10-K – 2026-02-27 – btsg-20251231.htm

In addition, each of our facilities and agencies must comply with required conditions of participation in the Medicare program. If we fail to meet the conditions of participation at a facility, we may receive a notice of deficiency from the applicable state surveyor. If that facility then fails to institute an acceptable plan of correction to remediate the deficiency within the correction period provided by the state surveyor, that care center could be terminated from the Medicare program or subjected to alternative sanctions. CMS may impose temporary management, direct a plan of correction, direct training, or impose payment suspensions and civil monetary penalties, in each case, upon providers who fail to comply with the conditions of participation. Termination of one or more of our facilities from the Medicare program for failure to satisfy the program’s conditions of participation, or the imposition of alternative sanctions, could disrupt operations, require significant attention by management, or have a material adverse effect on our reputation, business, financial condition, and results of operations.
In addition, we, like other healthcare providers, are subject to ongoing investigations by the U.S. Department of Health and Human Services Office of Inspector General, the United States Department of Justice, or DOJ, and State Attorneys General into the billing of services provided to Medicare and Medicaid patients, including whether such services were properly documented and billed, whether services provided were medically necessary, and general compliance with conditions of participation and conditions of payment in the Medicare and Medicaid programs. We are also subject to ongoing investigations by the Drug Enforcement Agency, or DEA, in our pharmacy operations. For example, a business we operate as Embrace Hospice is subject to an ongoing investigation, including by the DOJ and the DEA, of potential violations of the False Claims Act, Controlled Substances Act, and other laws, including allegations relating to hospice services that were not reasonable and medically necessary. While we believe our practices are compliant, the investigation continues to evolve and could become extensive and result in the government pursuing civil or criminal legal claims against us that may result in substantial liabilities. Private payors such as third-party insurance and managed care entities also often reserve the right to conduct audits. If billing errors are identified in the sample of reviewed claims, the billing error can be extrapolated to all claims filed which could result in a larger overpayment than originally identified in the sample of reviewed claims. Our costs to respond to and defend any such reviews, audits, and investigations are significant and are likely to increase in the current enforcement environment. These audits and investigations may require us to refund or retroactively adjust amounts that have been paid under the relevant government program or from other payors, and, depending on the findings, the resolution of these audits and investigations could require payment of significant recoupments and other monetary penalties. For example, we have been, and may continue to be, subject to audits and recoupments related to the adequacy of clinical documentation supporting claims submitted to the Medicare and Medicaid programs or other third-party payors. Although we provide education and training to the members of our workforce regarding improvements to clinical documentation and we are working with our vendors regarding system improvements, such measures may not be effective or implemented within the desired timeframes or at all, and we may be subject to additional audits in the future. Further, an adverse review, audit, or investigation could result in other adverse consequences, particularly if the underlying conduct is found to be pervasive or systemic. These consequences include: (1) state or federal agencies imposing significant fines, penalties, and other sanctions on us; (2) loss of our right to participate in the Medicare or Medicaid programs or one or more third-party payor networks; (3) indemnity claims asserted by patients and others for which we provide services; and (4) damage to our reputation in various markets, which could adversely affect our ability to attract patients and employees. If they were to occur, these consequences could have a material adverse effect on our business, financial condition, and results of operations.
Quality reporting requirements may negatively impact Medicare reimbursement.
We are subject to certain reporting requirements, and if we fail to comply with those requirements, our future Medicare reimbursement could be impacted. In particular, the ACA directed the Secretary of HHS to establish quality reporting requirements for hospice programs. Failure to submit required quality data will result in a 2% reduction to the market basket percentage increase for that year. This quality reporting program is currently “pay-for-reporting,” meaning it is the act of submitting data that determines compliance with program requirements. Similarly, in the Calendar Year 2015 Home Health Final Rule, CMS proposed to establish a new “Pay-for-Reporting Performance Requirement” with which provider compliance with quality reporting program requirements can be measured. Home health agencies that do not submit quality measure data to CMS are subject to a 2% reduction in their annual home health payment update percentage. Currently, home health agencies are required to report prescribed quality assessment data for a minimum of 90% of all patients. The Improving Medicare Post-Acute Care Transformation Act of 2014, or the IMPACT Act, requires the submission of standardized data by home health agencies and other providers. Specifically, the IMPACT Act requires, among other significant activities, the reporting of standardized patient assessment data with regard to quality measures, resource use, and other measures. Failure to report data as required will subject providers to a 2% reduction in market basket prices then in effect.
There can be no assurance that we will continue to meet quality reporting requirements in the future which may result in us seeing a reduction in our Medicare reimbursements. We could also incur meaningful additional expenses in an effort to comply with additional and changing quality reporting requirements.
 

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Risks Related to Our Indebtedness
Our high level of indebtedness requires that we dedicate a substantial portion of our cash flows to debt service payments and reduces the funds that would otherwise be available for other general corporate purposes and other business opportunities, which could adversely affect our operating performance, growth, profitability and financial condition, which in turn could make it more difficult for us to generate cash flow sufficient to satisfy all of our obligations under our indebtedness.
As of December 31, 2025, we had approximately $2,521.3 million outstanding under the First Lien Term Loan Facility. As of December 31, 2025, we had $475.0 million of borrowing capacity available under the Revolver as there were no borrowings under the Revolver or letters of credit outstanding, and $62.8 million of letters of credit outstanding under the LC Facility. On February 21, 2024, we used a portion of the net proceeds received from the IPO and the concurrent public offering by the Company of the 6.75% Tangible Equity Units (“TEUs”) to repay $343.3 million of the borrowings under the First Lien Term Loan Facility, and established a new Tranche B-4 Term Loan to refinance the remaining $2,566.0 million of First Lien Term Loan Facility borrowings. We also used a portion of the IPO and concurrent offering proceeds to repay all borrowings under the Second Lien Facility. See Note 6 “Debt and Derivatives” within the audited consolidated financial statements and related notes, included elsewhere in this Annual Report on Form 10-K.
Our overall level of indebtedness requires that we dedicate a substantial portion of our cash flows to debt service payments. The First Lien Term Loan Facility requires quarterly principal and periodic cash interest payments through February 21, 2031. The Revolving Credit Facility requires periodic cash interest payments on outstanding amounts through June 30, 2028.
Our substantial indebtedness reduces the funds that would otherwise be available for operations, future business opportunities, and payments of our debt obligations and limits our ability to:
• obtain additional financing, if necessary, for working capital and operations, or such financing may not be available on favorable terms;

• make needed capital expenditures;

• make strategic acquisitions or investments or enter into joint ventures;

• react to changes or withstand a future downturn in our business, our industries or the economy in general;

• meet budget targets and forecasts of future results;

• engage in business activities, including future opportunities that may be in our interest; and

• react to competitive pressures or compete with competitors with less debt.

These limitations could adversely affect our operating performance, growth, profitability, and financial condition, which would make it more difficult for us to generate cash flow sufficient to satisfy our obligations under our indebtedness.
Our ability to make scheduled payments on our debt obligations also depends on our financial condition, results of operations, and capital resources, which are subject to, among other things: the business, financial, economic, industry, competitive, regulatory, and other factors discussed in these risk factors, and on other factors, some of which are beyond our control, including: the level of capital expenditures we make, including those for acquisitions, if any; our debt service requirements; fluctuations in our working capital needs; our ability to borrow funds and access capital markets; and restrictions on debt service payments and our ability to make working capital borrowings for debt service payments contained in our debt instruments.
If we are unable to generate sufficient cash flow to permit us to make scheduled service payments on our debt, then we will be in default and holders of that debt and potentially certain of our other debt could declare all outstanding principal and interest to be due and payable. If our existing indebtedness were to be accelerated, there can be no assurance that we would have, or be able to obtain, sufficient funds to repay such indebtedness in full. In addition, upon the occurrence and continuance of an event of a default, the lenders under the Revolving Credit Facility could terminate their further commitments to loan money and our secured lenders under the First Lien Facilities could foreclose against the assets securing their borrowings, and we could be forced into bankruptcy or liquidation.
Despite our high level of indebtedness, we may still be able to incur substantially more debt, which could further increase the risks to our financial condition described above.
Despite our high level of indebtedness, we may be able to incur significant additional indebtedness in the future, including off-balance sheet financings, trade credit, contractual obligations, and general and commercial liabilities. Although the credit agreements

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governing the First Lien Facilities contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial. These restrictions also will not prevent us from incurring obligations that do not constitute indebtedness, and additionally we have further borrowing capacity under the Revolving Credit Facility. As of December 31, 2025, we had $475.0 million of borrowing capacity available under the Revolver as there were no borrowings under the Revolver or letters of credit outstanding, and $62.8 million of letters of credit outstanding under the LC Facility.
We may be able to increase the commitments under the Revolving Credit Facility, subject to certain conditions, which would be secured indebtedness. We may also be able to increase the capacity under the First Lien Term Loan Facility, subject to certain conditions, which would be secured indebtedness. The addition of new debt to our current debt levels could further exacerbate the related risks to our financial condition that we now face.
If we are unable to generate sufficient cash to service all of our indebtedness, we may be forced to take other actions to fund the satisfaction of our obligations under our indebtedness, which may not be successful.
If our cash flow is insufficient to fund our debt service obligations, we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to dispose of material assets or operations, raise additional debt or equity capital or restructure or refinance our indebtedness. However, we may not be able to implement any such alternative measures on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow us to meet our scheduled debt service obligations. Even if new financing were available, it may be on terms that are less attractive to us than our then existing indebtedness or it may not be on terms that are acceptable to us. In addition, the credit agreements governing the First Lien Facilities restrict our ability to dispose of assets and use the proceeds from those dispositions and may also restrict our ability to raise debt or equity capital to be used to repay other indebtedness when it becomes due. Thus, we may not be able to consummate those dispositions or to obtain proceeds in an amount sufficient to meet any debt service obligations then due.
If we cannot generate sufficient cash flow to permit us to make scheduled payments on our debt, then we will be in default and holders of that debt could declare all outstanding principal and interest to be due and payable. If our existing indebtedness were to be accelerated, there can be no assurance that we would have, or be able to obtain, sufficient funds to repay such indebtedness in full. In addition, in the event of a default, the lenders under the Revolving Credit Facility could terminate their further commitments to loan money and our secured lenders under the First Lien Facility could foreclose against the assets securing their borrowings and we could be forced into bankruptcy or liquidation.
The terms of our outstanding indebtedness may restrict our current and future operations, particularly our ability to respond to changes or to take certain actions.
The credit agreements governing the First Lien Facilities contain restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our best interest, including restrictions on our ability to:
• incur additional indebtedness and guarantee indebtedness;

• pay dividends or make other distributions in respect of, or repurchase or redeem, capital stock;

• prepay, redeem, or repurchase certain debt;

• make loans, investments, and other restricted payments;

• sell or otherwise dispose of assets;

• incur liens;

• enter into transactions with affiliates;

• alter the businesses we conduct;

• enter into agreements restricting our subsidiaries’ ability to pay dividends; and

• consolidate, merge, or sell all or substantially all of our assets.

Additionally, at certain times, the Revolving Credit Facility requires maintenance of a certain minimum fixed charge coverage ratio. Our ability to comply with the covenants and restrictions contained in our credit agreements may be affected by events beyond

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our control. If market or other economic conditions deteriorate, our ability to comply with these covenants and restrictions may be impaired.
A breach of the covenants under one of these agreements could result in an event of default under the applicable indebtedness, which, if not cured or waived, could have a material adverse effect on our business, results of operations, and financial condition. Such a default, if not cured or waived, may allow the creditors to accelerate the related debt principal and/or related interest payments and may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies. If our existing indebtedness were to be accelerated, there can be no assurance that we would have, or be able to obtain, sufficient funds to repay such indebtedness in full. In addition, an event of default under the credit agreements governing the First Lien Facilities would permit the lenders under our Revolving Credit Facility to terminate all commitments to extend further credit under that facility. Furthermore, if we were unable to repay the amounts due and payable under the First Lien Facilities, those lenders could proceed against the collateral granted to them to secure that indebtedness, and we could be forced into bankruptcy or liquidation.
Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.
Borrowings under the First Lien Facilities are at variable rates of interest and expose us to interest rate risk. As of December 31, 2025, while $1.5 billion notional amount of our outstanding debt was fixed through interest rate swap agreements, the other $1.1 billion of our outstanding debt remained subject to variable rates of interest and the related risk. If interest rates increase, our debt service obligations on the variable rate indebtedness will increase even though the amount borrowed will remain the same, and our net income and operating cash flows, including cash available for servicing our indebtedness, will correspondingly decrease.
The U.S. Federal Reserve Board significantly increased the federal funds rate in 2022 and 2023 and although it slightly reduced the federal funds rate in 2024 and continued to reduce the federal funds rate in 2025, may make further rate increases to combat inflation in the United States, which increased the borrowing costs on our variable rate debt and may increase the cost of any new debt we incur. Any further additional federal funds rate increases could in turn make our financing activities, including those related to our acquisition activity, more costly and limit our ability to refinance existing debt when it matures or pay higher interest rates upon refinancing and increase interest expense on refinanced indebtedness.
If the financial institutions that are lenders under the Revolving Credit Facility fail to extend credit under the facility or reduce the borrowing base, our liquidity and results of operations may be adversely affected.
One of our sources of liquidity is the Revolving Credit Facility. Each financial institution that is a lender under the Revolving Credit Facility is responsible on a several but not joint basis for providing a portion of the loans to be made under the facility. If any participant or group of participants with a significant portion of the commitments under the Revolving Credit Facility fails to satisfy its or their respective obligations to extend credit under the facility and we are unable to find a replacement for such participant or participants on a timely basis (if at all), our liquidity may be adversely affected.
In addition, the lenders under the Revolving Credit Facility may reduce the borrowing base under the facility in certain circumstances, which could adversely impact our liquidity and results of operations.
Our high level of indebtedness may hinder our ability to negotiate favorable terms with our suppliers, which could negatively impact our operating performance and, thus, could make it more difficult for us to generate cash flow sufficient to satisfy all of our obligations under our indebtedness.
Our high level of indebtedness may adversely affect our credit profile or rating, which may adversely affect our ability to negotiate favorable trade terms from our current or future suppliers, including pricing, payment, delivery, inventory, transportation, defective and marketing allowances, and other terms, and may increase our need to support pharmaceutical purchases with letters of credit. We may also be unable to negotiate favorable trade terms for our current or future service and non-pharmaceutical vendors, including vendors that assist us in critical aspects of the business such as transportation and logistics, supplies, professional services, insurance and risk management, procurement, marketing and advertising, operations, and information technology. This could negatively impact the profitability of our business and our ability to effectively compete against competitors. Thus, our high level of indebtedness could adversely affect the profitability of our business, which could make it more difficult for us to generate cash flow sufficient to satisfy our obligations under our indebtedness.

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General Risk Factors
We incur additional costs associated with the requirements of being a public company, and our management is required to devote substantial time to compliance adding complexity to running our business.
As a public company, we incur significant legal, regulatory, finance, accounting, investor relations, insurance, and other expenses that we did not incur as a private company, including costs associated with public company governance and reporting requirements and costs of recruiting and retaining non-executive directors. We also incur costs associated with the Sarbanes-Oxley Act, and the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, and related rules implemented by the SEC and costs in connection with continued listing on Nasdaq. Additionally, we are no longer a “controlled company” under the rules of Nasdaq and as such are no longer eligible for certain governance exemptions under those rules. The expenses incurred by public companies generally for reporting and corporate governance purposes have been increasing. Our efforts to comply with these rules and regulations increase our legal and financial compliance costs and make some activities more time-consuming and costly. Our management devotes a substantial amount of time to ensure that we comply with all of these requirements, diverting the attention of management away from revenue-producing activities. These laws and regulations also could make it more difficult or costly for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. These laws and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as our executive officers. Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our common stock and the Units, fines, sanctions and other regulatory action, and potentially civil litigation.
Failure to comply with requirements to design, implement, and maintain effective internal controls could have a material adverse effect on our business and stock price.
As a public company, we are subject to significant requirements for enhanced financial reporting and internal controls. We have made, and will continue to make, changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a public company. The process of designing and implementing effective internal controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environment, and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company. The measures we take may not be sufficient to satisfy our obligations as a public company and if we are unable to establish or maintain appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations on a timely basis, result in material misstatements in our consolidated financial statements, and harm our results of operations. In addition, we are required, pursuant to Section 404(a) of the Sarbanes-Oxley Act, or Section 404 to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. The rules governing the standards that must be met for our management to assess our internal control over financial reporting are complex and require significant documentation, testing, and possible remediation. Testing and maintaining internal controls may divert our management’s attention from other matters that are important to our business.
In connection with the implementation of the necessary procedures and practices related to internal control over financial reporting, we may identify deficiencies that we may not be able to remediate in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with the requirements of Section 404. In addition, we may encounter problems or delays in completing the remediation of any deficiencies identified by us or our independent registered public accounting firm in connection with the issuance of their attestation report.
Our testing, or the subsequent testing (if required) by our independent registered public accounting firm, may reveal deficiencies in our internal control over financial reporting that are deemed to be material weaknesses. Any material weaknesses could result in a material misstatement of our annual or quarterly consolidated financial statements or disclosures that may not be prevented or detected. If we are unable to successfully remediate any future material weaknesses in our internal control over financial reporting, or if we identify any material weaknesses, the accuracy and timing of our financial reporting may be adversely affected, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to Nasdaq listing requirements.
We may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 or our independent registered public accounting firm may not issue an unqualified opinion. If either we are unable to conclude that we have effective internal control over financial reporting or our independent registered public accounting firm is unable to provide us with an unqualified report, investors could lose confidence in our reported financial information, which could have a material adverse effect on the trading price of our common stock.

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You may be diluted by the future issuance of additional common stock in connection with our incentive plans, acquisitions or otherwise.
We have approximately 1.3 billion shares of common stock authorized but unissued. Our second amended and restated certificate of incorporation authorizes us to issue these shares of common stock, options, and other equity awards relating to common stock for the consideration and on the terms and conditions established by our board of directors in its sole discretion, whether in connection with acquisitions or otherwise. Issuances of common stock or voting preferred stock would reduce your influence over matters on which our stockholders vote, and, in the case of issuances of preferred stock, would likely result in your interest in us being subject to the prior rights of holders of that preferred stock, if any.
We have 3,584,759 Units outstanding, and each purchase contract that is a component of a Unit will settle automatically on the mandatory settlement date into between 3.2733 and 3.8461 shares of our common stock, subject to certain anti-dilution adjustments, which may result in dilution to investors.
We have reserved, or will reserve in the future, shares for issuance under our 2024 Incentive Plan. Any common stock that we issue, including under our 2024 Incentive Plan, including the issuance of the New Equity Awards, or other equity incentive plans that we may adopt in the future, would dilute the percentage ownership held by our then-current investors. In the future, we may also issue our securities in connection with investments or acquisitions. The number of shares of our common stock issued in connection with an investment or acquisition could constitute a material portion of our then-outstanding shares of our common stock. Any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to investors.
The Units may adversely affect the market price of our common stock.
The market price of our common stock is likely to be influenced by the Units. For example, the market price of our common stock could become more volatile and could be depressed by:
• investors’ anticipation of the potential resale in the market of a substantial number of additional shares of our common stock received upon settlement of the purchase contracts that are a component of the Units;

• possible sales of our common stock by investors who view the Units as a more attractive means of equity participation in us than owning shares of our common stock; and

• hedging or arbitrage trading activity that may develop involving the Units and our common stock.

Our ability to raise capital in the future may be limited.
Our business and operations may consume resources faster than we anticipate. In the future, we may need to raise additional funds through the issuance of new equity securities, debt, or a combination of both. Additional financing may not be available on favorable terms or at all. If adequate funds are not available on acceptable terms, we may be unable to fund our capital requirements. If we issue new debt securities, the debt holders would have rights senior to holders of our common stock to make claims on our assets and the terms of any debt could restrict our operations, including our ability to pay dividends on our common stock. If we issue additional equity securities or securities convertible into equity securities, existing stockholders will experience dilution and the new equity securities could have rights senior to those of our common stock. Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing, or nature of our future offerings. Thus, you bear the risk of our future securities offerings reducing the market price of our common stock and diluting your interest.
Because we have no current plans to pay cash dividends on our common stock, you may not receive any return on investment unless you sell your common stock for a price greater than that which you paid for it.
We have no current plans to pay cash dividends on our common stock. The declaration, amount and payment of any future dividends will be at the sole discretion of our board of directors, and will depend on, among other things, general and economic conditions, our results of operations and financial condition, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax, and regulatory restrictions, and implications on the payment of dividends by us to our stockholders or by our subsidiaries to us, including restrictions under our credit agreements and other indebtedness we may incur, and such other factors as our board of directors may deem relevant. As a result, you may not receive any return on an investment in our common stock unless you sell our common stock for a price greater than your purchase price.

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BrightSpring Health Services, Inc. depends on its subsidiaries for cash to fund its operations and expenses, including future dividend payments, if any, and to meet its debt obligations.
Our operations are conducted through our subsidiaries and our ability to generate cash to meet our debt service obligations (including the amortizing notes that are components of the Units) or to make future dividend payments, if any, is highly dependent on the earnings of, and the receipt of funds from, our subsidiaries via dividends or intercompany loans. We do not currently expect to declare or pay dividends on our common stock for the foreseeable future; however, to the extent that we determine in the future to pay dividends on our common stock, the agreements governing our indebtedness may restrict the ability of our subsidiaries to pay dividends or otherwise transfer assets to us. In addition, Delaware law may impose requirements that may restrict our ability to pay dividends to holders of our common stock.
Future sales or issuances, or the perception of future sales or issuances, by us or our existing stockholders, or the settlement of the purchase contracts, could cause the market price for our common stock to decline.
The sale or issuance of substantial amounts of shares of our common stock or other securities convertible or exchangeable into shares of our common stock in the public market, or the settlement of the purchase contracts that are a component of the Units, or the perception that such sales or issuances could occur, including sales by our existing stockholders, could harm the prevailing market price of shares of our common stock. These sales or issuances, or the possibility that these sales or issuances may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.
Anti-takeover provisions in our organizational documents could delay or prevent a change of control.
Certain provisions of our second amended and restated certificate of incorporation and amended and restated bylaws may have an anti-takeover effect and may delay, defer or prevent a merger, acquisition, tender offer, takeover attempt, or other change of control transaction that a stockholder might consider in its best interest, including those attempts that might result in a premium over the market price for the shares held by our stockholders.
These provisions provide for, among other things:
• a classified board of directors, as a result of which our board of directors is divided into three classes, with each class serving for staggered three-year terms;

• the ability of our board of directors to issue one or more series of preferred stock;

• advance notice requirements for nominations of directors by stockholders and for stockholders to include matters to be considered at our annual meetings; and

• certain limitations on convening special stockholder meetings;

• the removal of directors only for cause and only upon the affirmative vote of the holders of at least 66 2/3% of the shares of common stock entitled to vote generally in the election of directors; and

• that certain provisions may be amended only by the affirmative vote of at least 66 2/3% of shares of common stock entitled to vote generally in the election of directors.

These anti-takeover provisions could make it more difficult for a third party to acquire us, even if the third party’s offer may be considered beneficial by many of our stockholders. These provisions also may have the effect of preventing changes in our board of directors and may make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interests. As a result, our stockholders may be limited in their ability to obtain a premium for their shares.
Our second amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware (or if such court does not have jurisdiction, another state or the federal courts (as appropriate) located within the State of Delaware) will be the exclusive forum for substantially all disputes between us and our stockholders and the federal district courts will be the exclusive forum for Securities Act and Exchange Act claims, which could limit our stockholders’ ability to bring a suit in a different judicial forum than they may otherwise choose for disputes with us or our directors, officers, team members or stockholders.
Our second amended and restated certificate of incorporation provides that unless we consent to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or if such court does not have jurisdiction, another state or the federal courts (as appropriate) located within the State of Delaware) will, to the fullest extent permitted by law, be the sole and exclusive forum for

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any (i) derivative action or proceeding brought on behalf of our Company, (ii) action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, or other employee or stockholder of our Company to the Company or our stockholders, creditors, or other constituents, (iii) action asserting a claim against the Company or any current or former director or officer of the Company arising pursuant to any provision of the Delaware General Corporation Law, or the DGCL, or our second amended and restated certificate of incorporation or our amended and restated bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (iv) action asserting a claim governed by the internal affairs doctrine. Our second amended and restated certificate of incorporation also provides that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the U.S. federal district courts will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the federal securities laws of the United States, including any claims under the Securities Act and the Securities Exchange Act of 1934, as amended, or the Exchange Act. However, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce a duty or liability created by the Securities Act or the rules and regulations thereunder and accordingly, we cannot be certain that a court would enforce such provision.
If tax laws change or we experience adverse outcomes resulting from examination of our tax returns or disagreements with taxing authorities, it could adversely affect our business, financial condition, and results of operations.
We are subject to federal, state, and local tax laws and regulations in the United States. The application and interpretation of these laws in different jurisdictions affect our operations in complex ways and are subject to change, and some changes may be retroactively applied. Our future effective tax rates and the value of our deferred tax assets could be adversely affected by changes in tax laws, including impacts of the One Big Beautiful Bill Act, enacted July 4, 2025. In addition, in August 2022, the IRA was signed into law. The IRA, among other things, includes a new 15% corporate minimum tax as well as a 1% excise tax on corporate stock repurchases, subject to certain exceptions. The United States is also actively considering changes to existing U.S. tax laws that, if enacted, could increase our tax obligations or require us to change the manner in which we operate our business.
In addition, we are subject to the examination of our income and other tax returns by the Internal Revenue Service and other tax authorities. We regularly assess the likelihood of adverse outcomes resulting from such examinations to determine the adequacy of our provision for income taxes. Although we believe we have made appropriate provisions for taxes in the jurisdictions in which we operate, changes in the tax laws, or challenges from tax authorities under existing tax laws could adversely affect our business, financial condition, and results of operations.
It em 1B. Unresolved Staff Comments.
None.
Item 1C. Cybersecurity.
Risk Management and Strategy
We recognize the importance of identifying, assessing, and managing material risks associated with cybersecurity threats, which include, among other things, operational risks, intellectual property theft, fraud, extortion, harm to employees or patients, and violation of data privacy or security laws. We incorporate cybersecurity practices into our Enterprise Risk Management (ERM) approach, which is subject to oversight by our Board of Directors. Our cybersecurity policies and practices are aligned with relevant

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industry standards and are designed to detect, prevent, contain, and respond to cybersecurity threats and incidents in a prompt and effective manner.
Our cybersecurity risk management program is informed by prevailing security standards and is designed to provide a framework for evaluating and responding to cybersecurity risks. Key aspects of this risk management program include, but are not limited to:
• Identifying the source of a cybersecurity threat;

• Assessing the severity of a cybersecurity threat;

• Implementing cybersecurity countermeasures and mitigation strategies;

• Providing our employees with regular training on cybersecurity and the protection of our information systems;

• Maintaining and testing a business continuity and disaster recovery program;

• Maintaining insurance coverage intended to address cybersecurity and data breach risks; and

• Informing and updating management and, as needed, the Audit Committee and our Board of Directors of cybersecurity incidents that may pose a significant risk for the business.

 
Security events and data incidents are evaluated, ranked by severity, and prioritized for response and remediation. Incidents are evaluated to determine materiality, as well as operational and business impact, and reviewed for privacy impact.
We deploy technical safeguards that are designed to protect our information systems, products, operations and sensitive information from cybersecurity threats. These include firewalls, intrusion prevention and detection systems, disaster recovery capabilities, malware and ransomware prevention, access controls, and data protection. We provide periodic training for all personnel regarding cybersecurity threats, with such training appropriate to the roles, responsibilities and access of the relevant Company personnel. Our policies require all workers to report any real or suspected cybersecurity events.
Recognizing the complexity and evolving nature of cybersecurity threats, incidents and risks, we engage third-party experts, including cybersecurity consultants, to evaluate and support our risk management systems. We also rely on software support from third-party vendors to assist with evaluating, monitoring, and testing our information technology systems. These relationships enable us to leverage specialized knowledge and insights, to help ensure our cybersecurity strategies and processes remain effective. Our collaboration with these third parties includes regular audits, routine system monitoring, threat assessments, and consultation on potential security enhancements. We require third-party service providers with access to personal, confidential, or proprietary information to implement and maintain comprehensive cybersecurity practices consistent with applicable legal standards and industry best practices.
As of the date of this Annual Report on Form 10-K, we are not aware of any cybersecurity incidents that have materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of operations, or financial condition. For further discussion of the risks associated with cybersecurity incidents, as well as a description of an event that occurred in March 2023, see “Risk Factors—Risks Related to Our Business—Security breaches, loss of data, and other disruptions could compromise sensitive business or patient information, cause a loss of confidential patient data, employee data, personal information, or prevent access to critical information, and expose us to liability, litigation, and federal and state governmental inquiries and damage our reputation and brand.”
Governance
Our Board of Directors has overall oversight responsibility for our risk management, and delegates information security and related risk management oversight to the Audit Committee. The Audit Committee receives regular briefings on cybersecurity risks and risk management practices, including, for example, recent developments in the external cybersecurity threat landscape, evolving standards, vulnerability assessments, third-party and independent reviews, technological trends, as well as how management is addressing or mitigating those risks. The Audit Committee may also promptly receive information regarding any material cybersecurity incident that may occur, including any ongoing updates regarding the same. The Audit Committee periodically discusses our approach to cybersecurity risk management with our Chief Information Officer (CIO).
Our CIO is a member of our executive management team who is principally responsible for overseeing our cybersecurity risk management program , in partnership with other business leaders across the Company. Our CIO has over twenty-five years of extensive experience in information technology and security, and works in coordination with other members of the management team,

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including, among others, the Chief Financial Officer and Chief Compliance Officer and their designees. We believe our business leaders have the appropriate expertise, background, and depth of experience to manage risks arising from cybersecurity threats.

Our CIO, along with leaders from our privacy and corporate compliance functions, collaborate to implement a program designed to manage our exposure to cybersecurity risks and to promptly respond to cybersecurity incidents. Prompt response to incidents is delivered by multi-disciplinary teams in accordance with our incident response plan. Through ongoing communications with these teams during incidents, the CIO monitors the triage, mitigation and remediation of cybersecurity incidents, and reports such incidents to executive management, the Audit Committee and other colleagues in accordance with our cybersecurity policies and procedures , as is appropriate.

It em 2. Properties.
Our principal executive offices are located in Louisville, Kentucky, where we lease approximately 100,000 square feet. We also own 2 properties and lease 849 properties in the United States and lease one property in Canada. Of the leased properties, approximately 76% are provider service properties and 24% are pharmacy locations. We consider these facilities to be suitable and adequate for the management and operations of our business. Our properties that are associated with the Community Living business are excluded from this Item 2 since those operations are excluded from continuing operations.
Ite m 3. Legal Proceedings.
Legal Proceedings
See Note 15 "Commitments and Contingencies" within the audited consolidated financial statements and related notes included in this Annual Report on Form 10-K, which is incorporated herein by reference.
It em 4. Mi ne Safety Disclosures.
Not applicable.

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PART II
It em 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
BrightSpring’s common stock and 6.75% Tangible Equity Units began trading on the Nasdaq Global Select Market (Nasdaq), under the ticker symbol “BTSG” and “BTSGU”, respectively, on January 26, 2024. Prior to that date, there was no public market for our common stock or 6.75% Tangible Equity Units.
Stockholders
As of February 24, 2026, there were approximately 51 holders of our common stock. The actual number of stockholders of common stock is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees. This number of holders of record also does not include stockholders whose shares may be held in trust by other entities.
Dividends
We have no current plans to pay cash dividends on our common stock. The declaration, amount and payment of any future dividends will be at the sole discretion of our board of directors, and will depend on, among other things, general and economic conditions, our results of operations and financial condition, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and implications on the payment of dividends by us to our stockholders or by our subsidiaries to us, including restrictions under our credit agreements, our indenture governing the Notes and other indebtedness we may incur, and such other factors as our board of directors may deem relevant.
Recent Sales of Unregistered Securities
There were no sales of equity securities during the period covered by this Report that were not registered under the Securities Act and were not previously reported in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K filed by the Company.
Issuer Purchases of Equity Securities
The following table presents repurchases of shares of common stock completed during the three months ended December 31, 2025 (in thousands, except per share amounts):
 

Period

 

Total Number of Shares Purchased

 

 

Average Price Paid Per Share (1)

 

 

Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)

 

 

Maximum Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (in thousands)

 

October 1, 2025 - October 31, 2025

 

 

1,500

 

 

$

28.7820

 

 

 

1,500

 

 

 

—

 

November 1, 2025 - November 30, 2025

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

December 1, 2025 - December 31, 2025

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

 

1,500

 

 

$

43,173

 

 

 

1,500

 

 

 

—

 

 
(1) The average price per share is equal to the price at which the underwriter purchased the shares from KKR Stockholder in the underwritten secondary offering that closed on October 22, 2025.

(2) In October 2025, the Company announced the terms of the October 2025 secondary offering pursuant to which the Company concurrently repurchased from the underwriter 1,500,000 shares of common stock. As of December 31, 2025, the entire capacity available under this stock repurchase program had been utilized, and there is no remaining authorized repurchase capacity outstanding.

Stock Performance Graph
The following performance graph compares the cumulative total return to shareholders on our common stock relative to the cumulative total returns of the S&P 500 Index and S&P 500 Health Care Services Select Industry Index, the Dow Jones US Industrial Average Index and the S&P 500 Index for the period beginning with our IPO and ending December 31, 2025. The comparisons

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assume the investment of $100 on January 26, 2024 in our common stock and in each index, and the reinvestment of dividends, if any, when paid.
 

 
 

 

1/26/2024

 

 

3/28/2024

 

 

6/28/2024

 

 

9/30/2024

 

 

12/31/2024

 

 

3/31/2025

 

 

6/30/2025

 

 

9/30/2025

 

 

12/31/2025

 

BrightSpring Health
    Services, Inc.

$

100.00

 

 

$

98.82

 

 

$

103.27

 

 

$

133.45

 

 

$

154.82

 

 

$

164.45

 

 

$

214.45

 

 

$

268.73

 

 

$

340.45

 

S&P 500 Index

$

100.00

 

 

$

107.74

 

 

$

112.35

 

 

$

118.96

 

 

$

121.83

 

 

$

116.63

 

 

$

129.39

 

 

$

139.90

 

 

$

143.61

 

S&P 500 Health Care
    Services Select
    Industry Index

$

100.00

 

 

$

108.70

 

 

$

103.31

 

 

$

111.45

 

 

$

103.93

 

 

$

112.95

 

 

$

114.94

 

 

$

117.53

 

 

$

123.82

 

 
The stock performance graph above shall not be deemed to be “soliciting material” or to be “filed” with the U.S. Securities and Exchange Commission or subject to the liabilities of Section 18 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In addition, it shall not be deemed incorporated by reference by any statement that incorporates this Annual Report on Form 10-K by reference into any filing under the Securities Act of 1933 (the “Securities Act”) or the Exchange Act, except to the extent that we specifically incorporate this information by reference.
Item 6. [Res erved]

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Item 7. Management's Discussion and Analysis of Financial Condition and Results of O perations
The following discussion analyzes our financial condition and results of operations and should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. 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 “Risk Factors.” Factors that could cause or contribute to such difference are not limited to those identified in “Risk Factors.”
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, 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. Our presence spans all 50 states, we serve over 465,000 patients daily through our approximately 10,500 clinical providers and pharmacists, and our services make a profound impact in the lives and communities of the people we serve.
We have built a significant presence and capability in delivering complementary and high-touch daily healthcare services and programs to complex patients in their homes and in communities in order to address their multiple health needs and requirements more completely, through two reportable segments: Pharmacy Solutions and Provider Services. In pharmacy, we leverage our national infrastructure to provide daily medication therapy management to various customer and patient types wherever they reside in the community, including home and in-clinic infusion patients, oncology and other specialty patients in their homes, residents of independent and senior living communities, people receiving hospice care, neuro and Behavioral clients’ and patients’ homes, residents of skilled nursing and rehabilitation facilities, hospital patients, and the homes of Seniors who are on a significant number of medications. Within provider services, we address the clinical and supportive care needs of Senior and Specialty populations, including neuro patients, primarily in their homes, as well as some clinic and community settings. Our clinical services consist of home health and hospice and rehab therapy, and our supportive care services address activities of daily living and social determinants of health as well. We also provide home-based primary care for patients in senior living communities, long-term care, and individual homes to directly manage and optimize patient outcomes and to enable value-based care. By providing these complementary and necessary services for complex patients, our care model is designed to address multiple patient needs and better integrate health services delivery to improve quality and patient experiences, while reducing overall costs.
Discontinued Operations
 
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 the first fiscal quarter of 2026, subject to customary closing conditions. This transaction provides for continuity of important intellectual and developmental disability services while the Company 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 payor 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 the Company'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. As a result, 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 audited consolidated statements of operations, and its 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 II, Item 8. Note 2 for additional information regarding discontinued operations.
 

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2025 Key Highlights
• Completed three acquisitions within our Provider Services segment

• Announced definitive agreement to divest the Community Living business

• Completed two underwritten secondary offerings of our common stock by affiliates of Kohlberg Kravis Roberts & Co. L.P. and certain members of management, which were completed in June 2025 and October 2025. As a result of these offerings, we are no longer a “controlled company” within the meaning of the corporate governance standards of Nasdaq

• Repurchased 1,500,000 shares of common stock in connection with the October 2025 secondary offering

Financial Performance Highlights: Fiscal Year 2025 Compared to Fiscal Year 2024
• Revenue grew by $2.8 billion, or 28.2%, to $12.9 billion

• Pharmacy Solutions segment revenue grew by $2.7 billion, or 30.7%, to $11.4 billion

• Provider Services segment revenue grew by $146.9 million, or 11.1%, to $1.5 billion

• Net income increased by $173.7 million from a net loss of $68.9 million to net income of $104.8 million

• Adjusted EBITDA (1) increased by $157.4 million, or 34.2%, to $617.6 million

• Pharmacy Solutions segment EBITDA grew by $148.8 million, or 37.7%, to $543.5 million

• Provider Services segment EBITDA grew by $27.4 million, or 13.3%, to $232.7 million

• Diluted income per share increased by $0.82 from diluted loss per share of $(0.34) to diluted income per share of $0.48

• Adjusted EPS (1) increased by $0.65 from $0.35 to $1.00

 
(1) Reconciliation of GAAP to non-GAAP results is provided in the section “Non-GAAP Financial Measures” in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations ”
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.
The following table summarizes the revenues generated by each of our reportable segments for the most recent two years:
 

 

 

For the Years Ended December 31,

 

($ in millions)

 

2025

 

 

2024

 

 

 

Revenue

 

 

% of Revenue

 

 

Revenue

 

 

% of Revenue

 

Pharmacy Solutions

 

$

11,445.8

 

 

 

88.7

%

 

$

8,754.3

 

 

 

86.9

%

Provider Services

 

 

1,464.8

 

 

 

11.3

%

 

 

1,317.9

 

 

 

13.1

%

Consolidated BrightSpring

 

$

12,910.6

 

 

 

100.0

%

 

$

10,072.2

 

 

 

100.0

%

Pharmacy Solutions
We opportunistically provide pharmacy services when and where demanded and as required to customers and patients in their homes and communities, often in coordination with our provider services. The Company filled over 43 million prescriptions in 2025 from over 175 pharmacies across all 50 states, with services delivered to approximately 6,600 customer locations, approximately 73,000 individual or group homes, and over 410,000 patients, all through over 4,500 unique customer and payor contracts. Our leading pharmacy support across customer and patient settings is achieved through a focus on medication availability and reliability, cost containment, customer staff and patient support programs, clinical and regulatory education and support, and leading customer service. Infusion and Specialty Pharmacy prescriptions and Home and Community Pharmacy prescriptions have grown at more than 27% and 3%, respectively, from December 2024 to December 2025. We have a unique opportunity to increasingly provide more

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pharmacy services in the future to provider patients and patients transitioning across settings of care. Almost every one of the Company’s patients who receive provider services from us have a significant medication support need given their polypharmacy profile, which we have the opportunity to further address.
Infusion and Specialty Pharmacy
We provide infused, injectable, and oral medication services in the home and clinic focused on pharmaceutical therapies that require expert administration and high-touch clinical services to patients by our pharmacists, registered nursing staff, and patient support teams. Infusion therapy services are a specialty form of pharmaceuticals that involve the intravenous administration of higher-cost, specially-handled medications that treat a wide range of acute and chronic health conditions, including, for example, infections, auto-immune illnesses, oncology, multiple sclerosis, hemophilia, and nutritional deficiencies. Oral and injectable medication therapies for complex disease management treat oncology, neurology, dermatology, cardiology, immunology, inflammatory, rare and orphan, and other conditions. Within oncology, as one of the leading independent specialty pharmacies in the United States, our services encompass clinical coordination, patient education, protocol compliance, patient assistance with insurance access and outside funding, and timely delivery of medication. Our certified oncology pharmacists are available 24/7 to provide support for patients and caregivers while working in close coordination with their physicians.
As a result of our unique capabilities in serving pharmaceutical manufacturers and biotech companies, we have exclusive or preferred relationships in specialty oncology drugs, as manufacturers select our pharmacy – exclusively or as part of a group of a few other pharmacies – to distribute and support their therapies in the market. We currently have 149 limited distribution oncology drugs in the market, with an additional 18 in the pipeline still to launch over the next 12 to 18 months.
Home and Community Pharmacy
Our home and community-based pharmacy solutions ensure that medications are accessible and clinically supported for patients outside of retail pharmacies. The Company’s footprint of pharmacies covers all 50 states with a localized model that features “white-glove” and customized programs and allows for faster response times and a better customer and patient experience. We service customer locations typically multiple times a day and 24/7 as needed, within a radius of approximately 100 miles of a pharmacy location. Our pharmacy services are all customized to specific settings and patients among the Senior and Specialty populations served, for example whether a patient receiving our medications is in a senior living community, a behavioral group home, or a hospice patient in their own home.
Provider Services
We deliver a variety of impactful and valuable provider services to high-need, chronic, and complex patients in home and community settings. These services consist of clinical and supportive care to approximately 16,000 Senior and Specialty populations, with both census for Home Health Care services specifically, and rehab hours served, having grown approximately 9% and 12% from December 2024 to December 2025, respectively. While the clinical services that we provide have demonstrated attractive volume growth over the past several years, supportive care services have also demonstrated stability and growth due to the valuable nature of these services that address activities of daily living and social determinants of health. Many of our provider patients also receive their pharmacy services through the Company, which helps to optimize their pharmacy and medication care and needs, simplify their experience, and improve their satisfaction.
Subsequent to the divestiture of the Community Living business, 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 the Company’s expected Revenue and Adjusted EBITDA growth rates and maximize exposure to target growth markets that require the Company'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. The results of operations of Community Living are excluded from continuing operations in the Company's results of operations for the years ended December 31, 2025 and 2024.
Home Health Care
We provide patient-centric, highly skilled, and compassionate clinical care to Seniors and others in their homes. For Seniors and other patients recovering from surgery or illness or living with chronic diseases, we provide clinical home health care in the home. We also provide physical, emotional, and spiritual comfort and support primarily for Senior patients with terminal illnesses and their families through our hospice services. Like patients receiving home health care, our interdisciplinary hospice teams tailor individualized plans for patients and their families based on a comprehensive understanding of their needs. Our hospice patients require important daily pharmacy support, which we deliver through our pharmacy services. Additionally, for Seniors and others who require supportive care and activities of daily living support that address social determinants of health, including dietary and nutrition management and cognitive and social engagement, among others, we offer these daily or weekly services.

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We are continuing to build out specialized and different primary care capabilities through our home-based primary care medical home model and platform, which we view as central to the future of optimizing patient management, including patient experiences, outcomes, and cost. Home-based primary care is more patient-centered and incorporates patients’ specific objectives and goals by pro-actively addressing gaps in care and triaging health events in-place when possible, thus mitigating avoidable emergency room visits and hospitalizations. Home-based primary care coordinates care and resources for patients in pulling together previously disparate information and contact points into one place for more coordinated and informed patient care.
In addition to many of our provider patients also receiving their pharmacy services from the Company, our patients often receive multiple in-home provider services from the Company to improve outcomes, including home-based primary care and home health or hospice and transitions from home health to hospice. As more of our patients utilize the multiple needed services that they require and we provide, we pro-actively monitor patients and deploy triage tools through our Clinical (Nursing) Hub to address risks and optimize quality outcomes in real-time, particularly for higher risk patients. Within the Clinical (Nursing) Hub, we centralize on-call and tele-triage, perform high-risk patient monitoring and intervention, conduct “Aftercare” patient calls, and manage care coordination opportunities across the enterprise.
Rehab Care
Our Rehab Care services provide highly-skilled patient-centric clinical care to Senior and Specialty clients and patients living with age-related acute or chronic conditions, or recovering from a catastrophic neuro event (ABI/TBI or stroke) requiring intensive therapy. These services support individuals of all ages who need various forms of expert clinical care and therapy, including ABA therapies.
We provide specialized, highly-skilled, and custom-designed rehabilitation services, including physical, speech and occupational therapy and ABA, for clients and patients of all ages with a range of injuries and conditions, including brain and spinal cord injuries, stroke, pediatric neuro conditions, and autism. Our programs are principally administered in individuals’ homes and are predominantly based on individual support and clinical care plans designed to encourage greater independence and manage medical conditions.
Personal Care
Our Personal Care services provide home care support that assist with activities of daily living. These services allow Seniors who require long-term care and assistance with activities of daily living to maintain their independence at home with their families. These supportive care activities address social determinants of health, including dietary and nutrition management and cognitive and social engagement, among others, and we offer these daily or weekly services.
Locations of Operations
We are headquartered in Louisville, Kentucky with operations in all 50 states and Canada. We deliver a higher proportion of services in select regions with favorable demographics and regulatory environments.
We serve patients from and across approximately 7,700 offices, customer locations and group homes, as well as serving approximately 330,000 patients in their own homes, every day with co-location of our pharmacy and provider services in 40 states.
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. No payor represents more than 35% of our revenue in the aggregate for the years ended December 31, 2025 and 2024. 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 years ended December 31, 2025 and 2024. The federal, state, and local programs under which we operate are subject to legislative and budgetary changes that can influence reimbursement rates.
 
 
 
 
 
 
 

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The following tables set forth revenue by payor type for the years ended December 31, 2025 and 2024 (in millions):
 

 

 

For the Years Ended December 31,

 

($ in millions)

 

2025

 

 

2024

 

 

 

Revenue

 

 

% of Revenue

 

 

Revenue

 

 

% of Revenue

 

Commercial insurance

 

$

3,303.3

 

 

 

25.6

%

 

$

2,528.1

 

 

 

25.1

%

Medicaid

 

 

1,495.2

 

 

 

11.6

%

 

 

1,166.5

 

 

 

11.5

%

Medicare Part A

 

 

1,094.3

 

 

 

8.4

%

 

 

999.6

 

 

 

9.9

%

Medicare Part B

 

 

82.8

 

 

 

0.6

%

 

 

95.9

 

 

 

1.0

%

Medicare Part C

 

 

2,413.1

 

 

 

18.7

%

 

 

1,665.0

 

 

 

16.6

%

Medicare Part D

 

 

4,097.8

 

 

 

31.7

%

 

 

3,202.0

 

 

 

31.8

%

Private & other

 

 

424.1

 

 

 

3.4

%

 

 

415.1

 

 

 

4.1

%

 

$

12,910.6

 

 

 

100.0

%

 

$

10,072.2

 

 

 

100.0

%

 
We provide our services across all 50 states and Canada, with our top 10 states of operations comprising 53% and 47% of total Company revenue for the years ended December 31, 2025, and 2024 respectively.
The following tables summarize the percentage of revenue generated by each payor type for each of our service offerings and reportable segments:
 

 

For the Year Ended December 31, 2025

 

 

Commercial insurance

 

 

Medicaid

 

 

Medicare Part A

 

 

Medicare Part B

 

 

Medicare Part C

 

 

Medicare Part D

 

 

Private & other

 

 

Total

 

Infusion and Specialty Pharmacy

 

 

21.4

%

 

 

6.6

%

 

 

0.0

%

 

 

0.6

%

 

 

17.6

%

 

 

23.3

%

 

 

1.0

%

 

 

70.5

%

Home and Community Pharmacy

 

 

2.7

%

 

 

1.9

%

 

 

4.4

%

 

 

0.0

%

 

 

0.0

%

 

 

8.4

%

 

 

0.8

%

 

 

18.2

%

Pharmacy Solutions

 

 

24.1

%

 

 

8.5

%

 

 

4.4

%

 

 

0.6

%

 

 

17.6

%

 

 

31.7

%

 

 

1.8

%

 

 

88.7

%

Home Health Care

 

 

0.2

%

 

 

0.3

%

 

 

4.0

%

 

 

0.0

%

 

 

1.1

%

 

 

—

 

 

 

0.3

%

 

 

5.9

%

Rehab Care

 

 

1.2

%

 

 

0.7

%

 

 

—

 

 

 

0.0

%

 

 

0.0

%

 

 

—

 

 

 

0.4

%

 

 

2.3

%

Personal Care

 

 

0.1

%

 

 

2.1

%

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

0.9

%

 

 

3.1

%

Provider Services

 

 

1.5

%

 

 

3.1

%

 

 

4.0

%

 

 

0.0

%

 

 

1.1

%

 

 

—

 

 

 

1.6

%

 

 

11.3

%

Consolidated BrightSpring

 

 

25.6

%

 

 

11.6

%

 

 

8.4

%

 

 

0.6

%

 

 

18.7

%

 

 

31.7

%

 

 

3.4

%

 

 

100.0

%

 

 

For the Year Ended December 31, 2024

 

 

Commercial insurance

 

 

Medicaid

 

 

Medicare Part A

 

 

Medicare Part B

 

 

Medicare Part C

 

 

Medicare Part D

 

 

Private & other

 

 

Total

 

Infusion and Specialty Pharmacy

 

 

20.5

%

 

 

5.9

%

 

 

0.0

%

 

 

0.7

%

 

 

15.4

%

 

 

21.4

%

 

 

0.9

%

 

 

64.8

%

Home and Community Pharmacy

 

 

2.9

%

 

 

2.3

%

 

 

5.4

%

 

 

0.0

%

 

 

0.0

%

 

 

10.4

%

 

 

1.1

%

 

 

22.1

%

Pharmacy Solutions

 

 

23.4

%

 

 

8.2

%

 

 

5.4

%

 

 

0.7

%

 

 

15.4

%

 

 

31.8

%

 

 

2.0

%

 

 

86.9

%

Home Health Care

 

 

0.3

%

 

 

0.3

%

 

 

4.5

%

 

 

0.3

%

 

 

1.2

%

 

—

 

 

 

0.0

%

 

 

6.6

%

Rehab Care

 

 

1.3

%

 

 

0.6

%

 

 

0.0

%

 

 

0.0

%

 

 

0.0

%

 

—

 

 

 

0.8

%

 

 

2.7

%

Personal Care

 

 

0.1

%

 

 

2.4

%

 

 

0.0

%

 

 

0.0

%

 

 

0.0

%

 

—

 

 

 

1.3

%

 

 

3.8

%

Provider Services

 

 

1.7

%

 

 

3.3

%

 

 

4.5

%

 

 

0.3

%

 

 

1.2

%

 

 

—

 

 

 

2.1

%

 

 

13.1

%

Consolidated BrightSpring

 

 

25.1

%

 

 

11.5

%

 

 

9.9

%

 

 

1.0

%

 

 

16.6

%

 

 

31.8

%

 

 

4.1

%

 

 

100.0

%

See Note 3 of the audited consolidated financial statements and related notes in this Form 10-K for information regarding revenue by payor type for each reportable segment for the years ended December 31, 2025 and 2024.
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. Our high-need Senior and Specialty patients depend on closely and expertly managed daily medication regimens that are supported by pharmacist and nurse consultants whom are available in a timely and 24/7 manner. 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. Each of the end markets that these home and community-based pharmacy services supply and support are growing at attractive rates, and the lack of appropriate pharmacy medication management and resulting non-adherence among complex and polypharmacy patients in homes are significant contributors to ER visits, hospitalizations and increased costs.

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We have continued to expand our pharmacy capabilities to serve this need. Overall, our pharmacy has grown patient census and prescriptions by 4% over the past year. We are a leading independent pharmacy provider in our respective pharmacy patient markets, and we expect to continue to increase our share. Our growth in serving numerous patient types has been well into the double digits, including home infusion patients, specialty oncology patients, behavioral patients, in-home Seniors, and hospice patients.
Continued Growth of our Provider Services Patient Populations
Our Provider Services segment focuses 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. The U.S. Census Bureau projects that the U.S. population aged 65 and over will grow substantially from 15% of the population in 2016 to 21% of the population by 2030, and the population size of people over age 85 is expected to double by 2040, according to the Administration for Community Living. 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. Home health care can reduce 365-day post-discharge costs by more than $6,000 per patient, and as healthcare spending rises, home health care can improve the continuity of care while reducing overall costs. In addition, advancements in medical technology have allowed providers to expand access points and the breadth of services available in the home.
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. Over the past five years 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.
As noted earlier, the Company announced the entry into a purchase agreement in January 2025 with respect to the expected sale of our Community Living business, which is expected to close in the first fiscal quarter of 2026, subject to customary closing conditions. The sale of this business will represent a strategic shift from our services to Behavioral populations. After closing, our focus will be primarily on Seniors and Specialty patients receiving neuro rehab.
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 across our lines of business.
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 and other sections of this Annual Report on 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.
For example, across our pharmacies we achieve 99.99% order accuracy and 99.34% order completeness, “excellent” and “world class” NPS, a 94% satisfaction rating from infusion patients, and a reduction in hospitalizations with CCRx, while also driving savings through medication adherence and therapeutic interchanges. We achieve 100% patient satisfaction in our outpatient rehab services, and we achieve an 87% overall rating of care in hospice (compared to the national average of 81%), hospitalizations 35% lower than the national average in our home-based primary care, and four stars (out of five) in the CAHPS home health patient survey ratings. 91% of our home health branches have a STAR rating of 4 or higher. Our complex Behavioral clients, often with three or more comorbidities and requiring eight or more medications, are still able to spend 360 days a year at home on average. We believe that we are positioned to identify potential medical problems and avoid adverse events due to our highly proximate position to patients and attentive care protocols, as evidenced by these quality metrics.

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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 operating segments in 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.
Since January 1, 2018, we have opened 150 de novo offices (branches/agencies) and clinics in new locations across our pharmacy and provider services (not including offices divested as a part of the sale of the Community Living business). In 2025, we opened 7 de novo offices. 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 PMO, help to support and manage de novos 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, and 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 8,100 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 and not only across pharmacy and provider services, but also within each segment. Within the 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 complementary 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 (CCRx), 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 ACO arrangements to participate in shared savings from its attributed primary care patients and other ACO partnerships and contract as a preferred provider.
 

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Factors Affecting Results of Operations and Comparability
Acquisitions
 
In addition to organic growth, we have grown through acquisitions that have deepened and expanded our presence in current markets and facilitated entry into attractive adjacent markets.
During the years ended December 31, 2024 and 2025, we completed eight and three acquisitions for aggregate consideration, net of cash acquired, for these acquisitions of approximately $110.6 million and $247.0 million, respectively.
Discontinued Operations
On January 17, 2025, the Company entered into a definitive agreement to sell its Community Living business to National Mentor Holdings, Inc., 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 the first fiscal quarter of 2026, 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 consolidated balance sheets, and the results of operations from the Community Living business are classified as discontinued operations in the 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 consolidated financial statements and related notes, included elsewhere in this Form 10-K.
Legal Costs and Settlements Accrual
In November 2023, the Company agreed to settle the Silver 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; $110.0 million of the settlement was paid in 2024, and the remaining $10.0 million was paid in 2025. The District Court entered an order dismissing the Silver action in its entirety, with prejudice, on July 3, 2024. See Note 15 “Commitments and Contingencies” within the audited consolidated financial statements and related notes, included elsewhere in this Annual Report on Form 10-K.
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 primarily 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.

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Interest Expense, net . Interest expense, net includes interest paid on and 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
This section of this Annual Report on Form 10-K generally discusses the years ended December 31, 2025 and 2024 and year-over-year comparisons between the years ended December 31, 2025 and 2024. For information regarding our results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023, refer to Exhibit 99.1 of our Current Report on Form 8-K, filed with the SEC on June 10, 2025, which contains retrospective revisions for the changes resulting from the discontinued operations, where applicable, to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our previously filed Annual Report on Form 10-K.
Consolidated Results of Operations
 

($ in thousands)

 

For the Years Ended December 31,

 

 

 

 

 

 

 

 

 

Change

 

 

 

2025

 

 

2024

 

 

Amount

 

 

%

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

11,445,777

 

 

$

8,754,282

 

 

$

2,691,495

 

 

 

30.7

%

Services

 

 

1,464,787

 

 

 

1,317,932

 

 

 

146,855

 

 

 

11.1

%

Total revenues

 

 

12,910,564

 

 

 

10,072,214

 

 

 

2,838,350

 

 

 

28.2

%

Cost of goods

 

 

10,507,431

 

 

 

8,008,501

 

 

 

2,498,930

 

 

 

31.2

%

Cost of services

 

 

885,356

 

 

 

797,286

 

 

 

88,070

 

 

 

11.0

%

Gross profit

 

 

1,517,777

 

 

 

1,266,427

 

 

 

251,350

 

 

 

19.8

%

Selling, general, and administrative expenses

 

 

1,222,525

 

 

 

1,158,473

 

 

 

64,052

 

 

 

5.5

%

Operating income

 

 

295,252

 

 

 

107,954

 

 

 

187,298

 

 

 

173.5

%

Loss on extinguishment of debt

 

 

—

 

 

 

12,726

 

 

 

(12,726

)

 

n.m.

 

Interest expense, net

 

 

157,311

 

 

 

190,546

 

 

 

(33,235

)

 

 

(17.4

)%

Income (loss) from continuing operations before income taxes

 

 

137,941

 

 

 

(95,318

)

 

 

233,259

 

 

n.m.

 

Income tax expense (benefit)

 

 

33,145

 

 

 

(26,387

)

 

 

59,532

 

 

n.m.

 

Net income (loss) from continuing operations

 

$

104,796

 

 

$

(68,931

)

 

$

173,727

 

 

n.m.

 

Adjusted EBITDA (1)

 

$

617,570

 

 

$

460,220

 

 

$

157,350

 

 

 

34.2

%

* n.m.: not meaningful
(1) Reconciliation of GAAP to non-GAAP results is provided in the section “Non-GAAP Financial Measures” in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations ”
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 $12,910.6 million for the year ended December 31, 2025, as compared with $10,072.2 million for the year ended December 31, 2024, an increase of $2,838.4 million or 28.2%. 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 $10,507.4 million for the year ended December 31, 2025, as compared with $8,008.5 million for the year ended December 31, 2024, an increase of $2,498.9 million or 31.2%. The increase resulted from an increase in Pharmacy Solutions cost of goods. See additional discussion in “—Segment Results of Operations” below.
 

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Cost of Services
Cost of services was $885.4 million for the year ended December 31, 2025, as compared with $797.3 million for the year ended December 31, 2024, an increase of $88.1 million or 11.0%. 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 $1,222.5 million for the year ended December 31, 2025, as compared with $1,158.5 million for the year ended December 31, 2024, an increase of $64.1 million or 5.5%. The increase primarily resulted from the following segment activity and factors:
• an increase of $74.0 million, or 6.4%, on consolidated 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;

• an increase of $12.8 million, or 1.1%, on consolidated 2024 selling, general, and administrative expenses, as a result of an increase in other operational expenses year-over-year; offset by,

• a decrease of $22.7 million, or 2.0%, on consolidated 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.

Interest Expense, net
Interest expense, net was $157.3 million for the year ended December 31, 2025, as compared with $190.5 million for the year ended December 31, 2024, a decrease of $33.2 million or 17.4%. The decrease primarily resulted from a decrease in both the variable-rate and applicable margin for the year ended December 31, 2025 as compared to the prior periods and lower outstanding term debt as compared to the prior period, offset by a $20.1 million decrease in interest income related to cash flow hedges of interest rate risk.
Income Tax Expense (Benefit)
Income tax expense was $33.1 million for the year ended December 31, 2025, as compared with an income tax benefit of $26.4 million for the year ended December 31, 2024, an increase in the income tax expense of $59.5 million. The increase in the income tax expense is primarily driven by the increase in pre-tax book income for the year ended December 31, 2025 as compared to the year ended December 31, 2024, and a decrease in the effective tax rate for the year ended December 31, 2025 of 24.0% compared to 27.7% for the year ended December 31, 2024. The decrease in the effective tax rate is primarily as a result of $4.9 million in tax benefits resulting from the net impact of the recognition of excess tax benefits from stock-based compensation partially offset by limitations on the deductibility of certain executive compensation as a percentage of estimated pre-tax book income for the year ended December 31, 2025. In addition, the discrete tax benefit related to the Silver matter increased the effective tax rate on pre-tax book loss for the year ended December 31, 2024. See Note 15 "Commitments and Contingencies" within the consolidated financial statements and related notes, included elsewhere in this Annual Report on Form 10-K.
Net Income (Loss)
Net income was $104.8 million for the year ended December 31, 2025, as compared with a net loss of $68.9 million for the year ended December 31, 2024, an increase of $173.7 million. The increase in net income is primarily attributable to the increase in gross profit and the aforementioned decrease in interest expense, net, and loss on extinguishment of debt, partially offset by an increase in selling, general, and administrative expenses and income tax expense (benefit).
Adjusted EBITDA (1)
Adjusted EBITDA was $617.6 million for the year ended December 31, 2025, as compared with $460.2 million for the year ended December 31, 2024, an increase of $157.4 million or 34.2%. The increase primarily resulted from the following segment activity and factors:
• an increase of $176.2 million, or 38.3%, on consolidated 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 $18.8 million, or 4.1%, on consolidated 2024 Adjusted EBITDA, as a result of increases in investments in information technology and positions to support growth within the business.

(1) Reconciliation of GAAP to non-GAAP results is provided in the section “Non-GAAP Financial Measures” in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations ”

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Segment Results of Operations
Pharmacy Solutions Segment
The following table sets forth, for the years indicated, our segment results of operations.
 

 

 

Pharmacy Solutions

 

($ in thousands, except Business Metrics)

 

For the Years Ended December 31,

 

 

 

 

 

 

Change

 

 

 

2025

 

 

2024

 

 

Amount

 

 

%

 

Revenues

 

$

11,445,777

 

 

$

8,754,282

 

 

$

2,691,495

 

 

 

30.7

%

Cost of goods

 

 

10,507,431

 

 

 

8,008,501

 

 

 

2,498,930

 

 

 

31.2

%

Gross profit

 

 

938,346

 

 

 

745,781

 

 

 

192,565

 

 

 

25.8

%

Selling, general, and administrative expenses

 

 

502,042

 

 

 

462,219

 

 

 

39,823

 

 

 

8.6

%

Segment operating income

 

$

436,304

 

 

$

283,562

 

 

$

152,742

 

 

 

53.9

%

Segment EBITDA

 

$

543,502

 

 

$

394,665

 

 

$

148,837

 

 

 

37.7

%

 

 

 

 

 

 

 

 

 

 

 

 

Business Metrics:

 

 

 

 

 

 

 

 

 

 

 

 

Prescriptions dispensed

 

 

43,367,072

 

 

 

41,816,584

 

 

 

1,550,488

 

 

 

3.7

%

Revenue per script

 

$

263.93

 

 

$

209.35

 

 

$

54.58

 

 

 

26.1

%

Gross profit per script

 

$

21.64

 

 

$

17.83

 

 

$

3.81

 

 

 

21.4

%

 
Revenues
Revenues were $11,445.8 million for the year ended December 31, 2025, as compared with $8,754.3 million for the year ended December 31, 2024, an increase of $2,691.5 million or 30.7%. The increase primarily resulted from an increase in revenue per prescription dispensed, as well as volume growth in prescriptions dispensed across and within Pharmacy Solutions segment. Revenue attributable to Infusion and Specialty Pharmacy was $9,095.9 million for the year ended December 31, 2025, as compared with $6,526.0 million for the year ended December 31, 2024, an increase of $2,569.9 million or 39.4% attributable to an increase in prescriptions dispensed on certain specialty branded drugs. Revenue attributable to Home and Community Pharmacy was $2,349.9 million for the year ended December 31, 2025, as compared with $2,228.3 million for the year ended December 31, 2024, an increase of $121.6 million or 5.5% attributable to mix changes in prescriptions dispensed.
The increase in revenue per prescription dispensed is due to mix changes year-over-year and a greater relative increase in volume growth in certain specialty brand drugs, which carry a higher revenue per prescription dispensed.
Cost of Goods
Cost of goods was $10,507.4 million for the year ended December 31, 2025, as compared with $8,008.5 million for the year ended December 31, 2024, an increase of $2,498.9 million or 31.2%. The increase primarily resulted from the aforementioned revenue growth in the period as well as an increase in cost per prescription dispensed as a result of mix shift.
Gross profit was $938.3 million for the year ended December 31, 2025, as compared with $745.8 million for the year ended December 31, 2024, an increase of $192.6 million or 25.8%. The increase primarily resulted from the aforementioned revenue growth in the period, primarily the result of outsized volume growth as well as mix in certain specialty branded drugs, which have lower margins.
Gross profit margin for the year ended December 31, 2025 was 8.2% compared to 8.5% for the year ended December 31, 2024. The decrease in gross profit margin is due to mix shift in the Pharmacy Solutions segment with greater relative volume growth in Infusion and Specialty Pharmacy, along with product-level mix shifts, rate changes, and an increase in the fulfillment cost per script in Home and Community Pharmacy.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses were $502.0 million for the year ended December 31, 2025, as compared with $462.2 million for the year ended December 31, 2024, an increase of $39.8 million or 8.6%. The increase primarily resulted from the aforementioned revenue growth in the period with selling, general, and administrative expenses growing less than the volume growth rate and demonstrating economies of scale.

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Segment EBITDA
Segment EBITDA was $543.5 million for the year ended December 31, 2025, as compared with $394.7 million for the year ended December 31, 2024, an increase of $148.8 million or 37.7%. The increase primarily resulted from the aforementioned revenue and gross profit growth in the period. See Note 17 “Segment Information” to our audited consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K for further discussion.
Provider Services Segment
The following table sets forth, for the years indicated, our segment results of operations.
 

 

 

Provider Services

 

($ in thousands, except Business Metrics)

 

For the Years Ended December 31,

 

 

 

 

 

 

Change

 

 

 

2025

 

 

2024

 

 

Amount

 

 

%

 

Revenues

 

$

1,464,787

 

 

$

1,317,932

 

 

$

146,855

 

 

 

11.1

%

Cost of services

 

 

885,356

 

 

 

797,286

 

 

 

88,070

 

 

 

11.0

%

Gross profit

 

 

579,431

 

 

 

520,646

 

 

 

58,785

 

 

 

11.3

%

Selling, general, and administrative expenses

 

 

374,256

 

 

 

340,034

 

 

 

34,222

 

 

 

10.1

%

Segment operating income

 

$

205,175

 

 

$

180,612

 

 

$

24,563

 

 

 

13.6

%

Segment EBITDA

 

$

232,654

 

 

$

205,287

 

 

$

27,367

 

 

 

13.3

%

 

 

 

 

 

 

 

 

 

 

 

 

Business Metrics:

 

 

 

 

 

 

 

 

 

 

 

 

Home Health Care average daily census

 

 

31,135

 

 

 

28,532

 

 

 

2,603

 

 

 

9.1

%

Rehab Care persons served

 

 

7,127

 

 

 

6,597

 

 

 

530

 

 

 

8.0

%

Personal Care persons served

 

 

16,079

 

 

 

15,879

 

 

 

200

 

 

 

1.3

%

Revenues
Revenues were $1,464.8 million for the year ended December 31, 2025, as compared with $1,317.9 million for the year ended December 31, 2024, an increase of $146.9 million or 11.1%. The increase primarily resulted from volume growth as well as rate increases received during the period. Revenue attributable to Home Health Care was $767.9 million for the year ended December 31, 2025, as compared with $655.4 million for the year ended December 31, 2024, an increase of $112.5 million or 17.2%. Revenue attributable to Rehab Care was $294.7 million for the year ended December 31, 2025, as compared with $276.6 million for the year ended December 31, 2024, an increase of $18.1 million or 6.5%. Revenue attributable to Personal Care was $402.2 million for the year ended December 31, 2025, as compared with $385.9 million for the year ended December 31, 2024, an increase of $16.3 million or 4.2%.
Cost of Services
Cost of services was $885.4 million for the year ended December 31, 2025, as compared with $797.3 million for the year ended December 31, 2024, an increase of $88.1 million or 11.0%. The increase primarily resulted from the aforementioned revenue growth and included operational improvements resulting in lower cost of services increases compared to revenue growth.
Gross profit was $579.4 million for the year ended December 31, 2025, as compared with $520.6 million for the year ended December 31, 2024, an increase of $58.8 million or 11.3%. The increase primarily resulted from the aforementioned revenue growth and cost of services improvements in the period.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses were $374.3 million for the year ended December 31, 2025, as compared with $340.0 million for the year ended December 31, 2024, an increase of $34.2 million or 10.1%. The increase primarily resulted from the aforementioned revenue growth in the period with selling, general, and administrative expenses growing less than the volume growth rate and demonstrating economies of scale.
Segment EBITDA
Segment EBITDA was $232.7 million for the year ended December 31, 2025, as compared with $205.3 million for the year ended December 31, 2024, an increase of $27.4 million or 13.3%. The increase primarily resulted from the aforementioned revenue

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growth and operational improvements impacting cost of services. See Note 17 “Segment Information” to our audited consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K for further discussion.
Non-GAAP Financial Measures
In addition to our results of operations prepared in accordance with U.S. GAAP, which we have discussed above, we also evaluate our financial performance using EBITDA, Adjusted EBITDA, and Adjusted EPS. These non-GAAP financial measures are not intended to replace financial performance measures determined in accordance with U.S. GAAP, such as net income (loss) and diluted EPS. Rather, we present EBITDA, Adjusted EBITDA, and Adjusted EPS as supplemental measures of our performance.
EBITDA, Adjusted EBITDA, and Adjusted EPS
The following are key financial metrics and, when used in conjunction with U.S. GAAP measures, we believe they provide useful information for evaluating our core business performance, enable comparison of financial results across periods, and allow for greater transparency with respect to key metrics used by management for financial and operational decision-making. We define EBITDA as net income (loss) before income tax expense (benefit), interest expense, net, and depreciation and amortization. Adjusted EBITDA and Adjusted EPS exclude certain other items that are either non-recurring, infrequent, non-cash, unusual, or items deemed by management to not be indicative of the performance of our core operations, including non-cash, share-based compensation; acquisition, integration, and transaction-related costs; restructuring and divestiture-related and other costs; legal and settlement costs associated with certain historical matters for PharMerica; significant projects; and management fees. In determining which adjustments are made to arrive at Adjusted EBITDA and Adjusted EPS, management considers both (1) certain non-recurring, infrequent, non-cash, or unusual items, which can vary significantly from year to year, as well as (2) certain other items that may be recurring, frequent, or settled in cash but which management does not believe are indicative of our core operating performance. The financial measure calculated under U.S. GAAP which is most directly comparable to Adjusted EBITDA is net income (loss). The financial measure calculated under U.S. GAAP which is most directly comparable to Adjusted EPS is diluted EPS.
We have historically incurred substantial acquisition, integration, and transaction-related costs. The underlying acquisition activities take place over a defined timeframe, have distinct project timelines, and are incremental to activities and costs that arise in the ordinary course of our business. Therefore, we have excluded these costs from our Adjusted EBITDA and Adjusted EPS because it provides management a normalized view of our core, ongoing operations after integrating our acquired companies.
The legal costs and settlements adjustment represents defense costs associated with certain PharMerica litigation matters, all of which were finalized in 2024, that commenced prior to KKR Stockholder’s and Walgreen Stockholder’s acquisition of PharMerica in December 2017, as well as settlement costs associated with the Silver matter, which settled in November 2023. We have excluded defense costs associated with these PharMerica litigation matters from our Adjusted EBITDA and Adjusted EPS due to the magnitude of these cases and the costs attributable to them, the timing of the commencement of the cases and the fact that no similar cases have been brought against the Company since the acquisition of PharMerica, and the fact that these cases are unlike our routine legal and regulatory proceedings that we see in the normal course of business. Further, we have excluded settlement costs associated with the Silver matter from our Adjusted EBITDA and Adjusted EPS due to the magnitude of the case and the costs attributable to it, as well as the fact that the Silver matter is unlike our routine legal and regulatory proceedings that we see in the normal course of business.
The significant projects adjustment represents costs associated with certain transformational projects, which are not considered to be a part of our normal and recurring business operations and are not expected to recur in our future business plans. All significant projects were finalized in 2024. Moreover, the costs associated with significant projects, which are incurred on an infrequent and limited basis, are not reflective of our operating performance. Due to the aforementioned reasons, we have excluded the costs related to significant projects from our Adjusted EBITDA and Adjusted EPS, as such adjustment provides a more meaningful understanding to investors and others of our ongoing results.
The management fees adjustment represents fees paid historically under the Monitoring Agreement related to either (i) activities that are expected to be performed by our existing personnel upon the termination of the Monitoring Agreement, and thus not expected to result in incremental costs subsequent to the IPO Offerings, or (ii) acquisitions, divestitures, and external financing activities, which costs would otherwise be excluded from our Adjusted EBITDA and Adjusted EPS. Therefore, we have excluded management fees from our Adjusted EBITDA and Adjusted EPS, as such fees are no longer applicable and representative of our ordinary operating performance as a result of the completion of the IPO Offerings.
EBITDA, Adjusted EBITDA, and Adjusted EPS are not measures of financial performance under U.S. GAAP and should be considered in addition to, and not as a substitute for, net income (loss), diluted EPS or other financial measures performed in accordance with U.S. GAAP. Our method of determining non-GAAP financial measures may differ from other companies’ financial measures and therefore may not be comparable to methods used by other companies.
Given our determination of adjustments in arriving at our computations of EBITDA, Adjusted EBITDA, and Adjusted EPS, these non-GAAP measures have limitations as analytical tools and should not be considered in isolation or as substitutes or

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alternatives to net income (loss), operating income, income (loss) per diluted share, cash flows from operating activities, total indebtedness, or any other financial measures calculated in accordance with U.S. GAAP.
The following table reconciles net income (loss) from continuing operations to EBITDA and Adjusted EBITDA:
 

($ in thousands)

 

For The Years Ended

 

 

 

December 31,

 

 

 

2025

 

 

2024

 

Net income (loss) from continuing operations

 

$

104,796

 

 

$

(68,931

)

Income tax expense (benefit)

 

 

33,145

 

 

 

(26,387

)

Interest expense, net

 

 

157,311

 

 

 

190,546

 

Depreciation and amortization

 

 

162,948

 

 

 

162,144

 

EBITDA

 

$

458,200

 

 

$

257,372

 

Non-cash share-based compensation (1)

 

 

59,164

 

 

 

61,336

 

Acquisition, integration, and transaction-related costs  (2)

 

 

40,424

 

 

 

31,953

 

Restructuring and divestiture-related and other costs (3)

 

 

59,782

 

 

 

61,688

 

Legal costs and settlements (4)

 

 

—

 

 

 

21,886

 

Significant projects  (5)

 

 

—

 

 

 

2,604

 

Management fees (6)

 

 

—

 

 

 

23,381

 

Total adjustments

 

$

159,370

 

 

$

202,848

 

Adjusted EBITDA

 

$

617,570

 

 

$

460,220

 

 
(1) Represents non-cash share-based compensation to certain members of our management and other full-time employees. The year ended December 31, 2024 includes $15.0 million of previously unrecognized share-based compensation expense related to performance-vesting options under the 2017 Stock Plan, a portion of which vested upon completion of the IPO.

(2) Represents transaction costs incurred in connection with planned, completed, or terminated acquisitions, which include investment banking fees, legal diligence and related documentation costs, finance and accounting diligence and documentation; costs associated with the integration of acquisitions, including any facility consolidation, integration travel, or severance; and costs associated with other planned, completed, or terminated non-routine transactions. The years ended December 31, 2025 and 2024 included other non-routine transaction costs of $26.8 million and $5.8 million, respectively.

(3) Represents costs associated with restructuring-related activities, including closure costs, and related license impairment, and severance expenses associated with certain enterprise-wide or significant business line cost-savings measures. These costs included $23.4 million and $23.7 million of costs that did not meet the criteria for discontinued operations related to the Community Living divestiture for the years ended December 31, 2025 and 2024, respectively. These costs also included $12.7 million of unamortized debt issuance costs associated with the extinguishment of our Second Lien Facility in the year ended December 31, 2024.

(4) Represents settlement and defense costs associated with certain historical PharMerica litigation matters, including the Silver matter, all of which were finalized in 2024. See Note 15 “Commitments and Contingencies” within the audited consolidated financial statements and related notes, included elsewhere in this Annual Report on Form 10-K, for additional information.

(5) Represents costs associated with certain transformational projects and for the periods presented primarily included general ledger system implementation, pharmacy billing system implementation, and ransomware attack response costs, all of which were finalized in 2024.

(6) Represents annual management fees payable to the Managers under the Monitoring Agreement through the date of the IPO, and $22.7 million of termination fees resulting from the Monitoring Agreement being terminated upon completion of the IPO Offerings. All management fees ceased following the completion of the IPO in 2024.

 
 
 
 
 
 
 

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The following table reconciles diluted EPS to Adjusted EPS:
 

(shares in thousands)

 

For The Years Ended

 

 

 

December 31,

 

 

2025

 

 

2024

 

Diluted EPS

 

$

0.48

 

 

$

(0.34

)

Non-cash share-based compensation (1)

 

 

0.27

 

 

 

0.30

 

Acquisition, integration, and transaction-related costs (1)

 

 

0.18

 

 

 

0.16

 

Restructuring and divestiture-related and other costs (1)

 

 

0.27

 

 

 

0.31

 

Legal costs and settlements (1)

 

 

—

 

 

 

0.11

 

Significant projects (1)

 

 

—

 

 

 

0.01

 

Management fee  (1)

 

 

—

 

 

 

0.12

 

Income tax impact on adjustments (2)

 

 

(0.20

)

 

 

(0.32

)

Adjusted EPS

 

$

1.00

 

 

$

0.35

 

 

 

 

 

 

 

Weighted average common shares outstanding used in calculating diluted U.S. GAAP
     net income (loss) per share

 

 

219,774

 

 

 

192,997

 

Weighted average common shares outstanding used in calculating diluted Non-GAAP
     earnings per share

 

 

219,774

 

 

 

202,106

 

 
(1) This adjustment reflects the per share impact of the adjustment reflected within the definition of Adjusted EBITDA.
(2) The income tax impact of non-GAAP adjustments is calculated using the estimated tax rate for the respective non-GAAP adjustment. For the year ended December 31, 2024, the income tax impact on adjustments is inclusive of a discrete tax benefit related to the Silver matter that was finalized in connection with the signing of the settlement agreement during the second fiscal quarter of 2024. For all periods presented, the income tax impact on adjustments is inclusive of a discrete tax benefit related to share-based compensation.
Liquidity and Capital Resources
Our principal sources of cash have historically been from operating activities. Our principal source of liquidity in excess of cash from operating activities has historically been from proceeds from our debt facilities and issuances of common stock. Our principal uses of cash and liquidity have historically been for acquisitions, debt service requirements, and financing of working capital. We believe that our operating cash flows, available cash on hand, and availability under our Revolving Credit Facility and the LC Facility will be sufficient to meet our cash requirements for the next twelve months and beyond. Our future capital requirements will depend on many factors that are difficult to predict, including the size, timing, and structure of any future acquisitions, future capital investments, and future results of operations. We cannot assure you that cash provided by operating activities or cash and cash equivalents will be sufficient to meet our future needs. If we are unable to generate sufficient cash flows from operations in the future, we may have to obtain additional financing. If we obtain additional capital by issuing equity, the interests of our existing stockholders will be diluted. If we incur additional indebtedness, that indebtedness may contain significant financial and other covenants that may significantly restrict our operations. We cannot assure you that we could obtain refinancing or additional financing on favorable terms or at all.
We evaluate our liquidity based upon the availability we have under our First Lien Facilities, as applicable, in addition to the net cash provided by (used in) operating, investing, and financing activities. Specifically, we review the activity under the Revolving Credit Facility and the LC Facility and consider period end balances outstanding under the Revolving Credit Facility and the LC Facility. Based upon the outstanding borrowings and letters of credit under the Revolving Credit Facility and the LC Facility, we calculate the availability for incremental borrowings under the Revolving Credit Facility and the LC Facility. Such amount, in addition to cash on our balance sheet, is what we consider to be our “Total Liquidity.”
 
 
 
 
 

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The following table provides a calculation of our Total Liquidity:
 

($ in thousands)

 

For the Years Ended December 31,

 

 

 

2025

 

 

2024

 

Revolving Credit Facility Rollforward

 

 

 

 

 

 

Beginning Revolving Credit Facility balance

 

$

63,300

 

 

$

50,700

 

(Repayments) borrowings of swingline debt, net

 

 

(63,300

)

 

 

12,600

 

Ending Revolving Credit Facility balance

 

$

—

 

 

$

63,300

 

 

 

 

 

 

 

Calculation of Revolving Credit Facility and LC Facility availability

 

 

 

 

 

 

Revolving Credit Facility and LC Facility limit

 

$

540,000

 

 

$

540,000

 

Less: outstanding Revolving Credit Facility balance

 

 

—

 

 

 

63,300

 

Less: outstanding letters of credit subject to LC Sublimit

 

 

—

 

 

 

—

 

Less: outstanding letters of credit under the LC Facility

 

 

62,790

 

 

 

61,821

 

End of period Revolving Credit Facility and LC Facility availability

 

 

477,210

 

 

 

414,879

 

End of period cash balance

 

 

88,370

 

 

 

60,954

 

Total Liquidity, end of period

 

$

565,580

 

 

$

475,833

 

Cash Flow Activity
The activity discussed in this section relates to our consolidated company results and includes the impacts of discontinued operations. The following table sets forth a summary of our cash flows provided by (used in) operating, investing, and financing activities for the periods presented:
 

($ in thousands)

 

For the Years Ended December 31,

 

 

 

2025

 

 

2024

 

 

Variance

 

Net cash provided by operating activities

 

$

490,169

 

 

$

23,774

 

 

$

466,395

 

Net cash used in investing activities

 

$

(305,079

)

 

$

(140,237

)

 

$

(164,842

)

Net cash (used in) provided by financing activities

 

$

(157,866

)

 

$

164,645

 

 

$

(322,511

)

 
Operating Activities
Net cash provided by operating activities increased by $466.4 million, from $23.8 million for 2024, to $490.2 million for 2025. The increase was primarily due to the following:
• a $228.4 million increase in operating income in 2025 as compared to 2024;

• a $41.1 million increase in operating income from discontinued operations in 2025 as compared to 2024;

• a $30.9 million decrease in one-time cash outflows for direct and indirect remuneration (“DIR”) fees paid in connection with the conclusion of the DIR program;

• a $100.0 million decrease in cash outflows attributable to the timing of Silver legal settlement payments;

• a $27.9 million decrease in cash outflows for interest, net primarily as a result of a reduction in the variable interest rates applicable to our outstanding term debt;

• a $22.7 million decrease in cash outflows directly attributable to management fees paid in 2024 as a result of the termination of the Monitoring Agreement in connection with the IPO Offerings, and

• a $2.0 million increase in cash outflows for income taxes.

Investing Activities
Net cash used in investing activities increased by $164.8 million, from $140.2 million in 2024, to $305.1 million in 2025. The increase was primarily due to a $14.6 million increase in purchases of property and equipment and an increase of $144.8 million in cash paid for acquisitions.
Financing Activities
Net cash used in financing activities was $157.9 million for the year ended December 31, 2025, primarily attributable to repayments on our long-term debt of $50.3 million, net repayments on our Revolving Credit Facility of $63.3 million, repurchase of shares of common stock of $43.2 million in connection with the October 2025 secondary offering, and payment of finance lease

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obligations of $13.5 million, offset by proceeds from shares issued under share-based compensation plan of $25.3 million and other financing activities.
Net cash provided by financing activities was $164.6 million for the year ended December 31, 2024, primarily attributable to net proceeds received from the IPO Offerings of $1,045.5 million, net borrowings on our Revolving Credit Facility of $12.6 million, partially offset by extinguishment of and net repayments on our long-term debt of $830.3 million, payment of debt issuance costs of $47.0 million, payment of finance lease obligations of $11.6 million, and other financing activities.
Debt
We typically incur debt to finance mergers and acquisitions, and we borrow under our Revolving Credit Facility for working capital purposes, as well as to finance acquisitions, as needed.
On March 5, 2019, the Company entered into the First Lien Credit Agreement with Morgan Stanley Senior Funding, Inc., as the Administrative Agent and Collateral Agent. The Company also entered into a $450.0 million Second Lien Facility with certain Lenders and Wilmington Trust, National Association as the Administrative Agent and Collateral Agent, on the same date. The First Lien Credit Agreement, as amended, also extends credit in the form of a Revolving Credit Facility, or the Revolver, which is comprised of Revolving Credit Loans and Swingline Loans. The total borrowing capacity of the Revolver as of December 31, 2025 was $475.0 million. Additionally, the Letter of Credit Issuer may issue standby Letters of Credit at any time and the Swingline Lender may issue Swingline Loans in an aggregate amount outstanding not in excess of $65.0 million.
Following our IPO Offerings in January 2024, we used a portion of the net proceeds received to repay all outstanding borrowings under the Second Lien Facility and repay $343.3 million of borrowings under the First Lien Facility. No remaining obligation exists related to the Second Lien Facility and the transaction was accounted for as a debt extinguishment resulting in a $12.7 million write-off of unamortized debt issuance costs. At that time, we also established a new Tranche B-4 under the First Lien to refinance the equivalent amount of the remaining First Lien Tranche B-1, B-2 and B-3 borrowings. On December 11, 2024, we again amended the First Lien to establish a new Tranche B-5 Term Loan (“Tranche B-5”) in an aggregate principal amount of $2,553.2 million to refinance the equivalent amount of the remaining Tranche B-4 borrowings at a rate equal to SOFR plus 2.50% or ABR plus 1.50% with a maturity date of February 21, 2031.
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 and a senior amortizing note (“Amortizing Note”) due February 1, 2027, each issued by the Company. Refer to Note 7 within our consolidated financial statements and related notes in this Annual Report on Form 10-K for further discussion.
Our outstanding debt as of December 31, 2025 was $2,569.7 million, which is primarily comprised of $2,521.3 million outstanding under the First Lien Facility and $31.4 million outstanding related to Amortizing Notes.
The First Lien Credit Agreement described above contain customary negative covenants, including, but not limited to, restrictions on the Company and its restricted subsidiaries’ ability to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, make acquisitions, loans, advances, or investments, pay dividends, sell or otherwise transfer assets, prepay or modify terms of certain junior indebtedness, enter into transactions with affiliates, or change their lines of business or fiscal year. In addition, under the Revolving Credit Facility, the Company will not permit the consolidated first lien secured debt to consolidated EBITDA (as defined in the First Lien Credit Agreement) ratio to be greater than 6.90 to 1.00, which shall be tested as of the end of the most recent quarter at any time when the aggregate revolving credit loans exceed 35% of the total revolving credit commitments. We were in compliance with all applicable financial covenants under the First Lien Facilities as of December 31, 2025.
Interest Rate Swap Agreements
To manage fluctuations in cash flows resulting from changes in the variable rates, the Company entered into receive-variable, pay-fixed interest rate swap agreements. For the years ended December 31, 2025 and 2024, interest expense, net includes interest income related to cash flow hedges of interest rate risk of $15.2 million and $35.3 million, respectively. Refer to Note 6 within our audited consolidated financial statements and related notes in this Annual Report on Form 10-K for further discussion.
 
 
 
 
 

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The table below summarizes the total outstanding debt of the Company:
 

($ in thousands)

Rate

 

 

Long-term obligation and note payable

 

 

Interest Expense

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

 

Fiscal Year

 

 

Fiscal Year

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

First Lien - payable to lenders at SOFR plus
   applicable margin

 

—

 

 

 

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

18,151

 

First Lien Tranche B-2 and B-3 - payable to lenders at
   SOFR plus applicable margin

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

12,923

 

First Lien Incremental Term Loan Tranche B-4 -
   payable to lenders at SOFR plus applicable margin

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

150,759

 

First Lien Incremental Term Loan Tranche B-5 -
   payable to lenders at SOFR plus applicable margin

 

6.22

%

 

 

6.86

%

 

 

2,521,255

 

 

 

2,546,787

 

 

 

146,482

 

 

 

8,857

 

Second Lien - payable to lenders at SOFR plus
   applicable margin

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

4,482

 

Revolving Credit Loans - payable to lenders at SOFR
   plus applicable margin

 

6.47

%

 

 

7.61

%

 

 

—

 

 

 

—

 

 

 

—

 

 

 

331

 

Swingline Loans and Base Rate Loans - payable to
   lenders at ABR plus applicable margin

 

8.50

%

 

 

9.75

%

 

 

—

 

 

 

63,300

 

 

 

6,996

 

 

 

10,602

 

Amortizing Notes

 

 

 

 

 

 

 

31,360

 

 

 

53,804

 

 

 

4,183

 

 

 

4,899

 

Notes payable and other

 

 

 

 

 

 

 

17,129

 

 

 

19,428

 

 

 

886

 

 

 

316

 

Amortization of deferred financing costs & other, net
   of interest income from cash flow hedges

 

 

 

 

 

 

 

—

 

 

 

—

 

 

 

(1,236

)

 

 

(20,774

)

Total debt

 

 

 

 

 

 

$

2,569,744

 

 

$

2,683,319

 

 

$

157,311

 

 

$

190,546

 

Less: debt issuance costs, net

 

 

 

 

 

 

 

62,200

 

 

 

72,736

 

 

 

 

 

 

 

Total debt, net of debt issuance costs

 

 

 

 

 

 

 

2,507,544

 

 

 

2,610,583

 

 

 

 

 

 

 

Less: Current portion of long-term debt

 

 

 

 

 

 

 

52,340

 

 

 

48,725

 

 

 

 

 

 

 

Total long-term debt, net of current portion

 

 

 

 

 

 

$

2,455,204

 

 

$

2,561,858

 

 

 

 

 

 

 

Our Company's leverage, as calculated under our First Lien Credit Agreement, was 2.99x and 4.16x at December 31, 2025 and 2024, respectively. The results of the Community Living business are included in such calculation pursuant to the terms of our First Lien Credit Agreement.
Off-Balance Sheet Arrangements
As of December 31, 2025 and 2024, we did not have any material off-balance sheet arrangements. As part of our ongoing business, we do not participate in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, or SPEs, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As of December 31, 2025 and 2024, we were not involved in any unconsolidated SPE transactions. We do enter into letters of credit in the normal course of our operations.
Critical Accounting Policies and Use of Estimates
In preparing our consolidated financial statements in conformity with U.S. GAAP, we must use estimates and assumptions that affect the reported amounts of assets and liabilities and related disclosures and the reported amounts of revenue and expenses. In general, our estimates are based on historical experience and various other assumptions we believe are reasonable under the circumstances. We evaluate our estimates on an ongoing basis and make changes to the estimates and related disclosures as experience develops or new information becomes known. Actual results could differ from those estimates.
We consider our critical accounting policies and estimates to be those that involve significant judgments and uncertainties and may potentially result in materially different results under different assumptions and conditions. See Note 1 “Significant Accounting Policies” to our audited consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K for a summary of all of our significant accounting policies.
Revenue Recognition
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. Additionally, as a policy, where we are required to collect sales taxes from our customers, revenue is recognized net of any taxes collected, and the sales tax amounts are recorded as a liability until remitted to the governmental taxing authorities.

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Revenues and the associated receivables are based upon the actual reimbursements to be received and include contractual allowances based upon historical trends, contractual reimbursement terms, and other factors which may impact ultimate reimbursement. Amounts are adjusted to actual reimbursed amounts based upon cash receipts.
Pharmacy Solutions
Pharmacy Solutions revenues are generated from the products and services provided in association with the distribution of prescription drugs to consumers primarily under contracts with Prescription Drug Plans, or PDPs, under Medicare Part D, state Medicaid programs, long-term care institutions, third party insurance companies, and private payors. Services provided include individualized medication management and support, staff and patient support programs and solutions, regulatory support, and product delivery. When an order for a prescription is placed with the Company, it creates the performance obligation to deliver a prescription and related services. The performance obligation is satisfied at a point in time upon shipment for specialty pharmacies and upon delivery for other pharmacies. Revenues are recognized at a point in time when the associated performance obligations are satisfied at the contractual rate established at or before the time the performance obligation is satisfied.
Provider Services
Provider Services revenues are generated from providing care services directly to consumers under contracts with state, local, and other governmental agencies, as well as commercial insurance companies, long-term care insurance policies, private pay customers, and management contracts with private operators. Generally, these contracts, which are negotiated based on current contract practices as appropriate for the payor, establish the terms of a customer relationship, and set the broad range of terms for services to be performed at a stated rate. The contracts do not give rise to rights and obligations until a service request is placed with the Company. Contract terms vary but generally are for one year or less with available renewal options and a 30 – 60-day reimbursement period. When a service request is placed with the Company, it creates the performance obligation to provide a defined quantity of service hours per patient. Performance obligations to deliver patient care services are satisfied over time and revenue is recognized using a time-based input method to measure progress against the contract between the Company and the customer, given that consumers simultaneously receive and consume the benefits provided by the Company as the services are performed. Revenues are recognized over a period of time as the services are rendered at the contractual rate established at or before the time services are rendered; thus, there are no forms of variable consideration associated with the various revenue streams.
Accounts Receivable and Allowance for Credit Losses
Accounts receivable primarily consist of amounts due from PDPs under Medicare Part D, institutional healthcare providers, state Medicaid programs, other government agencies, third-party insurance companies, and private payors. The Company performs a periodic analysis to review the valuation of accounts receivable and collectability of outstanding balances. Management’s evaluation takes into consideration factors such as historical bad debt experience, business and economic conditions, trends in healthcare coverage, other collection indicators, and information about specific receivables. The Company’s evaluation also considers the age and composition of the outstanding amounts in determining their estimated net realizable value. The Company’s ability to collect outstanding receivables is critical to its results of operations and cash flows. To provide for accounts receivable that could become uncollectible in the future, the Company establishes an allowance for credit losses to reduce the carrying value of such receivables to the extent it is probable that a portion or all of a particular account will not be collected, with the related expense recorded as a component of selling, general, and administrative expenses.
Goodwill and Intangible Assets
Goodwill Impairment Analyses
Goodwill represents the amount of the purchase price in excess of the fair values assigned to the underlying identifiable net assets of acquired businesses. Goodwill is not amortized, but is subject to an annual impairment test. Tests are performed more frequently if events occur or circumstances change, that would more-likely-than-not reduce the fair value of the reporting unit below its carrying amount.
The Company performs an annual goodwill impairment test on October 1st of each year for each reporting unit. The Company first assesses certain qualitative factors to determine whether the existence of events or circumstances would indicate that it is more-likely-than-not that the fair value of a reporting unit was less than its carrying amount. If after assessing the totality of events and circumstances, we were to determine that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, then we would perform quantitative impairment testing. The quantitative impairment test is a single-step process. The process requires the Company to estimate and compare the fair value of a reporting unit to its carrying amount, including goodwill. If the fair value exceeds the carrying amount, the goodwill is not considered impaired. To the extent a reporting unit’s carrying amount exceeds

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its fair value, the reporting unit’s goodwill is deemed impaired, and an impairment charge is recognized based on the excess of a reporting unit’s carrying amount over its fair value.
A reporting unit is either an operating segment or one level below the operating segment. The Company has six reporting units: Institutional Pharmacy, Specialty Solutions, Home Infusion, Hospice Pharmacy, Behavioral Health, and Home Health & Therapies.
In 2025 and 2024, we performed a quantitative assessment of all reporting units as of October 1. We engaged a third-party valuation firm to assist in calculating each reporting unit’s fair value, which is derived using a combination of both income and market approaches. The material assumptions underlying the estimate of fair value of each reporting unit included the following:
• Future cash flow assumptions—the projections for future cash flows utilized in the model were derived from historical experience and assumptions regarding future growth and profitability of each reporting unit. These projections are consistent with our operating budget and strategic plan. Beyond the forecasted period, a long-term growth rate was utilized to determine a terminal value that reflects our estimate of stable and perpetual growth.

• Weighted average cost of capital (WACC)—the WACC is the rate used to discount each reporting unit’s estimated future cash flows. The WACC is calculated based on a proportionate weighting of the cost of debt and equity. The cost of equity is based on a capital asset pricing model and includes a company-specific risk premium to capture the perceived risks and uncertainties associated with each reporting unit’s projected cash flows.

• Market approach—the market approach measures the value of an asset through the analysis of publicly traded companies or present sales of similar businesses. The analysis entails measuring the multiple of sales and/or EBITDA at which the comparable companies are currently trading or were purchased.

• Equal weighting was applied to the discounted cash flow analysis or income approach (50%) and the market approach (50%).

 
Our 2025 and 2024 goodwill impairment analyses concluded that the fair value of each reporting unit was in excess of the carrying amount of each reporting unit. Subsequent to completing each goodwill impairment test, no indicators of impairment were identified.
Intangible Impairment Analyses
The Company’s intangible assets are comprised primarily of customer relationships, trade names, and definitive-lived licenses, which are amortized on a straight-line basis over their estimated useful lives, which is generally two to twenty years. The Company’s indefinite-lived intangible assets are comprised of indefinite lived licenses, which are reviewed for impairment annually or more frequently if events occur or circumstances change that would more-likely-than-not reduce the fair value of the intangible asset below its carrying amount. We elected to perform a qualitative assessment for our intangible assets for our annual impairment test in the fourth quarter of 2025 and 2024. As a result of our qualitative analyses, we determined that it was more-likely-than-not that the fair values of our indefinite-lived intangible assets were greater than their carrying values. We recorded intangible impairment of $10.8 million and $1.7 million related to definite-lived intangible licenses for the years ended December 31, 2025 and 2024, respectively.
The estimates and assumptions we use to estimate fair values when performing quantitative assessments are highly subjective judgments based on our experience and knowledge of our operations. Significant changes in the assumptions used in our analysis could result in an impairment charge related to goodwill or the indefinite-lived intangible assets. Circumstances that could result in changes to future estimates and assumptions include, but are not limited to, expectations of lower revenue growth, which can be caused by a variety of factors, fluctuations in comparable company and acquisition market multiples, increases in income tax rates, and increases in discount rates.
Self-insurance
The Company is self-insured for a substantial portion of the Company’s general and professional liability, automobile liability, workers’ compensation risks, and health benefits, subject to certain stop loss coverage at a high level of losses. Given the policy limits and high deductibles and/or self-insured retentions on many of the Company’s insurance programs, the vast majority of claims may not be paid by third-party insurance.
The Company’s self-insured liabilities contain uncertainties because management must make assumptions and apply judgment to estimate the ultimate cost of reported claims and claims incurred but not reported as of the balance sheet date. The Company’s provisions for losses for workers’ compensation and health benefit risks are based upon actuarially determined estimates and include an amount determined from reported claims and an amount based on past experiences for losses incurred but not reported. The Company’s provisions for general and professional and automobile liabilities are recorded on a claims-made basis, which includes

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estimates of fully developed losses for both reported and unreported claims. Accruals for general and professional and automobile liabilities are based on analyses performed internally by management.
On a quarterly basis, the Company evaluates the assumptions and the valuations to determine the adequacy of the self-insurance liabilities. The following are certain of the key assumptions and other factors that significantly influence the Company’s estimate of self-insurance liabilities: historical claims experience; trending of loss development factors; trends in the frequency and severity of claims; coverage limits of third-party insurance; demographic information; medical cost inflation; and payroll dollars. Any adjustments to the liabilities are reflected in earnings in the period identified.
The time period to resolve claims can vary depending upon the jurisdiction, the nature, and the form of resolution of the claims. The estimation of the timing of payments beyond a year can vary significantly. In addition, if current and future claims differ from historical trends, our estimated liabilities for self-insured claims may be significantly affected. The Company’s self-insurance liabilities for workers’ compensation are discounted based on actuarial estimates of claim payment patterns.
The Company believes the provision for loss is adequate for claims that have been reported but not paid and for claims that have been incurred but not reported. Due to the considerable variability that is inherent in such estimates, there can be no assurance the ultimate liability will not exceed management’s estimates. If actual results are not consistent with the assumptions and judgments, the Company may be exposed to gains or losses that could be material.
Recent Accounting Pronouncements
Refer to Note 1 “Significant Accounting Policies” within our audited consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K for further discussion.
Item 7A . Quantitative and Qualitative Disclosures About Market Risk
Impact of Inflation
Wages and other expenses increase during periods of inflation and when labor shortages occur in the marketplace. The impact of inflation on the Company is primarily in the area of labor costs. The healthcare industry is labor intensive. There can be no guarantee we will not experience increases in the cost of labor, particularly given the shortage of qualified caregivers in our markets, and the demand for homecare services is expected to grow.
In addition, increases in healthcare costs are typically higher than inflation and impact our costs under our employee benefit plans. Managing these costs remains a significant challenge and priority for us. While we believe the effects of inflation, if any, and labor shortages on our results of operations and financial condition have not been significant, there can be no guarantee we will not experience the effect of inflation in the future.
In addition, suppliers pass along rising costs to us in the form of higher prices, which impacts us primarily in the area of pharmaceutical drug costs in our Pharmacy Solutions segment. Changes in costs of drugs can be accompanied by a change in rate that we pass along to our customers. Additionally, our supply chain efforts have enabled us to effectively manage and mitigate any inflationary impacts in our supply chain over recent years. However, we cannot predict our ability to cover future cost increases.
We have little or no ability to pass on certain of these increased costs associated with providing services to Medicare and Medicaid patients due to federal and state laws that establish fixed reimbursement rates.
Interest Rate Risk
Our Company is exposed to interest rate risk related to changes in interest rates for borrowings under our First Lien Facilities. Although we hedge a portion of our interest rate risk through interest rate swaps, any borrowings under our First Lien in excess of the notional amount of the swaps are subject to variable interest rates.
As of December 31, 2025, our interest rate swaps that were designated as cash flow hedges of interest rate risk had a combined notional value of $1.5 billion. See Note 6 “Debt and Derivatives” within the audited consolidated financial statements and related notes, included elsewhere in the Annual Report on Form 10-K.
The changes in fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income, or AOCI, and are subsequently reclassified into earnings in the period that the hedged forecasted transaction impacts earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest expense, net as interest payments are made on the Company’s variable-rate debt. During the next twelve months, the Company expects approximately $0.8 million of losses will be reclassified into pre-tax earnings out of AOCI.

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As of December 31, 2025, our debt outstanding was $2.6 billion, of which $1.5 billion is fixed through interest rate swap agreements. A hypothetical 1% increase in interest rates would decrease our net income and our cash flows by $10.2 million on an annual basis based upon our borrowing level at December 31, 2025.

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Item 8. Financial Statements and Supplementary Data
 
INDEX TO C ONSOLIDATED FINANCIAL STATEMENTS
 

Report of Independent Registered Public Accounting Firm  (PCAOB ID: 185 )

82

Consolidated Balance Sheets as of December 31, 2025 and 2024

85

Consolidated Statements of Operations for the years ended December 31, 2025, 2024, and 2023

86

Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2025, 2024, and 2023

87

Consolidated Statements of Shareholders' Equity for the years ended December 31, 2025, 2024 and 2023

88

Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024, and 2023

89

Notes to Consolidated Financial Statements

92

 

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Repor t of Indepen dent Registered Public Accounting Firm
 
To the Shareholders and Board of Directors
BrightSpring Health Services, Inc.:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of BrightSpring Health Services, Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 27, 2026expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Valuation of self-insurance liabilities
As discussed in Note 1 to the consolidated financial statements, the Company is self-insured for a substantial portion of its general and professional liabilities and workers’ compensation liabilities. As discussed in Note 9 to the consolidated financial statements, accrued expenses include workers’ compensation insurance reserves and general and professional liability insurance reserves of $24,897 thousand and $7,696 thousand, respectively, and long-term liabilities include workers’ compensation insurance reserves and general and professional liability insurance reserves of $25,369 thousand and $25,032 thousand, respectively, as of December 31, 2025. The liabilities recognized for workers’ compensation are actuarially determined estimates, while the liabilities recognized for general and professional liability are based on analyses performed by management.
We identified the evaluation of the self-insurance liabilities noted above as a critical audit matter. Specifically, evaluation of the Company’s determination of the claims incurred but not reported for workers’ compensation liabilities involved auditor judgment due to significant measurement uncertainty. In addition, evaluation of the Company’s estimates of the ultimate cost of reported claims related to general and professional liabilities and workers’ compensation liabilities involved actuarial professionals with specialized skills and knowledge.

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The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the workers’ compensation liabilities and general and professional liabilities, including data received from third party administrator, and assessing management’s review of actuarial reports. We evaluated the Company’s ability to estimate self-insurance reserves, and assessed potential management bias, by comparing the prior year estimated reserves to subsequent adjustments to those reserves recorded in the current year. We involved actuarial professionals with specialized skills and knowledge, who assisted in:
• evaluating the Company’s expected loss rates used to determine claims incurred but not reported for workers’ compensation liabilities by developing an independent expectation of the loss rates using actuarial methodologies and independent assumptions and comparing them to the Company’s expected loss rates

• evaluating the Company’s determination of the ultimate cost of reported claims by developing an independent estimate of the Company’s loss development factors and comparing them to the Company’s loss development factors used to determine the ultimate cost of reported claims

 
/s/ KPMG LLP
We have served as the Company’s auditor since 2019.
Louisville, Kentucky
February 27, 2026
 

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Report of Independent Registered Public Accounting Firm
 
To the Shareholders and Board of Directors
BrightSpring Health Services, Inc.:
Opinion on Internal Control Over Financial Reporting
We have audited BrightSpring Health Services, Inc. and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements), and our report dated February 27, 2026 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ KPMG LLP
Louisville, Kentucky
February 27, 2026
 

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BrightSpring Health Services, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except share and per share data)
 

 

December 31, 2025

 

 

December 31, 2024

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

88,370

 

 

$

60,954

 

Accounts receivable, net of allowance for credit losses

 

 

989,719

 

 

 

902,782

 

Inventories

 

 

815,180

 

 

 

636,561

 

Prepaid expenses and other current assets

 

 

118,592

 

 

 

161,310

 

Current assets held for sale

 

 

882,189

 

 

 

131,447

 

Total current assets

 

 

2,894,050

 

 

 

1,893,054

 

Property and equipment, net of accumulated depreciation of $ 404,878  and $ 339,892
   at December 31, 2025 and 2024, respectively

 

 

204,689

 

 

 

180,570

 

Goodwill

 

 

2,545,673

 

 

 

2,363,884

 

Intangible assets, net of accumulated amortization

 

 

557,555

 

 

 

595,224

 

Operating lease right-of-use assets, net

 

 

171,632

 

 

 

161,032

 

Deferred income taxes, net

 

 

—

 

 

 

5,288

 

Other assets

 

 

39,712

 

 

 

39,128

 

Non-current assets held for sale

 

 

—

 

 

 

687,960

 

Total assets

 

$

6,413,311

 

 

$

5,926,140

 

Liabilities, Redeemable Noncontrolling Interests, and Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Trade accounts payable

 

$

1,217,946

 

 

$

923,926

 

Accrued expenses

 

 

333,024

 

 

 

295,746

 

Current portion of obligations under operating leases

 

 

42,936

 

 

 

38,910

 

Current portion of obligations under financing leases

 

 

6,794

 

 

 

3,463

 

Current portion of long-term debt

 

 

52,340

 

 

 

48,725

 

Current liabilities held for sale

 

 

195,994

 

 

 

117,563

 

Total current liabilities

 

 

1,849,034

 

 

 

1,428,333

 

Obligations under operating leases, net of current portion

 

 

135,420

 

 

 

129,467

 

Obligations under financing leases, net of current portion

 

 

14,544

 

 

 

6,530

 

Long-term debt, net of current portion

 

 

2,455,204

 

 

 

2,561,858

 

Deferred income taxes, net

 

 

6,178

 

 

 

—

 

Long-term liabilities

 

 

66,565

 

 

 

71,190

 

Non-current liabilities held for sale

 

 

—

 

 

 

77,177

 

Total liabilities

 

 

4,526,945

 

 

 

4,274,555

 

Redeemable noncontrolling interests

 

 

11,227

 

 

 

3,730

 

Shareholders’ equity:

 

 

 

 

 

 

Common stock, $ 0.01  par value, 1,500,000,000  shares authorized, 192,124,125  and
     174,245,990  shares issued and outstanding at December 31, 2025 and 2024, respectively

 

$

1,921

 

 

$

1,742

 

Preferred stock, $ 0.01  par value, 250,000,000  authorized, no  shares issued and
     outstanding at December 31, 2025 and 2024

 

 

—

 

 

 

—

 

Additional paid-in capital

 

 

1,954,482

 

 

 

1,866,850

 

Accumulated deficit

 

 

( 74,647

)

 

 

( 222,155

)

Accumulated other comprehensive (loss) income

 

 

( 6,691

)

 

 

1,418

 

Total shareholders’ equity

 

 

1,875,065

 

 

 

1,647,855

 

Noncontrolling interest

 

 

74

 

 

 

—

 

Total equity

 

 

1,875,139

 

 

 

1,647,855

 

Total liabilities, redeemable noncontrolling interests, and equity

 

$

6,413,311

 

 

$

5,926,140

 

 
See accompanying notes to the consolidated financial statements.

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BrightSpring Health Services, Inc. and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share amounts)
 

 

For the Years Ended December 31,

 

 

2025

 

 

2024

 

 

2023

 

Revenues:

 

 

 

 

 

 

 

 

 

Products

 

$

11,445,777

 

 

$

8,754,282

 

 

$

6,522,450

 

Services

 

 

1,464,787

 

 

 

1,317,932

 

 

 

1,168,566

 

Total revenues

 

 

12,910,564

 

 

 

10,072,214

 

 

 

7,691,016

 

Cost of goods

 

 

10,507,431

 

 

 

8,008,501

 

 

 

5,840,716

 

Cost of services

 

 

885,356

 

 

 

797,286

 

 

 

711,304

 

Gross profit

 

 

1,517,777

 

 

 

1,266,427

 

 

 

1,138,996

 

Selling, general, and administrative expenses

 

 

1,222,525

 

 

 

1,158,473

 

 

 

1,080,871

 

Operating income

 

 

295,252

 

 

 

107,954

 

 

 

58,125

 

Loss on extinguishment of debt

 

 

—

 

 

 

12,726

 

 

 

—

 

Interest expense, net

 

 

157,311

 

 

 

190,546

 

 

 

271,899

 

Income (loss) from continuing operations before income taxes

 

 

137,941

 

 

 

( 95,318

)

 

 

( 213,774

)

Income tax expense (benefit)

 

 

33,145

 

 

 

( 26,387

)

 

 

( 31,508

)

Income (loss) from continuing operations, net of income taxes

 

 

104,796

 

 

 

( 68,931

)

 

 

( 182,266

)

Income from discontinued operations, net of income taxes

 

 

84,317

 

 

 

48,410

 

 

 

25,431

 

Net income (loss)

 

 

189,113

 

 

 

( 20,521

)

 

 

( 156,835

)

Net loss attributable to noncontrolling interests included in continuing
   operations

 

 

( 1,553

)

 

 

( 2,459

)

 

 

( 2,232

)

Net income (loss) attributable to BrightSpring Health Services, Inc. and
   subsidiaries

 

$

190,666

 

 

$

( 18,062

)

 

$

( 154,603

)

 

 

 

 

 

 

 

 

 

Net income (loss) per common share (Note 10):

 

 

 

 

 

 

 

 

 

  Basic income (loss) per share attributable to common shareholders:

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.53

 

 

$

( 0.34

)

 

$

( 1.53

)

Discontinued operations

 

$

0.41

 

 

$

0.25

 

 

$

0.22

 

Net income (loss) per share

 

$

0.94

 

 

$

( 0.09

)

 

$

( 1.31

)

  Diluted income (loss) per share attributable to common shareholders:

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.48

 

 

$

( 0.34

)

 

$

( 1.53

)

Discontinued operations

 

$

0.39

 

 

$

0.25

 

 

$

0.22

 

Net income (loss) per share

 

$

0.87

 

 

$

( 0.09

)

 

$

( 1.31

)

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

 

202,564

 

 

 

192,997

 

 

 

117,868

 

Diluted

 

 

219,774

 

 

 

192,997

 

 

 

117,868

 

 
See accompanying notes to the consolidated financial statements.

86

Table of Contents

 

BrightSpring Health Services, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income (Loss )
(In thousands)
 

 

For the Years Ended December 31,

 

 

2025

 

 

2024

 

 

2023

 

Net income (loss)

 

$

189,113

 

 

$

( 20,521

)

 

$

( 156,835

)

Other comprehensive loss, net of tax:

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

206

 

 

 

( 309

)

 

 

131

 

Cash flow hedges:

 

 

 

 

 

 

 

 

 

           Net change in fair value, net of tax (1)

 

 

3,198

 

 

 

15,826

 

 

 

14,948

 

           Amounts reclassified to earnings, net of tax (2)

 

 

( 11,513

)

 

 

( 26,643

)

 

 

( 23,727

)

Total other comprehensive loss

 

 

( 8,109

)

 

 

( 11,126

)

 

 

( 8,648

)

Total comprehensive income (loss)

 

 

181,004

 

 

 

( 31,647

)

 

 

( 165,483

)

Comprehensive loss attributable to redeemable noncontrolling interests

 

 

( 1,143

)

 

 

( 1,789

)

 

 

( 2,167

)

Comprehensive loss attributable to noncontrolling interest

 

 

( 410

)

 

 

( 670

)

 

 

( 65

)

Comprehensive income (loss) attributable to BrightSpring Health Services, Inc.
    and subsidiaries

 

$

182,557

 

 

$

( 29,188

)

 

$

( 163,251

)

 
(1) The income tax effects of the net change in fair value were $( 1,038 ) , $( 5,149 ) , and $( 4,591 ) for the years ended December 31, 2025, 2024, and 2023 , respectively.
(2) The income tax effects of amounts reclassified to earnings were $ 3,736 , $ 8,646 , and $ 7,683 for the years ended December 31, 2025, 2024, and 2023 , respectively.
 
See accompanying notes to the consolidated financial statements.
 
 

87

Table of Contents

 

BrightSpring Health Services, Inc. and Subsidiaries
Consolidated Statements of Shareholders’ Equity
(In thousands, except share data or otherwise indicated)
 
 

 

Common Stock

 

 

Additional
Paid-In Capital

 

 

Accumulated Deficit

 

 

Accumulated Other
Comprehensive Income (Loss)

 

 

Noncontrolling Interest

 

 

Total

 

 

Shares

 

 

Amount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at January 1, 2023

 

 

117,860,839

 

 

$

1,179

 

 

$

778,121

 

 

$

( 45,716

)

 

$

21,192

 

 

$

—

 

 

$

754,776

 

Net loss (1)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

( 154,538

)

 

 

—

 

 

 

( 65

)

 

 

( 154,603

)

Other comprehensive loss, net of tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

( 8,648

)

 

 

—

 

 

 

( 8,648

)

Share-based compensation

 

 

—

 

 

 

—

 

 

 

3,917

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3,917

 

Repurchase of shares of common stock

 

 

( 81,654

)

 

 

( 1

)

 

 

( 1,299

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

( 1,300

)

Shares issued under share-based compensation plan,
     including tax effects

 

 

77,870

 

 

 

1

 

 

 

597

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

598

 

Repurchase of stock options

 

 

—

 

 

 

—

 

 

 

( 10,000

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

( 10,000

)

Investment in noncontrolling interest

 

 

—

 

 

 

—

 

 

 

—

 

 

 

( 65

)

 

 

—

 

 

 

735

 

 

 

670

 

Balances at December 31, 2023

 

 

117,857,055

 

 

$

1,179

 

 

$

771,336

 

 

$

( 200,319

)

 

$

12,544

 

 

$

670

 

 

$

585,410

 

Net loss (1)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

( 18,062

)

 

 

—

 

 

 

( 670

)

 

 

( 18,732

)

Other comprehensive loss, net of tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

( 11,126

)

 

 

—

 

 

 

( 11,126

)

Share-based compensation

 

 

—

 

 

 

—

 

 

 

69,174

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

69,174

 

Exercise of stock options

 

 

234,608

 

 

 

2

 

 

 

1,533

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,535

 

Issuance of common stock for settlement of RSUs

 

 

241,971

 

 

 

2

 

 

 

( 2

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Tax effect of net share settlement of equity awards

 

 

( 93,678

)

 

 

( 1

)

 

 

( 1,195

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

( 1,196

)

Shares issued for payment of acquisition

 

 

2,570,503

 

 

 

26

 

 

 

31,055

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

31,081

 

Derecognition of redeemable noncontrolling interest,
   net of tax

 

 

—

 

 

 

—

 

 

 

12,439

 

 

 

( 3,774

)

 

 

—

 

 

 

—

 

 

 

8,665

 

Issuance of common stock on initial public offering, net (2)

 

 

53,333,334

 

 

 

533

 

 

 

661,244

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

661,777

 

Proceeds from stock purchase contract issued under
   tangible equity units, net (3)

 

 

—

 

 

 

—

 

 

 

321,611

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

321,611

 

Other

 

 

102,197

 

 

 

1

 

 

 

( 345

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

( 344

)

Balances at December 31, 2024

 

 

174,245,990

 

 

$

1,742

 

 

$

1,866,850

 

 

$

( 222,155

)

 

$

1,418

 

 

$

—

 

 

$

1,647,855

 

Net income (loss) (1)