GAAP and non-GAAP revenues of $296 million

GAAP net income per diluted share of $0.61

Non-GAAP net income per diluted share of $1.08

Omnicell, Inc. (NASDAQ:OMCL) (“Omnicell,” “we,” “our,” “us,” “management,” or the “Company”), a leading provider of medication management solutions and adherence tools for healthcare systems and pharmacies, today announced results for its third quarter ended September 30, 2021.

GAAP Results

Total GAAP revenues for the third quarter of 2021 were $296.4 million, up $82.7 million, or 38.7%, from the third quarter of 2020. The increase in GAAP revenues reflects momentum in our commercial business and strong customer implementations as well as recovery from the impact of COVID-19 relative to the third quarter of 2020. Total GAAP revenues for the nine months ended September 30, 2021 were $821.0 million, up $178.0 million, or 27.7%, from the nine months ended September 30, 2020.

GAAP net income for the third quarter of 2021 was $29.3 million, or $0.61 per diluted share. This compares to GAAP net income of $8.8 million, or $0.20 per diluted share, for the third quarter of 2020.

GAAP net income for the nine months ended September 30, 2021 was $63.9 million, or $1.35 per diluted share. This compares to GAAP net income of $15.8 million, or $0.36 per diluted share, for the nine months ended September 30, 2020.

Non-GAAP Results

Total non-GAAP revenues for the third quarter of 2021 were $296.5 million, up $82.8 million, or 38.7%, from the third quarter of 2020. Total non-GAAP revenues for the nine months ended September 30, 2021 were $821.1 million, up $178.1 million, or 27.7%, from the nine months ended September 30, 2020.

Non-GAAP net income for the third quarter of 2021 was $49.9 million, or $1.08 per diluted share. This compares to non-GAAP net income of $26.2 million, or $0.60 per diluted share, for the third quarter of 2020.

Non-GAAP net income for the nine months ended September 30, 2021 was $131.6 million, or $2.90 per diluted share. This compares to non-GAAP net income of $71.1 million, or $1.63 per diluted share, for the nine months ended September 30, 2020.

Non-GAAP EBITDA for the third quarter of 2021 was $65.9 million. This compares to non-GAAP EBITDA of $41.2 million for the third quarter of 2020.

Non-GAAP EBITDA for the nine months ended September 30, 2021 was $177.6 million. This compares to non-GAAP EBITDA of $107.8 million for the nine months ended September 30, 2020.

“Our strong third quarter results reflect the continued momentum in Omnicell’s commercial business and the robust customer adoption of our cloud-based, Advanced Services portfolio,” said Randall Lipps, Chairman, President, Chief Executive Officer, and founder of Omnicell. “I am pleased with the solid execution this quarter and the progress we are making toward our long-term 2025 financial targets. Our strategic focus on advancing the vision of the autonomous pharmacy, combined with our employees’ dedication to our customers’ success, should position us well for continued value creation for all of our stakeholders.”

During the third quarter of 2021, Omnicell announced that it had completed its acquisition of pharmacy technology provider RxInnovation Inc., operating as FDS Amplicare (“FDS Amplicare”). This strategic acquisition has added a suite of comprehensive and complementary software-as-a-service (“SaaS”) technology solutions, as well as a nationwide network of more than 15,000 independent and specialty retail pharmacies, to expand the broad industry footprint of Omnicell’s EnlivenHealth™ offering. We believe that, with the combination of EnlivenHealth and FDS Amplicare^®, Omnicell now provides one of the industry’s most comprehensive offerings of SaaS technology solutions that is designed to help retail pharmacies and health plans grow and thrive in the new era of digital-driven healthcare. The results of operations of FDS Amplicare have been included in our consolidated results of operations beginning September 9, 2021.

In April of 2021, Omnicell published its Corporate Responsibility Report, which outlines the Company’s approach to corporate responsibility, defined through the four strategic pillars of Innovation, Environment, Social, and Governance, and describes Omnicell’s contributions to achieve a more sustainable future. The report details Omnicell’s focus on innovating to drive sustainability across the business by adhering to the Organization for Economic Co-operation and Development guidance for the responsible sourcing of raw materials and elevating our diversity and inclusion initiatives. In addition, the report includes a deeper look at Omnicell’s role in managing the impact of the COVID-19 pandemic on our customers, operations, and employees. For more information on Omnicell’s commitment to sustainability, please visit http://www.omnicell.com/corporate-social-responsibility-esg.

2021 Guidance

For the fourth quarter of 2021, the Company expects total GAAP and non-GAAP revenues to be between $308 million and $313 million. The Company expects fourth quarter GAAP and non-GAAP product revenues to be between $219 million and $222 million, and fourth quarter GAAP and non-GAAP service revenues to be between $89 million and $91 million. The Company expects fourth quarter 2021 non-GAAP EBITDA to be between $58 million and $61 million. The Company expects fourth quarter 2021 non-GAAP earnings to be between $0.90 and $0.95 per share.

For the full year of 2021, the Company expects product bookings to be between $1.130 billion and $1.170 billion. The Company expects full year 2021 total GAAP and non-GAAP revenues to be between $1.129 billion and $1.134 billion. The Company expects full year 2021 GAAP and non-GAAP product revenues to be between $808 million and $811 million, and full year 2021 GAAP and non-GAAP service revenues to be between $321 million and $323 million. The Company expects full year 2021 non-GAAP EBITDA to be between $235 million and $238 million. The Company expects full year 2021 non-GAAP earnings to be between $3.80 and $3.85 per share. Our fourth quarter and full year 2021 guidance includes the anticipated contribution of FDS Amplicare, as well as the anticipated effects of the current inflationary environment.

The table below summarizes Omnicell’s 2021 guidance outlined above.

The Company does not provide guidance for GAAP net income or GAAP earnings per share nor a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures on a forward-looking basis because it is unable to predict certain items contained in the GAAP measures without unreasonable efforts. These forward-looking non-GAAP financial measures do not include certain items, which may be significant, including, but not limited to, unusual gains and losses, costs associated with future restructurings, acquisition-related expenses, and certain tax and litigation outcomes.

Omnicell Conference Call Information

Omnicell will hold a conference call today, Tuesday, November 2, 2021 at 5:30 a.m. PT to discuss third quarter of 2021 financial results. The conference call can be accessed by dialing 1-855-451-1210 within the U.S. or 1-236-714-3867 for all other locations. The Conference ID # is 5688577. A link to the live and archived webcast will also be available on the Investor Relations section of Omnicell’s website at http://ir.omnicell.com/events-and-presentations/.

About Omnicell

Since 1992, Omnicell has been committed to transforming the pharmacy care delivery model to dramatically improve outcomes and lower costs. Through the vision of the autonomous pharmacy, a combination of automation, intelligence, and technology-enabled services, powered by a cloud data platform, Omnicell supports more efficient ways to manage medications across all care settings.

Over 7,000 facilities worldwide use Omnicell automation and analytics solutions to help increase operational efficiency, reduce medication errors, deliver actionable intelligence, and improve patient safety. More than 60,000 institutional and retail pharmacies across North America and the United Kingdom leverage Omnicell’s innovative medication adherence and population health solutions to improve patient engagement and adherence to prescriptions, helping to reduce costly hospital readmissions.

To learn more, visit www.omnicell.com. From time to time, Omnicell may use the Company’s investor relations website and other online social media channels, including its Twitter handle www.twitter.com/omnicell, LinkedIn page www.linkedin.com/company/omnicell, and Facebook page www.facebook.com/omnicellinc, to disclose material non-public information and comply with its disclosure obligations under Regulation Fair Disclosure (“FD”).

OMNICELL and AMPLICARE are registered trademarks and the Omnicell logo and ENLIVENHEALTH are trademarks of Omnicell, Inc. or one of its subsidiaries.

Forward-Looking Statements

To the extent any statements contained in this press release deal with information that is not historical, these statements are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Without limiting the foregoing, statements including the words “expect,” “intend,” “may,” “will,” “should,” “would,” “plan,” “potential,” “anticipate,” “believe,” “forecast,” “guidance,” “outlook,” “goals,” “target,” “estimate,” “seeks,” “predicts,” “projects,” and similar expressions are intended to identify forward-looking statements. Forward-looking statements are subject to the occurrence of many events outside Omnicell’s control. Such statements include, but are not limited to, Omnicell’s projected bookings, revenues, non-GAAP EBITDA, and non-GAAP earnings per share; planned new products and services and the related expected benefits; and statements about Omnicell’s strategy, plans, objectives, goals, and vision. Actual results and other events may differ significantly from those contemplated by forward-looking statements due to numerous factors that involve substantial known and unknown risks and uncertainties. These risks and uncertainties include, among other things, (i) risks related to outbreaks of contagious diseases or other adverse public health epidemics including the ongoing COVID-19 pandemic, including the duration and any resurgences of the COVID-19 pandemic (including the emergence of new variants of the COVID-19 virus), (ii) unfavorable general economic and market conditions, including due to economic disruption caused by public health crises such as the COVID-19 pandemic, (iii) Omnicell’s ability to take advantage of the growth opportunities in medication management across all care settings, (iv) Omnicell’s ability to develop and commercialize new products and enhance existing products, (v) Omnicell’s ability to deliver on the vision of the autonomous pharmacy and the impact that advanced automation, data intelligence, and expert services will have on patient care, (vi) risks to growth and acceptance of Omnicell’s products and services, including competitive conversions, and growth in the overall demand for medication management and supply chain solutions and medication adherence solutions generally, (vii) risks presented by the transition to selling more products and services on a subscription basis, (viii) risks related to the availability and sources of raw materials and components or price fluctuations, shortages, or interruptions of supply, as well as a failure for raw materials and components to satisfy our supply requirements, (ix) Omnicell’s dependence on a limited number of suppliers for certain components, equipment, and raw materials, (x) risks presented by a failure to manage inventory properly, (xi) potential increased competition, (xii) potential regulatory changes, (xiii) Omnicell’s ability to improve sales productivity to grow product bookings, (xiv) Omnicell’s ability to acquire companies, businesses, or technologies and successfully integrate such acquisitions, (xv) the outcome of any legal proceedings to which Omnicell is a party, (xvi) Omnicell’s ability to recruit and retain skilled and motivated personnel, and (xvii) other risks and uncertainties further described in the “Risk Factors” section of Omnicell’s most recent Annual Report on Form 10-K and subsequent quarterly reports on Form 10-Q, as well as in Omnicell’s other reports filed with or furnished to the United States Securities and Exchange Commission (“SEC”), available at www.sec.gov. Forward-looking statements should be considered in light of these risks and uncertainties. Investors and others are cautioned not to place undue reliance on forward-looking statements. All forward-looking statements contained in this press release speak only as of the date of this press release. Omnicell undertakes no obligation to update such statements, whether as a result of changed circumstances, new information, future events, or otherwise, except as required by law.

Use of Non-GAAP Financial Information

This press release contains financial measures that are not calculated in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). Management evaluates and makes operating decisions using various performance measures. In addition to Omnicell’s GAAP results, we also consider non-GAAP revenues, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income, non-GAAP net income per diluted share, non-GAAP diluted shares, non-GAAP EBITDA, non-GAAP EBITDA margin, and non-GAAP free cash flow. These non-GAAP results and metrics should not be considered as an alternative to revenues, gross profit, operating expenses, income from operations, net income, net income per diluted share, diluted shares, net cash provided by operating activities, or any other performance measure derived in accordance with GAAP. We present these non-GAAP results and metrics because management considers them to be important supplemental measures of Omnicell’s performance and refers to such measures when analyzing Omnicell’s strategy and operations.

Our non-GAAP revenues, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income, non-GAAP net income per diluted share, non-GAAP EBITDA, and non-GAAP EBITDA margin are exclusive of certain items to facilitate management’s review of the comparability of Omnicell’s core operating results on a period-to-period basis because such items are not related to Omnicell’s ongoing core operating results as viewed by management. We define our “core operating results” as those revenues recorded in a particular period and the expenses incurred within such period that directly drive operating income in such period. Management uses these non-GAAP financial measures in making operating decisions because, in addition to meaningful supplemental information regarding operating performance, the measures give us a better understanding of how we believe we should invest in research and development, fund infrastructure growth, and evaluate the effectiveness of marketing strategies. In calculating the above non-GAAP results: non-GAAP revenues excludes from its GAAP equivalent item a) below; non-GAAP gross profit and non-GAAP gross margin exclude from their GAAP equivalents items a), b), c), and e) below; non-GAAP operating expenses excludes from its GAAP equivalents items b), c), d), e), h), and i) below; non-GAAP income from operations and non-GAAP operating margin exclude from their GAAP equivalents items a), b), c), d), e), h), and i) below; and non-GAAP net income and non-GAAP net income per diluted share exclude from their GAAP equivalents items a) through j) below. Non-GAAP EBITDA is defined as earnings before interest income and expense, taxes, depreciation, and amortization. Non-GAAP EBITDA and non-GAAP EBITDA margin exclude from their GAAP equivalents items a), b), d), e), f), g), h), and i) below:

Management adjusts for the above items because management believes that, in general, these items possess one or more of the following characteristics: their magnitude and timing is largely outside of Omnicell’s control; they are unrelated to the ongoing operation of the business in the ordinary course; they are unusual and we do not expect them to occur in the ordinary course of business; or they are non-operational or non-cash expenses involving stock compensation plans or other items.

We believe that the presentation of non-GAAP revenues, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income, non-GAAP net income per diluted share, non-GAAP EBITDA, and non-GAAP EBITDA margin is warranted for several reasons:

Set forth below are additional reasons why share-based compensation expense is excluded from our non-GAAP financial measures:

Non-GAAP diluted shares is defined as our GAAP diluted shares, excluding the impact of dilutive convertible senior notes for which the Company is economically hedged through its anti-dilutive convertible note hedge transaction. We believe non-GAAP diluted shares is a useful non-GAAP metric because it provides insight into the offsetting economic effect of the hedge transaction against potential conversion of the convertible senior notes.

Non-GAAP free cash flow is defined as net cash provided by operating activities less cash used for software development for external use and purchases of property and equipment. We believe free cash flow is important to enable investors to better understand and evaluate our ongoing operating results and allows for greater transparency in the review and understanding of our overall financial, operational, and economic performance, because free cash flow takes into account certain capital expenditures and cash used for software development necessary to operate our business.

As stated above, we present non-GAAP financial measures because we consider them to be important supplemental measures of performance. However, non-GAAP financial measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for Omnicell’s GAAP results. In the future, we expect to incur expenses similar to certain of the non-GAAP adjustments described above and expect to continue reporting non-GAAP financial measures excluding such items. Some of the limitations in relying on non-GAAP financial measures are:

A detailed reconciliation between Omnicell’s non-GAAP and GAAP financial results is set forth in the financial tables at the end of this press release. Investors are advised to carefully review and consider this information strictly as a supplement to the GAAP results that are contained in this press release as well as in Omnicell’s other reports filed with or furnished to the SEC.

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