Owens & Minor (OMI -33.01%), a leading health care logistics and home health product distribution provider, reported its second quarter 2025 earnings on August 11, 2025. The most notable news was the company's continued transition into a pure-play Patient Direct business, following the reclassification of its Products & Healthcare Services (P&HS) segment as discontinued operations. Reported GAAP revenue was $681.9 million—well below analyst expectations of $2,730.4 million—and Adjusted non-GAAP earnings per share (EPS) were $0.26, missing the consensus estimate by $0.02. While the Patient Direct segment delivered growth in revenue and adjusted operating profitability, Results were shaped by significant one-time charges and transition costs, resulting in a much larger reported GAAP loss. Overall, the quarter reflected a company in mid-transition, with operational improvements in core Patient Direct, but major one-off expenses weighing on the reported results.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.26 | $0.28 | $0.25 | 4.0% |
| Revenue (GAAP) | $681.9 million | N/A | $660.4 million | 3.3% |
| Adjusted EBITDA (Non-GAAP) | $96.6 million | $91.1 million | 6.0% | |
| Adjusted Operating Income (Non-GAAP) | $56.9 million | $52.8 million | N/A | |
| Net Capital Expenditures (Non-GAAP) | $41.1 million | $24.9 million | 65.9% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Company Overview and Business Focus
Owens & Minor (OMI -33.01%) provides logistics, distribution, and direct-to-patient delivery of health care products and services in the United States. The company is best known for its Patient Direct division, which supplies home medical equipment and supplies, including diabetes management products and sleep therapy devices, directly to patients across the country.
In recent quarters, Owens & Minor has pursued a strategy to focus its operations squarely on the Patient Direct business by divesting non-core segments. This transition is accompanied by efforts to streamline operations, drive supply chain efficiency, and target high-growth therapy categories within home health, such as wound care and urology. Success depends on scaling its Patient Direct platform, maintaining operational discipline, and managing regulatory and financial risks in a competitive industry.
Quarter in Review: Strategic Pivot and Financial Performance
Patient Direct revenue grew by 6% compared to the first quarter of 2024, and by 7.3% on a same-day basis year-over-year. Adjusted EBITDA (non-GAAP), a measure of operating profitability before interest, taxes, depreciation, and amortization, rose to $96.6 million, marking a 6.0% increase compared to Q2 2024. Adjusted operating income (non-GAAP) improved by about 7%, and The adjusted operating margin for continuing operations increased to 8.34% from 7.99% in Q2 2024 (non-GAAP).
Despite these operational gains, reported results were overshadowed by a series of material one-time items. The company recorded an $80 million transaction breakage fee in connection with the termination of its planned Rotech acquisition, along with $18.3 million in transaction financing fees, $13.9 million in acquisition and amortization charges, and a $2.5 million realignment charge. These events drove the reported loss from continuing operations (GAAP) to $(83.8) million—much worse than the $(6.7) million reported for Q2 2024—while GAAP operating income swung to a loss of $(39.7) million versus a prior-year profit. Such charges highlight the transitional state of operations and the significant costs incurred during a strategic realignment.
The decision to divest the Products & Healthcare Services segment marked a crucial turning point, with management stating it was in the “final stages” of the process. This reclassification accounts for the dramatic decline in reported GAAP revenue relative to earlier analyst estimates, as nearly $2 billion in segment sales are now treated as discontinued operations.
Supply chain efficiency and cost control remained a focus during the period. Despite the strategic upheaval, GAAP selling, general, and administrative expenses (SG&A) fell slightly to $267.9 million from $269.9 million in Q2 2024.
Product Families and Market Position
Patient Direct focuses on providing home medical equipment, such as diabetes supplies, sleep therapy devices, wound care, and urology products, delivered straight to patients’ homes. The segment has benefited from demographic trends (an aging population and an increase in chronic diseases) and seeks growth by expanding in therapy categories and investing in revenue cycle management—the processes and technology used to manage insurance claims and patient payments.
Though the competitive landscape within home healthcare remains intense, cost containment, reliable delivery, and regulatory compliance (such as complying with privacy and billing standards) remain critical to sustaining its market presence.
Outlook and What’s Ahead
Owens & Minor reaffirmed its 2025 financial guidance, including revenue of $10.85 billion to $11.15 billion, adjusted EBITDA of $560 million to $590 million, and adjusted EPS of $1.60 to $1.85. Leadership reiterated its commitment to the Patient Direct strategy and expects to update stakeholders during the earnings call. No details on capital structure changes or revised outlook targets were disclosed as of the release date.
Looking forward, investors and industry watchers should monitor the completion of the divestiture of discontinued operations, ongoing execution in Patient Direct, working capital and liquidity management, and further progress on capital expenditures. With the company’s focus now firmly on home healthcare, its ability to invest in technology, navigate regulatory burdens, and scale efficiently in a competitive environment will be closely watched.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
