employees worldwide [108]. - In 2024, Omnicell achieved an overall employee satisfaction score of 73, an increase of 5 points from the previous score of 68 in September 2023 [109]. - More than 80% of Omnicell's global employee base resonates with the newly created Culture Statement, which aims to define the company's Culture of Care aspirations [110]. - Omnicell's wellness program includes on-site gym facilities, lifestyle spending rewards, and mental health counseling, promoting a comprehensive approach to employee health [112]. Risks and Compliance - The company faces substantial debt, which could impair financial flexibility and access to capital, along with covenants that restrict business operations [123]. - Compliance with data privacy and security regulations, such as HIPAA and the California Consumer Privacy Act (CCPA), is critical and may result in significant costs [160][165]. - The company must adapt to evolving data privacy laws, including the EU GDPR, which imposes stringent obligations on the processing of personal information [168][169]. - The company faces significant risks due to unfavorable economic conditions, which could lead to decreased demand for capital equipment and lower revenue growth rates [130]. Market Competition and Economic Conditions - The company operates in highly competitive markets, facing increased competition from current and future competitors with greater resources [153]. - The shift to value-based care could decrease utilization of healthcare services, impacting the company's revenues [137]. - Regulatory changes in the healthcare sector, including those affecting the 340B Drug Pricing Program, could adversely affect the company's related services and overall business [202]. Environmental, Social, and Governance (ESG) Considerations - Stakeholder expectations for ESG matters are rapidly evolving, requiring continuous monitoring and adaptation [215]. - Failure to meet ESG expectations could result in loss of business, legal proceedings, and diluted market valuation [216]. - Climate change and extreme weather conditions may increase operational costs and disrupt supply chains, impacting business results [213].

Core Viewpoint - Omnicell (OMCL) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on the consensus measure of EPS estimates from sell-side analysts, reflecting the company's changing earnings picture [1][2]. - Changes in earnings estimates are strongly correlated with near-term stock price movements, influenced by institutional investors who adjust their valuations based on these estimates [4][6]. Recent Performance and Projections - Omnicell is expected to earn $1.78 per share for the fiscal year ending December 2025, representing a year-over-year increase of 4.1% [8]. - Over the past three months, the Zacks Consensus Estimate for Omnicell has increased by 16%, indicating a positive trend in earnings expectations [8]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 (Strong Buy) stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of Omnicell to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Core Insights - Michael Dion is an expert in FP&A, Corporate Finance, and Small Business with 12 years of experience in Fortune 100 companies and various industries [1] - He founded F9 Finance to assist finance professionals and small business owners in understanding finance and accounting concepts [1] - Dion's investment strategy focuses on identifying value opportunities where market reactions to news are disproportionate, emphasizing strong fundamentals and dividends [1] Industry Insights - The finance and accounting sectors are increasingly recognizing the importance of cash flow for both companies and investors [1] - There is a growing trend among investors to seek out undervalued opportunities in the market, particularly in the context of small businesses and startups [1]

Core Viewpoint - Omnicell (OMCL) shows potential for upside with a mean price target of $54.71, indicating a 29% increase from the current price of $42.40 [1] Price Targets and Estimates - The mean estimate consists of seven short-term price targets with a standard deviation of $11.27, suggesting variability in analyst predictions [2] - The lowest estimate is $40, indicating a potential decline of 5.7%, while the highest estimate is $69, suggesting a potential increase of 62.7% [2] - Analysts' price targets should be approached with skepticism, as they may not accurately reflect future stock movements [3][8] Earnings Estimates - Analysts are optimistic about OMCL's earnings prospects, with a consensus indicating higher earnings estimates compared to previous forecasts [4][9] - Over the last 30 days, two estimates have been revised upward, leading to a 2% increase in the Zacks Consensus Estimate for the current year [10] Analyst Agreement - A low standard deviation in price targets indicates a high degree of agreement among analysts regarding the stock's price direction [7] - OMCL holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, suggesting strong potential for upside [11] Conclusion on Price Movement - While the consensus price target may not be a reliable indicator of the extent of OMCL's potential gains, it does provide a useful guide for the direction of price movement [12]