Adheris Health (AHE) Q2 2025 earnings summary

Executive summary

• Revenue declined 38.6–39% year-over-year, mainly due to deferred US vaccine programs and lower vaccination rates, with gross profit down 29–29.2%.

• Gross margin improved by 8.4 percentage points to 63.6%, driven by a shift toward higher-margin Thrive/THRIV programs.

• Transformation 360 restructuring and January 2025 restructure are underway, targeting AUD 5 million ($5m) in annual cost savings from FY2026, with $1.4m net savings in FY25 and $500,000 severance costs expensed in Q3.

• Strategic review to maximize shareholder value is ongoing, with possible outcomes or clarity expected by end of March.

• ANZ health programs grew over 60% year-over-year, supported by expanded pharmacist engagement.

Financial highlights

• US revenue dropped 43.7% year-over-year to $25.3m; ANZ revenue rose 1.9% to $5.4m.

• Group gross profit fell to $19.6m; group gross margin improved to 63.6%.

• Cash balance as of December 31 was AUD 12.4 million ($12.4m), with all $18.1m in financing facilities fully drawn.

• Net operating cash outflow was $4.0m for the quarter; estimated 3.1 quarters of funding remain at current burn rate.

• Transaction fee revenue for the half was AUD 2.4 million, separated from health programs revenue.

Outlook and guidance

• US revenue expected to recover in 2H FY25 as deferred vaccine programs resume and a stronger pipeline with over 50% more brands is targeted.

• ANZ region anticipated to maintain stability, with pricing adjustments from March 2025 expected to boost revenue.

• Full-year positive EBITDA is expected, with first half confirmed as positive; second half outlook depends on pipeline conversion.

• Annualized cost savings of $5m expected from FY26 due to restructuring.

• No anticipated negative impact from US political changes on vaccine program delivery.