Addus HomeCare Corporation

What they do

Addus provides home care services across three service lines: personal care, hospice, and home health. The company serves patients in select markets and contracts primarily with state and government payors for personal care and with Medicare and other payors for hospice and home health. As of the second quarter of 2026, personal care accounted for 78.4% of revenue, hospice 17.0%, and home health 4.6%.

Revenue drivers

• Personal care — The largest segment, generating 78.4% of second quarter 2026 revenue, driven by higher volumes and rate increases in key states such as Texas and Illinois, and acquisitions like HomeCourt Home Care.
• Hospice — Contributed 17.0% of revenue in the second quarter of 2026, with organic revenue up 11.1% year-over-year driven by improvements in average daily census and revenue per patient day.
• Home health — Represented 4.6% of revenue in the second quarter of 2026, with management noting more favorable admission and volume trends and positioning it as complementary to personal care and hospice.

Recent performance

For the second quarter of 2026, net service revenues increased 8.0% to $377.4 million compared with $349.4 million in the prior-year period. Net income was $27.6 million, or $1.49 per diluted share, versus $22.1 million and $1.20 per diluted share a year ago. Adjusted EBITDA rose 11.9% to $49.2 million, and adjusted net income per diluted share increased 16.1% to $1.73. For the first six months of 2026, net service revenues grew 7.8% to $741.0 million, with net income of $52.7 million and adjusted EBITDA of $93.7 million. Cash flow from operations was $40.0 million in the second quarter of 2026.

Strategy

Management emphasizes organic growth and disciplined execution across service lines, supported by cost management and operational efficiency. The company continues to pursue acquisitions, as evidenced by the HomeCourt Home Care acquisition completed on May 1, 2026. Rate increases in key states, such as a 9.9% increase in Texas and a 3.9% increase in Illinois, are cited as contributing to revenue growth. Addus also focuses on leverage reduction and maintaining a full continuum of care through its three business segments.

Risks

• Government payor dependence — Personal care revenue largely depends on state government contracts and rate-setting, as seen with rate increases in Texas and Illinois.
• Acquisition integration — The company has an active acquisition strategy, such as the May 2026 HomeCourt Home Care deal, which carries integration and execution risks.
• Labor cost and staffing — As a home care services provider, Addus relies on a large workforce, and wage pressures or staffing shortages could impact margins.
• Regulatory and reimbursement changes — Changes in Medicare or state reimbursement policies for hospice, home health, and personal care could affect revenue and profitability.

Outlook

Management expressed confidence in continued demand for home care services and the company's ability to drive profitable growth. They highlighted favorable admission and volume trends in home health and strong growth in hospice. The company continues to benefit from rate increases in key states and recently completed an acquisition to bolster personal care. No specific numerical guidance was provided in the excerpt.