Quipt Home Medical's Latest Earnings Call: Unraveling Contradictions in Revenue, Growth, and M&A

Revenue impact of Humana and disposable supply contract, organic growth rates, M&A activity, disposable supply contract renewal, and Humana's impact on revenue are the key contradictions discussed in Quipt Home Medical Corp.'s latest



Revenue and Patient Volume Decline:
- Quipt Home Medical reported revenue of $57.4 million for fiscal Q2 2025, down 6% year-over-year, with a decline in customer base by 2% year-over-year, serving 146,000 unique patients.
- The decrease in revenue was due to significant patient attrition stemming from a capitated agreement with other providers, a disposable supply contract not being renewed, and seasonal weakness in resupply volumes.

Strong Margin Performance Amidst Revenue Softness:
- The company's adjusted EBITDA margin remained strong at 23.3%, despite the revenue decline.
- This performance was the result of structural efficiencies initiated in late 2024, including streamlining back-office functions and optimizing logistics, which improved the organization's efficiency and responsiveness to market dynamics.

Sleep Apnea Business Stability:
- Referral activity for new device setups in the sleep business remained steady and consistent in recent months, with no impact from GLP-1 medications.
- Recent real-world data supported the positive effects of GLP-1s on treatment adherence, with increased likelihood of starting PAP therapy and higher resupply order rates, suggesting a long-term tailwind for the business.

Strategic Focus on Healthcare System Partnerships:
- Quipt is evolving its strategy to pursue healthcare system-bound opportunities, aiming to create deeper, more strategic partnerships.
- The company is actively engaging with leading regional health systems to leverage its scalable integration strategy, seeking preferred provider agreements that support integrated care delivery and embedded patient volume.

Financial Strength and Capital Allocation:
- Quipt exited Q2 with $17.1 million in cash and a total liquidity of $30.7 million, with a net debt to adjusted EBITDA leverage of 1.5 times EBITDA.
- The company maintains an active share repurchase program under its normal course issuer bid and continues to use capital strategically for growth initiatives, healthcare system opportunities, and shareholder returns.