BrightSpring Health Services (NASDAQ:BTSG) Chief Financial Officer Jennifer Phipps said the company’s recent growth has been driven by broad-based performance across its pharmacy and provider businesses, with specialty pharmacy remaining a key contributor.
Speaking at a Goldman Sachs healthcare services conference in a session hosted by analyst Scott Fidel, Phipps said BrightSpring has benefited from operating in “really attractive markets” and from leveraging its scale, investment strategy and mergers-and-acquisitions platform. Fidel noted that the company has delivered roughly 20% top-line growth and 25% to 30% EBITDA growth over the last few years, above the mid-teens framework the company had historically referenced.
“A lot of times, those LDDs typically take two to three years to grow in the market,” Phipps said, adding that 2026 revenue growth is partly supported by LDD wins from 2024.
Growth Outlook Supported by Volume, LDD Pipeline
Phipps said BrightSpring’s 2026-to-2028 growth framework, which calls for 15% to 20% growth, is underpinned by expectations for continued volume growth and high-quality services across its businesses. She said the company often works with drug manufacturers 12 to 18 months before launch, giving it visibility into future specialty pharmacy opportunities.
She said the pipeline of phase 3 products in oncology and rare and orphan diseases remains strong, and that pharmaceutical manufacturers continue to use narrower pharmacy networks than they did several years ago. According to Phipps, newer LDD networks are often limited to one or two pharmacies, compared with networks of three or more pharmacies in prior years.
“By layering on these new drugs where there are these limited networks, we’re capturing a larger share of that growth,” Phipps said.
Phipps also said BrightSpring sees operational efficiency opportunities in technology, including more manual areas such as front-end central intake and revenue cycle processes. She said the company has formalized Lean Six Sigma training and processes over the past 12 months, embedding them into operations and corporate teams.
Infusion, Provider Businesses Remain Focus Areas
In home infusion, Phipps said the business is a smaller part of BrightSpring’s pharmacy segment but represents “a big opportunity for growth.” The company currently has about 35 pharmacies across the United States and is evaluating expansion in additional markets. She said BrightSpring discussed five to 10 markets of interest at its investor day, and sees infusion opportunities in about 10 to 15 markets where it has less presence.
On the provider side, Phipps said BrightSpring’s home healthcare business includes home health, hospice and primary care. She described rehab as a strong growth market, while personal care is “more of a steady state, small grower” that still provides important supportive care for patients.
Phipps also highlighted potential growth from better coordination across pharmacy and provider services. She said BrightSpring serves patients who often have multiple chronic conditions and significant healthcare needs, and that its “one company model” can create value through shared patient relationships, improved outcomes, scale and best-practice deployment.
She cited a 2023 article in JAMDA that, according to Phipps, showed a 72% reduction in hospitalizations for BrightSpring patients receiving both home health and pharmacy in the home compared with average home health hospitalization patients.
Company Sees Value in Coordinated Care and Payment Models
Phipps said BrightSpring is interested in payment models that reflect the outcomes it says it is producing. In home health, she said the company has signed a couple of Medicare Advantage contracts over the past 12 months that provide enhanced rates tied to outcomes.
She said most of BrightSpring’s home health payer mix remains episodic Medicare, but the company is seeking “fair and appropriate” rates in Medicare Advantage relationships. She added that BrightSpring’s government relations team continues to advocate for appropriate reimbursement in home health.
Phipps said BrightSpring sees nurse practitioners in its primary care business as potential coordinators, or “quarterbacks,” for services needed in the home. She also described opportunities for home health, Part B rehab and senior living pharmacy teams to work together in senior living communities.
M&A Strategy Focused on Accretive Opportunities
Discussing capital allocation, Phipps said BrightSpring has reduced leverage since its IPO, moving from about 4.5 times leverage after the IPO to 2.27 times at the end of the first quarter. She said leverage would be 2.4 times when pro forma for taxes paid in the second quarter related to a transaction.
Phipps said BrightSpring expects to continue smaller tuck-in acquisitions, which the company views “almost” like capital expenditures because they are highly accretive. She said the company may also pursue somewhat larger deals in the range of $3 million to $15 million of EBITDA, particularly after focusing on deleveraging in recent years.
The most interesting acquisition areas, she said, are infusion within pharmacy and hospice and rehab within provider. Phipps also said a deal around $30 million of EBITDA could be possible over the next five years, but emphasized that the company would maintain its strategic and financial discipline.
Pricing Dynamics Include Generics and IRA Impact
Phipps said generic drug conversions can create a revenue headwind because prices decline, but may support EBITDA because drug costs can fall even more as manufacturer competition increases.
She also addressed the Inflation Reduction Act, saying it has been a revenue headwind. BrightSpring has been able to mitigate the EBITDA impact in drug and specialty pharmacy, she said, but the home and community pharmacy business has seen a profitability impact. Phipps said the company has partially, but not fully, mitigated the IRA-related impact through enhanced dispensing fees negotiated with pharmacy benefit managers.
“There has not yet been a fix legislatively to the impact to the pharmacies on IRA,” Phipps said, adding that BrightSpring and industry groups continue to advocate around what she described as unintended consequences for pharmacies.
About BrightSpring Health Services (NASDAQ:BTSG)
BrightSpring Health Services (NASDAQ: BTSG) is a leading provider of home and community-based care and workforce solutions aimed at seniors, individuals with disabilities and those facing behavioral health challenges. The company’s operations encompass a broad spectrum of services, including personal care, skilled nursing, therapy, habilitation and supported living, as well as specialized behavioral health programs delivered through both clinical and non-clinical channels.
Through its network of subsidiary brands, BrightSpring offers integrated care in the patient’s home environment, fostering independence and improving quality of life.
