Option Care Health, Inc. Q1 FY2026 earnings call

• Appreciation for the team's work in a dynamic first quarter. - Strategy built on national scale with patients at the center. - Mixed performance in first quarter with strong acute therapy portfolio execution, transitional period for chronic therapy portfolio, and certain challenges in CID portfolio. - Actions taken to sharpen execution, including increasing commercial team strength, focusing on operational excellence, deploying technology, and refining go-to-market model. - Positive momentum in alliances with payer and pharma partners, ambulatory infusion clinic utilization increase, and traction in oncology portfolio.

First quarter revenue was $1.4 billion, up slightly over 1% compared to last year. Acute revenue growth was in the high single digits, while chronic revenue declined slightly. Adjusted EBITDA was $105 million, down 6% over prior year but in line with expectations. Gross profit dollars declined slightly due to chronic revenue decline. SG&A grew 4%. Full year net revenue guidance adjusted to $5.675 billion to $5.775 billion, maintaining EBITDA and adjusted EPS ranges.

• Adjusted full year net revenue guidance to $5.675 billion to $5.775 billion, representing just over 1% growth at midpoint. - Maintaining full year EBITDA range of $480 million to $505 million and adjusted EPS range of $1.82 to $1.92. - Expecting second quarter sequential revenue growth in the mid-single digits with EBITDA sequential growth in the high single digits.

• Industry dynamics impacting chronic therapy portfolio, including higher volume of patients with insurance plan, benefit design, or formulary management changes leading to elongated approval decisions and unfavorable therapy transition and patient retention. - Risks associated with regulatory or commercial launch delays for rare and orphan programs. - Competitive dynamics in the healthcare industry affecting patient retention and market share.

• Q: Lisa Gill asked about gross profit headwind and benefit re-verification timing.

A: John and Minal discussed reasons for the headwind and the nature of benefit re-verification. - Q: Pito Chickering asked about 2Q EBITDA growth and back half ramp.

A: John and Meenal talked about positive aspects of the business and factors driving growth. - Q: David McDonald asked about conversion and resources.

A: Dave and John explained the elongated re-verification process and efforts to address it. - Q: Brian Chanquillette asked about patient market share loss and visibility.

A: John and Brian discussed patient census clarity and future growth. - Q: Joanna Gajuk asked about therapeutic exchanges and cost savings offset.

A: Meenal and John explained the impact of therapeutic exchanges and cost management efforts. - Q: Konstantin Savides asked about guidance assumptions and acute growth.

A: Scott and Meenal talked about guidance assumptions and acute growth confidence. - Q: Erin Wright asked about 2027 risk and headwind sequence.

A: Meenal stated no additional headwind expected in 2026 or 2027. - Q: Charles Rye asked about acute growth continuation and margin comparison.

A: John talked about acute growth continuation and portfolio importance. - Q: Michael Petusky asked about gross profit and margin and stock comp.

A: Meenal clarified on gross profit and margin focus and stock comp. - Q: Matt LaRue asked about competitive dynamics and patient acquisition costs.

A: John discussed competitive environment and unique circumstances affecting patient retention. - Q: Raj Kumar asked about chronic growth and capital investment conviction.

A: John talked about chronic growth areas and investment focus. - Q: AJ Rice asked about capital deployment priorities.

A: Meenal stated capital allocation priorities remain intact.