Release Date: May 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Quipt Home Medical Corp (QIPT, Financial) operates over 130 locations across 26 states, serving over 223,000 active patients, showcasing a strong national presence.
- The company maintains a focus on respiratory care, which comprises approximately 75% of its product mix, aligning with macro trends such as an aging population and rising prevalence of chronic respiratory conditions.
- Adjusted EBITDA margin was 23.3%, demonstrating strong operational efficiency despite revenue softness.
- Quipt Home Medical Corp (QIPT) has a solid recurring revenue base, accounting for 81% of total revenue in Q2 2025.
- The company has a strong balance sheet with $17.1 million in cash and total liquidity of $30.7 million, providing financial flexibility for growth initiatives.
Negative Points
- Revenue for fiscal Q2 2025 was $57.4 million, down 6% year-over-year, reflecting softer-than-expected performance.
- The company's customer base declined 2% year-over-year, serving 146,000 unique patients as of March 31, 2025.
- A disposable supply contract was not renewed, contributing to the overall revenue impact.
- Net loss for Q2 2025 was $3 million or $0.07 per diluted share, compared to $739,000 or $0.02 per diluted share for Q2 2024.
- Operating expenses as a percentage of revenue increased to 50.8% in fiscal Q2 2025 compared to 48.9% in the corresponding period in 2024.
Q & A Highlights
Q: Can you provide more details on the revenue impact from the Humana contract and the disposable supply contract issue?
A: Gregory Crawford, CEO: The revenue impact was due to referral patterns rather than the contract size. We underestimated the referral impact from Humana's PPO plans. The disposable supply contract was not renewed due to a change in staffing, which was unexpected as it was a long-standing contract.
Q: Do you expect your growth engine to become effective this quarter?
A: Hardik Mehta, CFO: Yes, we have visibility into our April numbers, and trends suggest stabilization and some uptick in rental revenue and recovery in our supplies business. However, it's still early, and more data is needed.
Q: Can you explain the cash flow situation and what you're doing to generate greater cash going forward?
A: Hardik Mehta, CFO: The cash flow situation is affected by timing and better controls on CapEx spend. We encourage looking at year-to-date numbers for a more stabilized pattern. The Philips recall has created cash constraints, but we expect stabilization over the next couple of quarters.
Q: Do you have visibility on when the CapEx overspend with Philips will clear up?
A: Hardik Mehta, CFO: We expect the situation to stabilize over the next couple of quarters. We initially aimed to recycle equipment by June, but it will likely extend into the quarter ending September or December due to Philips' processing delays.
Q: Can you provide commentary on the sequential and year-over-year revenue drop and its attribution to various factors?
A: Hardik Mehta, CFO: While we don't break down the impact publicly, similar patterns can be deduced from last quarter. The drop is attributed to Humana, the disposable contract, and seasonal deductible resets.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
