Addus HomeCare (NasdaqGS:ADUS) Q4 2025 Earnings call February 24, 2026 09:00 AM ET Speaker13Note, this event is being recorded. I would now like to turn the conference over to Drew Anderson. Please go ahead.Speaker7Thank you. Good morning, and welcome to the Addus HomeCare Corporation fourth quarter and 2025 earnings conference call. Today's call is being recorded. To the extent any non-GAAP financial measure is discussed in today's call, you will also find a reconciliation of that measure to the most direc ...

Financial Data and Key Metrics Changes - Total revenue for Q4 2024 was $297.1 million, an increase of 7.5% compared to $276.4 million in Q4 2023 [20] - Adjusted earnings per share for Q4 2024 was $1.38, up 4.6% from $1.32 in Q4 2023 [20] - Adjusted EBITDA for Q4 2024 was $37.8 million, a 10.3% increase from $34.3 million in Q4 2023 [20] - For the full year 2024, total revenue was $1.2 billion, a 9.1% increase from $1.1 billion in 2023 [21] - Adjusted EBITDA for 2024 was $140.3 million, up 15.9% from $121 million in 2023 [21] Business Line Data and Key Metrics Changes - Personal care revenues for Q4 2024 were $216.9 million, accounting for 73.8% of total revenue [52] - Hospice care revenues were $59 million, representing 20.1% of total revenue [52] - Home health revenues were $17.8 million, making up 6.1% of total revenue [52] - Same store revenue growth for personal care was 5.8% in Q4 2024 compared to Q4 2023 [35] - Hospice same store revenue increased by 7.8% year-over-year [37] - Home health segment returned to positive growth with a 1.6% increase compared to Q4 2023 [39] Market Data and Key Metrics Changes - Illinois enacted a 5.5% rate increase for personal care services effective January 1, 2025, expected to contribute approximately $23 million in annualized revenue [34][47] - The company experienced solid caregiver hiring success, with personal care hiring at 76 hires per day, up from 74 hires per day in Q4 2023 [30] Company Strategy and Development Direction - The company is focused on expanding services related to home care, which is seen as valuable to both states and Congress [18] - The Gentiva acquisition is a significant part of the growth strategy, adding approximately $280 million in annualized revenues [50] - The company aims for a targeted minimum annual revenue growth of 10% despite the larger revenue base [40] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the potential impact of Medicaid program changes, believing that their services reduce overall costs to state Medicaid programs [16][19] - The company is well-positioned to handle potential changes in Medicaid funding due to its low-cost provider status [99] - Management anticipates continued growth in personal care services, aiming for a revenue increase of 3% to 5% in 2025 [72] Other Important Information - The company had cash on hand of approximately $100 million as of the end of 2024 [22] - A one-time write-off of approximately $4.9 million was taken in Q4 2024 related to excess corporate office space [29] - The company maintains a conservative leverage position at just under one times Adjusted EBITDA, allowing flexibility for strategic acquisitions [23] Q&A Session Summary Question: Average revenue per hour in Q4 and its impact - The average revenue per hour is expected to be slightly down due to the Gentiva deal and the lower reimbursement rate in Texas [67] Question: Organic volume growth in personal care - Organic volume growth in personal care was slightly up, with expectations to reach the higher end of the 3% to 5% growth range in 2025 [72][74] Question: Impact of work requirements on business - The majority of clients served are elderly and disabled, so work requirements would have negligible direct effects, potentially increasing caregiver availability [83] Question: Integration of Gentiva and its impact on cash flow - The integration of Gentiva is progressing smoothly, with no significant impact on cash flow conversion expected [119] Question: Expected margin decline from Q4 to Q1 - A 200 basis point margin decline is anticipated, primarily due to the mix shift from Gentiva and annual resets of payroll taxes [54][109]