Addus HomeCare (NASDAQ:ADUS) reported second-quarter 2026 revenue growth of 8% and adjusted earnings-per-share growth of 16.1%, supported by expansion in personal care and hospice services, improved cash generation and ongoing acquisition activity.
Total net service revenues rose to $377.4 million from $349.4 million in the second quarter of 2025. Adjusted EBITDA increased 11.9% to $49.2 million, while adjusted diluted earnings per share rose to $1.73 from $1.49 a year earlier. Chairman and Chief Executive Officer Dirk Allison said cash flow from operations reached $40 million during the quarter, compared with $22.5 million in the prior-year period.
Personal Care Remains Largest Business
Personal care generated $296 million, or 78.4% of quarterly revenue. Same-store revenue in the segment increased 6.8% year over year, with same-store hours per business day rising 2.2%, within the company’s stated target range of 2% to 2.5%.
Addus said its personal care same-store census increased 1.2% sequentially, with growth in most markets. Allison highlighted client growth in Illinois, the company’s largest personal care market, and said the company expects to achieve year-over-year same-store census growth in the second half of 2026.
Hiring trends remained positive, though hires per business day of 104 were modestly below the prior quarter and roughly in line with the second quarter of 2025. The company’s consolidated percentage of authorized hours served improved into the mid-80% range. Poff said the company believes its fill rate could move into the upper 80% range on a consolidated basis, though reaching more than 90% would be difficult.
The company attributed some improvement in Texas to the rollout of its caregiver app. Poff said Texas fill rates had moved into the mid- to upper-80% range and that adoption was progressing faster than expected. New Mexico’s rollout has been slower because it must work through the state’s electronic visit verification application.
Allison said Addus has seen slightly lower caregiver turnover in markets where the app has been deployed. In Illinois, more than 90% of caregivers have downloaded and are using the app, Poff said.
Hospice Growth Offsets Home Health Decline
Hospice revenue totaled $64.2 million, or 17% of revenue, and same-store hospice revenue grew 11.1% from a year earlier. Same-store average daily census rose 6.5% to 3,964, and the company said hospice average daily census exceeded 4,000 in July. Median hospice length of stay was 24 days, compared with 22 days in the second quarter of 2025.
Addus recorded a little more than $3 million in Medicare cap accruals during the quarter, primarily related to its Ohio market. Poff said the company does not expect additional cap exposure during the rest of the year and believes mitigation efforts could reduce some of the expense before the end of the cap year.
Home health revenue was $17.2 million, or 4.6% of quarterly revenue. Same-store revenue declined 2.8% year over year, an improvement from the 6.6% decline reported in the first quarter. Management cited sequential improvements in revenue, operating income, admissions and referral conversion. Allison said newly hired leadership in home health has begun making changes that contributed to improving admissions trends.
Margins, Rates and Acquisition Strategy
Gross margin was 32.2%, compared with 32.6% a year earlier, but expanded 30 basis points sequentially from the first quarter. Adjusted general and administrative expenses declined to 19.2% of revenue from 20% a year earlier. Adjusted EBITDA margin increased to 13% from 12.6%.
Poff said Addus continues to expect full-year adjusted EBITDA margin between 12% and 13%, and indicated results could trend toward the high end of that range. He said margins are typically relatively steady from the second to third quarter before improving in the fourth quarter, when hospice reimbursement increases take effect and payroll-tax pressures ease.
On reimbursement, management said Illinois finalized its budget without a new rate increase for the next cycle, though wages are also expected to remain stable in that market. Addus received rate support in Michigan and Oregon, while New Mexico has allocated additional funds for services. Poff said the company expects New Mexico’s increase to be directionally near 4%, subject to ongoing negotiations with managed-care organizations.
The Centers for Medicare & Medicaid Services proposed a 2.1% net home health payment-rate increase for 2027 after accounting for a proposed 3% temporary adjustment. CMS also issued a final fiscal 2027 hospice payment update of 2.3%, effective Oct. 1, 2026. Addus said its market-specific hospice increase will likely be somewhat below the national average.
Addus completed the acquisition of HomeCourt Home Care’s personal care operations in Fort Wayne, Indiana, on May 1. The company also has an agreement to acquire certain operating assets of another personal care provider in the Indianapolis area, pending customary closing conditions and regulatory approval. Management said HomeCourt has performed ahead of initial volume expectations.
Allison said Addus is seeing more personal care acquisition opportunities as owners become more comfortable with the impact of Medicaid policy changes. He also cited increased optimism around skilled home health transactions following the proposed 2027 payment rule. The company said it will consider both smaller and scaled acquisitions while maintaining disciplined capital allocation.
About Addus HomeCare (NASDAQ:ADUS)
Addus HomeCare (NASDAQ: ADUS) is a leading provider of home and community-based care services for elderly, disabled, and medically complex individuals across the United States. Through a network of company-owned and franchise locations, the company delivers a broad spectrum of non-medical personal care and licensed home health services designed to support clients’ independence and quality of life.
The company’s core offerings include personal care assistance—covering daily living activities, medication reminders, and light housekeeping—and skilled home health services delivered under the supervision of registered nurses and licensed therapists.
