Good day, and thank you for standing by. Welcome to the Option Care Health Second Quarter 2025 Earnings Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Nicole Maggio, Senior Vice President of Finance. Please go ahead.

Good morning. 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. These forward-looking statements 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 Form 10-K filed with the SEC regarding the specific risks and uncertainties. We do not undertake any duty to update any forward-looking statements, except as required by law. During this call, we will use non-GAAP financial measures when talking about the company's performance and financial condition. You can find additional information on these non-GAAP measures in this morning's press release posted on the Investor Relations portion of our website. And with that, I will turn the call over to John Rademacher, President and Chief Executive Officer.

Thanks, Nicole, and good morning, everyone. In our second quarter results, the Option Care Health team delivered another strong quarter with growth across the portfolio. As a result, we are raising our guidance for the year in terms of revenue, adjusted EBITDA, and adjusted EPS. Option Care Health is in an industry with increasing demand, and we believe we are well positioned as a leading independent provider of home and alternate site infusion services, supported by significant scale, a diverse portfolio, and a robust operating model. During the quarter, our team took advantage of changing competitive dynamics and strengthened partnerships with payers and pharmaceutical manufacturers. We also utilized our national scale while being responsive to local needs, which we believe sets us apart. The resilient and flexible operating model we have built continues to show positive results, allowing us to achieve consistent performance regardless of the operating environment. Over my nearly 10 years leading this organization, Option Care Health has thrived through various challenges, and this quarter was no exception. I believe we have a strong foundation for future success. Mike will go into the financial details shortly, but to highlight some key points, we maintained revenue momentum in the second quarter with balanced results across the portfolio. Building on first-quarter achievements, we experienced a 15% increase in revenue compared to the same quarter last year. Growth in acute therapy was in the mid-teens, and our team executed well to leverage shifting industry dynamics and invest in our capabilities to meet the specific needs of patients receiving these therapies. Our chronic therapies also showed solid growth in the mid-teens. We continue to perform well with our rare and orphan and limited distribution therapies, showcasing our national scale and ability to reach smaller patient groups as we partner with pharmaceutical companies to develop and deliver innovative, tailored programs. The strong performance across various therapies, combined with disciplined spending, resulted in a 5% year-over-year growth in adjusted EBITDA, despite the challenges we faced. During the quarter, we focused on nurturing our relationships with health plans, as we believe our value proposition offers meaningful opportunities to reduce the total cost of care for their members and assist in managing medical loss ratios. Our commitment to providing high-quality care at appropriate costs in a patient-preferred setting makes us a vital part of addressing the challenges related to an aging population and increased healthcare service utilization. Our market access team continues to collaborate closely with national payers and health plans to create meaningful programs that enhance access and deliver better, more cost-effective care for their members. We are also deepening our collaborations with our pharmaceutical partners, leveraging our clinical expertise, pharmacy infrastructure, and wide geographic reach to enable tailored programs and services for patient populations with complex needs. Our extensive network of nearly 90 pharmacies, combined with our clinical centers of excellence and a nursing workforce of over 3,000 nurses, including Naven Health, gives us formidable capabilities. We keep expanding our therapy portfolio, including YEZTUGO and other limited distribution and rare orphan drugs, reflecting our ability to cater to patients with complex needs. Shifting focus, one of our business's core principles has been our emphasis on operational effectiveness and cash generation. Consequently, we maintain a strong balance sheet and the flexibility to strategically deploy capital for shareholder value. In the second quarter, we generated over $90 million in cash flow from operations and are on track to exceed $320 million for the full year. Our comprehensive approach to capital deployment allows us to carefully evaluate opportunities for utilizing our cash through mergers and acquisitions, internal investments, or share repurchases. We remain active in exploring both M&A and internal investment prospects as we aim to strengthen our platform and enhance our solutions and clinical capabilities. Share repurchase remains an attractive means to generate value for our shareholders, as indicated by our adjusted EPS performance, reinforcing our confidence in the business and its long-term potential. During the quarter, we completed $50 million in share repurchases. We continue to invest in our workforce, processes, technology, and facilities. For instance, our investments in artificial intelligence, advanced analytics, and our partnership with Palantir underscore our commitment to enhancing operational efficiency, which has been vital for our leverage growth. Regarding clinical resource efficiency, approximately 35% of our nursing visits occurred in one of our suites this quarter, and Naven Health conducted nearly 54,000 nursing visits. These factors are crucial in enabling us to take on new patients effectively. Furthermore, we believe our advanced practitioner model adds value to our home infusion services and drives growth by expanding our competencies and offering access to new patient groups. This clinical model enables us to serve higher-acuity patients under the supervision of a nurse practitioner while leveraging existing therapies to support patients who might not have been served profitably otherwise. Our investments in Intramed Plus and throughout the country have garnered valuable insights into our successful execution of this model, which we view as essential for expanding our national network. Given the strength observed in the first half of this year, we have increased our full-year guidance for revenue, adjusted EBITDA, and adjusted EPS, reflecting our confidence in the ongoing momentum and resilience of our platform and the execution of our team. With that, I'll turn the call over to Mike for more details.

Thanks, John, and good morning, everyone. As John mentioned, the second quarter was quite strong as we built up solid momentum from the first quarter. Revenue growth of 15.4% was balanced with mid-teens growth within both our acute and chronic portfolios of therapy. The acute therapy growth we delivered in the quarter was notably higher than we believe the overall market to be growing. And as John conveyed, the team executed well across the country. Gross profit of $269 million grew almost 8% versus the second quarter last year. This reflects the benefit from therapy mix with outsized acute growth as well as the performance of the chronic therapies. Gross margin rate was negatively impacted by some of the lower-margin limited distribution and rare and orphan therapies, but we continue to be encouraged by their gross profit dollar contribution. SG&A was in line with our expectations, and we expect continued strong spending leverage for the year as we see the benefits from the investments we have made in our infrastructure. Adjusted EBITDA of $114 million grew 5.2% over the prior year and represented 8.1% of net revenue and adjusted earnings per share of $0.41, grew 10.8% over the prior year. As John mentioned, we were active in deploying capital in the second quarter, repurchasing $50 million in stock. We will continue to thoughtfully consider the balance across M&A, internal investments, and share repurchase. And we maintain a strong balance sheet and capital structure with the capacity to continue executing our multifaceted strategy. Finally, I want to provide a quick update on our expectations for the full year. Given the strong momentum in the first half, for the full year 2025, we now expect to generate revenue of $5.5 billion to $5.65 billion and adjusted EBITDA of $465 million to $475 million, which we believe will translate into adjusted earnings per share of $1.65 to $1.72. Additionally, we continue to expect to generate more than $320 million in cash flow from operations. Consistent with our previous comments, our guidance considers our current expectations on the impact of potential tariffs, MFN pricing, and similar policy changes, which we believe will not have a material financial impact in 2025. Overall, we are excited about the strong first half of 2025, and we expect it will be another year of growth for Option Care Health. And with that, we will open the call for questions.

Our first question comes from David MacDonald with Truist.

A couple of questions here. First of all, can you guys just talk a little bit about just conversations with payers? I mean, it's obviously been a bit of a challenging environment at the payer level. And just anything incremental or accelerating in terms of just conversations around site of service redirection around candidly them looking more aggressively at things to help offset some of the cost pressures that they're seeing.

Dave, it's John. Yes, very productive conversations. Our market access team is in constant contact. I would say there is a heightened level of interest in not only utilizing our services, as we call out, we offer high-quality care at an appropriate cost in a setting in which patients want to receive it. So that continues to move forward. Interest in site of care initiative continues to increase, and we're seeing volumes starting to pick up in those areas where some of the payers are taking a more, I guess, a more aggressive approach to help provide their members with alternatives to some of the higher cost settings.

A couple of others. Guys, just first on the ambulatory infusion suites. Are you continuing to see chronic run pretty meaningfully ahead of acute and this year with some of the business that you picked up maybe that shift gets muted a little bit. But is there any reason we shouldn't expect that number to continue to drift higher? Just as in a "normalized year," your chronic business is growing more quickly than the acute business?

Yes. I think that's fair. Again, as we mentioned, we're up to 35%. We basically doubled the penetration since we initiated our center strategy a couple of years ago. And again, the majority of the utilization of the infusion suites are those chronic patients with recurring scheduled interactions with us. The fact that we were able to increase the penetration in a quarter where we still delivered mid-teens growth in the acute just speaks to your point, which is the penetration on the chronic side continues to be very, very encouraging.

Okay. Last 2 guys. John, during your prepared remarks, you talked about the advanced practitioner model and some patients in your portfolio that maybe you're able to service now. I would assume that that's something reimbursement related, maybe Medicare or whatever. But I was wondering if you could just drill down on that. And then I just have 1 quick follow-up.

Yes. So as you know, we don't have a broad access for Medicare fee-for-service beneficiaries. This allows us to expand our portfolio of patients that we can serve, utilizing that advanced practitioner model as well as also in my prepared remarks, I mean, we're also utilizing it for more complex patients that may have some additional needs that a nurse practitioner can provide better oversight or deeper oversight as well as help manage that care plan. So we're encouraged by the progress that we're making on this, and we think that it will continue to be a vector of growth for us as we're moving ahead.

And then, guys, just last question. A recent proposed rule seem to acknowledge the cost differential in terms of different sites of care around infusion. I'm just curious, any high-level thoughts or any updates just in terms of the Hill and conversations down there and just the acknowledgment of kind of what you guys do and how much money you save?

Yes. There's been a couple of positive moves on that. Certainly, there's recognition of the reduced cost of utilizing services in home and alternate sites. There is continued efforts, both as an industry as well as us individually to continue to advance that wherever we can. If site neutrality or other things continue to pick up momentum as ways that they're going to mitigate some of the cost trends over time, we feel like we're really well positioned given the cost structure that we operate with as well as the reimbursement comparables to some of the other sites that are chosen. So we're going to continue to have the conversations on the Hill and with key legislators to try to advance on behalf of the industry, but feel as if we're on the right side of most of those conversations where cost and quality are being measured.

Our next question comes from the line of Maya MacPherson with William Blair. Our next question comes from the line of Constantine Davides with Citizens.

A couple of quick financial questions. Just, Mike, wondering if you can update us on the Stelara expectations for the year. I know it's around $5 million in the first quarter. Just wondering how you're thinking about the impact across the balance of 2025?

Yes, Constantine, in the quarter, as we mentioned on our first quarter call, the negative impact for the second quarter was right around $20 million. It was actually probably a nudge above. But for the full year, and I think that's a decent proxy for the subsequent 2 quarters. So I think we're probably thinking for the year, our initial impact range was $60 million to $70 million. I think we're probably in the higher end of that range. And that's been fully contemplated in the guidance, which, again, as John mentioned, given the strength of the business, we've been able to more than mitigate.

I have a follow-up question regarding the therapeutic mix. Considering the strong acute momentum in recent quarters, are the operating margins for the chronic and acute portfolios still fairly comparable at this time?

In terms of what we previously said, yes, very consistent. What we've said, Constantine, is that the acute portfolio, the product margins are north of 50%. The chronic portfolio presents anywhere from 5% to 30% margin profiles. Again, a couple of moving dynamics, especially when you look at the margin rate year-over-year, obviously, the Stelara headline had a pretty meaningful impact on that. But obviously, we love the trajectory of the acute portfolio as well. And with the rare and orphan momentum we've seen, those therapies tend to be in the lower end of that 5% to 30% range. So a lot of moving pieces. Again, the way, as you know, we're really looking at the product or the gross profit dollars, which we're thrilled with the performance in the quarter.

Great. And then just last, John, I think you alluded to sort of M&A opportunities. And it still seems like there's a decent amount of infusion activity occurring in the market. Is it still right to sort of classify your interest as focused on the core? Or are you seeing opportunities in some adjacent areas that you look to explore?

Yes. We continue to be very focused on looking for opportunities on the core and looking to expand capability set. I think as we've said, we've also continued to think about areas that are enablement, whether it's in nursing and other capabilities that help us continue to advance to grow and increase some of the clinical capabilities. So it's a pretty active market. Our commitment to shareholders has always been that it will be both strategic and economic when we're evaluating where we deploy your capital in those types of activities. And therefore, I think you'll see us in a very disciplined way continue to look for opportunities to utilize the strength of the balance sheet in ways that will enhance value for our shareholders.

Our next question comes from the line of Pito Chickering with Deutsche Bank.

I guess looking at the second quarter gross profit dollars, if I adjust the first quarter with a $5 million headwind from Stelara, in the second quarter with a $20 million headwind from Stelara, the gross profit dollar growth accelerated pretty nice year-over-year from 1Q to 2Q. With the acute growth being similar, I think you said mid-teens in 1Q and mid-teens in 2Q. Can you sort of bridge us where the gross profit growth dollars are coming from if we exclude the Stelara impact?

Yes. I mean, that's a lot of moving pieces. I mean, look, at the end of the day, you stole our thunder. The way we manage this business is we look to maximize the gross profit dollar growth. When you normalize for the impact year-over-year and, again, we don't spend a lot of time looking at the world with and without, but our gross margins actually were consistent and expanded year-over-year despite the fact that within our chronic portfolio, again, as we mentioned in our prepared remarks, there is some downward pressure because of the mix towards those faster-growing rare and orphan and limited distribution drugs. So look, the 8% reported gross profit dollar growth, that's really an amalgamation of great execution on the acute side of the house, which, again, has been very productive for us thus far this year as well as just solid execution both within those lower gross margin rate LDDs and rare and orphan therapies, but also in kind of what I'll call the more established chronic therapies for the infliximab and immunoglobulins and MS therapies, et cetera.

Okay. As you've gained market share from the exits of CORe and Optum on the acute side, have you noticed any growth in market share on the chronic side? Additionally, as you renegotiate with payers for both acute and chronic services following these market exits, do you believe this provides you with greater leverage to secure better negotiating rates for both chronic and acute services in 2026?

Yes. From a market, I'll start and I'll pass it to John to answer the second part of your question. Pito, as we've talked broadly, and again, these are estimates, the acute therapy portfolio, those are very mature therapies that we administer. We estimate that those market dynamics suggest low single-digit market growth. So I'll let you project market share, but we're very encouraged delivering mid-teens growth in what we think is a very mature therapeutic category. The chronic side is a very broad portfolio of therapies. We've estimated that collectively, those chronic therapies are growing in the low double digits, given all the dynamics with new therapy introductions and things going subcu or oral, etc. So again, in a quarter where we're delivering mid-teens growth across both of those portfolios, we're feeling very good about the execution of the team across the board.

And on the payer side, again, continued strong progress in deepening our relationships there. As you point out, the strength of our portfolio and the balance that we have across both the acute and chronic therapeutic categories is one that we use to reinforce the value that we bring. As you would expect at this point in time, given some of the medical loss ratio challenges, things like bed day management and the total cost of care are front in mind. That ability for us to be a meaningful partner in that work to provide products across the portfolio that we have is something that we reinforce as we are articulating to them the value of our partnership. So we're always going to make certain that we are being paid fairly for the value that we deliver, and that is part of the conversation. But the national scale that we have, coupled with the local responsiveness and the breadth of the portfolio, we think is a differentiator and something that we're going to continue to invest in and continue to capitalize on in this marketplace today and into the future.

Our next question comes from the line of Joanna Gajuk with Bank of America.

So a couple of, I guess, follow-ups to other comments that were made on the advanced practitioner model. So that's very interesting what you're doing there. So can you tell us a little bit more in terms of the progress there using this model? How many chairs are in this model? And also, are you starting to take more oncology patients or Alzheimer's patients? Any additional color you might have on that?

Yes, we operate 170 facilities across the U.S., with over 750 chairs in use. We are currently exploring how to best utilize these for alternatives to home care as well as our advanced practitioner model, which we are evolving. This rollout will be done on a state-by-state basis, and we are pleased with the progress that aligns with our expectations. Regarding the advanced practitioner model, we have seen an expansion in its use to serve oncology patients and those with neurological disorders like Alzheimer's. This care model allows us to look at how we can expand our services. Some products in our portfolio are less suited for home care due to the need for nursing resources and travel time. Therefore, having center-based capabilities enhances our service offerings and broadens the patient population we can reach. We're committed to moving this initiative forward. Encouraging signs are emerging for growth in Alzheimer’s and oncology, which, while not a significant part of our overall portfolio yet, positions us well for future growth opportunities.

And I guess, if I may, on just, I guess, the broader suite portfolio to understand 750 chairs you have there. Can you talk about the utilization of those? I mean you did say 35% of the nursing business you deliver were in the settings. But the reverse question is like how much, I guess, more you can do without the need to grow? And then to that end, since you mentioned how you can leverage better the nurse and reduce the drag down and such. Can you help us understand the margin contribution when you have these settings being utilized more and more?

Yes, Joanna, look, I mean, the way we think about these centers and as you've been following us since '21 when we really started our strategy of aggressive suite expansion, we've been very thoughtful and methodical to make sure that as we open these, the utilization was following. We're very encouraged. We've gone from around 17% of our nurse visits occurring in one of our chairs to 35% plus. And so first and foremost, I think as you've heard us say in the past, utilization or capacity isn't something we necessarily worry about. Most of our centers aren't operating 7 days a week or 8 hours a day. And so as we think about the theoretical capacity, we have plenty and we'll continue to add brick-and-mortar as the local market dynamics dictate. The great thing is they don't have to be running at capacity to create tremendous value for us. And we haven't said what the dollar figure is in terms of the drop. But there's really 2 key benefits. First and foremost, for those mature centers, we're seeing more than 20% nurse productivity uplift. Said another way, that nursing labor component for a typical infusion is 20% more efficient because we're not paying for windshield time; they can oversee multiple patients at the same time. It's just a more efficient scheduling. But we're also creating 20% more nursing capacity, which is a finite clinical resource for us, which gives us the confidence to continue to aggressively expand our therapeutic portfolio. So this is a key enabler, as John said, to our growth. It drops value to the bottom line, but it continues to fuel our confidence around clinical labor capability.

If I may ask a follow-up, in your prepared remarks you mentioned that you don't expect the tariffs to have a significant impact this year. However, we're now hearing about potential tariffs on products from Europe, including pharmaceuticals. There's some discussion about a 15% or 18% rate. Could you elaborate on whether you're taking any steps in preparation for this? Do you need to build up inventory in light of these developments? Additionally, how should we consider your specific exposure to Europe?

Yes. Look, as we've said previously, and obviously, we spent a lot of time on our first quarter call and thereafter addressing some of the concerns. I mean, as we've said, I mean, part of our economics are we're maintaining a spread on the cost of the therapies. And drug prices increase and decrease on a regular basis, and our procurement and market access teams are managing those procurement strategies constantly. And we don't just sit back and wait. We have very proactive relationships with pharma, with distributors, with our suppliers. We haven't been shy, as you've seen in the past, around using our balance sheet where necessary. And there's a lot of strategies that we can deploy behind the scenes really to proactively address what we anticipate are changes in the drug costs. So as we've modeled countless scenarios, we don't see a scenario this year, and our guidance ranges incorporate what we think would be the impact, which again, as we collectively assess is just not material.

Our next question comes from the line of A.J. Rice with UBS.

Maybe just a follow up on that last train of thought first. I think your inventories are up about $35 million sequentially. Obviously, there sort of is some ongoing chatter about the tariffs, the MFN, et cetera. Are you doing anything now? Or that's a tool in the toolbox that you have? It wouldn't seem like a $35 million sequential quarterly step-up was that much in inventories in anticipation of tariffs or anything like that. But just trying to think about how quick you can move to take advantage of that and offset any impact from tariffs.

Yes, A.J., look, we're constantly managing. That's less than 2 days impact. We typically operate with about a month of inventory across the board. We're constantly looking at, as John mentioned, there's some new therapies that are launching. Obviously, with mid-teens growth, we want to make sure, given what has been robust growth thus far this year, that we have adequate supplies and inventory in the local markets to be responsive. So I would say that the inventory increase has been deliberate and methodical, but something that we're very comfortable with, again, given the strength of the balance sheet and capital structure.

Okay. I realize there aren’t any other drugs in your portfolio that are comparable to Stelara. However, I wanted to know if, during your conversations with manufacturers—who are currently experiencing significant changes—you're noticing any shifts in how they want to contract with you, perhaps in light of what happened with Stelara or due to the pressures they’re experiencing. Is there anything noteworthy occurring in that regard?

It's John. The conversations that we've had have been probably more aligned towards the clinical capabilities and the ability that we have to help ensure adherence to their product. As you called out, our relationship with Janssen and specifically on that product is just unique. And so across the board, the rest of the manufacturers that we have relationships with, I think they're all trying to understand what the future will hold with some of the actions being announced around pricing, et cetera, but we have not yet seen that be a material aspect of the way that they're contracting with us.

Okay. And then just the last question on OpEx growth embedded in your second half guidance. I know generally, your annual increases, I think, on that area are in the 3% to 5% range. Is there anything unusual about what you're seeing in the back half that would either step that up or make that rate of increase somewhat more modest?

Yes. Look, I mean, the great news is with the leveragability of our infrastructure, we drove 50 bps. OpEx was up, I think, high single digits or in the 10% range in the quarter. We still grow 50 basis points of leverage as a percent of revenue. A couple of things at play there. First and foremost, we closed on the Intramed acquisition, which we absorbed their burn. So on a year-over-year basis, we have the indirect spend of the Intramed enterprise that's now being reported. And frankly, as John mentioned, we're investing in a number of areas, whether it's our advanced practitioner model supporting some of the new therapies that we're ramping up for launch. And so we have the agility to pull forward some of those investments. And frankly, given the strength of the quarter, we're managing for the near term and the longer term, and we're making some investments for future growth initiatives. So I think it will be a little bit above that in the back half relative to our historical range. But there's nothing fundamental or structural. It's just the opportunistic ability for us to invest for future growth in a period where we're seeing really, really encouraging top line.

Our next question comes from the line of Brian Tanquilut with Jefferies.

Mike, maybe just as I think about towing A.J.'s question, how should I be thinking about your MFN exposure? I mean, just the mechanics around how that would flow through to you guys?

Well, Brian, again, based on what we've seen, and there hasn't been a lot of updates since the original executive order, again, there's some conceptual things in there around MFN that, frankly, it's hard to understand exactly how that's going to play out. Determining what the reference prices are and what things would ultimately impact us, it's just way too early to tell. And we haven't seen anything at least for the balance of '25 where that's going to impact us. We'll continue to keep an eye on it. But structurally, how there's going to be these international reference prices, how things would be adjusted, how the government may step in to start administering and operating pharmacies. As we've read the executive order, it's hard for us really to put our hands around. Again, I don't know that there's going to be anything implemented to impact '25, but how it would logistically be executed in even the near term.

Got it. Okay. I totally understand. Maybe shifting to Stelara biosimilars. Are you seeing any increase in new patients choosing Stelara biosimilars, or for those patients who would have been on Stelara? I'm curious about what you're observing regarding the growth in biosimilars.

Yes, Brian, it's John. I'd say it was a slow start, but we're starting to see that ramp up as we exited the quarter. Some of the PBMs are starting to make that a little bit more of an initiative for them as they move that ahead. Again, our focus has been around making certain that we have access to the products and expanding them into our portfolio as we move forward. There certainly are other opportunities where there's transition of some of those patients on to, let's call it, the next-generation chronic inflammatory disease products that are part of our portfolio as well. So I think the patient census is trending in alignment with our expectations and kind of how we have thought things were going to move. So nothing out of our expectation range. But as we exit the second quarter and go into the back half of the year, our expectations are that we'll continue to see increased utilization of the biosimilars that at this point in time are being deemed to be interchangeable. And therefore, the utilization, we think, will start to ramp up.

Our next question comes from the line of Sarah Conrad with Goldman Sachs.

This is Sarah Conrad on for Jamie. You've continued to see strong mid-teens acute growth following the competitor exits. But can you help us understand how we should think about acute growth progression for the balance of the year and into 2026 as you annualize these competitive exits?

Sarah, it's Mike. So a couple of things. One, I wouldn't characterize the mid-teen growth as just the result of just the competitive dynamics in certain markets. Again, we're seeing very solid execution even in markets where the competitive dynamics remain consistent with how they've been. I think that also is attributed to some of John's comments around the fact that, look, as we engage with scaled health plans and payers, they see the utility and value of a consistent, dependable national clinical model, which I think has served us some wind in our sails across the country. As it relates to this year, as you'll recall, in certain markets, there were some competitive changes late Q3, early Q4. So the prior year comps—and we saw this in mid-'22 as well—the year-over-year comp is going to be tougher in the fourth quarter. So on a reported basis, while we're confident we'll maintain the revenue base, the reported growth, we would expect to decrease a little bit in the fourth quarter. And as it relates to 2026, again, unfortunately, at this point, we're just not in a position to provide forward guidance beyond the guidance for 2025.

That's super helpful. And then I just want to follow up on A.J.'s OpEx growth question. Can you help us understand what's fueling that 10% SG&A growth that we saw in the first half? And where are you prioritizing investments going forward?

Yes, I think to break it down high level, there's 2 to 3 points of SG&A impact from the acquisition. So deal expenses as well as the fact that we're now reporting the Intramed's burn. And there's a couple of points of growth of what I will call acceleration of growth initiatives. So just to overly simplify, the same-store sales spending is still growing in that mid-single digits. But as we always have, we've been able to accelerate some of the initiatives. Again, back to my earlier comments, this is around expanding some of our clinical capabilities and the suite investing in new therapy launches, et cetera. So Sarah, at a high level, I'd break it down as OpEx, which again decreased as a percent of revenue by 50 bps year-over-year. That's despite, to your point, 10% growth, half of which is really the impact of acquisitions and opportunistic growth initiatives.

This concludes the question-and-answer session. I would now like to turn the call back over to John Rademacher for closing remarks.

Yes, thank you all for joining us this morning and participating in our call. Our team continued to execute on all levels, and we're excited to continue to expand patient access and provide extraordinary care to more patients and their families, which is delivering value for our shareholders. Thank you, everyone, for joining us, and have a great day.

This concludes today's conference call. Thank you for your participation. You may now disconnect.