Omnicell’s first quarter was marked by revenue growth that exceeded Wall Street expectations, driven by continued demand for its medication management platform and recurring service offerings. Despite this, the market responded negatively, as management highlighted the emerging impact of new tariffs on China-sourced components and the resulting pressure on profitability. CEO Randall Lipps noted, “We are focused on redefining how medications and supplies are managed across healthcare,” but acknowledged that the company’s cost structure is being challenged by shifting trade policies and supply chain complexities. Management took a cautious tone, emphasizing that while customer demand remains healthy, external cost pressures are likely to weigh on margins in the near term.
Is now the time to buy OMCL? Find out in our full research report (it’s free).
Omnicell (OMCL) Q1 CY2025 Highlights:
- Revenue: $269.7 million vs analyst estimates of $260 million (9.6% year-on-year growth, 3.7% beat)
- Adjusted EPS: $0.26 vs analyst estimates of $0.20 (27.1% beat)
- Adjusted EBITDA: $23.59 million vs analyst estimates of $21.46 million (8.7% margin, 9.9% beat)
- The company reconfirmed its revenue guidance for the full year of $1.13 billion at the midpoint
- Management lowered its full-year Adjusted EPS guidance to $1.33 at the midpoint, a 24.3% decrease
- EBITDA guidance for the full year is $122.5 million at the midpoint, below analyst estimates of $145 million
- Operating Margin: -4.3%, up from -8.9% in the same quarter last year
- Market Capitalization: $1.35 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Omnicell’s Q1 Earnings Call
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Jessica Datson (Piper Sandler) asked how tariff costs are distributed between Omnicell and customers. CEO Randall Lipps explained that most costs are currently absorbed by Omnicell, but possible future pricing adjustments are under consideration.
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Gene Mannheimer (Freedom Capital Markets) inquired about the timing of tariff impacts throughout the year. CFO Nchacha Etta clarified that the bulk of the impact will hit in the second half, with some bias toward the fourth quarter due to seasonality.
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Allen Lutz (Bank of America) questioned whether broader hospital IT spending trends are supporting demand. Lipps observed that pharmacy investments are increasingly strategic, especially in specialty and outpatient settings.
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Bill Sutherland (Benchmark) pressed for details on supply chain mitigation and the main components driving tariff exposure. Management cited subassemblies sourced from China as the primary risk, with ongoing efforts to diversify suppliers.
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Matt Hewitt (Craig Hallum) asked if Omnicell’s offerings remain a top purchasing priority for hospitals despite macroeconomic uncertainty. CFO Nchacha Etta noted that pharmacy automation remains highly strategic and is less vulnerable to near-term spending cuts.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be watching (1) how quickly Omnicell can shift its supply chain away from China and reduce tariff exposure; (2) the trajectory of recurring revenue growth from SaaS and specialty pharmacy services; and (3) customer adoption rates of new solutions like XT Amplify and the latest IBX software updates. Progress in these areas will signal management’s effectiveness in navigating external cost pressures while supporting long-term growth.
Omnicell currently trades at $28.84, down from $30.50 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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