Omnicell delivers strong fourth quarter financial results
Results exceed previously issued full year guidance for bookings, total revenues, and non-GAAP EBITDA
FORT WORTH, Texas--(BUSINESS WIRE)--Omnicell, Inc. (NASDAQ:OMCL) (“Omnicell,” “we,” “our,” “us,” “management,” or the “Company”), a leader in transforming the pharmacy and nursing care delivery model, today announced results for its fiscal year and fourth quarter ended December 31, 2024.
“We delivered solid financial results for the fourth quarter of 2024, including returning to year-over-year revenue growth. We are pleased with the improved execution of the business throughout 2024, including strong free cash flows achieved in the year,” stated Randall Lipps, chairman, president, chief executive officer, and founder of Omnicell. “As we progress through 2025, we remain focused on successfully executing on our strategic priorities, which include driving long-term revenue growth, achieving consistent GAAP profitability, and continuing to raise the bar in medication management and adherence through innovation and bringing new products and services to market.”
Financial Results
Total revenues for the fourth quarter of 2024 were $307 million, up $48 million, or 19%, from the fourth quarter of 2023. The quarter-over-quarter increase in total revenues reflects the improvement of the macroeconomic environment and the timing of implementation of XT Series systems, as well as continued growth in our SaaS and Expert Services (formerly known as Advanced Services), including an increase in revenues from our Specialty Pharmacy Services offering. Total revenues for the year ended December 31, 2024 were $1.112 billion, down $35 million, or 3%, from the year ended December 31, 2023. The year-over-year decrease in total revenues reflects the impact of a challenging environment through a significant portion of 2024 for some of our health system customers and the timing of our XT Series systems lifecycle, as we are largely through the replacement cycle.
Total GAAP net income for the fourth quarter of 2024 was $16 million, or $0.34 per diluted share. This compares to GAAP net loss of $14 million, or $0.32 per diluted share, for the fourth quarter of 2023. Total GAAP net income for the year ended December 31, 2024 was $13 million, or $0.27 per diluted share. This compares to GAAP net loss of $20 million, or $0.45 per diluted share, for the year ended December 31, 2023.
Total non-GAAP net income for the fourth quarter of 2024 was $28 million, or $0.60 per diluted share. This compares to non-GAAP net income of $15 million, or $0.33 per diluted share, for the fourth quarter of 2023. Total non-GAAP net income for the year ended December 31, 2024 was $79 million, or $1.71 per diluted share. This compares to non-GAAP net income of $87 million, or $1.91 per diluted share, for the year ended December 31, 2023.
Total non-GAAP EBITDA for the fourth quarter of 2024 was $46 million. This compares to non-GAAP EBITDA of $24 million for the fourth quarter of 2023. Total non-GAAP EBITDA for the year ended December 31, 2024 was $136 million. This compares to non-GAAP EBITDA of $138 million for the year ended December 31, 2023.
Bookings and Backlog - Historical Metric
Total bookings(1) for the year ended December 31, 2024 were $923 million compared to $854 million for the year ended December 31, 2023, or an increase of 8% year-over-year, primarily driven by XT Series upgrades as we complete the XT Series upgrade cycle, as well as better than expected bookings of XTExtend, a core component of the multi-year XT Amplify innovation program.
The chart below summarizes our total backlog(2) under the definition of bookings in use for the years ended December 31, 2024 and 2023:
| December 31, | |||||||
| 2024 |
| 2023 | |||||
| (In thousands) | |||||||
Total backlog | $ | 1,201,296 |
|
| $ | 1,142,686 |
| |
By type: |
|
|
| |||||
Product backlog | $ | 646,508 |
|
| $ | 610,832 |
| |
SaaS and Expert Services backlog (3) | $ | 554,788 |
|
| $ | 531,854 |
| |
By duration and type: |
|
|
| |||||
Short-term product backlog | $ | 447,412 |
|
| $ | 377,936 |
| |
Long-term product backlog | $ | 199,096 |
|
| $ | 232,896 |
| |
Short-term SaaS and Expert Services backlog (3) | $ | 93,113 |
|
| $ | 72,455 |
| |
Long-term SaaS and Expert Services backlog (3) | $ | 461,675 |
|
| $ | 459,399 |
| |
|
|
|
| |||||
| ____________________________ | ||
(1) | We utilize bookings as an indicator of the success of our business. During 2024, we defined bookings generally as: (i) the value of non-cancelable contracts for our connected devices, software products, and SaaS and Expert Services (although, for those SaaS and Expert Services contracts without a minimum commitment, bookings only include the amount of revenue that has been recognized once the services have been provided); and (ii) for our consumables, the value of orders placed through our Omnicell Storefront online platform or through written or telephonic orders. We typically exclude technical services and other less significant items ancillary to our products and services, such as freight revenue, from bookings. In addition, dependent upon counterparty or credit risk, which is evaluated at the time of contract signing, for a given multi-year subscription contract we may reduce the portion of the contractual commitment booked at a given time. Connected devices and software license bookings are recorded as revenue upon customer acceptance of the installation or receipt of goods. Revenues from SaaS and Expert Services bookings are recorded over the contractual term. | |
(2) | Backlog is the dollar amount of bookings that have not yet been recognized as revenue. Bookings for those SaaS and Expert Services contracts without a minimum commitment are not included in backlog. In addition, dependent upon counterparty or credit risk, which is evaluated at the time of contract signing, for a given multi-year subscription contract we may reduce the portion of the contractual commitment booked at a given time, and these excluded amounts are not included in backlog. A majority of our connected devices and software license products are installable and recognized as revenues within twelve months of booking, while service revenues from SaaS and Expert Services are recorded over the contractual term. Larger or more complex implementations such as software-enabled connected devices for Central Pharmacy, including but not limited to our Central Pharmacy Dispensing Service and IV Compounding Service, are often installed and recognized as revenue between 12 and 24 months after booking. We consider backlog that is expected to be converted to revenues in more than twelve months to be long-term backlog. We believe a majority of long-term product backlog will be convertible into revenues in 12 to 24 months. Long-term SaaS and Expert Services backlog typically represents multi-year subscription agreements (usually with contractual terms of 2 to 7 years, some of which have not yet been implemented) that will be converted to revenue over the contractual term. Due to industry practice that allows customers to change order configurations with limited advance notice prior to shipment and as customer installation schedules may change, backlog as of any particular date may not necessarily indicate the timing of future revenue. However, we do believe that backlog is an indication of a customer’s willingness to install our solutions and revenue we expect to generate over time. | |
(3) | Includes only the value of SaaS and Expert Services non-cancelable contracts with minimum commitments. | |
Product Bookings, Product Backlog and Annual Recurring Revenue - New Metrics
Starting in 2025, we will utilize product bookings(1) as a key performance metric for our business. Under the new definition, product bookings as of December 31, 2024 were $558 million. In addition, going forward, we will no longer be reporting SaaS and Expert Services backlog information, as these revenue streams will be captured by the new Annual Recurring Revenue (“ARR”) metric, which we will begin utilizing as a key performance metric for our business. For comparative purposes, the table below summarizes our product backlog and ARR for December 31, 2024 under the new definitions of product bookings and ARR:
|
| December 31, | ||
|
| 2024 | ||
|
|
| ||
|
| (In thousands) | ||
Total product backlog(2) |
| $ | 646,440 |
|
By duration: |
|
| ||
Short-term product backlog |
| $ | 447,344 |
|
Long-term product backlog |
|
| 199,096 |
|
|
|
| ||
Annual Recurring Revenue(3) |
| $ | 580,025 |
|
| ____________________________ | ||
(1) | We define product bookings generally as the value of non-cancelable contracts for our connected devices and software licenses. We typically exclude freight revenue and other less significant items ancillary to our products from product bookings. In addition, dependent upon counterparty or credit risk, which is evaluated at the time of contract signing, for a given multi-year subscription contract we may reduce the value of the contractual commitment booked at a given time. Connected devices and software license bookings are recorded as revenue upon customer acceptance of the installation or receipt of goods. We utilize product bookings as an indicator of the success of certain portions of our business that generate non-recurring revenue. | |
(2) | Product backlog is the dollar amount of product bookings that have not yet been recognized as revenue. A majority of our connected devices and software license products are installable and recognized as revenues within twelve months of booking. Larger or more complex implementations such as software-enabled connected devices for Central Pharmacy, including, but not limited to, our Central Pharmacy Dispensing Service and IV Compounding Service, are often installed and recognized as revenue between 12 and 24 months after booking. Due to industry practice that allows customers to change order configurations with limited advance notice prior to shipment and as customer installation schedules may change, backlog as of any particular date may not necessarily indicate the timing of future revenue. However, we do believe that backlog is an indication of a customer’s willingness to install our solutions and revenue we expect to generate over time. We consider backlog that is expected to be converted to revenues in more than twelve months to be long-term backlog. We believe a majority of long-term product backlog will be convertible into revenues in 12-24 months. | |
(3) | We consider revenues generated from our consumables, technical services, and SaaS and Expert Services to be recurring revenues. For the portions of our business which generate recurring revenues, we utilize ARR as a key metric to measure our progress in growing our recurring revenue business. We define ARR at a measurement date as the revenue we expect to receive from our customers over the course of the following year for providing them with products or services. ARR includes expected revenue from all customers who are using our products or services at the reported date. For technical services and SaaS and Expert Services, solutions are generally on a contractual basis, typically with contracts for a period of 12 months or more, with a high probability of renewal. Probability of renewal is based on historic renewal experience of the individual revenue streams or management’s best estimates if historical renewal experience is not available. Consumables orders are placed by customers through our Omnicell Storefront online platform or through written or telephonic orders and are sold to a customer base who utilize the consumable product and place recurring orders when customer inventory is depleted. ARR is generally calculated based on revenues received in the most recent quarter and changes to expected revenues where solutions were added to or removed from the install or customer base in the quarter. Revenues from technical services and SaaS and Expert Services are recorded ratably over the service term. Revenue from consumables are recorded when the product has shipped and title has passed. Our measure of ARR may be different than that used by other companies. Because ARR is based on expected future revenue, it does not represent revenue recognized during a particular reporting period or revenue to be recognized in future reporting periods. ARR should not be viewed as a substitute for GAAP revenues. | |
Balance Sheet
As of December 31, 2024, Omnicell’s balance sheet reflected cash and cash equivalents of $369 million, total debt (net of unamortized debt issuance costs) of $341 million, and total assets of $2.12 billion. Cash flows provided by operating activities in the fourth quarter of 2024 totaled $56 million. This compares to cash flows provided by operating activities totaling $38 million in the fourth quarter of 2023.
As of December 31, 2024, the Company had $350 million of availability under its revolving credit facility with no outstanding balance.
Business Highlights
OmniSphere
The Company announced OmniSphere, a next-generation, cloud native, software workflow engine and data platform that is intended to seamlessly integrate enterprise-wide robotics and smart devices to support more secure, data-driven, medication management across the continuum of care. OmniSphere is designed to provide customers state-of-the-art security, improved productivity, enterprise-wide visibility, and streamlined upgrades, that is meant to deliver optimal end-to-end medication management.
ASHP Midyear
More than 1,600 pharmacy and industry leaders had the opportunity to explore Omnicell’s portfolio of outcomes-centric solutions and learn best practices from peers as part of the American Society of Health System Pharmacists (ASHP) Midyear 2024 Clinical Meeting and Exhibition. This annual event is the largest gathering of pharmacy professionals in the world.
HITRUST Data Security Certification
Omnicell’s medication management solutions powered by the OmniCenter platform once again received HITRUST Common Security Framework (CSF) certification, which we believe demonstrates the Company’s ongoing commitment to high standards for cybersecurity and data protection within the organization and for business partners and customers.
Omnicell Issues New Convertible Senior Notes
In late November, Omnicell issued $172.5 million aggregate principal amount of 1.00% convertible senior notes due 2029. In addition, Omnicell completed a partial repurchase of $400.0 million aggregate principal amount of 0.25% convertible senior notes due 2025 for approximately $391.2 million in cash.
2025 Guidance
The table below summarizes Omnicell’s first quarter and full year 2025 guidance:
| Q1 2025 |
| 2025 | |
Product Bookings (2025 Definition) | Not provided |
| $500 million - $550 million | |
ARR | Not Provided |
| $610 million - $630 million | |
Total Revenues | $255 million - $265 million |
| $1.105 billion - $1.155 billion | |
Product Revenues | $137 million - $142 million |
| $610 million - $640 million | |
Service Revenues | $118 million - $123 million |
| $495 million - $515 million | |
Technical Services Revenues | Not provided |
| $235 million - $245 million | |
SaaS and Expert Service Revenue (formerly Advanced Services) | Not provided |
| $260 million - $270 million | |
Non-GAAP EBITDA | $19 million - $25 million |
| $140 million - $155 million | |
Non-GAAP Earnings Per Share | $0.15 - $0.25 |
| $1.65 - $1.85 |
The Company does not provide guidance for GAAP net income or GAAP earnings per share, nor a reconciliation of any forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures on a forward-looking basis because it is unable to predict certain items contained in the GAAP measures without unreasonable efforts. These forward-looking non-GAAP financial measures do not include certain items, which may be significant, including, but not limited to, unusual gains and losses, costs associated with future restructurings, acquisition-related expenses, and certain tax and litigation outcomes.
Omnicell Conference Call Information
Omnicell will hold a conference call today, Thursday, February 6, 2025 at 8:30 a.m. ET to discuss fourth quarter and year end 2024 financial results. The conference call can be monitored by dialing (800) 715-9871 in the U.S. or (646) 307-1963 in international locations. The Conference ID is 2515873. A link to the live and archived webcast will also be available on the Investor Relations section of Omnicell’s website at https://ir.omnicell.com/events-and-presentations/.
About Omnicell
Since 1992, Omnicell has been committed to transforming pharmacy and nursing care through outcomes-centric solutions designed to deliver clinical and business outcomes across all settings of care. Through a comprehensive portfolio of robotics and smart devices, intelligent software workflows, and data and analytics, all optimized by expert services, Omnicell solutions are helping healthcare facilities worldwide to uncover cost savings, improve labor efficiency, establish new revenue streams, enhance supply chain control, support compliance, and move closer to the industry-defined vision of the Autonomous Pharmacy. To learn more, visit omnicell.com.
From time to time, Omnicell may use the Company’s investor relations website and other online social media channels, including its LinkedIn page www.linkedin.com/company/omnicell, and Facebook page www.facebook.com/omnicellinc, to disclose material non-public information and comply with its disclosure obligations under Regulation Fair Disclosure (“Reg FD”).
OMNICELL, the Omnicell logo, and ENLIVENHEALTH are registered trademarks of Omnicell, Inc. or one of its subsidiaries. This press release may also include the trademarks and service marks of other companies. Such trademarks and service marks are the marks of their respective owners.
Forward-Looking Statements
To the extent any statements contained in this press release deal with information that is not historical, these statements are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Without limiting the foregoing, statements including the words “expect,” “intend,” “may,” “will,” “should,” “would,” “could,” “plan,” “potential,” “anticipate,” “believe,” “forecast,” “guidance,” “outlook,” “goals,” “target,” “estimate,” “seek,” “predict,” “project,” and similar expressions are intended to identify forward-looking statements. Forward-looking statements are subject to the occurrence of many events outside Omnicell’s control. Such statements include, but are not limited to, Omnicell’s projected product bookings, revenues, including product, service, technical services and SaaS and Expert Services revenues, annual recurring revenue, non-GAAP EBITDA, and non-GAAP earnings per share; expectations regarding our products and services and developing new or enhancing existing products and solutions and the related objectives and expected benefits (and any implied financial impact); our ability to drive long-term growth and consistent GAAP profitability; and statements about Omnicell’s strategy, plans, objectives, promise and purpose, goals, opportunities, and market or Company outlook. Actual results and other events may differ significantly from those contemplated by forward-looking statements due to numerous factors that involve substantial known and unknown risks and uncertainties. These risks and uncertainties include, among other things, (i) unfavorable general economic and market conditions, including the impact and duration of inflationary pressures, (ii) Omnicell’s ability to take advantage of growth opportunities and develop and commercialize new solutions and enhance existing solutions, (iii) reduction in demand in the capital equipment market or reduction in the demand for or adoption of our solutions, systems, or services, (iv) delays in installations of our medication management solutions or our more complex medication packaging systems, (v) risks related to Omnicell’s investments in new business strategies or initiatives, including its transition to selling more products and services on a subscription basis, and its ability to acquire companies, businesses, or technologies and successfully integrate such acquisitions, (vi) ability to realize the benefits of our expense containment initiatives, (vii) risks related to failing to maintain expected service levels when providing our SaaS and Expert Services or retaining our SaaS and Expert Services customers, (viii) Omnicell’s ability to meet the demands of, or maintain relationships with, its institutional, retail, and specialty pharmacy customers, (ix) risks related to climate change, legal, regulatory or market measures to address climate change and related emphasis on ESG matters by various stakeholders, (x) changes to the 340B Program, (xi) risks related to the incorporation of artificial intelligence technologies into our products, services and processes or our vendors’ offerings, (xii) Omnicell’s substantial debt, which could impair its financial flexibility and access to capital, (xiii) covenants in our credit agreement could restrict our business and operations, (xiv) continued and increased competition from current and future competitors in the medication management automation solutions market and the medication adherence solutions market, (xv) risks presented by government regulations, legislative changes, fraud and anti-kickback statues, products liability claims, the outcome of legal proceedings, and other legal obligations related to healthcare, privacy, data protection, and information security, and the costs of compliance with, and potential liability associated with, our actual or perceived failure to comply with such obligations, including any potential governmental investigations and enforcement actions, litigation, fines and penalties, exposure to indemnification obligations or other liabilities, and adverse publicity related to the same; (xvi) any disruption in Omnicell’s information technology systems and breaches of data security or cyber-attacks on its systems or solutions, including the previously disclosed ransomware incident and any potential adverse legal, reputational, and financial effects that may result from it and/or additional cybersecurity incidents, as well as the effectiveness of business continuity plans during any future cybersecurity incidents, (xvii) risks associated with operating in foreign countries, (xviii) Omnicell’s ability to recruit and retain skilled and motivated personnel, (xix) Omnicell’s ability to protect its intellectual property, (xx) risks related to the availability and sources of raw materials and components or price fluctuations, shortages, or interruptions of supply, (xxi) Omnicell’s dependence on a limited number of suppliers for certain components, equipment, and raw materials, as well as technologies provided by third-party vendors, (xxii) fluctuations in quarterly and annual operating results may make our future operating results difficult to predict, (xxiii) failing to meet (or significantly exceeding) our publicly announced financial guidance, and (xxiv) other risks and uncertainties further described in the “Risk Factors” section of Omnicell’s most recent Annual Report on Form 10-K, as well as in Omnicell’s other reports filed with or furnished to the United States Securities and Exchange Commission (“SEC”), available at www.sec.gov. Forward-looking statements should be considered in light of these risks and uncertainties. Investors and others are cautioned not to place undue reliance on forward-looking statements.
Contacts
Kathleen Nemeth
Senior Vice President, Investor Relations
650-435-3318
Kathleen.Nemeth@Omnicell.com
