BrightSpring Health Services, Inc. Common Stock Morgan Stanley 24th Annual Global Healthcare Conference

Thank you. Yeah, thanks for having us.

Yeah, thanks for the question. We obviously had really strong performance first half, 44% EBITDA growth year-over-year. We expect continued strong growth embedded in our guidance throughout the rest of the year. Some of that outperformance has been in volume and was broad-based across all of our different business lines. As we think about both the pharmacy and provider businesses, both have performed really well from a volume perspective. We had new LDD wins, many in the first half. We've had some new ones that we've launched since we last spoke at quarter end. Then we've had some updates on the pull-through associated with those. We've had EBITDA performance, again, broad-based across both segments and performance. We've had generics have performed ahead of expectations, and are expected growth throughout the rest of the year.

We have had lean and automation efficiency initiatives that have come online and as those have been implemented, we felt comfortable to put that into our guidance as well. As we think about our philosophy, we continue to put out guidance that we have a high confidence in our ability to deliver under a number of various different scenarios, and we are always working to exceed those expectations. Again, with volume growth underpinned by our high-quality services and maximizing leverage of our lean and automation and across our cost structure.

Yeah. I just like to mention that we manage our company ultimately for long-term, sustainable, and durable GP dollar and EBITDA dollar growth. GP per script ultimately is an output of 75 different factors across all of our different business lines and performance there. As it relates, and we do expect sequential growth throughout the rest of the year in terms of GP dollars. We did mention that we expect stability to maybe slight benefit in GP per script throughout the rest of the year. So those are some things that we have mentioned during the call after the quarter. The seasonality really relates to something that happens every first quarter, and it relates to price appreciation that occurs on branded drugs.

To the extent that we have any inventory on hand at the end of the year in advance of our price appreciation, we get the benefit associated with that, and that typically happens in Q1. That tends to be, at least the last couple of years, has been a very similar dollar impact, and so we did provide the dollar impact per script as it related to the seasonality throughout the rest of the year.

From a generic standpoint, we do not have a lot of biosimilars. That is more related to infusion. But from a generic standpoint, we have a number of different drivers that are impacting ultimately our profitability. Those items from a pharmacy perspective are certainly volume growth, new LDD wins, the ramp of LDD wins that we have had, generic conversions, and the growth of those generics as they ramp throughout the incremental component. We think of those generics as being a net tailwind ultimately across each of the next several quarters. Then ultimately, infusion, you have volume growth across those from a driver perspective, and then improved profitability and margin expansion. In the home and community pharmacy, as we think about those drivers and leverage our cost per script is really kind of the primary focus in addition to volume growth that we are focused on.

Yeah. One of the things to remember, this is why I mentioned early on that we are focused on the dollar growth, in addition to obviously managing each of the components of script growth for each different business that we have. Mix definitely has an impact as each of those different pharmacy businesses has varying different GP and EBITDA profile, and we are focused on driving maximum growth across each individual business line, which can then play out from a script standpoint. If you were to go to 2024, you are right. There were periods where we had a negative GP per script, but really significant GP dollar growth or even in some cases, margin expansion, and that was really a mix-related dynamic. Again, we think the right metric to focus on is the dollar growth.

But ultimately, from a sustainability standpoint, we've continued to drive outsized volume in certain areas like specialty pharmacy, which has a higher script growth as well.