Viemed Healthcare, Inc. Q2 FY2025 earnings call

• Disciplined execution of long-term strategy driving tangible results, with 17th consecutive quarter of increased active ventilator patient count.
• Complementary offerings like sleep and resupply showing strong sequential and year-over-year growth, diversifying revenue mix and strengthening margins.
• Acquisition of Lehan Medical Equipment entering maternal health space, diversifying patient base and leveraging infrastructure/payer relationships.
• Positive view on NCD final rule, ending step therapy on BiPAP which benefits patients and reduces operational lift; preparing with Engage Care Manager technology for usage metrics documentation.
• Anticipation of industry consolidation due to NCD challenges for smaller operators.
• Well-positioned to navigate potential competitive bidding for DME, with sophistication of providers likely aiding success.

Vents accounted for 54% of revenues. Vent revenue was up 5% sequentially and 11% year-over-year. Sleep therapy accounted for 19% of revenues; sleep therapy patients were up 15% sequentially and 51% year-over-year, with new patient setups up 72% year-over-year. Staffing was 8% of revenue. Resupply was up 10% sequentially and 25% year-over-year. The core Vent business was the largest segment at 54% of revenue, followed by sleep at 19%, staffing at 8%, and others.

• Raised full-year 2025 net revenue range to $271 million to $277 million, implying 22% growth over 2024 at midpoint.
• Raised adjusted EBITDA range to $59 million to $62 million, implying 18% growth over 2024 at midpoint.
• CapEx expected to normalize after completing ventilator exchanges with Philips.
• Anticipated improvement in adjusted free cash flow sequentially through the balance of the year.
• Board authorized share repurchase program to repurchase up to 5% of outstanding common stock, with $1.8 million spent on repurchasing shares in Q2.

• Tariffs: No material impact seen yet, but monitoring suppliers for potential effects; Nairobi Protocol expected to exempt most medical equipment from tariffs.
• Competitive bidding for DME: Potential resumption, with typical 12-18 month implementation period suggesting earliest effect in 2027, possibly delayed to 2028 or 2029.
• NCD compliance: Smaller operators without scale may struggle with documenting and reporting usage metrics, potentially leading to industry consolidation.

Q: On the vent program upgrade and exchanges, can you go into more detail on benefits?

A: Financially, got cash back for vents higher than net book value. Clinically, got new vents with lower repairs/maintenance, better technology.

Q: On sleep therapy patient count growth, any unusual factors?

A: No specific unusual factors, growth due to increased sales staff, sales force selling sleep, operational soundness, and possible correlation with GLP-1s and people taking sleep health more seriously.

Q: On quarterly revenue dynamics in staffing business and decline in Q2?

A: 76% of staffing business from behavioral health and social service needs, sequential slowdown due to softened labor demand, but optimistic for appropriations in back half of year