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Good afternoon, ladies and gentlemen, and welcome to the Guardian Pharmacy Services, Inc. Fourth Quarter Earnings Release Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. This call is being recorded on Wednesday, 03/11/2026. I would now like to turn the conference over to Ashley Stockton. Please go ahead.

Good afternoon. Thank you for participating in today's conference call. My name is Ashley Stockton, Vice President, Investor Relations for Guardian Pharmacy Services, Inc. I am joined on today's call by Fred Burke, President and Chief Executive Officer, and David Morris, Chief Financial Officer. After the close today, Guardian Pharmacy Services, Inc. posted its financial results for the quarter ended 12/31/2025. 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, as well as in our Annual Report on Form 10-K to be filed with the SEC, including the specific risk factors and uncertainties discussed therein. 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. I will now turn the call over to Fred for commentary.

Thank you, Ashley, and good afternoon, everyone. We appreciate your continued interest as we review another very strong quarter and year for Guardian Pharmacy Services, Inc. Turning briefly to the fourth quarter, we delivered results that exceeded our expectations across the board, reflecting solid execution throughout the organization. David will walk through the quarterly details in more depth. What I would like to focus on today is our full-year 2025 performance, including our key financial results and major accomplishments. Looking back, 2025 was one of broad-based execution and disciplined investment, with results that were ahead of plan. Our annual performance was anchored by organic revenue growth of 13%, driven by new resident additions, script growth, and higher acuity. Acquisitions, three of which were completed midyear, complemented our organic results and brought full-year reported revenue growth to 18%. Adjusted EBITDA grew 27% year over year with margins expanding 50 basis points to 7.9%. This increase occurred even as we integrated acquisitions that remain early in their path to profitability, navigated a branded inhaler category headwind, which was an unintended consequence of the American Rescue Plan, and absorbed new public company costs. That performance reflects disciplined execution, operating leverage, and the scalability of our model. Importantly, this earnings strength translated directly into cash generation and balance sheet flexibility, allowing us to invest for continued growth while further strengthening our financial position. We continue to deploy capital toward acquisitions and greenfield startups in attractive markets, while also investing in new data analytics capabilities. Even with these investments in growth, technology, and infrastructure, we increased our cash balance by approximately $60,000,000, reflecting the strong cash-generating nature of our model. Lastly, we delivered a full-year return of 27%. This performance underscores our disciplined approach to capital allocation. Our financial results ultimately reflect the operational and clinical value we deliver every day. From that perspective, 2025 was a strong year clinically and reinforced the value Guardian Pharmacy Services, Inc. brings to the broader health care network. Our pharmacists continue to play a critical role in medication management and care coordination. Through comprehensive medication reviews this year, our pharmacists performed more than 100,000 clinical interventions, benefiting approximately 74,000 residents. These interventions address serious risks such as duplicate therapies and drug allergies, helping prevent adverse events. Through our proactive insurance optimization program, we helped residents achieve an estimated $56,000,000 in cost savings, illustrating the tangible economic value our teams deliver every day. Our vaccine clinics administered over 120,000 vaccines during the third and fourth quarters, a 9% increase in script volumes for the full vaccine season with a material improvement in profitability year over year. In addition, we continued to invest in our customer service efforts. By way of example, we completed the rollout of our HIPAA-compliant secure messaging systems branded Guardian Hub and Guardian Note. This investment helps improve real-time visibility for facility partners into the prescription order status, from intake to fulfillment to delivery, enhancing service reliability and workflow efficiency. Importantly, our impact is not anecdotal. These outcomes are measured and tracked through our data and analytics platform, clearly demonstrating our ability to deliver differentiated clinical outcomes, reduce adverse events, and drive meaningful cost savings. In doing so, we deepen our partnerships across the care continuum and reinforce our clear, durable competitive advantage. Now, with 2025 in the rearview, I want to turn my focus to the future, and I will start with the IRA, since that is one of the most significant shifts our industry has experienced in over a decade, impacting pricing, reimbursement dynamics, processes, and payments. In January, we announced that we expect to offset the anticipated EBITDA impact in 2026 from this policy change, an important milestone as we navigated the unintended consequences of the legislation. In addition to the pricing and reimbursement changes, the IRA also introduced a new operational complexity with the launch of the Medicare Transaction Facilitator, a government-run payment clearinghouse. We are closely monitoring operations in the early days of this new environment, which involves various third parties, to make sure the systems, processes, and pricing adjustments are functioning as intended. Our objective is to avoid disruption to customers, service levels, partner relationships, and, importantly, cash flow. At the industry level, the IRA has created pressure across the long-term care pharmacy ecosystem. Within that context, we believe Guardian Pharmacy Services, Inc.'s scale, operating discipline, and local service model position us well to provide stability and consistent service as the industry works through this transition. These attributes are also becoming increasingly important in light of other changes in the industry. Stepping back, the long-term care pharmacy environment continues to evolve with ongoing consolidation at the facility level and increasing operational complexity. At the same time, demographic tailwinds are expected to accelerate. As the calendar turned to 2026, the first cohort of the silver tsunami entered their eighties, and with each successive year, the number of people in that cohort increases dramatically, which we anticipate will create an incremental tailwind. As occupancy rates rise, we believe operators will need to place greater emphasis on stability, consistency, and efficient clinical and operational processes. We believe both these dynamics favor pharmacy partners like Guardian Pharmacy Services, Inc. who can help reduce the labor burden on facilities and reliably deliver increasingly sophisticated capabilities. We have also seen recent industry developments, including a bankruptcy filing by an institutional long-term care pharmacy. We are monitoring developments and, as always, we are evaluating market opportunities through a disciplined strategic lens, with a focus on aligning our current geographical presence, operating model, culture, and long-term objectives. With these changes in mind, we believe the need for dependable, high-quality pharmacy service is becoming increasingly important to facility operators. Our priority remains to continue supporting our partners with consistent, reliable execution. With that backdrop, let me turn to our outlook. When we provided guidance in mid-January, we did so earlier than usual to signal that our adjusted EBITDA growth trajectory remained intact despite the IRA. At that time, we did not yet have full visibility into our final 2025 results. With the year now complete, we are updating our outlook to reflect what we now can see with greater clarity. As always, we frame guidance on an annual basis, grounded in what we can forecast with confidence, especially in a period of industry change. We also distinguish carefully between structural improvements in our business and favorable dynamics that can vary quarter to quarter. Reflecting the durable portion of our recent outperformance and applying our low double-digit growth framework, we are raising our 2026 adjusted EBITDA guidance to $120,000,000 to $124,000,000. This outlook reflects the ongoing drivers of our business and reinforces our confidence in the company's continued growth momentum. We are maintaining our current revenue forecast of $1,400,000,000 to $1,420,000,000 as new pricing flows through from the IRA. In summary, we delivered consistent outperformance this year and exited with solid momentum that we expect to continue into 2026 as we focus on driving durable growth, expanding margins as we scale, and investing to support long-term value creation for our shareholders. Most importantly, I want to recognize the people at Guardian Pharmacy Services, Inc., the pulse behind our organization and the reason we continue to deliver. Thank you for your continued focus and efforts. I will now turn the call over to David to walk through the financial details.

Thank you, Fred, and good afternoon, everyone. I am pleased to review another strong quarter in which we delivered results ahead of our expectations. We ended the quarter serving over 205,000 residents, an increase of 10% year over year. Script volume grew 14% year over year while revenue increased 17% year over year to $397,600,000, atop 12% organic growth. Gross profit rose 27% to $85,500,000 with gross margins expanding to 21.5% from 19.8% a year ago. Performance in the quarter reflects structural improvements, including stronger vaccine economics, improved contribution from acquisitions and greenfield startups, as well as continued success with our plan optimization initiatives. Let me start with vaccines. Vaccine script volumes were up 3% year over year, in line with our expectations, as some volume was pulled into the third quarter. More importantly, we saw an increase in profitability due to better vaccine purchasing and reimbursement. We also benefited from contributions from greenfield locations which are ramping efficiently and performing ahead of our initial expectations. Acquisitions also contributed to the outperformance, as we implemented purchasing and reimbursement programs sooner than anticipated in our Pacific Northwest additions. Both locations also began onboarding national accounts earlier than is typical. Our greenfield startup and acquisitions made over the last two years as a group continue to dampen our overall margin by approximately 90 basis points. We also continue to see success from our plan optimization initiatives, which helped to increase our Medicare Part D mix within the portfolio, supporting better coverage and lower out-of-pocket costs for residents plus improved reimbursement for us. In addition to the structural improvements, a portion of our upside in our gross margin was due to favorable payor dynamics and other quarter-to-quarter variability. While incorporated in our results, we do not forecast this continuing in our outlook. Moving down the income statement, adjusted SG&A was 13% of revenue versus 13.7% in the year-ago period. This reflects increasing scale efficiencies and improved labor leverage. D&A was consistent with the third quarter at $5,700,000. Stock-based compensation declined to approximately $1,000,000 as we sunset the pre-IPO equity program. Adjusted EBITDA increased 53% year over year to $39,500,000, with margins expanding to 9.9%, reflecting the operational drivers I just outlined along with the favorable variability noted earlier. Adjusted EPS came in at $0.37 a share. Turning to the balance sheet, the business continues to generate strong cash flow. During the quarter, we increased our cash balance to $66,000,000, up from $36,000,000 at the end of the third quarter and $5,000,000 at the end of 2024, highlighting our strong cash conversion rate of approximately 60%. We achieved this annual performance while continuing to invest for future growth, funding four new acquisitions and ongoing investments in several de novo greenfield startups from operating cash flow. To recap, our Wichita acquisition earlier this year and our Montana purchase later in the year expanded our operational footprint in key growth markets. We also added locations in Washington and Oregon midyear, establishing a platform in the Pacific Northwest to better serve our national accounts. Building on that momentum, we are actively engaged in discussions with several pharmacies that we believe would be strong additions to our platform and an excellent cultural fit. Importantly, we remain in a very strong financial position with ample liquidity and internally generated cash flow to support these investments. Now let me walk you through how we are approaching our outlook for 2026. For the full year 2025, we delivered adjusted EBITDA of $115,000,000, ahead of our most recent guidance range of $104,000,000 to $106,000,000 and well above our original outlook of $99,000,000 at the midpoint issued a year ago. As noted, fourth quarter results included favorable variability, which we do not forecast continuing in our 2026 outlook. We also forecast acuity remaining at current levels. We view the adjusted EBITDA run rate of our business as we exit 2025 to be approximately $110,000,000. Building on that foundation and reflecting low double-digit growth from the durable drivers of our business, we are raising our 2026 adjusted EBITDA guidance to a range of $120,000,000 to $124,000,000. We are maintaining our current revenue forecast of $1,400,000,000 to $1,420,000,000 as the new pricing impact flows through from the IRA. As always, our outlook does not include the impact of future acquisitions. On a more granular basis, we expect the quarterly distribution of revenue and adjusted EBITDA, as a percent of the full year, to be very similar to what we experienced in 2025. We will continue to see seasonality from vaccine contributions weighted toward the fourth quarter. D&A should be roughly $21,000,000 for the year. Following the additional annual LTIP grants we issued on March 1 this year, we expect our stock-based compensation expense to step up to a quarterly run rate of approximately $3,000,000. Our effective tax rate is expected to normalize to approximately 26% in 2026. Looking beyond 2026, additional branded drug negotiations under the IRA will take effect in 2027 and 2028. We expect these impacts to be much smaller than the 2026 revenue impact, approximately a $65,000,000 revenue headwind in 2027. As a result, we view these incremental impacts as manageable within our existing growth framework. In closing, we are pleased with how we finished the year. The fourth quarter capped a period of consistent execution and reinforced the durability of our operating model, positioning us well as we move into 2026. I also want to echo Fred's recognition of our employees, whose dedication drives our performance every day. Operator, we will now open the line for questions.

Thank you.

Ladies and gentlemen, we will now begin the question-and-answer session. Should you wish to cancel your request, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Thank you. Your first question comes from the line of John Ransom from Raymond James. Please go ahead.

Hey, good afternoon. Can you hear me?

Loud and clear.

Hello? Great. I am having some tech issues, David. So just still trying to process the 4Q feed. I know there were some nonrecurring things in there, but could you help us understand what is durable, what was vaccine, and what is not recurring in the quarter?

John, you are breaking up just a little bit, but we are guiding to our run rate we talked about as we ended the year, approximately $110,000,000 of EBITDA. And the variability with all the change going on in the industry that we had in the fourth quarter, we are not projecting that into our base. And we mentioned the things that related to that. There are always puts and takes with our PBM payors. Typically, they net out. In Q4, we had a net positive. So that is one thing that is not in our base that we are continuing. Also, increasing acuity is not in our base. So those are the main drivers that are not in there.

So did the vaccine program contribute more this year than last year? I know it was a big success for you last year.

It continued to be significant both revenue- and profit-wise in Q4, but we had some improvement on the reimbursement side and the buy side. So it continued to grow with our business. But the margins did expand slightly.

Okay. And then just kind of taking a step back. I know you are probably tired of talking about the IRA negotiations, but I think one thing you mentioned before was you wanted to take this opportunity to try to balance the profit contribution between generics and branded to better reflect the fact that 90% of your script volume is generic. So maybe just kind of talk about, at a high level, knowing you have got contract confidentiality, but just at a high level, what were you able to get done from a contracting standpoint to kind of better balance the two profit streams.

John, that is something we have been working on even before IRA, and we have made progress with several payors in 2025. You mentioned that 92% of our prescriptions that we dispense are generic, and I can say we are moving forward in a positive manner, aligning the gross margin dollars with that activity.

Okay. And then just finally, you had mentioned a stat a couple of calls ago that if you were to run everything at your margin, you have got a number of pharmacies now that are not at mature margin. Is that gap between potential margin and realized margin still what it was a couple of quarters ago?

It is a little bit more. We said 80 basis points last quarter. It was closer to 90 basis points in Q4, and that is the investment we are making for future locations and future accretive profitability.

Okay. That is it for me. Thank you.

Thank you, John.

Thank you. Your next question comes from the line of David MacDonald from Truist. Please go ahead.

Yes. Good afternoon, everyone. Just a couple. I wanted to follow up on John's first question a little bit. On the vaccine program, you highlighted a couple of things that improved profitability. I think you used the word materially. It did not sound like any of those would not be durable. Are we thinking about that correctly? And then, if we look at the better assumed margins in the 2026 guidance, is there one or two things that kind of stand out in terms of what is incrementally driving those margins better than your prior expectations?

Yeah. Let me start with the vaccine clinic.

The profitability was slightly improved in 2025 versus 2024. That is durable and will continue into 2026. And I think the midpoint of our new guidance is 8.6% for our adjusted EBITDA margin. And, David, that is really a factor of us continuing our year-on-year adjusted EBITDA growth rate in the low double digits while the revenues remain flattish. The combination of that will take us to midpoint adjusted EBITDA of about 8.6%. So we will see it go up.

And I will pipe in, Dave, to add to David's comments that, yes, the vaccine clinics have contributed materially to our full Q4, and we would expect to see that next year. It is part of our business.

And then, you mentioned some of the competitive dynamics in terms of a competitor out there. Can you spend a minute on the opportunity around either share gain with some struggling competitors, potentially more aggressive on the M&A side, or pace of greenfields around some of the areas where you see maybe some outsized opportunities? Just some of the disruption that some of the competitors are seeing, or certainly at least one, and the opportunities that potentially raises for you?

Very difficult topic to expand on because we are participating in the bankruptcy process. But all the things you mentioned could potentially represent opportunities for us as we move forward and that process is complete.

And then just one last one. You mentioned labor as a benefit on the margin side. Obviously, as you scale, you get increased efficiencies. But on the labor side, are you seeing both efficiencies and some improvement in just labor inflation? Or is that more just as you get bigger, you are able to better leverage the labor force that you have got in place?

Dave, it is more of the latter. The existing platform that scales labor is what is driving the efficiencies.

Okay. Thanks very much. That is all for me.

Thank you.

Thank you. Once again, that is star and one to ask a question. Your next question comes from the line of Raj Kumar from Stephens. Please go ahead.

Hey, good afternoon. Maybe just touching on the prepared remarks around faster ramp-up in the recently acquired facilities. As you think about the large and regional accounts and what that constitutes as part of the current resident base, any framing on the remaining opportunity on that front? And then also, since ALF is your core end market, there has been a lot of activity around divestitures or disposition of operations from certain large regional accounts of yours, and maybe if there is any impact that you see on that front or any color on how you ensure continuity of service and continue to cover the residents while these operational changes go on in the background.

I will take the latter question and then hand it to David. As the industry undergoes consolidation—I am speaking now about the assisted living operators, our core market segment—we believe that it provides us with opportunity. In fact, the one example that I am assuming you are citing ended up being exactly that. We have maintained service at all the facilities that we were serving, and it has given us an opportunity to meet new operating groups and show them what we can do. So, on balance, those types of dislocations represent, in our opinion, an opportunity for us.

And then, Raj, on your first question, we mentioned that we were able to integrate and achieve scale earlier with the platforms, particularly those that we closed in the Pacific Northwest. They vary. We talk a lot about, on average, it takes four years, plus or minus, to bring acquisitions up and achieve the synergies. Things like operating systems, purchasing platforms, and national accounts that can come on sooner or later impact these businesses. In the Pacific Northwest, we were able to do some of these things earlier.

Got it. And then, thinking about the M&A pipeline, there have been estimates where 60% of long-term care pharmacies are at risk of shutting down given cash flow constraints and IRA pricing. As we think about your strategy and what is available from an M&A standpoint in terms of your typical tuck-ins, are you seeing a buyer’s market on that front? And then relative to the inherent opportunity post-acquisition, does that still remain the same, or do you see more upside based on the assets that are coming into the market?

Good question, Raj. I want to start by emphasizing that we believe very strongly in being supportive of our industry, and the last thing we want to see are our industry colleagues under duress. That is why we have worked so hard and diligently with our trade group, the SCPC, to mitigate the effects of the various changes that are occurring on the policy front from DC. That said, it is early days. We are going through the first implementation of this IRA which, as I mentioned in my remarks, introduces new processes, reimbursement procedures, cash flow, etc. I am hopeful that our industry colleagues can manage their way through it. Potentially, it could impact our opportunity on the M&A front, and we certainly would welcome that opportunity with like-minded operators, but it is too early to call on that for sure. Right now, it is something we will be watching as we move forward.

Raj, as it relates to our pipeline, we had a robust pipeline in 2025 and it continues to be robust in 2026. As Fred said, as we are navigating all these industry changes, we are going to continue to take a disciplined approach. We see like-minded operators and territories that we want to expand into. I think we are adopting a very consistent approach to what we have had the last couple of years.

Got it. Thank you.

Thank you.