Addus HomeCare Lifts Profit as Operating Margin Expands
Second-quarter net service revenue rose 8.0% to $377.4 million.
Addus HomeCare Corp. (ADUS), a provider of home-care services, increased second-quarter net income 25.2% to $27.6 million as operating expenses grew more slowly than revenue. Diluted earnings rose to $1.49 a share from $1.20 a year earlier.
Revenue growth accelerated slightly from the 7.5% recorded in fourth-quarter 2024, though it remained below the 20.3% pace reported for first-quarter 2025. Adjusted diluted earnings increased 16.1% to $1.73 a share, compared with growth of 17.4% in first-quarter 2025 and 4.6% in fourth-quarter 2024.
Operating income climbed 18.4% to $38.9 million, expanding the operating margin to about 10.3% from 9.4%. Adjusted earnings before interest, taxes, depreciation and amortization rose 11.9% to $49.2 million, lifting the adjusted EBITDA margin to about 13.0% from 12.6%.
Personal care remained the main growth engine, with organic revenue rising 6.8% on higher volumes, rate increases in Texas and Illinois, and two months of acquired HomeCourt operations. The business accounted for 78.4% of revenue, up from 76.5% in first-quarter 2025 and 74.1% in fourth-quarter 2024.
Hospice organic revenue growth accelerated to 11.1% from 9.9% in first-quarter 2025 and 7.8% in fourth-quarter 2024, helped by higher average daily census and revenue per patient day. Its share of company revenue nevertheless declined to 17.0% as personal care expanded faster. Home health's share fell to 4.6%, though admission and volume trends were more favorable.
Gross margin narrowed to 32.2% from 32.6%, even as gross profit increased to $121.6 million from $113.9 million. Addus included $241,000 of restructuring and other nonrecurring costs in its adjustments, while acquisition expense declined to $1.5 million from $2.7 million.
Operating cash flow reached $40.0 million, more than double the $18.9 million reported for first-quarter 2025. Bank debt fell to $64.3 million from $203.0 million at the end of that earlier quarter, while net interest expense declined to $1.2 million from $2.9 million a year earlier.