• Revenue: $61.4 million for fiscal Q1 2025, a 2% decrease from $62.6 million in fiscal Q1 2024.
• Adjusted EBITDA: $14 million at a 22.8% margin for Q1 2025, compared to $15.3 million at a 24.5% margin for Q1 2024.
• Net Loss: Improved to $1.1 million or $0.03 per diluted share for Q1 2025, from $1.5 million or $0.04 per diluted share for Q1 2024.
• Operating Expenses: 49.5% of revenue in Q1 2025, compared to 47.6% in Q1 2024.
• Cash Flow from Operations: $9.3 million for the three months ended December 31, 2024, compared to $10.6 million in the prior period.
• Cash on Hand: $15.5 million as of December 31, 2024, compared to $16.2 million as of September 30, 2024.
• Customer Base: Grew by 1% to 157,000 unique patients as of December 31, 2024.
• Recurring Revenue: Approximately 77% of total revenue for Q1 2025.
• CapEx: $9.4 million for fiscal Q1 2025, compared to $7.3 million in fiscal Q1 2024.
• Net Leverage: 1.5 times, providing flexibility for strategic initiatives.

• Warning! GuruFocus has detected 4 Warning Signs with QIPT.

Release Date: February 11, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Quipt Home Medical Corp (NASDAQ:QIPT) achieved stable revenue generation of $61.4 million in the first quarter of fiscal 2025, with a strong sequential improvement in adjusted EBITDA margin to 22.8%.
• The company reported a significant improvement in adjusted EBITDA, reaching $14 million, reflecting proactive steps to streamline operations and optimize organizational structure.
• Quipt Home Medical Corp (NASDAQ:QIPT) has expanded to 135 locations across 26 states, serving over 314,000 active patients, strengthening its coast-to-coast reach.
• The company's sleep business remains strong, with GLP-1 medications having no negative impact on demand, and referral activity for new device setups remaining solid.
• The regulatory environment remains stable, allowing Quipt Home Medical Corp (NASDAQ:QIPT) to operate with greater efficiency and confidence, supporting both margin performance and strategic execution.

Negative Points

• Revenue for fiscal Q1 2025 decreased by 2% year-over-year, from $62.6 million in fiscal Q1 2024 to $61.4 million.
• The discontinuation of the Medicare 7,525 blended rate and the withdrawal of Medicare Advantage members negatively impacted revenue and operating results.
• A disposable supply contract was not renewed in November 2024, resulting in an estimated annual impact of approximately $8 million.
• Adjusted EBITDA for Q1 2025 decreased by 8.7% compared to Q1 2024, from $15.3 million to $14 million.
• Operating expenses as a percentage of revenue increased to 49.5% in fiscal Q1 2025 compared to 47.6% in the corresponding period in 2024.

Q & A Highlights

Q: Can you provide background on the contract termination for disposable supplies and its impact on fiscal '25? A: Gregory Crawford, CEO: The contract was for incontinence supplies with a state-operated home health agency, terminated on November 1st. We expect a $2.5 million headwind for calendar '25, with a heavier impact in the first quarter.

Q: How should we think about the headwinds from the capitated contract with Medicare Advantage members? A: Hardik Mehta, CFO: The impact was most significant in Q2 and Q3 of last year. We expect about $1 million in Q2 and $750,000 to $800,000 in Q3 of fiscal '25. The PPO plans have stabilized, and we're making progress with referrals.

Q: What are your expectations for margin progression and achieving a 25% adjusted EBITDA margin? A: Hardik Mehta, CFO: We aim for steady margin improvement throughout the year. While 25% is a long-term target, it may not be achievable in the next three quarters. However, with more scale, it remains an attainable goal.

Q: What steps are being taken to drive growth in the resupply business? A: Gregory Crawford, CEO: We're improving catchment rates for new setups and enhancing sleep compliance. We're also focusing on patient retention beyond the initial 90 days to drive more patients into the resupply program.

Q: How is the switch from IFRS to US GAAP affecting bad debt expense reporting? A: Hardik Mehta, CFO: Historically, bad debt expense was around 4% to 4.5%. We expect similar percentages in Q1 and Q2, with potential declines in the second half of 2025 due to improvements in our RCM team.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.