Option Care Health Balances Growth With 2026 Headwinds
Option Care Health Inc ((OPCH)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Option Care Health Inc.’s latest earnings call struck a cautiously optimistic tone as management balanced robust growth with clear-eyed discussion of emerging headwinds. Executives highlighted double‑digit revenue gains, margin and automation improvements, and successful integration of recent acquisitions, while acknowledging biosimilar and cash‑flow pressures that will weigh on 2026 but are viewed as manageable.
Revenue Growth
Full‑year 2025 net revenue reached $5.6 billion, up 13% year over year and underscoring solid demand across the portfolio. Management reaffirmed 2026 revenue guidance of $5.8 billion to $6.0 billion, implying roughly 4% growth at the midpoint even after factoring in notable headwinds from biosimilar transitions.
Patient Volume and Clinical Activity
Option Care served more than 315,000 unique patients in 2025 and completed over 2.5 million infusion events, underscoring the scale of its national platform. Pro forma infusion clinic visits, including Intramed Plus, grew more than 25% in the fourth quarter, with about 34% of nursing visits now occurring in infusion suites or clinics rather than home settings.
Profitability and Margin Performance
Gross profit dollars increased 7.4% in 2025, lagging the top‑line growth but still showing healthy expansion in a tougher mix environment. Adjusted EBITDA rose 6% to $471 million, reflecting an 8.3% margin, while adjusted diluted EPS climbed 9% to $1.72, signaling continued earnings leverage despite reimbursement and product‑mix pressures.
Operating Efficiency and SG&A Leverage
Selling, general and administrative expenses fell by 50 basis points as a share of sales to 12.1%, as the company harvested benefits from prior efficiency initiatives. Management emphasized that scale and process improvements are helping offset investment spending and payer pressure, and they expect further operating leverage as volumes grow.
Cash and Balance Sheet Actions
The company generated $258 million in operating cash flow in 2025 and ended the year with net leverage of about 2.0 times, leaving flexibility for growth initiatives and buybacks. Option Care repurchased more than $300 million of shares during the year, and the board expanded the repurchase authorization by another $500 million, signaling confidence in long‑term value creation.
Technology and Automation Gains
Management spotlighted technology and AI investments as a key driver of productivity, with roughly 40% of claims now processed without human intervention. Automation has also been rolled out across invoice processing and cash posting, helping reduce labor needs and support margin resilience in the face of rising complexity and wage inflation.
Network and Capacity Expansion
To capture growing demand for outpatient infusion, Option Care continued to build out its physical footprint, opening new infusion suites and pharmacies and adding more than 80 infusion chairs in 2025. The company now operates over 25 ambulatory infusion centers with advanced practitioner capabilities, increasing capacity for higher‑acuity and specialty therapies.
Pharma Partnerships and Formulary Expansion
The company expanded its role as a partner to drug manufacturers and payers, operating more than 20 enhanced programs with pharma and layering in earlier clinical trial support and data offerings. In 2025 it added five new programs with regional plans and two with nontraditional conveners, positioning its network to benefit from a growing pipeline of infused and injectable drugs for complex patients.
M&A and Integration Success
Option Care’s 2025 acquisition of Intramed Plus has outperformed initial expectations, according to management, and contributed materially to clinic visit growth. Executives highlighted synergies from integrating Intramed’s clinics into the broader network, reinforcing the company’s track record of disciplined dealmaking and successful post‑close execution.
Stelara and Biosimilar Headwinds
A key theme on the call was the impact of Stelara biosimilar adoption, which created about a 160‑basis‑point revenue headwind in 2025. Looking ahead, the company expects a roughly 400‑basis‑point revenue growth headwind in 2026 from Stelara‑related policy and biosimilar conversion, along with a $25 million to $35 million gross profit headwind spread evenly across the year.
Gross Profit vs Revenue Mix Pressure
Despite strong top‑line growth, gross profit expansion trailed revenue as mix shifts weighed on margins, particularly the faster growth of chronic therapies and lower reference‑price biosimilars. Management acknowledged that as chronic therapies scale, they create ongoing margin pressure, but argued that volume, efficiency gains, and contracting strategies will help offset these dynamics over time.
Operating Cash Flow Miss and Working Capital Build
Operating cash flow of $258 million fell short of prior guidance that had envisioned roughly $320 million, driven mainly by strategic inventory purchases and working capital needs for limited‑distribution therapies. Management framed these as deliberate investments to secure supply and support growth in high‑value therapies, though they recognize the need to improve cash conversion in 2026.
First-Quarter Seasonality and Near-Term Complications
Executives reminded investors that the first quarter is historically the weakest for cash generation, and noted that Q1 2026 will be particularly complicated given prior‑year forward buys. New‑year benefit verification and prior‑authorization activity also tends to spike early in the year, temporarily slowing collections and making near‑term comparisons more challenging.
Investment-Related SG&A Pressure
While SG&A as a percentage of sales improved, absolute SG&A spending remains elevated due to ongoing investments in commercial teams, clinical resources, and technology. One‑time and integration‑related costs, including those tied to Intramed Plus, may keep SG&A dollars growing in the near term before the company fully realizes the expected operating leverage.
Competitive and Payer Pressure
Management flagged tougher market dynamics, including payer rate pressure, particularly in Medicare Advantage, and shifting PBM and formulary decisions that affect access and pricing. Competition for limited‑distribution products and evolving product economics are creating reimbursement challenges, making scale, contracting expertise, and cost efficiency more critical to sustaining margins.
Working Capital Requirements for High-Cost Therapies
The company’s deeper push into rare and limited‑distribution drugs is increasing inventory and working capital requirements, adding to cash‑flow seasonality. Management outlined plans for more active working capital management to balance growth in these attractive but capital‑intensive therapies with the need to strengthen free cash flow over time.
Forward-Looking Guidance and Outlook
Option Care reaffirmed its 2026 outlook, calling for revenue of $5.8 billion to $6.0 billion and adjusted EBITDA of $480 million to $505 million, despite the anticipated Stelara‑related gross profit headwind. The company projects adjusted diluted EPS of $1.82 to $1.92 and operating cash flow of at least $340 million, more than 30% above 2025 levels, underlining management’s confidence in continued EBITDA expansion and improved cash conversion.
Option Care’s earnings call painted the picture of a growth business navigating a more complex reimbursement and product landscape with a focus on scale, technology, and disciplined capital deployment. For investors, the story hinges on whether automation, network expansion, and pharma partnerships can more than counterbalance biosimilar, payer, and working‑capital headwinds as the company moves through 2026.
