Executive Summary

Q2 2025 beat on the top and bottom line vs S&P Global consensus, with revenue of $290.6M vs $275.2M* and non-GAAP EPS of $0.45 vs $0.27*, driven by strength in connected devices (XT Series/XTExtend), technical services, SaaS & Expert Services, and consumables .
Non-GAAP gross margin expanded sequentially to 44.7% (+260 bps QoQ) on higher product volumes, favorable pricing/mix, and lower seasonal expenses; non-GAAP EBITDA rose to $38.4M (13.2% margin) from $24.0M in Q1 .
FY25 guidance was raised for total revenue ($1.130–$1.160B), non-GAAP EBITDA ($130–$145M) and non-GAAP EPS ($1.40–$1.65); product bookings ($500–$550M) and ARR ($610–$630M) reaffirmed .
Near-term watch items: tariff headwinds step up in H2 (approx. $6M per quarter in Q3/Q4; ~$15M net in 2025), and Q3 guide embeds higher tariffs and non-recurring software upgrade costs; pricing actions and supply chain mitigation are underway .

What Went Well and What Went Wrong

What Went Well

Broad-based demand with notable strength in point-of-care connected devices (XT/XTExtend), plus contributions from technical services, SaaS & Expert Services, and consumables; product revenue grew 4% YoY to $163.2M and services grew 6% YoY to $127.4M .
Sequential margin improvement: non-GAAP gross margin 44.7% (+260 bps QoQ), as higher volumes, pricing and mix offset costs; non-GAAP EPS improved to $0.45 from $0.26 in Q1 and GAAP EPS swung to +$0.12 from -$0.15 .
Management highlighted innovation milestones (OmniSphere HITRUST certification; launches of MedTrack RFID and MedVision) supporting a platform transition; CEO: “We are evolving … to an end-to-end medication and medical supplies management technology platform company” .

What Went Wrong

Year-over-year profitability still softer: non-GAAP EPS ($0.45) and non-GAAP EBITDA ($38.4M) declined vs Q2’24 ($0.51; $39.8M) amid cost pressures (tariffs) .
Cash from operations and non-GAAP free cash flow were lower YoY in Q2 ($42.8M vs $58.7M; FCF $26.8M vs $45.2M) .
Tariffs are a clear headwind: net ~$2M impact in Q2; expected ~$6M per quarter in Q3/Q4; FY25 net ~$15M (gross ~$32M), partly offset by pricing and mitigation; Q3 guide includes tariff and non-recurring field software upgrade costs .

Financial Results

Key P&L Metrics

Metric	Q2 2024	Q1 2025	Q2 2025
Total Revenue ($M)	$276.8	$269.7	$290.6
GAAP EPS ($)	$0.08	$(0.15)	$0.12
Non-GAAP EPS ($)	$0.51	$0.26	$0.45
GAAP Gross Margin (%)	41.3%	41.1%	43.9%
Non-GAAP Gross Margin (%)	44.2%	42.1%	44.7%
GAAP Operating Margin (%)	1.2%	(4.3)%	2.8%
Non-GAAP Operating Margin (%)	9.0%	3.5%	8.3%
Non-GAAP EBITDA ($M)	$39.8	$23.6	$38.4
Non-GAAP EBITDA Margin (%)	14.4%	8.7%	13.2%

Revenue Mix

Metric	Q2 2024	Q1 2025	Q2 2025
Product Revenue ($M)	$156.6	$145.2	$163.2
Service Revenue ($M)	$120.2	$124.5	$127.4

Cash Flow & Balance Sheet

Metric	Q2 2024	Q1 2025	Q2 2025
Cash from Operations ($M)	$58.7	$25.9	$42.8
Non-GAAP Free Cash Flow ($M)	$45.2	$10.2	$26.8
Cash & Cash Equivalents ($M)	—	$386.8 (3/31)	$399.0 (6/30)
Total Debt, net ($M)	—	—	$342 (6/30)

Notes: CFO cited Days Sales Outstanding (DSO) of 75 days in Q2 (down 11 days QoQ) . The company repurchased ~$16M of stock by 6/30 under the new $75M program .

Q2 2025 Actuals vs S&P Global Consensus

Metric	Consensus	Actual
Revenue ($M)	$275.24*	$290.56
Non-GAAP EPS ($)	$0.27*	$0.45

Values marked with * retrieved from S&P Global.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance (7/31)	Change
Total Revenue	FY 2025	$1.105B – $1.155B (5/22)	$1.130B – $1.160B	Raised
Product Revenue	FY 2025	$610M – $640M (5/22)	$625M – $640M	Raised (low end)
Service Revenue	FY 2025	$495M – $515M (5/22)	$505M – $520M	Raised (both ends)
Technical Services Rev.	FY 2025	$235M – $245M (5/22)	$245M – $250M	Raised
SaaS & Expert Services Rev.	FY 2025	$260M – $270M (5/22)	$260M – $270M	Maintained
Non-GAAP EBITDA	FY 2025	$120M – $145M (5/22)	$130M – $145M	Raised (low end)
Non-GAAP EPS	FY 2025	$1.30 – $1.65 (5/22)	$1.40 – $1.65	Raised (low end)
Product Bookings	FY 2025	$500M – $550M (5/22)	$500M – $550M	Reaffirmed
ARR	FY 2025	$610M – $630M (5/22)	$610M – $630M	Reaffirmed
Total Revenue	Q3 2025	N/A	$290M – $300M	Initial
Product Revenue	Q3 2025	N/A	$165M – $170M	Initial
Service Revenue	Q3 2025	N/A	$125M – $130M	Initial
Non-GAAP EBITDA	Q3 2025	N/A	$28M – $32M	Initial
Non-GAAP EPS	Q3 2025	N/A	$0.30 – $0.37	Initial

Management noted Q3 guide incorporates increased tariff expenses and non-recurring software upgrade costs in the field .

Earnings Call Themes & Trends

Topic	Q4 2024 (Q-2)	Q1 2025 (Q-1)	Q2 2025 (Current)	Trend
Platform/AI/Cloud	Announced OmniSphere platform; focus on recurring revenue expansion .	Reiterated cloud strategy; India software hub to accelerate cloud development .	OmniSphere received HITRUST i1; positioned as cloud backbone for devices and analytics .	Building security-certified cloud platform; expanding connected footprint.
Product Innovation	XT Amplify, Central Med Automation, OmniSphere highlighted .	Execution on innovation; demand for XT Amplify driving results .	MedTrack RFID and MedVision launched; IV automation momentum .	Broadening portfolio to perioperative and clinics; IV compounding adoption improving.
Tariffs/Supply Chain	Noted macro and cost pressures; balance sheet actions .	Tariff uncertainty prompted EBITDA/EPS guide cut (later partially improved) .	Net tariff impact ~$2M in Q2; ~$6M per quarter in Q3/Q4; FY net ~$15M; mitigation via pricing/sourcing .	Tariff headwind peaks in H2’25; mitigation ongoing; 2026 impact expected lower.
Pricing/Profitability	Improved execution; targeted profitability goals .	Exceeded Q1 rev/EPS guidance; recalibrated FY profit outlook .	Price increases gaining traction; non-GAAP gross margin up QoQ .	Pricing levers supporting margins amidst costs.
Demand/Install Visibility	Backlog robust; upgrade cycle largely complete .	Q2 guide set; ARR/bookings metrics introduced .	“95–100%” visibility into rest-of-year installs; steady pipeline .	Execution visibility rising; supports guide raises.

Management Commentary

CEO on strategy: “We are… evolving from a device-centric… company to an end-to-end… technology platform company, combining both automation and intelligence” .
Platform milestone: “Omnisphere received HITRUST CSF i1 certification… we believe we are the only med management company to achieve this milestone” .
Demand/pricing: “Customers… have been receptive of broader pricing increases… beginning to flow through” .
IV automation: “We have a product that’s ready to go… momentum both in the pipeline… and backlog; we’re pretty much the sole player in that market” .
Execution/visibility: “We almost have 95% to 100% visibility on the entire rest of the year as far as schedule and installs” .

Q&A Highlights

Competitive landscape: Management sees steady buying behavior and confidence vs a competitor’s launch; positioning as enterprise tech solution with strong cybersecurity .
Medicaid/macro: No material pipeline pushouts; customers looking to technology to reduce costs and enhance efficiency across inpatient and outpatient settings .
Tariffs: FY25 modeling assumes 30% rate; net impact ~$6M per quarter in Q3/Q4; 2026 impact anticipated to be lower as mitigation takes effect .
Pricing/margins: Price increases broader than just tariff pass-through; support non-GAAP gross margin as SaaS/Expert Services scale and XT Amplify contributes .
Mix/leasing: Recurring revenue roughly ~50% of mix; leasing through company facilities ~10%; consumables growth sustaining product line .

Estimates Context

Q2 2025: Revenue beat $290.6M vs $275.2M*; non-GAAP EPS beat $0.45 vs $0.27* .
FY 2025: Company raised guidance midpoints (rev ~$1.145B; EPS midpoint $1.525), but S&P consensus sits at $1.184B* revenue and $1.71* EPS, implying consensus may need to recalibrate to tariff-driven EPS headwinds despite stronger revenue .