Eric Coldwell • Robert W. Baird & Co.

Answer

CFO & CEO Glenn Coleman sized Illumicare as an $8-10 million revenue business for fiscal 2026 at breakeven profitability, while Contigo Health is expected to have a $9 million revenue and a $6 million EBITDA loss. Mr. Coleman confirmed large advisory deals are higher than $5 million annually and have milestone-based revenue recognition, making it back-end loaded for FY26. President & CEO Michael Alkire and David Zito, President of Performance Services, clarified that 'advisory' and 'consulting' are interchangeable terms for their comprehensive performance improvement engagements. Mr. Coleman noted the life sciences business is performing as expected.

Ask Fintool Equity Research AI

Answer

CEO Michael Alkire clarified the distribution was a one-time event from a minority partner, not OMNIA, and was excluded from adjusted results. Regarding the member departure, Alkire explained it's a phased termination as the member still uses some services post-partnership. CFO Glenn Coleman confirmed a one-time payment is expected in Q4 and is included in the updated guidance, though the amount was not disclosed.

Ask Fintool Equity Research AI

Answer

CEO James Foster stated that the NHP clearance provides significant flexibility for utilizing animals and improves future planning. CFO Flavia Pease clarified that the $20 million in revenue from the winding-down CDMO client was for the first half of the year, not just Q2, and carried a higher-than-normal margin. She also confirmed a separate payment was received in Q2 that boosted margins but did not quantify the amount.

Ask Fintool Equity Research AI

Answer

CEO James Foster stated that Charles River is actively interested in acquiring or licensing practical and validatable NAMs technologies that do not compromise patient safety. He highlighted existing strengths like the Retrogenix technology and virtual control groups, and identified the use of the company's vast, anonymized toxicology database as a key, underrepresented opportunity for leadership.

Ask Fintool Equity Research AI

Answer

EVP and CFO Flavia Pease confirmed that the timing of large model shipments can cause lumpiness and is factored into the Q4 guidance range. For the Q3 RMS margin, she explained that despite favorable NHP shipments, there were headwinds from a mix shift towards lower-margin volume growth in China and a revenue decline in the higher-margin research model services businesses.

Ask Fintool Equity Research AI

Answer

CFO Jill McConnell confirmed that the hesitant biotech clients chose a different direction, a temporary issue linked to the CEO transition uncertainty, similar to what was seen before the spin-off. CEO Anshul Thakral, on his third day, outlined his approach as being rooted in professional services, focusing on customer needs and delivering high-quality results, promising a more detailed plan after engaging with customers.

Ask Fintool Equity Research AI

Answer

CFO Jill McConnell confirmed that SG&A improvements would be phased, with marginal gains in Q2 and more dramatic improvements in Q3 and Q4 as cost-saving initiatives fully ramp up. She reiterated the full-year target of $150 million in gross savings, with $70 million from SG&A, expected to yield $40 million to $50 million in net SG&A reductions for the year.

Ask Fintool Equity Research AI

Answer

CFO Jill McConnell confirmed they expect more than 100 basis points of total margin improvement in 2026, as gross margins should also improve from absorbing growth with existing resources. CEO Tom Pike added that as new, higher-margin work becomes a larger portion of the revenue mix, it will naturally accrete to the bottom line, forming a key part of the recovery plan.

Ask Fintool Equity Research AI

Answer

CEO Tom Pike stated that clinpharm strength is broad-based across various sophisticated therapies, not primarily driven by GLP-1s, and confirmed win rates and Net Promoter Scores have improved since the spin-off without providing specific figures. CFO Jill McConnell added that the Q3 interest expense is a representative run-rate for the near future, subject to rate movements.

Ask Fintool Equity Research AI

Answer

CEO Suzanne Foster explained that the contract will begin ramping in Q1 2026 and achieve full service by 2027. CFO Jason Clemens added that the $200 million annual revenue is a conservative baseline that does not include potential growth from a "halo effect." He clarified that AdaptHealth expects to exit 2026 at a $200 million run-rate and noted the per-patient-per-month rate differs from other contracts due to a varied patient mix, including commercial members.

Ask Fintool Equity Research AI

Answer

Executive Jason Clemens stated that while it's early to update the fiscal '26 tariff outlook, the company feels better about its position now than it did in March, suggesting the impact could be lower. He confirmed a headwind of approximately $8 million in Q1 due to one less business day but noted no other significant selling day impacts are expected for the remainder of the year.

Ask Fintool Equity Research AI

Answer

CFO Jason Clemens explained the revenue mix shift is concentrated in the Sleep business due to accounting changes for integrated technology, causing a ~$25-30M Q1 revenue deferral that will wane through the year. He confirmed the 2024 PHE impact was ~$25M and described the 2025 reimbursement environment as "stable." Regarding Humana, he characterized the renewal as a multi-year extension of favorable existing terms.

Ask Fintool Equity Research AI

Answer

CFO Jason Clemens confirmed that the entire revenue and EBITDA guidance reduction was specific to the diabetes segment's recent CGM performance issues. He stated that the rest of the business, including sleep and respiratory, is performing as expected. He noted the EBITDA impact was a roughly one-third flow-through from the revenue reduction.

Ask Fintool Equity Research AI

Answer

CEO Steve Cutler clarified that near-term cancellations are expected to be in a 'broadly similar' range to the $916 million reported in Q2. COO Barry Balfe addressed the pass-through question, stating it is 'overwhelmingly a business mix trend' driven by an uptick in studies in areas like cardiometabolic, which inherently have higher pass-through costs.

Ask Fintool Equity Research AI

Answer

CFO Nigel Clerkin confirmed the $350 million was the anticipated revenue impact for 2025. He clarified that the total award value was higher and would have extended into the next year. He specified that the cancellation to be recorded in Q2 bookings will be approximately $300 million.

Ask Fintool Equity Research AI

Answer

Outgoing CFO Brendan Brennan attributed the rise in unbilled revenue to new large pharma contracting practices that push out milestones and reduce upfront pass-through payments. CEO Dr. Steve Cutler disclosed the acquisition of a modest-sized organization in Eastern Europe to supplement biotech and functional service capabilities, noting its financial contribution was immaterial in Q3.

Ask Fintool Equity Research AI

Answer

CEO August Troendle confirmed no single large study win drove the quarter's results. CFO Kevin Brady clarified the 200-300 basis point increase in reimbursables is relative to Q2's level, potentially pushing the mix into the low 40% range. Regarding sustainability, CEO August Troendle stated that while pass-throughs can be volatile, the underlying direct fee business growth is solid, and they don't foresee a major growth challenge in 2026.

Ask Fintool Equity Research AI

Answer

CFO Kevin Brady attributed the higher backlog burn to a combination of revenue acceleration, a significant increase in reimbursable pass-through costs, and a lower bookings denominator, rather than a change in execution. He confirmed the Q1 revenue beat was largely due to higher-than-expected reimbursables. President Jesse Geiger added that the company targets mid-single-digit headcount growth for the year, contingent on the business environment.

Ask Fintool Equity Research AI

Answer

CFO Kevin Brady projected that indirect revenue as a percentage of total revenue would be similar to Q4 2024 levels and anticipated a linear revenue progression in 2025. He attributed strong advanced billings to timing and payment schedules on active programs. CEO August Troendle clarified that performance obligations are a longer-term measure, while backlog is a better near-term indicator of revenue, explaining the divergence.

Ask Fintool Equity Research AI

Answer

CEO August Troendle clarified that virtually 100% of backlog recognition comes from awards made in prior quarters. He emphatically denied the rumors, stating they have had zero client losses due to performance dissatisfaction in the last year, attributing any moves to other CROs to client funding issues where Medpace had to issue termination notices. He positioned the 1.15x book-to-bill as a floor for H2 2025 expectations, not a new target. CFO Kevin Brady explained the burn rate is influenced more by the pace of new bookings than study progression. The executives estimated they are working on approximately 500 projects.

Ask Fintool Equity Research AI

Answer

CFO Britt Vitalone clarified that while the rate of growth for the 3PL business is expected to slow from a very strong fiscal 2025, they still anticipate good absolute growth consistent with historical trends. He affirmed they feel very good about the growth rate in the higher-margin access solutions, particularly given the strong momentum from Q4.

Ask Fintool Equity Research AI

Answer

CFO Britt Vitalone explained that the FCS accretion is subject to regulatory approval but is expected to be driven primarily by drug distribution and GPO services synergies that will benefit the providers and their patients. He noted that over time, FCS would also leverage McKesson's clinical trial and data capabilities, but the majority of the financial benefit stems from the drug-related synergies.

Ask Fintool Equity Research AI

Answer

Executive Edward Pesicka stated there was no material Q1 tariff impact due to inventory levels and that the timing of June price hikes aligns with when higher-cost products will flow through. He defended their direct, SKU-based tariff pass-through strategy and noted they must work with customers on alternatives. Executive Jonathan Leon confirmed Rotech's performance is tracking with the original deal model, with recent declines being anticipated post-COVID benefits.

Ask Fintool Equity Research AI

Answer

Executives Edward Pesicka and Jonathan Leon explained the capitated contract's impact is limited in 2025 due to timing and is factored into guidance. Leon noted that Patient Direct will drive most of 2025's growth and that P&HS contributes 20-25% of consolidated EBITDA. He also confirmed the Rotech debt financing premarketing went well, with costs expected to be in line with the deal model.

Ask Fintool Equity Research AI

Answer

CFO Jonathan Leon declined to provide specific growth rates but confirmed diabetes and sleep supplies were very strong. He suggested Q3 growth was driven more by real-time market demand than backlog clearance, as new demand remains high. Leon attributed the persistent backlog to the manual work still required post-Change Healthcare disruption and the high volume of incremental new patient starts.

Ask Fintool Equity Research AI

Answer

EVP and CFO Ron Bruehlman confirmed that FX has a very muted impact on EBITDA and no notable impact on EPS, so the reaffirmed guidance was not protected by currency movements. He specified that M&A contributed about 200 basis points to growth in the quarter and is expected to contribute 150 basis points for the full year, mostly in TAS. Chairman and CEO Ari Bousbib added that organic growth in TAS was in the low-to-mid single-digit range.

Ask Fintool Equity Research AI

Answer

CFO Aaron Alt confirmed that some protections are already in place and the team is actively working to identify additional products that could benefit. CEO Jason Hollar added that this is an established process for the company, having been used for the past two years across hundreds of SKUs, and they continue to monitor its application.

Ask Fintool Equity Research AI

Answer

CEO Jason Hollar confirmed that GMPD profit would have been in the mid-$20 million range without the $17 million health and wellness cost headwind. He noted the incremental manufacturing cost impact was of a similar magnitude. Executive Aaron Alt added that while their supply chain is diverse, tariffs on goods from regions like China will inevitably raise costs for the industry, some of which will have to be passed through.

Ask Fintool Equity Research AI

Answer

Chairman and CEO Adam Schechter specified that the remaining COVID-19 revenue comp for 2025 is approximately $18 million, spread across the final three quarters. He quantified the recent trial cancellation at 'slightly larger than about $100 million.' Regarding tariffs, he declined to give a specific number but characterized the potential impact as 'relatively manageable' due to contracted and US-based spending.

Ask Fintool Equity Research AI

Answer

CEO Adam Schechter described the Walgreens relationship as good, noting the 400 service centers were strategically chosen in high-traffic stores, and he is confident most will remain. He added that Labcorp can easily stand up its own centers if needed. Regarding employer testing, he acknowledged it remains a small headwind but stated it is not significant enough to materially impact results, and it's difficult to predict when it will bottom out.

Ask Fintool Equity Research AI

Answer

CFO James Cleary explained that while cell and gene therapy is a significant long-term opportunity, it is not yet a material contributor to the bottom line. He noted the expectation for a pickup is based on market data and pipeline analysis. He acknowledged the market is competitive but stated Cencora intends to remain a leader through innovation.

Ask Fintool Equity Research AI

Answer

Bennett Murphy, SVP, Head of Investor Relations and Treasury, affirmed that Cencora is a leader in the ophthalmology space and has a long-standing customer relationship with RCA. He reiterated that retina and ophthalmology have been consistent and key growth drivers for the company, similar to oncology.

Ask Fintool Equity Research AI