BrightSpring Health Services(BTSG) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total company revenue for Q1 2025 was $2.9 billion, representing a 26% year-over-year growth [7][27] - Pharmacy solutions revenue was $2.5 billion, achieving 28% growth year-over-year [7][27] - Provider services revenue was $346 million, reflecting a 12% growth compared to the prior year [7][27] - Adjusted EBITDA for the company was $131 million, growing 28% year-over-year [7][29] - Adjusted EBITDA margin improved despite calendar dynamics, with a negative impact from fewer days in Q1 2025 compared to Q1 2024 [9][29] Business Line Data and Key Metrics Changes - In the pharmacy segment, total revenue grew 28% in Q1, with adjusted EBITDA increasing by 31% [13][30] - Specialty and infusion business revenue grew 33% year-over-year, driven by new drug launches [13][30] - Home health care revenue grew 21% year-over-year, while rehab revenue increased by 5% and personal care revenue grew by 3% [20][28] Market Data and Key Metrics Changes - The company continues to see strong demand for home and community-based health services, with a focus on high-quality care [10][19] - The company has maintained a mid-teens revenue and EBITDA CAGR over the past nine years, indicating consistent growth [19] Company Strategy and Development Direction - The company is focused on leveraging its scale and investing in operational efficiencies to drive growth [6][10] - A planned divestiture of the Community Living business is expected to close in the second half of 2025, which will be reported in discontinued operations [6][7] - The company is optimistic about growth opportunities in pharmacy and provider businesses, particularly in assisted living and behavioral health [25][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining growth despite potential regulatory changes, including the IRA [38][42] - The company expects to deliver over $300 million in annual operating cash flows in 2025, with a focus on improving leverage ratios [31][32] - Management remains optimistic about the infusion business and its growth potential [90] Other Important Information - The company has a robust pipeline for generic drug launches, which is expected to enhance profitability [51] - Approximately 50% of the company's drug supply comes from the U.S. and North America, mitigating potential tariff impacts [17][19] Q&A Session Summary Question: What drove the strong gross profit per script in the quarter? - Management attributed the increase to a favorable mix of drugs and proactive purchasing efforts [35] Question: How does the IRA impact pharmacy growth in the second half of the year? - Management does not foresee a significant impact from the IRA on pharmacy growth rates [38][42] Question: Can you provide an update on the Amedisys acquisition? - Management stated that they are subject to confidentiality and cannot disclose details but emphasized their strong platform and lack of geographical overlap [54] Question: What are the potential scenarios around tariffs? - Management indicated that there are currently no meaningful tariffs in place and that any potential increases would be manageable [58][60] Question: Is the Amedisys deal indicative of more M&A activity? - Management confirmed that the deal aligns with their acquisition philosophy and does not impact leverage goals [66][68] Question: What is the guidance update for 2025? - Management increased revenue guidance to $12 billion to $12.5 billion, reflecting strong pharmacy performance [32][33]