Transcript: Guardian Pharmacy Service Q2 2026 Earnings Conference Call

Guardian Pharmacy Service (NYSE: GRDN ) released second-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below. This content is powered APIs. For comprehensive financial data and transcripts, visit Access the full call at Summary Guardian Pharmacy Service reported a 2% year-over-year revenue growth for Q2 2026, with an adjusted EBITDA growth of 23%, despite the impact of IRA pricing reductions.

45 billion and adjusted EBITDA to $129-$131 million, citing strong fundamentals and execution on strategic priorities. Key strategic initiatives include geographic expansion, a new regional leadership structure, and continued M&A and greenfield developments, such as the acquisition of Wellness Concepts and a new pharmacy in Lexington, Kentucky. Operational highlights include serving over 210,000 residents and completing 50,000 clinical interventions, contributing to a gross profit increase of 18% year over year. Management transitions were announced with David Morris as the new COO and Will Mudd as CFO, reflecting internal leadership development and succession planning.

Full Transcript OPERATOR Hello everyone. Thank you for joining us and welcome to Guardian Pharmacy Service's second quarter 2026 earnings call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one on your telephone keypad.

To withdraw your question, press star one again. I will now hand the call over to Ashley Stockton, Investor Relations. Please go ahead. Ashley Stockton, Vice President, Investor Relations Good afternoon.

Thank you for participating in today's conference call. This is Ashley Stockton, Vice President Investor Relations for Guardian Pharmacy Service. I'm joined on today's call by Fred Burke, President and Chief Executive Officer, David Morris, Chief Operating Officer, and Will Mudd, Chief Financial Officer. After the close today, Guardian posted its financial results for the quarter ended June 30, 2026.

A copy of the press release is available on the company's investor relations website. Please note that today's discussion will include certain forward-looking statements that reflect our current assumptions and expectations, including those related to our future financial performance and industry and market conditions. Such forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from our expectations.

We encourage you to review the information in today's press release and quarterly report on Form 10-Q, as well as the specific risk factors and uncertainties discussed in our annual report on Form 10-K. We do not undertake any duty to update any forward-looking statements, which speak only as of the date they are made on today's call. We also will use certain non-GAAP financial measures when discussing the company's financial performance and condition.

You can find additional information on these non-GAAP measures and reconciliations to their most directly comparable GAAP financial measures in today's press release, which again is available on our investor relations website. And now I will turn it over to Fred for high-level commentary. Fred Burke, President and Chief Executive Officer Thank you, Ashley, and good afternoon everyone. We appreciate you joining us today to review Guardian's second quarter results.

But before David and Will review the second quarter in detail, I would like to begin with some perspective on our performance through the first half of 2026 and our outlook for the remainder of the year. Guardian continues to execute well, supported by solid fundamentals across our local markets and meaningful progress against our strategic priorities, including continued geographic expansion. Through the first half of 2026, reported revenue grew 2%. Absent the IRA pricing reductions, revenue would have increased low double digits, a clearer indication of the underlying growth of the business.

Importantly, we have successfully mitigated the profitability impact of the changing reimbursement environment under the IRA through disciplined execution across the business, enabling us to generate adjusted EBITDA growth of 23% during the first half of 2026 compared with the first half of 2025. Based on our year-to-date performance and current expectations for the balance of the year, we are raising our full-year 2026 outlook. 45 billion and adjusted EBITDA of $129 million to $131 million.

As we move through the remainder of the year, our priorities remain consistent: delivering outstanding service to the residents and communities we support, expanding our platform in attractive markets, investing in the clinical and operational capabilities that strengthen our value proposition, and maintaining the financial discipline that has long been a hallmark of our model. Supporting those priorities requires an organizational structure and leadership team capable of managing the scale of the business today while positioning for growth ahead at the broader corporate level.

In June, we took an important step in the evolution of our company with the appointment of David Morris as Chief Operating Officer. David assumed this role after serving as Guardian's Chief Financial Officer since inception. He has played a central role in building this company and has helped shape our strategy, financial discipline and operating model. He knows our business, our pharmacy leaders and our local markets extremely well.

Moving into the broader COO role gives David the opportunity to apply his experience more directly to our operations and sales organizations. The new Field Operations Leadership team we put in place earlier this year to help advance our operational excellence now reports to David. He will discuss this new structure in greater detail. With David moving into the COO role, we are pleased to have appointed Will Mudd as Chief Financial Officer.

Will joined Guardian in 2012 and has worked closely with David for more than a decade. During that time he has taken on increasing responsibility across the organization and has played an important role in building and scaling the financial infrastructure that supported Guardian's growth and our transition to becoming a public company. His appointment is a natural progression and reflects our confidence in his ability to lead the finance organization through Guardian's next phase of growth.

These transitions demonstrate the depth of talent we have developed within Guardian, the strength of our succession planning process and our commitment to creating opportunities for leaders to grow within the organization. Alongside these changes, Kendall Forbes, a co—founder and long—term business partner who played an important role in Guardian's development, has retired. We are grateful for his many contributions to Guardian over the years and wish him all the best in his next chapter. 5 million shares.

Following that conversion, we expect between 35 to 37 million shares of Class A common stock will be held collectively by employees, members of management and directors. Including shares they hold today, nearly all those shares are subject to a closed—window trading restriction until the next open trading window that follows our third quarter earnings release, which is currently expected in early to mid November. The management and directors who hold the substantial majority of shares remain committed to taking a measured and prudent approach to liquidity over time to ensure a structured and orderly process with minimal market disruption.

With that, I will turn the call over to David, who will provide additional perspective on our operations. David Morris, Chief Operating Officer Thanks, Fred. I'm pleased to report that we delivered another solid quarter. Will plans to review our financial results in greater detail, but I would like to provide some operating context and discuss the progress we are making to strengthen Guardian's infrastructure as we scale.

Our clinical capabilities remain an important part of our value proposition and support our ability to drive top-line growth. Through the first half of the year, our clinicians have served over 300,000 residents. Across this population, our pharmacy teams have completed more than 50,000 clinical interventions affecting over 45,000 residents. As an example, we identified approximately 4,000 allergy risks and 5,000 instances of potentially duplicate drug therapies.

These interventions help reduce medication-related risk for our facility partners and, more importantly, help prevent adverse health outcomes across the resident population. We're also advancing several new clinical initiatives and are highly encouraged by the progress we are seeing. One example is our Falls Risk program, which we are expanding to additional facilities for further evaluation. Early data has shown meaningful improvement in outcomes, and we are encouraged by the opportunity to assess the program across a broader resident population and data set.

Turning to profitability, we continue to translate strong top-line performance into bottom-line growth. As we scale, we are benefiting from increased purchasing leverage, improved labor productivity and greater efficiency across our support infrastructure. While we expect these benefits to continue, we also recognize the importance of investing in the leadership, systems and infrastructure necessary to support our future growth and will do so as necessary. The strength of our operating performance is also supporting solid cash generation beyond our capital expenditure needs.

We continue to view M&A and greenfield startups as a highly attractive use of capital and an important driver of incremental growth. Consistent with that strategy, subsequent to quarter-end we announced the acquisition of Wellness Concepts, a long-term care pharmacy based in the Shenandoah Valley of Virginia. This pharmacy adds a service-oriented team with a strong reputation for quality in the communities it serves. While it is smaller in size, it is very much in line with the type of pharmacy we look to add to our platform.

Additionally, we launched a new greenfield pharmacy in Lexington, Kentucky, marking our first location in that state. Lexington is the fourth greenfield pharmacy developed by the team that joined Guardian through our Middle Tennessee acquisition in 2009. The launch is a collaborative effort between our Tennessee and Cincinnati pharmacies and demonstrates how acquired talent and local market expertise can come together to support continued growth. This effort is being led by David Brown, one of our newly appointed Senior Vice President regional leaders.

That brings me to one of our most important organizational initiatives in recent years: the implementation of our new regional leadership structure. To enhance our organization, we have appointed eight regional Senior Vice Presidents from within the company to provide leadership across our national footprint. These are some of our strongest and most experienced operators who have a proven track record. They understand our pharmacy teams, our customers and the markets in which we operate.

The objective is to bring greater consistency, accountability and support to our local pharmacies while preserving the entrepreneurial culture and local decision-making that have always distinguished Guardian. Our regional leaders will help pharmacies share best practices, develop and mentor local management teams, and identify opportunities to operate more efficiently and effectively. They will also play a central role in strengthening two-way communication between our pharmacies and support organization.

This includes translating company-wide priorities into action at the local level while ensuring that the experience and perspective of our local operators help inform broader strategic decisions. While the COO role is new for me, I have worked closely with our pharmacies and these regional leaders since Guardian's earliest days. I look forward to deepening those relationships and working alongside them to strengthen execution throughout the organization. I'll now turn it over to Will for a review of the quarter.

Will Mudd, Chief Financial Officer Thank you, David, and good afternoon, everyone. I'm pleased to be speaking with you today in my first earnings call as Chief Financial Officer. I've had the privilege of working closely with David, Fred, and the finance organization for many years, and I'm excited to continue supporting the company's growth with the same financial discipline and operational focus that have helped define Guardian's success. I'll now walk through our second quarter results in more detail and provide additional context around our outlook for the remainder of this year.

Residents served at quarter end were over 210,000, up high single digits year over year, reflecting continued growth across our facility base, increased adoption rates, and continued contributions from M&A. Script volumes also increased high single digits year over year. 2 million, up 2% year over year. Absent IRA-related pricing reductions, revenue would have been up low double digits year over year in the quarter.

Revenue growth benefited from organic growth, M&A, higher resident acuity, and our continued plan optimization efforts. We also saw favorable product and payer mix, both of which we expect to remain supportive through the end of the year. 8%. We delivered this improvement despite continued pressure from higher fuel costs.

9% of revenues in the quarter, in line with our expectation. 5 million cash payment, which was recognized as other income in the second quarter. Because the settlement payment is not reflective of our ongoing operating performance, it has been excluded from adjusted EBITDA. Importantly, the resolution also helped establish a stronger, mutually beneficial relationship with the payer, which was our objective from the onset.

9 million in the quarter and should remain near this level on a quarterly basis for the balance of the year. 4%. We achieved this margin while continuing to absorb dilution from the acquisitions and greenfield startups completed in 2024 and 2025. These locations remain below our corporate margin and reduced consolidated margin by approximately 60 basis points during the quarter, compared with 80 basis points in the first quarter, demonstrating continued progress in bringing the group closer to our consolidated margin.

The effective tax rate for the quarter was 26%, in line with our expectations. 8 million in the year-ago quarter. Turning to the balance sheet, we ended the quarter with cash of close to $90 million, up from approximately $65 million in the prior quarter. Importantly, cash conversion returned to a more normalized level following a one-time working capital reset associated with implementation of the IRA in the first quarter.

As Fred noted, based on our first half performance and current expectations for the remainder of the year, we are raising our full-year 2026 guidance. 42 billion. Our adjusted EBITDA range goes to $129 million to $131 million, up from $123 million to $127 million. As we have historically stated, our outlook does not include any contribution from future acquisitions.

However, we will continue to actively pursue business development opportunities consistent with our approach in prior years. With the larger acquisitions completed in the prior year now fully lapped, second half forecasted revenue growth will be driven primarily by organic performance with a modest contribution from the two smaller acquisitions thus far in 2026. As such, absent the IRA pricing reductions, we expect underlying revenue growth to remain in the high single digits.

Reported revenue, however, in the second half of the year is expected to decline year over year by a low single-digit percentage, reflecting the continued impact of the IRA-related pricing reductions. We expect our adjusted EBITDA margin to remain relatively stable in the third quarter, followed by a typical seasonal increase in the fourth quarter associated with vaccine activity. With that, I'll turn it back over to Fred for closing comments. Fred Burke, President and Chief Executive Officer Thank you, Will.

Again, we are very pleased with our performance for the first half of 2026 and with the continued execution across the organization, particularly in managing the impact of the IRA-related pricing environment. We will continue to focus on driving profitable growth across our existing markets, expanding through greenfield development, and pursuing disciplined M&A. We have a strong and experienced leadership team in place to execute against these priorities with continuity, accountability, and operating focus as we continue to scale the business.