Item 1. Financial Statements
Item 1. Financial Statements
4
Table of Contents
OPTION CARE HEALTH, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARES AND PER SHARE AMOUNTS)
September 30, 2025 December 31, 2024
(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 309,822 $ 412,565
Accounts receivable, net 474,500 409,733
Inventories 415,723 388,131
Prepaid expenses and other current assets 82,721 112,198
Total current assets 1,282,766 1,322,627
NONCURRENT ASSETS:
Property and equipment, net 134,298 127,367
Operating lease right-of-use asset 92,439 86,528
Intangible assets, net 22,732 16,993
Referral sources, net 295,716 284,017
Goodwill 1,606,646 1,540,246
Other noncurrent assets 45,248 43,965
Total noncurrent assets 2,197,079 2,099,116
TOTAL ASSETS $ 3,479,845 $ 3,421,743
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable $ 627,867 $ 610,779
Accrued compensation and employee benefits 72,460 63,028
Accrued expenses and other current liabilities 93,324 77,783
Current portion of operating lease liability 23,475 22,044
Current portion of long-term debt 6,780 6,512
Total current liabilities 823,906 780,146
NONCURRENT LIABILITIES:
Long-term debt, net of discount, deferred financing costs and current portion 1,155,056 1,104,641
Operating lease liability, net of current portion 90,894 84,776
Deferred income taxes 50,019 47,576
Other noncurrent liabilities 1,311 366
Total noncurrent liabilities 1,297,280 1,237,359
Total liabilities 2,121,186 2,017,505
STOCKHOLDERS’ EQUITY:
Preferred stock; $ 0.0001 par value; 12,500,000 shares authorized, no shares outstanding as of September 30, 2025 and December 31, 2024
— —
Common stock; $ 0.0001 par value: 250,000,000 shares authorized, 184,498,929 shares issued and 160,107,695 shares outstanding as of September 30, 2025; 183,846,725 shares issued and 166,261,112 shares outstanding as of December 31, 2024
18 18
Treasury stock; 24,391,234 and 17,585,613 shares outstanding, at cost, as of September 30, 2025 and December 31, 2024, respectively
( 722,192 ) ( 507,598 )
Paid-in capital 1,256,914 1,231,435
Retained earnings 818,417 669,336
Accumulated other comprehensive income 5,502 11,047
Total stockholders’ equity 1,358,659 1,404,238
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 3,479,845 $ 3,421,743
The accompanying notes to unaudited condensed consolidated financial statements are an integral part of these statements.
5
Table of Contents
OPTION CARE HEALTH, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Three Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 2024
NET REVENUE $ 1,435,016 $ 1,278,546 $ 4,184,073 $ 3,651,784
COST OF REVENUE 1,162,114 1,021,797 3,379,076 2,907,170
GROSS PROFIT 272,902 256,749 804,997 744,614
OPERATING COSTS AND EXPENSES:
Selling, general and administrative expenses 172,104 156,999 510,314 465,524
Depreciation and amortization expense 16,291 14,659 48,278 44,294
Total operating expenses 188,395 171,658 558,592 509,818
OPERATING INCOME 84,507 85,091 246,405 234,796
OTHER INCOME (EXPENSE):
Interest expense, net ( 14,146 ) ( 12,345 ) ( 41,824 ) ( 38,150 )
Equity in earnings of joint ventures 2,176 1,391 5,300 3,921
Other, net ( 3,570 ) ( 583 ) ( 8,497 ) 1,983
Total other (expense) income ( 15,540 ) ( 11,537 ) ( 45,021 ) ( 32,246 )
INCOME BEFORE INCOME TAXES 68,967 73,554 201,384 202,550
INCOME TAX EXPENSE 17,151 19,698 52,303 50,860
NET INCOME $ 51,816 $ 53,856 $ 149,081 $ 151,690
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Change in unrealized (loss) gain on cash flow hedges, net of income tax benefit of $ 478 , $ 1,998 , $ 1,809 and $ 1,785 , respectively
$ ( 1,463 ) $ ( 6,127 ) $ ( 5,545 ) $ ( 5,475 )
OTHER COMPREHENSIVE (LOSS) INCOME ( 1,463 ) ( 6,127 ) ( 5,545 ) ( 5,475 )
NET COMPREHENSIVE INCOME $ 50,353 $ 47,729 $ 143,536 $ 146,215
EARNINGS PER COMMON SHARE:
Earnings per share, basic $ 0.32 $ 0.32 $ 0.91 $ 0.88
Earnings per share, diluted $ 0.32 $ 0.31 $ 0.91 $ 0.87
Weighted average common shares outstanding, basic 161,829 170,636 163,393 172,490
Weighted average common shares outstanding, diluted 163,086 171,941 164,602 173,848
The accompanying notes to unaudited condensed consolidated financial statements are an integral part of these statements.
6
Table of Contents
OPTION CARE HEALTH, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
Nine Months Ended September 30,
2025 2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 149,081 $ 151,690
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization expense 50,374 46,029
Non-cash operating lease costs 19,756 17,892
Deferred income taxes - net 2,443 10,088
Loss on extinguishment of debt 4,744 377
Amortization of deferred financing costs 3,455 3,465
Equity in earnings of joint ventures ( 5,300 ) ( 3,921 )
Stock-based incentive compensation expense 30,638 27,620
Distribution from equity method investments 2,100 1,250
Other adjustments ( 435 ) ( 1,845 )
Changes in operating assets and liabilities:
Accounts receivable, net ( 55,430 ) ( 51,293 )
Inventories ( 24,899 ) ( 36,595 )
Prepaid expenses and other current assets 24,694 ( 3,175 )
Accounts payable 10,224 164,754
Accrued compensation and employee benefits 8,338 ( 31,673 )
Accrued expenses and other current liabilities 15,834 5,560
Operating lease liabilities ( 18,118 ) ( 16,833 )
Other noncurrent assets and liabilities 5,057 3,880
Net cash provided by operating activities 222,556 287,270
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment ( 27,661 ) ( 25,266 )
Business acquisitions, net of cash acquired ( 117,247 ) —
Other investing activities ( 2,529 ) —
Net cash used in investing activities ( 147,437 ) ( 25,266 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Stock-based compensation tax withholdings ( 7,916 ) ( 11,235 )
Purchase of company stock and related excise taxes ( 214,887 ) ( 160,122 )
Repayments of debt principal ( 3,255 ) ( 4,756 )
Proceeds from issuance of debt 229,472 49,959
Retirement of debt obligations ( 180,239 ) —
Deferred financing costs ( 3,382 ) ( 77 )
Other financing activities 2,345 3,404
Net cash used in financing activities ( 177,862 ) ( 122,827 )
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS ( 102,743 ) 139,177
Cash and cash equivalents - beginning of the period 412,565 343,849
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 309,822 $ 483,026
Supplemental disclosure of cash flow information:
Cash paid for interest $ 42,520 $ 48,666
Cash paid for income taxes $ 49,836 $ 45,258
Cash paid for operating leases $ 22,867 $ 21,861
The accompanying notes to unaudited condensed consolidated financial statements are an integral part of these statements.
7
Table of Contents
OPTION CARE HEALTH, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(IN THOUSANDS)
Preferred Stock Common Stock Treasury Stock Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity
Balance - December 31, 2023 $ — $ 18 $ ( 255,107 ) $ 1,204,270 $ 457,513 $ 14,978 $ 1,421,672
Exercise of stock options, vesting of restricted stock, and related tax withholdings — — — ( 8,182 ) — — ( 8,182 )
Stock-based incentive compensation — — — 9,605 — — 9,605
Purchase of company stock and related tax effects — — ( 40,289 ) — — — ( 40,289 )
Net income — — — — 44,791 — 44,791
Other comprehensive income — — — — — 1,551 1,551
Balance - March 31, 2024 $ — $ 18 $ ( 295,396 ) $ 1,205,693 $ 502,304 $ 16,529 $ 1,429,148
Exercise of stock options, vesting of restricted stock, and related tax withholdings — — — 1,299 — — 1,299
Stock-based incentive compensation — — — 7,608 — — 7,608
Purchase of company stock and related tax effects — — ( 78,768 ) — — — ( 78,768 )
Net income — — — — 53,043 — 53,043
Other comprehensive loss — — — — — ( 899 ) ( 899 )
Balance - June 30, 2024 $ — $ 18 $ ( 374,164 ) $ 1,214,600 $ 555,347 $ 15,630 $ 1,411,431
Exercise of stock options, vesting of restricted stock, and related tax withholdings — — — ( 948 ) — — ( 948 )
Stock-based incentive compensation — — — 10,407 — — 10,407
Purchase of company stock and related tax effects — — ( 42,388 ) — — — ( 42,388 )
Net income — — — — 53,856 — 53,856
Other comprehensive loss — — — — — ( 6,127 ) ( 6,127 )
Balance - September 30, 2024 $ — $ 18 $ ( 416,552 ) $ 1,224,059 $ 609,203 $ 9,503 $ 1,426,231
Balance - December 31, 2024 $ — $ 18 $ ( 507,598 ) $ 1,231,435 $ 669,336 $ 11,047 $ 1,404,238
Exercise of stock options, vesting of restricted stock, and related tax withholdings — — — ( 5,436 ) — — ( 5,436 )
Stock-based incentive compensation — — — 8,801 — — 8,801
Purchase of company stock and related tax effects — — ( 101,113 ) — — — ( 101,113 )
Net income — — — — 46,742 — 46,742
Other comprehensive loss — — — — — ( 2,398 ) ( 2,398 )
Balance - March 31, 2025 $ — $ 18 $ ( 608,711 ) $ 1,234,800 $ 716,078 $ 8,649 $ 1,350,834
Exercise of stock options, vesting of restricted stock, and related tax withholdings — — — ( 33 ) — — ( 33 )
Stock-based incentive compensation — — — 10,712 — — 10,712
Purchase of company stock and related tax effects — — ( 50,404 ) — — — ( 50,404 )
Net income — — — — 50,523 — 50,523
Other comprehensive loss — — — — — ( 1,684 ) ( 1,684 )
Balance - June 30, 2025 $ — $ 18 $ ( 659,115 ) $ 1,245,479 $ 766,601 $ 6,965 $ 1,359,948
Exercise of stock options, vesting of restricted stock, and related tax withholdings — — — 310 — — 310
Stock-based incentive compensation — — — 11,125 — — 11,125
Purchase of company stock and related tax effects — — ( 63,077 ) — — — ( 63,077 )
Net income — — — — 51,816 — 51,816
Other comprehensive loss — — — — — ( 1,463 ) ( 1,463 )
Balance - September 30, 2025 $ — $ 18 $ ( 722,192 ) $ 1,256,914 $ 818,417 $ 5,502 $ 1,358,659
The accompanying notes to unaudited condensed consolidated financial statements are an integral part of these statements.
8
Table of Contents
OPTION CARE HEALTH, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. NATURE OF OPERATIONS AND PRESENTATION OF FINANCIAL STATEMENTS
Corporate Organization and Business — Option Care Health, and its wholly-owned subsidiaries, provide infusion therapy and other ancillary healthcare services through a national network of 87 full service pharmacies, including 74 with ambulatory infusion suites. Additionally, the Company has 105 stand-alone ambulatory infusion suites, including 24 with advanced practitioner capabilities. The Company contracts with managed care organizations, third-party payers, hospitals, physicians, and other referral sources to provide pharmaceuticals and complex compounded solutions to patients for intravenous delivery in the patients’ homes or other nonhospital settings. The Company operates in one segment, infusion services. The Company’s stock is listed on the Nasdaq Global Select Market as of September 30, 2025.
Basis of Presentation — The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”) in the United States and contain all adjustments, including normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for interim financial reporting. The results of operations for the interim periods presented are not necessarily indicative of the results of operations for the entire year. These unaudited condensed consolidated financial statements do not include all of the information and notes to the financial statements required by GAAP for complete financial statements and should be read in conjunction with the 2024 audited consolidated financial statements, including the notes thereto, as presented in our Form 10-K.
Principles of Consolidation — The Company’s unaudited condensed consolidated financial statements include the accounts of Option Care Health, Inc. and its subsidiaries. All intercompany transactions and balances are eliminated in consolidation.
The Company has investments in companies that are 50 % owned and are accounted for as equity-method investments. The Company’s share of earnings from equity-method investments is included in the line entitled “Equity in earnings of joint ventures” in the unaudited condensed consolidated statements of comprehensive income. See Equity-Method Investments within Note 2, Summary of Significant Accounting Policies , for further discussion of the Company’s equity-method investments.
9
Table of Contents
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents — The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. As of September 30, 2025, cash equivalents consisted of money market funds.
Prepaid Expenses and Other Current Assets — Included in prepaid expenses and other current assets are volume-based rebates receivable from pharmaceutical and medical supply manufacturers of $ 28.4 million and $ 54.4 million as of September 30, 2025 and December 31, 2024, respectively.
Equity-Method Investments — The Company’s investments in certain unconsolidated entities are accounted for under the equity method. The balance of these investments is included in other noncurrent assets in the accompanying condensed consolidated balance sheets. As of September 30, 2025 and December 31, 2024, the balance of the investments was $ 27.7 million and $ 24.5 million, respectively. The balance of these investments is increased to reflect the Company’s capital contributions and equity in earnings of the investees. The balance of these investments is decreased to reflect the Company’s equity in losses of the investees and for distributions received that are not in excess of the carrying amount of the investments. The Company’s proportionate share of earnings or losses of the investees is recorded in equity in earnings of joint ventures in the accompanying unaudited condensed consolidated statements of comprehensive income. The Company’s proportionate share of earnings was $ 2.2 million and $ 5.3 million for the three and nine months ended September 30, 2025, respectively. The Company’s proportionate share of earnings was $ 1.4 million and $ 3.9 million for the three and nine months ended September 30, 2024, respectively. Distributions from the investees are treated as cash inflows from operating activities in the unaudited condensed consolidated statements of cash flows. During the three and nine months ended September 30, 2025, the Company received distributions from the investees of $ 0.5 million and $ 2.1 million, respectively. During the three and nine months ended September 30, 2024, the Company received distributions from the investees of $ 0.5 million and $ 1.3 million, respectively. See Note 16, Related-Party Transactions , for discussion of related-party transactions with these investees.
Concentrations of Business Risk — The Company generates revenue from managed care contracts and other agreements with commercial third-party payers. Revenue related to the Company’s largest payer was approximately 14 % for the three and nine months ended September 30, 2025. Revenue related to the Company’s largest payer was approximately 15 % for the three and nine months ended September 30, 2024. There were no other managed care contracts that represent greater than 10% of revenue for the periods presented.
For the three and nine months ended September 30, 2025, approximately 12 % of the Company’s revenue was reimbursable through direct government healthcare programs, such as Medicare and Medicaid. For the three and nine months ended September 30, 2024, approximately 11 % and 12 %, respectively, of the Company’s revenue was reimbursable through direct government healthcare programs, such as Medicare and Medicaid. As of September 30, 2025 and December 31, 2024, approximately 11 % of the Company’s accounts receivable was related to these programs. Governmental programs pay for services based on fee schedules and rates that are determined by the related governmental agency. Laws and regulations pertaining to government programs are complex and subject to interpretation. As a result, there is at least a reasonable possibility that recorded estimates will change in the near term.
The Company does not require its patients or other payers to carry collateral for any amounts owed for goods or services provided. Other than as discussed above, concentration of credit risk relating to trade accounts receivable is limited due to the Company’s diversity of patients and payers. Further, the Company generally does not provide charity care; however, Option Care Health offers a financial assistance program for patients that meet certain defined hardship criteria.
For the three and nine months ended September 30, 2025 , approximately 66 % and 67 %, respectively, of the Company’s pharmaceutical and medical supply purchases were from four vendors. For the three and nine months ended September 30, 2024, approximately 68 % and 67 %, respectively, of the Company’s pharmaceutical and medical supply purchases were from four vendors. Although there are a limited number of suppliers, the Company believes that other vendors could provide similar products on comparable terms for most products. However, a change in suppliers could cause delays in service delivery and possible losses in revenue, which could adversely affect the Company’s financial condition or operating results.
10
Table of Contents
3. BUSINESS COMBINATIONS
Intramed Plus, Inc. — On January 24, 2025, pursuant to the securities purchase agreement dated November 27, 2024, the Company completed the acquisition of 100 % of the equity interests in Intramed Plus, Inc. (“Intramed Plus”) for a purchase price, net of cash acquired, of $ 117.2 million.
The allocation of the purchase price of Intramed Plus was accounted for as a business combination in accordance with ASC Topic 805, Business Combinations, with the total purchase price being allocated to the assets and liabilities acquired based on the estimated fair value of each asset and liability. Certain adjustments were made to preliminary valuation amounts related to accounts receivable, net during the three months ended September 30, 2025. The following is a preliminary estimate of the allocation of the consideration transferred to acquired identifiable assets and assumed liabilities, net of cash acquired, as of September 30, 2025, which remains open for accounts receivable, net (in thousands):
Amount
Accounts receivable, net $ 9,337
Referral sources (1) 36,800
Trademarks/names (1) 8,300
Inventory 2,693
Other assets 4,831
Accounts payable and other liabilities ( 11,114 )
Fair value identifiable assets and liabilities 50,847
Goodwill (2) 66,400
Cash acquired 2,968
Purchase price 120,215
Less: cash acquired ( 2,968 )
Purchase price, net of cash acquired $ 117,247
(1) Referral sources and trademarks/names have been assigned a useful life of 15 years.
(2) Goodwill is attributable to cost synergies from procurement and operational efficiencies and elimination of duplicative administrative costs.
11
Table of Contents
4. REVENUE
The following table sets forth the net revenue earned by category of payer for the three and nine months ended September 30, 2025 and 2024 (in thousands):
Three Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 2024
Commercial payers $ 1,252,185 $ 1,109,971 $ 3,628,777 $ 3,160,490
Government payers 172,750 147,005 501,243 424,033
Patients 10,081 21,570 54,053 67,261
Net revenue $ 1,435,016 $ 1,278,546 $ 4,184,073 $ 3,651,784
5. INCOME TAXES
During the three and nine months ended September 30, 2025, the Company recorded tax expense of $ 17.2 million and $ 52.3 million, respectively, which represents an effective tax rate of 24.9 % and 26.0 %, respectively. The variance in the Company’s effective tax rate of 24.9 % and 26.0 % for the three and nine months ended September 30, 2025, respectively, compared to the federal statutory rate of 21%, is primarily attributable to the difference between federal and state tax rates and various non-deductible expenses. During the three and nine months ended September 30, 2024, the Company recorded tax expense of $ 19.7 million and $ 50.9 million, respectively, which represents an effective tax rate of 26.8 % and 25.1 %, respectively. The variance in the Company’s effective tax rate of 26.8 % and 25.1 % for the three and nine months ended September 30, 2024, respectively, compared to the federal statutory rate of 21%, is primarily attributable to the difference between federal and state tax rates, various non-deductible expenses, and a change in state valuation allowance. During the nine months ended September 30, 2024, the Company released $ 2.2 million of state valuation allowance.
The Company maintains a valuation allowance of $ 3.3 million against certain state net operating losses. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which those temporary differences are deductible. In making this assessment, the Company considers the scheduled reversal of deferred tax liabilities, including the effect in available carryback and carryforward periods, projected taxable income, and tax-planning strategies. On a quarterly basis, the Company evaluates all positive and negative evidence in determining if the valuation allowance is fairly stated.
The Company’s tax expense of $ 17.2 million and $ 52.3 million for the three and nine months ended September 30, 2025, respectively, consists of quarterly federal and state tax liabilities as well as recognized deferred federal and state tax expense. The Company’s tax expense of $ 19.7 million and $ 50.9 million for the three and nine months ended September 30, 2024, respectively, consists of quarterly federal and state tax liabilities as well as recognized deferred federal and state tax expense.
The Company has accumulated federal net operating loss carryovers that are subject to one or more Internal Revenue Code (“Code”) Section 382 limitations. This may limit the Company’s ability to utilize its federal net operating losses.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company has reflected the applicable provisions of the OBBBA into its unaudited condensed financial statements for the nine months ended September 30, 2025, and there is no material impact on its unaudited condensed consolidated financial statements and related disclosures.
12
Table of Contents
6. EARNINGS PER SHARE
The Company presents basic and diluted earnings per share for its common stock. Basic earnings per share is calculated by dividing the net income of the Company by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is determined by adjusting the profit or loss and the weighted average number of shares of common stock outstanding for the effects of all potentially dilutive securities.
The earnings are used as the basis of determining whether the inclusion of common stock equivalents would be anti-dilutive. The computation of diluted shares for the three and nine months ended September 30, 2025 and 2024 includes the effect of shares that would be issued in connection with warrants, stock options, restricted stock awards and performance stock unit awards, as these common stock equivalents are dilutive to the earnings per share recorded in those periods.
The following table presents the Company’s common stock equivalents that were excluded from the calculation of earnings per share as they would be anti-dilutive:
Three Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 2024
Stock option awards 698,780 779,876 697,668 855,323
Restricted stock awards 630,075 324,877 524,731 365,835
Performance stock unit awards 3,881 — 333,995 257,735
The following table presents the Company’s basic earnings per share and shares outstanding (in thousands, except per share data):
Three Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 2024
Numerator:
Net income $ 51,816 $ 53,856 $ 149,081 $ 151,690
Denominator:
Weighted average number of common shares outstanding 161,829 170,636 163,393 172,490
Earnings per common share:
Earnings per common share, basic $ 0.32 $ 0.32 $ 0.91 $ 0.88
The following table presents the Company’s diluted earnings per share and shares outstanding (in thousands, except per share data):
Three Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 2024
Numerator:
Net income $ 51,816 $ 53,856 $ 149,081 $ 151,690
Denominator:
Weighted average number of common shares outstanding 161,829 170,636 163,393 172,490
Effect of dilutive securities 1,257 1,305 1,209 1,358
Weighted average number of common shares outstanding, diluted 163,086 171,941 164,602 173,848
Earnings per common share:
Earnings per common share, diluted $ 0.32 $ 0.31 $ 0.91 $ 0.87
13
Table of Contents
7. LEASES
During the three and nine months ended September 30, 2025, the Company incurred operating lease expenses of $ 8.9 million and $ 26.0 million, respectively, including short-term lease expenses, which were included as a component of selling, general and administrative expenses in the unaudited condensed consolidated statements of comprehensive income. During the three and nine months ended September 30, 2024, the Company incurred operating lease expenses of $ 8.6 million and $ 25.3 million, respectively, including short-term lease expenses, which were included as a component of selling, general and administrative expenses in the unaudited condensed consolidated statements of comprehensive income. As of September 30, 2025 and December 31, 2024 , the weighted-average remaining lease term was 6.6 years and 6.5 years, respectively, and the weighted-average discount rate was 6.94 % and 6.56 %, respectively.
Operating leases mature as follows (in thousands):
Fiscal Year Ended December 31, Minimum Payments
2025 $ 7,829
2026 29,883
2027 24,863
2028 18,216
2029 13,647
Thereafter 51,281
Total lease payments 145,719
Less: interest ( 31,350 )
Present value of lease liabilities $ 114,369
During the nine months ended September 30, 2025 and 2024, the Company commenced new leases, extensions and amendments, resulting in non-cash operating activities in the unaudited condensed consolidated statements of cash flows o f $ 23.0 million and $ 23.0 million, respectively, re lated to increases in the operating lease right-of-use assets and operating lease liabilities. As of September 30, 2025, the Company did not have any significant operating or financing leases that had not yet commenced.
14
Table of Contents
8. PROPERTY AND EQUIPMENT
Property and equipment was as follows as of September 30, 2025 and December 31, 2024 (in thousands):
September 30, 2025 December 31, 2024
Infusion pumps $ 39,476 $ 37,659
Equipment, furniture and other 26,901 24,055
Leasehold improvements 129,105 116,675
Computer software, purchased and internally developed 50,631 46,532
Assets under development 23,242 22,990
269,355 247,911
Less: accumulated depreciation ( 135,057 ) ( 120,544 )
Property and equipment, net $ 134,298 $ 127,367
Depreciation expense is recorded within cost of revenue and operating expenses within the unaudited condensed consolidated statements of comprehensive income, depending on the nature of the underlying fixed assets. The depreciation expense included in cost of revenue relates to revenue-generating assets, such as infusion pumps. The depreciation expense included in operating expenses is related to infrastructure items, such as furniture, computer and office equipment, and leasehold improvements. The following table presents the amount of depreciation expense recorded in cost of revenue and operating expenses for the three and nine months ended September 30, 2025 and 2024 (in thousands):
Three Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 2024
Depreciation expense in cost of revenue $ 757 $ 568 $ 2,096 $ 1,735
Depreciation expense in operating expenses 7,022 6,063 20,615 18,485
Total depreciation expense $ 7,779 $ 6,631 $ 22,711 $ 20,220
15
Table of Contents
9. GOODWILL AND OTHER INTANGIBLE ASSETS
Changes in the carrying amount of goodwill consist of the following for the three and nine months ended September 30, 2025 (in thousands):
Amount
Balance at December 31, 2024
$ 1,540,246
Acquisitions 65,684
Balance at March 31, 2025 $ 1,605,930
Purchase accounting adjustments ( 75 )
Balance at June 30, 2025 $ 1,605,855
Purchase accounting adjustments 791
Balance at September 30, 2025
$ 1,606,646
There was no change in the carrying amount of goodwill for the three and nine months ended September 30, 2024.
The carrying amount and accumulated amortization of intangible assets consist of the following as of September 30, 2025 and December 31, 2024 (in thousands):
September 30, 2025 December 31, 2024
Gross intangible assets:
Referral sources $ 551,188 $ 514,388
Trademarks/names 46,808 39,136
Other amortizable intangible assets 985 985
Total gross intangible assets 598,981 554,509
Accumulated amortization:
Referral sources ( 255,472 ) ( 230,371 )
Trademarks/names ( 24,385 ) ( 22,599 )
Other amortizable intangible assets ( 676 ) ( 529 )
Total accumulated amortization ( 280,533 ) ( 253,499 )
Total intangible assets, net $ 318,448 $ 301,010
Amortization expense for intangible assets was $ 9.3 million and $ 27.7 million for the three and nine months ended September 30, 2025, respectively. Amortization expense for intangible assets was $ 8.6 million and $ 25.8 million for the three and nine months ended September 30, 2024, respectively.
16
Table of Contents
10. INDEBTEDNESS
Long-term debt consisted of the following as of September 30, 2025 (in thousands):
Principal Amount Discount Debt Issuance Costs Net Balance
Revolver Facility $ — $ — $ — $ —
First Lien Term Loan 678,000 ( 4,713 ) ( 5,112 ) 668,175
Senior Notes 500,000 — ( 6,339 ) 493,661
$ 1,178,000 $ ( 4,713 ) $ ( 11,451 ) 1,161,836
Less: current portion ( 6,780 )
Total long-term debt $ 1,155,056
Long-term debt consisted of the following as of December 31, 2024 (in thousands):
Principal Amount Discount Debt Issuance Costs Net Balance
Revolver Facility $ — $ — $ — $ —
First Lien Term Loan 631,617 ( 5,537 ) ( 7,555 ) 618,525
Senior Notes 500,000 — ( 7,372 ) 492,628
$ 1,131,617 $ ( 5,537 ) $ ( 14,927 ) 1,111,153
Less: current portion ( 6,512 )
Total long-term debt $ 1,104,641
On September 22, 2025, the Company entered into the fourth amendment (the “Fourth Amendment”) to the amended and restated First Lien Credit Agreement (the “Credit Agreement”). The Fourth Amendment, among other things, (i) refinances the existing term loans under the Credit Agreement with a new class of term loans (the “First Lien Term Loan”), reduces the interest rate on the First Lien Term Loan from Term Secured Overnight Financing Rate (“SOFR”) plus 2.25 % to Term SOFR plus 1.75 % and extends the maturity date of the First Lien Term Loan to September 22, 2032, (ii) provides for an additional $ 49.6 million of incremental First Lien Term Loan indebtedness, and (iii) extends the maturity date of the revolving credit commitments under the Credit Agreement (the “Revolver Facility”) to September 22, 2030.
As part of the above refinancing, certain lenders exited while others joined, resulting in both repayment and proceeds. The Company assessed whether the repayment of the First Lien Term Loan indebtedness resulted in an insubstantial modification or an extinguishment of the existing debt for each loan in the syndication by grouping lenders as follows: (i) Lenders participating in both the First Lien Term Loan and 4.375 % Senior Unsecured Notes due 2029 (the “Senior Notes”); (ii) previous lenders that exited; and (iii) new lenders. The Company determined that proceeds from the issuance of debt totaled $ 229.8 million, resulting in a cash inflow from financing activities, net of $ 0.3 million in fees incurred, in the unaudited condensed consolidated statements of cash flows. The Company also recognized $ 180.2 million of retirement of debt obligations, resulting in a cash outflow from financing activities, in the unaudited condensed consolidated statements of cash flows.
In connection with the refinancing of the First Lien Term Loan, the Company incurred $ 6.7 million in debt issuance costs and third-party fees, of which $ 3.5 million was capitalized, $ 2.8 million was expensed as a component of selling, general and administrative expenses and $ 0.4 million was expensed as a loss on extinguishment as a component of other expense in the consolidated statements of comprehensive income. The Company recognized a loss on extinguishment of debt of $ 4.7 million included in the line entitled “Other, net” in the consolidated statements of comprehensive income, of which $ 0.4 million related to debt issuance costs incurred with the First Lien Term Loan refinancing, as discussed above, and $ 4.3 million related to existing deferred financing fees that were written off upon extinguishment.
As part of the above refinancing, the Company incurred $ 0.3 million in fees related to the Revolver Facility, all of which were capitalized and included as a cash outflow from financing activities within the unaudited condensed consolidated statements of cash flows.
The interest rate on the First Lien Term Loan was 5.89 % and 6.82 % as of September 30, 2025 and December 31, 2024, respectively. The weighted average interest rate incurred on the First Lien Term Loan was 6.51 % and 6.56 % for the three and nine months ended September 30, 2025, respectively. The weighted average interest rate incurred on the First Lien Term Loan
was 7.56 % and 7.84 % for the three and nine months ended September 30, 2024, respectively. The First Lien Term Loan matures on September 22, 2032.
The interest rate on the Senior Notes was 4.375 % as of September 30, 2025 and December 31, 2024. The weighted average interest rate incurred on the Senior Notes was 4.375 % for the three and nine months ended September 30, 2025 and 2024. The Senior Notes mature on October 31, 2029.
As of September 30, 2025, the Company had $ 4.0 million of undrawn letters of credit issued and outstanding, resulting in net borrowing availability under the Revolver Facility of $ 396.0 million. The Revolver Facility matures on the date that is the earlier of (i) September 22, 2030 and (ii) the date that is 91 days prior to the stated maturity date applicable to the Senior Notes to the extent any amount of the Senior Notes remains unpaid and outstanding as of the date that is 91 days prior to the stated maturity date applicable to the Senior Notes.
Long-term debt matures as follows (in thousands):
Fiscal Year Ended December 31, Minimum Payments
2025 $ 1,695
2026 6,780
2027 6,780
2028 6,780
2029 506,780
Thereafter 649,185
Total $ 1,178,000
During the three and nine months ended September 30, 2025 and 2024, the Company engaged in hedging activities to limit its exposure to changes in interest rates. See Note 11, Derivative Instruments , for further discussion.
The following table presents the estimated fair values of the Company’s debt obligations as of September 30, 2025 (in thousands):
Financial Instrument Carrying Value as of September 30, 2025
Markets for Identical Item (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)
First Lien Term Loan $ 668,175 $ — $ 677,186 $ —
Senior Notes 493,661 — 480,000 —
Total debt instruments $ 1,161,836 $ — $ 1,157,186 $ —
See Note 12, Fair Value Measurements , for further discussion.
17
Table of Contents
11. DERIVATIVE INSTRUMENTS
The Company utilizes derivative financial instruments for hedging and non-trading purposes to limit the Company’s exposure to its variable interest rate risk. Use of derivative financial instruments in hedging strategies subjects the Company to certain risks, such as market and credit risks. Market risk represents the possibility that the value of the derivative financial instrument will change. Credit risk related to a derivative financial instrument represents the possibility that the counterparty will not fulfill the terms of the contract. The notional, or contractual, amount of the Company’s derivative financial instruments is used to measure interest to be paid or received and does not represent the Company’s exposure due to credit risk. Credit risk is monitored through established approval procedures, including reviewing credit ratings when appropriate.
In October 2021, the Company entered into an interest rate cap hedge with a notional amount of $ 300 million for a five-year term beginning November 30, 2021. The hedge partially offsets risk associated with the First Lien Term Loan’s variable interest rate. The interest rate cap instrument perfectly offsets the terms of the interest rates associated with the variable interest rate of the First Lien Term Loan.
The following table summarizes the amount and location of the Company’s derivative instruments in the condensed consolidated balance sheets (in thousands):
Fair Value - Derivatives in Asset Position
Derivative Balance Sheet Caption September 30, 2025 December 31, 2024
Interest rate cap designated as cash flow hedge Prepaid expenses and other current assets $ 6,518 $ 8,034
Interest rate cap designated as cash flow hedge Other noncurrent assets 842 6,680
Total derivative assets $ 7,360 $ 14,714
The gain and loss associated with the changes in the fair value of the effective portion of the hedging instrument is recorded in other comprehensive (loss) income. The gain and loss associated with the changes in the fair value of the hedging instrument is recognized in net income through interest expense.
The following table presents the pre-tax (loss) gain from derivative instruments recognized in other comprehensive (loss) income in the Company’s unaudited condensed consolidated statements of comprehensive income (in thousands):
Three Months Ended September 30, Nine Months Ended September 30,
Derivative 2025 2024 2025 2024
Interest rate cap designated as cash flow hedge $ ( 1,941 ) $ ( 8,125 ) $ ( 7,354 ) $ ( 7,260 )
The following table presents the amount and location of pre-tax income recognized in the Company’s unaudited condensed consolidated statements of comprehensive income related to the Company’s derivative instruments (in thousands):
Three Months Ended September 30, Nine Months Ended September 30,
Derivative Income Statement Caption 2025 2024 2025 2024
Interest rate cap designated as cash flow hedge Interest expense, net $ 2,241 $ 3,056 $ 6,642 $ 9,005
18
Table of Contents
12. FAIR VALUE MEASUREMENTS
Fair value measurements are determined by maximizing the use of observable inputs and minimizing the use of unobservable inputs. The hierarchy places the highest priority on unadjusted quoted market prices in active markets for identical assets or liabilities (Level 1 measurements) and gives the lowest priority to unobservable inputs (Level 3 measurements). The categories within the valuation hierarchy are described as follows:
• Level 1 — Inputs to the fair value measurement are quoted prices in active markets for identical assets or liabilities.
• Level 2 — Inputs to the fair value measurement include quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.
• Level 3 — Inputs to the fair value measurement are unobservable inputs or valuation techniques.
While the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
First Lien Term Loan : The fair value of the First Lien Term Loan is derived from a broker quote on the loans in the syndication (Level 2 inputs). See Note 10, Indebtedness , for further discussion of the carrying amount and fair value of the First Lien Term Loan.
Senior Notes: The fair value of the Senior Notes is derived from a broker quote (Level 2 inputs). See Note 10, Indebtedness , for further discussion of the carrying amount and fair value of the Senior Notes.
Interest Rate Cap: The fair value of the interest rate cap is derived from the interest rates prevalent in the market and future expectations of those interest rates (Level 2 inputs). The Company determines the fair value of the investments based on quoted prices from third-party brokers. See Note 11, Derivative Instruments , for further discussion of the fair value of the interest rate cap.
Money Market Funds: The fair value of the money market funds is derived from the closing price reported by the fund sponsor and classified as cash and cash equivalents on the Company’s condensed consolidated balance sheets (Level 1 inputs).
There were no other material assets or liabilities measured at fair value at September 30, 2025 and December 31, 2024.
13. COMMITMENTS AND CONTINGENCIES
The Company is involved in legal proceedings and is subject to investigations, inspections, audits, inquiries, and similar actions by governmental authorities, arising in the normal course of the Company’s business. Some of these suits may purport or may be determined to be class actions and/or involve parties seeking large and/or indeterminate amounts, including punitive or exemplary damages, and may remain unresolved for several years. From time to time, the Company may also be involved in legal proceedings as a plaintiff involving antitrust, tax, contract, intellectual property, and other matters. Gain contingencies, if any, are recognized when they are realized.
The results of legal proceedings are often uncertain and difficult to predict, and the costs incurred in litigation can be substantial, regardless of the outcome. The Company does not believe that any of these pending matters, after consideration of applicable reserves and rights to indemnification, will have a material adverse effect on the Company’s condensed consolidated balance sheets.
However, substantial unanticipated verdicts, fines, and rulings may occur. As a result, the Company may from time to time incur judgments, enter into settlements, or revise expectations regarding the outcome of certain matters, and such developments could have a material adverse effect on its results of operations in the period in which the amounts are accrued and/or its cash flows in the period in which the amounts are paid.
19
Table of Contents
14. STOCK-BASED INCENTIVE COMPENSATION
Equity Incentive Plans — Under the Company’s 2018 Equity Incentive Plan (the “2018 Plan”), approved at the annual meeting by stockholders on May 3, 2018 and amended and restated on May 19, 2021 and May 15, 2024, the Company may issue, among other things, incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock units, stock grants, and performance units to key employees and directors. The 2018 Plan is administered by the Company’s Compensation Committee, a standing committee of the Company’s Board of Directors. As of May 2021, a total of 9,101,734 shares of common stock were authorized for issuance under the 2018 Plan. In May 2024, an additional 4,000,000 shares were authorized for issuance under the 2018 Plan, resulting in a total of 13,101,734 shares of common stock authorized for issuance. The Company had stock options, restricted stock units and performance stock units outstanding related to the 2018 Plan as of September 30, 2025 and December 31, 2024. During the three and nine months ended September 30, 2025, total stock-based incentive compensation expense recognized by the Company related to the 2018 Plan was $ 11.1 million and $ 30.6 million, respectively. During the three and nine months ended September 30, 2024, total stock-based incentive compensation expense recognized by the Company related to the 2018 Plan was $ 10.4 million and $ 27.6 million, respectively.
15. STOCKHOLDERS’ EQUITY
Warrants — As of September 30, 2025 and December 31, 2024, the Company had warrants outstanding which entitle holders to purchase an immaterial number of shares of common stock.
Share Repurchase Program — The Company’s Board of Directors approved a share repurchase program of up to an aggregate $ 500.0 million of common stock of the Company. Under the share repurchase program, repurchases may occur in any number of methods depending on timing, market conditions, regulatory requirements, and other corporate considerations. The share repurchase program has no specified expiration date.
During the three and nine months ended September 30, 2025, the Company purchased 2,205,535 and 6,805,621 shares of common stock for an average share price of $ 28.32 and $ 31.22 , totaling $ 62.5 million and $ 212.5 million, respectively. During the three and nine months ended September 30, 2024, the Company purchased 1,399,674 and 5,317,183 shares of common stock for an average share price of $ 29.97 and $ 30.09 , totaling $ 41.9 million and $ 160.0 million, respectively. All repurchased shares became treasury stock. As of September 30, 2025, the Company is authorized to repurchase up to a remaining $ 287.5 million of common stock of the Company.
Shares Outstanding — The following table shows the Company’s changes in shares of common stock for the three and nine months ended September 30, 2025 and 2024 (in thousands):
2025 2024
Balance, beginning of the year 166,261 174,576
Equity award issuances 529 492
Share repurchases ( 3,046 ) ( 1,252 )
Balance March 31, 163,744 173,816
Equity award issuances 104 261
Share repurchases ( 1,554 ) ( 2,666 )
Balance June 30, 162,294 171,411
Equity award issuances 20 135
Share repurchases ( 2,206 ) ( 1,400 )
Balance September 30, 160,108 170,146
20
Table of Contents
16. RELATED-PARTY TRANSACTIONS
Transactions with Equity-Method Investees — The Company provides management services to its joint ventures such as accounting, invoicing and collections in addition to day-to-day managerial support of the operations of the businesses. The Company recorded management fee income of $ 1.9 million and $ 5.6 million for the three and nine months ended September 30, 2025, respectively. The Company recorded management fee income of $ 1.6 million and $ 4.5 million for the three and nine months ended September 30, 2024, respectively. Management fees are recorded in net revenues in the accompanying unaudited condensed consolidated statements of comprehensive income. During the three and nine months ended September 30, 2025, the Company received distributions from the investees of $ 0.5 million and $ 2.1 million, respectively. During the three and nine months ended September 30, 2024, the Company received distributions from the investees of $ 0.5 million and $ 1.3 million, respectively.
The Company had amounts due from its joint ventures of $ 0.6 million and due to its joint ventures of $ 0.5 million as of September 30, 2025. The Company had amounts due to its joint ventures of $ 1.4 million as of December 31, 2024. Receivables were included in prepaid expenses and other current assets in the accompanying condensed consolidated balance sheets. Payables were included in accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheets. These balances primarily relate to cash collections received by the Company on behalf of the joint ventures, offset by certain pharmaceutical inventories and other expenses paid for by the Company on behalf of the joint ventures.
17. SEGMENT REPORTING
The Company has adopted ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures and has revised prior year disclosures to conform with the current year presentation. The Company operates as a single reportable segment, infusion services. Infusion services derives revenue through the clinical management of infusion therapy, nursing support and care coordination in order to provide solutions to complex patient conditions in the home or other nonhospital settings. The Company’s infusion services segment activities are managed on a consolidated basis and therapies are distributed and administered in a similar manner.
Operating segments have been identified based on the financial information utilized by the Company’s Chief Executive Officer, the chief operating decision maker (“CODM”). The CODM uses net income as a measure of profitability to assess segment performance and deciding how to allocate resources such as capital investments, share repurchases, and acquisitions. The CODM does not use or receive total assets by segment to make decisions regarding resources; therefore, the total asset disclosure by segment has not been included.
The following table reflects results of operations of the Company’s reportable segment (in thousands):
Three Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 2024
Infusion services net revenue $ 1,411,051 $ 1,256,455 $ 4,115,240 $ 3,587,677
Other revenue (1) 23,965 22,091 68,833 64,107
Total Option Care Health revenue 1,435,016 1,278,546 4,184,073 3,651,784
(Expense) Income:
Cost of net revenues - drugs ( 1,016,245 ) ( 885,786 ) ( 2,953,923 ) ( 2,510,466 )
Salaries, benefits, and other employee expense ( 214,594 ) ( 199,723 ) ( 632,481 ) ( 584,835 )
Other segment items (2) ( 103,379 ) ( 93,287 ) ( 302,986 ) ( 277,393 )
Depreciation and amortization expense ( 16,291 ) ( 14,659 ) ( 48,278 ) ( 44,294 )
Interest expense, net ( 14,146 ) ( 12,345 ) ( 41,824 ) ( 38,150 )
Equity in earnings of joint ventures 2,176 1,391 5,300 3,921
Other, net ( 3,570 ) ( 583 ) ( 8,497 ) 1,983
Income tax expense ( 17,151 ) ( 19,698 ) ( 52,303 ) ( 50,860 )
Net Income $ 51,816 $ 53,856 $ 149,081 $ 151,690
(1) Represents business activities related to other miscellaneous revenue streams.
(2) Other segment items includes expenses for medical supplies, delivery and packaging, leases, professional services, and other expenses.
21
Table of Contents
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.