As we do on each of our earnings call, I will begin with a few overall comments, and then Brian will discuss the second quarter results in more detail. As we announced yesterday afternoon, our total revenue for the second quarter of 2026 was $377.4 million, an increase of 8% as compared to the $349.4 million for the second quarter of 2025. This revenue growth resulted in adjusted earnings per share of $1.73 as compared to adjusted earnings per share for the second quarter of 2025 of $1.49, an increase of 16.1%. Our adjusted EBITDA was $49.2 million, compared to $43.9 million for the second quarter of 2025, an increase of 11.9%.
For the second quarter of 2026, cash flow from operations was $40 million as compared to $22.5 million for the same period in 2025. As we announced on May 1st, we closed on the acquisition of the personal care operation of HomeCourt Home Care based in Fort Wayne, Indiana. This acquisition marks our entry into an attractive state which is adjacent to our largest personal care market of Illinois. We anticipate closing this acquisition subject to satisfaction of customary closing conditions, including regulatory review and approval.
The net result is a proposed payment rate increase of 2.1%, compared to last year's rate decrease of 1.3%. While we are pleased with the positive rate increase for 2027, we are concerned about the continuing effect of the temporary adjustment, and we support the industry's ongoing efforts to eliminate these adjustments. The final rate equates to a 2.3% increase versus the 2.4% proposed rate increase. While we are appreciative of this increase, it does reflect an approximate 30-basis-point decrease from the fiscal 2026 final hospice rate increase of 2.6%.
| Metric | Period | Current guidance |
|---|---|---|
| Adjusted EBITDA margin | FY2026 | Expected between 12% and 13%, trending toward the higher end, with Q3 similar to Q2 and a higher Q4 |
| Personal Care same-store revenue growth | FY2026 | Expected to remain at the high end of, or above, the 3%-5% range |
| Hospice same-store revenue growth | FY2026 | Long-term expectation of upper single digits |
| Effective tax rate | FY2026 | Expected in the upper-20% range following the WOTC program's expiration |
| Fiscal 2027 hospice Medicare rate | Effective October 1, 2026 | Final 2.3% increase, with the company's own rate likely a bit below the national average |
| New Mexico Medicaid rate | Second half 2026 | Around a 4% increase expected for Addus, being negotiated with the managed-care organizations |
| Metric | YoY | Note |
|---|---|---|
| Total revenue | +8% to $377.4M | Personal Care volume and rate growth, Hospice census gains, and the HomeCourt Indiana acquisition (two months). |
| Personal Care revenue | $296.0M (78.4% of revenue); +6.8% same-store | Texas (9.9%) and Illinois (3.9%) rate support plus a 2.2% rise in hours per business day and improving fill rates. |
| Hospice revenue | $64.2M (17% of revenue); +11.1% same-store | Average daily census up 6.5% to 3,964 and higher revenue per patient day, partly offset by a >$3 million Ohio Medicare cap accrual. |
| Home Health revenue | $17.2M (4.6% of revenue); -2.8% same-store | Narrowing decline with same-store new admissions up 9.8% and sequential improvement under new leadership. |
| Adjusted EBITDA | +11.9% to $49.2M (13% margin) | Revenue growth and G&A leverage (adjusted G&A 19.2%), despite the hospice cap accrual. |
| Adjusted EPS | +16.1% to $1.73 | Revenue growth and margin expansion, partly offset by a higher tax rate from WOTC expiration. |
| Operating cash flow | $40M in quarter | Continued strong collections; Illinois Department on Aging DSO fell to 26.8 days from 47.4 days; bank debt cut to $64.3 million. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| M&A pipeline acceleration | Two or three larger processes beginning | An increasing number of personal care opportunities plus renewed home health deal interest following the improved 2027 proposed rule; the company is actively pursuing and remains interested in Gentiva-scale, well-scaled assets while preserving its low-leverage balance sheet. | — |
| Personal Care census inflection | Illinois turned positive in Q1 | Illinois and New Mexico show good momentum while Texas holds steady; management targets a return to year-over-year same-store census growth in the second half of 2026 alongside continued sequential gains. | — |
| Caregiver app (Addus Connect) | Rolled out to all three big states | Illinois adoption over 90% with fill rate driving turnover slightly lower; Texas ramped faster than expected into the upper-80s; New Mexico slower due to the state's EVV system. | — |
| Hospice Medicare cap management | Occasional isolated cap exposure | A >$3 million Ohio cap accrual was recorded, with mitigation strategies expected to prevent further cap expense this year; management emphasizes maintaining a balanced long/short-stay referral mix. | — |
| Bridge Program & EMR consolidation | New Mexico and Tennessee, now Illinois | Bridge Program referrals from Home Health to Hospice exceed 25% in New Mexico and Tennessee; Personal Care conversion to Homecare Homebase is on track to complete by the end of Q1 2027, enabling a full-continuum bridge, with ~$1 million of Gentiva EMR synergies expected in 2027. | — |
| Fraud, waste and abuse / state funding | Supportive of scrutiny | Federal payment withholding tied to audits (e.g., Minnesota, California) has not affected Addus's markets; states that have finalized budgets maintained rates, with Oregon and Michigan granting increases, and Illinois flat this cycle. | — |