Addus HomeCare Delivers Growth, Margin Gains in Q1

Addus HomeCare Corporation ((ADUS)) has held its Q1 earnings call. Read on for the main highlights of the call.

Addus HomeCare Corporation opened its latest earnings call on a confident note, emphasizing broad-based growth and stronger profitability despite a few operational bumps. Management pointed to higher revenue, expanding earnings, and robust cash generation as evidence that the company’s core strategy in personal care and hospice is working, with challenges such as weather and segment mix viewed as manageable rather than structural.

Revenue Growth

Addus reported first-quarter 2026 revenue of $363.6 million, a 7.7% increase from $337.7 million a year earlier, underscoring steady demand for its in-home care services. Management framed this top-line advance as balanced across core segments, even with a small drag from home health and a temporary hit from severe winter weather.

Adjusted EPS Improvement

Profitability improved faster than sales, with adjusted earnings per diluted share rising 14.1% to $1.62 from $1.42 in the prior-year quarter. The wider gap between EPS and revenue growth reflects operating leverage, disciplined cost control, and lower interest expense from reduced bank debt.

Adjusted EBITDA and Margin Expansion

Adjusted EBITDA climbed 9.7% to $44.5 million, lifting the adjusted EBITDA margin to 12.2% from 12.0%. Management reiterated that margins should stay above 12% for the full year, highlighting scale benefits and a more efficient cost structure even as the company continues to invest in growth and technology.

Strong Operating Cash Flow and Balance Sheet

Operating cash flow surged to $52.4 million from $18.9 million, giving Addus more financial flexibility for debt reduction and deal-making. The company ended the quarter with $103.1 million in cash, total bank debt of $94.3 million, and $547.8 million of available capacity on its $650 million revolving credit facility.

Personal Care Segment Performance

Personal care, Addus’s largest business, delivered revenues of $281.1 million, up 8.8% and representing 77.3% of total sales. Same-store revenue rose 6.5%, supported by a 2.2% increase in hours and improved hiring trends, with average daily hires advancing to 108 from 103 in the prior quarter.

Hospice Growth and Census Strength

Hospice remained a key growth engine, generating $65.8 million in revenue, or 18.1% of the total, with same-store revenue up 7.7%. Average daily census climbed 8.2% to 3,804 patients, and median length of stay extended to 23 days from 19, highlighting deeper penetration and stronger patient retention.

Operational Leverage and Cost Discipline

Gross margin held steady year over year at 31.9%, showing that revenue growth did not come at the expense of pricing or cost inflation. General and administrative expenses fell to 21.4% of revenue, with adjusted G&A at 19.6%, reflecting tighter spending and better leverage as the business scales.

Technology and Productivity Initiatives

Addus continued rolling out its caregiver app in Illinois and parts of New Mexico and Texas, with early adoption in Texas surpassing 10% within days. Management expects the tool to lift service levels, boost caregiver engagement, and increase billable hours, all of which should support both growth and margin gains over time.

M&A Progress and Market Expansion

On the deal front, Addus closed the acquisition of HomeCourt Home Care in Fort Wayne, Indiana, adding roughly 240 clients and about $9.7 million in annual revenue. The company also signed another Indiana personal care transaction and signaled interest in larger targets, saying its strengthened balance sheet leaves ample capacity for further M&A.

Weather-Related Revenue Impact

Management acknowledged that a widespread late-January storm disrupted personal care visits, leading to an estimated $1.5 million in lost revenue. Some missed visits could not be rescheduled, contributing to a modest sequential dip in personal care census, though volumes improved later in the quarter.

Home Health Revenue Decline

Home health, the smallest segment, posted revenue of $16.7 million, or 4.6% of the total, with organic revenue down 6.6% year over year. Even so, the company noted improved operating income, and sequential gains in admissions and visits, suggesting early signs of stabilization despite the top-line pressure.

Increase in Days Sales Outstanding

Days sales outstanding rose sharply to 63 days from 38.2 days at the end of the fourth quarter, a move management tied primarily to payment timing shifts. The company highlighted that some year-end timing issues have already been resolved and noted that Illinois DSO improved to 47.4 days from 54.7 days.

Hospice Revenue per Patient Day Weakness

While hospice volumes were strong, revenue per patient day declined versus prior periods, tempering the overall contribution from that segment. Executives attributed the softness mainly to the normalization of a prior price concession benefit and some mix changes, downplaying the risk of deeper structural pricing pressure.

One-Time Stock-Based Compensation

Reported results included higher non-cash stock-based compensation due to accelerated vesting tied to the retirement of the former president and COO. Management characterized this as a one-time item, which increased per-share adjustments but does not affect the underlying cash earnings profile.

Sequential Personal Care Census Dip

Personal care same-store census slipped slightly on a sequential basis, with the company again citing weather disruptions as a key factor. However, momentum improved later in the quarter, particularly in Illinois, giving management confidence that underlying demand remains intact.

Forward-Looking Guidance and Outlook

Looking ahead, Addus expects its adjusted EBITDA margin to remain above 12% for full-year 2026, supported by stable gross margins and disciplined G&A spending. The company is targeting an effective tax rate in the mid-20% range and sees continued growth from personal care and hospice, backed by strong cash flow, a solid balance sheet, and ample capacity for acquisitions.

Addus’s earnings call painted a picture of a company balancing disciplined execution with selective expansion in its core in-home care markets. For investors, the key takeaways were steady revenue growth, rising profitability, healthy cash generation, and a pipeline of M&A opportunities, with short-term headwinds such as weather, home health softness, and DSO volatility viewed as manageable against a constructive long-term backdrop.