GP
Guardian Pharmacy Services, Inc. (GRDN)·Q1 2025 Earnings Summary
Executive Summary
- Q1 2025 delivered solid top-line growth: revenue rose 20% YoY to $329.3M, with resident count up 15% to ~189,000; Adjusted EBITDA was $23.4M (7.1% margin) despite ~$0.5M of accelerated Heartland integration costs and ~$1.0M public-company cost in the quarter .
- Results vs consensus: revenue beat ($329.3M vs $321.2M*), while S&P “Primary EPS” was a slight miss ($0.207* vs $0.22*) as integration costs were pulled forward into Q1 . Values marked with * are from S&P Global.
- Guidance: 2025 revenue guidance reaffirmed at $1.33–$1.35B with management indicating the outcome should land toward the upper end; Adjusted EBITDA guidance maintained at $97–$101M and includes ~$4M of full-year public-company costs .
- Setup/catalysts: (1) Q2 expected roughly flat with Q1; (2) vaccine clinic seasonality should again lift Q4; (3) active M&A pipeline and new Wichita acquisition on 4/1/25 (post-quarter) support expansion; (4) management sees limited tariff impact; IRA implications remain under active discussion with payors .
What Went Well and What Went Wrong
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What Went Well
- Double-digit YoY growth in revenue (+20%), resident count (+15%), and Adjusted EBITDA (+16%) amid ongoing acquisition integration .
- Management reiterated full-year guidance and signaled revenue should trend toward the top of the range given the strong start to the year .
- Strategic progress: closed a Wichita, KS pharmacy on 4/1/25 (52 total), continued integration of Heartland and Freedom, and highlighted a robust acquisition pipeline near-term .
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What Went Wrong
- Profitability modestly pressured by an accelerated Heartland IT platform transition, pulling
$0.5M of costs into Q1; public-company costs ($1M in Q1; ~$4M FY) also weighed on margins . - Q2 outlook called “consistent” with Q1 implies limited sequential momentum before seasonality benefits recur in Q4 (vaccine clinics) .
- External/regulatory overhangs: uncertainty around any executive action and longer-dated IRA impacts; management remains engaged but visibility still developing .
- Profitability modestly pressured by an accelerated Heartland IT platform transition, pulling
Financial Results
- Consolidated results and KPIs
- Estimates vs actuals (S&P Global for consensus and “Primary EPS”)
- Values marked with * are from S&P Global.
Values marked with * are from S&P Global.
- Additional operating/cash metrics (Q1 2025)
- Cash and equivalents: $14.0M; long-term debt: none .
- Cash from operations: $17.6M vs $8.7M in Q1 2024 .
Guidance Changes
Earnings Call Themes & Trends
Management Commentary
- “We are pleased to report a strong start to 2025… We delivered double-digit year-over-year growth in revenue, resident count, and adjusted EBITDA… our acquisition pipeline remains highly active…” — Fred Burke, CEO .
- “We believe that revenue will come in at the higher end of our $1.33 billion to $1.35 billion range… For adjusted EBITDA, we are reiterating $97 million to $101 million… we want to remain conservative… given… integration-related expenses.” — David Morris, CFO .
- “We decided to begin the transition of Heartland’s IT operating infrastructure… Expediting the operating system transition also accelerated cost, putting pressure on Q1 profitability.” — David Morris .
- “We feel comfortable we will avoid major impact [from tariffs]… 70% of our revenue comes from Part D and we are paid on a spread based on AWP… generic marketplace is highly competitive…” — Fred Burke .
- “We are continuing to have constructive conversations [re: IRA]… no significant developments to report… confident in our ability to navigate the potential margin impact.” — Fred Burke .
Q&A Highlights
- Heartland integration cost timing: Expedited conversion pulled ~$0.5M of costs from Q2/Q3 into Q1; costs are included in guidance .
- Part D/PBM pricing cadence: No immediate reset expected; next formal opportunity aligns with 2026 renegotiations; no force majeure expected .
- Resident growth mix: Organic growth was high-single-digit YoY; the remainder from Heartland and Freedom acquisitions .
- Pipeline tone: “As strong as it’s ever been”; several active projects; smaller operators facing pressure provide opportunities .
- Policy overhang: Uncertainty around any executive action; management sees complexity given non-interference clause and expects any developments to play out over time .
Estimates Context
- Q1 2025 vs consensus: Revenue beat ($329.3M vs $321.2M*); Primary EPS slight miss ($0.207* vs $0.22*). Integration timing and public-company costs explain most of the EPS variance despite healthy revenue .
- Trajectory: Q3 and Q4 2024 both exceeded revenue consensus; Primary EPS (S&P) actuals exceeded in Q3, modestly above in Q4, and modestly below in Q1 2025, consistent with the integration cost timing commentary .
- Implication: Street models may hold on FY EBITDA (range reiterated) but could rebalance quarterly cadence (flat Q2, seasonal lift in Q4) and fine-tune EPS for integration/public-company expense timing .
Values marked with * are from S&P Global.
Key Takeaways for Investors
- Core growth intact: +20% revenue and +16% Adjusted EBITDA YoY underscore resilient demand and contribution from recent acquisitions .
- Mix of integration cost and pubco expenses capped EPS despite revenue strength; timing effects should normalize as Heartland transitions complete through 2H25 .
- FY25 outlook steady with upside bias to revenue; EBITDA range intact with conservatism for integration variability; Q2 set up to mirror Q1, with seasonal Q4 uplift likely again .
- Balance sheet flexible: $14M cash, no long-term debt, available revolver lends capacity to pursue bolt-on M&A and contiguous expansions .
- External risks appear manageable: tariff exposure limited by AWP-based reimbursement and competitive generics; IRA discussions ongoing with PBMs, with more clarity expected over time .
- Execution focus: 10 of 52 pharmacies are ≤~1 year old and remain earnings ramps; the integration playbook typically drives margin convergence by years 3–4, creating embedded earnings power .
- Near-term trading lens: Expect a “steady” Q2 print, with narrative dominated by integration progress and pipeline updates; set up turns more favorable into Q4 seasonality if execution remains on track .
Appendix: Detailed Tables
Detailed GAAP and Non-GAAP Metrics
Reconciliation/Adjustments (Q1 2025)
- Adjusted EBITDA bridge: GAAP EBITDA $18.371M; add share-based comp $3.968M; legal/regulatory matters $0.296M; public company/financing $0.798M ⇒ Adjusted EBITDA $23.433M; Adjusted EBITDA margin 7.1% .
- SG&A (GAAP) $51.344M; minus share-based comp $3.968M; legal/regulatory $0.296M; public company/financing $0.798M ⇒ Adjusted SG&A $46.282M; 14.1% of revenue .
Quarterly Estimates vs Actuals (S&P Global)
Values marked with * are from S&P Global.