Addus grew Q2 2026 revenue 8.0% to $377.4M and diluted EPS 24% to $1.49 on personal care hours and state rate increases, while hospice profit fell 18% and home health shrank.
Revenue
$377M
+8.0% YoY
Net income
$28M
+25.2% YoY
Diluted EPS
$1.49
+24.2% YoY
Operating margin
10.3%
This period vs a year ago
Same period last year
This period
Revenue▲+8.0%
≈$349M
$377M
Net income▲+25.2%
≈$22M
$28M
Diluted EPS▲+24.2%
≈$1.20
$1.49
Year-ago figures (≈) are worked out from the growth rate the company reported. Each row has its own scale.
Personal care carried the quarter: revenue up 8%, earnings per share up 24%
Addus HomeCare sends caregivers into people's homes. Most of its business (78% of second-quarter revenue) is personal care: non-medical help with bathing, dressing and meals, mostly for elderly or disabled people on Medicaid, paid by the hour by state agencies and by the private insurers that run Medicaid plans for states ("managed care organizations"). The rest is hospice (end-of-life care, 17%, almost all paid by Medicare) and home health (short-term nursing and therapy at home, 5%).
In the quarter ended June 30, 2026, revenue rose 8.0% to $377.4 million and net income rose 25.2% to $27.6 million, or $1.49 per diluted share against $1.20 a year earlier. Almost all of the growth came from personal care, where Addus both served more hours and got paid more per hour. Hospice looked fine on its own organic measure but earned less profit than a year ago, and home health shrank.
At a glance
+10.0% personal care revenue ($296.0M): billable hours rose 5.6% and revenue per hour rose 4.2% to $26.55, helped by state rate increases in Texas and Illinois. This segment produced about 80% of segment profit.
Hospice profit down 18.3% ($12.1M) despite 6.6% more patients on an average day: reported hospice revenue grew only 3.3%, well below the 11.1% "organic" growth management quotes, and care costs rose 11.0%.
$92.4M operating cash flow in the first half vs $52.7M net income: faster payment by Illinois, Addus's largest payer, turned profit into cash at 1.75x, and Addus paid down $60M of debt.
Metric
Q2 2026
Q2 2025
YoY Change
Net service revenue
$377.4M
$349.4M
+8.0%
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Gross margin
32.2%
32.6%
-0.4 pts
Operating income
$38.9M
$32.9M
+18.4%
Operating margin
10.3%
9.4%
+0.9 pts
Net income
$27.6M
$22.1M
+25.2%
Diluted EPS
$1.49
$1.20
+24.2%
Adjusted EPS (company non-GAAP)
$1.73
$1.49
+16.1%
Adjusted EBITDA (company non-GAAP)
$49.2M
$43.9M
+11.9%
Personal care same-store revenue growth
6.8%
7.4%
-0.6 pts
Personal care billable hours
11.15M
10.56M
+5.6%
Personal care revenue per billable hour
$26.55
$25.49
+4.2%
Hospice average daily census
3,964
3,720
+6.6%
Gross margin is the share of revenue left after paying caregivers and other direct care costs. Operating margin is the share left after also paying for offices, head office and depreciation, before interest and tax. "Same-store" growth counts only locations open at least a year, so it strips out acquisitions.
Personal care: more hours and a higher price per hour
Personal care revenue rose $26.8 million (10.0%) to $296.0 million. The filing splits that cleanly: 5.6% more billable hours and 4.2% more revenue per billable hour. Management credits the price side to state rate increases, a 9.9% increase in Texas late last year and a 3.9% increase in Illinois in January (the Illinois hourly rate for in-home care is now $30.80). On the volume side, the average number of clients rose only 1.4% to 51,097; most of the extra hours came from each client receiving more care, 72.9 hours a month against 69.8.
Part of the growth was bought rather than organic. Same-store revenue grew 6.8%, so roughly 3 points of the 10.0% came from acquisitions: Helping Hands (Pennsylvania, August 2025), Gold Horses (Texas, October 2025) and HomeCourt Home Care (Indiana, bought for about $12.2 million on May 1, 2026, so it contributed two months).
Profitability improved: gross margin rose to 28.9% from 28.2%, which the filing attributes to higher revenue per billable hour, and segment operating income grew 16.9% to $60.4 million, a 20.4% margin against 19.2%. The payer mix also kept shifting toward managed care organizations, now 47.1% of personal care revenue against 45.3%.
Concentration remains the main feature of this segment: Illinois was 32.1% of total company revenue, and a single payer, the Illinois Department on Aging, was 17.7%.
Hospice and home health: more patients, less profit
Hospice revenue rose 3.3% to $64.2 million, but segment operating income fell 18.3% to $12.1 million and the segment margin dropped to 18.8% from 23.8%. The filing puts the gross margin drop (44.0% from 47.9%) down to higher direct wages, taxes and benefits as a share of revenue. The volume numbers are mixed:
Average daily census (patients on service on a typical day) rose 6.6% to 3,964, but admissions slipped 0.4% to 3,247.
The census grew because patients stayed longer: average length of stay at discharge rose to 100.1 days from 90.6.
Home health revenue fell 4.8% to $17.2 million on 6.5% fewer visits, partly offset by a better payer mix, and segment operating income fell 25.0% to $3.3 million. New admissions rose 9.8%, which management describes as "more favorable admission and volume trends", but recertifications (patients continuing into a second 60-day episode) fell 1.7%. Medicare is also paying less: CMS estimates its 2026 home health payments fall 1.3%.
What the headline numbers hide
Cash conversion is strong, but partly timing. First-half operating cash flow was $92.4 million against $52.7 million of net income, and $40.0 million in the second quarter alone. The filing attributes the jump from $41.5 million a year earlier to the timing of receivable collections and of payroll and supplier payments. Receivables fell $5.8 million while revenue grew; days sales outstanding (how long customers take to pay) fell to 36 from 38, and for the Illinois Department on Aging to 27 days from 55 at year-end. Illinois has historically paid in lumps, so some of this can reverse.
Hospice's reported revenue is well below its "organic" revenue. Management highlights 11.1% organic hospice revenue growth, but reported hospice revenue grew only 3.3%. The organic figure and the $190.66 revenue per patient day both exclude "one-time adjustments such as ARPA, Medicare cap or specific situational reserves". By our arithmetic, $190.66 times 360,692 patient days is about $68.8 million, roughly $4.5 million more than the $64.2 million actually booked, against a gap of about $0.4 million a year ago. The filing does not itemize the adjustment, so we can't say which item it is. One likely candidate: Medicare caps the total it pays a hospice per patient ($35,361 for federal fiscal 2026), and longer average stays push providers closer to that cap. Either way, it is why hospice profit fell while its headline census grew.
The GAAP-to-adjusted gap is mostly stock pay. Adjusted EPS of $1.73 excludes $0.17 of stock-based compensation, $0.06 of acquisition expenses and $0.01 of restructuring. Stock compensation ($4.4 million this quarter) is a recurring cost of paying staff, so we anchor on GAAP EPS of $1.49.
Part of the EPS growth came from below the operating line. Pre-tax income rose $7.8 million. $1.8 million of that came from lower interest expense, which halved to $1.7 million as Addus repaid its revolving credit line (from $124.3 million at year-end to $64.3 million) at a slightly lower rate. Lower acquisition costs ($1.5 million against $2.7 million) also helped operating income. Excluding acquisition expenses, operating income grew about 13.5% rather than 18.4%. Buybacks played no role: diluted shares rose 0.8%. A higher tax rate (26.9% against 26.4%) was a small headwind.
A temporary subsidy is still in the cost line. Addus spent $2.4 million of state pandemic-era ARPA funds on caregivers in the quarter, booked as a reduction of care costs. That is about 0.6 points of gross margin. $12.4 million of unspent ARPA money sits on the balance sheet, and several state spending plans run only through September 30, 2026. The filing does not give the prior-year quarter's usage, so we can't say whether this flattered the year-over-year comparison.
Takeaway: Addus is increasingly a personal care company whose earnings depend on state Medicaid rates. That segment grew 10% and earned about 80% of segment profit, with hours and rate both up, while hospice profit fell 18% and home health shrank. The pending AccentCare deal would add about $280 million of mostly personal care revenue. That makes the next Illinois and Texas rate decisions matter even more than they do now.
Outlook
Addus does not publish formal financial guidance, and the release gives none. What the filings do lay out:
A large acquisition. On September 14, 2026, Addus agreed to buy AccentCare's personal care division (outside New York) for about $275 million, funded from its credit line and cash. The division serves an average of about 13,700 clients in 10 states, mainly Texas, Illinois, California and Arizona. It is expected to add about $280 million of annual revenue, roughly 19% of Addus's revenue base. Closing awaits regulatory approval. At June 30 Addus had $99.6 million of cash against $64.3 million of bank debt and $577.8 million of unused borrowing capacity, so it can fund the deal without strain. The deal would, however, put more of the company's revenue on Illinois and Texas rates.
Rate risk in Illinois. The Illinois fiscal 2027 budget keeps the $30.80 hourly rate flat, so 2026's increase is not being followed by another. The filing warns that results will suffer in any period where wage increases are not matched by a rate increase. Illinois's waiver for its main elderly home care program also expires September 30, 2026 unless CMS renews it.
Regulatory headwinds in the smaller segments. In May 2026 CMS put a six-month nationwide freeze on new Medicare enrollments for hospices and home health agencies, including new branches, which limits opening new clinical locations. The 2025 federal budget law (OBBBA) is expected to reduce Medicaid spending over time.
Management change. President and COO Heather Dixon left on August 10, 2026. Former COO Brad Bickham is back as interim COO for one year.
Our read: personal care looks steady. Same-store growth has held near 7%, and more hours per client suggests the demand is there. The next leg of margin gains, however, depends on rate increases that Illinois has just paused. In the Q3 report, watch three things: whether the gap between hospice's organic and reported revenue closes (a one-off) or recurs (a structural cap problem), whether home health's admission gains turn into visit growth, and how much of the first-half cash surge reverses as Illinois payment timing normalizes.