0001014739-26-000011
SEC filingRevenue grew modestly year-over-year, but gross profit and operating income declined, reflecting margin pressure from the CID portfolio and higher cost of revenue driven by therapy mix and revenue growth.
Revenue for Q1 FY2026 totaled $1.4B, an increase of 1.3% compared to $1.3B in Q1 FY2025. This growth reflects continued demand for acute therapies, partially offset by challenges in the chronic therapy segment tied to the CID portfolio. Gross profit was $262.0M, down slightly from $263.1M in the prior-year period, resulting in a gross margin of 19.4%. As disclosed in Management’s Discussion, the decrease in gross profit margin was primarily due to headwinds on the CID portfolio, and the increase in cost of revenue was driven by both revenue growth and shifts in therapy mix.
Operating income declined 8.4% to $72.5M, and net income decreased 3.0% to $45.3M. Diluted EPS rose 3.6% to $0.29, reflecting a lower weighted-average share count. The decline in operating income occurred despite stable revenue growth, underscoring margin compression pressures. Management attributes this dynamic to the interplay between revenue expansion, cost structure adjustments, and portfolio-specific challenges — not broad-based operational inefficiencies.
Net cash used in operating activities was $12.1M, compared to $7.2M used in Q1 FY2025. This deterioration reflects timing-related working capital movements, specifically an increase in accounts receivable driven by administrative efforts around annual reverification of patients’ insurance coverage and calendar-year deductible resets. Inventory declined due to focused supply chain management, partially offsetting the receivables impact. Capital expenditures totaled $9.0M, unchanged from the prior year, supporting internal infrastructure and technology initiatives consistent with the Company’s stated strategy of investing in resources and systems to enable future growth. Free cash flow — defined as net cash provided by (used in) operating activities less capital expenditures — was -$21.2M.
The Company reaffirms its view that existing cash, expected operating cash flows, and availability under its credit facility will be sufficient to meet operating requirements over the next 12 months and beyond. Its capital deployment framework continues to prioritize internal investments in resources, infrastructure, and technologies — actions intended to drive long-term revenue growth, profitability, and cash generation. No share repurchases or borrowings were executed during Q1 FY2026, and liquidity remains supported by the credit facility, though specific capacity figures are not quantified in this filing’s authoritative financial packet.