Guardian Raises Outlook as Margins Widen
Second-quarter revenue reached $351.8 million as drug-price reductions restrained reported growth.
Guardian Pharmacy Services (GRDN), a long-term care pharmacy services provider, raised its full-year outlook after wider margins helped offset muted sales growth in the second quarter.
Revenue rose 2% from a year earlier and 4.5% from the first quarter, marking a sharp deceleration from 17% annual growth in the fourth quarter. Revenue would have increased by a low-double-digit percentage without price reductions tied to the Inflation Reduction Act.
The company served about 210,000 residents, up 8% from a year earlier and roughly 1.4% sequentially. Annual resident growth slowed from 10% in each of the previous two quarters.
Profitability continued to outpace sales. Adjusted EBITDA rose 18.9% to $29.7 million, while adjusted EBITDA margin expanded 1.2 percentage points to 8.4%, reflecting scale, purchasing leverage and operating efficiencies. Adjusted EBITDA was essentially flat from the first quarter, and its annual growth rate slowed from about 27%.
Gross margin widened to 22.8% from 19.8% as cost of goods sold declined 1.6%. Operating income increased 64% to $20.6 million, lifting operating margin to 5.9% from 3.7% despite a 6.9% increase in selling, general and administrative expenses.
Net income increased to $22.1 million from $8.8 million, and diluted earnings rose to $0.34 a share from $0.14. The quarter included an $8.5 million payor-dispute settlement recorded as other income. Adjusted earnings were $0.29 a share, up from $0.23 a year earlier and unchanged from the first quarter.
Guardian now expects 2026 revenue of $1.43 billion to $1.45 billion, with both ends of the range raised by $30 million. It also projects adjusted EBITDA of $129 million to $131 million, lifting the midpoint by $5.5 million from the prior range and extending a series of increases from its initial January outlook.
Cash rose to $89.8 million at June 30, and Guardian continued to report no long-term credit-facility debt, though first-half operating cash flow slipped to $36.1 million. After the quarter, the company acquired Virginia-based Wellness Concepts and opened its first Kentucky location, adding two markets to its geographic expansion.