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

Our revenue and profitability willcould decline if the pharmaceutical industry undergoes certain changes, including limiting or discontinuing research, development, production and marketing of the pharmaceuticals that are compatible with the services we provide.

Changes in our relationships with pharmaceutical suppliers,manufacturers, including changes in drug availability or pricing, could adversely affect our business and financial results.

We have contractual relationships with pharmaceutical manufacturers to purchase the pharmaceuticals that we dispense. In order to have access to these pharmaceuticals, and to be able to participate in the launch of new pharmaceuticals, we must maintain a good working relationship with these manufacturers. Most of the manufacturers of the pharmaceuticals we sell have the right to cancel their supply contracts with us without cause and after giving only minimal notice. Any changes to these relationships, including, but not limited to, the loss of a manufacturer relationship, drug shortages or changes in pricing, could have an adverse effect on our business and financial results. For example, in October 2024, we received notice of a manufacturer’s intention to significantly reduce the spread at which we procure a certain therapy relative to drug reference prices beginning in early 2025, which is expected to negatively impact gross profit by approximately $60 million to $70 million dollars in 2025.

For the year ended December 31, 2024,2025, approximately 58%68% of our pharmaceutical and medical supply purchases were from threefour vendors. Most of the pharmaceuticals that we purchase are available from multiple sources,distributors, and we believe they are available in sufficient quantities to meet our needs and the needs of our patients. We keep safety stock to ensure continuity of service for reasonable, but limited, periods of time. Should a supply disruption result in our inability to obtain especially high margin drugs and compound components necessary for patient care, our consolidated financial statements could be negatively impacted.

Technology, including the ability to capture and report outcomes, is also an important component of our business as we continue to utilize new and better channels to communicate and interact with our clients, members and business partners. If ourwe competitorsfail areto moresuccessfully successfulintegrate thanAI us in employing new technology,into our abilityplatform and business processes, or if we fail to attractkeep newpace clients,with retainrapidly existingevolving clientsAI technological developments, including attracting and operateretaining efficientlytalented AI developers and programmers, we may suffer.face Any significant shifts in the structure of the healthcare products and services industry in general could alter the industry dynamics and adversely affect our ability to attract or retain clients. Our failure to anticipate or appropriately adapt to changes in the industry could negatively impact oura competitive position and adversely affect our business and results of operations.disadvantage.

Changes in future business conditions could cause business investments and/or recorded goodwill to become impaired, and our financial condition and results of operations could suffer if there is an impairment of goodwill.

Our acquisitions resulted in significant goodwill reported on our financial statements. Goodwill results when the purchase price exceeds the fair value of the identifiable tangible and intangible assets and liabilities acquired. We may not realize the full value of this goodwill. As such, we evaluate on at least an annual basis whether events and circumstances indicate that all or some of the carrying value of goodwill is no longer recoverable, in which case we would recognize the unrecoverable goodwill as a charge against our earnings. The Company completes its goodwill impairment test annually in the fourth quarter on a qualitative basis. If the fair value is more likely than not less than the carrying value, a quantitative assessment will be performed. When evaluating goodwill for potential impairment on a quantitative basis, we compare the fair value of our reporting units to their respective carrying amounts. We estimate the fair value of our reporting units using the income approach. If the carrying amount of a reporting unit exceeds its estimated fair value, a goodwill impairment loss is recognized in an amount equal to the excess to the extent of the goodwill balance. The income approach requires us to estimate a number of factors for our reporting units, including projected future operating results, economic projections, anticipated future cash flows, and discount rates. The fair value determined using the income approach is then compared to marketplace fair value data from within a comparable industry grouping for reasonableness. Because of the significance of our goodwill, any future impairment could result in material non-cash charges to our results of operations, which could have an adverse effect on our financial condition and results of operations.

Federal actions and legislation maycould reduce reimbursement rates from governmental payers and adversely affect our results of operations.

In recent years, Congress has passed legislation reducing payments to healthcare providers. The Budget Control Act of 2011, as amended, requires automatic spending reductions to reduce the federal deficit, including Medicare spending reductions of up to 2% per fiscal year that extend through 2027. The Center for Medicare & Medicaid Services (“CMS”) began imposing a 2% reduction on Medicare claims on April 1, 2013. The Affordable Care Act provides for material reductions in the growth of Medicare program spending. The 21st Century Cures Act (the “Cures Act”) significantly reduced the amount paid by Medicare for drug costs, while delaying the implementation of a clinical services payment, although Congress also passed a temporary transitional service payment that took effect January 1, 2019. In addition, from time to time, CMS revises the reimbursement systems used to reimburse healthcare providers, which may result in reduced Medicare payments. Most recently, the Inflation Reduction Act of 2022 (the “IRA”) granted CMS the authority to negotiate drug prices under Medicare Part D, with price controls taking effect in 2026.D. In August 2024, CMS announced the results of its first round of drug price negotiations, which included a 66% reduction from 2023 list price for one therapy in our portfolio.portfolio Theeffective manufacturerJanuary of this therapy subsequently informed us in October 2024 of its intent to significantly reduce our procurement spread relative to drug reference prices beginning in early 2025.2026. The direct and indirect impact IRA-mandated price negotiations and future CMS determinations is expected to negatively impact our results of operations.

The reimbursement process for the services we provide is complex, resulting in delays between the time we bill for a service and receipt of payment that can be significant. Reimbursement and procedural issues often require us to resubmit claims multiple times and respond to multiple administrative requests before payment is remitted. The collection of accounts receivable is challenging and requires constant focus and involvement by management and ongoing enhancements to information systems and billing center operating procedures. While management believes that our controls and processes are satisfactory, there can be no assurance that collections of accounts receivable will continue at historical rates. The risks associated with third-party payers and the inability to collect outstanding accounts receivable could have a material adverse effect on our liquidity, cash flows and results of operations. For example, in the first quarter of 2024, Change Healthcare, a subsidiary of UnitedHealth Group, experienced a cybersecurity incident that disrupted its operations, causing us to disconnect from certain Change Healthcare applications until the end of the quarter, preventing us from processing claims for services and reducing our cash flows from operations in the first quarter of 2024. The majority of previously unprocessed claims were recognized in the second quarter of 2024. While we have substantially addressed the backlog and resumed normal billing operations as of the fourth quarter of 2024, we continue to evaluate the impact of the incident on our broader revenue cycle management processes.

Competition to provide healthcare services, efforts by traditional Third-Party Payers to contain or reduce healthcare costs, and the increasing influence of managed care payers such as HMOs, hashave resulted in reduced rates of reimbursement for home infusion and specialty pharmacy services. Changes in reimbursement policies of governmental Third-Party Payers, including policies relating to Medicare, Medicaid and other federal and state funded programs, could reduce the amounts reimbursed to our customers for our products and, in turn, the amount these customers would be willing to pay for our products and services, or could directly reduce the amounts payable to us by such payers. Pricing pressures by Third-Party Payers may continue, and these trends may adversely affect our business.

The operationoperations of compounding pharmacies are regulated by federal and state governmental agencies. We believe that our compounding is performed in safe environments, and we have clinically appropriate policies and procedures in place. We do not believe that our current compounding practices qualify us as an outsourcing facility because we only compound pursuant to a patient-specific prescription and do so in compliance with the applicable United States Pharmacopeia, Chapter 797 (“USP 797”) standards and applicable state pharmacy laws. Should state regulators or the FDA disagree, or should our business practices change to qualify us as an outsourcing facility, there is risk of regulatory action and/or increased resources required to comply with federal requirements imposed pursuant to the Drug Quality & SafetySecurity Act (“DQSA”) on outsourcing facilities that could significantly increase our costs or otherwise affect our results of operations. Furthermore, we cannot predict the overall impact of increased scrutiny on compounding pharmacies.

The (“DQSA”) amended the Federal Drug & Cosmetic Act (“FDCA”) to grant the FDA additional authority to regulate and monitor the manufacturing of compounded pharmaceutical drugs. In 2013, Congress passed the DQSA, which creates a new category of compounding facilities called outsourcing facilities that are regulated by the FDA. The Company complies with all federal and state regulations, as well as all PCAB Accreditation Standards for Sterile and Non-Sterile Pharmacy Compounding, and pursues accreditation from quality associations. The Company believes it complies in all material respects with all applicable requirements of a non-outsourcing-facility pharmacy, as outlined in Section 503A of the FDCA. TitleIn IIaddition, ofthe thisCompany measure,believes knownit ascomplies in all material respects with the Drug Supply Chain Security Act (“DSCSA”), establishedwhich requirementsincludes in November 2013 to facilitate the tracing of prescription drug products through the pharmaceutical supply distribution chain. These requirements included a 10-year timeline culminating in the building of "an electronic, interoperable system to identify and trace certain prescription drugs as they are distributed in the United States.” The law’s track and trace requirements are applicable to manufacturers, wholesalers, re-packagers and dispensers (e.g., pharmacies) of prescription drugs. The Company is currently materially compliant with the DSCSA provisions currently in effect. As an eligible trading partner, the Company believes it is materially compliant with the additional provisions of DSCSA, which requires the electronic receipt and exchange of transaction information (with specific product identifiers for each package) and transaction statements. Please note that the FDA has issued an exemption from the enhanced drug distribution security requirements of section 582 of the FDCA for eligible trading partners until November 27, 2025. These regulatory measures, future DSCSA regulatory measures and the potential for increased DSCSA enforcement by the FDA could increase pharmacy costs. Noncompliance with these regulations could have an adverse impact on our reputation and profitability.

As of December 31, 2024,2025, we had $1,131.6$1,176.3 million of outstanding borrowings, including (i) $631.6$676.3 million under our First Lien Term Loan (as defined herein) and (ii) $500.0 million under our 4.375% Senior Unsecured Notes due 2029 (the “Senior Notes”). All obligations under the First Lien Term Loan are secured by first-priority perfected security interests in substantially all of our assets and the assets of our subsidiaries, subject to permitted liens and other exceptions. Our indebtedness, or any additional indebtedness we may incur, could require us to divert funds identified for other purposes for debt service and impair our liquidity position. If we cannot generate sufficient cash flow from operations to service our debt, we may need to refinance our debt, dispose of assets or issue equity to obtain necessary funds. We do not know whether we will be able to take any of these actions on a timely basis, on terms satisfactory to us or at all.

Our level of indebtedness may place us at a competitive disadvantage to our competitors that are not as highly leveraged. Fluctuations in interest rates can increase borrowing costs. Increases in interest rates may directly impact the amount of interest we are required to paypay, as our First Lien Term Loan has an applicable interest rate of Term SOFR plus 1.75%, and reduce earnings accordingly. In addition, developments in tax policy, such as the disallowance of tax deductions for interest paid on outstanding indebtedness, could have an adverse effect on our liquidity and our business, financial condition and results of operations. Further, our credit agreements and indenture contain customary affirmative and negative covenants and certain restrictions on operations that could impose operating and financial limitations and restrictions on us, including restrictions on our ability to enter into particular transactions and to engage in other actions that we may believe are advisable or necessary for our business. Our First Lien Term Loan is also subject to mandatory prepayments in certain circumstances and requires a prepayment of a certain percentage of our excess cash flow. This excess cash flow payment, and future required prepayments, will reduce our cash available for investment in our business.

Despite our indebtedness, weWe may still incur significantly moreadditional debt, which could exacerbateincrease the risks associated with our substantial leverage.

Our ability to make scheduled payments or to refinance outstanding debt obligations depends on our financial and operating performance, which will be affected by prevailing economic, industry and competitive conditions and by financial, business and other factors beyond our control. We may not be able to maintain a sufficient level of cash flow from operating activities to permit us to pay the principal, premium, if any, and interest on our indebtedness. Any failure to make payments of interest and principal on our outstanding indebtedness on a timely basis would likely result in a reduction of our credit rating, which would also harm our ability to incur additional indebtedness.

If our cash flow and capital resources are insufficient to fund our debt service obligations, we may be required to reduce or delay capital expenditures, sell assets, seek additional capital or seek to restructure or refinance our indebtedness. Any refinancing of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. In the absence of such cash flow and resources, we could face substantial liquidity problems and might be required to sell material assets or operations to attempt to meet our debt service obligations. The financing documents governing our First Lien Term Loan, Revolver Facility (as defined herein) and our Senior Notes restrict our ability to conduct asset sales and/or use the proceeds from asset sales. We may not be able to consummate these asset sales to raise capital or sell assets at prices and on terms that we believe are fair and any proceeds that we do receive may not be adequate to meet any debt service obligations then due. If we cannot meet our debt service obligations, the holders of our indebtedness may accelerate such indebtedness and, to the extent such indebtedness is secured, foreclose on our assets. In such an event, we may not have sufficient assets to repay all of our indebtedness.

Our third amended and restated certificate of incorporation contains provisions that could make it more difficult for a third party to acquire us, even if doing so might be beneficial to our stockholders. Among other things, these provisions:

•allow us to authorize the issuance of undesignated preferred stock, the terms of which may be established and the shares of which may be issued without stockholder approval, and which may include supermajority voting, special approval, dividend, or other rights or preferences superior to the rights of stockholders and which could depress the price of our common stock;

Our third amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us.

Pursuant to our third amended and restated certificate of incorporation, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees and stockholders to us or our stockholders, (iii) any action asserting a claim against us arising pursuant to any provision of the DGCL or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, our third amended and restated certificate of incorporation or our bylaws or (iv) any other action asserting a claim against us that is governed by the internal affairs doctrine; provided that, for the avoidance of doubt, the forum selection provision that identifies the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation, including any “derivative action”, will not apply to suits to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Our third amended and restated certificate of incorporation will further provide that any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock is deemed to have notice of and consented to the provisions of our third amended and restated certificate of incorporation described above. The forum selection clause in our third amended and restated certificate of incorporation may have the effect of discouraging lawsuits against us or our directors and officers and may limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us.

We cannot guarantee that our stock repurchase program will be fully implemented or that it will enhance long-term stockholder value.

We cannot guarantee that our stock repurchase program will be fully implemented or that it will enhance long-term stockholder value. In January 2025,2026, the Company’s Board of Directors approved aan newincrease stockto its 2025 share repurchase program authorizingauthorization the repurchase of up tofrom $500 million ofto our$1 common stock.billion. The repurchase program does not have an expiration date, and we are not obligated to repurchase a specified number or dollar value of shares, on any particular timetable or at all. There can be no assurance that we will repurchase stock at favorable prices. The repurchase program may be suspended or terminated at any time and, even if fully implemented, may not enhance long-term stockholder value.

As a result of operating in the home infusion industry, our business is subject to inherent risk of claims, losses and potential lawsuits alleging medical professional liability incidents involving our employees that are likely to occur in a patient’s home.home or alternate site. We maintain professional liability insurance to provide coverage to us and our subsidiaries against these risks. A successful product or professional liability claim in excess of our insurance coverage could harm our consolidated financial statements. Various aspects of our business may subject us to litigation and liability for damages. For example, a prescription drug dispensing error could result in a patient receiving the wrong amount of medication, which could lead to personal injury or death. Our business and consolidated financial statements could suffer if we pay damages or defense costs in connection with a claim that is outside the scope of any applicable contractual indemnity or insurance coverage.

Our insurance coverage also includes property and business interruption liability, cyber liability, clinical trials liability, crime liability, auto liability, intercompany transit liability, workers’ compensation, employers’ liability, executive liability policies (employment practices liability, fiduciary liability, directors’ and officers’ liability), umbrella/excess liability, storage tank liability and general liability with varying limits. We cannot assure that the insurance we maintain will satisfy claims made against us or that insurance coverage will continue to be available to us at commercially reasonable rates, in adequate amounts or on satisfactory terms or at all. Claims made against us will be subject to the terms, conditions and exclusions of the insurance policies we maintain. Any claims made against us, regardless of their merit or eventual outcome, could damage our reputation and business.

Medicare,Medicare and other federal and state payers,payers account for a portion of our revenues. During economic downturns and periods of stagnant or slow economic growth, federal and state budgets are typically negatively affected, resulting in reduced reimbursements or delayed payments by the federal and state government healthcare coverage programs in which we participate, including Medicare, Medicaid, and other federal or state assistance plans. Government programs could also slow or temporarily suspend payments, negatively impacting our cash flow and increasing our working capital needs and interest payments. We have seen, and believe we will continue to see, Medicare and state Medicaid programs institute measures aimed at controlling spending growth, including reductions in reimbursement rates.

We may pursue acquisitions ofor strategic investments in, or strategicalliances relationships withwith, businesses and technologies. Acquisitions may entail numerous risks, including difficulties in assessing values for acquired businesses, intangible assets and technologies, difficulties in the assimilation of acquired operations and products, diversion of management’s attention from other business concerns, assumption of unknown material liabilities of acquired companies, amortization of acquired intangible assets that could reduce future reported earnings, and potential loss of clients or key employees of acquired companies. We may not be able to successfully integrate the operations, personnel, services or products that we have acquired or may acquire in the future. Strategic investments may also entail some of the risks described above. If these investments are unsuccessful, we may need to incur charges against earnings.

Our business depends onupon our information systems. A cyber-attack, security breach or our inability to effectively integrate, manage and keep our information systems secure and operational could disrupt our operations.

Cybersecurity refers to the combination of technologies, processes and procedures established to protect information technology systems and data from unauthorized access, attack, or damage.damage as well as the development of a company culture of security and data protection. The Company relies on its information systems to provide security for processing, transmitting, and storing confidential information about patients, customers, and personnel, such as names, addresses and other individually identifiable information protected by HIPAA and other privacy laws. Cybersecurity risks could compromise our information and expose us to liability, which may harm our ability to operate effectively and may cause harm to our business and reputation. Cyber incidents can result from deliberate attacks or unintentional events. The regulatory environment surrounding information security and privacy is increasingly demanding, with the frequent imposition of new and changing requirements. Compliance with changes in privacy and information security laws and with rapidly evolving industry standards may result in the Company incurring significant expense due to increased investment in technology and the development of new operational processes.

We may experience interruptions, delays and outages in service and availability from time to time, including infrastructure changes, human or software errors, upgrade disruptions and capacity constraints. We have not experienced any material known attacks on our information technology systems that compromised any confidential information. We maintain our information technology systems with safeguards against cyber-attacks including passive intrusion protection,prevention and detection, firewalls and viruscontinuous detectionmonitoring software.of our environment for viruses and malware. In addition, we provide our employees with extensive training on best ways to protect our patient information, including, among others, avoiding phishing emails and sharing access to sensitive information on a need-only basis. However, these safeguards do not ensure that a significant cyber-attack could not occur. Although we have taken steps to protect the security of our information technology systems and the data maintained in those systems, it is possible that our safety and security measures will not prevent the systems’ improper functioning or damage or the improper access or disclosure of personal health information or personally identifiable information such as in the event of cyber-attacks.a cyber-attack or employee error or misuse of the system.

Security breaches, including physical or electronic break-ins, computer viruses, attacks by hackers and similar breaches can create system disruptions or shutdowns or the unauthorized use or disclosure of confidential information. If personalpersonally identifiable information or protected health information is improperly accessed, tampered with or disclosed as a result of a security breach, we may incur significant costs to notify, and mitigate potential harm to the affected individuals,individuals. and weWe may be subject to sanctions and civil or criminal penalties if we are found to be in violation of the privacy or security rules under HIPAA or other federal or state laws protecting confidential personal information. In addition, a security breach of our information technology systems could damage our reputation, subject us to liability claims or regulatory penalties for compromised personal information and could have a materially adverse effect on our business, financial condition, and results of operations.

Our information technology infrastructure includes hosting services provided by third parties. While we believe these third parties are high-performing organizations with secure platforms and customary certifications, they could suffer a security breach or business interruption, which in turn could impact our operations negatively. In addition, changes in pricing terms charged by our technology vendors may adversely affect our financial performance.

If we fail to successfully integrate AI into our platform and business processes, or if we fail to keep pace with rapidly evolving AI technological developments, including attracting and retaining talented AI developers and programmers, we may face a competitive disadvantage. At the same time, theThe use or offering of AI technologies may result in new or expanded risks and liabilities, including enhanced government or regulatory scrutiny, litigation, compliance issues, ethical concerns, confidentiality, reputational harm and security risks. It is not possible to predict all of the risks related to the use of AI and changes in laws, rules, directives, and regulations governing the use of AI may adversely affect our ability to develop and use AI or subject us to legal liability. The cost of complying with laws and regulations governing AI could be significant and would increase our operating expenses, which could adversely affect our business, financial condition and results of operations. Further, market demand and acceptance of AI technologies are uncertain, and we may be unsuccessful in efforts to further incorporate AI into our processes.

Acts of God, such as major weather disturbances,disturbances or other force majeure events, could disrupt our business.

Acts of God, such as major weather disturbances, natural disasters, or other force majeure events, could disrupt our operations, supply chain, and the services we provide to patient.patients. Our business relies on a network of prescribers, providers, patients and facilities that can be negatively impacted by local weather disturbances and other force majeure events. For example, in anticipation of major weather events, patients with impaired health may be moved to alternate sites. After a major weather event, availability of electricity, clean water and transportation can impact our ability to provide service in patients’ homes. Additionally, such events could impact key suppliers or vendors, disrupting the services or materials they provide to us. Climate change, or legal, regulatory or market measures to address climate change, could adversely affect our business and results of operations. In addition, acts of God and other force majeure events may cause a reduction in our business or increased costs, such as increased costs in our operations as we incur overtime charges or redirect services to other locations, delays in our ability to work with payers, hospitals, physicians and other strategic partners on new business initiatives, and disruption to referral patterns as patients are moved out of facilities affected by such events or are unable to return to sites of service in patients’ homes.

Interest Expense, Net. Interest expense consists principally of interest and fee payments on the Company’s outstanding borrowings under the ABL Facility, First Lien Term Loan, Revolver Facility, Senior Notes, amortization of discount and deferred financing fees, payments associated with the interest rate cap, and interest income earned on cash and cash equivalents. Refer to the “Liquidity and Capital Resources” section below for further discussion of these outstanding borrowings.

Change in Unrealized (Loss) Gain on Cash Flow Hedge, Net of Income Tax Benefit (Expense). Change in unrealized (loss) gain on cash flow hedge, net of income tax benefit (expense), consists of the (loss) gain associated with the changes in the fair value of derivatives designated as hedging instruments related to the interest rate cap, net of income taxes.

The increase in net revenue during the year ended December 31, 20242025 was primarily driven by organic growth in the Company’s portfolio of therapies, consisting of acute revenue that had high single digitsmid-teens growth relative to the prior year while chronic revenue grew in the highlow teens.double-digits. Acute growth was largely driven by the impact of shifts in the competitive landscape, which increased the volume of patient service. The increase in cost of revenue was primarily driven by the growth in revenue,revenue and therapy mix, and acute drug supply chain disruption, as well as the comparable impact of certain temporary favorable therapy procurement dynamics in the prior year.mix. The decrease in gross profit margin was primarily due to themix, launch ofincluding certain new higher cost therapies included within chronic growth (including rare and orphan therapies) andas towell theas samebiosimilar comparableadoption, impactpartially ofoffset by certain temporarymitigation favorableefforts procurement dynamicsexecuted in the priorfirst year that did not continue into 2024. Additionally, the Company received noticequarter of a2025. manufacturer’sManagement intentionexpects tothese significantly reduce the spread at which the Company procures a certain therapy relative to drug reference prices beginning in early 2025, which is expecteddynamics to negatively impact gross profit by approximately $60$25 million to $70$35 million in 2025.2026.

The increase in selling, general and administrative expenses during the year ended December 31, 20242025 was primarily due to an increaseinvestment in salaries,internal benefits,resources and other general costs to support theboth ongoing business; however,needs theseas well as future business growth. Selling, general and administrative expenses have declined as a percentage of revenue to 12.1% for the year ended December 31, 2025 compared to 12.6% for the year ended December 31, 2024 compared to 14.1% for the year ended December 31, 2023,2024, due to the Company’s focus on leveraging existing infrastructure to control spending. The increase in depreciation and amortization expense was primarily due to the Intramed Plus acquisition. See Note 3, Business Acquisitions, of the consolidated financial statements for further information.

The decreaseincrease in interest expense, net during the year ended December 31, 20242025 was primarily attributable to additionalless interest income generated from our cash and cash equivalents,equivalents due to lower interest rates, partially offset by ana increasedecrease in the interest rate on the Company’s First Lien Term Loan principal balance,Loan, compared to the year ended December 31, 2023.2024. See Note 11, Indebtedness, of the consolidated financial statements for further information.

Net comprehensive income decreased to $200.6 million for the year ended December 31, 2025, compared to net comprehensive income of $207.9 million for the year ended December 31, 2024, compared to net comprehensive income of $260.9 million for the year ended December 31, 2023, primarily as a result of the changesfactors described in netthe incomeabove discussed above.sections.

For the years ended December 31, 20242025 and 2023,2024, the Company’s primary sources of liquidity were cash and cash equivalents of $412.6$232.6 million and $343.8$412.6 million, respectively. As of December 31, 2024,2025, the Company had $395.9$396.0 million of borrowings available under its credit facilities (net of $4.1$4.0 million undrawn letters of credit issued and outstanding), described further below. During the yearyears ended December 31, 2023,2025 and 2024, the Company’s positive cash flows from operations have enabled investments in pharmacy, infusion suites, and information technology infrastructure to support growth and create additional capacity in the future, as well as to pursue acquisitions and sharerepurchases repurchases.of Company shares.

The Company’s primary uses of cash and cash equivalents include supporting our ongoing business activities, investment in capital expenditures in both facilities and technology, and the pursuit of acquisitions and share repurchases. Ongoing operating cash outflows are associated with procuring and dispensing drugs, personnel and other costs associated with servicing patients, as well as paying cash interest on outstanding debt and cash taxes. Ongoing investing cash flows are primarily associated with capital projects and business acquisitions, the improvement and maintenance of our pharmacy facilities and investment in our information technology systems. Ongoing financing cash flows are primarily associated with the quarterly principal payments on itsour outstanding debt, along with potential future share repurchases.

Our business strategy includes thestrategic deployment of capital to pursueinternal investments in resources, infrastructure, and technologies to support future growth, the pursuit of strategic tuck-in and adjacent acquisitions that complement our existing operations.operations and the pursuit of share repurchases. We continue to evaluate acquisition opportunities and view acquisitions as a key part of our growth strategy. The Company historicallyhas hasgenerally funded its acquisitions with cash and cash equivalents with the exception of the Merger.equivalents. The Company may require additional capital in excess of current availability in order to complete future acquisitions. It is impossible to predict the amount of capital that may be required for acquisitions, and there is no assurance that sufficient financing for these activities will be available on acceptable terms.

The Company’s ability to make principal and interest payments on any borrowings under our credit facilities and our ability to fund planned capital expenditures will depend on our ability to generate cash and cash equivalents in the future, which to a certain extent, is subject to general economic, financial, competitive, regulatory and other conditions. Based on our current level of operations and planned capital expenditures, we believe that our existing cash and cash equivalents balances andbalances, expected cash flows generated from operationsoperations, and credit facility will be sufficient to meet our operating requirements for at leastover the next 12 months and beyond. We may require additional borrowings under our credit facilities and alternative forms of financings or investments to achieve our longer-term strategic plans.

On MaySeptember 8,22, 2024,2025, the Company entered into the thirdfourth amendment (“the Fourth Amendment”) to the amended and restated First Lien Credit Agreement (the “Credit Agreement”) dated as of October 27, 2021 (the “Third Amendment”).2021. The ThirdFourth Amendment, among other things, (i) providesrefinances forthe anexisting additionalterm $50.0loans millionwith a new class of incrementalterm loans (the “First Lien Term Loan indebtedness and (ii”), reduces the interest rate on the First Lien Term Loan from Term Secured Overnight Financing Rate (“SOFR”) (including a credit spread adjustment) plus 2.75%2.25% to Term SOFR plus 2.25%1.75% and removesextends the creditmaturity spreaddate adjustmentof with respect to suchthe First Lien Term Loan.Loan to September 22, 2032, (ii) provides for an additional $49.6 million of incremental First Lien Term Loan indebtedness, and (iii) extends the maturity date of the revolving credit commitments under the Credit Agreement (the “Revolver Facility”) to September 22, 2030.

TheUnder the Fourth Amendment, the principal balance of the First Lien Term Loan is repayable in quarterly installments of $1.6$1.7 million plus interest, with a final payment of all remaining outstanding principal due on OctoberSeptember 27,22, 2028.2032. The quarterly principal payments commenced in March 2022. Under the Third Amendment, interestInterest on the First Lien Term Loan is payable monthly on either (i) the SOFR (with a floor of 0.50% per annum) plus an applicable margin of 2.25%1.75% for Term SOFR Loans (as such term is defined in the Third Amendment); or (ii) a base rate determined in accordance with the Third Amendment,rate, plus 1.25%0.75% for Base Rate Loans (as such term is defined in the Third Amendment).Loans.

The decreaseincrease in cash used in investing activities during the year ended December 31, 20242025 was primarily duerelated to priorthe yearIntramed Plus acquisition activity with no comparable activity during the year ended December 31, 2024. See Note 3, Business Acquisitions and Divestitures, of the consolidated financial statements for more information.

The Company prepares its consolidated financial statements in accordance with United States generally accepted accounting principles (“GAAP”), which require the Company to make estimates and assumptions. The Company evaluates its estimates and judgmentsassumptions on an ongoing basis. Estimates and judgmentsassumptions are based on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgmentsassumptions about the carrying values of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the period presented. The Company’s actual results may differ from these estimates, and different assumptions or conditions may yield different estimates.

The following discussion is not intended to be a comprehensive list of all the accounting policies, estimates or judgmentsassumptions made in the preparation of our financial statements. A discussion of our significant accounting policies, including further discussion of the accounting policies described below, can be found in Note 2, Summary of Significant Accounting Policies, within the notes to the consolidated financial statements included in Item 8 of this Annual Report.

After applying the criteria from ASC 606, an allowance for doubtful accounts is established only as a result of an adverse change in the payers’ ability to pay outstanding billings. As of December 31, 20242025 and 2023,2024, the Company had noan immaterial allowance for doubtful accounts. The Company recorded an allowance for implicit price concessions based on its historical experience of additional revenue being recorded or revenue being written off when amounts received are greater than or less than the originally estimated net realizable value. The detailed assessments included, among other factors, current over/under payments which had not yet been applied to an account, historical contractual adjustments, and historical payments. Contractual allowance estimates are adjusted to actual amounts as cash is received and claims are settled.

The Company accounts for business acquisitions in accordance with ASC Topic 805, Business Combinations (“ASC 805”), with assets and liabilities being recorded at their acquisition date fair values and goodwill being calculated as the purchase price in excess of the net identifiable assets. The application of ASC 805 requires management to make estimates and assumptions when determining the acquisition date fair values of acquired assets and assumed liabilities. Management’s estimates and assumptions include, but are not limited to, the future cash flows an asset is expected to generate and the weighted-average cost of capital. See Note 3, Business Acquisitions and Divestitures,Acquisitions, for further discussion of business acquisitions.

Option Care Health, and its wholly-owned subsidiaries, provide infusion therapy and other ancillary health care services through a national network of 8786 full service pharmacies,pharmacies includingand 73 with ambulatory infusion suites. Additionally, the Company has 111 stand-alone187 ambulatory infusion suites, including 2832 with advanced practitioner capabilities. Our services are provided in coordination with, and under the direction of, the patient’s physician. Our multidisciplinary team of clinicians, including pharmacists, nurses, and dietitians work with the physician to develop a plan of care suited to each patient’s specific needs. We provide home infusion services consisting of anti-infectives, nutrition support, therapies for neurological disorders and chronic inflammatory disorders, immunoglobulin therapy, and other therapies for chronic and acute conditions. Our national footprint enables us to collaborate with health systems and national payers to provide high quality care at an appropriate cost in a comfortable setting. We have established key relationships that allow us access to local resources to ensure responsiveness to our patients’ needs. At the center of everything we do is the patient. This is the driving force behind all of our actions and the partnerships that we have across the healthcare ecosystem.

The following results of operations include the accounts of Option Care Health and our subsidiaries for the three and six months ended MarchJune 31,30, 2026 and 2025.

The following table presents Option Care Health’s consolidated results of operations for the three and six months ended MarchJune 31,30, 2026 and 2025 (in thousands, except for percentages):

Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025

The following tables present selected consolidated comparative results of operations from Option Care Health’s unaudited condensed consolidated financial statements for the three months ended MarchJune 31,30, 2026 and 2025.

The increase in net revenue was primarily driven by highcontinued single-digitstrong growth in the Company’sCompany's acute portfolio of therapies, whilewhich saw high single-digit growth over the chronic portfolio of therapies were down slightly compared to prior year.year, Acutereflecting growthongoing wassuccess driven by a focus onin maintaining referral source and payer relationships along withand strong partnerships with hospitals and health systems. The Company’s chronic portfolio revenueof therapies was primarilyflat impactedversus the prior year. This was driven by shiftsgrowth in both the IG/neuro and rare and orphan portfolio and offset by a decline within the chronic inflammatory disease (“"CID”") portfolio, relatedprimarily due to increased patient attrition and unfavorable therapy mix, as well as slower than expected growth of certain other specialty therapies.mix. Management nowcontinues expectsto theexpect CIDCID-related dynamics to negatively impact gross profit by approximately $55 million induring 2026. The increase in cost of revenue was primarily driven by the growth in revenue and therapy mix, while the decrease in gross profit margin was primarily due to headwinds on the CID portfolio.

The Company recorded incomeIncome tax expense ofincreased $15.7$1.7 millionmillion, andor $16.89.5%, to $20.1 million for the three months ended MarchJune 31,30, 2026 andcompared 2025,to respectively,$18.3 which represents an effective tax rate of 25.7% and 26.5%, respectively. The variance in the Company’s effective tax rate of 25.7% and 26.5%million for the three months ended MarchJune 31,30, 2025. The Company’s effective tax rates were 27.1% and 26.6% for the three months ended June 30, 2026 and 2025, respectively, compared to the U.S. federal statutory rate of 21%,21.0%. asThe wellCompany’s aseffective year-over-yeartax changes,rate wasfor the three months ended June 30, 2026 and three months ended June 30, 2025 were higher than the U.S. federal statutory rate primarily attributabledue to state income taxes in multiple jurisdictions and various non-deductible expenses.

For the three months ended MarchJune 31,30, 2026 and 2025, the change in unrealized (loss) gain on cash flow hedges, net of income taxes was related to the change in fair market value of the $300.0 million interest rate cap hedge executed in October 2021.

Net comprehensive income increased to $44.6$52.8 million for the three months ended MarchJune 31,30, 2026, compared to net comprehensive income of $44.3$48.8 million for the three months ended MarchJune 31,30, 2025, primarily as a result of the factors described in the above sections.

For the threesix months ended MarchJune 31,30, 2026 and the twelve months ended December 31, 2025, the Company’s primary sources of liquidity were cash and cash equivalents of $177.3$193.8 million and $232.6 million, respectively. On March 30, 2026, the Company entered into the Fifth Amendment to the amended and restated Credit Agreement dated as of October 27, 2021. The Fifth Amendment, among other things, increases the Revolver Facility by $450.0 million, resulting in an aggregate capacity amount of $850.0 million. As of MarchJune 31,30, 2026, the Company had $846.0 million of borrowings available under its credit facilities (net of $4.0 million undrawn letters of credit issued and outstanding). As of December 31, 2025, the Company had $396.0 million of borrowings available under its credit facilities (net of $4.0 million undrawn letters of credit issued and outstanding). During the threesix months ended MarchJune 31,30, 2026 and 2025, the Company’s cash flows from operations have been invested in pharmacies, infusion suites, and information technology infrastructure to support growth and create additional capacity in the future, as well as the pursuit of acquisitions and the periodic repurchases of Company shares.

The Company’s primary uses of cash and cash equivalents include supporting our ongoing business activities, internal investment in resources to support future growth, investment in capital expenditures in both facilities and technology, the pursuit of acquisitions,share repurchases, and the pursuit of share repurchases.acquisitions.

Our business strategy includes strategic deployment of capital to internal investments in resources, infrastructure, and technologies to support future growth, the periodic repurchases of Company shares and the pursuit of strategic tuck-in and adjacent acquisitions that complement our existing operations and the periodic repurchases of Company shares.operations. We continue to evaluate acquisition opportunities and view acquisitions as a key part of our growth strategy. The Company has historically funded its acquisitions with cash and cash equivalents. The Company may require additional capital in excess of current availability in order to complete future acquisitions. It is impossible to predict the amount of capital that may be required for acquisitions, and there is no assurance that sufficient financing for these activities will be available on acceptable terms.

The Company’s Revolver Facility provides for borrowings up to $850.0 million. The Revolver Facility matures on the date that is the earlier of (i) September 22, 2030 and (ii) the date that is 91 days prior to the stated maturity date applicable to the Senior Notes to the extent any amount of the Senior Notes remains unpaid and outstanding as of the date that is 91 days prior to the stated maturity date applicable to the Senior Notes. Borrowings under the Revolver Facility will bear interest at a rate equal to, at the option of the Company, either (i) the Term SOFR applicable thereto plus the Applicable Rate or (ii) the then-applicable Base Rate plus the Applicable Rate, which Applicable Rate shall be, subject to certain caveats thereto, as follows (i) until delivery of financial statements and related Compliance Certificate for the first full fiscal quarter ending after the effective date of the fourth amendment to the Credit Agreement, (A) for Term SOFR Loans, 1.75%, or (B) for Base Rate Loans, 0.75% and (ii) thereafter, the Applicable Rate for Term SOFR Loans and Base Rate Loans, based upon the Total Net Leverage Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to the terms of the Credit Agreement (as such terms are defined in the Credit Agreement). As of MarchJune 31,30, 2026, the Company had $4.0 million of undrawn letters of credit issued and outstanding, resulting in net borrowing availability under the Revolver Facility of $846.0 million.

Interest payments over the course of long-term debt obligations total an estimated $312.3$295.5 million based on final maturity dates of the Company’s credit facilities. Interest payments are calculated based on current rates as of MarchJune 31,30, 2026. Actual payments are based on changes in SOFR and exclude the interest rate cap derivative instrument.

ThreeSix Months Ended MarchJune 31,30, 2026 Compared to ThreeSix Months Ended MarchJune 31,30, 2025

The decrease in cashCash used in investing activities during the threesix months ended MarchJune 31,30, 2026 was primarily related capital expenditures. Cash used in investing activities during the six months ended June 30, 2025 was primarily attributable to the Intramed Plus acquisition made during the three months ended March 31, 2025 with no comparable activity during the threesix months ended MarchJune 31,30, 2026.

The decreaseincrease in cash used in financing activities was primarily related to the Company’s $17.5$167.5 million repurchase of common stock during the threesix months ended MarchJune 31,30, 2026, compared to the Company’s $100.0$150.0 million repurchase of common stock during the threesix months ended MarchJune 31,30, 2025.