Executive Summary

Q2 2026 results and 8‑K/earnings call are not yet available; this recap anchors on Aveanna’s recent trajectory (Q2–Q3 2025) and Wall Street consensus for Q2 2026 from S&P Global estimates.*
Momentum strengthened through 2025: revenue up 16.8% YoY in Q2 ($589.6M) and 22.2% YoY in Q3 ($621.9M); adjusted EBITDA rose 93.6% in Q2 ($88.4M; 15.0% margin) and 67.5% in Q3 ($80.1M; 12.9% margin) .
Management raised FY25 guidance twice: revenue “> $2.3B” and adj. EBITDA “> $270M” in Q2, then revenue “> $2.375B” and adj. EBITDA “> $300M” in Q3, signaling sustained execution ahead of 2026 .
Strategic drivers: preferred payer mix expansion, Medicaid rate integrity, and Thrive Skilled Pediatric Care integration bolstered PDS and HHH segments; CEO/CFO emphasize ongoing wage pass‑through and efficiency benefits .

What Went Well and What Went Wrong

What Went Well

Preferred payer strategy scaling: PDS preferred payer agreements grew to 25; HHH episodic mix reached 74.5% with admissions +4.3% YoY in Q2 and continued strength in Q3 .
Pricing/rate wins and value‑based payments: roughly $9M timing‑related items (rate enhancements, reserves, annual value‑based payments) favorably impacted Q2 revenue/EBITDA; management expects normalization as wage pass‑through continues .
Integration progress: Thrive Skilled Pediatric Care accretive and on‑track; expanding PDS footprint into Kansas and New Mexico .

What Went Wrong

Home health regulatory overhang: management strongly opposed the proposed CY2026 CMS home health cut (~6.4%); risk to sector sentiment even if AVAH’s mix mitigates direct impact .
Margin normalization expected: MS gross margins “a little hot” at 45.6% in Q2; management guides normalization to 42–44% range in H2 as modernization progresses .
Labor cost/availability remain a headwind: wage pressures persist; Aveanna is methodically passing through targeted wage increases to align capacity with preferred payers .

Financial Results

Metric	Q2 2025	Q3 2025	Q4 2025 (Consensus)	Q1 2026 (Consensus)	Q2 2026 (Consensus)
Revenue ($USD Millions)	$589.6	$621.9	$622.0*	$612.0*	$631.4*
Diluted EPS ($USD)	$0.13	$0.06	$0.125*	$0.134*	$0.153*
Adjusted EPS ($USD)	$0.18	$0.15	—	—	—
Gross Margin %	35.8%	32.6%	—	—	—
Adjusted EBITDA Margin %	15.0%	12.9%	—	—	—
Operating Income % of Revenue	13.6%	8.6%	—	—	—
Values with asterisk (*) retrieved from S&P Global.

Segment performance

Segment	Metric	Q2 2025	Q3 2025
PDS	Revenue ($USD Millions)	$486.0	$514.4
PDS	Gross Margin %	32.5%	29.0%
HHH	Revenue ($USD Millions)	$60.1	$62.4
HHH	Gross Margin %	55.0%	53.3%
MS	Revenue ($USD Millions)	$43.4	$45.1
MS	Gross Margin %	45.6%	45.0%

KPIs

Segment	KPI	Q2 2025	Q3 2025
PDS	Hours (thousands)	11,053	11,822
PDS	Revenue rate ($/hour)	$43.97	$43.51
PDS	Spread rate ($/hour)	$14.29	$12.62
HHH	Total admissions (thousands)	9.8	9.7
HHH	Episodic mix (%)	74.5%	77.3%
HHH	Revenue per episode ($)	$3,231	$3,215
MS	Unique patients served (thousands)	91	91
MS	Revenue rate ($/UPS)	$477.24	$495.43
MS	Spread rate ($/UPS)	$217.60	$222.76

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	> $2.15B	> $2.30B	Raised
Adjusted EBITDA	FY 2025	> $207M	> $270M	Raised
Revenue	FY 2025	> $2.30B	> $2.375B	Raised
Adjusted EBITDA	FY 2025	> $270M	> $300M	Raised
Net Income	FY 2025	Not provided (volatility of inputs)	Not provided	Maintained (no guidance)

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2025 and Q3 2025)	Current Period (Q2 2026 context)	Trend
Preferred payer strategy (PDS/HHH/MS)	PDS at 25 preferred payer agreements; HHH episodic mix 74.5% and admissions growth; MS at 18 preferred payers with margin normalization target	Expect continued alignment of caregiver capacity with preferred payers into 2026; margin normalization ongoing*	Improving mix; sustained execution
Labor/wage pass‑through	Targeted, ongoing wage pass‑through to support volumes; spread rate temporarily elevated by $9M timing items and $6M settlement reversal	Continued pass‑through to balance margins and capacity*	Normalizing margins; capacity improving
Medicaid rate integrity	10 rate enhancements YTD; advocacy in 10+ states; California remains key target	Ongoing state partnerships and advocacy*	Positive but fiscally cautious
CMS Home Health proposed cut	Strong opposition to ~6.4% proposed cut; limited direct impact given Medicaid mix	Sector headwind persists into 2026; advocacy continues*	External risk; mitigated mix
Thrive integration	Accretive, on‑track; footprint expanded into KS/NM	Full integration benefits expected to carry into 2026*	Executing to plan
Liquidity/free cash flow	Liquidity ~$354M; YTD FCF $36.9M in Q2; nine‑month FCF $86.2M by Q3	Supports optionality into 2026*	Strengthening
Values with asterisk (*) retrieved from S&P Global.

Management Commentary

“Our second quarter results reflect the continued positive momentum in all three operating divisions… We continue to advocate for our patients and families to receive the value of high‑quality health care in the comfort of their home.” — CEO Jeff Shaner .
“Additionally, second quarter results were positively impacted by timing related… value‑based payments in our PDS segment, which contributed approximately $9,000,000 to revenue and EBITDA.” — CFO Matt Buckhalter .
“We have achieved 10 rate enhancements year to date in our private duty services segment… [and] added one additional preferred payer agreement in Q2.” — CEO Jeff Shaner .
“We expect gross margins [MS] to normalize in the 42% to 44% range… and UPS to continue its growth.” — CFO Matt Buckhalter .

Q&A Highlights

Guidance cadence and one‑time items: Management clarified ~$9M timing items (rate/value‑based) and $6M legal settlement reversal (no EBITDA impact), and reiterated wage pass‑through plan into H2 .
Labor/capacity: Hiring trends improving alongside rate integrity and preferred payer growth; targeted wage actions by geography/shift to fill coverage .
Medicaid policy: States remain supportive of HCBS despite OBBBA headwinds; single‑digit rate enhancements more common in 2025; California remains priority .
Home Health policy risk: Strong opposition to proposed 6.4% cut; AVAH insulated by Medicaid mix but industry access concerns remain .

Estimates Context

Metric	Q4 2025	Q1 2026	Q2 2026
Revenue Consensus Mean ($USD Millions)	$622.0*	$612.0*	$631.4*
Primary EPS Consensus Mean ($USD)	$0.125*	$0.134*	$0.153*
EBITDA Consensus Mean ($USD Millions)	—	—	$81.6*
Primary EPS – # of Estimates	—	—	6*
Revenue – # of Estimates	—	—	6*
Values retrieved from S&P Global.

Implication: Consensus embeds modest sequential revenue growth from Q1→Q2 2026 and EPS in the mid‑teens, broadly consistent with 2025 trajectory (Q3 2025 revenue $621.9M; adj. EBITDA $80.1M) . Expectation revisions will hinge on preferred payer mix, wage pass‑through pace, and MS margin normalization .

Key Takeaways for Investors

Preferred payer strategy remains the core narrative driver into 2026; mix improvements and episodic bias in HHH underpin margin durability .
Wage pass‑through is ongoing and targeted; watch spread normalization as value‑based timing effects fade and caregiver costs equilibrate .
Regulatory overhang (CMS HHH proposed cut) is a sector risk but less material to AVAH given Medicaid‑heavy mix; advocacy likely continues into 2026 .
Thrive integration expands PDS footprint and capacity; on‑track execution supports sustained volume and revenue rate growth .
Liquidity and free cash flow strengthened in 2025, providing flexibility for selective M&A and operational investments in 2026 .
Near‑term trading: Consensus points to steady Q2 2026 revenue/EPS; any updates on preferred payer wins, rate integrity, or wage normalization could shift estimate trajectories.*
Medium‑term thesis: AVAH’s home‑based care platform leverages payer partnerships to translate rate integrity into capacity, margin stability, and cash generation, with MS modernization a multi‑quarter lever .

Values with asterisk (*) retrieved from S&P Global.

Aveanna Healthcare Holdings, Inc. (AVAH)·Q2 2026 Earnings Summary