Healthcare services provider BrightSpring Health Services (NASDAQ: BTSG) reported Q3 CY2025 results topping the market’s revenue expectations, with sales up 14.7% year on year to $3.33 billion. The company’s full-year revenue guidance of $12.65 billion at the midpoint came in 0.9% above analysts’ estimates. Its non-GAAP profit of $0.29 per share was 11.2% above analysts’ consensus estimates.

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"We are pleased with our third quarter organizational results," said Jon Rousseau, Chairman, President, and Chief Executive Officer of the Company.

Company Overview

Founded in 1974, BrightSpring Health Services (NASDAQ: BTSG) offers home health care, hospice, neuro-rehabilitation, and pharmacy services.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, BrightSpring Health Services grew its sales at an impressive 17.9% compounded annual growth rate. Its growth beat the average healthcare company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. BrightSpring Health Services’s annualized revenue growth of 21.4% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

BrightSpring Health Services also breaks out the revenue for its most important segment, Pharmacy. Over the last two years, BrightSpring Health Services’s Pharmacy revenue averaged 32.2% year-on-year growth. This segment has outperformed its total sales during the same period, lifting the company’s performance.

This quarter, BrightSpring Health Services reported year-on-year revenue growth of 14.7%, and its $3.33 billion of revenue exceeded Wall Street’s estimates by 5.3%.

Looking ahead, sell-side analysts expect revenue to grow 11.2% over the next 12 months, a deceleration versus the last two years. We still think its growth trajectory is attractive given its scale and indicates the market is baking in success for its products and services.

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Adjusted Operating Margin

Adjusted operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies because it excludes non-recurring expenses, interest on debt, and taxes.

BrightSpring Health Services was profitable over the last five years but held back by its large cost base. Its average adjusted operating margin of 3.9% was weak for a healthcare business.

Analyzing the trend in its profitability, BrightSpring Health Services’s adjusted operating margin decreased by 1.8 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. BrightSpring Health Services’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.

In Q3, BrightSpring Health Services generated an adjusted operating margin profit margin of 3.6%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

BrightSpring Health Services’s full-year EPS dropped significantly over the last four years. We’ll keep a close eye on the company as diminishing earnings could imply changing secular trends and preferences.

In Q3, BrightSpring Health Services reported adjusted EPS of $0.29, up from $0.11 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects BrightSpring Health Services’s full-year EPS of $0.92 to grow 23.5%.

Key Takeaways from BrightSpring Health Services’s Q3 Results

We were impressed by how significantly BrightSpring Health Services blew past analysts’ revenue, EPS, and EBITDA expectations this quarter. We were also glad it raised its full-year revenue guidance. Overall, we think this was a solid quarter with some key areas of upside. The market seemed to be hoping for more given its premium valuation going into the print, and the stock traded down 2.3% to $33.20 immediately after reporting.

Big picture, is BrightSpring Health Services a buy here and now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.