Addus HomeCare FY Conference Summary Company Overview - **Company**: Addus HomeCare (NasdaqGS:ADUS) - **Industry**: Home-based care and support services, focusing on personal care, hospice, and home health Key Points and Arguments Operational Opportunities and Priorities - **Caregiver App**: High utilization rates observed in Illinois, with plans to roll out in New Mexico and Texas, aiming to increase service utilization percentage [3][4] - **Census Growth**: Illinois has seen an increase in admissions while discharges decrease, setting up for growth in 2026 [4][6] - **Integration of Services**: Long-term strategy to connect personal care services (PCS) with skilled home health and hospice for seamless care [5] Financial Metrics and Growth Projections - **Revenue Growth**: Targeting 3%-5% revenue growth, split evenly between volume and rate [6] - **Census Metrics**: Consistent growth in census expected, with New Mexico showing over 3% growth post-redetermination [9][10] - **Fill Rate**: Current fill rate at approximately 83%-83.5%, with a goal to reach mid-80s [12][16] Reimbursement Environment - **Medicaid Landscape**: Ongoing uncertainty in Medicaid reimbursement, particularly in New Mexico and Pennsylvania, with expectations for potential rate updates in early 2026 [19][20] - **Advocacy for Rate Increases**: Emphasis on the importance of reimbursement increases to support caregiver wages and attract more caregivers [21][30] Market Dynamics and Competitive Positioning - **Low-Cost Provider Advantage**: Addus positions itself as a low-cost provider, emphasizing the cost savings of home care versus skilled nursing facilities [24] - **Minimum Wage Increases**: Minimal impact from recent minimum wage increases in certain states, with Illinois rates outpacing CPI increases [26] M&A Strategy and Market Position - **M&A Focus**: Targeting $100 million in annualized revenue through M&A, with a preference for blended asset acquisitions [46][48] - **De Novo Opportunities**: Open to de novo expansions but historically focused on acquisitions due to quicker profitability [43] Clinical and Hospice Business Performance - **Hospice Growth**: Year-to-date organic growth in hospice is in the low teens, outperforming the targeted 5%-7% growth [35] - **Bridge Program Success**: A quarter of hospice referrals are coming from the Bridge program, which connects home health to hospice [37] Future Outlook and Challenges - **2026 Projections**: Anticipation of continued growth in personal care and hospice, with a focus on maintaining margins and managing costs [39][55] - **Technological Integration**: Plans to leverage technology and AI for operational efficiency and cost management [65] Conclusion - Addus HomeCare is strategically positioned to capitalize on growth opportunities in the home care sector, with a focus on operational efficiency, caregiver support, and integration of services. The company is navigating a complex reimbursement landscape while maintaining a commitment to growth through both organic and acquisition strategies.

Financial Data and Key Metrics Changes - In Q3 2025, the company's revenue grew by 32% year-over-year, with a platform annual revenue run rate of $439 million [9][32] - The number of customers on the platform increased to 713, representing an 11% year-over-year growth [9][34] - Adjusted gross margin improved to 39.6% compared to 39.2% in Q3 2024 [39] Business Line Data and Key Metrics Changes - Revenue from government customers increased by $26.5 million, or 34% year-over-year [9] - Revenue from U.S. customers rose by $23.1 million, or 42% year-over-year [10] - The student transportation vertical saw more than two times growth in the number of customers subscribing to solutions [26] Market Data and Key Metrics Changes - The serviceable addressable market in North America and Western Europe is estimated at $82 billion, with the company capturing less than 1% of this market [11] - The company has identified approximately 63,000 potential customers in North America and Europe [11] Company Strategy and Development Direction - The company aims to broaden its platform, deepen its vertical stack, and innovate its go-to-market strategy to capture more market share [25] - A new strategic partnership with Waymo aims to advance the use of autonomous vehicles in public transit [30] - The company is focused on expanding its product capabilities and features, particularly in the student transportation vertical [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to maintain strong performance while transforming the public transit market [44] - The company is well-positioned to capitalize on the digital transformation and AI opportunities in public transit [45] - Management noted that bipartisan political support for public transit funding continues to grow, with an average increase of 4% per year since 2012 [12] Other Important Information - The company has invested over $500 million in R&D, with R&D expenses representing 19.1% of revenue as of Q3 2025 [38] - The company has established a playbook for executing M&A, with successful acquisitions like Remix and Citymapper [39] Q&A Session Summary Question: How would you characterize both the catalyst and barriers in converting more customer opportunities? - Management noted that the primary barrier is the customer's aversion to risk and reluctance to change, but these barriers are starting to come down [49][50] Question: How do you balance growth and investment? - Management focuses on investing in areas with growth potential, particularly in new products and core geographies [52] Question: What was notable about the 24 net new customer additions this quarter? - The growth was driven by strong demand in North America and traction around new products, including the schools product [54] Question: How has the IPO affected customer awareness and interest? - Management observed a positive change in customer reception post-IPO, which is helping to develop the pipeline [62] Question: How does referenceability influence future revenue growth? - Referenceability is key, as existing customers' success stories help in convincing new customers to adopt the platform [70] Question: What is the outlook for the Waymo partnership and autonomous vehicles? - Management sees significant opportunities in autonomous vehicles, particularly in Europe, where government initiatives are pushing for their adoption [74]

Financial Data and Key Metrics Changes - In Q3 2025, the company's revenue grew by 32% year over year, with a platform annual revenue run rate of $439 million [9][29] - The number of customers on the platform increased to 713, representing an 11% year-over-year growth [9][31] - Adjusted gross margin improved to 39.6%, compared to 39.2% in Q3 2024 [36] Business Line Data and Key Metrics Changes - Revenue from government customers increased by $26.5 million, or 34% year over year [9] - Revenue from U.S. customers rose by $23.1 million, or 42% year over year [10] - The student transportation vertical saw more than two times growth in the number of customers subscribing to solutions [24] Market Data and Key Metrics Changes - The serviceable addressable market in North America and Western Europe is estimated at $82 billion, with the company capturing less than 1% of this market [11] - The company has identified approximately 63,000 potential customers in North America and Europe, with 713 currently on the platform [11] Company Strategy and Development Direction - The company aims to broaden its platform, deepen its vertical stack, and innovate its go-to-market strategy to capture more market share [23] - A new strategic partnership with Waymo aims to advance the use of autonomous vehicles in public transit [27] - The company is focused on expanding its product capabilities and features, particularly in the schools vertical [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining strong performance as the company continues to transform the public transit market [40] - The company has not seen any impact from the federal government shutdown, and funding for public transit is expected to continue growing [13][94] - Management highlighted the importance of referenceability and customer success stories in driving new customer acquisitions [66] Other Important Information - The company has invested over $500 million in R&D, with R&D expenses representing 19.1% of revenue as of Q3 2025 [35] - The company is committed to achieving an adjusted gross margin of 50% in the medium to long term [36] Q&A Session Summary Question: How would you characterize both the catalyst and barriers in converting more of the 63,000 customer opportunities? - Management noted that the primary barrier is the customer's aversion to risk and reluctance to change, but these barriers are starting to come down [45][46] Question: How do you balance growth and investment? - Management emphasized focusing investment on areas with growth potential, particularly in new products and core geographies [49] Question: What was notable about the 24 net new customer additions this quarter? - Management indicated strong demand in North America and traction around new products, including the schools product [51] Question: How much of the sequential customer adds are tied to increasing referenceability? - Management highlighted that referenceability is key, as proof points from existing customers significantly influence new customer decisions [67] Question: What is the impact of COVID-era funding expiring on transit funding priorities? - Management stated that while some funding is expiring, overall transit funding is expected to continue growing, and the company is well-positioned to help customers become more efficient [94]