Executive Summary

Q3 2025 showed revenue stabilization and a return to positive organic growth: revenue $58.3M (+1.6% q/q; -4.1% y/y), Adjusted EBITDA $13.7M (23.5% margin), and recurring revenue at 81% of total, supported by stronger sleep resupply volumes late in the quarter .
Results were slightly below consensus on revenue and consistent with a negative EPS profile: revenue $58.3M vs $58.9M estimate (miss), GAAP diluted EPS -$0.07 vs -$0.04 estimate; sequential margin stability and improving volumes partially offset top-line pressure from prior payer and contract headwinds that impacted Q1–Q2 * .
Strategic health-system integration accelerated: closed the Ballad Health-owned DME acquisition with a Preferred Provider Agreement (PPA) giving access to discharge referrals from 20 hospitals, and signed a JV to acquire 60% of Hart Medical Equipment, expected to bring consolidated run-rate revenue to ~$300M post-close—key near-term catalysts for volume and mix quality .
Balance sheet remains conservative (Net Debt/Adj. EBITDA 1.5x) with $35.3M of credit availability at quarter-end, preserving flexibility to fund integration and growth initiatives, including de novos and health-system partnerships .

What Went Well and What Went Wrong

What Went Well

Returned to positive organic growth sequentially (+1.6% q/q), with activity improvements across set-ups (+3.5% q/q) and respiratory resupply deliveries (+7.2% q/q), indicating demand normalization after Q2 seasonality .
Margin resilience: Adjusted EBITDA margin held at 23.5% (vs 23.4% y/y), underscoring cost work and operating discipline implemented since late 2024; management: “This underscores the scalability and resiliency of our operating platform” .
Strategic positioning through health-system integration: Ballad Health acquisition plus PPA embeds Quipt into discharge pathways; Hart JV with Henry Ford, McLaren, and others provides direct access to >19 hospitals and ~67k monthly patients—growing high-quality, recurring referral flows .

What Went Wrong

Revenue remained below prior-year levels (-4.1% y/y) and narrowly missed consensus, reflecting lingering effects from Q1–Q2 payer/contract changes and earlier seasonality; GAAP EPS remained negative (-$0.07) vs consensus -$0.04 *.
Operating expenses as a percent of revenue were elevated in Q3 (53.3% vs 50.4% prior year), and rental equipment CapEx remained pressured by the Philips ventilator recall, weighing on EBITDA less patient CapEx .
Unique patients declined y/y (151k vs 153k), and total set-ups/deliveries were slightly lower y/y (210k vs 216k), highlighting that volume recovery is still in early innings despite sequential improvements .

Financial Results

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Millions)	$61.4	$57.4	$58.3
Revenue Consensus Mean ($USD Millions)*	$63.0	$61.4	$58.9
Surprise vs Estimate ($)	-$1.6	-$4.0	-$0.6
YoY Revenue Change (%)	-2.0%	-6.0%	-4.1%
Diluted EPS (GAAP) ($)	-$0.03	-$0.07	-$0.07
Primary EPS Consensus Mean ($)*	-$0.044	-$0.016	-$0.037
Adjusted EBITDA ($USD Millions)	$14.0	$13.4	$13.7
Adjusted EBITDA Margin (%)	22.8%	23.3%	23.5%
Net Income (Loss) ($USD Millions)	-$1.1	-$3.0	-$3.0
Recurring Revenue % of Total	77%	81%	81%

*Values retrieved from S&P Global.

Segment/KPI breakdown

Revenue Composition (Recurring detail)

Metric	Q1 2025	Q2 2025	Q3 2025
Rentals of Medical Equipment ($M)	$24.3	$24.0	$23.2
Respiratory Resupplies ($M)	$22.9	$22.3	$23.8
Recurring Revenue ($M)	$47.2	$46.3	$47.0
Recurring Revenue % of Total	77%	81%	81%

Operating/Activity KPIs and Liquidity

KPI	Q1 2025	Q2 2025	Q3 2025
Unique Patients (000s)	157	146	151
Unique Set-ups/Deliveries (000s)	221	203	210
Respiratory Resupply Set-ups/Deliveries (000s)	124	111	119
Cash ($M)	$15.5	$17.1	$11.3
Credit Availability ($M)	$32.4	$30.7	$35.3
Net Debt / Adjusted EBITDA (x)	1.5x	1.5x	1.5x

Notes on non-GAAP: Adjusted EBITDA adds back D&A, ROU lease amortization/interest, net interest, tax, professional fees (including CID, loss of private issuer status, proxy/activist matters), stock-based comp, acquisition costs, derivative fair value changes, FX, gains/losses on disposals, and equity-method losses .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Organic Growth	Calendar 2025	Return to historical organic growth levels expected (qualitative)	Reiterated; achieved sequential organic growth in Q3 and expect return to historical levels in calendar 2025 (qualitative)	Maintained outlook; execution improving
Adjusted EBITDA Margin	FY 2025	“Strong margin performance throughout the year” (qualitative)	Margin held 23.5% in Q3; management continues to expect strong margin performance (qualitative)	Maintained
Run-Rate Revenue (post Hart JV)	Post-close	n/a	~ $300M annualized run-rate upon consolidation of Hart post-close	New disclosure
Health System Embeddedness	Ongoing	Pursuing health system partnerships (qualitative)	Ballad DME acquisition + PPA; Hart JV embedding Quipt/Hart into discharge pipelines across >19 hospitals	Strengthened

No formal numeric revenue/EPS/margin guidance ranges were issued this quarter; management reiterated qualitative guardrails around margin strength and organic growth trajectory .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 2025)	Trend
Health-system partnerships	“Actively engaged in conversations” to embed into discharge-driven care	Closed Ballad DME + PPA (20 hospitals) and signed Hart JV (60% stake) with Henry Ford, McLaren, others; formal entry into MI/northern OH	Accelerating
Organic growth	Aimed to return to historical organic growth in calendar 2025	Positive organic growth q/q achieved; referral volumes normalizing	Improving
Margin resilience	Structural efficiency improvements since late 2024; margins stable	Adj. EBITDA margin 23.5%; CFO underscores scalability/resiliency	Stable/strong
Sleep/GLP-1 effects	Not highlighted	CEO cites 1.6M-patient data: GLP-1 users 11% more likely to start PAP; +300–500 bps higher resupply order rates at 1–2 years	Supportive to resupply
CapEx and Philips recall	Noted equipment investment backdrop	Rental equipment CapEx elevated due to Philips ventilator recall (drag on EBITDA minus patient CapEx)	Elevated but temporary
Regulatory reimbursement	Medicare 75/25 blended rate ended; revenue/ops impact noted	No new operational impacts flagged in Q3; “One Big Beautiful bill” not expected to affect ops	Stabilizing

Management Commentary

CEO: “We saw clear revenue stabilization… and a return to positive organic growth driven by strength in our core therapies… We believe the most difficult period is behind us and our operating engine is well positioned to scale again.”
CEO (on strategy): Ballad acquisition and Hart JV “embed us directly into the discharge pathway… and create a scalable blueprint for future health system partnerships across the country.”
CFO: “Our results indicate we are seeing clear revenue stabilization… with a return to positive organic growth quarter over quarter… we delivered a strong and consistent adjusted EBITDA margin of 23.5%.”
CFO (on JV economics): Hart generated ~$60M revenue and ~$7M Adj. EBITDA TTM to June 2025; Quipt to acquire 60% for $17–18M; expected to align Hart margin with corporate averages within ~3 quarters post-close .
CFO: Net Debt/Adj. EBITDA 1.5x; total credit availability $35.3M at Q3-end .

Q&A Highlights

EBITDA less patient CapEx: Analyst noted margin improvement; CFO expects continued steady-to-expanding trajectory as revenue stabilizes and recall-related CapEx normalizes over time .
Hart JV integration and margin uplift: Management plans to align cost structures and leverage operating best practices; target to bring Hart’s margin up to Quipt averages over a few quarters post-close .
Referral flow and product mix in hospital discharge pathways: Expect majority respiratory (ventilation, oxygen) plus sleep testing/equipment; programs intended to increase respiratory referrals captured from health systems .
M&A pipeline: Strong pipeline with increased inbound interest; blend of partnerships and traditional acquisitions contemplated .
Regulatory: No anticipated operational impact from the referenced “One Big Beautiful bill” .

Estimates Context

Q3 2025: Revenue $58.3M vs $58.9M consensus (miss); EPS -$0.07 vs -$0.04 consensus (miss). Sequential growth resumed, but revenue still below y/y and estimate; margins steady at 23.5% *.
Q2 2025: Revenue $57.4M vs $61.4M consensus (miss), impacted by Medicare Advantage capitated agreement shifts, non-renewed disposable supply contract, and seasonal resupply softness; EPS -$0.07 vs -$0.02 consensus (miss) *.
Q1 2025: Revenue $61.4M vs $63.0M consensus (miss), EPS -$0.03 vs -$0.04 consensus (slightly better) *.

Where estimates may adjust: Given Q3 stabilization and health-system embedded growth vectors, revenue trajectories for FY25–26 may move higher on improving volumes and consolidation of Hart post-close; however, elevated equipment CapEx and opex ratio suggest near-term EPS estimate drift may remain conservative until integration synergies are realized .
*Values retrieved from S&P Global.

Key Takeaways for Investors

Reacceleration setup: Sequential organic growth, improved volumes, and stable 23.5% margin suggest Q3 marked the bottoming/stabilization phase; trendline is now positive into 2H calendar 2025 .
Structural catalysts: Ballad DME + PPA (20 hospitals) and Hart JV (consolidation to ~$300M run-rate post-close) materially deepen embedded hospital discharge access—supporting recurring revenue and mix quality .
Margin durability: Despite revenue pressure y/y, EBITDA margins held firm; integration synergies from Hart and ongoing cost discipline provide a path to defend/expand margins medium term .
Watch CapEx normalization: Philips ventilator recall elevated rental equipment CapEx; easing should improve EBITDA minus patient CapEx and free cash conversion over time .
Liquidity supports execution: 1.5x leverage and $35.3M availability provide flexibility to fund integration, de novos, and selective M&A; balance sheet not a constraint .
Estimate dynamics: Near-term consensus likely nudges higher on embedded growth (post-close Hart consolidation) but EPS remains sensitive to opex mix and integration timing; monitor closing and synergy cadence .
Risk checks: Reimbursement/regulatory shifts, DOJ CID-related costs (non-GAAP add-backs), integration risks, and payer dynamics remain key externalities to track .

Quipt Home Medical Corp. (QIPT)·Q3 2025 Earnings Summary