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QH

Quipt Home Medical Corp. (QIPT)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue declined 6% year-over-year to $57.4M, driven by Medicare Advantage attrition from a capitated agreement shifting to other providers, the non-renewal of a disposable supply contract, and seasonal deductible headwinds; Adjusted EBITDA margin remained resilient at 23.3% despite top-line pressure .
  • Results missed S&P Global consensus: revenue $57.4M vs $61.4M consensus and EPS -$0.07 vs -$0.0165 consensus; the miss was attributed to referral pattern changes tied to Humana PPO and seasonal resupply resets, with management citing improving momentum exiting March and April; margin strength was supported by structural efficiencies initiated in late 2024 .
  • Management reiterated priorities to reignite organic growth and pursue health system partnerships/joint ventures to embed Quipt into hospital discharge pathways, aiming to access embedded patient volume and scale across markets .
  • Liquidity stayed solid ($17.1M cash; $30.7M total availability; leverage 1.5x), enabling ongoing NCIB repurchases and growth initiatives; working-capital friction persists near-term from the Philips ventilator recall, but is expected to stabilize over the next couple of quarters .

What Went Well and What Went Wrong

What Went Well

  • Adjusted EBITDA margin held at 23.3% amid revenue softness, reflecting late-2024 operational streamlining (back office, logistics, intake) and cost discipline; management expects leverage on this margin base as growth reaccelerates .
  • Strategic pivot toward health system partnerships to embed Quipt in discharge planning as preferred provider; active discussions with leading regional systems and a scalable JV playbook for future expansion .
  • Recurring revenue remained robust (81% of total), supported by rentals ($24.0M) and resupply sales ($22.3M), underpinning revenue stability in a challenging quarter .
  • Quote: “Adjusted EBITDA…was solid at 23.3% of revenue, underscoring the structural improvements we made across the organization since late 2024” — Gregory Crawford, CEO .
  • Quote: “Our cost structure is optimized, scalable, and aligned with our long-term objectives…we expect this operational discipline to support strong margin performance throughout the year” — Hardik Mehta, CFO .
  • Quote: “We see a meaningful opportunity to embed Quipt as the preferred provider for hospital discharge-driven care” — Gregory Crawford, CEO .

What Went Wrong

  • Revenue fell 6% YoY to $57.4M due to MA member withdrawal under a capitated agreement to other providers, a non-renewed disposable supply contract (identified around Sep/Oct), and seasonal deductible resets pressuring resupply volumes .
  • Patient and activity metrics declined: unique patients -2% YoY to 146k; set-ups/deliveries -3% YoY to 203k; resupply set-ups decreased 4% YoY to 111k .
  • EPS declined to -$0.07 vs -$0.02 YoY; operating expenses ratio rose to 50.8% (vs 48.9% prior year quarter), reflecting headwinds and mix/timing effects .

Financial Results

Sequential Trends (oldest → newest)

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$61.3 $61.4 $57.4
Adjusted EBITDA ($USD Millions)$13.4 $14.0 $13.4
Adjusted EBITDA Margin %21.8% 22.8% 23.3%
Net Income (Loss) ($USD Millions)$(3.2) $(1.1) $(3.0)
Cash on Hand ($USD Millions)$16.2 $15.5 $17.1
Net Debt / Adjusted EBITDA (x)1.6x 1.5x 1.5x

Year-over-Year Comparison (Q2 2025 vs Q2 2024)

MetricQ2 2024Q2 2025
Revenue ($USD Millions)$61.3 $57.4
Adjusted EBITDA ($USD Millions)$14.9 $13.4
Adjusted EBITDA Margin %24.3% 23.3%
Net Income (Loss) ($USD Millions)$(0.7) $(3.0)
Diluted EPS ($USD)$(0.02) $(0.07)

Operational KPIs

KPIQ1 2025Q2 2025
Unique Patients (period-end)157,000 146,000
Set-ups/Deliveries (Units)221,000 203,000
Respiratory Resupply Set-ups (Units)124,000 111,000
Recurring Revenue % of Total77% 81%

Revenue Composition (Q2 2025)

ComponentQ2 2025
Rentals of Medical Equipment ($USD Millions)$24.0
Respiratory Resupply Sales ($USD Millions)$22.3
Recurring Revenue Total ($USD Millions)$46.3
Total Revenue ($USD Millions)$57.4

Estimates vs Actuals (S&P Global consensus)

MetricQ1 2025 ConsensusQ1 2025 ActualQ2 2025 ConsensusQ2 2025 Actual
Revenue ($USD Millions)63.009*61.4 61.426*57.4
Primary EPS ($USD)-0.0436*-0.03 -0.0165*-0.07

Values marked with * retrieved from S&P Global.

Guidance Changes

Management did not provide quantitative revenue/EPS guidance; below summarizes qualitative directional commentary from Q2 2025 materials.

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDA MarginFY 2025Not providedExpect strong margin performance throughout the year Qualitative maintained expectations
Organic GrowthCalendar 2025Not providedTarget return to historical organic growth levels Qualitative target stated
Capital Allocation (NCIB)2025Not providedActive share repurchases planned under NCIB Continued/expanded program

Earnings Call Themes & Trends

TopicQ4 2024 (two quarters back)Q1 2025 (prior quarter)Q2 2025 (current)Trend
Health system partnerships/JVsStrategy confidence and focus on scalable growth; no specific HS JV emphasis Emphasis on operational efficiency and steady demand; HS JV not central Central pillar: embed Quipt in hospital discharge pathways via preferred provider agreements; multiple discussions underway Accelerating toward HS integration
GLP-1 impact on sleepNot highlightedNo negative impact; adherence/starts supported by large real-world data No negative impact; 1.4M patient dataset shows higher PAP starts/resupply; long-term tailwind Stable positive
Regulatory/macro (75/25, tariffs)75/25 pause noted; recovery into 2025 Lapping 75/25; potential reinstatement momentum; overall stability Stable regulatory environment; tariffs not expected to impact Medicare/insurance contract products Improving/stable
Margin/efficiencyFY24 Adj. EBITDA margin 23.5%; Q4 21.8% Sequential margin improvement to 22.8% Margin resilience at 23.3% on lower revenue due to structural efficiencies Sustained strength
MA capitated agreement headwindsNoted as FY24 headwind Residual headwinds; front-half weighted in 2025 Ongoing referral pattern impact; stabilization and uptick exiting Mar/Apr Dissipating
Disposable supply contract non-renewalNoted; timing around Nov 2024 ~$2.5M calendar 2025 headwind; first quarter heavier Continued impact; cited among Q2 revenue drivers Ongoing 2025
Philips ventilator recall (working capital)—Driving CapEx/working capital overspend; process expected to stabilize; replacement program ongoing Intake delays at Philips extending timeline into Sep/Dec; paused swaps to manage warehouse backlog Resolving over next couple quarters

Management Commentary

  • Strategic focus: “Reignite organic growth and utilize our scalable playbook…to partner with healthcare systems in a more integrated way…embed Quipt as the preferred provider for hospital discharge-driven care” — Gregory Crawford, CEO .
  • Margin outlook: “Our cost structure is optimized, scalable…we expect this operational discipline to support strong margin performance throughout the year” — Hardik Mehta, CFO .
  • Execution priorities: “Reaccelerate organic growth…maintaining and further enhance margin performance…building scale intelligently with a focus towards healthcare system integration…drive shareholder value with disciplined capital allocation” — Gregory Crawford, CEO .

Q&A Highlights

  • Revenue drivers and Humana PPO referrals: Management underestimated referral behavior, with more Humana PPO patients referred to other providers; the disposable supply contract non-renewal was communicated earlier and contributed to the quarter’s shortfall .
  • Sequential trends: April showed stabilization and uptick in rental revenue and resupply volumes; management expects trends to improve as year progresses .
  • Working capital and Philips recall: Timing issues and intake delays at Philips created CapEx overspend and warehouse backlog; program likely extends into September/December; stabilization expected over next couple of quarters .
  • COGS normalization: YTD COGS % stabilized vs FY2024; Q2 benefited from credits not received in the prior quarter; management targets positive trends into Q3/Q4 .
  • Headwind sizing: Humana-related YoY impact heaviest in Q2/Q3 (front-half weighted); disposable supply contract headwind ~ $2.5M for calendar 2025, heavier in early periods .

Estimates Context

  • Q2 2025 missed consensus: revenue $57.4M vs $61.4M consensus and EPS -$0.07 vs -$0.0165 consensus; Q1 2025 likewise trailed revenue and EPS consensus modestly. Expect sell-side to lower near-term revenue and EPS given referral patterns and contract headwinds, with margins likely held near low-20s pending reacceleration .
  • Consensus inputs used: see table above. Values retrieved from S&P Global.

Key Takeaways for Investors

  • Miss driven by MA contract attrition, non-renewed disposable supply contract, and seasonal deductibles; margin resilience at 23.3% is the positive counterweight to top-line pressure .
  • Near-term catalysts: announcements on health system partnerships/JVs, visible sequential improvements in rental/resupply volumes, and resolution progress on the Philips recall supporting working capital normalization .
  • Strategic pivot toward embedded health system relationships could structurally lower acquisition dependence and accelerate organic growth via discharge pathway integration .
  • Recurring revenue base (81%) and liquidity (cash $17.1M; total availability $30.7M; leverage 1.5x) support NCIB repurchases and selective growth investments, mitigating downside while organic growth rebuilds .
  • Watch referral dynamics at Humana PPO and resupply compliance initiatives; management is focusing on catchment rates and reducing resupply attrition in months 5–10 to rebuild the funnel .
  • Estimate revisions likely trend lower on revenue/EPS near term; margin expectations may remain stable given structural efficiency gains; significant surprise would be a health system JV announcement or faster-than-expected resupply rebound .
  • Narrative pivot from “recovery” to “integration-led growth” can drive multiple expansion if execution delivers sequential organic growth and embedded volume through hospital partnerships .