BrightSpring Health Services Q3 Earnings Call Highlights

Key Points

• BrightSpring exceeded Q3 expectations: Revenue rose 26% year over year to $4.2 billion, adjusted EBITDA increased 42% to $228 million, and adjusted EPS climbed 80% to $0.54. Operating cash flow topped $200 million.
• Pharmacy Solutions drove growth with 26% revenue growth and 43% segment EBITDA growth, while Provider Services revenue increased 31%, supported by the Amedisys and LHC acquisitions. Home and community pharmacy revenue declined 6% due partly to Inflation Reduction Act impacts and exits from uneconomic relationships.
• BrightSpring raised its 2026 outlook to $850 million–$860 million in adjusted EBITDA and $15.9 billion–$16.125 billion in revenue, while reiterating expectations for at least 15%–20% organic adjusted EBITDA growth in 2027.

BrightSpring Health Services NASDAQ: BTSG reported third-quarter results above its forecast, with revenue rising 26% year over year to $4.2 billion and adjusted EBITDA increasing 42% to $228 million. Adjusted earnings per share were $0.54, up 80% from the prior-year quarter and 20% sequentially, while operating cash flow exceeded $200 million.

CEO Jon Rousseau said the company’s performance reflected growth across its Pharmacy Solutions and Provider Services businesses, supported by patient reach, operating efficiency and acquisitions. Results and guidance exclude the Community Living business, which was divested on March 30 and is classified as discontinued operations.

Pharmacy Solutions Leads Revenue Growth

Pharmacy Solutions generated $3.7 billion in third-quarter revenue, up 26% from a year earlier, and segment EBITDA of $202 million, up 43%. Specialty and infusion revenue rose 34% to $3.2 billion, driven by 29% script growth, branded limited distribution drug, or LDD, launches, generics, pharmaceutical services and mid-teens growth in acute and chronic infusion therapies.

The company launched seven LDDs during the quarter, bringing the year-to-date total to 19 and its overall portfolio to 162 LDDs. Rousseau said the 2026 launches are outperforming the company’s 2025 launches during their first year. He added that LDD opportunities generally begin developing at least a year before a therapy’s launch, though timing can vary by product.

Chief Financial Officer Jen Phipps said pharmacy revenue per script was $340.86, up 24% year over year, while gross profit per script rose 27% to $28.86. She said the quarter-over-quarter improvement was primarily driven by mix, including faster growth in specialty and infusion scripts, which carry higher gross profit per script than the company average. However, Phipps said management focuses on absolute gross profit and EBITDA growth rather than per-script metrics.

Home and community pharmacy revenue declined 6% to $553 million, reflecting an approximately $50 million impact from the Inflation Reduction Act and the company’s exit from certain uneconomic customer relationships. BrightSpring expects another approximately $50 million IRA-related impact in the fourth quarter, bringing the full-year impact to about $200 million. Rousseau said the unit nevertheless has become a contributor to organic growth through operational and technology investments, as well as expansion in markets including hospice, senior living, PACE and behavioral health.

Provider Services Expands, Supported by Acquired Branches

Provider Services revenue increased 31% to $481 million, while segment EBITDA rose 30% to $79 million. Segment EBITDA margin was 16.4%, consistent with the prior-year quarter. Excluding acquired Amedisys and LHC branches, Provider Services EBITDA grew 16%.

Home healthcare revenue climbed 50% to $288 million. The acquired Amedisys and LHC branches contributed approximately $76 million in quarterly revenue, while revenue excluding those locations increased 12%. Rousseau said the integration has performed as expected, particularly in IT and back-office functions, and BrightSpring continues to expect approximately $35 million in adjusted EBITDA contribution from the acquired branches during 2026.

Rousseau said home healthcare average daily census grew approximately 58%, supported by de novo locations, preferred Medicare Advantage relationships, business development and the acquired branches. He said 96% of legacy home health branches are rated four stars or better.

Elsewhere in Provider Services, rehab care revenue increased 8% to $82 million, and personal care revenue rose 8% to $111 million, with growth tied to persons served and hours billed. Rousseau said demand in personal care continues to exceed the company’s ability to provide services.

Cash Flow, Capital Deployment and Primary Care

BrightSpring generated $204 million in operating cash flow during the quarter. As of Sept. 30, the company had approximately $2.2 billion of debt and $718 million of cash, resulting in net debt of about $1.5 billion and a leverage ratio of 1.79 times. The company has repurchased $120 million of shares year to date.

Rousseau said the company remains active in acquisition opportunities and expects to pursue a balanced approach across service lines. While tuck-in acquisitions remain its main focus, he said BrightSpring may increasingly consider transactions with roughly $20 million of EBITDA or less. He said management has not pursued, and does not expect to pursue, transactions in partnership with private equity firms or other outside partners.

The company was selected as a provider in the LEAD ACO Medicare program beginning in January. Rousseau described primary care as central to BrightSpring’s integrated-care strategy and said the company sees potential for meaningful economic contribution from the program beginning in 2028. He said BrightSpring currently has no downside risk in its ACO arrangements and reported some shared savings during the year.

2026 Outlook Raised; 2027 Growth Framework Reiterated

BrightSpring raised its 2026 adjusted EBITDA outlook to a range of $850 million to $860 million, representing growth of 37.6% to 39.3% over 2025. The company expects full-year revenue of $15.9 billion to $16.125 billion, including $14 billion to $14.2 billion from Pharmacy Solutions and $1.9 billion to $1.925 billion from Provider Services.

The company also expects at least $700 million in operating cash flow for 2026, excluding Community Living transaction-related cash flow impacts. Phipps said adjusted EBITDA-to-operating-cash-flow conversion is expected to exceed 60% on average, with a higher conversion rate anticipated this year.

Looking ahead, management reiterated its expectation for at least 15% to 20% organic adjusted EBITDA growth in 2027, now from a higher 2026 EBITDA base. Phipps said the company anticipates year-over-year EBITDA growth in every quarter of 2027, with growth in the second half expected to be modestly higher than in the first half because of normal seasonal patterns.

About BrightSpring Health Services (NASDAQ:BTSG)

BrightSpring Health Services NASDAQ: BTSG is a Louisville, Kentucky-based provider of home- and community-based health services and pharmacy services. The company focuses on supporting individuals with complex or chronic care needs, including older adults and people with disabilities, through care delivered in homes, communities and other non-hospital settings.

Its services include home health, hospice, personal care, behavioral health, primary care, rehabilitation and community living programs.

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