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VH

VIEMED HEALTHCARE, INC. (VMD)·Q3 2025 Earnings Summary

Executive Summary

  • Record quarter: revenue $71.9M (+24.0% YoY; +14.1% QoQ), diluted EPS $0.09, Adjusted EBITDA $16.1M (22.4% margin). Growth driven by sleep therapy and continued ventilation strength; Lehan’s integration accretive to EPS .
  • Guidance narrowed: FY2025 net revenue to $271–$273M (lowered upper bound), Adjusted EBITDA to $60–$62M (raised lower bound), reflecting higher-margin sleep outpacing lower-margin staffing; mix expected to modestly lift EBITDA margin .
  • Patient base expansion: PAP therapy patients +63.7% YoY and +21.4% QoQ; sleep resupply +51.4% YoY and +32.8% QoQ; vent patients +8.8% YoY and +1.8% QoQ .
  • Capital deployment: completed buybacks of 1,706,380 shares at $6.68 average ($11.4M), maintained strong liquidity ($11.1M cash; $38M undrawn lines), long-term debt $19.6M (paid down $5M in October) .
  • Stock reaction catalyst: despite KPIs trending up and strong FCF, initial reaction was modestly negative (noted -2.5% intra-day) amid sector underperformance; management flagged potential for further buybacks depending on valuation .

What Went Well and What Went Wrong

What Went Well

  • Record revenue with diversified mix: “ventilation now accounts for less than half of net revenue…positioning Viemed for sustainable, diversified growth” . Q3 revenue $71.9M (+24% YoY; +14% QoQ) .
  • Sleep momentum: new sleep starts +96% YoY; resupply base surpassed PAP rental base; Lehan’s added 2,465 patients, expanding footprint .
  • Efficiency and margins: SG&A improved 160 bps YoY and 130 bps QoQ; Adjusted EBITDA $16.1M (+15.5% YoY), margin 22.4% .
  • Free cash flow strength: Q3 FCF $12.4M; TTM FCF $23.3M; supports acquisitions and buybacks .
  • Capital allocation discipline: “completed our 2025 share repurchase program…immediately accretive” and readiness for targeted M&A with ample liquidity and credit capacity .

What Went Wrong

  • Gross margin compression: GM 57% vs 58% in Q2 and 59% in Q3’24 as sleep mix grows; management expects SG&A leverage to offset lower gross margin products .
  • Revenue vs consensus: Q3 revenue modestly below S&P Global consensus ($71.9M vs $72.0M*), EPS in-line ($0.09 vs $0.09*); limited coverage (one estimate) reduces signal strength . Values retrieved from S&P Global.
  • Higher reported debt at quarter-end ($19.6M) post acquisition and buybacks (though $5M repaid in October), lowering working capital to $5.8M vs $18.0M in Q2 .
  • Guidance upper bound lowered for revenue (mix shift away from lower-margin staffing growth), implying neutral top-line impact but improved EBITDA mix .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Revenue ($USD Millions)$58.0 $63.1 $71.9
Gross Profit ($USD Millions)$34.4 $36.7 $41.3
Gross Margin (%)59% 58% 57%
Net Income Attrib. to VMD ($USD Millions)$3.9 $3.2 $3.5
Diluted EPS ($USD)$0.10 $0.08 $0.09
Adjusted EBITDA ($USD Millions)$14.0 $14.3 $16.1
Adjusted EBITDA Margin (%)24.1% 22.7% 22.4%

Actual vs S&P Global Consensus (Q3 2025):

  • Revenue: $71.9M actual vs $72.0M estimate* (slight miss) . Values retrieved from S&P Global.
  • EPS (Diluted): $0.09 actual vs $0.09 estimate* (in-line) . Values retrieved from S&P Global.
MetricQ3 2025 ActualQ3 2025 Consensus*
Revenue ($USD Millions)$71.9 $72.0*
Diluted EPS ($USD)$0.09 $0.09*

Segment/Revenue Mix Detail

Category ($USD Thousands)Q3 2024Q2 2025Q3 2025
Ventilators (non-invasive & invasive)$31,772 $33,819 $34,883
Other HME Rentals$12,459 $13,823 $15,401
Equipment & Supply Sales$8,440 $9,514 $15,700
Service Revenues$5,333 $5,900 $5,930
Total Revenues$58,004 $63,056 $71,914
Rental Mix (%)76% 76% 70%
Sales Mix (%)24% 24% 30%
Payor Mix – Medicare (%)40% 40% 37%
Ventilation Share of Revenue (%)55% 54% 49%
Sleep Share of Revenue (%)17% 19% 21%

KPIs

KPIQ3 2024Q2 2025Q3 2025
Vent Patients (count)11,374 12,152 12,372
PAP Therapy Patients (count)19,478 26,260 31,891
Sleep Resupply Patients (count)22,143 25,246 33,518

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Revenue ($USD Millions)FY 2025$271–$277 $271–$273 Narrowed; upper bound lowered
Adjusted EBITDA ($USD Millions)FY 2025$59–$62 $60–$62 Raised lower bound
CommentaryFY 2025Inclusion of Lehan’s 2H contribution Higher-margin sleep ahead; lower-margin staffing slower; modest EBITDA margin lift Mix shift improves margin profile

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025, Q2 2025)Current Period (Q3 2025)Trend
AI/Technology initiativesInvesting in tech-enabled efficiencies; structure from 2024 improvements Deploying AI-powered revenue cycle tools in sleep; scaling to other lines in Q4/2026 Accelerating deployment; broader scope
Regulatory/Medicare Advantage & NCDNo tariff impact observed; stable payers Expect improved MA access, streamlined approvals; implementing new NCD for home ventilation Positive regulatory tailwind
Product performance – SleepNew starts +40% YoY (Q1); sleep metrics growing New starts +96% YoY; resupply base > PAP rentals; share gains with dedicated reps Strengthening growth driver
Product performance – VentilationRobust YoY growth and sequential increases Double-digit YoY growth; remains cornerstone while <50% of revenue Stable core, diversified mix
Regional strategyExpansion across new territories; rural footprint Focus on rural/adjacent markets; national maternity rollout planned for 2026 Continued rural-first; new nationwide service
Capital allocationStrong balance sheet; pursuing M&A and buybacks Completed buybacks; debt paydown; M&A-ready with $38M undrawn + $30M accordion Active, flexible deployment
Tariffs/macroNo observed impact; value proposition reinforced Sector underperformance noted; persistent FCF may force multiple reset Macro cautious; company-specific resilience

Management Commentary

  • CEO (Casey Hoyt): “We delivered another outstanding quarter…Both [buybacks and Lehan’s acquisition] were accretive to earnings per share and reflect our unwavering commitment to creating long-term shareholder value” .
  • CEO (Casey Hoyt): “Ventilation…now accounts for less than half of our net revenue…positioning Viemed for sustainable, diversified growth” .
  • COO (Todd Zehnder): “SG&A expenses were 44.4% of revenue, a 160 basis point improvement YoY, and a 130 basis point improvement sequentially…driving continued improvement and operating leverage as we scale” .
  • COO (Todd Zehnder): “We now expect net revenue between $271M and $273M…Adjusted EBITDA between $60M and $62M…higher-margin lines, especially sleep, are tracking ahead of expectations” .
  • CFO (Trae Fitzgerald) call intro and availability of materials on SEC sites .

Q&A Highlights

  • Organic growth ex-Lehan’s: Analyst estimated ~13–14%; management affirmed 14% revenue growth .
  • Sleep share gains: Dedicated sleep reps, training and market expansion underpin outsized growth across geographies .
  • Competitive bidding: Company expects CB’s return; confident larger, operationally sound players will win; maternal segment insulated (commercial/Medicaid) .
  • Capital allocation: Sector weak; management highlighted strong FCF and willingness to pursue further buybacks depending on valuation; active debt paydown .
  • Payer/mix & AR/DSO: Shift with Lehan’s (near-zero Medicare in maternal), but Medicare remains a “great payer”; AR levels low; conversion strong .
  • Margin levers: AI-based intake streamlining setup/compliance in sleep; SG&A leverage to offset lower GM from sleep mix .
  • Geographic focus: Rural-first, adjacency expansion in COPD-prevalent regions; nationwide maternal rollout targeted for 2026 .

Estimates Context

  • Coverage thin (generally one estimate per quarter), but S&P Global consensus for Q3 2025: revenue $72.0M*, EPS $0.09*. Actuals: revenue $71.9M (slight miss), EPS $0.09 (in-line) . Values retrieved from S&P Global.
  • FY2025 consensus: revenue $272.05M*, EPS $0.43*; company guidance $271–$273M revenue and $60–$62M Adjusted EBITDA . Values retrieved from S&P Global.
MetricQ1 2025 ActualQ1 2025 Consensus*Q2 2025 ActualQ2 2025 Consensus*Q3 2025 ActualQ3 2025 Consensus*FY 2025 Consensus*
Revenue ($USD Millions)$59.1 $60.6*$63.1 $63.5*$71.9 $72.0*$272.05*
Diluted EPS ($USD)$0.06 $0.06*$0.08 $0.09*$0.09 $0.09*$0.43*

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Diversification thesis is working: ventilation <50% of revenue for the first time in a decade; sleep and maternal add breadth and resilience .
  • Sleep is the growth engine: new starts +96% YoY; resupply scale driving recurring sales; expect continued mix shift with SG&A leverage offsetting gross margin pressure .
  • Guidance quality improved: narrower FY2025 range with higher EBITDA floor; mix shift (less staffing, more sleep) enhances margin profile without sacrificing top-line .
  • Strong cash generation supports optionality: Q3 FCF $12.4M; TTM $23.3M; management remains ready for M&A and opportunistic buybacks .
  • Regulatory tailwinds: Medicare Advantage coverage clarity and NCD implementation expected to streamline approvals and support vent growth .
  • Execution catalysts: AI-enabled intake and revenue cycle tools rolling across divisions in Q4/2025–2026; potential operational efficiency lift and faster patient setup/compliance .
  • Trading implications: Near-term, expect estimate fine-tuning (flat revenue vs slight consensus miss, in-line EPS); watch for Q4 sequential growth and updated mix/margin commentary. Medium-term, valuation rerating case rests on sustained FCF, diversified growth, and demonstrated margin leverage .

Additional Materials Searched

  • Other press releases in Q3 2025: no company-specific releases beyond earnings; one press note was unrelated to Viemed (Instinct Science/Cornell veterinary software) .