Healthcare services provider BrightSpring Health Services (NASDAQ: BTSG) reported Q4 CY2025 results beating Wall Street’s revenue expectations, with sales up 16.3% year on year to $3.55 billion. The company’s full-year revenue guidance of $14.73 billion at the midpoint came in 0.7% above analysts’ estimates. Its non-GAAP profit of $0.33 per share was 4.7% below analysts’ consensus estimates.

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"In 2025, BrightSpring’s financial performance was driven by ongoing demand for our high-quality and differentiated services and operational capabilities,” said Jon Rousseau, Chairman, President, and Chief Executive Officer of the Company.

Company Overview

Founded in 1974, BrightSpring Health Services (NASDAQ: BTSG) offers home health care, hospice, neuro-rehabilitation, and pharmacy services.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Thankfully, BrightSpring Health Services’s 18.3% annualized revenue growth over the last five years was impressive. Its growth beat the average healthcare company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. BrightSpring Health Services’s annualized revenue growth of 20.9% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

We can better understand the company’s revenue dynamics by analyzing its most important segment, Pharmacy. Over the last two years, BrightSpring Health Services’s Pharmacy revenue averaged 30.7% year-on-year growth. This segment has outperformed its total sales during the same period, lifting the company’s performance.

This quarter, BrightSpring Health Services reported year-on-year revenue growth of 16.3%, and its $3.55 billion of revenue exceeded Wall Street’s estimates by 5%.

Looking ahead, sell-side analysts expect revenue to grow 13.4% over the next 12 months, a deceleration versus the last two years. We still think its growth trajectory is attractive given its scale and suggests the market is baking in success for its products and services.

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Operating Margin

BrightSpring Health Services was profitable over the last five years but held back by its large cost base. Its average operating margin of 2.2% was weak for a healthcare business.

Analyzing the trend in its profitability, BrightSpring Health Services’s operating margin decreased by 1.4 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. BrightSpring Health Services’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.

In Q4, BrightSpring Health Services generated an operating margin profit margin of 3%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Cash Is King

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

BrightSpring Health Services has shown mediocre cash profitability over the last five years, giving the company limited opportunities to return capital to shareholders. Its free cash flow margin averaged 1.8%, subpar for a healthcare business.

Taking a step back, we can see that BrightSpring Health Services’s margin dropped by 1.6 percentage points during that time. It may have ticked higher more recently, but shareholders are likely hoping for its margin to at least revert to its historical level. Almost any movement in the wrong direction is undesirable because of its already low cash conversion. If the longer-term trend returns, it could signal it’s in the middle of an investment cycle.

BrightSpring Health Services’s free cash flow clocked in at $193.9 million in Q4, equivalent to a 5.5% margin. This result was good as its margin was 3 percentage points higher than in the same quarter last year, but we wouldn’t read too much into the short term because investment needs can be seasonal, leading to temporary swings. Long-term trends trump fluctuations.

Key Takeaways from BrightSpring Health Services’s Q4 Results

We were impressed by how significantly BrightSpring Health Services blew past analysts’ revenue expectations this quarter. We were also glad its full-year EBITDA guidance trumped Wall Street’s estimates. On the other hand, its EPS missed. Overall, we think this was a decent quarter with some key metrics above expectations. The stock traded up 1.9% to $40.88 immediately following the results.

BrightSpring Health Services had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).