Addus HomeCare Corp (ADUS)

Business Summary

Addus HomeCare Corporation operates in the home care services industry, providing personal care, hospice, and home health services. The company's services are principally provided in-home under agreements with federal, state and local government agencies, managed care organizations, commercial insurers and private individuals. Consumers are predominantly dual eligible, meaning they are eligible to receive both Medicare and Medicaid benefits. The personal care services industry is subject to increasing regulation, including federal standards requiring states to mandate electronic visit verification systems. The industry has developed in a fragmented manner with many small participants and a few larger participants with significant market share across multiple regions or states. The company believes ongoing consolidation within the industry is driven by the desire of healthcare systems and managed care organizations to narrow their networks of service providers, and also by the industry's increasingly complex regulatory, operating and technology requirements.

The company believes its industry is highly competitive, fragmented and market specific. Competition consists of personal care service providers, home health providers, hospice providers, private caregivers, publicly held companies, privately held companies, privately held single-site agencies, hospital-based agencies, not-for-profit organizations, community-based organizations, managed care organizations and self-directed care programs. Some competitors and competitive care models may have greater financial, technical, political and marketing resources, as well as name recognition with consumers and payors. Factors impacting the company's competitive position include the quality of care and services provided, ability to attract and retain caregivers and other personnel, relationships with potential referral sources, and ability to retain and renew contracts with payors and enter into new contracts on favorable terms. The company believes it is well-positioned to capitalize on industry trends given its reputation in the market, strong payor relationships and integration of technology into its business model.

The company generates net service revenues by providing services directly to consumers primarily on an hourly basis in the personal care segment, on a daily basis in the hospice segment and on an episodic basis in the home health segment. Payment for services is received from payor clients including federal, state and local governmental agencies, managed care organizations, commercial insurers and private consumers. Managed care revenues accounted for 37.0% ¹ of revenue during the year ended December 31, 2025. The company's consumers are predominantly dual eligible, meaning they are eligible to receive both Medicare and Medicaid benefits. The company's services and operating model address needs across the healthcare continuum, with care provided in the home generally costing less than facility-based care and typically preferred by consumers and their families.

The personal care segment provides non-medical assistance with activities of daily living, primarily to persons who are at increased risk of hospitalization or institutionalization, such as the elderly, chronically ill or disabled. Services include assistance with bathing, grooming, oral care, feeding and dressing, medication reminders, meal planning and preparation, housekeeping and transportation services. For the year ended December 31, 2025, personal care net service revenues were $1,089,215,000 ². The hospice segment provides physical, emotional and spiritual care for people who are terminally ill as well as related services for their families, including palliative nursing care, social work, spiritual counseling, homemaker services and bereavement counseling. For the year ended December 31, 2025, hospice net service revenues were $262,542,000 ³. The home health segment provides services that are primarily medical in nature to individuals who may require assistance during an illness or after hospitalization and include skilled nursing and physical, occupational and speech therapy. For the year ended December 31, 2025, home health net service revenues were $70,773,000 ⁴.

The company completed four acquisitions in 2025: Gold Horses, LLC on October 1, 2025 for approximately $7,400,000 ⁵; Helping Hands Home Care Service, Inc. on August 1, 2025 for approximately $21,400,000 ⁶; Great Lakes Home Care Unlimited, LLC on March 1, 2025 for $2,600,000 ⁷; and the Jacksonville affiliate on January 1, 2025 for approximately $800,000 ⁸. Acquisitions completed in 2025 accounted for $11,800,000 ⁹ in net service revenues for the year ended December 31, 2025. The company completed two acquisitions in 2024: the Gentiva Acquisition on December 2, 2024 for approximately $353,600,000 ¹⁰, and the Upstate Acquisition on March 9, 2024 for $400,000 ¹¹. Effective May 20, 2024, the company entered into a definitive asset purchase agreement to sell all of its New York operations for a purchase price of up to $23,000,000 ¹² in cash, with an initial payment of $4,600,000 ¹³ and $6,900,000 ¹⁴ paid pro rata as a deferred payment. The company recorded a gain on divestiture of $3,700,000 ¹⁵ during the year ended December 31, 2024. On June 28, 2024, the company completed a public offering of 1,725,000 ¹⁶ shares of common stock at a public offering price of $108.00 ¹⁷ per share, receiving net proceeds of approximately $175,600,000 ¹⁸.

For the year ended December 31, 2025, total net service revenues were $1,422,530,000 ¹⁹, compared to $1,154,599,000 ²⁰ in 2024, an increase of 23.2% ²¹. Net income was $95,910,000 ²² for 2025, compared to $73,598,000 ²³ in 2024. Diluted net income per share was $5.22 ²⁴ for 2025, compared to $4.23 ²⁵ in 2024. Adjusted EBITDA was $179,984,000 ²⁶ for 2025, compared to $140,290,000 ²⁷ in 2024. Gross profit as a percentage of net service revenues was 32.5% ²⁸ for both 2025 and 2024. Operating income was $138,615,000 ²⁹ for 2025, compared to $102,691,000 ³⁰ in 2024.

Business Outlook & Financial Sufficiency

The Illinois fiscal year 2026 budget includes an increase in hourly rates for in-home care services to $30.80 ³¹, effective January 1, 2026, which sustains a minimum wage of $18.75 ³² per hour for direct service workers. The Texas fiscal year 2026 budget included an increase in hourly rates to $17.13 ³³ for in-home care services effective September 1, 2025. Effective October 1, 2025, CMS increased hospice payment rates by 2.6% ³⁴, reflecting a 3.3% ³⁵ market basket increase and a negative 0.7 ³⁶ percentage point productivity adjustment. For calendar year 2026, CMS estimates that Medicare payments to home health agencies will decrease by 1.3% ³⁷, based on a home health payment update percentage of 2.4% ³⁸, which reflects a 3.2% ³⁹ market basket update reduced by a productivity adjustment of 0.8 ⁴⁰ percentage points. The per-beneficiary cap amount for hospice was updated to $35,361.44 ⁴¹ for federal fiscal year 2026.

The company intends to drive organic growth through several initiatives, including continuing to build and enhance sales and marketing capabilities, enhancing business intelligence analytic capabilities, recruiting and retaining employees and investing in technology and operations to drive efficiencies. The company expects organic growth will benefit from an increase in demand for services by an aging population and increased alignment with referral sources and payors. The company continues to selectively open new offices in existing markets when an opportunity is identified and appropriate. The company markets to and partners with managed care organizations, taking advantage of an industry shift from traditional fee-for-service Medicare and Medicaid toward managed care models. The company believes its expansion from primarily personal care services into hospice and home health has increased its value to managed care partners by diversifying home-based care offerings.

The company plans to continue growing through acquisitions, focusing on identifying growing markets with favorable demographics in states that are fiscally well managed and have a reasonable minimum wage environment and where the company has the potential to become one of the leading providers in the state. The company believes its experience identifying and executing on opportunities generated by its acquisition pipeline, as well as its history of integrating acquisitions, will lead to additional growth. The company's active pipeline and strong financial position support additional acquisitions.

Gross profit, expressed as a percentage of net service revenues, was 32.5% ⁴² for the year ended December 31, 2025, unchanged from 2024. General and administrative expenses, expressed as a percentage of net service revenues, decreased to 21.6% ⁴³ for 2025, from 22.4% ⁴⁴ in 2024. The effective income tax rate was 24.7% ⁴⁵ for the year ended December 31, 2025, compared to 25.9% ⁴⁶ in 2024. The lower effective income tax rate in 2025 was principally due to a higher excess tax benefit, which was 2.3% ⁴⁷ in 2025 compared to 0.5% ⁴⁸ in 2024.

The company currently utilizes multiple applications to support various lines of business and locations for patient accounting. The company licenses the Qlik Business Intelligence platform to provide historical, current, and forward-looking operational performance analysis. The company utilizes the ADP Vantage Suite as its base human resources and payroll processing system. For financial management, the company utilizes Oracle's Planning Budgeting Cloud Service for budgeting, forecasting, and financial reporting and Oracle Fusion for the general ledger, accounts payable and fixed assets. The company uses AI in connection with recruitment and is considering other uses.

Stock-based compensation expense was $16,424,000 ⁴⁹ for the year ended December 31, 2025, compared to $11,165,000 ⁵⁰ in 2024 and $10,319,000 ⁵¹ in 2023. The company had $7,900,000 ⁵² in outstanding letters of credit at December 31, 2025. The company's credit facility provides for a $650,000,000 ⁵³ revolving credit facility and a $150,000,000 ⁵⁴ incremental loan facility, with a maturity date of July 30, 2028 ⁵⁵. At December 31, 2025, the company had $517,700,000 ⁵⁶ available for borrowing under its credit facility.

The company's financial results have been, and may continue to be, adversely impacted by negative macroeconomic conditions, including inflationary pressures, elevated interest rates and challenging labor market conditions. These factors had an unfavorable impact on the company's financial results during the year ended December 31, 2025, and may have an unfavorable impact in future periods which could be material. The inflationary conditions have resulted in, and may continue to result in, increased operating costs, particularly as the result of increased wages paid to caregivers and other personnel. The company might not be able to realize rate increases from government programs and private payors, which represent most of its revenue, and any rate increases obtained may not be sufficient to offset increases to operating expenses. Higher interest rates also raise the company's financing costs.

The company's revenues are particularly sensitive to regulatory and economic changes in states in which it generates a significant portion of its revenues including Illinois, New Mexico and Texas. In 2025, the company derived approximately 37.0% ⁵⁷ of its net service revenues from services provided in Illinois, 13.1% ⁵⁸ from services provided in New Mexico and 15.2% ⁵⁹ from services provided in Texas. The company derived approximately 18.1% ⁶⁰ of its revenue from the Illinois Department on Aging programs for the year ended December 31, 2025. The company derived approximately 39.3% ⁶¹ of its net service revenues from state and local governmental agencies, primarily through Medicaid state programs, and 20.5% ⁶² from Medicare for the year ended December 31, 2025.

Management Sentiments & Priorities

Management's message emphasizes the company's focus on providing high-quality care, driving organic growth in existing markets, marketing to managed care organizations, and growing through acquisitions. The company's growth strategy includes consistently providing high-quality care, driving organic growth through building sales and marketing capabilities, enhancing business intelligence analytic capabilities, recruiting and retaining employees, and investing in technology and operations. The company plans to continue revenue growth and enhance competitive positioning by executing on these growth strategies. Management believes the company's model provides significant value to managed care organizations and that the company is well positioned to assist in meeting goals of lowering costs and improving outcomes while also improving consumer satisfaction. The company expects ongoing consolidation within the industry and believes it is well-positioned to capitalize on these trends given its reputation in the market, strong payor relationships and integration of technology into its business model.

Financial Details

For the year ended December 31, 2025, total net service revenues were $1,422,530,000 ⁶⁹ compared to $1,154,599,000 ⁷⁰ in 2024. Net income was $95,910,000 ⁷¹ compared to $73,598,000 ⁷² in 2024. Diluted net income per share was $5.22 ⁷³ compared to $4.23 ⁷⁴ in 2024. Operating income was $138,615,000 ⁷⁵ compared to $102,691,000 ⁷⁶ in 2024. Adjusted EBITDA was $179,984,000 ⁷⁷ compared to $140,290,000 ⁷⁸ in 2024. Cash and cash equivalents were $81,617,000 ⁷⁹ at December 31, 2025, compared to $98,911,000 ⁸⁰ at December 31, 2024. Total assets were $1,437,308,000 ⁸¹ at December 31, 2025, compared to $1,412,634,000 ⁸² at December 31, 2024. Long-term debt, net of debt issuance costs, was $120,959,000 ⁸³ at December 31, 2025, compared to $218,443,000 ⁸⁴ at December 31, 2024. Net cash provided by operating activities was $111,507,000 ⁸⁵ for 2025, compared to $116,434,000 ⁸⁶ in 2024. The personal care segment generated net service revenues of $1,089,215,000 ⁸⁷ and segment operating income of $207,201,000 ⁸⁸ for 2025. The hospice segment generated net service revenues of $262,542,000 ⁸⁹ and segment operating income of $67,414,000 ⁹⁰ for 2025. The home health segment generated net service revenues of $70,773,000 ⁹¹ and segment operating income of $12,451,000 ⁹² for 2025.

Risk Factors

The company's revenues are concentrated in a small number of states, making it particularly sensitive to regulatory and economic changes in those states, with 37.0% ⁶³ of net service revenues from Illinois, 13.1% ⁶⁴ from New Mexico, and 15.2% ⁶⁵ from Texas in 2025. The company derived 18.1% ⁶⁶ of revenue from the Illinois Department on Aging programs, and any future efforts to reduce costs of those programs could adversely affect service revenues and profitability. The company's hospice operations are subject to annual Medicare caps, and if payments received under any hospice provider numbers exceed these caps, the company must reimburse Medicare such excess amounts, which could have a material adverse effect. The company had $996,700,000 ⁶⁷ of goodwill and $102,400,000 ⁶⁸ of intangible assets at December 31, 2025, and if required to write down all or part of these assets, net earnings and net worth could be materially adversely affected. The company's financial results have been adversely impacted by negative macroeconomic conditions, including inflationary pressures and elevated interest rates, and these factors may continue to have an unfavorable impact in future periods which could be material.

View Source Annual Report on SEC.gov ↗

References

[1] Item 7, MD&A — Overview
[2] Item 7, MD&A — Results of Operations
[3] Item 7, MD&A — Results of Operations
[4] Item 7, MD&A — Results of Operations
[5] Item 7, MD&A — Acquisitions
[6] Item 7, MD&A — Acquisitions
[7] Item 7, MD&A — Acquisitions
[8] Item 7, MD&A — Acquisitions
[9] Item 1, Business — Growth Strategy
[10] Item 7, MD&A — Acquisitions
[11] Item 7, MD&A — Acquisitions
[12] Item 7, MD&A — Divestiture
[13] Item 7, MD&A — Divestiture
[14] Item 7, MD&A — Divestiture
[15] Item 7, MD&A — Divestiture
[16] Item 7, MD&A — Public Offering
[17] Item 7, MD&A — Public Offering
[18] Item 7, MD&A — Public Offering
[19] Item 7, MD&A — Results of Operations
[20] Item 7, MD&A — Results of Operations
[21] Item 7, MD&A — Results of Operations
[22] Item 7, MD&A — Results of Operations
[23] Item 7, MD&A — Results of Operations
[24] Item 8, Consolidated Statements of Income
[25] Item 8, Consolidated Statements of Income
[26] Item 7, MD&A — Non-GAAP Financial Measures
[27] Item 7, MD&A — Non-GAAP Financial Measures
[28] Item 7, MD&A — Results of Operations
[29] Item 7, MD&A — Results of Operations
[30] Item 7, MD&A — Results of Operations
[31] Item 7, MD&A — Changes in Illinois Reimbursement
[32] Item 7, MD&A — Changes in Illinois Reimbursement
[33] Item 7, MD&A — Changes in Texas Reimbursement
[34] Item 7, MD&A — Changes in Medicare Reimbursement
[35] Item 7, MD&A — Changes in Medicare Reimbursement
[36] Item 7, MD&A — Changes in Medicare Reimbursement
[37] Item 7, MD&A — Changes in Medicare Reimbursement
[38] Item 7, MD&A — Changes in Medicare Reimbursement
[39] Item 7, MD&A — Changes in Medicare Reimbursement
[40] Item 7, MD&A — Changes in Medicare Reimbursement
[41] Item 7, MD&A — Changes in Medicare Reimbursement
[42] Item 7, MD&A — Results of Operations
[43] Item 7, MD&A — Results of Operations
[44] Item 7, MD&A — Results of Operations
[45] Item 7, MD&A — Results of Operations
[46] Item 7, MD&A — Results of Operations
[47] Item 7, MD&A — Results of Operations
[48] Item 7, MD&A — Results of Operations
[49] Item 8, Note 1 — Stock-based Compensation
[50] Item 8, Note 1 — Stock-based Compensation
[51] Item 8, Note 1 — Stock-based Compensation
[52] Item 7, MD&A — Standby Letters of Credit
[53] Item 7, MD&A — Borrowing Capacity
[54] Item 7, MD&A — Borrowing Capacity
[55] Item 7, MD&A — Borrowing Capacity
[56] Item 7, MD&A — Liquidity and Capital Resources
[57] Item 1A, Risk Factors
[58] Item 1A, Risk Factors
[59] Item 1A, Risk Factors
[60] Item 1A, Risk Factors
[61] Item 1A, Risk Factors
[62] Item 1A, Risk Factors
[63] Item 1A, Risk Factors
[64] Item 1A, Risk Factors
[65] Item 1A, Risk Factors
[66] Item 1A, Risk Factors
[67] Item 1A, Risk Factors
[68] Item 1A, Risk Factors
[69] Item 8, Consolidated Statements of Income
[70] Item 8, Consolidated Statements of Income
[71] Item 8, Consolidated Statements of Income
[72] Item 8, Consolidated Statements of Income
[73] Item 8, Consolidated Statements of Income
[74] Item 8, Consolidated Statements of Income
[75] Item 8, Consolidated Statements of Income
[76] Item 8, Consolidated Statements of Income
[77] Item 7, MD&A — Non-GAAP Financial Measures
[78] Item 7, MD&A — Non-GAAP Financial Measures
[79] Item 8, Consolidated Balance Sheets
[80] Item 8, Consolidated Balance Sheets
[81] Item 8, Consolidated Balance Sheets
[82] Item 8, Consolidated Balance Sheets
[83] Item 8, Consolidated Balance Sheets
[84] Item 8, Consolidated Balance Sheets
[85] Item 8, Consolidated Statements of Cash Flows
[86] Item 8, Consolidated Statements of Cash Flows
[87] Item 7, MD&A — Personal Care Segment
[88] Item 7, MD&A — Personal Care Segment
[89] Item 7, MD&A — Hospice Segment
[90] Item 7, MD&A — Hospice Segment
[91] Item 7, MD&A — Home Health Segment
[92] Item 7, MD&A — Home Health Segment

Analysis on 9/28/2026

Recent Material Events

Sep 14, 2026Material Event

Addus HomeCare Corporation announced a definitive agreement to acquire the personal care division of AccentCare, Inc., excluding operations in New York, for approximately $275 million in cash. The transaction adds an average daily census of roughly 13,700 customers across ten states and is expected to contribute approximately $280 million in annualized revenue, representing a 19% increase to Addus' revenue base. Closing is subject to regulatory approvals, including Hart-Scott-Rodino waiting period expiration, and customary conditions, with funding provided via the company's revolver and cash on hand. The acquisition significantly expands Addus' personal care footprint in Texas, Illinois, California, and Arizona, while also entering Colorado, Georgia, Minnesota, Pennsylvania, Tennessee, and Washington. Addus HomeCare Corporation is a provider of home care services that primarily include personal care services assisting with activities of daily living, as well as hospice and home health services.

Aug 13, 2026Material Event

Addus HomeCare Corporation announced that Heather Dixon departed as President and Chief Operating Officer on August 7, 2026. The company appointed W. Bradley Bickham as interim COO effective immediately for a one-year term ending July 31, 2027. Mr. Bickham receives an annualized base salary of $622,000 and fixed bonuses under his employment agreement. Addus HomeCare operates in the home care services industry, providing personal care, hospice, and home health services to elderly, chronically ill, and disabled consumers.

Aug 3, 2026Material Event

Addus HomeCare Corporation reported financial results for the fiscal quarter ended June 30, 2026. Net service revenues increased 8.0% year-over-year to $377.4 million, while net income rose to $27.6 million, or $1.49 per diluted share, compared to $22.1 million in the prior-year period. Adjusted EBITDA grew 11.9% to $49.2 million, and adjusted net income per diluted share increased 16.1% to $1.73. The company reported cash flow from operations of $40.0 million for the quarter. Addus HomeCare operates in the home care services industry, providing personal care, hospice, and home health services.