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Addus HomeCare Corp (ADUS)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered strong profitability with adjusted EPS of $1.42, a clear beat vs S&P Global consensus $1.33, while revenue of $337.7M was a modest miss vs $339.9M; adjusted EBITDA rose 25% to $40.6M and margin was 12% .*
  • Growth was led by Personal Care (76.5% of revenue) with 7.4% organic revenue growth; Hospice improved with 9.9% organic growth and revenue per patient day up to $194.23; Home Health showed 1.3% organic growth .
  • Management reiterated full-year adjusted EBITDA margin “above 12%” and mid-20% tax rate; Q2–Q4 margin cadence expected to follow historical seasonality (Q2 step-up 40–50 bps, Q4 step-up with hospice rate), implying continued margin expansion through year-end .
  • Near-term catalysts: Gentiva PCS integration outperformance on bottom line, state rate support (confirmed post-quarter by Illinois and Texas FY26 budgets), and ongoing acquisition pipeline; watch Texas rate implementation timing and additional synergies realization .

What Went Well and What Went Wrong

What Went Well

  • Personal Care organic growth of 7.4% on improving volume and rate support (Illinois +5.5% Jan 1), with strong caregiver hiring (79 per day) and enhanced scheduling tools raising service fill rates. “We benefited from higher volumes as well as additional rate support, including a 5.5% increase…for Illinois” .
  • Hospice momentum: ADC +4.6% y/y, patient days and revenue per day higher; leadership changes stabilizing execution. “We achieved 9.9% organic revenue growth…higher average daily census, patient days and revenue per patient day” .
  • Adjusted EBITDA margin held 12% despite mix shift and seasonal headwinds; management expects >12% for 2025, with normal seasonal cadence improvements through Q2/Q4 .

What Went Wrong

  • Top-line fell slightly short of consensus as revenue per billable hour in personal care decreased sequentially ($25.32 vs $26.40 in Q4 and $27.66 in Q3), reflecting mix effects and January weather events before rebound .*
  • Home Health volumes/visits remain below prior quarters (94,593 vs 99,803 in Q4 and 104,730 in Q3) while leadership gaps in one market constrain improvement, though mix vs MA/FFS stabilized .
  • Illinois DSOs lengthened to 47.6 days on payment timing (vs 40 days in Q4), requiring monitoring of cash conversion; though collections improved early Q2 .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$289.8 $297.1 $337.7
GAAP Diluted EPS ($)$1.10 $1.07 $1.16
Adjusted EPS ($)$1.30 $1.38 $1.42
Gross Margin (%)31.8% 34.2% 31.9%
Operating Income ($USD Millions)$26.0 $26.9 $30.5
Net Income ($USD Millions)$20.2 $19.5 $21.2
Adjusted EBITDA ($USD Millions)$34.3 $37.8 $40.6
Adjusted EBITDA Margin (%)——12.0%

Segment revenue breakdown:

Segment Revenue ($USD Millions)Q3 2024Q4 2024Q1 2025
Personal Care$215.4 $220.3 $258.3
Hospice$57.3 $59.0 $61.4
Home Health$17.0 $17.8 $18.0
Total Revenue$289.8 $297.1 $337.7

KPIs:

KPIQ3 2024Q4 2024Q1 2025
Personal Care Billable Hours (000s)7,776 8,210 10,201
Personal Care Revenue per Billable Hour ($)$27.66 $26.40 $25.32
Hospice Average Daily Census (ADC)3,534 3,472 3,515
Hospice Revenue per Patient Day ($)$176.25 $185.95 $194.23
Home Health Visits104,730 99,803 94,593
Organic Revenue Growth (%) – Personal Care6.8% 5.8% 7.4%
Organic Revenue Growth (%) – Hospice3.5% 7.8% 9.9%
Organic Revenue Growth (%) – Home Health(1.7%) 1.6% 1.3%

Consensus vs Actuals (S&P Global):

MetricQ3 2024 EstimateQ3 2024 ActualSurpriseQ4 2024 EstimateQ4 2024 ActualSurpriseQ1 2025 EstimateQ1 2025 ActualSurprise
EPS ($, Primary)1.28338*1.30+0.01662*1.35883*1.38+0.02117*1.33281*1.42+0.08719*
Revenue ($USD Millions)289.47*289.79+0.32*291.04*297.14+6.10*339.92*337.71-2.21*

Values with asterisk retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDA Margin (%)FY 2025Not provided“Remain above 12%” Raised clarity (explicit threshold)
Margin Seasonality Pattern2025Historical patternQ2 +40–50 bps; Q3 level; Q4 step-up (hospice rate Oct 1) Maintained
Effective Tax RateCalendar 2025Not providedMid-20% range New
Hospice Revenue Growth Run-RateFY 2025Not provided5–7%, likely upper end New
Personal Care Same-Store Hours GrowthFY 2025~2% target2–2.5% expected Narrowed higher end
DSOs / Cash ConversionFY 2025Not providedConsistent conversion; IL DSOs higher short-term with payments received early Q2 Clarified

Note: Company does not issue formal revenue/EPS guidance; items above reflect management outlook/tone.

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024 & Q4 2024)Current Period (Q1 2025)Trend
Personal Care organic growth & laborQ3: 6.8% organic growth; favorable hiring . Q4: 5.8% organic; continued demand .7.4% organic; 79 hires/day; improved fill rates via scheduling tools/app .Improving growth, better utilization
Hospice performance & capQ3/Q4: steady improvement in ADC and revenue/day .9.9% organic growth; ADC +4.6%; cap immaterial; mix managed by new sales leadership .Momentum, operational discipline
Home Health & MA ratesQ3: small segment, mixed trends . Q4: stabilized .Mix stable; MA per-visit discount improved to ~15–20% vs FFS (from ~40%) .Improving payer rates
Technology initiativesLimited prior detail in PRs.Caregiver app adoption in IL and rolling to NM; HCHB PCS in pilot, enterprise rollout late 2025/early 2026 .Scaling digital tools
Medicaid & state rate environmentOngoing rate support in IL/NM .Illinois +5.5% Jan 1; watching Texas session; post-quarter budgets approved IL/TX increases for FY26 .Constructive reimbursement backdrop
M&A strategyGentiva PCS announced and closed; target density, clinical adds .Gentiva bottom-line ahead of plan; pipeline of tuck-ins; disciplined on valuations .Integration strong; selective pipeline

Management Commentary

  • “Revenue for the first quarter of 2025 was up 20.3% and adjusted EBITDA increased 25.1%…These results reflect solid organic growth and include the first full quarter of the personal care operations of Gentiva” — Dirk Allison, CEO .
  • “Our personal care services segment was the key driver…7.4% organic revenue growth…rate support included a statewide reimbursement increase in Illinois” — Brian Poff, CFO .
  • “Adjusted EBITDA margin was 12%…we continue to expect our adjusted EBITDA margin percentage for the full year to remain above 12%” — Brian Poff, CFO .
  • “We really haven’t seen…material hospice cap issues…managing cap pretty well” — Brad Bickham, President/COO .
  • “Caregiver application…good adoption…visibility to underserving clients…adjust schedules through the application” — Brad Bickham .

Q&A Highlights

  • Hospice cap cushions immaterial; improved sales leadership and balanced referral mix mitigate risks .
  • Margin cadence: Q2 expansion of 40–50 bps, Q3 level, Q4 step-up with hospice rate; full-year adjusted EBITDA margin above 12% .
  • Medicaid/ACA: expansion rollback seen as minimal direct impact given elderly/disabled core Medicaid clientele; Addus positioned as low-cost provider for states seeking efficiency .
  • MA rates: per-visit discounts narrowed to ~15–20% vs FFS from ~40%; mix stable (episodic vs non-episodic ~55/45) .
  • Technology & operations: caregiver app scaling; HCHB PCS in pilot phase; operational tools improving fill rates and rescheduling under weather disruptions .

Estimates Context

  • Q1 2025: EPS beat (+$0.087) on adjusted EPS $1.42 vs $1.33 consensus; revenue slight miss (-$2.21M) vs $339.9M consensus; prior two quarters (Q3 and Q4) saw both revenue and EPS beats [GetEstimates].*
  • Implications: Expect upward bias to EPS models given margin resilience and hospice strength; revenue estimates may reflect cautious PCS rates/mix; watch state rate implementations (Texas, Illinois) for H2 trajectory .

Values with asterisk retrieved from S&P Global.

Key Takeaways for Investors

  • Margin story intact: management reiterated >12% adjusted EBITDA margin for FY25 with typical seasonal step-ups; this underpins EPS resilience even with PCS mix shifts .
  • Personal Care volume/utilization improving; technology-enabled scheduling and hiring gains support sustained 2–2.5% hour growth and mid-single-digit organic revenue growth .
  • Hospice acceleration continues: ADC and revenue/day trending up; 5–7% growth outlook at upper end should support Q4 margin step-up with rate increase .
  • Revenue/EPS vs Street: Q1 EPS beat and slight revenue miss; expect models to lift EPS while monitoring PCS revenue per hour/mix dynamics .*
  • Gentiva integration a positive: bottom line ahead of expectations; Texas market recovering post-redetermination—watch synergy realization and tuck-in acquisitions in TX/NM/MI .
  • Cash and liquidity strong; ongoing debt reduction and ample revolver capacity (availability $421.9M) supports M&A optionality without pressuring leverage .
  • Policy tailwinds: post-quarter budgets approved rate increases in IL (effective 1/1/26) and TX (effective 9/1/25), reinforcing medium-term revenue visibility and potential margin support in key markets .
Note: Company documents (press releases and 8-K exhibits) underpin all operational and financial figures; estimate comparisons use S&P Global consensus data.

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