Quipt Home Medical (QIPT) - 2025 Q3 - Quarterly Results

Report Overview Conference Call Information Quipt Home Medical will host its earnings conference call on Tuesday, August 12, 2025, at 10:00 a.m. (ET), with webcast access available on the company's investor website - Earnings Conference Call scheduled for Tuesday, August 12, 2025, at 10:00 a.m. (ET)[2] - Live webcast accessible via www.quipthomemedical.com, with replay available for at least one year[2] Financial Highlights Q3 2025 Performance Q3 2025 revenue reached $58.3 million (down 4.1% YoY), with $13.7 million Adjusted EBITDA and 81% recurring revenue Q3 2025 Key Financial Metrics | Metric | Q3 2025 | Q3 2024 | Change (YoY) | Q2 2025 | Change (QoQ) | | :----- | :------ | :------ | :----------- | :------ | :----------- | | Revenue ($ millions) | $58.3M | $60.8M | -4.1% | $57.4M | +1.6% (organic) | | Adjusted EBITDA ($ millions) | $13.7M | $14.2M | -3.6% | N/A | N/A | | Adjusted EBITDA (% of revenue) | 23.5% | 23.4% | +0.1 pp | N/A | N/A | | Net Income (Loss) ($ millions) | ($3.0M) | ($1.6M) | -87.5% | N/A | N/A | | Diluted EPS ($) | ($0.07) | ($0.04) | -75.0% | N/A | N/A | - Recurring Revenue for Q3 2025 was 81% of total revenue, indicating strong recurring business[5] Nine Months Ended June 30, 2025 Performance Nine months ended June 30, 2025, revenue decreased 4.1% to $177.0 million, with $41 million Adjusted EBITDA and improved cash flow Nine Months Ended June 30, 2025 Key Financial Metrics | Metric | 9M 2025 | 9M 2024 | Change (YoY) | | :----- | :------ | :------ | :----------- | | Revenue ($ millions) | $177.0M | $184.6M | -4.1% | | Adjusted EBITDA ($ millions) | $41.0M | $44.4M | -7.7% | | Adjusted EBITDA (% of revenue) | 23.2% | 24.1% | -0.9 pp | | Cash flow from operations ($ millions) | $27.9M | $25.4M | +9.8% | Balance Sheet and Liquidity As of June 30, 2025, Quipt held $11.3 million cash, $35.3 million credit, and a 1.5x Net Debt to Adjusted EBITDA Leverage Ratio Cash on Hand | Metric | As of June 30, 2025 | As of March 31, 2025 | | :----- | :------------------ | :------------------- | | Cash on hand ($ millions) | $11.3M | $17.1M | - Total credit availability of $35.3 million as of June 30, 2025, comprising $14.3 million on a revolving credit facility and $21.0 million on a delayed-draw term loan facility[5] - Maintained a conservative balance sheet with a Net Debt to Adjusted EBITDA Leverage Ratio of 1.5x[5] Operational Highlights Patient and Service Metrics Quipt served 151,000 unique patients as of June 30, 2025, with a 1.3% YoY decrease but 3.4% QoQ increase Q3 2025 Operational Metrics | Metric | Q3 2025 | Q3 2024 | Change (YoY) | Q2 2025 | Change (QoQ) | | :----- | :------ | :------ | :----------- | :------ | :----------- | | Unique Patients | 151,000 | 153,000 | -1.3% | 146,000 | +3.4% | | Unique Set-ups/Deliveries | 210,000 | 216,000 | -2.8% | 203,000 | +3.5% | | Respiratory Resupply Set-ups/Deliveries | 119,000 | 120,000 | -0.8% | 111,000 | +7.2% | Subsequent Highlights Ballad Health Acquisition Quipt acquired a DME provider from Ballad Health on July 7, 2025, expanding to over 12,500 patients and securing a Preferred Provider Agreement - Acquired 100% of a full-service durable medical equipment (DME) provider from Ballad Health on July 7, 2025[12] Ballad Health Acquisition Details | Metric | Value | | :----- | :---- | | Acquired Revenue ($ millions) | $6.6 million | | Expanded Patient Reach | Over 12,500 patients annually | | Expanded Branch Locations | 4 (East Tennessee and Southwest Virginia) | - Signed a Preferred Provider Agreement (PPA) with Ballad Health, integrating Quipt into the health system's hospital discharge planning process and gaining access to patient referrals from 20 hospitals across four states[12] - Acquisition was funded entirely with cash on hand at an attractive valuation, preserving balance sheet flexibility[12] - Management expects acquired operations' Adjusted EBITDA margins to align with Quipt's historical range within two quarters[12] Management Commentary Management highlighted positive organic growth, stable Adjusted EBITDA margins, and the strategic fit of the Ballad Health acquisition - CEO Greg Crawford noted a return to positive organic growth and clear revenue stabilization, positioning the company for sustainable long-term growth[7] - CFO Hardik Mehta highlighted strong and consistent Adjusted EBITDA margins, demonstrating the scalability and resiliency of the operating platform[9] - Management views the Ballad Health acquisition as a meaningful milestone, reinforcing the strategy of expanding through healthcare system partnerships and enhancing geographic footprint and health system relationships[8][9] About Quipt Home Medical Corp. Quipt Home Medical Corp. provides in-home monitoring and disease management services, specializing in respiratory solutions and chronic disease management - Provides in-home monitoring and disease management services, with a focus on end-to-end respiratory solutions for patients in the U.S. healthcare market[10] - Strategic objective is to expand offerings to include management of chronic disease states (heart/pulmonary disease, sleep disorders, reduced mobility) and increase shareholder value[10] - Organic growth strategy involves increasing annual revenue per patient by offering multiple services and consolidating patient services[10] Reader Advisories Forward-Looking Statements This section contains forward-looking statements, subject to various risks, uncertainties, and assumptions regarding future events and performance - Identifies forward-looking statements using terms like 'may,' 'would,' 'could,' 'should,' 'will,' 'seek,' 'intend,' 'plan,' 'anticipate,' 'believe,' 'estimate,' 'expect,' and 'outlook'[13][14] - Key assumptions include successful identification and completion of acquisitions, maintenance of current operating metrics, and absence of further external events like the Medicare 75/25 rate cut or Change Healthcare cybersecurity incident[14] - Risk factors include credit, market, liquidity, operational, reputational, insurance, strategic, regulatory, legal, environmental, and capital adequacy risks, as well as challenges in integrating acquired businesses, declining reimbursement rates, and increased competition[14] Non-GAAP Financial Measures Adjusted EBITDA Reconciliation This section defines and reconciles Adjusted EBITDA, a non-GAAP financial measure, to GAAP net loss for Q3 and nine months ended June 30, 2025 and 2024 - Adjusted EBITDA is a non-GAAP financial measure used to provide additional information on the Company's performance, calculated by adjusting net loss for various non-cash and non-operating items[15][16] Adjusted EBITDA Reconciliation ($ millions) | Metric ($ millions) | 3 months ended June 30, 2025 | 3 months ended June 30, 2024 | 9 months ended June 30, 2025 | 9 months ended June 30, 2024 | | :------------------ | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Net loss | (3.0) | (1.6) | (7.2) | (3.8) | | Add back: | | | | | | Depreciation and amortization | 11.2 | 11.1 | 33.6 | 33.0 | | Interest expense, net | 1.5 | 1.6 | 4.6 | 4.9 | | Right-of-use operating lease amortization and interest | 1.6 | 1.7 | 4.8 | 4.6 | | Provision for income taxes | — | — | 0.1 | 0.5 | | Professional fees | 1.3 | 0.7 | 3.1 | 2.2 | | Stock-based compensation | 2.1 | 0.5 | 2.6 | 2.2 | | Acquisition-related costs | 0.1 | 0.2 | 0.2 | 0.4 | | Change in fair value of derivative liability - interest rate swaps | 0.2 | (0.1) | (0.4) | 0.2 | | Gain on disposals of property and equipment | (0.8) | (0.1) | (0.9) | (0.1) | | Loss (gain) on foreign currency transactions | (0.6) | 0.1 | 0.2 | 0.1 | | Share of loss in equity method investment | 0.1 | 0.1 | 0.2 | 0.2 | | Adjusted EBITDA | 13.7 | 14.2 | 41.0 | 44.4 | Recurring Revenue Calculation This section defines and calculates Recurring Revenue for Q3 2025, which stood at 81% of total revenue - Recurring Revenue for Q3 2025 is calculated as rentals of medical equipment ($23.2 million) plus sales of respiratory resupplies ($23.8 million), totaling $47.0 million, divided by total revenues of $58.3 million, resulting in 81%[17] Net Debt to Adjusted EBITDA Leverage Ratio This section defines and reconciles the Net Debt to Adjusted EBITDA Leverage Ratio, which was 1.5x as of June 30, 2025 - Net Debt to Adjusted EBITDA Leverage Ratio is calculated as Net Debt divided by (Adjusted EBITDA for Q3 times four)[18] Net Debt to Adjusted EBITDA Leverage Ratio Reconciliation ($ millions) | Metric ($ millions) | As of and for the three months ended June 30, 2025 | | :------------------ | :------------------------------------------------- | | Senior credit facility, principal | $66.0 | | Equipment loans | $10.5 | | Lease liabilities | $16.9 | | Cash | ($11.3) | | Net Debt | $82.1 | | Adjusted EBITDA for Q3 times four | $54.8 | | Net Debt to Adjusted EBITDA Leverage Ratio | 1.5x |