10q10k10q10k.net

What changed in Addus HomeCare Corp's 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of Addus HomeCare Corp's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+453 added−424 removedSource: 10-K (2026-02-24) vs 10-K (2025-02-25)

Top changes in Addus HomeCare Corp's 2025 10-K

453 paragraphs added · 424 removed · 342 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

93 edited+54 added−23 removed110 unchanged
Biggest changeThe fraud and abuse laws and regulations to which we are subject include but are not limited to: • The federal Anti-Kickback Statute, which prohibits providers and others from directly or indirectly soliciting, receiving, offering or paying any remuneration with the intent of generating referrals or orders for services or items covered by a federal healthcare program.
Biggest changeThese laws include, but are not limited to, the federal Anti-Kickback Statute, the federal Stark Law, the federal False Claims Act (“FCA”), the federal Civil Monetary Penalties Law, other federal and state fraud and abuse, insurance fraud, and fee-splitting laws, which may extend to services reimbursable by any payor, including private insurers. 18 Table of Contents The fraud and abuse laws and regulations to which we are subject include but are not limited to: • The federal Anti-Kickback Statute, which prohibits providers and others from directly or indirectly soliciting, receiving, offering or paying any remuneration with the intent of generating referrals or orders for services or items covered by a federal healthcare program.
Medicaid Programs Medicaid is a state-administered program that provides certain social and medical services to qualifying low-income individuals and is jointly funded by the federal government and individual states. The federal government pays a percentage match for state Medicaid expenditures that varies by state and other factors, with no pre-set limit on federal spending.
Medicaid Medicaid is a state-administered program that provides certain social and medical services to qualifying low-income individuals and is jointly funded by the federal government and individual states. The federal government pays a percentage match for state Medicaid expenditures that varies by state and other factors, with no pre-set limit on federal spending.
Courts have interpreted this statute broadly and held that there is a violation of the Anti-Kickback Statute if just one purpose of the remuneration is to generate referrals. 14 Table of Contents • The federal physician self-referral law, commonly known as the Stark Law, which prohibits physicians from referring Medicare and Medicaid patients to healthcare entities in which they or any of their immediate family members have ownership interests or other financial arrangements, if these entities provide certain “designated health services” (including home health services) reimbursable by Medicare or Medicaid, unless an exception applies.
Courts have interpreted this statute broadly and held that there is a violation of the Anti-Kickback Statute if just one purpose of the remuneration is to generate referrals. • The federal physician self-referral law, commonly known as the Stark Law, which prohibits physicians from referring Medicare and Medicaid patients to healthcare entities in which they or any of their immediate family members have ownership interests or other financial arrangements, if these entities provide certain “designated health services” (including home health services) reimbursable by Medicare or Medicaid, unless an exception applies.
We believe that our model is well positioned to assist in meeting those goals while also improving consumer satisfaction, and, as a result, we expect increased referrals from managed care organizations. 3 Table of Contents Our Market and Opportunity We provide home care services that primarily include personal care services to assist with activities of daily living, as well as hospice and home health services.
We believe that our model is well positioned to assist in meeting those goals while also improving consumer satisfaction, and, as a result, we expect increased referrals from managed care organizations. 5 Table of Contents Our Market and Opportunity We provide home care services that primarily include personal care services to assist with activities of daily living, as well as hospice and home health services.
In addition, some states use, or have applied to use, waivers granted by CMS to impose non-standard eligibility or enrollment restrictions, implement Medicaid expansion under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the “ACA”), or otherwise implement programs that vary from federal standards.
Some states use, or have applied to use, waivers granted by CMS to impose non-standard eligibility or enrollment restrictions, implement Medicaid expansion under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the “ACA”), or otherwise implement programs that vary from federal standards.
The final rule includes significant provisions related to HCBS, including the “80/20” or “payment adequacy” requirement, which will require states to ensure that at least 80% of all Medicaid payments a provider receives for homemaker, home health aide, and personal care services, less certain excluded costs, under specified programs are spent on total compensation (including benefits) for direct care workers furnishing these services, rather than administrative overhead or profit, subject to limited exceptions.
The final rule includes significant provisions related to HCBS, including the “80/20” or “payment adequacy” requirement, which will require states to ensure by mid-2030 that at least 80% of all Medicaid payments a provider receives for homemaker, home health aide, and personal care services, less certain excluded costs, under specified programs are spent on total compensation (including benefits) for direct care workers furnishing these services, rather than administrative overhead or profit, subject to limited exceptions.
We completed two acquisitions in 2024: the personal care business of Curo Health Services, LLC, a Delaware limited liability company that does business as Gentiva, consisting of certain equity interests and assets and liabilities, on December 2, 2024 (collectively, the “Gentiva Acquisition”), and Upstate Home Care Solutions (“Upstate”) on March 9, 2024 .
We completed two acquisitions in 2024: the personal care business of Curo Health Services, LLC, a Delaware limited liability company that does business as Gentiva, consisting of certain equity interests and assets and liabilities, on December 2, 2024 (collectively, the “Gentiva Acquisition”), and Upstate Home Care Solutions (the “Upstate Acquisition”) on March 9, 2024.
Permits, Licensure and Certificate of Need Our hospice, home health and personal care services are authorized and/or licensed in accordance with various state and county requirements, which also address a variety of operational issues including standards for the provision of medical or care services, clinical records, personnel, infection control and care plans.
Permits, Licensure and Certificate of Need Our hospice, home health and personal care services are authorized and/or licensed in accordance with various state and local requirements, which also address a variety of operational issues including standards for the provision of medical or care services, clinical records, personnel, infection control and care plans.
At the current time, our compliance with environmental legal requirements, including legal requirements relating to climate change, do not have a material effect on our capital expenditures, financial results or operations, and we did not incur material capital expenditures for environmental matters during the year ended December 31, 2024.
At the current time, our compliance with environmental legal requirements, including legal requirements relating to climate change, do not have a material effect on our capital expenditures, financial results or operations, and we did not incur material capital expenditures for environmental matters during the year ended December 31, 2025.
As of December 31, 2024, we provide all three levels of care, personal care, home health and hospice services, in Ohio, Tennessee, Illinois and New Mexico and strategically continue to pursue other markets. A summary of our financial results is provided in the table below.
As of December 31, 2025, we provide all three levels of care, personal care, home health and hospice services, in Ohio, Tennessee, Illinois and New Mexico and strategically continue to pursue other markets. A summary of our financial results is provided in the table below.
Increased competition may result in pricing pressures, loss of or failure to gain market share or loss of consumers or payors, any of which could harm our business. 6 Table of Contents Our strategies are designed to help our service lines remain competitive.
Increased competition may result in pricing pressures, loss of or failure to gain market share or loss of consumers or payors, any of which could harm our business. 8 Table of Contents Our strategies are designed to help our service lines remain competitive.
The references to our website address in this Form 10-K do not constitute incorporation by reference of the information contained on the website and should not be considered part of this document. 16 Table of Contents
The references to our website address in this Form 10-K do not constitute incorporation by reference of the information contained on the website and should not be considered part of this document. 21 Table of Contents
Without our services, many of our consumers would be at increased risk of hospitalization or placement in a long-term care institution. Personal Care Our personal care segment provides non-medical assistance with activities of daily living, primarily to persons who are at increased risk of hospitalization or institutionalization, such as the elderly, chronically ill or disabled.
Without our services, many of our consumers would be at increased risk of hospitalization or placement in a long-term care institution. 7 Table of Contents Personal Care Our personal care segment provides non-medical assistance with activities of daily living, primarily to persons who are at increased risk of hospitalization or institutionalization, such as the elderly, chronically ill or disabled.
Managed care organizations are a significant portion of our personal care segment payor mix as a result of states shifting from administering fee-for-service programs to utilizing managed care models. See “ Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview ” for our revenue mix by payor type.
Managed care organizations are a significant portion of our personal care segment payor mix as a result of states shifting from administering fee-for-service programs to utilizing managed care models. See “ Management ’ s Discussion and Analysis of Financial Condition and Results of Operations — Overview ” for our revenue mix by payor type.
We believe our experience identifying and executing on opportunities generated by our acquisition pipeline, as well as our history of integrating acquisitions, will lead to additional growth. 5 Table of Contents Our Services We operate three business segments: personal care, hospice and home health.
We believe our experience identifying and executing on opportunities generated by our acquisition pipeline, as well as our history of integrating acquisitions, will lead to additional growth. Our Services We operate three business segments: personal care, hospice and home health.
We have numerous collective bargaining agreements with local affiliates of the Service Employees International Union (“SEIU”), which are renegotiated from time to time. People Development and Experience: We believe in a strong workplace culture focused on people development.
We have numerous collective bargaining agreements with local affiliates of the Service Employees International Union (“SEIU”), which are renegotiated from time to time. 14 Table of Contents People Development and Experience: We believe in a strong workplace culture focused on people development.
Through these comprehensive safety efforts, the Addus safety program enhances our ability to provide consistent and quality client care and service. Talent Acquisition Talent acquisition is a strategic imperative of the company, and our Addus CARES culture is committed to attracting, retaining, and engaging talent.
Through these comprehensive safety efforts, the Addus safety program enhances our ability to provide consistent and quality client care and service. 15 Table of Contents Talent Acquisition Talent acquisition is a strategic imperative of the company, and our Addus CARES culture is committed to attracting, retaining, and engaging talent.
See “ Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations ” for information regarding the Company’s segment metrics. Our Payors Our payor clients are principally federal, state and local governmental agencies and managed care organizations.
See “ Management ’ s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations ” for information regarding the Company’s segment metrics. Our Payors Our payor clients are principally federal, state and local governmental agencies and managed care organizations.
Supreme Court decisions that increase judicial scrutiny of agency authority, shift greater responsibility for statutory interpretation to courts and expand the timeline in which a plaintiff can sue regulators. Recent decisions of the U.S.
Supreme Court decisions that increase judicial scrutiny of agency authority, shift greater responsibility for statutory interpretation to courts and expand the timeline in which a plaintiff can sue regulators.
These arrangements, which are subject to approval by CMS, allow states to implement delivery system and provider payment initiatives by requiring Medicaid managed care organizations to pay providers according to specific rates or methods.
SDP arrangements are subject to approval by CMS and allow states to implement delivery system and provider payment initiatives by requiring Medicaid managed care organizations to pay providers according to specific rates or methods.
If we were to violate the applicable federal and state regulations governing Medicare or Medicaid participation, we could be excluded from participation in federal and state healthcare programs and be subject to substantial administrative, civil and criminal penalties.
If we were to violate the applicable federal and state regulations governing Medicare or Medicaid participation, we could be subject to substantial administrative, civil and criminal penalties, including exclusion from participation in federal and state healthcare programs.
For financial management, we utilize Oracle’s Planning Budgeting Cloud Service as our solution for budgeting, forecasting, and financial reporting and Oracle Fusion for the general ledger, accounts payable and fixed assets. 12 Table of Contents Government Regulation Overview Our business is subject to extensive federal, state and local regulation.
For financial management, we utilize Oracle’s Planning Budgeting Cloud Service as our solution for budgeting, forecasting, and financial reporting and Oracle Fusion for the general ledger, accounts payable and fixed assets. Government Regulation Overview Our business is subject to extensive federal, state and local regulation.
We currently have relationships and agreements with the Veterans Health Administration to provide personal care services in several states, principally in New Mexico, Illinois and California. 9 Table of Contents Other Other sources of funding are available to support personal care, hospice and home health services in different states and localities.
We currently have relationships and agreements with the Veterans Health Administration to provide personal care services in several states, principally in Texas, New Mexico, Illinois and California. Other Other sources of funding are available to support personal care, hospice and home health services in different states and localities.
Many states are moving the administration of their Medicaid hospice and home healthcare programs to managed care organizations in order to effectively manage costs by making spending more predictable for states. Personal care services and other HCBS are largely reimbursed on a fee-for-service basis.
Many states have transitioned the administration of their Medicaid hospice and home health programs to managed care organizations in order to effectively manage costs by making spending more predictable for states. Personal care services and other HCBS are largely reimbursed on a fee-for-service basis.
We believe licensing and other operational requirements and regulations, the increasing focus on improving health outcomes, the rising cost and complexity of operations and technology and pressure on reimbursement rates may discourage new providers and may encourage industry consolidation. Our consumers are predominantly “dual eligibles,” meaning they are eligible for both Medicare and Medicaid.
We believe licensing and other operational requirements and regulations, the increasing focus on improving health outcomes, the rising cost and complexity of operations and technology and pressure on reimbursement rates may discourage new providers and may encourage industry consolidation. As discussed in more detail below, our consumers are predominantly “dual eligibles,” meaning they are eligible for both Medicare and Medicaid.
At the core of our operations is a dedicated team of 5,548 full-time caregivers, clinical staff, and administrative employees. Complementing their efforts are 43,517 part-time caregivers and administrative employees. We offer flexibility in the form of adaptable work options, which may not be as readily available in other industries.
At the core of our operations is a dedicated team of 5,290 full-time caregivers, clinical staff, and administrative employees. Complementing their efforts are 44,658 part-time caregivers and administrative employees. We offer flexibility in the form of adaptable work options, which may not be as readily available in other industries.
For example, CMS and state Medicaid agencies contract with recovery audit contractors (“RACs”) on a contingency fee basis to conduct post-payment reviews to detect and correct improper payments in the Medicare and Medicaid programs. RACs review claims submitted to Medicare for billing compliance, including correct coding and medical necessity. The RAC program’s scope also includes Medicaid claims.
For example, CMS and state Medicaid agencies contract with recovery audit contractors (“RACs”) on a contingency fee basis to conduct post-payment reviews to detect and correct improper payments in the Medicare and Medicaid programs. RACs review claims submitted to these programs for billing compliance, including correct coding and medical necessity.
In our most recent annual employee engagement survey, our workforce scored work-life balance at an 80% satisfaction rating. We have over 600 administrative and professional employees at our two corporate support centers. Approximately 17,283 or 34.8% of our total employees are represented by labor unions. We maintain strong working relationships with these labor unions.
In our most recent annual employee engagement survey, our workforce scored work-life balance at an 80% satisfaction rating. We have over 7 00 administrative and professional employees at our two corporate support centers. Approximately 17,468 or 34.5% of our total employees are represented by labor unions. We maintain strong working relationships with these labor unions.
Our consumers are predominantly “dual eligible,” meaning they are eligible to receive both Medicare and Medicaid benefits. As of December 31, 2024, we provided services in 23 states through approximately 258 offices. For the year ended December 31, 2024, we served approximately 105,000 discrete consumers.
Our consumers are predominantly “dual eligible,” meaning they are eligible to receive both Medicare and Medicaid benefits. As of December 31, 2025, we provided services in 23 states through approximately 262 offices. For the year ended December 31, 2025, we served approximately 107,000 discrete consumers.
Additionally, healthcare professionals at our agencies are required to be individually licensed or certified under state law. Although our personal care service caregivers are generally not subject to licensure requirements, certain states require them to complete pre- and post-employment training programs, background checks, and, in certain instances, maintain state certification.
Additionally, healthcare professionals at our agencies are required to be individually licensed or certified under state law. Although our personal care service caregivers are generally not subject to licensure requirements, certain states require them to complete varying degrees of pre- and post-employment training programs, continuing education, background checks and maintain state certification.
CMS uses quality information to administer other value-based care models, such as the HHVBP Model, under which home health agencies receive increases or reductions to their Medicare fee-for-service payments based on their performance against specific quality measures, relative to the performance of other home health agencies. CMS also identifies hospices for the Hospice Special Focus Program based on quality information.
CMS uses quality information to administer other value-based care models, such as the HHVBP Model, under which home health agencies receive increases or reductions to their Medicare fee-for-service payments based on their performance against specific quality measures, relative to the performance of other home health agencies.
Federal agencies oversee, regulate and otherwise affect many aspects of our business, including through Medicare and Medicaid payment and coverage policies, policies affecting size of the uninsured population, administration of state Medicaid programs, and enforcement and interpretation of fraud and abuse laws.
Federal agencies oversee, regulate and otherwise affect many aspects of our business, including through Medicare and Medicaid policies, policies affecting the size of the uninsured population and interpretation and enforcement of fraud and abuse laws.
Illinois Department on Aging A significant amount of our net service revenues from our personal care segment are derived from one specific payor client, the Illinois Department on Aging, which accounted for 21.0% and 20.9% of our net service revenues for 2024 and 2023, respectively.
Illinois Department on Aging A significant amount of our net service revenues from our personal care segment are derived from one specific payor client, the Illinois Department on Aging, which accounted for 18.1% and 21.0% of our net service revenues for 2025 and 2024, respectively.
Factors that impact our competitive position include the quality of care and services we provide, our ability to attract and retain caregivers and other personnel, our relationships with potential referral sources and our ability to retain and renew our contracts with payors and enter into new contracts on favorable terms.
Factors that impact our competitive position include the quality of care and services we provide, our ability to attract and retain caregivers and other personnel, our relationships with potential referral sources and our ability to retain and renew our contracts with payors and enter into new contracts on favorable terms. Increased consolidation among payors has increased payor bargaining power.
Market to Managed Care Organizations As a large-scale provider of home-based care, we market to and partner with managed care organizations, taking advantage of an industry shift from traditional fee-for-service Medicare and Medicaid toward managed care models that aim to better coordinate care, among other goals.
Market to Managed Care Organizations As a large-scale provider of home-based care, we market to and partner with managed care organizations, taking advantage of an industry shift from traditional fee-for-service Medicare and Medicaid toward managed care models that aim to better coordinate care and typically have narrower provider networks.
The regulatory framework for AI is rapidly evolving as many federal and state legislatures and agencies have adopted, introduced or are currently considering additional laws and regulations that impact the use of AI, particularly in the employment and health care space. Additionally, existing laws and regulations may be interpreted in ways that could impact our use of AI.
The regulatory framework for AI is rapidly evolving as many federal and state legislatures and agencies have adopted, introduced or are currently considering additional laws and regulations that impact the use of AI, particularly in the employment and health care space.
Moreover, individuals generally prefer to receive care in their homes, and we believe the COVID-19 pandemic heightened this preference due to health concerns that may be associated with institutional settings for long-term care, along with concerns about the re-imposition of visitor restrictions that were imposed in many long-term care facilities in response to the pandemic.
Individuals generally prefer to receive care in their homes, and we believe the COVID-19 pandemic heightened this preference due to health concerns that may be associated with institutional settings for long-term care, along with concerns about the imposition of visitor restrictions that may be imposed during a public health crisis.
Our rates are established to achieve a pre-determined gross margin, and are competitive with those of other local providers. We bill our private pay consumers for services rendered weekly, bi-monthly or monthly. Other private payors include workers’ compensation programs/insurance, preferred provider organizations and employers.
Private Pay Our private pay services are provided on an hourly or type of services basis. Our rates are established to achieve a pre-determined gross margin, and are competitive with those of other local providers. We bill our private pay consumers for services rendered weekly, bi-monthly or monthly. Other private payors include some workers’ compensation programs/insurance and employers.
Some states also require a provider to obtain a CON or permit of approval before establishing, constructing, acquiring or expanding certain health services, operations or facilities or making certain capital expenditures. These requirements are intended to avoid unnecessary duplication of services.
Some states also require a provider to obtain a CON or permit of approval before establishing, constructing, acquiring or expanding certain health services, operations or facilities or making certain capital expenditures.
Our caregivers are provided with pre-service training and orientation and an evaluation of their skills. In many cases, caregivers are also required to attend ongoing in-service education. In certain states, our caregivers are required to complete certified training programs and maintain a state certification.
We monitor the performance of our caregivers through regular supervisory visits in the homes of consumers. Our caregivers are provided with pre-service training and orientation and an evaluation of their skills. In many cases, caregivers are also required to attend ongoing in-service education. In certain states, our caregivers are required to complete certified training programs and maintain a state certification.
For example, SDP arrangements may require managed care plans to implement value-based purchasing models or performance improvement initiatives or may direct managed care plans to adopt specific payment parameters, such as minimum or maximum fee schedules for specific types of providers. Some states have converted supplemental payment programs to SDP arrangements, diverting previously available funding.
For example, SDP arrangements may require managed care plans to implement value-based purchasing models or performance improvement initiatives or may direct managed care plans to adopt specific payment parameters, such as minimum or maximum fee schedules for specific types of providers.
In addition to the reimbursement adjustments and policies discussed below, the Budget Control Act of 2011 requires automatic spending reductions to reduce the federal deficit, resulting in a uniform percentage reduction across all Medicare programs of 2%.
In addition to the reimbursement adjustments and policies discussed below, the Budget Control Act of 2011 requires automatic spending reductions to reduce the federal deficit, resulting in a uniform percentage reduction across all Medicare programs of 2%. These cuts continue through the first eleven months of federal fiscal year 2032.
We believe this approach to care delivery and the integration of our services into the broader healthcare continuum are particularly attractive to managed care organizations and others who are ultimately responsible for the healthcare needs of our consumers and over time will increase our business with these organizations. 4 Table of Contents Our Growth Strategy The growth of our revenues is closely correlated with the number of consumers to whom we provide our services.
We believe this approach to care delivery and the integration of our services into the broader healthcare continuum are particularly attractive to managed care organizations and others who are ultimately responsible for the healthcare needs of our consumers and over time will increase our business with these organizations.
Likewise, to participate in Medicaid programs, our personal care services, hospices and home health agencies are subject to various requirements imposed by federal and state authorities.
Likewise, to participate in and qualify for reimbursement under Medicaid programs, our personal care services, hospices and home health agencies are subject to various federal and state requirements.
We provide our services in accordance with a care plan developed by the care coordinator and under administrative directives from the Illinois Department on Aging. We are reimbursed on an hourly fee-for-service basis.
We provide our services in accordance with a care plan developed by the care coordinator and under administrative directives from the Illinois Department on Aging.
We plan to continue our revenue growth and enhance our competitive positioning by executing on the following growth strategies: Consistently Provide High-Quality Care We schedule and require our caregivers to perform their services as defined within the individual plan of care. We monitor the performance of our caregivers through regular supervisory visits in the homes of consumers.
We plan to continue our revenue growth and enhance our competitive positioning by executing on the following growth strategies: 6 Table of Contents Consistently Provide High-Quality Care We schedule and require our caregivers to perform their services as defined within the individual plan of care.
In May 2024, CMS finalized a rule intended to improve access to services and quality of care for Medicaid beneficiaries across fee-for-service and managed care delivery systems, but which could negatively impact our business and financial condition.
For example, in May 2024, CMS finalized a rule intended to improve access to services and quality of care for Medicaid beneficiaries across fee-for-service and managed care delivery systems.
Acquisitions completed in 2023 accounted for $18.8 million in net service revenues for the year ended December 31, 2023. Our active pipeline and strong financial position support additional acquisitions.
Acquisitions completed in 2024 accounted for $22.6 million in net service r evenues for the year ended December 31, 2024. Our active pipeline and strong financial position support additional acquisitions.
These cuts continue through the first eight months of federal fiscal year 2032. 7 Table of Contents Hospice Medicare beneficiaries who have a terminal illness and a life expectancy of six months or less may elect to receive hospice benefits (i.e., palliative services for management of a terminal illness) in lieu of standard Medicare coverage for treatment.
Hospice Medicare beneficiaries who have a terminal illness and a life expectancy of six months or less may elect to receive hospice benefits (i.e., palliative services for management of a terminal illness) in lieu of standard Medicare coverage for treatment.
We believe, but cannot assure you, that our operations comply with the principles expressed by these agencies. 15 Table of Contents HIPAA and Other Privacy and Security, Data Exchange and AI Requirements The Health Insurance Portability and Accountability Act of 1996, as amended (“HIPAA”) and its implementing regulations require the use of uniform electronic data transmission standards and code sets for certain healthcare claims and reimbursement payment transactions submitted or received electronically.
HIPAA and Other Privacy and Security, Data Exchange and AI Requirements The Health Insurance Portability and Accountability Act of 1996, as amended (“HIPAA”) and its implementing regulations require the use of uniform electronic data transmission standards and code sets for certain healthcare claims and reimbursement payment transactions submitted or received electronically.
Our continued growth depends on our ability to provide consistent high-quality care, maintain our existing payor relationships, establish relationships with new payors, increase our referral sources and attract and retain caregivers. Our continued growth is also dependent upon the authorization by state agencies of new consumers to receive our services.
Our Growth Strategy The growth of our revenues is closely correlated with the number of consumers to whom we provide our services. Our continued growth depends on our ability to provide consistent high-quality care, maintain our existing payor relationships, establish relationships with new payors, increase our referral sources and attract and retain caregivers.
Veterans Health Administration The Veterans Health Administration operates the nation’s largest integrated healthcare system, with more than 1,300 healthcare facilities, and provides healthcare benefits, including personal care, hospice and home health services, to eligible military veterans.
We are reimbursed on an hourly fee-for-service basis. 12 Table of Contents Veterans Health Administration The Veterans Health Administration operates the nation’s largest integrated healthcare system, with more than 1,300 healthcare facilities, and provides healthcare benefits, including personal care, hospice and home health services, to eligible military veterans.
For instance, the Illinois Insurance Claims Fraud Prevention Act penalizes the knowing offer or payment of remuneration to induce a person to procure clients or patients under a contract of insurance, including commercial insurance plans.
For instance, the Illinois Insurance Claims Fraud Prevention Act penalizes the knowing offer or payment of remuneration to induce a person to procure clients or patients under a contract of insurance, including commercial insurance plans. Some state laws include whistleblower provisions, allowing for enforcement by private parties on the government’s behalf.
The cost to comply with such laws and regulations could be significant and would increase our operating expenses. Environmental, Health and Safety Laws We are subject to federal, state and local regulations governing the storage, transport, use and disposal of hazardous materials and waste products.
Environmental, Health and Safety Laws We are subject to federal, state and local regulations governing the storage, transport, use and disposal of hazardous materials and waste products.
For the Years Ended December 31, 2024 2023 (Amounts in Thousands) Personal care $ 856,581 $ 794,718 Hospice 228,191 207,155 Home health 69,827 56,778 Total net service revenue by segment $ 1,154,599 $ 1,058,651 Net income $ 73,598 $ 62,516 Total assets $ 1,412,634 $ 1,024,426 Our services and operating model address a number of crucial needs across the healthcare continuum.
For the Years Ended December 31, 2025 2024 (Amounts in Thousands) Personal care $ 1,089,215 $ 856,581 Hospice 262,542 228,191 Home health 70,773 69,827 Total net service revenue by segment $ 1,422,530 $ 1,154,599 Net income $ 95,910 $ 73,598 Total assets $ 1,437,308 $ 1,412,634 Our services and operating model address a number of crucial needs across the healthcare continuum.
In order to obtain a CON, a state health planning agency must determine that a need exists for the project. Fraud and Abuse Laws The laws and regulations governing our operations, including the terms of participation in Medicare, Medicaid and other government programs, impose certain requirements and limitations on our operations, business arrangements and our interactions with providers and consumers.
Fraud and Abuse Laws The laws and regulations governing our operations, including the terms of participation in Medicare, Medicaid and other government programs, impose certain requirements and limitations on our operations, business arrangements and our interactions with providers and consumers.
From time to time, various federal and state agencies, such as HHS, issue guidance that identifies practices and provider types that may be subject to heightened scrutiny, as well as practices that may violate fraud and abuse laws.
From time to time, various federal and state agencies, such as HHS, issue guidance that identifies practices and provider types that may be subject to heightened scrutiny, as well as practices that may violate fraud and abuse laws. We believe, but cannot assure you, that our operations comply with the principles expressed by these agencies.
In addition, the MMCO and the CMS Innovation Center are considering or have implemented demonstration projects affecting reimbursement for services provided to dual eligibles, and some members of Congress and the presidential administration have raised potential changes such as integrating Medicare and Medicaid coverage for dual eligibles in a single plan or program.
The MMCO and the CMS Innovation Center collaborate to support care coordination models for dually eligible individuals, including by implementing demonstration projects affecting reimbursement for services provided to dual eligibles. Some members of Congress and the federal administration have raised potential changes such as requiring integrated Medicare and Medicaid coverage for dual eligibles in a single plan or program.
Periodic and random audits conducted or directed by these agencies could result in a delay in receipt or an adjustment to the amount of reimbursements due or received under federal or state programs and could result in referrals to other agencies to investigate and/or prosecute potential fraud or abuse.
Periodic and random audits conducted or directed by these agencies could result in a delay in receipt or an adjustment to the amount of reimbursements due or received under federal or state programs and could result in referrals to other agencies to investigate and/or prosecute potential fraud or abuse. 19 Table of Contents CMS and state Medicaid agencies contract with third parties to promote the integrity of the Medicaid and Medicare programs through reviews of quality concerns and detections and corrections of improper payments.
In recent years, aspects of existing or proposed Medicaid programs have been subject to legal challenge, resulting in uncertainty. In addition, federal legislation and administrative policies that shape administration of the Medicaid programs at the state level are subject to change, including as a result of changes in the presidential administration and legal challenges.
In recent years, aspects of existing or proposed Medicaid programs have been subject to legal challenge, resulting in uncertainty. Federal legislation and administrative policies that shape administration of the Medicaid programs at the state level are also subject to change. CMS administrators may in the future make various changes impacting eligibility or enrollment conditions and other aspects of waiver programs.
Addus Ink is a semi-annual publication that highlights local stories and news from around the country that celebrate our mission and values. 11 Table of Contents Employee Welfare As part of our commitment to providing high quality care and service to our clients and patients, while also promoting the health and well-being of our employees, Addus takes a multifaceted approach to employee wellness and safety.
Employee Welfare As part of our commitment to providing high quality care and service to our clients and patients, while also promoting the health and well-being of our employees, Addus takes a multifaceted approach to employee wellness and safety.
Other federal and state laws and regulations that apply to the collection, use, retention, protection, security, disclosure, transfer and other processing of personal data may impose additional or inconsistent obligations and/or result in additional penalties. For example, various state laws and regulations require us to notify affected individuals in the event of a data breach involving individually identifiable information.
Other federal and state laws and regulations that apply to the collection, use, retention, protection, security, disclosure, transfer and storage of personal information, including restrictions on the offshoring of data, and other processing of personal data may impose additional or inconsistent obligations and/or result in additional penalties.
For example, the CMS Innovation Center has established pilot programs that bundle acute care hospital services with physician services and post-acute care services, which may include home health services for certain patients.
The CMS Innovation Center tests innovative payment and service delivery systems to reduce Medicare and Medicaid program expenditures while maintaining or enhancing quality. For example, the CMS Innovation Center has established pilot programs that bundle acute care hospital services with physician services and post-acute care services, which may include home health services for certain patients.
For example, some supplemental payments are intended to address the difference between Medicaid fee-for-service payments and Medicare reimbursement rates, or payments under other state-specific programs.
For example, some supplemental payments are intended to address the difference between Medicaid fee-for-service payments and Medicare reimbursement rates, or payments under other state-specific programs. These supplemental reimbursement arrangements are generally authorized by CMS for a specified period of time and require CMS’ approval to be extended.
The rule removes regulatory barriers to help states use SDP arrangements to implement value-based purchasing payment arrangements and include non-network providers in SDP arrangements. Further, the rule requires states to ensure each provider receiving an SDP attest by January 1, 2028, that they do not participate in any arrangement that holds taxpayers harmless for the cost of a tax.
Further, the rule requires states to ensure each provider receiving an SDP attest by January 1, 2028, that they do not participate in any arrangement that holds taxpayers harmless for the cost of a tax. The various elements of the rule take effect between issuance and early 2028.
Further, some members of Congress and the presidential administration have raised potential measures that may impact our operations, such as those intended to accelerate the shift from traditional Medicare to Medicare Advantage or eliminating some or all of the consumer protections established by the ACA. 13 Table of Contents The federal and state governments also continue to explore other payment and delivery system reform initiatives.
For example, some members of Congress and the executive branch have raised potential measures that may impact our operations, such as those intended to accelerate the shift from traditional Medicare to Medicare Advantage or eliminating some or all of the consumer protections established by the ACA.
The recent Supreme Court decisions may also result in inconsistent judicial interpretations and delays in and other impacts to the agency rulemaking and legislative processes.
These decisions may increase legal challenges to healthcare regulations and agency guidance and decisions, and may result in inconsistent judicial interpretations and delays in and other impacts to the agency rulemaking and legislative processes. In recent years, the U.S.
The Illinois Department on Aging coordinates programs and community-based services intended to improve quality of life and preserve the independence of older individuals. The Illinois Department on Aging is funded by Medicaid, Illinois’ Commitment to Human Services Fund, and general revenue funds of the state of Illinois, and also receives funding available under the federal Older Americans Act (“OAA”).
The Illinois Department on Aging is funded by Medicaid, Illinois’ Commitment to Human Services Fund and general revenue funds of the state of Illinois and historically has received funding available under the federal Older Americans Act (“OAA”), although OAA funding expired in 2025.
Commercial Insurance Most long-term care insurance policies contain benefits for in-home services. Policies are generally subject to dollar limitations on the amount of daily, weekly or monthly coverage provided. Private Pay Our private pay services are provided on an hourly or type of services basis.
Long-term care insurance policies may cover services provided in a variety of settings, and most policies include benefits for in-home services. Policies are generally subject to dollar limitations on the amount of daily, weekly or monthly coverage provided, and many policies have limits on the duration of coverage.
Developments in Healthcare Policy The healthcare industry is subject to changing political, regulatory, economic and other influences at the federal and state level, along with scientific and technological initiatives and innovations that may affect our business. Healthcare reform efforts at the federal and state levels have been aimed at reducing costs and government spending and increasing access to health insurance.
Developments in Healthcare Policy The healthcare industry is subject to changing political, regulatory, economic and other influences at the federal and state level, along with scientific and technological initiatives and innovations that may affect our business. The outcome of the 2024 federal elections has increased regulatory uncertainty and the potential for significant policy changes.
In addition, the healthcare industry has experienced, and is expected to continue to experience, extensive and dynamic change. It is difficult to predict the effect of these changes on budgetary allocations for our services.
In addition, the healthcare industry has experienced, and is expected to continue to experience, extensive and dynamic change.
Grow Through Acquisitions In addition to our organic growth, we have been growing through acquisitions that have expanded our presence in current markets or facilitated our entry into new markets.
In particular, our expansion from primarily personal care services into hospice and home health has increased our value to our managed care partners by diversifying our home-based care offerings. Grow Through Acquisitions In addition to our organic growth, we have been growing through acquisitions that have expanded our presence in current markets or facilitated our entry into new markets.
The Medicare-Medicaid Coordination Office (“MMCO”) was established within the Centers for Medicare & Medicaid Services (“CMS”) to improve services for dual-eligible individuals and improve coordination between the federal government and states to enhance access to quality services to which they are entitled.
The Medicare-Medicaid Coordination Office (“MMCO”) was established within CMS to enhance access to services for dual-eligible individuals by improving coordination between the federal government and states. The MMCO works with state Medicaid agencies, other federal and state agencies and other stakeholders to more effectively integrate benefits between Medicare and Medicaid and to improve care coordination, quality and cost-effectiveness.
Depending on the type of service, coverage for services may be predicated on a case manager, physician or nurse determination that the care is necessary or on the development of a plan for care in the home.
Depending on the type of service, coverage for services may be predicated on a case manager, physician or nurse determination that the care is necessary or on the development of a plan for care in the home. 9 Table of Contents Medicare Medicare is a federal program that provides medical insurance benefits to persons aged 65 or older, some disabled persons, persons with end-stage renal disease and persons with amyotrophic lateral sclerosis.
Value-Based Care Arrangements CMS has indicated that promoting value-based, person-centered care is among its top priorities, and commercial payors are also increasingly using value-based care arrangements. Generally, value-based care aims to hold providers accountable for delivering efficient, effective care by tying provider reimbursement to patient outcomes or related measures.
Value-Based Care Arrangements There is a trend toward value-based purchasing of healthcare services across the industry among both governmental and commercial payors. Generally, value-based care aims to hold providers accountable for delivering efficient, effective care by tying provider reimbursement to patient outcomes or related measures.
ACOs that achieve quality performance standards established by HHS are eligible to share in a portion of the amounts saved by the Medicare program. Several private third-party payors are also increasingly employing alternative payment models, which may increasingly shift financial risk to providers or increase payments for quality improvement.
The CMS Innovation Center also indicated that it plans to test improvements in Medicare Advantage and Medicaid. Several state Medicaid programs and private third-party payors are also increasingly employing alternative payment models, which may increasingly shift financial risk to providers or increase payments for quality improvement.
CMS websites make available to the public data submitted by home health agencies, hospices and other Medicare-certified providers in connection with Medicare reimbursement claims, including performance data on quality measures and patient satisfaction. In addition, federal and state regulations, including state certificate of need (“CON”) laws, which limit the expansion of healthcare facilities or services, may affect the competitive landscape.
A number of states have adopted their own healthcare price transparency requirements. The Centers for Medicare & Medicaid Services (“CMS”) websites make available to the public data submitted by home health agencies, hospices and other Medicare-certified providers in connection with Medicare reimbursement claims, including performance data on quality measures and patient satisfaction.
Acquisitions completed in 2024 accounted for $22.6 million in net service revenues for the year ended December 31, 2024. We completed two acquisitions in 2023: Coastal Nursecare of Florida, Inc.
Acquisitions completed in 2025 accounted for $11.8 million in net service revenues for the year ended December 31, 2025.
Medicare Medicare is a federal program that provides certain medical insurance benefits to persons aged 65 or older, some disabled persons, persons with end-stage renal disease and persons with amyotrophic lateral sclerosis. Each of our hospice and home care agencies must comply with the extensive conditions of participation in the Medicare program in order to continue receiving Medicare reimbursement.
Each of our hospice and home care agencies must comply with the extensive conditions of participation in the Medicare program in order to continue receiving Medicare reimbursement.
Other congressional and administrative initiatives and proposals have also focused on the dual-eligible population, including proposals to enroll all dual-eligible individuals in a single plan or program that provides both Medicare and Medicaid benefits. Other industry participants, such as private payors and large employer groups and their affiliates, may introduce or encourage additional financial or delivery system reforms.
In addition, the CMS Innovation Center collaborates with the Medicare-Medicaid Coordination Office to support care coordination models for dually eligible individuals. Other congressional and administrative initiatives and proposals have also focused on the dual-eligible population, including proposals to enroll all dual-eligible individuals in a single plan or program that provides both Medicare and Medicaid benefits.

… 90 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

106 edited+33 added−41 removed130 unchanged
Biggest changeThese legal and regulatory requirements relate to, among other matters: • facility and personnel licensure, and certification and enrollment with government programs; • eligibility for services; • appropriateness and necessity of services provided; • adequacy and quality of services; • qualifications, training and supervision of personnel; • confidentiality, maintenance, interoperability, exchange and security of medical records and other health-related and personal information, including information blocking, data breach, ransomware, identify theft and online tracking of personal information; • the provision of services via telehealth, including technological standards and coverage restrictions or other limitations on reimbursement; • the development and use of AI and other predictive algorithms, including those used in clinical decision support tools; • environmental protection, health and safety; • relationships with physicians, other referral sources and recipients of referrals; • operating policies and procedures; • addition of, and changes to, facilities and services; 23 Table of Contents • adequacy and manner of documentation for services provided; • billing and coding for services; • timely and proper handling of overpayments; and • debt collection and communications with consumers.
Biggest changeThese legal and regulatory requirements relate to, among other matters: • facility and personnel licensure, certification and enrollment with government programs; • eligibility for services; • appropriateness and necessity of services; • adequacy and quality of services; • qualifications, training and supervision of personnel; • confidentiality, maintenance, interoperability, exchange and security of medical records and other health-related and personal information, including information blocking, data breach, ransomware, identify theft and online tracking of personal information; • the provision of services via telehealth, including technological standards and coverage restrictions or other limitations on reimbursement; • distribution, maintenance and dispensing of pharmaceuticals and controlled substances; • the development and use of AI and other predictive algorithms, including those used in clinical decision support tools; • environmental protection, health and safety; • relationships with physicians, other referral sources and recipients of referrals; • operating policies and procedures; • addition of, and changes to, facilities and services; • adequacy and manner of documentation for services provided; • billing and coding for services; • timely and proper handling of overpayments; and • debt collection and communications with consumers. 31 Table of Contents These laws include, but are not limited to, the federal Anti-Kickback Statute, the federal Stark Law, the federal FCA, the federal Civil Monetary Penalties Law, other federal and state fraud and abuse, insurance fraud, and fee-splitting laws, which may extend to services reimbursable by any payor, including private insurers, the No Surprises Act, and federal and state laws governing the security and privacy of health information.
In addition, any significant cybersecurity event may require us to devote significant management time and resources to address and respond to any such event, interfere with the pursuit of other important business strategies and initiatives, and cause us to incur additional expenditures, which could be material, including to investigate such events, remedy cybersecurity problems, recover lost data, prevent future compromises and adapt systems and practices in response to such events.
In addition, any significant cybersecurity event may require us to devote significant management time and resources to address and respond to any such event, interfere with the pursuit of other important business strategies and initiatives, and cause us to incur additional expenditures, which could be material, including to investigate such events, remedy cybersecurity problems, recover lost data, attempt to prevent future compromises and adapt systems and practices in response to such events..
We may also be subject us to litigation and governmental enforcement actions (including under HIPAA and other applicable laws) as a result of cyber-attacks or security or data breaches, which could result in fines, settlement agreements, corrective action plans, and of which could have a material adverse effect on our business, financial position and results of operations.
We may also be subject to litigation and governmental enforcement actions (including under HIPAA and other applicable laws) as a result of cyber-attacks or security or data breaches, which could result in fines, settlement agreements, corrective action plans, and of which could have a material adverse effect on our business, financial position and results of operations.
Generally, value-based purchasing programs tie payment to the quality and efficiency of care provided. For example, Medicare requires hospices and home health agencies to report certain quality data in order to receive full reimbursement. Failure to report quality data or poor performance may negatively impact the amount of reimbursement received.
Generally, value-based care programs tie payment to the quality and efficiency of care provided. For example, Medicare requires hospices and home health agencies to report certain quality data in order to receive full reimbursement. Failure to report quality data or poor performance may negatively impact the amount of reimbursement received.
Each of our subsidiaries that employ an average of at least 50 full-time employees in a calendar year are required to offer a minimum level of health coverage for 95% of our full-time employees in 2024 or be subject to an annual penalty, for example.
Each of our subsidiaries that employ an average of at least 50 full-time employees in a calendar year are required to offer a minimum level of health coverage for 95% of our full-time employees or be subject to an annual penalty, for example.
Our ability to renew or retain our agreements depends on our quality of service and reputation, as well as other factors over which we have little or no control, such as state appropriations and changes in provider eligibility requirements.
Our ability to renew or retain our agreements depends on our quality of service, reputation and pricing, as well as other factors over which we have little or no control, such as state appropriations and changes in provider eligibility requirements.
Since our personal care operations are concentrated in Illinois and New Mexico, we are also particularly sensitive to changes in laws and regulations in these states. We may not be able to offset any increased costs and expenses.
Since our personal care operations are concentrated in Illinois, New Mexico and Texas, we are also particularly sensitive to changes in laws and regulations in these states. We may not be able to offset any increased costs and expenses.
An adverse outcome under any such audit or investigation, a determination that we have violated applicable laws and regulations, or a public announcement that we are being investigated for possible violations could result in liability, result in adverse publicity, require us to change our operations and/or to implement plans of correction for alleged deficiencies, and result in other negative consequences that could adversely affect our business, financial condition, or results of operations.
An adverse outcome under any such audit or investigation, a determination that we have violated applicable laws and regulations, or a public announcement that we are being investigated for possible violations could result in liability, adverse publicity, and interruptions to payment, require us to change our operations and/or to implement plans of correction for alleged deficiencies, and result in other negative consequences that could adversely affect our business, financial condition, or results of operations.
Although we have contingency plans in place, including infection control plans, the potential impact of, as well as the public’s response and governmental responses to, any such future pandemic, epidemic or outbreak of infectious disease with respect to our markets is difficult to predict and could adversely impact our business and future results of operations and financial condition. 30 Table of Contents ITEM 1B.
Although we have contingency plans in place, including infection control plans, the potential impact of, as well as the public’s response and governmental responses to, any such future pandemic, epidemic or outbreak of infectious disease with respect to our markets is difficult to predict and could adversely impact our business and future results of operations and financial condition. 39 Table of Contents ITEM 1B.
Labor costs are the most significant component of our total expenditures and, therefore, an increase in the cost of labor could significantly harm our business. 19 Table of Contents If we were required to write down all or part of our goodwill and/or our intangible assets, our net earnings and net worth could be materially adversely affected.
Labor costs are the most significant component of our total expenditures and, therefore, an increase in the cost of labor could significantly harm our business. 25 Table of Contents If we were required to write down all or part of our goodwill and/or our intangible assets, our net earnings and net worth could be materially adversely affected.
We have implemented backup of our key information systems that are designed to allow our operations to failover to our geographically separate disaster recovery datacenter with a quick return to operations for all sites and systems in the event our main datacenter becomes inoperable because of a natural disaster, attacks or other cause.
We have implemented backup of our key information systems that is designed to allow our operations to failover to our geographically separate disaster recovery datacenter with a quick return to operations for all sites and systems in the event our main datacenter becomes inoperable because of a natural disaster, attacks or other cause.
Changes in the law’s implementation, subsequent legislation and regulations, state initiatives and other factors have affected and may continue to affect the number of individuals that elect to obtain public or private health insurance or the scope of such coverage, if purchased, and may impact our payor mix.
Changes in the law’s implementation, subsequent legislation and regulations, state initiatives and other factors have affected and may continue to affect the number of individuals that elect to obtain public or private health insurance or the scope of such coverage, if obtained, and may impact our payor mix.
The emergence and effects related to a potential future pandemic, epidemic, or outbreak of infectious disease could adversely impact our business and future results of operations and financial condition, and we may be more vulnerable to the effects of a public health emergency than other businesses due to the nature of our business and consumers.
The emergence and effects related to a potential future pandemic, epidemic, or outbreak of infectious disease could adversely impact our business and future results of operations and financial condition, and we may be more vulnerable to the effects of a public health crisis than other businesses due to the nature of our business and consumers.
The occurrence of any system failure could result in interruptions, delays, the loss or corruption of data and cessations or interruptions in the availability of systems, all of which could have a material, adverse effect on our financial position and results of operations and harm our business reputation.
The occurrence of any system failure could result in harm to consumers, interruptions, delays, the loss or corruption of data and cessations or interruptions in the availability of systems, all of which could have a material, adverse effect on our financial position and results of operations and harm our business reputation.
RI SK FACTORS Any of the risks described below, and the risks described elsewhere in this Form 10-K, could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows, cause the trading price of our common stock to decline and cause the actual outcome of matters to differ materially from our current expectations as reflected in forward-looking statements made in this Form 10-K.
RISK FACTORS Any of the risks described below, and the risks described elsewhere in this Form 10-K, could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows, cause the trading price of our common stock to decline and cause the actual outcome of matters to differ materially from our current expectations as reflected in forward-looking statements made in this Form 10-K.
It is difficult to predict the nature and/or success of current and future public policy changes, any of which may have an adverse effect on our business, financial condition, and operating results. The industry trend toward value-based purchasing may negatively impact our revenues. There is a trend toward value-based purchasing of healthcare services among both government and commercial payors.
It is difficult to predict the nature and/or success of current and future public policy changes, any of which may have an adverse effect on our business, financial condition, and operating results. The industry trend toward value-based payment models may negatively impact our revenues. There is a trend toward value-based payment of healthcare services among both government and commercial payors.
You should refer to the explanation of the qualifications and limitations on forward-looking statements under “Special Caution Concerning Forward-Looking Statements.” All forward-looking statements made by us are qualified by the risk factors described below.
You should refer to the explanation of the qualifications and limitations on forward-looking statements under “ Special Caution Concerning Forward-Looking Statements. ” All forward-looking statements made by us are qualified by the risk factors described below.
If we or any of our third-party service providers or certain other third-parties are subject to cyber-attacks or experience security or data breaches in the future, this could result in harm to consumers, interruptions and delays in services provided to consumers, loss, misappropriation, corruption, or unauthorized access of protected patient medical data or other information subject to privacy laws, disruption to our information technology systems and/or business, the inability to access data, reputational harm, or adversely impact our financial results.
If we or any of our third-party service providers or certain other third-parties are subject to cyber-attacks or experience security or data breaches in the future, this could result in harm to consumers, interruptions and delays in services provided to consumers, loss, misappropriation, corruption, or unauthorized access of protected patient medical data or other information subject to privacy laws, disruption to our information technology systems and/or business, the inability to access data, reputational harm, or adverse impacts to our financial results.
Further, our insurance coverage intended to address cybersecurity and data breach risks may not be sufficient to cover all losses or the types of claims that may arise. 28 Table of Contents Human Capital Risks We may not be able to attract and retain qualified personnel or we may incur increased costs in doing so.
Further, our insurance coverage intended to address cybersecurity and data breach risks may not be sufficient to cover all losses or the types of claims that may arise. Human Capital Risks We may not be able to attract and retain qualified personnel or we may incur increased costs in doing so.
These factors had an unfavorable impact on our financial results during the year ended December 31, 2024, and may have an unfavorable impact on our financial results in future periods which could be material.
These factors had an unfavorable impact on our financial results during the year ended December 31, 2025, and may have an unfavorable impact on our financial results in future periods which could be material.
If payments received under any of our hospice provider numbers exceed these caps, we may be required to reimburse Medicare such excess amounts, which could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows.
If payments received under any of our hospice provider numbers exceed these caps, we are required to reimburse Medicare such excess amounts, which could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows.
The 36 Month Rule applies if the acquired home health agency or hospice either enrolled in Medicare or underwent a change in majority ownership fewer than 36 months prior to the acquisition, subject to certain exceptions. Instead, the buyer must enroll as a new provider with Medicare.
The 36 Month Rule applies if the acquired home health agency or hospice either enrolled in Medicare or underwent a change in majority ownership fewer than 36 months prior to the acquisition, subject to certain exceptions. In such circumstances, the buyer must enroll as a new provider with Medicare.
Our ability to meet these restrictive covenants and financial ratios and tests may be affected by events beyond our control, and we cannot assure you that we will meet those tests. 29 Table of Contents A breach of any of these covenants could result in a default under our credit facility.
Our ability to meet these restrictive covenants and financial ratios and tests may be affected by events beyond our control, and we cannot assure you that we will meet those tests. A breach of any of these covenants could result in a default under our credit facility.
In the future, CMS may establish new value-based purchasing programs affecting a broader range of providers, some of which may be mandatory. Initiatives aimed at improving quality and cost of care include alternative payment models, such as ACOs and bundled payment arrangements.
CMS may establish new value-based purchasing programs affecting a broader range of providers, some of which may be mandatory. Initiatives aimed at improving quality and cost of care include alternative payment models, such as ACOs and bundled payment arrangements.
We are regularly the target of attempted cybersecurity and other threats that could have a security impact, and we expect to continue to experience an increase in cybersecurity threats in the future, as the volume and intensity of cyberattacks on healthcare entities and vendors continue to increase.
We are regularly the target of attempted cybersecurity and other threats that could have a security impact, and we expect to continue to experience an increase in cybersecurity threats in the future, as the volume and intensity of cyber-attacks on healthcare entities and vendors continue to increase.
States may also face significant fiscal challenges and revise their revenue forecasts and adjust their budgets, and sales tax collections and income tax receipts could be depressed, which may place further pressure on government healthcare program spending, among other effects. Timing differences in reimbursement may cause liquidity problems.
States may also face significant fiscal challenges and revise their revenue forecasts and adjust their budgets, and sales tax collections and income tax receipts could be depressed, which may place further pressure on government healthcare program spending, among other effects. 23 Table of Contents Timing differences in reimbursement may cause liquidity problems.
In addition, CMS publishes home health and hospice quality measure data online to allow consumers and others to search and compare data for Medicare-certified providers.
CMS publishes home health and hospice quality measure data online to allow consumers and others to search and compare data for Medicare-certified providers.
As of December 31, 2024, 34.8% of our workforce was represented by labor unions. We have numerous agreements with local SEIU affiliates which are renegotiated from time to time. These negotiations are often initiated when we receive increases in our hourly rates from various state agencies.
As of December 31, 2025, 34.5% of our workforce was represented by labor unions. We have numerous agreements with local SEIU affiliates which are renegotiated from time to time. These negotiations are often initiated when we receive increases in our hourly rates from various state agencies.
Our ability to expand in a manner consistent with historic practices may be limited if we are unable to obtain such consent from our lenders. 17 Table of Contents Business Risks Our financial results have been, and may continue to be, adversely impacted by negative macroeconomic conditions.
Our ability to expand in a manner consistent with historic practices may be limited if we are unable to obtain such consent from our lenders. Business Risks Our financial results have been, and may continue to be, adversely impacted by negative macroeconomic conditions.
For example, the Budget Control Act of 2011 (“BCA”) requires automatic spending reductions to reduce the federal deficit, resulting in a uniform reduction across all Medicare programs of 2% per fiscal year that extends through the first eight months of 2032.
The Budget Control Act of 2011 (“BCA”) requires automatic spending reductions to reduce the federal deficit, resulting in a uniform reduction across all Medicare programs of 2% per fiscal year that extends through the first eleven months of 2032.
Federal and state regulation may impair our ability to consummate acquisitions or open new agencies. Federal and state laws and regulations may adversely impact our ability to acquire or open new start-up agencies, and the change of ownership processes for Medicare, Medicaid and other payors can be complex.
Federal and state laws and regulations may adversely impact our ability to acquire or open new start-up agencies, and the change of ownership processes for Medicare, Medicaid and other payors can be complex.
Liability Risks Our operations subject us to risk of litigation. Operating in the healthcare and personal care services industries exposes us to an inherent risk of wrongful death, personal injury, professional malpractice and other potential claims or litigation brought by our consumers and employees.
Operating in the healthcare and personal care services industries exposes us to an inherent risk of wrongful death, personal injury, professional malpractice and other potential claims or litigation brought by our consumers and employees.
Licensure is generally required of agencies providing home health and hospice services, though requirements vary by state. Some states also require a provider to obtain a CON or other type of approval before establishing, purchasing, or expanding certain health services, operations or facilities.
However, many states require entities to obtain a license before providing home care services. Licensure is generally required of agencies providing home health and hospice services, though requirements vary by state. Some states also require a provider to obtain a CON or other type of approval before establishing, purchasing, or expanding certain health services, operations or facilities.
Our credit facility contains various covenants that limit our ability to take certain actions, including our ability to: • make, create, incur, assume or suffer to exist any lien; • sell or otherwise dispose of assets, including capital stock of subsidiaries; • merge, consolidate, sell or otherwise dispose of all or substantially all our assets; • make restricted payments, including paying dividends and making certain loans and investments; • create, incur, assume, permit to exist, or otherwise become or remain directly or indirectly liable with respect to any additional indebtedness; • enter into transactions with affiliates; • engage in any additional line of business; • amend our organization documents; • make a change in accounting treatment or reporting practices, change our name or change our jurisdiction of organization or formation; • make any payment or prepayment of certain subordinated indebtedness; • enter into agreements that restrict dividends and certain other payments from subsidiaries; and • engage in a sale leaseback or similar transaction.
Our credit facility contains various covenants that limit our ability to take certain actions, including our ability to: • make, create, incur, assume or suffer to exist any lien; • sell or otherwise dispose of assets, including capital stock of subsidiaries; • merge, consolidate, sell or otherwise dispose of all or substantially all our assets; • make restricted payments, including paying dividends and making certain loans and investments; • create, incur, assume, permit to exist, or otherwise become or remain directly or indirectly liable with respect to any additional indebtedness; • enter into transactions with affiliates; • engage in any additional line of business; • amend our organization documents; • make a change in accounting treatment or reporting practices, change our name or change our jurisdiction of organization or formation; • make any payment or prepayment of certain subordinated indebtedness; • enter into agreements that restrict dividends and certain other payments from subsidiaries; and • engage in a sale leaseback or similar transaction. 38 Table of Contents In addition, our credit facility contains restrictive covenants and requires us to maintain specified financial ratios and satisfy other financial condition tests.
Alongside this quality and public reporting effort, home health agencies receive, under the HHVBP Model, increases or decreases to their Medicare fee-for-service payments of up to 5% based on performance against specific quality measures relative to the performance of other home health providers. Data collected in each performance year impacts Medicare payments two years later.
In addition, home health agencies receive, under the HHVBP Model, increases or decreases to their Medicare fee-for-service payments of up to 5% based on performance against specific quality measures relative to the performance of other home health providers. Data collected in each performance year impacts Medicare payments two years later.
If we perform at a level below the outcomes demonstrated by our competitors, fail to satisfy quality data reporting requirements, are unable to meet or exceed quality performance standards under any applicable value-based purchasing program, or otherwise fail to effectively provide or coordinate the efficient delivery of quality healthcare services, our reputation in the industry may be negatively impacted, we may receive reduced reimbursement amounts and we may owe repayments to payors, causing our revenues, financial position, results of operations and cash flows to decline.
If we perform at a level below the outcomes demonstrated by our competitors, fail to satisfy quality data reporting requirements, are unable to meet or exceed quality performance standards under any applicable value-based models, or otherwise fail to effectively provide or coordinate the efficient delivery of quality healthcare services, our reputation in the industry may be negatively impacted, we may receive reduced reimbursement amounts and we may owe repayments to payors, causing our revenues, financial position, results of operations and cash flows to decline. 34 Table of Contents Liability Risks Our operations subject us to risk of litigation.
Federal agencies oversee, regulate and otherwise affect many aspects of our business, including through Medicare and Medicaid payment and coverage policies, policies affecting size of the uninsured population, administration of state Medicaid programs, and enforcement and interpretation of fraud and abuse laws.
Federal agencies oversee, regulate and otherwise affect many aspects of our business, including through Medicare and Medicaid policies, policies affecting the size of the uninsured population and interpretation and enforcement of fraud and abuse laws.
After giving effect to the amount drawn on our credit facility, approximately $8.0 million of outstanding letters of credit at each of December 31, 2024 and 2023, and borrowing limits based on an advanced multiple of Adjusted EBITDA (as defined in the Credit Agreement), we had $346.6 million and $335.6 million available for borrowing under our credit facility as of December 31, 2024 and 2023, respectively.
After giving effect to the amount drawn on our credit facility, approximately $ 7.9 million of outstanding letters of credit at each of December 31, 2025 and 2024, and borrowing limits based on an advanced multiple of Adjusted EBITDA (as defined in the Credit Agreement), we had $ 517.7 million and $346.6 million available for borrowing under our credit facility as of December 31, 2025 and 2024, respectively.
We had $970.6 million and $663.0 million of goodwill and $109.6 million and $92.0 million of intangible assets recorded on our Consolidated Balance Sheets at December 31, 2024 and 2023, respectively. It is not possible at this time to determine if there will be any future impairment charge, or if there is, whether such charges would be material.
We had $ 996.7 million and $970.6 million of goodwill and $ 102.4 million and $109.6 million of intangible assets recorded on our Consolidated Balance Sheets at December 31, 2025 and 2024, respectively. It is not possible at this time to determine if there will be any future impairment charge, or if there is, whether such charges would be material.
The rapid evolution and increased adoption of artificial intelligence technologies may intensify cybersecurity risks by making cyber-attacks more difficult to detect, contain or mitigate. Internal access management failures or vulnerabilities in hardware, software or applications could also result in the compromise of confidential data.
The rapid evolution and increased adoption of AI technologies internally and by our third-party vendors may intensify cybersecurity risks, including by making cyber-attacks more difficult to detect, contain or mitigate. Internal access management failures or vulnerabilities in hardware, software or applications could also result in the compromise of confidential data.
Reductions in the number of insured individuals or the scope of insurance coverage, or an increase in patients covered under governmental health programs or other health plans with lower reimbursement levels, may have an adverse effect on our business.
Reductions in the number of insured individuals or the scope of insurance coverage, or an increase in patients covered under governmental health programs or other health plans with lower reimbursement levels, may have an adverse effect on our business. In addition, the Medicare and Medicaid programs are subject to change.
We cannot predict at this time what effect alternative payment models may have on our Company. 22 Table of Contents Our industry is highly competitive, fragmented and market-specific. The healthcare and long-term care industries are highly competitive among service providers and care models.
We cannot predict at this time what effect alternative payment models may have on our Company. 29 Table of Contents Our industry is highly competitive, fragmented and market-specific. The healthcare industry, including the long-term care industry, is highly competitive among service providers and care models for patients, personnel and acquisitions.
Changes that have occurred or that may occur at the federal or state level to contain costs include, for example: • limiting increases in, or decreasing, reimbursement rates; • redefining eligibility standards or coverage criteria for social and medical programs or the receipt of services under those programs; • increasing consumer responsibility, including through increased co-payment requirements; • decreasing benefits, such as limiting the number of hours of personal care services that will be covered; • changing reimbursement methodology and program participation eligibility; • slowing payments to providers; • increasing utilization of self-directed care alternatives or “all inclusive” programs; • shifting beneficiaries to managed care organizations; and • implementing demonstration projects and alternative payment models.
Cost containment initiatives at the federal or state level have included, and in the future may include, for example: • limiting increases in, or decreasing, reimbursement rates; • redefining eligibility standards or coverage criteria for social and medical programs or otherwise restricting the receipt of services under those programs, including by limiting the number of people receiving waiver services; • eliminating or reducing the scope of coverage for optional Medicaid benefits; • increasing consumer responsibility, including through increased co-payment requirements; • decreasing benefits, such as limiting the number of hours of personal care services that will be covered; • changing reimbursement methodology and program participation eligibility; • slowing payments to providers; • increasing utilization of self-directed care alternatives or “all inclusive” programs; • shifting beneficiaries to managed care organizations; and • implementing demonstration projects and alternative payment models.
These and other factors could impact our ability to contract with payors on favorable terms, result in pricing pressures, loss of or failure to gain market share or loss of consumers or payors, or otherwise affect our competitive position.
These and other factors could impact our ability to contract with payors on favorable terms, result in pricing pressures, loss of or failure to gain market share or loss of consumers or payors, or otherwise affect our competitive position, any of which could cause a decline in revenue and negatively impact our results of operations.
The laws and regulations governing our operations, along with the terms of participation in various government programs, affect the way in which we do business, the services we offer, and our interactions with providers and consumers.
Our industry is extensively regulated at the federal and state government levels. The laws and regulations governing our operations, along with the terms of participation in various government programs, affect the way in which we do business, the services we offer, and our interactions with providers and consumers.
We face routine and periodic surveys, audits and investigations by governmental agencies and private payors, which could have adverse findings that may negatively impact our business. We are and have been subject to routine and periodic surveys, audits and investigations by various governmental agencies.
We have been and may become the subject of surveys, audits and investigations by governmental agencies and private payors, which could have adverse findings that may negatively impact our business. We are and have been subject to surveys, audits and investigations by various governmental agencies and their agents.
We license this software through CellTrak and partner with states that utilize other software. We rely on these vendors to provide continual maintenance and enhancements, as well as security of any protected data. To the extent that our EVV vendors fail to support these processes, our internal operations could be negatively affected.
We rely on these vendors to provide continual maintenance and enhancements, as well as security of any protected data. To the extent that our EVV vendors fail to support these processes, our internal operations could be negatively affected.
For example, some members of Congress and the presidential administration have raised, and Congress may in the future adopt, proposals intended to reduce Medicaid expenditures such as restructuring the Medicaid program to give states a “block grant” or fixed amount of overall funding for their respective Medicaid programs or to impose spending caps such as per Medicaid beneficiary limits on federal contributions.
For example, some members of Congress and the executive branch have raised, and may in the future adopt, proposals intended to accelerate the shift from traditional Medicare to Medicare Advantage, restructure the Medicaid program to give states a “block grant” or fixed amount of overall funding for their respective Medicaid programs, or to impose Medicaid spending caps such as per beneficiary limits on federal contributions.
The implementation of alternative payment models and the transition of Medicaid and Medicare beneficiaries to managed care organizations may limit our market share and could adversely affect our revenues. Many government and commercial payors are transitioning providers to alternative payment models that are designed to promote cost-efficiency, quality and coordination of care.
The implementation of alternative payment models and any increases in enrollment in Medicare Advantage or Medicaid managed care plans may limit our market share and could adversely affect our revenues. Many government and commercial payors have transitioned or are transitioning providers to alternative payment models that are designed to promote cost-efficiency, quality and coordination of care.
Our business may be adversely impacted by changes and uncertainty in the healthcare industry, including healthcare public policy developments and other changes to laws and regulations. The healthcare industry is subject to changing political, regulatory and other influences. Regulatory uncertainty has increased as a result of decisions issued by the U.S.
Our business may be adversely impacted by changes and uncertainty in the healthcare industry, including healthcare public policy developments and other changes to laws and regulations. The healthcare industry is subject to changing political, regulatory and other influences.
In certain states, payment of home health claims may be impacted by the Review Choice Demonstration for Home Health Services, a program intended to identify and prevent fraud, reduce the number of Medicare appeals, and improve provider compliance with Medicare program requirements. Private third-party payors may also conduct audits and investigations, and we also perform internal audits and monitoring.
In certain states in which we operate, payment of home health claims may be impacted by the Review Choice Demonstration for Home Health Services, a program intended to identify and prevent fraud, reduce the number of Medicare appeals, and improve provider compliance with Medicare program requirements.
We may not be able to offset higher labor costs by increasing the rates we charge for our services. In addition, if we fail to attract and retain qualified and skilled personnel, our ability to conduct our business operations effectively and our results of operations would be harmed. Competition may be greater for managers, such as regional and agency directors.
In addition, if we fail to attract and retain qualified and skilled personnel, our ability to conduct our business operations effectively and our results of operations would be harmed. Competition may be greater for managers, such as regional and agency directors.
A cyber-attack or security breach could cause a loss of confidential consumer data, give rise to remediation and other expenses, expose us to liability under privacy laws, consumer protection laws, common law and other legal theories, subject us to litigation and federal and state governmental inquiries, damage our reputation, result in interruptions or delays to services, adversely impact our financial results, and otherwise be disruptive to our business. 27 Table of Contents We, directly and through our vendors and other third parties, collect and store sensitive information, including proprietary business information, protected health information of our patients and personally identifiable information of our employees, patients and consumers.
A cyber-attack or security breach could cause a loss of confidential consumer data, give rise to remediation and other expenses, expose us to liability under privacy laws, consumer protection laws, common law and other legal theories, subject us to litigation and federal and state governmental inquiries, damage our reputation, result in interruptions or delays to services, adversely impact our financial results, and otherwise be disruptive to our business.
It is unclear how price transparency requirements, value-based purchasing and similar initiatives will affect consumer behavior, our relationships with payors, or our ability to set and negotiate prices. We expect these competitive trends to continue.
It is unclear how price transparency requirements, value-based purchasing and similar initiatives will affect consumer behavior, our relationships with payors, or our ability to set and negotiate prices, but our competitive position could be negatively affected if our prices are higher or perceived to be higher than the prices of our competitors. We expect these competitive trends to continue.
De novo offices involve risks, including those relating to licensing, accreditation, payor program enrollment, hiring new personnel, establishing relationships with referral sources and delays or difficulty in installing our operating and information systems. We may not be successful in generating sufficient business activity to sustain the operating costs of such de novo operations.
De novo offices involve risks, including those relating to licensing, accreditation, payor program enrollment, hiring new personnel, establishing relationships with referral sources and delays or difficulty in installing our operating and information systems.
Supreme Court in June 2024 that affect review of federal agency actions. These decisions increase judicial scrutiny of agency authority, shift greater responsibility for statutory interpretation to courts, expand the time period during which a plaintiff can sue regulators, and may result in inconsistent judicial interpretations and delays in agency rulemaking processes. In Loper Bright Enterprises v.
These decisions increase judicial scrutiny of agency authority, shift greater responsibility for statutory interpretation to courts, expand the time period during which a plaintiff can sue regulators, and may result in inconsistent judicial interpretations and delays in agency rulemaking processes. These decisions may increase legal challenges to healthcare regulations and agency guidance and decisions.
We rely on external service providers to provide continual maintenance, upgrading, and enhancement of our primary information systems used for our operational needs.
We rely on external service providers to provide continual maintenance, upgrading, and enhancement of our primary information systems used for our operational needs, and we rely on various third-party technology platforms, which continue to grow in complexity and scope.
These audits and investigations can result and have resulted in recoupments by Medicare, state programs and other payors of amounts previously paid to us if we fail to comply with applicable laws or program requirements.
Private third-party payors may also conduct audits and investigations, and we also perform internal audits and monitoring. These audits and investigations can result and have resulted in recoupments by Medicare, state programs and other payors of amounts previously paid to us if it is determined that we failed to comply with applicable laws, regulations or program requirements.
Difficulties with operational processes may negatively affect our revenue growth rates, cash flow and profitability for services provided. Other alternative payment models may be presented by the government and commercial payors that subject our Company to financial risk. It is difficult to predict the nature and success of any such models.
Other alternative payment models may be presented by the government and commercial payors that subject our Company to financial risk. It is difficult to predict the nature and success of any such models.
While we believe we are adapting our business strategies to compete in a value-based reimbursement environment, we are unable at this time to predict how this trend will affect our results of operations.
It is unclear whether alternative models will successfully coordinate care and reduce costs or whether they will decrease overall reimbursement. While we believe we are adapting our business strategies to compete in a value-based reimbursement environment, we are unable at this time to predict how this trend will affect our results of operations.
For example, ACOs incentivize hospitals, physician groups, and other providers to organize and coordinate patient care while reducing unnecessary costs. Some states have implemented, or plan to implement, accountable care models for their Medicaid populations.
For example, ACOs incentivize hospitals, physician groups, and other providers to organize and coordinate patient care while reducing unnecessary costs. Some states have implemented, or plan to implement, accountable care models for their Medicaid populations. If we are not included in these programs, or if ACOs establish programs that overlap with our services, we risk losing market share.
If implemented in its current form, the final rule could negatively impact our business and financial performance by, among other things, increasing our labor costs.
If implemented in its current form, the final rule could negatively impact our business and financial performance by, among other things, increasing our labor costs. Reductions in coverage or payment rates, decreases in Medicaid enrollment, and other changes to state Medicaid programs could adversely affect our business.
Payment policies for different types of providers and for various items and services continue to evolve, and future health reform efforts could impact both federal and state programs. 21 Table of Contents If changes in Medicare, Medicaid or other state and local medical and social programs result in a reduction in available funds for the services we offer, a reduction in the number of beneficiaries eligible for our services or a reduction in the number of hours or amount of services that beneficiaries eligible for our services may receive, then our revenues and profitability could be negatively impacted.
If changes in Medicare, Medicaid or other state and local medical and social programs result in a reduction in available funds for the services we offer, increased costs of providing services, a reduction in the number of beneficiaries eligible for our services or able to access our services, or a reduction in the number of hours or amount of services that beneficiaries eligible for our services may receive, then our revenues and profitability could be negatively impacted.
Further, changes in governmental administration, including changes in agency structures and staffing, such as reduction or elimination of personnel and agencies, may result in changes to established rulemaking conventions and timelines, including for regularly-issued reimbursement rules, among other effects.
Further, changes in governmental administration, including changes in agency structures and staffing, such as reduction or elimination of personnel and agencies, may result in changes to established rulemaking conventions and timelines, including for regularly-issued reimbursement rules, among other effects. 33 Table of Contents Legislation and administrative actions at the federal level may impact funding for, or the structure of, the Medicaid program and may shape administration of the Medicaid program at the state level, including through changes to waiver programs.
Each of our agreements is generally in effect for a specific term, but they are also generally terminable with 60 days’ notice.
Failure to renew a significant payor agreement or group of related payor agreements may materially impact our revenue. Each of our agreements is generally in effect for a specific term, but they are also generally terminable with 60 days’ notice.
Even if we are successful in our defense, lawsuits or regulatory proceedings could distract us from running our business or irreparably damage our reputation. 26 Table of Contents Our insurance liability coverage may not be sufficient for our business needs.
Even if we are successful in our defense, lawsuits or regulatory proceedings could distract us from running our business or damage our reputation. Our insurance liability coverage may not be sufficient for our business needs. Although we maintain insurance consistent with industry practice, the insurance we maintain may not be sufficient to satisfy all claims made against us.
Overall payments made by Medicare to each hospice provider number (generally corresponding to each of our hospice agencies) are subject to an inpatient cap and an aggregate cap, which CMS sets each federal fiscal year.
If we exceed the caps, our business and consolidated financial condition, results of operations and cash flows could be materially adversely affected. Overall payments made by Medicare to each hospice provider number (generally corresponding to each of our hospice agencies) are subject to an inpatient cap and an aggregate cap, which CMS sets each federal fiscal year.
Accordingly, any change in the current demographic, economic, competitive or regulatory conditions in these states could have an adverse effect on our business, financial condition or results of operations.
Because a substantial portion of our business is concentrated in a small number of states, any change in the current demographic, economic, competitive or regulatory conditions in these states could have a disproportionately negative impact on our business, financial condition or results of operations.
Under the 21st Century Cures Act, states must require the use of EVV for all Medicaid-funded personal care services and home health services that require an in-home visit by a provider.
Under the 21st Century Cures Act, states must require the use of EVV for all Medicaid-funded personal care services and home health services that require an in-home visit by a provider. States that failed to meet the deadlines for implementation are subject to incremental reductions in federal Medicaid funding, which may negatively impact the reimbursement we receive for our services.
If future reforms impact the eligibility of consumers for services, the number of hours authorized or otherwise restrict services provided to existing consumers, our service revenues, results of operations, financial position and growth may be adversely affected. Failure to renew a significant payor agreement or group of related payor agreements may materially impact our revenue.
The nature and extent of any proposed future cost reduction initiatives is difficult to predict. If future reforms impact the eligibility of consumers for services, the number of hours authorized or otherwise restrict services provided to existing consumers, our service revenues, results of operations, financial position and growth may be adversely affected.
Our revenues are particularly sensitive to regulatory and economic changes in states in which we generate a significant portion of our revenues including Illinois and New Mexico. We expect to derive a significant portion of our revenues from Texas going forward as a result of the Gentiva Acquisition.
Our revenues are concentrated in a small number of states, which makes us particularly sensitive to regulatory and economic changes in those states. Our revenues are particularly sensitive to regulatory and economic changes in states in which we generate a significant portion of our revenues including Illinois, New Mexico and Texas.
We may be similarly impacted by increased enrollment of Medicare and Medicaid beneficiaries in managed care plans, which is part of the general shift away from traditional fee-for-service models. Under the managed Medicare program, known as Medicare Advantage, the federal government contracts with private health insurers to provide Medicare benefits.
We may be similarly impacted by increases in enrollment of Medicare and Medicaid beneficiaries in managed care plans, which are part of the general shift away from traditional fee-for-service models.
These modifications may result in increased operational costs to us, which may adversely impact our financial performance. 24 Table of Contents In addition, individuals and entities excluded by the OIG from federal healthcare programs, including Medicare and Medicaid, are prohibited from receiving payment from federal healthcare programs for any items or services they furnish, order or provide, and providers who employ or contract with excluded individuals are subject to significant penalties.
Furthermore, any failure to comply with these laws, including even a seemingly minor infraction, can result in significant penalties which could harm our reputation and have a material adverse effect on our business. 32 Table of Contents In addition, individuals and entities excluded by the OIG from federal healthcare programs, including Medicare and Medicaid, are prohibited from receiving payment from federal healthcare programs for any items or services they furnish, order or provide, and providers who employ or contract with excluded individuals are subject to significant penalties.
In addition, economic changes such as increases in minimum wage and changes in Department of Labor rules can also impact the ease of entry into a market. These factors may affect competition in the states in which we operate. Often our contracts with payors are not exclusive. Local competitors may develop strategic relationships with referral sources and payors.
These and other factors affecting barriers to entry in a market may affect competition in the states in which we operate. Often our contracts with payors are not exclusive. Local competitors may develop strategic relationships with referral sources and payors.
However, despite these efforts, our technology, and that of our third-party service providers, may fail to adequately secure the protected health information and personally identifiable information we create, receive, transmit and maintain in our databases. We may be at increased risk because we outsource certain services or functions to, or have systems that interface with, third parties.
Despite these efforts, our technology, and that of our third-party service providers, may fail to adequately secure the protected health information, personally identifiable information and other sensitive information we create, receive, transmit and maintain in our databases, compromising the privacy, integrity or availability of such information.
Other legislative and executive branch initiatives related to health insurance, such as permitting the sale of insurance plans that lack currently required consumer protections, could significantly affect insurance markets. In addition, the Medicare and Medicaid programs are subject to change, including as a result of changes in the presidential administration.
Other legislative and executive branch initiatives related to health insurance, such as permitting the sale of insurance plans that lack currently required consumer protections, could significantly affect insurance markets, including by increasing rates of uninsured and underinsured individuals and destabilizing markets.
If we are unable to compete effectively, consumers may seek services from other providers, which could have a negative impact on our business and results of operations.
If we are unable to compete effectively, consumers may seek services from other providers, which could have a negative impact on our business and results of operations. 30 Table of Contents If we fail to comply with the extensive laws and regulations governing our business, we could be subject to penalties or be required to make changes to our operations, which could negatively impact our business and profitability.
These competitive advantages may limit our ability to attract and retain referrals in local markets and to increase our overall market share. In many states, there are limited barriers to entry in providing personal care services. However, some states require entities to obtain a license before providing home care services.
If consumers obtain services we do not offer from other providers, they may shift their preferences to those providers for services we do provide. These competitive advantages may limit our ability to attract and retain referrals in local markets and to increase our overall market share. In some states, there are limited barriers to entry in providing personal care services.
As federal healthcare expenditures continue to increase and as many state governments navigate budgetary pressures, federal and state governments have made, and may continue to make, significant changes to the Medicare and Medicaid programs and reimbursement received for services rendered to beneficiaries of such programs.
Budgetary shortfalls and funding changes may affect our contracts and the reimbursement we receive, as governmental agencies generally condition their agreements upon a sufficient budgetary appropriation. 27 Table of Contents As federal healthcare expenditures continue to increase and as many state governments navigate budgetary pressures, federal and state governments have made, and may continue to make, significant changes to the Medicare and Medicaid programs, including changes to reimbursement for or coverage of items and services rendered to beneficiaries of such programs.
As a result, changes to government healthcare programs that reduce Medicare, Medicaid or other payments may negatively impact payments from private payors, as well. Any reduction in reimbursements from governmental or private payors or policies that negatively affect utilization of our services, such as the imposition of copayments or prior authorization requirements, could also materially adversely affect our profitability.
Any reduction in reimbursements from governmental or private payors or policies that negatively affect utilization of our services, such as the imposition of copayments or prior authorization requirements, could also materially adversely affect our profitability. 28 Table of Contents Federal and state regulation may impair our ability to consummate acquisitions or open new agencies.

… 100 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

2 edited+0 added−0 removed7 unchanged
Biggest changeOur cybersecurity incident response plan provides that the Chief Information Security Officer will work with our IT Department and the impacted segment of our business to investigate and respond to any identified incident (including by escalating the incident to the Company’s senior management and the Board depending on the nature and scope ).
Biggest changeOur cybersecurity incident response plan provides that the Chief Information Security Officer will work with our IT Department and the impacted segment of our business to investigate and respond to any identified incident (including by escalating the incident to the Company’s senior management and the Board depending on the nature and scope). 40 Table of Contents
The Chief Information Security Officer has extensive cybersecurity experience, including more than 15 years working in senior IT infrastructure and IT security roles in the healthcare se ctor (seven of which years were spent as the Chief Information Security Officer).
The Chief Information Security Officer has extensive cybersecurity experience, including more than 15 years working in senior IT infrastructure and IT security roles in the healthcare sector ( seven of which years were spent as the Chief Information Security Officer).

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−1 removed0 unchanged
Biggest changeITEM 2. P ROPERTIES We do not own any real property. We lease administrative offices for our local branches, none of which are individually material. We lease approximately 59,000 and 75,000 square feet of office space in Downers Grove, Illinois and Frisco, Texas, respectively, which serve as our support centers.
Biggest changeITEM 2. PROPERTIES We do not own any real property. We lease administrative offices for our local branches, none of which are individually material. We lease approximately 18,000 and 75,000 square feet of office space in Lisle, Illinois and Frisco, Texas, respectively, which serve as our support centers.
Removed
We sublease approximately 21,000 and 37,400 square feet of our office space in Downers Grove and Frisco, respectively, to third parties. 31 Table of Contents

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed1 unchanged
Biggest changeFurther information with respect to this item may be found in Note 11 to the Consolidated Financial Statements in Part II, Item 8—“Financial Statements and Supplementary Data,” which is incorporated herein by reference. ITEM 4. MINE SAF ETY DISCLOSURES Not applicable. 32 Table of Contents PART II
Biggest changeFurther information with respect to this item may be found in Note 11 to the Consolidated Financial Statements in Part II, Item 8—“Financial Statements and Supplementary Data,” which is incorporated herein by reference. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 41 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+0 added−1 removed3 unchanged
Biggest changeMARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STO CKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed on The Nasdaq Global Market under the symbol “ADUS.” Holders As of December 31, 2024, 2.0% of our shares of common stock were held by our officers and directors and approximately 98.0% of our common stock was held by 440 institutional investors.
Biggest changeMARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed on The Nasdaq Global Market under the symbol “ADUS.” Holders As of December 31, 2025, 2.6% of our shares of common stock were held by our officers and directors and approximately 97.4% of our common stock was held by 419 institutional investors.
An insignificant amount of common stock is held by individual holders. As of February 18, 2025, Addus HomeCare Corporation had approximately 43,455 shareholders of its common stock, including 85 shareholders of record.
An insignificant amount of common stock is held by individual holders. As of February 17, 2026 , Addus HomeCare Corporation had approximately 45,726 shareholders of its co mmon stock, including 86 shareholders of record.
Removed
ITE M 6. [ Reserved] 33 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

134 edited+24 added−16 removed77 unchanged
Biggest changeFor the years ended December 31, 2024, 2023 and 2022, our revenue by payor and significant states by segment were as follows: Personal Care 2024 2023 2022 Amount (in Thousands) % of Segment Net Service Revenues Amount (in Thousands) % of Segment Net Service Revenues Amount (in Thousands) % of Segment Net Service Revenues State, local and other governmental programs $ 456,885 53.3 % $ 400,753 50.4 % $ 348,234 49.3 % Managed care organizations 376,604 44.0 367,557 46.2 326,778 46.3 Private pay 15,589 1.8 16,268 2.0 18,301 2.6 Commercial insurance 5,593 0.7 6,321 0.8 7,689 1.1 Other 1,910 0.2 3,819 0.6 5,505 0.7 Total personal care segment net service revenues $ 856,581 100.0 % $ 794,718 100.0 % $ 706,507 100.0 % Illinois $ 441,012 51.5 % $ 411,081 51.7 % $ 360,778 51.1 % New Mexico 115,381 13.5 115,986 14.6 105,315 14.9 New York 71,763 8.4 92,469 11.6 86,592 12.3 All other states 228,425 26.6 175,182 22.1 153,822 21.7 Total personal care segment net service revenues $ 856,581 100.0 % $ 794,718 100.0 % $ 706,507 100.0 % With the acquisition of Upstate and the Gentiva Acquisition in 2024, the Company expanded its personal care services to consumers in the state of Arizona, Arkansas, California, Missouri, North Carolina, South Carolina and Texas. 35 Table of Contents Hospice 2024 2023 2022 Amount (in Thousands) % of Segment Net Service Revenues Amount (in Thousands) % of Segment Net Service Revenues Amount (in Thousands) % of Segment Net Service Revenues Medicare $ 208,099 91.2 % $ 186,317 89.9 % $ 183,407 90.9 % Managed care organizations 7,603 3.3 7,037 3.4 7,353 3.6 Other 12,489 5.5 13,801 6.7 11,012 5.5 Total hospice segment net service revenues $ 228,191 100.0 % $ 207,155 100.0 % $ 201,772 100.0 % Ohio $ 84,811 37.2 % $ 74,871 36.1 % $ 70,503 35.0 % Illinois 52,560 23.0 47,247 22.8 47,181 23.4 New Mexico 28,532 12.5 30,782 14.9 30,722 15.2 All other states 62,288 27.3 54,255 26.2 53,366 26.4 Total hospice segment net service revenues $ 228,191 100.0 % $ 207,155 100.0 % $ 201,772 100.0 % With the acquisition of Tennessee Quality Care in 2023, the Company expanded its hospice services to patients in the state of Tennessee and with the acquisition of JourneyCare in 2022, the Company also expanded its hospice services to patients in the state of Illinois.
Biggest changeFor the years ended December 31, 2025, 2024 and 2023, our revenue by payor and significant states by segment were as follows: Personal Care 2025 2024 2023 Amount (in Thousands) % of Segment Net Service Revenues Amount (in Thousands) % of Segment Net Service Revenues Amount (in Thousands) % of Segment Net Service Revenues State, local and other governmental programs $ 553,475 50.8 % $ 456,885 53.3 % $ 400,753 50.4 % Managed care organizations 501,528 46.0 376,604 44.0 367,557 46.2 Private pay 27,871 2.6 15,589 1.8 16,268 2.0 Commercial insurance 5,609 0.5 5,593 0.7 6,321 0.8 Other 732 0.1 1,910 0.2 3,819 0.6 Total personal care segment net service revenues $ 1,089,215 100.0 % $ 856,581 100.0 % $ 794,718 100.0 % Illinois $ 458,828 42.1 % $ 441,012 51.5 % $ 411,081 51.7 % Texas 216,712 19.9 17,936 2.0 — — New Mexico 118,588 10.9 115,381 13.5 115,986 14.6 New York — — 71,763 8.4 92,469 11.6 All other states 295,087 27.1 210,489 24.6 175,182 22.1 Total personal care segment net service revenues $ 1,089,215 100.0 % $ 856,581 100.0 % $ 794,718 100.0 % With the Jacksonville Acquisition, the Great Lakes Acquisition, the Helping Hands Acquisition and the Gold Horses Acquisition in 2025, the Company expanded its personal care services to consumers in the state of Florida, Michigan, Pennsylvania and Texas.
Historical trends established in these metrics can be used to evaluate current operating results, identify trends affecting our business, determine the allocation of resources and assess the quality and potential variability of our cash flows and earnings.
Historical trends established in these metrics can be used to evaluate current operating results, identify trends affecting our business, determine the allocation of resources and assess the quality and potential variability of our cash flows and earnings.
We believe they are useful to investors in evaluating and understanding our business but should not be used solely in assessing the Company’s performance.
We believe they are useful to investors in evaluating and understanding our business but should not be used solely in assessing the Company’s performance.
These key performance indicators should not be considered superior to, as a substitute for or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented herein to fully evaluate and understand the business as a whole. These measures may not be comparable to similarly-titled performance indicators used by other companies.
These key performance indicators should not be considered superior to, as a substitute for or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented herein to fully evaluate and understand the business as a whole. These measures may not be comparable to similarly-titled performance indicators used by other companies.
Many of these metrics serve as the basis of reported revenues and assessment of these, provide direct correlation to the results of operations from period to period and facilitate comparison with the results of our peers.
Many of these metrics serve as the basis of reported revenues and assessment of these, provide direct correlation to the results of operations from period to period and facilitate comparison with the results of our peers.
Historical trends established in these metrics can be used to evaluate current operating results, identify trends affecting our business, determine the allocation of resources and assess the quality and potential variability of our cash flows and earnings.
Historical trends established in these metrics can be used to evaluate current operating results, identify trends affecting our business, determine the allocation of resources and assess the quality and potential variability of our cash flows and earnings.
We believe they are useful to investors in evaluating and understanding our business but should not be used solely in assessing the Company’s performance.
We believe they are useful to investors in evaluating and understanding our business but should not be used solely in assessing the Company’s performance.
Additionally, our calculation of Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.
Additionally, our calculation of Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.
Historical trends established in these metrics can be used to evaluate current operating results, identify trends affecting our business, determine the allocation of resources and assess the quality and potential variability of our cash flows and earnings.
Historical trends established in these metrics can be used to evaluate current operating results, identify trends affecting our business, determine the allocation of resources and assess the quality and potential variability of our cash flows and earnings.
We believe they are useful to investors in evaluating and understanding our business but should not be used solely in assessing the Company’s performance.
We believe they are useful to investors in evaluating and understanding our business but should not be used solely in assessing the Company’s performance.
These key performance indicators should not be considered superior to, as a substitute for or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented herein to fully evaluate and understand the business as a whole. These measures may not be comparable to similarly-titled performance indicators used by other companies.
These key performance indicators should not be considered superior to, as a substitute for or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented herein to fully evaluate and understand the business as a whole. These measures may not be comparable to similarly-titled performance indicators used by other companies.
Because management believes Adjusted EBITDA is useful as a performance measure, management uses Adjusted EBITDA: • as one of our primary financial measures in the day-to-day oversight of our business to allocate financial and human resources across our organization, to assess appropriate levels of marketing and other initiatives and to generally enhance the financial performance of our business; • in the preparation of our annual operating budget, as well as for other planning purposes on a quarterly and annual basis, including allocations in order to implement our growth strategy, to determine appropriate levels of investments in acquisitions and to endeavor to achieve strong core operating results; • to evaluate the effectiveness of business strategies, such as the allocation of resources, the mix of organic growth and acquisitive growth and adjustments to our payor mix; • as a means of evaluating the effectiveness of management in directing our core operating performance, which we consider to be performance that can be affected by our management in any particular period through their allocation and use of resources that affect our underlying revenue and profit-generating operations during that period; • for the valuation of prospective acquisitions, and to evaluate the effectiveness of integration of past acquisitions into our Company; and • in communications with our Board concerning our financial performance.
Because management believes Adjusted EBITDA is useful as a performance measure, management uses Adjusted EBITDA: • as one of our primary financial measures in the day-to-day oversight of our business to allocate financial and human resources across our organization, to assess appropriate levels of marketing and other initiatives and to generally enhance the financial performance of our business; 55 Table of Contents • in the preparation of our annual operating budget, as well as for other planning purposes on a quarterly and annual basis, including allocations in order to implement our growth strategy, to determine appropriate levels of investments in acquisitions and to endeavor to achieve strong core operating results; • to evaluate the effectiveness of business strategies, such as the allocation of resources, the mix of organic growth and acquisitive growth and adjustments to our payor mix; • as a means of evaluating the effectiveness of management in directing our core operating performance, which we consider to be performance that can be affected by our management in any particular period through their allocation and use of resources that affect our underlying revenue and profit-generating operations during that period; • for the valuation of prospective acquisitions, and to evaluate the effectiveness of integration of past acquisitions into our Company; and • in communications with our Board concerning our financial performance.
Hospice generates revenue by providing care to patients with a life expectancy of six months or less, as well as related services for their families. Hospice offers four levels of care, as defined by Medicare, to meet the varying needs of patients and their families.
The hospice segment generates revenue by providing care to patients with a life expectancy of six months or less, as well as related services for their families. Hospice offers four levels of care, as defined by Medicare, to meet the varying needs of patients and their families.
Potential Developments Home care and other healthcare providers may be significantly impacted by changes to the Medicaid program, including changes resulting from legislation and administrative actions at the federal and state levels.
Potential Developments Home care and other healthcare providers may be significantly impacted by changes to the Medicaid program, including changes resulting from the OBBBA and other legislation and administrative actions at the federal and state levels.
In certain states, payment of claims may be impacted by the Review Choice Demonstration for Home Health Services, a program intended to identify and prevent fraud, reduce the number of Medicare appeals and improve provider compliance with Medicare program requirements. The program is currently limited to home health agencies in Illinois, Ohio, Oklahoma, North Carolina, Florida and Texas.
Payment of claims may be impacted by the Review Choice Demonstration for Home Health Services, a program intended to identify and prevent fraud, reduce the number of Medicare appeals and improve provider compliance with Medicare program requirements. The program is currently limited to home health agencies in Illinois, Ohio, Oklahoma, North Carolina, Florida and Texas.
This program has not had a material impact on our results of operations or financial position. 37 Table of Contents CMS Final Rule: “ Ensuring Access to Medicaid Services ” In May 2024, CMS finalized a rule intended to improve access to services and quality of care for Medicaid beneficiaries across fee-for-service and managed care delivery systems.
This program has not had a material impact on our results of operations or financial position. 47 Table of Contents CMS Final Rule: “ Ensuring Access to Medicaid Services ” In May 2024, CMS finalized a rule intended to improve access to services and quality of care for Medicaid beneficiaries across fee-for-service and managed care delivery systems.
The final rule includes significant provisions related to HCBS, including the “80/20” or “payment adequacy” requirement, which will require states to ensure that at least 80% of all Medicaid payments a provider receives for homemaker, home health aide, and personal care services, less certain excluded costs, under specified programs are spent on total compensation (including benefits) for direct care workers furnishing these services, rather than administrative overhead or profit, subject to limited exceptions.
The final rule includes significant provisions related to HCBS, including the “80/20” or “payment adequacy” requirement, which will require states to ensure by mid-2030 that at least 80% of all Medicaid payments a provider receives for homemaker, home health aide, and personal care services, less certain excluded costs, under specified programs are spent on total compensation (including benefits) for direct care workers furnishing these services, rather than administrative overhead or profit, subject to limited exceptions.
This reflects a 3.4% market basket increase and a negative 0.5 percentage point productivity adjustment. Hospices that do not satisfy quality reporting requirements are subject to a 4-percentage point reduction to the market basket update. Overall payments made by Medicare to each hospice provider number are subject to an inpatient cap and an aggregate cap.
This reflects a 3.3% market basket increase and a negative 0.7 percentage point productivity adjustment. Hospices that do not satisfy quality reporting requirements are subject to a 4-percentage point reduction to the market basket update. Overall payments made by Medicare to each hospice provider number are subject to an inpatient cap and an aggregate cap.
Our investing activities for the year ended December 31, 2024 primarily consisted of $0.4 million for the acquisition of Upstate, $353.5 million for the Gentiva Acquisition, $6.1 million in purchases of property and equipment related to technology infrastructure, offset by $5.4 million in proceeds received on the sale of our New York business.
Our investing activities for the year ended December 31, 2024, primarily consisted of $0.4 for the acquisition of Upstate, $353.5 million for the Gentiva Acquisition, $6.1 million in purchases of property and equipment related to technology infrastructure, offset by $5.4 million in proceeds received on the sale of our New York Asset Sale.
We define the same store base to include those stores open for at least 52 full weeks. These measures highlight the performance of existing stores, while excluding the impact of acquisitions, new store openings and closures. * Management deems these metrics to be key performance indicators.
We define the same store base to include those stores open for at least 52 full weeks. These measures highlight the performance of existing stores, while excluding the impact of acquisitions, new store openings, closures and cap reserves. * Management deems these metrics to be key performance indicators.
Adjusted EBITDA is a performance measure used by management that is not calculated in accordance with GAAP. It should not be considered in isolation or as a substitute for net income, operating income or any other measure of financial performance calculated in accordance with GAAP.
A djusted EBITDA is a performance measure used by management that is not calculated in accordance with GAAP. It should not be considered in isolation or as a substitute for net income, operating income or any other measure of financial performance calculated in accordance with GAAP.
We believe that Adjusted EBITDA allows management, investors and others to evaluate and compare our core operating results, including return on capital and operating efficiencies, from period to period, by removing the impact of our capital structure (interest expense), asset base (amortization and depreciation), tax consequences, stock-based compensation expense and other identified adjustments. • We believe that Adjusted EBITDA is a measure widely used by securities analysts, investors and others to evaluate the financial performance of other public companies. • We recorded stock-based compensation expense of $11.2 million, $10.3 million and $10.6 million for the years ended December 31, 2024, 2023 and 2022, respectively.
We believe that Adjusted EBITDA allows management, investors and others to evaluate and compare our core operating results, including return on capital and operating efficiencies, from period to period, by removing the impact of our capital structure (interest expense), asset base (amortization and depreciation), tax consequences, stock-based compensation expense and other identified adjustments. • We believe that Adjusted EBITDA is a measure widely used by securities analysts, investors and others to evaluate the financial performance of other public companies. • We recorded stock-based compensation expense of $ 16.4 million, $11.2 million and $10.3 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Managed care revenues accounted for 34.8%, 36.6% and 36.0% of our revenue during the years ended December 31, 2024, 2023, and 2022 respectively. A summary of certain consolidated financial and statistical data results for 2024, 2023 and 2022 are provided in the table below.
Managed care revenues accounted for 37.0 %, 34.8% and 36.6% of our revenue during the years ended December 31, 2025, 2024, and 2023 respectively. A summary of certain consolidated financial and statistical data results for 2025, 2024 and 2023 are provided in the table below.
HCBS spending plans for the additional matching funds vary by state, but common initiatives in which the Company is participating include those aimed at strengthening the provider workforce (e.g., efforts to recruit, retain, and train direct service providers).
HCBS spending plans for the additional matching funds vary by state, but common initiatives in which the Company participates include those aimed at strengthening the provider workforce (e.g., efforts to recruit, retain, and train direct service providers).
Our actual results may differ materially from those we currently anticipate as a result of the factors we describe under “Risk Factors” and elsewhere in this Annual Report on Form 10-K and other risks as well as other factors that are not currently known to us, that we currently consider immaterial or that are not specific to us, such as general economic conditions.
Our actual results may differ materially from those we currently anticipate as a result of the factors we describe under “ Risk Factors ” and elsewhere in this Annual Report on Form 10-K and other risks as well as other factors that are not currently known to us, that we currently consider immaterial or that are not specific to us, such as general economic conditions.
(4) Patient days is days of service for all patients in the period. (5) Revenue per patient day is hospice revenue divided by the number of patient days in the period. (6) Revenue organic growth and average daily census organic growth reflect the change in year-over-year revenue and average daily census for the same store base.
(4) Patient days is days of service for all patients in the period. 52 Table of Contents (5) Revenue per patient day is hospice revenue divided by the number of patient days in the period. (6) Revenue organic growth and average daily census organic growth reflect the change in year-over-year revenue and average daily census for the same store base.
Employees are also reimbursed for their travel time and related travel costs in certain instances. 38 Table of Contents General and Administrative Expenses Our general and administrative expenses include our costs for operating our network of local agencies and our administrative offices. Our agency expenses consist of costs for supervisory personnel, our community care supervisors and office administrative costs.
Employees are also reimbursed for their travel time and related travel costs in certain instances. General and Administrative Expenses Our general and administrative expenses include our costs for operating our network of local agencies and our administrative offices. Our agency expenses consist of costs for supervisory personnel, our community care supervisors and office administrative costs.
The daily rate depends on the level of care provided to a patient (routine home care, continuous home care, inpatient respite care, or general inpatient care). Daily rates are adjusted for factors such as area wage levels. CMS updates hospice payment rates each federal fiscal year. Effective October 1, 2024, CMS increased hospice payment rates by 2.9%.
The daily rate depends on the level of care provided to a patient (routine home care, continuous home care, inpatient respite care, or general inpatient care). Daily rates are adjusted for factors such as area wage levels. CMS updates hospice payment rates each federal fiscal year. Effective October 1, 2025, CMS increased hospice payment rates by 2.6%.
Reductions in federal funding or changes to the federal funding formula for Medicaid could have a significant impact, particularly in states that expanded Medicaid under the ACA and especially if federal contributions for Medicaid expansion populations decrease and states are unable to offset the reductions.
Reductions in federal funding or changes to the federal funding formula for Medicaid under the OBBBA or future initiatives could have a significant impact, particularly in states that expanded Medicaid under the ACA and especially if federal contributions for Medicaid expansion populations decrease and states are unable to offset the reductions.
Managed care organizations accounted for 44.0% and 46.2% of net service revenues for the years ended December 31, 2024 and 2023, respectively, with commercial insurance, private pay and other payors accounting for the remainder of net service revenues.
Managed care organizations accounted for 46.0 % and 44.0% of net service revenues for the years ended December 31, 2025 and 2024, respectively, with commercial insurance, private pay and other payors accounting for the remainder of net service revenues.
The Company entered into a consulting agreement with the purchaser, as the transfer of clients and caregivers and payment for assets pursuant to the New York Asset Sale is occurring over time as regulatory approvals are received, coordination of the transfer of clients and caregivers occurs, and the change of control takes place.
The Company entered into a consulting agreement with the purchaser effective May 20, 2024, as the transfer of clients and caregivers and payment for assets pursuant to the New York Asset Sale is occurring over time as regulatory approvals are received, coordination of the transfer of clients and caregivers occurs, and the change of control takes place.
The home health segment’s general and administrative expenses consist of administrative employee wages, taxes and benefit costs, rent, information technology and office expenses. General and administrative expenses, expressed as a percentage of net service revenues, were 25.5% and 24.7% for the years ended December 31, 2024 and 2023, respectively.
The home health segment’s general and administrative expenses consist of administrative employee wages, taxes and benefit costs, rent, information technology and office expenses. General and administrative expenses, expressed as a percentage of net service revenues, were 24.2% and 25.5% for the years ended December 31, 2025 and 2024 , respectively.
For additional information regarding the risks to us from the current competitive labor market and increasing labor costs, see Item 1A—Risk Factors — “ We may not be able to attract and retain qualified personnel or we may incur increased costs in doing so. ” 51 Table of Contents
For additional information regarding the risks to us from the current competitive labor market and increasing labor costs, see Item 1A—Risk Factors — “ We may not be able to attract and retain qualified personnel or we may incur increased costs in doing so. ”
Cash from operations could also be affected by various risks and uncertainties, including, but not limited to the effects of risks detailed in Part I, Item 1A—”Risk Factors” Debt As of December 31, 2024, the Company had outstanding debt on our revolving loan under our credit facility of $223.0 million, payable on July 30, 2028.
Cash from operations could also be affected by various risks and uncertainties, including, but not limited to the effects of risks detailed in Part I, Item 1A—”Risk Factors”. Debt As of December 31, 2025, the Company had outstanding debt on our revolving loan under our credit facility of $ 124.3 million, payable on July 30, 2028.
Further, some members of Congress and the presidential administration have raised potential measures intended to accelerate the shift from traditional Medicare to Medicare Advantage or eliminating some or all of the consumer protections established by the ACA.
Further, some members of Congress and the executive branch have raised potential measures intended to accelerate the shift from traditional Medicare to Medicare Advantage or eliminating some or all of the consumer protections established by the ACA.
However, some members of Congress and the presidential administration have raised, and Congress may in the future adopt, proposals intended to reduce Medicaid expenditures such as restructuring the Medicaid program to give states a “block grant” or fixed amount of overall funding for their respective Medicaid programs or to impose spending caps such as per Medicaid beneficiary limits on federal contributions.
In addition, some members of Congress and the executive branch have raised, and Congress may in the future adopt, other proposals intended to reduce Medicaid expenditures such as restructuring the Medicaid program to give states a “block grant” or fixed amount of overall funding for their respective Medicaid programs or to impose spending caps such as per Medicaid beneficiary limits on federal contributions.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FIN ANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion together with our Consolidated Financial Statements and the related notes included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements about our business and operations.
ITEM 7. MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion together with our Consolidated Financial Statements and the related notes included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements about our business and operations.
A significant amount of our revenue is derived from one payor client, the Illinois Department on Aging, the largest payor program for our Illinois personal care operations, which accounted for 21.0% and 20.9% of our net service revenues for the years ended December 31, 2024 and 2023, respectively.
A significant amount of our revenue is derived from one payor client, the Illinois Department on Aging, the largest payor program for our Illinois personal care operations, which accounted for 18.1% and 21.0% of our net service revenues for the years ended December 31, 2025 and 2024, respectively.
The Company received state funding provided by the ARPA in an aggregate amount of $15.7 million and $3.7 million for the years ended December 31, 2024 and 2023, respectively.
The Company received state funding provided by the ARPA in an aggregate amount of $7.2 million and $15.7 million for the years ended December 31, 2025 and 2024, respectively.
The calculated interest payable amounts use actual rates available through January 2024 and assumes the January rates of 6.34%, for all future interest payable on the revolving loans. See Note 9, Long-Term Debt, to the Notes to Consolidated Financial Statements for additional details of our long-term debt.
The calculated interest payable amounts use actual rates available through January 2026 and assumes the January rates of 5.48%, for all future interest payable on the revolving loans. See Note 9, Long-Term Debt, to the Notes to Consolidated Financial Statements for additional details of our long-term debt.
The aggregate cap, which is set each federal fiscal year, limits the total Medicare reimbursement that a hospice may receive in a cap year (typically the federal fiscal year), based on an annual per-beneficiary cap amount and the number of Medicare patients served. The aggregate cap was updated to $34,465.34 for federal fiscal year 2025.
The aggregate cap limits the total Medicare reimbursement that a hospice may receive in a cap year (typically the federal fiscal year), based on an annual per-beneficiary cap amount, which is set each federal fiscal year, and the number of Medicare patients served. The per-beneficiary cap amount was updated to $35,361.44 for federal fiscal year 2026.
The Company utilized $10.2 million and $10.5 million of these funds during the years ended December 31, 2024 and 2023, respectively, primarily for caregivers and adding support to recruiting and retention efforts.
The Company utilized $6.8 million and $10.2 million of these funds during the years ended December 31, 2025 and 2024, respectively, primarily for caregivers and adding support to recruiting and retention efforts.
Liquidity and Capital Resources Overview Our primary sources of liquidity are cash on hand and cash from operations and borrowings under our credit facility. At December 31, 2024 and 2023, we had cash balances of $98.9 million and $64.8 million, respectively.
Liquidity and Capital Resources Overview Our primary sources of liquidity are cash on hand and cash from operations and borrowings under our credit facility. At December 31, 2025 and 2024, we had cash balances of $ 81.6 million and $98.9 million, respectively.
Interest payments associated with the debt aggregate to $54.5 million, with $15.6 million payable within 12 months. As described in Note 9 to the Notes to Consolidated Financial Statements, interest on borrowings under the revolving loan are variable.
Interest payments associated with the debt aggregate to $ 21.4 million, with $ 8.5 million payable within 12 months. As described in Note 9 to the Notes to Consolidated Financial Statements, interest on borrowings under the revolving loan are variable.
Borrowing Capacity The Company’s Credit Agreement provides for a $650.0 million revolving credit facility and a $150.0 million incremental loan facility, which incremental loan facility may be for term loans or an increase to the revolving loan commitments.
Borrowing Capacity The Company’s Credit Agreement provides for a $650.0 million revolving credit facility and a $150.0 million incremental loan facility, which incremental loan facility may be for term loans or an increase to the revolving loan commitments. The maturity of the credit facility is July 30, 2028.
Net cash provided by financing activities was $272.3 million for the year ended December 31, 2024 compared to net cash used in $8.2 million for the year ended December 31, 2023.
Net cash used in financing activities was $96.3 million for the year ended December 31, 2025, compared to net cash provided by $272.3 million for the year ended December 31, 2024.
Changes in Illinois Reimbursement The City of Chicago requires the Chicago minimum wage to be adjusted annually based on increases in the Consumer Price Index (“CPI”), subject to a cap and other requirements. On July 1, 2024, the rate was adjusted to $16.20 based on the increase in the CPI.
The City of Chicago requires the Chicago minimum wage to be adjusted annually based on increases in the Consumer Price Index (“CPI”), subject to a cap and other requirements. Effective July 1, 2025, the rate was adjusted to $16.60 based on the increase in the CPI.
The open receivable balance from the Illinois Department on Aging, the largest payor program for the Company’s Illinois personal care operation, decreased by $3.1 million from $29.8 million as of December 31, 2023 to $26.7 million as of December 31, 2024. Our collection procedures include review of account aging and direct contact with our payors.
The open receivable balance from the Illinois Department on Aging, the largest payor program for the Company’s Illinois personal care operation, increased by $11.6 million from $26.7 million as of December 31, 2024 to $38.3 million as of December 31, 2025. Our collection procedures include review of account aging and direct contact with our payors.
Our DSOs were 39 days at each of December 31, 2024 and 2023. The DSOs for our largest payor, the Illinois Department on Aging, at December 31, 2024 and 2023 were 40 days and 50 days, respectively. Off-Balance Sheet Arrangements As of December 31, 2024, we did not have any off-balance sheet guarantees or arrangements with unconsolidated entities.
The DSOs for our largest payor, the Illinois Department on Aging, at December 31, 2025 and 2024 were 55 days and 40 days , respectively. 59 Table of Contents Off-Balance Sheet Arrangements As of December 31, 2025, we did not have any off-balance sheet guarantees or arrangements with unconsolidated entities.
By comparing our Adjusted EBITDA in different periods, our investors can evaluate our operating results without stock-based compensation expense, which is a non-cash expense which we believe is not a key measure of our operations. 44 Table of Contents In addition, management has chosen to use Adjusted EBITDA as a performance measure because we believe that the amount of non-cash expenses, such as depreciation, amortization and stock-based compensation expense, may not directly correlate to the underlying performance of our business operations, and because such expenses can vary significantly from period to period as a result of new acquisitions, full amortization of previously acquired tangible and intangible assets or the timing of new stock-based awards, as the case may be.
In addition, management has chosen to use Adjusted EBITDA as a performance measure because we believe that the amount of non-cash expenses, such as depreciation, amortization and stock-based compensation expense, may not directly correlate to the underlying performance of our business operations, and because such expenses can vary significantly from period to period as a result of new acquisitions, full amortization of previously acquired tangible and intangible assets or the timing of new stock-based awards, as the case may be.
The New York Asset Sale purchase price of up to $23.0 million includes an initial payment of $4.6 million, $6.9 million paid pro rata as a deferred payment as caregivers are transferred and 50% in the form of contingent consideration for the Company’s Consumer Directed Personal Assistance Program (“CDPAP”) business.
The purchase price included 50% cash consideration, paid out as an initial payment of $4.6 million and $6.9 million paid pro rata as a deferred payment as caregivers are transferred, and 50% in the form of contingent consideration for the Company’s New York Consumer Directed Personal Assistance Program (“CDPAP”) business.
Overview We are a home care services provider operating three segments: personal care, hospice and home health. Our services are principally provided in-home under agreements with federal, state and local government agencies, managed care organizations, commercial insurers and private individuals. Our consumers are predominantly “dual eligible,” meaning they are eligible to receive both Medicare and Medicaid benefits.
Our services are principally provided in-home under agreements with federal, state and local government agencies, managed care organizations, commercial insurers and private individuals. Our consumers are predominantly “dual eligible,” meaning they are eligible to receive both Medicare and Medicaid benefits.
The four levels of hospice include routine care, continuous care, general inpatient care and respite care. Our hospice segment principally provides routine care. 42 Table of Contents Net service revenues from Medicare accounted for 91.2% and 89.9% and managed care organizations accounted for 3.3% and 3.4% for the years ended December 31, 2024 and 2023, respectively.
The four levels of hospice include routine care, continuous care, general inpatient care and respite care. Our hospice segment principally provides routine care. Net service revenues from Medicare accounted for 93.1 % and 91.2% and managed care organizations accounted for 3.1 % and 3.3% for the years ended December 31, 2025 and 2024, respectively.
At December 31, 2024, we had a total of $223.0 million in revolving loans, with an interest rate of 6.34% outstanding on our credit facility.
At December 31, 2024, we had a total of $223.0 million of revolving loans, with an interest rate of 6.34%.
One payor client, the Illinois Department on Aging, accounted for 21.0% and 20.9% of net service revenues for the years ended December 31, 2024 and 2023, respectively. Net service revenues from state, local and other governmental programs accounted for 53.3% and 50.4% of net service revenues for the years ended December 31, 2024 and 2023, respectively.
One payor client, the Illinois Department on Aging, accounted for 18.1% and 21.0% of net service revenues for the years ended December 31, 2025 and 2024, respectively. Net service revenues from state, local and other governmental programs accounted fo r 50.8% and 53.3% of net service revenues for the years ended December 31, 2025 and 2024, respectively.
Interest income increased $2.9 million due to an increase in cash investment into interest bearing accounts from the Company’s public offering of common stock. All of our income is from domestic sources. We incur state and local taxes in states in which we operate.
Interest income decreased to $2.4 million from $4.4 million for the year ended December 31, 2025, compared to 2024, due to an increase in cash investment into interest bearing accounts from the Company’s public offering of common stock in 2024. All of our income is from domestic sources. We incur state and local taxes in states in which we operate.
We believe that consideration of Adjusted EBITDA, together with a careful review of our GAAP financial measures, is the most informed method of analyzing our Company. 45 Table of Contents The following table sets forth a reconciliation of net income, the most directly comparable GAAP measure, to Adjusted EBITDA: For the Years Ended December 31, 2024 2023 2022 (Amounts In Thousands) Reconciliation of net income to Adjusted EBITDA (a): Net income $ 73,598 $ 62,516 $ 46,025 Interest expense, net 3,338 9,630 8,566 Impact of retroactive New York rate increase (3,004 ) (868 ) — Income tax expense 25,755 18,810 14,146 Depreciation and amortization 13,530 14,126 14,060 Acquisition expenses 14,678 6,220 7,657 Stock-based compensation expense 11,165 10,319 10,625 Restructure expense and other related costs — 269 461 Impairment of operating lease assets 4,968 — — Gain on sale of assets (3,738 ) (2 ) (60 ) Adjusted EBITDA* $ 140,290 $ 121,020 $ 101,480 (a) The selected historical Consolidated Statements of Income data for the fiscal years ended December 31, 2024, 2023 and 2022, were derived from our audited Consolidated Financial Statements. * Management deems Adjusted EBITDA to be a key performance indicator.
We believe that consideration of Adjusted EBITDA, together with a careful review of our GAAP financial measures, is the most informed method of analyzing our Company. 56 Table of Contents The following table sets forth a reconciliation of net income, the most directly comparable GAAP measure, to Adjusted EBITDA: For the Years Ended December 31, 2025 2024 2023 (Amounts In Thousands) Reconciliation of net income to Adjusted EBITDA (a): Net income $ 95,910 $ 73,598 $ 62,516 Interest expense, net 11,170 3,338 9,630 Impact of New York retroactive rate increases — (3,004 ) (868 ) Impact of New York accounts receivable settlements (1,864 ) — — Income tax expense 31,535 25,755 18,810 Depreciation and amortization 16,412 13,530 14,126 Acquisition expense 8,899 14,678 6,220 Stock-based compensation expense 16,424 11,165 10,319 Restructuring and other non-recurring costs 1,500 — 269 Impairment of operating lease assets — 4,968 — Gain on sale of assets (2 ) (3,738 ) (2 ) Adjusted EBITDA* $ 179,984 $ 140,290 $ 121,020 (a) The selected historical Consolidated Statements of Income data for the fiscal years ended December 31, 2025, 2024 and 2023, were derived from our audited Consolidated Financial Statements. * Management deems Adjusted EBITDA to be a key performance indicator.
For calendar year 2025, CMS estimates that Medicare payments to home health agencies will increase by 0.5%. This is based on a home health payment update percentage of 2.7%, which reflects a 3.2% market basket update, reduced by a productivity adjustment of 0.5 percentage points and an estimated 1.8% decrease associated with the transition to the PDGM, among other changes.
For calendar year 2026, CMS estimates that Medicare payments to home health agencies will decrease by 1.3%. This is based on a home health payment update percentage of 2.4%, which reflects a 3.2% market basket update, reduced by a productivity adjustment of 0.8 percentage points, among other changes.
For the Years Ended December 31, 2024 2023 2022 (Amounts in Thousands, except States and Locations) Net service revenues $ 1,154,599 $ 1,058,651 $ 951,120 Net income $ 73,598 $ 62,516 $ 46,025 Total assets $ 1,412,634 $ 1,024,426 $ 937,994 Adjusted EBITDA (1) $ 140,290 $ 121,020 $ 101,480 States served at period end 23 22 22 Locations at period end 258 219 202 (1) The Company defines adjusted EBITDA as earnings before interest expense, other non-operating income, taxes, depreciation, amortization, acquisition expense, stock-based compensation expense, restructure and other non-recurring costs, gain or loss on the sale of assets, impairment of operating lease assets, retroactive rate increases from New York and the retroactive impact from collective bargaining negotiations.
For the Years Ended December 31, 2025 2024 2023 (Amounts in Thousands, except States and Locations) Net service revenues $ 1,422,530 $ 1,154,599 $ 1,058,651 Net income $ 95,910 $ 73,598 $ 62,516 Total assets $ 1,437,308 $ 1,412,634 $ 1,024,426 Adjusted EBITDA (1) $ 179,984 $ 140,290 $ 121,020 States served at period end 23 23 22 Locations at period end 262 258 219 (1) The Company defines adjusted EBITDA as earnings before net interest expense, taxes, depreciation, amortization, acquisition expense, stock-based compensation expense, restructuring and other non-recurring costs, the gain or loss on the sale of assets, the impairment of operating lease assets, the impact of New York retroactive rate increases, and the impact of New York accounts receivable settlements.
Revenues per billable hour is revenue, attributed to billable hours, divided by billable hours. (3) Same store growth reflects the change in year-over-year revenue for the same store base. We define the same store base to include those stores open for at least 52 full weeks.
(3) Same store growth reflects the change in year-over-year revenue for the same store base. We define the same store base to include those stores open for at least 52 full weeks.
We define Adjusted EBITDA as earnings before interest expense, other non-operating income, taxes, depreciation, amortization, acquisition expenses, stock-based compensation expense, restructure expenses and other non-recurring costs, gain or loss on the sale of assets, impairment of operating lease assets, retroactive rate increases from New York and the retroactive impact from collective bargaining negotiations.
We define Adjusted EBITDA as earnings before net interest expense, taxes, depreciation, amortization, acquisition expense, stock-based compensation expense, restructuring and other non-recurring costs, the gain or loss on the sale of assets, the impairment of operating lease ass ets, the impact of New York retroactive rate increases, and the impact of New York accounts receivable settlements .
Gross profit, expressed as a percentage of net service revenues, was relatively consistent at 47.0% and 46.8% for the years ended December 31, 2024 and 2023, respectively. The hospice segment’s general and administrative expenses primarily consist of administrative employee wages, taxes and benefit costs, rent, information technology and office expenses.
The hospice segment’s general and administrative expenses primarily consist of administrative employee wages, taxes and benefit costs, rent, information technology and office expenses. General and administrative expenses, expressed as a percentage of net service revenues, was 23.0 % and 24.3% for the years ended December 31, 2025 and 2024, respectively.
After giving effect to the amounts drawn on our credit facility, approximately $8.0 million of outstanding letters of credit and borrowing limits based on an advance multiple of Adjusted EBITDA (as defined in the Credit Agreement), we had $577.7 million of capacity and $346.6 million available for borrowing under our credit facility.
After giving effect to the amounts drawn on our credit facility, approximately $7.9 million of outstanding letters of credit and borrowing limits based on an advance multiple of Adjusted EBITDA (as defined in the Credit Ag reement), w e had $650.0 million of capacity and $517.7 million available for borrowing under our credit facility.
Given the very long implementation period and the likelihood of further changes as a result of litigation, administration and congressional changes, further rule-making and state changes in response to the final rule, it is premature to predict the ultimate impact of the final rule on our business.
Given the long implementation period and the likelihood of further changes as a result of litigation, administration and congressional changes, further rule-making and state changes in response to the final rule, it is premature to predict the ultimate impact of the final rule on our business. Some states have adopted or may consider adopting similar caregiver compensation restrictions.
We drew approximately $233.0 million on the revolver portion of our credit facility to fund, in part, the purchase price paid in connection with the Gentiva Acquisition and repaid $136.4 million under our revolving credit facility in 2024.
We drew approximately $11.3 million on the revolver portion of our credit facility to fund, in part, the purchase price paid in connection with the Helping Hands Acquisition and repaid $110.0 million under our revolving credit facility in 2025.
(2) Billable hours is the total number of hours served to clients during the period. Average billable hours per census per month is billable hours divided by average billable census. Billable hours per day is total billable hours divided by the number of business days in the period.
Average billable hours per census per month is billable hours divided by average billable census. Billable hours per day is total billable hours divided by the number of business days in the period. Revenues per billable hour is revenue, attributed to billable hours, divided by billable hours.
With the purchase of Upstate, the Company expanded its personal care services segment in South Carolina. 34 Table of Contents On December 2, 2024, we completed the Gentiva Acquisition for approximately $353.6 million, with funding primarily provided by drawing on the Company’s revolving credit facility and a portion of the net proceeds of the Company’s public offering of common stock.
On December 2, 2024, we completed the Gentiva Acquisition for approximately $353.6 million, with funding primarily provided by drawing on the Company’s revolving credit facility and a portion of the net proceeds of the Company’s public offering of common stock.
The Illinois fiscal year 2025 budget includes an increase in hourly rates for in-home care services to $29.63, effective January 1, 2025, and required a minimum wage of $18.00 per hour for direct service workers.
For example, the Illinois fiscal year 2025 budget included an increase in hourly rates for in-home care services to $29.63, effective January 1, 2025, and required a minimum wage of $18.00 per hour for direct service workers. CMS approved an amendment to the Illinois HCBS Waiver for Persons Who are Elderly that included this rate increase, effective January 1, 2025.
Laws and regulations governing the governmental programs in which we participate are complex and subject to interpretation. Net service revenues related to uninsured accounts, or self-pay, is recorded net of implicit price concessions estimated based on historical collection experience to reduce revenue to the estimated amount we expect to collect.
Net service revenues related to uninsured accounts, or self-pay, is recorded net of implicit price concessions estimated based on historical collection experience to reduce revenue to the estimated amount we expect to collect.
Leases The Company has lease arrangements for local branches, our corporate headquarters and certain equipment. As of December 31, 2024, the Company had fixed lease payment obligations aggregating to $65.0 million, with $15.8 million payable within 12 months. See Note 2, Leases, to the Notes to Consolidated Financial Statements for additional details of our leases.
Leases The Company has lease arrangements for local branches, our corporate headquarters and certain equipment. As of December 31, 2025, the Company had fixed lease payment obligations aggregating to $ 59.5 million, with $ 15.8 million payable within 12 months.
States are required to ensure compliance with the 80/20 requirement by mid-2030. The final rule includes several other measures intended to promote transparency and enhance quality and access to services, including a variety of reporting requirements for states.
The final rule includes several other measures intended to promote transparency and enhance quality and access to services, including a variety of reporting requirements for states.
CMS approved an amendment to Illinois’ Persons who are Elderly waiver program that included this rate increase, effective January 1, 2025. 36 Table of Contents Our business will benefit from the rate increases noted above as planned for 2025, but there is no assurance that there will be additional rate increases in Illinois for fiscal years beyond fiscal year 2025 to offset increases to minimum wage, and our financial performance will be adversely impacted for any periods in which an additional offsetting reimbursement rate increase is not in effect.
Our business will benefit from the rate increases noted above as planned for 2026, but there is no assurance that there will be additional rate increases in Illinois for fiscal years beyond fiscal year 2026 to offset increases to minimum wage, and our financial performance will be adversely impacted for any periods in which an additional offsetting reimbursement rate increase is not in effect.
The Company estimates the fair value of non-competition agreements based on a method of analyzing the factors to compete and factors not to compete, which involves estimating historical financial data, forecasted financial statements, growth rates, tax amortization benefit, discount rate, review of factors to compete and factors not to compete as well as an assessment of the probability of successful enforcement for each non-competition agreement. 49 Table of Contents As of December 31, 2024 and 2023, goodwill was $970.6 million and $663.0 million, respectively, included in our Consolidated Balance Sheets.
The Company estimates the fair value of non-competition agreements based on a method of analyzing the factors to compete and factors not to compete, which involves estimating historical financial data, forecasted financial statements, growth rates, tax amortization benefit, discount rate, review of factors to compete and factors not to compete as well as an assessment of the probability of successful enforcement for each non-competition agreement.
No impairment charge was recorded for the years ended December 31, 2024, 2023 or 2022. Amortization of intangible assets is reported in the statement of income caption, “Depreciation and amortization” and not included in the income statement caption cost of service revenues.
No impairment charge was recorded for the years ended December 31, 2025, 2024 or 2023. Amortization of intangible assets is reported in the statement of income caption, “Depreciation and amortization” and not included in the income statement caption cost of service revenues. Recent Accounting Pronouncements Refer to Note 1 to the Notes to Consolidated Financial Statements for further discussion.
Net service revenue increased by $61.9 million, $21.0 million and $13.0 million in our personal care, hospice and home health segments, respectively, for the year ended December 31, 2024, compared to 2023.
Net service revenues increased by $ 232.6 million, $ 34.4 million and $0.9 million in the personal care, hospice and home health segments, respectively, for the year ended December 31, 2025, compared to 2024.
Additionally, we believe that Adjusted EBITDA is a measure widely used by securities analysts, investors and others to evaluate the financial performance of other public companies. The financial results presented in accordance with U.S. GAAP and a reconciliation of this non-GAAP measure included within this Annual Report on Form 10-K should be carefully evaluated.
Additionally, we believe that Adjusted EBITDA is a measure widely used by securities analysts, investors and others to evaluate the financial performance of other public companies. The financial results presented in accordance with U.S.
In our home health segment, net service revenues are based on an episodic basis at a stated rate and recognized based on the number of days elapsed during a period of care within the reporting period. We also record estimated implicit price concessions (based primarily on historical collection experience) related to uninsured accounts to record revenues.
In our home health segment, net service revenues are based on an episodic basis at a stated rate and recognized based on the number of days elapsed during a period of care within the reporting period.
Our identifiable intangible assets consist of customer and referral relationships, trade names, trademarks, state licenses and non-competition agreements.
The Company’s significant identifiable intangible assets consist of customer and referral relationships, trade names and trademarks and state licenses.
We base our estimates and judgments on historical experience and other sources and factors that we believe to be reasonable under the circumstances, however, actual results may differ from these estimates.
We base our estimates and judgments on historical experience and other sources and factors that we believe to be reasonable under the circumstances, however, actual results may differ from these estimates. Our critical accounting policies requiring estimates, assumptions and judgments that we believe have the most significant impact on our consolidated financial statements are described below.
The personal care segment’s general and administrative expenses primarily consist of administrative employee wages, taxes and benefit costs, rent, information technology and office expenses. General and administrative expenses, expressed as a percentage of net service revenues, was 7.9% and 8.1% for the years ended December 31, 2024 and 2023, respectively.
Gross profit, expressed as a percentage of net service revenues, was relatively consistent at 27.9% for the year ended December 31, 2025, compared to 28.3% in 2024. The personal care segment’s general and administrative expenses primarily consist of administrative employee wages, taxes and benefit costs, rent, information technology and office expenses.

… 94 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed0 unchanged
Biggest changeITEM 7A. QUANTITATIVE AND QUALITA TIVE DISCLOSURES ABOUT MARKET RISK We are exposed to market risk associated with changes in interest rates on our variable rate long-term debt. As of December 31, 2024, we had outstanding borrowings of approximately $223.0 million on our credit facility, all of which was subject to variable interest rates.
Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to market risk associated with changes in interest rates on our variable rate long-term debt. As of December 31, 2025, we had outstanding borrowings of approximately $ 124.3 million on our credit facility, all of which was subject to variable interest rates.
If the variable rates on this debt were 100 basis points higher than the rate applicable to the borrowing during the year ended December 31, 2024, our net income would have decreased by $0.6 million, or $0.03 per diluted share. We do not currently have any derivative or hedging arrangements, or other known exposures, to changes in interest rates.
If the variable rates on this debt were 100 basis points higher than the rate applicable to the borrowing during the year ended December 31, 2025 , our net income would have decreased by $1.4 million, or $0.08 per diluted share. We do not currently have any derivative or hedging arrangements, or other known exposures, to changes in interest rates.
As of December 31, 2023, we had outstanding borrowings of approximately $126.4 million on our credit facility, all of which was subject to variable interest rates.
As of December 31, 2024, we had outsta nding borrowings of approximately $223.0 million on our credit facility, all of which was subject to variable interest rates.

Other ADUS 10-K year-over-year comparisons