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VH

VIEMED HEALTHCARE, INC. (VMD)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered record net revenue of $60.7M (+20% YoY) and sequential growth of ~4.6%, with diluted EPS of $0.10, gross margin ~60%, and Adjusted EBITDA of $14.2M .
  • The company met the high end of its prior Q4 revenue guidance range ($59.7M–$60.9M); actual $60.7M. Bold beat vs guidance: met high end .
  • FY 2025 guidance introduced: net revenue $254M–$265M and Adjusted EBITDA $54M–$58M (21%–23% margin), implying continued double-digit growth and stronger operating scale .
  • Operational momentum: ventilator patients +14% YoY to 11,795; PAP therapy patients +43% YoY; sleep resupply patients +29% YoY, supporting multi-line growth .
  • Near-term catalysts: accelerated sales force ramp, continued Philips vent fleet swap generating gains while elevating net CapEx near term, and a more active, “target‑rich” M&A pipeline in complementary services .

What Went Well and What Went Wrong

What Went Well

  • Record revenue and profitability with strong organic growth; management: “fourth quarter results meeting the high end of our expectations… strong organic growth and profitability” .
  • Scaling efficiency and SG&A leverage amid mix shifts; Q4 gross margin ~59.5% and Adjusted EBITDA margin ~23.5%, reflecting disciplined cost control and operating scale .
  • Demand drivers across vents, sleep, and staffing; CEO highlighted a “massively underserved market” in complex respiratory care and rising sleep engagement, with expansion of behavioral health staffing opportunities .

What Went Wrong

  • Mix-driven margin compression YoY as sleep and staffing grew faster than vents, reducing EBITDA margin vs prior year despite strong absolute EBITDA growth .
  • Net CapEx elevated by accelerated vent fleet swap (gross $13.6M in Q4; net ~$8.9M), suppressing full-year free cash flow ($11.6M vs $21.7M in 2023) .
  • Consensus estimates inaccessible (SPGI retrieval error), limiting formal beat/miss benchmarking; reliance on company guidance for comparative context (note: SPGI data unavailable) [GetEstimates error].

Financial Results

Quarterly Headline Results

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$54.965 $58.004 $60.695
Diluted EPS ($USD)$0.04 $0.10 $0.10
Gross Profit %60% 59% 60%
Adjusted EBITDA ($USD Millions)$12.813 $13.954 $14.242

Year-over-Year (Q4 2023 vs Q4 2024)

MetricQ4 2023Q4 2024
Revenue ($USD Millions)$50.739 $60.695
Gross Profit ($USD Millions)$32.111 $36.138
Diluted EPS ($USD)$0.09 $0.10
Net Income Attributable ($USD Millions)$3.477 $4.316
Adjusted EBITDA ($USD Millions)$12.845 $14.242

Segment/Revenue Mix (Quarterly)

Category ($USD Millions)Q2 2024Q3 2024Q4 2024
Ventilator rentals (NIV & invasive)$30.445 $31.772 $33.173
Other HME rentals$12.211 $12.459 $13.047
HME equipment & supply sales$7.378 $8.440 $8.940
Service revenues$4.334 $5.333 $5.535
Total net revenue$54.965 $58.004 $60.695
Category (% of Total)Q2 2024Q3 2024Q4 2024
Ventilator rentals55.4% 54.8% 54.7%
Other HME rentals22.2% 21.5% 21.5%
HME equip. & supply sales13.4% 14.6% 14.7%
Service revenues9.0% 9.2% 9.1%

KPIs

KPIQ2 2024Q3 2024Q4 2024
Vent patients (quarter-end)10,905 11,374 11,795
PAP therapy patients17,349 19,478 21,338
Sleep resupply patients20,185 22,143 24,478

FY 2024 Mix (Reference)

Mix (FY 2024)Value
Service mix: Ventilation 56%, Sleep 16%, Oxygen 11%, Other 17%
Payor mix: Medicare 41%, Medicaid/MCO 7%, Medicare Advantage 21%, Commercial 18%, Other 13%
Revenue mix: Rental 77%, Sales 23%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net RevenueFY 2025None$254M–$265M New
Adjusted EBITDAFY 2025None$54M–$58M (21%–23% margin) New
Quarterly cadence assumptionsFY 2025NoneQ1 typically flat/down vs Q4; Q2–Q4 sequential +3–6% New
Net RevenueQ4 2024$59.7M–$60.9M Actual $60.695M Met high end

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4 2024)Trend
Sales force restructuring & productivityQ2: +15% avg monthly vent setups per rep; recruiting to accelerate . Q3: +18% setups; continued ramp .Q4: +14% setups; doubling down on aggressive salesforce ramp .Improving productivity; aggressive ramp
Philips vent fleet swap & CapExQ2: buyback underway (~15% fleet sold); net CapEx/EBITDA healthy . Q3: net CapEx ~$5M; gains continue .Q4: gross CapEx $13.6M, net ~$8.9M; $1.1M gains; program likely completes ~mid-2025 .Elevated near-term CapEx; ongoing gains
Sleep business & GLP‑1 impactQ2: GLP‑1s not impeding; positive engagement . Q3: research shows GLP‑1 users more likely to start/adopt PAP; resupply up .Q4: sequential growth across sleep patients, CPAP units, resupply; supportive narrative persists .Strengthening
Regulatory & payorQ2: step-therapy easing, better medical policies . Q3: NCD 280.1 reconsideration; 75–25 relief momentum .Q4: discussion of tariffs; hospitals tightening under Medicaid pressure—supports home care positioning .Supportive policy backdrop; efficiency focus
Staffing & behavioral healthQ2: service revenue ramp from staffing . Q3: staffing ~10% revenue; variability but positive cash flow impact .Q4: ~80% of staffing driven by behavioral health RFPs; viewed as complementary growth .Expanding contribution
JV strategy (East Alabama)Q2: integration on track . Q3: incremental progress; target ~$4M annualized revenue path .Q4: profitable pilot; future JVs need to be larger to justify integration effort .Model proven; selective scaling

Management Commentary

  • “We once again demonstrated our value as a vital link between patients, providers, and payers… maintaining a track record of strong organic growth and profitability…” — Casey Hoyt, CEO .
  • “Adjusted EBITDA grew 11% for the quarter to $14.2 million and 19% for the full year to $51.1 million, driven by strong organic growth and contributions from each of our businesses.” — Todd Zehnder, COO .
  • On 2025 outlook cadence: “Year-over-year growth expected to be consistent… Q1 is typically flat to down sequentially vs Q4; assumes sequential revenue growth of 3% to 6% for Q2–Q4.” .
  • On M&A environment: “More target‑rich and fertile… pipeline is building… more options… optimistic relative to the quiet prior two years.” — Casey Hoyt .

Q&A Highlights

  • Tariffs and macro: No supplier indications yet; hospitals tightening under Medicaid pressure which supports Viemed’s role in efficient discharge and home care .
  • M&A pipeline: Increasing inbound interest; company remains prudent and culturally selective; more “target‑rich” than the prior bidding years .
  • JV update: East Alabama JV is profitable; future JVs must be larger to justify integration effort (“make the juice worth the squeeze”) .
  • Free cash flow trajectory: Expect expansion as staffing and resupply grow, though rapid vent growth elevates CapEx; noted cash taxes and Philips receivable timing effects in 2024 .
  • Patient lengths of stay: Vent length of stay ~17 months; PAP generally caps at ~12–13 months; resupply longevity not yet disclosed but expected multi‑year for compliant patients .

Estimates Context

  • Wall Street consensus (S&P Global) was unavailable due to an access error during retrieval; formal beat/miss vs consensus cannot be provided at this time [GetEstimates error].
  • Relative to company guidance, Q4 revenue landed at the high end of the guided range ($59.7M–$60.9M actual $60.7M), supporting a narrative of execution ahead of FY 2025 targets .
  • Given newly issued FY 2025 guidance (midpoint implies ~16% YoY revenue growth and ~10% EBITDA growth), sell‑side models likely require upward revisions to top‑line and EBITDA trajectories and to quarterly cadence assumptions .

Key Takeaways for Investors

  • Q4 print was clean with revenue at record levels and margins stable around ~60% gross and ~23.5% Adjusted EBITDA despite mix shifts; execution met the high end of guidance, a positive signal for credibility and operating discipline .
  • Growth engines are diversified: vents remain the core, while sleep and staffing (behavioral health) add durable, cash‑generative streams; segment mix implies continued margin variability but stronger scale efficiencies in SG&A .
  • Near-term watch: elevated net CapEx as vent swap continues through mid‑2025 and typical Q1 sequential softness; the fleet program generates gains and positions the company with younger assets, supporting service reliability and future FCF expansion .
  • Regulatory backdrop favorable: NCD 280.1 reconsideration and 75–25 relief efforts, plus hospital efficiency pressures, support Viemed’s in‑home model and growth runway for NIV and sleep .
  • Commercial strategy: aggressive salesforce expansion with measured, demonstrated productivity improvements; expect continued patient adds across vents and sleep .
  • Capital flexibility: strong liquidity ($17.5M cash, $55M undrawn facilities) and no net debt provide optionality for organic investments and selective M&A .
  • Actionable: Position for a typical Q1 seasonal dip and acceleration through Q2–Q4; monitor mix (sleep/staffing) for margin implications; reassess valuation as FY 2025 guidance supports sustained double‑digit growth and scale .