Of today's presentation, simply email me at Glen, G-L-E-N, @bristolir.com. We will break for questions at the end of the formal presentation. When we do break, we encourage those questions. As a reminder, we are only going to take questions through the webinar portal. If you are listening over the telephone, please access the web link sent earlier to ask a question. You could submit a question using the text box at any time. I will read the questions on the air for everyone to hear, and Carrie or Barry will then answer. I am not going to reference any names, but simply read the questions asked. As a reminder, we are only going to take questions through the webinar portal. If you are listening over the telephone, please access the web link sent earlier today.
I am not going to read the forward-looking statements, but simply state that they apply and refer to them on page two of this PowerPoint. With that said, once again, thank you for joining us. Remember, this is fairly informal, and we do encourage questions to help you better understand the business and its growth path. Now I will turn the call over to Carrie to start the discussion and presentation.
Thanks, Glen, I appreciate it. I just want to take a couple minutes to introduce myself, and I will kick it over to Barry to go over his background as well. Carrie Lachance, CEO of InfuSystem. I have been with InfuSystem about 16 years. Actually 16 years this month. Prior to InfuSystem, my background is nursing, so I am still a nurse. I think that is important as we are a healthcare company, and so we look to drive this business with a patient-first mentality. So every decision we made, we have to keep the patients in mind, certainly.
So I joined InfuSystem 16 years ago, actually as a sales rep. I ran our Northeast territory, our Boston territory. Some of our largest customers are in the Boston territory. I think that is also important to know as from a sales perspective, it is beneficial to understand how we win our clinics, right?
What we are doing for clinics, what they need from InfuSystem. So to keep that in mind, to continue to grow this business is really important. So I think those two pieces are key to how I decide to, and the choices we make to drive this company. So I was a sales rep for several years and ended up we had some backend changes at the company. I ended up taking over our customer service department, which led to our clinical department as well. In 2019, was appointed as Chief Operating Officer of the company. So I ran as Chief Operating Officer with our prior CEO and Barry to make decisions over the past several years until May of last year when I was appointed CEO. So it has been a busy 14, 15 months in this role.
Barry and I are certainly driving the company differently as we have in the past, and we will get into some of that during the slides. So with that I kick it over to Barry.
Thanks, Carrie. I am Barry Steele. I am the Chief Financial Officer. I have been with InfuSystem for six years now. Prior to joining the company, I worked as a CFO at a couple different companies that were automotive suppliers. One company called Gentherm. I joined the company when it was about $20 million in revenue, and by the time I left, we were about $1 billion in revenue. I have been through growth experiences, and that is what, when I joined InfuSystem, what we are trying to do here and what I look forward to.
Perfect. Thanks, Barry. Who are we? Who is InfuSystem? Truly a home healthcare services platform. Our core is really the durable medical equipment space. We like to say we are the DME of choice for patients, providers, physicians, hospitals, and the payer. Our markets are really oncology. We are in wound care and lymphedema. We will talk a lot about the lymphedema space as that is a growing space today. We do have some platforms underneath that, such as biomedical services and some rentals and supply sales and distribution as well. Today we are about 450 employees, covering about 4,500 customer locations individually throughout the country, as you can see the map here on the right-hand side. We do so through seven centers of excellence. We have six within the U.S. and one in Canada covering, again, those 4,500 customers. We do have a large device fleet.
Again, durable medical equipment, so we need a large device fleet to maintain all of those products for our customers. 100,000 devices, mostly ambulatory infusion devices, some regular hospital infusion pumps as well. Infusion is our specialty today, but we do have other devices such as EKGs, ESUs, and other ambulatory devices that hospitals use. From a market perspective, our core is really oncology. It is how we started. We have been in the business for 40 years, started as an oncology company. We do have 70% market share from a patient perspective in the market for patients that are going home with their chemotherapy on an infusion pump. We do service 18 of the top 20 U.S. hospital systems, and we do all of this through our 800+ payer contracts. Again, we are a durable medical equipment company.
Coverage is vitally important for the amount of growth we have, the new products that we can bring on board. Our 800+ payer contracts are certainly important to cover the 97% of patient lives within the country. We are a growing company. Very strong financial performance. We are in our seventh record year of growth for the company. In 2025, $143 million in revenue, $31.5 million in adjusted EBITDA. We are expanding our margins. As I said, Barry and I are running this company a little bit differently today. We are focused on not just revenue for revenue's sake, but revenue with profitability. Our margins are expanding. We will get into some reasons for that here shortly. We are a very strong cash-generating company, as well as great liquidity. Why invest in InfuSystem? As I mentioned, we have this core of DME, right?
This really strong DME company with other platforms and growth vectors underneath that. Not just within oncology, but adding new platforms, adding new services underneath that really core of what we are doing. Again, seven consecutive years of growth, and capital efficiency expansion into some other areas. Again, wound care, the lymphedema market. Lymphedema space is an exciting space and a growing space today. We will talk about that as well. Again, $58 million in liquidity to support our growth. We have a very large fleet as we look to get into new products. We have the cash that we are able to support growth opportunities to include tuck-in acquisitions if we see the need, if we see the opportunity. Certainly, from a diligence perspective, we are a little bit picky on who we do look at from a tuck-in acquisitions perspective. We do have expanding margins.
We have been investing infrastructure in the company to be more efficient, to be able to scale faster. We have a new ERP that we just implemented, a new revenue cycle system that we also just implemented, which has been allowing us to bring in and scale faster, without necessarily adding headcount. We also are shifting towards less capital-intensive opportunities within the platforms that we are. Oncology, as my example, it is a little capital-intensive. We have a lot of devices that are needed to maintain that equipment and send more equipment out to hospitals. Some of the newer businesses that we are looking at, and we are aimed at continuing to look at areas that are less capital-intensive. For instance, in wound care, in our lymphedema space, the new DME markets that we are involved in, we do not have to own that device.
That device is actually paid for by the insurance company for the patient, and the patient owns that device. We will get into that a little bit more as well. Expanding margins 21.9% for fiscal year of 2025, with a long-term target of 22% - 25%, and we are comfortably in that 22% -2 5% this year, and we will talk a little bit more about our margin expansions here shortly. We do have a de-risk revenue profile. We have no one customer that represents more than 10% of our total revenue. Our Medicare exposure is far beneath 10%. We have no contract that is more than 10% of our revenue that comes in as well. Multi-year payer contracts. We have had some of our contracts for 30 - 40 years. We have great relationships with our payers.
Most of the overhang from a DME perspective is there's a worry for reimbursement cuts. What we can see from our payers are increases in our rates every year. We have actually increased our cash per pump, for instance, in oncology over the years. We aren't everything to everyone, so we're not a DME that provides wheelchairs and crutches, et cetera. We're kind of niche markets. Our payers enjoy that. We're certainly a compliant company, and so we have these long-standing contracts to provide predictability and visibility. Certainly, a de-risk company to invest in. Then we have certainly a hard-to-replicate competitive moat. Challenging for our competitors to become InfuSystem. We own the market from an oncology perspective for ambulatory infusion, and hospitals that are sending their patients home on electronic infusion devices going home.
We have our 800 payer contracts covering the majority of the patient lives, and really deep relationships with 1,800 oncology practices, and large hospital systems. When I say deep relationships, I really want to share that we partner with our hospitals. Again, I gave the example that I was a sales rep when I started with this company. Our sales reps really don't go to the waiting room when they're waiting to get into that practice. They have deep partnerships where we're helping our clinics. We have badges to get in and out of maybe a pharmacy or a nursing department and really partner with that clinic to care for that patient and take the burden off of the management of everything that we do for that clinic. Certainly a barrier to entry for others that are coming into the market.
We do have two sides of our business. We have a shared platform in the background, but we have our patient services segment. You can think of our patient services side of our business are really anything that is insurance payer paid for. Our oncology DME services, wound care, compression, all of those type of DME, true DME into the patient home services paid for by insurance are really our patient services segment. Device solutions are really long-standing contracts to provide biomedical support, both to hospitals as well as manufacturers throughout the country. That might be through one of our seven locations and service centers where we may repair, from a biomed perspective, other people's devices, a hospital's devices, or sending our own fleet of technicians into the field to service on-site.
Those all belong to our device solutions, as well as rentals and sales of equipment. Supporting both our patient service and device solutions are really one robust back-end system, which is really the key as we layer on new products and platforms. Our clinical service supports both segments. Our biomedical services, they take care of our customer devices as well as that 100,000 devices that we support our patient services and have as a DME perspective. We have this robust shared services platform on the back end, allowing us to continue to scale and grow efficiently. From a revenue platform economics, very shortly we'll get into really the margins and the economics between the two sides of our business. But for patient service, it's really the core of what we do. 60% of our revenue does come from patient services.
It is the higher growing area that we see today. This is repetitive. Our oncology is very stable business. Patients are on our pumps for six, eight , 12 months. Sometimes it can be really years. From a wound care and a compression durable medical equipment, these patients are on repeated cycles. Then we are seeing some massive growth into, and I will use compression, I talk about lymphedema, I will talk about a little bit more higher growth areas.
Again, we own most of the market in oncology, so it is a very solid, very repetitive business for us. But it is not a fast grower for us because we do have so much of that market. The new markets, again, that is our stability. However, the new markets offer some faster growth. On the device solution side, 40% of our revenue, again, equipment rentals, services direct to facilities.
Those are multi-year agreements, both with hospitals. Sometimes that is a rental for thousands of infusion pumps, say to a home care company, or the service of and maintenance of devices for even our manufacturers. We do have manufacturer partners that utilize InfuSystem as their arm from a biomedical perspective. Between the two sides of our business, a lot of synergies between the two offering. Again, if I go into an oncology clinic, they need biomedical services. We are able to bring our biomedical services team into there. It is certainly a lot of synergies between our two platforms. What exactly do we provide in each of our platforms? For oncology, really, we allow a clinic all of the pumps, supplies that they need to safely and effectively get their patient out of the hospital, out of the infusion suite, and into the home. We do offer clinical support.
As a large infusion center, you have a patient on a pump, on a device in the middle of the night. The last thing you want to have is a bunch of nurses that you need to have on call. We actually handle all of that for patients. We offer a case management program under oncology, to allow education for patients. To ease the burden of, again, everything around that device getting that patient to the home safely and effectively, for their oncology infusion, their chemotherapy. These are long-term infusions. They can be anywhere from 46 hours to a week at a time. Important to have that clinical support for patients in the background. From a wound care perspective, very similar. In oncology, we do get that device to a clinic, and it goes out from the clinic or in the infusion center.
In wound care, we get that device direct, and in lymphedema, direct to that patient. We do have a few partners under our wound care and specifically in negative pressure. One of our larger partners in this space is Smith+Nephew. We have a great relationship with Smith+Nephew. From the lymphedema space, I will talk a little bit more about lymphedema. We have a few new partners in that space. It is an expanding space. The lymphedema market, it is a chronically underserved market in our country. The nice part is healthcare is headed towards the home, and healthcare is also headed towards preventative care for patients. If you can prevent disease, you can prevent added cost in the long run and further complications. Lymphedema, there are millions of patients in the country with lymphedema. Chronically, and prior to 2024, there was not reimbursement around the treatment for lymphedema.
In 2024, January of 2024, something called the Lymphedema Treatment Act was enacted, which really established reimbursement for patients with chronic lymphedema in the country. It really took off in 2025. We joined our first partner in the lymphedema space in 2025, added a new partner this year in 2026. What we can see is a lot of expansion and growth in that market because of that new reimbursement and because it is such a chronically underserved market. We are really excited about the lymphedema space and the care and the opportunities that are happening in that space. Look forward to talking about that more. Under wound care also, advanced wound care dressings and supplies. As patients go home, they are going on a negative pressure wound therapy device for maybe a chronic wound. They may be a diabetic, something like that. They are not healing well.
They also need advanced wound care dressings. Again, all reimbursable, all often cyclical, and so they are on these devices for several months at a time. In pain management, the opioid epidemic is a real concern in our country. Very similar to oncology, there are infusion pumps and nerve blocks that patients can go on versus getting an opioid as they get a post-op surgery. They go home with a pump versus a prescription for an opioid. We have been in this market about 10 years, and are happy to assist with the opioid epidemic here in the country to prevent patients from needing those opioids. For device solutions, again, biomedical service is a big piece of what we do. A lot of them are within our seven service centers.
Preventative maintenance, repair of devices, again, a service arm to a lot of our manufacturer partners in oncology for some of the oncology infusion devices out there. Certification, as hospitals need all of their equipment certified, it is a little bit challenging for them to attack maybe 5,000 infusion pumps. Usually, a hospital has a few biomedical technicians. They cannot ship a bed right, or a stretcher. They need their biomed technicians to fix equipment in the hospital that has to maintain in the hospital. They can send us devices to one of our service centers. We can send a fleet of technicians out to service all of their equipment at once. Big piece of what we do on device solutions. Also device rentals and sales. These are long-term contracts that we have for rentals and sales.
If you think of a hospital, they may have 5,000 infusion pumps. For flu season, they may need an extra 1,000 infusion pumps. They probably do not want the capital outlay to invest for a short term. They end up renting devices from us. It could be a few hundred devices. It could be a few thousand devices. We maintain that equipment for them. The nice part for InfuSystem, those become long-term rentals. They just never end up pulling that back out. The device rentals with sales, it is a great opportunity for us to maintain that relationship with that hospital, which allows us then the consumable sales as well from a sales perspective. How do we create value to our stakeholders?
For hospitals, oncology practices, physicians, and clinics, again, we ease the burden of getting the devices, the supplies that they need, really to have them on their shelf at the time they need them, when they need them to get their patient treated and out the door. Not only to have it, but really to help them choose what type of device. We are device agnostic. We have every pump on the market, and so we can help physicians and clinics to best suit what will help them, and to treat their patients. We also offer that flexibility that if they choose a device that isn't working for them, they can ship it back to InfuSystem and we can put a different type of device in there. If they purchase their own equipment, that wouldn't happen.
In addition, as you think of durable medical equipment for hospitals, oncology practices, those physicians, those clinic practices, it's no-cost solution for them. So we reduce their capital expenditure because they don't have to buy these devices for their patients, which is perfect. For patients, again, we have that case management program. We have our 24/7 clinical care to answer if they have any issues in the evening, in the night, or anytime, or for our clinics, certainly, we have our clinical nursing service that answers that. Patients are happier in the home. They heal better in the home. It's better than certainly being admitted for those long-term infusions. For payers, we lower the total cost of care in all areas and avenues that we are in. It's cheaper to get a patient healthcare is moving to the home, and we live very nicely in that space.
As I mentioned, we are transitioning from an investment phase to margin expansion. Barry and I are very focused on profitability for the organization. There's a few things that are expanding our margins. First and foremost, we have been investing in an ERP solution. Our prior solution was end of life. We need a new system. We've been going through that process of a new ERP. It did go live in March of this year. We're very happy to say it was a successful launch. We are still continuing a little of that spend, and Barry will get into some of the specifics around the spend here in a couple slides. We do see some opportunities to continue a little bit of that spend for improvements within the system, which has been great, as well as our revenue cycle system.
DME, there are a lot of claims that come in. It's a lot of manual work. It's been previously a very headcount-heavy type of business. What we had is an older, antiquated revenue cycle system. Again, we've been around for 40 years, and so we were looking for a new revenue cycle system. We did implement a new one. It's specific today for wound care and our new emerging therapies. We are working through the process to get that into oncology. What that allows is machine learning, some AI technologies, some capabilities to allow us to process claims faster, process claims more efficiently, drive scalability in the future for our organization.
You can see that certainly today with the amount of wound care growth that we've had over the course of the past year, I will get into some numbers, but we grew wound care 103% year-over-year this year. That is all with the fact of that revenue cycle system expanding that into oncology throughout the end of this year. We are hopeful by the end of the year to continue expansion and abilities to bring in new products. Scaling revenue without scaling costs. We are looking at contract optimization as well. So from a contract perspective, we always want to make sure that everything that we are doing makes sense and it is profitable. We are shifting out of, or did shift last year. You will actually see that in the pro forma revenue, and Barry may talk about that.
We did shift out of a non-profitable contract, a little bit of a non-profitable contract. We restructured that contract for profitability. Had some price increases on that this year. That was with GE HealthCare, so you will hear that as you learn about InfuSystem. We are, again, really focused on trying to shift out of capital-intensive businesses into less capital-intensive businesses, such as wound care and our compression space. What that is doing for us is, again, expanding our margins. So again, we are 21.9% in 2025. Goals of 22%-25% for future forward and beyond. You can see that we are certainly there today in 2026. So proven expansion beyond oncology. Again, we started as an oncology company 40 years ago.
We have proven very well that we are able to take this kind of platform under us and add new products and add new devices under that, utilizing those 800 payer contracts that we have to continue to grow our business, again, into some of these more rapidly growing areas. For wound care, as I mentioned, our revenue in wound care grew 103% year-over-year, Q2 of 2025 to Q2 of 2026. Our lymphedema grew 154%. So these are expanding markets. They have a faster growth. They are underserved population, so we are really excited about expanding into these newer emerging markets. Pain management, again, we have been in that business for 10 years. It is very stable, and it has been very successful for us. Selective tuck-in acquisitions. We have had a couple successful acquisitions over the years. In 2021, we purchased or acquired two small biomedical company.
That allowed us some of that experience and ability to service our technicians in the hospital. So we send out that really strike team into a hospital to service all of that equipment. That gave us some of that, gave us some additional capabilities and some devices that we did not service prior. So we also had a small acquisition of a company in 2025. That actually brought us that revenue cycle system that we are talking about, that is allowing us some technologies to help us to scale faster. So we are very diligent, and I would say pretty picky on who we are looking at from a DME perspective or an acquisition in general perspective. We want it to be immediately accretive if it is something that we are interested in doing, certainly. Then our repeatable platform expansion model. We have a great core.
We have all of these services on our backend, our clinical, our warehouses, our depots, our biomed, and really can continue to add new partners to our business without adding a lot of incremental cost. Our competitive moat, by far, our payer contracts is really one of the biggest competitive moats around our business. 800+ payer contracts. A lot of hospitals utilize regional DME. A lot of manufacturers might need to utilize regional DMEs to get a patient out of the hospital, into the home, with their product. What we offer is coast to coast. We offer coverage for all patients, certainly, and then that ability to make sure that we can get that device also to that patient with our backend services. Embedded in clinical and reimbursement workflows. We really have a stickiness with our customers. Again, as I said, we're not just a distribution company.
We really are partners in the care for our clinics, our oncology clinics, our wound care clinics. We have API connections with a lot of our partners. We have EMR connectivity with a lot of the hospitals that we're working with, so we get our referrals direct versus a manual heavy lift of faxing in referrals for us. Same goes for our payer contracts. We are connected electronically often, which creates a stickiness around our business. Our scaled platform, again, deep standing relationships across the country. We saw the 4,500 hospitals, really deep relationships and longstanding contracts with those hospitals. That reusable asset model. We have the 100,000+ devices. That's really hard to replicate. It took us 40 years to get to that number, and for somebody else to come in and want to replicate what InfuSystem's doing, that's a lot of capital outlay, certainly.
We have our three complementary growth engines. I'll talk again about our core. Very important for us, our oncology. Some of these longstanding businesses that we've had. It does fund our expansion and our growth. It's very predictable. We can see it. Once we win an oncology clinic, for instance, we don't really lose that clinic. We lower their cost. We help them. We partner with them to get their patients well cared for, making their lives easier and certainly more cost-effective. Expansion growth. These are the new areas that we're headed into. Wound care, preventative therapies like pneumatic compression. That is that lymphedema market, certainly. There are other markets that we have our eye on, as long as it fits into our platform, right?
We have these tools now on the backend, our revenue cycle system that allows us to bring in and partner with other manufacturers and other products efficiently without adding that head count. So it is allowing us to scale at a faster pace, and we're really excited about that. From efficiency and margin, again, we're going to look at our contract. We're going to continue to head into non-capital intensive businesses. We like some of the markets that we're seeing. We're going to continue to look at our contracts. We know what we're good at, and we know where we struggle. We can see that ERP is actually helping us a lot to see from a financial perspective what's making the most sense for InfuSystem and what do we have to tweak slightly to continue to expand our margins.
I get to kick it over to Barry.
Thanks, Carrie. What we will go through here is some of the financial metrics and the trends that we have seen. We will start at the top left. This is our revenue over several years. You can see that, as Carrie pointed out, we have had many years of continued revenue growth. It is actually, over the last five years, been an 8% annual CAGR. You see that in 2026, it looks like it has flattened out a little bit, but that is the impact for the GE HealthCare contract Carrie mentioned. We restructured that contract. We gave back about $7 million in revenue, but we cut even more costs. That is, as you see the margins in a moment, the margin percentages, we see some improvements from that, having done that.
That is why we express our guidance for 2026 as a pro forma growth number, because we are adjusting for that change, and that guidance for this year is 6%-8% of revenue growth. Turning to our EBITDA, as you can see that we still have in the trailing period here shown a little bit of the COVID benefit that we had back in 2021 and 2020 appearing on the screen. But you will see that we went down a little bit as we gave some of that revenue and profitability coming from the things that we did to support the COVID era. You see that just the continued expansion for EBITDA as we go through time that go along with the revenue growth.
As we look at 2026, and we will get to the margins in a minute, our guidance for the profitability is to deliver that mid to low 20% range, which is, as you will see, a significant improvement over where we have been recently. Just turning to the two graphs on the lower end here, you can see that the revenue growth has happened in both segments, both the patient services segment and the device solution segment, with the exception of, in device solutions, the GE HealthCare impact as specifically in that segment. That is why you see the numbers coming down for 2026 of the trailing 12 period for device solutions. Want to switch the slide, Carrie. All right, now turning a little bit to our margins. You can see the gross margin on the top left.
As we invested in some new businesses, particularly the biomed capabilities expanding into the ability to provide services into the field, our margins came down a little bit, but they have been improving since we did that launch. That's been getting better and better. If you look at adjusted EBITDA margin to the right, you can again see that as we came off of COVID, we definitely gave back some of our margins. Then in 2022, 2023, we started investing in some of the new businesses, like wound care, things that we're seeing the benefits of today. Then over the last couple of years, we've been significantly expanding those margins into the level that we see today, which we believe is very solid, very sustainable. We don't expect to see a downturn in our margins.
We do think that catalysts for improved margin expansion are the benefits from the ERP we invested in and we went live earlier this year and the revenue cycle system both Carrie mentioned. Those should help us be more productive as well as they're catalysts to top line growth. Then two lower graphs, you see just the distribution for margins between the patient services and the device solution segments. The patient services segment has a much better gross margin. It does have a little bit more G&A that goes along with it. Our revenue cycle, some of our clinical costs and other things do support that business are a little heavier than the device solutions.
As you can see, device solutions, as we invested in expanding our capabilities for providing biomed services in the field, our margins came down a bit and now have been improving, particularly as we've adjusted that GE contract. Want to flip there, Carrie. Just a quick view, a couple points I want to make on this slide. Just basically the same data shown in a quarterly fashion. You'll see that on the left, for the first time in many, many years, we actually had a decrease in our revenue. That was in the first quarter. As we got into the second quarter, that was driven down by the adjustment for the GE contract, which that adjustment started in the first quarter.
You can see we've already recovered from that, and the revenue growth was positive again by the time we got to the second quarter this year. Turning to the right, a couple of points I'll make on our EBITDA, and that is that our first quarter always is a little bit lower. EBITDA is something for you to be aware of as we continue to report each quarter. There's a couple of reasons for that. Our collections and the patient service is a little bit lower. Co-pays and the deductibles drive that down a little bit. We have a little bit heavier expenses in the first quarter, things related to our audit and some marketing expenses usually hit that quarter a little bit heavier. One last thing to point out is that you'll notice that since Carrie took over, the columns are much bigger in all periods.
That's the last couple of years you see there, the light blue and the orange. We definitely been working hard to get things in a much better shape. You want to flip the slide here. Just a few comments on our cash flow balance sheet. We have just a little bit of debt, a very modest amount, very small leverage, 0.61 x our outstanding debt to EBITDA. Our debt is consisting of an all-revolver facility led by JPMorgan bank and then a few other banks. Very solid bank group, very supportive of the company. The $20 million that we have drawn is protected by a currency swap we put in place during COVID, actually, so we have a very low interest rate. That goes till a couple more years, that protection. We hear in the news about interest rates going up.
We are definitely sitting in a good position because of our low amount of debt, and then the fixed amount of that debt. The graph on the right shows you how much fixed debt we have. This is as of June 30th versus what the variable portion was. Because the revolving facility is a $75 million facility, that along with the little bit of cash we're carrying, gives us tons of liquidity. Not that we necessarily need that liquidity, because if you see the operating cash flow here, certainly all the growth plans that we have can be completely funded from our operating cash flow. In fact, over the last couple of years, we've bought back about $15 million in our own stock as a way to keep our cash working for us.
You see there's only a very small amount of cash on the balance sheet, and as of June 30th, it was $1 million. The reason for that is that we have an all-revolver facility, as I mentioned, and we pay down cash every day. We're very efficient on cash. We don't have pockets of cash stranded in foreign countries or anything like that. So we're able to carry a very small amount of cash but still have the significant liquidity through the revolver and a very strong bank group. One last thing to point out is that there are some periods where we generated some net operating losses.
10 years ago, we still have a little bit of that left that protects some of our cash flow, and for the next year or so, we do have some protection on being a cash taxpayer, but then we'll be a cash taxpayer. You want to flip the slide there, Carrie. Actually, just some high level. Yes, we are traded on the New York Stock Exchange American. About 20 million shares outstanding, all floating in the marketplace. We're pretty widely held. The market cap there is actually wrong. This was a June 30th slide. We're about $250 million in market cap. The stock is trading in the $12-$13 range now. If you look at the bottom left, capital allocation strategy is really to prioritize investing in ourselves, and could be acquisitions. We've been very disciplined, only done a couple small acquisitions, but that's definitely something we look at.
Then the analyst coverage, we have four sell side analysts covering the company.
Thank you, Barry.
That is the last slide.
Yeah. Thanks, Barry. So just quickly on our leadership, again, for us, from an executive leadership perspective, we are a small but mighty team, I would like to say. We come from a vast array of backgrounds, from healthcare to Barry, where he, again, automotive and certainly from a growth perspective for the company. I would be remiss to not talk about the leadership under us. We have a very capable, very qualified, they understand our business, leadership team beneath the executive management here.
So very strong, very driven team that are looking at executing on our strategy as we are. Then a very supportive board of directors with a variety of backgrounds, again, from governance to healthcare. We have a very supportive board of directors as we are trying to execute on our strategy to partner and support us through that. So I will wrap it up with why InfuSystem.
Again, healthcare services platform. 18 of the top 20 U.S. hospitals. Our massive payer contract portfolio. It really is one of the moats around our business. Very hard to replicate, certainly. Our device fleet, 40 years foundation. We are not an idea company, right? We are not just out there. We are very stable. We have deep relationships with our customers. This massive core within oncology, and then obviously multiple paths to growth. New products, expanding into wound care and lymphedema.
That lymphedema space really is exciting. There are other opportunities, other partners, other products that we can take our core background and expand into. Our visible margin expansions. We are running a better company today, is what I like to say. We are focused on profitability. I do not want revenue for revenue's sake. I want revenue and profitable growth, certainly. We are working at and driving efficiencies to expand our margins.
De-risk revenue base. Again, no customer, no contract bigger than 10%. Well distributed amongst our revenue today. Strong balance sheet, as Barry just went over. An experienced leadership team certainly aligns with our shareholders looking for growth of this company, but certainly profitable growth. With that, I think we are ready for question and answers. I will kick it back to you, Glen. Thank you.
Super. Thanks. Great job, guys. Again, to our audience, if you have a question, please use the text box within the portal to ask. We do have quite a few questions in the queue. Remember, I am only asking the questions, I am not reading the names. First question, Carrie, it looks like you guys have been around since going back to 2010. Only started to gain real traction in 2019. Can you just give a little bit of background of what was happening between 2010 and 2019, and then what happened in 2019 that actually caused the business to really start to take off?
Yeah. As I mentioned, this year actually is our 40th anniversary, so we have been around a long time. 2010 is actually when I joined the company. I think we actually acquired a small biomedical company. We were, prior to InfuSystem, really just a DME company, just that core of oncology, started in the garage of our founder. In 2010, right around that time, we purchased a company called First Biomedical. So we expanded in 2010, which brought on our biomedical services as well. So we fought over that market. We were starting to dabble into biomedical services. In 2018, 2019-ish timeframe, our largest competitor, there are not a lot of companies that do what InfuSystem does. We fight over maybe Elastomerics might be a big, strong competitor.
In around 2018, 2019, our largest competitor, they were acquired by McKesson actually, and they exited the oncology business as far as providing oncology pumps, infusion supplies, as we do as a DME provider. They got out of that business, so we won that business. When you see that spike in 2018, that really is that large competitor in the market. They were called MSD. They got out of that market, and we won all of that business from them. Which is, again, why we have a good portion of that. We had a good portion prior, but that 70% market share within oncology, there aren't a lot of other customers, or DME companies that service oncology like we do.
Super.
Hopefully that answers that question.
Thank you. How would you rank the factors required to achieve the upper end of the long-term EBITDA target of 22%-25%? I'll let you answer that, and then I have another question.
Okay, perfect. Barry, you want to take the margins?
Sure, absolutely. The catalyst that we believe that will drive margins are a couple things. One is that we invested in ERP. We should be able to start getting some efficiencies and improve the profitability, and our revenue cycle. Those are investments we have made. We are still working on some things that will help improve our profitability and manage our costs quite a bit. As we look at where we see growth, we do see that some of the new products that are coming in and opportunities like Lymphedema are a little bit lower gross margin, but should contribute pretty well to the EBITDA margin, but we will see. They are just a little bit lower in terms of the net margins. The nice thing, though, is that, as Carrie mentioned, those are not capital-intensive business.
They will cash flow immediately so that the return on that capital investment, which is just working capital really, should be very good. Those two things, the cost savings and the efficiencies that we expect to get, a little bit lower margin business that we are seeing as a real growth driver, those things will balance out. We expect to be kind of where we are at today or slightly increased over time.
Okay, thank you. I guess as the second part of this question, regarding the expansion growth levers that you touched on, are you evaluating other verticals beyond oncology, wound care, and pain management?
That is a great question. I would say yes. We are always evaluating what other opportunities. We have had other manufacturers, for instance, come to say, "Hey, could you help us as well? We have that payer contract portfolio that we can help manufacturers continue to grow." What we always want to do is look at what is reimbursement, right? What is the cost of that? What is reimbursement? Who is the competition in that market? Today, we see such an opportunity in the space that we are in, both wound care as well as compression. We want to focus on what is right in front of us.
We are keeping our eye from a strategic standpoint on what is next. We are in conversation. We are always looking at the market. Again, what is that opportunity? What does reimbursement look like? Is there competitive bidding coming in a market?
We get accredited when we are interested in a new product. We go through accreditation process and are able to add those new codes and new products to our payer portfolio very easily. Yes, we are always looking at the next best thing as well.
Thank you. I guess with that in mind, revenues are growing but single digits. Can these new growth verticals increase that to higher, I guess, faster growth?
Yes. As I mentioned, we have a massive core in oncology, so they really maintain that single-digit growth. What we are seeing and we saw, we can see with the higher growth year-over-year in the wound care space and compression, the goal is really to continue to scale. We have those systems that allow us that faster claims processing, ability to scale, bring in more partners in that space. The hope is really in the plan, and our strategy is really to continue. We would like double-digit growth, certainly in the future. Barry, I do not know if you have any comments on that.
Yeah, I would just say that the wound care has doubled the last couple years and we have a lot of runway left there.
That's right.
Thank you. Can you tell us more about the business model for lymphedema market?
Absolutely. From a lymphedema perspective, again, a growing market, underserved need in healthcare in general. These are patients that never had opportunity to get treated. Prior to 2024, there was no reimbursement. They could get treated, but it's an outlay for their own pocket. Now there is reimbursement in this space. There are partners. There are multiple products in this space, both from a compression therapy as well as, you would think of it as the old T.E.D. stockings. You had surgery, you had to put on those super tight T.E.D. stockings. There's new, better, more effective types of compression therapies for patients today. We are partnered with different partners. Some have customizable compression, some have adjustable compression wraps. It is a growing market. There's a lot of opportunity to help patients, again, chronically underserved.
We've partnered with a few manufacturers in that space, they are growing rapidly on their own, and we are in conversation and certainly have that opportunity to continue to look at other partners in that market that might offer a product that's just different. That is the one thing, and I'll remind, we are device agnostic. We are not exclusive to anyone. I want a patient or a provider to be able to choose InfuSystem no matter what the product is that they want. We aren't exclusive in these areas. We can partner really with any compression therapy or lymphedema market partner or manufacturer out there. I hope that answered.
Thanks, Carrie.
Yep.
Have infusion pumps ever come up in CMS competitive bidding discussions, and how would you manage this? Medicare and commercial payers tied to Medicare fee schedule drive a large share of patient services revenue, and price cuts on pump falls entirely almost to EBITDA. What percentage of patient services revenue is Medicare? Of priced off Medicare or priced off Medicare, what percentage, or what would a 5% cut to those rates do to your EBITDA?
That's a lot to unpack there. Yes. It's actually a really easy question. Yes, we did go through the competitive bid process probably in 2010, 2011, 2012. Long time ago. We won that bid. We're one of the partners in that space. We're beyond competitive bidding for oncology, which is great. For Medicare, I will share, this is the overhang. It's an interesting conversation when you think of Medicare. Medicare did come in 2016. Medicare sent InfuSystem a letter then. We were only an oncology company. Sent us a letter to say, "Hey, we're not going to pay for oncology pumps anymore." For Medicare, again, our largest platform is really patient services on oncology, our biggest segment of that. Medicare patients are all paid for direct by the hospital, so we do not get reimbursed by Medicare at all in the oncology space.
We do get Medicare patients from a wound care and a lymphedema perspective. Although some of our partners have their own DME, and so we get a lot of the. We have the 800 commercial payers. That's really the referrals that we get. So we have a very small percentage of Medicare patients. Barry, maybe you can jump into the actual numbers. Very small percentage of our revenue is actually based in Medicare. Zero from an oncology perspective. So no haircut there. We get paid for directly from the clinic for all Medicare patients. So we just flipped the bill to them. It's well established. We didn't lose any customers when that conversion from Medicare, and they cut us.
Our customers love the relationship with InfuSystem, love what we do for them, that deep partnership, and it's worth their care certainly to just pay for that infusion device to have the same standard across all of their patients. All commercial payers continue to pay.
Yep. Basically, we have no exposure. The 5% haircut would not affect us.
Super. Thank you. On the oncology side, can you talk about concentration by drugs, modalities? Do you see any changes in drug mix, and do you see any pressure from any of the recently approved oral drugs?
We do not. In oncology, we really are specific. For oncology patients that are going home, the standard of care, the drug is called fluorouracil or 5-FU. The acronym is 5-FU. They're really gastric cancers, so could be oral cancer, could be stomach cancer, could be pancreatic cancer, but any colon cancers. Any of the GI-based cancers. The golden standard is 5-FU. We have not seen. It's been the golden standard, and it's an inexpensive drug also. It is the golden standard of care and has been for many, many years. We do continue to watch for drugs that might be coming down the line. We don't see any effect to our business certainly today. Some new drugs that are coming out, biologics, et cetera, some of those as we're watching, they may be sub-Q infusions versus an IV infusion.
However, our devices, they also have abilities to infuse a sub-Q infusion. You just need a different set on the end. If a new drug came out, we do have multiple drugs that come into light through our pump, not just gastrics. So not just 5-FU, but most things coming out today are really IV infused or sub-Q infused. There are some oral that we haven't seen any effect or nor do I expect much of an effect for our business today. I hope that answered.
Thank you. What is your ERP spend going to be for 2026? Will you be done on this by 2027?
Yeah. The number last year was about $2.5 million. This year, that number went up in the first quarter, but is coming back down. I won't be able to give you the actual number for the full year, but it is significantly lower because we went already through the go live phase. We are spending a little bit more than we planned in the post go live phase, but it's just to get more stabilization. We're still going through some of the learning curves, and we're starting to see some things we want to go enhance the system with that will help drive further improvement. Next year, we might have a little bit of enhancement costs left, but those will be things that will be able to drive improvements and get paybacks for fairly quickly.
The benefit from the ERP generally should start to see from. The cashflow will reverse, and we'll start seeing benefits then sometime next year is what we expect.
Thanks, Barry. Can you talk about the cash conversion cycle and if you see substantial seasonality other than those that are mentioned on EBITDA page 18?
Cash conversion cycle is pretty simple. We have a lot of AR that we have to invest in as we are growing. We do see that our requirements as we grow in certain areas like the oncology and in our DME rental business do require us to invest in devices as we grow. But with the new businesses that don't require us to buy devices, we are converting cash very quickly. That is why, as we have looked at the last few years, our operating cash flow has far exceeded the amount of additional money we need to invest in working capital or into additional capital items.
Thank you. At one time, the NOPAIN Act was viewed as something that could be a real catalyst for growth in pain management. Can you speak to why that meaningful uptick has not really unfolded? Can this piece of your business eventually benefit from the NOPAIN Act, or are there structural gating factors there?
Yeah. I think we expected, or certainly I hope that the rest of the market, the NOPAIN Act does end at some, I think we have one more year of that NOPAIN Act, unless regulation does repeat it or renew that ability. They are watching, has this been effective for patients to get them off of opioids and to drive other, not just infusion pumps, but any other type of pain management solution that prevents the use of opioids for patients. We did expect that to be a driver. Again, our pumps, so two devices that we use that are not our pump, but our manufacturer pumps that did get added to that, the real hope is that this is wonderful. This is going to drive a clinic to make the right choice, use an infusion pump, send that patient home with a nerve block.
There are some challenges there where a clinic has, there's a lot of reporting on the clinic side. It's not an InfuSystem side. But on the clinic side, as they're putting patients out, what are the pain scores? What is all of the steps that that clinic has to do to get that reimbursement? I think it's a little bit of a burden for some practices to end up doing that, so they end up continuing with an opioid or a prescription versus that. It's a little bit on the clinic side. I will say we do continue to win customers. However, we are partnering a little deeper with some of the manufacturer partners that we have in that space to continue to attack that market, and our hope is that we continue to grow that market.
Super. Thank you. I'm just doing a time check. We're right on the hour, and I know there's quite a few questions in the queue. I do believe most of them have been addressed throughout the discussion. If you're an audience member and you haven't had your question answered, just send me an email. I'll make sure that it is addressed. And I'll ask you one final question, Carrie, and then we'll end the call.
Sure.
Can you talk about how you're utilizing any AI, and what benefits you've seen so far?
I can. As I said, most of that would be on our revenue cycle side. I'll let Barry jump into the ERP. I haven't really implemented a lot of, maybe from a reporting perspective or the data that we're getting, there may be some AI tools there from an ERP perspective. But our revenue cycle tool, there is some technology. Some of it's machine learning, so it's not really AI, but it's machine learning and AI technology coming in with that new revenue cycle system. We do like it. We're seeing more opportunity there. It's how we've been able to scale. I will say, I'm excited for that space. It's a lot of manual processes that are done along the revenue cycle path. I think of a verification. I need to ping a payer.
There are abilities as we see in the future and some new tools that we are looking at even to add on within that revenue cycle system that may be able to do that automatically for us. Again, ping that payer back and forth, and to automate something as simple as a verification for insurance. There are a lot of steps along the revenue cycle road that we can actually utilize AI for. We are doing it cautiously today. We want to be certainly cautious. We are not going to just go automate, say, billing, et cetera. At least not today. We are using it in pieces, but looking forward to implementing some more over the near future.
Perfect. Appreciate that. Carrie, Barry, maybe I will leave you guys with some closing remarks, and then we will end the presentation.
That sounds great. Thank you, Glen. Appreciate everybody.
Yes.
Thank you.
Appreciate it. Thanks to our audience. This concludes this webinar.