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AMEDISYS INC (AMED)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered solid top-line and non-GAAP earnings growth: net service revenue $621.9M (+5.2% YoY), adjusted EBITDA $80.8M (+10.4% YoY), and adjusted diluted EPS $1.54 vs $1.32 YoY .
  • GAAP diluted EPS was $0.84, down from $0.98 YoY, driven primarily by $26.3M of merger-related expenses; consolidated gross margin compressed 70 bps to 44.3% .
  • Segment performance was balanced: Home Health revenue $396.2M (+5% YoY) with pre-corporate EBITDA margin down 80 bps on wage inflation/mix; Hospice revenue $215.0M (+5% YoY) with margin up 100 bps supported by 2025 rate increase; High Acuity Care revenue $10.7M (+9% YoY) .
  • Cash generation and liquidity strengthened: CFFO $67.2M, DSO improved to 40.9 days, net leverage ~0.1x, total liquidity ~$845.3M .
  • No earnings call was held due to the pending UnitedHealth merger; industry backdrop includes finalized 2025 rate increases and a proposed 2026 Home Health rule with a -6.4% decrease—key stock catalysts remain merger/regulatory milestones .

What Went Well and What Went Wrong

What Went Well

  • Adjusted earnings strength: adjusted EBITDA rose to $80.8M (+$7.6M YoY) and adjusted diluted EPS to $1.54 (vs $1.32), reflecting operational improvement and favorable reimbursement .
  • Hospice margin expansion: “EBITDA margin up 100 basis points primarily due to the 2025 rate increase (effective 10/1/2024) partially offset by raises,” with net revenue per day up 4.1% to $179.96 .
  • Working capital and leverage: DSO improved to 40.9 (vs 52.1 prior year) and net leverage ~0.1x; revolver availability $508.0M, total liquidity ~$845.3M .

What Went Wrong

  • GAAP profitability compressed: diluted EPS fell to $0.84 (from $0.98) on $26.3M merger-related expenses; consolidated gross margin slipped to 44.3% (from 45.0%) .
  • Home Health margin headwinds: “EBITDA margin decreased 80 basis points driven by wage increases and shift in admissions mix;” total cost per visit rose 2.3% YoY to $119.82 .
  • Rising cost base in Hospice: cost per day up 2.9% YoY to $90.74, partially offsetting rate gains; absence of quarterly call limited external guidance/clarifications .

Financial Results

Consolidated sequential trends (oldest → newest)

MetricQ4 2024Q1 2025Q2 2025
Net Service Revenue ($USD Millions)$598.1 $594.8 $621.9
Gross Margin %42.7% 44.2% 44.3%
Operating Income ($USD Millions)$(19.6) $43.4 $45.6
Diluted EPS (GAAP) ($)$(0.62) $1.84 $0.84
Adjusted EBITDA ($USD Millions)$54.6 $68.8 $80.8
Adjusted EBITDA Margin %9.1% 11.6% 13.0%
Adjusted Diluted EPS ($)$0.96 $1.25 $1.54

Year-over-year comparison

MetricQ2 2024Q2 2025
Net Service Revenue ($USD Millions)$591.2 $621.9
Gross Margin %45.0% 44.3%
Operating Income ($USD Millions)$52.2 $45.6
Diluted EPS (GAAP) ($)$0.98 $0.84
Adjusted EBITDA ($USD Millions)$73.2 $80.8
Adjusted Diluted EPS ($)$1.32 $1.54

Segment breakdown

Segment ($USD Millions)Q2 2024Q1 2025Q2 2025
Home Health Revenue$377.4 $379.2 $396.2
Home Health Gross Margin %43.1% 42.3% 41.9%
Home Health Pre-Corp EBITDA$70.7 $66.1 $70.9
Hospice Revenue$204.0 $206.2 $215.0
Hospice Gross Margin %49.0% 48.7% 49.6%
Hospice Pre-Corp EBITDA$51.9 $51.3 $56.8
High Acuity Care Revenue$9.8 $9.4 $10.7

KPIs

KPIQ4 2024Q1 2025Q2 2025
DSO (days)43.0 45.7 40.9
Cash From Operations ($USD Millions)$70.3 $(3.7) $67.2
Net Leverage (x)~0.3x ~0.3x ~0.1x
Revolver Availability ($USD Millions)$511.2 $508.0 $508.0
Total Liquidity ($USD Millions)$814.4 $792.9 $845.3
Hospice Revenue/Day (net, $)$179.02 $179.48 $179.96
Hospice Cost/Day ($)$93.82 $92.14 $90.74
Home Health CPV ($)$124.06 $119.99 $119.82
Medicare Rev/Episode (Home Health, $)$3,030 $3,008 $3,058
Hospice ADC (units)12,925 12,759 13,132

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Company financial guidanceQ2 2025N/ANo quarterly call and no formal guidance provided due to pending mergerMaintained “no guidance” stance
Home Health reimbursement (industry)CY 2025 FinalN/A+0.5% increase effective 1/1/2025N/A
Hospice reimbursement (industry)FY 2025 FinalN/A+2.9% increase effective 10/1/2024N/A
Home Health reimbursement (industry)CY 2026 ProposedN/A-6.4% decrease proposed effective 1/1/2026Potential headwind if finalized
Hospice reimbursement (industry)FY 2026 ProposedN/A+2.4% increase proposed effective 10/1/2025Potential tailwind if finalized

Earnings Call Themes & Trends

Note: No Q2 2025 earnings call was held; themes from supplemental materials and prior quarters are tracked.

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Labor costs/wage inflationHome Health CPV up; margin pressure from wage inflation ; CPV continued elevated in Q1 Home Health margin down 80 bps; CPV +2.3% YoY Persistent cost pressure; gradual operational mitigation
Reimbursement backdropFinal 2025 rates and strong Hospice performance ; 2025 rate tailwind in Q1 Hospice margin +100 bps on 2025 rate; 2026 proposals mixed (-6.4% HH; +2.4% Hospice) Near-term tailwind; medium-term mixed risk
Working capital/DSODSO 43.0 days in Q4 ; increased to 45.7 in Q1 DSO improved to 40.9 days; strong AR collections Improving trajectory
Quality scoresMaintained 4-star average; high % of providers at 4+ stars 4-star average; 89% providers at 4+ stars; hospice quality trending up Sustained high quality
High Acuity Care (HAC)Admissions growth and operational focus Admissions +29% YoY in Q4 context; 2Q HAC revenue $10.7M Incremental progress; still small revenue mix
Merger/regulatoryPending UnitedHealth merger highlighted; DOJ action risk referenced No call; ongoing merger process and litigation/regulatory risks reiterated Overhang persists

Management Commentary

  • “Adjusted EBITDA of $80.8 million compared to $73.2 million in 2024” and “Adjusted net income per diluted share of $1.54 compared to $1.32 in 2024” (press release) .
  • “In light of the pending merger… Amedisys will not conduct a quarterly earnings call to discuss the second quarter results.” .
  • Home Health: “EBITDA margin decreased 80 basis points driven by wage increases and shift in admissions mix,” with Medicare revenue per episode up 0.7% primarily due to the 0.5% rate increase effective 1/1/2025 .
  • Hospice: “EBITDA margin up 100 basis points primarily due to the 2025 rate increase (effective 10/1/2024) partially offset by raises;” revenue per day +4.1% .
  • Corporate cost discipline: “Year over year total G&A as a percentage of revenue decreased 150 basis points… Total G&A remained flat sequentially” .

Q&A Highlights

  • No Q&A session; the company did not hold a quarterly call due to the pending merger with UnitedHealth Group .

Estimates Context

  • Wall Street consensus (S&P Global) for Q2 2025 EPS and revenue was unavailable due to a mapping issue; consequently, no beat/miss comparison versus consensus can be provided. Values would normally be retrieved from S&P Global; however, consensus data was unavailable.

Key Takeaways for Investors

  • Non-GAAP outperformance: Adjusted EBITDA margin expanded to 13.0% and adjusted EPS rose to $1.54, supported by reimbursement tailwinds and operational execution .
  • GAAP earnings impeded by merger costs: $26.3M in merger-related expenses reduced GAAP EPS to $0.84 and trimmed operating income vs prior year .
  • Home Health margin vigilance: Wage inflation and mix continue to pressure margins; cost per visit remains elevated, requiring continued productivity and staffing optimization .
  • Hospice steady strength: Rate increase drove margin gains and revenue/day expansion; cost/day increases remain manageable relative to pricing .
  • Working capital improvement: DSO fell to 40.9 days and CFFO hit $67.2M, reducing net leverage to ~0.1x and lifting liquidity to ~$845M—supportive for near-term resilience .
  • Regulatory watch: Proposed 2026 Home Health rule (-6.4%) introduces medium-term headwind risk, while proposed Hospice (+2.4%) is supportive; monitor final rulings and effective dates for trajectory impact .
  • Merger overhang as catalyst: Absence of a call places focus on merger approvals/DOJ litigation and timing; stock reaction will be sensitive to regulatory outcomes and deal closure prospects .