Financial Data and Key Metrics Changes - Revenue for Q4 2024 was approximately $520 million, representing an 8.6% increase year-over-year [5][16] - Full year 2024 revenue was approximately $2.024 billion, a 6.8% increase over the prior year [5] - Adjusted EBITDA for Q4 was $55.2 million, a 42.6% increase year-over-year, primarily due to improved payer rates and cost reduction efforts [5][16] - Full year 2024 adjusted EBITDA was $183.5 million, a 31.8% increase over the prior year [5] Business Line Data and Key Metrics Changes - Private Duty Services (PDS) revenue for Q4 was approximately $422.2 million, a 10.1% increase, driven by a volume increase of 4% [17] - Home Health and Hospice segment revenue for Q4 was approximately $54.4 million, a 0.6% increase, with 76% of admissions being episodic [19][21] - Medical Solutions segment revenue for Q4 was approximately $43.3 million, a 4.8% increase, with revenue per unique patient served at approximately $486, up 5.9% [22] Market Data and Key Metrics Changes - Preferred payer agreements accounted for approximately 50% of total PDS Managed Care Organization (MCO) volumes in Q4, up from 47% in Q3 [10] - The episodic payer mix for home health was 76% in Q4, exceeding the goal of 70% [10][11] Company Strategy and Development Direction - The company continues to focus on enhancing partnerships with government partners and preferred payers to create additional capacity and growth [14] - The strategic plan for 2025 includes identifying cost efficiencies, modernizing the medical solutions business, and managing capital structure while producing positive free cash flow [14] - The company aims to increase the number of preferred payer agreements in PDS from 22 to 30 by the end of 2025 [35][74] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the labor market improving and the demand for home and community-based care remaining strong [6][13] - The initial outlook for 2025 anticipates revenue in the range of $2.1 billion to $2.12 billion and adjusted EBITDA between $190 million and $194 million [14][27] - Management highlighted the importance of aligning clinical capacity with preferred payers to improve clinical outcomes and financial performance [12][52] Other Important Information - The company secured 12 private duty services state rate increases for the full year 2024, with significant improvements in Georgia and Massachusetts [8] - The company had liquidity of approximately $260 million at the end of Q4, providing ample room to operate and invest in growth [25] Q&A Session Summary Question: Guidance on top line growth and EBITDA margins - Management characterized their guidance as prudent, expecting continued momentum in 2025 with solid rate increases and preferred payer execution [31][32] Question: M&A pipeline focus - The company is focused on tuck-in acquisitions in home health and private duty services, planning to stay within its capital structure [34][35] Question: PDS segment rate growth and gross margin progression - Management indicated confidence in PDS growth rates, with expectations for spread per hour to normalize between $10 and $10.5 [40][41] Question: Capital allocation and leverage comfort - The company aims to continue deleveraging while maintaining a strong cash flow position, with a focus on organic growth and potential M&A opportunities [43][48] Question: Medical solutions payer strategy and contract conversions - The company is aligning clinical capacity with preferred payers and expects to see improved clinical outcomes and margin expansion in the Medical Solutions segment [51][52] Question: Medicaid regulatory changes and policy discussions - Management expressed confidence in being a cost saver for government programs and is well-positioned to adapt to potential changes in Medicaid [57][68] Question: Revenue guidance for PDS revenue growth - The guidance implies a total revenue growth of 3% to 5% in the PDS segment, with a focus on increasing preferred payer volumes [72][74]

Financial Data and Key Metrics Changes - Total net revenues for Q4 2024 increased by 7.1% year-over-year to RMB 1.15 billion from RMB 1.07 billion in the prior year period [24] - Gross margin for Q4 2024 increased to 77.8% from 73.7% in the prior year period, driven by higher gross margin products [10][25] - For the full year 2024, total net revenues decreased by 0.6% year-over-year to RMB 3.39 billion from RMB 3.41 billion [34] - Net loss for the full year 2024 was RMB 710.2 million, a decrease from RMB 750.2 million in the prior year [36] Business Line Data and Key Metrics Changes - Combined revenues from clinical and premium skincare brands grew by 3% year-over-year, while color cosmetics revenues increased by 16.4% in Q4 2024 [9][10] - Skincare revenues grew by 0.7% year-over-year for the full year 2024, with skincare brands accounting for 41.1% of total net revenues [11] - Color cosmetics revenues saw a modest decline of 0.3% year-over-year for the full year 2024 [11] Market Data and Key Metrics Changes - The overall beauty retail sales in China declined by 1.5% year-over-year in Q4 2024, contrasting with total retail sales of consumer goods which grew by 3.8% [8] Company Strategy and Development Direction - The company is focusing on balancing revenue growth between skincare and color cosmetics, with skincare expected to be a stable growth engine [44][49] - Strategic initiatives include enhancing brand equity, refining product and channel mix, and investing in R&D for sustainable growth [13][18] - The company aims to improve operational efficiencies and strategically allocate resources for long-term growth [22] Management's Comments on Operating Environment and Future Outlook - Management noted that headwinds in the beauty market will persist, with intensified price competition and more rational consumer purchasing decisions [44] - The company expects total net revenues for Q1 2025 to be between RMB 788.8 million and RMB 866.2 million, reflecting a year-over-year increase of approximately 2% to 12% [38] Other Important Information - R&D expenses represented 3.2% of total net revenues for the full year 2024, highlighting the company's commitment to innovation [18] - The company achieved its lowest full-year net loss and non-GAAP net loss since 2020 [12] Q&A Session Summary Question: Future profitability expectations for 2025 and resource allocation between categories - Management acknowledged the positive Q4 performance and emphasized the importance of maintaining and improving gross margin growth while balancing growth and profitability [44] - Skincare is expected to remain a key stable growth engine, while color cosmetics, particularly Perfect Diary, are anticipated to contribute to sustainable growth [45][49]