Addus HomeCare (ADUS) 47th Annual Raymond James Institutional Investor Conference summary

Strategic evolution and business performance

• Transitioned from a pure-play Personal Care company with 5-6% margins to a diversified provider with 12-13% margins and over $1.5 billion in revenue, driven by cost structure improvements, M&A, and clinical service additions.

• Largest acquisition to date, Gentiva, added $280 million in annualized revenue and expanded presence in Texas, performing in line with expectations.

• Focus remains on organic growth, margin expansion, and leveraging scale, with continued interest in tuck-in M&A and potential larger deals later in the year.

• Hospice business has rebounded post-COVID, showing strong ADC growth after operational and sales force changes.

• Technology initiatives, such as the caregiver app, have improved fill rates and are being rolled out to additional states.

Medicaid pricing, regulatory environment, and compliance

• Achieved significant rate increases in key markets: nearly 10% in Texas (effective September 2025) and 4-5% in New Mexico (effective back half of 2024); Illinois rate increases remain uncertain but historically consistent.

• Gross margin pull-through on rate increases typically in the mid-20% range, with some state-specific variations.

• Robust compliance investments and processes in place, including pre-service training, supervisory visits, and client surveys, with no material impact from recent industry fraud headlines.

• No observed impact from immigration or Medicaid cuts on labor or demand; company positioned as a low-cost, high-quality provider valued by states.

• Government relations led by an experienced team, with state-specific lobbyists and industry association participation.

Operational trends and outlook

• Personal Care census declined due to state redeterminations and administrative bottlenecks but is now showing sequential improvement, with expectations for year-over-year growth by mid-2024.

• Hiring remains strong, aided by economic conditions and inflation-driven wage needs; fill rates improved with technology adoption.

• Margin profile expected to remain stable or improve, with Q1 typically the seasonal low; continued leverage on G&A anticipated.

• Hospice organic growth expected to moderate from recent double-digit rates to upper single digits; home health remains a small, opportunistic segment.

• M&A focus remains on smaller, accretive deals and select larger opportunities, with a clean balance sheet enabling flexibility.