AMEDISYS INC (AMED)·Q1 2025 Earnings Summary

Executive Summary

• Net service revenue grew 4.1% year over year to $594.8M; GAAP diluted EPS rose to $1.84, driven by a $48.1M gain on an equity method investment; adjusted EPS increased to $1.25 and adjusted EBITDA to $68.8M .
• Segment mix: Home Health revenue $379.2M (+4.2% YoY), Hospice $206.2M (+2.6% YoY), High Acuity Care $9.4M (+47% YoY) .
• Amedisys did not host an earnings call due to the pending merger with UnitedHealth; supplemental slides were furnished; credit facility maturity extended to July 30, 2027, and liquidity remains strong with $284.9M cash and $508.0M revolver availability .
• Merger/regulatory developments: DOJ litigation remains pending; divestiture agreements signed with BrightSpring and The Pennant Group contingent on merger closing—key catalysts for stock narrative and regulatory path forward .

What Went Well and What Went Wrong

What Went Well

• Revenue and profitability improved: Adjusted EBITDA rose to $68.8M and adjusted EPS to $1.25 on rate increases and volume growth; GAAP EPS benefited from a $48.1M gain on Medalogix transaction .
• Hospice pricing tailwind: Net revenue per day increased to $179.48 (+3.7% YoY) aided by the FY2025 final rule (+2.9% industry impact effective 10/1/24), supporting segment operating income expansion to $49.0M .
• Liquidity and leverage: Cash $284.9M, available revolver $508.0M; net leverage ~0.3x per slides; credit facility maturity extended to 2027, reducing near-term refinancing risk .
  • “Based on our operating forecasts… we believe we will have sufficient liquidity to fund our operations, capital requirements and debt service requirements for the next twelve months and beyond.”

What Went Wrong

• Cost pressure: Home Health total cost per visit increased 2.9% YoY (to $119.99 in slides; $120.87 in 10‑Q table) on planned wage increases and health insurance costs; hospice cost per day up ~2% YoY, pressuring margins despite rate increases .
• Collections timing: DSO rose to 45.7 days vs 43.0 in Q4 2024, reflecting typical Q1 build and working capital timing; accounts receivable increased by $24M sequentially .
• Regulatory/legal overhang: DOJ litigation regarding the UnitedHealth merger continues; waiver sets break fee at $275–$325M and trial tentatively set for Oct 27, 2025 (or potentially Feb 9, 2026), sustaining headline risk and expense drag .

Financial Results

Segment revenue breakdown:

Selected KPIs:

Non-GAAP metrics reflect adjustments detailed in exhibits; reconciliations furnished in the 8‑K and press release .

Guidance Changes

Amedisys did not issue formal financial guidance due to the pending merger with UnitedHealth; rate updates are industry-wide and noted for context .

Earnings Call Themes & Trends

Amedisys did not conduct a Q1 2025 call; themes synthesized from Q3/Q4 releases, Q1 10‑Q, and supplemental slides.

Management Commentary

• “We expect our high acuity care segment to continue to generate operating losses; however, we also expect improvement as we leverage our operating structure.”
• “Based on our analysis of the final rule, we expect our impact to be in line with the 2.9% [hospice] increase” and the proposed FY2026 +2.4% increase; “we expect our impact to be in line with the 0.5% [home health] increase.”
• “Due to these conditions, events and other contingencies, there can be no assurance that the Merger will be successfully completed. During the periods prior to… [closing] we expect to incur significant additional merger-related expenses.”
• “As of March 31, 2025, we had $284.9 million in cash and cash equivalents and $508.0 million in availability under our $550.0 million Revolving Credit Facility.”

Q&A Highlights

• No earnings call or Q&A was held for Q1 2025 due to the pending merger; supplemental slides were furnished in lieu of a call .

Estimates Context

• S&P Global consensus estimates for Q1 2025 were unavailable via our data interface at the time of writing due to a ticker mapping issue (SpgiEstimatesError: Missing CIQ mapping for AMED). As a result, we cannot provide a quantitative comparison to Wall Street estimates for revenue, EPS, or EBITDA at this time. Values would normally be retrieved from S&P Global; unavailable here due to technical mapping constraints.

Key Takeaways for Investors

• Rate tailwinds: Hospice (+2.9% FY2025) and Home Health (+0.5% CY2025) pricing support revenue per day/episode; cost discipline is critical to translate rate gains into margin given wage and health insurance pressures .
• Quality liquidity and extended maturities reduce near-term balance sheet risk, affording flexibility through merger litigation timelines and working capital seasonality .
• High Acuity Care remains an investment area; scaling is evident (admissions +31% YoY), but operating losses persist—monitor utilization curve and unit economics quarterly for inflection .
• The $48.1M Medalogix transaction gain is a one-time benefit to GAAP EPS; focus on adjusted metrics (EBITDA, EPS) for sustainable performance trends .
• Regulatory/legal path: DOJ action, waiver terms (break fee), and contingent divestitures (BrightSpring, Pennant) are the primary stock catalysts; any milestones (trial scheduling changes, settlement/divestiture approvals) could drive sentiment and spread to deal value .
• Operational priorities: Address cost inflation (staffing, insurance), maintain collections efficiency (DSO), and optimize payor mix (non‑Medicare growth vs Medicare decline in Home Health) to preserve margins .
• Near-term trading: Expect headlines around merger litigation and divestiture progress to dominate; fundamentals are stable with modest rate-led growth, but adjusted margin trajectory and HAC losses warrant close watch .