OPCH Q1 Earnings Call: Revenue Growth Surpasses Expectations as Acute and Chronic Therapies Expand

Alternate site health provider Option Care Health (NASDAQ: OPCH) reported Q1 CY2025 results exceeding the market’s revenue expectations, with sales up 16.3% year on year to $1.33 billion. The company’s full-year revenue guidance of $5.5 billion at the midpoint came in 1.3% above analysts’ estimates. Its non-GAAP profit of $0.40 per share was 20% above analysts’ consensus estimates.

Is now the time to buy OPCH? Find out in our full research report (it’s free).

StockStory’s Take

Option Care Health’s first quarter results reflected broad-based growth across both acute and chronic therapy lines, with management citing improved IV bag supply, expanded infusion clinic capacity, and deeper payer partnerships as key drivers. CEO John Rademacher emphasized the company’s ability to support complex patient needs through investments in technology, a national compounding pharmacy network, and the addition of dedicated care transition staff. He also noted that revenue growth was balanced, with acute therapies growing in the mid-teens and chronic therapies in the high teens year over year.

Looking ahead, management’s full-year outlook is shaped by ongoing investment in technology, further expansion of infusion clinic and nursing capabilities, and proactive risk management in response to potential policy changes such as new tariffs. CFO Mike Shapiro highlighted that guidance does not yet reflect any material impact from tariffs or policy shifts, citing current uncertainty. However, Rademacher noted that a cross-functional team is actively monitoring potential supply chain disruptions and cost increases, aiming for an agile response if needed.

Key Insights from Management’s Remarks

Option Care Health’s management attributed first quarter outperformance to operational execution in both acute and chronic care segments, expanded clinical capacity, and efficiency gains from technology investments. The ability to serve a diverse patient portfolio and deepen relationships with payers underpinned the company’s positive momentum.

• Acute therapy growth: Management reported mid-teens growth in acute therapies, driven by improved IV bag supply and investments in dedicated care transition specialists. This allowed the company to respond rapidly to patient discharges and win new referrals from hospitals.
• Chronic therapy momentum: High-teens growth in chronic therapies was supported by strong performance in rare, orphan, and limited distribution drugs. Management cited effective revenue cycle management and sustained patient census despite reimbursement changes as contributors.
• Clinic and chair expansion: The opening of new infusion clinics and additional compounding pharmacy facilities increased the company’s capacity to meet patient demand. Over one-third of nursing visits now occur in company-operated centers, highlighting a shift toward alternate-site care.
• Technology-enabled efficiency: Investments in robotic process automation and AI, particularly in patient registration and revenue cycle processes, led to measurable improvements in cash collection velocity and operational productivity. The partnership with Palantir was highlighted as enabling faster patient onboarding.
• Payer partnership deepening: Management described more collaborative relationships with health plans, as payers seek to manage medical loss ratios and total cost of care. Option Care Health’s national scale and local responsiveness were positioned as differentiators in supporting site-of-care initiatives.

Drivers of Future Performance

Management’s outlook for the remainder of the year is centered on maintaining balanced growth across therapy types, increasing operational efficiency, and adapting to potential changes in the regulatory or reimbursement environment.

• Therapy mix and payer demand: Sustained growth in both acute and chronic therapies is expected, supported by payer-driven site-of-care initiatives and the company’s ability to deliver lower-cost, high-quality care in non-hospital settings.
• Operational leverage and technology adoption: Continued investment in automation and AI is projected to drive further efficiency in revenue cycle management and patient onboarding, supporting margin stability even as volumes grow.
• Policy and supply chain risks: Management acknowledged that uncertainty around tariffs, reimbursement policy, and possible supply chain disruptions remains a risk. A dedicated team is monitoring developments, with the company prepared to adjust procurement and pricing strategies if needed.

Top Analyst Questions

• Lisa Gill (JPMorgan): Asked whether guidance conservatism reflected fundamental concerns beyond tariff uncertainty. Management said the cautious approach was due to seasonal volatility and the unpredictable impact of potential policy shifts.
• Pito Chickering (Deutsche Bank): Inquired about tariff pass-through mechanics and reference pricing lags. CFO Mike Shapiro explained that reimbursement typically tracks procurement costs over time, though there could be short-term mismatches.
• Constantine Davides (Citizens): Queried on evolving payer relationships and network design. CEO John Rademacher said Option Care Health is increasingly integral to payer site-of-care strategies, especially amid competitive retrenchment.
• Matt Larew (William Blair): Questioned the sustainability of acute therapy growth after recent market share gains. Management noted that while recent growth was elevated, long-term acute growth is expected to normalize as market dynamics stabilize.
• Joanna Gajuk (Bank of America): Sought clarity on the size and timing of STELARA headwinds and supply costs related to tariffs. Management confirmed the expected annual impact from STELARA and that medical supply costs exposed to tariffs are currently limited and manageable.

Catalysts in Upcoming Quarters

In future quarters, the StockStory team will closely track (1) the durability of acute therapy growth as competitive dynamics evolve, (2) the impact of ongoing technology investments on revenue cycle and cost efficiency, and (3) the company’s ability to mitigate policy and tariff risks as Washington debates new healthcare measures. Progress on integrating recent acquisitions and expanding clinic capacity will also be important markers of execution.

Option Care Health currently trades at a forward P/E ratio of 19.3×. In the wake of earnings, is it a buy or sell? The answer lies in our free research report.

Stocks That Trumped Tariffs in 2018

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.