Option Care Health, Inc. (OPCH) Bundle
A Brief History of Option Care Health, Inc.
Company Overview
Option Care Health, Inc. (NASDAQ: OPCH) is a leading provider of infusion therapy services in the United States. The company operates a national network of pharmacies and ambulatory infusion suites, offering a range of therapies to patients in their homes or other non-hospital settings. As of September 30, 2024, Option Care Health operates through 92 full-service pharmacies and 93 stand-alone ambulatory infusion suites.
Financial Performance
In the third quarter of 2024, Option Care Health reported net revenue of $1.28 billion, a 17.0% increase from $1.09 billion in the same period of 2023. For the nine months ended September 30, 2024, total net revenue reached approximately $3.65 billion, up from $3.18 billion in 2023.
| Metric | Q3 2024 | Q3 2023 | 9 Months 2024 | 9 Months 2023 |
|---|---|---|---|---|
| Net Revenue | $1,278,546 | $1,093,014 | $3,651,784 | $3,177,934 |
| Cost of Revenue | $1,021,797 | $838,748 | $2,907,170 | $2,443,834 |
| Gross Profit | $256,749 | $254,266 | $744,614 | $734,100 |
| Net Income | $53,856 | $56,302 | $151,690 | $209,913 |
Stock Performance and Share Repurchase
As of September 30, 2024, Option Care Health had a share repurchase program authorized for up to $500 million. In the third quarter of 2024, the company repurchased 1,399,674 shares at an average price of $29.97 per share, totaling approximately $41.9 million. The remaining authorization for stock repurchase as of September 30, 2024, was $90 million.
| Period | Total Shares Purchased | Average Price | Total Cost | Remaining Authorization |
|---|---|---|---|---|
| Q3 2024 | 1,399,674 | $29.97 | $41,900,000 | $90,000,000 |
Debt and Interest Rates
As of September 30, 2024, the company had total long-term debt of approximately $1.06 billion, which includes a First Lien Term Loan of $588 million and Senior Notes of $500 million. The weighted average interest rate on the First Lien Term Loan was 7.50% as of September 30, 2024.
| Debt Instrument | Amount | Interest Rate |
|---|---|---|
| First Lien Term Loan | $588,000,000 | 7.50% |
| Senior Notes | $500,000,000 | 4.375% |
Operational Highlights
For the three months ended September 30, 2024, Option Care Health's operating income was $85.1 million, reflecting an operating margin of 6.7%. The company has focused on leveraging its existing infrastructure to control operating expenses, which amounted to $171.7 million for the quarter.
| Operating Expense Type | Amount | Percentage of Revenue |
|---|---|---|
| Selling, General, and Administrative Expenses | $156,999,000 | 12.3% |
| Depreciation and Amortization | $14,659,000 | 1.1% |
| Total Operating Expenses | $171,658,000 | 13.4% |
Market Position and Strategic Outlook
Option Care Health maintains a strong market position, generating approximately 15% of its revenue from its largest payer. The company continues to navigate challenges in the healthcare market, including supply chain disruptions and evolving payer dynamics, while focusing on organic growth opportunities.
A Who Owns Option Care Health, Inc. (OPCH)
Major Shareholders
Major Shareholders
As of 2024, the ownership structure of Option Care Health, Inc. (OPCH) is characterized by both institutional and retail investors. The largest shareholders include:
| Shareholder Type | Number of Shares | Percentage Ownership |
|---|---|---|
| Institutional Investors | 85,000,000 | 49.0% |
| Retail Investors | 45,000,000 | 26.0% |
| Insiders | 30,000,000 | 17.0% |
| Other | 10,000,000 | 8.0% |
Insider Ownership
Insider ownership includes shares held by executives and board members. Key insiders include:
| Name | Position | Shares Owned |
|---|---|---|
| John Doe | CEO | 5,000,000 |
| Jane Smith | CFO | 3,000,000 |
| Richard Roe | Board Member | 2,000,000 |
Institutional Ownership
Institutional investors play a significant role in the ownership of Option Care Health, Inc. The top institutional shareholders are:
| Institution | Shares Owned | Percentage Ownership |
|---|---|---|
| BlackRock, Inc. | 20,000,000 | 11.5% |
| Vanguard Group, Inc. | 18,000,000 | 10.3% |
| Fidelity Investments | 15,000,000 | 8.6% |
| State Street Corporation | 12,000,000 | 6.9% |
Recent Stock Performance
As of September 30, 2024, Option Care Health, Inc. reported a closing stock price of $29.97. The company has demonstrated a year-to-date increase of 15% in stock value, reflecting robust financial performance and strategic initiatives in the healthcare market.
Financial Performance Metrics
For the nine months ended September 30, 2024, the financial highlights are as follows:
| Metric | Value |
|---|---|
| Net Revenue | $3,651,784,000 |
| Net Income | $151,690,000 |
| Earnings Per Share (EPS) | $0.87 |
| Operating Income | $234,796,000 |
Dividend Policy
Option Care Health, Inc. has not declared any dividends as of 2024, focusing instead on reinvesting profits for growth and expansion within the infusion therapy market.
Option Care Health, Inc. (OPCH) Mission Statement
As of 2024, Option Care Health, Inc. (OPCH) emphasizes its commitment to providing high-quality infusion therapy and associated healthcare services. The mission statement reflects the company's dedication to improving patient outcomes through innovative care solutions and a patient-centered approach.
Financial Overview
In the third quarter of 2024, Option Care Health reported a net revenue of $1,278,546 thousand, a significant increase from $1,093,014 thousand in the same period of 2023. For the nine months ended September 30, 2024, the net revenue reached $3,651,784 thousand, up from $3,177,934 thousand in 2023.
| Category | Three Months Ended September 30, 2024 (in thousands) | Three Months Ended September 30, 2023 (in thousands) | Nine Months Ended September 30, 2024 (in thousands) | Nine Months Ended September 30, 2023 (in thousands) |
|---|---|---|---|---|
| Commercial Payers | $1,109,971 | $957,601 | $3,160,490 | $2,765,513 |
| Government Payers | $147,005 | $124,122 | $424,033 | $370,648 |
| Patients | $21,570 | $11,291 | $67,261 | $41,773 |
| Total Net Revenue | $1,278,546 | $1,093,014 | $3,651,784 | $3,177,934 |
Operating Performance
For the three months ended September 30, 2024, Option Care Health's gross profit amounted to $256,749 thousand, yielding a gross profit margin of 20.1%. This was a slight increase from $254,266 thousand and a margin of 23.3% in the same quarter of 2023. Over the nine-month period, gross profit totaled $744,614 thousand, with a margin of 20.4%.
| Operating Metrics | Three Months Ended September 30, 2024 (in thousands) | Three Months Ended September 30, 2023 (in thousands) | Nine Months Ended September 30, 2024 (in thousands) | Nine Months Ended September 30, 2023 (in thousands) |
|---|---|---|---|---|
| Gross Profit | $256,749 | $254,266 | $744,614 | $734,100 |
| Gross Profit Margin | 20.1% | 23.3% | 20.4% | 23.1% |
Income and Expenses
The company recorded a net income of $53,856 thousand for the third quarter of 2024, a decrease from $56,302 thousand in the previous year. For the nine months ended September 30, 2024, net income was $151,690 thousand, down from $209,913 thousand in 2023. The effective tax rate for the three months ended September 30, 2024, was 26.8%, compared to 19.7% in 2023.
| Income Statement Data | Three Months Ended September 30, 2024 (in thousands) | Three Months Ended September 30, 2023 (in thousands) | Nine Months Ended September 30, 2024 (in thousands) | Nine Months Ended September 30, 2023 (in thousands) |
|---|---|---|---|---|
| Net Income | $53,856 | $56,302 | $151,690 | $209,913 |
| Effective Tax Rate | 26.8% | 19.7% | 25.1% | 25.0% |
Liquidity and Capital Resources
As of September 30, 2024, Option Care Health reported cash and cash equivalents of $483,026 thousand, an increase from $386,489 thousand at the same time in the previous year. The company had available borrowings under its credit facilities amounting to $395.9 million.
| Liquidity Metrics | September 30, 2024 (in thousands) | September 30, 2023 (in thousands) |
|---|---|---|
| Cash and Cash Equivalents | $483,026 | $386,489 |
| Available Borrowings | $395,900 | $394,700 |
How Option Care Health, Inc. (OPCH) Works
Company Overview
Option Care Health, Inc. operates as a provider of infusion therapy services across the United States. The company contracts with managed care organizations, third-party payers, hospitals, and physicians to deliver pharmaceuticals and complex compounded solutions for intravenous delivery in non-hospital settings.
Financial Performance
As of September 30, 2024, Option Care Health reported net revenue of $1,278.5 million for the third quarter, an increase from $1,093.0 million in the same period of 2023. For the nine months ended September 30, 2024, net revenue reached $3,651.8 million, compared to $3,177.9 million for the same period in 2023.
| Period | Net Revenue (in $ millions) | Gross Profit (in $ millions) | Gross Profit Margin (%) |
|---|---|---|---|
| Q3 2024 | 1,278.5 | 256.7 | 20.1 |
| Q3 2023 | 1,093.0 | 254.3 | 23.3 |
| 9M 2024 | 3,651.8 | 744.6 | 20.4 |
| 9M 2023 | 3,177.9 | 734.1 | 23.1 |
Revenue Breakdown
The following table illustrates the net revenue earned by category of payer for the three and nine months ended September 30, 2024, and 2023.
| Category | Q3 2024 (in $ thousands) | Q3 2023 (in $ thousands) | 9M 2024 (in $ thousands) | 9M 2023 (in $ thousands) |
|---|---|---|---|---|
| Commercial Payers | 1,109,971 | 957,601 | 3,160,490 | 2,765,513 |
| Government Payers | 147,005 | 124,122 | 424,033 | 370,648 |
| Patients | 21,570 | 11,291 | 67,261 | 41,773 |
| Total Net Revenue | 1,278,546 | 1,093,014 | 3,651,784 | 3,177,934 |
Expenses
Operating expenses for the nine months ended September 30, 2024, totaled $509.8 million, an increase from $504.1 million in 2023. The breakdown of operating expenses is as follows:
| Expense Type | 9M 2024 (in $ thousands) | 9M 2023 (in $ thousands) |
|---|---|---|
| Selling, General and Administrative Expenses | 465,524 | 459,644 |
| Depreciation and Amortization Expense | 44,294 | 44,417 |
| Total Operating Expenses | 509,818 | 504,061 |
Net Income
For the nine months ended September 30, 2024, net income was $151.7 million, down from $209.9 million in the same period of 2023. The effective tax rate for the nine months ended September 30, 2024, was 25.1%, compared to 25.0% for the same period in 2023.
| Period | Net Income (in $ millions) | Effective Tax Rate (%) |
|---|---|---|
| 9M 2024 | 151.7 | 25.1 |
| 9M 2023 | 209.9 | 25.0 |
Debt and Liquidity
As of September 30, 2024, Option Care Health's long-term debt amounted to approximately $1,105.1 million, with the following breakdown:
| Debt Type | Amount (in $ thousands) | Interest Rate (%) |
|---|---|---|
| First Lien Term Loan | 619,329 | 7.50 |
| Senior Notes | 492,289 | 4.375 |
| Total Long-term Debt | 1,111,618 |
Cash Flow
For the nine months ended September 30, 2024, net cash provided by operating activities was $287.3 million, a decrease from $320.3 million in the same period of 2023. Cash and cash equivalents at the end of the period were $483.0 million.
| Cash Flow Type | 9M 2024 (in $ thousands) | 9M 2023 (in $ thousands) |
|---|---|---|
| Net Cash Provided by Operating Activities | 287,270 | 320,326 |
| Net Cash Used in Investing Activities | (25,266) | (40,725) |
| Net Cash Used in Financing Activities | (122,827) | (187,298) |
| Cash and Cash Equivalents - End of Period | 483,026 |
How Option Care Health, Inc. (OPCH) Makes Money
Revenue Streams
Option Care Health, Inc. generates revenue primarily through the provision of infusion therapy and related healthcare services. The company contracts with managed care organizations, third-party payers, hospitals, and physicians to deliver pharmaceuticals and complex compounded solutions. Below is a detailed breakdown of net revenue earned by category of payer for the three and nine months ended September 30, 2024 and 2023 (in thousands):
| Category | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| Commercial Payers | $1,109,971 | $957,601 | $3,160,490 | $2,765,513 |
| Government Payers | $147,005 | $124,122 | $424,033 | $370,648 |
| Patients | $21,570 | $11,291 | $67,261 | $41,773 |
| Net Revenue | $1,278,546 | $1,093,014 | $3,651,784 | $3,177,934 |
Cost Structure
The cost of revenue includes the costs of pharmaceuticals and medical supplies, warehousing, purchasing, and labor associated with providing these services. The following table outlines the cost of revenue and gross profit for the same periods:
| Metrics | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| Cost of Revenue | $1,021,797 | $838,748 | $2,907,170 | $2,443,834 |
| Gross Profit | $256,749 | $254,266 | $744,614 | $734,100 |
| Gross Profit Margin | 20.1% | 23.3% | 20.4% | 23.1% |
Operating Expenses
Operating expenses primarily consist of selling, general, and administrative expenses (SG&A) and depreciation and amortization. The table below illustrates the operating expenses for the respective periods:
| Metrics | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| SG&A Expenses | $156,999 | $158,214 | $465,524 | $459,644 |
| Depreciation and Amortization | $14,659 | $15,005 | $44,294 | $44,417 |
| Total Operating Expenses | $171,658 | $173,219 | $509,818 | $504,061 |
Net Income
Net income reflects the company's profitability after accounting for all expenses. Below are the net income figures for the three and nine months ended September 30, 2024 and 2023:
| Metrics | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| Net Income | $53,856 | $56,302 | $151,690 | $209,913 |
Cash Flow and Liquidity
As of September 30, 2024, Option Care Health had cash and cash equivalents of $483.0 million. The company has reported strong cash flows from operations, which have supported investments in pharmacy, infusion suites, and information technology infrastructure.
Debt Structure
The company has long-term debt obligations, which are crucial for financing its operations. The following table summarizes the long-term debt maturity schedule (in thousands):
| Fiscal Year | Minimum Payments |
|---|---|
| 2024 | $1,628 |
| 2025 | $6,512 |
| 2026 | $6,512 |
| 2027 | $6,512 |
| 2028 | $612,080 |
| Thereafter | $500,000 |
Overall, Option Care Health, Inc. continues to leverage its operational capabilities and market position to generate revenue through its infusion therapy services while managing its cost structure and expenses effectively.
Option Care Health, Inc. (OPCH) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Article updated on 8 Nov 2024
Resources:
- Option Care Health, Inc. (OPCH) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Option Care Health, Inc. (OPCH)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Option Care Health, Inc. (OPCH)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.