Jared Haase • William Blair & Company

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CEO Seth Blackley described the Aetna agreement as an innovative, marquee partnership poised for multi-state expansion, with Florida being a logical starting point based on Aetna's membership and needs. CFO John Johnson added that the margin ramp is expected to follow the standard Performance Suite model, targeting a 10% margin within the first two years of the contract.

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EVP & CFO Doug Coltharp explained the benefits expense increase was driven by a higher frequency of large medical claims over $100,000, not specialty pharma. He projected that long-term free cash flow growth would be similar to the current trajectory, supported by EBITDA growth and tax benefits from bonus depreciation.

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CFO Douglas Coltharp explained that while high volume creates broad OpEx leverage, the most significant impact was on the SWB line, and he expects productivity metrics to normalize over the year. CEO Mark Tarr attributed sustained quality to a strong focus on staffing, training, and onboarding, emphasizing that growth is contingent on maintaining high-quality outcomes. CFO Douglas Coltharp added that the company has achieved its highest-ever Net Promoter and employee engagement scores.

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CEO Mark Tarr confirmed the program's success in improving retention, citing overall RN turnover down to 20.4% and therapist turnover at 7.7%, but did not have specific participation data on hand. CFO Douglas Coltharp acknowledged that the company tracks this data internally and would be prepared to answer with specifics in future calls.

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CEO Mark Tarr responded that growth is a combination of both strong organic demand from demographic tailwinds and market share gains. CFO Douglas Coltharp added that the total addressable market is underserved, with only 14% of eligible patients nationally going to an IRF. He noted that broad-based discharge growth across Medicare, MA, and managed care demonstrates a value proposition that resonates with all payers.

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President & COO Bradley Bickham stated that Addus is seeing no current impact from immigration policy, as only a small fraction of its workforce (~600 of 50,000) is on work-eligible visas. Regarding hospice, he suggested that a sustainable long-term organic growth rate is likely in the 5% to 7% range, moderating from the recent 10% which was boosted by post-COVID recovery and specific operational improvements.

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W. Bickham, President and COO, confirmed that the labor environment has improved industry-wide since the COVID era, particularly in personal care, though clinical hiring remains challenging in certain areas. He stated that MA plan churn did not materially impact home health volumes, noting their episodic vs. non-episodic mix has remained stable.

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CEO R. Allison agreed that the policy environment could indeed catalyze a shift to value-based models, which he views as a significant advantage for Addus given its experience in demonstrating cost savings. President and COO W. Bickham explained that the clinical labor challenge stems from a national shortage of nurses and wage competition from institutional settings, whereas the labor pool for personal care is more stable.

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CEO R. Allison expressed confidence in state support for personal care, noting that in most of their states, reimbursement rates are dictated by the state, not the managed care plan, insulating Addus from those pressures. President and COO Brad Bickham stated that hiring has been solid for over a year in personal care and improving on the clinical side, and he does not foresee any near-term factors that would materially impact these positive trends.

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CEO John Kao stated the investments impact both retention and growth by systematizing workflows to enable scale. He cited recent implementations of new EHR, HR, and claims adjudication platforms (integrated into AIVA) as foundational work that will yield future efficiencies in claims payment and care navigation. Regarding supplemental benefits, Kao confirmed that negative variances from the prior year have been corrected and utilization is now in line with expectations.

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CEO Chaim Indig responded that while AI is a powerful tool enhancing Phreesia's products, clients buy solutions to complex problems, not just 'AI'. He noted a 'flight to quality,' with providers returning to trusted partners like Phreesia after negative experiences with smaller, less stable competitors, and affirmed AI is driving significant value within the platform.

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Executive Balaji Gandhi clarified the comment was Phreesia-specific, comparing this year's visibility to last year's. He credited the company's product and Life Sciences teams for driving this improved outlook through product development and execution.

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CEO Jeff Tangney responded that Doximity continues to gain share due to a 'flight to quality' based on superior ROI, noting that some clients' experiments with programmatic channels were unsuccessful. He clarified that News Feed ad load has not increased; rather, monetization has expanded into new workflow channels like point-of-care, which has been critical for growth without impacting the core user experience. He highlighted the News Feed's 30% year-over-year growth in articles tapped as a key success metric.

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CEO Jeff Tangney highlighted that endocrinologists are heavy users of telehealth and noted the rapid growth of the Nurse Practitioner (NP) audience, supported by the new 'NP Navigator' tool. CFO Anna Bryson explained the H2 OpEx increase is driven by seasonally higher sales commissions, increased costs from purchasing weekly prescription data, and strategic hiring in commercial R&D and sales.

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CEO Christopher Reading attributed the IIP segment's strong performance to successful cross-selling, expansion into new industry verticals, and growing market awareness of injury prevention's value. For the large contract win, he highlighted the team's strong reputation in the auto industry, service quality, and established relationships as being more critical than pricing.

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CEO Matt Hawkins confirmed strong demand entering 2025, driven by providers' focus on efficiency and operating margins. He highlighted significant interest in solutions that prevent claim denials, such as Eligibility Verification and Prior Authorization, as well as the new generative AI-powered Denial and Appeal Management solution. He also noted the company started 2025 with a more robust pipeline than in 2024.

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CEO Robert Frist described Insights Plus as a significant upgrade built on modern technologies like Snowflake, offering faster performance and enhanced analytics to measure learning effectiveness. It is sold as a buy-up, generating incremental revenue. Regarding M&A, Frist cited improving macro conditions, including better price valuations for targets, and stated the company is now ready to integrate acquisitions after a period of focusing on its core platform. He expects initial deals to be small, supportive tuck-ins.

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