W`ell, we're ready to get started with our next panel. I'm Scott Fidel. I'm the Healthcare Services Analyst with Goldman Sachs. Really delighted to have BrightSpring Health Services with us today, hear from the company that Jennifer Phipps, Jen is the Chief Financial Officer, and then David Deuchler as well is in the audience with investor relations. Jen, first of all, welcome to the conference. Yeah. It's great to have you and BrightSpring here. Also, personally, it's just great timing for us, because we actually just initiated research coverage on the company on Friday night, and that is really exciting to be covering the company. I've been monitoring the company's progress since the IPO, and have definitely been quite impressed with the performance the company has delivered against some end markets where it's not necessarily a given that everything's going to be linear. Looking forward to covering the company on the forward. I think, Jen, maybe let's just sort of start with the growth profile and start with sort of a little bit of a look back over the last couple of years, like I just mentioned. The companies, like we had in our note, one of the headlines was the growth profile that's hard to ignore in terms of what you've delivered. Over the last few years, it's been 20% top-line growth, 25%-30% EBITDA growth, which is well ahead of the mid-teens framework that you have historically referenced. Why don't we take a look back and give us some insight into where those outperformance levers have been driven from, when we think about, LDD cadence, share gains, operational initiatives, just in terms of giving us insight into what the underlying drivers of performance have been. Scott, thanks for having us. Obviously, we're glad to be here today. BrightSpring has operated traditionally in really attractive markets that are growing at attractive rates, providing higher ROI services to the network. As we think about that, we've been leaders in the market across both pharmacy and provider. We've had broad-based growth across all of our businesses. We've been able to leverage our scale, leverage our investments and our M&A platform, which has helped deliver on the growth that we've had over the last few years. As we look across all of our businesses, we've seen really good growth across all of our businesses. Our specialty pharmacy business has grown higher than our company average. As we think about that growth rate, that has been underpinned by our high-quality services and volume that we've been able to drive, largely because we've won new LDDs. We've won 16-20 LDDs each of the last several years. As we think about that going forward, there's really strong continued markets in both the oncology and rare and orphan, which is where we traditionally have focused our specialty pharmacy growth. As we look at that profile, and a lot of times, those LDDs typically take two to three years to grow in the market. Our 2026 growth from a revenue standpoint is partly underpinned by LDD wins that we had back in 2024. We have seen, again, that broad-based growth across pharmacy and provider, which I think has really been beneficial. We've been able to leverage our scale, which has allowed us additional operational efficiencies and improvements. That's really at the core of who we are. We've been talking about that since the IPO. Really, if you go back 10 years, you see a list of projects that we are going after every single year. In the last 12 months, we've really operationalized and formalized our Lean Six Sigma training and processes, embedding that throughout the operations as well as focused teams at our corporate that are helping deliver on some of those growth. All right, great. Why don't we take that, and we'll just transfer it forward and timing is good to talk about the forward. You had your investor conference not too long ago at which you laid out a framework for 15%-20% growth algorithm from that 2026-2028 timeframe. Maybe sort of similarly, maybe talk about as you laid out that model, some of the key variables, the key inputs that you think could push that towards the top end versus the bottom of the range. In particular, a few of the things that I'd love to hear from you about would be those sort of that continuation of the LDD wins, which has been, I think, such a unique competitive differentiator for the company recently. Then the infusion ramp and then provider growth as well. Yeah, no. I think underpinning really that entire growth rate is our expectations for continuing really strong volume growth, which is underpinned by our high-quality services. As we think about each of our different business lines, those markets are highly attractive markets that are growing. We've been able to grow in those markets via expansion into new geographies as well as deepening in those markets and market share that we've been able to take. We expect that to continue across our different businesses. As we think about, you asked specifically about LDDs, we've provided an outlook. We typically are working with manufacturers what can be 12-18 months in advance of launch. We have oftentimes pretty good visibility, pretty far out. As I mentioned, 2027's growth will be underpinned by the 2024 class of launches or the 2025 class of launches, which we've already launched. Continuing on that LDD growth and what we won in 2026 will deliver meaningful opportunities in 2027. We have pretty good visibility, again, 12+ months out from a launch, as well as what we've launched, which helps us give confidence in that framework. We think these are really strong markets. As you think about the pipeline of products coming out that are in the phase III trials, both in oncology and the rare and orphan space, which is where we target those opportunities. We see very strong pipelines, and we continue to see those pipelines execute on these more narrow networks than they traditionally had, what might've been five or 10 years ago. We've seen that continuing narrowing. We continue to see that over the next several years, as we're working with manufacturers on the potential launch of their products and understand what that market looks like. Again, it's really important to continue to win those that we deliver on those high-quality services. We're one of the highest quality providers in this space with time to first fill, medication possession ratio, which is like an adherence measure that is allowing us and a strong sales force that is pulling through script volume. Ultimately, developing really strong relationships with pharma to have white glove processes, and information and services around the launch of their new drugs, which we think is very beneficial. From operational efficiencies, we continue to see opportunities across, especially technology as we leverage into more manual processes like front-end central intake or revenue cycle. We see opportunities across a few different areas. Home infusion, as you mentioned, is an area we've been investing in over the last couple of years. That is a smaller piece of our pharmacy business, but we really see the value of infusion and we do think that that is a big opportunity for growth. We'll be focused on, we really have about 35 pharmacies across the U.S. and there's additional areas that we need a presence in from an acute standpoint. There's geographical expansion, but also deepening in the markets where we are. Finally, you asked about the provider side. We operate in what we call home healthcare, which is home health hospice and primary care. We see that as being just a really important opportunity to leverage across our pharmacy network and continue to deepen relationships as well as growing in those markets. On the rehab side, that is a strong growth market. Personal care is really more of a steady state, small grower for us, but really important value that it's delivering from an activity of daily living that's supportive care, that is very beneficial to patients. Certainly, Jon's really talked about obviously our growth being core and strategic and then highly accretive M&A. As you think about the core growth, each of our businesses having focused growth strategies and plans and operational teams that are focused on growing in each of their individual end markets from a strategic growth standpoint. How can we better unlock referral opportunities and integrated care opportunities across our platform? That is definitely something that we think is of value and will be able to be valuable to us in the next two to five years. Then obviously highly accretive M&A. Great. Wow, there was a lot in there, thank you for that. One quick question just on the acute care infusion expansion that you mentioned, and you said you were at 35, 36, currently? Pharmacies? Yeah. Yes. 35 pharmacies. Do you have any visualizing of where you think that number could grow to over the next two to three years? It's a good question. Obviously, this is an area that we do have some interest potentially in M&A. We're certainly thinking about the buy versus build. As we think, there's definitely 5- 10 markets that we laid out. I don't think we actually laid out the markets, but we talked about 5- 10 markets that we would be interested in expanding into, over the next handful of years, at the Investor Day, in our infusion area. As we think about some key areas where there's infusion opportunities where we don't deliver into as much, we see that probably in about 10- 15 markets. Sounds like a good place to team find out and do a little research on, and sort of maybe get some insights there. Great. You ended with sort of talking about. We sort of talked about all the different pieces, the pharmacy, the provider model. Let's maybe bring it back up. I know we went straight to growth and which I always want to do and straight to the numbers. Let's sort of bring it back up to the business model itself and in particular, give us some real insight into when you talk about that adding value by having both the pharmacy and the provider business. What that really sort of translates to, what that really means in terms of whether it's synergies on the revenue side, synergies on the expense side. We always hear a lot about that, and then there's having the businesses, and then there's having them truly integrated, right, and creating value and sort of let us know what to you is that sort of integrated value creation. Yeah. We've talked about sort of our one company model as delivering a number of different value areas. The first is we're serving very similar patients across both our pharmacy and our provider needs. If you look at the needs of the patients that we're serving, they often have multi-chronic, they're the most expensive individuals in healthcare. Our patients typically have six or more chronic conditions. They all need pharmacy. Most of them, at various points in time, will need provider services, whether it's rehab, home health, or hospice services. They all have a primary care physician need. As we think about how can we provide more of those services to the patient, which just, I guess would be, as you think about that core growth, how do we just leverage patients that are receiving one area of, whether it's pharmacy or provider services, how do we better leverage that patient across multiple services, maybe core growth. As we think about the connected nature of their needs and how do you provide even better outcomes. In late 2023, we had an article published in JAMDA that showed a 72% hospital reduction for our patients that receive our home health along with our pharmacy in the home versus home health on average. An average home health hospitalization patient. I mean, 72% reduction, that is very statistically meaningful. We do think that there's improved outcomes when you receive more coordinated care. We are very interested in how can we have better payment models across, in addition to just additional core growth, how can we unlock better payment models, potentially, for the outcomes that we're producing, whether that's happening in an individual business line. For example, in home health, we had a couple of new contracts in the last 12 months where, on the MA side, where we're getting enhanced rates for outcomes. The core rate, they wanted us to serve more, and so we were producing the outcomes, and so with those outcomes, we're getting enhanced rates. That is a version of sort of a value-based care, I guess, enhancement. Scale is critically important. Whether it's scale on the payer side, on the reimbursement side or scale on the cost side, how can we better leverage our scale to drive value and economics that allow us, whether it's increased EBITDA growth or continued investment into our businesses, into our high quality and compliance processes or technologies that allow us to get better. That scale has allowed us to invest in targeted areas that we think are really attractive and to be able to target growth for three years from now or five years from now. Best practices deployment is critically important. As we think about, we think our home infusion business should be better in how they do nursing because we have home health, and we do nursing there every day. How can we better connect best practices, whether it's in how do we target nursing, in getting better nursing or how do we make sure that they've got the right career pathing, as an example. That's just one example. IT, finance, the list could go on. How do we leverage those best practices across our organization? Really finally, it allows us to invest in, whether it's de novo or highly accretive M&A that has allowed us to continue to grow as well. Great. Two quick follow-up questions, just sticking with this theme. The first, just on some of those enhanced rate contracts that you said you're getting from payers and the big theme across the whole home health space in terms of meaning, essentially, to get that, especially with how challenging the CMS reimbursement backdrop has been. Hopefully, maybe we're going to lap finally away from PDGM sort of pain. We'll see in the future. Any type of insight you can give us into terms of how much of a gap between sort of traditionally discounted MA rates, which were as low as 25% lower historically than fee-for-service. How much of that gap you even getting to sort of fill through some of these enhanced rate structures? Yeah. The majority of what we do is episodic Medicare, from a payer mix standpoint. Where we do MA, we are obviously looking to make sure that we're getting a fair and appropriate rate. For the services that we are providing. Some of the ways we've done that, as payers have come to us and asked us to take more of their patients, has been to be able to commit to quality because of our high-quality services that allows us to get an enhanced rate. That's just an example of some things that we've done there. We continue to have strong advocacy, across many of our different areas. Home health certainly has become more important to us with the It's always been important to us, but it's been even more important with the Amedisys acquisition and Amedisys, LHC branches. Our government relations team continues to advocate for fair and appropriate rates. We know that over 40% of people that get written for a home health script don't get it because of access. We also believe that CMS and Congress understand the value of home health services and how it improves outcomes for the industry. The other thing I'd be curious about is how the company has been evaluating what you think is the optimal clinical structure, if you're going to look to try to integrate some of those different services into a particular patient in the home. In terms of the home infusion services on one side, the home health services on the other. I'm just thinking back even to when Opticare had pursued the acquisition of Amedisys, and a lot of that thesis had been about really integrating and elevating the home health nurse to oversee a lot of those integrated services. Just curious around how you envision that clinical model as it relates to the actual clinician themselves, like how they can optimize the services. Yeah. I think we think about our set of assets as being a little bit different than obviously that acquisition or that potential acquisition and that thesis. We're really focused on, first and foremost, core growth in each of our different business lines, which we think each of our different service lines have really attractive opportunities and markets where they can drive value individually. Separately, as we think about how do we better come together, that can come in different ways. For example, how can our home health and our Part B rehab go to senior living communities and be a better partner, and be a one-stop shop for those? How can we then potentially bring along our senior living pharmacy leaders in those relationships or vice versa? How do we leverage those relationships? As you know, these are largely fee-for-service or episodic type relationships on the individual service line, and we see that being as sort of the most important driver for each of those business lines. How can we leverage the relationships we have to grow better in those core? As it relates to more integration of care, I think we see nurse practitioners in our primary care being sort of the quarterback of what is needed in the home, for a patient that potentially allows for additional opportunity. Yeah. That makes sense to me. Okay. Just a quick question on, following the community living divestiture, maybe just talk about the structural change to that platform in terms of the growth profile and the margin trajectory. Yeah. Starting at the beginning of 2025, right after we announced the transaction, we started reporting the community living as discontinued operations. From a continuing operations standpoint, throughout 2025 and any comparison periods you would look at related to 2024 in your 2025 financials, you actually would not see community living in there at all. One of the items, though, that we did talk about early in 2025 before it was removed is community living was a lower growth profile business for us, and it was also a slightly lower margin business. If you were to look at it including discontinued operations, I guess I should say, because it's been reported outside of that, you would've seen a lower margin as well as a slightly lower growth profile business within provider. What I'd say is that our financials, as people have read them, would've reflected that frankly since early 2025. Okay. All right. That's helpful, certainly. Okay. Maybe let's talk about M&A, and sounds like there's going to be at least some healthy optionality as you look out over the next couple of years and conversation has been around potentially up to $2 billion of dry capital available for investor accretive opportunities. That's exactly, as we published our model, we certainly saw that visibility into it and certainly have that reflected in the free cash flow production as well. The company has generally continued to focus on smaller tuck-ins, but now has leverage in the mid-twos. In our model, that comes down quite substantially over the next couple of years. Maybe talk about the roadmap or the grid as we think about the tuck-ins across your target markets and then how the criteria would maybe evolve towards thinking about something larger. Yeah, no. We really are proud of the work that we've done to deleverage and get ourselves to this position. We were at about 4.5x leverage post-IPO at 2.27x at the end of Q1, 2.4x if you pro forma it for the taxes we had to pay in Q2 on that transaction, under our long-term target as you mentioned. As we think about M&A, we agree, we think that there's opportunities for us to leverage really the M&A platform that we've built over the years to continue to do acquisitions. I would expect that we'll be able to do the small tuck-in M&A that really, we almost think of as CapEx for us. They're highly accretive, really small tuck-in M&A, and I would expect that we'll continue to do that. I think where we have the opportunity to lean in more, as we think about deals that we've not done many of the last couple of years as we've been focusing on deleverage, are deals in, let's call it the $3 million-$15 million worth of EBITDA range. I think there's opportunities for us to do maybe a little bit more of that, which is a little bit chunkier of an M&A. Give us an opportunity as we think about expansion. The areas most interesting to us are infusion within pharmacy, hospice, and rehab within provider. We will continue to have the same rigor, and I would expect us to have the same process. Every deal we do has a strategic reason why we're doing it. We continue to be focused on what our growth rate looks like and the trajectory of our long-term growth rate. The deals that we do are going to be obviously important to making sure that we maintain that profile. Could there be a deal in a $30 million-ish range, one or two of those in the next five years? Potentially. I think our capital flexibility definitely gives us that opportunity. Again, I think we're going to continue to have the same rigor and strategic rationale and process, led by our corporate development team, which is a very strong team, as well as our integration management office, on any deals that we would do. Great. Time's flying by here. Wanted to ask a couple questions just on specialty pharmacy, which has really been the core engine for the company, 75%+ of EBITDA. From the end market itself, we have it sort of growing sort of that low-to-mid teens type rate in the report. Your specialty business has been growing materially faster than that. Why don't we just sort of start with those, the build around the growth. As we think about, clearly we have the market growth, but then in terms of the market share and some of those particular strategies that we've already touched on. Maybe talk about how that layers into the outperformance we've seen and then hopefully continues into the future. Yeah. I think our targeted strategy around LDDs has been very helpful in that. You're right, it's a market that's growing 10%-15%. If you look at that, where we've been focused are on these Limited Distribution Drugs that are going into narrow networks of one, two, or maybe three pharmacies, although we've typically seen one to two over the last few years. This means that we're getting, if it's a network of two, it means that we would be aspiring to get more than 50% of the market of that drug. If it's a network of three, it would be greater than 33%. By layering on these new drugs where there are these limited networks, we're capturing a larger share of that growth, just by nature of our LDD focus. Sticking with that, you've guided to around 16- 20 LDD launches over the next 12- 18 months. How does that compare to the cadence that you've seen historically, on the relative size of those launches? Every drug is different in terms of the size of the launch and is an N of one, obviously it depends on each drug. We've seen very large drugs. We've seen smaller drugs, obviously, when it's in that LDD network, we certainly think those are attractive opportunities for us. Over the last few years, we've seen a narrowing of the networks. Where maybe three, four years ago, there were three pharmacies, we're seeing, a lot of times, two pharmacies in these new LDDs. Each drug is different in terms of the market opportunity. We continue to see pharma going through these limited distribution channels. We don't see anything changing about that. There's a lot of reasons why we think that's very beneficial to pharma working with a narrow set of pharmacies, and they've become increasingly comfortable. We believe they've become increasingly comfortable that a couple of pharmacies are able to service the entire market of that drug. We seek to be a really good partner with pharma, offering whatever white glove or pharma services that they would potentially need. We're able to be very flexible in those needs. Being a high-quality patient and physician-preferred pharmacy, and then layering on top of that the relationships we have with pharma, has been very beneficial to continuing to win that. As I mentioned, we typically have a pretty good outlook and are oftentimes working with manufacturers 12 months in advance of a launch. We have pretty good visibility into what that looks like. Great. Sticking on the financial model inside. On the gross profit per script side, the company has reported some upside that's been driven by mix towards specialty. How do you see the gross profit per script? How would you provide some thoughts around the modeling of that moving forward? Do you see that trending relatively stable, or do you see further room for mix-driven expansion on the forward? Yeah. As you think about scripts growth, so what we report externally is obviously just total gross profit per script because we just have the total pharmacy script. Certainly, depending on how growth rate changes in each of our individual businesses could impact the GP per script. Right. That's the mix shift. If specialty is growing faster than other areas of pharmacy, we've seen that shift up. What we've seen in each underlying business is expansion and margin, which we think is very healthy. We're focused on driving healthy growth in terms of dollars and mix across each of the different opportunity sets that we have. All right, great. For a new analyst or portfolio manager that would come in there, a few things that are a little bit different about the pricing dynamics and margin dynamics in this business because, you've got a couple of things playing out here. One around the generic conversions, where that could be a revenue headwind, but it translates into an EBITDA tailwind. Also we've had in the home and community pharmacy side, some of the nuances and around the Inflation Reduction Act and some of the regulatory changes that went into effect there, that also has pressured revenues and pressured pricing yields, right? You still were able to deliver gross profit growth there. I know that those are two different dynamics, but we have a minute and a half left, but I think it's really helpful, I think to just maybe to understand those dynamics and really ultimately around those, what matters in the modeling moving forward. Yeah. To your question on generics, we think generics are good for everybody. The price comes down and is a revenue headwind, as you note. Typically the competition on the manufacturer side, and the cost of the drug, allows the cost to come down even more. That is the dynamic around generics. As it relates to IRA, certainly, that has been a headwind to revenue. We have been able to mitigate the EBITDA impact for the drug and specialty pharmacy. Where we have the impact from a profitability standpoint is in home community pharmacy. There has not yet been a fix legislatively to the impact to the pharmacies on IRA. It was left to the pharmacies to negotiate individually with the PBMs, on an enhanced dispensing fee. We were able to partially mitigate, but not fully mitigate the impacts associated with the IRA impact to BrightSpring. We'll look to continue to try to improve on that enhanced dispensing fee. Certainly, our government relations team is actively working, as are the industry experts and advocacy groups regarding the home and community pharmacy and the impact of IRA to the pharmacies. Do you think, we'll probably wrap it that, there could be some momentum. Clearly, I think there's an acknowledgement at D.C. that the intention was not to penalize pharmacies in order to shift profitability to PBMs. That's certainly not as part of what the narrative has been in Washington. Again, like you said, there hasn't been a fix yet, and there's a lot of just unproductive areas of focus in Washington. Yeah. It is certainly a focus area for us, to make sure that we're advocating for the industry, as the industry groups are doing, to make sure that people understand what we believe is the unintended consequences associated with that. Yeah. All right. Well, we are out of time. Jen, thanks so much for joining us and again, hope you have a productive rest of the conference. Great. Thank you.