Addus HomeCare (ADUS) Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Total Revenue: $377.4 million, up 8% from $349.4 million in Q2 2025.

Adjusted Earnings Per Share (EPS): $1.73, a 16.1% increase from $1.49 in Q2 2025.

Adjusted EBITDA: $49.2 million, up 11.9% from $43.9 million in Q2 2025.

Cash Flow from Operations: $40 million, significantly up from $22.5 million in Q2 2025.

Bank Debt: Reduced to $64.3 million, down $30 million from the previous quarter.

Gross Margin: 32.2%, slightly down from 32.6% in Q2 2025 but improved from Q1 2026.

General & Administrative (G&A) Expenses: 20.8% of revenue, down from 22.1% a year ago.

2Strategic Updates and Business Highlights

Acquisitions: Completed the acquisition of HomeCourt Home Care in Indiana, expanding into a new market adjacent to Illinois. A second acquisition in Indianapolis is pending.

Hiring Trends: Continued positive hiring with an average of 104 hires per business day, maintaining the capacity to meet organic growth targets.

Same-Store Revenue Growth:

Personal Care: 6.8% increase.

Hospice: 11.1% increase.

Home Health: Decreased by 2.8%, but showed sequential improvement.

CMS Updates: Proposed 2.4% increase in home health payments for 2027, but concerns remain about a temporary 3% adjustment. Hospice rates increased by 2.3% for fiscal 2027.

3Forward Guidance and Outlook

Adjusted EBITDA Margin: Expected to remain between 12% and 13% for the full year.

Acquisition Strategy: Plans to pursue additional acquisitions that complement organic growth while maintaining a disciplined capital allocation strategy.

Market Conditions: Anticipates continued growth in personal care services due to demographic trends and supportive state-level reimbursement rates.

4Bad News, Challenges, or Points of Concern

Home Health Segment: Experienced a decline in same-store revenue, although there was sequential improvement in admissions and revenue.

Medicare Cap Exposure: Encountered some cap exposure in the hospice segment, particularly in Ohio, which could impact margins.

Temporary Adjustments: Ongoing concerns about the negative impact of temporary adjustments on reimbursement rates.

Competitive Pressures: While the overall demand for personal care services remains strong, challenges in caregiver recruitment persist, impacting growth potential.

5Notable Q&A Insights

Census Growth: Positive trends observed in Illinois and New Mexico, while Texas remains steady. The company is focused on improving growth in Texas.

Caregiver App: The rollout has improved fill rates and is expected to enhance caregiver retention, particularly in Illinois.

M&A Activity: Increased optimism in the market for personal care opportunities and home health, with a focus on larger, scaled assets.

State Budgets: Most states have maintained reimbursement rates, with some increases in smaller states like Oregon and Michigan.

Regulatory Environment: The company is optimistic about potential changes to the 80/20 Medicaid access rule, which could benefit operations. Overall, Addus HomeCare reported strong financial performance in Q2 2026, with strategic acquisitions and positive hiring trends supporting growth. However, challenges in the home health segment and ongoing regulatory concerns pose risks to future performance.