Option Care Health, Inc. Common Stock Q2 2026 Earnings Call

Welcome to the Option Care Health second quarter 2026 earnings call. At this time, all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. Robert Okunski, Vice President of Investor Relations. Please go ahead. Good morning, and welcome to Option Care Health's second quarter 2026 earnings conference call.

With me today are Jon Rademacher, President and Chief Executive Officer, and Meenal Sethna, Executive Vice President and Chief Financial Officer. Before we begin, a reminder that today's discussion will include certain forward-looking statements that reflect our current assumptions and expectations. These forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from our expectations. We assume no obligation to update any forward-looking statement except as required by law. We will also use non-GAAP financial measures when talking about the company's performance and financial condition.

For more information on the specific risks and uncertainties, as well as our non-GAAP measures, we encourage you to review the information in today's press release, which is posted on the investor relations portion of our website, as well as in our Form 10-K and 10-Q filed with the SEC. Finally, for the question and answer portion of today's call, we ask that you limit questions to one question and one follow-up per participant. With that, I will turn the call over to Jon. Jon? Thanks, Bob. Good morning, everyone, and thank you for joining us.

We're pleased to share updates on our second quarter 2026 today. Before I do this, I want to take a moment to say thank you to the Option Care Health team for their unwavering commitment to the patients and communities that we serve every day. I am grateful to our team members whose dedication to clinical excellence, patient outcomes, and service quality continues to differentiate Option Care Health in the marketplace. Their efforts continue to strengthen our foundation and have contributed to the positive momentum we are seeing across the business. As recognition of the great work our team does on a daily basis, we're incredibly proud to be ranked number 15 on TIME's World's Most Impactful Companies of 2026 list that was presented by TIME and Statista earlier in the second quarter.

At a high level, as the nation's largest independent provider of home and alternate site infusion therapy, our strategy is built on a national scale with local responsiveness. Our comprehensive network of home infusion pharmacies and infusion suites, URAC accredited specialty pharmacy centers of excellence, along with the breadth and depth of our nursing resources, uniquely positions us in the marketplace. We combine consistent, high quality clinical care with local access, leveraging our platform of infusion suites and clinics to drive clinical innovation while meeting patients where they want to be. This model not only helps us deliver reliable, clinical, excellent care for hospitals and health systems, specialty physician practices, and health plans across the country, but also positions us as an important solution to help drive down rising healthcare costs.

Our platform provides broad payer access, expanded pharmacy capabilities, and a robust nursing network that can oversee patients in their home or one of our more than 190 facilities, making us a strong solution for pharma partners who require these services from a channel partner in support of their medicines. Turning to our results, we delivered a strong second quarter performance reflecting the strength of our operational execution and the positive impact of our 2026 strategic initiatives and focus on recovery. Although I am pleased with our progress in the second quarter, I am not satisfied with our performance, knowing we have much greater potential given the strength of our platform and the quality of our team. In the quarter, revenue, adjusted EBITDA, and EPS were all ahead of our expectations, and we had a strong quarter of cash generation.

Additionally, we repurchased $150 million in stock under our buyback program in the second quarter, reinforcing our commitment to disciplined capital allocation and shareholders' return. Finally, we made significant progress on many of our strategic initiatives to position us for long-term growth. Diving into revenue dynamics, within our acute therapy portfolio, we posted another strong quarter of organic growth in the high single digits as we continue to be the partner of choice for many hospitals, health systems, and providers. As a reminder, acute is a very time sensitive and local therapy platform requiring close coordination with hospitals and healthcare providers to safely and effectively transition patients to home-based environment. We do this on a national scale. Our ability to consistently deliver for providers and their patients drove another quarter of above-market, high single digit revenue growth.

With acute, we saw both sequential and year-over-year growth across all key therapeutic categories and the number of patients served. Looking ahead, we expect our acute portfolio to continue to grow faster than the broader industry as we deepen our partnerships with hospitals and health systems. Across our chronic platform, revenue for the quarter was in line with last year and up high single digits sequentially from the first quarter. Breaking this down across the larger therapeutic categories we serve, we delivered another strong quarter in IG Neuro portfolio, showing sequential and year-over-year revenue growth. We remain excited about the opportunities in this portfolio and expect to continue the momentum as the key drivers for the company moving forward.

Across our chronic inflammatory portfolio, as we refer to as CID, we began to stabilize our portfolio coming out of the first quarter reset and saw our second quarter patient census rise sequentially. As we move through the remainder of the year, we expect to further grow our patient census in CID products as we monitor this patient base and product mix closely. Our rare and orphan portfolio also delivered solid results for revenue growth, both sequentially and year-over-year. Growth was broad-based across a range of therapies and reflects our close relationships with our pharma partners and the strength of our clinical capabilities. We are excited about the momentum we are building and continue to focus on expanding our rare and orphan portfolio and have added new therapies to our portfolio. Some of these will not go live until late 2026, early 2027.

This is a sign of strength of our offering. We believe we possess a competitive advantage given our national scale with local reach, broad market access for both pharmacy and medical benefits, along with consistent clinical execution through our dedicated program teams. This, combined with specialized data capture and reporting, positions us as a strong partner for pharmaceutical manufacturers. We remain confident in the strength of our platform to support these clinically complex therapies and the value they provide for our patients and partners. Additionally, we have made good progress on advancing on our strategic initiatives to sharpen our execution, improve our operational competitiveness, and identify the best opportunities to invest in the business to resume our growth trajectory. These initiatives include strengthening our commercial team, enhancing our go-to-market strategy, and improving our operational effectiveness.

We have realigned resources and rebalanced coverage across our top specialty practices and accounts to increase reach and frequency and drive growth. Technology and data analytics also remains important enablers of our strategy as well. We are continuing to invest in artificial intelligence, digital tools, workflow automation, and advanced analytics that improve care coordination, reduce administrative complexity, and enhance the experience for patients, referral sources, and employees. We believe these capabilities will become increasingly important as healthcare continues its transition towards more connected, efficient, and patient-centered models of care. We are also advancing a coordinated set of technology and process improvements across a number of areas to provide a more frictionless experience for our patients and providers. These investments include developing tools in areas such as patient admission and onboarding, claims processing, and patient communication.

We are deploying technology solutions incorporating artificial intelligence to improve field productivity and operational effectiveness while improving profitability. Our approach with these initiatives is to combine advanced technology with experienced teams to identify patient requirements earlier, strengthen authorization and claim submission, and reduce repetitive work. Ultimately, we believe the application of artificial intelligence will reduce the cost of healthcare while improving clinician efficiency, enabling them to spend more time with their patients. We've further expanded our ambulatory infusion clinic footprint, adding five new facilities in the second quarter. Utilization of these facilities continues to expand, with visits growing more than 20% year-over-year. We are now operating with advanced practitioner capabilities in key markets, and we will continue to drive performance through deeper partnership with local providers. These trends reinforce our confidence in clinic-based growth as an important complement to our pharmacy model.

We continue to leverage our entire network of infusion suites, conducting over 35% of our nursing visits in one of our suites or clinics during the quarter. In closing, I want to again thank our team for their outstanding work and commitment. The strength of our second quarter results reinforces our confidence in the underlying fundamentals of the business. While we are encouraged by our progress, we are not satisfied with the results. There are still significant opportunities to improve process, enhance productivity, strengthen patient access, expand our clinical reach, and drive growth. Our team is committed to continuous improvement and to delivering sustainable long-term value for our patients, partners, and shareholders. With that, I will turn the call over to Meenal. Meenal? Thanks, John. Good morning, everyone.

Our second quarter revenue was $1.4 billion, up 2% compared to last year and up 7% sequentially. We had strong execution across our acute portfolio, with chronic showing strength in our IG Neuro and rare and orphan platforms. As John mentioned, we were encouraged with the stabilization in our CID therapy portfolio. Gross profit dollars grew 2% sequentially, with a slight decline versus last year. As a reminder, our 2026 full year revenue and gross profit projections incorporate the CID portfolio headwinds we noted last quarter. We continue to expect year-over-year revenue headwinds to be approximately 600 basis points and the gross profit headwind to be $55 million. We continue to expect STELARA and related biosimilars will represent less than 1% of 2026 company net revenue and gross profit.

SG&A declined 3% versus last year to approximately 11% of revenue, primarily driven by lower indirect labor costs and the benefits of our expense control initiatives, including a reduction in variable compensation. We continue to invest in commercial resources to support future growth. Adjusted EBITDA of $117.5 million was up 3% over last year and up 12% sequentially, reflecting our second quarter revenue growth, improved operational efficiency as well as SG&A savings. Adjusted EPS was $0.45, an increase of $0.04 over last year with an uplift of about $0.03 from the benefit of share repurchases. Our operating cash flow finished very strong in the quarter at $184 million. This was led by benefits from a number of our working capital initiatives we implemented over the last few quarters.

Our balance sheet remains strong. We ended the quarter at a net debt to leverage ratio of 2.1 times. Finally, we remain committed to our current capital allocation strategy. As a reminder, our near-term capital allocation priorities start with organic investments to drive revenue growth, capacity, and optimization of our cost structure. Second is return of capital to our shareholders through periodic share buybacks. During the second quarter, we repurchased $150 million of our shares, representing nearly 5% of our shares outstanding. This reduces our share repurchase authorization to $525 million. Lastly, we continue to evaluate potential acquisitions, focusing on adjacencies and tuck-ins that align with the breadth of our portfolio. Moving on to our full year forecast, our revenue guidance remains unchanged in the range of $5.675 billion to $5.775 billion.

We are narrowing both our adjusted EBITDA and EPS ranges as has been our historical practice through the year. We now expect adjusted EBITDA to be in the range of $480 million-$495 million, and we expect adjusted EPS to be in the range of $1.85-$1.92. Our EBITDA and EPS guidance reflects a number of actions we continue to take, including initiatives to drive additional revenue and gross profit growth, implementing programs to drive further reductions in our cost structure, and reducing operating costs, including other cost management initiatives and variable incentive compensation. We continue to expect SG&A growth to remain at or slightly below gross profit growth for the full year 2026. Additionally, for the year, we are maintaining our estimates of net interest expense to be in the range of $50 million-$55 million, and a full year tax rate range of 26%-28%.

We are also maintaining our operating cash flow target of at least $320 million for the year. Similar to last quarter, I also wanted to provide some color on the third quarter for modeling purposes. The following assumptions are on a sequential basis reflecting third quarter growth over the second quarter of 2026. For the third quarter, we expect sequential revenue growth in the low to mid-single digits, with sequential EBITDA growth in the mid-single digit range. We anticipate seasonality to be consistent with prior years with sequential growth through the year. With that, I will turn it over to the operator to open it up for questions. Operator? Thank you. To ask a question, please press *11 on your telephone and wait for your name to be announced.

To withdraw your question, press *11 again. Due to time constraints, we ask that you please limit yourself to one question and one follow-up question. Please stand by while we compile the Q&A roster. Our first question will come from the line of Lisa Gill with J.P. Morgan. Your line is open.

Lisa, thanks very much, and good morning. I just really wanted to ask a numbers question. I just want to understand two things. One, based on the guidance that you have given for the third quarter, and I look at the margin, can you maybe just talk about the mix that you are expecting? When I think about what the margin implied guidance is, then your thoughts on cadence for the third and the fourth quarter.

Sure, Lisa. Good morning. As we think about the Q3 guide, and I know there's going to be questions coming up about revenue and our progress on revenue growth. We're making some broad assumptions where, as an example, in the second quarter, we talked about high single-digit acute revenue growth. We expect that to continue as we think about the year. We're making good progress on our chronic side, and we'll talk more about our CID performance, but we're seeing patient census growth there. We expect that to continue as we progress through the year as well. Just other initiatives that are going on around site of care and other areas as well. I would say, we would expect the revenue mix to continue, but also recognizing a bit that we'll see probably more growth coming through chronic as we continue to progress through the year.

Just as a follow-up. Is that- Sure what's driving, if I just look at, again, the growth versus the expectation of us in the Street is stronger growth on the revenue line.

Obviously chronic is generally more expensive of a drug than we see on the chronic side, but the margins are generally a little bit lower. Is that the right way to think about it? If I just look at the midpoint of what you're talking about for each, we're talking about roughly a margin in the 8.3%-ish range as we get into the third quarter. I just want to make sure we're thinking about this correctly, as we start to see that improvement here moving into the back half of the year.

I would think about that mix as we talked about. I guess I'm just trying to understand the exact question. Are you saying, is it revenue?

I just want to make sure I understand, like, the revenue mix and what that means to margin. When I think about the adjusted EBITDA sequential growth that you're talking about. If we use that 5% as the midpoint of a mid single digit number, and we use a midpoint of 3% growth on revenue, that's going to put the margin on EBITDA somewhere in the range of 8.3%. I just want to make sure that we're thinking about that correctly and there's not something else that we need to consider and how we think about all of the initiatives that you have, et cetera, on that margin impact and again, the mix to what I talked about chronic versus acute. Again, I just want to make sure we have this correct.

Sure. That makes sense, and thanks for the clarification. Yeah. The assumptions and how you're thinking about it makes sense. I would say that's pretty reasonable and in line with how we're thinking about our guidance for the third quarter.

Perfect. Thank you. One moment for our next question.

That will come from the line of David MacDonald with Truist. Your line is open. Good morning, guys.

John, I just had a quick question. On the first quarter call, you laid out a handful of different initiatives, broadening the specialty call points, expanding the commercial team, realigning resources. You touched on a couple of them in your prepared remarks. I'm just curious if you can give us a little bit of an update in terms of, since you guys have put those in place, and I realize it's early. Are there a couple of those that are gaining traction pretty quickly? Which ones should we think about being more on the come as we get through 2026 into 2027? Just any additional perspective on some of those initiatives and the timing of impacts would be helpful.

Yeah. Good morning, Dave, and thanks for the question. Very good progress on the reset that we had identified within the commercial team and realigning those resources. In my prepared remarks, I did call out, we realigned the resources around their call points. We look to expand reach and frequency. We have put additional resources in place as well as realigned some of those resources within the markets that they serve. I'd say that is indicative of some of the comments around, number one, the stabilization of the CID census and beginning to grow again in the second quarter. The strength of what we saw within our IG Neuro portfolio and again, the capture of the market demand, by reaching into those call points. The reach and frequency continues to improve from that standpoint.

The ability for us to deploy some technology that helps us better target our activities was also deployed. As you called out, these things take time, and we expect that it will continue to build as we go through the back half of the year and continue into 2027. I'm pleased with the progress that the team is making. I know there's a lot more opportunity that sits before us as we drive that forward, but that commercial go-to-market strategy and the alignment of the commercial resources, I'd say we made significant headways in the quarter of setting the right framework and putting some of the pieces in place to drive that growth as we move forward. The only other thing I'd tell you, Dave, is we did make significant progress in the deployment of some of the advanced technology and artificial intelligence within the portfolio.

As we have called out before, a lot of that sits in back-office capabilities, but things that help support nursing optimization and getting our nurses more productive and efficient by route optimizing and looking at scheduling on that. We look at things around deliveries, and optimizing the delivery and the path that we utilize for that. We're deploying the technology to really help our patient registration and onboarding aspect. Again, really solid progress in either deploying some of that technology into test markets and expanding from there, or deploying it broadly as part of enhancements that we put into our base technology solutions.

Good progress there, I think you saw that in the results in the second quarter, we expect that's going to continue to build momentum as we move through the back half of the year and continue with our focus in driving growth over the near and long term.

Just my quick follow-up. John, I know you mentioned still work to be done. As we think about STELARA and that kind of finally being put to bed and just some of the momentum that you're going to build throughout the year, not asking you to comment on 2027, how do you think about just getting back to a more normalized cadence relative to the long-term growth algorithm and just how we should think about that?

We are putting the pieces in place right now to drive the performance of the organization. As I said in my comments, good progress. We knew coming out of the reset in the first quarter, we needed to be building on that and feel as if we're making progress against that and continue to push that as we move through the second half of the year. As you would expect, we'll be a little bit elusive. We're not prepared to give 2027 guidance on that.

Sure. We like the building momentum that we have.

We like the build that you see in the back half of the year as we're looking quarter after quarter. Our belief is that we're putting the right pieces in place. There's still more work to do. The team is focused around continuous improvement, we will be driving that as we move forward. We like the pace, and we think that we can continue to push on the sequential growth and getting back towards the growth view that we've had in this organization and being able to be the partner of choice with our referral sources and being able to continue to expand our patient census as we move forward.

Okay. Thank you very much.

Yeah. Thanks, Dave. One moment for our next question.

That will come from the line of Brian Tanquilut with Jefferies. Your line is open. Hey, good morning.

Neel, when I think of the guidance that you've given here, especially with Q3, it looks like there's a step-up implied in Q4 that's sort of in the 11%-19% quarter-over-quarter range. Just curious what drives that when considering last year that number was like 7% ex procurement. Just curious how you're thinking about the sequential drivers here, more from Q3 to Q4 than the Q2 to Q3 ramp. Thanks. Good morning. On the Q3 to Q4, I'm not going to quote specific numbers because I'm sure everybody's got their own consensus out there on what they think Q4 looks like.

In general, if you take a look at some history beyond just last year, going back a few years, we've seen one that half 2, the second half of the year versus first half of the year, there's been somewhere around a high single digit, low double digit growth rate that's out there. Even if you just look at percent of what's achieved, the EBITDA tends to be a little bit lower in the first half of the year as a percentage of the full year versus half 2. That sequential growth has been there, it's more of an expectation as we think about it.

Maybe I'll just add on what are some of the specific drivers that we think about for the second half. John talked a lot about just the building momentum that we have around revenue, which includes the commercial resources. We talked about the fact that we had been investing in more commercial resources starting late last year into the beginning part of this year, we expect the, I'll call it the increased productivity as these resources ramp up. That's going to be a positive to revenue that that drops through. As part of that also, just our chronic census recovery, right? We started that build in the second quarter. We expect that to continue in the third and fourth quarter. You've got that sequence going as well.

Some of that is also cost initiatives, I want to point out it's not just a one-time cost reduction. You're always looking at that as part of a broader portfolio on how you operate the company. At the same time, John just mentioned some of the deployment that we've done around technology, some AI pieces. We are in the process of, in some cases, we've just started deploying it in the first half of the year. More to go in the back half. That's part of that ramp. Just a number of things we talked around, our normal procurement initiatives that we're going after, when we continue to work with payers around value realization inside of care programs. It's a broad basket of things, again, we expect continued progressive improvements to the year.

That's how we're thinking about with the guidance that we put forward in Q3, continued momentum into Q4 as well.

Got it. Maybe, John, just as I think about the market backdrop here, obviously you're gaining strength continuously in acute. If you can just walk me through how you're thinking about what's going on in the competitive dynamics of infusion, number one, and then just curious what you're seeing in terms of the formulary changes that have occurred in the market, including the CVS changes, I think it was mid-year.

Yeah. Again, it's always been a competitive market, and we do feel that we're well-positioned with the capability set that we have and this national scale that has local responsiveness. The dynamics continue to be strong, as you know, Brian, in the marketplace. We are making progress against that and continue to invest in what we believe are the right areas to continue on our growth and continue to be a partner of choice and capture that market demand. It starts with the breadth of our portfolio, as you called out. The ability that we have to be able to serve hospitals, health systems with our solutions team on that end, are continued to build within the specialty practices, the clinics, and then our focus around manufacturer programs that support limited distribution drugs as well as rare and orphan.

All of that we think continues to really demonstrate the breadth of our capabilities, utilizes our clinical resources to their fullest, and capitalizes on a unique platform that we have that has national scale and that local responsiveness. Feel like we're well-positioned. We don't underestimate the competitive dynamics. We know that we've got to win every single day. That's kind of the rally cry for the team into the marketplace, is to be that partner of choice and capture that market demand. We really believe that the breadth of our portfolio and the partnerships that we're developing with key referral sources and within the healthcare providers within the markets that we serve, that we're very well positioned to continue to grow and to continue to capture market demand.

Thank you. Yeah. Thanks, Brian.

One moment for our next question. That will come from the line of Scott Fidel with Goldman Sachs. Your line is open. Hey, good morning.

You have Valentin Vlasov on for Scott Fidel. Earlier this month, CMS proposed expanding Medicare coverage for certain home infusion pumps and drugs beginning in 2027. How do you think about the potential impact of that proposal would be helpful? Thank you. Yeah. As we have said in previous calls, we continue to be active in Washington, both in the support of the NHIA, the National Home Infusion Association, and their activities to expand coverage to Medicare beneficiaries, as well as activities that we take on as an independent company within that marketplace.

What had been proposed and what is moving forward is a very narrow set of therapies and therapeutic categories that will, again, receive coverage in an expanded basis within Medicare. We think we're well positioned to participate in that and support that expansion in the marketplace. I don't believe it's going to be a significant material aspect given the limited therapies that are combined there.

Any opportunity that there is to expand market access, any opportunity that there is to demonstrate to CMS the value of being able to treat patients safely in the home, and in site of care that reduces the total cost, we think is a positive aspect and one that we'll continue to build on in the way that we're engaging in Washington and helping to provide additional insights around the value that can be derived and the cost savings that could be generated if CMS were to expand access to the home and to alternate site infusion therapy.

Thank you. Our next question will come from the line of Erin Wright with Morgan Stanley. Your line is open. Great.

Thanks. How much of the guide at this point is reliant on underlying kind of proactive administrative cost cuts? Can you talk about what's in your control on that front as we go into the second half and how to think about some of those moving pieces as we go into 2027? Like, what's the right jumping off point? And then also just from a capital deployment standpoint, I just want to make sure, future buybacks are not embedded in your current guidance, right? Or at least outside of what has been announced so far, or can you speak on kind of the buyback opportunity too? Thanks. Yeah. Thanks, Erin. Maybe just answering the second question first.

Our current guidance does not include any new or prospective buybacks. It only incorporates the buyback that we did, the $150 million buyback that we did as part of the second quarter. Nothing incremental is assumed in there. As to the assumptions for the guidance, as we think about Q3 and Q4, look, we've got, and I think as I talked about this just on a previous question, we have a number of things that we're working on, a number of initiatives. I would not put cost reductions like G&A cost reductions as the top driver of how we're getting to our guide.

I would start with commercial, both revenue growth, the positive impact from the investments that we're making with our commercial resources starting from late last year and seeing progressive improvement, and we started to see that in the second quarter. The continued improvement in our CID census with the first quarter being the base, et cetera. I'd use that as the first piece of the foundation. Along the way, as we normally do, there will be a number of, I'll say, whether it's GP or SG&A things that we're going after.

It's not necessarily cost cuts just to cut, but it may be, again, as we talked about technology deployment that we're doing that overall requires fewer resources or the resources that we have, as an example, in nursing, become more productive if they're able to spend more time with patients as opposed to some other less productive activities, et cetera. Just some of the other technology deployment we talked about with patient registration and patient administration, those sorts of things. Again, everything we can do to make it a more paperless frictionless experience where we think about the perfect claim as an example, that also improves our cost position, and it doesn't necessarily require just standard cut. We've got a lot of things that we're going after, and I feel good about the progress that we're making and what's in the hopper.

Thank you. One moment for our next question. That will come from the line of Pito Chickering with Deutsche Bank. Your line is open. Hey, good morning, guys, and thanks for taking my questions.

I guess the first one here is just looking at SG&A in the quarter and in the full year guidance, how should we think about bonuses and executive comps and changes that we may have made sort of going through the year versus where we are today? As you plan on sort of 2027, how could those impact next year if they're pulled out this year? Do we add them back in for next year?

Sure. Good morning, Pito. Maybe just a couple things on the variable compensation. Just a reminder, variable compensation isn't a number that we make a decision on. It's really a function of our performance, and our focus right now is really driving our performance really as we think about that. It's not really around trying to figure out where that variable compensation ends. At this point, I know the question is, what are your assumptions around that? It really is a factor of the performance and the performance drivers. Given that there's a lot of moving pieces, I've been talking about some of the initiatives that are going on. The exact number ends up becoming a moving target.

The one thing I do want to mention, though, is as part of our second quarter performance, the assumptions we made around variable compensation for Q2 versus where we actually finished were identical. Maybe said another way, our finish in the second quarter was not driven by changes in the variable comp assumptions that we had made. As we think about this, we're progressing through the year. We're focused on the initiatives that we have going on, and we really want to drive the performance in the business first and foremost. Then as we get further into the year, we'll see what and how that may impact 2027.

Okay, fair enough. Can you talk about what you saw with IVIG this quarter, I guess, how is growth versus last quarter in 2025 and any change in the margin profile? I'm just looking at VYVGART. Just curious if that's an impact or if things are continuing as they always have been. Thank you. Yeah, Pito, it's John.

I'll take that one. We continue to see strength as we had called out in the IG Neuro area, and the momentum within IG specifically continued to build as we've gone through the year. Again, as part of our overall portfolio, we do have VYVGART and Hizentra as part of the product portfolio and patients that we have on VYVGART and continue to work with our partners at argenx around access to their product and making certain that we're serving those patients well. As we have called out before, the relationship we have with neurologists and with the patients that we have on VYVGART, what we find is that when patients are responding well to the therapy that they're on, the physicians normally keep them on that therapy.

Although we expect that we'll see some drive from naive patients and those that are presenting with the disease and continue down that path, we are very bullish on IG as a therapeutic category across all of the products that we have within that category, as well as both the IV and subcutaneous indications that we're able to dispense through our team. We expect that we're going to continue to see growth as the fractionators have called out kind of in the way that they've looked at this as well. We expect ramps to continue to increase, and our expectations are that we're going to continue to be well-positioned to capture that market demand and continue to grow.

Great. If I can just squeeze in just to put this together, just you're thinking about sort of 2027, just to be very clear, with all the moving parts, do we still think that 2027 growth should be in line with historical levels or anything that we should be thinking about changing, whether it's executive comp or other aspects, anything that could impact 2027 from a normalized growth rate of what you're seeing today?

Right now we're focused on 2026 and our performance through the year. When it comes to revenue and revenue growth, that's really our biggest focus right now, and we really want to be able to drive that to where we've been from a historical level on that. I think all the other pieces as we get through the rest of this year into early 2027, we're working through all the assumptions. A lot of that, frankly, depends on our performance in 2026. I think as we work through it, we definitely understand that everybody wants to get a little bit more clarity on that. As we progress through the year, we'll work on that with you.

Thank you. One moment for our next question, and that will come from the line of Joanna Gajuk with Bank of America. Your line is open. Oh, hi.

Good morning. Thanks so much for taking the question. First of my questions, and I have a follow-up. I guess somewhat related to Pito, both of these questions, but on the first one, in terms of, I know you're not in a position to talk about 2027 specifically, but just big picture, with the progress you're making on CID and some of these commercial efforts and such, and some of these cost initiatives and such, how should we think about your long-term growth algorithm? Is this very intact, or there's some things we should consider or think about it differently? I'm not asking specific to 2027, but just say multi-year.

Yeah, I'll start, Joanna, and then certainly Milo can add some additional color if needed. The progress that we're making, again, as we had called out, we like the progress in the second quarter, ahead of our expectations as we had put into the quarterly guidance that we had provided after the end of the first quarter. Feel like the team is reacting well and responding well and developing, and executing our plans effectively through that process. We expect that's going to continue to move forward. The CID portfolio is an important portfolio of broad products, right? Moving beyond just a single product, but the breadth of that product. We expect that given the position that we have and the reach and frequency of our team, we'll continue to capture market demand there and continue to use that as a relevant portion of our portfolio.

Again, albeit at a lower level, given some of the biosimilar from a revenue standpoint, and the economics associated with that. It still is an important call point for us. It still is an important group of therapies around inflammatory disease, and we expect that we're going to now continue to build on the census as we had called out of the stabilization and growth as we move forward. Feel good about that aspect. I feel good that, again, we're making progress again in the specialty area of positioning the team well from that standpoint, and I feel good about the progress that we're making with hospitals and health systems in being able to be a partner of choice with their discharges on many of the acute therapies and expanding on that.

We continue to build on those aspects, Joanna, and we're going to continue to push on that, right? We know what this business is capable of. We like the foundation that we have and that we're building towards, and we are not satisfied that we are at the level that we need to be, and we're going to continue to push on that aspect. I think as we go through the back half of the year and you see kind of the sequencing of that sequential growth quarter over quarter and building on the momentum of that is the focus of the organization, and carrying that into 2027 is the goal and what we're trying to establish around the foundation and the activities today that are driving that growth into the future. We like the pharma programs that we put in place.

I called out that we continue to make progress in winning new opportunities there in the partnerships that we have given the platform. Really great progress with the acute therapies, with the hospitals and health systems and the partnerships there, and an emerging resurgence in the specialty area, given the focus that we put there and the leadership team and the tools that are being deployed across that. I'd sum it up in good progress, not satisfied. There's a lot more opportunity for this organization and knowing the quality of this team, I feel confident that we're going to continue to push and drive forward.

The only other thing I'll add, beyond what John's talked about, the progress we're making on revenue and revenue growth. A number of the initiatives we're going after, right, we absolutely expect the benefits in 2026. We're now at a point where you'll get a wraparound also into 2027, right? Technology deployments that we're going after, and they're continuing to accelerate as we're implementing those. They're going to benefit. There's some benefit in gross profit as we think about how do we improve nurse productivity through optimization around scheduling and routing, as an example. That's something we've been talking about, and we're deploying that now. We'll see that benefit this year going into next year. A number of other actions that we're taking, again, technology related around the patient administration process I talked about.

It's not just a, "Hey, are you going to look at cost reductions?" It's actually broader, sustainable programs that we're putting in place that are going to drive, not just reduced costs, but really improved productivity and really where we and where our teams spend their time working with patients.

Thank you. One moment for our next question. That will come from the line of Raj Kumar with Stephens. Your line is open. Hey, good morning.

Maybe just one on the accrual comp, kind of sequential movement. I think, if we look back a couple of years that sequentially moved less so from 1Q to 2Q. Curious on if there was any reversal based on your prior 1Q assumptions on that balance item that drove the 2Q balance.

Yeah. Maybe I'll just re-echo what I said before just for clarity. Going into our 2Q, we had offered up a 2Q guidance when we talked about sequential growth Q1 to Q2. As part of that 2Q guidance, we made assumptions around the variable compensation. The actual finish for our Q2 was no different, meaning that the assumption we made on the variable compensation is what is included in the 2Q. Our performance in the 2Q was really driven by the We've been talking about the revenue growth and the other actions and activities that we took. It is not related to changes in the variable comp assumption versus actuals.

Got it. Maybe as my follow-up, as we think about the 4Q implied ramp, I think, John, you alluded to maybe some rare and orphan kind of portfolio drugs coming online in late 2026 or early 2027. Is there an embedded assumption within the range of the high end representing that some of those drugs come online in 2026 and then low end kind of Alluding to that pushes out to 2027. Just any clarification on that would be helpful.

Yeah. On some of those products, as we've called out, the ramp is a little bit hard to predict on them. I think you're thinking about the right way, right? The range that we put out there have the range of possibilities, some of them positive, some of them that it's just the existing portfolio that we have moving forward. We're working in close partnership with our pharma partners and being ready to assist them in their commercialization and go-to-market strategies as they're launching those products. Some of it will depend upon approvals and other things that are a little bit out of our control, as we had called out in the first half of the year or in the first quarter.

As you look at the range of outcomes, and again, that's why we put a range out there are variables that in some ways could be a positive on that. Right now, as we're looking at it and what's incorporated within the way that we're guiding is really based on the momentum that we have, the core business and the foundation that we've established, and then the momentum that we believe we'll build through the back half of the year without a big portion of that coming from unknown or products that aren't currently being served within our portfolio.

Thank you. You're welcome, Raj.

Thanks. Thank you. Our next question will come from the line of Charles Rhyee with TD Cowen.

Your line is open. Thanks for taking the question.

Just wanted to follow up on some of the earlier questions. There was a question asked about your comfort with the second half ramp, particularly in EBITDA, as we get to the back half of the year, particularly three Q to four Q, and you mentioned if we look back historically, we've seen periods of reaching that kind of impact. The question, I guess, is, certainly looking that obviously low double digits achievable, but the way at least how it seems to us is that the range would imply low double digits, probably to high double digits is the range. What helps get you to the high end, given where we are looking at relatively more flat sequential revenues in the four Q, and you had mentioned costs aren't necessarily the biggest point.

Is it really a mix shift? Should we be expecting more acute drugs in the mix as we get into particularly the end of the year? Any help there would be helpful, and I have one follow-up. Thanks. Sure. I guess if I step back and talk about the first half versus the second half.

Separate from this year, we typically have a sequential growth rate that progresses over the course of the year. It's a bit of a natural phenomenon. Q2 to Q3 to Q4, we grow. What I had pointed out was if you go back and take an average over the past few years, our second half ramp versus first half tends to be somewhere around the high single digits to the low double digits in terms of growth rates. Again, a lot of that being driven by seasonal growth as the fourth quarter tends to be our largest quarter.

I would say for us, some of the incremental ramps that we would see above and beyond seasonality are an example we've talked about ramping up our revenue growth rate with the CID. As we think about the CID portfolio, we continue to grow that census base. We think about the commercial resources. It's a little bit different this year in that we brought in and invested in more commercial resources in the fourth quarter going into the first quarter, and we expect continued improved productivity as we go through the year, that'll add growth as well as some bottom-line performance there as well. A number of the initiatives that we have at this point as we are focusing on them.

You know that as an example, whether we think about procurement initiatives or when we think about market access, as we're talking to partners, they take a little bit of time. We started those efforts in the second quarter. We're starting to see the fruits of our labor. There's more going on in the third quarter. We'll see them building on top of one another, which is part of the ramp that's there. At this point, as we think about Q3 going into Q4, that's what really for us builds up that guide that we have out there.

It's really if certain kind of procurement benefits come through or some of these initiatives, that's what kind of drives you sort of to the higher end of the range. Is that the right way to think of it?

Yeah. If I step back and think about the basket of initiatives, I think revenue growth, I would say, is probably one of the first ones that we think about is, hey, the acceleration of that ramp, we absolutely expect a ramp, but if it accelerates a little better, we thought through all the actions we're taking and everything John has been talking about, that definitely would put us at the higher end, as an example.

Okay. My follow-up question then is, obviously appreciate all the changes that have been going on the market, I understand the earlier question regarding CVS's shift on STELARA. More broadly, maybe John, can you talk to sort of what you're seeing in terms of increased white bagging efforts by some of the PBMs, particularly as it relates to some of these higher cost therapies, because we're hearing it's spreading maybe even beyond drugs like STELARA into some other high-cost infusion drugs. Maybe talk a little bit about what you're seeing in regards to that and how you guys operate in that kind of environment. Thanks. Yes. The continued progress that we're making on the CID portfolio and what we have put forward as our guide for the remainder of the year contemplates the census and formulary shifts that are known in the marketplace on that.

I would say the team has done a really good job of navigating that and thinking about how do we position ourselves as we move forward. We have not seen a significant impact on white bagging, as you would expect. We are a pharmacy, and the vast amount of what we're doing is a pharmacy, and a lot of the white bagging is into the physician office practices or into clinics within that process. We continue to be in network. We continue to have a broad spectrum of products. Over 600 products are part of our portfolio.

We expect that the conversations we're having with the PBMs and the health plans continue to be productive. We're on the right side of the cost-quality equation. We continue to see forward progress in the site of care initiatives that we're working on with national and regional payers. We think there still is a significant amount of room for us to continue to grow, to continue to execute, and to continue to be a partner of choice for the health plans and the PBMs as they're thinking about ways to manage the total cost of care and mitigate the medical loss ratios that they've had spikes on towards the end of last year and earlier in this year.

Great. Thank you. You're welcome.

Thank you. Our next question will come from the line of Jared Haas with William Blair. Your line is open. Jared, your line is open. Please unmute if you're on mute.

Yes, thanks. Sorry, this is Matt Larew. Thanks for the question. Maybe no timeframe in terms of the answer I'm looking for here, but do you still see, given what everybody's asked about terms of formulary changes and embrace portfolio changes, do you still see the chronic home infusion business as a low double-digit growth market over the long term? Do you still believe that Option Care can be a company that grows at or above market growth?

Hey, Matt, it's John. I appreciate the question. Let me try to answer it in this way. We continue to have strong partnerships across the value chain, so it starts with the relationship and the continued deepening of relationship with our pharma partners, being a part of their go-to-market strategy and access strategy that they have. We continue to make investments in that area, I feel we're well-positioned to continue to expand the portfolio of products and help with the introduction of new products in that. As we look forward and get past some of the initial CID reset and those aspects that we're dealing with, we feel that Option Care Health is extremely well-positioned to continue to participate in the breadth of the portfolio and an expanding portfolio as we look forward.

The ability that we have to have a hybrid model that can do both medical billing and pharmacy billing, our ability to use advanced practitioner as well as pharmacy benefits through that process, we think positions us uniquely in the marketplace. We continue to invest in the infusion clinic capability and expanding from that end. We do think that there is continued opportunities if there is expansion in Medicare to provide broader access to beneficiaries. We see that we are on the right side of the cost-quality equation. Again, given the breadth of portfolio and the ability to serve patients that are being discharged from the hospital all the way to the most complex patients from a rare and orphan standpoint, we believe we are well-positioned to be in network and part of the payer solution as they're trying to manage that total cost of care.

A long answer to the fundamentals remain strong. The portfolio continues to expand our ability to utilize our clinical resources and our clinical capabilities, everything from nursing to pharmacists to dietitians to our physicians. All of that really sets us up to continue to participate vigorously in the market and the market growth. Again, we know we have work to do. We're not satisfied with the second quarter. We think we are doing everything we can to be well-positioned to really drive the business and to capture that market demand.

Okay, great. Thanks, John. Yeah.

Thanks, Matt. Thank you. I'm showing no further questions in the queue at this time.

I would now like to turn the call back over to Mr. John Rademacher for any closing remarks.

Thanks, Sherry. In closing, while we posted improved second quarter results, there is still work to do. However, we believe the actions we have taken so far, combined with the strength of our clinical platform and market position, provide a strong foundation to re-accelerate our long-term growth trajectory and create meaningful value for patients, partners, and shareholders. Thank you very much for attending the call, and we hope you have a great day. Take care. This concludes today's program.

Thank you all for participating.