Omnicell misses Q4 EPS on revenue beat, strong ARR growth fuels optimism
Healthcare automation leader beats revenue expectations and grows ARR 9.6% YoY, launches next-gen Titan XT system
Omnicell Inc shares faced pressure in Thursday trading after the healthcare automation technology company reported mixed fourth-quarter results, missing earnings expectations while exceeding revenue targets on the strength of expanding recurring revenue and a flagship product launch.
The Mountain View-based company reported adjusted earnings per share of $0.40 for the quarter ended December 31, 2025, falling short of the $0.50 consensus estimate from Wall Street analysts. However, revenue climbed to $314 million, surpassing the consensus forecast of $313.4 million and marking a 7% increase for the full fiscal year to $1.185 billion.
The company's annual recurring revenue reached $635.6 million, growing 9.6% year-over-year and exceeding management's prior guidance range of $610 million to $630 million. The strong ARR performance signals expanding adoption of Omnicell's subscription-based software and service offerings, which provide higher-margin revenue compared to traditional equipment sales.
"Our team executed well in the fourth quarter, delivering ARR growth above our outlook and solid revenue performance," said Omnicell's management in prepared remarks accompanying the results.
A key catalyst for the company came in December with the commercial launch of Titan XT, the company's next-generation automated dispensing system introduced at the ASHP Midyear Clinical Meeting. The system, built on Omnicell's OmniSphere cloud platform, represents what the company calls its "third wave of technology" and is designed as a complete replacement for legacy cabinet systems in hospitals.
The Titan XT features AI-driven task guidance, real-time inventory visibility, and unified user interfaces across enterprise deployments. Key capabilities include DynamicRestock functionality that Omnicell says can reduce pharmacy technician restocking time by up to 70%, as well as embedded safety safeguards like "look-alike, sound-alike" medication alerts to help prevent dispensing errors. The system is currently available in the United States, with international rollout planned for 2026.
Looking ahead, Omnicell issued fiscal 2026 guidance with total revenues projected between $1.215 billion and $1.255 billion, representing growth of 2.5% to 6%, and non-GAAP EPS expected in the range of $1.65 to $1.85. The outlook represents an improvement over current analyst expectations, according to market data.
Analysts maintain a mixed view on the stock, with a consensus "Hold" rating and average price target of $48.57, though some firms have turned more bullish. Bank of America and KeyCorp recently upgraded shares, citing valuation appeal ahead of the fourth-quarter results and confidence in the company's long-term growth trajectory.
Omnicell operates in a healthcare automation market projected to grow from $44.75 billion in 2025 to $69.06 billion by 2030, driven by hospitals and pharmacies seeking to improve patient safety, reduce medication errors, and streamline workflows amid staffing shortages. Key competitors include Becton, Dickinson and Company, Capsa Healthcare, and Swisslog Healthcare.
With a market capitalization of approximately $2.23 billion and shares trading around $46.70, Omnicell's forward price-to-earnings ratio stands at roughly 29.5 times, suggesting investors are pricing in growth expectations tied to the Titan XT adoption and continued ARR expansion. The stock remains well below its 52-week high of $55, representing about 18% upside to that peak level reached earlier in the fiscal year.
Investors will be watching closely in the coming quarters for signs that the Titan XT system is gaining traction with health systems and driving replacement cycles, as well as whether the company can narrow the EPS gap while maintaining the robust recurring revenue growth that underpins its long-term strategic outlook.