Guardian Pharmacy Services, Inc. Class A

Good day, everyone, and welcome to Guardian Pharmacy's third quarter earnings call. At this time, all participants are on a listen only mode. Later, you will have the opportunity to ask questions during the question and answer session. I will now hand the call over to Ashley Stockton.

Good afternoon. Thank you for participating in today's conference call. This is Ashley Stockton, Senior Director of Investor Relations for Guardian Pharmacy Services. I'm joined on today's call by Fred Burke, President and Chief Executive Officer, and David Morris, Chief Financial Officer. After the close today, Guardian posted its financial results for the quarter ended September 30th, 2025. A copy of the press release 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 and market conditions. Such forward-looking statements are not guarantees of future performance and 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 as well as in our quarterly report on Form 10-Q to be filed with the SEC, including the specific risk factors and uncertainties discussed in our SEC filings. We do not undertake any duty to update any forward-looking statements which speak only as of the date they are made. On today's call, we will also use certain non-GAAP financial measures when discussing the company's financial performance and condition. You can find additional information on these non-GAAP measures and reconciliations to their most directly comparable GAAP financial measures in today's press release, which again is available on our Investor Relations website. And now I will turn it over to Fred for commentary on the quarter.

Thank you, Ashley, and good afternoon, everyone. Thank you for joining us as we review another strong quarter for Guardian. Before diving into the details, I want to take a brief moment to reflect on how far we've come. This quarter marks an important milestone. Our first full year as a publicly traded company. A little over a year ago, we stood on the floor of the New York Stock Exchange to ring the bell. not as the culmination of a journey, but as the beginning of a new chapter in the 20 plus year life of our company. When we went public, we made a commitment to continue to execute with discipline, grow with purpose, and carry forward the entrepreneurial spirit that has always defined Guardian, all while earning the trust of our new shareholders along the way. I believe that thus far, We've delivered on that promise, and I'm very proud of what our team has achieved. As I look ahead, I'm even more energized by the opportunities in front of us to continue building a company that provides exceptional service to our communities and the residents they serve, creates value for our partners, and delivers sustainable long-term growth for our shareholders. With that foundation in mind, let's turn to our third quarter performance, which marked another period of strong double-digit growth across revenue, resident count, and adjusted EBITDA, which yielded adjusted EPS of 25 cents. Revenue grew 20% to $377 million, a top 13% resident growth driven both organically and through acquisitions. Adjusted EBITDA grew 19% to $27 million, with margins holding steady at 7.2%, including the continued dilutive impact from recent greenfields and acquired pharmacies. Given the strength of the quarter, we are raising full-year revenue and adjusted EBITDA guidance, which David will go over in detail later in the call. Now, turning to the policy environment. The unintended consequences of the Inflation Reduction Act remain an issue for our industry as a whole. Consistent with our longstanding approach, we're working closely with our peers and trade group to advocate for legislative and policy solutions that address these impacts and support the long-term stability of our sector. But at the same time, we continue to take proactive steps with our payors. Those initiatives are taking shape, and combined with other strategic actions across the business, we are growing ever more confident in our ability to offset the anticipated EBITDA headwind, even as reported revenue growth is expected to remain relatively flat in 2026. Our philosophy on addressing policy issues remains simple. Control what we can. and navigate thoughtfully around what we cannot. It's becoming increasingly clear how important the right people and scale are to executing successfully through these challenges. And that same mindset, disciplined, proactive, and grounded in leadership extends across our organization. To that end, Our pharmacy entrepreneurs fuel our growth with ingenuity and commitment to the clients we serve, and the specialized teams supporting them strengthen our platform every day, from purchasing to PBM contracting to data analytics, to name a few. Most of our pharmacy leaders have been with Guardian for more than a decade, some going on, too. Prior to joining, they were highly skilled clinicians who built successful, independent pharmacies from the ground up, entrepreneurs in their own right. They recognized the opportunity to combine their local expertise and community relationships with the strength of Guardian's national platform and scale, unlocking new levels of performance and profitability within their pharmacies. Many have since built on that success, launching greenfield locations in adjacent markets. Guardian has continued to invest in these professionals, helping them deepen their business acumen. Today, they are exceptional operators who embody a rare combination of clinical expertise, entrepreneurial drive, and business-minded execution. That blend is central to our model, and underscores why selecting the right local leadership teams is so critical, and why we remain highly selective and targeted in our acquisitions. Collectively, our operators have helped propel us to be the clear leader in serving assisted living facilities. While our national market share is 13%, we have a much stronger presence in the markets where we operate. In fact, 37 of our pharmacies have 20% plus market share, with 12 pharmacies operating at over 40%. Additionally, we now serve nearly 204,000 residents, the vast majority in-house. Looking ahead, we expect to benefit from powerful demographic tailwinds as the aging population grows, while continuing to gain share through new facility partnerships higher resident adoption, and greenfield expansion with the help of our existing operators. At the same time, at the corporate level, we'll continue to pursue targeted acquisitions, such as the recent additions in Oregon and Washington, which put us on the map in the Pacific Northwest and answered demand from our national customer partners. Integration with both pharmacies is tracking as expected with both teams already onboarding facilities operated by our national customer partners. Over time, we expect this geographic area to become an important growth contributor. On the heels of these acquisitions, our pipeline continues to be very attractive and active. Furthermore, as the assisted living facility market continues to consolidate, we believe Guardian's scale sophistication and partnership-driven model positions us as the provider of choice. Looking back, we've accomplished a lot in the last year. We've expanded our pharmacy footprint, delivered consistent financial performance, strengthened our balance sheet, and deepened relationships with a broader investor base. Internally, We've enhanced our infrastructure and continue to navigate policy-related headwinds. Together, these accomplishments give us confidence as we enter our second year as a public company, stronger and better positioned for the opportunities ahead. Our priorities remain clear. Drive organic growth through new customer facility wins, higher adoption, and greenfield expansions. Expand our network through disciplined acquisitions aligned with our culture and vision. Enhance profitability by integrating new pharmacies, implementing our technology advantages and leveraging procurement, reimbursement and logistics efficiencies. And lastly, navigate policy changes thoughtfully with confidence and discipline, advocating for fair outcomes while managing risks proactively. These are the same levers that have propelled Guardian's growth for over two decades, but today enhanced by greater scale, visibility, and financial flexibility. So on that note, happy birthday, Guardian. We're still early in our journey as a public company, but our foundation is strong, our strategy is clear, and our momentum is real. With that, I'll turn the call over to David Morris, our CFO, who will take you through the Corridor's financial results and outlook in more detail.