Financial Data and Key Metrics Changes - Revenue growth for Q4 2024 was reported at 19.7% compared to Q4 2023, driven by balanced performance across the portfolio [18][19] - Gross profit increased by 8.6% year-over-year, reflecting strong top-line growth [19] - Adjusted EBITDA for Q4 was $121.6 million, growing almost 9% year-over-year, while adjusted earnings per share reached $0.44, representing a 15.8% increase [21] - Full-year cash flow generation was $323 million, with $250 million allocated to share repurchases [22] Business Line Data and Key Metrics Changes - The acute therapy segment experienced high single-digit growth, despite earlier supply chain disruptions [19] - The company reported significant contributions from its rare and orphan therapies, which are part of its limited distribution portfolio [18][19] - The advanced practitioner model was highlighted as a key area for growth, with 15 sites currently operational and plans for expansion [12][100] Market Data and Key Metrics Changes - The company noted improvements in IV solution supply dynamics, which had previously constrained patient onboarding [8][28] - The competitive landscape has shifted, with some larger competitors exiting the market, allowing the company to capture additional market demand [30][31] Company Strategy and Development Direction - The company aims to continue investing in its national integrated network of compounding pharmacies and infusion suites to enhance local responsiveness [9][16] - The acquisition of Intramed Plus is expected to expand the company's footprint and enhance its advanced practitioner model [11][12] - The focus remains on delivering value to referral sources and driving top-line growth despite challenges from specific therapy dynamics [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the challenges posed by the Stelara dynamics, estimating a gross profit impact of $60 million to $70 million for 2025 [15][24] - The company anticipates continued earnings growth in 2025, supported by a balanced portfolio and strategic investments [15][16] - Management emphasized the importance of maintaining high-quality care and operational efficiency in a competitive environment [30][31] Other Important Information - The company has exhausted its prior share repurchase authorization, repurchasing $90 million in Q4, and has a new $500 million authorization approved by the Board [13][14] - The company is committed to enhancing its infusion suite network and expanding clinical capabilities to provide comprehensive care solutions [12][100] Q&A Session Summary Question: Acute therapy growth and competition - Management noted improved supply chain dynamics and a strong position to onboard new patients, despite competitive shifts in the market [28][30] Question: Adjusted EPS and long-term growth algorithm - Management indicated that adjusted EPS growth is expected to outpace adjusted EBITDA growth due to share repurchase efforts and M&A activities [35][36] Question: Q1 seasonality and guidance - Management acknowledged typical early Q1 disruptions but expressed confidence in stable revenue from chronic therapies [42][43] Question: Impact of Stelara and patient support - Management confirmed ongoing support for complex Stelara patients while reallocating resources to growth initiatives [46][47] Question: Intramed acquisition and margins - Management expressed optimism about improving Intramed's margins through integration and leveraging existing capabilities [52][54] Question: M&A strategy and market opportunities - Management stated that they are not capital constrained and are actively pursuing M&A opportunities that align with their strategic goals [58][61] Question: Biosimilars impact on guidance - Management indicated that the current year would not see a material impact from biosimilars on guidance [70] Question: Labor costs and recruitment - Management reported a strong position in recruiting and retaining talent, with effective strategies in place to manage labor costs [72][74] Question: Payer negotiations and Medicare Advantage - Management highlighted constructive relationships with payers and the value they provide in managing total cost of care [105][109] Question: SG&A growth and operational investments - Management discussed investments in operational infrastructure to support market opportunities, with SG&A as a percentage of revenue continuing to decline [111][113] Question: VYJUVEK product traction - Management noted that while VYJUVEK is a clinical success, its gross margin profile remains mid-single-digit due to high therapy costs [116]

Core Insights - Option Care (OPCH) reported quarterly earnings of $0.35 per share, exceeding the Zacks Consensus Estimate of $0.33 per share, and showing an increase from $0.32 per share a year ago, resulting in an earnings surprise of 6.06% [1] - The company achieved revenues of $1.35 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.56% and up from $1.12 billion year-over-year [2] - Option Care's stock has increased approximately 40.7% since the beginning of the year, significantly outperforming the S&P 500's gain of 1.3% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.25 on revenues of $1.23 billion, while for the current fiscal year, the estimate is $1.26 on revenues of $5.35 billion [7] - The estimate revisions trend for Option Care is mixed, leading to a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Medical - Outpatient and Home Healthcare industry, to which Option Care belongs, is currently ranked in the top 24% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Core Viewpoint - Option Care Health, Inc. reported solid financial results for the fourth quarter and full year 2024, demonstrating resilience in a challenging environment while focusing on patient-centered care [4]. Fourth Quarter 2024 Financial Highlights - Net revenue reached $1,346.4 million, a 19.7% increase from $1,124.4 million in Q4 2023 [6]. - Gross profit was $268.4 million, representing 19.9% of net revenue, up 8.6% from $247.1 million (22.0% of net revenue) in Q4 2023 [6]. - Net income was $60.1 million, compared to $57.2 million in Q4 2023, with diluted earnings per share of $0.35, a 9.4% increase from $0.32 [6]. - Adjusted net income was $75.5 million, up from $66.7 million in Q4 2023, with adjusted diluted earnings per share of $0.44, a 15.8% increase from $0.38 [6]. - Adjusted EBITDA was $121.6 million, an 8.9% increase from $111.6 million in Q4 2023 [6]. - Cash flow from operations was $36.1 million, down 29.1% from $51.0 million in Q4 2023 [6]. - Approximately $90.0 million of stock was repurchased in Q4 2024 [6]. Full Year 2024 Financial Highlights - Total net revenue for the year was $4,998.2 million, a 16.2% increase from $4,302.3 million in 2023 [6]. - Gross profit for the year was $1,013.0 million, or 20.3% of revenue, up 3.2% from $981.2 million (22.8% of revenue) in 2023 [6]. - Net income for the year was $211.8 million, down from $267.1 million in 2023, with diluted earnings per share of $1.23, a 16.9% decrease from $1.48 [6]. - Adjusted net income was $272.8 million, compared to $257.7 million in 2023, with adjusted diluted earnings per share of $1.58, a 10.5% increase from $1.43 [6]. - Adjusted EBITDA for the year was $443.8 million, up 4.4% from $425.2 million in 2023 [6]. - Cash flow from operations totaled $323.4 million, down 12.9% from $371.3 million in 2023 [6]. Full Year 2025 Financial Guidance - Expected net revenue is projected to be between $5.3 billion and $5.5 billion [7]. - Adjusted diluted earnings per share is anticipated to be between $1.59 and $1.69 [7]. - Adjusted EBITDA is expected to range from $450 million to $470 million [7]. - Cash flow from operations is projected to be at least $320 million [7]. - Effective tax rate is estimated to be between 25% and 27% [7]. - Net interest expense is expected to be approximately $55 million to $60 million [7]. Company Overview - Option Care Health is the largest independent provider of home and alternate site infusion services in the U.S., employing over 8,000 team members, including more than 5,000 clinicians [8].

Revenue Projections - For Q4 2024, Option Care Health expects net revenue of approximately $1.34 billion to $1.35 billion, representing a growth of approximately 19.2% to 20.1% over Q4 2023[4] - For the full year 2024, net revenue is expected to be approximately $4.99 billion to $5.00 billion, indicating a growth of approximately 16.0% to 16.2% compared to the prior year[4] - For full year 2025, Option Care Health expects net revenue of $5.2 billion to $5.4 billion, with adjusted EBITDA of $445 million to $465 million[11] EBITDA and Income Projections - Adjusted EBITDA for Q4 2024 is projected to be approximately $118.7 million to $121.7 million, reflecting a 6.4% to 9.1% increase over Q4 2023[4] - Adjusted net income for full year 2024 is projected to be approximately $268.3 million to $274.1 million, with adjusted diluted earnings per share of $1.55 to $1.59[4] Cash Flow and Financial Guidance - The company anticipates cash flow from operations of at least $300 million for the full year 2024[4] - The company will provide further financial guidance for 2025 during its Q4 earnings call scheduled for February 26, 2025[8] Stock Repurchase Program - The company has authorized a new $500 million stock repurchase program, following the completion of a previous $90 million program[6] Impact of Pricing Adjustments - A negative gross profit impact of approximately $60 million to $70 million is expected for 2025 due to Stelara pricing adjustments[5] Upcoming Events - Option Care Health will participate in the 43rd Annual J.P. Morgan Healthcare Conference on January 13, 2025[7]

Core Viewpoint - Option Care Health, Inc. announced preliminary unaudited financial results for Q4 and full year 2024, highlighting significant revenue growth and a new share repurchase program [1][4][5]. Financial Results Summary - For Q4 2024, the company expects net revenue between $1.34 billion and $1.35 billion, reflecting a growth of approximately 19.2% to 20.1% compared to Q4 2023 [8]. - Net income for Q4 2024 is projected to be between $56.8 million and $60.9 million, translating to diluted earnings per share of $0.33 to $0.36 [8]. - Adjusted net income for Q4 2024 is anticipated to be between $71.0 million and $76.8 million, with adjusted diluted earnings per share ranging from $0.42 to $0.45 [8]. - Adjusted EBITDA for Q4 2024 is expected to be between $118.7 million and $121.7 million, indicating a 6.4% to 9.1% increase over Q4 2023 [8]. Full Year 2024 Results - For the full year 2024, net revenue is expected to be approximately $4.99 billion to $5.00 billion, representing a growth of about 16.0% to 16.2% year-over-year [8]. - Net income for the full year is projected to be between $208.5 million and $212.6 million, with diluted earnings per share of $1.21 to $1.23 [8]. - Adjusted net income for the full year is anticipated to be between $268.3 million and $274.1 million, with adjusted diluted earnings per share ranging from $1.55 to $1.59 [8]. - Adjusted EBITDA for the full year is expected to be between $441.0 million and $444.0 million, reflecting a 3.7% to 4.4% increase compared to the previous year [8]. 2025 Guidance - For full year 2025, the company anticipates a negative gross profit impact of approximately $60 million to $70 million due to pricing adjustments related to Stelara [4]. - Further details regarding 2025 financial guidance will be provided during the fourth quarter earnings call in February [4]. Share Repurchase Program - In Q4 2024, the company completed $90 million of share repurchases under its previous program and has authorized a new $500 million stock repurchase program with no specified expiration date [5]. Upcoming Events - The company will present at the 43rd Annual J.P. Morgan Healthcare Conference on January 13, 2025, and will release full Q4 and full year results on February 26, 2025 [6][7].

Financial Performance - For the three months ended September 30, 2024, net revenue was $1,278,546, a 17.0% increase from $1,093,014 in the same period of 2023[101] - Gross profit for the third quarter of 2024 was $256,749, representing a gross profit margin of 20.1%, down from 23.3% in the prior year[101] - Cost of revenue increased to $1,021,797, which is 79.9% of net revenue, compared to 76.7% in the same quarter of 2023[101] - Operating income for the third quarter of 2024 was $85,091, or 6.7% of revenue, compared to $81,047, or 7.4% of revenue in the same period of 2023[101] - Net income for the third quarter of 2024 was $53,856, representing 4.2% of revenue, compared to $56,302, or 5.2% in the prior year[101] - Net revenue for the nine months ended September 30, 2024, was $3,651.8 million, an increase of 14.9% compared to $3,177.9 million for the same period in 2023[117] - Gross profit for the nine months ended September 30, 2024, was $744.6 million, with a gross profit margin of 20.4%, down from 23.1% in 2023[117] - Net income for the nine months ended September 30, 2024, was $151.7 million, a decrease of 27.7% from $209.9 million in 2023[125] Expenses and Taxation - Selling, general and administrative expenses decreased to $156,999, or 12.3% of revenue, down from 14.5% in the same quarter of 2023[106] - Income tax expense for the three months ended September 30, 2024, was $19.7 million, representing a 42.9% increase from $13.8 million in 2023[110] - The effective tax rate for the three months ended September 30, 2024, was 26.8%, compared to 19.7% for the same period in 2023[110] - Selling, general and administrative expenses for the nine months ended September 30, 2024, were $465.5 million, representing 12.7% of revenue, down from 14.5% in 2023[118] Cash Flow and Liquidity - Cash and cash equivalents as of September 30, 2024, were $483.0 million, up from $343.8 million as of December 31, 2023[130] - The Company had net cash provided by operating activities of $287.3 million for the nine months ended September 30, 2024, a decrease of $33.1 million compared to $320.3 million for the same period in 2023[141] - Cash and cash equivalents at the end of the period increased to $483.0 million, up by $96.5 million from $386.5 million at the end of the same period in 2023[141] - The Company used $122.8 million in financing activities during the nine months ended September 30, 2024, a decrease of $64.5 million compared to $187.3 million in the same period in 2023[141] Debt and Financing - The Company entered into a Third Amendment on the First Lien Term Loan in May 2024, which included an additional $50.0 million of incremental indebtedness and reduced the interest rate from Term SOFR plus 2.75% to Term SOFR plus 2.25%[136] - Interest payments on long-term debt obligations are estimated to total $305.1 million based on current rates as of September 30, 2024[139] - The Company had $395.9 million of net borrowing availability under the Revolver Facility as of September 30, 2024, after accounting for $4.1 million of undrawn letters of credit[135] - The principal balance of the First Lien Term Loan is repayable in quarterly installments of $1.6 million plus interest, with a final payment due on October 27, 2028[137] - The Senior Notes bear interest at a rate of 4.375% per annum and mature on October 31, 2029[138] Operational Recovery and Future Outlook - The company has substantially recovered operationally from the Change Healthcare Cybersecurity Incident, with no material financial impact reported during the third quarter of 2024[89] - The company continues to maintain strong liquidity and has resumed submission of a majority of claims to payers following the cybersecurity incident[89] - The increase in net revenue was primarily driven by organic growth in the company's portfolio of therapies, with chronic revenue growing in the low-twenties percentage[105] - The company anticipates that gross profit will be negatively impacted in 2025 due to a proposed significant reduction in the spread for a key therapy[105] - The company continues to evaluate acquisition opportunities as a key part of its growth strategy, with a focus on funding through cash and cash equivalents[132] Other Financial Metrics - The company recorded total other expense of $32.2 million for the nine months ended September 30, 2024, compared to income of $49.8 million in 2023, reflecting a variance of 164.8%[120] - The decrease in cash used in investing activities was primarily due to prior year acquisition activity, with no comparable activity in the nine months ended September 30, 2024[143] - The Company received a $106.0 million payment on behalf of Amedisys under the Mutual Termination Agreement, impacting cash flows from operating activities[142]

Financial Data and Key Metrics Changes - The company reported a revenue growth of 17% in Q3 2024, driven by strong performance in rare and orphan portfolios and established therapeutic categories [21][25] - Adjusted EBITDA reached $115.6 million, representing 9% of revenue and a 5.3% increase year-over-year [23] - Cash flow from operations was robust at $160.4 million, with cash balances of $483 million after share repurchases of approximately $42 million [23][25] - The net debt-to-EBITDA leverage ratio improved to 1.5x, the lowest since the merger with BioScrip in 2019 [7][23] Business Line Data and Key Metrics Changes - The company experienced sequential improvement in gross profit dollar generation, with an increase of approximately $7.3 million compared to Q2 2024 [22] - SG&A expenses decreased by almost 1% year-over-year, representing 12.3% of revenue, indicating improved spending leverage [22] Market Data and Key Metrics Changes - The company faced supply chain disruptions due to Hurricane Helene, impacting operations primarily in the Southeast, but the overall impact on Q3 results was not material [21][25] - The supply of intravenous (IV) bags remains constrained, affecting the ability to onboard new patients primarily receiving intravenous antibiotics and nutrition support therapy [11][12] Company Strategy and Development Direction - The company continues to focus on organic growth initiatives and views the current supply chain disruptions as a medium-term growth opportunity once conditions improve [14][20] - The management emphasized the importance of maintaining strong relationships with referral sources and leveraging unique capabilities to capture market demand [15][34] - The company plans to report adjusted earnings per share starting in 2025, highlighting its commitment to transparency and capital deployment strategies [24] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing challenges from supply chain disruptions and unexpected drug pricing actions, particularly regarding STELARA, which is expected to impact gross profit in 2025 [18][20][100] - Despite these challenges, the management remains optimistic about the company's ability to deliver growth and serve more patients in the medium term [21][100] Other Important Information - The company has begun reporting adjusted earnings per share as a key financial metric, which will help articulate the value created through capital deployment efforts [24] - The company is actively engaged in acquisition opportunities and remains disciplined in capital deployment strategies [70] Q&A Session Summary Question: Update on IV bag supply and recovery timeline - Management indicated that supply is showing encouraging signs of improvement, but it is difficult to predict when it will return to normal levels [30][31] Question: Opportunities from competitor exits - Management believes that their investments in infrastructure position them well to capture market demand as competitors exit certain therapies [34] Question: Revenue contribution from STELARA - Chronic inflammatory therapies, including STELARA, represent approximately 20% of the company's revenue [38] Question: Impact of STELARA pricing changes - Management noted that the pricing actions from the manufacturer are unprecedented and could materially impact gross profit starting in early 2025 [18][44] Question: Future EBITDA growth potential - Management is not in a position to provide specific guidance for 2025 but remains confident in the company's growth trajectory despite challenges [91][94] Question: Updates on infusion suites - The company added three infusion suites in the quarter and continues to drive utilization and patient satisfaction [96]

Group 1: Earnings Performance - Option Care reported quarterly earnings of $0.41 per share, exceeding the Zacks Consensus Estimate of $0.31 per share, and up from $0.31 per share a year ago, representing an earnings surprise of 32.26% [1] - The company posted revenues of $1.28 billion for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 4.69%, compared to year-ago revenues of $1.09 billion [2] - Over the last four quarters, Option Care has consistently surpassed consensus EPS estimates [2] Group 2: Stock Performance and Outlook - Option Care shares have declined approximately 9.5% since the beginning of the year, while the S&P 500 has gained 22.3% [3] - The current consensus EPS estimate for the upcoming quarter is $0.35 on revenues of $1.25 billion, and for the current fiscal year, it is $1.22 on revenues of $4.84 billion [7] - The estimate revisions trend for Option Care is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Group 3: Industry Context - The Medical - Outpatient and Home Healthcare industry, to which Option Care belongs, is currently ranked in the top 12% of over 250 Zacks industries, suggesting a favorable industry outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Core Insights - Option Care Health reported a net revenue of $1,278.5 million for Q3 2024, representing a 17.0% increase from $1,093.0 million in Q3 2023 [2] - The gross profit for the quarter was $256.7 million, accounting for 20.1% of net revenue, which is a slight increase from $254.3 million (23.3% of net revenue) in the same quarter last year [2] - Net income decreased by 4.3% to $53.9 million, maintaining a diluted earnings per share of $0.31, unchanged from Q3 2023 [2] - Adjusted net income was $70.7 million, or $0.41 adjusted diluted earnings per share, down 3.2% from $73.1 million ($0.40) in Q3 2023 [2] - Adjusted EBITDA rose by 5.3% to $115.6 million compared to $109.8 million in Q3 2023 [2] - Cash flow from operations significantly increased to $160.4 million from $61.0 million in Q3 2023 [2] - The company ended Q3 2024 with cash and cash equivalents of $483.0 million [2] Supply Chain Challenges - Option Care Health faced supply chain disruptions due to Hurricane Helene, affecting the production of intravenous solution bags, which impacts the ability to support existing and new patients [2] - The company is closely monitoring the situation and collaborating with manufacturers to secure inventory, but expects negative impacts on Q4 financial results [2] Updated Financial Guidance - For the full year 2024, Option Care Health anticipates net revenue between $4.9 billion and $4.95 billion [3] - Adjusted EBITDA is expected to be in the range of $438 million to $443 million [3] - The company maintains a cash flow from operations guidance of at least $300 million [3] - The effective tax rate is projected to be between 26% and 28%, consistent with previous guidance [3] - Net interest expense is expected to be approximately $55 million to $60 million, also consistent with prior guidance [3] Company Overview - Option Care Health is the largest independent provider of home and alternate site infusion services in the U.S., employing over 7,500 team members, including more than 4,500 clinicians [4] - The company aims to elevate care standards for patients with acute and chronic conditions across all 50 states [4]

Financial Performance - Net revenue for Q3 2024 was $1,278.5 million, a 17.0% increase from $1,093.0 million in Q3 2023[2] - Gross profit for Q3 2024 was $256.7 million, representing 20.1% of net revenue, compared to $254.3 million or 23.3% of net revenue in Q3 2023[2] - Net income for Q3 2024 was $53.9 million, down 4.3% from $56.3 million in Q3 2023, with diluted earnings per share remaining at $0.31[2] - Adjusted net income for Q3 2024 was $70.7 million, a decrease of 3.2% from $73.1 million in Q3 2023[2] - Adjusted EBITDA for Q3 2024 was $115.6 million, up 5.3% from $109.8 million in Q3 2023[2] - Net income for the nine months ended September 30, 2024, was $151,690,000, a decrease of 27.8% compared to $209,913,000 for the same period in 2023[14] - EBITDA for the nine months ended September 30, 2024, was $286,729,000, down 21.4% from $365,056,000 in the prior year[15] - Adjusted net income for the nine months ended September 30, 2024, was $197,329,000, an increase of 3.7% compared to $190,621,000 for the same period in 2023[15] - The company’s diluted earnings per share for the nine months ended September 30, 2024, was $0.87, down from $1.16 in the same period of 2023[15] - The company’s adjusted earnings per share for the nine months ended September 30, 2024, was $1.14, compared to $1.05 for the same period in 2023, reflecting an increase of 8.6%[15] Cash Flow and Liquidity - Cash flow from operations for Q3 2024 was $160.4 million, significantly higher than $61.0 million in Q3 2023[2] - Cash and cash equivalents at the end of Q3 2024 were $483.0 million, an increase from $343.8 million at the end of 2023[10] - Net cash provided by operating activities for the nine months ended September 30, 2024, was $287,270,000, compared to $320,326,000 in the same period of 2023, reflecting a decrease of 10.3%[14] - Cash and cash equivalents at the end of the period increased to $483,026,000 from $386,489,000, representing a growth of 25.0% year-over-year[14] Investment and Stock Activity - The company repurchased approximately $41.9 million of stock in Q3 2024[2] - The company reported a net cash used in investing activities of $25,266,000 for the nine months ended September 30, 2024, a decrease from $40,725,000 in the prior year[14] Operational Challenges - Supply chain disruptions related to intravenous solution bags are anticipated to negatively impact Q4 2024 financial results[2] - The company experienced a significant increase in accounts payable, which rose to $164,754,000 from $50,726,000, indicating a change in working capital dynamics[14] - The company’s interest expense for the nine months ended September 30, 2024, was $38,150,000, slightly down from $38,816,000 in the previous year[15] Future Outlook - The company expects full year 2024 net revenue to be between $4.9 billion and $4.95 billion[3]