Executive Summary

BrightSpring delivered Q2 2024 revenue of $2.730B (+26.0% YoY) and adjusted EBITDA of $139.1M; adjusted EPS was $0.10 .
Segment performance was broad-based: Pharmacy Solutions revenue $2.114B (+32%) and Provider Services revenue $616M (+8%); Provider adjusted EBITDA margin expanded to 14.0% .
Full-year 2024 guidance was raised again: revenue to $10.45–$10.90B and adjusted EBITDA to $570–$580M; pharmacy revenue guide $8.0–$8.4B and provider $2.45–$2.50B .
Management highlighted sustained specialty strength (118 LDDs; +36% specialty script growth), a large SNF pharmacy win ramping in H2, and margin tailwinds from calendar days, payroll taxes, operational excellence, and hospice final rule in Q4 .
Stock reaction catalysts: repeated guidance raises, continued specialty pipeline and oncology generics wave (first conversion expected in Q4 2024), and improving provider margins/OCF, offset by leverage at 4.51x and one-time legal cash outflow in Q2 .

What Went Well and What Went Wrong

What Went Well

Specialty and infusion strength: infusion and specialty revenue +40% YoY; specialty scripts +36% with 118 LDDs and expected ~18 more LDD wins over 12–18 months .
Provider margin expansion and volume growth: Provider adjusted EBITDA $86M (+16% YoY), margin 14.0% (vs 13.1% LY); home health ADC 44,246 (+13% YoY) and rehab billable hours grew high single digits .
FY24 guidance raised on momentum: Adj. EBITDA midpoint raised ~+$13M vs prior quarter (now $570–$580M) and revenue guide increased to $10.45–$10.90B, signaling confidence in H2 trajectory .

Management quote: “We are pleased to report strong second quarter performance… adjusted EBITDA of $139.1 million, which represented 17% growth year-over-year and exceeded our internal plan” (ex-QIP) .

What Went Wrong

QIP not received: the specialty PBM Quality Incentive Payment program concluded; NPS of 87 was below the 90 contractual threshold, eliminating a $30M benefit received in 2023 .
Cash from operations negative in Q2 (-$15M) due to a $90M legacy pharmacy legal payment; excluding this, OCF was +$75M .
Corporate costs and growth investments: corporate costs were $41M in Q2 and the quarter included start-up costs for a large SNF customer and de novo investments, tempering near-term margin despite future benefit .

Financial Results

Consolidated Performance vs prior quarters and estimates

Metric	Q4 2023	Q1 2024	Q2 2024
Revenue ($USD Billions)	$2.375	$2.6	$2.730
Diluted EPS ($)	$(0.06)	N/A	$0.10
Adjusted EPS ($)	N/A	$0.12	$0.10
Gross Profit ($USD Millions)	$368.7	$369.0	$389.0
Adjusted EBITDA ($USD Millions)	$142.6	$131.0	$139.1

Notes: SPGI consensus estimates for Q2 2024 were unavailable due to data access limits; comparisons to Street estimates cannot be provided at this time.

Actual vs SPGI Consensus (Q2 2024)

Metric	Actual	SPGI Consensus
Revenue ($USD Billions)	$2.730	N/A – SPGI consensus unavailable
Adjusted EPS ($)	$0.10	N/A – SPGI consensus unavailable
Adjusted EBITDA ($USD Millions)	$139.1	N/A – SPGI consensus unavailable

Segment Breakdown

Metric	Q1 2024	Q2 2024
Pharmacy Solutions Revenue ($USD Millions)	$2,000	$2,114
Infusion & Specialty Revenue ($USD Millions)	$1,500	$1,600
Home & Community Pharmacy Revenue ($USD Millions)	$511	$528
Pharmacy Solutions Adjusted EBITDA ($USD Millions)	$88	$94
Provider Services Revenue ($USD Millions)	$600	$616
Provider Services Adjusted EBITDA ($USD Millions)	$82	$86
Total Segment Adjusted EBITDA ($USD Millions)	$170	$180
Corporate Costs ($USD Millions)	N/A	$(41)

KPIs

KPI	Q1 2024	Q2 2024
Total Scripts Dispensed (Millions)	~9.9	~10.1
Specialty Scripts Volume Growth (YoY, %)	>35%	36%
Home & Community Pharmacy Revenue Growth (YoY, %)	15%	13%
Home Health Average Daily Census	~43,000	44,246
Rehab Core Billable Hours Growth (YoY, %)	High teens	High single digits
Specialty Net Promoter Score (PBM QIP cohort)	N/A	87
Limited Distribution Drugs (count)	117	118
Operating Cash Flow ($USD Millions)	$(79)	$(15) (incl. $90M legal); $75 ex-legal
Leverage Ratio (Net Debt/Adj. EBITDA)	4.3x (as of Mar 31)	4.51x (as of Jun 30)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue ($USD Billions)	FY 2024	$10.30–$10.80 (Q1 update)	$10.45–$10.90	Raised
Adjusted EBITDA ($USD Millions)	FY 2024	$555–$570 (ex-QIP, Q1 update)	$570–$580	Raised
Pharmacy Revenue ($USD Billions)	FY 2024	$7.85–$8.30	$8.00–$8.40	Raised
Provider Revenue ($USD Billions)	FY 2024	$2.45–$2.50	$2.45–$2.50	Maintained
Initial FY24 Guide (context)	FY 2024	Revenue $9.35–$9.50; Adj. EBITDA $550–$564 (with QIP potential upside)	—	Superseded by Q1 and Q2 raises

Management noted midpoint of adjusted EBITDA guide has increased nearly $35M since the start of the year; margin expected to expand through H2 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2023 and Q1 2024)	Current Period (Q2 2024)	Trend
Specialty/Infusion momentum	Q4: FY23 adj. EBITDA $538M; strength in pharmacy (press) ; Q1: infusion & specialty revenue +44%, specialty scripts +35%, 117 LDDs	Infusion & specialty +40% revenue; specialty scripts +36%; 118 LDDs; ~18 more LDDs expected in ~15 months; oncology generics wave begins Q4	Accelerating growth; robust pipeline
Home & Community pharmacy	Q1: revenue +15%; largest year ever for new customers; scripts HSD	Revenue +13%; large SNF customer onboarding in H2; ~35–40k beds won YTD	Strong customer wins; H2 ramp
Provider Services	Q1: adj. EBITDA +25%; margin expansion; ADC ~43k; rehab billable hours high teens	Adj. EBITDA $86M (+16%); margin to 14.0%; ADC 44,246; rehab billable hours HSD	Sustained margin/volume improvement
Operational excellence/IT	Q1: five-year data lake build; mitigated Change Healthcare disruption ; Q1 guide raised	Automation/lean projects driving H2 margins; general ledger and pharmacy billing migrations completed	Ongoing efficiency tailwinds
Regulatory/legal	Q4 press: legal costs elevated in 2023 ; Q1: Change Healthcare impact modest	Hospice final rule better than estimated (effective Q4); $90M legacy legal payment; Silver matter discrete tax benefit; leverage 4.51x	Mixed: cost tailwind in Q4; legal cash headwind
M&A	Q1: tuck-ins planned; de minimis Q1 impact; pipeline strong	Haven Hospice Florida CON acquisition expected to be ~$15M+ EBITDA over time; guidance excludes Haven; small tuck-in focus	Strategic tuck-ins; selective larger assets

Management Commentary

Strategy and momentum: “Total revenue… representing 26% growth year-over-year and adjusted EBITDA of $139.1 million… exceeded our internal plan” (ex-QIP) .
Specialty differentiation: “We continue to expand access to limited distribution drugs… high Net Promoter Scores… approach or exceed 90” .
H2 margin drivers: “Benefit from favorability in the way the days fall… reduction in payroll taxes… operational initiatives… hospice final rule… go live in Q4” .
Provider outlook: “We do see sustainability in those [14%] margins… underpinned by operational performance and volume growth” .
OCF/leverage: “Cash flow from operations was negative $15 million… included a $90 million… legal matter… Excluding that… $75 million… leverage ratio at 4.51x” .

Q&A Highlights

Pharmacy H2 trajectory: Management expects similar growth rates into H2; ~53% of annual EBITDA typically in H2; margins to increase due to calendar/taxes and fixed cost leverage .
Specialty drivers: Brand ramps/LDD launches, high-value generics, large sales force; specialty margins picked up and expected to continue improving .
Large SNF win: Onboarded a very large national skilled nursing customer in late Q2; start-up costs incurred, revenue ramps H2 .
Oncology generics pipeline: First significant brand-to-generic conversion expected in Q4 2024; 11 large brands converting over 5–6 years .
Guidance raise composition: Even mix of pharmacy and provider; margin drivers include operational initiatives and fixed cost leverage .
Haven Hospice: Attractive Florida CON asset; immaterial near-term guidance impact; longer-term ~$15M+ EBITDA potential post-integration .

Estimates Context

Wall Street consensus (S&P Global) for Q2 2024 revenue, EPS, and EBITDA was unavailable due to data access limits; therefore, we cannot quantify beats/misses at this time. Management reported adjusted EPS of $0.10, revenue $2.730B, and adjusted EBITDA $139.1M .

Key Takeaways for Investors

Re-acceleration in specialty and infusion, plus home/community pharmacy customer wins, supports continued top-line strength into H2 and 2025; oncology generics provide incremental tailwinds starting Q4 .
Provider margins are expanding with volume growth and operational efficiencies; 14.0% Q2 margin appears sustainable per management .
H2 margin expansion catalysts (calendar days, payroll taxes, automation/lean, hospice rule) position the company to deliver the raised FY24 adjusted EBITDA guidance range .
Cash flow trajectory improving: Q2 OCF would have been +$75M excluding legacy legal payment; path to ~3x leverage within ~3 years remains a focus .
M&A remains targeted and accretive (tuck-ins), with selective larger assets like Haven Hospice offering longer-term EBITDA growth without near-term guidance reliance .
QIP program conclusion removes prior-year $30M tailwind; underlying growth and margin initiatives offset this headwind in 2024 .
Monitor SPGI estimates when available for confirmation of beats/misses; repeated guidance raises indicate internal momentum and may drive estimate revisions upward .

BrightSpring Health Services, Inc. (BTSG)·Q2 2024 Earnings Summary