Viemed Healthcare US ((VMD)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Viemed Healthcare’s recent earnings call reflected a generally positive sentiment, driven by strong revenue growth and performance in its core businesses, particularly in the vent and sleep segments. Despite challenges such as declining EBITDA margins and increased capital expenditures, the company’s robust cash position and optimistic outlook for 2025 contributed to an overall positive tone.
Record Revenue Growth
Viemed Healthcare reported an impressive 20% year-over-year increase in revenue for Q4 2024 and a 23% increase for the full year, setting new records for both the quarter and the year. This growth underscores the company’s strong market presence and operational efficiency.
Strong Vent Business Performance
The vent business was a major contributor to Viemed’s success, accounting for 55% of Q4 revenue and 56% for the year. The segment saw a 4.4% sequential increase in Q4, with a total of 1,500 net vent adds in 2024, nearly 50% more than in 2023, highlighting its critical role in the company’s portfolio.
Significant Growth in Sleep Business
The sleep business also demonstrated remarkable growth, with a nearly 10% sequential increase in patients, resulting in a 43% increase in 2024 compared to 2023. This segment contributed 17% to Q4 revenues, showcasing its expanding influence.
Positive EBITDA Growth
Viemed’s adjusted EBITDA grew by 11% for the quarter to $14.2 million and 19% for the full year. This growth was driven by strong organic expansion and contributions from each of the company’s business segments, reinforcing its financial health.
Strong Cash Position
The company reported a free cash flow of $11.6 million in 2024, supported by a robust balance sheet with $55 million available on credit facilities and $17.5 million in cash on hand, providing a solid foundation for future investments.
Decreasing EBITDA Margins
Despite the positive growth, adjusted EBITDA margins declined year over year and sequentially, primarily due to shifts in product and service mix. This poses a challenge that the company will need to address moving forward.
High CapEx Due to Ventilator Purchases
Viemed’s gross capital expenditures were $13.6 million for Q4 and $37.8 million for the year, driven by the growth in vent patients and ventilator exchange programs. This impacted free cash flow, highlighting the cost of maintaining and expanding their ventilator fleet.
Lower Free Cash Flow Percentage
The free cash flow as a percentage of revenue decreased to 5.2% in 2024 compared to 11.9% in 2023, despite revenue growth. This indicates a need for the company to optimize its cash flow management strategies.
Forward-Looking Guidance
Looking ahead, Viemed Healthcare projects net revenue between $254 million and $265 million for 2025, indicating a 16% growth at the midpoint. Adjusted EBITDA is expected to range from $54 million to $58 million, representing a 10% growth. The company plans to expand its sales force, explore M&A opportunities, and leverage growth in its staffing division’s behavioral health segment. CapEx for the first half of 2025 is anticipated to mirror the latter half of 2024, influenced by ventilator fleet upgrades.
In summary, Viemed Healthcare’s earnings call highlighted strong revenue growth and robust performance in key business segments, despite challenges with EBITDA margins and capital expenditures. The company’s positive outlook for 2025, supported by strategic initiatives and a solid cash position, suggests continued growth and resilience in the healthcare market.