GRDN

• Organizational Leadership Changes

  • David Morris, former CFO, appointed Chief Operating Officer to oversee operations and sales, including the new field operations leadership team
  • Will Mudd, a long-tenured company employee, appointed Chief Financial Officer, reflecting strong internal talent development and succession planning
  • Co-founder Kendall Forbes retired after contributing to Guardian's long-term development
  • Eight internal senior vice presidents appointed to new regional leadership roles to improve consistency, accountability, and local support while preserving entrepreneurial local decision-making

• Clinical and Operational Progress

  • Clinical capabilities drive top-line growth: over 300,000 residents served in H1 2026, with over 50,000 clinical interventions completed to reduce medication-related adverse health outcomes
  • The new Falls Risk Program is being expanded to additional facilities, with early data showing meaningful improvement in patient outcomes
  • Operational scale benefits include improved purchasing leverage, higher labor productivity, and greater support infrastructure efficiency, translating top-line growth to bottom-line gains
  • Q2 2026 cash conversion returned to normalized levels after a one-time Q1 2026 working capital reset tied to IRA implementation

• Growth Activity

  • Post-quarter end, Guardian acquired Wellness Concepts, a small long-term care pharmacy in Virginia that aligns with the company's acquisition strategy
  • Launched the company's first Greenfield pharmacy location in Lexington, Kentucky, the first Guardian location in the state, developed using existing local market expertise from adjacent regions
  • The company prioritizes M&A and Greenfield startups as attractive capital allocation uses to drive incremental growth

Management raised full-year 2026 guidance based on strong first-half performance:

• Full-year 2026 revenue guidance updated to $1.43 billion to $1.45 billion, upward from the prior range of $1.4 billion to $1.42 billion
• Full-year 2026 adjusted EBITDA guidance updated to $129 million to $131 million, upward from the prior range of $123 million to $127 million
• Guidance does not include any potential contribution from future unannounced acquisitions
• Second half 2026 reported revenue is expected to decline low single digits year-over-year due to continued IRA pricing impacts, but underlying organic revenue growth (excluding IRA reductions) is expected to be high single digits, with only a modest contribution from 2026 acquisitions
• Adjusted EBITDA margin is expected to stay relatively stable in Q3 2026, followed by a typical seasonal increase in Q4 2026 tied to annual vaccine activity

Guardian Pharmacy does not break out results for separate product segments in this earnings call. Aggregate consolidated results for Q2 2026 are: reported revenue of $351.2 million, up 2% year-over-year. Gross profit increased 18% year-over-year to $80 million, with a gross margin of 22.8%. SG&A expense was $56.5 million, equal to 16.1% of revenue. Adjusted EBITDA was $29.7 million, up 19% year-over-year, with an adjusted EBITDA margin of 8.4%. Net income was $22.1 million (inclusive of an $8.5 million one-time settlement gain) compared to $8.8 million in the year-ago quarter. End-of-quarter cash balance was approximately $90 million, up from $65 million in the prior quarter. For the first half of 2026, reported revenue grew 2% year-over-year, and adjusted EBITDA grew 23% year-over-year.

• Continued downward pressure on top-line reported revenue from IRA-related drug pricing reductions, which will result in a low single-digit year-over-year reported revenue decline in the second half of 2026
  • New Greenfield and acquired pharmacy locations operate below consolidated corporate margin targets during their ramp phase, creating temporary margin dilution for the consolidated business (this dilution decreased to 60 basis points in Q2 2026 from 80 basis points in Q1 2026 as ramping assets improve)
  • Persistent cost pressure from elevated fuel costs that negatively impacts gross margin
  • Forward-looking performance is subject to risks and uncertainties that could cause actual results to differ materially from management's current expectations
  • The 2028 tranche of IRA pricing changes will still result in some revenue decline, though the impact will be smaller than the 2026 impact

Q: What is the typical ramp timeline for new M&A and Greenfield assets to reach corporate average profitability, and how strong is the current pipeline for future M&A and Greenfield growth? / A: Management states the typical ramp to average profitability is roughly four years, with some assets ramping faster or slower depending on the specific situation. They note the company currently holds a very robust pipeline for both Greenfield launches and new M&A activity, aligned with the firm's long-standing growth strategy.

Q: What is the expected impact of the 2028 tranche of IRA drug pricing changes, and have payer contracts already been adjusted to mitigate future margin impacts? / A: Management confirms the next tranche of IRA changes will cause some revenue decline from price cuts, but the 2028 tranche's revenue impact will be roughly 40% of the size of the 2026 tranche's impact. They note they are comfortable that margin impacts from these future changes have been fully mitigated through existing operational and contracting adjustments.

Q: What benefits will the new regional leadership structure bring to Guardian, and will it change day-to-day operations? / A: The new regional leaders are long-tenured, experienced internal operators who have grown existing regional businesses. They will provide improved guidance, support, and best practice sharing to local pharmacy teams (including newer teams from recent M&A), strengthening organizational capabilities to support continued scaled growth. Changes will be gradual, and the firm has already seen early positive impacts from the restructuring.

Q: Outside of M&A and Greenfield investment, how is management thinking about capital deployment with a strong cash balance and no debt? Is shareholder returns a near-term priority? / A: Management's primary capital priority remains deploying cash into M&A and Greenfield development, as these options leverage Guardian's existing platform very effectively. They plan to hold dry powder to retain flexibility in case a potential opportunity emerges to acquire divested Omnicare assets, so they are maintaining a flexible approach to additional capital deployment for the time being.