Addus HomeCare (ADUS)·Q4 2025 Earnings Summary

Addus HomeCare Beats Q4 as Personal Care Drives 26% Revenue Surge

February 24, 2026 · by Fintool AI Agent

Addus HomeCare (NASDAQ: ADUS) reported Q4 2025 results this morning with revenue of $373.1 million (up 25.6% YoY) and adjusted EPS of $1.77 (up 28.3% YoY), beating consensus estimates on earnings while meeting revenue expectations . The home care services provider achieved a record $1.42 billion in annual revenue, driven by strong demand in personal care and hospice segments .

Did Addus HomeCare Beat Earnings?

Addus delivered a solid quarter that met or exceeded expectations across key metrics:

The company has now beaten or met EPS estimates for 9 consecutive quarters, demonstrating consistent operational execution .

How Did the Stock React?

ADUS shares rose +2.4% on Feb 23 following the earnings release, then gave back gains on the earnings call day (Feb 24), falling -1.0% to close at $106.16. Volume was elevated at 189K shares on the call day. The stock is trading near its 52-week range of $88.96–$124.44.

What Drove Addus HomeCare's Growth?

Segment Performance

Personal Care remains the dominant growth engine, with all three segments contributing to the quarterly results:

Personal Care (76.5% of revenue): Same-store revenue growth of 6.3% with hours up 2.4% YoY . Hiring remained strong at 101 hires per business day in Q4, rebounding to 107/day in early January before winter storms . The segment benefited from the Del Cielo acquisition (October 2025), the Texas rate increase (September 2025), and the Illinois rate increase effective January 1, 2026 adding ~$17.5M in annualized revenue .

Hospice (18.9% of revenue): The standout performer with 16% same-store revenue growth . Average daily census increased to 3,885 (+11.9% YoY) with median length of stay improving to 25 days (vs 22 days in Q3) . Over 25% of hospice admissions in New Mexico and Tennessee now come from Addus's overlapping home health operations .

Home Health (4.6% of revenue): Same-store revenue declined 7.5% , though management noted admissions ticked up in Q4 and hired a new market president to lead the turnaround . Goal is to return to growth in H2 2026 .

Key Rate Increases

Management highlighted favorable state reimbursement trends:

• Texas: 9.9% rate increase effective September 1, 2025 — now ADUS's second-largest personal care market
• Illinois: 3.9% increase effective January 1, 2026 — ADUS's largest personal care market, adding ~$17.5M annualized revenue at low-20% margins
• New Mexico: 4-5% rate increase passed legislature, awaiting governor signature, expected in H2 2026

80/20 Rule Update

Management expressed strong confidence the 80/20 provision of the Medicaid Access Rule will be repealed:

"We believe this outcome would be a significant and encouraging development for the industry and our company... From what we're hearing, it should be, that rule should change, and we're hoping will change in the near future." — CEO Dirk Allison

What Changed From Last Quarter?

Gross margin improved sequentially as rate increases flowed through, particularly the Texas rate increase that became effective in September . Cash flow from operations normalized after a strong Q3, but full-year operating cash flow of $111.5M was robust .

Q1 2026 Outlook: Management expects gross margin to decline ~120 bps sequentially due to annual merit increases and payroll tax resets . Illinois rate increase benefit will be offset by 2 fewer business days and winter storm impacts in certain markets .

What Did Management Say?

CEO Dirk Allison on the results:

"Our fourth quarter results marked a strong finish to another year of growth and progress for Addus. Our results for the year reflect the continuing execution of our strategy, which allows us to both deliver consistent organic growth and realize the benefit of our recent acquisitions."

On fraud/abuse focus as competitive advantage:

"We like the fact that there is a focus on fraud and abuse because we believe we spend extra dollars and extra time and make sure we're trying to comply... as states look at fraud and abuse, it may give us the opportunity to grow our business some, as maybe some of the smaller mom-and-pops realize that there are things they need to do that maybe they can't afford to do."

CFO Brian Poff on M&A pipeline:

"There are some potential larger personal care assets that we think will be coming to market... our estimate is those are probably mid-year toward the back half of the year. We'll still continue to be focused on the type of deals that we did in 2025."

Q&A Highlights

On hiring trends (Heather Dixon, President & COO): Hiring remained stable at 101/day in Q4 with typical holiday seasonality, rebounding to 107/day in early January before winter storms slowed activity. February has seen strong hiring trends .

On Addus Connect app: The caregiver app has driven service percentage rates to the upper-80% range in Illinois. Rollout to Texas is targeted for completion by Q2/early Q3 2026, where management sees the "greatest opportunity" due to market dynamics .

On value-based care: Addus has shown "fairly compelling results" leading with personal care to mitigate costs for high-risk patients, with mature data in New Mexico and expanding programs in Illinois and Tennessee .

On home health turnaround: Addus hired a new market president to lead home health, alongside new sales leadership. Management expects to see growth "towards the second half of 2026" .

On Medicaid work requirements: Management views potential work requirements as an opportunity for hiring, as people seeking flexible or part-time work can find it with Addus .

Cash and Balance Sheet

Addus significantly reduced debt during 2025, paying down roughly $94M in bank debt while maintaining strong liquidity with over $517M available under its revolving credit facility .

Full Year 2025 Summary

Key Operating Metrics

Looking Ahead

Key catalysts and themes to watch in 2026:

Margin outlook: Q1 2026 gross margin expected to decline ~120 bps sequentially from merit increases and payroll tax resets — a normal seasonal pattern .

Balance sheet: Net leverage under 1x EBITDA with $517.7M credit facility availability provides significant firepower for acquisitions .

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Data sourced from Addus HomeCare Q4 2025 earnings call transcript, 8-K filing, and S&P Global.