Aveanna Healthcare (NASDAQ:AVAH) raised its full-year 2026 outlook after reporting double-digit revenue and adjusted EBITDA growth in the first quarter, citing improved reimbursement rates, higher volumes and operating efficiencies across its three business segments.
Chief Executive Officer Jeff Shaner said revenue for the quarter was approximately $648 million, up 15.9% from the prior-year period, while adjusted EBITDA rose 25.2% to $84.4 million. Shaner said the results reflected progress in aligning caregiver capacity with government and managed care payers willing to support enhanced reimbursement and value-based arrangements.
Company Raises 2026 Guidance
Based on the first-quarter performance and continued execution of its strategic initiatives, Aveanna increased its full-year 2026 revenue guidance to a range of $2.56 billion to $2.58 billion. The company also raised its adjusted EBITDA guidance to a range of $328 million to $332 million.
Shaner said the outlook does not include any contribution from the pending acquisition of Family First Homecare, a Florida-based pediatric homecare company. Aveanna expects that transaction to close in late in the second quarter, subject to regulatory approval.
Chief Financial Officer Matt Buckhalter said the company benefited in the quarter from roughly $6 million in strong collections on previously reserved accounts receivable, which lifted both revenue and EBITDA. He said the benefit was tied in part to artificial intelligence and automation initiatives in revenue cycle management that have helped reduce days sales outstanding and improve cash collections.
Shaner said that, excluding the timing-related collections, the company views first-quarter adjusted EBITDA as being in the high $70 million range, with a more modest sequential build into the second quarter than in a typical year.
Segment Growth Broad-Based
Buckhalter said Aveanna generated year-over-year revenue growth in each of its three operating divisions:
- Private Duty Services: Revenue rose 16.4% to approximately $536 million, driven by about 12.1 million hours of care, up 10.7% from the prior-year period. Revenue per hour increased 5.7% to $44.43.
- Home Health and Hospice: Revenue increased 17.4% to approximately $66.6 million. The segment reported about 11,000 total admissions and 14,900 episodes of care, with total episodes up 23.1% year over year.
- Medical Solutions: Revenue rose 7.4% to $45.7 million, driven by approximately 93,000 unique patients served and revenue per unique patient served of about $491.
In Private Duty Services, Buckhalter said gross margin was $149.2 million, or 27.9%, while the spread per hour was $12.38. He said the company continues to pass through wage improvements and other benefits to caregivers as part of efforts to improve volumes.
In Home Health and Hospice, Aveanna’s episodic mix was approximately 80%, above its stated target of maintaining the mix above 75%. Buckhalter said the segment’s gross margin was 53.7%, reflecting cost initiatives and a focus on episodic admissions. Shaner said the company has seen more Medicare Advantage payers become comfortable with episodic contracting.
For Medical Solutions, gross margin was approximately $20.4 million, or 44.7%. Shaner said the business is expected to remain in the mid-single-digit growth range for the next few quarters before returning to double-digit growth by the end of the year. In the question-and-answer session, he later said high-single-digit growth by the fourth quarter and low-double-digit growth in the first half of next year may be a more realistic progression.
Preferred Payer Strategy Expands
Aveanna executives repeatedly pointed to preferred payer agreements as a central driver of the company’s strategy. In Private Duty Services, Shaner said Aveanna signed four preferred payer agreements in the first quarter and remains on track toward its 2026 goal of adding eight agreements, for a total of 38 preferred payers.
Preferred payer agreements accounted for about 60% of Aveanna’s total Private Duty Services managed care organization volumes in the quarter, up from 57% at the end of 2025. Shaner said the company expects that figure to move into the low- to mid-60% range this year, with a longer-term opportunity to reach the low- to mid-80% range.
In Home Health, Aveanna added four preferred payer agreements in the quarter after ending 2025 with 45. The company had previously expected to add five in all of 2026, and Shaner said Aveanna is on track to exceed its goal of 50 preferred payers in the segment.
In Medical Solutions, Aveanna signed two additional preferred payer agreements, bringing the total to 20. The company entered 2026 with a goal of reaching 25 by year-end.
Regulatory Questions Focus on Medicare Moratorium
Analysts questioned management about a newly announced Centers for Medicare & Medicaid Services moratorium on new Medicare enrollment for home health and hospice providers. Shaner said the announcement was consistent with CMS messaging around fraud, waste and abuse, though he expressed disappointment that a nationwide moratorium was being used to address what he described as targeted issues in areas such as Los Angeles County.
Shaner said the moratorium has “absolutely no impact” on Aveanna’s 2026 guidance, current business plan or ability to grow. He said it does not affect the company’s Medicaid business or the pending Family First acquisition, and that Aveanna expects to continue a thoughtful acquisition strategy in Home Health and Hospice.
Balance Sheet and Capital Allocation
Aveanna ended the first quarter with approximately $525 million of liquidity, including $189 million of cash, $110 million of availability under its securitization facility and $226 million of availability on its undrawn revolver. Buckhalter said the company had approximately $1.48 billion of variable-rate debt at quarter-end, with substantially all of it hedged through swaps and interest rate caps.
Cash generated by operating activities was $4.3 million in the quarter, while free cash flow was negative $3.8 million. Buckhalter said the first quarter is typically the seasonal low point for both measures, with improvement expected through the rest of the year.
On capital allocation, Buckhalter said Aveanna remains focused on organic and inorganic growth while continuing to manage leverage. He said the company reduced net leverage to 3.8 times on a trailing 12-month basis and remains focused on moving toward at or below 3 times over time. Beyond Family First, he said the company may pursue small tuck-in acquisitions, but likely nothing “monumental” this year.
Shaner said Aveanna’s 2026 strategic priorities include strengthening government and preferred payer partnerships, improving clinical outcomes and customer engagement scores, using artificial intelligence and automation to improve efficiency, growing through acquisitions while improving net leverage and free cash flow, and engaging employees around the company’s mission.
About Aveanna Healthcare (NASDAQ:AVAH)
Aveanna Healthcare, Inc (NASDAQ: AVAH) is a national provider of in-home health care services, specializing in pediatric skilled nursing, therapy, and related support for medically complex and chronically ill children. The company delivers a range of clinical and therapeutic solutions designed to enable patients to receive care in the comfort of their own homes, reducing the need for hospital stays and long-term institutional care. Aveanna’s offerings include registered nursing, physical, occupational and speech therapy, behavioral health counseling, and durable medical equipment coordination.
In addition to pediatric home health services, Aveanna operates adult home health and personal care support programs, assisting elderly and disabled adults with daily living activities, medication management, and rehabilitation therapies.
