VIEMED HEALTHCARE, INC. Q4 FY2024 earnings call

• Massive underserved patient populations in complex respiratory care, sleep apnea, and behavioral health present growth opportunities. COPD has ~25 million US patients, ~2.5 million at advanced stages, and ~1.25 million in chronic respiratory failure. Sleep apnea has ~80 million undiagnosed individuals. Behavioral health is a growing crisis with over half complex respiratory care patients struggling with anxiety/depression.
• Vent business: 1,500 net Vent adds in 2024, close to an all-time high, and Q4 sales rep average monthly setups up 14% due to sales restructuring.
• Sleep business: Sequential growth in CPAP units, resupply orders, and home sleep tests, with 43% growth in 2024 vs 2023, and opportunities for product/service diversification.
• Trend of more clinical care in the home, with hospitals and payers favoring home care for cost and outcome benefits.
• 2025 focus on organic growth and potential inorganic growth, with aggressive sales force ramp-up in Vent, Sleep, and Staffing (especially in behavioral health).

In Q4 2024, revenue grew 20% year over year and 4.6% sequentially, with full-year 2024 revenue up 23% year over year. The Vent business accounted for 55% of Q4 revenue and 56% of full-year revenue, with 1,500 net Vent adds in 2024, and Vent revenue up 4.4% sequentially in Q4. The Sleep business saw nearly a 10% sequential increase in Q4 2024, leading to a 43% increase compared to 2023, and accounted for 17% of Q4 revenue and 16% of full-year revenue. The Oxygen and Staffing businesses each contributed roughly 10% of both Q4 revenue and full-year revenue. Adjusted EBITDA was up 11% in Q4 to $14.2 million and 19% for the full year, with gross margin at 59.5% in Q4 and 59.4% for the year.

• 2025 net revenue projected to be in the range of $254 million to $265 million, implying 16% growth over 2024 at the midpoint.
• Adjusted EBITDA projected to be in the range of $54 million to $58 million, implying 10% growth over 2024.
• Year-over-year growth in each quarter expected to be roughly consistent with 2024 increases; Q1 typically flat/down sequentially, Q2-Q4 expected to have 3%-6% revenue growth.
• Adjusted EBITDA margin expected to be in the range of 21%-23% for 2025.
• CapEx in first half of 2025 similar to second half of 2024, with second half 2025 more muted.

• Tariff impact: Uncertainty regarding potential tariffs on suppliers, with no current impact seen but potential implications if taxes are passed on.
• Medicaid/Medicare policy changes: Pressure on these programs may affect hospital length of stay optimization and patient transition to home care.
• Competitive bidding: No current whispers of competitive bidding, but historical issues with Medicare program cancellation due to lack of cost savings.

Q: Brooks O'Neil asked about potential impact of tariffs from the new administration.

A: Todd Zehnder said no impact seen to date, and Casey Hoyt noted hospitals are actively seeking efficiency and leaning on the company due to Medicaid/payer pressures.

Q: Brooks O'Neil inquired about competitive bidding.

A: Casey Hoyt stated no whispers of competitive bidding, with potential activity around 2027 and beyond, referencing past Medicare program cancellation.

Q: Brooks O'Neil asked about M&A environment.

A: Casey Hoyt said M&A environment is more target-rich than in Biden years, with more interest and conversations.

Q: Andrew Rem asked about the JV.

A: Casey Hoyt said the JV is profitable, and Todd Zehnder added it's been accretive financially.

Q: Andrew Rem asked about behavioral health in staffing.

A: Casey Hoyt explained staffing division is ~80% driven by behavioral health needs.

Q: Andrew Rem inquired about cash flow and CapEx.

A: Todd Zehnder said free cash flow expected to increase, and Trey Fitzgerald added on length of stay metrics for Vent and Sleep.