BrightSpring Health Services is betting that scale and efficiency in home-based care can overcome policy-driven revenue headwinds, a strategy validated by a strong first-quarter earnings beat and upgraded full-year guidance.
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BrightSpring raises 2026 outlook by $300M on home care strength
BrightSpring Health Services Inc. raised its full-year 2026 revenue forecast by about $300 million after first-quarter earnings and margins beat analyst estimates, signaling its strategy of integrating pharmacy and provider services for at-home care is gaining traction faster than expected.
"The quarter also reinforced the company’s strategy: pair pharmacy scale with provider capabilities to benefit from care moving into the home," Zacks Investment Research said in a May 19 report.
The company reported a 105.3% year-over-year increase in adjusted earnings to 39 cents per share, surpassing the Zacks Consensus Estimate of 29 cents. Revenue climbed 25.6% to $3.61 billion, while operating margin expanded 180 basis points to 3.8%, reflecting what management called the benefits of scale flowing through a largely fixed cost structure.
The performance suggests BrightSpring can expand profitability despite an estimated $175 million annual revenue drag from the Inflation Reduction Act. The company is navigating this pressure by focusing on higher-margin services and exiting less profitable contracts, a move that puts execution at the center of its 2026 investment case.
Specialty and Infusion Drive Growth
The core growth engine for BrightSpring in 2026 remains its Specialty and Infusion segment, which saw revenue increase 36% year-over-year to $2.64 billion in the first quarter. Management highlighted the addition of four exclusive limited-distribution drugs, bringing its portfolio to 153. This access is a key strategic advantage, deepening relationships with drug manufacturers and creating a stickier platform for payers and referral sources.
The company's integrated model, which serves more than 475,000 patients daily, is designed to capture the ongoing shift of healthcare services into lower-cost home and community settings. This trend is a tailwind for peers as well, though execution varies; Addus HomeCare (ADUS) currently holds a Zacks Rank #3 (Hold), while Option Care Health (OPCH) has a #5 (Strong Sell), showing how investors differentiate based on operational consistency.
Provider Integration Ahead of Schedule
BrightSpring’s Provider Services arm is also becoming a more significant factor for growth and margin expansion. First-quarter revenue in the segment rose 28% year-over-year to $442 million, supported by momentum in home healthcare, new branch openings, and contributions from recent acquisitions.
Management noted that the integration of acquired branches is running ahead of expectations, helped by centralized intake processes and technology standardization. This is translating into strong quality metrics, with more than 91% of its home health branches rated four stars or higher, which helps attract referrals and secure favorable contracts with Medicare Advantage plans. The company expects acquired assets to contribute approximately $30 million in adjusted EBITDA in 2026, with a significant portion weighted toward the second half of the year, making continued integration success critical to meeting full-year targets.
Navigating Headwinds and Risks
Despite the strong quarter, BrightSpring faces clear challenges. Its Home and Community Pharmacy segment is in a deliberate reset, with revenue declining 9% in the first quarter to $527 million. Management attributed this to a roughly $50 million impact from the Inflation Reduction Act (IRA) and the decision to exit less profitable customer contracts.
The company expects the IRA to create a revenue headwind of about $45 million per quarter for the rest of 2026. The strategy is to offset this pressure by improving its customer mix and investing in automation to boost efficiency.
Following a divestiture of its Community Living operations in March, the company ended the quarter with a stronger balance sheet, holding $888.8 million in cash. This provides flexibility for debt reduction and further investment in its core growth areas. For 2026, the company raised its revenue outlook to a range of $14.725 billion to $15.225 billion and lifted its adjusted EBITDA forecast to between $795 million and $825 million, signaling confidence that margin expansion will outpace top-line pressures.
This article is for informational purposes only and does not constitute investment advice.
