Quipt Home Medical (Nasdaq: QIPT) reported a softer-than-expected fiscal second quarter, with revenue falling to $57.4 million, a 10% year-over-year decline, the company announced on Monday.
Still, Quipt is working to stabilize operations and pivot toward long-term growth by building up hospital partnerships, CEO Greg Crawford said during the company’s earnings call.
“We are executing with urgency and precision across all opportunities,” Crawford said. “We’re not discouraged. On the contrary, we have strong conviction in the fundamentals of our business.”
The drop in revenue was caused by three factors: lingering effects from the 2024 loss of a capitated Medicare Advantage agreement, the non-renewal of a decades-old disposable supply contract and seasonal weakness tied to patient deductible resets, Crawford said.
“We clearly underestimated the referral impact as far as their behavior of referring to the other Humana patients that are on PPO plans,” Crawford said.
Quipt, which operates more than 130 locations in 26 states, continues to focus on respiratory care, which accounts for roughly 75% of its product mix.
Looking ahead, the company is doubling down on a strategy to embed itself more deeply in hospital discharge pathways through preferred provider agreements with regional health systems, Crawford said.
“These relationships are compelling because they offer access to embedded patient volume,” he said. “We are actively engaged in multiple conversations.”
Quipt’s sleep business also remained stable, with no negative impact seen from GLP-1 medications. In fact, Crawford cited data suggesting GLP-1 users with obstructive sleep apnea were more likely to adhere to CPAP therapy, bolstering resupply activity.
“The study found that individuals with an obstructive sleep apnea, OSA diagnosis, who were prescribed the GLP-1 were 10.8% more likely to start positive airway pressure PEP therapy compared to those not on GLP-1s,” he said. “Additionally, these patients exhibited higher resupply order rates over both 12- and 24- month periods.”
From a financial standpoint, the company ended the quarter with $17.1 million in cash and $30.7 million in total liquidity. While capital expenditures were elevated due in part to complications from the Philips ventilator recall, spending is expected to stabilize over the coming quarters, CFO Hardik Mehta said during the call.
“Our platform is now more scalable and resilient,” he said. “We’re executing across multiple fronts to restore growth, expand margins and deliver shareholder value.”
