Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $362.3 million, a 25% increase from $289.8 million in Q3 2024 [4] - Adjusted earnings per share rose to $1.56, up 20% from $1.30 in Q3 2024 [4] - Adjusted EBITDA increased by 31.6% to $45.1 million compared to $34.3 million in Q3 2024 [5][20] - Gross margin percentage improved to 32.2% from 31.8% in Q3 2024 [20] - Adjusted EBITDA margin was 12.5%, compared to 11.8% for the same quarter last year [22] Business Line Data and Key Metrics Changes - Personal care revenues were $275.8 million, accounting for 76.1% of total revenue, with a same-store revenue growth of 6.6% [20] - Hospice care revenues reached $68.9 million, representing 19% of total revenue, with same-store revenue growth of 19% [20][11] - Home health revenues were $17.6 million, or 4.9% of total revenue, with a same-store revenue decrease of 2.8% [20][12] Market Data and Key Metrics Changes - Texas and Illinois announced rate increases for personal care services, effective October 1, 2025, and January 1, 2026, respectively [6][7] - The Texas rate increase is expected to add approximately $17.7 million in annualized revenue [17] - The Illinois rate increase is projected to add about $17.5 million in annualized revenue [17] Company Strategy and Development Direction - The company continues to pursue strategic acquisitions to enhance geographic coverage and density, with recent acquisitions including Del Cielo HomeCare Services [12][19] - Focus on maintaining a strong balance sheet to support acquisition strategies and organic growth [24][25] - The company aims to leverage the increased demand for home-based care as a growth opportunity [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the favorable reimbursement support from states, which recognizes the value of personal care services [7] - The company anticipates continued growth in hospice and personal care segments, supported by strong hiring trends and rate increases [16][18] - There is caution regarding the home health segment due to potential Medicare payment reductions, but management remains hopeful for improvements [9][41] Other Important Information - The company had cash on hand of approximately $102 million as of September 30, 2025, with net leverage under one times adjusted EBITDA [5][24] - The company is actively working on legislative efforts in various states to advocate for future rate increases [7] Q&A Session Summary Question: Can you provide an update on the Caregiver App rollout in Illinois and New Mexico? - Management noted improvements in fill rates in Illinois and expressed optimism for New Mexico, where the rollout is planned next [28][30] Question: How do you view the hiring trends into 2026 given the strong volume growth? - Management indicated strong hiring momentum with 113 hires per business day, suggesting a positive outlook for organic growth in 2026 [36][39] Question: What is the company's strategy regarding home health and hospice assets? - Management confirmed interest in home health acquisitions that complement personal care and hospice services, while being cautious due to current reimbursement uncertainties [41][42] Question: Can you clarify the impact of overlapping operations in New Mexico and Tennessee on referrals? - Management highlighted the benefits of continuity of care and improved patient outcomes due to the overlap of services [72] Question: What is the outlook for gross margins in Q4 and next year? - Management expects Q4 to be the highest margin quarter, projecting adjusted EBITDA above 13% [54][56] Question: Are there any updates on potential rate increases in New Mexico and Pennsylvania? - Management expressed hope for a rate increase in New Mexico but noted uncertainty regarding Pennsylvania's budget situation [59][60]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $362.3 million, a 25% increase from $289.8 million in Q3 2024 [6] - Adjusted earnings per share rose to $1.56, up 20% from $1.30 in the previous year [6] - Adjusted EBITDA increased by 31.6% to $45.1 million compared to $34.3 million in Q3 2024 [6][18] - Operating cash flow exceeded $50 million for the quarter, with cash on hand of approximately $102 million as of September 30, 2025 [6][25] - Net leverage was under one times adjusted EBITDA, providing flexibility for strategic acquisitions [6] Business Line Data and Key Metrics Changes - Personal Care segment revenues were $275.8 million, accounting for 76.1% of total revenue, with same-store revenue growth of 6.6% [21] - Hospice segment revenues increased by 19% year-over-year, with same-store average daily census rising to 3,872, up 9.5% from the previous year [13][20] - Home Health segment revenues were $17.6 million, representing 4.9% of total revenue, with a 2.8% decrease in same-store revenue compared to Q3 2024 [14][22] Market Data and Key Metrics Changes - Texas and Illinois announced rate increases for personal care services, with Texas effective October 1, 2025, and Illinois set for January 1, 2026 [8][19] - The hospice reimbursement rate update effective October 1, 2025, is expected to increase rates by approximately 3.1% [20] - Proposed home health payment rule indicates a 6.4% aggregate reduction in Medicare payments for 2026 [10] Company Strategy and Development Direction - The company continues to pursue strategic acquisitions to enhance geographic coverage and density, with recent acquisitions including Del Cielo Home Care Services [15][21] - Focus on maintaining a balanced approach to organic growth and acquisitions, particularly in overlapping markets for home health and hospice services [16][68] - Emphasis on the value of home-based care and the benefits of personal care services in reducing overall care costs [8][17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the growth potential in personal care services due to favorable rate increases and strong hiring trends [19][40] - The company anticipates continued organic growth momentum into 2026, supported by recent rate increases and hiring performance [41] - Management acknowledged challenges in the home health segment but remains focused on improving operational efficiencies and profitability [50][52] Other Important Information - The company reported a gross margin percentage of 32.2%, an increase from 31.8% in Q3 2024 [22] - Adjusted G&A expenses were 19.8%, a decrease from 20% in the prior year [23] - The company maintains a strong balance sheet with total bank debt of $154.3 million, down from the previous quarter [25] Q&A Session Summary Question: About same store volume growth in Personal Care - Management noted improvements in fill rates and billable hours, attributing part of the 6.6% same store revenue growth to these factors [28][33] Question: On cash flow and DSOs - Management indicated that fluctuations in DSOs are typical and attributed the strong cash flow to timing rather than specific changes in payer behavior [34] Question: Organic growth expectations for 2026 - Management expressed confidence in maintaining above 2% year-over-year volume growth, supported by strong hiring and rate increases [40][41] Question: Home health and hospice asset allocation - Management remains interested in home health acquisitions that complement existing personal care and hospice services, despite current market uncertainties [44] Question: Hospice revenue per patient day and Medicare cap dynamics - Management confirmed that the absence of cap liability this quarter positively impacted revenue per patient day, with expectations for similar dynamics in Q4 [104]

Financial Performance - Net service revenues increased by 25.0% to $362.3 million in Q3 2025 compared to $289.8 million in Q3 2024[2] - Net income for Q3 2025 was $22.8 million, or $1.24 per diluted share, up from $20.2 million, or $1.10 per diluted share in Q3 2024[2] - Adjusted EBITDA rose by 31.6% to $45.1 million in Q3 2025 from $34.3 million in Q3 2024[2] - Adjusted net income for the first nine months of 2025 was $82.1 million, compared to $65.9 million in the same period of 2024[2] - Net income for the nine months ended September 30, 2025, was $66.1 million, up 22.3% from $54.1 million in the same period of 2024[20] - Operating income for the nine months ended September 30, 2025, was $96.3 million, a 27% increase from $75.8 million in the same period of 2024[20] - Adjusted net income for Q3 2025 was $28,723 million, representing a 20.5% increase from $23,780 million in Q3 2024[28] - Net income per diluted share for Q3 2025 was $1.24, compared to $1.10 in Q3 2024, reflecting a 12.7% increase[28] - Adjusted net income per diluted share for Q3 2025 was $1.56, up 20% from $1.30 in Q3 2024[28] Revenue Growth - Personal care business accounted for 76.1% of total revenues in Q3 2025, with organic revenue growth of 6.6%[5] - Hospice care revenue grew by 19.0% in Q3 2025, driven by increases in admissions and revenue per patient day[6] - Personal Care segment generated $275.8 million in Q3 2025, a 28% increase from $215.4 million in Q3 2024[24] - Hospice segment revenues grew by 20.3% year-over-year in Q3 2025, reaching $68.9 million compared to $57.3 million in Q3 2024[24] - Net service revenues for Q3 2025 reached $362.3 million, a 25% increase from $289.8 million in Q3 2024[20] - Adjusted net service revenues for the nine months ended September 30, 2025, totaled $1,049,439 million, up 22.4% from $857,259 million in the same period of 2024[28] Operational Metrics - Average billable census total increased to 50,480 in Q3 2025, compared to 37,701 in Q3 2024, reflecting a significant growth in service capacity[26] - Gross profit margin improved to 32.2% in Q3 2025 compared to 31.8% in Q3 2024[20] - Cash flow from operations was $51.3 million in Q3 2025, with cash on hand of $101.9 million[9] - Cash at the end of Q3 2025 was $101.9 million, down from $222.9 million at the end of Q3 2024[22] - Total assets increased to $1.42 billion as of September 30, 2025, compared to $1.15 billion in 2024, reflecting strong growth in the company's financial position[22] Strategic Activities - The company completed the acquisition of Del Cielo Home Care Services for $7.4 million on October 1, 2025, which serves approximately 700 clients[7] - The company expects continued growth supported by favorable trends in home-based care and strategic acquisitions[11] - The company served 23 states at the end of Q3 2025, up from 21 states at the end of Q3 2024, indicating market expansion[26] Expenses - Acquisition expenses for Q3 2025 amounted to $2,012 million, consistent with $2,072 million in Q3 2024[28] - Stock-based compensation expense for Q3 2025 was $4,286 million, an increase from $2,833 million in Q3 2024[28] - The company reported restructuring and other non-recurring costs of $1,500 million for Q3 2025, with no such costs reported in Q3 2024[28]

Core Viewpoint - Addus HomeCare Corporation will release its third-quarter earnings on November 3, 2025, after market close, indicating a scheduled update on financial performance [1] Company Information - The earnings report will cover the period ended September 30, 2025, providing insights into the company's financial health and operational performance [1] - A conference call is scheduled for November 4, 2025, at 9:00 a.m. Eastern Time, where key executives will discuss the earnings results [1] - Participants in the conference call will include Dirk Allison (Chairman and CEO), Brian Poff (Executive Vice President and CFO), and Heather Dixon (President) [1]

Summary of Addus HomeCare Conference Call Company Overview - **Company**: Addus HomeCare (NasdaqGS:ADUS) - **Industry**: Personal Care Services - **States of Operation**: 22 states in the U.S. [2] Core Business Segments - **Personal Care**: Represents approximately 75% of the business - **Clinical Services**: Comprises about 20% of the business, primarily hospice - **Home Health**: Accounts for 5% of the business [4] Growth Strategy - **Acquisition Target**: Aiming for 10% annual growth, with half from acquisitions [6] - **Recent Acquisition**: Acquired Gentiva's personal care business, becoming the largest provider in Texas and Arkansas, expanding into seven states [6] - **Market Position**: Currently holds 5% market share in Texas, indicating significant growth potential [7] Financial Performance - **Organic Growth**: Historically, personal care has a long-term growth rate of 3% to 5%, with recent performance exceeding this due to rate increases and volume growth [10] - **Rate Increases**: Texas experienced a nearly 20% rate increase, with Illinois also providing strong support [10] - **Future Projections**: Anticipates maintaining or exceeding 3% to 5% growth in personal care, with hospice growth around 10% [12][14] Challenges and Opportunities - **Redeterminations Impact**: Experienced delays in admissions due to state agencies reallocating resources for Medicaid redeterminations, but expects normalization by 2026 [25][30] - **Labor Environment**: The company is seeing stable hiring metrics and wage inflation returning to historical norms of around 3% [42][44] Technology and Integration - **Technology Adoption**: Implementing a caregiver app to enhance communication and efficiency, with a goal of 90% participation in Illinois [39] - **Integration of Gentiva**: The integration process is progressing smoothly, with plans to transition Gentiva to a unified electronic medical record (EMR) system by late 2026 [33][34] Medicaid and State Relations - **Value Proposition**: Emphasizes the cost-effectiveness of home care versus nursing homes, advocating for continued state support [15][16] - **Managed Medicaid Strategy**: Focus on building relationships with managed care organizations to negotiate rates and improve service delivery [20][22] Investor Insights - **Underappreciated Aspects**: The potential positive impact of Medicaid changes and work requirements on the company's operations, positioning Addus as a cost-saving solution for states [54][55] Conclusion - **Overall Outlook**: Addus HomeCare is well-positioned for growth through strategic acquisitions, technology integration, and strong state relationships, with a focus on maintaining quality care while navigating challenges in the Medicaid landscape [56]

Company Overview - Addus HomeCare Corporation (ADUS) is currently experiencing significant activity in the options market, particularly with the Oct 17, 2025 $130 Call option showing high implied volatility, indicating potential for a major price movement [1] - The company holds a Zacks Rank 3 (Hold) in the Medical - Outpatient and Home Healthcare industry, which is positioned in the top 35% of the Zacks Industry Rank [3] Analyst Insights - Over the past 60 days, one analyst has raised the earnings estimate for the current quarter from $1.52 to $1.53 per share, while no analysts have lowered their estimates, suggesting a positive outlook [3] - The high implied volatility in options trading may signal that traders are anticipating a significant price movement for Addus HomeCare shares, which could indicate a developing trading opportunity [4] Options Trading Strategy - Options traders often seek out options with high implied volatility to sell premium, a strategy that can capture decay and potentially reduce risk if the underlying stock does not move as much as expected [4]

Core Insights - The Zacks Medical - Outpatient and Home Healthcare industry is experiencing a significant shift towards digital healthcare, driven by rising demand for telemedicine and AI-powered services, particularly due to an aging global population and increasing healthcare costs [1][4][10] Industry Overview - The industry includes companies providing outpatient care using advanced medical technologies for diagnosis, treatment, and rehabilitation, with a focus on innovation and value-based care models [3] - The global home healthcare market was valued at $416.4 billion in 2024 and is projected to reach $747.70 billion by 2030, growing at a CAGR of approximately 10.2% [1] Major Trends - Aging Population: The growing elderly population is a primary driver for home healthcare services, as older individuals prefer receiving care in familiar home settings [4] - Cost Effectiveness: Outpatient clinics offer cost-effective care, reducing the financial burden on patients and healthcare systems [5] - AI's Role: AI enhances patient care through remote monitoring and data analysis, facilitating timely interventions and improving care management [7] - Technological Advancements: Virtual assistants and chatbots are increasingly used to assist patients in managing their care and appointments [8] Staffing Challenges - The U.S. healthcare industry faces severe staffing shortages, particularly among home health aides, exacerbated by high burnout rates and international migration of health workers [11] Market Performance - The industry has underperformed compared to the S&P 500, losing 0.5% over the past year, while the S&P 500 rose by 18.2% [14] - The industry's current valuation is at a forward P/E of 19.6X, compared to the S&P 500's 23.4X [18] Company Highlights - **Quest Diagnostics**: Anticipates 2025 revenue growth of 9.9% and earnings growth of 9.1%, with a current ROE of 15.2% [21][22][25] - **DaVita**: Expected revenue growth of 5% and earnings growth of 12.9% for 2025, with an impressive ROE of 369.4% [26][27][30] - **Addus HomeCare**: Forecasts a 21.5% increase in revenues and a 16.5% rise in earnings for 2025, with a ROE of 9.4% [31][32][34] - **The Pennant Group**: Projects a 26.5% growth in revenues and a 21.3% increase in earnings for 2025, with a ROE of 9.9% [35][36][37]

Core Viewpoint - Addus HomeCare Corporation will participate in the Jefferies 2025 Healthcare Services Conference, indicating its engagement with industry stakeholders and potential for future growth [1] Company Participation - Dirk Allison, Chairman and CEO, and Brian Poff, Executive Vice President and CFO, will represent the company at the conference [1] - The event is scheduled for September 29 - 30, 2025, in Nashville, Tennessee [1] Presentation Details - There will be a live broadcast and replay of the company's presentation during the conference [1]

Group 1 - TimesSquare Capital Management's "U.S. Small Cap Growth Strategy" reported a gross return of 11.28% and a net return of 11.02% in Q2 2025, underperforming the Russell 2000 Growth Index which returned 11.97% [1] - The fund's performance was attributed to double-digit returns in equities driven by global economic activity [1] - The top five holdings of the fund were highlighted as key picks for 2025 [1] Group 2 - Addus HomeCare Corporation (NASDAQ:ADUS) provides personal care services and reported a one-month return of -2.37% and a 52-week loss of 13.64% [2] - As of September 11, 2025, Addus HomeCare's stock closed at $112.38 with a market capitalization of $2.069 billion [2] - In Q2 2025, Addus HomeCare reported total revenue of $349.4 million, marking a 21.8% increase compared to Q2 2024 [4] Group 3 - TimesSquare Capital expressed a preference for Health Care stocks that provide novel therapies or specialized services, noting Addus HomeCare's 16% rise due to solid Q1 results [3] - The personal care segment of Addus HomeCare is highlighted as a bright spot, benefiting from stable volumes and favorable rate increases [3] - Despite the potential of Addus HomeCare, the company is not among the 30 most popular stocks among hedge funds, with 16 hedge fund portfolios holding its stock at the end of Q2 2025, down from 24 in the previous quarter [4]

Core Viewpoint - Addus HomeCare Corporation (NASDAQ: ADUS) is perceived as a "show me" story, with its Q2 '25 numbers reinforcing this perspective [1] Financial Performance - The company's recent financial results indicate a need for further validation of its growth narrative [1] Investment Sentiment - The stock is under scrutiny, with investors looking for clear evidence of sustainable performance before committing [1]