AVAH

Recent research flagged Aveanna Healthcare Holdings (AVAH) as potentially undervalued, with valuation ratios that compare favorably with industry peers and an earnings outlook that has attracted fresh attention from value focused investors. This combination of relatively lower P/E, P/S, and P/CF metrics, together with that earnings view, has turned a spotlight on how the market is currently pricing Aveanna Healthcare and what that might mean for patient home care exposure in a diversified portfolio. Aveanna Healthcare Holdings’ share price has moved sharply in recent months, with a 30 day share price return of 45.55% and a 90 day share price return of 103.29%. The 1 year total shareholder return of 65.21% points to building momentum around the valuation story highlighted by recent research. Compare Aveanna Healthcare Holdings with other value focused opportunities by scanning our curated list of 47 high quality undervalued stocks that also pair attractive pricing with solid fundamentals. Bulls view Aveanna Healthcare Holdings as a discounted way to gain exposure to home based care after such a sharp move. Bears see a stock that may be running ahead of itself. The current valuation metrics give more weight to one side. The most followed narrative values Aveanna Healthcare Holdings at $13.90 per share, slightly above the last close of $13.58. This frames a modest undervaluation story built on detailed assumptions about growth, margins, and future cash flows. Read the complete narrative. Want to see what backs that fair value for Aveanna Healthcare Holdings? The narrative leans on specific revenue paths, shifting profit margins, and a future earnings multiple that assumes investors are willing to pay up for those outcomes. The analysts behind this narrative forecast how Aveanna Healthcare Holdings' revenue, earnings, and share count could evolve over several years, then discount those future cash flows back at a rate of 7.54%. They also anchor the valuation to a specific future P/E level that sits below the current average for the wider US Healthcare sector, which helps explain why the current price sits only slightly below the $13.90 fair value estimate. Result: Fair Value of $13.90 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, Aveanna Healthcare Holdings still faces real pressure from reimbursement decisions and high variable rate debt, and these factors could quickly undermine this modest undervaluation story. Find out about the key risks to this Aveanna Healthcare Holdings narrative. If the mixed sentiment around Aveanna Healthcare Holdings leaves you curious, move quickly, review the data yourself, and weigh both the 3 key rewards and 3 important warning signs. If Aveanna Healthcare Holdings has sharpened your focus on value, do not stop here. Use the Simply Wall St Screener to spot other stocks that might fit your approach. Target steadier potential by reviewing companies with resilient fundamentals and modest risk profiles using the 82 resilient stocks with low risk scores. Hunt for potential mispricing across the market by checking the 47 high quality undervalued stocks that currently combine appealing valuations with stronger financial profiles. Spot opportunities that many investors may be overlooking by scanning the 19 high quality undiscovered gems before they move onto everyone else's radar. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include AVAH. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Aveanna Healthcare (AVAH) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company. Analysts' growing optimism on the earnings prospects of this home health care services provider is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. This insight is at the core of our stock rating tool -- the Zacks Rank. The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008. For Aveanna Healthcare, strong agreement among the covering analysts in revising earnings estimates upward has resulted in meaningful improvement in consensus estimates for the next quarter and full year. The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate: The earnings estimate of $0.19 per share for the current quarter represents a change of +26.7% from the number reported a year ago. Over the last 30 days, two estimates have moved higher for Aveanna compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 12.5%. The company is expected to earn $0.80 per share for the full year, which represents a change of +33.3% from the prior-year number. In terms of estimate revisions, the trend for the current year also appears quite encouraging for Aveanna. Over the past month, three estimates have moved higher compared to no negative revisions, helping the consensus estimate increase 11.11%. The promising estimate revisions have helped Aveanna earn a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision.You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500. Investors have been betting on Aveanna because of its solid estimate revisions, as evident from the stock's 37.4% gain over the past four weeks. As its earnings growth prospects might push the stock higher, you may consider adding it to your portfolio right away. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Aveanna Healthcare Holdings Inc. (AVAH) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Thursday, Aug. 13, 2026 at 10 a.m. ET Chief Accounting Officer - Deborah Stewart Chief Executive Officer - Jeffrey Shaner Chief Financial Officer - Matthew Buckhalter Need a quote from a Motley Fool analyst? Email [email protected] Operator: Good morning, and welcome to Aveanna Healthcare Holdings Second Quarter 26 Earnings Conference Call. Today's call is being recorded, and we have allocated 1 hour for prepared remarks and Q and A. At this time, I would like to turn the call over to Debbie Stewart, Aveanna's Chief Accounting Officer. Deborah Stewart: Thank you. Operator: You may begin. Deborah Stewart: Good morning, and welcome to Aveanna's Second Quarter 26 Earnings Call. I am Debbie Stewart, the company's Chief Accounting Officer. With me today is Jeffrey Shaner, our chief executive officer and Matthew Buckhalter, our Chief Financial Officer. During this call, we will make forward-looking statements. Risk factors that may impact those statements and could cause actual future results to differ materially from currently projected results. Are described in this morning's press release, and the reports we file with the SEC. The company does not undertake any duty to update such forward-looking statements. Additionally, during today's call, we will discuss certain non-GAAP measures. Which we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of these measures can be found in this morning's press release which is posted on our website, aviana.com, and in our most recent quarterly report on Form 10 Q when filed. With that, I will turn the call over to Aveanna's Chief Executive Officer, Jeffrey Shaner. Jeffrey? Jeffrey Shaner: Thank you, Debbie. Good morning, and thank you for joining us today. We appreciate each of you investing your time this morning to better understand our Q2 results and how we are moving Aveanna forward in 2026. My initial comments will briefly highlight our second quarter results, along with the steps we are taking to address the labor markets and our ongoing efforts with government and preferred payers, to create additional capacity. I will then provide updates on the Family First Homecare integration, how we are progressing with our 2026 strategic initiatives, our enhanced 2026 guidance, and updated long term growth outlook before turning the call over to Matthew. Let's move to the highlights of the second quarter. Revenue for the second quarter was approximately $670 million representing a 13.7% increase over the prior year period. Second quarter adjusted EBITDA was $95.4 million representing an 8% increase over the prior year period primarily due to the improved rate and volume environment and continued operational efficiencies. As we have previously discussed, the labor environment represented the primary challenge that we needed to address to see Aveanna resume the growth trajectory that we believed our company could achieve. It is important to note that our industry does not have a demand problem The demand for home and community based care continues to be strong with both state and federal governments and managed care organizations asking for solutions that create more capacity reducing the total cost of care. Our Q2 results highlight that we continue to align our objectives with those of our preferred payers and government partners. By focusing our clinical capacity on our preferred payers, we achieved solid year over year growth in all 3 of our business segments. We also experienced improvement in our caregiver hiring and retention trends by aligning our efforts with those payers willing to engage with us on enhanced reimbursement rates and value based agreements. While we continue to operate in a challenging environment, our preferred payer strategy supports our ability to achieve accelerated growth rates in all 3 of our business segments. Since our first quarter earnings call, I am pleased with the continued progress we have made on several of our rate improvement initiatives with both government and preferred payer partners. As well as continued signs of improvement in the caregiver labor market. Specifically, as it relates to our private duty services business, our government affairs strategy for 2026 was twofold. First, we wanted to expand our strong advocacy presence with both federal and state legislatures across our national footprint and enhancing our value proposition. And second, we expect it to achieve mid single digit state rate enhancements. As of Q2, we have achieved 7 state rate enhancements and believe we will add a few additional states as they complete their budget process in Q3. Most importantly, after 4 years of dedicated advocacy and focus on the state of California, I am proud to announce the 2027 California budget includes a significant investment in pediatric private duty nursing rates effective January 1, 2027. While we are awaiting the final details from the Medi-Cal department, we believe the investment represents a meaningful increase in California's private duty nursing rates. This achievement on behalf of the California Medically Fragile Pediatric Patients and Families is monumental in nature as the private duty nursing rates and as a result, the nursing wages had fallen far behind the competitive market in California. We believe the California PDN rate increase will improve our ability to attract and retain nurses as well as support efficient discharges from the children's hospitals. We plan to proactively address nurse wages this fall in anticipation of the rate increase on January 1, 2027. As I reflect on the significance of the California private nursing rate increase, I think it is important to comment on the success of our government affairs strategy. Roughly 4 years ago, we set out on a deliberate strategy to address the reimbursement rates and caregiver wages in all 32 Private Duty Services states in which we operate. California, represented the final state in our goal to achieve enhanced PDN rates and caregiver wages across our national footprint. While our work is never done, we believe the disconnect sorry. While our work is never done, we believe the disconnect that existed between reimbursement rates and caregiver wages has finally been addressed in every Aveanna state, and we can now focus on cost of living and inflation type enhancement with our government partners. I am proud of our government affairs teams and the advocacy work of our employees, caregivers, patients, families who have made this a reality. Now moving on to our private duty services preferred payer initiatives. Our preferred payer goal for 2026 was to achieve 8 additional agreements for a total of 38 preferred payers. We signed 3 additional preferred pay agreements in Q2, and now have 37 agreements in total. We expect to exceed our 2026 private duty services preferred payer goal of 38 as we navigate the second half of 26. Aveanna's preferred payer strategy continues to gain momentum and allows us to invest in caregiver wages and recruitment efforts to accelerate hiring and staffing of nurses for our payer partners. Additionally, our Q2 preferred pay agreements accounted for 64% of our total private duty services MCO volumes, up from 60% at the end of Q1. This positive momentum in preferred payer volumes continues to highlight the shift in our caregiver capacity and recruitment efforts towards our preferred payer partners. Moving to our preferred payer progress in home health. Our goal for 2026 was to maintain our episodic mix above 75% while returning to a more normalized growth rate. I am pleased to report in Q2 our episodic mix was approximately 81% and our total episodic volume growth was 18.5% compared with the prior year period. Further, we exited 2025 with 45 preferred pay agreements in home health, and expected to add 5 agreements in 2026 for a total of 50. I am pleased to report in Q2 we have achieved our goal of 50 preferred payers year to date. Our dedicated focus on aligning our home health caregiver capacity with those payers willing to reimburse us on an episodic basis has led to double digit year over year growth in home health admissions and episodes as well as improvement in our clinical and financial outcomes. Also, we are pleased with CMS's proposed home health rule published on July 1st as well as the final hospice rule published on August 6th. The 27 per proposed home health rate shows positive movement by CMS aligned with a strong collaboration from the National Alliance for Home Health Quality and Innovation. While there still is work to be done addressing the temporary adjustment, and its impact on the annual home health rate, we have come a long way as an industry. We believe the stability of the home health and hospice rates are important as we continue to meet the increasing demand for America's aging population cared for in the comfort of their home. Finally, as we have achieved our desired preferred payer model and private duty services and home health and hospice, we are continuing with a similar strategy in our medical solutions business. As we exited 2025, we had 18 preferred payer agreements, and expect that number to grow to 25 by the end of 26. As of Q2, we have a total of 20 preferred payer agreements. Our gross margins have stabilized in our desired range, as we align our clinical capacity with those payers that value our services and pay us in a timely fashion. I am pleased with our Q2 volume growth of approximately 95 thousand unique pay patients served or positive 4.4% over the prior year period. As we think about MedSolutions, revenue growth in 2026, I still expect us to remain in the high single digits for the next few quarters and then return to double digit growth by the beginning of 27. We are encouraged by our rate increases, preferred payer agreements, and subsequent growth in our businesses. Our company has demonstrated a stable return to organic growth as we achieve our rate goals previously discussed. Home and community based care will continue to grow and Aveanna is a comprehensive platform with a diverse payer base providing cost effective high quality alternative to higher cost care settings. Now turning to our recently announced acquisition of Family First Homecare. A Florida based company with a great reputation for quality in home pediatric care. We closed the Family First Homecare acquisition in early June, and are progressing nicely in the early stages of integration. Our leadership teams continue to focus on exceptional clinical care and supporting our branches as we navigate the necessary back office integrations. I expect us to wrap up the majority of the Family First Homecare integration efforts by late Q4. I believe the Family First Homecare team has already made a positive impact on Aveanna and is a welcome addition to our family. Additionally, let me comment on our strategic plan and enhanced outlook for 2026. We will continue to focus our efforts on 5 primary strategic initiatives. First, strengthening our partnerships with government partners and preferred payers to create additional capacity and growth. Second, improving clinical outcomes and customer engagement scores while lowering the total cost of care. Third, implementing high priority artificial intelligence and automation efforts to improve operational efficiency and productivity gains, Fourth, growing through acquisitions while improving net leverage and free cash flow and finally, engaging our leaders and employees and delivering our Aveanna mission. Based on the strength of our second quarter results, and the continued execution of our key strategic initiatives, we are increasing our full year revenue and adjusted EBITDA guidance to a revenue range greater than $2.6 billion and adjusted EBITDA greater than $365 million. As I reflect on the strong start to 2026, and the improved visibility with state and federal reimbursement rates. A year after the Big Beautiful Bill Act was passed into legislation we are now poised to update our long-term core organic growth rates in private duty services and home health and hospice. Specifically, we are adjusting our long-term private duty services organic growth rate from a range of 3% to 5% to now 5% to 6% primarily driven by the improved state government affairs and continued preferred payer execution. Also, we are updating our long-term home health and hospice organic growth rate range from 5% to 7% to now 8% to 10%. Primarily driven by the improved federal government affairs and preferred payer results. We remain consistent with our current growth rates in medical Solutions of 8% to 10%. With the durability of our organic growth rates and thoughtful M&A activity, we believe Aveanna is well positioned to achieve double digit revenue growth on an annual basis. Aveanna has a strong value proposition to our federal and state government partners as well as to our MCO preferred payers. And these important relationships are underpinning our enhanced view on our future organic growth rates and our core business segments. We look forward to updating you on our continued execution of our business plans, as we navigate the back half of 26. With that, let me turn the call over to Matthew to provide further details on the quarter and our improved capital structure. Matthew? Matthew Buckhalter: Thank you, Jeffrey. Good morning. I will first discuss our second quarter financial results and liquidity before providing additional details on our refreshed outlook for 2026. Starting with the top line, we saw revenues rise 13.7% over the prior year period to $670.5 million We achieved year over year revenue growth in all 3 of our operating divisions, led by our home health and hospice, private duty services, and medical solutions divisions which grew by 14.8%, 14.0%, and 9.4% compared to the prior year period. Consolidated gross margin was $218.5 million or 32.6%. Consolidated adjusted EBITDA was $95.4 million an 8% increase as compared to the prior year period. This growth reflects an improved rate environment increased volumes, as well as enhanced operational efficiencies. Now taking a deeper look into each of our segments. Starting with private duty services, revenue for the quarter was approximately [Inaudible]. Q2 revenue per hour of $44.62 was up 1.7% compared to the prior year quarter. Primarily driven by growth in preferred payer volume and updated reimbursement agreements. We remain optimistic about our ability to attract caregivers and address market demands for our services when we obtain acceptable reimbursement rates. Turning to our cost of labor and gross margin metrics. We achieved $160 million gross margin or 28.9%. The cost of revenue rate of $31.74 in Q2 was up $2.06 or 7.8% from the prior year period. Our Q2 spread per hour was $12.88, reflecting continued normalization driven in part by ongoing caregiver wage adjustments supporting higher volumes, and improving. Clinical outcomes. As a reminder, Q2 of 2025 included approximately $9 million of nonrecurring favorable items in our PDS division. Primarily driven by the timing of rate enhancements and favorable revenue reserve adjustments. Moving on to our home health and hospice segment. Revenue for the quarter was approximately $69 million, a 14.8% increase over the prior year. Revenue was driven by 10.5 thousand total admissions with approximately 81% being episodic, and 14.7 thousand total episodes of care up 18.5% from the prior year quarter, Medicare revenue per episode was $3.2 thousand for the quarter. Our episodic focus has accelerated our margin expansion and improved clinical outcomes. With episodic admissions well over 75%, we have achieved our goal of rightsizing our margin profile and enhancing our clinical offerings. We are pleased with our Q2 gross margin of 53.9% representing our continued focus on cost initiatives to achieve our targeted margin profile. Our home health and hospice platform is dedicated to creating value through effective operational management and the delivery of exceptional patient care. Now to our medical solutions segment results for Q2. During the quarter, we produced revenue of $47.5 million up 9.4% over the prior year period. Revenue was driven by approximately 95 thousand unique patients served revenue per UPS of approximately $500, up 5% over the prior year period. Gross margin was approximately $21.4 million or 45.1% for the quarter. As Jeff mentioned, we are in the final stages of our preferred payer strategy in medical solutions. By aligning our capacity to those payers that value our resources, and appropriately reimburse us for the services we provide. As a result, we expect UPS to continue to accelerate its growth in the back half of 26. In summary, we remain focused on keeping our patients' care at the center of everything we do. It is clear that aligning caregiver capacity with preferred payers who value our partnership is the right path forward at Aveanna. With a strong momentum through Q2, we are optimistic these trends will continue throughout 2026. We will continue to pass through wage improvements, and other benefits to our caregivers and the ongoing effort to better improve volumes. Now turning to our balance sheet and liquidity. During the quarter, we were pleased to receive credit rating upgrades from all 3 major rating agencies. Reflecting the continued strength in our financial profile and the consistent execution of our long-term strategy. At the end of the second quarter, we had liquidity of approximately $433 million representing cash on hand of approximately $97 million, $110 million of availability under our securitization facility, approximately $226 million of availability on our revolver, which was undrawn as of the end of the quarter. We had $24.5 million in outstanding letters of credit at the end of Q2. As a reminder, we funded the Family First Homecare acquisition and associated closing costs during Q2 using exclusively cash on hand. On the debt service front, we had approximately $1.48 billion of variable rate debt at the end of Q2. Of this amount, $1.4 billion is hedged with interest rate caps, which limits exposure to increases in SOFR. Accordingly, substantially all of our variable rate debt is hedged. Additionally, during the second quarter, we successfully repriced our term loan reducing our interest rate by 75 basis points. This refinancing will lower our annual interest expense by approximately $10 million The repricing reflects our continued strong operational performance and the ongoing support and confidence of our lending partners. Looking at year to date cash flow, cash generated by operating activities, was $85.3 million and free cash flow was positive $75.4 million. We are encouraged by our strong cash collections and the cost efficiency efforts which has driven solid operating and free cash flow in 2026. We expect similar cash flow performance in the back half of the year. Before I hand the call over to the operator, for Q&A, let me take a moment to address our enhanced outlook for 2026. As Jeff mentioned, we expect full year revenue to be greater than $2.68 billion and adjusted EBITDA greater than $365 million This improved guidance reflects continued strength in our underlying business, supported by strong organic growth and sustained demand for our services. As we reflect on our Q2 results, I would like to take a moment to express my sincere gratitude to our Aveanna teammates. These strong results would not have been possible without your hard work and dedication. Looking ahead, I am excited for the continued execution of our 2026 strategic plan and look forward to providing you with further updates at the end of Q3. With that, let me turn the call over to the operator. Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. We ask that analysts limit themselves to 1 question and a follow-up so that others have the opportunity to do so as well. 1 moment, please, while we poll for questions. Our first question comes from Brian Tanquilut with Jefferies. Please proceed with your question. Brian Tanquilut: Good morning. This is This is Ben Hendrix on for Brian Tanquilut. Congrats on the quarter, guys, and full year guidance raise and the California rate increase. I know that is been in the works for a while. I guess starting on your LRPs that you raised for the business segments, given that you are raising the revenue rate, should we be thinking about corresponding margin increase in those segments as well? Jeffrey Shaner: Yep. By the thank you, Ben, and good morning. Yeah. We are excited now that we have kind of 15, 16 months after the OBBA has settled in, we have more clarity, more visibility on how our state rate setting process has played through and will play through. We also have more confidence as we talked about in both our home health and our hospice rate setting and rule making process. As we think of the long-term revenue growth to your comment, I think Matthew and I would lead you to continue to think about wage pass through being a, you know, key component of our story. So from a gross margin standpoint, I would think about the gross margin percentage staying pretty consistent. Clearly, gross margin dollars will increase as revenue accelerates and revenue dollars accelerate. But I think you are seeing that even in our results today. So really focused on continuing to grow the business at accelerated rates. As well as continue our caregiver pass through both on a government basis and a preferred payer basis. Matthew, you wanna add to that? Matthew Buckhalter: No. I think you said it really well, Jeffrey, but I think gross margins came right in line with our Expectations in Q2. Obviously, 2025 had a little bit of timing related items for PDS segment, and people are able to normalize that out and understand what that is. But we believe Q2 really does the results represent and specifically in the PDS business, but everywhere else, where we expect gross margins to remain going forward? Brian Tanquilut: Thank you. And then on the California state rate increase, is there any additional color you guys can provide on the expected benefit as we think about 2027? I know it is a little early. And then you mentioned passing through the wages prior to the rate going into place, in the back half of this year. How should we be thinking about that? Thanks. Jeffrey Shaner: Yeah. Thanks, Megan. Probably not the last California question we are going to get this morning. Really excited to your point because if you think about the last rate increase in California was 07/01/2018. So I mean we are coming up on almost 9 years, 8.5 years We have been advocating with our peers, industry peers, and the California Homecare Association now for almost 5 years. So really pleased that the investing in the private duty nursing legislature and the governor both saw the value in investing rate. We are in a process now that the legislature and the governor have allocated specific dollars to the to the Medi-Cal department. In the process now of the Medi-Cal department now updating its fee for service schedule And as you said, we will have to we will have to remain a little bit patient over the next few weeks as they do their normal process. We would expect by the end of September for the Medi-Cal department to have updated 2020 sorry, 2027, rate schedule to include the updated investment from the legislature. So it will be a few more weeks, probably a month before we see the final rates for the PDN rate increase in 2027. Matthew, with that, do you want to talk about the wage pass through? Matthew Buckhalter: Yeah, Megan. We have done this in the past, and we have had a lot of great success. We will be proactive. Once things settle, to Jeffrey's point, on passing through wages to really pull those patients out of the hospital it is been, like I said, 8 years, going on 9 years since the last rate increase in the state of California and there is so much pent up demand for services. So we will be thoughtful on our approach to that in kind of the back half of Q3, really in Q4. About starting to pass through some of those wages proactively even before the rate goes live. so that we can pull that census out of the hospital, get our staffing rates and percentages up, and really hire those caregivers to provide that care. Thank you, Megan. Operator: Our next question comes from Raj Kumar with Stephens. Please proceed with your question. Raj Kumar: Hey, good morning. Maybe just on 2026 guidance. I know you guys intra quarter increased it for the Family First Homecare acquisition. But maybe kind of thinking about the new enhanced guidance, is there any increased contributions there from Family First Homecare, or should we just be all thinking about the raise being solely driven by the kind of core organic business. Matthew Buckhalter: You nailed it there, Raj, and good question. So we did previously increase our guidance for the Family First Homecare impact kind of in within the quarter itself. So that is already contemplated into our previous guidance that we provided earlier. So what you are really seeing now is just driven by strong operational performance in the core Aveanna business. So all 3 divisions continuing to perform at very high levels, give us the confidence to increase our revenue and our EBITDA guidance for 2026. Raj Kumar: Got it. And then as my follow-up, you know, looking at the long term outlook, you guys also increased the contributions from M&A And so as I kinda think about that, maybe kinda just discuss your appetite you know, private duty nursing and home health and hospice and kind of where do you feel comfortable with the leverage profile as you kind of think about doing these deals? Jeffrey Shaner: it is a great question and great catch, Raj. Yes, I think as I said in our prepared remarks, thoughtful M&A is continuing to be where we see the opportunity to grow And to your point, as Matthew talked about free cash flow generation, first half of the year was right around $75 million I think Matthew talked about similar expectations in the back half of the year. So the $150 million, $150 million plus of free cash flow generation We saw with Family First Homecare, we were able we were able to pay for Family First Homecare and its closing costs with all cash on the balance sheet, cash on hand. We are quickly regenerating that cash flow. Matthew would want me to point out that although temporary leverage went up, that the story will continue to be deleveraging between now and the end of the year. And so the ability to accelerate our model now using cash flow and cash generation and certainly being thoughtful. I know Matthew will want to talk about leverage just to hammer home that point. Matthew Buckhalter: Yeah. Our M&A pipeline continues to be very robust, though. But we are gonna remain focused, Raj. Just acquisitions that fit our culture, and, of course, create long-term value for Aveanna. Of course, and the shareholders at Aveanna. We are going to remain disciplined around the valuation of these acquisitions as well, though, and keeping leverage at our top of mind. So I think you could see us like you said, increasing that a little bit, but also continue to deleverage the organization to really get to our long-term goal of being a sub-3x leveraged company. Jeffrey Shaner: I think I think that is the point. that is a very important point. We have had a long-term target now for a couple of years to get the company under 3x leverage. That continues to be our target. The path gets clearer and clearer every quarter. Certainly, today's announcement on our growth rates gives us even more confidence on being able to achieve that in 2027. Thanks, Raj. Great. Thank you. Operator: Our next question comes from Pito Chickering with Deutsche Bank. Please proceed with your question. Pito Chickering: Hey, good morning, guys, and thanks for taking my questions. Nice job again here. Going back to that long-term guidance change in PBS and home health and hospice, on the corporate level, my back down little math here is about a 150-basis-point revenue raise to long-term guidance. So a pretty big jump from 4.6 to 6.1 assuming my math is right. But can you talk about the margin leverage you can get on the EBITDA line from this revenue raise? And does it mean EBITDA now be growing long term in, like, the 7%, 8%-plus range? Jeffrey Shaner: it is all true to us in your math, Pito. As always, your math is very tight. that is roughly 6% from a core organic standpoint is where we landed on a forward-looking basis. Think I wanna be careful as we are touching 14% you know, EBITDA at this point. I think we have we have kind of guided that 13% to 14% is where we thought we would land as a primary Medicaid driven organization. I think I will say as you think of our forward-looking growth rates, our geriatric business, although it is smaller in nature today, is what will be our fastest growing business. And I think as you think of M&A, think of us leaning in deeper into the home health side of the M&A picture. So I do think what you will see from our growth rates is we are leaning into the faster growing part of our business. And the business where we have the most opportunity to fill in geographically across America. With that said, we wanna be crystal clear. Our job is to hire more nurses and put more caregivers to work. To do that, we gotta continue. And I think California, as I said, is a great example of that. You know, our rate increase will not begin till January 1, 2027. We will start passing wages through some point early to mid-October, And to Matthew's point, we will be ramped up so that by the time we hit the end of December in California, we wanna be running at full speed and we will invest those dollars ahead of time to get ahead. All of that is in the spirit of continuing to do the right thing for our families, and grow our business. So I do not know that I would try to sell that our 14% EBITDA target is changing materially Matthew, any comments just on leverage? Matthew Buckhalter: No. I think, Pito, you are obviously seen it over the last few years, where gross margin has been pretty consistent, but our SG&A leverage has been really, really impressive. We have done it through a lot of ways just being more effective and efficient, throwing in some automation technology as well. 14% is a pretty good spot. Maybe that sneaks up to 15% as we develop and get better with some of those growth rates. But I would not bake on it being much higher than that. Jeffrey Shaner: Yeah. Yeah. I know much more about, obviously, SG&A leverage than it was about gross margin because, obviously, that is that will that will be more of a pass through. Pito Chickering: I guess, you know, this follow-up question here is, you know, looking at the spreads sort of, you know, in 2Q, I guess, how should in PBS, I guess, should we think about that in the back half of the year? And then the hour growth was incredibly impressive in the second quarter, and as the spreads maybe compress in the back half of the year, kinda what should we be thinking about the PDS hourly growth rate for the back half? Thanks. Matthew Buckhalter: Yep. You know, I am going to continue to pull you back to a gross margin comment, you know, each time. So 28.9% gross margin on the PDS segment really impressed with where it came in at and right where we expected to come in at. We have guided to that 26% to 28%. You know, we said publicly that, hey. It will be north of that. Here in 2026, and we expect the remainder of the year to be right in line with that 28% and change, 29% gross margin. So that is our business model. As we continue to win state rate increases, assign additional preferred payers. We will continue to pass those dollars down by keeping that 28% to 29% gross margin at the top of mind. Thanks, Pito. Operator: Our next question comes from Benjamin Rossi with JPMorgan and Shane. Please proceed with your question. Benjamin Rossi: Hey. Good morning, all. Appreciate you taking my questions here. Following up on TDS preferred payer mix, you highlighted that 400-basis-point sequential step up during 2Q to 64%. Of mix covered by these preferred payers. Do you expect that figure to remain largely flat through the remainder of the year? And then step up on January 1 when the new California rates take effect? How are you thinking about forward cadence as we head into 2027 with that notable state set to come through? Jeffrey Shaner: Yes. And let me separate those 2, Ben, because remember, the 64% is MCO volumes and the majority of California is still Medicare, Medicaid reimbursed. So we do not count that in the PDS per payer MCO volume. So think of 60 I think we talked earlier in the year. We kinda ended last year right, you know, mid to mid to high fifties percent thought we would kinda hit mid sixties this year. From where we sit today, we would probably tell you we will be a little bit north probably still shy of 70% in 2026. So, you know, and probably another couple of percentage points on the current 64%, but not a whole lot more this year. Pivoting to back to the California comment, the majority of our California business is as I mentioned, is still a Medi Cal reimbursed. Again, it will it will mimic more of what preferred payer rates look like once this rate is we think, is applied through. We do have a small portion of our business in California we talked about before, which is preferred payer in nature. And we are excited for those rates to remain in contact. So long story short, I think we will end the year kind of slightly above what we said from a preferred payer PDS volume standpoint and excited. Clearly now with the California 27 kinda bulkhead leading us in. We are excited about the momentum it will take in 2027. Benjamin Rossi: Great. Appreciate that clarification. Just a follow-up on capacity within PDS. Obviously, demand seems to remain elevated there. Where are you seeing the greatest opportunity to add capacity Do you think it is through these new preferred payer wins in existing states or entering or expanding in the new white space geographies and do you think the California rate unlock maybe opens up some new market opportunities there? Thanks. Matthew Buckhalter: Yes, Benjamin. California has obviously lagged the last few years. it is been pretty significant that it is been 9 years since the last rate increase itself. And so the amount of our fill rate and our volumes in California has really become less significant to Aveanna over the last few years. With the implementation of it, we will be able to grow this 1 actively and really hire those caregivers and onboard those caregivers to provide additional care There are some opportunities for geography that we still wanna, fill in, specifically in PDS really that Middle Of America, the Ohios, the Kentuckys, the West Virginias. Those are attractive markets for us to continue to grow inorganically. Still, organically, there is a lot of opportunity out there, whether it is in the states that we currently provide services to or just the continued high demand for our services in every single 1 of our markets. Is there. So a lot of meat left on this bone. there is a lot of opportunity out there for it, but we are gonna work with our state legislators and our preferred payers to continue to fill that demand. Jeffrey Shaner: And I think as Matthew as we said in the prepared remarks, it is nice to now put California to bed to where we can really focus on cost of living type adjustments, inflation type adjustments, as we do not wanna go 9 years with California to do another rate adjustment. We want we want 24 months later to be in a COLA type or a cost of living. And that is what we are in the 7 rate wins outside of California. We are seeing more cost of living type adjustments, which is great. that is the that is the world we wanna live in moving forward versus this catch up process we have been in. So it is nice to put that part to bed. Thanks, Benjamin. Thanks. Operator: Our next question comes from A. J. Rice with UBS. Please proceed with your question. Albert Rice: Hi, everybody. Just to lean into California a little more, can you obviously, if you have not had a rate increase for that long a period of time, it probably has not been a growth vehicle for you. So what is the percent of your business that is in today? And when you think about the opportunity, that this rate update is gonna present, do you I know you are saying you will lean into giving care givers the salary increases they need to start attracting later this year. Do you need to put any play in infrastructure of any sort to be able to address the state of that size fully given now it is gonna become a growth area as opposed to sort of a maintenance of what you already had, type of situation? Jeffrey Shaner: Great question, AJ. And I am I will I will start with I will start with a different perspective. We have had a lot of people ask us over the last 2 years why we stayed in California. Like, why do not you just pack up and leave? The rates do not work. Your business has been lethargic in the state. And I think this is the reason why we do not leave states, right? This is the lesson that you have to learn in this business is stay focused on the long term, stay focused on the advocacy for these patients. So, yes, to your point, as the company has accelerated over the last 3 years, California has been doing our California business has been doing the opposite. it is been lethargic, lagging, Fill rates have dropped, you know, almost 30%, or a third, meaning our ability to fill the hours that have already authorized. So the very first thing that we wanna do is get the caregivers who are working to work more hours on the shifts, on the patients that they currently have. So the first part of our growth is just getting our caregivers who already are working more engaged by paying them more. As Matt talked about, the next 2 steps that get exciting is really unlocking the unnecessary hospital days, and that is where the savings come is as we start pulling through the patients that have been just sitting in hospitals waiting to come home. And then the third group is really the families that have been doing the jobs themselves, meaning you have parents that are providing basically high level nursing care in their home. Because they cannot hire a nurse anywhere. And so even though they are not in the hospital today, certainly giving those families that have medicated children, that may be the mother and the father, neither of which work because they are they are providing full time care for the patient. it is just a third opportunity for us. So as you think of all of that, it will take some time to solve number 2 and number 3, but the very first thing we wanna do that we can start solving even before we get to January 1 is getting the current caregivers more engaged filling more hours. So the short term and long term growth it unlocks is very exciting for us. But the most important part is we get to actually help the families in California. Matthew Buckhalter: Yeah. Jeffrey, I would just add on to and address your question, AJ. The infrastructure itself is already in place. We have a very robust team, a very strong team, and a team who is ready to grow and now has the ability to grow, which is the most important thing. Going through the PDM modernization, the PDS modernization a few years ago, we have our targeted operating model in every single 1 of our place locations. And every single 1 of our areas. And so we live by that every single day. And so that structure and infrastructure is already set up to propel us forward. Albert Rice: Okay. Maybe on the follow-up, you, along with some others are obviously feeling a little better about adult home care and the rate updates and the Can you talk a little bit about just general backdrop for the segment. I know you got a lot going on with PDS, but how you might lean into growth there, new states, anything you are looking at to try to maybe go on and encourage the acceleration there? Jeffrey Shaner: Yeah. Great question. I think, you know, in my comments a few minutes ago, AJ, as we think of our M&A activity, I will call it 2.0, but we think the majority of our M&A activity moving forward will be in the adult space, primarily because we have filled in the majority of the PDS states in America. Matthew talked about we still have about 5 or 6 states we wanna we wanna tuck in on the PDS side, mainly that Michigan, Ohio, as Matthew was talking about kind of Mid America. But the remaining part of our growth in our in our de novo/M&A growth will really be on the more home health than hospice. We love hospice. We just do not love the multiples of hospice. So I think we feel we have we have been a big proponent of home health the last 3 years. We think we have got we have got a best in class home health and hospice team. And with the cash generation we are doing now, we think we can you know, begin to begin to grow in that business on a on an inorganic and an organic basis. Thanks, AJ. Operator: Alright. Our next question comes from Sean Dodge with BMO Capital Markets. Please proceed with your question. Sean Dodge: Yes. Thanks. Good morning. Maybe just going back to the PDS preferred payer mix. Jeffrey, you said 64% now. Longer term, how much higher do you think you can drive that mix? And then how should we think about how that impacts your spreads over time over the next couple of years? How additive can that be aside from any of these kind of more margin neutral dynamics around timing of rate updates and the subsequent pass throughs? Jeffrey Shaner: Yes. Great question, Shane. I think as we have thought about long term is our ultimate goal is to kind of reach the mid-80s, maybe 1 day the high 80s of PDS MCO volumes. that is probably still 3 to 5 years from now. So I think if you just take the last 3 years and think about what this year is gonna most likely be, we have been adding around 4 to 6, 4% to 7% growth in that per year. The so I think that we see that continuing forward. The key thing to really think about underneath that is last week's admissions and PDS the week before, those are still, like, 90% to 95% preferred payer admissions. So the majority of our admissions the majority of our nurse hires day to day is still in that in a preferred payer environment. So again, I think we are we are pleased where we are gonna end this year in the, you know, mid- to upper-mid 60s. And probably in that 4% to 6% per year growth. Matthew, anything else on spread? Matthew Buckhalter: I think we will we will continue to stay consistent. Our goal and objective is not necessarily to increase that gross margin percentage, but to be able to invest those dollars to hire more caregivers and get better clinical outcomes. that is what our preferred payers are continuing to ask of us, and that is what we need to continue to deliver. To ultimately reduce the total cost of care. Sean Dodge: Okay. And then, in home health, your episodic mix was 81%. So it remains well above your 75% goal. Is there any reason it would begin to normalize back down? Or do you think kind of somewhere in the neighborhood of 80% or better is kind of sustainable there going forward? Jeffrey Shaner: Yeah. it is a great point. By the way, we have some of that metric internally. As a team. We have been at 80% now for almost not quite a full year, but 2 to 3 quarters, and it is been pretty consistent. We would be comfortable, Shane, with that going back down to 78, 79%, even 77%. If growth continued to accelerate, you know, north of 20% year over year. Growth. So we are okay with anything in the high 70s, low 80s. I think as we lap 2026 on 2027, we will update our target from greater than 75% to something north of that. Because at this point, it really has settled in pretty comfortably in this 80% range. I will add to that 1 other piece. Where 4 years ago, was very hard to get a Medicare Advantage MCO payer to want to engage in a episodic agreement that no longer is that difficult. I think the industry's done a really good job Our peers, us, you know, even the payers have come around to this is the best form of payment. It is the best clinical outcome, a solid financial outcome, a fair reimbursement. So I it has gotten I do not wanna use the word easier, but it is just gotten more efficient for payers to work within an episodic arrangement and I think that will continue to help keep us around that 80% long-term episodic range. Thanks, Shane. Operator: Okay. Yeah. Thanks. Our next question comes from Jared Haase with William Blair. Please proceed with your question. Jared: Hey, guys. Good morning. Thanks for taking the questions. And echo the congrats on all the success so far here. So you know, obviously, you guys have talked a little bit about just how the labor environment is really the gating unlock here to driving the volume. And I think you have really well articulated the strategy of getting these rate increases and using that to invest in the workforce. I guess I am just curious, know, aside from wages, is there anything incremental either strategically or operationally that you feel like is really resonating in terms of how you are finding caregivers, onboarding, you know, training them up, or ultimately getting them, you know, matched to the cases that they wanna work. Matthew Buckhalter: Yeah, Jared, The answer is yes. I mean, every single part of our infrastructure and our size and scale has really allowed us to create that more easily than maybe some of our peers out there in the market. So whether it be your training that is put into place, your onboarding, your quickness to onboarding on top of your daily pay that you are being able to offer, the technology that is in there for, adding in notes, all of those really add up into a benefit of the caregiver. Obviously, 1 of the biggest drivers and the main driver is gonna continue to be wages out there. So that is the reason we see that success with driving, driving reimbursement to invest into our wages. But our entire infrastructure and our entire technological stack out there also makes it more beneficial for caregivers to be on our service as well or provide services for us. Jeffrey Shaner: And I will point out, Jared, a great point. We have a national onboarding team led by a wonderful, leader, a clinical leader here. And I will use Family First Homecare as great example. Family First Homecare did a really good job of recruiting and hiring nurses They did not have the ability to onboard nurses 7 days a week, effectively. 24 hours a day, And we do. Because of our size and scale, we have invested in a team of nurses that just do virtual orientation and onboarding for our nurses across all 32 states and PDS and growing. But it is a great example of to Matt's point about size and scale. We have invested into that team. They do an amazing job. And as soon as we close on Family First Homecare, we are able to offer that service to Family First. And they have been very positive on the efficiency of that team and how it helps nurses onboard quicker to families. So, again, I think to Matthew's point, wage is number 1. Certainly, wage is the most important in the decision point for most nurses. But the efficiencies and scale do help us. Jared: Okay. Yeah. that is that is great. that is really helpful. And then maybe just as a follow-up. So when I maybe taking a step back a little bit. But, you know, obviously, with the home health industry becoming perhaps a little bit more appealing here with some clarity on the rate front. And if we start to see some more investment from you guys towards that segment of the market, can you just talk a little bit about, like, how do you think potential synergies that I might not be thinking about offhand between offering both PDS and home health. Yeah. Obviously, it is a little bit of a different patient population. it is a little bit of a payer mix, Medicaid versus Medicare. But maybe just, you know, aside from national scale, which and potential corporate efficiencies, leverage, things like that, there anything else you would flag as far as potential synergies from expanding in that segment of the business? Jeffrey Shaner: Yes. I would love to sell you on something, but you, but those are the 3 that we have been thinking. I mean, corporate efficiencies, back office efficiencies, billing collections. We use 2 different EMR operating systems for those businesses because they are very different. Different leaders who lead them. I will say just the efficiencies of those great leaders partnering together because we offer the same services in many of our same states. So, you know, people get to know us both on the Medicaid side, the Medicare side. We are branded the same Aveanna Home Health and Hospice, Aveanna, private duty services. So, you know, just using the brand, it is different payers. Right? Medicare Advantage payers. Even if it is the same, you know, parent company of UnitedHealthcare, it is 2 different total departments in the payer standpoint. So there are there are efficiencies, but it but it is not nursing efficiencies or caregiver efficiencies. it is it is mostly back-office, as you as you pointed out. Okay. that is fair. And I certainly hear you that you see, you know, elevated growth opportunities in home health, and that maybe has a margin benefit as well. But to make sure I was not missing anything, but that is great. Thank you. Thank you, Jared, Operator: Our next question comes with from Andrew Mok with Barclays. Please proceed with your question. Andrew Mok: Hi. Good morning. Can you speak to how your government affairs team has been able to secure better rates under a difficult state funding environment? If we take a step back, state budgets still look constrained, and we are now starting to implement OBB. So is the view internally that PDF is benefiting from a reallocation of funding within Medicaid And is that helped by OBB's efforts to curb spending in the adult Medicaid population? Thanks. Jeffrey Shaner: Andrew, good morning. Great question. Very, very thoughtful question. 1, we have a long term approach to our states. Right? I think California is a great example. There were a lot of low hanging fruit in the past the last 3 years. When we did not get the California rate increase that we had asked for. So it is a long term approach to these states. Geographic diversity matters. So I think being spread out across 30 plus states does matter. You know? Being able to offset the growth in other states as we have been working through California. But staying at the table, continuing to talk about the benefits of the cost savings of our business has settled in. And I think as to the second part of your question, I hate I hate to say that taking a trillion dollars out of Medicaid actually helps PDN. But I think what we take away from it is PDN is absolutely insulated from the idea of cuts to the OBBBA legislation. And over the long term is opening some doors in some states for reallocations of dollars. And so, you know, we do not we do not like the idea of, you know, diminishing Medicaid services for any family who deserves those services. But recognizing the value of PDN And I think as we continue to hear from our MCO payers, you know, 10x savings per day, set $6 thousand or $7 thousand a day in a NICU or center, you know, $600 or $700 a day at home. That is just resonating incredibly well with the MCO payers. And over time, our state legislator partners. So I think we are far enough in you know, to the you know, being a year and a half into the OBBBA legislation to really be able to see that PDN is gonna come out of this you know, primarily in very good shape. Great. Thank you. Thanks, Andrew. Operator: Our next question comes from Andrew Cooper with Raymond James. Please proceed with your question. Andrew Cooper: Hi, everybody. Thanks for the questions. I will try once just to see. Can you give us a little bit more of a quantitative starting point for California and PDS to think about as we head into 2027? And then you think about some other states where you have seen, you know, bigger step function rate increases, how much have you been able to add to that labor pool and drive the volume in response based on some of your historic experience. Matthew Buckhalter: Yeah. Andrew, while we do not provide specifics about any state or any payer out there, we previously said that California's impact on Aveanna has become a little bit less significant over the last few years. that is really driven by the PDN growth and PDS growth in the other 31 states and because of California's rates, therefore, their wages lagging, they have been less impactful for us. Now we are really excited about this rate increase and the impact the rate enhancement is going to have on the medically fragile patient population and our ability to recruit and retain those caregivers going forward. Jeffrey Shaner: Yeah. And To the second part of your question, Andrew. Let me use Georgia as a great example. So 3 years ago, we had a it had been 10 years in Georgia since any movement in the Medicaid rate. And we got a I would say, in line with this increase, if not a little bit even more significant in Georgia. And it moved the market in a matter of days, weeks. We got ahead of the rate increase in Georgia by about 3 or 4 months in the wage pass through. So it was a July 1st effective date. We started passing wage through in March and April. We saw fill rates dramatically improve. And then the most important thing is a month or 2 after the rate increase went through in Georgia, the largest children's hospital is a couple miles from our office here in Atlanta. And we heard things like, you know, the halls have never been empty before, and these beds have never been you know, cleared out and truly, it did, it unlocked the unnecessary days that were being spent in the hospital. And so our hospital peers really, really valued that step change. And again, California is a little bit bigger than Georgia. it is got more children's hospitals than 1. But we think we will see a similar effect take place over Q1 and Q2 of next year as really the unlocking of these unnecessary hospitalizations just start to get pulled through back to the home? Andrew Cooper: And that is helpful. And then oh, go ahead. No. You are fine. You are fine. Go ahead. I was just gonna say, shifting a little bit and thinking, you know, I know you will not guide to 2027 right now, but when we think about the moving parts, of kinda on plan, if not ahead of plan in the preferred payer progress across the segments, You get California giving you a bump as well. I mean, is it safe to think that 2027's rate of increase across the spectrum of the business is probably a little more than your average? And so the growth we think about, at least on the rate side, it may be a little bit a little bit better than what the long term framework would suggest in a more normal year. Matthew Buckhalter: No, Andrew. I think that is why we were comfortable increasing our growth rates specifically in PDS from that 3% to 5% range to that 5% to 6% range going forward. Obviously, the clarity of the OBBA coming through, but also just our consistent engagement with governor, with governors and legislative bodies that says, like, hey. This is a value add to the health care system. This is a cost reduction from the health care system. So between that 1, also with our movement from the 5% to 7% range in our home health and hospice business to going 8% to 10% going forward. We have kinda built that into our long range growth plans itself. Yes. California might carry the water a little bit more next year, but then the following year, maybe it is Maybe after that, it is Florida. The year after that, it is Massachusetts. And that is really because of the diversity of states and the 32 states that they are in, 32 specific PDS states. All that diversity allows us to really increase our growth rates going forward. Jeffrey Shaner: I would still underpin it with it is still more volume growth than rate. So in that 5 to 6% PDS guide, it is I would still think more of like you know, 2- to 3-fourths volume, 1-fourth roughly rate. So it is rate is helping drive the volume, but volume is still the biggest driver of all of our organic growth rates. Thank you, Andrew. Operator: Great. Our next question comes from Grayson Joshua McAlisterAllister with Truist Securities. Please proceed with your question. Grayson Joshua McAlister: Hey, guys. Grayson Joshua McAlister on for David. I will wrap it up with just 1 quick 1 for me here. I guess, could you talk a little bit more about the Family First Homecare integration thus far? How has the integration gone versus your expectations? And then any bigger, more challenging aspects that you would expect for the second half of you as you look to get it wrapped up? Jeffrey Shaner: Great question. And I think in our remarks, we are incredibly pleased. The Thrive integration a year earlier gave us a great roadmap for PDS acquisitions. Family First Homecare is a little bit bigger, but very similar going as well or better than expected. Yeah. I would I would say we are still in the front third of the integration in the next few months, you know, a few months, intensify as we work through the back office and EMR. You know, transitions, are the biggest movements. But the teams are doing great. They have they have strengthened our business in a couple of key markets, including Florida. I would say we are a better business today because of their partnership in the state of Florida. And it is also just bolstered some of the service areas in Iowa and South Dakota that were really important. I mean, these are incredibly rural communities or rural states. So the ability to have a little bit better service distribution in those states of Illinois, South Dakota, Iowa really, I think, ultimately make us better. And then leaning forward in your last part of your question there is yeah, I think as we think about this moving forward, you know, we would like to see similar type acquisitions on the triple H side, the home health and hospice side, you know, where we start to materially move home health and hospice business from an inorganic growth standpoint. But the models here, we have a great team. Our integration management office does a phenomenal job. Leading us through the integration process. So incredibly pleased. Also excited to wrap it up here later part of the year and get this done by the end of 2026. Grayson Joshua McAlister: Great. Thanks, guys. Jeffrey Shaner: Thanks, Grayson. Operator: We have reached the end of our question and answer session. I would now like to turn the floor back over to Jeffrey Shaner for closing comments. Jeffrey Shaner: Thank you so much. We look forward to updating you on our continued progress at the end of Q3, and have a great day and thanks for your continued interest in Aveanna Healthcare. Operator: This concludes today's teleconference. You may disconnect your lines at any time. Thank you for your participation. Before you buy stock in Aveanna Healthcare, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Aveanna Healthcare wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Aveanna Healthcare (AVAH) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Aveanna Healthcare Holdings Inc. AVAH used its second-quarter 2026 earnings call to raise growth expectations, citing reimbursement gains, preferred payer traction and improving caregiver capacity. The key message was a higher 2026 outlook paired with stronger organic growth targets for Private Duty Services and Home Health & Hospice, while California emerged as a 2027 capacity opportunity. CFO Matt Buckhalter said full-year revenues should exceed $2.68 billion, up from $2.63 billion-$2.65 billion. Adjusted EBITDA should exceed $365 million versus $338 million-$342 million previously. CFO Buckhalter told a Stephens analyst that the increase reflects core operating performance. Family First’s contribution was already included in Aveanna’s prior guidance. Second-quarter adjusted EPS of $0.22 beat the Zacks Consensus Estimate of $0.17, while revenues of $670.5 million topped the $647.1 million consensus. Revenues rose 13.7% year over year and adjusted EBITDA increased 8% to $95.4 million. Aveanna Healthcare Holdings Inc. price-consensus-eps-surprise-chart | Aveanna Healthcare Holdings Inc. Quote CEO Jeff Shaner said California’s 2027 budget includes a significant pediatric private duty nursing rate investment effective Jan. 1, 2027. Aveanna expects Medi-Cal to publish updated rates by the end of September. Buckhalter said Aveanna plans to begin passing higher wages to caregivers in the back half of the third quarter, before the reimbursement change takes effect. Shaner told a UBS analyst that California fill rates have fallen almost 30% as reimbursement and wages lagged. Buckhalter added that the operating infrastructure needed to expand staffing is already in place. Shaner said Private Duty Services ended the second quarter with 37 preferred payer agreements and 64% of managed-care volume tied to preferred payers, up from 60% at the end of the first quarter. He expects the mix to finish 2026 higher but below 70%. In Home Health & Hospice, Shaner said Aveanna reached its 2026 target of 50 preferred payers. Episodic mix was about 81%, and total episodes grew 18.5% year over year. Shaner told a BMO Capital Markets analyst that a high-70% to low-80% episodic mix is sustainable. Recent Private Duty Services admissions have been 90%-95% preferred payer. Shaner told a Jefferies analyst that higher reimbursement is intended partly to fund caregiver wages, so management expects gross margin percentages to remain broadly consistent as revenue grows. Buckhalter said Private Duty Services' gross margin of 28.9% was in line with expectations. He pointed to roughly 28%-29% for the rest of 2026 as rate gains continue to be passed through. Responding to Deutsche Bank, Buckhalter said about 14% remains a reasonable adjusted EBITDA margin level, with room to approach 15% through SG&A leverage and automation. Shaner did not indicate a material change to the margin framework. Shaner said most future acquisition activity should shift toward adult care, particularly Home Health & Hospice, while Aveanna still sees several Private Duty Services state tuck-in opportunities. Buckhalter told a Stephens analyst that the M&A pipeline remains robust, but valuation discipline and leverage remain priorities. Management continues to target leverage below 3 times, with CEO Shaner expressing confidence in reaching that level in 2027. Shaner said the Family First integration is going as well as or better than expected. Back-office and electronic medical record transitions are the main remaining tasks, with completion expected by the end of 2026. Shaner raised the long-term organic growth target for Private Duty Services to 5%-6% from 3%-5% and for Home Health & Hospice to 8%-10% from 5%-7%. Medical Solutions remains at 8%-10%. Shaner told a Raymond James analyst that Private Duty Services growth should be roughly three-quarters volume and one-quarter rate. Management’s focus remains on converting reimbursement gains into caregiver capacity and patient volumes. AVAH carries a Zacks Rank #3 (Hold), with a Value Score of B, Growth Score of A, Momentum Score of C and a VGM Score of A. Under the Zacks framework, A and B grades indicate stronger characteristics within each investment style. The Rank and Style Scores are designed to complement one another, with the strongest combinations centered on Zacks Rank #1 (Strong Buy) and #2 (Buy) stocks paired with A or B Style Scores. AVAH’s current Rank is a Hold and can change as estimates are revised after the just-reported results. You can see the complete list of today’s Zacks #1 Rank stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Aveanna Healthcare Holdings Inc. (AVAH) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Revenue: $670.5 million, a 13.7% increase year-over-year. Adjusted EBITDA: $95.4 million, an 8% increase compared to the prior year period. Gross Margin: $218.5 million, or 32.6% of revenue. Private Duty Services Revenue: Grew 14.0% year-over-year, with revenue per hour of $44.62, up 1.7%. Private Duty Services Gross Margin: $159.9 million, or 28.9%. Home Health and Hospice Revenue: $69 million, a 14.8% increase year-over-year. Home Health and Hospice Admissions: 10,500 total admissions, with approximately 81% being episodic. Home Health and Hospice Episodes: 14,700 total episodes of care, up 18.5% year-over-year. Medicare Revenue per Episode: $3,202 for the quarter. Home Health and Hospice Gross Margin: 53.9%. Medical Solutions Revenue: $47.5 million, up 9.4% year-over-year. Medical Solutions Unique Patients Served: Approximately 95,000, up 4.4% year-over-year. Medical Solutions Revenue per UPS: Approximately $500, up 5% year-over-year. Medical Solutions Gross Margin: Approximately $21.4 million, or 45.1%. Cash Flow: Year-to-date cash generated by operating activities was $85.3 million, and free cash flow was positive $75.4 million. Liquidity: Approximately $433 million at the end of Q2, including $97 million cash on hand, $110 million availability under securitization facility, and $226 million availability on revolver. Debt: Approximately $1.48 billion of variable rate debt, with $1.4 billion hedged with interest rate caps. 2026 Guidance: Full-year revenue expected to be greater than $2.68 billion and adjusted EBITDA greater than $365 million. Warning! GuruFocus has detected 5 Warning Sign with AVAH. Is AVAH fairly valued? Test your thesis with our free DCF calculator. Release Date: August 13, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Revenue increased 13.7% year-over-year to $670.5 million, with growth across all three business segments. Adjusted EBITDA rose 8% to $95.4 million, driven by improved rates, higher volumes, and operational efficiencies. Secured a significant California private duty nursing rate increase effective January 1, 2027, after years of advocacy, which is expected to boost growth and caregiver recruitment. Achieved 37 preferred payer agreements in Private Duty Services, exceeding the goal of 38, and 50 in Home Health, ahead of schedule. Raised full-year 2026 guidance to revenue greater than $2.68 billion and adjusted EBITDA greater than $365 million, reflecting strong operational performance. Successfully repriced term loan, reducing interest expense by $10 million annually, and received credit rating upgrades from all three major agencies. Generated strong free cash flow of $75.4 million year-to-date, with liquidity of $433 million at quarter-end. Updated long-term organic growth rates to 5%-6% for Private Duty Services and 8%-10% for Home Health and Hospice, driven by improved government and payer relations. Home Health episodic mix reached 81%, with total episodic volume growth of 18.5%, indicating strong payer alignment and margin expansion. Family First acquisition integration is progressing well, with expectations to complete most integration by late Q4 2026. Labor market remains a primary challenge, with caregiver hiring and retention still difficult despite improvements. Private Duty Services gross margin was 28.9%, impacted by ongoing caregiver wage adjustments and non-recurring favorable items in Q2 2025. California rate increase will not take effect until January 1, 2027, and proactive wage pass-throughs in late 2026 may pressure margins before benefits are realized. Medical Solutions growth is expected to remain in high single digits for the next few quarters, with double-digit growth not expected until early 2027. The company faces ongoing uncertainty regarding federal Home Health rate adjustments, including the temporary adjustment issue. M&A activity, while robust, is subject to disciplined valuation and leverage targets, potentially limiting near-term inorganic growth. Gross margin percentage is expected to remain consistent, with wage pass-throughs limiting margin expansion despite revenue growth. California business has been lethargic with fill rates dropping nearly 30%, and recovery will take time to unlock hospital discharges and family-provided care. Integration of Family First involves complex back-office and EMR transitions, which could pose execution risks in the second half of 2026. The company's long-term EBITDA margin target of 14% may only slightly improve to 15%, limiting significant profitability gains. Q: Given the raised long-term revenue growth rates for the business segments, should we expect a corresponding margin increase in those segments as well? A: Jeff Shaner (CEO) stated that wage pass-through remains a key component of the story, so gross margin percentage should stay consistent. While gross margin dollars will increase with accelerated revenue, the focus remains on growing the business and continuing caregiver pass-through. Matt Buckhalter (CFO) added that Q2 gross margins came in line with expectations and represent where they expect margins to remain going forward. Q: Can you provide additional color on the expected benefit from the California state rate increase for 2027, and how should we think about the wage pass-through before the rate goes into place? A: Jeff Shaner (CEO) explained that the last rate increase in California was in 2018, and the 2027 budget includes a significant investment in pediatric private duty nursing rates effective January 1, 2027. The Medi-Cal department is updating its fee-for-service schedule, with final rates expected within a month. Matt Buckhalter (CFO) noted they will be proactive in passing through wages in Q4, even before the rate goes live, to pull census out of hospitals and get staffing rates up. Q: Is the enhanced 2026 guidance driven by increased contributions from Family First, or solely by the core organic business? A: Matt Buckhalter (CFO) confirmed that the Family First impact was already contemplated in the previous guidance provided earlier in the quarter. The new increase in revenue and EBITDA guidance is driven by strong operational performance in the core Aveanna business across all three divisions. Q: With the increased long-term growth rates, does this mean EBITDA should now be growing in the 7% to 8% plus range long-term? A: Jeff Shaner (CEO) acknowledged the math but cautioned against expecting the 14% EBITDA target to change materially. He noted the geriatric business will be the fastest growing, and M&A will lean more into Home Health. Matt Buckhalter (CFO) added that 14% is a good spot, potentially sneaking up to 15% with continued SG&A leverage, but it shouldn't be expected much higher. Q: With the PDS preferred payer mix at 64%, do you expect this to remain flat through the year and step up on January 1 when California rates take effect? A: Jeff Shaner (CEO) clarified that the 64% represents MCO volumes, and California is primarily Medi-Cal reimbursed, so it's not counted in that metric. He expects to end the year slightly above the mid-60s percentage, probably still shy of 70% in 2026. The California rate increase will mimic preferred payer rates once applied, providing momentum for 2027. Q: Where are you seeing the greatest opportunity to add capacity in PDS, and does the California rate unlock open up new market opportunities? A: Matt Buckhalter (CFO) noted California has lagged due to the nine years without a rate increase, but with implementation, they can actively grow and hire caregivers. There are geographic opportunities in the middle of America (Ohio, Kentucky, West Virginia) for inorganic growth, but organic growth remains strong in existing markets. Jeff Shaner (CEO) added that with California now addressed, they can focus on cost-of-living adjustments rather than catch-up rate increases. Q: What is the percent of your business in California today, and do you need to put any infrastructure in place to address a state of that size given it will become a growth area? A: Jeff Shaner (CEO) explained that California's business has been lethargic with fill rates dropping almost a third. The first priority is getting current caregivers to work more hours, then unlocking unnecessary hospital days, and finally helping families providing care themselves. Matt Buckhalter (CFO) confirmed the infrastructure is already in place with a robust team ready to grow, having gone through PDS modernization with a targeted operating model in every location. Q: How might you lean into growth in adult Home Health given the improved rate backdrop, and what are you looking at to encourage acceleration there? A: Jeff Shaner (CEO) stated that the majority of M&A activity moving forward will be in the adult space, primarily because they've filled in most PDS states. They love Hospice but not the multiples, so they've been proponents of Home Health. With strong cash generation, they can begin growing that business both inorganically and organically. Q: How much higher can you drive the PDS preferred payer mix long-term, and how does that impact spreads over the next couple of years? A: Jeff Shaner (CEO) stated the ultimate goal is to reach mid-80s to high 80s in percentage of PDS MCO volumes, which is probably three to five years away. They've been adding 4% to 6% growth per year, and current admissions are still 90% to 95% preferred payer. Matt Buckhalter (CFO) added that the goal isn't necessarily to increase gross margin percentage but to invest those dollars to hire more caregivers and improve clinical outcomes. Q: With the episodic mix at 81%, is there any reason that would normalize back down, or is 80% or better sustainable? A: Jeff Shaner (CEO) said they'd be comfortable with the mix going back down to 77% to 79% if growth continued to accelerate north of 20% year-over-year. As they lap 2026 on 2027, they'll update the target from greater than 75% to something north of that. He noted that Medicare Advantage payers have come around to episodic arrangements being the best form of payment, which should help maintain the 80% range. Q: Aside from wages, is there anything incremental strategically or operationally that is resonating in terms of finding, onboarding, and training caregivers? A: Matt Buckhalter (CFO) highlighted their infrastructure and size and scale, including training, onboarding speed, daily pay options, and technology for notes. Jeff Shaner (CEO) added that they have a national onboarding team that provides virtual orientation 24/7 across all 32 states, which was immediately beneficial for the Family First acquisition. While wages remain the number one driver, these efficiencies help attract caregivers. Q: For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Aveanna Healthcare (AVAH) came out with quarterly earnings of $0.22 per share, beating the Zacks Consensus Estimate of $0.17 per share. This compares to earnings of $0.18 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +29.41%. A quarter ago, it was expected that this home health care services provider would post earnings of $0.13 per share when it actually produced earnings of $0.18, delivering a surprise of +38.46%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Aveanna, which belongs to the Zacks Medical - Outpatient and Home Healthcare industry, posted revenues of $670.48 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 3.62%. This compares to year-ago revenues of $589.55 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Aveanna shares have added about 10.8% since the beginning of the year versus the S&P 500's gain of 13.2%. While Aveanna has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Aveanna was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.18 on $669.68 million in revenues for the coming quarter and $0.73 on $2.65 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Medical - Outpatient and Home Healthcare is currently in the top 29% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the broader Zacks Medical sector, Pro-Dex, Inc. (PDEX), has yet to report results for the quarter ended June 2026. This company is expected to post quarterly earnings of $0.67 per share in its upcoming report, which represents a year-over-year change of +86.1%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Pro-Dex, Inc.'s revenues are expected to be $19.2 million, up 9.8% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Aveanna Healthcare Holdings Inc. (AVAH) : Free Stock Analysis Report Pro-Dex, Inc. (PDEX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance beat was driven by improved reimbursement rates, volume growth across all segments, and continued operational efficiencies from automation and AI efforts. The company successfully concluded a four-year advocacy campaign in California, securing a significant pediatric private duty nursing rate increase effective January 1, 2027. Management is pivoting the labor strategy to proactively increase nurse wages in California this fall, aiming to capture pent-up demand and facilitate hospital discharges ahead of the formal rate implementation. The 'Preferred Payer' strategy is nearing completion across all segments, with 64% of PDS MCO volumes now under these agreements, up from 60% in Q1. Home Health and Hospice growth was fueled by a strategic shift toward episodic care, which reached 81% of the mix, significantly improving margin profiles and clinical outcomes. The labor market is showing signs of stabilization, allowing the company to focus on cost-of-living adjustments rather than the 'catch-up' rate increases required over the past few years. Increased full-year 2026 revenue guidance to greater than $2.68 billion and adjusted EBITDA to greater than $365 million based on core organic strength. Raised long-term organic growth targets for Private Duty Services to 5-6% and Home Health and Hospice to 8-10%, reflecting improved visibility into state and federal rate environments. Management expects to return Medical Solutions to double-digit growth by the beginning of 2027 as the preferred payer transition in that segment concludes. The M&A strategy is shifting toward 'Aveanna 2.0,' prioritizing Home Health and Hospice acquisitions to fill geographic gaps and leverage the company's existing back-office infrastructure. Free cash flow is projected to remain strong at approximately $150 million for the full year, supporting a deleveraging path toward a sub-3x target by 2027. The Family First Homecare acquisition closed in June; The Family First Homecare integration is progressing nicely and as well or better than expected, with the majority of efforts expected to wrap up by late Q4. with back-office consolidation expected to wrap up by late Q4. Successfully repriced a term loan during Q2, reducing the interest rate by 75 basis points and lowering annual interest expense by approximately $10 million. Substantially all variable rate debt ($1.4 billion) is now hedged with interest rate caps to mitigate SOFR exposure. Management noted that while the 'Big Beautiful Bill' (OBBBA) impacts Medicaid broadly, Private Duty Nursing remains insulated due to its significant cost-savings value proposition compared to NICU care. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management expects gross margin percentages to remain stable as rate increases are primarily passed through as caregiver wage improvements. The primary benefit will be in gross margin dollars and volume acceleration as higher wages unlock clinical capacity that has been 'lethargic' for nine years. Management believes the 80% range is sustainable as Medicare Advantage payers have become more willing to engage in episodic reimbursement models. They would accept a slight dip to the high 70s if it were accompanied by volume growth exceeding 20%. The company intends to remain disciplined on valuations, focusing on assets that fit the 'Aveanna culture' while maintaining a path to sub-3x leverage. Future M&A will lean more heavily into the adult Home Health space due to higher growth potential and existing national PDS coverage. Synergies are primarily found in back-office functions, billing, and brand recognition rather than caregiver sharing. The company uses distinct EMR systems for each segment due to the different clinical and regulatory requirements of Medicaid versus Medicare.

Interested in Aveanna Healthcare Holdings Inc.? Here are five stocks we like better. Strong Q2 performance: Revenue rose 13.7% year over year to $670.5 million, while adjusted EBITDA increased 8% to $95.4 million, driven by growth across all three operating divisions, higher reimbursement and operational efficiencies. Raised 2026 outlook: Aveanna now expects full-year revenue above $2.68 billion and adjusted EBITDA above $365 million. It also increased long-term organic growth targets for Private Duty Services to 5%–6% and Home Health and Hospice to 8%–10%. Expansion and reimbursement opportunities: The company is integrating its Family First acquisition, funded entirely with cash, and expects a meaningful California pediatric nursing rate increase beginning in January 2027. Management plans to use higher reimbursement to support caregiver wage increases, staffing and capacity growth. 3 Small-Cap Stocks Trading Under $10 With Room to Run Aveanna Healthcare (NASDAQ:AVAH) reported higher second-quarter revenue and adjusted EBITDA, supported by growth across its three operating divisions, improved reimbursement rates, increased volumes and operational efficiencies. The company also raised its full-year outlook and updated its long-term organic growth targets for its Private Duty Services and Home Health and Hospice businesses. Revenue for the second quarter of 2026 increased 13.7% year over year to $670.5 million, while adjusted EBITDA rose 8% to $95.4 million. Consolidated gross margin was $218.5 million, or 32.6% of revenue. → AST SpaceMobile Earnings Just Reminded Investors How Risky Space Can Be Chief Executive Officer Jeff Shaner said Aveanna’s strategy of concentrating clinical capacity among government partners and managed-care organizations willing to provide enhanced reimbursement or value-based arrangements helped drive growth. “The demand for home and community-based care continues to be strong,” Shaner said, noting that payers and government agencies are seeking ways to expand care capacity while lowering the total cost of care. Aveanna reported year-over-year revenue growth in each of its operating segments. Home Health and Hospice revenue increased 14.8%, Private Duty Services revenue rose 14.0%, and Medical Solutions revenue grew 9.4%. Private Duty Services: Revenue per hour was $44.62, up 1.7% from the prior-year period, driven by preferred-payer volume growth and updated reimbursement agreements. Gross margin was $159.9 million, or 28.9%. The cost of revenue rate rose 7.8% to $31.74 per hour, reflecting caregiver wage adjustments. Aveanna’s spread per hour was $12.88. Home Health and Hospice: Revenue was approximately $69 million. The segment recorded 10,500 total admissions and 14,700 total episodes of care, with episodes rising 18.5% year over year. About 81% of admissions were episodic, above the company’s target of 75%. Medicare revenue per episode was $3,202, while gross margin reached 53.9%. Medical Solutions: Revenue was $47.5 million, with approximately 95,000 unique patients served, up 4.4% from the year-earlier quarter. Revenue per unique patient served increased 5% to about $500. Gross margin was approximately $21.4 million, or 45.1%. → Nebius’ Q2 Beat Shows the AI Bottleneck Is Capacity, Not Demand Shaner said Aveanna had signed three additional preferred-payer agreements in Private Duty Services during the second quarter, bringing its total to 37. The company expects to exceed its 2026 goal of reaching 38 agreements. Preferred-payer agreements represented approximately 64% of the company’s Private Duty Services managed-care organization volume at the end of the quarter, compared with 60% at the end of the first quarter. In Home Health, Aveanna reached its 2026 target of 50 preferred-payer agreements during the second quarter. Shaner said the company’s episodic mix and double-digit admissions and episode growth reflected its efforts to align capacity with payers reimbursing on an episodic basis. → On Holding's Price Stumble May Be an Opening for a Company Built to Run Medical Solutions had 20 preferred-payer agreements at the end of the second quarter, compared with 18 at the end of 2025. The company continues to target 25 such agreements by the end of 2026. Shaner said Medical Solutions revenue growth is expected to remain in the high-single-digit range for the next several quarters before returning to double-digit growth by the start of 2027. A key development for Aveanna was the inclusion of an investment in pediatric private duty nursing rates in California’s 2027 budget, effective Jan. 1, 2027. Shaner said the company is awaiting final details from the Medi-Cal department but expects the investment to represent a meaningful increase in California private duty nursing reimbursement rates. The CEO said California’s last rate increase occurred in 2018 and that reimbursement and nursing wages had fallen behind the competitive market. Aveanna plans to begin raising nurse wages during the fall, before the new reimbursement rates take effect, in an effort to recruit and retain caregivers and increase staffing capacity. “The very first thing that we want to do is get the caregivers who are working to work more hours on the shifts on the patients that they currently have,” Shaner said during the question-and-answer session. He also cited opportunities to help discharge medically fragile children from hospitals and to assist families providing care themselves because they have been unable to find nurses. Aveanna said it had achieved seven state rate enhancements as of the second quarter and expects additional states to complete their budget processes during the third quarter. Shaner said the California development completed the company’s multiyear objective to secure enhanced private duty nursing rates and caregiver wages across its operating footprint. The company closed its acquisition of Florida-based pediatric home-care provider Family First Homecare in early June. Shaner said integration efforts were progressing as planned, with most work expected to be completed by late in the fourth quarter. The integration includes back-office and electronic medical record transitions. Chief Financial Officer Matt Buckhalter said Aveanna funded the acquisition and related closing costs entirely with cash on hand. The company ended the quarter with approximately $433 million in liquidity, including $97 million in cash, $110 million available under its securitization facility and approximately $226 million available on its undrawn revolver. Aveanna had approximately $1.48 billion of variable-rate debt at quarter-end, including $1.4 billion hedged with interest-rate caps. The company also repriced its term loan during the second quarter, reducing its interest rate by 75 basis points. Buckhalter said the repricing is expected to lower annual interest expense by approximately $10 million. Year-to-date operating cash flow totaled $85.3 million, and free cash flow was $75.4 million. Buckhalter said the company expects similar cash-flow performance in the second half of 2026. Aveanna raised its 2026 guidance and now expects full-year revenue of more than $2.68 billion and adjusted EBITDA of more than $365 million. Buckhalter said the increase reflected operational performance in the core business rather than an additional contribution from Family First, whose expected impact had already been incorporated into prior guidance. The company also raised its long-term organic growth outlook for Private Duty Services to 5% to 6%, from 3% to 5%, and increased its Home Health and Hospice target to 8% to 10%, from 5% to 7%. Aveanna maintained its Medical Solutions growth target of 8% to 10%. Management said its gross-margin percentage is expected to remain generally consistent as reimbursement gains are passed through to caregivers in the form of higher wages. Shaner said the company remains focused on reaching its long-term goal of leverage below three times, which management said it believes it can achieve in 2027. Aveanna Healthcare, Inc (NASDAQ: AVAH) is a national provider of in-home health care services, specializing in pediatric skilled nursing, therapy, and related support for medically complex and chronically ill children. The company delivers a range of clinical and therapeutic solutions designed to enable patients to receive care in the comfort of their own homes, reducing the need for hospital stays and long-term institutional care. Aveanna's offerings include registered nursing, physical, occupational and speech therapy, behavioral health counseling, and durable medical equipment coordination. In addition to pediatric home health services, Aveanna operates adult home health and personal care support programs, assisting elderly and disabled adults with daily living activities, medication management, and rehabilitation therapies. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Aveanna Healthcare Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Aveanna Healthcare (AVAH) reported $670.48 million in revenue for the quarter ended June 2026, representing a year-over-year increase of 13.7%. EPS of $0.22 for the same period compares to $0.18 a year ago. The reported revenue compares to the Zacks Consensus Estimate of $647.08 million, representing a surprise of +3.62%. The company delivered an EPS surprise of +29.41%, with the consensus EPS estimate being $0.17. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how Aveanna performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Hours - PDS: 12,413.00 hrs versus the two-analyst average estimate of 12,099.02 hrs. Revenue rate - MS: $500.33 versus $488.94 estimated by two analysts on average. Unique patients served (UPS) - MS: 95 versus 95 estimated by two analysts on average. Revenue rate - PDS: $44.62 compared to the $43.81 average estimate based on two analysts. Revenue- PDS: $553.93 million versus $530.01 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +14% change. Revenue- MS: $47.53 million versus $46.23 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +9.5% change. Revenue- HHH: $69.02 million versus $65.79 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +14.8% change. View all Key Company Metrics for Aveanna here>>> Shares of Aveanna have returned -5.7% over the past month versus the Zacks S&P 500 composite's +2.4% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Aveanna Healthcare Holdings Inc. (AVAH) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research