BrightSpring Health Services(BTSG) - 2025 Q2 - Quarterly Results

Executive Summary & Business Update BrightSpring reports strong Q2 2025 results, updates full-year guidance, and announces a planned divestiture Second Quarter 2025 Financial Highlights 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 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 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] - 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] Planned Divestiture 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] Company Information BrightSpring provides integrated home- and community-based pharmacy and provider health solutions for complex populations About BrightSpring Health Services 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] - 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] - BrightSpring consistently demonstrates strong quality metrics, improving quality of life for high-need individuals and reducing overall healthcare system costs[12] Detailed Financial Performance This section details BrightSpring's Q2 2025 consolidated results and updated full-year 2025 guidance Second Quarter 2025 Consolidated Results 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 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 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 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 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 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 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 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 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 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] - Management uses these measures to evaluate business strategies, make budgeting decisions, award incentive compensation, and compare performance against peers[21] - 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] Reconciliation of EBITDA and Adjusted EBITDA 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] Reconciliation of Adjusted EPS 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 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] - A live and archived webcast, along with supplemental financial information, is available on the 'Events & Presentations' section of the BrightSpring investor relations website[11] Forward-Looking Statements and Risk Factors 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] - 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] - 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][15] Investor and Media Contacts 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] - Media Contact: Leigh White, leigh.white@brightspringhealth.com, 502.630.7412[25]