What Management Said
Read the full Q1 2026 transcript ↗As we do on each of our quarterly earnings calls, I will begin with a few overall comments, Brian will discuss the first quarter results in more detail. As we announced yesterday afternoon, our total revenue for the first quarter of 2026 was $363.6 million, an increase of 7.7% as compared to $337.7 million for the first quarter of 2025. This revenue growth resulted in an adjusted earnings per share of $1.62 as compared to adjusted earnings per share for the first quarter of 2025 of $1.42, an increase of 14.1%. Our adjusted EBITDA was $44.5 million compared to $40.6 million for the first quarter of 2025, an increase of 9.7%.
For the first quarter of 2026, cash flow from operation was $52.4 million as compared to $18.9 million for the same period in 2025. During the first quarter, we saw an impact on revenue due to the widespread weather event that occurred towards the end of January. While the amount of the revenue was immaterial to our company overall, we did see a loss of revenue of approximately $1.5 million as a result of these storms. As we announced on May 1, we closed on the acquisition of the personal care operations 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 that this additional Indiana acquisition should close in the coming months, subject to customary regulatory approvals. As we mentioned on our last earnings call, the State of Illinois increased our rates in personal care service effective on January 1, 2026, adding approximately $17.5 million in annualized revenues. This most recent rate increase continues to show the important support we are receiving from our state partners as we continue to provide these much-needed services to our elderly and disabled clients.
What went well
- First-quarter revenue grew 7.7% year-over-year to $363.6 million, with adjusted EPS up 14.1% to $1.62 and adjusted EBITDA up 9.7% to $44.5 million (a 12.2% margin).
- Personal Care Services (77.3% of revenue at $281.1 million) grew 8.8% overall and 6.5% on a same-store basis, benefiting from the 3.9% Illinois rate increase effective January 1, 2026 and the 9.9% Texas increase from September 2025; Gentiva entered the same-store base for the first time.
- Illinois - the company's largest market - turned to census growth as starts of care exceeded discharges, with March census exceeding both January and February, a key milestone for returning to year-over-year census growth.
- Generated very strong operating cash flow of $52.4 million (versus $18.9 million a year earlier), reducing bank debt to $94.3 million (down $30 million) and ending with $103.1 million of cash and ample revolver availability.
- Announced entry into Indiana with the HomeCourt Home Care acquisition (closed May 1, ~240 clients, ~$9.7 million annual revenue) plus a signed definitive agreement for a similarly sized second Indiana operation, giving nearly $20 million of combined revenue in an attractive adjacent market.
- Adjusted G&A improved to 19.6% of revenue from 19.9% a year earlier, continuing the company's operating-leverage trend.
What went wrong
- A widespread late-January winter-weather event reduced revenue by approximately $1.5 million and weighed on sequential Personal Care census, though February and March normalized.
- Home Health same-store revenue declined about 6.6% year-over-year, remaining the smallest and weakest segment at 4.6% of revenue, though operating income improved year-over-year and sequentially.
- Hospice revenue per patient day growth turned negative for the first time in a while as the prior implicit price-concession benefit reverted to historical norms, alongside some mix impact.
- Gross margin was 31.9% - seasonally the low-water mark - pressured by annual merit increases and the payroll-tax reset, consistent with the company's historical pattern.
- Non-cash stock-based compensation rose sequentially (about $0.20 per share) due to one-time accelerated vesting tied to the former President and COO's retirement.
Guidance Changes
| Metric | Period | Current guidance |
|---|---|---|
| Adjusted EBITDA margin | FY2026 | Expected to remain above 12% for the full year |
| Personal Care same-store revenue growth | FY2026 | Expected at the high end of, or above, the normal 3%-5% range for the remainder of the year |
| Hospice same-store revenue growth | FY2026 | Long-term expectation of upper single digits, not the double-digit rates of 2025 |
| Same-store hours per business day | FY2026 | Targeting a 2.0%-2.5% range going forward |
| Effective tax rate | FY2026 | Expected in the mid-20% range for the full year |
Performance Breakdown
| Metric | YoY | Note |
|---|---|---|
| Total revenue | +7.7% to $363.6M | Personal Care volume and rate growth plus acquisitions, partly offset by winter-weather impact and two fewer business days. |
| Personal Care revenue | $281.1M (77.3% of revenue); +8.8% total / +6.5% same-store | Illinois (3.9%) and Texas (9.9%) rate support plus higher volumes; Gentiva now in the same-store base. |
| Hospice revenue | $65.8M (18.1% of revenue); +7.7% same-store | Higher average daily census (8.2% to 3,804), partly offset by lower revenue per patient day as implicit price concessions normalized. |
| Home Health revenue | $16.7M (4.6% of revenue); -6.6% same-store | Volume weakness, though operating income improved year-over-year and sequentially and admissions/visits rose sequentially. |
| Adjusted EBITDA | +9.7% to $44.5M (12.2% margin) | Revenue growth and G&A leverage (adjusted G&A 19.6%). |
| Adjusted EPS | +14.1% to $1.62 | Revenue growth, margin leverage and a lower effective tax rate (22.7%) from an excess stock-comp tax benefit. |
| Operating cash flow | $52.4M (vs $18.9M) | Strong collections and resolution of year-end payment-cycle timing; Illinois Department on Aging DSO improved to 47.4 days from 54.7 days. |
Earnings Call Themes & Trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Personal Care census inflection | Census soft in 2025 | Illinois turned to growth with starts of care exceeding discharges; management believes all three big states (Illinois, Texas, New Mexico) are positioned to grow census in 2026, though it emphasizes billable hours over raw census. | — |
| Indiana market entry | - | HomeCourt Home Care (closed May 1) plus a signed second deal mark entry into Indiana, an attractive, less-competitive market adjacent to Illinois with good rate support since ~2023 and strong managed-Medicaid relationships. | — |
| Larger M&A pipeline | Mostly small tuck-ins | Two or three Gentiva-sized personal care processes have begun in the last few months; the clean, low-leverage balance sheet is being preserved specifically to execute larger deals as debt is paid down. | — |
| Caregiver app (Addus Connect) | Illinois and New Mexico | Now deployed across all three largest states; Texas rollout in Q1 saw over 10% adoption within days, expected to lift service percentage as the year progresses. | — |
| 80/20 Medicaid Access Rule | Expected repeal | Recent communications indicate the 80/20 provision is expected to be eliminated this year, an encouraging signal for the industry. | — |
| Self-directed care scrutiny | - | CMS skepticism of self-directed care (e.g., New York, California) is viewed as favorable for Addus's agency-directed, compliance-heavy model. | — |
Q&A Summary
Jefferies (Brian Tanquilut) asked about the Texas caregiver app rollout and the hospice cap outlook.
Dixon said the app is deployed in all three largest states with positive Texas adoption momentum; Poff said there are no current Medicare cap concerns given a well-managed referral mix and a 23-day median length of stay.
Stephens (Raj Kumar) asked about the Indiana rate backdrop and state budgets.
Poff cited strong Indiana rate support since ~2023 with consolidated-level margins and good managed-Medicaid coverage; New Mexico has finalized budget dollars for home and community-based services, while Illinois remained in session with its budget not yet finalized.
KeyBanc (Matthew Gillmor) asked about Personal Care census and the self-directed care model.
Dixon confirmed sequential census gains with March exceeding January/February and Illinois turning positive; Allison and management argued CMS scrutiny of self-directed care benefits Addus's compliance-driven agency model.
BMO (Christopher Charlton) asked what drives strong billable-hours growth amid declining census, and the 2027 Home Health rate outlook.
Dixon credited refined scheduling processes and the caregiver app improving fill rates; Poff expressed hope for a more favorable 2027 Home Health proposed rule as CMS appears more appreciative of the industry.
Citizens (Constantine Davides) asked about the size of the M&A pipeline and Indiana rates versus the blended average.
Allison said two or three Gentiva-sized opportunities are in process, enabled by the clean balance sheet; Indiana rates are higher than several Midwestern states with less competition.
TD Cowen (Ryan Langston) and RBC (Michael Murray) asked about Indiana market share/synergies and the Home Health return-to-growth timeline.
Poff said the combined Indiana deals give ~$20 million of revenue that tucks under existing regional leadership for G&A leverage; Dixon reiterated Home Health margins are where wanted with a focus on volume and a targeted return to growth later in 2026.
UBS (A.J. Rice) asked about seasonality of Personal Care/Hospice growth and appetite for Home Health M&A.
Poff expected PCS same-store to stay at the high end of or above the 3%-5% range and Hospice in the upper single digits; Allison said Addus would now look at strategically fitting Home Health deals that overlap Personal Care and Hospice.
Bank of America (Joanna Gajuk) asked about weather-adjusted hours growth, Q2 gross margin and the elevated stock comp.
Poff reaffirmed the 2.0%-2.5% same-store hours target, expected modest Q1-to-Q2 gross-margin improvement as payroll-tax caps are met, and confirmed the higher stock comp was a one-time item from accelerated vesting on the former COO's retirement.
More on Addus HomeCare Corp
Reported 2026-05-05 · figures from the Addus HomeCare Corp Q1 2026 earnings call.
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