Viemed Healthcare Q1 Earnings Call Highlights

Key Points

• Revenue rose 28% to $75.4 million, driven by strong expansion in sleep (PAP patients up 57% YoY to ~36,000) and resupply (+47% YoY) and by early, faster-than-expected scaling of maternal health (≈4,000 new maternal patients).
• Ventilator rentals grew about 10% YoY to $35.4 million with accelerating new-patient starts, but new NCD compliance evaluations have increased turnover and created near-term pressure on the ventilator census (12,089), even as active-patient compliance has improved ~20% since the NCD.
• Cash flow and guidance improved: free cash flow turned positive to $2.6 million (vs. -$5.7M a year ago) with trailing 12‑month FCF of $36.3M; management reaffirmed Adjusted EBITDA guidance of $65–$69M and narrowed net revenue guidance to $312–$320M while executing buybacks and reducing long-term debt to $8.3M.

Viemed Healthcare NASDAQ: VMD reported first-quarter results that executives said reflected “consistent execution” across its platform, led by continued growth in sleep therapy, early momentum in maternal health expansion, and improving operational trends in its ventilation business. The company also highlighted a year-over-year improvement in free cash flow and updates to its 2026 outlook.

Revenue rose 28% as sleep, resupply, and maternal health expanded

Chief Executive Officer Casey Hoyt said first-quarter revenue was $75.4 million, up 28% from the prior year, and that the quarter matched the company’s record fourth quarter performance despite what he described as a “predictable seasonal pattern” in Q1. Todd Zehnder, the company’s Chief Operating Officer, said revenue was essentially flat sequentially versus $76.2 million in the fourth quarter of 2025, which he said aligned with the company’s expectations for seasonal moderation.

Zehnder broke down revenue into several key categories:

• Ventilator rentals: $35.4 million, up about 10% year-over-year.
• Other home medical equipment rentals: $16.2 million, up 25% year-over-year, driven by patient growth across PAP, oxygen, and airway clearance.
• Equipment and supply sales: $17.5 million, more than doubling from $7.5 million in the prior-year period, driven by sleep resupply growth and maternal health offerings.

Zehnder noted that ventilator rentals represented about 47% of total revenue in the first quarter of 2026, down from 54% a year earlier, describing the mix shift as intentional diversification. He also said Medicare represented 35% of revenue, down from 41% in the year-ago quarter, as commercial payers became a larger part of the mix with growth in sleep and maternal health.

Sleep therapy base approached 36,000 patients

Hoyt said sleep continued to be one of the company’s strongest growth drivers, with PAP therapy patients up 57% year-over-year. The company ended the quarter with “nearly 36,000” PAP patients, and Zehnder provided the quarter-end figure of 35,938 patients, up 4% sequentially.

Hoyt emphasized that recent setup activity has translated into a larger base of resupply patients, which he said increases visibility into future revenue. He added that quarterly resupply patient counts were down modestly from the fourth quarter due to typical seasonal dynamics as deductibles reset, but said resupply patients were still up 47% year-over-year.

Hoyt also pointed to what he described as strong long-term demand drivers for sleep, including underdiagnosis of obstructive sleep apnea and a broader focus on metabolic health, including increased adoption of GLP-1 therapies.

Maternal health integration and new-market expansion “exceeding expectations”

Hoyt said maternal health performance was ahead of plan, and that Lehan “continued to perform well,” with a smooth integration that has been accretive “since day one.” He highlighted early signs of scaling maternal health through Viemed’s existing infrastructure, stating that during the first quarter the company serviced “just under 4,000 new maternal health patients” under Viemed contracts in markets where Lehan previously had no presence.

Hoyt described the result as an indicator that the company can extend maternal health into additional Viemed markets, citing the ability to leverage existing payer relationships, intake and billing infrastructure, and compliance capabilities. He said the company expects to continue expanding maternal health into more markets as it moves through 2026.

In the Q&A session, Zehnder addressed operational constraints in maternal health, saying sales capacity is not the primary limiter. “It’s really back office and fulfillment that we’re staffing up on,” he said, adding that the company is “hiring as fast as we can and fulfilling as fast as we can,” and that growth is driven “more [by] digital marketing than anything.”

Ventilation trends improved, while compliance created near-term census pressure

On ventilation, Hoyt said the company is seeing stronger-than-expected momentum in new patient starts as referral sources become more comfortable with updated criteria and the documentation process matures. He called the trend “the inflection point we’ve been working towards,” and said it was arriving ahead of schedule. Hoyt cited March as a particularly strong month for ventilator setups, with 759 starts compared to 692 a year earlier.

Hoyt also said the company’s “100% ALJ success rate on Medicare Advantage denials” continued to validate patient appropriateness, and that more denials are being resolved earlier in the process.

At the same time, Hoyt said that patients set up under the new NCD criteria are now reaching required compliance evaluation points, and that turnover for those patients is higher than before the NCD, creating near-term pressure on the net patient census. The ventilator patient census ended the quarter at 12,089 patients. Hoyt said the pressure is “not a demand issue” or “a competitive issue,” but rather a “compliance dynamic” inherent in the new rules.

He added that compliance among active ventilator patients has improved by nearly 20% since the NCD went into effect, which he said supports the company’s view that its “high touch, high tech model” can drive further improvement as the NCD matures. Hoyt also said the company is advocating for policy changes, arguing that patients who experience temporary non-compliance episodes can lose access to ventilators even though their clinical need may remain.

Hoyt addressed other regulatory topics, stating that CMS competitive bidding categories in the upcoming round do not include Viemed’s current product offerings, and that the company does not expect a material impact. He also said a CMS enrollment moratorium had “no impact on Viemed’s operations whatsoever,” adding that it restricts new entrants and could make the competitive landscape “more rational over time.”

Margins, cash flow, and capital allocation

Zehnder reported gross profit of $42.8 million, with a gross margin of 56.8%, slightly higher than 56.3% in the first quarter of 2025 but down sequentially from 57.9% in the fourth quarter, which he attributed largely to normal Q1 volume effects and relatively fixed labor components in cost of goods sold.

Adjusted EBITDA was $14.3 million, or 19% of revenue, compared with $12.8 million, or 21.6% of revenue, in the year-ago quarter. Zehnder noted that the first quarter of 2025 included a $2.7 million non-recurring gain related to the Philips ventilator buyback program, which has concluded. Excluding that gain, he said first-quarter 2025 Adjusted EBITDA margin would have been about 17%, implying about 200 basis points of year-over-year expansion on a comparable basis. He reiterated expectations for full-year 2026 Adjusted EBITDA margin of roughly 21% to 22%.

SG&A as a percentage of revenue improved to 46.1% from 48.1% a year earlier. Zehnder said headcount-related costs increased in absolute dollars to support growth, including staffing added to Lehan, and that the company ended the quarter with 1,387 employees, up from 1,222 a year ago.

Net income attributable to Viemed was $2.6 million, or $0.06 per diluted share, essentially flat year-over-year, with Zehnder again noting the prior-year period’s non-recurring disposal gain.

Free cash flow was $2.6 million, compared with negative $5.7 million in the first quarter of 2025, an $8.3 million improvement. Cash flow from operations rose to $8.1 million from $2.9 million, while net CapEx fell to $5.5 million from $8.5 million, which Zehnder linked to a greater mix of less capital-intensive lines such as sleep resupply and maternal health. He said trailing 12-month free cash flow increased to $36.3 million as of the call, up from $23.3 million through the third quarter of 2025 and $11.6 million at the end of 2024.

During the quarter, the company repurchased and canceled 150,000 shares at an average price of $9.29 per share for a total cost of $1.4 million. Viemed also made $3.2 million in principal payments, reducing long-term debt to $8.3 million as of March 31, 2026. The company ended the quarter with $9.8 million in cash and $46 million available under its credit facilities. Zehnder said the company was “effectively at net zero debt” and maintained capacity for potential acquisitions, while emphasizing discipline on return thresholds and strategic fit.

For guidance, Zehnder said the company narrowed and raised the low end of its full-year 2026 net revenue outlook to $312 million to $320 million (from $310 million to $320 million), reaffirmed Adjusted EBITDA guidance of $65 million to $69 million, and lowered its net CapEx outlook to 9% to 10.5% of net revenue (from 10% to 11.5%). He added that the company expects sequential revenue growth of 3% to 5% per quarter through the remainder of the year.

In response to an analyst question about potential upside to guidance, Zehnder said all product lines could contribute, highlighting ventilation new patient start momentum, rapid maternal health growth as operations scale, and sleep performance that “continues to outperform what we ever thought it would do a few years ago.”

About Viemed Healthcare NASDAQ: VMD

Viemed Healthcare, Inc NASDAQ: VMD is a provider of home-based respiratory therapy services, specializing in the management of patients requiring long-term mechanical ventilation and pulmonary support. The company’s offerings encompass invasive and noninvasive ventilation, airway clearance therapies, cough assist devices, and supplemental oxygen. Viemed combines durable medical equipment with clinical care, delivering tailored respiratory treatment plans that are overseen by licensed respiratory therapists and registered nurses.

Founded in the early 2010s and headquartered in Birmingham, Alabama, Viemed has grown its footprint to serve patients across multiple states in the United States.

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