GRDN 10-K & 10-Q changes, risk factors and insider trading

In addition, LTCF residents have the ability to choose among pharmacy providers. Certain states have a “freedom of choice” requirement as part of their state Medicaid programs or in separate legislation that enable a resident to select his/ or her provider. These laws may prevent LTCFs from requiring their residents to purchase pharmacy services or pharmaceuticals from particular providers that have a supplier relationship with the LTCF. Such “freedom of choice” requirements increase the competition we face in providing services to LTCF residents. The ability of a resident to select the pharmacy that supplies him or her with prescription drugs could adversely affect our business, financial condition and results of operations because there can be no assurance that such resident will select us as a provider.

We maintain contractual relationships with pharmaceutical wholesalers and manufacturers that provide us with, among other things, discounts for drugs we purchase to be dispensed from our pharmacies. Our contracts with pharmaceutical wholesalers and manufacturers often provide us with, among other things, discounts on drugs we purchase andpurchase, rebates and service fees. Our contracts with pharmaceutical wholesalers and manufacturers generally are terminable on relatively short notice by either party and we have limited contractual protections with them. If any of these contractual relationships are terminated, materially altered, or renewed on terms that are less favorable to us, our business and operating results could be materially adversely affected.

The healthcare industry in the United States is subject to fundamental changes due to ongoing federal and state healthcare reform efforts and related political, economic, and regulatory influences, including those from the recent change in presidential administration. Notably, the Affordable Care Act resulted in expanded healthcare coverage and has resulted in significant changes to the United States healthcare system. The Affordable Care Act outlines certain reductions for Medicare reimbursed services, which may affect skilled nursing, home health, hospice, and outpatient therapy services, as well as certain other changes to Medicare payment methodologies. In addition, there have been legislative initiatives with respect to pharmaceutical pricing practices, and we could be adversely affected by the impact of such legislation and the continuing efforts of government and private health plan payors to lower pharmaceutical costs. For example, the Inflation Reduction Act of 2022 contains several provisions that couldhave havehad, and are expected to continue to have, the effect of reducing the prices we can charge and the reimbursement we receive for thecertain branded drugs we dispense, thereby reducing our profitability, and could adversely affect our financial condition and results of operations. These provisions include the establishment of a Medicare Drug Price Negotiation Program, which requires the government to negotiate and set a “maximum fair price” for select high-expenditure drugs covered under Medicare Part D (starting in 2026) and Part B (starting in 2028), and the implementation of changes to Medicare Part D benefits designed to limit patient out-of-pocket drug costs and shift program liabilities from patients to other stakeholders, including health plans, manufacturers and the government. These comprehensive healthcare reform efforts have resulted and will likely continue to result in extensive rulemaking and policy decisions by regulatory authorities, and applicable legislation and regulations may be altered, amended, repealed, or replaced. Moreover, there have been legal and political challenges to the Affordable Care Act and the Inflation Reduction Act since their passage and there may be future challenges. Additionally, the new presidential administration has signed numerous executive orders, including some overturning those of the prior administration aimed at researching alternative payment and delivery models to lower prescription drug costs. Therefore, it is difficult to predict the full impact of the Affordable Care Act, the Inflation Reduction Act, or other healthcare reform efforts, including new executive orders, due to the complexity of the law and implementing regulations, as well our inability to foresee how CMS and other participants in the healthcare industry will respond to the choices available to them under the law. The provisions of the legislation and other regulations implementing the Affordable Care Act, the Inflation Reduction Act, any amended or replacement legislation, or other healthcare reform efforts may increase our costs, materially and adversely affect our revenues and profitability, expose us to expanded liability, or require us to significantly alter the ways in which we conduct our business.

In addition, a portion of our health plan payor reimbursements derive from our participation in the MHA Managed Care Network (“MHA”). In the event that we were to have a contractual dispute with MHA or fail to renew our agreement upon acceptable terms, our reimbursements may decrease. We also participate in the MHA group purchasing organization (“GPO”), for purposes of drug purchasing. In the event that our relationship were to suffer with MHA under either the network participation agreement or the MHA GPO agreement, our reimbursements could be further impacted and our business and operating results could be adversely affected.

To remain competitive, we must continually maintain and upgrade our technologies to meet the evolving preferences, needs and expectations of LTCFs and residents and to improve our productivity and reduce our operating expenses. We cannot predict the effect of technological changes on our business, and new services and technologies in the futurefuture, including those implementing or created using artificial intelligence, could be superior to, or render obsolete, the technologies we currently use in our business. Incorporating new technologies into our products and services may require substantial expenditures and take considerable time, and ultimately may not be successful. In addition, our ability to adopt and develop new technologies may be inhibited by industry-wide standards, new laws and regulations and other factors. Our success will depend on our ability to develop new technologies and adapt to technological changes and evolving industry standards. We rely in part on third parties for the development of and access to new technologies, which may adversely impact our ability to integrate new technologies into our business. If we fail to effectively maintain and upgrade our technology, our ability to sustain and grow our business and our results of operations may be materially adversely affected.

In the ordinary course of our business, we process, store and transmit data, which may include sensitive personal information as well as proprietary or confidential information relating to our business or third parties. We have in the past been subject to a ransomware attack, and may in the future be subject to various cyber or ransomware attacks or data breaches. Although the ransomware attack we experienced did not have a material impact to our business, such future incidents could disrupt and materially adversely affect our business. A cybersecurity attack or other data security incident could result in the misappropriation of confidential or personal information, create system interruptions or deploy malicious software that attacks our information technology security systems. Such an attack or incident could result in business interruptions from the disruption of our information technology systems or those of our third-party information systems providers, or negative publicity resulting in reputational harm with our customers, stockholders and other stakeholders. In addition, the unauthorized dissemination of sensitive personal information or proprietary or confidential information could expose us to regulatory fines or penalties, litigation and potential liability or otherwise harm our business.

A group of our stockholders, consisting of Bindley Capital Partners I, LLC (“Bindley Capital”),LLC, Pharmacy Investors, LLC (“Pharmacy Investors”),LLC, Cardinal Equity FundFund, LP (“Cardinal” and, together with Pharmacy Investors, the “Cardinal Stockholders”),L.P., Fred Burke, David Morris and Kendall Forbes (collectively, the “Guardian Founders”) beneficially own shares of our common stock representing a majority of our combined voting power. Pursuant to the terms of the Stockholders’ Agreement, the Guardian Founders have the ability to elect all of the members of our board of directors and thereby control our management and affairs. In addition,Accordingly, the Guardian Founders are able to determine the outcome of substantially all matters requiring action by our stockholders, including amendments to our certificate of incorporation and bylaws, any proposed merger, consolidation or sale of all or substantially all of our assets and other corporate transactionstransactions, even if such actions are not favored by our other stockholders. This concentration of ownership may also prevent a change in the composition of our board of directors or a change in control of our company that could deprive our stockholders of an opportunity to receive a premium for their Class A common stock as part of a sale of our company and might ultimately affect the market price of our Class A common stock.

The Guardian Founders own more than 50% of the total voting power of our outstanding common stock and we are therefore a “controlled company” under NYSE corporate governance standards. As a controlled company, we are not required by NYSE, for continued listing of our Class A common stock, to (i) have a majority of our board of directors consist of independent directors, (ii) maintain a nominating and governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities or (iii) maintain a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities. For so long as we qualify as a “controlled company,” we may rely on some or all of these exemptions from NYSE listing requirements. Accordingly, our stockholders do not have the same protections afforded to stockholders of companies that are subject to all of the NYSE corporate governance requirements and the ability of our independent directors to influence our business policies and affairs may be reduced. As a result, our status as a “controlled company” could make our Class A common stock less attractive to some investors or could otherwise harm our Class A common stock price.

Our future issuance of Class A common stock, Class B common stock, preferred stock or convertible debt securities could dilute our common stockholders and adversely affect the market value of our Class A common stock.

The future issuance of shares of Class A common stock, Class B common stock, preferred stock or convertible debt securities may dilute the economic and voting rights of our stockholders and reduce the market price of the Class A common stock. Preferred stock, if issued, could have a preference with respect to liquidating distributions or a preference with respect to dividend payments that could limit our ability to pay dividends to the holders of our Class A common stock and adversely affect the market price of the Class A common stock.

From time to time in the future, we may also issue additional shares of our Class A common stock or securities convertible into Class A common stock pursuant to a variety of transactions, including acquisitions. We also anticipate that we may issue shares of our Class B common stock as consideration in the buyout of minority owners in our future greenfield start-up pharmacies and future acquired pharmacies. The issuance by us of additional shares of our Class A common stock, Class B common stock or securities convertible into our Class A common stock wouldmay dilute your ownership of us and the sale of a significant amount of such shares in the public market could adversely affect prevailing market prices of our Class A common stock.

As of March 15, 2025, we had outstanding 9,200,000 shares of our Class A common stock. As a company with a relatively limited public float, shares of our Class A common stock may experience greater stock price volatility, price run-ups, lower trading volumes, large spreads in bid and ask prices and less liquidity than companies with larger capitalizations. Such volatility, including any stock run-ups, may be unrelated to our actual or expected operating performance, results of operations, financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our Class A common stock.

In addition, if the trading volumes of our Class A common stock are low, persons buying or selling in relatively small quantities may easily influence the price of our Class A common stock. This low volume of trades could also cause the price of our Class A common stock to fluctuate greatly, with large percentage changes in price occurring in any particular trading day session. Holders of our Class A common stock may also not be able to readily liquidate their investment or may be forced to sell at depressed prices due to low volume trading. Broad market fluctuations and general economic and political conditions may also adversely affect the market price of our Class A common stock. As a result of this volatility, investors may experience losses on their investment in our Class A common stock. A decline in the market price of our Class A common stock could also adversely affect our ability to issue additional shares of Class A common stock or other of our securities and our ability to obtain additional financing in the future. No assurance can be given that an active market in our Class A common stock will develop or be sustained. If an active market does not develop, holders of our Class A common stock may be unable to readily sell the shares they hold or may not be able to sell their shares at all.

We expect to incur significant additional annual expenses related to these steps associated with, among other things, director fees, reporting requirements, transfer agent fees, additional accounting, legal and administrative personnel, increased auditing and legal fees and similar expenses. We also expect that the new rules and regulations that we willare benow subject to as a result of being a public company will continue to make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage for such directors and officers. Any of these factors could make it more difficult for us to attract and retain qualified members of our board of directors.

The sale of substantial amounts of shares of our Class A common stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of shares of our Class A common stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. As of DecemberMarch 31,2, 2024,2026, we have outstanding approximately 5427.1 million shares of Class B common stock,stock (substantially all of which were issued in our Corporate Reorganization in September 2024), which shares are convertible into shares of Class A common stock on a one-to-one basis. The shares of Class B common stock are subject to certain transfer restrictions and conversion terms, including with respect to sales. These transfer restrictions will cease to apply as shares of Class B common stock automatically convert into shares of Class A common stock over the two yeartwo-year period following thetheir IPO.respective dates of issuance. In addition, our board of directors may accelerate the conversion of Class B common stock into Class A common stock at their discretion.

As a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in such internal controls. In addition, beginning with our secondthis Annual Report on Form 10-K, we will beare required to furnish a report by management on the effectiveness of our internal control over financial reporting, pursuant to Section 404 of the Sarbanes-Oxley Act. The process of designing, implementing, and testing the internal control over financial reporting required to comply with this obligation is time consuming, costly, and complicated. If we identify material weaknesses in our internal control over financial reporting, if we are in the future unable to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, or if we are unable to assert that our internal control over financial reporting is effective, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our Class A common stock could decline, and we could also become subject to investigations by the stock exchange on which our Class A common stock is listed, the SEC, or other regulatory authorities, which could require additional financial and management resources.

We are a holding company and have no material assets other than our ownership of equity interests in our subsidiaries,operating including Guardian Pharmacy, LLC.subsidiaries. As a holding company, we have no independent means of generating revenue, and our principal source of cash flow will be distributions from our direct and indirect subsidiaries. Therefore, our ability to fund and conduct our business, service our debt, and pay dividends, if any, in the future will depend on the ability of our subsidiaries to generate sufficient cash flow to make upstream cash distributions to us. Our subsidiaries are separate legal entities, and although they are wholly owned or majority owned and controlled by us, they have no obligation to make any funds available to us, whether in the form of loans, dividends, or otherwise. The ability of our subsidiaries to distribute cash to us will also be subject to, among other things, restrictions that may be contained in our subsidiary agreements (as entered into from time to time), availability of sufficient funds in such subsidiaries and applicable laws and regulatory restrictions. Claims of any creditors of our subsidiaries generally will have priority as to the assets of such subsidiaries over our claims and claims of our creditors and stockholders. To the extent the ability of our subsidiaries to distribute dividends or other payments to us is limited in any way, our ability to fund and conduct our business, pay our expenses, service our debt, and pay dividends, if any, could be harmed.

We are a leading, highly differentiated pharmacy services company that provides an extensive suite of technology-enabled services designed to help residents of long-term health care facilities (“LTCFs”) adhere to their appropriate drug regimen, which in turn helps reduce the cost of care and improve clinical outcomes. We enter into contracts directly with LTCFs to serve as the principal pharmacy provider for their residents. In this capacity, we offer high-touch, individualized clinical, drug dispensing and administration capabilities that are tailored to serve the needs of residents in historically lower acuity LTCFs, such as assisted living facilities (“ALFs”) and BHFs.behavioral health facilities (“BHFs”). Additionally, our robust capabilities enable us to serve residents in all types of LTCFs. Our services include prescription intake and adjudication management, packaging drugs into unit dose and/or multi-dose compliance packaging that are organized by date and time of administration, and electronically tracking each drug from delivery through administration to LTCF residents. We also offer training to caregivers and conduct mock audits to ensure compliance with pharmacy administration requirements, billing claims processing, government regulation and other matters. As of December 31, 2024,2025, our 5161 pharmaciespharmacies, 54 of which are full-service, served approximately 186,000205,000 residents in approximately 7,0008,400 LTCFs across 38 states.

While our national competitors have primarily focused on SNFs,skilled nursing facilities (“SNFs”), we believe we enjoy a strong competitive position as a large and purpose-built provider of pharmacy services to ALFs and BHFs. More than two-thirds of our annual revenue for each of the past three years has been generated from residents of ALFs and BHFs, while the remainder has been generated primarily from residents of SNFs. LTCF industry trends, including aging demographics, increases in the number of assisted living residents, improving life expectancies and enhanced quality of care, have resulted in ALF and BHF resident populations that require assistance with their increasingly acute and complex healthcare needs. Through our value-added capabilities and local management model, we have been able to pass on to residents, LTCFs and health plan payors the benefits of our scale without compromising on the high-touch, localized customer service traditionally associated with an independent pharmacy. For this reason, we are well positioned to continue to serve ALFs and BHFs, which we believe to be the most attractive and highest growth sector of the LTCF market.

Corporate Reorganization and IPO

On September 27, 2024, wethe Company consummated theits initial public offering (“IPO”) of 8,000,000 shares of ourits Class A common stock, aspar describedvalue in$0.001 ourper final prospectus dated September 25, 2024, filed with the SEC on September 26, 2024 pursuant to Rule 424(b) under the Securities Act of 1933, as amendedshare (the“Class “ProspectusA common stock”). Also on September 27, 2024, the underwriters for the IPO exercised in full their option to purchase an additional 1,200,000 shares of Class A common stock. The 9,200,000 shares were issued at a public offering price of $14.00 per share, resulting in net proceeds to usthe Company of $119.8 million, after deducting underwriting discounts of $9.0 million. In addition to the underwriting discounts, wethe Company incurred $13.0 million of offering costs, which were recorded to additional paid-in capital.

During the2024 yearand ended December 31, 2024,2025, we completed acquisitions of various pharmacy operations (the “Acquisitions”). The operating results of the Acquisitions were a contributing factor in certain changes in the results of operations for the year ended December 31, 20242025 compared to the year ended December 31, 2023.2024. For comparative purposes, acquisitionAcquisition impacts are only considered forwhen the 12beginning monthsof followingthe comparative period precedes the acquisition date.

In connection with the Corporate Reorganization and IPO, Restricted Interest Unit awards associated with the Converted Subsidiaries and Guardian Pharmacy, LLC were converted into Common Units of Guardian Pharmacy, LLC, and the Common Units in Guardian Pharmacy, LLC were then converted into Class B common stock of the Company. This conversion of Restricted Interest Units was treated as a modification, requiring the units to be marked to fair value on the modification date, resulting in usthe Company recognizing $125.7 million of incremental share-based compensation expense during the year ended December 31, 2024. In addition, certain Restricted Interest Unit awards which converted into Class B common stock are subject to a one-year service period ending one year subsequent to the IPO closing date. The unamortized share-based compensation expense associated with these awards is $10.1 million as of December 31, 2024. Refer to Note 11 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further detail surrounding the Restricted Interest Units conversion.

Cost of goods sold. Cost of goods sold consists primarily of expenses associated with the fulfillment and delivery of the prescription.prescription, including prescription drug acquisition costs. Cost of goods sold also includes associated pharmacy personnel-related expenses, including salaries and benefits, delivery charges and other supporting overhead costs (such as rent and depreciation and amortization of assets used in the fulfillment and delivery of the prescription).

Selling, general, and administrative expenses. Selling, general, and administrative expenses consist primarily of personnel-related expenses, including share-based compensation, salaries and benefits, for our employees at the pharmacies and support services engaged in other pharmacy related activities including sales and marketing, finance, legal, human resources, purchasing and other administrative functions. Selling, general, and administrative expenses also include facilities-related expenses, software expenses, sales and marketing expenses, insurance premiums, professional services expenses, including for outside legal and accounting services, other overhead costs, changes in the fair value of contingent payments related to acquisitions, depreciation related to long lived assets, and amortization of intangible assets.

Prior to the Corporate Reorganization and IPO, share-based compensation expense primarily represented non-cash recognition of changes in the value of Restricted Interest Unit awards. These awards contained a cash settlement feature and were accounted for as a liability in accordance with U.S. generally accepted accounting principles in the United States of America (“GAAP”). These units remained in place until they were (a) forfeited (which occurs when the employee leaves before the units are fully vested), (b) paid out (we purchase the units at a calculated value upon termination of employment) or (c) converted into shares as a result of a major capital event such as a sale or public offering. TheseIn unitsconnection vest in their entirety onwith the thirdCorporate anniversary of their grant date. The value of the units is recognized ratably over the vesting periodReorganization and isIPO, remeasuredall and reported at the end of each quarter based on the change in calculated value pursuant to ouroutstanding Restricted Interest PurchaseUnit Agreements.awards, Theother primarythan inputsthose usedissued by Non-Converted Subsidiaries, were converted into shares of Class B common stock, certain of which had additional vesting requirements following the IPO, and are no longer considered a liability. In addition to valuethe unvested Class B common stock issued in connection with the unitsCorporate includeReorganization and IPO, the accumulatedCompany vesting status of the issued units, the trailing four quarters of our adjusted earnings, inclusive ofhas share-based compensation expenseawards (income),in the form of restricted stock units, which are settled in shares of Class A common stock upon vesting and our outstanding capital and debt obligations as of the quarterly measurement date. The liability and corresponding expense are adjustedconsidered onequity-based a quarterly basis. Based on the number of participants and units outstanding, trailing earnings, forfeitures and other factors, we have experienced volatility in our share-based compensation liability. This calculation has in turn had a significant impact on our net income for the periods presented.awards.

Other expense,expense (income), net. Other expense, net consists primarily of gain (loss) on asset disposals.disposals and interest income earned on cash deposits.

Cost of goods sold for the year ended December 31, 20242025 increased by $146.2$171.9 million or 17.4%17.5% compared to the year ended December 31, 2023.2024. $48.1$60.7 million of the increase was attributable to the Acquisitions, with the remaining $98.1$111.2 million of the increase attributable to the organic growth of our business. Cost of goods sold as a percentage of revenue wasdecreased flat atfrom 80.1% to 79.8% year over year.

Selling, general and administrative expenses increaseddecreased $139.9$87.3 million or 83.6%(28.4)% for the year ended December 31, 20242025 compared to the year ended December 31, 2023.2024. The$117.6 increasemillion of the decrease was primarilydriven dueby todecreases in share-based compensation expenseexpense, (income), which was $131.5 million foras the year ended December 31, 2024,2024 comparedincluded tosignificant $(6.1)share-based compensation expense recognized in connection with the Corporate Reorganization and IPO. This decrease was offset by a $30.3 million for year ended December 31, 2023. Additionally, $21.8 million of the increase in selling,expense general,due and administrative expenses was driven byto an increase in average employee headcount, with $15.4$20.1 million resulting from organic growth and $6.4$10.2 million resulting from the Acquisitions. These increases were offset by recognition in 2023 of $23.5 million in non-recurring attorneys’ fees, settlements costs and other expenses associated with certain legal proceedings compared to $4.0 million in 2024. Selling, general and administrative expenses as a percentage of revenue increaseddecreased from 16.0%25.0% to 25.0%15.2% primarily as a result of the increasesdecreases in share-based compensation expense described above.

Interest expense increaseddecreased $0.4$2.6 million or 14.7%(79.7)% for the year ended December 31, 20242025 compared to the year ended December 31, 2023.2024. The increasedecrease was primarily due to increasedhaving utilizationno ofbalances outstanding under the Credit Facility (see “—Liquidity-Liquidity and Capital Resources” below), coupled with higher interest rates onduring the Company’syear outstandingended indebtedness.December 31, 2025.

Income tax expense increased by $4.6$19.9 million or 437.0% for the year ended December 31, 20242025 compared to the year ended December 31, 2023.2024. In 2024, Guardian Pharmacy Services, Inc. and its majority-owned and wholly-owned limited liability company subsidiaries reported one quarter of tax expense, post-IPO and Corporate Reorganization. Prior to the IPO, we conducted our business through Guardian Pharmacy, LLC, and its majority-owned and wholly-owned limited liability company subsidiaries, which were treated for income tax purposes as partnerships and disregarded entities, respectively.respectively As such, no income tax expense was recorded duringfor the yearfirst endedthree Decemberquarters 31,of 2023.2024.

To supplement the results presented in our consolidated financial statements in accordance with GAAP, we also present Adjusted EBITDAEBITDA, Adjusted Net Income, Adjusted EPS and Adjusted SG&A, which are financial measures not based on any standardized methodology prescribed by GAAP.

We define Adjusted EBITDA as net income (loss) before interest expense, income taxes, depreciation and amortization, as adjusted to exclude the impact of items and amounts that we view as not indicative of our core operating performance, including share-based compensation, acquisition accounting adjustments, certain legal and regulatory items, and IPO-related costs. We define Adjusted SG&A as GAAP selling, general,financing-related and administrativeother expensesactivities, adjustedpayor-reimbursement matters, and certain tax matters related to exclude the impactCorporate of share-based compensation, expenses relating to certain legalReorganization and regulatory items, and IPO-related costs. Adjusted EBITDA and Adjusted SG&A do not have a definition under GAAP, and our definition of Adjusted EBITDA and Adjusted SG&A may not be the same as, or comparable to, similarly titled measures used by other companies.IPO.

We use Adjusted EBITDAEBITDA, Adjusted Net Income, Adjusted EPS, and Adjusted SG&A to better understand and evaluate our core operating performance and trends. We believe that presenting Adjusted EBITDAEBITDA, Adjusted Net Income, Adjusted EPS, and Adjusted SG&A provides useful information to investors in understanding and evaluating our operating results, as it permits investors to view our core business performance using the same metrics that management uses to evaluate our performance.

There are a number of limitations related to the use of Adjusted EBITDAEBITDA, Adjusted Net Income, Adjusted EPS, and Adjusted SG&A rather than the most directly comparable GAAP financial measure, including:

Because of these limitations, Adjusted EBITDAEBITDA, Adjusted Net Income, Adjusted EPS, and Adjusted SG&A should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. You should consider Adjusted EBITDAEBITDA, Adjusted Net Income, Adjusted EPS, and Adjusted SG&A alongside other financial measures, including net income, diluted EPS, GAAP selling, general, and administrative expense and our other financial results presented in accordance with GAAP.

A reconciliation of Adjusted EBITDA to net income, of Adjusted Net Income to Net Income Attributable to Guardian Pharmacy Services, Inc., and a reconciliation of Adjusted SG&A to GAAP selling, general, and administrative expense, the most directly comparable GAAP financial measures, are set forth below.

We have historically financed our business and acquisitions primarily through cash from operations and borrowings under our Credit Facility (as defined below) and, more recently, sales of our Class A common stock in our IPO. We use cash in the ordinary course of our operations primarily for prescription drug acquisition costs, capital expenditures, and personnel costs. As of December 31, 2024,2025, we had $4.7$65.6 million in cash and cash equivalents. Our cash primarily consists of demand deposits held with a large regional financial institution.

On May 13, 2024, wethe Company entered into the Sixth Amendment to the Third Amended and Restated Loan and Security Agreement (the “2024 Amendment”) to the existing credit facility with Regions Bank (the “Credit Facility”). The Credit Facility provides for term loans (the “Term Loan”) and a line of credit. The 2024 Amendment extended the maturity date of the Credit Facility from April 23, 2025 to April 23, 2027. The line of credit under the Credit Facility bears an interest rate equal to the one-month Secured Overnight Financing Rate (“SOFR”) plus an additional rate of 1.80% to 2.80% based on certain financial ratios maintained by the Company. Additionally, the 2024 Amendment added a new Term Loan of $15.0 million to the Credit Facility. The interest rate of the Term Loan bears an interest rate equal to the one-month SOFR plus an additional rate of 1.80% to 2.80% based on certain financial ratios maintained by the Company. The Term Loan is payable in quarterly installments of $1.4 million through March 31, 2027, with the remaining balance of the Term Loan due in a final lump sum payment at maturity on April 23, 2027. On December 9, 2024, the Term Loan was paid down in full. The total amount available under the line of credit as of December 31, 20242025 is $40 million and we have the ability to increase our overall Credit Facility up to $75 million.

As of December 31, 2024,2025, we had no amounts of principal outstanding under the Term Loan and no amounts of borrowings outstanding under the line of credit.

We believe our existing cash and cash equivalents, expected cash fromflows provided by our operations, and the amounts available under our Credit Facility will be sufficient to meet our working capital and capital expenditure needs over at least the next 12 months and for the foreseeable future, though we may require additional capital resources in the future.

Cash flows provided by operating activities consist of our net income (loss) principally adjusted for certain non-cash items, such as depreciation and amortization, provision for losses on accounts receivable, changes in deferred tax asset, and share-based compensation expense (income).expense. Cash flows used in operating activities consist primarily of changes in our operating assets and liabilities. Subsequent to the Corporate Reorganization and IPO, income tax payments and receivables are presented as changes in operating assets and liabilities within operating activities.

Net cash provided by operating activities for the years ended December 31, 20242025 decreasedincreased by $12.9$42.3 million compared to the corresponding period in 2023.2024. The decreaseincrease was primarily due to increasesless accounts receivable growth, decreases in receivablesthe anduse inventories,of andcash decreasesfor toother operating liabilities. primarily due to certain legalliabilities, and regulatory matters accrued for in 2023 and paid for in 2024, offset by increases in net income principally adjusted for certain non-cash items, such as depreciation and amortization, provision for losses on accounts payablereceivable, changes in deferred tax asset, and share-based compensation expense, when compared to the corresponding period in 2023.2024.

Cash flows provided by financing activities consist primarily of borrowings from the Term Loan (recorded as borrowings from notes payable) and the line of credit, and proceeds from the issuancecredit and sale of shares ofour Class A common stock in connection with the IPO.stock. Cash flows used in financing activities consist primarily of repayment of borrowings from the Term Loan (recorded as repayment of notes payable) and the line of credit, and Merger Consideration payments to holderspayment of Classequity Boffering commoncosts stock.associated with the IPO and Q2 2025 Offering. Prior to the Corporate Reorganization and IPO, cash flows used in financing activities included significant distributions to equity holders (inclusive of non-controlling interests) of Guardian Pharmacy, LLC, mostly consisting of distributions to fund income tax liabilities and operational distributions, as well as return of capital.

NetCash cashflows used in financing activities were $23.6 million for the year ended December 31, 2024 decreased by $33.6 million compared to the corresponding period in 2023. The decrease is2024, primarily due to the net proceeds received from the IPO of $119.8 million and the 2024 Amendment resulting in $15.0 million being added to the Credit Facility, offset by the Merger Consideration payment to holders of Class B common stock of $55.2 million in connection with the Corporate Reorganization and IPO, adistributions $14.0to equity holders (inclusive of non-controlling interest) of $50.2 million, $23.0 million increaseof innet payments made on notes payable, $9.0 million of net payments made on the line of credit, and $34.0$4.2 million increase inof payments madeof onequity offering costs, offset by net proceeds received from the TermIPO loanof when$119.8 compared to the corresponding period in 2023.million.

Refer to Note 2 Summary of Significant Accounting Policies to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for accounting pronouncements adopted and recent accounting pronouncements not yet adopted as of the date of this Annual Report on Form 10-K.

We are a leading, highly differentiated pharmacy services company that provides an extensive suite of technology-enabled services designed to help residents of long-term health care facilities (“LTCFs”) adhere to their appropriate drug regimen, which in turn helps reduce the cost of care and improve clinical outcomes. We enter into contracts directly with LTCFs to serve as the principal pharmacy provider for their residents. In this capacity, we offer high-touch, individualized clinical, drug dispensing and administration capabilities that are tailored to serve the needs of residents in historically lower acuity LTCFs, such as assisted living facilities (“ALFs”) and behavioral health facilities (“BHFs”). Additionally, our robust capabilities enable us to serve residents in all types of LTCFs. Our services include prescription intake and adjudication management, packaging drugs into unit dose and/or multi-dose compliance packaging that are organized by date and time of administration, and electronically tracking each drug from delivery through administration to LTCF residents. We also offer training to caregivers and conduct mock audits to ensure compliance with pharmacy administration requirements, billing claims processing, government regulation and other matters. As of MarchJune 31,30, 2026, our 61 pharmacies, 54 of which are full-service, served approximately 207,000210,000 residents in approximately 8,400 LTCFs across 3839 states.

In March 2026, the Company completed an underwritten follow-on public offering (the “Q1 2026 Offering”) of 1,020,000 shares of Class A common stock at an offering price of $31.00 per share. We used all of the proceeds, net of underwriting discounts of $1,344 from the Q1 2026 Offering to purchase 1,020,000 shares of outstanding Class A common stock that were issued upon conversion of shares of our Class B common stock that were originally issued in connection with our Corporate Reorganization. The 1,020,000 shares of Class A common stock purchased by the Company were cancelled,retired, resulting in no change to the total number of Class A common stock outstanding. We did not retain any of the proceeds from the sale of shares in the offering.

Our results of operations for the three and six months ended MarchJune 31,30, 2026 and the corresponding periodperiods in 2025 have been affected by the following, among other factors, which must be understood to assess the comparability of our period-to-period financial performance and condition.

During 2025, we completed acquisitions of various pharmacy operations (the “2025 Acquisitions”). The operating results of the 2025 Acquisitions were a contributing factor in certain changes in the results of operations for the three and six months ended MarchJune 31,30, 2026 compared to the corresponding periods in 2025. Acquisition impacts are considered when the beginning of the comparative period precedes the acquisition date.

In August 2022, Congress passed the Inflation Reduction Act (the “IRA”), which, among other provisions, introduced significant drug pricing reforms aimed to reduce federal government and beneficiary spending for Medicare Part B and Part D drugs. Key provisions in this legislation include limited authority for regulators to negotiate prices for certain Medicare drugs, caps on beneficiary cost share and maximum out-of-pocket spending, and rebates on manufacturers where drug prices exceed inflation. The Centers for Medicare and Medicaid Services released initial guidance related to the implementation of this program, and has since entered three rounds of the Medicare Drug Price Negotiation Program. In January 2026, the initial ten Part D drugs that were part of IRA negotiations had their negotiated prices go into effect. The reduction in prices to the IRA-impacted drugs affect the comparability of results, specifically for revenue and cost of goods sold, for the three and six months ended MarchJune 31,30, 2026, which includesinclude the impact of the IRA, when compared against the results of the three and six months ended MarchJune 31,30, 2025, which doesdo not include the impact of the IRA. We expect IRA-related price reductions to continue impacting year-over-year comparability throughout the remainder of 2026.

Other expense (income), net. Other expense,expense (income), net consists primarily of gain (loss) on asset disposals anddisposals, interest income earned on cash deposits.deposits, and certain legal settlements.

Results of Operations for the Three and Six Months Ended MarchJune 31,30, 2025 and 2026

The following table sets forth our consolidated statements of operations data for the three and six months ended MarchJune 31,30, 2025 and 2026, respectively. The year-over-year comparison of results of operations is not necessarily indicative of results for future periods.

Revenue for the three months ended MarchJune 31,30, 2026 increased by $7.3$7.4 million or 2.2% compared to the three months ended MarchJune 31,30, 2025. Excluding the $18.5$13.3 million increase in revenue attributable to the 2025 Acquisitions, organic revenue decreased by $11.2$5.9 million, primarily attributable to pricing decreases as a result of the IRA. Although organic revenue decreased due to IRA price changes, the number of residents served increased from 189,000195,000 residents during MarchJune 2025 to 207,000210,000 residents during MarchJune 2026 and prescriptions dispensed increased from 6.77.0 million during the three months ended MarchJune 31,30, 2025 to 7.47.6 million during the three months ended MarchJune 31,30, 2026.

Cost of goods soldRevenue for the threesix months ended MarchJune 31,30, 2026 decreasedincreased $4.7by $14.7 million or (1.8)%2.2% compared to the threesix months ended MarchJune 31,30, 2025. Excluding the $14.2$31.9 million increase in cost of goods soldrevenue attributable to the 2025 Acquisitions, organic cost of goods soldrevenue decreased by $18.9$17.2 million, primarily attributable to product costpricing decreases as a result of the IRA. CostAlthough of goods sold as a percentage oforganic revenue decreased from 80.5%due to 77.3%IRA price changes, the number of residents served increased from 195,000 residents during June 2025 to 210,000 residents during June 2026 and prescriptions dispensed increased from 13.7 million during the threesix months ended MarchJune 31,30, 2026, primarily due2025 to product15.0 costmillion decreases as a result ofduring the IRA.six months ended June 30, 2026.

Selling, generalgeneral, and administrative expenses increased $7.3$3.8 million or 14.2%6.9% for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. This increase was driven by an increase in expenses due to an increase in average employee headcount, with $5.0$2.2 million resulting from organic growth and $2.3$1.6 million resulting from the 2025 Acquisitions. Selling, general and administrative expenses as a percentage of revenue increased from 15.6%16.1% to 17.4%16.9% based primarily on decreasesSelling, togeneral, and administrative expenses increasing at a higher rate than revenue during the three months ended MarchJune 31,30, 2026 as a result of the IRA price changes.

Income tax expense increased by $0.9$3.9 million for the three months ended MarchJune 31,30, 2026, when compared to the prior year. Income tax expense increased by $4.8 million for the six months ended June 30, 2026, when compared to the prior year. This increase is primarily due to the increase in income from operations for the period offset by a lower effective tax rate as a result of a decrease in the incremental share-based compensation charge in connection with the Corporate Reorganization and IPO.

We define Adjusted EBITDA as net income before interest expense,expense (income), income taxes, depreciation and amortization, as adjusted to exclude the impact of items and amounts that we view as not indicative of our core operating performance, including share-based compensation, certain legal and regulatory items, financing-related and other activities, and payor-reimbursement matters.

We have historically financed our business and acquisitions primarily through cash from operations and borrowings under our creditLoan facilityAgreement (as defined below) and, more recently, sales of our Class A common stock in our IPO. We use cash in the ordinary course of our operations primarily for prescription drug acquisition costs, capital expenditures, and personnel costs. As of MarchJune 31,30, 2026, we had $64.9$89.8 million in cash and cash equivalents. Our cash primarily consists of demand deposits held with a large regional financial institution.

On May 13,21, 2024,2026, the Company entered into the SixthEighth Amendment (the “Amendment”) to the Third Amended and Restated Loan and Security Agreement dated as of April 23, 2018 (as amended from time to time, the “2024Loan AmendmentAgreement”) to the existing credit facility, with Regions Bank (the “Credit Facility”).Bank. The CreditLoan FacilityAgreement provides for both term loansloan (the “Term Loan”)commitments and arevolving lineloan of credit.commitments. The 2024 Amendment extendedamended the Loan Agreement to, among other things, (i) replace references to Guardian Pharmacy, LLC with the Company as borrower and make certain related modifications to reflect the borrower’s status as a public company, (ii) extend the maturity date of the Creditrevolving Facilityloan commitments from April 23, 20252027 to AprilMay 23,21, 2027.2030 and (iii) permit the Company to add incremental term loans and/or increase the revolving loan commitments thereunder in an aggregate amount not to exceed $40 million. The linerevolving ofloan creditcommitment under the CreditLoan FacilityAgreement bears an interest rate equal to the one-month Secured Overnight Financing Rate (“SOFR”) plus an additional rate of 1.80% to 2.80% based on certain financial ratios maintained by the Company. The total amount available under the line ofrevolving credit as of March 31, 2026facility is $40 millionmillion, and wethe haveCompany has the ability to increase ourits overall Creditborrowing Facility upcapacity to $75$80 million.million through additional revolving commitments and/or incremental term loans. As of June 30, 2026, the Company was in compliance with all required debt and financial covenants under the Loan Agreement.

As of MarchJune 31,30, 2026, we had no amounts of principal outstanding under theany Termterm Loanloan commitments and no borrowings outstanding under theany linerevolving ofloan credit.commitments.

We believe our existing cash and cash equivalents, expected cash flows provided by our operations, and the amounts available under our CreditLoan FacilityAgreement will be sufficient to meet our working capital and capital expenditure needs over at least the next 12 months and for the foreseeable future, though we may require additional capital resources in the future.

For the threesix months ended MarchJune 31,30, 2025 and 2026, respectively, our net cash flows provided by / (used in) were as follows:

Net cash provided by operating activities for the threesix months ended MarchJune 31,30, 2026 decreased $11.5$1.4 million compared to the corresponding period in 2025. The decrease was primarily due to an increase in accounts receivable and a decrease in accounts payable, driven by timing differencesdifference in working capital associated with the IRA, offset by an increase in other current liabilities when compared to the corresponding period in 2025.2025, and $8.5 million received as a part of a payor-related legal settlement during the six months ended June 30, 2026.

Net cash used in investing activities for the threesix months ended MarchJune 31,30, 2026 decreased by $0.8$9.5 million compared to the corresponding period in 2025. The decrease was primarily due to the decrease in cash paidpayments for purchasesacquisitions of property plant and equipment of $0.8$8.9 million compared to the corresponding period in 2025.

Net cash used in financing activities for the threesix months ended MarchJune 31,30, 2026 decreased by $0.6$1.9 million compared to the corresponding period in 2025. The decrease is primarily due to decreases in payments of equity offering costs, partially offset by increased distributions to non-controlling interests.