Omnicell, Inc.

and I will be your conference operator today. At this time, I would like to welcome everyone to the OmniCell first quarter 2025 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Kathleen Nemeth, Senior Vice President, Investor Relations. Please go ahead.

Good morning and welcome to the Omnicell first quarter 2025 financial results conference call. On the call with me today are Randall Lipps, Omnicell Chairman, President, CEO, and Founder, Nandi Njoku, Executive Vice President and Chief Operating Officer, and Chacha Eta, Executive Vice President and Chief Financial Officer. This call will contain certain forward-looking statements, including statements related to financial projections or performance, or other statements regarding OmniCell's plans, strategy, objectives, goals, vision, expectations, planned investments, opportunities, expense mitigation, products, services or solution, driving toward a recurring revenue model, navigating the current macroeconomic environment, the impact of or ability to mitigate the impact of tariffs or market or company outlook that are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied. For a more detailed description of the risks that impact these forward-looking statements, Please refer to the information in our press release issued today in the OmniCell Annual Report on Form 10-K filed with the SEC on February 27, 2025, and in other more recent reports filed with the SEC. Please be aware that you should not place undue reliance on any forward-looking statements made today. All forward-looking statements speak only as of the date hereof or the date specified on the call. Except as required by law, we do not assume any obligation to update or otherwise release publicly any revisions to our forward-looking statements. Our results were released this morning and are posted in the investor relations section of our website on ir.omnifil.com. Additionally, we would like to remind you that during this call, we will discuss some non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most comparable GAAP financial measures are included in our financial results press release posted on our Investor Relations website. With respect to forward-looking non-GAAP measures, we do not provide a reconciliation of forward-looking non-GAAP measures to the comparable GAAP measures on a forward-looking basis. As these items are inherently uncertain and difficult to estimate, and cannot be predicted without unreasonable effort. With that, I will turn the call over to Randall. Randall?

Good morning, and thank you all for joining us on today's call. Our business performed very well during the first quarter of 2025, with results driven by demand for OmniCell's robust medication management platform. At OmniCell, We are focused on redefining how medications and supplies are managed across healthcare as we seek to help customers seamlessly control inventory from the loading dock to the point of patient care. Our platform is designed to empower organizations to improve medication safety, drive supply chain efficiency, and make smarter data-driven decisions. Our future growth is expected to come from three core levers. First, we seek to capture greater market share across inpatient settings, including nursing floors, operating rooms, and procedural areas, as well as central and satellite pharmacies, while continuing expansion into outpatient settings such as specialty, retail, and institutional pharmacies. Second, We are growing and scaling our predictable reoccurring revenue. And third, we are striving to grow Omnisphere, our cloud-based platform, to extend and connect innovative automation technologies, which we expect will include the use of AI across the entire continuum of care. Let's review a few highlights from our strong first quarter. The demand environment tracked well to our expectations as we saw market share gains and continued interest in our platform of products and services. We delivered solid revenue performance and are pleased with the growth in our recurring revenue. And we continue to see strong customer interest in OmniSales' long-term innovation roadmap. Now let's turn to the financials. OmniFail delivered a solid first quarter. Total revenue was 270 million, an increase of 24 million from our first quarter of 2024. Revenue in the quarter decreased by 37 million from our fourth quarter of 2024, reflecting typical seasonality and the fact that fourth quarter 2024 performance was very strong. Product revenues came in above our first quarter 2025 outlook at $145 million, which is an increase of $12 million over the first quarter of 2024, and a decrease of $37 million compared to fourth quarter 2024. Service revenues were $125 million, an increase of $12 million over the first quarter of 2024, and flat compared to fourth quarter 2024. Non-GAAP gross margin for the first quarter of 2025 was 42.1%, a decrease of 530 basis points from the prior quarter due to the combination of lower product revenue volumes, as well as some seasonal expenses, including payroll taxes and employee benefits reset. Our first quarter 2025 earnings per share, in accordance with GAAP, was a loss of 15 cents per share compared to a loss of 34 cents per share in the first quarter 2024 and a profit of 34 cents per share in the prior quarter. Our first quarter 2025 non-GAAP earnings per share was 26 cents compared with 3 cents per share in the same period last year and 60 cents per share in the prior quarter. First quarter non-GAAP EBITDA was 24 million, an increase of 13 million when compared to the same period last year, and a decrease of 23 million compared to the previous quarter. As you can see from our revised 2025 guidance that Cha Cha will cover in more detail, we have completed an initial assessment of the company's tariff exposure, assuming the announced tariffs, particularly on China-based products, are implemented as scheduled. As a reminder, we began working on optimizing our supply chain several years ago with a combination of dual sourcing and nearshoring efforts. However, we continue to source a meaningful percentage of our sub-assemblies from China. At this time, we anticipate the impact from tariffs for 2025 to be approximately $40 million to non-GAAP EBITDA As a result, we are reducing the ranges for our full year 2025 non-GAAP EBITDA and non-GAAP earnings per share guidance to reflect that currently expected partial year potential impact from tariffs net of our planned mitigation efforts. Please note that absent the tariff headwinds, we remain comfortable with our previously issued full year 2025 non-GAAP EBITDA and non-GAAP earnings per share guidance and are only modifying the ranges to reflect the expected potential impact from tariffs. We intend to continue to shift production of sub-assemblies to more favorable geographies and over time we anticipate considering broader changes to our supply chain. We believe we have a strong competitive position and we plan to continue to innovate regardless of the tariff impact. Also, as we continue our pivot to recurring revenue services, our exposure to tariffs on a relative basis should decline over time. We expect to have more to share with you as the situation develops. I'll now highlight a few of the key customer wins in the first quarter. Point-of-care dispensing solutions including XT cabinets for nursing care areas, anesthesia workstations for perioperative settings, and our XT Amplify program offerings continue to be the backbone of medication management for many leading health systems. Leading health systems in New Jersey, Pennsylvania, and West Virginia have recently invested in OmniCell solutions as they seek to increase pharmacy and nursing efficiency and improve patient safety while delivering maximum value for the technology investment. Our comprehensive platform and innovative roadmap are resonating with customers, and we are seeing continued momentum converting customers to OmniCell solutions. One of the leading healthcare organizations in Illinois has chosen OmniCell XT automated dispensing cabinets to support point of care dispensing across numerous sites of care. This health system intends to leverage OmniCell's enterprise analytics solution, inventory optimization service, and an effort to enhance inventory visibility, gain medication usage insights, and optimize workflows across their system. A nonprofit health system in Rhode Island selected OmniCell's point-of-care dispensing solutions, including XT cabinets and anesthesia workstations, as they look to improve clinical outcomes and enhance efficiency for health care staff. A Southern California nonprofit teaching hospital has chosen OmniCell's central pharmacy solutions as it seeks to reduce medication dispensing errors and waste, improve accuracy, and streamline workflows for their central pharmacy operations, which should free staff to focus on higher-value tasks. The federal government, specifically the U.S. Department of Veterans Affairs and other federal healthcare facilities, is a sizable portion of OmniCell's customer footprint. This quarter, we saw traction within our government customers for our central pharmacy and point-of-care solutions, including products from our XT Amplify program. Those systems continue to expand care delivery beyond acute care settings to improve patients' costs and increased revenue. This expansion includes investments in outpatient pharmacy programs, which for many providers may enable an opportunity for health systems to achieve financial growth and improve the patient experience. A Northeast nonprofit healthcare system will add a new specialty pharmacy to their community in partnership with OmniCell's Specialty Pharmacy Services Division. We also partnered with a Pennsylvania-based health system to open a new specialty pharmacy to serve their community. A Georgia-based not-for-profit healthcare system has selected Amichel to launch a new initiative targeted at optimizing their specialty pharmacy by expanding patient access to specialty medications and growing outpatient services. Now, before I turn it over to Chacha, I want to provide some closing thoughts. We are pleased with our first quarter performance. and we remain very encouraged about our long-term growth strategy and how we believe it aligns with the industry-defined vision of the autonomous pharmacy. OmniCell is a trusted leader in automating medication and supply management, and we believe we are poised to grow as hospitals continue to digitize. Despite the fluid tariff environment, I am confident that we will manage through the current tariff situation. We're reviewing different mitigation strategies around our supply chain, and I feel confident that the company's competitive position will remain strong as we tackle these headwinds. With or without tariffs, we are here to help our healthcare provider partners as they endeavor to increase operating efficiencies and improve patient safety. At this point, I'd like to turn the call over to our Chief Financial Officer, Chacha Etta, and for a more detailed review of our first quarter financial performance.