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What changed in Guardian Pharmacy Services, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Guardian Pharmacy Services, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+323 added−338 removedSource: 10-K (2026-03-11) vs 10-K (2025-03-26)

Top changes in Guardian Pharmacy Services, Inc.'s 2025 10-K

323 paragraphs added · 338 removed · 261 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

118 edited+28 added−30 removed146 unchanged
Biggest changeWe are subject to certain requirements of the DSCSA that have already taken effect, such as: product tracing requirements for dispensers of prescription drugs, including receipt, storage, and provision of transaction information, history, and statement; and obligations to implement systems to identify potential “suspect” or “illegitimate” products. 22 Table of Contents In addition, under the Comprehensive Drug Abuse Prevention and Control Act of 1970, as a dispenser of controlled substances, we must register with the DEA, file reports of inventories and transactions and provide adequate security measures.
Biggest changeConsequently, we are subject to the enhanced drug distribution security requirements of the DSCSA, such as: product tracing requirements for dispensers of prescription drugs, including receipt, storage, and provision of transaction information, history, and statement and verification processes; and obligations to implement systems to identify potential “suspect” or “illegitimate” products and to utilize secure, interoperable, electronic systems.
In turn, these caregivers require more sophisticated pharmacy capabilities and require an extensive range of pharmacy workflow services to ensure proper medication adherence and delivery of care. Highly Fragile Population of Individuals with Behavioral Health Needs at BHFs Similarly, BHFs serve as caretakers for a highly fragile population of individuals with behavioral health needs.
In turn, these caregivers require more sophisticated pharmacy capabilities and an extensive range of pharmacy workflow services to ensure proper medication adherence and delivery of care. Highly Fragile Population of Individuals with Behavioral Health Needs at BHFs Similarly, BHFs serve as caretakers for a highly fragile population of individuals with behavioral health needs.
Increasingly Complex Medication Regimens In general, older residents face more critical health conditions, including chronic illness, increased disability and multiple medical diagnoses—for a longer period of time. As a result, there is an increasingly growing demand for not only long-term care facilities, but also for caregivers who are able to help navigate the complex medication regimens of this elderly population.
Increasingly Complex Medication Regimens In general, older residents face more critical health conditions, including chronic illness, increased disability and multiple medical diagnoses—for a longer period of time. As a result, there is growing demand for not only long-term care facilities, but also for caregivers who are able to help navigate the complex medication regimens of this elderly population.
Examples of our specialized services include: • Assisting residents in optimizing pharmacy benefit plan coverage of their medication by coordinating formulary interchanges with residents’ physicians; • Proactively analyzing potential adverse drug interactions and managing potential risks in medication administration; 5 Table of Contents • Providing robotic dispensing and customized compliance solutions, organized by resident and time of administration; • Integrating a resident’s drug regimen with the LTCF’s Electronic Medication Administration Records (“EMARs”) to help ensure adherence; • Providing training for LTCF caregivers to help them administer medications to residents more safely, efficiently and cost-effectively; • Partnering with LTCF operators to increase the number of residents using our services at each facility we serve, which we refer to as “resident adoption,” in order to streamline drug administration and minimize medication management risk; • Conducting mock audits of LTCFs to monitor compliance with drug administration and government regulation; and • Reviewing periodically the drug regimen for each resident by consulting pharmacists.
Examples of our specialized services include: • Assisting residents in optimizing pharmacy benefit plan coverage of their medication by coordinating formulary interchanges with residents’ physicians; 1 Table of Contents • Proactively analyzing potential adverse drug interactions and managing potential risks in medication administration; • Providing robotic dispensing and customized compliance solutions, organized by resident and time of administration; • Integrating a resident’s drug regimen with the LTCF’s Electronic Medication Administration Records (“EMARs”) to help ensure adherence; • Providing training for LTCF caregivers to help them administer medications to residents more safely, efficiently and cost-effectively; • Partnering with LTCF operators to increase the number of residents using our services at each facility we serve, which we refer to as “resident adoption,” in order to streamline drug administration and minimize medication management risk; • Conducting mock audits of LTCFs to monitor compliance with drug administration and government regulation; and • Reviewing periodically the drug regimen for each resident by consulting pharmacists.
While we do not believe any single competitor offers a comparably robust, integrated pharmacy services solution, our primary competitors in the ALF and BHF space are large national providers including Omnicare, Inc. and PharMerica Corporation, in addition to local and regional pharmacies in each of our markets, including Remedi SeniorCare, PharmCareUSA and Polaris Pharmacy Services.
While we do not believe any single competitor offers a comparably robust, integrated pharmacy services solution, our primary competitors in the ALF and BHF space are large national providers including Omnicare and PharMerica Corporation, in addition to local and regional pharmacies in each of our markets, including Remedi SeniorCare, PharmCareUSA and Polaris Pharmacy Services.
Key Characteristics of LTCFs ALFs and BHFs SNFs Resident Ability to Choose Pharmacy Provider Each ALF resident has the right to choose his or her own pharmacy benefit plan and provider Most SNFs encourage their residents to select the SNF’s contracted pharmacy provider Level of Staff Experience Typically, minimal clinical training for caregivers / staff members Experienced staff members, including an on-site medical director and a registered nurse (RN), as well as a licensed practical nurse (LPN) or certified nursing assistant (CNA) required to administer medications Access to a Medical Provider Most ALF residents maintain their physician relationships, with office visits Each SNF contracts with a medical director that is regularly on site 16 Table of Contents Our Growth Strategy Our core growth strategy is focused on increasing the number of residents we serve.
Key Characteristics of LTCFs ALFs and BHFs SNFs Resident Ability to Choose Pharmacy Provider Each ALF resident has the right to choose his or her own pharmacy benefit plan and provider Most SNFs encourage their residents to select the SNF’s contracted pharmacy provider 11 Table of Contents ALFs and BHFs SNFs Level of Staff Experience Typically, minimal clinical training for caregivers / staff members Experienced staff members, including an on-site medical director and a registered nurse (RN), as well as a licensed practical nurse (LPN) or certified nursing assistant (CNA) required to administer medications Access to a Medical Provider Most ALF residents maintain their physician relationships, with office visits Each SNF contracts with a medical director that is regularly on site Our Growth Strategy Our core growth strategy is focused on increasing the number of residents we serve.
Specifically, at the pharmacy level, each pharmacy is run by a President, who directly oversees three directors: As we acquire or organically open new pharmacies, we offer the following support services and training to each of these directors and their local pharmacy management teams: • purchasing strategy and tools • health plan payor negotiations • revenue cycle management • business intelligence and analytics • human capital management 10 Table of Contents • treasury, business services and financial accounting • business development • operational and regulatory • sales and marketing • information technology We believe this local approach that capitalizes on our national scale distinguishes us from our competitors by eliminating a “one size fits all” approach that may create inefficiencies in a particular local market.
Specifically, at the pharmacy level, each pharmacy is run by a President, who directly oversees three directors: As we acquire or organically open new pharmacies, we offer the following support services and training to each of these directors and their local pharmacy management teams: • purchasing strategy and tools • health plan payor negotiations • revenue cycle management • business intelligence and analytics • human capital management • treasury, business services and financial accounting • business development 6 Table of Contents • operational and regulatory • sales and marketing • information technology We believe this local approach that capitalizes on our national scale distinguishes us from our competitors by eliminating a “one size fits all” approach that may create inefficiencies in a particular local market.
SNFs, which are licensed healthcare residences for individuals who require a higher level of medical care than can be provided in an ALF, provide medical care—including drug administration and rehabilitation services such as physical, occupational, and speech therapy—through registered nurses, licensed practical nurses, and certified nurse’s assistants.
SNFs, which are licensed healthcare residences for individuals who require a higher level of medical care than can be provided in an ALF, provide medical care—including drug administration and rehabilitation services such as physical, occupational, and speech therapy—through healthcare providers such as registered nurses, licensed practical nurses, and certified nurse’s assistants.
Although we believe we are in compliance with applicable federal and state regulations currently in effect, these regulations may be interpreted or applied in the future in a manner inconsistent with our business practices, which could adversely affect our results of operations, cash flows, and financial condition. The DEA, the U.S.
Although we believe we are in compliance with applicable federal and state regulations currently in effect, these regulations may be interpreted, applied, or expanded in the future in a manner inconsistent with our business practices, which could adversely affect our results of operations, cash flows, and financial condition. The DEA, the U.S.
HIPAA Pursuant to HIPAA, the Department of Health and Human Services (“HHS”) adopted national standards for electronic healthcare transactions and code sets, unique health identifiers, and privacy and security of individually identifiable health information. HIPAA regulations that standardize transactions and code sets require standard formatting for healthcare providers, like us, that submit claims electronically.
HIPAA Pursuant to HIPAA, the Department of Health and Human Services (“HHS”) adopted national standards for electronic healthcare transactions and code sets, unique health identifiers, and privacy and security of individually identifiable health information. HIPAA regulations require standard formatting for healthcare providers, like us, that submit claims electronically.
Through our extensive suite of pharmacy services and our service-focused approach, we believe that we offer a compelling value proposition to residents, LTCFs and their respective caregivers, particularly in ALFs and BHFs, and to health plan payors. 7 Table of Contents Our Workflow Lifecycle and Pharmacy Support Through our locally-based pharmacies, we utilize a complex, technology-enabled platform to manage the dispensing and administration of prescriptions to residents of LTCFs over the full prescription lifecycle in order to manage medication risk.
Through our extensive suite of pharmacy services and our service-focused approach, we believe that we offer a compelling value proposition to residents, LTCFs and their respective caregivers, particularly in ALFs and BHFs, and to health plan payors. 3 Table of Contents Our Workflow Lifecycle and Pharmacy Support Through our locally-based pharmacies, we utilize a complex, technology-enabled platform to manage the dispensing and administration of prescriptions to residents of LTCFs over the full prescription lifecycle in order to manage medication risk.
This rule finalized the implementation of the Patient Driven Payment Model (“PDPM”), a case-mix classification system for classifying SNF residents in a Medicare Part A covered stay into payment groups under the SNF PPS.
This rule finalized the implementation of the Patient Driven Payment Model (“PDPM”), a case-mix classification model for classifying SNF residents in a Medicare Part A covered stay into payment groups under the SNF PPS.
Our services help facilitate proper management of residents’ drug regimens and reduce errors in drug administration, which we believe ultimately results in better clinical outcomes and thereby lowers overall health care costs for health insurance payors. 6 Table of Contents Our Solution and Value Proposition We believe that we have purpose-built our capabilities and associated technology tools to address the growing challenges that are specific to our end markets.
Our services help facilitate proper management of residents’ drug regimens and reduce errors in drug administration, which we believe ultimately results in better clinical outcomes and thereby lowers overall health care costs for health insurance payors. 2 Table of Contents Our Solution and Value Proposition We believe that we have purpose-built our capabilities and associated technology tools to address the growing challenges that are specific to our end markets.
Following acquisition, we embark on a standardized multi-year integration process that begins with centralizing pharmacy operations and ultimately transforms core functions and sets the foundation for superior growth and profitability. 18 Table of Contents Upon acquisition, we are typically able to significantly enhance the profitability and margin of the acquired pharmacy by implementing our IT services and leveraging our purchasing, revenue cycle management and national sales capabilities.
Following acquisition, we embark on a standardized multi-year integration process that begins with centralizing pharmacy operations and ultimately transforms core functions and sets the foundation for superior growth and profitability. 13 Table of Contents Upon acquisition, we are typically able to significantly enhance the profitability and margin of the acquired pharmacy by implementing our IT services and leveraging our purchasing, revenue cycle management and national sales capabilities.
Further, the Affordable Care Act continued the current statutory exclusion of prompt pay discounts offered to wholesalers and added three other exclusions to the AMP definition: (i) bona fide services fees; (ii) reimbursement for unsalable returned goods (recalled, expired, damaged, etc.); and (iii) payments from and rebates/discounts to certain entities not conducting business as a wholesaler or retail community pharmacy.
Further, the Affordable Care Act continued the previous statutory exclusion of prompt pay discounts offered to wholesalers and added three other exclusions to the AMP definition: (i) bona fide services fees; (ii) reimbursement for unsalable returned goods (recalled, expired, damaged, etc.); and (iii) payments from and rebates/discounts to certain entities not conducting business as a wholesaler or retail community pharmacy.
The importance and strength of our local leadership was highlighted during the COVID-19 pandemic as local management teams were empowered to make decisions in real-time that were specific to the evolving pandemic-driven conditions and regulations in their markets, in order to maintain our high service levels for our customers and residents. 19 Table of Contents • Strong corporate support group.
The importance and strength of our local leadership was highlighted during the COVID-19 pandemic as local management teams were empowered to make decisions in real-time that were specific to the evolving pandemic-driven conditions and regulations in their markets, in order to maintain our high service levels for our customers and residents. • Strong corporate support group.
We believe we compete favorably in all areas, including SNFs, based on the following competitive factors: • the value and comprehensiveness of the pharmacy services solution we offer and the superior outcomes for residents and reduced health care costs for pharmacy benefit plans; • the strength of our business model, which focuses on local autonomy as opposed to a hub and spoke model; • the superiority of our data analytics capabilities; 31 Table of Contents • the variety of clinical services we offer to improve the quality of care for residents at ALFs and BHFs; and • our significant investment in automation at each local pharmacy.
We believe we compete favorably in all areas, including SNFs, based on the following competitive factors: • the value and comprehensiveness of the pharmacy services solution we offer and the superior outcomes for residents and reduced health care costs for pharmacy benefit plans; • the strength of our business model, which focuses on local autonomy as opposed to a hub and spoke model; • the superiority of our data analytics capabilities; • the variety of clinical services we offer to improve the quality of care for residents at ALFs and BHFs; and • our significant investment in automation at each local pharmacy.
These regulations encompass many areas, including licensing requirements, quality control, drug dispensing, day-to-day operations and reimbursement, and in many cases apply differently depending on the type of LTCF in question. ALFs offer assisted living services for people who need help with daily care.
These regulations encompass many areas, including licensing requirements, professional standards, quality control, drug dispensing, day-to-day operations and reimbursement, and in many cases apply differently depending on the type of LTCF in question. ALFs offer assisted living services for people who need help with daily care.
Below are select examples of the insights and analytics we are able to produce from our GuardianShield platform for the year ended December 31, 2024 on a Company-wide basis. Advances to GuardianShield We continuously strive to advance the capabilities of GuardianShield, and are actively developing new predictive tools to assist LTCFs and our pharmacies.
Below are select examples of the insights and analytics we are able to produce from our GuardianShield platform for the year ended December 31, 2025 on a Company-wide basis. Advances to GuardianShield We continuously strive to advance the capabilities of GuardianShield, and are actively developing new predictive tools to assist LTCFs and our pharmacies.
As of December 31, 2024, we had pharmacy licenses for each pharmacy we operate, and to our knowledge, all issued licenses remain valid and in good standing. In addition, states regulate out-of-state pharmacies that fill prescriptions for in-state patients (including residents). Where applicable, our pharmacies hold the requisite licenses to deliver to out-of-state patients (including residents).
As of December 31, 2025, we had pharmacy licenses for each pharmacy we operate, and to our knowledge, all issued licenses remain valid and in good standing. In addition, states regulate out-of-state pharmacies that fill prescriptions for in-state patients (including residents). Where applicable, our pharmacies hold the requisite licenses to deliver to out-of-state patients (including residents).
Medicare The Medicare program consists of four parts: (i) Medicare Part A, which covers, among other things, in-patient hospital, SNFs, certain home healthcare services, and certain other types of healthcare services; (ii) Medicare Part B, which covers physicians’ services, outpatient services, durable medical equipment, and certain other types of items and healthcare services; (iii) Medicare Part C, also known as Medicare Advantage, which is a managed care option for beneficiaries who are enrolled in Medicare Part A and Medicare Part B; and (iv) Medicare Part D, which provides coverage for prescription drugs that are not otherwise covered under Medicare Part A or Part B for those beneficiaries that enroll.
Medicare The Medicare program consists of four parts: (i) Part A covers, among other things, in-patient hospital, SNFs, certain home healthcare services, and certain other types of healthcare services; (ii) Part B covers physicians’ services, outpatient services, durable medical equipment, and certain other types of items and healthcare services; (iii) Part C, also known as Medicare Advantage, provides a managed care option for beneficiaries enrolled in Parts A and B; and (iv) Part D provides coverage for prescription drugs that are not otherwise covered under Medicare Part A or Part B for those beneficiaries that enroll.
We believe that, consequently, Medicare Part D plans generally offer more favorable and stable contract terms for LTCF pharmacies relative to commercial plans that are offered to retail pharmacies. Set forth below are our revenues by payor for the year ended December 31, 2024.
We believe that, consequently, Medicare Part D plans generally offer more favorable and stable contract terms for LTCF pharmacies relative to commercial plans that are offered to retail pharmacies. Set forth below are our revenues by payor for the year ended December 31, 2025.
Regulations to which Guardian is Subject from Health Plan Payors Medicare, as set forth in the Social Security Act Section XVIII, is a federal program that provides certain hospital and medical insurance benefits to persons age 65 and over and to certain disabled persons.
Regulations to which Guardian is Subject from Health Plan Payors Medicare, as set forth in the Social Security Act Title XVIII, is a federal program that provides certain hospital and medical insurance benefits to persons age 65 and over and to certain disabled persons.
As a pharmacy provider for LTCFs, we focus our attention on both regulations applicable to our pharmacy business as well as regulations that pertain to the institutions we serve. Regulations That Affect Guardian Directly Licensure Operation of a pharmacy within a state requires licensure by the respective state’s board of pharmacy.
As a pharmacy provider for LTCFs, we focus our attention on both regulations applicable to our pharmacy business as well as regulations that pertain to the institutions we serve. Regulations That Affect Guardian Directly Licensure Operating a pharmacy within a state requires licensure by the respective state’s board of pharmacy.
We track various individual pharmacy-based operating metrics including financial revenue per Rx, labor per Rx, resident count trends and adoption rate trends per facility among others. GuardianShield Programs GuardianShield offers a suite of specialized services, enhanced by actionable analytics, that drive accuracy, efficiency, safety, and savings for LTCFs and create benefits for both residents and LTCF staff.
We track various individual pharmacy-based operating metrics including financial revenue per Rx, labor per Rx, resident count trends and adoption rate trends per facility among others. 7 Table of Contents GuardianShield Programs GuardianShield offers a suite of specialized services, enhanced by actionable analytics, that drive accuracy, efficiency, safety, and savings for LTCFs and create benefits for both residents and LTCF staff.
This LTCF institutional pharmacy market is currently served by Guardian, two national pharmacy services providers historically focused on serving the needs of SNFs, several regional providers, and over 1,200 independent pharmacies. We believe that in long-term care settings, proper coordination of drug administration is critical to managing the overall health and wellbeing of residents.
This LTCF institutional pharmacy market is currently served by Guardian, two national pharmacy services providers historically focused on serving the needs of SNFs, several regional providers, and over 1,200 independent pharmacies. 9 Table of Contents We believe that in long-term care settings, proper coordination of drug administration is critical to managing the overall health and wellbeing of residents.
We currently serve facilities operated by Brookdale Senior Living, Life Care Services, Sunrise Senior Living and numerous other regional and national providers. We believe that our customer-oriented business model, which is able to serve large numbers of residents across geographic regions, provides a competitive advantage as we continue to develop and expand relationships with ALF operators.
We currently serve facilities operated by Brookdale Senior Living, Life Care Services, Sunrise Senior Living and numerous other regional and national providers. We believe that our customer-oriented business model, which is able to serve large numbers of residents across geographic regions, 12 Table of Contents provides a competitive advantage as we continue to develop and expand relationships with ALF operators.
In August 2022, Congress passed the Inflation Reduction Act, which, among other provisions, introduced significant drug pricing reforms aimed to reduce federal government and beneficiary spending for Medicare Part B and Part D drugs.
Medicare Part B and D Changes In August 2022, Congress passed the Inflation Reduction Act (“IRA”), which, among other provisions, introduced significant drug pricing reforms aimed to reduce federal government and beneficiary spending for Medicare Part B and Part D drugs.
In December 2023, CMS issued the “Medicare Part D Drug Inflation Rebates Paid by Manufacturers: Revised Guidance” revising initial guidance issued in February 2023, with respect to identification of Part D rebatable drugs and exclusions, calculation of the Part D inflation rebate amount, ensuring integrity of inflation rebates, enforcement of rebate amount payments by manufacturers, and adding example formulas to illustrate how CMS will calculate Part D drug inflation rebate amounts.
In December 2023, CMS issued the “Medicare Part D Drug Inflation Rebates Paid by Manufacturers: Revised Guidance” revising initial guidance issued in February 2023, with respect to identification of Part D rebatable drugs and exclusions, calculation of the Part D inflation rebate amount, ensuring integrity of inflation 23 Table of Contents rebates, enforcement of rebate amount payments by manufacturers, and adding example formulas to illustrate how CMS will calculate Part D drug inflation rebate amounts.
Oftentimes, these residents are suffering from intellectual and developmental disorders or mental health challenges such as schizophrenia, depression, and anxiety-related afflictions. Pharmaceutical drugs are often first line therapies for these individuals, and the proper administration of and compliance with drug regimens is essential to maintaining their health.
Oftentimes, these residents are suffering from intellectual and developmental disorders or mental health challenges such as schizophrenia, depression, and anxiety-related afflictions. Pharmaceutical drugs are often first 10 Table of Contents line therapies for these individuals, and the proper administration of and compliance with drug regimens is essential to maintaining their health.
Prescription drugs covered under Medicare Part B include immunosuppressive drugs, oral anti-emetic drugs, oral anti-cancer drugs, and drugs self-administered through any piece of DME (e.g., respiratory or inhalation drugs administered via nebulizer or drugs administered with a Medicare-covered infusion pump). A DMEPOS supplier typically must obtain DMEPOS accreditation to enroll and bill directly under Medicare Part B.
Prescription drugs covered under Medicare Part B include immunosuppressive drugs, oral anti-emetic drugs, oral anti-cancer drugs, and drugs self-administered through any piece of DME (e.g., respiratory or inhalation drugs administered via nebulizer or drugs administered with a Medicare-covered infusion pump). 22 Table of Contents A DMEPOS supplier typically must obtain DMEPOS accreditation to enroll and bill directly under Medicare Part B.
The SEC also maintains a website (www.sec.gov) where you can view annual, quarterly and current reports, proxy and information statements and other information regarding us and other public companies. 32 Table of Contents
The SEC also maintains a website (www.sec.gov) where you can view annual, quarterly and current reports, proxy and information statements and other information regarding us and other public companies. 28 Table of Contents
Reg. 68,688 and entitled “Medicare and Medicaid Programs, Reform of Requirements for Long-Term Care Facilities,” referenced previously in this Annual Report on Form 10-K (see Government Regulation—Regulations That Affect Guardian Directly—CMS Regulations Affecting Guardian’s Provision of Pharmacy Services for Certain LTCF Customers) , LTCFs participating in the Medicare and Medicaid programs must develop and maintain policies and procedures, including to address the steps the pharmacist must take when the pharmacist identifies an irregularity that requires urgent action.
Reg. 68,688 and entitled “Medicare and Medicaid Programs, Reform of Requirements for Long-Term Care Facilities,” as amended and modified from time to time, referenced previously in this Annual Report on Form 10-K (see Government Regulation—Regulations That Affect Guardian Directly—CMS Regulations Affecting Guardian’s Provision of Pharmacy Services for Certain LTCF Customers) , LTCFs participating in the Medicare and Medicaid programs must develop and maintain policies and procedures, including to address the steps the pharmacist must take when the pharmacist identifies an irregularity that requires urgent action.
In addition, we are required to comply with all the relevant requirements of the Controlled Substances Act for the transfer and shipment of pharmaceuticals. Supply chain laws and regulations such as the DQSA and DSCSA could increase the overall regulatory burden and costs associated with our dispensing business.
In addition, we are required to 17 Table of Contents comply with all the relevant requirements of the Controlled Substances Act for the transfer and shipment of pharmaceuticals. Supply chain laws and regulations such as the DQSA and DSCSA could increase the overall regulatory burden and costs associated with our dispensing business.
We seek to maintain an on-site inventory of pharmaceuticals and supplies at our local pharmacies to ensure prompt delivery to the facilities we serve. Guardian receives a modest amount of rebates from pharmaceutical manufacturers and distributors of pharmaceutical products associated with dispensing their products.
We seek to maintain an on-site inventory of pharmaceuticals and supplies at our local pharmacies to ensure prompt delivery to the facilities we serve. 16 Table of Contents Guardian receives a modest amount of rebates from pharmaceutical manufacturers and distributors of pharmaceutical products associated with dispensing their products.
States have thirty (30) days after the effective date of the monthly updates to implement the new FULs. In addition, the definition of AMP changed to reflect net sales only to drug wholesalers that distribute to retail community pharmacies and to retail community pharmacies that directly purchase from drug manufacturers.
States have thirty (30) days after the effective date of the monthly updates to implement the new FULs. 24 Table of Contents In addition, the definition of AMP changed to reflect net sales only to drug wholesalers that distribute to retail community pharmacies and to retail community pharmacies that directly purchase from drug manufacturers.
Our Adoption Rate Tracker provides information to our pharmacies and ALF communities to help 12 Table of Contents them understand the current opportunity and increase the number of residents we serve in those communities. Higher resident adoption rates mean higher organic growth for us and improved safety and efficiency for the communities and residents.
Our Adoption Rate Tracker provides information to our pharmacies and ALF communities to help them understand the current opportunity and increase the number of residents we serve in those communities. Higher resident adoption rates mean higher organic growth for us and improved safety and efficiency for the communities and residents.
IBISWorld, an independent publisher of industry research reports, estimated that U.S. institutional pharmacy market revenues for 2024 would be approximately $24.8 billion. The U.S. institutional pharmacy market is comprised of pharmacies that provide a range of distribution and drug administration services to residents of nursing homes and other healthcare environments that do not have on-site pharmacies.
IBISWorld, an independent publisher of industry research reports, estimated that U.S. institutional pharmacy market revenues for 2025 would be approximately $24.3 billion. The U.S. institutional pharmacy market is comprised of pharmacies that provide a range of distribution and drug administration services to residents of nursing homes and other healthcare environments that do not have on-site pharmacies.
It is comprised of 10 programs, eight of which are currently in use, and two of which are in the development phase, all of which are made possible through the data warehouse.
It is comprised of ten programs, eight of which are currently in use, and two of which are in the development phase, all of which are made possible through the data warehouse.
This program is expected to improve the overall health of the residents we serve and lower health care costs for the pharmacy benefit plans with whom we work. 13 Table of Contents Our Market Opportunity We believe we have an attractive market opportunity for continued growth.
This program is expected to improve the overall health of the residents we serve and lower health care costs for the pharmacy benefit plans with whom we work. Our Market Opportunity We believe we have an attractive market opportunity for continued growth.
The PDPM replaced the prior case-mix classification system, shifting the focus to value-based care and bases reimbursement on clinical complexity and the resident’s conditions and care needs.
The PDPM replaced the prior case-mix classification system, shifting the focus to value-based care and basing reimbursement on clinical complexity and the resident’s conditions and care needs.
We completed our IPO in September 2024 and our Class A common stock is listed on the NYSE under the symbol “GRDN”. Our principal offices are located at 300 Galleria Parkway SE, Suite 800, Atlanta, Georgia 30339. Our telephone number is (404) 810-0089. We maintain a website at www.guardianpharmacy.com.
We completed our IPO in September 2024 and our Class A common stock is listed on the NYSE under the symbol “GRDN”. 27 Table of Contents Our principal offices are located at 300 Galleria Parkway SE, Suite 800, Atlanta, Georgia 30339. Our telephone number is (404) 810-0089. We maintain a website at www.guardianpharmacy.com.
Certain customer LTCFs may also be subject to the Nursing Home Reform Act, part of the Omnibus Budget Reconciliation Act of 1987, as amended, which imposes strict compliance standards relating to quality of care for facility operations, including increased documentation and reporting requirements, unannounced surveys and related enforcement processes, and residents’ bill of rights.
Certain customer LTCFs may also be subject to the Nursing Home Reform Act, part of the Omnibus Budget Reconciliation Act of 1987, as amended, which imposes strict compliance standards relating to quality of care, including increased certification, documentation and reporting requirements, unannounced surveys and related enforcement processes, and residents’ bill of rights.
We embrace equal opportunity in our workforce and are committed to building a team that represents a variety of backgrounds, perspectives and skills. The more inclusive we are, the better our work will be. As of December 31, 2024, we employed approximately 3,400 persons, all of whom are located within the United States.
We embrace equal opportunity in our workforce and are committed to building a team that represents a variety of backgrounds, perspectives and skills. The more inclusive we are, the better our work will be. As of December 31, 2025, we employed approximately 3,600 persons, all of whom are located within the United States.
Bindley, a pioneer in the healthcare services industry, was the founder, chairman and chief executive officer of Bindley Western, a pharmaceutical distribution and services company acquired by Cardinal Health, Inc. for $2.1 billion in 2001.
Bindley, a pioneer in the healthcare services industry, 14 Table of Contents was the founder, chairman and chief executive officer of Bindley Western, a pharmaceutical distribution and services company acquired by Cardinal Health, Inc. for $2.1 billion in 2001.
These services may include access to prepared meals, assistance with personal care, drug administration, housekeeping, laundry, and social and recreational activities.
These services may include access to prepared meals, assistance with personal care, drug administration and medication management, housekeeping, laundry, and social and recreational activities.
The Health Information Technology for Economic and Clinical Health Act (“HITECH”) was enacted as part of the American Recovery and Reinvestment Act of 2009, changed several aspects of HIPAA including, without limitation, the following: (i) imposing certain liability on business associates of covered entities, for example, with respect to impermissible uses and disclosures of PHI and Security Rule obligations; (ii) requires a data breach notification in the event of certain unauthorized uses or disclosures of unsecured PHI; (iii) allows individuals to obtain their PHI in electronic format if the provider has implemented an electronic health record system; (iv) requires HHS to conduct periodic audits of covered entities and business associates; and (v) strengthens enforcement activities and increases penalties.
The Health Information Technology for Economic and Clinical Health Act (“HITECH”) was enacted as part of the American Recovery and Reinvestment Act of 2009 and changed several aspects of HIPAA including, without limitation, the following: (i) imposing certain liability on business associates of covered entities, for example, with respect to impermissible uses and disclosures of PHI and Security Rule obligations; (ii) requiring a data breach notification in the event of certain unauthorized uses or disclosures of unsecured PHI; (iii) allowing individuals to obtain their PHI in electronic format if the provider has implemented an electronic health record system; (iv) requiring HHS to conduct periodic audits of covered entities and business associates; and (v) strengthening enforcement activities and increasing penalties.
In practice, the Security Rule requires us to facilitate ensuring the confidentiality, integrity and availability of all e-PHI we create, receive, maintain or transmit, including protecting against unauthorized use or disclosure of e-PHI.
In practice, the Security Rule requires us to ensure the confidentiality, integrity and availability of all e-PHI we create, receive, maintain or transmit, including protecting against unauthorized use or disclosure of e-PHI.
This service adds substantial value for the LTCFs and pharmacy benefit plans we work with, and ultimately, the residents we serve, as we help residents avoid adverse drug reactions and complications resulting from, and the additional costs associated with, the improper dosage or incorrect administration to residents.
This service adds substantial value for the LTCFs and pharmacy benefit plans we work with, and 8 Table of Contents ultimately, the residents we serve, as we help residents avoid adverse drug reactions and complications resulting from, and the additional costs associated with, the improper dosage or incorrect administration to residents.
Of the more than 800,000 U.S. residents residing in ALFs in 2024, more than half are above 85 years old, with an additional 31% aged between 75 to 84. These increases in the age demographics of ALF residents have been driven by both later average initial admission age for residents and significant increases in overall life expectancy.
Of the more than 1 million U.S. residents residing in ALFs, more than half are above 85 years old, with an additional 31% aged between 75 to 84. These increases in the age demographics of ALF residents have been driven by both later average initial admission age for residents and significant increases in overall life expectancy.
Our primary wholesale distributor relationships currently include Cardinal Health, Inc., McKesson 21 Table of Contents Corporation, Smith Drug Company, and Morris and Dickson Co. L.L.C., in addition to various generic drug manufacturers. Additionally, we purchase some generic pharmaceuticals directly from their manufacturers.
Our primary wholesale distributor relationships currently include Cardinal Health, Inc., McKesson Corporation, Smith Drug Company, and Morris and Dickson Co. L.L.C., in addition to various generic drug manufacturers. Additionally, we purchase some generic pharmaceuticals directly from their manufacturers.
These 20 Table of Contents contracts can be terminated by either party generally upon 30 days’ notice. Most LTCF contracts specify certain facility-wide services that we may provide for a fee, including EMAR support, consulting services and training.
These contracts can be terminated by either party generally upon 30 days’ notice. Most LTCF contracts specify certain facility-wide services that we may provide for a fee, including EMAR support, consulting services and training.
These synergies are often substantially realized over a 36-month period from acquisition and represent a substantial opportunity for us and our acquired pharmacy partners. In the future, we anticipate that we will structure our acquisitions and greenfield start-ups in a manner similar to our business development strategy prior to this offering.
These synergies are often substantially realized over a 48-month period from acquisition and represent a substantial opportunity for us and our acquired pharmacy partners. In the future, we anticipate that we will structure our acquisitions and greenfield start-ups in a manner similar to our business development strategy prior to our IPO.
At the time of drug administration, the nurse or caregiver must scan the barcode associated with each resident at the time of drug delivery, which creates a notation on the EMAR system.
At the time of drug administration, the nurse or caregiver must scan the barcode associated with each 5 Table of Contents resident at the time of drug delivery, which creates a notation on the EMAR system.
In this industry generally, federal and state governmental agencies conduct survey, audit and enforcement efforts resulting in a significant number of inspections, citations for regulatory deficiencies and other administrative sanctions including demands for refund of overpayments, terminations from the Medicare and Medicaid programs, suspensions of Medicare and Medicaid payments, and monetary penalties or other types of fines, penalties and orders.
In this industry generally, 19 Table of Contents federal and state governmental agencies conduct survey, audit and enforcement efforts resulting in a significant number of inspections, citations for regulatory deficiencies and other administrative sanctions including demands for refund of overpayments, terminations from the Medicare and Medicaid programs, suspensions of Medicare and Medicaid payments, limitations on licensure, and monetary penalties or other types of fines, penalties and orders.
Our workforce includes over 500 pharmacists and over 80 nurses, in addition to more than 120 employees who work in the Atlanta office to support our local pharmacies nationwide. 30 Table of Contents We consider the intellectual capital of our employees to be an essential driver of our business and key to future prospects.
Our workforce includes over 500 pharmacists and over 90 nurses, in addition to more than 120 employees who work in the Atlanta office to support our local pharmacies nationwide. We consider the intellectual capital of our employees to be an essential driver of our business and key to future prospects.
Based on prescription volume information reported by NIC MAP Vision (“NIC MAP”) for ALFs and memory care facilities (“ALF/MC”) as of December 31, 2024, we believe we are the largest LTCF pharmacy in the United States in terms of market share serving ALF/MC, with an approximate 12.6% market share nationally.
Based on prescription volume information reported by NIC MAP Vision (“NIC MAP”) for ALFs and memory care facilities (“ALF/MC”) as of December 31, 2025, we believe we are the largest LTCF pharmacy in the United States in terms of market share serving ALF/MC, with an approximate 13.0% market share nationally.
In 2020, the OIG published a final rule, set forth in 85 Fed. Reg. 77,684, that provides additional protections to inducements offered to patients for patient engagement and support arrangements to improve quality of care, health outcomes, and efficiency.
In 2020, the OIG published a final rule, set forth in 85 Fed. Reg. 77,684, as amended and modified from time to time, that provides additional protections to inducements offered to patients for patient engagement and support arrangements to improve quality of care, health outcomes, and efficiency.
Part D Plan formularies must include drug categories and classes that cover disease states consistent with Part D program requirements, and Part D Plans generally must cover at least two drugs per category.
Part D Plan formularies must include drug categories and classes that cover disease states consistent with Part D program requirements, and Part D Plans generally must cover at least two drugs per category with broader requirements for certain protected classes.
For residents that are eligible for Medicaid only, and are not dually eligible for Medicare and Medicaid, we bill the individual state Medicaid program or in certain circumstances the state’s designated managed care or other similar organizations for covered prescription drugs.
For residents that are eligible for Medicaid only, and are not dually eligible for Medicare and Medicaid, we bill the individual state Medicaid program or, where applicable, the state’s designated managed care or other similar organizations for covered prescription drugs.
We have test initiatives ongoing in these adjacent markets. Such initiatives are in the nascent stages and have generated only immaterial revenues to date. Customers Our customers are LTCFs and their residents. For the year ended December 31, 2024, we provided pharmacy services to approximately 186,000 residents in approximately 7,000 LTCFs across 38 states.
We have test initiatives ongoing in these adjacent markets. Such initiatives are in the nascent stages and have generated only immaterial revenues to date. Customers Our customers are LTCFs and their residents. For the year ended December 31, 2025, we provided pharmacy services to approximately 205,000 residents in approximately 8,400 LTCFs across 38 states.
For example, the federal Anti-Kickback Statute (“AKS”), set forth in 42 U.S.C. § 1320a-7b(b), prohibits knowingly or willfully soliciting, receiving, offering or paying remuneration “including any kickback, bribe or rebate” directly or indirectly in return for or to induce the referral of an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under Medicare, Medicaid or other Federal Health Care Program (as that term is defined in 42 U.S.C. § 1320a-7b(f)).
For example, the federal Anti-Kickback Statute (“AKS”), set forth in 42 U.S.C. § 1320a-7b(b), prohibits individuals or entities from knowingly and willfully soliciting, receiving, offering or paying remuneration “including any kickback, bribe or rebate” directly or indirectly in return for or to induce the referrals for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal Health Care Program (as that term is defined in 42 U.S.C. § 1320a-7b(f)), such as Medicare or Medicaid.
In particular, for the year ended December 31, 2024, approximately 70% of our revenue was derived from Medicare Part D. CMS mandates 10 rules and service capabilities to qualify for participation as a Part D NLTCP provider, as differentiated from traditional Part D and commercial reimbursement.
In particular, for the year ended December 31, 2025, approximately 71% of our revenue was derived from Medicare Part D. CMS mandates 10 rules and service capabilities to qualify for 15 Table of Contents participation as a Part D NLTCP provider, as differentiated from traditional Part D and commercial reimbursement.
Additionally, the Administrative False Claims Act (AFCA), recently amending the Program Fraud Civil Remedies Act of 1986 (PFCRA), notably increases potential recovery for the government from $150,000 to $1 million, as adjusted, via an administrative process and can cover false statements even in the absence of a claim for payment.
Additionally, the Administrative False Claims Act (“AFCA”), which recently amended the Program Fraud Civil Remedies Act of 1986 (“PFCRA”), notably increased potential recovery for the government from $150,000 to $1 million, as adjusted, via an administrative process and can cover false statements even in the absence of a claim for payment.
Under these final rules, CMS will begin invoicing drug companies in 2025 for Part B and Part D inflation rebates owed for applicable time periods, and establishing a process to impose civil monetary penalties on manufacturers that fail to pay such rebates by applicable deadlines.
Under these final rules, CMS began invoicing drug companies in 2025 for Part B and Part D inflation rebates owed for applicable time periods and established a process to impose civil monetary penalties on manufacturers that fail to pay such rebates by applicable deadlines. Significant changes to Part D became effective in 2025.
We are a trusted partner to residents, LTCFs and health plan payors because we help reduce errors in drug administration, manage and ensure adherence to drug regimens, and lower overall healthcare costs. As of December 31, 2024, our 51 pharmacies served approximately 186,000 residents in approximately 7,000 LTCFs across 38 states. Within the U.S.
We are a trusted partner to residents, LTCFs and health plan payors because we help reduce errors in drug administration, manage and ensure adherence to drug regimens, and lower overall healthcare costs. As of December 31, 2025, our 61 pharmacies, 54 of which are full-service, served approximately 205,000 residents in approximately 8,400 LTCFs across 38 states. Within the U.S.
Specifically, most LTCFs are required to be licensed in the states in which they operate. In addition, for SNFs and other LTCFs serving Medicaid or Medicare residents, such facilities must be certified to be in compliance with applicable requirements for participation set forth in 42 C.F.R. Part 483 (subpart B).
In addition, for SNFs and other LTCFs serving Medicaid or Medicare residents, such facilities must be certified to be in compliance with applicable requirements for participation set forth in 42 C.F.R. Part 483 (subpart B).
Failure to comply with HIPAA or state equivalent laws could subject us to loss of customers, denial of the right to conduct business, civil damages, fines, criminal penalties and other enforcement actions.
Because our operations involve PHI, failure to comply with HIPAA, HITECH or state equivalent laws could subject us to loss of customers, breach notification requirements, denial of the right to conduct business, civil damages, fines, criminal penalties and other enforcement actions.
Of the more than 800,000 residents residing in ALFs in the United States in 2024, we serve approximately 126,000, with the remainder of the residents we serve residing in other types of LTCFs.
Of the more than 1 million residents residing in ALFs in the United States, we serve approximately 140,000, with the remainder of the residents we serve residing in other types of LTCFs.
Moreover, LTCFs must have an effective quality assurance and performance improvement program, person-centered care planning, an infection preventionist, a compliance and ethics program, a means to call for staff assistance from the bedside, and effective staff training, among other requirements. Finally, LTCFs must focus on reducing or eliminating the inappropriate use of psychotropic drugs.
Moreover, LTCFs must have an effective quality assurance and performance improvement program, person-centered care planning, an infection preventionist, a compliance and ethics program, a means to call for staff assistance from the bedside, and effective staff training, among other requirements.
In addition to HIPAA, we may be subject to state privacy laws and other state privacy or health information requirements not preempted by HIPAA, including those which may furnish greater privacy protection for individuals than HIPAA. Our operations involve PHI, and the nature of our operations is complex.
In addition to HIPAA and HITECH, we may be subject to state privacy laws and other state privacy or health information requirements not preempted by HIPAA, including those which may furnish greater privacy protection for individuals than HIPAA.
Rebates Guardian receives a modest amount of rebates from pharmaceutical manufacturers and distributors of pharmaceutical products associated with dispensing their products. CMS appears to continue to question whether institutional pharmacies should be permitted to receive these access/performance rebates from manufacturers with respect to prescriptions covered under Medicare Part D, but has not prohibited the receipt of such rebates.
CMS appears to continue to question whether institutional pharmacies should be permitted to receive these access/performance rebates from manufacturers with respect to prescriptions covered under Medicare Part D, but has not prohibited the receipt of such rebates.
CMS Regulations Affecting Guardian’s Provision of Pharmacy Services for Certain LTCF Customers We are subject to a rule issued by CMS and set forth in 81 Fed. Reg. 68,688, entitled “Medicare and Medicaid Programs, Reform of Requirements for Long-Term Care Facilities,” that, among other things, revised the requirements for LTCF participation in the Medicare and Medicaid programs.
CMS Regulations Affecting Guardian’s Provision of Pharmacy Services for Certain LTCF Customers We are subject to a CMS rule, entitled “Medicare and Medicaid Programs, Reform of Requirements for Long-Term Care Facilities,” as amended and modified from time to time, that, among other things, revised the requirements for LTCF participation in the Medicare and Medicaid programs.
Often, in the absence of a sophisticated provider, pharmaceuticals are simply delivered to residential settings without an associated suite of 15 Table of Contents services to help ensure successful drug administration (e.g., resident compliance, documentation, data collection, ALF and BHF staff training, etc.).
Often, in the absence of a sophisticated provider, pharmaceuticals are simply delivered to residential settings without an associated suite of services to help ensure successful drug administration (e.g., resident compliance, documentation, data collection, ALF and BHF staff training, etc.). LTCFs and residents are seeking assistance to help monitor and ensure ongoing adherence with their increasingly complex medication regimens.
The DSCSA established federal standards with which pharmacies must comply that require drugs to be labeled and tracked at the package level. These standards preempt state and local requirements related to tracing drugs through the distribution system. The full product tracing requirements of the DSCSA are subject to exemptions slated to phase out in 2025.
The DSCSA established federal standards with which pharmacies must comply that require prescription drugs to be labeled and tracked at the package level. These standards preempt state and local requirements related to tracing drugs through the distribution system. Prior exemptions applicable to some product tracing requirements for large dispensers ended in 2025.
We believe our success in increasing resident adoption is one of our key strengths. 17 Table of Contents Ongoing geographic expansion. For both our acquisition program and our greenfield initiatives, we focus on expanding our market share and increasing profitability through strategic evaluation and implementation of opportunities to acquire and build out new pharmacies in existing and underserved markets.
For both our acquisition program and our greenfield initiatives, we focus on expanding our market share and increasing profitability through strategic evaluation and implementation of opportunities to acquire and build out new pharmacies in existing and underserved markets.
This helps us ensure the safe and effective delivery of medications to each resident at each Med Pass and helps LTCFs to manage their regulatory requirements. 9 Table of Contents Cybersecurity, Infrastructure, Disaster Recovery and Business Continuity We employ multiple levels of protection to minimize the risks associated with cybersecurity, ransomware and data breaches, including firewalls, cloud-based backups, multifactor authentication, encryption software, intrusion testing and security information and event management (“SIEM”) networking monitoring to ensure the integrity of our data and systems.
Cybersecurity, Infrastructure, Disaster Recovery and Business Continuity We employ multiple levels of protection to minimize the risks associated with cybersecurity, ransomware and data breaches, including firewalls, cloud-based backups, multifactor authentication, encryption software, intrusion testing and security information and event management (“SIEM”) networking monitoring to ensure the integrity of our data and systems.
Key provisions in this legislation include limited authority for regulators to negotiate prices for certain Medicare drugs, caps on beneficiary cost share and maximum out-of-pocket spending, and rebates on manufacturers where drug prices exceed inflation.
Key provisions in this legislation include limited authority for regulators to negotiate prices for certain Medicare drugs, caps on beneficiary cost share and maximum out-of-pocket spending, and rebates on manufacturers where drug prices exceed inflation. CMS released initial guidance related to the implementation of this program, and has since entered three rounds of the Medicare Drug Price Negotiation Program.
The use of automation within our pharmacies leverages our size and distinguishes us from many of our competitors. It increases our dispensing accuracy and speed of pharmaceutical distribution, in addition to providing significant cost benefits. Specifically, we currently have over 100 automated dispensing machines deployed across our network.
Automated Robotic Dispensing Technology We have invested significantly in advanced pharmacy automation technologies. The use of automation within our pharmacies leverages our size and distinguishes us from many of our competitors. It increases our dispensing accuracy and speed of pharmaceutical distribution, in addition to providing significant cost benefits.
In October 2024, CMS also introduced more complex updates to SNF disclosures regarding ownership and management information. We continue to bill SNFs based upon a negotiated fee schedule and are paid based on contractual relationships with the SNFs. We do not receive direct payment from Medicare for residents covered under the Medicare Part A benefit.
We continue to bill SNFs based upon a negotiated fee schedule and are paid based on contractual relationships with the SNFs. We do not receive direct payment from Medicare for residents covered under the Medicare Part A benefit.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAcquisitions involve numerous risks and uncertainties, including, without limitation: • difficulties integrating acquired operations, personnel and information systems, or in realizing projected efficiencies and cost savings; • failure to operate acquired facilities profitably or to achieve improvements in their financial performance; • diversion of management’s time from existing operations; • potential loss of key employees or customers of acquired companies; • inaccurate assessment of assets and liabilities and exposure to undisclosed or unforeseen liabilities of acquired companies, including liabilities for failure to comply with healthcare laws; and • increases in our indebtedness.
Biggest changeAcquisitions involve numerous risks and uncertainties, including, without limitation: • difficulties integrating acquired operations, personnel and information systems, or in realizing projected efficiencies and cost savings; • failure to operate acquired facilities profitably or to achieve improvements in their financial performance; • diversion of management’s time from existing operations; • potential loss of key employees or customers of acquired companies; • inaccurate assessment of assets and liabilities and exposure to undisclosed or unforeseen liabilities of acquired companies, including liabilities for failure to comply with healthcare laws; and • increases in our indebtedness. 38 Table of Contents Some of the pharmaceuticals we dispense are warehoused with a single logistics provider for warehouse and distribution services to our pharmacies, and our business could be harmed if our logistics provider performs poorly, fails to comply with its licensing requirements or is unavailable and we are unable to replace it.
In addition, LTCF residents have the ability to choose among pharmacy providers. Certain states have a “freedom of choice” requirement as part of their state Medicaid programs or in separate legislation that enable a resident to select his/her provider.
In addition, LTCF residents have the ability to choose among pharmacy providers. Certain states have a “freedom of choice” requirement as part of their state Medicaid programs or in separate legislation that enable a resident to select his or her provider.
We maintain contractual relationships with pharmaceutical wholesalers and manufacturers that provide us with, among other things, discounts for drugs we purchase to be dispensed from our pharmacies. Our contracts with pharmaceutical wholesalers and manufacturers often provide us with, among other things, discounts on drugs we purchase and rebates and service fees.
We maintain contractual relationships with pharmaceutical wholesalers and manufacturers that provide us with, among other things, discounts for drugs we purchase to be dispensed from our pharmacies. Our contracts with pharmaceutical wholesalers and manufacturers often provide us with, among other things, discounts on drugs we purchase, rebates and service fees.
No assurance can be given that an active market in our Class A common stock will develop or be sustained. If an active market does not develop, holders of our common stock may be unable to readily sell the shares they hold or may not be able to sell their shares at all.
No assurance can be given that an active market in our Class A common stock will develop or be sustained. If an active market does not develop, holders of our Class A common stock may be unable to readily sell the shares they hold or may not be able to sell their shares at all.
For example, our certificate of incorporation and bylaws: • provide that our board of directors is classified into three classes of directors with staggered three-year terms; 48 Table of Contents • authorize the issuance of “blank check” preferred stock that could be issued by our board of directors without further action by our stockholders to increase the number of outstanding shares of capital stock, making a takeover more difficult and expensive; • do not permit cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates; • do not permit stockholders to take action by written consent other than during the period in which we qualify as a “controlled company” within the meaning of NYSE rules; • provide that special meetings of the stockholders may be called only by or at the direction of the chair of our board or a majority of the directors; • vacancies on our board of directors will be able to be filled only by our board of directors (subject to the provisions set forth in the Stockholders’ Agreement) and not by stockholders; • restrict the forum for certain litigation against us to Delaware; and • provide for advance notice procedures, which apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders.
For example, our certificate of incorporation and bylaws: • provide that our board of directors is classified into three classes of directors with staggered three-year terms; • authorize the issuance of “blank check” preferred stock that could be issued by our board of directors without further action by our stockholders to increase the number of outstanding shares of capital stock, making a takeover more difficult and expensive; • do not permit cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates; • do not permit stockholders to take action by written consent other than during the period in which we qualify as a “controlled company” within the meaning of NYSE rules; • provide that special meetings of the stockholders may be called only by or at the direction of the chair of our board or a majority of the directors; 43 Table of Contents • provide that vacancies on our board of directors will be able to be filled only by our board of directors (subject to the provisions set forth in the Stockholders’ Agreement) and not by stockholders; • restrict the forum for certain litigation against us to Delaware; and • provide for advance notice procedures, which apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders.
In cases where there are no acceptable prescription drug equivalents or alternatives for these recalled or withdrawn pharmaceuticals, our volumes of dispensed pharmaceuticals and our operating results may decline. 33 Table of Contents If we lose relationships with one or more pharmaceutical wholesalers or key manufacturers, or if such wholesalers or manufacturers refuse to extend our relationships on the same or similar terms, our business and financial results could be materially and adversely affected.
In cases where there are no acceptable prescription drug equivalents or alternatives for these recalled or withdrawn pharmaceuticals, our volumes of dispensed pharmaceuticals and our operating results may decline. 29 Table of Contents If we lose relationships with one or more pharmaceutical wholesalers or key manufacturers, or if such wholesalers or manufacturers refuse to extend our relationships on the same or similar terms, our business and financial results could be materially and adversely affected.
The Guardian Founders own more than 50% of the total voting power of our outstanding common stock and we are a “controlled company” under NYSE corporate governance standards.
The Guardian Founders own more than 50% of the total voting power of our outstanding common stock and we are therefore a “controlled company” under NYSE corporate governance standards.
The future issuance of shares of Class A common stock, Class B common stock, preferred stock or debt securities may dilute the economic and voting rights of our stockholders and reduce the market price of the Class A common stock.
The future issuance of shares of Class A common stock, Class B common stock, preferred stock or convertible debt securities may dilute the economic and voting rights of our stockholders and reduce the market price of the Class A common stock.
Our future issuance of Class A common stock, Class B common stock, preferred stock or debt securities could dilute our common stockholders and adversely affect the market value of our Class A common stock.
Our future issuance of Class A common stock, Class B common stock, preferred stock or convertible debt securities could dilute our common stockholders and adversely affect the market value of our Class A common stock.
While we currently have no basis to expect any such challenge would be successful, if a court were to find our forum selection provision to be inapplicable or unenforceable, we may incur additional costs associated with having to litigate in other jurisdictions, which could have an adverse effect on our business, financial condition and results of operations and result in a diversion of the time, resources and attention of our management.
While we currently have no basis to expect any such challenge would be successful, if a court were to find our forum selection provision to be inapplicable or unenforceable, we may incur additional costs associated with having to litigate in other jurisdictions, which could have an adverse effect on our business, financial condition and results of operations and result in a diversion of the time, resources and attention of our management. 44 Table of Contents
We may from time to time become subject in the ordinary course of business to material legal action related to, among other things, intellectual property disputes, professional liability and employee-related matters, as well as inquiries from governmental agencies and Medicare or Medicaid carriers requesting comment and information on allegations of billing irregularities and other matters that are brought to their attention through billing audits, 40 Table of Contents third parties or other sources.
We may from time to time become subject in the ordinary course of business to material legal action related to, among other things, intellectual property disputes, professional liability and employee-related matters, as well as inquiries from governmental agencies and Medicare or Medicaid carriers requesting comment and information on allegations of billing irregularities and other matters that are brought to their attention through billing audits, third parties or other sources.
The issuance by us of additional shares of our Class A common stock, Class B common stock or securities convertible into our Class A common stock would dilute your ownership of us and the sale of a significant amount of such shares in the public market could adversely affect prevailing market prices of our Class A common stock.
The issuance by us of additional shares of our Class A common stock, Class B common stock or securities convertible into our Class A common stock may dilute your ownership of us and the sale of a significant amount of such shares in the public market could adversely affect prevailing market prices of our Class A common stock.
If we identify material weaknesses in our internal control over financial reporting, if we are unable to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, or if we are unable to assert that our internal control over financial reporting is effective, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our Class A common stock could decline, and we could also become subject to investigations by the stock exchange on which our Class A common stock is listed, the SEC, or other regulatory authorities, which could require additional financial and management resources.
If we identify material weaknesses in our internal control over financial reporting, if we are in the future unable to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, or if we are unable to assert that our internal control over financial reporting is effective, investors may 42 Table of Contents lose confidence in the accuracy and completeness of our financial reports and the market price of our Class A common stock could decline, and we could also become subject to investigations by the stock exchange on which our Class A common stock is listed, the SEC, or other regulatory authorities, which could require additional financial and management resources.
As a controlled company, we are not required by NYSE, for continued listing of our Class A common stock, to (i) have a majority of our board of directors consist of independent directors, (ii) maintain a nominating and governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities or (iii) maintain a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.
As a controlled company, we are not required by NYSE, for continued listing of our Class A common stock, to (i) have a majority of our board of directors consist of independent directors, (ii) maintain a nominating and governance committee that is 40 Table of Contents composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities or (iii) maintain a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.
The OIG and the DOJ have, from time to time, established national enforcement initiatives, targeting all providers of a particular type, that focus on specific billing practices or other suspected areas of abuse. Our pharmacies are registered with the appropriate state and federal authorities pursuant to statutes governing the regulation of pharmaceuticals and controlled substances.
The OIG and the DOJ have, from time to time, established national enforcement initiatives, targeting all providers of a particular type, that focus on specific billing practices or other suspected areas of abuse. 35 Table of Contents Our pharmacies are registered with the appropriate state and federal authorities pursuant to statutes governing the regulation of pharmaceuticals and controlled substances.
Any changes that lower reimbursement rates under Medicare, Medicaid or private payor programs could result in a substantial reduction in our revenues. Our 35 Table of Contents operating results may be adversely affected due to deterioration in reimbursement, changes in payor mix and growth in operating expenses in excess of increases, if any, in payments by health plan payors.
Any changes that lower reimbursement rates under Medicare, Medicaid or private payor programs could result in a substantial reduction in our revenues. Our operating results may be adversely affected due to deterioration in reimbursement, changes in payor mix and growth in operating expenses in excess of increases, if any, in payments by health plan payors.
These and other related services we offer are complex, and if and to the extent we make errors in the provision of these services, we may be subject to claims and potential liability, any of which could harm our reputation, operating results and financial condition. Our future success depends upon our ability to maintain and manage our growth.
These and other related services we offer are complex, and if and to the extent we make errors in the provision of these services, we may be subject to claims and potential liability, any of which could harm our reputation, operating results and financial condition. 39 Table of Contents Our future success depends upon our ability to maintain and manage our growth.
Managed care organizations and other health plan payors have seemingly continued to consolidate in order to enhance their ability to influence the delivery and cost structure of healthcare services. Consequently, the 36 Table of Contents healthcare needs of a large percentage of the U.S. population are increasingly served by a smaller number of managed care organizations.
Managed care organizations and other health plan payors have seemingly continued to consolidate in order to enhance their ability to influence the delivery and cost structure of healthcare services. Consequently, the healthcare needs of a large percentage of the U.S. population are increasingly served by a smaller number of managed care organizations.
There may be increased risk of injury to LTCF residents if physicians attempt to use the pharmaceuticals off-label. LTCF caregivers may also misuse pharmaceuticals that we dispense, ignore or disregard information provided in training or fail to obtain adequate training, potentially leading to injury and an increased risk of 43 Table of Contents product liability.
There may be increased risk of injury to LTCF residents if physicians attempt to use the pharmaceuticals off-label. LTCF caregivers may also misuse pharmaceuticals that we dispense, ignore or disregard information provided in training or fail to obtain adequate training, potentially leading to injury and an increased risk of product liability.
In addition, the Guardian Founders are able to determine the outcome of substantially all matters requiring action by our stockholders, including amendments to our certificate of incorporation and bylaws, any proposed merger, consolidation or sale of all or substantially all of our assets and other corporate transactions even if such actions are not favored by our other stockholders.
Accordingly, the Guardian Founders are able to determine the outcome of substantially all matters requiring action by our stockholders, including amendments to our certificate of incorporation and bylaws, any proposed merger, consolidation or sale of all or substantially all of our assets and other corporate transactions, even if such actions are not favored by our other stockholders.
Under the qui tam or “whistleblower” provisions of the federal and various state false claims acts, private citizens may bring lawsuits alleging that a violation of the AKS or similar laws has resulted in the submission of “false” claims to federal and/or state healthcare programs, including Medicare and Medicaid.
Under the qui tam or “whistleblower” provisions of the federal and various state false claims acts, private citizens may bring lawsuits alleging that a violation of the AKS or similar laws has resulted in the submission of “false” claims to federal and/or state 34 Table of Contents healthcare programs, including Medicare and Medicaid.
Such volatility, including any stock run-ups, may be unrelated to our 45 Table of Contents actual or expected operating performance, results of operations, financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our Class A common stock.
Such volatility, including any stock run-ups, may be unrelated to our actual or expected operating performance, results of operations, financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our Class A common stock.
Our success and our ability to grow our business depends in large part on our ability to attract and retain employees. We have experienced labor shortages in the past, including as a result of the COVID-19 pandemic which negatively affected the labor market for employers.
Our success and our ability to grow our business depends in large part on our ability to attract and retain employees. We have experienced labor shortages in the past, including as a result of the COVID-19 pandemic 33 Table of Contents which negatively affected the labor market for employers.
There are costs and administrative burdens associated with ongoing compliance with HIPAA’s Privacy and Security Rules, as well as HITECH and state equivalents, and other 39 Table of Contents applicable federal and state regulations. Failure to comply carries with it the risk of significant penalties, damages, and sanctions.
There are costs and administrative burdens associated with ongoing compliance with HIPAA’s Privacy and Security Rules, as well as HITECH and state equivalents, and other applicable federal and state regulations. Failure to comply carries with it the risk of significant penalties, damages, and sanctions.
As a holding company, we have no independent means of generating revenue, and our principal source of cash flow will be distributions from our direct and indirect subsidiaries.
As a holding company, we have no independent means of generating revenue, and our principal source of cash flow will be distributions from our subsidiaries.
Such an attack or incident could result in business interruptions from the disruption of our information technology 41 Table of Contents systems or those of our third-party information systems providers, or negative publicity resulting in reputational harm with our customers, stockholders and other stakeholders.
Such an attack or incident could result in business interruptions from the disruption of our information technology systems or those of our third-party information systems providers, or negative publicity resulting in reputational harm with our customers, stockholders and other stakeholders.
Formulary fee programs have been the subject of debate in federal and state legislatures and various other public and governmental forums. If these benchmarks and programs were adopted, our operating results could be materially adversely affected.
Formulary fee programs have 31 Table of Contents been the subject of debate in federal and state legislatures and various other public and governmental forums. If these benchmarks and programs were adopted, our operating results could be materially adversely affected.
We also expect that the new rules and regulations that we will be subject to as a result of being a public company will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage for such directors and officers.
We also expect that the rules and regulations that we are now subject to as a result of being a public company will continue to make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage for such directors and officers.
In addition, we cannot predict the impact of future legislation and 38 Table of Contents regulatory changes on our business or assure that we will be able to obtain or maintain the regulatory approvals required to operate our business.
In addition, we cannot predict the impact of future legislation and regulatory changes on our business or assure that we will be able to obtain or maintain the regulatory approvals required to operate our business.
As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”) and NYSE rules, including those promulgated in response to the Sarbanes-Oxley Act.
As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”) and NYSE rules, including those promulgated in response 41 Table of Contents to the Sarbanes-Oxley Act.
We are a holding company with no operations of its own and, accordingly, we depend on our subsidiaries for cash to fund our operations and expenses, including future dividend payments, if any. We are a holding company and have no material assets other than our ownership of equity interests in our subsidiaries, including Guardian Pharmacy, LLC.
We are a holding company with no operations of its own and, accordingly, we depend on our subsidiaries for cash to fund our operations and expenses, including future dividend payments, if any. We are a holding company and have no material assets other than our ownership of equity interests in our operating subsidiaries.
We do not expect to pay any dividends on our common stock in the foreseeable future.
We do not intend to pay any cash dividends on our common stock in the foreseeable future. We do not expect to pay any dividends on our common stock in the foreseeable future.
In addition, beginning with our second Annual Report on Form 10-K, we will be required to furnish a report by management on the effectiveness of our internal control over financial reporting, pursuant to Section 404 of the Sarbanes-Oxley Act.
In addition, beginning with this Annual Report on Form 10-K, we are required to furnish a report by management on the effectiveness of our internal control over financial reporting, pursuant to Section 404 of the Sarbanes-Oxley Act.
However, our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and 49 Table of Contents regulations thereunder.
However, our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.
For example, the Inflation Reduction Act of 2022 contains several provisions that could have the effect of reducing the prices we can charge and the reimbursement we receive for the drugs we dispense, thereby reducing our profitability, and could adversely affect our financial condition and results of operations.
For example, the Inflation Reduction Act of 2022 contains several provisions that have had, and are expected to continue to have, the effect of reducing the prices we can charge and the reimbursement we receive for certain branded drugs we dispense, thereby reducing our profitability, and could adversely affect our financial condition and results of operations.
It is possible that a third party that we rely on could experience interruptions, including as a result of a cybersecurity attack, data security breach or otherwise. These third-party providers also may decide to discontinue operating these systems.
It is possible that a third party that we rely on could experience interruptions, including as a result of a cybersecurity attack, data security breach or otherwise.
The Affordable Care Act outlines certain reductions for Medicare reimbursed services, which may affect skilled nursing, home health, hospice, and outpatient therapy services, as well as certain other changes to Medicare payment methodologies.
Notably, the Affordable Care Act resulted in expanded healthcare coverage and has resulted in significant changes to the United States healthcare system. The Affordable Care Act outlines certain reductions for Medicare reimbursed services, which may affect skilled nursing, home health, hospice, and outpatient therapy services, as well as certain other changes to Medicare payment methodologies.
A group of our stockholders, consisting of Bindley Capital Partners I, LLC (“Bindley Capital”), Pharmacy Investors, LLC (“Pharmacy Investors”), Cardinal Equity Fund LP (“Cardinal” and, together with Pharmacy 44 Table of Contents Investors, the “Cardinal Stockholders”), Fred Burke, David Morris and Kendall Forbes (collectively, the “Guardian Founders”) beneficially own shares of our common stock representing a majority of our combined voting power.
A group of our stockholders, consisting of Bindley Capital Partners I, LLC, Pharmacy Investors, LLC, Cardinal Equity Fund, L.P., Fred Burke, David Morris and Kendall Forbes (collectively, the “Guardian Founders”) beneficially own shares of our common stock representing a majority of our combined voting power.
Continuing increased costs and prolonged inflation could materially and adversely affect our business, operating results and profitability. 37 Table of Contents Government efforts to combat inflation, along with other interest rate pressures arising from an inflationary economic environment, could lead to us to incur even higher interest rates and financing costs and may reduce our profitability.
Government efforts to combat inflation, along with other interest rate pressures arising from an inflationary economic environment, could lead to us to incur even higher interest rates and financing costs and may reduce our profitability.
Our business and operating results may be materially and adversely affected if any of these systems are interrupted for any reason (including cybersecurity threats or third-party provider failures), damaged or if they fail for an extended period of time. Significant disruptions to our infrastructure or any of our facilities due to failure of technology could adversely impact our business.
These third-party providers also may decide to discontinue operating these systems. 36 Table of Contents Our business and operating results may be materially and adversely affected if any of these systems are interrupted for any reason (including cybersecurity threats or third-party provider failures), damaged or if they fail for an extended period of time.
The healthcare industry in the United States is subject to fundamental changes due to ongoing federal and state healthcare reform efforts and related political, economic, and regulatory influences, including those from the recent change in presidential administration. Notably, the Affordable Care Act resulted in expanded healthcare coverage and has resulted in significant changes to the United States healthcare system.
The healthcare industry in the United States is subject to fundamental changes due to ongoing federal and state healthcare reform efforts and related political, economic, and regulatory influences, including those from the recent 30 Table of Contents change in presidential administration.
We are highly dependent on our senior management team, our local pharmacy management teams and our pharmacy professionals and the loss of such persons could cause our business to suffer and materially adversely affect our operating results.
In the event that our relationship were to suffer with MHA under the MHA GPO agreement, our business and operating results could be adversely affected. 32 Table of Contents We are highly dependent on our senior management team, our local pharmacy management teams and our pharmacy professionals and the loss of such persons could cause our business to suffer and materially adversely affect our operating results.
The market price of shares of our Class A common stock has experienced, and may in the future experience, substantial volatility. As of March 15, 2025, we had outstanding 9,200,000 shares of our Class A common stock.
The market price of shares of our Class A common stock has experienced, and may in the future experience, substantial volatility.
Acquisitions may involve significant cash expenditures, debt incurrence, operating losses, amortization of certain intangible assets of acquired companies, and expenses that could have a material adverse effect on our 42 Table of Contents financial condition, results of operations and liquidity.
Our growth plans rely, in part, on the successful completion of future acquisitions. If we are unsuccessful, our business would suffer. Acquisitions may involve significant cash expenditures, debt incurrence, operating losses, amortization of certain intangible assets of acquired companies, and expenses that could have a material adverse effect on our financial condition, results of operations and liquidity.
We could experience disruptions to our operations as a result of any such public health crisis, outbreak of infectious disease or national emergency, and our business and operations may be negatively impacted. 34 Table of Contents The impact of ongoing healthcare reform efforts on our business cannot accurately be predicted, and continuing government and private efforts to lower pharmaceutical costs, including by capping the prices for certain drugs and by limiting reimbursements, may adversely impact our profitability, results of operations and financial condition.
The impact of ongoing healthcare reform efforts on our business cannot accurately be predicted, and continuing government and private efforts to lower pharmaceutical costs, including by capping the prices for certain drugs and by limiting reimbursements, may adversely impact our profitability, results of operations and financial condition.
Although we maintain various forms and levels of insurance to protect us against potential loss exposures, our available insurance coverage, and indemnification amounts available to us, may not be adequate to protect us against all potential risks, allegations and claims against us.
Product liability or personal injury claims may be asserted against us with respect to any of the products or pharmaceuticals we dispense or services we provide. 37 Table of Contents Although we maintain various forms and levels of insurance to protect us against potential loss exposures, our available insurance coverage, and indemnification amounts available to us, may not be adequate to protect us against all potential risks, allegations and claims against us.
A cybersecurity attack or other data security incident could result in the misappropriation of confidential or personal information, create system interruptions or deploy malicious software that attacks our information technology security systems.
Although the ransomware attack we experienced did not have a material impact to our business, such future incidents could disrupt and materially adversely affect our business. A cybersecurity attack or other data security incident could result in the misappropriation of confidential or personal information, create system interruptions or deploy malicious software that attacks our information technology security systems.
We cannot predict the effect of technological changes on our business, and new services and technologies in the future could be superior to, or render obsolete, the technologies we currently use in our business. Incorporating new technologies into our products and services may require substantial expenditures and take considerable time, and ultimately may not be successful.
We cannot predict the effect of technological changes on our business, and new services and technologies in the future, including those implementing or created using artificial intelligence, could be superior to, or render obsolete, the technologies we currently use in our business.
These transfer restrictions will cease to apply as shares of Class B common stock automatically convert into shares of Class A common stock over the two year period following the IPO. In addition, our board of directors may accelerate the conversion of Class B common stock into Class A common stock at their discretion.
The shares of Class B common stock are subject to certain transfer restrictions and conversion terms, including with respect to sales. These transfer restrictions will cease to apply as shares of Class B common stock automatically convert into shares of Class A common stock over the two-year period following their respective dates of issuance.
We generally are not able to sufficiently raise our pricing to offset these increased costs.
We generally are not able to sufficiently raise our pricing to offset these increased costs. Continuing increased costs and prolonged inflation could materially and adversely affect our business, operating results and profitability.
We rely in part on third parties for the development of and access to new technologies, which may adversely impact our ability to integrate new technologies into our business. If we fail to effectively maintain and upgrade our technology, our ability to sustain and grow our business and our results of operations may be materially adversely affected.
Our success will depend on our ability to develop new technologies and adapt to technological changes and evolving industry standards. We rely in part on third parties for the development of and access to new technologies, which may adversely impact our ability to integrate new technologies into our business.
Cybersecurity attacks or other data security incidents could disrupt our operations and expose us to regulatory fines or penalties, liability or reputational harm. In the ordinary course of our business, we process, store and transmit data, which may include sensitive personal information as well as proprietary or confidential information relating to our business or third parties.
In the ordinary course of our business, we process, store and transmit data, which may include sensitive personal information as well as proprietary or confidential information relating to our business or third parties. We have in the past been subject to a ransomware attack, and may in the future be subject to various cyber or ransomware attacks or data breaches.
In addition, our ability to adopt and develop new technologies may be inhibited by industry-wide standards, new laws and regulations and other factors. Our success will depend on our ability to develop new technologies and adapt to technological changes and evolving industry standards.
Incorporating new technologies into our products and services may require substantial expenditures and take considerable time, and ultimately may not be successful. In addition, our ability to adopt and develop new technologies may be inhibited by industry-wide standards, new laws and regulations and other factors.
As of December 31, 2024, we 46 Table of Contents have outstanding approximately 54 million shares of Class B common stock, which shares are convertible into shares of Class A common stock on a one-to-one basis. The shares of Class B common stock are subject to certain transfer restrictions and conversion terms, including with respect to sales.
As of March 2, 2026, we have outstanding approximately 27.1 million shares of Class B common stock (substantially all of which were issued in our Corporate Reorganization in September 2024), which shares are convertible into shares of Class A common stock on a one-to-one basis.
Removed
In addition, a portion of our health plan payor reimbursements derive from our participation in the MHA Managed Care Network (“MHA”). In the event that we were to have a contractual dispute with MHA or fail to renew our agreement upon acceptable terms, our reimbursements may decrease.
Added
We could experience disruptions to our operations as a result of any such public health crisis, outbreak of infectious disease or national emergency, and our business and operations may be negatively impacted.
Removed
We also participate in the MHA group purchasing organization (“GPO”), for purposes of drug purchasing. In the event that our relationship were to suffer with MHA under either the network participation agreement or the MHA GPO agreement, our reimbursements could be further impacted and our business and operating results could be adversely affected.
Added
We participate in the MHA group purchasing organization (“GPO”), for purposes of drug purchasing.
Removed
We have been subject to a ransomware attack, and may in the future be subject to various cyber or ransomware attacks or data breaches. Although the ransomware attack we experienced did not have a material impact to our business, such future incidents could disrupt and materially adversely affect our business.
Added
Significant disruptions to our infrastructure or any of our facilities due to failure of technology could adversely impact our business.
Removed
Product liability or personal injury claims may be asserted against us with respect to any of the products or pharmaceuticals we dispense or services we provide.
Added
If we fail to effectively maintain and upgrade our technology, our ability to sustain and grow our business and our results of operations may be materially adversely affected. Cybersecurity attacks or other data security incidents could disrupt our operations and expose us to regulatory fines or penalties, liability or reputational harm.
Removed
Our growth plans rely, in part, on the successful completion of future acquisitions. If we are unsuccessful, our business would suffer.
Added
In addition, our board of directors may accelerate the conversion of Class B common stock into Class A common stock at their discretion.
Removed
Some of the pharmaceuticals we dispense are warehoused with a single logistics provider for warehouse and distribution services to our pharmacies, and our business could be harmed if our logistics provider performs poorly, fails to comply with its licensing requirements or is unavailable and we are unable to replace it.
Removed
Our limited operating history as a publicly-traded company, and our inexperience could materially and adversely affect us and our stockholders. We completed our IPO in September 2024 and became a publicly-traded company. Our senior management team lacks experience in operating a public company.
Removed
As a publicly-traded company, we are required to develop and implement substantial control systems, policies and procedures in order to satisfy our periodic SEC reporting and NYSE obligations. We cannot guarantee that management’s past experience will be sufficient to successfully develop and implement these systems, policies and procedures and to operate our company.
Removed
Failure to do so could jeopardize our status as a public company, and the loss of such status may materially and adversely affect us and our stockholders.
Removed
While we currently qualify as an “emerging growth company” under the JOBS Act, taking advantage of the reduced disclosure requirements applicable to emerging growth companies could make our Class A common stock less attractive to investors. Once we lose emerging growth company status, the costs and demands placed upon our management are expected to increase.
Removed
The Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) permits “emerging growth companies” like us to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies.
Removed
As long as we qualify as an emerging growth company, we would be permitted, and we intend to, omit the auditor’s attestation on internal control over financial reporting that would otherwise be required by the Sarbanes-Oxley Act, as described above.
Removed
We intend to take advantage of the extended transition period to comply with new or revised accounting standards applicable to public companies.
Removed
We also intend to take advantage of the exemption provided under the JOBS Act from the requirements to submit say-on-pay, say-on-frequency and say-on-golden parachute votes to our stockholders and we will avail ourselves of reduced executive compensation disclosure that is already available to smaller reporting companies.
Removed
We could remain an “emerging growth company” for up to five years, or until the earliest of (a) the last day of the first fiscal year in which our annual gross revenues exceed $1.235 billion, (b) the date that we become a 47 Table of Contents “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur on the last day of the relevant fiscal year if the market value of our common equity that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (c) the date on which we have issued more than $1.0 billion in non-convertible debt securities during any three-year period.
Removed
Until such time that we lose “emerging growth company” status, it is unclear if investors will find our Class A common stock less attractive because we may rely on these exemptions.
Removed
If some investors find our Class A common stock less attractive as a result, there may be a less active trading market for our Class A common stock and our stock price may be more volatile and could cause our stock price to decline.
Removed
We may lose emerging growth status within a relatively short period of time and as early as December 31, 2025, on account of our public float exceeding $700 million or our annual gross revenues exceeding $1.235 billion.
Removed
Once we lose emerging growth company status, we expect the costs and demands placed upon our management to increase, as we would have to comply with additional disclosure and accounting requirements. We do not intend to pay any cash dividends on our common stock in the foreseeable future.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFor further discussion of the risks associated with cybersecurity incidents, see “ Risk Factors—Risks Related to Our Business—Interruptions to our information systems may materially and adversely affect our operating results ” as well as “— Cybersecurity attacks or other data security incidents could disrupt our operations and expose us to regulatory fines or penalties, liability or reputational harm. ” 51 Table of Contents Governance Our board of directors has overall oversight responsibility for our risk management, and delegates data protection and cybersecurity risk oversight to the audit committee.
Biggest changeFor further discussion of the risks associated with cybersecurity incidents, see “ Risk Factors—Risks Related to Our Business—Interruptions to our information 45 Table of Contents systems may materially and adversely affect our operating results ” as well as “— Cybersecurity attacks or other data security incidents could disrupt our operations and expose us to regulatory fines or penalties, liability or reputational harm. ” Governance Our board of directors has overall oversight responsibility for our risk management, and delegates data protection and cybersecurity risk oversight to the audit committee.
Security events and data incidents are evaluated, ranked by severity, and prioritized for response and remediation. Incidents are evaluated to determine materiality, as well as operational and business impact, and reviewed for privacy impact. We deploy technical safeguards that are designed to protect our information systems, products, operations and sensitive information from cybersecurity threats.
Security events and data incidents are evaluated, ranked by severity, and prioritized for response and remediation. Incidents are evaluated to determine materiality, as well as operational and business impact, and are reviewed for privacy impact. We deploy technical safeguards that are designed to protect our information systems, products, operations and sensitive information from cybersecurity threats.
These relationships enable us to leverage specialized knowledge and insights, to help ensure our cybersecurity strategies and processes remain effective. Our collaboration with these third parties includes regular audits, routine system monitoring, threat assessments, incident response, and consultation on potential security enhancements.
These relationships enable us to leverage specialized knowledge and insights, which help ensure our cybersecurity strategies and processes remain effective. Our collaboration with these third parties includes regular audits, routine system monitoring, threat assessments, incident response, and consultation on potential security enhancements.
Our VP of Technology & Senior Security Officer, along with leaders from our privacy and corporate compliance functions, collaborate to implement a program designed to manage our exposure to cybersecurity risks and to promptly respond to cybersecurity incidents. Response to incidents is delivered by multi-disciplinary teams in accordance with our incident response plan.
Our SVP of Technology & Senior Security Officer, along with leaders from our privacy and corporate compliance functions, collaborate to implement a program designed to manage our exposure to cybersecurity risks and to promptly respond to cybersecurity incidents. Response to incidents is delivered by multi-disciplinary teams in accordance with our incident response plan.
The audit committee may also promptly receive information regarding any material cybersecurity incident that may occur, including any ongoing updates regarding the same. The audit committee periodically discusses our approach to cybersecurity risk management with our VP of Technology & Senior Security Officer. Our VP of Technology & Senior Security Officer is responsible for overseeing our cybersecurity risk management program.
The audit committee may also promptly receive information regarding any material cybersecurity incident that may occur, including any ongoing updates regarding the same. The audit committee periodically discusses our approach to cybersecurity risk management with our SVP of Technology & Senior Security Officer. Our SVP of Technology & Senior Security Officer is responsible for overseeing our cybersecurity risk management program.
Our VP of Technology & Senior Security Officer has over 20 years of extensive experience in information technology and security, and works in coordination with other members of the management team.
Our SVP of Technology & Senior Security Officer has over 20 years of extensive experience in information technology and security, and works in coordination with other members of the management team.
Through ongoing communications with these teams during incidents, the VP of Technology & Senior Security Officer monitors the triage, mitigation and remediation of cybersecurity incidents, and reports such incidents to executive management, the audit committee and other colleagues in accordance with our cybersecurity policies and procedures, as appropriate. 52 Table of Contents
Through ongoing communications with these teams during incidents, the SVP of Technology & Senior Security Officer monitors the triage, mitigation and remediation of cybersecurity incidents, and reports such incidents to executive management, the audit committee and other colleagues in accordance with our cybersecurity policies and procedures, as appropriate. 46 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. Our corporate headquarters occupy approximately 25,000 square feet in Atlanta, Georgia, under a lease that expires on October 31, 2030. We use this space for administration, sales, marketing, data analytics, and customer support. We have 59 additional leases in place for our local pharmacies, totaling approximately 700,000 square feet.
Biggest changeItem 2. Properties. Our corporate headquarters occupy approximately 25,000 square feet in Atlanta, Georgia, under a lease that expires on October 31, 2030. We use this space for administration, sales, marketing, data analytics, and customer support. We have 65 additional leases in place for our local pharmacy operations and warehousing pharmaceuticals, totaling approximately 780,000 square feet.
Removed
We also lease approximately 8,100 square feet at a third-party logistics provider’s warehouse in Vonore, Tennessee. We warehouse pharmaceuticals that we purchase from certain manufacturers at the leased space and contract with the third-party logistics provider for its distribution services.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeFred Burke , age 75, has served as our President and Chief Executive Officer since our founding in 2004 and as a member of our board of directors since our incorporation in 2021. Prior to co-founding Guardian, Mr. Burke was a co-founder and president of two start-up companies in Atlanta, Georgia: Central Pharmacy Services, Inc.
Biggest changeFred Burke , age 76, has served as our President and Chief Executive Officer since our founding in 2004 and as a member of our board of directors, since our incorporation in 2021. Prior to co-founding Guardian, Mr. Burke was a co-founder and president of two start-up companies in Atlanta, Georgia: Central Pharmacy Services, Inc.
David Morris , age 61, has served as our Executive Vice President and Chief Financial Officer since our founding in 2004 and as a member of our board of directors since our incorporation in 2021. Prior to co-founding Guardian, Mr. Morris served as Chief Financial Officer at Central Pharmacy from 1993 to 2001. Mr.
David Morris , age 62, has served as our Executive Vice President and Chief Financial Officer since our founding in 2004 and as a member of our board of directors since our incorporation in 2021. Prior to co-founding Guardian, Mr. Morris served as Chief Financial Officer at Central Pharmacy from 1993 to 2001. Mr.
Kendall Forbes , age 68, has served as our Executive Vice President of Sales & Operations since our founding in 2004. Prior to co-founding Guardian, Mr. Forbes was a co-founder and the Executive Vice President of Operations of Central Pharmacy from 1993 to July 2004. Mr.
Kendall Forbes , age 69, has served as our Executive Vice President of Sales & Operations since our founding in 2004. Prior to co-founding Guardian, Mr. Forbes was a co-founder and the Executive Vice President of Operations of Central Pharmacy from 1993 to July 2004. Mr.
Forbes received a B.S. from the University of Louisiana Monroe School of Pharmacy and completed his graduate fellowship in Radiopharmacy at the University of New Mexico. 53 Table of Contents PART II
Forbes received a B.S. from the University of Louisiana Monroe School of Pharmacy and completed his graduate fellowship in Radiopharmacy at the University of New Mexico. 47 Table of Contents PART II
Item 4. Mine Safety Disclosures. Not applicable. Information About Our Executive Officers. Set forth below is certain information with respect to our executive officers as of March 15, 2025.
Item 4. Mine Safety Disclosures. Not applicable. Information About Our Executive Officers. Set forth below is certain information with respect to our executive officers as of March 1, 2026.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSeptember 26 2024 September 30 2024 October 31 2024 November 30 2024 December 31 2024 Guardian Pharmacy Services, Inc. $ 100 $ 105 $ 112 $ 156 $ 127 Russell 2000 100 101 99 110 101 S&P 500 Healthcare 100 101 96 96 90 Issuer Purchases of Equity Securities None.
Biggest changeThe comparisons shown in the graph are not intended to forecast or be indicative of the future performance of our common stock. 48 Table of Contents September 26 September 30 December 31 March 31 June 30 September 30 December 31 2024 2024 2024 2025 2025 2025 2025 Guardian Pharmacy Services, Inc. $ 100 $ 105 $ 127 $ 133 $ 133 $ 164 $ 188 Russell 2000 100 101 101 91 98 110 112 S&P 500 Healthcare 100 101 90 95 88 91 101 Issuer Purchases of Equity Securities None.
The graph below shows the cumulative total stockholder return on our Class A common stock between September 26, 2024 (the date that our Class A common stock commenced trading on the NYSE) through December 31, 2024 in comparison to the Russell 2000 Index and the S&P 500 Healthcare Index.
The graph below shows the cumulative total stockholder return on our Class A common stock between September 26, 2024 (the date that our Class A common stock commenced trading on the NYSE) through December 31, 2025 in comparison to the Russell 2000 Index and the S&P 500 Healthcare Index.
Item 5. Market for the Company’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our Class A common stock began trading on the New York Stock Exchange (“NYSE”) on September 26, 2024 under the ticker symbol “GRDN”. Prior to that, there was no public market for our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our Class A common stock began trading on the New York Stock Exchange (“NYSE”) on September 26, 2024 under the ticker symbol “GRDN”. Prior to that, there was no public market for our common stock.
The actual number of stockholders of common stock is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees. This number of holders of record also does not include stockholders whose shares may be held in trust by other entities.
The actual number of stockholders of Class A common stock is greater than such number of record holders and includes stockholders who are beneficial owners of Class A common stock but whose shares are held in street name by brokers and other nominees.
The representative of the underwriters for the IPO was Raymond James & Associates, Inc. 54 Table of Contents Performance Graph This performance graph shall not be deemed “soliciting material” or “filed” with the SEC for purposes of Section 18 of the Exchange Act, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act.
Recent Sales of Unregistered Securities None. Performance Graph This performance graph shall not be deemed “soliciting material” or “filed” with the SEC for purposes of Section 18 of the Exchange Act, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act.
Our Class B common stock is not publicly traded, but each outstanding share of our Class B common stock will automatically convert into one share of our Class A common stock over a two-year period commencing on September 27, 2024 pursuant to the terms of our certificate of incorporation.
Our Class B common stock is not publicly traded, but such shares automatically convert into one share of our Class A common stock over a two-year period following their date of issuance pursuant to the terms of our certificate of incorporation.
Data for the Russell 2000 Index and S&P 500 Healthcare Index assume reinvestment of dividends. The comparisons shown in the graph are not intended to forecast or be indicative of the future performance of our common stock.
Data for the Russell 2000 Index and S&P 500 Healthcare Index assume reinvestment of dividends.
Dividends We do not currently intend to pay any cash dividends on our common stock.
This number of holders of record also does not include stockholders whose shares may be held in trust by other entities. Dividends We do not currently intend to pay any cash dividends on our common stock.
See Note 1 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Stockholders As of March 15, 2025, there were approximately 95 record holders of our Class A common stock and approximately 240 record holders of our Class B common stock.
Stockholders As of March 2, 2026, there were approximately 197 record holders of our Class A common stock and approximately 242 record holders of our Class B common stock.
Removed
Recent Sales of Unregistered Securities None. Use of Proceeds On September 27, 2024, we completed our IPO in which we issued and sold 8,000,000 shares of Class A common stock at a public offering price of $14.00 per share.
Removed
Also on September 27, 2024, the underwriters for the IPO exercised in full their overallotment option to purchase 1,200,000 additional shares of Class A common stock. Following such sales, we received net proceeds of $119.8 million after deducting underwriter discounts of $9.0 million.
Removed
All shares sold were registered pursuant to the Company’s registration statement on Form S-1, as amended (Registration No. 333 274847) (the “Initial Registration Statement”) and the related registration statement on Form S-1 (Registration No. 333-282344) filed pursuant to Rule 462(b) under the Securities Act (the “462(b) Registration Statement” and, together with the Initial Registration Statement, the “Registration Statement”).
Removed
The Initial Registration Statement was declared effective by the SEC on September 25, 2024, and the 462(b) Registration Statement became effective on September 26, 2024 upon filing with the SEC pursuant to Rule 462(b) under the Securities Act.
Removed
We used $55.2 million of the net proceeds from the IPO to fund the aggregate cash portion of the merger consideration payable in connection with the Corporate Reorganization and $20.0 million to repay certain borrowings on the line of credit under our existing credit facility.
Removed
We intend to use the balance of the net proceeds for general corporate purposes and working capital.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeYear Ended December 31, (in thousands) 2023 2024 Net income (loss) $ 37,720 $ (71,033 ) Add: Interest expense 2,859 3,278 Depreciation and amortization 18,234 19,772 Provision for income taxes — 4,556 EBITDA $ 58,813 $ (43,427 ) Share-based compensation (1) (6,090 ) 131,490 Certain legal & other regulatory matters (2) 23,452 3,988 IPO-related costs (3) — 453 Other (4) — (1,670 ) Adjusted EBITDA $ 76,175 $ 90,834 62 Table of Contents Year Ended December 31, (in thousands) 2023 2024 Net income (loss) as a percentage of revenue 3.6 % (5.8 )% Adjusted EBITDA as a percentage of revenue 7.3 % 7.4 % GAAP selling, general, and administrative expenses $ 167,364 $ 307,291 Subtract: Share-based compensation (1) (6,090 ) 131,490 Certain legal & other regulatory matters (2) 23,452 3,988 IPO-related costs (3) — 453 Adjusted SG&A $ 150,002 $ 171,360 GAAP selling, general, and administrative expenses as a percentage of revenue 16.0 % 25.0 % Adjusted SG&A as a percentage of revenue 14.3 % 13.9 % (1) Prior to the Corporate Reorganization and IPO, our share-based compensation expense primarily represented non-cash recognition of changes in the value of Restricted Interest Unit awards, which has historically been recorded as a liability using a cash settlement methodology as calculated on a quarterly basis.
Biggest changeGAAP net income per share N/A 63,297,123 Weighted average common shares outstanding used in calculating diluted Non-GAAP net income per share N/M 63,297,123 Diluted EPS $ (1.77 ) $ 0.78 Adjusted EPS N/M (8 ) $ 1.07 GAAP selling, general, and administrative expenses $ 307,291 $ 220,017 Subtract: Share-based compensation (1) 131,490 13,850 Certain legal & other regulatory matters (2) 3,988 1,094 Financing-related and other activities (3) 453 2,175 Payor-reimbursement matters (4) $ — $ 4,316 Adjusted SG&A $ 171,360 $ 198,582 GAAP selling, general, and administrative expenses as a percentage of revenue 25.0 % 15.2 % Adjusted SG&A as a percentage of revenue 13.9 % 13.7 % 57 Table of Contents (1) Prior to the Corporate Reorganization and IPO, our share-based compensation expense primarily represented non-cash recognition of changes in the value of Restricted Interest Unit awards, which had historically been recorded as a liability using a cash settlement methodology as calculated on a quarterly basis.
Known material factors that could affect our financial performance and actual results, and could cause actual results to differ materially from those expressed or implied in any forward-looking statements included in this discussion or otherwise made by our management, are described in “Risk Factors.” Factors that could cause or contribute to such difference are not limited to those identified in “Risk Factors.” A discussion regarding our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 is presented below.
Known material factors that could affect our financial performance and actual results, and could cause actual results to differ materially from those expressed or implied in any forward-looking statements included in this discussion or otherwise made by our management, are described in “Risk Factors.” Factors that could cause or contribute to such difference are not limited to those identified in “Risk Factors.” A discussion regarding our financial condition and results of operations for the year ended December 31, 2025 compared to the year ended December 31, 2024 is presented below.
Immediately prior to the IPO, we completed a series of corporate reorganization transactions (the “Corporate Reorganization”), pursuant to which: • All Preferred Units in Guardian Pharmacy, LLC were converted into Common Units, resulting in Guardian Pharmacy, LLC having only Common Units outstanding; • The membership interests, including restricted interest unit (“Restricted Interest Unit”) awards, held by members other than Guardian Pharmacy, LLC in our subsidiaries (other than certain subsidiaries that were not parties to the Corporate Reorganization, as discussed below) were converted into Common Units of Guardian Pharmacy, LLC.
Immediately prior to the IPO, we completed a series of corporate reorganization transactions (the “Corporate Reorganization”), pursuant to which: • All Preferred Units in Guardian Pharmacy, LLC were converted into Common Units, resulting in Guardian Pharmacy, LLC having only Common Units outstanding; • The membership interests, including Restricted Interest Unit awards, held by members other than Guardian Pharmacy, LLC in our subsidiaries (other than certain subsidiaries that were not parties to the Corporate Reorganization, as discussed below) were converted into Common Units of Guardian Pharmacy, LLC.
Also on September 27, 2024, the underwriters for the IPO exercised in full their option to purchase an additional 1,200,000 shares of Class A common stock. The 9,200,000 shares were issued at a public offering price of $14.00 per share, resulting in net proceeds to us of $119.8 million, after deducting underwriting discounts of $9.0 million.
Also on September 27, 2024, the underwriters for the IPO exercised in full their option to purchase an additional 1,200,000 shares of Class A common stock. The 9,200,000 shares were issued at a public offering price of $14.00 per share, resulting in net proceeds to the Company of $119.8 million, after deducting underwriting discounts of $9.0 million.
Selling, general, and administrative expenses also include facilities-related expenses, software expenses, sales and marketing expenses, insurance premiums, professional services expenses, including for outside legal and accounting services, other overhead costs, changes in the fair value of contingent payments related to acquisitions, depreciation related to long lived assets, and amortization of intangible assets.
Selling, general, and administrative expenses also include facilities-related expenses, software expenses, insurance premiums, professional services expenses, including for outside legal and accounting services, other overhead costs, changes in the fair value of contingent payments related to acquisitions, depreciation related to long lived assets, and amortization of intangible assets.
On May 13, 2024, we entered into the Sixth Amendment to the Third Amended and Restated Loan and Security Agreement (the “2024 Amendment”) to the existing credit facility with Regions Bank (the “Credit Facility”). The Credit Facility provides for term loans (the “Term Loan”) and a line of credit.
On May 13, 2024, the Company entered into the Sixth Amendment to the Third Amended and Restated Loan and Security Agreement (the “2024 Amendment”) to the existing credit facility with Regions Bank (the “Credit Facility”). The Credit Facility provides for term loans (the “Term Loan”) and a line of credit.
There are a number of limitations related to the use of Adjusted EBITDA and Adjusted SG&A rather than the most directly comparable GAAP financial measure, including: • Adjusted EBITDA does not reflect interest and income tax payments that represent a reduction in cash available to us; • Depreciation and amortization are non-cash charges and the assets being depreciated may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; • Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; • Adjusted EBITDA and Adjusted SG&A do not consider the impact of share-based compensation; and • Adjusted EBITDA and Adjusted SG&A exclude the impact of certain legal and regulatory items, which can affect our current and future cash requirements.
There are a number of limitations related to the use of Adjusted EBITDA, Adjusted Net Income, Adjusted EPS, and Adjusted SG&A rather than the most directly comparable GAAP financial measure, including: • Adjusted EBITDA does not reflect interest and income tax payments that represent a reduction in cash available to us; • Depreciation and amortization are non-cash charges and the assets being depreciated may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; • Adjusted EBITDA, Adjusted Net Income, and Adjusted EPS do not reflect changes in, or cash requirements for, our working capital needs; • Adjusted EBITDA, Adjusted Net Income, Adjusted EPS, and Adjusted SG&A do not consider the impact of share-based compensation; and • Adjusted EBITDA, Adjusted Net Income, Adjusted EPS, and Adjusted SG&A exclude the impact of certain legal and regulatory items, and payor-reimbursement matters which can affect our current and future cash requirements.
Factors Affecting the Comparability of Our Results of Operations Our results of operations for the year ended December 31, 2024 and the year ended December 31, 2023 have been affected by the following, among other factors, which must be understood to assess the comparability of our period-to-period financial performance and condition. 57 Table of Contents Acquisitions Our growth strategy involves periodically acquiring institutional pharmacies servicing LTCFs and their residents as well as residents in other care settings.
Factors Affecting the Comparability of Our Results of Operations Our results of operations for the year ended December 31, 2025 and the year ended December 31, 2024 have been affected by the following, among other factors, which must be understood to assess the comparability of our period-to-period financial performance and condition. 51 Table of Contents Acquisitions Our growth strategy involves periodically acquiring institutional pharmacies servicing LTCFs and their residents as well as residents in other care settings.
We believe that presenting Adjusted EBITDA and Adjusted SG&A provides useful information to investors in understanding and evaluating our operating results, as it permits investors to view our core business performance using the same metrics that management uses to evaluate our performance.
We believe that presenting Adjusted EBITDA, Adjusted Net Income, Adjusted EPS, and Adjusted SG&A provides useful information to investors in understanding and evaluating our operating results, as it permits investors to view our core business performance using the same metrics that management uses to evaluate our performance.
Recent Accounting Pronouncements Refer to Note 2 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for accounting pronouncements adopted and recent accounting pronouncements not yet adopted as of the date of this Annual Report on Form 10-K.
Recent Accounting Pronouncements Refer to Note 2 Summary of Significant Accounting Policies to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for accounting pronouncements adopted and recent accounting pronouncements not yet adopted as of the date of this Annual Report on Form 10-K.
Prior to the Corporate Reorganization and IPO, share-based compensation expense primarily represented non-cash recognition of changes in the value of Restricted Interest Unit awards. These awards contained a cash settlement feature and were accounted for as a liability in accordance with U.S. generally accepted accounting principles (“GAAP”).
Prior to the Corporate Reorganization and IPO, share-based compensation expense primarily represented non-cash recognition of changes in the value of Restricted Interest Unit awards. These awards contained a cash settlement feature and were accounted for as a liability in accordance with generally accepted accounting principles in the United States of America (“GAAP”).
Our strategy includes the acquisition of freestanding institutional pharmacy businesses as well as other assets, generally less significant in size, which are combined with existing pharmacy operations to augment internal organic growth. During the year ended December 31, 2024, we completed acquisitions of various pharmacy operations (the “Acquisitions”).
Our strategy includes the acquisition of freestanding institutional pharmacy businesses as well as other assets, generally less significant in size, which are combined with existing pharmacy operations to augment internal organic growth. During 2024 and 2025, we completed acquisitions of various pharmacy operations (the “Acquisitions”).
This conversion of Restricted Interest Units was treated as a modification, requiring the units to be marked to fair value on the modification date, resulting in us recognizing $125.7 million of incremental share-based compensation expense during the year ended December 31, 2024.
This conversion of Restricted Interest Units was treated as a modification, requiring the units to be marked to fair value on the modification date, resulting in the Company recognizing $125.7 million of incremental share-based compensation expense during the year ended December 31, 2024. Components of Results of Operations Revenues .
While our national competitors have primarily focused on SNFs, we believe we enjoy a strong competitive position as a large and purpose-built provider of pharmacy services to ALFs and BHFs.
While our national competitors have primarily focused on skilled nursing facilities (“SNFs”), we believe we enjoy a strong competitive position as a large and purpose-built provider of pharmacy services to ALFs and BHFs.
In connection with the Corporate Reorganization and IPO, all outstanding Restricted Interest Unit awards, other than those issued by Non-Converted Subsidiaries, were converted into shares of Class B common stock and are no longer considered a liability.
In connection with the Corporate Reorganization and IPO, all outstanding Restricted Interest Unit awards, other than those issued by Non-Converted Subsidiaries, were converted into shares of Class B common stock, certain of which had additional vesting requirements following the IPO, and are no longer considered a liability.
(2) Represents non-recurring attorney’s fees, settlement costs and other expenses associated with certain legal proceedings. The Company excludes such charges when evaluating operating performance because it does not incur such charges on a predictable basis and exclusion allows for consistent evaluation of operations. (3) Represents non-recurring costs associated with our IPO.
(2) Represents non-recurring attorney’s fees, settlement costs and other expenses associated with certain legal proceedings. The Company excludes such charges when evaluating operating performance because it does not incur such charges on a predictable basis and exclusion allows for consistent evaluation of operations. (3) Represents non-recurring costs associated with various financing-related activities and costs to transition to a public company.
Further, the increase was attributable to increases in the number of residents served from 163,000 residents during December 2023 to 186,000 residents during December 2024 and prescriptions dispensed from 22.2 million during the year ended December 31, 2023 to 25.1 million during the year ended December 31, 2024, as well as annual drug price inflation.
Further, the increase was attributable to increases in the number of residents served from 186,000 residents during December 2024 to 205,000 residents during December 2025 and prescriptions dispensed from 25.1 million during the year ended December 31, 2024 to 28.6 million during the year ended December 31, 2025, as well as annual drug price inflation.
Income Taxes We account for income taxes under the asset and liability approach. Deferred tax assets or liabilities are determined based on the differences between the financial statement and tax basis of assets and liabilities as measured by the enacted tax rates as well as net operating losses and credit carryforwards, which will be in effect when these differences reverse.
Deferred tax assets or liabilities are determined based on the differences between the financial statement and tax basis of assets and liabilities as measured by the enacted tax rates as well as net operating losses and credit carryforwards, which will be in effect when these differences reverse.
For the year ended December 31, 2024, this share-based compensation expense primarily represents the incremental expense recognized for Restricted Interest Unit awards that were modified in connection with the Corporate Reorganization and IPO. (2) These figures, for both Converted Subsidiaries and Non-Converted Subsidiaries, reflect minority membership interests in our subsidiaries preceding the Corporate Reorganization and IPO.
For the year ended December 31, 2025, this share-based compensation expense primarily represents the incremental expense recognized for Restricted Interest Unit awards that were modified in connection with the Corporate Reorganization and IPO, and share-based compensation expense for Restricted Stock Units granted for Class A common stock. 53 Table of Contents (2) These figures, for both Converted Subsidiaries and Non-Converted Subsidiaries, reflect minority membership interests in our subsidiaries preceding the Corporate Reorganization and IPO.
In connection with the Corporate Reorganization and IPO, certain Restricted Interest Unit awards were modified, resulting in share-based compensation expense of $125.7 million during the year ended December 31, 2024, based on the fair value of the modified awards. Going forward, these modified awards will be equity classified.
In connection with the Corporate Reorganization and IPO, certain Restricted Interest Unit awards were modified, resulting in incremental share-based compensation expense of $125.7 million during the year ended December 31, 2024, based on the fair value of the modified awards. Share-based compensation expense for the year ended December 31, 2025 relates to equity-classified awards.
Net cash used in investing activities for the year ended December 31, 2024 increased by $17.0 million compared to the corresponding period in 2023.
Net cash used in investing activities for the year ended December 31, 2025 increased by $1.8 million compared to the corresponding period in 2024.
The Non-Converted Subsidiaries collectively own ten pharmacies that are (i) greenfield start-up pharmacies in various stages of development and integration with Guardian and do not currently have material operations or (ii) pharmacies that we recently acquired.
In addition, Guardian Pharmacy, LLC remained the majority owner of each of the Non-Converted Subsidiaries. The Non-Converted Subsidiaries are (i) greenfield start-up pharmacies in various stages of development and integration with Guardian and do not currently have material operations or (ii) pharmacies that we recently acquired.
Judgment is used to assess the collectability of account balances and the economic ability of customers to pay. At such time when a balance is definitively deemed to be uncollectible, the balance is written off against the allowance for credit losses.
Judgment is used to assess the collectability of account balances and the economic ability of customers to pay. At such time when a balance is definitively deemed to be uncollectible, the balance is written off against the allowance for credit losses. Intangible Assets We have intangible assets with finite useful lives as a result of acquisitions.
Net Cash Flows For the years ended December 31, 2023 and 2024, respectively, our net cash flows provided by / (used in) were as follows: (in thousands) Year Ended December 31, 2023 2024 Operating activities $ 70,819 $ 57,960 Investing activities (13,441 ) (30,407 ) Financing activities (57,233 ) (23,645 ) Operating Activities Cash flows provided by operating activities consist of our net income (loss) principally adjusted for certain non-cash items, such as depreciation and amortization, provision for losses on accounts receivable, and share-based compensation expense (income).
Net Cash Flows For the years ended December 31, 2024 and 2025, respectively, our net cash flows provided by / (used in) were as follows: (in thousands) Year Ended December 31, 2024 2025 Operating activities $ 57,960 $ 100,255 Investing activities (30,407 ) (32,225 ) Financing activities (23,645 ) (7,071 ) Operating Activities Cash flows provided by operating activities consist of our net income principally adjusted for certain non-cash items, such as depreciation and amortization, provision for losses on accounts receivable, changes in deferred tax asset, and share-based compensation expense.
We also offer training to caregivers and conduct mock audits to ensure compliance with pharmacy administration requirements, billing claims processing, government regulation and other matters. As of December 31, 2024, our 51 pharmacies served approximately 186,000 residents in approximately 7,000 LTCFs across 38 states.
We also offer training to caregivers and conduct mock audits to ensure compliance with pharmacy administration requirements, billing claims processing, government regulation and other matters. As of December 31, 2025, our 61 pharmacies, 54 of which are full-service, served approximately 205,000 residents in approximately 8,400 LTCFs across 38 states.
Interest expense consists of interest on our long-term debt and line of credit under our Credit Facility and finance leases. Other expense, net . Other expense, net consists primarily of gain (loss) on asset disposals. Provision for income taxes . Provision for income taxes consists primarily of income taxes in certain jurisdictions in which we conduct business.
Interest expense consists of interest on our long-term debt and line of credit under our credit facility and finance leases. Other expense (income), net . Other expense, net consists primarily of gain (loss) on asset disposals and interest income earned on cash deposits. Provision for income taxes .
Our services include prescription intake and adjudication management, packaging drugs into unit dose and/or multi-dose compliance packaging that are organized by date and time of administration, and electronically tracking each drug from delivery through administration to LTCF residents.
Additionally, our robust capabilities enable us to serve 49 Table of Contents residents in all types of LTCFs. Our services include prescription intake and adjudication management, packaging drugs into unit dose and/or multi-dose compliance packaging that are organized by date and time of administration, and electronically tracking each drug from delivery through administration to LTCF residents.
The operating results of the Acquisitions were a contributing factor in certain changes in the results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023. For comparative purposes, acquisition impacts are only considered for the 12 months following the acquisition date.
The operating results of the Acquisitions were a contributing factor in certain changes in the results of operations for the year ended December 31, 2025 compared to the year ended December 31, 2024. Acquisition impacts are considered when the beginning of the comparative period precedes the acquisition date.
Overview We are a leading, highly differentiated pharmacy services company that provides an extensive suite of technology-enabled services designed to help residents of LTCFs adhere to their appropriate drug regimen, which in turn helps reduce the cost of care and improve clinical outcomes. We enter into contracts directly with LTCFs to serve as the principal pharmacy provider for their residents.
Overview We are a leading, highly differentiated pharmacy services company that provides an extensive suite of technology-enabled services designed to help residents of long-term health care facilities (“LTCFs”) adhere to their appropriate drug regimen, which in turn helps reduce the cost of care and improve clinical outcomes.
Adjusted EBITDA and Adjusted SG&A do not have a definition under GAAP, and our definition of Adjusted EBITDA and Adjusted SG&A may not be the same as, or comparable to, similarly titled measures used by other companies. We use Adjusted EBITDA and Adjusted SG&A to better understand and evaluate our core operating performance and trends.
Adjusted EBITDA, Adjusted Net Income, Adjusted EPS and Adjusted SG&A do not have a definition under GAAP, and our definition of Adjusted EBITDA, Adjusted Net Income, Adjusted EPS and Adjusted SG&A may not be the same as, or comparable to, similarly titled measures used by other companies.
Revenue Year Ended December 31, 2023 2024 % Change (in thousands) Revenue $ 1,046,193 $ 1,228,409 17.4 % Revenue for the year ended December 31, 2024 increased by $182.2 million or 17.4% compared to the year ended December 31, 2023. $55.1 million of the increase was attributable to revenue from the Acquisitions, with the remaining $127.1 million of the increase attributable to the organic growth of our business.
Revenue Year Ended December 31, % Change 2024 2025 (in thousands) Revenue $ 1,228,409 $ 1,448,685 17.9 % Revenue for the year ended December 31, 2025 increased by $220.3 million or 17.9% compared to the year ended December 31, 2024. $68.4 million of the increase was attributable to revenue from the Acquisitions, with the remaining $151.9 million of the increase attributable to the organic growth of our business.
Such minority membership interests in the Converted Subsidiaries (but not in the Non-Converted Subsidiaries) were eliminated as part of the Corporate Reorganization. (3) See “ —Adjusted EBITDA and Other Non-GAAP Financial Measures ” below for more information and for a reconciliation of Adjusted EBITDA to net income, the most directly comparable financial measure calculated and presented in accordance with GAAP.
(3) See “ —Adjusted EBITDA and Other Non-GAAP Financial Measures ” below for more information and for a reconciliation of Adjusted EBITDA to net income, the most directly comparable financial measure calculated and presented in accordance with GAAP.
The subsidiaries that participated in the Corporate Reorganization are referred to as the “Converted Subsidiaries”, and the subsidiaries that were not parties to the Corporate Reorganization are referred to as the Non-Converted Subsidiaries; and • Guardian Pharmacy, LLC became a wholly-owned subsidiary of Guardian Pharmacy Services, Inc. by participating in a merger with a transitory subsidiary of Guardian Pharmacy Services, Inc.
The subsidiaries that participated in the Corporate Reorganization are referred to as the “Converted Subsidiaries”, and the subsidiaries that were not parties to the Corporate Reorganization (including those which were formed or acquired subsequent to the Corporate Reorganization) are referred to as the “Non-Converted Subsidiaries”; and 50 Table of Contents • Guardian Pharmacy, LLC became a wholly-owned subsidiary of the Company by participating in a merger with a transitory subsidiary of the Company.
Pursuant to the merger, each Common Unit of Guardian Pharmacy, LLC was converted into (i) one share of Class B common stock and (ii) the right to receive $1.02 in cash per share, without interest (collectively, the “Merger Consideration”). In the merger, 54,094,232 shares of Class B common stock were issued in exchange for common units of Guardian Pharmacy, LLC.
Pursuant to the merger, each Common Unit of Guardian Pharmacy, LLC was converted into (i) one share of the Company’s Class B common stock, par value $0.001 per share (“Class B common stock”) and (ii) the right to receive $1.02 in cash per share, without interest (collectively, the “Merger Consideration”).
Cost of goods sold Year Ended December 31, % Change 2023 2024 (in thousands) Cost of goods sold $ 837,883 $ 984,038 17.4 % Percentage of revenue 80.1 % 80.1 % Cost of goods sold for the year ended December 31, 2024 increased by $146.2 million or 17.4% compared to the year ended December 31, 2023. $48.1 million of the increase was attributable to the Acquisitions, with the remaining $98.1 million of the increase attributable to the organic growth of our business.
Cost of goods sold Year Ended December 31, % Change 2024 2025 (in thousands) Cost of goods sold $ 984,038 $ 1,155,967 17.5 % Percentage of revenue 80.1 % 79.8 % Cost of goods sold for the year ended December 31, 2025 increased by $171.9 million or 17.5% compared to the year ended December 31, 2024. $60.7 million of the increase was attributable to the Acquisitions, with the remaining $111.2 million of the increase attributable to the organic growth of our business.
Prior to the IPO, we conducted our business through Guardian Pharmacy, LLC, and its majority-owned and wholly-owned limited liability company subsidiaries, which were treated for income tax purposes as partnerships and disregarded entities, respectively. As such, no income tax expense was recorded during the year ended December 31, 2023.
Prior to the IPO, we conducted our business through Guardian Pharmacy, LLC, and its majority-owned and wholly-owned limited liability company subsidiaries, which were treated for income tax purposes as partnerships and disregarded entities, respectively for the first three quarters of 2024.
Because of these limitations, Adjusted EBITDA and Adjusted SG&A should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. You should consider Adjusted EBITDA and Adjusted SG&A alongside other financial measures, including net income, GAAP selling, general, and administrative expense and our other financial results presented in accordance with GAAP.
Because of these limitations, Adjusted EBITDA, Adjusted Net Income, Adjusted EPS, and Adjusted SG&A should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
We believe our existing cash and cash equivalents, expected cash from operations, and the amounts available under our Credit Facility will be sufficient to meet our working capital and capital expenditure needs over at least the next 12 months and for the foreseeable future, though we may require additional capital resources in the future.
As of December 31, 2025, we had no amounts of principal outstanding under the Term Loan and no borrowings outstanding under the line of credit. 58 Table of Contents We believe our existing cash and cash equivalents, expected cash flows provided by our operations, and the amounts available under our Credit Facility will be sufficient to meet our working capital and capital expenditure needs over at least the next 12 months and for the foreseeable future, though we may require additional capital resources in the future.
The total amount available under the line of credit as of December 31, 2024 is $40 million and we have the ability to increase our overall Credit Facility up to $75 million. 63 Table of Contents As of December 31, 2024, we had no amounts of principal outstanding under the Term Loan and no amounts of borrowings outstanding under the line of credit.
The total amount available under the line of credit as of December 31, 2025 is $40 million and we have the ability to increase our overall Credit Facility up to $75 million.
Provision for income taxes Year Ended December 31, % Change 2023 2024 (in thousands) Provision for income taxes $ — $ 4,556 N/A Income tax expense increased by $4.6 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Provision for income taxes Year Ended December 31, % Change 2024 2025 (in thousands) Provision for income taxes $ 4,556 $ 24,465 437.0 % Income tax expense increased by $19.9 million or 437.0% for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Interest expense Year Ended December 31, % Change 2023 2024 (in thousands) Interest expense $ 2,859 $ 3,278 14.7 % Interest expense increased $0.4 million or 14.7% for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Interest expense Year Ended December 31, % Change 2024 2025 (in thousands) Interest expense $ 3,278 $ 665 (79.7 )% Interest expense decreased $2.6 million or (79.7)% for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Prior to the Corporate Reorganization and IPO, cash flows used in financing activities included significant distributions to equity holders (inclusive of non-controlling interests) of Guardian Pharmacy, LLC, mostly consisting of distributions to fund tax liabilities and operational distributions, as well as return of capital.
Prior to the Corporate Reorganization and IPO, cash flows used in financing activities included significant distributions to equity holders (inclusive of non-controlling interests) of Guardian Pharmacy, LLC, mostly consisting of distributions to fund income tax liabilities and operational distributions, as well as return of capital. 59 Table of Contents Net cash used in financing activities for the year ended December 31, 2025 decreased by $16.6 million compared to the corresponding period in 2024.
Year Ended December 31, (in thousands) 2023 2024 Revenues $ 1,046,193 $ 1,228,409 Cost of goods sold 837,883 984,038 Gross profit 208,310 244,371 Selling, general, and administrative expenses (1) 167,364 307,291 Operating income (loss) 40,946 (62,920 ) Other expenses: Interest expense 2,859 3,278 Other expense, net 367 279 Total other expenses 3,226 3,557 Income (loss) before income taxes 37,720 (66,477 ) Provision for income taxes — 4,556 59 Table of Contents Year Ended December 31, (in thousands) 2023 2024 Net income (loss) 37,720 (71,033 ) Less net income attributable to Guardian Pharmacy, LLC prior to the Corporate Reorganization 23,902 22,760 Less net income attributable to non-controlling interests (2) 13,818 16,254 Net income (loss) attributable to Guardian Pharmacy Services, Inc $ — $ (110,047 ) Adjusted EBITDA (3) $ 76,175 $ 90,834 (1) Included in selling, general, and administrative expenses is share-based compensation expense (income) of $(6,090) and $131,490 during the years ended December 31, 2023 and 2024, respectively.
Year Ended December 31, (in thousands) 2024 2025 Revenues $ 1,228,409 $ 1,448,685 Cost of goods sold 984,038 1,155,967 Gross profit 244,371 292,718 Selling, general, and administrative expenses (1) 307,291 220,017 Operating income (loss) (62,920 ) 72,701 Other expenses: Interest expense 3,278 665 Other expense (income), net 279 (1,387 ) Total other expenses (income), net 3,557 (722 ) Income (loss) before income taxes (66,477 ) 73,423 Provision for income taxes 4,556 24,465 Net income (loss) (71,033 ) 48,958 Less net income attributable to Guardian Pharmacy, LLC prior to the Corporate Reorganization 22,760 — Less net income (loss) attributable to non-controlling interests (2) 16,254 (261 ) Net income (loss) attributable to Guardian Pharmacy Services, Inc $ (110,047 ) $ 49,219 Adjusted EBITDA (3) $ 90,834 $ 115,145 (1) Included in selling, general, and administrative expenses is share-based compensation expense of $131,490 and $13,850 during the years ended December 31, 2024 and 2025, respectively.
As a result of the Corporate Reorganization, Guardian Pharmacy Services, Inc. became a holding company with no material assets other than its 100% interest in Guardian Pharmacy, LLC, and the Converted Subsidiaries became wholly-owned subsidiaries of Guardian Pharmacy, LLC. In addition, Guardian Pharmacy, LLC remained the majority owner of each of the Non-Converted Subsidiaries.
The Merger Consideration was $55,176 and was paid using the proceeds from the IPO. As a result of the Corporate Reorganization, the Company became a holding company with no material assets other than its 100% interest in Guardian Pharmacy, LLC, and the Converted Subsidiaries became wholly owned subsidiaries of Guardian Pharmacy, LLC.
We establish an allowance for trade accounts receivable considered to be at increased risk of becoming uncollectible to reduce the carrying value of such receivables to their estimated net realizable value.
The primary collection risk relates to facility and private pay customers, as billings to these customers can be complex and may lead to payment disputes or delays. We establish an allowance for trade accounts receivable considered to be at increased risk of becoming uncollectible to reduce the carrying value of such receivables to their estimated net realizable value.
We use cash in the ordinary course of our operations primarily for prescription drug acquisition costs, capital expenditures, and personnel costs. As of December 31, 2024, we had $4.7 million in cash and cash equivalents. Our cash primarily consists of demand deposits held with a large regional financial institution.
As of December 31, 2025, we had $65.6 million in cash and cash equivalents. Our cash primarily consists of demand deposits held with a large regional financial institution.
Net cash used in financing activities for the year ended December 31, 2024 decreased by $33.6 million compared to the corresponding period in 2023.
Net cash provided by operating activities for the years ended December 31, 2025 increased by $42.3 million compared to the corresponding period in 2024.
A reconciliation of Adjusted EBITDA to net income, and a reconciliation of Adjusted SG&A to GAAP selling, general, and administrative expense, the most directly comparable GAAP financial measures, are set forth below.
You should consider Adjusted EBITDA, Adjusted Net Income, Adjusted EPS, and Adjusted SG&A alongside other financial measures, including net income, diluted EPS, GAAP selling, general, and administrative expense and our other financial results presented in accordance with GAAP. 56 Table of Contents A reconciliation of Adjusted EBITDA to net income, of Adjusted Net Income to Net Income Attributable to Guardian Pharmacy Services, Inc., and of Adjusted SG&A to GAAP selling, general, and administrative expense, the most directly comparable GAAP financial measures, are set forth below.
In this capacity, we offer high-touch, individualized clinical, drug dispensing and administration capabilities that are tailored to serve the needs of residents in historically lower acuity LTCFs, such as ALFs and BHFs. Additionally, our robust capabilities enable us to serve residents in all types of LTCFs.
We enter into contracts directly with LTCFs to serve as the principal pharmacy provider for their residents. In this capacity, we offer high-touch, individualized clinical, drug dispensing and administration capabilities that are tailored to serve the needs of residents in historically lower acuity LTCFs, such as assisted living facilities (“ALFs”) and behavioral health facilities (“BHFs”).
(4) Represents non-recurring proceeds from settlements related to payor reimbursement, which were recorded as revenue upon settlement. Liquidity and Capital Resources We have historically financed our business and acquisitions primarily through cash from operations and borrowings under our Credit Facility and, more recently, sales of our Class A common stock in our IPO.
Liquidity and Capital Resources We have historically financed our business and acquisitions primarily through cash from operations and borrowings under our Credit Facility (as defined below) and, more recently, sales of our Class A common stock in our IPO. We use cash in the ordinary course of our operations primarily for prescription drug acquisition costs, capital expenditures, and personnel costs.
Revenue recognized reflects the consideration we expect to receive in exchange for these goods and services. Cost of goods sold . Cost of goods sold consists primarily of expenses associated with the fulfillment and delivery of the prescription.
We recognize revenue at the time of delivery of prescriptions and other pharmacy services to the LTCF, at which time control has been transferred. Revenue recognized reflects the consideration we expect to receive in exchange for these goods and services. Cost of goods sold .
Adjusted EBITDA and Other Non-GAAP Financial Measures To supplement the results presented in our consolidated financial statements in accordance with GAAP, we also present Adjusted EBITDA and Adjusted SG&A, which are financial measures not based on any standardized methodology prescribed by GAAP. 61 Table of Contents We define Adjusted EBITDA as net income (loss) before interest expense, income taxes, depreciation and amortization, as adjusted to exclude the impact of items and amounts that we view as not indicative of our core operating performance, including share-based compensation, acquisition accounting adjustments, certain legal and regulatory items, and IPO-related costs.
We define Adjusted EBITDA as net income (loss) before interest expense, income taxes, depreciation and amortization, as adjusted to exclude the impact of items and amounts that we view as not indicative of our core operating performance, including share-based compensation, certain legal and regulatory items, financing-related and other activities, payor-reimbursement matters, and certain tax matters related to the Corporate Reorganization and IPO.
We define Adjusted SG&A as GAAP selling, general, and administrative expenses adjusted to exclude the impact of share-based compensation, expenses relating to certain legal and regulatory items, and IPO-related costs.
We define Adjusted EPS as Adjusted Net Income divided by the total weighted average of diluted shares for Class A common stock and Class B common stock. 55 Table of Contents We define Adjusted SG&A as GAAP selling, general, and administrative expenses adjusted to exclude the impact of share-based compensation, expenses relating to certain legal and regulatory items, financing-related and other activities, and payor-reimbursement matters.
Cash flows used in financing activities consist primarily of repayment of the Term Loan (recorded as repayment of notes payable) and the line of credit, and Merger Consideration payments to holders of Class B common stock.
Cash flows used in financing activities consist primarily of repayment of borrowings from the Term Loan (recorded as repayment of notes payable) and the line of credit, and payment of equity offering costs associated with the IPO and Q2 2025 Offering.
We have generated organic growth through new and expanded LTCF relationships as well as increased resident adoption of our services in the facilities we already serve. 56 Table of Contents Recent Developments Corporate Reorganization Prior to the IPO, we conducted our business through Guardian Pharmacy, LLC, and its majority-owned and wholly-owned limited liability company subsidiaries, which were treated for income tax purposes as partnerships and disregarded entities, respectively.
In addition to the underwriting discounts, the Company incurred $13.0 million of offering costs, which were recorded to additional paid-in capital. Prior to the IPO, we conducted our business through Guardian Pharmacy, LLC, and its majority owned and wholly owned limited liability company subsidiaries, which were treated for income tax purposes as partnerships and disregarded entities, respectively.
Results of Operations for the Years Ended December 31, 2023 and 2024 The following table sets forth our consolidated statements of operations data for the years ended December 31, 2023 and 2024, respectively. The year-over-year comparison of results of operations is not necessarily indicative of results for future periods.
The year-over-year comparison of results of operations is not necessarily indicative of results for future periods.
The decrease is primarily due to the net proceeds received from the IPO of $119.8 million and the 2024 Amendment resulting in $15.0 million being added to the Credit Facility, offset by the Merger Consideration payment to holders of Class B common stock of $55.2 million in connection with the Corporate Reorganization and IPO, a $14.0 million increase in net payments made on the line of credit, and $34.0 million increase in payments made on the Term loan when compared to the corresponding period in 2023.
Cash flows used in financing activities were $23.6 million for the year ended December 31, 2024, primarily due to Merger Consideration payment to holders of Class B common stock of $55.2 million in connection with the Corporate Reorganization and IPO, distributions to equity holders (inclusive of non-controlling interest) of $50.2 million, $23.0 million of net payments made on notes payable, $9.0 million of net payments made on the line of credit, and $4.2 million of payments of equity offering costs, offset by net proceeds received from the IPO of $119.8 million.
These increases were offset by recognition in 2023 of $23.5 million in non-recurring attorneys’ fees, settlements costs and other expenses associated with certain legal proceedings compared to $4.0 million in 2024. Selling, general and administrative expenses as a percentage of revenue increased from 16.0% to 25.0% primarily as a result of the increases in share-based compensation expense described above.
Selling, general and administrative expenses as a percentage of revenue decreased from 25.0% to 15.2% primarily as a result of the decreases in share-based compensation expense described above.
Collection of trade accounts receivable from customers is our primary source of operating cash flow and is critical to our operating performance and financial condition. The primary collection risk relates to facility and private pay customers, as billings to these customers can be complex and may lead to payment disputes or delays.
We refer to such estimates and judgments, discussed further below, as critical accounting estimates. Allowance for Credit Losses Collection of trade accounts receivable from customers is our primary source of operating cash flow and is critical to our operating performance and financial condition.
Additionally, $21.8 million of the increase in selling, general, and administrative expenses was driven by an increase in average employee headcount, with $15.4 million resulting from organic growth and $6.4 million resulting from the Acquisitions.
This decrease was offset by a $30.3 million increase in expense due to an increase in average employee headcount, 54 Table of Contents with $20.1 million resulting from organic growth and $10.2 million resulting from the Acquisitions.
In accordance with the terms of our certificate of incorporation, such issued shares of Class B common stock will automatically convert on a one-for-one basis into shares of our Class A common stock over the two-year period following the IPO. The cash payment related to the Merger Consideration was $55.2 million and was paid using the proceeds from the IPO.
In accordance with the terms of the Company’s Amended and Restated Certificate of Incorporation, such issued shares of Class B common stock automatically convert on a one-for-one basis into shares of Class A common stock, with 25% of each holder’s shares of Class B common stock converting into shares of Class A common stock on each of the following dates: (i) March 28, 2025; (ii) September 27, 2025; (iii) March 28, 2026; and (iv) September 27, 2026.
Cost of goods sold as a percentage of revenue was flat at 80.1% year over year. 60 Table of Contents Selling, general, and administrative expenses Year Ended December 31, % Change 2023 2024 (in thousands) Selling, general, and administrative expenses $ 167,364 $ 307,291 83.6 % Percentage of revenue 16.0 % 25.0 % Selling, general and administrative expenses increased $139.9 million or 83.6% for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Selling, general, and administrative expenses Year Ended December 31, % Change 2024 2025 (in thousands) Selling, general, and administrative expenses $ 307,291 $ 220,017 (28.4 )% Percentage of revenue 25.0 % 15.2 % Selling, general and administrative expenses decreased $87.3 million or (28.4)% for the year ended December 31, 2025 compared to the year ended December 31, 2024. $117.6 million of the decrease was driven by decreases in share-based compensation expense, as the year ended December 31, 2024 included significant share-based compensation expense recognized in connection with the Corporate Reorganization and IPO.
The decrease was primarily due to increases in receivables and inventories, and decreases to operating liabilities. primarily due to certain legal and regulatory matters accrued for in 2023 and paid for in 2024, offset by increases in accounts payable when compared to the corresponding period in 2023.
The increase was primarily due to increases in cash used for purchases of property and equipment of $3.2 million, offset by decreases in cash used for acquisitions of $1.3 million compared to the corresponding period in 2024.
Cash flows used in operating activities consist primarily of changes in our operating assets and liabilities. Net cash provided by operating activities for the years ended December 31, 2024 decreased by $12.9 million compared to the corresponding period in 2023.
Cash flows used in operating activities consist primarily of changes in our operating assets and liabilities. Subsequent to the Corporate Reorganization and IPO, income tax payments and receivables are presented as changes in operating assets and liabilities within operating activities.
The increase was primarily due to increases in cash paid for the Acquisitions of $13.7 million and increases in purchases of property and equipment of $1.8 million compared to the corresponding period in 2023. 64 Table of Contents Financing Activities Cash flows provided by financing activities consist primarily of borrowings from the Term Loan (recorded as borrowings from notes payable) and the line of credit, and proceeds from the issuance and sale of shares of Class A common stock in connection with the IPO.
Financing Activities Cash flows provided by financing activities consist primarily of borrowings from the line of credit and sale of our Class A common stock.
Removed
Initial Public Offering On September 27, 2024, we consummated the IPO of 8,000,000 shares of our Class A common stock, as described in our final prospectus dated September 25, 2024, filed with the SEC on September 26, 2024 pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the “Prospectus”).
Added
We have generated organic growth through new and expanded LTCF relationships as well as increased resident adoption of our services in the facilities we already serve. Corporate Reorganization and IPO On September 27, 2024, the Company consummated its initial public offering (“IPO”) of 8,000,000 shares of its Class A common stock, par value $0.001 per share (“Class A common stock”).
Removed
In addition to the underwriting discounts, we incurred $13.0 million of offering costs, which were recorded to additional paid-in capital.
Added
In the merger, 54,094,232 shares of Class B common stock were issued in exchange for Common Units of Guardian Pharmacy, LLC.
Removed
In addition, certain Restricted Interest Unit awards which converted into Class B common stock are subject to a one-year service period ending one year subsequent to the IPO closing date. The unamortized share-based compensation expense associated with these awards is $10.1 million as of December 31, 2024.
Added
Conversion of Class B Common Stock to Class A Common stock In accordance with the terms of the Company’s Amended and Restated Certificate of Incorporation and the conversion schedule described in the Corporate Reorganization and IPO section above, on March 28, 2025 and September 27, 2025, 13,519,946 and 13,523,285 shares, respectively, of the Company’s Class B common stock automatically converted, in accordance with the terms of such class and without any further action by their holders or the Company, into an equal number of shares of the Company’s Class A common stock.
Removed
Refer to Note 11 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further detail surrounding the Restricted Interest Units conversion. Components of Results of Operations Revenues . We recognize revenue at the time of delivery of prescriptions and other pharmacy services to the LTCF, at which time control has been transferred.
Added
Follow-On Offering In May 2025, the Company completed an underwritten follow-on public offering of 1,440,447 shares of Class A common stock at an offering price of $21.00 per share (the “Q2 2025 Offering”).
Removed
These units vest in their entirety on the third anniversary of their grant date. The value of the 58 Table of Contents units is recognized ratably over the vesting period and is remeasured and reported at the end of each quarter based on the change in calculated value pursuant to our Restricted Interest Purchase Agreements.
Added
We used all of the net proceeds from the Q2 2025 Offering to purchase 1,440,447 shares of outstanding Class A common stock that were issued upon conversion of shares of our Class B common stock that were originally issued in connection with our Corporate Reorganization.
Removed
The primary inputs used to value the units include the accumulated vesting status of the issued units, the trailing four quarters of our adjusted earnings, inclusive of share-based compensation expense (income), and our outstanding capital and debt obligations as of the quarterly measurement date. The liability and corresponding expense are adjusted on a quarterly basis.
Added
The 1,440,447 shares of Class A common stock purchased by the Company were cancelled, resulting in no change to the total number of Class A common stock outstanding. We did not retain any of the proceeds from the sale of shares in the offering.
Removed
Based on the number of participants and units outstanding, trailing earnings, forfeitures and other factors, we have experienced volatility in our share-based compensation liability. This calculation has in turn had a significant impact on our net income for the periods presented.
Added
As part of the Q2 2025 Offering, certain selling stockholders, consisting of the Company’s founders (the “Guardian Founders”), sold 7,184,553 shares of Class A common stock. We did not receive any proceeds from the sale of shares by the selling stockholders in the Q2 2025 Offering.
Removed
As discussed above in the “ —Factors Affecting the Comparability of Our Results of Operations—Share-Based Compensation (in connection with the Corporate Reorganization and IPO)” , this conversion resulted in significant incremental share-based compensation expense upon the IPO and additional expense related to the conversion will continue during the one-year period subsequent to the IPO. Interest expense .

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeHistorical fluctuations in interest rates have not had a significant impact on our financial condition or results of operations, and a hypothetical 100 basis point increase or decrease in interest rates would not have a material impact on the value of our cash and cash equivalents or on our future financial condition or results of operations. 67 Table of Contents http://fasb.org/us-gaap/2024#OtherLiabilitiesNoncurrenthttp://fasb.org/us-gaap/2024#OtherLiabilitiesNoncurrenthttp://fasb.org/us-gaap/2024#OtherLiabilitiesCurrenthttp://fasb.org/us-gaap/2024#OtherLiabilitiesCurrenthttp://fasb.org/us-gaap/2024#PropertyPlantAndEquipmentNethttp://fasb.org/us-gaap/2024#PropertyPlantAndEquipmentNet
Biggest changeHistorical fluctuations in interest rates have not had a significant impact on our financial condition or results of operations, and a hypothetical 100 basis point increase or decrease in interest rates would not have a material impact on the value of our cash and cash equivalents or on our future financial condition or results of operations. 61 Table of Contents http://fasb.org/us-gaap/2025#OtherLiabilitiesNoncurrenthttp://fasb.org/us-gaap/2025#OtherLiabilitiesNoncurrenthttp://fasb.org/us-gaap/2025#OtherLiabilitiesCurrenthttp://fasb.org/us-gaap/2025#OtherLiabilitiesCurrenthttp://fasb.org/us-gaap/2025#PropertyPlantAndEquipmentNethttp://fasb.org/us-gaap/2025#PropertyPlantAndEquipmentNet1
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk We are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate sensitivities. We held cash and cash equivalents of $4.7 million as of December 31, 2024, which primarily consist of demand deposits held with financial institutions.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk We are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate sensitivities. We held cash and cash equivalents of $65.6 million as of December 31, 2025, which primarily consist of demand deposits held with financial institutions.