Addus HomeCare (NasdaqGS:ADUS) FY Conference November 18, 2025 10:00 AM ET Company ParticipantsDirk Allison - Chairman and CEOBrian Poff - EVP and CFOHeather Dixon - President and COOConference Call ParticipantsRaj Kumar - Healthcare Services AnalystRaj KumarAll right, we're here at the top of the hour. Welcome, everyone, to day one of the Stephens 2025 Annual Investment Conference. We're live and in person here in Nashville. I'm Raj Kumar, Healthcare Services Analyst with Stephens. To initiate our conferen ...

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]