Addus HomeCare (ADUS) investor relations material

Key performance drivers and challenges

• Focused on revitalizing the hospice segment in 2025 through leadership and sales investments, showing strong progress.

• Emphasized growing census with a focus on maximizing hours per client for profitability.

• Navigated Medicaid program changes under the Trump administration, requiring operational adjustments.

• Addressed redetermination pressures in key states, impacting census growth trends.

• Sequential census growth expected to continue into 2026, with improvements seen in Illinois, Texas, and New Mexico.

Rate environment and regulatory landscape

• Received recent rate increases in Texas and New Mexico, with Illinois' budget process ongoing and no increase currently anticipated.

• States value personal care for its cost savings versus institutional care, supporting reimbursement rates.

• Rate support has enabled caregiver pay above minimum wage in most markets, though future increases may slow.

• Compliance investments and proactive audits support strong fraud and abuse prevention.

• Regulatory scrutiny may pressure smaller providers, potentially leading to acquisition opportunities.

Labor trends and technology initiatives

• Labor environment has stabilized, with hiring trends positive and aided by inflation and higher unemployment.

• Maintaining daily hires above 105 supports census growth targets.

• Technology and AI have streamlined onboarding, improving hiring efficiency.

• Caregiver app rollout in Illinois increased fill rates from low 80% to upper 80%, with similar gains targeted in Texas and New Mexico.

• App functionality is limited in New Mexico due to state-mandated systems, but full features are available in Texas.