Image source: The Motley Fool.
DATE
Friday, Feb. 27, 2026 at 8:30 a.m. ET
CALL PARTICIPANTS
- Chief Executive Officer — Jon Rousseau
- Chief Financial Officer — Jennifer A. Phipps
- Investor Relations — David Deuchler
Need a quote from a Motley Fool analyst? Email [email protected]
TAKEAWAYS
- Total Revenue — $12.9 billion, achieving 28% year-over-year growth, driven by both Pharmacy Solutions and Provider Services.
- Pharmacy Solutions Revenue — $11.4 billion, up 31% year over year; Provider Services revenue was $1.5 billion, up 11% year over year.
- Fourth-Quarter Revenue — $3.6 billion, reflecting 29% year-over-year growth, with Pharmacy Solutions contributing $3.2 billion (32% growth) and Provider Services $394 million (13% growth).
- Specialty and Infusion Revenue — $2.6 billion for the quarter, marking 43% growth year over year; home and community pharmacy revenue declined 1% to $593 million, attributed to a customer bankruptcy and exiting uneconomic accounts.
- Fourth-Quarter Gross Profit — $413 million, rising 22% from the prior year; Pharmacy Solutions gross profit increased 25% to $255 million and Provider Services gross profit rose 17% to $158 million.
- Adjusted EBITDA — $618 million for the year, a growth of 34%, with a full-year margin of 4.8%, up 20 basis points primarily from procurement efficiencies and revenue mix; fourth-quarter adjusted EBITDA reached $184 million (41% year-over-year growth).
- Cash Flow from Operations — $490 million for the year and $232 million in the fourth quarter, exceeding company expectations.
- Leverage Ratio — 2.99x as of year-end, improved from 4.16x prior year; pro forma for the Community Living sale, leverage is expected at 2.6x.
- Community Living Divestiture — Transaction expected to close end of Q1 with net after-tax proceeds of approximately $715 million, “primarily utilize for debt pay down.”
- Amedisys and LHC Acquisition — Two-part transaction closing with 107 branches acquired for $239 million cash, generating $345 million in full-year pro forma 2025 revenue; anticipated EBITDA contribution of $30 million in 2026.
- 2026 Guidance — Total revenue expected in the $14.45 billion-$15.0 billion range (11.9%-16.2% growth); adjusted EBITDA guidance of $760 million-$790 million (23.1%-27.9% growth), excluding Community Living and unclosed deals.
- Quality and Service Metrics — Over 91% of home health branches at four stars or greater, with 99.4% timely care initiation; hospice CAHPS rating 87%; rehab satisfaction scores of 100% outpatient and 98.4% home/community; pharmacy dispensing accuracy 99.99% with on-time delivery of 96.8%.
- Specialty Pharmacy Limited Distribution Drugs (LDDs) — Total portfolio at 149 LDDs, with 24 launches in 2025; expectation for 16-20+ launches over next 12-18 months.
- Provider Segment Details — Q4 home health revenue $217 million (19% growth); average daily census up 15% to nearly 35,000; rehab revenue $75 million (8% growth) with 17% growth in hours billed for core neuro rehab; personal care revenue $102 million (4% growth) with persons served up 2%.
- Operational Investments — Ongoing investments in AI, technology, process automation, and sales resources stated as part of 2026 plan for productivity and margin expansion.
- Segment Margins — Provider Services fourth-quarter adjusted EBITDA margin was 16.4% (up 50 basis points); Pharmacy Solutions margin was 5.1% (up 40 basis points).
- IR Act (IRA) and Brand-to-Generic Conversions — Expected 2026 revenue headwinds of approximately $200 million in specialty/infusion, $400 million from brand-generic conversions, and $175 million in home and community, totaling nearly $775 million, partially offset by growth.
SUMMARY
BrightSpring Health Services (BTSG +9.97%) reported sizeable top-line expansion, driven by strong performance in specialty, infusion, and provider services, with segment-level margin improvement attributable to procurement strategies and operational efficiencies. The closure of the Community Living business is slated to further improve the company’s leverage profile, while integration of Amedisys and LHC is expected to augment 2026 EBITDA. Management explicitly highlighted material revenue headwinds from the Inflation Reduction Act and generic conversions but detailed ongoing payer negotiations for dispensing fees and productivity initiatives intended to address these challenges. Forecasted revenue and EBITDA for 2026 exclude potential contributions from pending transactions, maintaining transparency and operational clarity for investors.
- CEO Rousseau stated, “and financial performance exceeded the high end of our guidance range for the year.”
- Fourth-quarter specialty and infusion script growth reached 30% year over year, propelled by “market adoption of existing LDDs, new LDD wins, fee-for-service growth, and strong commercial execution.”
- Management’s 2026 guidance assumes “broad-based margin expansion” from late 2025 and 2026 initiatives, aided by “favorable mix both in terms of product and services.”
- Pharmacy Solutions script volume was 10.8 million in the quarter, with CEO Rousseau describing total pharmacy volumes as declining 1% due to the impact of “customer going through bankruptcy and our decision to exit specific uneconomic customers.”
- Integration work for Amedisys and LHC branches is expected to lift margins “towards our overall profile” over time, as stated by CFO Phipps.
- Sequential quarterly growth for both revenue and margin is anticipated throughout 2026, with Q1 forecasted as the lowest quarter due to fewer days and product launch timing.
- Operational cash flow and deleveraging have enabled the company to complete recent acquisitions with cash on hand, providing what management described as increased “capital allocation flexibility in 2026 and beyond.”
- Payer negotiations secured “enhanced dispensing fee” agreements in LTC pharmacy, providing partial mitigation for IRA-related headwinds.
INDUSTRY GLOSSARY
- LDD (Limited Distribution Drug): Pharmaceuticals available only via a small number of specialty pharmacies, typically due to complexity, high cost, or need for special handling.
- CAHPS (Consumer Assessment of Healthcare Providers and Systems): A standardized survey instrument used to measure patients’ perceptions of care quality and satisfaction.
- ADC (Average Daily Census): The average number of patients served per day within a given period, often used in provider or facility-based healthcare settings.
- IRA (Inflation Reduction Act): 2022 U.S. legislation impacting prescription drug pricing and reimbursement mechanisms, producing meaningful revenue headwinds for healthcare service providers.
- Payer: An entity (insurer, government, or managed care organization) responsible for paying for healthcare services received by patients.
- MMIT Survey: Rankings based on the Managed Markets Insight & Technology physician and staff satisfaction survey, commonly referenced in specialty pharmacy.
- ACHC IG Distinction: Accreditation Commission for Health Care award for excellence in Immunoglobulin (IG) therapy, signifying high standards of clinical and operational care.
- De novo: Refers to business expansion via newly established locations, as opposed to acquisitions.
- Fee-for-service: A payment model where healthcare providers are paid for each service performed.
- Hub: An integrated service point for pharmaceutical manufacturers supporting specialty therapy access, patient support, and data exchange.
Full Conference Call Transcript
David Deuchler: Thank you for participating in today’s conference call. My name is David Deuchler with Investor Relations for BrightSpring Health Services, Inc. Common Stock. I am joined on today’s call by Jon Rousseau, Chief Executive Officer, and Jennifer A. Phipps, Chief Financial Officer. Earlier today, BrightSpring Health Services, Inc. Common Stock released financial results for the quarter and full year ended 12/31/2025. A copy of the press release and presentation is available on the company’s Investor Relations website. Please note that today’s discussion will include certain forward-looking statements that reflect our current assumptions and expectations, including those related to our future financial performance and industry and market conditions. Forward-looking statements are not a guarantee of future performance.
These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations. We encourage you to review the information in today’s press release and presentation, as well as in our Annual Report and Form 10-Ks that we file with the SEC, including the specific risk factors and uncertainties discussed in our Form 10-Ks. Such factors may be updated from time to time in our periodic filings with the SEC, and we do not undertake any duty to update any forward-looking statements except as required by law. During the call, we will use non-GAAP financial measures when talking about the company’s financial performance and financial condition.
You can find additional information on these non-GAAP measures and reconciliations of our non-GAAP financial measures to their most directly comparable GAAP financial measures, to the extent available without unreasonable effort, in today’s earnings press release and presentation, which again are available on the Investor Relations website. This webcast is being recorded and will be available for replay on our Investor Relations website. With that, I will turn the call over to Jon Rousseau, Chief Executive Officer.
Jon Rousseau: Good morning, everyone, and thank you for joining BrightSpring Health Services, Inc. Common Stock’s fourth quarter and full year 2025 earnings call. I would like to begin by expressing my and the company’s appreciation to all of our BrightSpring teammates who work hard to deliver attentive and quality patient care and services to people in communities across the country. They drive the realization of our mission forward every day. 2025 was another productive and impactful year at BrightSpring Health Services, Inc. Common Stock in many ways. Overall, we saw continued success delivering revenue and EBITDA growth while achieving many milestones, all underpinned by the delivery of high-quality and compassionate services and care to patients.
In the beginning of 2025, we announced our plan to divest the Community Living business, which will streamline the company’s operations and create more focus on core patient populations in prioritized markets. Earlier this year, the Community Living divestiture transaction was approved by the and at this time, we expect the transaction to close at the end of the first quarter. The transaction is expected to result in net after-tax cash proceeds of approximately $715 million, which we intend to primarily utilize for debt pay down to further improve our leverage and further strengthen the balance sheet. Additionally, the acquisition of Amedisys in 2025 in a two-part transaction on December 1 and December 31. BrightSpring Health Services, Inc.
Common Stock acquired 107 branches at a purchase price of $239 million, which was fully funded from cash on hand. The assets generated full-year pro forma revenue of $345 million in 2025, which includes the months throughout the year prior to the transaction close. These assets are very complementary to our existing home health business from a geographic perspective, while also being in the same markets as our hospice locations in many cases, and we are thrilled to have the Amedisys and LHC assets and colleagues integrated into BrightSpring Health Services, Inc. Common Stock, as we are already taking steps to bring new and improved company capabilities to these acquired operations.
This is another example of thoughtful, logical, strategic, and accretive M&A that has defined our acquisitions history. Home health, of course, has a tremendous value proposition given its impact on clinical outcomes and cost, as it is shown to reduce ER visits and hospitalizations by 15% and 25%, respectively, and reduce mortality rates by 30% relatively. With an estimated 35% of patients referred to home health but who do not end up receiving the service, home health should continue to be an important solution in the future of health care.
See More
