Greetings, and welcome to the Viemed Healthcare Second Quarter 2025 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Trae Fitzgerald. Thank you. You may begin.

Thank you, and good morning, everyone. We appreciate you joining us today. Please note that our remarks in this conference call may include forward-looking statements under the U.S. federal securities laws or forward-looking information under applicable Canadian securities legislation, which we collectively refer to as forward-looking statements. Such statements reflect the company's current views and intentions with respect to future results or events and are subject to certain risks and uncertainties, which could cause actual results or events to vary from those indicated in forward-looking statements. Examples of such risks and uncertainties are discussed in our disclosure documents filed with the SEC or the security regulatory authorities in certain provinces of Canada. Because of these risks and uncertainties, investors should not place undue reliance on forward-looking statements. The forward-looking statements made in this conference call are made as of today, and the company undertakes no obligations to update or revise any forward-looking statements, except as required by law. The second quarter financial supplement and financial news release as well as the related financial statements are available on the SEC's website. I'll now turn it over to our CEO, Casey Hoyt, to get things started.

Okay. Thank you, Trae. Good morning, everyone, and thank you for joining us today. First and foremost, I want to give a big shout out to our more than 1,200 employees and publicly welcome our newest family members from Lehan's Medical Equipment. Thank you for all that you do to care for our patients, providers, partners and each other as we continue to grow Viemed's trusted place in the home. We have an incredible team, and each of you are making a difference in the lives of our patients. This quarter underscores a clear theme. Our disciplined execution of the long-term strategy is driving tangible, measurable results. We sustained impressive growth on our core in-home ventilation business, where we've established ourselves as a national leader and innovator. For the 17th consecutive quarter, we've increased our active ventilator patient count at a strong and steady pace. That kind of consistency and scale doesn't happen by chance. It happens because we built a best-in-class clinical and operational model that addresses the deeply underserved population, and we continue to expand our leadership in this critical area of care. At the same time, we're seeing even faster growth in our complementary product offerings, especially sleep and resupply, which have been long strategic priorities. These offerings were developed intentionally to meet the evolving needs of our patient base. Results are clear. Both sleep therapy and resupply have shown strong sequential and year-over-year growth, accelerating the diversification of our revenue mix and strengthening our margin profiles. Building on this momentum, we are successfully advancing another layer of the strategy, expanding our addressable at-home market. The recent acquisition of Lehan Medical Equipment marks a critical step forward in this initiative. With Lehan's, we're entering the maternal health space, further diversifying our patient base and leveraging Viemed's national…

All right. Thank you, Casey. In reviewing the financial results, all figures are in U.S. dollars and the full results have been made available on the SEC website. In my comments today, I'll reference disclosures we have made available in our quarterly financial supplement. This supplement can be found on our IR website. Our year-over-year revenue increased 14.7% and was entirely driven by organic growth this quarter, keeping us within the range we had anticipated for organic growth during the year. The core Vent business accounted for 54% of the revenue. The sleep business increased to 19% of revenues. The staffing business was 8% and oxygen was 10% of revenue. Gross margin was 58.3% for the quarter compared with 59.8% for the second quarter of 2024 and 56.3% in the first quarter of '25. The year-over-year decline was consistent with what we've been calling out the last several quarters, namely that while margins remain quite strong and steady in our core vent business, its percentage of overall revenue has declined year-over-year on a much larger base. The year-over-year comparisons for us on gross margin -- the gross margin line are becoming less relevant as we focus more on the CapEx-light businesses such as sleep resupply and staffing that allow us to leverage SG&A and drive net income, adjusted EBITDA and cash flow growth. That being said, we did see a sequential improvement from Q1 due to the growth in the sleep business outpacing the growth of all of our other businesses. When we layer in Lehan's in the second half of the year, we'll continue to see even more evolution of the gross margin as a less relevant measure. Adjusted EBITDA for the quarter grew 12% year-over-year to $14.3 million, driven by strong organic growth and contributions from each of…

[Operator Instructions] Our first question comes from the line of Ryan Langston with TD Cowen.

On the vent program upgrade and exchanges, can you maybe go into a little bit more detail on sort of the benefits of that move, I guess, both from a financial and a clinical perspective?

Yes, sure, Ryan. I mean the financial part is pretty clear. The Philips ended up buying these back. The price that they paid us dependent on the age of the vent. So we got cash back for the vent, which was generally higher than our net book value, as you can see through the gains that came through the P&L. And the clinical -- the true clinical value is that we got a vent that had a born-on date of this year versus vent that could be anywhere from 5 to 10 years old. So we got a new asset that had lower repairs and maintenance, didn't have to get PM'd as much and a new -- what we depreciate a 10- year life. The vents have obviously gotten more and more technologically favorable, Bluetooth connectivity, different features. So it's just been a good program, and it's unfortunate that Philips had to go through it, but we took full advantage of it.

Got it. And I guess, Dr. Oz now has been kind of in his seat for a few months. I think CMS has been fairly aggressive to some places like MA, home health, the OPPS rule in particular. I guess, do you have a view or do we know maybe what he sort of thinks about DME in general?

I wish I knew what Dr. Oz was thinking. But I mean, the administration has just shown that they're looking to cut costs in all sectors of government. And so you -- the competitive bidding pressure is definitely coming from what we understand, the White House level all the way to the top. But it's -- they kind of really -- and they were the ones that initiated the first go-round in the first Trump administration. So they took a page out of that playbook and kind of does it off refreshed it and submitted it. So we'll just have to wait and see. But we're going through the same process as an industry to just kind of give them the feedback that they need to roll out a successful competitive bidding program because competitive bidding doesn't have to be a bad thing if it is structured the right way. And so that's the level that we're at. It's just providing a lot of education, a lot of feedback to Dr. Oz and his team.

Our next question comes from the line of Ilya Zubkov with Freedom Broker.

So I have a couple of questions on the revenue side. I see that there's been a notable uptick in sleep therapy patient count. I'm just curious whether there are any unusual factors that contributed to this growth.

Nothing that we can point out, Ilya. I mean, obviously, we have grown our sleep sales staff some, but we've also just opened it up over the last few years of letting our entire sales force sell sleep. And as we become more operationally sound and savvy, maybe more of those referral sources are sending more orders into us. We read everything like most of the investors do, and it does not appear that GLP-1s is doing anything negative to us, it may be coincidental, but maybe not that our sleep business has been growing rapidly since GLP-1s have come about. So that might play into some of the manufacturer studies that show that people are taking sleep health a little bit more seriously as they lose some weight. So it could be a combination of all of that. We're very happy with the growth and the scalability of sleep around the country. As you can see, it makes 19% of our revenues now. And we're just going to keep growing it as fast as we possibly can.

Yes. And I'd add to that, Ilya, that just a reminder, when we're thinking about the sleep therapy patients, we will see a lag between our PAP therapy patients that then become 3, 6 months later roll into our sleep program, and Casey alluded to that in his prepared remarks. And so when we talk about new PAP therapy setups being up 72% year-over-year, you're not going to see that type of growth in the resupply. It's going to be delayed a little bit longer tail for another 3 to 6 months, which is really why we're excited about the back half of the year and then looking into next year as we have a more maturing sleep program.

Okay. Got it. And could you also elaborate on the quarterly revenue dynamics in the staffing business? So what drove the decline in service revenue in Q2?

Well, 76% of the business is coming from behavioral health and social service needs, and we're fulfilling it throughout the country with different state agencies and so on and so forth. So we're getting appropriations to do business and then it's up to the state to kind of let us know how many folks they need. But yes, we're pleased with that shift in the business. We kind of -- when we started staffing originally, it was in the middle of a clinical labor shortage to find our own respiratory therapists to find some nursing for our referral sources, and that has shifted throughout -- over the years. And so they've been pretty scrappy. They've been -- even though they had a sequential slowdown this quarter, we're optimistic for some of the appropriations that they landed for the back half of the year. We'll just -- it's kind of up to the states that we want to work with to see how much they want to fulfill those needs. So -- but we're in a good spot with it for it to be on a more normalized level.

[Operator Instructions] And it looks like we have reached the end of the question-and-answer session. I'll turn the call back over to management for closing remarks.

We want to thank everybody for participating. We're obviously very excited about the back half of the year. And if anybody has follow-up questions, just reach out to us. Have a great day.

Thank you. This concludes today's teleconference. You may disconnect your line at this time. Thank you for your participation.