Executive Summary

Q4 2025 results are not yet reported. Management guided that Q4 should look “very similar to Q3,” with a positive contribution from a 53rd (14th) week, while acknowledging modest holiday seasonality .
Aveanna raised FY25 guidance twice in H2: to >$2.30B revenue and >$270M Adjusted EBITDA on Aug 7, then to >$2.375B revenue and >$300M Adjusted EBITDA on Nov 6, reflecting strong rate/volume momentum and execution .
Q3 showed broad-based strength: revenue $621.9M (+22.2% y/y), Adjusted EBITDA $80.1M (+67.5% y/y), net income $14.1M; liquidity ~ $479M post-refinancing (cash ~$146M, securitization availability ~$106M, undrawn revolver ~$227M) .
Strategic catalysts into Q4: 30 preferred payer agreements in PDS (56% of PDS MCO volume), continued home health episodic mix (~77%), and integration of Thrive Skilled Pediatric Care targeted for completion by year-end .
Balance sheet de-risking: first-lien refinancing extended maturities to 2030/2032 and expanded revolver to $250M; net leverage trending toward an internal “three-handle” over 2026–2027 per CFO .

What Went Well and What Went Wrong

What Went Well

Strong growth and mix: Q3 revenue $621.9M (+22.2% y/y) and Adjusted EBITDA $80.1M (+67.5% y/y), driven by improved rates, volume, and cost execution; management expects Q4 to mirror Q3 plus a 53rd week .
PDS preferred payer strategy scaled: 30 agreements covering ~56% of PDS MCO volume; CEO: “We added five additional preferred payer agreements in Q3 and are currently positioned at 30 agreements in total” .
Home Health episodic focus paying off: episodic mix ~77%, admissions up ~9%, and Medicare revenue/episode +3.6%; CFO: “We’re pleased with our Q3 gross margin of 53.3%” .

What Went Wrong

Regulatory overhang: Proposed 2026 home health cuts remain a sector risk; Aveanna is “strongly” opposed, but timing/visibility into the final rule is uncertain .
PDS wage pass-through pressure: Spread/GM normalized from an unusually strong Q2 (timing benefits), and wage pass-through will continue into Q4 and early 2026 to support volumes .
Medical Solutions (MS) flat: Q3 MS revenue was essentially flat y/y (-0.5%) and gross margin dipped 60 bps; management is mid-transition to the preferred payer model and expects GM to normalize in the 42–44% range .

Financial Results

Note: Q4 2025 not yet reported. Below are recent reported quarters and prior-year Q4 for context.

Metric	Q4 2024	Q2 2025	Q3 2025
Revenue ($USD Millions)	$519.9	$589.6	$621.9
YoY Revenue Growth (%)	8.6%	16.8%	22.2%
Gross Margin ($USD Millions)	$171.7	$210.8	$202.8
Adjusted EBITDA ($USD Millions)	$55.2	$88.4	$80.1
Net Income ($USD Millions)	$29.2	$27.0	$14.1

Segment breakdown (latest two quarters):

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

Operating KPIs:

KPI	Q2 2025	Q3 2025
PDS Hours (000s)	11,053	11,822
PDS Revenue Rate ($/hr)	$43.97	$43.51
PDS Spread Rate ($/hr)	$14.29 (timing-inflated)	$12.62 (normalizing)
HHH Total Admissions (000s)	9.8	9.7
HHH Episodic Mix (%)	74.5%	77.3%
HHH Medicare Rev/Episode ($)	$3,231	$3,215
MS Unique Patients Served (000s)	91	91
MS Revenue Rate	$477.24	$495.43

Context and notes:

Q2 spread was elevated by ~$9M of timing-related value-based payments and reserve items; management expected spread normalization in H2 as wage pass-through continues .
Q4 2025 will include a 53rd (14th) week, which management said should be a tailwind vs a typical 13-week quarter .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	$2.10–$2.12B (3/13/25)	>$2.30B (8/7/25)	Raised
Adjusted EBITDA	FY 2025	$190–$194M (3/13/25)	>$270M (8/7/25)	Raised
Revenue	FY 2025	>$2.30B (8/7/25)	>$2.375B (11/6/25)	Raised
Adjusted EBITDA	FY 2025	>$270M (8/7/25)	>$300M (11/6/25)	Raised

Management does not provide net income guidance due to volatility in fair value adjustments on derivatives .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2025)	Previous Mentions (Q3 2025)	Current Period (Q4 2025 Set-Up)	Trend
PDS Preferred Payers	25 agreements; ~55% of PDS MCO volume	30 agreements; ~56% of PDS MCO volume	Target mid-to-high 30s/approach 40 in 2026; expand coverage	Accelerating
Home Health Episodic Mix	74.5% episodic; +6.9% episodes y/y	~77% episodic; +14.2% episodes y/y; GM 53.3%	Maintain >70%; management comfortable pushing >75–80%	Improving
PDS Wage Pass-Through/Spread	Q2 spread $14.29 inflated by timing; pass-through ongoing	Q3 spread $12.62; continued wage pass-through into 2026	Further normalization expected; supports volume/retention	Normalizing
Regulatory (Home Health Rule)	Strong opposition to proposed 2026 cuts	Expect final rule “in the coming days”	Outcome pending; FY26 impact limited to small HH mix	Risk persists
Capital Structure & Liquidity	Securitization extended; added availability	First-lien refi; revolver to $250M; maturities 2030/2032	Deleveraging to a “three-handle” over 2026–27 targeted	Improving
Thrive Integration	On target; accretive thesis; new states (KS, NM)	“On track to be completed by end of the year”	Completion expected by year-end	Progressing

Management Commentary

“Q4…should be very similar to Q3,” with a 14th week tailwind and some holiday seasonality; continuing a “beat and raise” cadence (11th consecutive quarter) .
“Our goal for 2025 was to increase the number of PDS preferred payer agreements from 22 to 30. We added five additional preferred payer agreements in Q3 and are currently positioned at 30” .
“Episodic admissions well over 70%…We’re pleased with our Q3 gross margin of 53.3%” in Home Health .
“We refinanced our first-lien credit facility…Revolver availability increased to $250 million…term loans mature in 2032” .
On Medicaid state dynamics: rate wins continue but are more muted; headwinds expected in 2026–2027 as states balance budgets .

Q&A Highlights

Q4 trajectory and conservatism: Management expects Q4 performance similar to Q3 (plus 53rd week), maintaining a prudent guidance posture despite strong momentum .
PDS spread normalization: Q2 spread was timing-elevated; Q3 normalized; additional wage pass-through will continue into early 2026 to support volumes and clinical outcomes .
Deleveraging/M&A: Net leverage ~4.62x with a path to a “three-handle”; capital deployment will be “thoughtful” between tuck-ins and debt reduction .
Value-based care (VBC): Nine upside-only VBC agreements layered on top of enhanced rates; focus on fill-rate and medical cost benchmarks; payers “want more” Aveanna capacity .
Home Health rule risk: Aveanna and peers are actively lobbying; company impact limited by Medicaid-weighted mix, but policy outcome is important for industry access/capacity .

Estimates Context

Wall Street consensus for Q4 2025 via S&P Global (EPS/Revenue/EBITDA) was unavailable at time of research due to data access limits. We will update the comparison vs. consensus once the Q4 2025 release and S&P Global estimates are accessible.

Key Takeaways for Investors

Setup into Q4 looks favorable: management telegraphed a quarter similar to Q3 with a 53rd week tailwind, against a raised FY25 guide (> $2.375B revenue, > $300M Adj. EBITDA) .
The preferred payer flywheel is working: 30 PDS agreements and >75% episodic mix in Home Health underpin pricing, volumes, and margin quality heading into Q4 .
Expect continued wage pass-through to weigh modestly on PDS spread near term but support sustained volume growth and retention through 1H26 .
Balance sheet risk has improved: extended maturities, expanded liquidity, and a clear deleveraging path position Aveanna to execute tuck-ins when visibility improves .
Regulatory is the main wild card: home health rule outcome is pending; Aveanna’s Medicaid-weighted mix tempers company-specific risk but sector volatility is possible around the final rule .
Watch for Thrive integration completion and incremental preferred payer wins in Q4/Q1 as additional catalysts .
Post-print, focus on FY26 cadence: wage normalization, continued payer penetration (PDS/MS), and deleveraging trajectory should shape revisions and multiple support .

Appendix: Additional Detail and Non-GAAP Notes

Q3 Adjusted EBITDA reflects add-backs including loss on debt extinguishment, fees related to debt modifications, integration costs, and legal costs; reconciliations provided in the press release/8-K .
Liquidity at Q3: cash ~$145.9M; securitization availability ~$105.8M; undrawn revolver ~$227M; total debt ~$1.49B; swaps $520M and caps $880M substantially hedge variable rate exposure .
Q4 2024 context: revenue $519.9M, gross margin $171.7M, Adjusted EBITDA $55.2M; FY25 initial guide (issued 3/13/25) was later raised twice as momentum strengthened .

Citations:

Q2 2025 press release and transcript: – –
Q3 2025 press release, 8-K, and transcript: – – –
Q4 2024 press release (IR site):

Aveanna Healthcare Holdings, Inc. (AVAH)·Q4 2025 Earnings Summary