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ROC

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-41938

BrightSpring Health Services, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware	82-2956404
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
805 N. Whittington Parkway Louisville, Kentucky	40222
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (502) 394-2100

Securities registered pursuant to Section 12(b) of the Act:

      Title of each class

      Trading
Symbol(s)

      Name of each exchange on which registered

      Common Stock, par value $0.01 per share
6.75% Tangible Equity Units

      BTSG
BTSGU

      The Nasdaq Stock Market LLC
The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of Registrant’s Common Stock outstanding as of April 28, 2026 was 193,918,398.

Table of Contents


		Page

PART I.	FINANCIAL INFORMATION	3

Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Comprehensive Income	5
	Condensed Consolidated Statements of Shareholders' Equity	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	36

PART II.	OTHER INFORMATION	37

Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	37
Item 4.	Mine Safety Disclosures	37
Item 5.	Other Information	37
Item 6.	Exhibits	38
Signatures		39

Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q (this “Form 10-Q”) to “BrightSpring,” the “Company,” “we,” “us,” and “our” refer to BrightSpring Health Services, Inc. and its consolidated subsidiaries.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes forward-looking statements that reflect our current views with respect to, among other things, our operations, and financial performance. We have used words such as “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “future,” “will,” “seek,” “foreseeable,” the negative version of these words, or similar terms and phrases to identify forward-looking statements.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our industries, business strategy, goals and expectations concerning our market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources and other financial and operating information. We believe that these factors include but are not limited to the following:

•

our operation in a highly competitive industry;

•

our inability to maintain relationships with existing patient referral sources or establish new referral sources;

•

changes to Medicare and Medicaid rates or methods governing Medicare and Medicaid payments for our services;

•

cost containment initiatives of third-party payors, including post-payment audits;

•

the implementation of alternative payment models and the transition of Medicaid and Medicare beneficiaries to managed care organizations may limit our market share and could adversely affect our revenues;

•

changes in the case mix of patients, as well as payor mix and payment methodologies, and decisions and operations of third-party organizations;

•

our reliance on federal and state spending, budget decisions, and continuous governmental operations which may fluctuate under different political conditions;

•

changes in drug utilization and/or pricing, PBM contracts, and Medicare Part D/Medicaid reimbursement, which may negatively impact our profitability;

•

changes in our relationships with pharmaceutical suppliers, including changes in drug availability or pricing;

•

reliance on the continual recruitment and retention of nurses, pharmacists, therapists, caregivers, direct support professionals, and other qualified personnel, including senior management;

•

compliance with or changes to federal, state, and local laws and regulations that govern our employment practices, including minimum wage, living wage, and paid time-off requirements;

•

fluctuation of our results of operations on a quarterly basis;

•

harm caused by labor relation matters;

•

limitations in our ability to control reimbursement rates received for our services if we are unable to maintain or reduce our costs to provide such services;

•

delays in collection or non-collection of our accounts receivable, particularly during the business integration process;

•

failure to manage our growth effectively, which may inhibit our ability to execute our business plan, maintain high levels of service and satisfaction or adequately address competitive challenges;

•

our ability to identify, successfully complete and manage acquisitions, joint ventures, divestitures and other significant transactions and strategic initiatives;

•

our ability to continue to provide consistently high quality of care;

•

maintenance of our corporate reputation or the emergence of adverse publicity, including negative information on social media or changes in public perception of our services;

•

contract continuance, expansion and renewal with our existing customers, including renewals at lower fee levels, customers declining to purchase additional services from us, or reduction in the services received from us pursuant to those contracts;

•

effective investment in, implementation of improvements to and proper maintenance of the uninterrupted operation and data integrity of our information technology and other business systems;

•

security breaches, loss of data, and other disruptions, which could compromise sensitive business or patient information; cause a loss of confidential patient data, employee data or personal information; or prevent access to critical information and thereby expose us to liability, litigation, and federal and state governmental inquiries and damage our reputation and brand;

•

risks related to credit card payments and other payment methods;

•

potential substantial malpractice or other similar claims;

•

various risks related to governmental inquiries, regulatory actions, and whistleblower and other lawsuits, which may not be entirely covered by insurance;

•

our current insurance program, which may expose us to unexpected costs, particularly if we incur losses not covered by our insurance or if claims or losses differ from our estimates;

•

factors outside of our control, including those listed, which have required and could in the future require us to record an asset impairment of goodwill;

•

a pandemic, epidemic, or outbreak of an infectious disease;

•

inclement weather, natural disasters, acts of terrorism, riots, civil insurrection or social unrest, looting, protests, strikes, or street demonstrations;

•

our inability to adequately protect our intellectual property rights;

•

risks related to our compliance with our regulatory framework;

•

the significant interests of KKR Stockholder may conflict with our stockholders’ interests in the future;

•

our substantial indebtedness;

•

significant changes in tax or trade policies, tariffs, or trade relations between the United States and other countries, such as the imposition of unilateral tariffs on imported products, including impacts on imported drug products, which could result in supply chain disruptions and significant increases in costs; and

•

the amount and frequency of our stock repurchases may fluctuate.

Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. If any of these risks materialize, or if any of our assumptions underlying forward-looking statements prove incorrect, actual results and developments may differ materially from those made in or suggested by the forward-looking statements contained in this Form 10-Q. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, those set forth in Item 1A, “Risk Factors,” of Part I of our Annual Report on Form 10-K for the year ended December 31, 2025 (our “Form 10-K”) filed with the U.S. Securities and Exchange Commission (the “SEC”). Although we have attempted to identify important risk factors, there may be other risk factors not presently known to us or that we presently believe are not material that could cause actual results and developments to differ materially from those made in or suggested by the forward-looking statements contained in this Form 10-Q. We caution you against relying on any forward-looking statements, which should also be read in conjunction with the other cautionary statements that are included elsewhere in this Form 10-Q. Any forward-looking statement made by us in this Form 10-Q speaks only as of the date hereof. We undertake no obligation to publicly update or to revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

BrightSpring Health Services, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)

(Unaudited)


	March 31, 2026			December 31, 2025
Assets
Current assets:
Cash and cash equivalents	$	888,797		$	88,370
Accounts receivable, net of allowance for credit losses		1,113,534			989,719
Inventories		560,166			815,180
Prepaid expenses and other current assets		126,806			118,592
Current assets held for sale		—			882,189
Total current assets		2,689,303			2,894,050
Property and equipment, net of accumulated depreciation of $421,329 and $404,878 at March 31, 2026 and December 31, 2025, respectively		201,885			204,689
Goodwill		2,533,555			2,545,673
Intangible assets, net of accumulated amortization		536,884			557,555
Operating lease right-of-use assets, net		173,333			171,632
Other assets		78,354			39,712
Total assets	$	6,213,314		$	6,413,311
Liabilities, Redeemable Noncontrolling Interests, and Equity
Current liabilities:
Trade accounts payable	$	1,091,434		$	1,217,946
Accrued expenses		351,891			333,024
Current portion of obligations under operating leases		45,391			42,936
Current portion of obligations under financing leases		6,737			6,794
Current portion of long-term debt		52,960			52,340
Current liabilities held for sale		—			195,994
Total current liabilities		1,548,413			1,849,034
Obligations under operating leases, net of current portion		136,724			135,420
Obligations under financing leases, net of current portion		13,021			14,544
Long-term debt, net of current portion		2,444,871			2,455,204
Deferred income taxes, net		1,166			6,178
Long-term liabilities		79,226			66,565
Total liabilities		4,223,421			4,526,945
Redeemable noncontrolling interests		10,512			11,227
Shareholders' equity:
Common stock, $0.01 par value, 1,500,000,000 shares authorized, 193,209,722 and 192,124,125 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively	$	1,932		$	1,921
Preferred stock, $0.01 par value, 250,000,000 authorized, no shares issued and outstanding at March 31, 2026 and December 31, 2025		—			—
Additional paid-in capital		1,964,516			1,954,482
Retained earnings (accumulated deficit)		14,135			(74,647	)
Accumulated other comprehensive loss		(1,265	)		(6,691	)
Total shareholders' equity		1,979,318			1,875,065
Noncontrolling interest		63			74
Total equity		1,979,381			1,875,139
Total liabilities, redeemable noncontrolling interests, and equity	$	6,213,314		$	6,413,311

See accompanying notes to the condensed consolidated financial statements.

BrightSpring Health Services, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)


	For the Three Months Ended
	March 31,
	2026			2025
Revenues:
Products	$	3,171,349		$	2,532,171
Services		442,372			345,958
Total revenues		3,613,721			2,878,129
Cost of goods		2,870,575			2,328,215
Cost of services		260,924			211,545
Gross profit		482,222			338,369
Selling, general, and administrative expenses		360,773			287,630
Operating income		121,449			50,739
Interest expense, net		38,615			41,763
Income from continuing operations before income taxes		82,834			8,976
Income tax expense (benefit)		8,551			(240	)
Income from continuing operations, net of income taxes		74,283			9,216
Income from discontinued operations, net of income taxes		74,327			19,794
Net income		148,610			29,010
Net loss attributable to noncontrolling interests included in continuing operations		(157	)		(532	)
Net income attributable to BrightSpring Health Services, Inc. and subsidiaries	$	148,767		$	29,542

Net income per common share (Note 10):
Basic income per share attributable to common shareholders:
Continuing operations	$	0.36		$	0.05
Discontinued operations	$	0.37		$	0.10
Net income per share	$	0.73		$	0.15
Diluted income per share attributable to common shareholders:
Continuing operations	$	0.34		$	0.05
Discontinued operations	$	0.33		$	0.09
Net income per share	$	0.67		$	0.14
Weighted average shares outstanding:
Basic		204,712			201,005
Diluted		221,321			214,927

See accompanying notes to the condensed consolidated financial statements.

BrightSpring Health Services, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income

(In thousands)

(Unaudited)


	For the Three Months Ended
	March 31,
	2026			2025
Net income	$	148,610		$	29,010
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		(92	)		(38	)
Cash flow hedges:
Net change in fair value, net of tax (1)		5,962			108
Amounts reclassified to earnings, net of tax (2)		(444	)		(3,357	)
Total other comprehensive income (loss), net of tax		5,426			(3,287	)
Total comprehensive income		154,036			25,723
Comprehensive loss attributable to redeemable noncontrolling interests		(159	)		(407	)
Comprehensive income (loss) attributable to noncontrolling interest		2			(125	)
Comprehensive income attributable to BrightSpring Health Services, Inc. and subsidiaries	$	154,193		$	26,255

(1)

The income tax effects of the net change in fair value were $(1,935) and $(33) for the three months ended March 31, 2026 and 2025, respectively.

(2)

The income tax effects of amounts reclassified to earnings were $144 and $1,087 for the three months ended March 31, 2026 and 2025, respectively.

See accompanying notes to the condensed consolidated financial statements.

BrightSpring Health Services, Inc. and Subsidiaries

Condensed Consolidated Statements of Shareholders’ Equity

(In thousands, except share data)

(Unaudited)


	For the Three Months Ended March 31, 2026
	Common Stock						Additional Paid-In Capital			(Accumulated Deficit) Retained Earnings			Accumulated Other Comprehensive Loss			Noncontrolling Interest			Total
	Shares			Amount
Balances at December 31, 2025		192,124,125		$	1,921		$	1,954,482		$	(74,647	)	$	(6,691	)	$	74		$	1,875,139
Net income (1)		—			—			—			148,767			—			2			148,769
Other comprehensive income, net of tax		—			—			—			—			5,426			—			5,426
Share-based compensation		—			—			3,676			—			—			—			3,676
Exercise of stock options		1,377,708			14			12,078			—			—			—			12,092
Issuance of common stock for settlement of RSUs		1,316,385			13			(13	)		—			—			—			—
Tax effect of net share settlement of equity awards		(143,689	)		(1	)		(5,707	)		—			—			—			(5,708	)
Share repurchase		(1,464,807	)		(15	)		—			(59,985	)		—			—			(60,000	)
Other		—			—			—			—			—			(13	)		(13	)
Balances at March 31, 2026		193,209,722		$	1,932		$	1,964,516		$	14,135		$	(1,265	)	$	63		$	1,979,381


	For the Three Months Ended March 31, 2025
	Common Stock						Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interest			Total
	Shares			Amount
Balances at December 31, 2024		174,245,990		$	1,742		$	1,866,850		$	(222,155	)	$	1,418		$	—		$	1,647,855
Net income (loss) (1)		—			—			—			29,542			—			(125	)		29,417
Other comprehensive loss, net of tax		—			—			—			—			(3,287	)		—			(3,287	)
Share-based compensation		—			—			15,681			—			—			—			15,681
Exercise of stock options		36,253			—			345			—			—			—			345
Issuance of common stock for settlement of RSUs		1,052,536			11			(11	)		—			—			—			—
Tax effect of net share settlement of equity awards		(151,345	)		(1	)		(2,766	)		—			—			—			(2,767	)
Balances at March 31, 2025		175,183,434		$	1,752		$	1,880,099		$	(192,613	)	$	(1,869	)	$	(125	)	$	1,687,244

(1) Net income (loss) to the Company for the three months ended March 31, 2026 and 2025 excludes $(159) and $(407), respectively, allocable to the redeemable noncontrolling interests for our joint venture arrangements.

See accompanying notes to the condensed consolidated financial statements.

BrightSpring Health Services, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	For the Three Months Ended
	March 31,
	2026			2025
Operating activities:
Net income	$	148,610		$	29,010
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		39,094			42,161
Change in fair value of contingent consideration, net		—			1,698
Provision for credit losses		10,559			8,101
Amortization of deferred debt issuance costs		2,816			2,749
Share-based compensation		3,676			15,681
Deferred income taxes, net		(7,193	)		4,031
Gain on sale of discontinued operations		(103,412	)		—
Other		(72	)		2,919
Change in operating assets and liabilities, net of acquisitions and dispositions:
Accounts receivable		(114,125	)		(79,449	)
Prepaid expenses and other current assets		(7,791	)		23,973
Inventories		254,833			103,300
Trade accounts payable		(86,987	)		(53,871	)
Accrued expenses		11,030			8,643
Other assets and liabilities		(28,095	)		(7,348	)
Net cash provided by operating activities	$	122,943		$	101,598
Investing activities:
Purchases of property and equipment	$	(21,544	)	$	(17,632	)
Acquisitions of businesses		(42,203	)		(6,754	)
Proceeds from sale of discontinued operations		810,908			—
Other		232			195
Net cash provided by (used in) investing activities	$	747,393		$	(24,191	)
Financing activities:
Long-term debt repayments	$	(12,353	)	$	(11,792	)
Repayments of the Revolving Credit Facility, net		—			(63,300	)
Repurchase of shares of common stock		(60,000	)		—
Proceeds from shares issued under share-based compensation plan		12,092			345
Taxes paid related to net share settlement of equity awards		(5,708	)		(2,763	)
Purchase of redeemable noncontrolling interest		—			(5,100	)
Payments of financing lease obligations		(4,047	)		(3,408	)
Net cash used in financing activities	$	(70,016	)	$	(86,018	)
Net increase (decrease) in cash and cash equivalents		800,320			(8,611	)
Cash and cash equivalents at beginning of period		88,477			61,253
Cash and cash equivalents at end of period	$	888,797		$	52,642
Cash and cash equivalents included in assets held for sale at end of period		—			305
Cash and cash equivalents included in continuing operations at end of period	$	888,797		$	52,337
Supplemental disclosures of cash flow information:
Cash paid for:
Interest, net	$	42,715		$	53,799
Income taxes, net of refunds	$	398		$	245
Supplemental schedule of non-cash investing and financing activities:
Financing lease obligations	$	726		$	3,408
Purchases of property and equipment in accounts payable	$	3,668		$	10,416

See accompanying notes to the condensed consolidated financial statements.

Index to Notes to Condensed Consolidated Financial Statements


	Page

Note 1 - Significant Accounting Policies	9
Note 2 - Discontinued Operations	10
Note 3 - Revenue	12
Note 4 - Acquisitions	13
Note 5 - Goodwill and Intangible Assets	15
Note 6 - Debt and Derivatives	16
Note 7 - TEUs	17
Note 8 - Income Taxes	18
Note 9 - Detail of Certain Balance Sheet Accounts	18
Note 10 - Earnings Per Share	19
Note 11 - Segment Information	20

BrightSpring Health Services, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Significant Accounting Policies

Description of Business

BrightSpring Health Services, Inc. and its subsidiaries (“BrightSpring”, the “Company”, “we,” “us,” or “our”) is a leading home and community-based healthcare services platform, focused on delivering complementary pharmacy and provider services to complex patients. Our platform delivers clinical services and pharmacy solutions across Medicare, Medicaid, and commercially-insured populations.

On December 7, 2017, affiliates of Kohlberg Kravis Roberts & Co. L.P. (“KKR” or “KKR Stockholder”) and Walgreens Boots Alliance, Inc. (“WBA”) purchased PharMerica Corporation (“PharMerica”) and on March 5, 2019, expanded with the acquisition of BrightSpring Health Holdings Corp. The surviving entity was renamed BrightSpring Health Services, Inc. WBA sold their remaining ownership interests in the Company in 2025 through open market transactions and is no longer considered a related party of the Company. As a result of the registered secondary public offerings in 2025, the Company no longer qualifies as a “controlled company” under the Nasdaq Stock Market LLC listing standards.

On January 17, 2025, the Company entered into a purchase agreement to divest its community living services, home and community based waiver programs, and intermediate care facilities (the “Community Living business”). The transaction closed on March 30, 2026.

In March 2026, KKR Stockholder and certain management selling stockholders completed an additional registered secondary public offering of 20,000,000 shares of the Company's common stock (the “March 2026 Offering”) and the Company concurrently repurchased 1,464,807 shares of common stock from the underwriter at the same price the underwriter purchased the shares from the selling stockholders. The Company did not sell any shares of common stock that were offered in the March 2026 Offering. The Company did not receive any proceeds from the March 2026 Offering, other than proceeds received in connection with the cash exercise of stock options by the management selling stockholders in connection with the March 2026 Offering. The par value of the shares repurchased and the amount paid to repurchase the shares in excess of the par value were recorded as common stock and retained earnings, respectively, in the unaudited condensed consolidated balance sheets.

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of BrightSpring Health Services, Inc. and its subsidiaries. The Company consolidates its majority-owned and controlled entities, including variable interest entities (“VIEs”) for which the Company is the primary beneficiary. All intercompany balances and transactions have been eliminated.

We record a noncontrolling interest for the allocable portion of income or loss and comprehensive income or loss to which the noncontrolling interest holders are entitled based upon their ownership share of the affiliate. The Company determined noncontrolling interests for certain of these VIEs to be redeemable noncontrolling interests, which are presented in the unaudited condensed consolidated balance sheets as redeemable noncontrolling interests.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly our financial position, our results of operations, and our cash flows in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial reporting. Our results of operations for the interim periods presented are not necessarily indicative of the results of our operations for the entire year.

As discussed in Note 2, the Community Living business met the criteria to be reported as discontinued operations and held for sale during the first fiscal quarter of 2025. Therefore, the Company has reported the historical results of the Community Living business, including the results of operations and cash flows as discontinued operations for all periods presented herein, and related assets and liabilities, as held for sale as of December 31, 2025. Unless otherwise noted, all activities and amounts reported in the accompanying notes to the unaudited condensed consolidated financial statements relate to the continuing operations of the Company and exclude activities and amounts related to the Community Living business.

This report should be read in conjunction with our consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025, which includes information and disclosures not included herein. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have

been condensed or omitted from the interim financial information presented, as allowed by the rules and regulations of the Securities and Exchange Commission.

Use of Estimates

The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts and related disclosures. We rely on historical experience and on various other assumptions that we believe to be reasonable under the circumstances to make judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Significant estimates are involved in the valuation of accounts receivable, inventory, intangible assets, derivatives, contingent consideration, taxes, insurance reserves, share-based compensation, and goodwill. Actual amounts may differ from these estimates.

Commitments and Contingencies

The Company is party to various legal and/or administrative proceedings arising out of the operation of our programs and arising in the ordinary course of business. We record accruals for such contingencies to the extent that we conclude it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We do not believe the ultimate liability, if any, for outstanding proceedings or claims, individually or in the aggregate, in excess of amounts already provided, will have a material adverse effect on our consolidated financial condition, results of operations, or cash flows. It is reasonably possible that an adverse determination might have an impact on a particular period. While we believe our provision for legal contingencies is adequate, the outcome of legal proceedings is difficult to predict, and we may settle legal claims or be subject to judgments for amounts that exceed our estimates.

Related Party Transactions

There were no related party transactions for the periods presented other than those disclosed elsewhere in these notes to the unaudited condensed consolidated financial statements.

Recently Adopted Accounting Standards

There were no new accounting standards adopted during the three months ended March 31, 2026.

Recently Issued Accounting Standards

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which was further clarified in January 2025 through the issuance of ASU 2025-01. These ASUs require new financial statement disclosures to provide disaggregated information for certain types of expenses, including purchases of inventory, employee compensation, depreciation, and amortization in commonly presented expense captions such as cost of goods and services and selling, general, and administrative expenses. The amendments in these ASUs are effective for annual periods beginning after December 15, 2026, with early adoption permitted. The adoption of this guidance will have no impact on the Company's consolidated financial condition or results of operations. The Company is currently evaluating the impact to the related disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which modernizes the accounting for internal-use software costs by removing all references to prescriptive and sequential software development stages. The new standard requires entities to consider whether significant development uncertainty has been resolved before starting to capitalize software costs and aligns disclosure requirements with ASC 360, Property, Plant, and Equipment. The ASU is effective for annual and interim reporting periods beginning after December 15, 2027, and can be applied prospectively, retrospectively, or using a modified transition method, with early adoption permitted. The Company is currently evaluating the impacts of this guidance on the consolidated financial statements and related disclosures.

2. Discontinued Operations

On January 17, 2025, BrightSpring entered into a definitive agreement to sell its Community Living business to National Mentor Holdings, Inc. (the “Purchaser”) for $835.0 million in cash upon closing, subject to certain post-closing adjustments. We entered into the transaction in order to streamline our service offerings and further focus on the senior and specialty populations. On March 30,

2026, the Company completed the transaction pursuant to the terms of the definitive agreement for cash proceeds of $810.9 million, resulting in a pre-tax gain on sale of $103.4 million.

The following tables reconciles the gross proceeds on sale of the Community Living business:


	For the Three Months Ended
	March 31,
	2026
Gross proceeds	$	835,000
Less: certain post-closing adjustments		11,073
Less: direct costs to sell		13,854
Less: carrying amount of Community Living business		706,661
Gain on sale of discontinued operations	$	103,412
Less: current and deferred tax impact		72,218
Net gain on sale of discontinued operations	$	31,194

The Company determined the divestiture of the Community Living business represents a strategic shift that will have a major effect on its business and concluded the criteria for classification as discontinued operations were met during the first fiscal quarter of 2025. Accordingly, the Community Living business is reported as discontinued operations in accordance with Accounting Standards Codification (“ASC”) 205-20, Discontinued Operations. The Community Living business was historically presented as a part of the Provider Services reportable segment.

In accordance with ASC 205-20, Allocation of Interest to Discontinued Operations, the Company elected to allocate interest expense to discontinued operations for the Company’s debt that is not directly attributed to the Community Living business. Interest expense was allocated based on a ratio of net assets held for sale to the sum of consolidated net assets and consolidated debt. In addition, upon closing of the divestiture, we entered into a transition services agreement (“TSA”) with the Purchaser to support the Purchaser's post-closing operations of the Community Living business by providing the Purchaser with certain transition services in exchange for service fees in the form of both fixed-price and pass through costs over the 18 months following the close of the transaction. Transition services primarily include finance and accounting, human resources, IT, facilities management, and compliance services.

The financial results of the Community Living business are presented as income from discontinued operations on our unaudited condensed consolidated statements of operations through March 31, 2026. The following table presents the financial results of the Community Living business (in thousands):


	For the Three Months Ended
	March 31,
	2026		2025
Services revenue	$	306,646	$	299,106
Cost of services		206,585		204,183
Gross profit		100,061		94,923
Selling, general, and administrative expenses		37,966		60,744
Operating income of discontinued operations		62,095		34,179
Interest expense, net		6,677		7,907
Gain on sale of discontinued operations		103,412		—
Income of discontinued operations before incomes taxes		158,830		26,272
Income tax expense of discontinued operations		84,503		6,478
Income from discontinued operations, net of income taxes	$	74,327	$	19,794

The following table presents the aggregate carrying amounts of assets and liabilities held for sale for the Community Living business as of December 31, 2025 in the unaudited condensed consolidated balance sheet (in thousands):


Assets
Current assets:
Cash and cash equivalents	$	107
Accounts receivable, net of allowance for credit losses		136,875
Inventories		3,294
Prepaid expenses and other current assets		2,717
Total current assets held for sale		142,993
Property and equipment, net of accumulated depreciation of $104,314		83,465
Goodwill		307,640
Intangible assets, net of accumulated amortization		216,192
Operating lease right-of-use assets, net		129,005
Other assets		2,894
Total assets held for sale	$	882,189
Liabilities
Current liabilities:
Trade accounts payable	$	25,081
Accrued expenses		59,038
Current portion of obligations under operating leases		32,749
Current portion of obligations under financing leases		7,691
Total current liabilities held for sale		124,559
Obligations under operating leases, net of current portion		57,771
Obligations under financing leases, net of current portion		12,766
Deferred income taxes, net		390
Long-term liabilities		508
Total liabilities held for sale	$	195,994

The following table presents the significant non-cash items and purchases of property and equipment for the discontinued operations that are included in the accompanying unaudited condensed consolidated statements of cash flows (in thousands):


	For the Three Months Ended
	March 31,
	2026			2025
Cash flows from operating activities of discontinued operations:
Depreciation and amortization	$	—		$	1,329
Share-based compensation		(9,301	)		3,207
Gain on sale of discontinued operations		(103,412	)		—

Cash flows used in investing activities of discontinued operations:
Purchases of property and equipment		3,088			3,044

3. Revenue

The Company is substantially dependent on revenues received under contracts with federal, state, and local government agencies. Operating funding sources are generally earned from Medicaid, Medicare, commercial insurance reimbursement, and from private and other payors. There is no single customer whose revenue was 10% or more of our consolidated revenue during the periods presented. The following tables set forth revenue by payor type (in millions):


	Pharmacy Solutions
		For the Three Months Ended March 31,
		2026					2025
		Revenue		% of Revenue			Revenue		% of Revenue
Commercial insurance		$	959.4		26.5	%	$	674.5		23.4	%
Medicaid			308.6		8.5	%		238.2		8.3	%
Medicare Part A			137.7		3.8	%		140.4		4.9	%
Medicare Part B			20.3		0.6	%		19.5		0.7	%
Medicare Part C			602.4		16.7	%		487.7		16.9	%
Medicare Part D			1,074.1		29.7	%		910.9		31.6	%
Private & other			68.8		2.0	%		61.0		2.2	%
		$	3,171.3		87.8	%	$	2,532.2		88.0	%


	Provider Services
		For the Three Months Ended March 31,
		2026					2025
		Revenue		% of Revenue			Revenue		% of Revenue
Commercial insurance		$	54.9		1.5	%	$	41.4		1.4	%
Medicaid			97.1		2.7	%		85.1		3.0	%
Medicare Part A			171.2		4.7	%		122.4		4.3	%
Medicare Part B			1.5		0.0	%		1.5		0.1	%
Medicare Part C			64.6		1.8	%		32.6		1.1	%
Private & other			53.1		1.5	%		62.9		2.1	%
		$	442.4		12.2	%	$	345.9		12.0	%


	Consolidated
		For the Three Months Ended March 31,
		2026					2025
		Revenue		% of Revenue			Revenue		% of Revenue
Commercial insurance		$	1,014.3		28.0	%	$	715.9		24.8	%
Medicaid			405.7		11.2	%		323.3		11.3	%
Medicare Part A			308.9		8.5	%		262.8		9.2	%
Medicare Part B			21.8		0.6	%		21.0		0.8	%
Medicare Part C			667.0		18.5	%		520.3		18.0	%
Medicare Part D			1,074.1		29.7	%		910.9		31.6	%
Private & other			121.9		3.5	%		123.9		4.3	%
		$	3,613.7		100.0	%	$	2,878.1		100.0	%

Refer to Note 11 for the disaggregation of revenue by reportable segment.

4. Acquisitions

2026 Acquisitions

There were no acquisitions completed during the three months ended March 31, 2026.

2025 Acquisitions

During the year ended December 31, 2025, we completed three acquisitions within the Provider Services segment for aggregate consideration net of cash acquired of $247.0 million. We entered into these transactions in order to expand our services and geographic offerings. The operating results of these acquisitions are included in our unaudited condensed consolidated financial statements from the respective dates of the acquisition.

Amedisys and LHC Branches Acquisition

The Company entered into a purchase agreement with Amedisys, Inc., UnitedHealth Group Incorporated and certain of their respective subsidiaries, to purchase certain Amedisys home health and hospice care centers and certain UnitedHealth Group care centers (the “Amedisys and LHC Branches Acquisition”), which is comprised of 110 branches, for a total purchase price of $246.4

million, net of cash acquired. On December 1, 2025 and December 31, 2025, the Company closed on 103 branches and 4 branches, respectively, as a part of the Amedisys and LHC Branches Acquisition for aggregate consideration of $238.5 million net of cash acquired of which $42.2 million was paid in the first fiscal quarter of 2026. The closing of the remaining three branches is expected to occur in fiscal year 2026, subject to customary regulatory approvals and other closing conditions.

Upon closing, we entered into a one-year TSA with the sellers to support our post-closing operations of the Amedisys and LHC Branches Acquisition. The sellers will continue to provide certain transition services in exchange for fixed-price service fees. Transition services primarily include finance and accounting, human resources, IT, and legal and compliance services. The fees associated with the services rendered under the TSA are not material to our results of operations and are recorded within selling, general, and administrative expenses in our unaudited condensed consolidated statements of operations.

The Amedisys and LHC Branches Acquisition provides home health and hospice care services through several legal entities in 18 states, of which 17 states have closed as of March 31, 2026. Its results are consolidated within the Provider Services segment. The allocation of the purchase price is provisional as of March 31, 2026. Provisional amounts primarily relate to the valuation of intangible assets, certain lease right-of-use assets and lease liabilities, working capital accounts (accounts receivable and certain accruals), and the valuation of redeemable noncontrolling interests. The provisional status is due to pending third‑party valuations, receipt of additional information from the sellers, and completion of certain closing procedures. We expect to complete the purchase price allocation no later than December 1, 2026. During the measurement period, we will record adjustments to provisional amounts with a corresponding adjustment to goodwill, reflecting facts and circumstances that existed as of the acquisition dates. The following table summarizes the consideration paid (in thousands) for the Amedisys and LHC Branches Acquisition and the provisional fair value of the assets acquired and the liabilities assumed at the respective acquisition dates.


Accounts receivable	$	35,715
Prepaid expenses and other current assets		32
Property and equipment		5,633
Goodwill		162,986
Intangible assets		62,897
Operating lease right-of-use assets		12,604
Other assets		96
Trade accounts payable		1,881
Accrued expenses		10,813
Current portion of obligations under operating leases		4,177
Current portion of obligations under financing leases		1,797
Obligations under operating leases, net of current portion		8,427
Obligations under financing leases, net of current portion		3,587
Long-term liabilities		2,773
Redeemable noncontrolling interests		8,084
Noncontrolling interest		(35	)
Aggregate purchase price, net of cash acquired	$	238,459

The Company acquired eight joint ventures as a part of the transaction which are recorded either as redeemable noncontrolling interests or noncontrolling interest on the unaudited condensed consolidated balance sheets based on the nature of the joint venture.

The fair value of acquired licenses of $62.9 million was based upon a third-party valuation, of which $56.0 million were assigned an indefinite life. The definite-lived licenses have an estimated weighted average useful life of 10.0 years. We expect all of the goodwill will be deductible for tax purposes. The Company believes the resulting amount of goodwill reflects its expectation of synergistic benefits of the acquisition.

The Amedisys and LHC Branches Acquisition contributed $78.5 million in revenue and $7.4 million in operating income during the three months ended March 31, 2026. The Amedisys and LHC Branches Acquisition was not completed until the fourth fiscal quarter of 2025, as such it did not contribute any revenue or operating income during the three months ended March 31, 2025.

The following table contains the unaudited pro forma consolidated financial information, assuming that the Amedisys and LHC Branches Acquisition transaction closed on January 1, 2025 (in thousands):


	For The Three Months Ended
	March 31,
	2025
Revenue	$	2,963,594
Operating income	$	60,724
Net income from continuing operations attributable to BrightSpring Health Services, Inc. and subsidiaries	$	17,037

These pro forma results include adjustments for current factors that would affect the business, including non-recurring transaction costs, depreciation, amortization of acquired intangible assets, and income taxes based on the Company's statutory tax rate. The unaudited pro forma financial information is not necessarily indicative of either future results of operations or results of operations that might have been achieved had the acquisition been consummated as of January 1, 2025 and does not reflect any operating efficiencies and cost savings that may be realized from the integration of the acquisition.

Others

Aggregate consideration for the two other acquisitions completed in 2025 was approximately $8.5 million. No cash was acquired as a part of these transactions. The operating results of the acquisitions are not material to our results of operations.

The Company expects to finalize the purchase price allocation for the 2025 acquisitions prior to the one-year anniversary date of each acquisition. During the three months ended March 31, 2025, the Company incurred immaterial transaction costs related to all 2025 acquisitions, including those acquisitions completed in subsequent quarters of 2025. These costs are included in selling, general, and administrative expenses in our unaudited condensed consolidated statements of operations.

5. Goodwill and Intangible Assets

A summary of changes to goodwill, by reportable segment, is as follows (in thousands):


	Goodwill
	Pharmacy Solutions		Provider Services			Total
Goodwill at January 1, 2026*	$	841,052	$	1,704,621		$	2,545,673
Measurement period adjustments		—		(12,056	)		(12,056	)
Foreign currency adjustments		—		(62	)		(62	)
Goodwill at March 31, 2026*	$	841,052	$	1,692,503		$	2,533,555

* For the periods presented, the carrying amount of goodwill is presented net of accumulated impairment losses of $40.9 million, which were incurred in fiscal year 2022.

Intangible assets are as follows (in thousands):


	March 31, 2026						December 31, 2025
	Gross		Accumulated Amortization		Net Carrying Value		Gross		Accumulated Amortization		Net Carrying Value		Life (Years)
Customer relationships	$	501,510	$	368,679	$	132,831	$	502,160	$	356,146	$	146,014	5-20
Trade names		318,768		160,123		158,645		318,768		154,601		164,167	2-20
Licenses		67,395		19,973		47,422		67,395		18,886		48,509	10-20
Doctor/payor network		4,260		3,768		492		5,650		4,987		663	5-8
Covenants not to compete		6,604		4,984		1,620		6,654		4,717		1,937	2-7
Other intangible assets		10,940		8,316		2,624		10,940		7,925		3,015	5-7
Total definite-lived assets	$	909,477	$	565,843	$	343,634	$	911,567	$	547,262	$	364,305
Licenses		193,250		—		193,250		193,250		—		193,250	Indefinite
Total intangible assets	$	1,102,727	$	565,843	$	536,884	$	1,104,817	$	547,262	$	557,555

Amortization expense for the three months ended March 31, 2026 and 2025 was $20.7 million and $23.4 million, respectively.

6. Debt and Derivatives

The table below summarizes the total outstanding debt of the Company (in thousands):


	March 31, 2026					December 31, 2025
	Rate			Amount		Rate			Amount
First Lien Incremental Term Loan Tranche B-5 - payable to lenders at SOFR plus applicable margin		6.17	%	$	2,514,872		6.22	%	$	2,521,255
Revolving Credit Loans - payable to lenders at SOFR plus applicable margin		6.42	%		—		6.47	%		—
Swingline/Base Rate - payable to lenders at ABR plus applicable margin		8.50	%		—		8.50	%		—
Amortizing Notes (1)					25,394					31,360
Notes payable and other					17,125					17,129
Total debt					2,557,391					2,569,744
Less: debt issuance costs, net					59,560					62,200
Total debt, net of debt issuance costs					2,497,831					2,507,544
Less: current portion of long-term debt					52,960					52,340
Total long-term debt, net of current portion				$	2,444,871				$	2,455,204

(1)

See Note 7 for discussion of Amortizing Notes.

The following discussion summarizes the debt agreements for the three months ended March 31, 2026 and the year ended December 31, 2025.

First Lien Credit Agreement

On March 5, 2019, the Company entered into a First Lien Credit Agreement (the “First Lien”), with Morgan Stanley Senior Funding, Inc., as the Administrative Agent and the Collateral Agent.

On December 11, 2024, we amended the First Lien to refinance the outstanding principal by establishing a Tranche B-5 Term Loan (“Tranche B-5”) in an aggregate principal amount of $2,553.2 million at a rate equal to Secured Overnight Financing Rate (“SOFR”) plus 2.50% or Alternate Base Rate (“ABR”) plus 1.50% with a maturity date of February 21, 2031. Principal payments are due on the last business day of each quarter, which commenced in the first fiscal quarter of 2025 and equate to 0.25% of the principal at issuance, with a balloon payment due February 21, 2031.

Revolving Credit Facility

The First Lien also extends credit in the form of a Revolving Credit Facility with a borrowing capacity of $475.0 million (the “Revolver”), of which up to $50.0 million is available as swingline loans and up to $82.5 million is available as letters of credit (the “LC Sublimit”). The Revolver will mature on June 30, 2028. Borrowings bear interest at a rate equal to SOFR (with a floor of 0.00%) plus 3.00% for the Revolving Credit Loans and ABR (with a floor of 0.00%) plus 2.00% for the Swingline Loans. As of March 31, 2026 and December 31, 2025, the Company had $475.0 million of borrowing capacity available under the Revolver as there were no borrowings under the Revolver or letters of credit outstanding.

The Company’s First Lien also provides for an additional $65.0 million of letter of credit commitments (the “LC Facility”), which are not subject to the LC Sublimit and do not reduce the Revolver borrowing capacity. As of March 31, 2026, there were $62.9 million of letters of credit outstanding under the LC Facility, resulting in an available borrowing capacity of $2.1 million. As of December 31, 2025, there were $62.8 million of letters of credit outstanding under the LC Facility, resulting in an available borrowing capacity of $2.2 million.

Derivative Financial Instruments

To manage fluctuations in cash flows resulting from changes in the variable interest rates, the Company entered into receive-variable, pay-fixed interest rate swap agreements. The following table summarizes our interest rate swaps designated as cash flow hedges (in millions):


	Notional Amount as of
Financial Institution	March 31, 2026		December 31, 2025		Effective Dates	Fixed Rates
Credit Agricole Corporate and Investment Bank	$	500	$	500	1-year period ending September 30, 2026		3.72500	%
Mizuho Capital Markets		500		500	1-year period ending September 30, 2026		3.61121	%
Credit Agricole Corporate and Investment Bank		250		250	3-year period ending September 30, 2028		3.33150	%
Morgan Stanley		250		250	3-year period ending September 30, 2028		3.17700	%
Existing contracts	$	1,500	$	1,500

Mizuho Capital Markets	$	500	$	500	2-year period ending September 30, 2028		3.20220	%
Forward starting contracts (1)	$	500	$	500

(1)

During the fourth fiscal quarter of 2025, we entered into a forward starting interest rate swap agreement, with a $500 million notional amount, to hedge the cash flow risk of variability in interest payment on our variable rate borrowings. The effective date of the forward starting interest rate swap agreement is September 30, 2026. As of March 31, 2026, this contract meets the criteria of a cash flow hedge.

The net fair value of the cash flow hedges as of March 31, 2026 and December 31, 2025 was a $6.9 million asset and a $0.4 million liability, respectively, and is reflected in prepaid expenses and other current assets, other assets, accrued expenses and long-term liabilities, as applicable, in the unaudited condensed consolidated balance sheets. Refer to Note 9 for details. The fair values of our interest rate swaps are based upon Level 2 inputs, which include valuation models. The key inputs for the valuation models are quoted market prices, interest rates, forward yield curves, and credit risk adjustments that are necessary to reflect the probability of default by the counterparty or us.

Amounts reported in accumulated other comprehensive income (“AOCI”) related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. Interest received, including payments made or received under the cash flow hedges, was $0.6 million and $4.4 million for the three months ended March 31, 2026 and 2025, respectively. The Company expects approximately $3.0 million of pre-tax gains to be reclassified out of AOCI into earnings within the next twelve months.

7. Tangible Equity Units (“TEUs”)

Concurrently with the IPO in 2024, we issued 8,000,000 TEUs, which have a stated amount of $50.00 per unit. Each TEU is comprised of a prepaid stock purchase contract (“Purchase Contract”) and a senior amortizing note (“Amortizing Note”) due February 1, 2027, each issued by the Company. Each TEU may be separated by a holder into its constituent Purchase Contract and Amortizing Note, each of which is considered a freestanding financial instrument. The proceeds from the issuance were allocated to equity and debt based on the relative fair value of the respective components of each TEU.

The value allocated to the Purchase Contract is reflected net of issuance costs in additional paid-in capital. The value allocated to the Amortizing Notes is reflected in long-term debt, with payments expected in the next twelve months reflected in current portion of long-term debt, in the unaudited condensed consolidated balance sheets. The long-term portion of the Amortizing Notes as of December 31, 2025 was $6.6 million. The full value of the Amortizing Notes as of March 31, 2026 was included in current portion of long-term debt since the final installment payment date is due within one-year of the period end. The current portion of the Amortizing Notes as of March 31, 2026 and December 31, 2025 was $25.4 million and $24.8 million, respectively. Issuance costs related to the Amortizing Notes are reflected as a reduction of the carrying amount and are amortized through the maturity date using the effective interest rate method.

Amortizing Notes

The Company pays equal quarterly cash installments of $0.8438 per Amortizing Note on February 1, May 1, August 1 and November 1, commencing on May 1, 2024, except for the May 1, 2024 installment payment, which was $0.8531 per Amortizing Note, with a final installment payment date of February 1, 2027. In the aggregate, the annual quarterly cash installments are the equivalent of 6.75% per year. Each installment payment constitutes a payment of interest and a partial repayment of principal. The Company paid $6.8 million and $6.7 million in TEU installment payments during the three months ended March 31, 2026 and 2025, respectively. The Amortizing Notes rank equally in right of payment with all other existing and future unsecured senior indebtedness and rank senior to all of our existing and future indebtedness, if any, that is subordinated to the Amortizing Notes.

Purchase Contracts

At any time prior to the second scheduled trading day immediately preceding February 1, 2027, a holder may elect to settle its Purchase Contract early, in whole or in part, at an early settlement rate equal to the minimum settlement rate. The Company has the right to settle the Purchase Contracts on or after November 1, 2024, in whole but not in part, on a date fixed by it at an early mandatory settlement rate equal to the maximum settlement rate, subject to certain exceptions. During the three months ended March 31, 2026 and 2025, no TEUs were converted at the holder's option.

Unless settled earlier at the holder’s option or at the Company's election, each Purchase Contract will, subject to postponement in certain limited circumstances, automatically settle on February 1, 2027 for a number of shares of our common stock, subject to certain anti-dilution adjustments, based upon the 20-day volume-weighted average price of our common stock.

The Purchase Contracts are mandatorily convertible into a minimum of 26.2 million shares or a maximum of 30.8 million shares of our common stock on the mandatory settlement date (unless redeemed by us or settled earlier at the unit holder's option). The 26.2 million minimum shares are included in the calculation of basic weighted average shares outstanding. The difference between the minimum and maximum shares represents potentially dilutive securities, which are included in the calculation of diluted weighted average shares outstanding to the extent that the average applicable market value is equal to or greater than $13.00 but is less than or equal to $15.28 during the period (see Note 10).

8. Income Taxes

The provision for income taxes is attributable to U.S federal, state, and foreign income taxes. The Company’s effective tax rate used for interim periods is based on an estimated annual effective tax rate and includes the tax effect of items required to be recorded discretely in the interim periods in which those items occur.

A reconciliation of the Company’s effective tax rate is as follows:


	For the Three Months Ended
	March 31,
	2026			2025
Estimated annual effective tax rate before discrete items		25.4	%		25.7	%
Discrete items recognized		(15.1	)%		(28.4	)%
Effective tax rate recognized in the statements of operations		10.3	%		(2.7	)%

During the three months ended March 31, 2026, the Company’s effective tax rate was lower than the U.S. federal income tax rate, primarily as a result of including $12.5 million in net tax benefits resulting from the recognition of excess tax benefits from share-based compensation, partially offset by limitations on the deductibility of certain executive compensation. During the three months ended

BrightSpring Health Services, Inc. 10-Q