Option Care Health, Inc. (OPCH) Q2 2026 Earnings Report, Transcript and Summary

Good day, and 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 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, press 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. Bob 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 John Charles Rademacher, President and Chief Executive Officer and Meenal Anil 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 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-Ks and 10-Qs filed with the SEC. Finally, for the question-and-answer portion of today's call, ask that you limit questions to one question and one follow-up per participant. With that, I will turn the call over to John. John?

Thanks, Bob. Good morning, everyone, and thank you for joining us. We are 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. And as recognition of the great work our team does on a daily basis, we are 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 care for hospitals and health systems, specialty physician practices, health plans across the country, also positions us as an important solution to help drive down rising healthcare costs. And 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 shareholder returns. 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, 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 a home-based environment. And we do this on a national scale. Our ability to consistently deliver to 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 the 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 a key driver 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, however, 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. Additionally, 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, 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. Additionally, 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, strengthening 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. Finally, we 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. And 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. And with that, I will turn the call over to Meenal. Meenal?

Thanks, John, and good morning, everyone. Our second quarter revenue of $1.4 billion was 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 orphan platform. 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 headwinds of $55 million. And we continue to expect Stelara and related biosimilars will represent less than 1% of 2026 company net revenue and gross profit. SG&A was down 3% versus last year to approximately 11% of revenue primarily driven by lower indirect labor costs, and the benefits of our expense control initiative 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, and we ended the quarter at a net debt leverage ratio of 2.1x. 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. And 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 to $495 million and we expect adjusted EPS to be in the range of $1.85 to $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 to $55 million and a full-year tax rate range of 26% to 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. And 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 phone. To withdraw your question, press 11 again. Due to time restraints, 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. And our first question will come from the line of Lisa Gill with JPMorgan. Your line is open.

Thanks very much, and good morning. I just wanted to ask a numbers question. 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, and then, you know, your thoughts on cadence for the third and the fourth quarter?

Sure, Lisa. Yes. As we think about the Q3 guide, and I know there is going to be questions coming up about revenue and our progress on revenue growth. We are 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 are making good progress on our chronic side, and we will talk more about our CID performance, but we are seeing patient census growth there. We expect that to continue as we progress through the year as well. And then just other initiatives that are going on around site-of-care and other areas as well. So I would say we would expect, you know, the revenue mix to continue but also recognizing a bit that we will see probably more growth coming through chronic as we continue to progress through the year.

And, you know, just as a follow-up. So is that what is driving if I just look at again, the growth versus the expectation of us in the straightest stronger growth on the revenue line, and so obviously, chronic is generally a more expensive drug than we see on the acute side, but the margins are generally a little bit lower. So is that the right way to think about it? And if I just look at kind of the midpoint of what you are talking about for each, we are 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 are thinking about this correctly as we start to see that improvement here moving into the back half of the year.

Yes. I mean, I would think about that mix as we talk about.

I guess I am just trying to understand the exact question. Are you saying is it revenue? I just want to make sure we--yeah.

Well, I just wanna make sure I understand, like, the revenue and what that means to margin. Right? So, you know, when I think about the adjusted EBITDA sequential growth that you are talking about. So, again, if we use that 5% as the midpoint of a mid-single digit number and we use the midpoint of, you know, 3% growth on revenue, that is gonna put the margin on EBITDA somewhere in the range of 8.3%. I just want to make sure that we are thinking about that correctly, and there is not something else that we need to consider and, you know, how we how we think about all of the initiatives that you have, etcetera, right, on that margin impact. And again, the mix to what I talked about, chronic versus I just again, I just wanna make sure we have this correct.

Sure. No, that makes sense and thanks for the clarification.

Yeah. You know, the assumptions and how you are thinking about it makes sense. I would say that is pretty reasonable and in line with how we are 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.

Hi. Hi. Good morning, guys. John, I just had a quick question. Meenal, 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 am just curious if you can kind of give us a little bit of an update in terms of you know, since you guys have put those in place, I realize it is early you know, are there a couple of those that are you know, gaining traction pretty quickly? Which one should we think about being more on the come as we get, you know, through 2026 into 2027? Just any additional perspective on some of those initiatives and the timing of impacts would be helpful.

Yeah. Good morning, David, and thanks for the question. Very good progress on the reset that we had identified within the commercial team and realigning those resources. And in my prepared remarks, I did call out know, we realigned the resources around their call points. We looked to expand reach and frequency. We have put additional resources in place as well as realign some of those resources. Within the markets that they serve. And I would say that is indicative of some of the comments around, number one, the stabilization of the CID census and beginning to grow again. The second quarter. The strength of what we saw within our IG neuro portfolio and the, again, the capture of the market demand reaching into those call points. So the reach and frequency continues to improve from that standpoint. And, you know, 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. But I am pleased with the progress, that the team is making. I know there is 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 would say we made significant headway 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 would I would tell you, David, 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 routes that we utilize for that. We are deploying the technology to really help our patient registration and onboarding aspect. And, 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 solution. So good progress there, and I think you saw that in the results in the second quarter, and we expect it is going to continue to build momentum as we move through the back half of the year and then continue with our focus in driving growth over the near and long-term. Okay. And then just my quick follow-up.

Okay. And then just my quick follow-up. John, I know you mentioned, you know, still work to be done, but, you know, as we think about Stelara and that, you know, kind of finally being put to bed and just, you know, some of the momentum that, you know, you are going to build throughout the year. I am not asking you to comment on 2027, but 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?

Yeah. 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, you know, as if we are making progress against that and continue to push that as we move through the back half of the year. As you would expect, we will be a little bit elusive. We are not prepared to give 2027 guidance on that. Sure. But we like the building momentum that we have. We like the build that you see in the back half of the year as we are looking quarter after quarter. And, you know, our belief is that we are putting the right pieces in place there is still more work to do. The team is focused around continuous improvement, and 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, you know, the growth view that we have had in this organization and being able to be the partner of choice with our referral sources being able to continue to expand our patient census as we move forward. Okay. Thank you very much. Yeah. Thanks, David.

One moment for our next question. And that will come from the line of Brian Tanquilut with Jefferies. Your line is open.

Hey, good morning. Meenal, when I think of the guidance that you have given here, especially with Q3, it looks like there is a step up implied in Q4 that sort of in the 11% to 19% quarter-over-quarter range. Just curious what drives that when considering last year that number was, like, 7% ex procurement. So just curious how you are thinking about the sequential drivers here. More from Q3 to Q4 than the Q2 to Q3 ramp. Thanks.

Sure. And good morning. Yeah. So on the, you know, the Q3 to Q4, and I am not going to quote specific numbers because I am sure everybody's got their own consensus out there on what they think Q4 looks like. But in general, if you take a look at some history beyond just last year, but going back a few years, we have seen that H2, the second half of the year versus the first half of the year, there has been somewhere around high-single-digit, low double-digit growth rate that is out there. And even if you just look at you know, percent of what is achieved it tends to be a little bit the EBITDA tends to be a little bit lower in the first half of the year as a percentage of the full year versus H2. So that sequential growth has been there, and it is in more of an expectation as we think about it. Maybe I will just add on what are some of the specific drivers that we think about for the second half. John talked a lot about just 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, and we expect the call it, the increased productivity as these resources ramp up. And so that is gonna be a positive to revenue 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. So you have got that sequence going as well. And part of that is also cost initiatives. And I wanna point out it is not just a one-time cost reduction. Always looking at that as part of a broader portfolio on how you operate the company. But at the same time, John just mentioned some of the deployment that we have done around technology, some AI pieces, In some cases, we have just started deploying it in the first half of the year. More to go in the back half. So that is part of that ramp. And then just a number of things we talked around, you know, our normal procurement initiatives that we are going after, you know, when we continue to work with payers around value realization and site-of-care programs. So it is a broad basket of things, but, again, we expect continued progressive improvement to the year. That is how we are thinking about with the guidance that we put forward in Q3 but then continued momentum into Q4 as well.

Got it. And then maybe, John, just as I think about the market back here, I mean, obviously, you are gaining strength continuously in acute. If you can just walk me through how you are thinking about what is going on in the competitive dynamics of infusion, number one.

And then just curious what you are seeing in terms of the formulary changes that have occurred in the market, including, you know, the CVS changes. I think it was midyear.

Yeah. Again, it is always been a competitive market, and we do, you know, feel that we are well positioned with the capability set that we have and this national scale that has local responsiveness. You know, the dynamics continue to be strong as you know, Brian, in the marketplace, but, you know, 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. And 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 in that local responsiveness. So, you know, I feel like we are well positioned. We do not, underwrite the competitive dynamics. We know that we have got to, you know, win every single day. That is kind of the rally cry for the team in the marketplace is to be that partner of choice and capture that market demand. But we really believe that the breadth of our portfolio and the partnerships that we are developing with key referral sources and within the healthcare providers within the markets that we serve that we are 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. And that will come from the line of Scott Fidel with Goldman Sachs. Your line is open.

You have Valentin Blassev 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 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 a 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 a expanded basis. Within Medicare. You know, we think we are well positioned to participate in that and support that expansion. In the marketplace. I do not believe it is going to be of significant material aspect given the limited therapies that are combined there. But know, any opportunity that there is to expand market access, any opportunities 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 will continue to build on. In the way that we are 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 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? And can you talk about what is 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? Look, what is the right jumping off point? And then also, just from a capital deployment standpoint, I just wanna make sure, like, 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?

Yes. Thanks, Erin, So 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. So nothing incremental was assumed in there. As to the assumptions for the guidance, as we think about Q3 and Q4, look, we have got and I think as I talked about this just on a previous question, we have a number of things that we are working on, a number of initiatives. I would not put you know, cost reductions, like G&A cost reductions, as top driver of how we are getting to our guide. I would start with commercial, both revenue growth, the positive impact from the investments that we are 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, etcetera. So I would use that as the first piece of the foundation. Then along the way, as we normally do, there will be a number of, I will say, whether it is GP or SG&A things that we are going after. it is not necessarily cost cuts just to cut, but it may be again, as we talked about technology deployment that we are doing that overall requires fewer resources or the resources that we have as an example, in nursing become more productive if they are able to spend more time with patients as opposed to, you know, some other less productive activities etcetera. And just some of the other technology deployment we talked about with, you know, patient registration and patient administration, those sorts of things. Again, you know, 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 does not necessarily require just, you know, standard cut. So we have got a lot of things that we are going after, and I feel good about the progress that we are making and what is in the hopper. Thank you.

One moment for our next question. That will come from the line of Pito Chickering with Deutsche Bank.

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 the full-year guidance, how should we think about bonuses and executive comps and sort of changes that you may have made sort of going through the year versus where we are today? And as you plan on sort of 2027, how could those impact sort of next year? If they are pulled out this year, do we add them back into next? Sure.

Good morning, Pito. So maybe just a couple things on the variable compensation. Just a reminder, right? it is not a variable compensation is not a number that we make a decision on. it is really a function of our performance. And our focus right now is really driving our performance really as we think about that. So it is 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. And so given that there is a lot of moving pieces, I have been talking about some of the initiatives that we are going that are going on so 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. So maybe said another way, our finish in the second quarter was not driven by changes in the variable comp assumptions that we have made. So as we think about this, we are progressing through the year. We are focused on the initiatives that we have going on. We really want to drive the performance in the business first and foremost. And then as we get further into the year, we will see, you know, what and how that may impact 2027.

Okay. Fair enough. And then can you talk about what you saw with IVIG this quarter? I guess, how's growth versus last quarter in 2025? And any change to the margin profile? I am just looking at Vyvgart. I was curious if that is an impact or if things are continuing as they always happen. Thank you.

Yes, Pito, it is John. I will take that one. We continue to see strength as we have called out, in the IG neuro area. And you know, the momentum within IG specifically continued, you know, to build as we have gone through the year. Again, as part of our overall portfolio, we do have Vyvgart and Hytrulo as part of the product portfolio and patients that we have on Census. And continue to work with, with our partners at Argenx around you know, access to the product and making certain that we are serving those patients well. You know, as we have called out before, you know, the relationship we have with neurologists and with the patients that we have on census, what we find is that when patients are responding well to the therapy that they are on, the physicians normally keep them on that therapy. So although, you know, we expect that we will 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 are able to dispense through our team. And we expect that we are gonna continue to see growth as the fractionators have called out kind of in the way that they have looked at this. As well. So expect ramps to continue to increase, and, our expectations are that we are gonna continue to be well positioned to capture that market demand and continue to grow. Great.

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

Yeah. Look, right now, we are focused on 2026 and our performance through the year. When it comes to revenue and revenue growth, we are that is really our biggest focus right now, and we really want to be able to drive that to where we have been from a historical level on that. I think all the other pieces as we get through the rest of this year into early 27, we are working through all the assumptions A lot of that, frankly, depends on our performance in 2026. And so I think as we work through it, we will we definitely understand that everybody wants to get a little bit more clarity on that. And as we progress through the year, we will we will 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.

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

I will I will start, Joanna, and then, certainly, Meenal can add additional color if needed. Progress that we are 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 you know, guidance that we had provided after the end of the first quarter. So feel like the team is reacting well and responding well and developing, and executing our plans effectively through that process. We expect that is gonna 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. And we expect that given the position that we have and the reach and frequency of our team, we will 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. But you know, 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 are going to continue to build on the census as we had called out of the stabilization and growth. As we move forward. So feel good about that aspect. I feel good that, again, we are making progress again in the specialty area of positioning the team well from that standpoint. I feel, you know, good about the progress that we are 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 it. So we continue to build on those aspects, Joanna, and gonna continue to push on that. Right? We know what this business is capable of. We like the foundation that we have. And that we are building towards. And we are not satisfied that we are, you know, at the level that we need to be, and we are gonna 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, 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 are trying to establish around the foundation and the activities today that are driving that growth into the future. So 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. So, again, really great progress with the with the acute therapies, with the hospitals and health systems, and the partnerships there. And an emerging re-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. So I would sum it up in good progress, not satisfied, there is a lot more opportunity for this organization. And knowing the quality of this team I feel confident that we are gonna continue to push and drive forward. Yeah.

And the only other thing I will add, beyond what John's talked about the progress we are making on revenue and revenue growth, A number of the initiatives we are going after, right, we absolutely expect the benefits in 2026. We are now at a point where you will get a wraparound also into 2027. Right? So technology deployments that we are going after and they are continuing to accelerate is where implementing those They are going to benefit. Or, yes, there is some benefit in gross profit as we think about, you know, how do we improve nurse productivity through optimization around scheduling and routing as an example. That is something we have been talking about, and we are deploying that now. We will see that benefit this year going into next year. A number of other actions that we are we are taking, again, technology related around you know, around the patient administration process I talked about. So it is not just a, hey. You know, are you gonna look at cost reductions? But it is actually broader sustainable programs that we are putting in place that are gonna drive not just reduce cost, but really improve productivity and really where we and where our team spend their time working with patients. Thank you.

One moment for our next question. That will come from the line of Kumar with Stephens. Your line is open.

Maybe just one on the accrual comp kind of sequential movement. I think you know, if we look back a couple years that, you know, sequentially moved less so from 1Q to 2Q. So curious on if there was any reversal based on your prior Q1 assumptions on that balance sheet item that, you know, drove, you know, the Q2 balance?

Maybe I will just re echo what I said before just for clarity. We made going into our second quarter, we had offered up a second quarter guidance when we talked about sequential growth Q1 to Q2. As part of that second quarter guidance, we made assumptions on the variable compensation. The actual finished for Q2 was no different, meaning that assumption we made on the variable compensation is what is included in the second quarter. So our performance in the second quarter was really driven by the we have 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 actual. Got it.

And then maybe as my follow-up, as we kinda think about the Q4 implied ramp and I think, John, you alluded to know, maybe some rare and orphan kind of portfolio drugs coming online in late 26 or early 27. So is there an embedded assumption within the range of, you know, the high end representing that some of those you know, drugs come online in 2026 and then low end kind of you know, alluding that, you know, that pushes out to 2027. Just any clarification on that would be helpful.

Yes. On some of those products, as we have called out, the ramp is a little bit hard to predict on them. And so I think you are thinking about it the right way. The range that we put out there has the range of possibilities. Some of them positive. Some of them that it is just the existing portfolio that we have moving forward. And so, you know, we are working in close partnership with our pharma partners and you know, being ready to assist them in their commercialization and go-to-market strategies. As they are launching those products. Some of it will depend on approvals and other things that are a little bit out of our control. You know, as we had called out in the first half of the year or in the first quarter. So know, as you look at the range of outcomes, and, again, that is why we put a range out there is there are variables that in some ways could be a positive on that. But right now, as we are looking at it and what is incorporated within the way that we are guiding is really know, based on the momentum that we have the core business, and the foundation that we have established. And then the momentum that we believe we will build through the back half of the year without a big portion of that coming from unknown or, products that are not currently being served within our portfolio. Thank you. You are welcome, Raj. Thanks. Thank you.

Our next question will come from the line of Charles Rhyee with TD Cowen. Your line is open.

Yes. Thanks for taking the question. Just wanted to follow-up on some of the other questions. Meenal, there was a question asked about sort of your comfort with the second half ramp. Particularly in EBITDA as we get to the back half of the year. Particularly Q3 to Q4. And you kind of mentioned if we look back historically, we have seen periods of reaching that kind of impact. So the question, I guess, is so certainly looking at, 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 the high double-digits. is the range? What helps get you to the high end, given where we are looking at you know, relatively more flat sequential revenues in the Q4, and you had mentioned costs are not necessarily the biggest point. Is it really a mix shift? Should we be expecting more acute drugs in the mix as we get into the end of the year? Any of that would be helpful. And I have one follow-up.

Thanks. Sure. I mean, so I guess if I step back and just 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. So it is it is a bit of a natural phenomenon Q2 to Q3, Q3 to Q4, we grow What I had pointed out was if you go back and you take an average over the past few years, you know, our second half ramp versus first half tended 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 for an example, we have 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 is 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. And so that will add that will add growth as well as some bottom line performance there as well. And then just 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 we think about market access and as we are talking to partners, they take a little bit of time. We started those efforts in the second quarter. We are starting to see the fruits of our labor. there is more going on in the third quarter. And so we will see them building on top of one another, which is part of the ramp that is there. So at this point, as we think about Q3 going into Q4, that is what really for us, builds up that guide that we have out there. So it is really, if certain kind of procurement benefits come through or some of these initiatives, that is what kinda drives you sort of to the higher end of the range.

Is that the right way to think of it?

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

And my follow-up question that is, you know, obviously appreciate, you know, all the change that is been going on the market, and I understand the earlier question regarding, you know, CVS's shift on Stelara. But more broadly, maybe John, can you talk to sort of what you are seeing in terms of increased white-bagging efforts by some of the, you know, PBMs particularly as it relates to some of these higher cost therapies and, you know, because we are hearing it is spreading maybe even beyond drugs like Stelara and some other high-cost infusion drugs. Maybe talk a little bit about what you are seeing in regards to that and, you know, how you guys operate in that kind of environment. Thanks.

Yeah. So, you know, the continued progress that we are making on the CID portfolio and what we have put forward as our guide for the remainder of the year contemplates you know, the census and formulary. Shifts that are known in the marketplace on that. And I would say, the team has done a really good job of navigating that and thinking about, you know, 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. The vast amount of what we are doing is a pharmacy, and a lot of the white-bagging is into the physician office practices or into, you know, clinics within that process. And so 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 you know, the conversations we are having with the PBMs and the health plans continue to be productive. We are on the right side of the cost quality equation. We continue to see forward progress in the site-of-care initiatives that we are working on with national and regional payers. And so 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 are thinking about ways to manage the total cost of care and mitigate the medical loss ratios that they have had spikes on towards the end of last year and earlier in this year. Great. Thank you. You are welcome.

Thank you. And 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 are on mute. I am sorry.

This is Matthew Larew. Thanks for the question. Maybe no timeframe in terms of the answer I am looking for here, but do you still see, given, you know, what everybody's asked about terms of formula 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? And do you still believe that Option Care can be a company that grows at or above market growth?

Hey, Matthew, it is John. I appreciate the question. Let me try to answer this way. We continue to have strong partnerships across the value chain. And so it starts with the relationship and the continued deepening of relationship with our pharma partners. And being a part of their go-to-market strategy and access strategy that they have. And we continue to make investments in that area, and I feel we are 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 are dealing with We feel that Option Care Health is extremely well positioned to continue to participate in the breadth of the portfolio and in 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 benefit through that process, I 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. And, 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 are trying to manage that total cost of care. So 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 in the market and the market growth. So again, we know we have work to do. We are not satisfied with the second quarter, but 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.

Yes, Matthew, Thank you.

I am showing no further questions in the queue at this time. I would now like to turn the call back over to Mr. John Charles Rademacher for any closing remarks.

Thanks, operator. 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 reaccelerate 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. You may now disconnect.