Prepared remarks
Thank you for standing by, and welcome to BrightSpring Health Services Second Quarter 2026 Earnings Conference Call. Operator provides instructions to participants on how to queue for questions. I would now like to hand the call over to David Deuchler, Investor Relations. Please go ahead.
Good morning. Thank you for participating in today's conference call. My name is David Deuchler with Investor Relations at BrightSpring. I'm joined on today's call by Jon Rousseau, Chief Executive Officer; and Jen Phipps, Chief Financial Officer. Earlier today, BrightSpring released financial results for the quarter ended June 30, 2026. A copy of the press release and presentation is available on the company's Investor Relations website. Please note that today's discussion will include certain forward-looking statements that reflect our current assumptions and expectations, including those related to our future financial performance and industry market conditions. Such forward-looking statements are not guarantees of future performance. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations. We encourage you to review the information in today's press release and presentation as well as in our quarterly report on Form 10-Q that will be filed with the SEC, including specific risk factors and uncertainties discussed in our Form 10-K and Form 10-Q. Such factors may be updated from time to time in our periodic filings with the SEC, and we do not undertake any duty to update any forward-looking statements, except as required by law.
During the call, we will use non-GAAP financial measures when talking about the company's financial performance and financial condition. You can find additional information on these non-GAAP measures and reconciliations of our non-GAAP financial measures to their most directly comparable GAAP financial measures to the extent available without unreasonable effort in today's press release and presentation, which again are available on our Investor Relations website. This webcast is being recorded and will be available for replay on our Investor Relations website. With that, I will now turn the call over to Jon Rousseau, Chief Executive Officer.
Good morning, everyone, and thank you for joining BrightSpring's Second Quarter 2026 Earnings Call. I'd like to start by thanking everyone at BrightSpring who drives our mission forward and makes a lasting impact every day. We're grateful for the hard work and commitment of all of our teammates, enabling us to deliver high-quality and timely care to patients in so many communities across the U.S. As we grow the BrightSpring platform, we remain focused on our important role and value proposition of delivering quality services and compassionate care to patients in lower cost and most often patient-preferred settings. Our strategy is aligned with many secular trends in U.S. health care, and we are focused on strong execution, thoughtful innovation and continuous improvement to drive greater impact and sustained growth. Our business continues to be underpinned by quality and operational performance, and these fundamental and critical enablers go hand-in-hand with patient volume increases, expansion into adjacent and new markets and disciplined capital allocation.
We see many opportunities for the company in the years ahead. Turning to the second quarter. We were pleased with the performance across the organization, which reinforces our conviction in the value that we provide to patients and stakeholders across the country. Financial results for the quarter came in ahead of baseline expectations with total company revenue of $3.9 billion that represented 23% year-over-year growth and adjusted EBITDA of $206 million that grew 44% year-over-year. In the segments, Pharmacy Solutions revenue of $3.4 billion represented 22% growth year-over-year and adjusted EBITDA of $180 million represented an increase of 44% versus last year. In Provider Services, revenue of $466 million represented 30% growth and adjusted EBITDA of $75 million increased 33% versus last year. In Pharmacy Solutions, we saw continued business momentum in the second quarter. Our Specialty and Infusion business delivered revenue growth of 30% and script growth of 31%, reflecting strong performance from the clinical, operational and commercial teams and relationships developed with manufacturers, physicians and patients over the years.
Our Specialty business continues to be driven by the branded oncology LDD portfolio, while we continue to leverage proven and core capabilities and expand into other targeted therapeutic areas, including certain rare, orphan and other complex therapies with noteworthy partnership wins in these areas. During the quarter, we added 2 ultra-narrow network LDDs to our portfolio, bringing the total number of LDDs to 155. For the year, we have launched 12 LDDs through Q2, 4 as exclusive partners and 8 ultra-narrow. And we, of course, continue to be extremely committed to our manufacturing and biotech partners and patients to deliver the best possible service support and experience for these life-changing and life-saving therapies. Additionally, we continue to see solid contribution from generic scripts, driven in part by newly available generic alternatives last year and this year. The Infusion business delivered solid volume growth across both acute and chronic therapies in line with expectations, driven by operational initiatives and service levels as well as growth investments and execution this year.
We plan to expand both the acute and chronic footprint into new markets in the future and are optimistic about the opportunity to scale this business. In Home and Community Pharmacy, we continue to operate at a high level with service levels and controllable customer retention at all-time highs as we serve a variety of growing end markets, including assisted living, behavioral, hospice, PACE, skilled nursing and others. Second quarter volume and revenue performance in the Home and Community Pharmacy business was impacted by the exit of certain skilled nursing customers last year and earlier this year, which in some cases has helped improve profitable growth year-to-date. We continue to invest in automation and technology to improve efficiency and service across our scaled national footprint and the positive impact of these initiatives was reflected in the profitability of the business in the quarter, which was up year-over-year.
On the Provider side, the Home Health Care business performed well, driven by strong need and demand for these valuable services and continued volume growth above industry levels as well as de novo investments, preferred MA and ACO contract execution and contribution from acquisitions, all underpinned by leading quality results across the provider service lines. We are pleased with the integration of the Amedisys and LHC branches, with the Home Health team doing a great job of integrating, particularly in the areas of HR and IT, all while we continue to have nearly 95% of our branches at 4 star or better. We now expect an EBITDA contribution of approximately $35 million in 2026 from these acquired branches. Our hospice services continue to demonstrate industry-leading quality metrics and strong census growth. The Rehab Care business continues its long-standing performance with continued payer contract advancements for these highly clinical neurotherapy programs, entry into new markets and programs like Rehab in Motion resonating with patients and customers.
All retention metrics for our clinicians continue to improve every year with retention at best practice levels. Personal Care continues to provide consistent high-quality supportive care to patients who need assistance with activities of daily living in the home with a growth rate in hours served well above the industry growth rate. And in our home-based primary care business, our quality measures are extremely good, demonstrating significant reductions in hospitalizations and overall health care costs realized by patients in our network. We continue to expand and invest in business development in this service line while further integrating with home health and hospice, also laying the groundwork for future growth in quality-based payment models. At the corporate level and across the organization, we continue to invest in and progress on key clinical, HR and operational systems and new applications, including leveraging new automation and AI tools and agents in areas such as hiring, onboarding, intake, documentation, medication reviews and patient care plans.
We've now had almost 300 employees receive Lean Sigma certification of various belts while completing Lean projects for each across the organization as we further institutionalize Lean business processes every year. On acquisitions, we have a full pipeline per usual. And while we remain very disciplined in executing deals that clearly meet our strategy and objectives, we are optimistic about possible transactions in the second half, having signed several small tuck-ins and geographical expansions in the past quarter. Now let me provide a few more financial highlights from the second quarter, which Jen will discuss in greater detail in a few minutes. As a reminder, the company's financial results referenced pertain to continuing operations and do not include results from the Community Living business, which was divested on March 30, 2026. Second quarter financial results came in ahead of baseline expectations with total company revenue of $3.9 billion, representing 23% year-over-year growth.
Pharmacy Solutions revenue of $3.4 billion and Provider Services revenue of $466 million represented 22% and 30% growth, respectively. Second quarter adjusted EBITDA of $206 million grew 44% year-over-year, representing an adjusted EBITDA margin of 5.3%, an 80 basis point improvement versus last year. Profitability in the quarter again benefited from the scale and complementary diversification of our platform across our target Home and Community end markets, which enables tangible advantages, including breadth and optionality of opportunities for revenue generation, disciplined operational execution leveraging top-down driven best practices, procurement and contracting processes across the organization, the cumulative impact of our lean and process improvement programs, ongoing technology and AI investments and our acquisition integration capabilities and synergies. Many initiatives contributed to the profitability and margin performance in the quarter, and these remain an important source of ongoing efficiency generation going forward.
From a cash flow perspective, the company generated $144 million of cash flow from operations in the quarter, excluding a onetime cash tax payment of approximately $100 million related to the Community Living transaction. Leverage was reduced to 2.15x as of June 30, 2026. We now expect approximately $600 million of operating cash flow this year with EBITDA to operating cash conversion of around 70%, and leverage for the year to end below 2x before any potential acquisitions. Also in the quarter, we received ratings upgrades from both S&P and Moody's, and we refinanced our debt at a 50 basis points lower spread. As mentioned, performance in the quarter was underpinned by consistent focus on quality of care and patient satisfaction. Additional quality measures of note included an industry-leading timely initiation of care of 99% in Home Health, hospice quality measures that continue to be well above the national average with a CAHPS overall hospice rating of 89%, rehab patient satisfaction scores above 97% and client satisfaction scores of 4.6 out of 5 in Personal Care.
On the Pharmacy side, in Home and Community Pharmacy, dispensing accuracy was 99.98%, order completeness was 99% and on-time delivery was 94.3%. While in Infusion, our patient satisfaction score was 94% with 94% of discharges due to completion of therapy. Specialty Pharmacy demonstrated quality metrics well above the national average in the second quarter, delivering a high medication possession ratio of 93% and time to first fill of 3.7 days with industry-leading Net Promoter Scores. We are very pleased to consistently demonstrate exceptional service and quality across our businesses. Earlier this month, CMS released the calendar year 2027 preliminary rate for home health services. The preliminary rates include a positive annual payment update, the first such upward adjustment in several years and a positive starting point. We continue to work with CMS and Congress to highlight third-party data showing the positive health outcomes and lower Medicare cost profile of high-quality, clinically appropriate and medically necessary home health services.
To close, the second quarter reflected consistent execution that we strive for every day with broad performance and steady progress towards our operating and growth priorities. We are building upon a strong foundation of growth anchored on quality to drive scale while we deploy best practices and processes across the organization to continually improve operations for the future. As we move into the second half of the year, the business is well positioned, momentum is broad-based, and we are confident in our ability to deliver the updated full year guidance Jen will discuss in a moment. With that, I'll turn the call over to her.
Thank you, Jon. As a reminder, we closed the Community Living transaction on March 30, 2026, and all financial results reflect only continuing operations with Community Living results reflected in discontinued operations. For the second quarter of 2026, the company revenue was $3.9 billion, representing 23% growth from the prior year period. Pharmacy Solutions segment revenue in the quarter was $3.4 billion, achieving 22% year-over-year growth. Within the Pharmacy segment, Specialty and Infusion revenue was $2.9 billion, representing growth of 30% from prior year, which was driven by branded LDDs and new LDD launches script growth as well as wraparound fee-for-service program growth, generics, acute infusion growth and strong commercial execution in both the Specialty and Infusion businesses. Home and Community Pharmacy revenue was $540 million, representing a decline of 8% year-over-year due to an approximate $50 million impact from the IRA, along with our decision to exit some uneconomic customers, both of which we have previously discussed and performed as expected.
On the IRA impact for the balance of the year, we continue to see a revenue impact in Home and Community Pharmacy of approximately $45 million in each of the remaining quarters in 2026, bringing the total year IRA impact to Home and Community pharmacy revenue of approximately $200 million. In the Provider Services segment, we reported revenue of $466 million, which represents 30% growth compared to the prior year. Home Health Care reported $278 million in revenue, growing 51% versus last year. Revenue performance was driven by average daily census growth, de novo expansions and the impact of the acquired Amedisys and LHC branches, which contributed approximately $78 million of revenue and approximately $8 million of adjusted EBITDA in the second quarter. Rehab Care revenue was $82 million, growing 12% versus last year, with healthy growth in persons served and hours billed in core neuro rehab, along with the continued momentum in our Rehab in Motion program.
Personal Care revenue was $107 million, representing 7% growth year-over-year, driven by modest growth in persons served, strong growth in hours billed and stable operations. Moving down the P&L. Second quarter company gross profit was $493 million, representing growth of 32% compared with the second quarter of last year. Adjusted EBITDA for the total company was $206 million in the second quarter, an increase of 44% compared to the second quarter of 2025. Adjusted EPS for the total company was $0.45. Company profitability benefited from strong top line performance across the businesses as well as consistent operational execution in addition to and from investments related to technology and AI. We continue to make targeted investments supporting a variety of operational processes and programs that will improve procurement efficiencies, streamline operations and further standardize best practices throughout the organization.
Turning to segment profitability performance in the second quarter. Pharmacy Solutions gross profit was $298 million, growing 28% compared with the second quarter of last year. Adjusted EBITDA for Pharmacy Solutions was $180 million for the second quarter, an increase of 44% compared to last year, representing an adjusted EBITDA margin of 5.3%, which increased approximately 80 basis points versus last year and was similar to the first quarter of 2026. Second quarter Pharmacy profitability benefited from strong branded LDD portfolio performance, product mix across all Pharmacy businesses, pharma services and hub revenue and gross profit as well as continued investments to improve operational performance. Of note, notwithstanding external IRA and any payer impacts, Home and Community Pharmacy EBITDA performed well year-over-year in the quarter due to our internal continued operational process improvements underpinned by the deployment of new technologies.
Provider Services gross profit was $195 million, growing 38% versus the second quarter of last year, with adjusted EBITDA of $75 million, growing 33% versus last year. This represents an adjusted EBITDA margin of 16.1%, up approximately 30 basis points compared to last year. We have continued to see the benefits of operational initiatives that we have put in place over the past year, driving broad-based growth, greater efficiency and economies of scale and increased margins across our Provider Services lines. On a total company basis, cash flow from operations was $44 million in the second quarter. Excluding the onetime cash payment for taxes of approximately $100 million related to the Community Living transaction, cash flow from operations was $144 million. Recall that the discontinued operations cash flows are included in the consolidated company cash flows. As we look forward to the balance of the year, excluding Community Living related cash flow impact, we expect to deliver approximately $600 million of annual operating cash flow.
As of June 30, net debt outstanding was approximately $1.7 billion, and we finished the quarter with a leverage ratio of 2.15x, which includes the impact of approximately $100 million of taxes associated with the Community Living divestiture in the quarter. As mentioned during the Q1 2026 earnings call, our leverage at Q1 when adjusting for the Community Living taxes that were due subsequent to quarter end was a leverage of 2.4x. We were able to reduce our leverage from Q1 2026 to Q2 2026 on an adjusted basis by 0.25x. Our leverage ratio also includes $120 million of share repurchases year-to-date. During the second quarter, we repaid approximately $300 million of the term loan with proceeds from the Community Living sale and repriced the loan at SOFR plus 200. This compares with SOFR plus 325 at the time of our IPO and reflects strong operating performance of the business, improved cash flow generation and our lower leverage position of the company since the IPO.
During Q2, Moody's and S&P both upgraded BrightSpring's credit rating, better reflecting our leverage position and debt management philosophies. Moody's upgraded its rating to Ba3 from B1, and our senior secured first lien revolving credit facility and senior secured first lien Term Loan B ratings to Ba3 from B1. S&P upgraded our issuer credit rating to BB- from B+ and also upgraded the ratings on our revolving credit facility and first-lien term loans to BB- from B+. The company has evolved since going public in January 2024 with business mix, scale, operating performance and leverage all further improved. As we move into the second half of the year and 2027, we will continue to evaluate options for the most appropriate capital structure needed to support growth over the next 5 years. Turning to guidance for 2026, which excludes the Community Living business as well as any acquisitions that have not yet closed.
Total revenues is expected to be in the range of $15.1 billion to $15.425 billion, including Pharmacy Solutions revenue of $13.2 billion to $13.5 billion and Provider Services revenue of $1.9 billion to $1.925 billion. This range reflects 17.0% to 19.5% growth over full year 2025, excluding Community Living in both years. Total adjusted EBITDA is now expected to be in the range of $820 million to $845 million for full year 2026. This would reflect 32.8% to 36.8% growth over full year 2025, excluding Community Living in both years. Included in total adjusted EBITDA is expected contribution from the Amedisys and LHC assets acquisitions of approximately $35 million. I will now turn it back to Jon.
Thanks, Jen, and thank you for your time today to go through BrightSpring's second quarter 2026 results. We will now open up the call for questions. Operator?
Questions and answers
The operator provides instructions to participants for the question-and-answer session. Our first question comes from Charles Rhyee of TD Cowen.
Congrats on the quarter. I just wanted to ask maybe what you're seeing in terms of generics. There's a lot of discussion the other day about Revlimid. And I think you guys had said previously that that was kind of coming on in stages. Just curious maybe sort of the contribution you saw in the quarter from that? And maybe just give us an update on what you're seeing, how we should be thinking about layering in the benefit as we look to the rest of '26. And then maybe, Jen, just real quick, any comments on sort of the step-up in corporate expense in the quarter?
Charles, I'm not entirely familiar with any news on Revlimid lately, but that started going generic about 4 years ago. It's been fully generic for quite a while now. So there's really been no change whatsoever to our expectations this year.
Yes. From a corporate standpoint, Charles, we did see an increase as we continue to increase some investments across key hires, including some key hires we have in a couple of different business roles as well as corporate leaders that we're really excited about that are going to help drive value. We also did continue to invest in AI and automation technology projects throughout the quarter, and we'll be looking for the benefit of those to come on either later in the year or very early next year.
Our next question comes from the line of Ann Hynes of Mizuho.
I just want to focus on gross margin in the Pharmacy segment. It was up year-over-year 40 basis points, but it was down sequentially 70 basis points. And when I look historically, gross margin is usually flat or up Q1 to Q2. Can you just tell us what's going on?
Yes, Ann, the margins in Q2 were very healthy again and completely in line with our expectations. We had seasonality in Q1 of this year, which is very typical and typical for your gross margin to be a little bit higher in Q1 versus Q2 for a variety of reasons. And on a GP per script basis, actually, when you normalize for that, our GP per script was actually up in Q2. So I would just reiterate that in the business, year-over-year growth was still 28% in GP, higher than revenue growth and Specialty script growth, in particular, was 32% year-over-year and even 15% up sequentially.
Our next question comes from the line of Scott Fidel of Goldman Sachs.
Would be interested if you can maybe parse out in the Infusion business, maybe talk about how growth in the chronic versus the acute segments looked in terms of anything to call out year-over-year or sequentially. And then maybe just talk about in terms of the continued sort of investment and build-out in the chronic infusion side of the business in terms of momentum there in terms of manufacturing engagement or demand or any other milestones you'd want to call out.
Scott. Yes, we continue to be really positive on the Infusion market, notwithstanding some things here and there. It's a $20 billion market, still pretty fragmented, less competitive on the acute side for a variety of reasons, given the demands of service delivery requirements there. But within that market, I can say that our acute volume year-over-year was up over 20%, which is some 7 to 8 times what that market grows at. So some of our investments really pay off. And I think as we sit here today, there's another 12 to 15 states that we want to be in over the next 5 years. So we really view Infusion as a long-term play where we can continue to grind away. On the chronic side, we're still making progress, nowhere near where we want to be. Nevertheless, the volume growth on that side of the business year-over-year was close to 20%. We've done some things like roll out white glove concierge programs for things like immunoglobulin, and we've seen that increase our conversion rate noticeably in the quarter.
We're going to do that on some other target therapies. And we just continue to invest and add into the business in terms of capabilities and infrastructure. We've got a key AI project going on on the intake side. We've made some key hires, upgraded the CFO in the business within the last quarter, some commercial investments as well, brought in new leadership from a data analytics standpoint. And we're starting to put this business together from a payer and purchasing standpoint in a more integrated way with our Pharmacy for America business and all of that scale over there. So we see a lot of benefits from that in the future as well. It's been a really productive quarter in that business, but remain, I would say, more enthusiastic from a long-term perspective.
Our next question comes from the line of Pito Chickering of Deutsche Bank.
Can you talk about the ramp of the LDDs in the back half of the year and how to think about the contribution of revenue and EBITDA? Any color if you will be involved in daraxonrasib when it launches in the fall? And how should we think about the overall EBITDA seasonality in 3Q and 4Q?
Yes. I'll let Jen handle some of this. But Pito, we remain really enthusiastic about that business, given we've already won 12 LDDs to date this year. As mentioned, not only are we continuing to try to be the best oncology partner we can be within what is one of the more dynamic and innovative spaces within the specialty market, we're really leveraging those capabilities as much as we can, not only from an operational, but from a commercial and field perspective to extend our partnerships outside of oncology. And we have a lot of those today. Some of our most exciting wins going forward have actually been outside of oncology. So we're not at liberty to talk about any specific drugs, but we're well aware of the situation you referenced. We're always leveraging our unique operational capabilities and our customer satisfaction feedback and our value-add wraparound services for manufacturers, which include patient contact centers, nursing services, third-party logistics, data analytics agreements and capabilities. We continue to lean into those and leverage our track record to put ourselves in a great position to continue to be a partner for many of the therapies in the pipeline. Optimistic about it as well. The year is playing out as planned, if not a little bit better than planned, and we couldn't be more enthusiastic about the future.
Yes. The only thing I would add, Pito, in terms of growth through each quarter of 2026 and our guidance, we have delivered a very strong first half, $206 million in the quarter. We expect quarter-over-quarter growth continuing for the rest of 2026. We do expect that growth quarter-over-quarter to be very similar. So Q2 to Q3, and Q3 to Q4, we expect continued growth and that Q3 and Q4 growth to be similar to each other.
Last year's second half for a variety of reasons and catalysts was a really huge second half, and we're going to be lapping that. But we still expect robust year-over-year growth. If you look at the first half versus our guidance and the high end of the guidance, that implies continued strong growth throughout the year.
Our next question comes from the line of Stephen Baxter of Wells Fargo.
I was hoping to get an update on pharmacy sourcing initiatives as you continue to build scale. And then relatedly, we saw some headlines recently about the potential for generic tariffs starting in a couple of years. So how are you thinking about the potential impact of that? And how do you build contingencies for that into your contracting?
From a purchasing perspective, that's something that we've had a focus on for a decade now. If you look at our value proposition as a home and community health care company targeting attractive markets and those of highest need and then leveraging our scale in our operating and commercial capabilities, that scale component has been a focus for us for a long time. We continue to be one face to many external partners to leverage that scale as much as possible, and we'll continue to do that.
From a tariff perspective, there continues to be a lot of noise, but nothing has impacted the company to date. We're pleased that the administration has pushed any potential tariffs on generics to 2028. We continue to be flexible in our purchasing contracts. There are many opportunities to buy drugs from different locations. We continue to monitor that closely, and we'll exercise good judgment as best we can as we approach any potential tariff impact.
Generics are obviously a lot lower cost, and as we look across our business, when you evaluate product by product and business by business, that's not something that has us concerned for our long-term growth algorithm. It doesn't change our view of the multiple levers of growth we have over the years.
Our next question comes from the line of A.J. Rice of UBS.
I'm just interested maybe in pursuing a little more Jen's comments in the prepared remarks that you were looking at options for evaluating what the optimal capital structure is for the company going forward. I know you've gotten the proceeds in now from the Community Living divestiture. Are you thinking maybe you can lean into acquisitions a little more? Maybe give us a little flavor of what you're seeing in terms of the pipeline as well. Or is there something else you're looking at in terms of commenting on optimal capital structure?
A.J., thank you. We're really proud of the work we've done from a balance sheet perspective with our leverage at 2.15x at the end of this quarter. We appreciate the position that puts us in. As Jon mentioned, we were able to reduce our interest expense. We continue to look at what makes sense from a capital structure perspective, especially with the ratings upgrades. We do believe that we will continue to lean into M&A, and we have a very robust pipeline. We're excited about the back half of 2026 and into 2027; the balance sheet position has given us a lot of flexibility from a capital standpoint.
A.J., we're considering adding to the M&A team. We currently have seven people on the team and they do a great job, but the hallmark of our M&A approach over the last decade has been targeting tuck-ins in geographically adjacent areas where we can apply operational capabilities and synergies to drive accretive deals. We operate in massive markets; some don't have many acquisition opportunities, but in Home Health, Hospice, Rehab, Infusion, Primary Care and Home and Community Pharmacy, there are many. The ability to be a scale provider across these markets and leverage our scale, synergies and operational capabilities is a strong value proposition. We'll likely look to increase the frequency of smaller tuck-ins. For medium-sized deals, for us, bigger is still generally less than $30 million to $40 million of EBITDA. That pipeline continues to be large and long. We stay disciplined; valuations in some areas can be aggressive. We'll stick to our criteria. We're pleased with the balance sheet evolution, and with over $600 million of operating cash flow expected this year, free cash flow will follow. We're excited about how this has played out over time.
Our next question comes from the line of David Larsen of BTIG.
Can you talk a bit about your selling efforts and how they've evolved? If you're talking to an acute care IDN, what is the value proposition to those hospital systems? How much time do you spend selling to the actual health plans? Are they encouraging their networks to work with you? And then how many reps do you have commission-based reps, really, if any, just how that has evolved over time?
Fundamentally, our value proposition is to be a leading partner delivering high-quality services to payers, hospital systems and ACOs, helping particularly in the first 30 to 60 days post-discharge to reduce unnecessary readmissions and ER visits. That focus has enabled us to become a preferred provider in narrower networks with ACOs, hospital systems and payers, and that remains a key focus. It's part of why we're seeing growth well above industry averages. On the Provider side, the business grew over 30% year-over-year, and organically we were just under 20% on the Provider side. It starts with quality and then execution—being responsive with thousands of referral sources and hundreds of thousands of patients daily. We have a lot of individual clinical liaisons across our service lines that are in doctor offices and hospital systems every day—near 1,000 clinical liaisons across our service lines—doing educational and support work daily. Formalizing post-discharge programs and entering preferred agreements is an ongoing opportunity and is contributing to our volume growth.
Our next question comes from the line of Sean Dodge of BMO Capital Markets.
In Pharmacy, the IRA headwinds this year—Jen, you said $200 million to Home and Community. And I think you said before, $175 million to Specialty and Infusion. Is that still what you're expecting for Specialty? And then is it too early to tell if there are directional indicators on the impact next year, either in aggregate or by subsegment?
Yes. IRA for Home and Community is about $200 million for the full year, driven by our sales. That's roughly $50 million impact in each quarter. The EBITDA impact for Home and Community remains about $15 million for the year. For Specialty, the IRA impact from a revenue perspective is around $175 million for the year, but from an EBITDA standpoint it's really negligible. For 2027, our best view is that the drugs selected for next year are the largest drugs, and from a Home and Community standpoint, about 50% of the impact we saw in 2026 is our best estimate for 2027. We continue regulatory engagement and payer contracting efforts to mitigate impact, in addition to operational work.
We've tried to get well ahead of the IRA impacts operationally. Many of the technology, automation and AI initiatives we've implemented last year and this year will help next year as well. While the IRA approach has had unintended consequences, we're focused on controlling what we can. The team's operational execution this year has been strong, and that's reflected in the business. We'll continue to work through it and remain optimistic about prospects next year given operational drivers and growth markets like assisted living and behavioral health.
Our next question comes from the line of Joanna Gajuk of Bank of America.
If I may follow up on the question around gross profit in the Pharmacy segment. So like you said, the gross profit per script was up 28% or so year-over-year, but sequentially it did decline slightly. Is that $27.50 gross profit per script a good number to think about going forward? Is there more growth we should assume for that metric? And can you help quantify the impact of fee-for-service revenue adding to that metric as well?
Joanna, take a step back—overall the company growth across Pharmacy and Provider is strong. Within Specialty and Infusion, several levers contributed to the quarter: fee-for-service, acute Infusion performance, chronic growth, operational efficiencies, and LDD wins. Fee-for-service wraparound services are a growing contributor and we offer those services across launches. GP per script in the quarter was up sequentially when you adjust for seasonality and items that occur in Q1. We think that level is pretty stable for the rest of the year and within our expectations.
Our next question comes from the line of Whit Mayo of Leerink Partners.
Jon, you've talked about acute infusion as an area of focus for the organization. I was just wondering if any of the potential 340B changes impact your views on that.
Whit, no, that is not a meaningful part of our Infusion business.
Our next question comes from the line of Raj Kumar of Stephens.
Maybe going back to the generic conversion component of the growth here. As we think about 2027 and that pipeline, any way of framing what the branded versions of those drugs make up in the current script that you're seeing year-to-date as we try to frame the opportunity for 2027?
The launches of brands going generic that we see in 2027 will probably happen later in the year, which is our current expectation.
Our next question comes from the line of Matthew Gillmor of KeyBanc.
I wanted to see if you could frame up the rare and orphan opportunity relative to oncology. And then can you help us think through any augmentation or investments into the sales force that needs to go along with that? Or does that leverage the existing sales force within Specialty Pharmacy?
On the sales force, you're exactly right. We have several hundred clinical liaisons working across thousands of prescriber offices today. Some niche companies focusing on rare and orphan may not have an established sales force. We have 155 LDD programs and 15 years of experience. There are many therapies outside of oncology we can service, and we've had noteworthy wins in the last six months based on our track record. Rare and orphan is an obvious area of strategic growth—sizable but not nearly as big as oncology—yet it can be a meaningful contributor in the future.
Our next question comes from the line of Jared Haase of William Blair.
Maybe I'll drill back to your comments about seeing retention at all-time highs in the Home and Community business. Would you primarily attribute that to technology initiatives, or is there anything else driving that retention? How much more incremental opportunity do you see to push retention higher as a growth lever?
Jared, that's been an area of focus for a long time and is fundamentally three things. First, we continue to invest in compensation and benefits to attract the best talent. Second, technology and process improvements are designed to make jobs more efficient so clinicians and caregivers can focus on patients rather than administrative burdens. We've been innovative in that area and continue to invest. Third, training and onboarding are huge investments; we aim to make onboarding seamless, provide development and advancement opportunities within the organization. Culturally, we focus on the mission and creating a good place to work. The larger we get, the more we invest in people and talent management.
Our next question comes from the line of Erin Wright of Morgan Stanley.
I want to go back to gross profit per script. It was up 28% in the second quarter, 50% in the first quarter, 21% in 2025. But before that, it was roughly flat. Can you give context for what led to the inflection and durable overarching drivers as we head into 2027? And related, can you speak to hub services—how big it is, how much a driver for growth, and how those fee-for-service relationships work?
Changes in our gross profit margin are always a function of mix across our businesses. As we've layered on more fee-for-service business, those services are offered in every launch. When we come to market with a new drug, there are many additional services required for real-time visibility and optimal patient outcomes. Fee-for-service is not the majority of profitability, but it has become a meaningful contributor—probably a top three or top four contributor to margin in the business.
Our next question comes from the line of Brian Tanquilut of Jefferies.
Congrats on the quarter. Jon, as we think about some of these bigger oncology or oral oncologics coming down the pipeline, how do we think about the dynamics of those shifting or going down the LDD pipe? And as we think through exclusive agreements versus ultra-narrow networks? And Jen, from a margin perspective, how should we think through differences between exclusives and ultra-narrow and how they ramp over time?
Brian, we're very enthusiastic about the oncology pipeline. There's significant innovation, and we've positioned ourselves as a partner of choice in that market given our capabilities and experience.
From a margin perspective, we typically negotiate with payers on a basket of LDDs, which includes exclusives and ultra-narrow networks. Having exclusives and ultra-narrows has been a differentiator and helps our ability to negotiate rate on those drugs.
Our next question comes from the line of Parker Snure of Raymond James.
Piggybacking off a previous question on the sales force in Pharmacy: if I look at G&A in the Pharmacy business, it stepped down in the second quarter by about $13 million to $14 million from the first quarter. What were the drivers? Any timing of certain investments or anything else to call out? How should we expect that line item to track going forward?
We had some specific one-time investments in the first quarter related to sales force and other key positions as we layered our management team to support future growth. Some AI and automation project spend wrapped up in Q1. We continue to have other projects and spend, some of which is in our corporate spend in Q2.
Our next question comes from the line of Jason Cassorla of Guggenheim.
On the Amedisys and LHC assets, you upped the EBITDA expectation there by about $5 million. Can you walk through the drivers beyond pricing benefits of hopping onto your platform? Any help there would be great.
Integration in that business has continued to go really well. As we started off the year, we planned for a slower ramp on some growth initiatives to ensure the team had time for integration work and necessary investments. As of today, all of our business lines and branches are on our home care system. We're working through final integration steps and feel more confident about increasing that guidance.
Integration has gone extremely well and the volume is moving up under our ownership now.
I would now like to turn the conference back to Jon Rousseau for closing remarks.
Thank you, everybody, for joining today. We really appreciate your time on the call, and it was a productive quarter. We continue to invest for the future while delivering today, and we look forward to talking with you in another 90 days. Thank you, and have a great day.
This concludes today's conference call. Thank you for participating. You may now disconnect.