In the third quarter, Addus HomeCare Corporation (Nasdaq: ADUS) announced a decrease in its personal care census, just weeks after the company’s agreement to purchase personal care service (PCS) assets from AccentCare.
CEO Dirk Allison said the decline is primarily due to caregivers wanting a 40-hour work week. This makes it harder to staff cases with fewer hours, he explained.
Despite the census dip, Addus saw growth in higher hour cases year over year. This, combined with improved service percentages, led to an increase in same-store personal care hours.
Addus is addressing the staffing challenge with two main strategies. The first is expanding its caregiver app, Addus Connect. The app helps caregivers manage their schedules and availability. It performed well in Illinois and is now rolling out in Texas, with plans for New Mexico next.
The second strategy is being more selective. The company aims to accept patients who require more hours while balancing relationships with referral sources. Allison emphasized Addus will still serve lower-hour patients but wants to optimize staffing for them.
The company is also growing through acquisition. On Sept. 14, Addus agreed to buy AccentCare’s personal care assets for about $275 million. The deal would add 13,700 clients across 10 states, including new markets like Colorado and Georgia. It is expected to close in Q1 2027.
Addus reported third-quarter net revenue of $387.7 million, a 7% year-over-year increase. Its PCS unit generated $301 million in revenue, up 9% from last year.
The company’s home health segment remains small, accounting for 4.6% of total revenue. However, it saw positive year-over-year revenue for the first time in years. This was driven by a new leadership team and a 13.8% increase in same-store admissions. Home health brought in $17.7 million for the quarter, a 0.36% increase year-over-year, and same-store revenue increased 2.5%.
Allison said a Medicare home health enrollment moratorium has not affected the company’s growth. Since Addus is not a de novo-based business, the moratorium does not impact its operations. The company plans to grow its home health arm as opportunities arise. Addus serves about 62,500 individuals throughout 263 locations within 24 states, and its adjusted EBITDA for the quarter was $51.2 million, a 13.5% year-over-year increase. Allison estimated that the AccentCare deal would increase Addus’ revenue base by approximately 19%.
