OMNICELL, INC. Q1 FY2025 earnings call

• Business performed well in Q1 2025 driven by demand for Omnicell's medication management platform. - Focus on capturing market share in inpatient and outpatient settings, growing recurring revenue, and expanding OmniSphere cloud-based platform with AI. - Strong customer interest in Omnicell's innovation roadmap, with key customer wins in various healthcare settings. - Sourced a meaningful percentage of subassemblies from China, working on supply chain optimization with dual sourcing and nearshoring efforts.

Total revenue for Omnicell's First Quarter 2025 was $270 million, an increase of $24 million from Q1 2024. Product revenues were $145 million, which is an increase of $12 million over Q1 2024 and a decrease of $37 million compared to Q4 2024. Service revenues were $125 million, an increase of $12 million over Q1 2024 and flat compared to Q4 2024. Non-GAAP gross margin for Q1 2025 was 42.1%, a decrease of 530 basis points from the prior quarter due to lower product revenue volumes and seasonal expenses.

• Anticipate tariff impact on 2025 non-GAAP EBITDA to be approximately $40 million. - Revised 2025 full-year non-GAAP EBITDA and earnings per share guidance to reflect tariff impact. - Second quarter 2025 total revenue expected to be between $270 million and $280 million, non-GAAP EBITDA between $22 million and $30 million, and non-GAAP earnings per share between $0.19 and $0.32 per share. - Full-year 2025 total revenue expected to be between $1.105 billion and $1.155 billion, non-GAAP EBITDA between $100 million and $145 million, and non-GAAP earnings per share between $1 and $1.65.

• Tariff impact on non-GAAP EBITDA, with an expected $40 million impact in 2025. - Need for supply chain mitigation strategies as tariffs pose challenges to cost and profitability. - Fluid tariff environment with potential additional impacts from future changes not yet enacted.

Q: Can you describe what your outlook implies in terms of tariff distribution and passing through costs to customers?

A: At this moment, not passing significant price increases to customers, but reorienting supply chain to reduce tariff impact.

Q: Does XT Amplify have a more favorable supply chain relative to XT Cabinets?

A: XT Amplify is part of the XT portfolio, and point of care products including XT and Amplify components are sourced globally. XTExtend is being rolled out as we speak.

Q: What's the cadence of the $40 million tariff impact?

A: $5 million impact in Q2, with remainder in the second half of 2025, potentially biased towards Q4.

Q: How are hospital customers thinking about pharmacy IT budgets?

A: Specialty is a top topic, making pharmacy conversations more strategic for providers, driving demand for pharmacy IT solutions.

Q: What are the key mitigation steps for tariffs?

A: Reallocating supply chain footprint to more favorable geographies, accelerating component shipments from lower tariff regions, and evaluating pricing actions.

Q: How much time to disintermediate supply chain exposure to China?

A: Takes time, with actions to move components to other nodes, but some components still flow through China/Taiwan. Revenue exposure to China is not material.

Q: Progression of expected revenue growth in product and services?

A: Strong momentum in Amplify portfolio, which started last year, with continued growth. Guidance reflects slowdown in year-over-year growth rate but strong long-term prospects for Amplify.