Omnicell Inc Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jessica Tassan - Piper Sandler - Analyst : Hi guys, thank you for for taking the question and thanks for the color on on tariffs. Can you guys describe what your outlook implies in terms of just tariff distribution or how the burden of tariffs is distributed between Omni and your customers? Like to what extent are you passing through some portion of price, or are you absorbing effectively all of the impact? Thanks.

Question: Jessica Tassan - Piper Sandler - Analyst : Got it. That's helpful. And so the reiterated guidance implies no change to units effectively because the price to the customer will be the same. That's my first one. And then just secondly, I'm interested to know, does XT Amplify have any have kind of a more favorable supply chain? Yeah, a more favorable or domestic supply chain relative to the XT Cabinets. And then just can you confirm that XT Amplify's first product, so XTExtend, is on the market and deploying right now? Thanks.

Question: Gene Mannheimer - Freedom Capital Markets - Analyst : Thanks, and good morning. Could you just maybe talk about the cadence of that $40 million tariff impact? In other words, Nchacha called out $5 million in Q2, but I'm trying to get a sense for whether the biggest impact will be in Q4 since that's when you install the most hardware. Just curious on that trajectory.

Question: Gene Mannheimer - Freedom Capital Markets - Analyst : Right, right. That makes sense. Thanks. And my follow-up is, Randy called out some nice wins in Illinois and the Northeast with respect to XT. I'm just curious if those selections maybe were extended from the fourth quarter. I'm just trying to get a sense on where the demand is and where we are in the cycle for XT upgrades now. Thank you.

Question: Gene Mannheimer - Freedom Capital Markets - Analyst : That's great. Thanks again.

Question: Allen Lutz - Bank of America - Analyst : Good morning, and thanks for taking the questions. I know a lot of focus has been on the tariff piece here, but I want to talk about just generally what your hospital customers are thinking here. There have been some data points out in the market that pharmacy IT budgets may actually be inflecting a little bit more positively than where they've been over maybe the past couple of years or so. So if we kind of ignore the tariff piece for a second, are there any fundamentals going on within the hospital market that you're seeing that could be driving any type of reacceleration in demand for pharmacy IT and those types of budgets? Thank you.

Question: Bill Sutherland - The Benchmark Company, LLC - Analyst : Thank you, everybody. I'm wondering about, as we think about the new EBITDA guidance range, what are the assumptions at the lower end of it? And what would be the assumptions at the higher end? Is it just a matter of success with mitigation? And if that's the case, maybe I should rephrase the question as what are the two or three key mitigation steps you think are going to be most effective?

Question: Bill Sutherland - The Benchmark Company, LLC - Analyst : Yeah, I'm sorry, go ahead.

Question: Bill Sutherland - The Benchmark Company, LLC - Analyst : Okay. And are the two biggest factors, semiconductors and metal for the frame?

Question: Bill Sutherland - The Benchmark Company, LLC - Analyst : Okay. And then I guess last, Randy, just a product question. IBX, an update on how that's moving forward?

Question: Bill Sutherland - The Benchmark Company, LLC - Analyst : Great. Thanks for all the color, guys.

Question: Stan Berenstein - Wells Fargo - Analyst : Hi. Thanks for taking my questions. Just back on the China tariff discussion, how much time would it take to sufficiently disintermediate the supply chain exposure to China?

Question: Stan Berenstein - Wells Fargo - Analyst : Okay. And do you have any revenue exposure to China?

Question: Stan Berenstein - Wells Fargo - Analyst : Okay, thanks so much.

Question: Matt Hewitt - Craig Hallum Capital Group - Analyst : Good morning. Thanks for taking the questions. Maybe first up, historically, you were in a position where your products, your services were -- call it top five from a decision standpoint at your customers. And that's kind of helped you when things were a little cheekier or there were questions about the macro. How does that -- how does your product portfolio or service portfolio sit today? You look at hospitals and there are some questions about the macro and Medicaid cuts and things like that. And we've heard anecdotally at least that there are some companies that are starting to see customers kind of pull back a little bit on some of the purchasing decisions. Yet you obviously had a very strong quarter. You reaffirmed your revenue guidance for the year. So is it because you kind of sit in that top five purchasing decision or is there some other dynamic that's helping you? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 06, 2025 / 12:30PM, OMCL.OQ - Q1 2025 Omnicell Inc Earnings Call

Question: Matt Hewitt - Craig Hallum Capital Group - Analyst : That's helpful, Randy. Maybe as a follow up question, a little bit separate here, but I realize that you're sourcing some of your components globally. But with such an outsized tariff on the products coming from China, is there any way that you could quantify, I mean, is it roughly half of your components are coming from China? And as you mitigate that, as you shift some of your sourcing to other regions, that would have an outsized impact on helping your margins recover or any color that you could provide on geography exposure?

Question: Matt Hewitt - Craig Hallum Capital Group - Analyst : Right, thank you.

Question: David Larsen - BTIG LLC - Analyst : Hi. Can you talk about the progression of expected revenue growth, I think both in product and services? I mean, your revenue growth looks pretty good in the quarter, year over year. And it seems like on a year over year basis, you're guiding to a pretty significant slowdown in that growth rate. I'm just wondering why that is. And just any thoughts on XT Amplify, how those sales are progressing, maybe what the current penetration rate is in your base? Thanks very much. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 06, 2025 / 12:30PM, OMCL.OQ - Q1 2025 Omnicell Inc Earnings Call

Question: David Larsen - BTIG LLC - Analyst : Great. Thanks. And just related to that, how would you characterize, like, the hospital buying environment? I mean, there was a period there with labor constraints and higher inflation. You mentioned like a 6% margin for facilities now. Would you say that the environment, despite tariffs, has improved?

Question: David Larsen - BTIG LLC - Analyst : Okay. Thanks very much.