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ROC

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March~~June 3130, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-41938

BrightSpring Health Services, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware	82-2956404
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
805 N. Whittington Parkway Louisville, Kentucky	40222
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (502) 394-2100

Securities registered pursuant to Section 12(b) of the Act:

      Title of each class

      Trading
Symbol(s)

      Name of each exchange on which registered

      Common Stock, par value $0.01 per share
6.75% Tangible Equity Units

      BTSG
BTSGU

      The Nasdaq Stock Market LLC
The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of Registrant’s Common Stock outstanding as of ~~April~~July 3029, 2025 was ~~174~~177,~~245~~148,~~248~~693.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION	23
Item 1.	Financial Statements (Unaudited)	23
	Condensed Consolidated Balance Sheets	23
	Condensed Consolidated Statements of Operations	34
	Condensed Consolidated Statements of Comprehensive Income (Loss)	45
	Condensed Consolidated Statements of Shareholders' Equity	56
	Condensed Consolidated Statements of Cash Flows	68
	Notes to Condensed Consolidated Financial Statements	810
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2527
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4047
Item 4.	Controls and Procedures	4148
PART II.	OTHER INFORMATION	4249
Item 1.	Legal Proceedings	4249
Item 1A.	Risk Factors	4249
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4249
Item 3.	Defaults Upon Senior Securities	4249
Item 4.	Mine Safety Disclosures	4249
Item 5.	Other Information	4249
Item 6.	Exhibits	4350
Signatures		4451

Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q (this “Form 10-Q”) to “BrightSpring,” the “Company,” “we,” “us,” and “our” refer to BrightSpring Health Services, Inc. and its consolidated subsidiaries.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes forward-looking statements that reflect our current views with respect to, among other things, our operations, and financial performance. We have used the words “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “future,” “will,” “seek,” “foreseeable,” the negative version of these words, or similar terms and phrases to identify forward-looking statements.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our industries, business strategy, goals and expectations concerning our market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources and other financial and operating information. ~~Because~~We ~~forward-looking~~believe ~~statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances~~ that ~~are difficult to predict and many of which are outside of our control. If any of~~ these risks materialize, or if any of our assumptions underlying forward-looking statements prove incorrect, actual results and developments may differ materially from those made in or suggested by the forward-looking statements contained in this Form 10-Q. Important factors ~~that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements~~ include, ~~among~~but others, those set forth in Item 1A, “Risk Factors,” of Part I of our Annual Report on Form 10-K for the year ended December 31, 2024 (our “Form 10-K”) filed with the U.S. Securities and Exchange Commission (the “SEC”). Although we have attempted to identify important risk factors, there may be other risk factors not presently known to us or that we presently believe are not ~~material~~limited ~~that could cause actual results and developments~~ to ~~differ materially from those made in or suggested by~~ the forward-looking statements contained in this Form 10-Q. We caution you against relying on any forward-looking statements, which should also be read in conjunction with the other cautionary statements that are included elsewhere in this Form 10-Q. Any forward-looking statement made by us in this Form 10-Q speaks only as of the date hereof. We undertake no obligation to publicly update or to revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.following:

•

our operation in a highly competitive industry;

•

our inability to maintain relationships with existing patient referral sources or establish new referral sources;

•

changes to Medicare and Medicaid rates or methods governing Medicare and Medicaid payments for our services;

•

cost containment initiatives of third-party payors, including post-payment audits;

•

the implementation of alternative payment models and the transition of Medicaid and Medicare beneficiaries to managed care organizations may limit our market share and could adversely affect our revenues;

•

changes in the case mix of patients, as well as payor mix and payment methodologies, and decisions and operations of third-party organizations;

•

our reliance on federal and state spending, budget decisions, and continuous governmental operations which may fluctuate under different political conditions;

•

changes in drug utilization and/or pricing, PBM contracts, and Medicare Part D/Medicaid reimbursement, which may negatively impact our profitability;

•

changes in our relationships with pharmaceutical suppliers, including changes in drug availability or pricing;

•

reliance on the continual recruitment and retention of nurses, pharmacists, therapists, caregivers, direct support professionals, and other qualified personnel, including senior management;

•

compliance with or changes to federal, state, and local laws and regulations that govern our employment practices, including minimum wage, living wage, and paid time-off requirements;

•

fluctuation of our results of operations on a quarterly basis;

•

harm caused by labor relation matters;

•

limitations in our ability to control reimbursement rates received for our services if we are unable to maintain or reduce our costs to provide such services;

•

delays in collection or non-collection of our accounts receivable, particularly during the business integration process;

•

failure to manage our growth effectively, which may inhibit our ability to execute our business plan, maintain high levels of service and satisfaction or adequately address competitive challenges;

•

our ability to identify, successfully complete and manage acquisitions, joint ventures, and other strategic initiatives, including the pending sale of our Community Living business;

•

our ability to continue to provide consistently high quality of care;

•

maintenance of our corporate reputation or the emergence of adverse publicity, including negative information on social media or changes in public perception of our services;

•

contract continuance, expansion and renewal with our existing customers, including renewals at lower fee levels, customers declining to purchase additional services from us, or reduction in the services received from us pursuant to those contracts;

•

effective investment in, implementation of improvements to and proper maintenance of the uninterrupted operation and data integrity of our information technology and other business systems;

•

security breaches, loss of data, and other disruptions, which could compromise sensitive business or patient information; cause a loss of confidential patient data, employee data or personal information; or prevent access to critical information and thereby expose us to liability, litigation, and federal and state governmental inquiries and damage our reputation and brand;

•

risks related to credit card payments and other payment methods;

•

potential substantial malpractice or other similar claims;

•

various risks related to governmental inquiries, regulatory actions, and whistleblower and other lawsuits, which may not be entirely covered by insurance;

•

our current insurance program, which may expose us to unexpected costs, particularly if we incur losses not covered by our insurance or if claims or losses differ from our estimates;

•

factors outside of our control, including those listed, which have required and could in the future require us to record an asset impairment of goodwill;

•

a pandemic, epidemic, or outbreak of an infectious disease;

•

inclement weather, natural disasters, acts of terrorism, riots, civil insurrection or social unrest, looting, protests, strikes, or street demonstrations;

•

our inability to adequately protect our intellectual property rights;

•

risks related to our compliance with our regulatory framework;

•

the interests of KKR Stockholder (as defined below) may conflict with our stockholders’ interests in the future;

•

our substantial indebtedness; and

•

significant changes in tax or trade policies, tariffs, or trade relations between the United States and other countries, such as the imposition of unilateral tariffs on imported products, including impacts on imported drug products, which could result in supply chain disruptions and significant increases in costs.

Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. If any of these risks materialize, or if any of our assumptions underlying forward-looking statements prove incorrect, actual results and developments may differ materially from those made in or suggested by the forward-looking statements contained in this Form 10-Q. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, those set forth in Item 1A, “Risk Factors,” of Part I of our Annual Report on Form 10-K for the year ended December 31, 2024 (our “Form 10-K”) filed with the U.S. Securities and Exchange Commission (the “SEC”). Although we have attempted to identify important risk factors, there may be other risk factors not presently known to us or that we presently believe are not material that could cause actual results and developments to differ materially from those made in or suggested by the forward-looking statements contained in this Form 10-Q. We caution you against relying on any forward-looking statements, which should also be read in conjunction with the other cautionary statements that are included elsewhere in this Form 10-Q. Any forward-looking statement made by us in this Form 10-Q speaks only as of the date hereof. We undertake no obligation to publicly update or to revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

BrightSpring Health Services, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)

(Unaudited)

	March 31, 2025			December 31, 2024
	June 30, 2025			December 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	5270,~~337~~070		$	60,954
Accounts receivable, net of allowance for credit losses		~~975~~972,~~264~~721			902,782
Inventories		~~533~~625,~~637~~465			636,561
Prepaid expenses and other current assets		~~131~~129,~~027~~248			161,310
Current assets held for sale		~~836~~850,~~183~~455			131,447
Total current assets		2,~~528~~647,~~448~~959			1,893,054
Property and equipment, net of accumulated depreciation of $355,623 and $339,892 at March 31, 2025 and December 31, 2024, respectively		177,228			180,570
Property and equipment, net of accumulated depreciation of $372,236 and $339,892 at June 30, 2025 and December 31, 2024, respectively		177,582			180,570
Goodwill		2,370,~~024~~134			2,363,884
Intangible assets, net of accumulated amortization		~~568~~544,~~284~~337			595,224
Operating lease right-of-use assets, net		~~162~~164,~~371~~095			161,032
Deferred income taxes, net		23,~~311~~328			5,288
Other assets		3836,~~279~~162			39,128
Non-current assets held for sale		—			687,960
Total assets	$	5,~~846~~943,~~945~~597		$	5,926,140
Liabilities, Redeemable Noncontrolling Interest, and Equity
Current liabilities:
Trade accounts payable	$	~~868~~965,~~080~~302		$	923,926
Accrued expenses		~~302~~252,~~590~~828			295,746
Current portion of obligations under operating leases		38,~~687~~489			38,910
Current portion of obligations under financing leases		3,~~287~~875			3,463
Current portion of long-term debt		4850,~~725~~836			48,725
Current liabilities held for sale		~~196~~194,~~248~~035			117,563
Total current liabilities		1,~~457~~505,~~617~~365			1,428,333
Obligations under operating leases, net of current portion		~~130~~132,~~360~~547			129,467
Obligations under financing leases, net of current portion		68,~~477~~238			6,530
Long-term debt, net of current portion		2,~~489~~477,~~339~~917			2,561,858
Long-term liabilities		7274,~~585~~107			71,190
Non-current liabilities held for sale		—			77,177
Total liabilities		4,~~156~~198,~~378~~174			4,274,555
Redeemable noncontrolling interest		32,~~323~~816			3,730
Shareholders' equity:
Common stock, $0.01 par value, 1,500,000,000 shares authorized, 175,183,434 and 174,245,990 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively	$	1,752		$	1,742
Common stock, $0.01 par value, 1,500,000,000 shares authorized, 177,055,327 and 174,245,990 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively	$	1,771		$	1,742
Preferred stock, $0.01 par value, 250,000,000 authorized, no shares issued and outstanding at March 31, 2025 and December 31, 2024		—			—
Preferred stock, $0.01 par value, 250,000,000 authorized, no shares issued and outstanding at June 30, 2025 and December 31, 2024		—			—
Additional paid-in capital		1,~~880~~909,~~099~~854			1,866,850
Accumulated deficit		(~~192~~164,~~613~~405	)		(222,155	)
Accumulated other comprehensive (loss) income		(14,~~869~~330	)		1,418
Total shareholders' equity		1,~~687~~742,~~369~~890			1,647,855
Noncontrolling interest		(~~125~~283	)		—
Total equity		1,~~687~~742,~~244~~607			1,647,855
Total liabilities, redeemable noncontrolling interest, and equity	$	5,~~846~~943,~~945~~597		$	5,926,140

See accompanying notes to the condensed consolidated financial statements.

BrightSpring Health Services, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

	For the Three Months Ended						For the Six Months Ended
	March 31,
	June 30,						June 30,
	2025			2024			2025			2024
Revenues:
Products	$	2,~~532~~790,~~171~~101		$	12,~~977~~114,~~035~~491		$	5,322,272		$	4,091,526
Services		~~345~~357,~~958~~597			~~308~~323,~~731~~763			703,555			632,494
Total revenues		23,~~878~~147,~~129~~698			2,~~285~~438,~~766~~254			6,025,827			4,724,020
Cost of goods		2,~~328~~556,~~215~~402			1,~~807~~931,~~100~~760			4,884,617			3,738,860
Cost of services		~~211~~216,~~545~~444			~~186~~194,~~175~~318			427,989			380,493
Gross profit		~~338~~374,~~369~~852			~~292~~312,~~491~~176			713,221			604,667
Selling, general, and administrative expenses		~~287~~326,~~630~~295			~~307~~273,~~826~~523			613,925			581,349
Operating income (loss)		50,739			(15,335	)
Operating income		48,557			38,653			99,296			23,318
Loss on extinguishment of debt		—			~~12,726~~—			—			12,726
Interest expense, net		4138,~~763~~778			5443,~~470~~282			80,541			97,752
Income (loss) from continuing operations before income taxes		89,~~976~~779			(824,~~531~~629	)		18,755			(87,160	)
Income tax benefit		(240	)		(26,504	)
Income tax expense (benefit)		1,238			(13,115	)		998			(39,619	)
Income (loss) from continuing operations, net of income taxes		98,~~216~~541			~~(56~~8,~~027~~486	)		17,757			(47,541	)
Income from discontinued operations, net of income taxes		19,~~794~~001			910,~~642~~955			38,795			20,597
Net income (loss)		2927,~~010~~542			~~(46~~19,~~385~~441	)		56,552			(26,944	)
Net loss attributable to noncontrolling interests included in continuing operations		(~~532~~666	)		(~~635~~478	)		(1,198	)		(1,113	)
Net income (loss) attributable to BrightSpring Health Services, Inc. and subsidiaries	$	2928,~~542~~208		$	~~(45~~19,~~750~~919	)	$	57,750		$	(25,831	)
Net income (loss) per common share (Note 10):
Basic income (loss) per share attributable to common shareholders:
Continuing operations	$	0.05		$	(0.3105	)	$	0.09		$	(0.25	)
Discontinued operations	$	0.1009		$	0.05		$	0.20		$	0.11
Net income (loss)	$	0.1514		$	(0.2610	)	$	0.29		$	(0.14	)
Diluted income (loss) per share attributable to common shareholders:
Continuing operations	$	0.0504		$	(0.3104	)	$	0.09		$	(0.25	)
Discontinued operations	$	0.09		$	0.0506		$	0.18		$	0.11
Net income (loss)	$	0.1413		$	(0.2610	)	$	0.27		$	(0.14	)
Weighted average shares outstanding:
Basic		201,~~005~~807			~~175~~197,~~531~~515			200,516			186,523
Diluted		~~214~~216,~~927~~336			~~175~~208,~~531~~987			214,963			186,523

See accompanying notes to the condensed consolidated financial statements.

BrightSpring Health Services, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Loss)

(In thousands)

(Unaudited)

	For the Three Months Ended						For the Six Months Ended
	March 31,
	June 30,						June 30,
	2025			2024			2025			2024
Net income (loss)	$	2927,~~010~~542		$	~~(46~~19,~~385~~441	)	$	56,552		$	(26,944	)
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments		~~(38~~246	)		(~~146~~49	)		208			(195	)
Cash flow hedges:
Net change in fair value, net of tax (1)		~~108~~614			173,~~959~~145			722			21,104
Amounts reclassified to earnings, net of tax (2)		(3,~~357~~321	)		(7,~~242~~186	)		(6,678	)		(14,428	)
Total other comprehensive (loss) income, net of tax		(32,~~287~~461	)		10(4,~~571~~090	)		(5,748	)		6,481
Total comprehensive income (loss)		25,~~723~~081			~~(35~~15,~~814~~351	)		50,804			(20,463	)
Comprehensive loss attributable to redeemable noncontrolling interests		(~~407~~508	)		(~~483~~339	)		(915	)		(822	)
Comprehensive loss attributable to noncontrolling interest		(~~125~~158	)		(~~152~~139	)		(283	)		(291	)
Comprehensive income (loss) attributable to BrightSpring Health Services, Inc. and subsidiaries	$	2625,~~255~~747		$	~~(35~~15,~~179~~829	)	$	52,002		$	(19,350	)

(1)

The income tax effects of the net change in fair value were $(33201) and $(~~5,815~~234) for the three and six months ended ~~March~~June 3130, 2025, respectively, and $(1,018) and $(6,833) for the three and six months ended June 30, 2024, respectively.

(2)

The income tax effects of amounts reclassified to earnings were $1,~~087~~080 and $2,~~345~~167 for the three and six months ended ~~March~~June 3130, 2025, respectively, and $2,327 and $4,672 for the three and six months ended June 30, 2024, respectively.

See accompanying notes to the condensed consolidated financial statements.

BrightSpring Health Services, Inc. and Subsidiaries

Condensed Consolidated Statements of Shareholders’ Equity

(In thousands, except share data)

(Unaudited)

	For the Three Months Ended March 31, 2025
	For the Three Months Ended June 30, 2025
	Common Stock						Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive ~~Income (~~Loss)			NoncontrollingInterest			Total
	Shares			Amount
Balances at December 31, 2024		174,245,990		$	1,742		$	1,866,850		$	(222,155	)	$	1,418		$	—		$	1,647,855
Net income (loss) (1)		—			—			—			29,542			—			(125	)		29,417
Other comprehensive loss, net of tax		—			—			—			—			(3,287	)		—			(3,287	)
Share-based compensation		—			—			15,681			—			—			—			15,681
Exercise of stock options		36,253			—			345			—			—			—			345
Issuance of common stock for settlement of RSUs		1,052,536			11			(11	)		—			—			—			—
Tax effect of net share settlement of equity awards		(151,345	)		(1	)		(2,766	)		—			—			—			(2,767	)
Balances at March 31, 2025		175,183,434		$	1,752		$	1,880,099		$	(192,613	)	$	(1,869	)	$	(125	)	$	1,687,244
Net income (loss) (1)		—			—			—			28,208			—			(158	)		28,050
Other comprehensive loss, net of tax		—			—			—			—			(2,461	)		—			(2,461	)
Share-based compensation		—			—			22,802			—			—			—			22,802
Exercise of stock options		1,283,882			14			8,703			—			—			—			8,717
Issuance of common stock for settlement of RSUs		649,010			6			(6	)		—			—			—			—
Tax effect of net share settlement of equity awards		(60,999	)		(1	)		(1,744	)		—			—			—			(1,745	)
Balances at June 30, 2025		177,055,327		$	1,771		$	1,909,854		$	(164,405	)	$	(4,330	)	$	(283	)	$	1,742,607

	For the Three Months Ended March 31, 2024
	For the Three Months Ended June 30, 2024
	Common Stock				Additional Paid-In Capital		Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			NoncontrollingInterest			Total
	Shares		Amount
Balances at December 31, 2023		117,857,055	$	1,179	$	771,336	$	(200,319	)	$	12,544		$	670		$	585,410
Net loss (1)		—		—		—		(45,750	)		—			(152	)		(45,902	)
Other comprehensive income, net of tax		—		—		—		—			10,571			—			10,571
Share-based compensation		—		—		24,848		—			—			—			24,848
Derecognition of redeemable noncontrolling interest		—		—		14,981		—			—			—			14,981
Issuance of common stock on initial public offering, net (2)		53,333,334		533		655,952		—			—			—			656,485
Proceeds from stock purchase contract issued under tangible equity units, net (3)		—		—		321,611		—			—			—			321,611
Balances at March 31, 2024		171,190,389	$	1,712	$	1,788,728	$	(246,069	)	$	23,115		$	518		$	1,568,004
Net income (loss) (1)		—		—		—		19,919			—			(139	)		19,780
Other comprehensive loss, net of tax		—		—		—		—			(4,090	)		—			(4,090	)
Share-based compensation		—		—		15,136		—			—			—			15,136
Shares issued under share-based compensation plan, including tax effects		107,389		1		21		—			—			—			22
Shares issued for payment of acquisition		99,252		1		1,080		—			—			—			1,081
Balances at June 30, 2024		171,397,030	$	1,714	$	1,804,965	$	(226,150	)	$	19,025		$	379		$	1,599,933

(1) Net loss to the Company for the three months ended ~~March~~June 3130, 2025 and 2024 excludes $(~~407~~508) and $(~~483~~339), respectively, allocable to the redeemable noncontrolling interests for our joint venture arrangements.

BrightSpring Health Services, Inc. and Subsidiaries

Condensed Consolidated Statements of Shareholders’ Equity (continued)

(In thousands, except share data)

(Unaudited)


	For the Six Months Ended June 30, 2025
	Common Stock						Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interest			Total
	Shares			Amount
Balances at December 31, 2024		174,245,990		$	1,742		$	1,866,850		$	(222,155	)	$	1,418		$	—		$	1,647,855
Net income (loss) (1)		—			—			—			57,750			—			(283	)		57,467
Other comprehensive loss, net of tax		—			—			—			—			(5,748	)		—			(5,748	)
Share-based compensation		—			—			38,483			—			—			—			38,483
Exercise of stock options		1,320,135			14			9,048			—			—			—			9,062
Issuance of common stock for settlement of RSUs		1,701,546			17			(17	)		—			—			—			—
Tax effect of net share settlement of equity awards		(212,344	)		(2	)		(4,510	)		—			—			—			(4,512	)
Balances at June 30, 2025		177,055,327		$	1,771		$	1,909,854		$	(164,405	)	$	(4,330	)	$	(283	)	$	1,742,607


	For the Six Months Ended June 30, 2024
	Common Stock				Additional Paid-In Capital		Accumulated Deficit			Accumulated Other Comprehensive Income		Noncontrolling Interest			Total
	Shares		Amount
Balances at December 31, 2023		117,857,055	$	1,179	$	771,336	$	(200,319	)	$	12,544	$	670		$	585,410
Net loss (1)		—		—		—		(25,831	)		—		(291	)		(26,122	)
Other comprehensive income, net of tax		—		—		—		—			6,481		—			6,481
Share-based compensation		—		—		39,984		—			—		—			39,984
Shares issued under share-based compensation plan, including tax effects		107,389		1		21		—			—		—			22
Shares issued for payment of acquisition		99,252		1		1,080		—			—		—			1,081
Derecognition of redeemable noncontrolling interest		—		—		14,981		—			—		—			14,981
Issuance of common stock on initial public offering, net (2)		53,333,334		533		655,952		—			—		—			656,485
Proceeds from stock purchase contract issued under tangible equity units, net (3)		—		—		321,611		—			—		—			321,611
Balances at June 30, 2024		171,397,030	$	1,714	$	1,804,965	$	(226,150	)	$	19,025	$	379		$	1,599,933

(1) Net loss to the Company for the six months ended June 30, 2025 and 2024 excludes $(915) and $(822), respectively, allocable to the redeemable noncontrolling interests for our joint venture arrangements.

(2) Issuance of common stock on initial public offering is presented net of underwriting discounts and commissions, and offering-related expenses of $36.8 million.

(3) Proceeds from stock purchase contract issued under tangible equity units is presented net of underwriting discounts and commissions of $9.1 million.

BrightSpring Health Services, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	For the Three Months Ended
	For the Six Months Ended
	March 31,
	June 30,
	2025			2024
Operating activities:
Net income (loss)	$	2956,~~010~~552		$	(4626,~~385~~944	)
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
Depreciation and amortization		4284,~~161~~000			4898,~~922~~993
Impairment of long-lived assets		34,~~411~~019			1,~~769~~980
Change in fair value of contingent consideration, net		12,~~698~~003			—
Provision for credit losses		8,101			6,622
Payment of contingent consideration in excess of acquisition date fair value		(1,500	)		—
Amortization of deferred debt issuance costs		2,749			4,447
Provision for credit losses		40,658			13,118
Share-based compensation		15,681			24,848
Amortization of deferred debt issuance costs		5,543			6,937
Deferred income taxes, net		4,031			(31,732	)
Share-based compensation		38,483			39,984
Deferred income taxes, net		3,892			(49,260	)
Loss on extinguishment of debt		—			12,726
(Gain) loss on disposition of fixed assets		(287	)		122
Loss on disposition of fixed assets		1,161			24
Other		~~161~~(1,422	)		(~~312~~1,438	)
Change in operating assets and liabilities, net of acquisitions and dispositions:
Accounts receivable		(79112,~~449~~756	)		(~~115~~112,~~576~~522	)
Prepaid expenses and other current assets		2324,~~973~~411			821,~~916~~737
Inventories		~~103~~11,~~300~~473			3029,~~485~~720
Trade accounts payable		(53,~~871~~277	)		2141,~~605~~329
Accrued expenses		8(43,~~643~~490	)		(43153,~~430~~892	)
Other assets and liabilities		(715,~~714~~630	)		(116,~~886~~576	)
Net cash provided by (used in) operating activities	$	~~101~~150,~~598~~674		$	(7894,~~859~~084	)
Investing activities:
Purchases of property and equipment	$	(1742,~~632~~057	)	$	(2145,~~816~~559	)
Acquisitions of businesses		(6,754	)		(943,~~394~~611	)
Other		~~195~~1,377			~~272~~540
Net cash used in investing activities	$	(2447,~~191~~434	)	$	(3088,~~938~~630	)
Financing activities:
Long-term debt borrowings	$	—		$	2,566,000
Long-term debt repayments		(1123,~~792~~720	)		(3,~~359~~370,~~353~~970	)
Proceeds from issuance of common stock on initial public offering, net		—			656,485
Proceeds from issuance of tangible equity units, net		—			389,000
Repayments of the Revolving Credit Facility, net		(63,300	)		(50,700	)
(Repayments) borrowings of the Revolving Credit Facility, net		(63,300	)		5,100
Payment of debt issuance costs		—			(42,963	)
Payments of debt issuance costs		—			(43,188	)
Repurchase of shares of common stock		—			(~~325~~650	)
Proceeds from shares issued under share-based compensation plan		~~345~~9,062			—404
Taxes paid related to net share settlement of equity awards		(24,~~763~~512	)		—
Shares issued for payment of acquisition		—			1,081
Payment of acquisition earn-outs		—			(2,656	)
Purchase of redeemable noncontrolling interest		(5,100	)		(300	)
Payment of financing lease obligations		(3,408	)		(3,081	)
Payments of financing lease obligations		(6,691	)		(5,636	)
Net cash (used in) provided by financing activities	$	(8694,~~018~~261	)	$	~~154~~194,~~763~~670
Net (decrease) increase in cash and cash equivalents		(8,611	)		44,966
Net increase in cash and cash equivalents		8,979			11,956
Cash and cash equivalents at beginning of period		61,253			13,071
Cash and cash equivalents at end of period	$	5270,~~642~~232		$	5825,~~037~~027
Cash and cash equivalents included in assets held for sale at end of period		~~305~~162			2,~~494~~179
Cash and cash equivalents included in continuing operations at end of period	$	5270,~~337~~070		$	5522,~~543~~848

BrightSpring Health Services, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (continued)

(In thousands)

(Unaudited)

	For the Three Months Ended
	For the Six Months Ended
	March 31,
	June 30,
	2025		2024
Supplemental disclosures of cash flow information:
Cash paid for:
Interest, net	$	5396,~~799~~069	$	60110,~~282~~905
Income taxes, net of refunds	$	~~245~~13,022	$	1123,~~186~~692
Supplemental schedule of non-cash investing and financing activities:
Financing lease obligations	$	3,408	$	3,004
Notes issued in connection with acquisitions	$	—	$	2,533
Repurchases of common stock in accounts payable	$	—	$	325
Financing lease obligations	$	6,691	$	6,282
Purchases of property and equipment in accounts payable	$	104,~~416~~103	$	~~937~~1,950
Consideration for purchase of redeemable noncontrolling interest in accounts payable	$	—	$	5,100

See accompanying notes to the condensed consolidated financial statements.

BrightSpring Health Services, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Significant Accounting Policies

Description of Business

BrightSpring Health Services, Inc. and its subsidiaries (“BrightSpring”, the “Company”, “we,” “us,” or “our”) is a leading home and community-based healthcare services platform, focused on delivering complementary pharmacy and provider services to complex patients. Our platform delivers clinical services and pharmacy solutions across Medicare, Medicaid, and commercially-insured populations.

On December 7, 2017, affiliates of Kohlberg Kravis Roberts & Co. L.P. (“KKR” or “KKR Stockholder”) and Walgreens Boots Alliance, Inc. (“WBA”) purchased PharMerica Corporation (“PharMerica”) and on March 5, 2019, expanded with the acquisition of BrightSpring Health Holdings Corp. The surviving entity was renamed BrightSpring Health Services, Inc.

BrightSpring Health Services, Inc. completed its initial public offering (“IPO”) of 53,333,334 shares of its common stock at a price of $13.00 per share and its concurrent offering of 8,000,000 6.75% tangible equity units (“TEUs”) with a stated amount of $50.00 per unit in January 2024 (collectively, “the IPO Offerings”). The net proceeds from the IPO Offerings amounted to $656.5 million and $389.0 million for the common stock and TEUs, respectively, after deducting underwriting discounts and commissions, and offering-related expenses.

On January 17, 2025, the Company entered into a purchase agreement to divest its community living services, home and community based waiver programs, and intermediate care facilities (the “Community Living business”). The transaction is subject to customary closing conditions and certain other antitrust laws and is expected to close in late 2025.

During the second quarter of 2025, WBA sold their remaining ownership interests in the Company through open market transactions and is no longer considered a related party of the Company. In June 2025, KKR Stockholder and certain management selling stockholders completed a registered secondary public offering of the Company’s common stock. The Company did not purchase or sell any shares of common stock that were offered in the secondary public offering. The Company did not receive any proceeds from the Offering, other than proceeds received in connection with the cash exercise of stock options by the Management Selling Stockholders in connection with the Offering. As a result of the aforementioned transactions, the Company no longer qualifies as a “controlled company” under the Nasdaq Stock Market LLC listing standards and is therefore required to comply with all applicable corporate governance requirements of Nasdaq, subject to phase-in rules.

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of BrightSpring Health Services, Inc. and its subsidiaries. The Company consolidates its majority-owned and controlled entities, including variable interest entities (“VIEs”) for which the Company is the primary beneficiary. All intercompany balances and transactions have been eliminated.

We record a noncontrolling interest for the allocable portion of income or loss and comprehensive income or loss to which the noncontrolling interest holders are entitled based upon their ownership share of the affiliate. The Company determined noncontrolling interests for certain of these VIEs to be redeemable noncontrolling interests, which are presented in the unaudited condensed consolidated balance sheets as redeemable noncontrolling interests.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly our financial position, our results of operations, and our cash flows in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial reporting. Our results of operations for the interim periods presented are not necessarily indicative of the results of our operations for the entire year.

As a result of the Company's plan to divest the Community Living business discussed in Note 2, the Community Living business met the criteria to be reported as discontinued operations and held for sale. Therefore, the Company has reported the historical results of the Community Living business, including the results of operations, cash flows, and related assets and liabilities, as discontinued operations and held for sale for all periods presented herein. Unless otherwise noted, all activities and amounts reported in the accompanying notes to the unaudited condensed consolidated financial statements relate to the continuing operations of the Company and exclude activities and amounts related to the Community Living business.

This report should be read in conjunction with our consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024, ~~which~~as ~~include~~well ~~information~~as ~~and~~the ~~disclosures~~revised ~~not included herein. Certain information~~ and ~~footnote~~recasted ~~disclosures~~consolidated ~~normally included in annual~~ financial statements ~~prepared in accordance with U.S. GAAP have been condensed or omitted from the interim financial information presented, as allowed by the rules~~ and ~~regulations of the Securities and Exchange Commission.~~

related notes thereto for the year ended December 31, 2024 that reflect the Community Living business as discontinued operations included in our Current Report on Form 8-K as filed on June 10, 2025, which includes information and disclosures not included herein. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from the interim financial information presented, as allowed by the rules and regulations of the Securities and Exchange Commission.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts and related disclosures. We rely on historical experience and on various other assumptions that we believe to be reasonable under the circumstances to make judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Significant estimates are involved in the valuation of accounts receivable, inventory, long-lived assets, intangible assets, derivatives, contingent consideration, taxes, insurance reserves, share-based compensation, and goodwill. Actual amounts may differ from these estimates.

readily apparent from other sources. Significant estimates are involved in the valuation of accounts receivable, inventory, long-lived assets, intangible assets, derivatives, contingent consideration, taxes, insurance reserves, share-based compensation, and goodwill. Actual amounts may differ from these estimates.

Recently Adopted Accounting Standards

There were no new accounting standards adopted during the ~~three~~six months ended ~~March~~June 3130, 2025.

Recently Issued Accounting Standards

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU requires the following disclosures on an annual basis:

•

A tabular rate reconciliation using both percentages and amounts, broken out into specific categories with certain reconciling items at or above 5% of the statutory tax further broken out by nature and/or jurisdiction;

•

Qualitative disclosure of the nature and effect of significant reconciling items by specific categories and individual jurisdictions; and

•

Income taxes paid (net of refunds received), broken out between federal, state/local and foreign, and amounts paid to an individual jurisdiction when 5% or more of the total income taxes paid.

The amendments in this ASU are effective for annual periods beginning after December 15, 2024, with early adoption permitted, and should be applied on a prospective basis. This ASU will have no impact on the Company’s consolidated financial condition or results of operations. The Company is currently evaluating the impact to the income tax disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which was further clarified in January 2025 through the issuance of ASU 2025-01. These ASUs require new financial statement disclosures to provide disaggregated information for certain types of expenses, including purchases of inventory, employee compensation, depreciation, and amortization in commonly presented expense captions such as cost of goods and services and selling, general, and administrative expenses. The amendments in these ASUs are effective for annual periods beginning after December 15, 2026, with early adoption permitted. The adoption of this guidance will have no impact on the Company's consolidated financial condition or results of operations. The Company is currently evaluating the impact to the related disclosures.

2. Discontinued Operations

On January 17, 2025, BrightSpring entered into a definitive agreement to sell its Community Living business to National Mentor Holdings, Inc. (the “Purchaser”), for $835.0 million in cash upon closing, subject to certain post-closing adjustments. We entered into the transaction in order to streamline our service offerings and further focus on the senior and specialty populations. The transaction is currently expected to close in late 2025, subject to receipt of customary regulatory approvals and satisfaction of other closing conditions.

The Company has determined the divestiture of the Community Living business represents a strategic shift that will have a major effect on its business and has concluded the criteria for classification as discontinued operations were met during the first fiscal quarter of 2025. Accordingly, the Community Living business is reported as discontinued operations in accordance with Accounting Standards Codification (“ASC”) 205-20, Discontinued Operations. The related assets and liabilities of the Community Living business are classified as assets and liabilities held for sale in the accompanying unaudited condensed consolidated balance sheet as of ~~March~~June 3130, 2025, and the results of operations from the Community Living business are classified as discontinued operations in the unaudited condensed consolidated statements of operations. Applicable amounts in prior years have been recast to conform to this ~~discontinued operations presentation. The Community Living business was historically presented as a part of the Provider Services reportable segment.~~

In accordance with ASC 205-20, Allocation of Interest to Discontinued Operations, the Company elected to allocate interest expense to discontinued operations for the Company’s debt that is not directly attributed to the Community Living business. Interest expense was allocated based on a ratio of net assets held for sale to the sum of consolidated net assets and consolidated debt. In addition, upon closing of the divestiture, we will enter into a transition services agreement with the Purchaser to support the Purchaser's post-closing operations of the Community Living business by providing the Purchaser with certain transition services in exchange for service fees 11

9discontinued operations presentation. The Community Living business was historically presented as a part of the Provider Services reportable segment.

The financial results of the Community Living business are presented as income from discontinued operations on our unaudited condensed consolidated statements of operations through ~~March~~June 3130, 2025. The following table presents the financial results of the Community Living business (in thousands):

	For the Three Months Ended				For the Six Months Ended
	March 31,
	June 30,				June 30,
	2025		2024		2025		2024
Services revenue	$	~~299~~307,~~106~~683	$	~~290~~291,~~872~~956	$	606,789	$	582,828
Cost of services		~~204~~211,~~183~~614		~~213~~215,~~972~~099		415,797		429,071
Gross profit		9496,~~923~~069		76,~~900~~857		190,992		153,757
Selling, general, and administrative expenses		6063,~~744~~739		53,~~498~~096		124,483		106,594
Operating income of discontinued operations		3432,~~179~~330		23,~~402~~761		66,509		47,163
Interest expense, net		7,~~907~~590		109,~~550~~157		15,497		19,707
Income of discontinued operations before incomes taxes		2624,~~272~~740		1214,~~852~~604		51,012		27,456
Income tax expense of discontinued operations		65,~~478~~739		3,~~210~~649		12,217		6,859
Income from discontinued operations, net of income taxes	$	19,~~794~~001	$	910,~~642~~955	$	38,795	$	20,597

The following table presents the aggregate carrying amounts of assets and liabilities held for sale for the Community Living business in the unaudited condensed consolidated balance sheets (in thousands):

	March 31, 2025		December 31, 2024
	June 30, 2025		December 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	~~305~~162	$	299
Accounts receivable, net of allowance for credit losses		~~124~~128,~~737~~031		125,872
Inventories		3,~~631~~630		4,007
Prepaid expenses and other current assets		32,~~276~~598		1,269
Total current assets held for sale		~~131~~134,~~949~~421		131,447
Property and equipment, net of accumulated depreciation of $110,728 and $110,417 at March 31, 2025 and December 31, 2024, respectively		72,839		69,715
Property and equipment, net of accumulated depreciation of $107,168 and $110,417 at June 30, 2025 and December 31, 2024, respectively		75,063		69,715
Goodwill		307,640		307,640
Intangible assets, net of accumulated amortization		216,~~331~~319		216,258
Operating lease right-of-use assets, net		~~101~~112,~~651~~299		88,717
Deferred income taxes, net		287		287
Other assets		54,~~486~~426		5,343
Total assets held for sale	$	~~836~~850,~~183~~455	$	819,407
Liabilities
Current liabilities:
Trade accounts payable	$	1721,~~629~~239	$	17,366
Accrued expenses		5955,~~235~~580		60,791
Current portion of obligations under operating leases		3233,~~863~~307		30,755
Current portion of obligations under financing leases		8,~~419~~019		8,651
Total current liabilities held for sale		118,~~146~~145		117,563
Obligations under operating leases, net of current portion		60,~~389~~675		58,147
Obligations under financing leases, net of current portion		1714,~~160~~676		18,461
Long-term liabilities		~~553~~539		569
Total liabilities held for sale	$	~~196~~194,~~248~~035	$	194,740

1012

In accordance with ASC 205-20, all assets and liabilities held for sale are reported as current at June 30, 2025 as the Community Living transaction is expected to close within one-year of the balance sheet date. The presentation of assets and liabilities held for sale at December 31, 2024 are reported as current and noncurrent, consistent with the conclusion in the period, as the transaction did not meet the requirements of held for sale at that point in time.

The following table presents the significant non-cash items and purchases of property and equipment for the discontinued operations that are included in the accompanying unaudited condensed consolidated statements of cash flows (in thousands):

	For the Three Months Ended
		For the Six Months Ended
	March 31,
		June 30,
	~~2025~~	2025		~~2024~~	2024
Cash flows from discontinued operations operating activities:
Depreciation and amortization	$	~~1,329~~$	1,329	$	~~9,686~~$	20,057
Share-based compensation		~~3,207~~	6,501		~~1,262~~	2,911
Impairment of long-lived assets		—	—		~~1,437~~	1,872
Cash flows from discontinued operations investing activities:
Purchases of property and equipment		~~3,044~~	5,868		~~2,607~~	5,331

3. Revenue

The Company is substantially dependent on revenues received under contracts with federal, state, and local government agencies. Operating funding sources are generally earned from Medicaid, Medicare, commercial insurance reimbursement, and from private and other payors. There is no single customer whose revenue was 10% or more of our consolidated revenue during the periods presented. The following tables set forth revenue by payor type (in millions):

	~~Pharmacy Solutions~~	Pharmacy Solutions
		For the Three Months Ended March 31,
		For the Three Months Ended June 30,										For the Six Months Ended June 30,
		2025					2024					2025					2024
		Revenue		% of Revenue			Revenue		% of Revenue			Revenue		% of Revenue			Revenue		% of Revenue
Commercial insurance		$	~~674~~742.50		23.46	%	$	~~504~~570.42		2223.14	%	$	1,416.5		23.5	%	$	1,074.6		22.7	%
Medicaid			~~238~~266.2		8.35	%		~~187~~199.37		8.2	%		504.4		8.4	%		387.0		8.2	%
Medicare A			~~140~~138.49		4.94	%		~~129~~127.47		5.72	%		279.3		4.6	%		257.1		5.4	%
Medicare B			1918.57		0.76	%		16.97		0.7	%		38.2		0.6	%		33.6		0.7	%
Medicare C			~~487~~555.76		1617.97	%		~~336~~377.9		1415.75	%		1,043.3		17.3	%		714.8		15.1	%
Medicare D			~~910~~1,008.94		3132.60	%		~~756~~770.30		3331.16	%		1,919.3		31.9	%		1,526.3		32.3	%
Private & other			6160.03		21.28	%		4552.83		2.01	%		121.3		2.0	%		98.1		2.2	%
		$	2,~~532~~790.21		88.06	%	$	12,~~977~~114.05		86.57	%	$	5,322.3		88.3	%	$	4,091.5		86.6	%

	~~Provider Services~~	Provider Services
		For the Three Months Ended March 31,
		For the Three Months Ended June 30,										For the Six Months Ended June 30,
		2025					2024					2025					2024
		Revenue		% of Revenue			Revenue		% of Revenue			Revenue		% of Revenue			Revenue		% of Revenue
Commercial insurance		$	4144.41		1.4	%	$	41.19		1.87	%	$	85.5		1.4	%	$	83.1		1.8	%
Medicaid			8588.15		32.08	%		8283.79		3.64	%		173.6		2.9	%		166.5		3.5	%
Medicare A			~~122~~125.48		4.30	%		~~105~~107.37		4.64	%		248.2		4.1	%		212.9		4.5	%
Medicare B			1.54		0.10	%		68.91		0.3	%		2.9		0.0	%		15.0		0.3	%
Medicare C			3234.6		1.1	%		2028.21		01.92	%		67.2		1.1	%		48.3		1.0	%
Private & other			6263.92		2.1	%		5254.61		2.3	%		126.1		2.2	%		106.7		2.3	%
		$	~~345~~357.96		1211.04	%	$	~~308~~323.8		13.53	%	$	703.5		11.7	%	$	632.5		13.4	%

1113

	~~Consolidated~~	Consolidated
		For the Three Months Ended March 31,
		For the Three Months Ended June 30,										For the Six Months Ended June 30,
		2025					2024					2025					2024
		Revenue		% of Revenue			Revenue		% of Revenue			Revenue		% of Revenue			Revenue		% of Revenue
Commercial insurance		$	~~715~~786.91		2425.80	%	$	~~545~~612.51		2325.91	%	$	1,502.0		24.9	%	$	1,157.7		24.5	%
Medicaid			~~323~~354.37		11.3	%		~~270~~283.06		11.86	%		678.0		11.3	%		553.5		11.7	%
Medicare A			~~262~~264.87		98.24	%		~~234~~235.74		109.36	%		527.5		8.7	%		470.0		9.9	%
Medicare B			2120.01		0.86	%		2324.8		1.0	%		41.1		0.6	%		48.6		1.0	%
Medicare C			~~520~~590.32		18.08	%		~~357~~406.10		1516.67	%		1,110.5		18.4	%		763.1		16.1	%
Medicare D			~~910~~1,008.94		3132.60	%		~~756~~770.30		3331.16	%		1,919.3		31.9	%		1,526.3		32.3	%
Private & other			123.95		4.3.9	%		98106.4		4.34	%		247.4		4.2	%		204.8		4.5	%
		$	23,~~878~~147.17		100.0	%	$	2,~~285~~438.83		100.0	%	$	6,025.8		100.0	%	$	4,724.0		100.0	%

Refer to Note 15 for the disaggregation of revenue by reportable segment.

4. Acquisitions

2025 Acquisition

During the ~~three~~six months ended ~~March~~June 3130, 2025, we completed anone acquisition within the Provider Services segment on January 1, 2025. Wefor ~~entered~~aggregate ~~into the transaction in order to expand our services and geographic offerings. Aggregate~~ consideration ~~for~~of ~~the acquisition was approximately~~ $6.8 million. No cash was acquired as a part of this transaction. We entered into the transaction in order to expand our services and geographic offerings. The operating results of the acquisition are included in our unaudited condensed consolidated financial statements from the date of the acquisition and are not material to our results of operations.

The following table summarizes the consideration paid (in thousands) for the 2025 acquisition, and the estimated fair value of the assets acquired and the liabilities assumed at the acquisition date, which are adjusted for immaterial measurement-period adjustments through March 31, 2025.

Goodwill	$	6,400
Intangible asset		400
Accrued expenses		46
Aggregate purchase price	$	6,754

The Company is in the process of reviewing the fair value of the assets acquired and liabilities assumed. We have estimated the fair value of the acquired intangible asset based upon the values assigned in prior acquisitions that were deemed comparable in nature. Based on the Company’s preliminary valuations, the total estimated consideration has been allocated to assets acquired and liabilities assumed as of the acquisition date.

The intangible asset consists of a $0.4 million covenants not to compete and has an estimated useful life of 5.0 years. We expect all of the goodwill will be deductible for tax purposes. The Company believes the resulting amount of goodwill reflects its expectation of synergistic benefits of the acquisition.

The above acquisition contributed approximately $0.8 million in revenue and $0.3 million in operating income during the three months ended March 31, 2025. Pro forma financial data for the 2025 acquisition has not been included as the results of the operations are not material to our unaudited condensed consolidated financial statements.

During the three months ended March 31, 2025, the Company incurred approximately $0.1 million in transaction costs related to the acquisition completed in 2025. These costs are included in selling, general, and administrative expenses in our unaudited condensed consolidated statements of operations.

2024 Acquisitions

During the year ended December 31, 2024, we completed eight acquisitions within the Pharmacy Solutions and Provider Services segments. We entered these transactions in order to expand our services and geographic offerings. Aggregate consideration net of cash acquired for these acquisitions was approximately $110.6 million. The operating results of these acquisitions are included in our unaudited condensed consolidated financial statements from the respective dates of the acquisition.

Haven Hospice

The following table summarizes the consideration paid (in thousands) for the September 1, 2024 acquisition of North Central Florida Hospice, Inc. (“Haven Hospice”) and the fair value of the assets acquired and the liabilities assumed at the acquisition date, which are adjusted for immaterial measurement-period adjustments through ~~March~~June 3130, 2025. Haven Hospice provides hospice and palliative care services in the state of Florida. Its results are consolidated within the Provider Services segment.


Inventories	$	45
Property and equipment		495
Goodwill		45,114
Intangible assets		19,860
Operating lease right-of-use assets		7,157
Trade accounts payable		764
Current portion of obligations under operating leases		2,235
Obligations under operating leases, net of current portion		4,922
Aggregate purchase price	$	64,750

Consideration for the Haven Hospice acquisition included a $15.0 million cash payment, $15.0 million seller note payable in 2028, and $30.0 million of the Company's common stock equal to 2,471,251 shares. The number of shares was calculated by dividing $30.0 million by a price per share equal to the average of the volume weighted average trading price of the Company's common stock on each of the fifteen consecutive trading days ending on and including the trading day that is three trading days prior to the closing date, as required by the asset purchase agreement. The sellers ~~are~~were restricted from trading during a 180-day lock-up period from closing with agreed-upon sale volume limitations for four years thereafter. The asset purchase agreement also includes a post-closing adjustment feature to the extent any losses are incurred by the sellers in the sale of their common stock for four years following closing with a final equity adjustment feature. See Note 12.

The intangible assets consist of $14.8 million in indefinite-lived licenses and $5.1 million of trade name. The fair value of acquired licenses and trade name were based upon a third-party valuation. The trade name has an estimated useful life of 10.0 years. We expect all of the goodwill will be deductible for tax purposes. The Company believes the resulting amount of goodwill reflects its expectation of synergistic benefits of the acquisition.

Haven Hospice contributed $1516.95 million and $32.4 million in revenue during the three and six months ended June 30, 2025, respectively. Haven Hospice contributed $12.0 million and $3.2 million of operating income during the three and six months ended ~~March~~June 3130, 2025, respectively. The Haven Hospice acquisition was not completed until the third fiscal quarter of 2024, as such it did not contribute any revenue or operating income during the three and six months ended ~~March~~June 3130, 2024. Pro forma financial data for the Haven Hospice acquisition has not been included as the results of the operations are not material to our unaudited condensed consolidated financial statements.

Others

The following table summarizes the consideration paid (in thousands) for 2024 acquisitions, excluding Haven Hospice, and the estimated fair value of the assets acquired and the liabilities assumed at the acquisition dates, which are adjusted for immaterial measurement-period adjustments through ~~March~~June 3130, 2025. Consideration for acquisitions by the Pharmacy Solutions and Provider Services segments was $27.0 million and $18.9 million, respectively.


Accounts receivable	$	3,749
Inventories		1,234
Prepaid expenses and other current assets		174
Property and equipment		398
Goodwill		17,721
Intangible assets		31,233
Operating lease right-of-use assets		364
Other assets		1,438
Trade accounts payable		650
Accrued expenses		7,657
Current portion of obligations under operating leases		56
Current portion of obligations under financing leases		53
Obligations under operating leases, net of current portion		308
Obligations under financing leases, net of current portion		8
Deferred income taxes, net		1,686
Aggregate purchase price, net of cash acquired	$	45,893

Accounts receivable	$	3,749
Inventories		1,234
Prepaid expenses and other current assets		174
Property and equipment		398
Goodwill		17,814
Intangible assets		31,233
Operating lease right-of-use assets		364
Other assets		1,438
Trade accounts payable		650
Accrued expenses		7,750
Current portion of obligations under operating leases		56
Current portion of obligations under financing leases		53
Obligations under operating leases, net of current portion		308
Obligations under financing leases, net of current portion		8
Deferred income taxes, net		1,686
Aggregate purchase price, net of cash acquired	$	45,893

The Company is in the process of reviewing the fair value of the assets acquired and liabilities assumed. We have estimated the fair value of acquired customer relationships, licenses, trade names, and covenants not to compete based upon third-party valuations and/or the values assigned in prior acquisitions that were deemed comparable in nature. Based on the Company’s preliminary valuations, the total estimated consideration has been allocated to assets acquired and liabilities assumed as of the acquisition dates.

The estimated intangible assets consist primarily of $22.3 million in customer relationships, $5.7 million in definite-lived licenses, $2.1 million in indefinite-lived licenses, $0.6 million in covenants not to compete, and $0.5 million in trade names. Definite-lived intangible assets have an estimated weighted average useful life of 14.9 years. We expect $12.0 million of the goodwill will be deductible for tax purposes. The Company believes the resulting amount of goodwill reflects its expectation of synergistic benefits of the acquisitions.

The above acquisitions contributed approximately $1922.7 million and $41.8 million in revenue during the three and six months ended June 30, 2025, respectively, compared to $15.1 million and $15.9 million in revenue during the three and six months ended June 30, 2024. The above acquisitions contributed approximately $1.35 million and $2.8 million in operating income during the three and six months ended ~~March~~June 3130, 2025, respectively, compared to $0.89 million ~~in revenue~~ and $0.1.0 million in operating income during the three and six months ended ~~March~~June 3130, 2024. Pro forma financial data for the 2024 acquisitions has not been included as the results of the operations are not material to our unaudited condensed consolidated financial statements.

Measurement period adjustments for all aforementioned acquisitions completed in 2024 recorded in the three and six months ended ~~March~~June 3130, 2025 were not material to the unaudited condensed consolidated financial statements. The Company expects to finalize the purchase price allocation for the 2024 acquisitions prior to the one-year anniversary date of each acquisition.

During the three and six months ended ~~March~~June 3130, 2024, the Company incurred approximately $01.62 million and $1.9 million in transaction costs, respectively, related to 2024 acquisitions that were completed in subsequent quarters of 2024. These costs are included in selling, general, and administrative expenses in our unaudited condensed consolidated statements of operations.

The Company also agreed to purchase the remaining 30% noncontrolling interest in Gateway Pediatric Therapy, LLC during the first fiscal quarter of 2024 and the remaining 45% noncontrolling interest in Harvest Grove LTC, LLC during the third fiscal quarter of 2024. These transactions did not meet the definition of a business combination in accordance with ASC 805, Business Combinations.

5. Goodwill and Intangible Assets

A summary of changes to goodwill, by reportable segment, is as follows (in thousands):

	Goodwill
	Pharmacy Solutions		Provider Services			Total
Goodwill at January 1, 2025*	$	841,052	$	1,522,832		$	2,363,884
Goodwill added through acquisitions		—		6,~~400~~430			6,~~400~~430
Measurement period adjustments		—		(~~279~~372	)		(~~279~~372	)
Foreign currency adjustments		—		19192			19192
Goodwill at March 31, 2025*	$	841,052	$	1,528,972		$	2,370,024
Goodwill at June 30, 2025*	$	841,052	$	1,529,082		$	2,370,134

* For the periods presented, the carrying amount of goodwill is presented net of accumulated impairment losses of $40.9 million.

Intangible assets are as follows (in thousands):

	March 31, 2025						December 31, 2024
	June 30, 2025						December 31, 2024
	Gross		AccumulatedAmortization		Net Carrying Value		Gross		AccumulatedAmortization		Net Carrying Value		Life(Years)
Customer relationships	$	~~540~~522,~~935~~435	$	~~349~~345,~~417~~663	$	~~191~~176,~~518~~772	$	542,137	$	335,647	$	206,490	5-20
Trade names		332,977		~~146~~153,~~113~~017		~~186~~179,~~864~~960		332,977		140,020		192,957	2-20
Licenses		62,~~801~~167		1617,~~837~~556		4544,~~964~~611		68,425		17,528		50,897	10-20
Doctor/payor network		5,650		4,~~426~~613		1,~~224~~037		12,730		10,965		1,765	5-8
Covenants not to compete		7,~~890~~640		45,~~996~~112		2,~~894~~528		8,790		5,886		2,904	2-7
Other intangible assets		10,940		67,~~753~~144		43,~~187~~796		10,940		6,362		4,578	5-7
Total definite-lived assets	$	~~961~~941,~~193~~809	$	~~528~~533,~~542~~105	$	~~432~~408,~~651~~704	$	975,999	$	516,408	$	459,591
Licenses		135,633		—		135,633		135,633		—		135,633	Indefinite
Total intangible assets	$	1,~~096~~077,~~826~~442	$	~~528~~533,~~542~~105	$	~~568~~544,~~284~~337	$	1,111,632	$	516,408	$	595,224

Amortization expense for the three and six months ended ~~March~~June 3130, 2025 was $23.6 million and ~~2024~~$47.0 ~~was~~million, respectively, as compared to $2324.42 million and $2347.79 million for the three and six months ended June 30, 2024, respectively.

6. Debt and Derivatives

The table below summarizes the total outstanding debt of the Company (in thousands):

	March 31, 2025					December 31, 2024
	June 30, 2025					December 31, 2024
	Rate			$		Rate			$
First Lien Incremental Term Loan Tranche B-5 - payable to lenders at SOFR plus applicable margin		6.8283	%	$	2,~~540~~534,~~404~~021		6.86	%	$	2,546,787
Revolving Credit Loans - payable to lenders at SOFR plus applicable margin		7.3233	%		—		7.61	%		—
Swingline/Base Rate - payable to lenders at ABR plus applicable margin		9.50	%		—		9.75	%		63,300
Amortizing Notes (1)					4842,~~399~~859					53,804
Notes payable and other					19,~~424~~419					19,428
Total debt					2,~~608~~596,~~227~~299					2,683,319
Less: debt issuance costs, net					7067,~~163~~546					72,736
Total debt, net of debt issuance costs					2,~~538~~528,~~064~~753					2,610,583
Less: current portion of long-term debt					4850,~~725~~836					48,725
Total long-term debt, net of current portion				$	2,~~489~~477,~~339~~917				$	2,561,858

(1)

See Note 7 for discussion of Amortizing Notes.

The following discussion summarizes the debt agreements and related modifications for the three months ended March 31, 2025 and the year ended December 31, 2024. We were in compliance with all applicable financial debt covenants at March 31, 2025 and December 31, 2024.16

The following discussion summarizes the debt agreements and related modifications for the six months ended June 30, 2025 and the year ended December 31, 2024. We were in compliance with all applicable financial debt covenants at June 30, 2025 and December 31, 2024.

First Lien Credit Agreement

On March 5, 2019, the Company entered into a First Lien Credit Agreement (the “First Lien”), with Morgan Stanley Senior Funding, Inc., as the Administrative Agent and the Collateral Agent. The First Lien originally consisted of a principal amount of $1,650.0 million. In 2019, an additional delayed draw of $150.0 million was made on the First Lien, resulting in a gross borrowing of $1,800.0 million (“Tranche B-1”). The First Lien, as amended in 2020, provided for the establishment of a Tranche B-2 Term Loan (“Tranche B-2”) in an aggregate principal amount equal to $550.0 million. The First Lien, as amended in 2021, provided for the establishment of a Tranche B-3 Term Loan (“Tranche B-3”) in an aggregate principal amount equal to $675.0 million.

On February 21, 2024, we used a portion of the net proceeds received from the IPO Offerings to repay $343.3 million of the borrowings under the First Lien, and amended the First Lien to establish a new Tranche B-4 Term Loan (“Tranche B-4”) in an aggregate principal amount of $2,566.0 million. The proceeds from Tranche B-4 borrowings were used to refinance the equivalent amount of the remaining First Lien Tranches B-1, B-2, and B-3 borrowings and was accounted for as a debt modification.

On December 11, 2024, we amended the First Lien to refinance Tranche B-4 by establishing a Tranche B-5 Term Loan (“Tranche B-5”) in an aggregate principal amount of $2,553.2 million at a rate equal to Secured Overnight Financing Rate (“SOFR”) plus 2.50% or Alternate Base Rate (“ABR”) plus 1.50% with a maturity date of February 21, 2031. The non-cash transaction was accounted for as a debt modification. Principal payments are due on the last business day of each quarter, which commenced in the first fiscal quarter of 2025 and equate to 0.25% of the principal at issuance, with a balloon payment due February 21, 2031.

debt modification. Principal payments are due on the last business day of each quarter, which commenced in the first fiscal quarter of 2025 and equate to 0.25% of the principal at issuance, with a balloon payment due February 21, 2031.

Revolving Credit Facility

The First Lien also extends credit in the form of a Revolving Credit Facility with a borrowing capacity of $475.0 million (the “Revolver”), of which up to $50.0 million is available as swingline loans and up to $82.5 million is available as letters of credit (the “LC Sublimit”). The Revolver will mature on June 30, 2028. In connection with the First Lien modification on February 21, 2024, borrowings under the Revolver bore interest at a rate equal to SOFR (with a floor of 0.00%) plus 3.25% for the Revolving Credit Loans or ABR plus 2.25% for the Swingline Loans at December 31, 2024. During the first fiscal quarter of 2025, the variable rate on the Revolving Credit Loans and Swingline Loans decreased to SOFR plus 3.00% and ABR plus 2.00%, respectively, as a result of our improved leverage ratio in accordance with the terms of our credit agreement. As of ~~March~~June 3130, 2025, the Company had $475.0 million of borrowing capacity available under the Revolver as there were no borrowings under the Revolver or letters of credit outstanding. As of December 31, 2024, the Company had $63.3 million of borrowings outstanding under the Revolver and no letters of credit, reducing the available borrowing capacity to approximately $411.7 million.

The Company’s First Lien also provides for an additional $65.0 million of letter of credit commitments (the “LC Facility”), which are not subject to the LC Sublimit and do not reduce the Revolver borrowing capacity. As of ~~March~~ 31June 30, 2025 and December 31, 2024, there were $61.8 million of letters of credit outstanding under the LC Facility, resulting in an available borrowing capacity of $3.2 million.

Second Lien Credit Agreement

The Company’s amended and restated Second Lien Credit Agreement (the “Second Lien Facility”), with certain Lenders and Wilmington Trust, National Association, as the Administrative Agent and the Collateral Agent consisted of a principal amount of $450.0 million. On January 30, 2024, we used a portion of the net proceeds received from the IPO Offerings to repay all outstanding borrowings under the Second Lien Facility. No remaining obligation exists related to the Second Lien Facility. This transaction was accounted for as a debt extinguishment and the Company incurred a loss on extinguishment of debt of $12.7 million related to the write-off of unamortized debt issuance costs during the first fiscal quarter of 2024.

Derivative Financial Instruments

To manage fluctuations in cash flows resulting from changes in the variable interest rates, the Company entered into receive-variable, pay-fixed interest rate swap agreements. The following table summarizes our interest rate swaps designated as cash flow hedges:

		Notional Amount as of
Financial Institution	Date entered into	March 31, 2025			December 31, 2024			Effective Dates	Fixed Rates
Credit Suisse	September 30, 2022	$	500	million	$	500	million	3-year period ending September 30, 2025		3.4165	%
Morgan Stanley	September 30, 2022		1,050	million		1,050	million	3-year period ending September 30, 2025		3.4200	%
Credit Agricole Corporate and Investment Bank	September 30, 2022		450	million		450	million	3-year period ending September 30, 2025		3.5241	%
Existing contracts		$	2,000	million	$	2,000	million
Credit Agricole Corporate and Investment Bank	March 17, 2025	$	500	million	$	—		1-year period ending September 30, 2026		3.7250	%
Mizuho Capital Markets	March 28, 2025		500	million		—		1-year period ending September 30, 2026		3.6110	%
Forward starting contracts (1)		$	1,000	million	$	—

During the first fiscal quarter of 2025, we enter into two forward starting interest rate swap agreements, each with a $500 million notional amount, to hedge the cash flow risk of variability in interest payment on our variable rate borrowings. The effective date of the forward starting interest rate swap agreements is September 30, 2025. As of March 31, 2025, these contracts meet the criteria of a cash flow hedge.


	Notional Amount as of
Financial Institution	June 30, 2025			December 31, 2024			Effective Dates	Fixed Rates
Credit Suisse	$	500	million	$	500	million	3-year period ending September 30, 2025		3.41650	%
Morgan Stanley		1,050	million		1,050	million	3-year period ending September 30, 2025		3.42000	%
Credit Agricole Corporate and Investment Bank		450	million		450	million	3-year period ending September 30, 2025		3.52410	%
Existing contracts	$	2,000	million	$	2,000	million

Credit Agricole Corporate and Investment Bank	$	500	million	$	—		1-year period ending September 30, 2026		3.72500	%
Mizuho Capital Markets		500	million		—		1-year period ending September 30, 2026		3.61121	%
Forward starting contracts (1)	$	1,000	million	$	—

(1)

~~The~~During ~~fair~~the ~~value~~first offiscal ~~the~~quarter ~~cash~~of ~~flow~~2025, ~~hedges~~we asentered ofinto ~~March~~two ~~31,~~forward ~~2025~~starting ~~and~~interest ~~December~~rate 31swap agreements, ~~2024~~each ~~was~~with a $~~6.3~~500 million ~~and~~notional ~~$10.6 million~~amount, ~~respectively,~~to ~~and~~hedge isthe ~~reflected~~cash flow risk of variability in ~~prepaid~~interest ~~expenses~~payment ~~and~~on ~~other~~our ~~current~~variable ~~assets~~rate borrowings. The effective date of the forward starting interest rate swap agreements is September 30, ~~other~~2025. ~~assets~~As of June 30, ~~and~~2025, ~~long-term~~these ~~liabilities~~contracts inmeet the ~~unaudited~~criteria ~~condensed~~of ~~consolidated~~a ~~balance~~cash ~~sheets.~~flow hedge.

16The fair value of the cash flow hedges as of June 30, 2025 and December 31, 2024 was $2.7 million and $10.6 million, respectively, and is reflected in prepaid expenses and other current assets, other assets, and long-term liabilities in the unaudited condensed consolidated balance sheets.

Amounts reported in accumulated other comprehensive income (“AOCI”) related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. Interest received, including payments made or received under the cash flow hedges, was $4.4 million and $98.68 million for the three and six months ended ~~March~~June 3130, 2025, respectively, as compared to $9.5 million and $19.1 million for the three and six months ended June 30, 2024, respectively. The Company expects approximately $74.2 million of pre-tax gains to be reclassified out of AOCI into earnings within the next twelve months.

7. Tangible Equity Units

Concurrently with the IPO, we issued 8,000,000 TEUs, which have a stated amount of $50.00 per unit. Each TEU is comprised of a prepaid stock purchase contract (“Purchase Contract”) and a senior amortizing note (“Amortizing Note”) due February 1, 2027, each issued by the Company. Each TEU may be separated by a holder into its constituent Purchase Contract and Amortizing Note, each of which is considered a freestanding financial instrument. The proceeds from the issuance were allocated to equity and debt based on the relative fair value of the respective components of each TEU as follows (in thousands~~, except per unit values~~):


	Equity Component		Debt Component		Total
Fair value per unit	$	41.3382	$	8.6618	$	50.00

Gross proceeds	$	330,706	$	69,294	$	400,000
Less: issuance costs		9,095		1,905		11,000
Net proceeds	$	321,611	$	67,389	$	389,000

The value allocated to the Purchase Contract is reflected net of issuance costs in additional paid-in capital. The value allocated to the Amortizing Notes is reflected in long-term debt in the unaudited condensed consolidated balance sheet, with payments expected in the next twelve months reflected in current portion of long-term debt. The long-term portion of the Amortizing Notes as of June 30, 2025 and December 31, 2024 was $19.9 million and $32.9 million, respectively. The short-term portion of the Amortizing Notes as of June 30, 2025 and December 31, 2024 was $23.0 million and $20.9 million, respectively. Issuance costs related to the Amortizing Notes are reflected as a reduction of the carrying amount and will be amortized through the maturity date using the effective interest rate method.

Amortizing Notes

The Company pays equal quarterly cash installments of $0.8438 per Amortizing Note on February 1, May 1, August 1 and November 1, commencing on May 1, 2024, except for the May 1, 2024 installment payment, which was $0.8531 per Amortizing Note, with a final installment payment date of February 1, 2027. In the aggregate, the annual quarterly cash installments are the equivalent of 6.75% per year. Each installment payment constitutes a payment of interest and a partial repayment of principal. The Company paid $6.7 million and $13.5 million in TEU installment payments during the three and six months ended ~~March~~June 3130, 2025., ~~There~~respectively, ~~were~~as nocompared ~~TEU~~to ~~installment~~$6.8 ~~payments~~million during the three and six months ended ~~March~~June 3130, 2024. The Amortizing Notes rank equally in right of payment with all other existing and future unsecured senior indebtedness and rank senior to all of our existing and future indebtedness, if any, that is subordinated to the Amortizing Notes.

Purchase Contracts

At any time prior to the second scheduled trading day immediately preceding February 1, 2027, a holder may elect to settle its Purchase Contract early, in whole or in part, at an early settlement rate equal to the minimum settlement rate. The Company has the right to settle the Purchase Contracts on or after November 1, 2024, in whole but not in part, on a date fixed by it at an early mandatory settlement rate equal to the maximum settlement rate, subject to certain exceptions. During the three and six months ended ~~March~~June 3130, 2025 and 2024, respectively, no TEUs were converted at the holder's option.

Unless settled earlier at the holder’s option or at the Company's election, each Purchase Contract will, subject to postponement in certain limited circumstances, automatically settle on February 1, 2027 for a number of shares of our common stock, subject to certain anti-dilution adjustments, based upon the 20-day volume-weighted average price (“VWAP”) of our common stock as follows:


VWAP of BTSG Common Stock		Common Stock Issued
Greater than $15.28		3.2733 shares (minimum settlement rate)
Equal to or less than $15.28 but greater than or equal to $13.00		$50 divided by VWAP
Less than $13.00		3.8461 shares (maximum settlement rate)

The Purchase Contracts are mandatorily convertible into a minimum of 26.2 million shares or a maximum of 30.8 million shares of our common stock on the mandatory settlement date (unless redeemed by us or settled earlier at the unit holder's option). The 26.2 million minimum shares are included in the calculation of basic weighted average shares outstanding. The difference between the minimum and maximum shares represents potentially dilutive securities, which are included in the calculation of diluted weighted average shares outstanding to the extent that the average applicable market value is equal to or greater than $13.00 but is less than or equal to $15.28 during the period (see Note 10).

average shares outstanding to the extent that the average applicable market value is equal to or greater than $13.00 but is less than or equal to $15.28 during the period (see Note 10).

8. Income Taxes

The provision for income taxes is attributable to U.S federal, state, and foreign income taxes. The Company’s effective tax rate used for interim periods is based on an estimated annual effective tax rate and includes the tax effect of items required to be recorded discretely in the interim periods in which those items occur.

A reconciliation of the Company’s effective tax rate is as follows:

	For the Three Months Ended						For the Six Months Ended
	March 31,
	June 30,						June 30,
	2025			2024			2025			2024
Estimated annual effective tax rate before discrete items		2527.71	%		37(102.97	)%		26.4	%		30.5	%
Discrete items recognized		(2814.4	)%		(5386.80	)%		(21.1	)%		15.0	%
Effective tax rate recognized in the statements of operations		(212.7	)%		32283.13	%		5.3	%		45.5	%

During the three months ended ~~March~~June 3130, 2025, the Company’s effective tax rate was lower than the U.S. federal income tax rate, primarily as a result of including $21.4 million in tax benefits resulting from the recognition of excess tax benefits from share-based compensation. During the three months ended June 30, 2024, the Company's effective tax rate was higher than the U.S. federal income tax rate, primarily as a result of the discrete tax benefit on pre-tax book losses related to the Silver matter which was determined to be partially deductible upon finalization of the agreement.

During the ~~three~~six months ended ~~March~~June 3130, ~~2024~~2025, the Company’'s effective tax rate was ~~higher~~lower than the U.S. federal income tax rate, primarily as a result of ~~limitations~~including on$3.7 ~~the~~million ~~deductibility of certain executive compensation that now apply to the Company after the IPO Offerings, which were completed~~ in ~~January 2024. The discrete~~ tax ~~expense~~benefits ~~for~~resulting ~~the~~from ~~three months ended March 31, 2024 primarily relates to additional legal settlement accruals recorded in~~ the ~~period,~~recognition ~~which~~of ~~are~~excess ~~not~~tax ~~expected~~benefits tofrom beshare-based ~~deductible for tax purposes.~~

compensation. During the six months ended June 30, 2024, the Company’s effective tax rate was higher than the U.S. federal income tax rate, primarily as a result of limitations on the deductibility of certain executive compensation that now apply to the Company after the IPO Offerings, which were completed in January 2024. In addition, the discrete tax benefit related to the Silver matter increased the effective tax rate on pre-tax book losses to date.

See Note 13 for further discussion of the Silver matter.

9. Detail of Certain Balance Sheet Accounts

Prepaid expenses and other current assets consist of the following (in thousands):

	March 31, 2025		December 31, 2024
	June 30, 2025		December 31, 2024
Rebate receivable	$	3941,~~116~~397	$	49,538
Non-trade receivables		3027,~~038~~324		45,428
Inventory returns receivable		11,676		11,245
Income tax receivable		16,216		13,468
Income tax receivable		10,886		13,468
Inventory returns receivable		12,616		11,245
Prepaid insurance		10,785		13,892
Prepaid maintenance		5,161		3,644
Interest rate swaps		7,148		10,633
Prepaid insurance		4,609		13,892
Prepaid maintenance		5,274		3,644
Interest rate swaps		4,311		10,633
Other prepaid expenses and current assets		1617,~~104~~614		13,462
Total prepaid expenses and other current assets	$	~~131~~129,~~027~~248	$	161,310

Other assets consist of the following (in thousands):

	March 31, 2025		December 31, 2024
	June 30, 2025		December 31, 2024
Notes receivable	$	108,~~112~~457	$	8,577
Insurance recoveries		7,~~385~~441		7,564
Cloud computing		6,~~526~~313		7,362
Deposits		5,~~689~~632		6,733
Deferred debt issuance costs		2,~~293~~117		2,470
Equity method investments		~~650~~970		670
Other assets		5,~~624~~232		5,752
Total other assets	$	3836,~~279~~162	$	39,128

Accrued expenses consist of the following (in thousands):

	March 31, 2025		December 31, 2024
	June 30, 2025		December 31, 2024
Wages and payroll taxes	$	~~113~~86,~~490~~600	$	98,245
Checks in excess of cash balance		36,680		27,643
Compensated absences		26,692		24,360
Workers compensation insurance reserves		2423,~~672~~963		19,966
Compensated absences		24,639		24,360
Health insurance reserves		19,268		14,934
Health insurance reserves		18,383		14,934
Checks in excess of cash balance		19,060		27,643
Legal settlements and professional fees		12,569		13,982
Property insurance reserves		11,405		9,879
Deferred revenue		8,~~730~~232		10,196
General and professional liability insurance reserves		67,~~669~~278		8,328
Contingent consideration		54,~~334~~139		3,136
Automobile insurance reserves		3,~~303~~868		21,353
Interest		1,838		8,779
Legal settlements and professional fees		3,185		13,982
Taxes other than income taxes		12,~~551~~266		1,985
Recoupment fees		177		536
Interest		1,722		8,779
Other		4435,~~555~~150		4232,~~303~~960
Total accrued expenses	$	~~302~~252,~~590~~828	$	295,746

Long-term liabilities consist of the following (in thousands):

	March 31, 2025		December 31, 2024
	June 30, 2025		December 31, 2024
Workers compensation insurance reserves	$	2425,~~280~~326	$	25,360
General and professional liability insurance reserves		2223,~~319~~283		21,182
Automobile insurance reserves		108,~~546~~815		9,034
Contingent consideration		4,750		5,250
Employee incentives		3,493		3,993
Interest rate swaps		~~818~~1,567		—
Deferred gain		462		195
Other		6,873		6,371
Other		5,917		6,176
Total long-term liabilities	$	74,107	$	71,190
Total long-term liabilities	$	72,585	$	71,190

10. Earnings Per Share (“EPS”)

Basic net income (loss) per share excludes dilution and is reported separately for continuing operations and discontinued operations. Basic net income (loss) per share of common stock for continuing operations and discontinued operations is calculated by dividing net income (loss) from continuing operations and discontinued operations attributable to common shareholders by the weighted average number of shares outstanding for the reporting period~~, respectively~~. Diluted net income (loss) per share of common stock is computed by giving effect to all potential weighted average dilutive common stock. In periods of net loss, no potentially dilutive common shares are included in the diluted shares outstanding as the effect is anti-dilutive.

The number of additional shares of common stock related to restricted stock units (“RSUs”) and stock option awards is calculated using the treasury stock method, if dilutive.

For the three and six months ended ~~March~~June 3130, 2025 and 2024, the TEUs were assumed to be outstanding at the minimum settlement amount for weighted-average shares for basic EPS. For the three and six months ended ~~March~~June 3130, 2025, the Company's average applicable market value was greater than $15.28, resulting in no dilutive impact to EPS for TEUs. For the three and six months ended ~~March~~June 3130, 2024, the Company's average applicable market value was less than $13.00. Thus, the TEUs were assumed to be settled at a conversion factor based on the maximum settlement amount of 3.8461 shares per Purchase Contract, if dilutive. See Note 7 for further discussion of TEUs.

The following table sets forth the computation of basic and diluted net income (loss) per share attributable to common shareholders (in thousands, except per share amounts):

	For the Three Months Ended						For the Six Months Ended
	March 31,
	June 30,						June 30,
	2025			2024			2025			2024
Numerator:
Net income (loss) from continuing operations	$	98,~~216~~541		$	~~(56~~8,~~027~~486	)	$	17,757		$	(47,541	)
Less: Net loss attributable to noncontrolling interests		(~~532~~666	)		(~~635~~478	)		(1,198	)		(1,113	)
Net income (loss) from continuing operations attributable to common shareholders		9,~~748~~207			~~(55~~8,~~392~~964	)		18,955			(46,428	)
Net income from discontinued operations		19,~~794~~001			910,~~642~~955			38,795			20,597
Net income (loss) attributable to common shareholders	$	2928,~~542~~208		$	~~(45~~19,~~750~~919	)	$	57,750		$	(25,831	)
Denominator:
Weighted-average shares outstanding - basic		201,~~005~~807			~~175~~197,~~531~~515			200,516			186,523
Effect of dilutive securities:
Stock options		8,~~055~~098			—4,764			8,167			—
RSUs		56,~~867~~431			—2,095			6,280			—
TEUs		—			—4,582			—			—
Weighted-average shares outstanding - diluted		214,927			175,531
Other		—			31			—			—
Basic income (loss) per share attributable to common shareholders:
Weighted-average shares outstanding - diluted		216,336			208,987			214,963			186,523
Continuing operations	$	0.05		$	(0.31	)
Discontinued operations	$	0.10		$	0.05
Net income (loss)	$	0.15		$	(0.26	)
Diluted income (loss) per share attributable to common shareholders:
Continuing operations	$	0.05		$	(0.31	)
Discontinued operations	$	0.09		$	0.05
Net income (loss)	$	0.14		$	(0.26	)


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
Basic income (loss) per share attributable to common shareholders:
Continuing operations	$	0.05	$	0.05	$	0.09	$	(0.25	)
Discontinued operations	$	0.09	$	0.05	$	0.20	$	0.11
Net income (loss)	$	0.14	$	0.10	$	0.29	$	(0.14	)

Diluted income (loss) per share attributable to common shareholders:
Continuing operations	$	0.04	$	0.04	$	0.09	$	(0.25	)
Discontinued operations	$	0.09	$	0.06	$	0.18	$	0.11
Net income (loss)	$	0.13	$	0.10	$	0.27	$	(0.14	)

The following potentially common share equivalents were excluded from the computation of diluted net income (loss) per share because their effect would have been anti-dilutive for the periods presented (in thousands):

	For the Three Months Ended				For the Six Months Ended
	March 31,
	June 30,				June 30,
	2025		2024		2025		2024
Stock options		1,~~422~~350		153,~~583~~280		1,350		15,300
RSUs		—		~~4,037~~—		—		11,526
TEUs		—		~~4,582~~—		—		4,582
Total		1,422		24,202
Other		—		—		—		31
Total		1,350		3,280		1,350		31,439

11. Common Stock, Preferred Stock, and Share-Based Compensation

Common Stock and Preferred Stock

The Company’s Board of Directors approved a 15.7027-for-one stock split of the Company’s common stock on January 24, 2024. The stock split became effective on January 25, 2024. The par value per share of the Company’s common stock remained unchanged at $0.01 per share, and the authorized shares of the Company’s common stock increased from 8,750,000 to 137,398,625. Upon completion of the IPO Offerings in January 2024, the Company's Board of Directors approved an amendment to our articles of incorporation to authorize 1,500,000,000 and 250,000,000 shares of common stock and preferred stock, respectively, each with a par value of $0.01 per share.

Share-Based Compensation

In January 2025, the Company's Board of Directors approved the modification of certain equity awards in connection with the divestiture of the Community Living business, which resulted in $1.47 million and $3.1 million of incremental share-based compensation expense recognized during the three and six months ended ~~March~~June 3130, 2025, respectively.

Upon completion of the IPO in January 2024, and included in the results for the three months ended March 31, 2024, the Company recognized $8.1 million related to new equity awards granted to management and certain other full-time employees under the 2024 Incentive Plan. Additionally, the performance condition was satisfied for the Tier I and Tier II performance-vesting options under the 2017 Stock Plan upon completion of the IPO, which resulted in the vesting of Tier I performance-vesting options, and $15.0 million of previously unrecognized share-based compensation expense being recognized in the three months ended March 31, 2024.

12. Fair Value

Assets and liabilities measured at fair value are based on one or more of the following three valuation techniques:

Market approach: Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

Cost approach: Amount that would be required to replace the service capacity of an asset (replacement cost).

Income approach: Techniques to convert future amounts to a single present amount based upon market expectations (including present value techniques, option-pricing and excess earnings models).

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The financial assets or liabilities recorded at fair value on a recurring basis are set forth in the table below (in thousands):

	March 31, 2025		December 31, 2024		Valuation Technique
	June 30, 2025		December 31, 2024		Valuation Technique
Assets:
Interest rate swaps (Level 2)	$	62,~~330~~744	$	10,633	A
Total assets	$	62,~~330~~744	$	10,633
Liabilities:
Contingent consideration (Level 3)	$	108,~~084~~889	$	8,386	C
Total liabilities	$	108,~~084~~889	$	8,386

The fair values of our interest rate swaps are based upon Level 2 inputs, which include valuation models. The key inputs for the valuation models are quoted market prices, interest rates, forward yield curves, and credit risk adjustments that are necessary to reflect the probability of default by the counterparty or us. For disclosures about the fair value measurements of our derivative instruments, refer to Note 6.

The contingent consideration represents future earn-outs and a post-closing equity adjustment feature, both associated with acquisitions, which are recognized as a component of the purchase price at the estimated fair value on the acquisition date. These liabilities are classified as accrued expenses and long-term liabilities in our accompanying unaudited condensed consolidated balance sheets.

The fair values of the liabilities associated with future earn outs were derived using the income approach with unobservable inputs, including future earnings forecasts and present value assumptions, and there was little or no market data (Level 3). The Company will re-assess the fair values on each reporting period thereafter until settlement.

The fair value of the liability associated with post-closing equity adjustment feature related to the Haven Hospice acquisition was derived with unobservable inputs using a Monte Carlo simulation, where the common stock price of the Company was evolved using a Geometric Brownian Motion of a period from the valuation date to the end of the fourth anniversary of closing. Estimated equity volatility was based on historical volatility, implied volatility, and peer group volatility over various periods. The Company will re-assess the fair value at each reporting period with changes in value being recorded through the statement of operations. The ultimate settlement of the liability will be through either issuance of additional equity shares and/or additional cash paid in case of net realized losses on sales; or reduction of the outstanding balance of the seller note, in the case of net aggregate realized gain on sales up to the amounts previously paid.

13. Commitments and Contingencies

Legal Proceedings

On March 4, 2011, Relator Marc Silver, on behalf of the U.S. Government and various state governments, filed a complaint in the United States District Court for the District of New Jersey (“the District Court”) against PharMerica, seeking relief, with respect to alleged violations of the federal False Claims Act and state false claims acts. The U.S. Government and state governments declined to intervene in the case. The District Court issued an order dismissing the case in full in 2016. In 2018, however, the Third Circuit Court of Appeals issued an order reinstating the case. In June 2023, the District Court issued an order setting a trial date of December 4, 2023. In November 2023, the District Court denied our motion for summary judgment and the Company subsequently agreed to settle the matter without admitting liability. On May 29, 2024, the parties entered into a final settlement agreement, which was approved by both the United States Department of Justice and the District Court.

The total financial impact of the settlement was $120.0 million; $~~110~~90.0 million ~~of which~~ was paid ~~during~~in ~~the~~June ~~year ended December 31,~~ 2024, ~~with the remaining~~ $1020.0 million inwas ~~accrued~~paid ~~expenses~~ in ~~the~~July ~~unaudited~~2024, ~~condensed~~and ~~consolidated~~the ~~balance~~remaining ~~sheet~~$10.0 asmillion ~~of March 31, 2025, which~~ was paid in April 2025. The District Court entered an order dismissing the Silver action in its entirety, with prejudice, on July 3, 2024.

The Company is also party to various legal and/or administrative proceedings arising out of the operation of our programs and arising in the ordinary course of business. We record accruals for such contingencies to the extent that we conclude it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We do not believe the ultimate liability, if any, for outstanding proceedings or claims, individually or in the aggregate, in excess of amounts already provided, will have a material adverse effect on our consolidated financial condition, results of operations, or cash flows. It is reasonably possible that an adverse determination might have an impact on a particular period. While we believe our provision for legal contingencies is adequate, the ~~outcome of legal proceedings is difficult to predict, and we may settle legal claims or be subject to judgments for amounts that exceed our estimates.~~

outcome of legal proceedings is difficult to predict, and we may settle legal claims or be subject to judgments for amounts that exceed our estimates.

14. Related Party Transactions

The Company was party to a Monitoring Agreement with KKR and WBA, which required payment of an aggregate advisory fee equivalent to 1% of consolidated earnings before interest, taxes, depreciation, and amortization (“EBITDA”), payable in quarterly installments in arrears at the end of each quarter. The Monitoring Agreement terminated upon the completion of the IPO Offerings in January 2024.

Prior to the termination of the Monitoring Agreement, the Company recognized $0.7 million in monitoring and advisory fees during the first fiscal quarter of 2024 as a component of selling, general, and administrative expenses in our accompanying unaudited condensed consolidated statements of operations.

As a result of the termination of the Monitoring Agreement and in accordance with the agreement, the Company paid $22.7 million in termination fees to KKR and WBA in the fourth fiscal quarter of 2024. The termination fees were recognized in the first fiscal quarter of 2024 as selling, general, and administrative expense in our unaudited condensed consolidated statement of operations.

KKR Capital Markets LLC (“KCM”), a wholly owned subsidiary of KKR, acted as an underwriter in the IPO Offerings during the first fiscal quarter of 2024 and received $7.4 million in underwriting discounts and commission. In connection with debt refinancing in the first fiscal quarter of 2024, the Company paid underwriter, arranger, and transaction fees to KCM of $1.9 million. These fees are included within selling, general, and administrative expenses in our unaudited condensed consolidated statement of operations for the ~~three~~six months ended ~~March~~June 3130, 2024. There were no similar fees paid to KCM during the three months ended ~~March~~June 3130, 2024, and the three or six months ended June 30, 2025.

KKR has ownership interests in a broad range of portfolio companies, and we may enter into commercial transactions for goods or services in the ordinary course of business with these companies. We do not believe such transactions are material to our business.

The Company had an agreement with WBA and/or certain of its affiliates under which the Company purchased significant volume of inventory, including a Joinder Agreement to the Pharmaceutical Purchase and Distribution Agreement (the “WBAD Membership Agreement”) between WBA and AmerisourceBergen Drug Corporation (“ABDC”). The WBAD Membership Agreement was terminated in the first fiscal quarter of 2025, and we entered into a separate agreement with ABDC on February 1, 2025.

15. Segment Information

The Company's Chief Operating Decision Maker (“CODM”) is its Chief Executive Officer, who evaluates the performance of our segments and allocates resources based on segment EBITDA. Segment EBITDA is used as the key profitability measure when we set our annual operating plan for each segment, is the metric with which our CODM assesses segment results, and is a key component of our annual variable compensation plans. Segment EBITDA is commonly used as an analytical indicator within the health care industry and is utilized in the evaluation of segment operating performance as it is a profit measure that is generally within the control of the operating segments.

and is utilized in the evaluation of segment operating performance as it is a profit measure that is generally within the control of the operating segments.

For all segments, the CODM uses segment EBITDA in the annual budgeting and monthly forecasting process. The CODM considers actual-to budget and actual-to current forecast variances for segment EBITDA on a monthly basis for evaluating performance of each segment and making decisions about allocating capital and other resources to each segment.

Segment amounts exclude certain expenses not specifically identifiable to the segments for functions performed in a centralized manner, which include accounting, finance, human resources, legal, information technology, corporate office support, and overall corporate management. Segment assets and capital expenditures are not provided to the Company’s CODM and, therefore, are not disclosed.

The following tables set forth information about the Company’s reportable segments, along with the items necessary to reconcile the segment information to the totals reported in the Company’s unaudited condensed consolidated statements of operations as follows (in thousands):

	For the Three Months Ended March 31, 2025
	For the Three Months Ended June 30, 2025
	Pharmacy Solutions		Provider Services		Total Segments
Products revenue	$	2,~~532~~790,~~171~~101	$	—	$	2,~~532~~790,~~171~~101
Services revenue		—		~~345~~357,~~958~~597		~~345~~357,~~958~~597
Cost of drugs		2,~~147~~377,~~576~~477		—		2,~~147~~377,~~576~~477
Cost of services		—		~~211~~216,~~545~~444		~~211~~216,~~545~~444
Other direct costs (1)		~~180~~178,~~639~~925		—		~~180~~178,~~639~~925
Segment selling, general, and administrative expenses (2)		~~115~~136,~~738~~040		9091,~~102~~871		~~205~~227,~~840~~911
Segment depreciation and amortization expense (3)		27,~~508~~033		67,~~769~~174		34,~~277~~207
Segment EBITDA	$	~~115~~124,~~726~~692	$	5156,~~080~~456	$	~~166~~181,~~806~~148

	For the Three Months Ended March 31, 2024
	For the Three Months Ended June 30, 2024
	Pharmacy Solutions		Provider Services		Total Segments
Products revenue	$	12,~~977~~114,~~035~~491	$	—	$	12,~~977~~114,~~035~~491
Services revenue		—		~~308~~323,~~731~~763		~~308~~323,~~731~~763
Cost of drugs		1,~~657~~778,~~759~~358		—		1,~~657~~778,~~759~~358
Cost of services		—		~~186~~194,~~175~~318		~~186~~194,~~175~~318
Other direct costs (1)		~~149~~153,~~341~~402		—		~~149~~153,~~341~~402
Segment selling, general, and administrative expenses (2)		~~109~~115,~~010~~457		8184,~~544~~728		~~190~~200,~~554~~185
Segment depreciation and amortization expense (3)		27,~~249~~222		5,~~743~~950		3233,~~992~~172
Segment EBITDA	$	8894,~~174~~496	$	4650,~~755~~667	$	~~134~~145,~~929~~163


	For the Six Months Ended June 30, 2025
	Pharmacy Solutions		Provider Services		Total Segments
Products revenue	$	5,322,272	$	—	$	5,322,272
Services revenue		—		703,555		703,555
Cost of drugs		4,525,053		—		4,525,053
Cost of services		—		427,989		427,989
Other direct costs (1)		359,564		—		359,564
Segment selling, general, and administrative expenses (2)		251,778		181,973		433,751
Segment depreciation and amortization expense (3)		54,541		13,943		68,484
Segment EBITDA	$	240,418	$	107,536	$	347,954


	For the Six Months Ended June 30, 2024
	Pharmacy Solutions		Provider Services		Total Segments
Products revenue	$	4,091,526	$	—	$	4,091,526
Services revenue		—		632,494		632,494
Cost of drugs		3,436,117		—		3,436,117
Cost of services		—		380,493		380,493
Other direct costs (1)		302,743		—		302,743
Segment selling, general, and administrative expenses (2)		224,467		166,272		390,739
Segment depreciation and amortization expense (3)		54,471		11,693		66,164
Segment EBITDA	$	182,670	$	97,422	$	280,092

(1)

Other direct costs primarily includes direct labor costs, delivery costs, insurance, and depreciation and amortization expense that relates to revenue-generating assets.

(2)

Segment selling, general, and administrative expense includes direct labor costs, depreciation and amortization, insurance, rent, lease, supplies, professional services, maintenance, repairs, utilities, and communications expense.

(3)

Total segment depreciation and amortization expense is presented in other direct costs, costs of services, and segment general and administrative expenses, based on the associated asset.

	For the Three Months Ended
	March 31,
	2025			2024
Reconciliation of income or loss:
Total Segment EBITDA	$	166,806		$	134,929
Segment depreciation and amortization		34,277			32,992
Expenses not allocated at segment level:
Selling, general, and administrative expenses		75,235			111,028
Depreciation and amortization		6,555			6,244
Loss on extinguishment of debt		—			12,726
Interest expense, net		41,763			54,470
Income tax benefit		(240	)		(26,504	)
Net income (loss) from continuing operations	$	9,216		$	(56,027	)


	For the Three Months Ended					For the Six Months Ended
	June 30,					June 30,
	2025		2024			2025		2024
Reconciliation of income or loss:
Total Segment EBITDA	$	181,148	$	145,163		$	347,954	$	280,092
Segment depreciation and amortization		34,207		33,172			68,484		66,164
Expenses not allocated at segment level:
Selling, general, and administrative expenses		90,752		66,810			165,987		177,838
Depreciation and amortization		7,632		6,528			14,187		12,772
Loss on extinguishment of debt		—		—			—		12,726
Interest expense, net		38,778		43,282			80,541		97,752
Income tax expense (benefit)		1,238		(13,115	)		998		(39,619	)
Net income (loss) from continuing operations	$	8,541	$	8,486		$	17,757	$	(47,541	)

~~16. Subsequent Event~~26

On April 30, 2025, the Company entered into a purchase agreement with Amedisys, Inc., UnitedHealth Group Incorporated and certain of their respective subsidiaries, to purchase certain Amedisys home health and hospice care centers and certain UnitedHealth Group care centers.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion analyzes our financial condition and results of operations and should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q (our “Form 10-Q”). This discussion contains forward-looking statements that involve risks and uncertainties. See “Forward-Looking Statements.” When reviewing the discussion below, you should keep in mind the substantial risks and uncertainties that characterize our business. Known material factors that could affect our financial performance and actual results, and could cause actual results to differ materially from those expressed or implied in any forward-looking statements included in this discussion or otherwise made by our management, are described in Item 2 of Part I of this Form 10-Q, and in Item 1A, “Risk Factors” of Part I of our Annual Report on Form 10-K for the year ended December 31, 2024 (our “Form 10-K”). Factors that could cause or contribute to such difference are not limited to those identified in “Risk Factors.” When used in the following discussion, “Senior” patients and populations mean individuals who are aged 65 and older, “Specialty” patients and populations mean individuals who have unique, specialized and most often chronic/life-long health conditions and needs, and “Behavioral” patients and populations mean individuals with intellectual and developmental disabilities including mental illness.

Overview

We are a leading home and community-based healthcare services platform, focused on delivering complementary pharmacy and provider services to complex patients. We have a differentiated approach to care delivery, with an integrated and scaled model that addresses critical services that the highest-need and highest-cost patients require. With a focus on Senior and Specialty patients, which includes Behavioral populations, our platform provides pharmacy and provider services (both clinical and supportive care in nature) in lower-cost home and community settings largely to Medicare, Medicaid, and commercially-insured populations. We are an essential part of our nation’s health delivery network as a front-line provider of high-quality and cost-effective care to a large and growing number of people, who increasingly require a combination of specialized solutions to enable holistic health care management. Our presence spans all 50 states, we serve over ~~450~~460,000 patients daily through our approximately 1110,000 clinical providers and pharmacists, and our services make a profound impact in the lives and communities of the people we serve.

On January 17, 2025, the Company entered into a purchase agreement with National Mentor Holding, Inc. to divest our community living services, home and community based waiver programs, and intermediate care facilities (the “Community Living business”), for $835 million, subject to typical adjustments for working capital and other customary items. We expect the divestiture to close in late 2025, subject to customary closing conditions. This transaction provides for continuity of important intellectual and developmental disability services while BrightSpring focuses on a concentrated group of customers, patients and stakeholders in the future. We believe the Company’s streamlined service offerings will result in increased strategic focus, operational efficiencies, a refined payer mix, and greater clinical integration and business synergy across the Provider Services segment. The divestiture will also augment our expected Revenue and Adjusted EBITDA growth rates and maximize exposure to target growth markets that require BrightSpring’s needed and valuable solutions, such as home health, rehab, primary care, and hospice.

The Company has determined the divestiture of the Community Living business represents a strategic shift that will have a major effect on its business and therefore met the criteria for classification as discontinued operations in the first fiscal quarter of 2025. As a result, in accordance with ASC 205-20, the financial results of the Community Living business, which were previously reported as part of our Provider Services segment, have been classified as discontinued operations in the unaudited condensed consolidated statements of operations, and ~~its~~the Community Living business's assets and liabilities have been classified as held for sale for all periods presented. Unless otherwise noted, amounts and disclosures throughout this Management’s Discussion and Analysis relate to our continuing operations. Refer to “PART I - Item 1. Note 2” of our Form 10-K for additional information regarding discontinued operations.

For additional overview of our business, see “PART I - Item 1. Business” of our Form 10-K.

~~First~~Second Quarter of 2025 Key Highlights:

•

~~Completed~~Announcement ~~one~~of ~~acquisition~~definitive ~~within~~agreement ~~our~~to ~~Provider~~purchase ~~Services~~home ~~segment~~health and hospice care centers of Amedisys, Inc., and certain group care centers of UnitedHealth Group.

•

~~Announcement~~Completion of ~~definitive~~underwritten ~~agreement~~secondary tooffering ~~divest~~of our common stock by affiliates of Kohlberg Kravis Roberts & Co. L.P. and certain members of management, which was completed in June 2025. As a result of this offering, we are no longer a “controlled company” within the ~~Community~~meaning ~~Living~~of ~~business~~the corporate governance standards of Nasdaq.

2527

Financial Performance Highlights: ~~First~~Second Quarter of 2025 Compared to ~~First~~Second Quarter of 2024

•

Revenue grew by $~~592~~709.4 million, or 2529.91%, to $23,~~878~~147.17 million

•

Pharmacy Solutions segment revenue grew by $~~555~~675.16 million, or 2832.10%, to $2,~~532~~790.21 million

•

Provider Services segment revenue grew by $3733.28 million, or 1210.15%, to $~~345~~357.96 million

•

Net ~~loss~~income ~~decreased~~remained byflat ~~$65.2~~at ~~million from~~ $568.05 million ~~to net income of $9.2 million~~

•

Adjusted EBITDA(1) increased by $2831.89 million, or 28.28%, to $~~131~~142.15 million

•

Pharmacy Solutions segment EBITDA increased by $2730.62 million, or 3132.20%, to $~~115~~124.7 million

•

Provider Services segment EBITDA grew by $45.38 million, or 911.34%, to $5156.15 million

•

~~Loss~~Basic and diluted earnings per share ~~decreased~~(EPS) byremained ~~$0.36~~flat ~~from~~at $(0.~~31)~~05 toand $0.0504, respectively

•

Adjusted EPS(1) increased by $0.1016 from $0.0906 to $0.1922

(1) Reconciliation of GAAP to non-GAAP results is provided below under the section entitled “Non-GAAP Financial Measures.”

Our Service Offerings

We are one of the largest independent providers of home and community-based health services in the United States, delivering both pharmacy and provider services. We believe our high-quality and complementary health services offerings address significant and important patient and stakeholder needs. We enhance patient outcomes through the delivery and coordination of high-quality services that high-need, high-cost patients require. Our services are principally delivered in patient-preferred and lower-cost settings and often over longer periods of time, given the chronic nature of the patient conditions that we address. We believe our breadth of service capabilities and proven outcomes position us as a provider of choice for patients, families, referral sources, customers, and payors. We deliver services through two reportable segments: Pharmacy Solutions and Provider Services. For additional details regarding our diversified service offerings within each reportable segment see “PART I - Item 1. Business” of our Form 10-K.

The following table summarizes the revenues generated by each of our reportable segments:

	For the Three Months Ended March 31,
	For the Three Months Ended										For the Six Months Ended
	2025					2024
	June 30,										June 30,
($ in millions)	Revenue		% of Revenue			Revenue		% of Revenue
	2025					2024					2025					2024
Pharmacy Solutions	$	2,532.2		88.0	%	$	1,977.0		86.5	%
($ in millions)	Revenue		% of Revenue			Revenue		% of Revenue			Revenue		% of Revenue			Revenue		% of Revenue
Provider Services		345.9		12.0	%		308.8		13.5	%
Pharmacy Solutions	$	2,790.1		88.6	%	$	2,114.5		86.7	%	$	5,322.3		88.3	%	$	4,091.5		86.6	%
Consolidated BrightSpring	$	2,878.1		100.0	%	$	2,285.8		100.0	%
Provider Services		357.6		11.4	%		323.8		13.3	%		703.5		11.7	%		632.5		13.4	%
Consolidated BrightSpring	$	3,147.7		100.0	%	$	2,438.3		100.0	%	$	6,025.8		100.0	%	$	4,724.0		100.0	%

Payor Mix

We are characterized by payor diversification across our platform. Our payors are principally federal, state, and local governmental agencies, commercial insurance, private, and other payors. Additionally, our Medicaid payors can be further broken down across each individual state with our top 10 Medicaid states representing 6% of total Company revenue for the three and six months ended ~~March~~June 3130, 2025, compared to 7% for the three and six months ended ~~March~~June 3130, 2024.

We provide our services across all 50 states, Puerto Rico and Canada, with our top 10 states of operations comprising 53% of total Company revenues for the three and six months ended ~~March~~June 3130, 2025, compared to 5452% and 53% for the three and six months ended ~~March~~June 3130, 2024, respectively. The federal, state, and local programs under which we operate are subject to legislative and budgetary changes that can influence reimbursement rates.

2628

The following tables summarize the percentage of revenue generated by each payor type for each of our service offerings and reportable segments:

	For the Three Months Ended March 31, 2025
	For the Three Months Ended June 30, 2025
	Commercial insurance			Medicaid			Medicare Part A			Medicare Part B			Medicare Part C			Medicare Part D			Private & other			Total
Infusion and Specialty Pharmacy		20.79	%		6.25	%		—			0.76	%		1617.97	%		2223.3	%		01.90	%		6770.70	%
Home and Community Pharmacy		2.7	%		2.10	%		4.94	%		—			0.0	%		98.37	%		10.38	%		2018.36	%
Pharmacy Solutions		23.46	%		8.35	%		4.94	%		0.76	%		1617.97	%		3132.60	%		21.28	%		88.06	%
Home Health Care		0.2	%		0.3	%		4.30	%		0.10	%		1.1	%		—			0.23	%		65.29	%
Rehab Care		1.1	%		0.6	%		—			0.0	%		0.0	%		—			0.76	%		2.43	%
Personal Care		0.1	%		2.1.9	%		—			—			—			—			1.2	%		3.42	%
Provider Services		1.4	%		32.08	%		4.30	%		0.10	%		1.1	%		—			2.1	%		1211.04	%
Consolidated BrightSpring		2425.80	%		11.3	%		98.24	%		0.86	%		18.08	%		3132.60	%		4.3.9	%		100.0	%

	For the Three Months Ended March 31, 2024
	For the Three Months Ended June 30, 2024
	Commercial insurance			Medicaid			Medicare Part A			Medicare Part B			Medicare Part C			Medicare Part D			Private & other			Total
Infusion and Specialty Pharmacy		1920.57	%		5.78	%		—			0.7	%		1415.75	%		2221.84	%		01.80	%		6465.21	%
Home and Community Pharmacy		2.67	%		2.54	%		5.72	%		—0.0	%		0.0	%		10.32	%		1.21	%		2221.36	%
Pharmacy Solutions		2223.14	%		8.2	%		5.72	%		0.7	%		1415.75	%		3331.16	%		2.01	%		86.57	%
Home Health Care		0.32	%		0.43	%		4.64	%		0.3	%		01.92	%		—			0.1	%		6.65	%
Rehab Care		1.4	%		0.6	%		—			0.0	%		0.0	%		—			0.8	%		2.8	%
Personal Care		0.1	%		2.65	%		—			—			—			—			1.4	%		4.10	%
Provider Services		1.87	%		3.64	%		4.64	%		0.3	%		01.92	%		—			2.3	%		13.53	%
Consolidated BrightSpring		2325.91	%		11.86	%		109.36	%		1.0	%		1516.67	%		3331.16	%		4.34	%		100.0	%

See Note 3 of the unaudited condensed consolidated financial statements and related notes in this Form 10-Q for more information regarding revenue by payor type for each reportable segment for the three months ended March 31, 2025 and 2024.


	For the Six Months Ended June 30, 2025
	Commercial insurance			Medicaid			Medicare Part A			Medicare Part B			Medicare Part C			Medicare Part D			Private & other			Total
Infusion and Specialty Pharmacy		20.8	%		6.4	%		—			0.6	%		17.3	%		22.9	%		0.9	%		68.9	%
Home and Community Pharmacy		2.7	%		2.0	%		4.6	%		—			0.0	%		9.0	%		1.1	%		19.4	%
Pharmacy Solutions		23.5	%		8.4	%		4.6	%		0.6	%		17.3	%		31.9	%		2.0	%		88.3	%
Home Health Care		0.2	%		0.3	%		4.1	%		0.0	%		1.1	%		—			0.4	%		6.1	%
Rehab Care		1.1	%		0.6	%		—			0.0	%		0.0	%		—			0.6	%		2.3	%
Personal Care		0.1	%		2.0	%		—			—			—			—			1.2	%		3.3	%
Provider Services		1.4	%		2.9	%		4.1	%		0.0	%		1.1	%		—			2.2	%		11.7	%
Consolidated BrightSpring		24.9	%		11.3	%		8.7	%		0.6	%		18.4	%		31.9	%		4.2	%		100.0	%


	For the Six Months Ended June 30, 2024
	Commercial insurance			Medicaid			Medicare Part A			Medicare Part B			Medicare Part C			Medicare Part D			Private & other			Total
Infusion and Specialty Pharmacy		20.0	%		5.7	%		—			0.7	%		15.1	%		22.0	%		1.1	%		64.6	%
Home and Community Pharmacy		2.7	%		2.5	%		5.4	%		0.0	%		0.0	%		10.3	%		1.1	%		22.0	%
Pharmacy Solutions		22.7	%		8.2	%		5.4	%		0.7	%		15.1	%		32.3	%		2.2	%		86.6	%
Home Health Care		0.3	%		0.4	%		4.5	%		0.3	%		1.0	%		—			0.1	%		6.6	%
Rehab Care		1.4	%		0.6	%		—			0.0	%		0.0	%		—			0.8	%		2.8	%
Personal Care		0.1	%		2.5	%		—			—			—			—			1.4	%		4.0	%
Provider Services		1.8	%		3.5	%		4.5	%		0.3	%		1.0	%		—			2.3	%		13.4	%
Consolidated BrightSpring		24.5	%		11.7	%		9.9	%		1.0	%		16.1	%		32.3	%		4.5	%		100.0	%

Trends and Other Factors Affecting Business

Continued Growth of our Pharmacy Solutions Patient Populations

We focus on providing health-dependent medications in a timely and well-supported manner to our patients receiving pharmacy solutions in their home and community-based settings. Our pharmacy services are primarily delivered directly to patients in their place of residence, home, or stay, and sometimes in a clinic setting. According to industry reports, pharmacy solutions delivered to and tailored for the home environment, such as home infusion services, oncology services, and daily medication management services in the home, will continue to grow faster than the overall and general pharmacy market. We have continued to expand our pharmacy capabilities to serve this need. Overall, our pharmacy has grown patient census and prescriptions by approximately 116% and 107%, respectively, in the ~~first~~second fiscal quarter of 2025 compared to the ~~first~~second fiscal quarter of 2024. We are a leading independent pharmacy provider in our respective pharmacy patient markets, and we expect to continue to increase our share, including home infusion patients, specialty oncology patients, behavioral patients, in-home Seniors, and hospice patients.

Continued Growth of our Provider Services Patient Populations

We focus on delivering high-touch and coordinated services to medically complex Senior and Specialty patients in the home and community-based settings where they live. As the baby boomer population ages, Seniors, who comprise a significant majority of our patients, will represent a higher percentage of the overall population. Given the proven value proposition of home-based health services, we believe patients will increasingly seek treatment and referral sources and payors will increasingly support treatment in homes more often than in higher cost, less convenient, higher acuity institutional settings.

The vast majority of patients we serve in our provider businesses are served in the home, and we have purposefully continued to expand our service offering and footprint to serve patients in this lower cost setting. Since 2019, we built upon supportive care services to patients, as we have meaningfully expanded our footprint of highly clinical and expert services to home health, rehabilitation, and hospice patients to address a large national healthcare need and more completely and better serve Senior and Specialty patients in the home as evidenced by continued census growth within the Provider Services segment. Our complementary services that address the multiple needs of these patient populations will increasingly provide integrated care opportunities to provide more complete and better coordinated services to patients across health settings and stages.

Stable Reimbursement Environment Across our Portfolio of Businesses

Our revenue is dependent upon our contracts and relationships with payors for our “must-serve” patient populations. We partner with a large and diverse set of payor groups nationally and in each of our markets, to form provider networks and to lower the overall cost of care. We structure our payor contracts to help both providers and payors achieve their objectives in a mutually aligned manner. Maintaining, supporting, and both deepening and increasing the number of these contracts and relationships, particularly as we continue to grow market share and enter new markets, is important for our long-term success.

We have observed relatively stable reimbursement rates from government and commercial payors in our pharmacy and provider services over a number of years, particularly for services provided to high-need, medically complex populations. Due to the medical necessity of our services, which are lower cost than healthcare services provided in other settings and reduce ER, hospital and institutional facility utilization, we have a history of reimbursement stability.

Culture of Quality and Compliance and Consistent Operations Execution

Quality and compliance are central to our strategies and mission. We have demonstrated leading and excellent service and customer/patient/family satisfaction scores across the organization, as referenced in prior filings such as our Form 10-K. In addition to quality and compliance resources and programs in field operations, we invest in people, training, auditing, signature programs, accreditations, advocacy, and technologies to support quality, compliance, and safety as part of our “Quality First” framework. We have demonstrated consistently high and often leading marks for service levels, satisfaction scores, and quality metrics in our industries.

Operational excellence is also an ongoing focus at the Company, including how we collect and share key metrics, hold operational reviews, audit, conduct training, deploy expert support resources, execute on corrective and preventative actions, and implement continuous improvement initiatives across the organization. We have continued to make investments in automation, data, and technology systems to support enhanced workflows, further scale, and future growth across service lines.

Ability to Build De Novo Locations

We have a proven ability to augment growth of existing operations by expanding our presence and opening new locations – in both of our reportable segments, Pharmacy Solutions and Provider Services – across geographies with consistent ramp-up in performance after site opening. We believe our platform can continue to build further scale nationally, adding density to additional and targeted key markets as a lever to facilitate maximum pharmacy and provider services overlap, integrated and value-based care, and growth. The Company’s geographic and operations scale, and platform of complementary segments and service lines, provides us with access to more de novo opportunities to consider and prioritize.

We typically identify and open new locations within proximity of an existing location as we leverage existing market knowledge and presence to expand in target markets, regions, and states. Our internal support resources in real estate, purchasing, IT, credentialing, payor contracting, HR, and sales and marketing, along with our Project Management Office, help to support and manage de novo locations from start to opening. We expect to continue to selectively and strategically expand our footprint within the United States and extend our service offerings to our patients and for customers, referral sources, and payors. We believe de novo investments facilitate more integrated care capability and are a meaningful organic growth driver for the Company.

Ability to Facilitate Integrated Care

Our operating model consists of complementary pharmacy and provider services that high-need Senior and Specialty populations require, and it is designed to increasingly coordinate, manage, and serve patients across our various needs and settings over time, leading to improved patient, family, physician, and referral source satisfaction, improved payor experiences, and better outcomes. Our performance and potential to drive increased service volume for increased patient and health outcomes impact is driven partly by our appeal with our patients, families, customers, referral sources, and payors to provide multiple integrated care services – either in the same setting at the same time or across settings and stages of health – within our collection of pharmacy solutions and provider services and differentiated overall capabilities.

We provide multiple pharmacy and provider services to approximately ~~[20~~9,000] patients today, and we believe that there are substantially more opportunities to deliver more integrated care, given the hundreds of thousands of patients we serve and a similar number of patients discharging from customers annually. Value-add, beneficial, and multiple integrated care opportunities exist for our customer base and all Senior and Specialty patient populations not only across pharmacy and provider services, but also within each segment. Within pharmacy services, CCRx is aimed at providing medication risk and therapy management continuously and longitudinally post discharge from hospitals and skilled nursing customers. Within ~~the~~ provider services, patients often transition from home health to hospice services and can receive therapy and supportive care services concurrent with each other and with home health and hospice.

Aligning to Value-Based Care Reimbursement Models with Innovative Solutions

The scale and depth of our complimentary platform of diverse yet related customer and patient services – that complex patients require – positions us at the forefront with governmental and commercial payors who are increasingly seeking ways to expand value-based reimbursement models. Our high-quality services that are delivered in home and community-based and patient and family-preferred settings at lower comparable costs are well-positioned for the long-term, and we continue to add wraparound care management capabilities and offerings to our core services. In addition to our large Medicare and Medicaid beneficiary populations, we have a large number of non-governmental payor contracts across the organization today, which both diversifies our payor mix, and provides for additional value-based opportunities and partnerships. The Company’s focused build out of its (i) Home-Based Primary Care, transitional care programs, and in-home medication therapy management, and (ii) Clinical (Nursing) Hub, are key enablers to coordinate base pharmacy and provider services and drive improved quality and lower costs for value-based care constructs. In addition to numerous payor contracts that feature reimbursement incentives, in the past year the Company has entered into several accountable care organization (“ACO”) arrangements to participate in shared savings from its attributed primary care patients and other ACO partnerships and contract as a preferred provider.

Initial Public Offering

On January 30, 2024, we completed our initial public offering (“IPO”) of 53,333,334 shares of common stock at a price of $13.00 per share and a concurrent offering of 8,000,000 6.75% tangible equity units (“TEUs”) with a stated amount of $50.00 per unit (collectively, the “IPO Offerings”). The net proceeds from the IPO Offerings amounted to $656.5 million and $389.0 million for the common stock and TEUs, respectively, after deducting underwriting discounts, commissions, and offering-related expenses. The shares of common stock and TEUs began trading on the Nasdaq Global Select Market on January 26, 2024 under the ticker symbols “BTSG” and “BTSGU,” respectively.

We used the proceeds received from the IPO Offerings (i) to repay all indebtedness outstanding under the Second Lien Facility, (ii) to repay all indebtedness outstanding under the Revolving Credit Facility, (iii) to repay $343.3 million outstanding aggregate amount under the First Lien Facility, and (iv) to pay certain expenses in the offering. We have used and intend to use the remaining proceeds for general corporate purposes. Additionally, we paid $22.7 million of termination fees in connection with the termination of our monitoring agreement with our controlling stockholders, Kohlberg Kravis Roberts & Co. L.P. (“KKR”) and Walgreens Boots Alliance, Inc. (together with KKR, the “Managers”) (the “Monitoring Agreement”). The Company paid these fees during the fourth fiscal quarter of 2024.

Factors Affecting Results of Operations and Comparability

Legal Costs and Settlements Accrual

In November 2023, the Company agreed to settle the Silver matter without admitting liability, as discussed under Part I, Item 3. “Legal Proceedings” in our Annual Report on Form 10-K for the year ended December 31, 2024. On May 29, 2024, the parties entered into a final settlement agreement, which was approved by both the United States Department of Justice and the District Court. The total financial impact of the settlement was $120.0 million; ~~$115.0~~all ~~million~~ of which ~~was~~has ~~recorded~~been ~~during~~paid ~~the year ended December 31, 2023~~ as anof ~~estimate,~~April ~~and an incremental $5~~2025.0 ~~million was recorded in the year ended December 31, 2024 once the settlement agreement was finalized.~~ We paid $110.0 million of the settlement in 2024, and the remainder ~~was paid~~ in April 2025. The District Court entered an order dismissing the Silver action in its entirety, with prejudice, on July 3, 2024. See Note 13 “Commitments and Contingencies” within the unaudited condensed consolidated financial statements and related notes, included elsewhere in this Form 10-Q.

Discontinued Operations

On January 17, 2025, the Company entered into a definitive agreement to sell its Community Living business to National Mentor Holdings, Inc. (the “Purchaser”), for $835.0 million in cash upon closing, subject to certain post-closing adjustments. We entered into the transaction in order to streamline our service offerings and further focus on the senior and specialty populations. The transaction is currently expected to close in late 2025, subject to receipt of customary regulatory approvals and satisfaction of other closing conditions.

The Company has determined the divestiture of the Community Living business represents a strategic shift that will have a major effect on its business and has concluded the criteria for classification as discontinued operations were met during the first fiscal quarter of 2025. Accordingly, the Community Living business is reported as discontinued operations in accordance with Accounting Standards Codification (“ASC”) 205-20, Discontinued Operations. The related assets and liabilities of the Community Living business are classified as assets and liabilities held for sale in the accompanying unaudited condensed consolidated balance sheet as of June 30, 2025, and the results of operations from the Community Living business are classified as discontinued operations in the unaudited condensed consolidated statements of operations. Applicable amounts in prior years have been recast to conform to this discontinued operations presentation. The Community Living business was historically presented as a part of the Provider Services reportable segment.

See Note 2 “Discontinued Operations” within the unaudited condensed consolidated financial statements and related notes, included elsewhere in this Form 10-Q.

Components of Results of Operations

Revenues. The Company recognizes the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. For transactions involving the transfer of goods, revenues are primarily recognized when the customer obtains control of the products sold, which is generally upon shipment or delivery, depending on the delivery terms specified in the sales agreement. For transactions exclusively involving provision of services, revenues are recognized over time based on an appropriate measure of progress.

Cost of Goods and Cost of Services. We classify expenses directly related to providing goods and services, including depreciation and amortization, as cost of goods and cost of services. Direct costs and expenses principally include cost of drugs, net of rebates, salaries and benefits for direct care and service professionals, contracted labor costs, insurance costs, transportation costs for clients requiring services, certain client expenses such as food, supplies and medicine, residential occupancy expenses, which primarily comprise rent and utilities, and other miscellaneous direct goods or service-related expenses.

Selling, General, and Administrative Expenses. Selling, general, and administrative expenses consist of expenses incurred in support of our operations and administrative functions and include labor costs, such as salaries, bonuses, commissions, benefits, and travel-related expenses, distribution expenses, facilities rental costs, third-party revenue cycle management costs, and corporate support costs including finance, information technology, legal costs and settlements, human resources, procurement, and other administrative costs.

Loss on Extinguishment of Debt. Loss on extinguishment of debt reflects the write-off of unamortized debt issuance costs upon the early repayment of our Second Lien Facility in 2024.

Interest Expense, net. Interest expense, net includes the debt service costs associated with our various debt instruments, including our First Lien Facilities, and the amortization of related deferred financing fees, which are amortized over the term of the respective credit agreement. Interest expense, net also includes the portion of the gain or loss on our interest rate swap agreements that is reclassified into earnings.

Income Tax Expense (Benefit). Our provision for income taxes is based on permanent book/tax differences and statutory tax rates in the various jurisdictions in which we operate. Significant estimates and judgments are required in determining the provision for income taxes.

Results of Operations

Consolidated Results of Operations

Three Months Ended ~~March~~June 3130, 2025 Compared to Three Months Ended ~~March~~June 3130, 2024

The following table sets forth, for the periods indicated, our consolidated results of operations.

($ in thousands)	For the Three Months Ended ~~March~~June 3130,
							Change
	2025			2024			Amount			%
Revenues:
Products	$	2,~~532~~790,~~171~~101		$	12,~~977~~114,~~035~~491		$	~~555~~675,~~136~~610			2832.10	%
Services		~~345~~357,~~958~~597			~~308~~323,~~731~~763			3733,~~227~~834			1210.15	%
Total revenues		23,~~878~~147,~~129~~698			2,~~285~~438,~~766~~254			~~592~~709,~~363~~444			2529.91	%
Cost of goods		2,~~328~~556,~~215~~402			1,~~807~~931,~~100~~760			~~521~~624,~~115~~642			2832.83	%
Cost of services		~~211~~216,~~545~~444			~~186~~194,~~175~~318			2522,~~370~~126			1311.64	%
Gross profit		~~338~~374,~~369~~852			~~292~~312,~~491~~176			4562,~~878~~676			1520.71	%
Selling, general, and administrative expenses		~~287~~326,~~630~~295			~~307~~273,~~826~~523			~~(20~~52,~~196~~772	)		(619.63	)%
Operating income (loss)		50,739			(15,335	)		66,074			(430.9	)%
Operating income		48,557			38,653			9,904		n.m.
Loss on extinguishment of debt		—			12,726			(12,726	)	n.m.
Interest expense, net		38,778			43,282			(4,504	)		(10.4	)%
Interest expense, net		41,763			54,470			(12,707	)		(23.3	)%
Income (loss) before income taxes		9,779			(4,629	)		14,408		n.m.
Income (loss) before income taxes		8,976			(82,531	)		91,507		n.m.
Income tax expense (benefit)		1,238			(13,115	)		14,353		n.m.
Income tax benefit		(240	)		(26,504	)		26,264		n.m.
Net income	$	8,541		$	8,486		$	55			0.6	%
Net income (loss)	$	9,216		$	(56,027	)	$	65,243		n.m.
Adjusted EBITDA (1)	$	142,517		$	110,637		$	31,880			28.8	%
Adjusted EBITDA (1)	$	131,062		$	102,215		$	28,847			28.2	%

* n.m.: not meaningful

(1) Reconciliation of GAAP to non-GAAP results is provided below under the section entitled “Non-GAAP Financial Measures.”

The following discussion of our results of operations should be read in conjunction with the foregoing table summarizing our consolidated results of operations.

Revenues

Revenues were $23,~~878~~147.17 million for the three months ended ~~March~~June 3130, 2025, as compared with $2,~~285~~438.83 million for the three months ended ~~March~~June 3130, 2024, an increase of $~~592~~709.4 million or 2529.91%. The increase resulted from growth in our Pharmacy Solutions and Provider Services segments. See additional discussion in “—Segment Results of Operations” below.

Cost of Goods

Cost of goods was $2,~~328~~556.24 million for the three months ended ~~March~~June 3130, 2025, as compared with $1,~~807~~931.18 million for the three months ended ~~March~~June 3130, 2024, an increase of $~~521~~624.16 million or 2832.83%. The increase resulted from an increase in Pharmacy Solutions cost of goods. See additional discussion in “—Segment Results of Operations” below.

Cost of Services

Cost of services was $~~211~~216.54 million for the three months ended ~~March~~June 3130, 2025, as compared with $~~186~~194.23 million for the three months ended ~~March~~June 3130, 2024, an increase of $2522.41 million or 1311.64%. The increase resulted from an increase in Provider Services cost of services. See additional discussion in “—Segment Results of Operations” below.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses were $~~287~~326.63 million for the three months ended ~~March~~June 3130, 2025, as compared with $~~307~~273.85 million for the three months ended ~~March~~June 3130, 2024, aan ~~decrease~~increase of $2052.28 million or 619.63%. The ~~decrease~~increase primarily resulted from the following segment activity and factors:

•

an increase of $1527.37 million, or 510.01% growth on consolidated ~~first~~second quarter of 2024 selling, general, and administrative expenses, as a result of growth in our Pharmacy Solutions and Provider Services segments. See additional discussion in “—Segment Results of Operations” below; ~~offset by,~~

a decrease of $22.7 million, or 7.4%, decline on consolidated first quarter of 2024 selling, general, and administrative expenses, as a result of the termination fees incurred at the time of the IPO Offerings in connection with the termination of our Monitoring Agreement for which there is no comparable expense in 2025; 33

•

aan ~~decrease~~increase of $116.10 million, or 32.62%, ~~decline~~growth on consolidated ~~first~~second quarter of 2024 selling, general, and administrative expenses, due to non-cash share-based compensation related to the ~~new~~ equity awards granted to management and certain full-time employees ~~in conjunction with the IPO~~; ~~and~~

•

aan ~~decrease~~increase of $114.78 million, or 05.64%, ~~decline~~increase onin consolidated ~~first~~second quarter of 2024 selling, general, and administrative expenses, as a result of an increase in ~~other~~acquisition, ~~operational~~integration ~~expenses~~and ~~year~~transaction-~~over-year.~~related expenses; and,

•

an increase of $4.3 million, or 1.6%, increase in consolidated second quarter of 2024 selling, general, and administrative expenses, as a result of an increase in other operational expenses year-over-year.

Interest Expense, net

Interest expense, net was $38.8 million for the three months ended June 30, 2025, as compared with $43.3 million for the three months ended June 30, 2024, a decrease of $4.5 million or 10.4%. The decrease primarily resulted from a decrease in both the variable-rate and applicable margin for the three months ended June 30, 2025 as compared to the prior period, offset by a $5.1 million decrease in interest income received related to cash flow hedges of interest rate risk.

Income Tax Expense (Benefit)

Income tax expense was $1.2 million for the three months ended June 30, 2025, as compared with an income tax benefit of $13.1 million for the three months ended June 30, 2024, an increase in the expense of $14.4 million. The increase in the income tax expense is primarily driven by the increase in pre-tax book income for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, and a decrease in the effective tax rate for the three months ended June 30, 2025 of 12.7% compared to 283.3% for the three months ended June 30, 2024. The decrease in the effective tax rate is primarily as a result of $1.4 million in tax benefits resulting from the recognition of excess tax benefits from stock-based compensation and partially offset by limitations on the deductibility of certain executive compensation as a percentage of estimated pre-tax book income for the three months ended June 30, 2025. In addition, the discrete tax benefit related to the Silver matter increased the effective tax rate on pre-tax book loss for the three months ended June 30, 2024.

Net Income

Net income was $8.5 million for the three months ended June 30, 2025, as compared with $8.5 million for the three months ended June 30, 2024, an increase of $0.1 million or 0.6%. The increase in net income is primarily attributable to the increase in gross profit and the aforementioned decrease in interest expense, net, offset by an increase in selling, general, and administrative expenses and income tax expense.

Adjusted EBITDA (1)

Adjusted EBITDA was $142.5 million for the three months ended June 30, 2025, as compared with $110.6 million for the three months ended June 30, 2024, an increase of $31.9 million or 28.8%. The increase primarily resulted from the following segment activity and factors:

•

an increase of $36.0 million, or 32.5% growth on consolidated second quarter of 2024 Adjusted EBITDA, as a result of growth in our Pharmacy Solutions and Provider Services segments. See additional discussion in “—Segment Results of Operations” below; offset by

•

a decrease of $4.1 million, or 3.7% decline on consolidated second quarter of 2024 Adjusted EBITDA, as a result of increases in certain public company costs incurred, investments in information technology, and positions to support growth within the business.

(1) Reconciliation of GAAP to non-GAAP results is provided below under the section entitled “Non-GAAP Financial Measures.”

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

The following table sets forth, for the periods indicated, our consolidated results of operations.


($ in thousands)	For the Six Months Ended June 30,
						Change
	2025		2024			Amount			%
Revenues:
Products	$	5,322,272	$	4,091,526		$	1,230,746			30.1	%
Services		703,555		632,494			71,061			11.2	%
Total revenues		6,025,827		4,724,020			1,301,807			27.6	%
Cost of goods		4,884,617		3,738,860			1,145,757			30.6	%
Cost of services		427,989		380,493			47,496			12.5	%
Gross profit		713,221		604,667			108,554			18.0	%
Selling, general, and administrative expenses		613,925		581,349			32,576			5.6	%
Operating income		99,296		23,318			75,978			325.8	%
Loss on extinguishment of debt		—		12,726			(12,726	)	n.m.
Interest expense, net		80,541		97,752			(17,211	)		(17.6	)%
Income (loss) before income taxes		18,755		(87,160	)		105,915		n.m.
Income tax expense (benefit)		998		(39,619	)		40,617		n.m.
Net income (loss)	$	17,757	$	(47,541	)	$	65,298		n.m.
Adjusted EBITDA (1)	$	273,579	$	212,852		$	60,727

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