Option Care Health’s first quarter results for 2025 delivered revenue and adjusted profits above Wall Street expectations, but the market responded cautiously. Management pointed to balanced growth across its acute and chronic therapy portfolios as key drivers, with acute therapies benefiting from improved intravenous bag supply and robust local execution. CEO John Rademacher highlighted the company’s ability to partner with referral sources and health plans, emphasizing, “our national scale and local responsiveness places us in a unique position.” The quarter also saw investments in technology and expanded nursing capabilities, while a muted impact from procurement changes in the STELARA therapy helped limit gross profit headwinds.
Is now the time to buy OPCH? Find out in our full research report (it’s free).
Option Care Health (OPCH) Q1 CY2025 Highlights:
- Revenue: $1.33 billion vs analyst estimates of $1.26 billion (16.3% year-on-year growth, 6.1% beat)
- Adjusted EPS: $0.40 vs analyst estimates of $0.34 (20% beat)
- Adjusted EBITDA: $111.8 million vs analyst estimates of $102.8 million (8.4% margin, 8.8% beat)
- The company lifted its revenue guidance for the full year to $5.5 billion at the midpoint from $5.4 billion, a 1.9% increase
- Management slightly raised its full-year Adjusted EPS guidance to $1.66 at the midpoint
- EBITDA guidance for the full year is $462.5 million at the midpoint, in line with analyst expectations
- Operating Margin: 5.9%, in line with the same quarter last year
- Market Capitalization: $5.16 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Option Care Health’s Q1 Earnings Call
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Lisa Gill (JPMorgan) asked about the rationale for cautious guidance despite a strong quarter. CFO Mike Shapiro explained that seasonality, lingering uncertainties around tariffs, and the timing of STELARA inventory impacts warranted a measured approach.
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Pito Chickering (Deutsche Bank) pressed on the potential effects of tariffs on pharmaceutical procurement and reimbursement. Shapiro detailed how reference pricing structures may partially offset supplier price hikes, but acknowledged lags and variability across contracts.
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Constantine Davides (Citizens) inquired about evolving payer relationships and their influence on both acute and chronic therapy volumes. CEO John Rademacher described deeper engagement with payers focused on site-of-care cost savings and expanded therapy offerings.
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Matt Larew (William Blair) asked about the sustainability of acute therapy growth and share shift opportunities. Shapiro noted that some factors are temporary, related to market dynamics and competitive exits, and growth rates may moderate over time.
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Joanna Gajuk (Bank of America) sought clarification on the STELARA headwind timing and the scale of tariff exposure on non-pharmaceutical supplies. Management provided detail on inventory-driven timing of gross profit impacts and minimal direct exposure to Chinese-sourced medical supplies.
Catalysts in Upcoming Quarters
In the coming quarters, our team will focus on (1) the pace and sustainability of acute and chronic therapy growth as competitive dynamics shift, (2) the effectiveness of technology investments in driving operational efficiency and cash flow, and (3) the company’s ability to mitigate potential tariff and reimbursement headwinds. Progress on integrating recent acquisitions and expanding infusion clinic capacity will also be closely watched.
Option Care Health currently trades at $31.53, down from $32.98 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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