Addus HomeCare Corp

Previous wording

You should read the following discussion together with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this quarterly report on Form 10-Q. This discussion contains forward-looking statements about our business and operations. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include words like“believes,”* “belief,” “expects,” “plans,” “anticipates,” “intends,” “projects,” “estimates,” “may,” “might,” “would,” “should,” and similar expressions are intended to be forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and assumptions of our management based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: the impact of macroeconomic conditions, including inflation and interest rates, legislative and political developments, including federal government shutdowns, any lapse in appropriations and any hold on or cancellation of congressionally authorized spending or interruptions in the distribution of government funds, trade policies and tensions, including changes in, or the imposition of, tariffs and/or trade barriers and the economic impacts, volatility and uncertainty resulting therefrom, and the potential adverse effects of current conditions; business disruptions due to inclement weather, natural disasters, acts of terrorism, military conflicts, pandemics, civil insurrection or social unrest; changes in operational and reimbursement processes and payment structures at the state or federal levels; changes in Medicaid, Medicare, other government program and managed care organizations*’* policies and payment rates, and the timeliness of reimbursements received under government programs; the implementation of new, and possible changes to existing, federal and state laws or regulations, or our failure to comply with such laws or regulations or comply on a timely basis; the impact of decisions of the U.S. Supreme Court regarding the actions of federal agencies; changes in the executive branch of the federal government; changes in the structure and administration of, and funding for, federal and state agencies and programs; competition in the healthcare industry; the geographical concentration of our operations; changes in the case mix of consumers and payment methodologies; operational changes resulting from the assumption by managed care organizations of responsibility for managing and paying for our services to consumers; the nature and success of future financial and/or delivery system reforms; changes in estimates and judgments associated wit…

Excerpt shortened here; the source contains the full paragraph.

Current wording

You should read the following discussion together with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this quarterly report on Form 10-Q. This discussion contains forward-looking statements about our business and operations. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include words like“believes,”* “belief,” “expects,” “plans,” “anticipates,” “intends,” “projects,” “estimates,” “may,” “might,” “would,” “should,” and similar expressions are intended to be forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and assumptions of our management based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: the impact of macroeconomic conditions, including inflation and interest rates, legislative and political developments, including federal government shutdowns, any lapse in appropriations and any hold on or cancellation of congressionally authorized spending or interruptions in the distribution of government funds, trade policies and tensions, including changes in, or the imposition of, tariffs and/or trade barriers and the economic impacts, volatility and uncertainty resulting therefrom, and the potential adverse effects of current conditions; business disruptions due to inclement weather, natural disasters, acts of terrorism, military conflicts, pandemics, civil insurrection or social unrest; changes in operational and reimbursement processes and payment structures at the state or federal levels; changes in Medicaid, Medicare, other government program and managed care organizations*’* policies and payment rates, and the timeliness of reimbursements received under government programs; the implementation of new, and possible changes to existing, federal and state laws or regulations, or our failure to comply with such laws or regulations or comply on a timely basis; the impact of decisions of the U.S. Supreme Court regarding the actions of federal agencies; changes in the executive branch of the federal government; changes in the structure and administration of, and funding for, federal and state agencies and programs; competition in the healthcare industry; the geographical concentration of our operations; changes in the case mix of consumers and payment methodologies; operational changes resulting from the assumption by managed care organizations of responsibility for managing and paying for our services to consumers; the nature and success of future financial and/or delivery system reforms; changes in estimates and judgments associated wit…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

We are a home care services provider operating three segments: personal care, hospice, and home health. Our services are principally provided in-home under agreements with federal, state, and local government agencies, managed care organizations, commercial insurers, and private individuals. Our consumers are predominantly “dual eligible,” meaning they are eligible to receive both Medicare and Medicaid benefits. Managed care organizations accounted for 38.3% and 36.4% of our net service revenues during the three months ended March 31, 2026 and 2025, respectively.

Current wording

We are a home care services provider operating three segments: personal care, hospice, and home health. Our services are principally provided in-home under agreements with federal, state, and local government agencies, managed care organizations, commercial insurers, and private individuals. Our consumers are predominantly “dual eligible,” meaning they are eligible to receive both Medicare and Medicaid benefits. Managed care organizations accounted for 38.6% and 36.7% of our net service revenues during the three months ended June 30, 2026 and 2025, respectively, and 38.4% and 36.5% of our net service revenues during the six months ended June 30, 2026 and 2025, respectively.

Previous wording

As of March 31, 2026, we provided our services in 23 states through 263 offices. Our personal care segment also includes staffing services, with clients including assisted living facilities, nursing homes, and hospice facilities.

Current wording

As of June 30, 2026, we provided our services in 24 states through 264 offices. Our personal care segment also includes staffing services, with clients including assisted living facilities, nursing homes, and hospice facilities.

Previous wording

On August 1, 2025, the Company completed its acquisition of Helping Hands Home Care Service, Inc. (the “Helping Hands Acquisition”), for approximately $21.4 million, with funding through the Company’s revolving credit facility and available cash. With the purchase of Helping Hands, the Company expanded its services within its personal care segment and entered the hospice and home health markets in Pennsylvania and recognized goodwill in its personal care segment of $19.0 million.

Current wording

On August 1, 2025, the Company completed its acquisition of Helping Hands Home Care Service, Inc. (the “Helping Hands Acquisition”), for approximately $21.4 million, with funding through the Company’s revolving credit facility and available cash. With the Helping Hands Acquisition, the Company expanded its services within its personal care segment and entered the hospice and home health markets in Pennsylvania and recognized goodwill in its personal care segment of $19.0 million.

Previous wording

Effective May 20, 2024, we entered into the New York Asset Sale. The Company entered into a consulting agreement with the purchaser, as the transfer of clients and caregivers and payment for assets pursuant to the New York Asset Sale is occurring over time as regulatory approvals are received, coordination of the transfer of clients and caregivers occurs, and the change of control takes place. In connection with this transaction, the Company ceased operations in New York. See Note 3 to the Notes to Unaudited Condensed Consolidated Financial Statements,Divestiture, for additional details regarding our divestiture.

Current wording

Effective May 20, 2024, we entered into the New York Asset Sale. The Company entered into a consulting agreement with the purchaser, as the transfer of clients and caregivers and payment for assets pursuant to the New York Asset Sale was occurring over time. In connection with this transaction, the Company ceased operations in New York. See Note 3 to the Notes to Unaudited Condensed Consolidated Financial Statements,Divestiture, for additional details regarding our divestiture.

Previous wording

The personal care segment derives a significant amount of its net service revenues in Illinois, which represented 32.1% and 33.0% of our net service revenues for the three months ended March 31, 2026 and 2025, respectively.

Current wording

The personal care segment derives a significant amount of its net service revenues in Illinois, which represented 32.1% and 33.0% of our net service revenues for the both the three and six months ended June 30, 2026 and 2025, respectively.

Previous wording

A significant amount of our net service revenues are derived from one payor, the Illinois Department on Aging, the largest payor program for our Illinois personal care operations, which accounted for 17.8% and 18.5% of our net service revenues for the three months ended March 31, 2026 and 2025, respectively.

Current wording

A significant amount of our net service revenues are derived from one payor, the Illinois Department on Aging, the largest payor program for our Illinois personal care operations, which accounted for 17.7% and 18.6% of our net service revenues for the three months ended June 30, 2026 and 2025, respectively, and accounted for 17.8% and 18.6% of our net service revenues for the six months ended June 30, 2026 and 2025, respectively.

Previous wording

As noted above, we derive a significant amount of our net service revenues in Illinois. Changes to reimbursement rates and minimum wage requirements may materially impact our revenues. For example, the Illinois fiscal year 2026 budget included an increase in hourly rates for in-home care services to $30.80, effective January 1, 2026, and required a minimum wage of $18.75 per hour for direct service workers. CMS approved an amendment to Illinois’ Persons Who are Elderly waiver program that included this rate increase, effective January 1, 2026.

Current wording

As noted above, we derive a significant amount of our net service revenues in Illinois. Changes to reimbursement rates and minimum wage requirements may materially impact our revenues. The Illinois fiscal year 2026 budget included an increase in hourly rates for in-home care services to $30.80, effective January 1, 2026, and required a minimum wage of $18.75 per hour for direct service workers. These rates remain stable under the Illinois fiscal year 2027 budget. CMS approved an amendment to Illinois’ Persons Who are Elderly waiver program that included the 2026 rate increase, effective January 1, 2026. Illinois’ current Persons Who are Elderly waiver expires September 30, 2026, unless CMS approves a renewal.

Previous wording

The City of Chicago requires the Chicago minimum wage to be adjusted annually based on increases in the Consumer Price Index (“CPI”), subject to a cap and other requirements. Effective July 1, 2025, the rate was adjusted to $16.60 based on the increase in the CPI.

Current wording

The City of Chicago requires the Chicago minimum wage to be adjusted annually based on increases in the Consumer Price Index (“CPI”), subject to a cap and other requirements. Effective July 1, 2026, the rate was adjusted to $17.05 based on the increase in the CPI.

Previous wording

Our business will benefit from the rate increases noted above for 2026, but there is no assurance that there will be additional rate increases in Illinois for fiscal years beyond fiscal year 2026 to offset increases to minimum wage, and our financial performance will be adversely impacted for any periods in which an additional offsetting reimbursement rate increase is not in effect.

Current wording

Our business will benefit from the rate increases noted above for 2026, but there is no assurance that there will be additional rate increases in Illinois for fiscal years beyond fiscal year 2026 to offset increases in minimum wage, and our financial performance will be adversely impacted for any periods in which an additional offsetting reimbursement rate increase is not in effect.

Previous wording

The outcome of the 2024 federal elections, affecting both the executive and legislative branches, has increased regulatory uncertainty and the potential for significant policy changes. The President has issued executive orders that impact or may impact the healthcare industry. Further, some members of Congress and the presidential administration have raised potential measures intended to accelerate the shift from traditional Medicare to Medicare Advantage or eliminating some or all of the consumer protections established by the ACA.

Current wording

In addition, the President has issued executive orders that impact or may impact the healthcare industry. Further, some members of Congress and the presidential administration have raised potential measures intended to accelerate the shift from traditional Medicare to Medicare Advantage or eliminating some or all of the consumer protections established by the ACA.

Previous wording

All of our income is from domestic sources. We incur state and local taxes in states in which we operate. The effective income tax rates were 22.7% and 21.4% for the three months ended March 31, 2026 and 2025, respectively, compared to our federal statutory rate of 21%. The difference between our federal statutory and effective income tax rates was principally due to the inclusion of state taxes, non-deductible compensation, excess tax expense or benefit and the use of federal employment tax credits.

Current wording

All of our income is from domestic sources. We incur state and local taxes in states in which we operate. The effective income tax rates were 26.9% and 26.4% for the three months ended June 30, 2026 and 2025, respectively. The effective income tax rates were 25.0% and 24.0% for the six months ended June 30, 2026 and 2025, respectively, compared to our federal statutory rate of 21%. The difference between our federal statutory and effective income tax rates was principally due to the inclusion of state taxes, non-deductible compensation, excess tax expense and the use of federal employment tax credits.

Previous wording

Net service revenues increased by 7.7% to$363.6 million for the three months ended March 31, 2026 compared to$337.7 million for the three months ended March 31, 2025. Revenue increased by$22.8 million in our personal care segment, by$4.3 million in our hospice segment and decreased by $1.3 million in our home health segment during the three months ended March 31, 2026, compared to the same period in 2025. The increase in our personal care segment was primarily due to organic growth in billable hours combined with the Gold Horses Acquisition and the Helping Hands Acquisition. The increase in our hospice segment revenue was due to organic growth in average daily census. The decrease in our home health segment was primarily attributed to lower volumes.

Current wording

Net service revenues increased by 8.0% to$377.4 million for the three months ended June 30, 2026 compared to$349.4 million for the three months ended June 30, 2025. Revenue increased by$26.8 million in our personal care segment, increased by$2.0 million in our hospice segment and decreased by $0.9 million in our home health segment during the three months ended June 30, 2026, compared to the same period in 2025. The increase in our personal care segment was primarily attributable to organic growth in billable hours combined with the HomeCourt Acquisition, the Gold Horses Acquisition and the Helping Hands Acquisition. The increase in our hospice segment revenue was due to organic growth. The decrease in our home health segment was primarily attributed to lower patient volumes.

Previous wording

General and administrative expenses increased to$77.8 million for the three months ended March 31, 2026, compared to$73.2 million for the three months ended March 31, 2025. The increase in general and administrative expenses was primarily due to acquisition activity, including the Gold Horses Acquisition and Helping Hands Acquisition, which contributed to an increase in administrative employee wage, bonus, tax, and benefit costs of $3.3 million. General and administrative expenses, expressed as a percentage of net service revenues, were 21.4% for the three months ended March 31, 2026, compared to 21.7% for the three months ended March 31, 2025.

Current wording

General and administrative expenses increased to$78.5 million for the three months ended June 30, 2026, compared to$77.1 million for the three months ended June 30, 2025. The increase in general and administrative expenses was primarily due to acquisition activity, including the HomeCourt Acquisition, the Gold Horses Acquisition and the Helping Hands Acquisition, which contributed to an increase in administrative employee wage, bonus, tax, and benefit costs of $4.0 million, partially offset by a $1.7 million decrease in professional fees and other decreases in general and administrative expenses. General and administrative expenses, expressed as a percentage of net service revenues, were 20.8% for the three months ended June 30, 2026, compared to 22.1% for the three months ended June 30, 2025.

Previous wording

Interest expense decreased to$2.2 million for the three months ended March 31, 2026 from$4.0 million for the three months ended March 31, 2025. The decrease in interest expense was primarily due to lower average outstanding borrowings and a lower weighted average interest rate under our credit facility for the three months ended March 31, 2026,compared to the three months ended March 31, 2025.

Current wording

Interest expense decreased to$1.7 million for the three months ended June 30, 2026 from$3.5 million for the three months ended June 30, 2025. The decrease in interest expense was primarily due to lower average outstanding borrowings and a lower weighted average interest rate under our credit facility for the three months ended June 30, 2026, compared to the three months ended June 30, 2025.

Previous wording

All of our income is from domestic sources. We incur state and local taxes in states in which we operate. The effective income tax rate was 22.7% and 21.4% for the three months ended March 31, 2026 and 2025, respectively. Our higher effective income tax rate for the three months ended March 31, 2026, was principally due to a lower excess tax benefit with a lower benefit from the use of federal employment tax credits. For the three months ended March 31, 2026 and 2025, the excess tax benefit and federal employment tax credits were 5.3% and 7.2%, respectively.

Current wording

All of our income is from domestic sources. We incur state and local taxes in states in which we operate. The effective income tax rate was 26.9% and 26.4% for the three months ended June 30, 2026 and 2025, respectively. Our higher effective income tax rate for the three months ended June 30, 2026 was principally due to a lower excess tax expense with a lower benefit from the use of federal employment tax credits. For the three months ended June 30, 2026 and 2025, the excess tax benefit and federal employment tax credits were 1.2% and 2.6%, respectively.

Previous wording

The personal care segment derives a significant amount of its net service revenues from operations in Illinois, which represented 32.1% and 33.0% of our net service revenues for the three months ended March 31, 2026 and 2025, respectively. One payor, the Illinois Department on Aging, accounted for 17.8% and 18.5% of net service revenues for the three months ended March 31, 2026 and 2025, respectively.

Current wording

The personal care segment derives a significant amount of its net service revenues from operations in Illinois, which represented 32.1% and 33.0% of our net service revenues for both the three and six months ended June 30, 2026 and 2025, respectively. One payor, the Illinois Department on Aging, accounted for 17.7% and 18.6% of net service revenues for the three months ended June 30, 2026 and 2025, respectively, and accounted for 17.8% and 18.6% of net service revenues for the six months ended June 30, 2026 and 2025, respectively.

Previous wording

Net service revenues from state, local, and other governmental programs accounted for 49.7% and 51.5% of net service revenues for the three months ended March 31, 2026 and 2025, respectively. Managed care organizations accounted for 47.6% and 45.3% of net service revenues for the three months ended March 31, 2026 and 2025, respectively, with commercial insurance, private pay, and other payors accounting for the remainder of net service revenues.

Current wording

Net service revenues from state, local, and other governmental programs accounted for 50.3% and 51.4% of net service revenues for the three months ended June 30, 2026 and 2025, respectively. Managed care organizations accounted for 47.1% and 45.3% of net service revenues for the three months ended June 30, 2026 and 2025, respectively, with commercial insurance, private pay, and other payors accounting for the remainder of net service revenues. Net service revenues from state, local, and other governmental programs accounted for 50.0% and 51.4% of net service revenues for the six months ended June 30, 2026 and 2025, respectively. Managed care organizations accounted for 47.3% and 45.3% of net service revenues for the six months ended June 30, 2026 and 2025, respectively, with commercial insurance, private pay, and other payors accounting for the remainder of net service revenues.

Previous wording

Net service revenues increased by 8.8% for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. Net service revenues included a 5.2% increase in billable hours and a 3.3% increase in revenues per billable hour for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

Current wording

Net service revenues increased by 10.0% and 9.4% for the three and six months ended June 30, 2026 respectively, compared to the three and six months ended June 30, 2025. Net service revenues reflected a 5.6% and 5.4% increase in billable hours and a 4.2% and 3.7% increase in revenues per billable hour for the three and six months ended June 30, 2026, respectively.

Previous wording

The personal care segment’s general and administrative expenses primarily consist of administrative employee wages, taxes, and benefit costs, rent, information technology, and office expenses. General and administrative expenses, expressed as a percentage of net service revenues, was 8.9%and 9.2%for thethree months ended March 31, 2026 and 2025, respectively.

Current wording

The personal care segment’s general and administrative expenses primarily consist of administrative employee wages, taxes, and benefit costs, rent, information technology, and office expenses. General and administrative expenses, expressed as a percentage of net service revenues, were 8.5% and 9.0% for the three months ended June 30, 2026 and 2025, respectively, and 8.7%and 9.1%for thesix months ended June 30, 2026 and 2025, respectively.

Previous wording

Net service revenues from Medicare accounted for 94.4% and 92.4% for the three months ended March 31, 2026 and 2025, respectively. Net service revenues from managed care organizations accounted for 2.3% and 3.3% for the three months ended March 31, 2026 and 2025 respectively.

Current wording

Net service revenues from Medicare accounted for 93.4% and 93.0% for the three months ended June 30, 2026 and 2025, respectively, and 93.9% and 92.7% for the six months ended June 30, 2026 and 2025, respectively. Net service revenues from managed care organizations accounted for 3.0% and 3.2% for the three months ended June 30, 2026 and 2025, respectively, and for 2.6% and 3.3% for the six months ended June 30, 2026 and 2025, respectively.

Previous wording

Gross profit, expressed as a percentage of net service revenues, was 46.3% and 47.5% for the three months ended March 31, 2026 and 2025, respectively. For thethree months ended March 31, 2026, the decrease was mainly attributed to an increase in direct wages, taxes and benefit costs as a percentage of net service revenues.

Current wording

Gross profit, expressed as a percentage of net service revenues, was 44.0% and 47.9% for the three months ended June 30, 2026 and 2025, respectively, and 45.2% and 47.7% for the six months ended June 30, 2026 and 2025, respectively. The decreases were primarily attributable to an increase in direct wages, taxes and benefit costs as a percentage of net service revenues.

Previous wording

The hospice segment’s general and administrative expenses primarily consist of administrative employee wage, tax, and benefit costs, rent, information technology, and office expenses. General and administrative expenses, expressed as a percentage of net service revenues, was 24.1% and 23.7% for the three months ended March 31, 2026 and 2025, respectively.

Current wording

The hospice segment’s general and administrative expenses primarily consist of administrative employee wage, tax, and benefit costs, rent, information technology, and office expenses. General and administrative expenses, expressed as a percentage of net service revenues, was 25.2% and 24.1% for the three months ended June 30, 2026 and 2025, respectively, and 24.6% and 23.9% for the six months ended June 30, 2026 and 2025, respectively.

Previous wording

The home health segment generates net service revenues by providing home health services on a short-term, intermittent or episodic basis to individuals, generally to treat an illness or injury. Net service revenues from Medicare accounted for 61.1% and 69.9%, managed care organizations accounted for 23.7% and 21.2%, and state, local, and other governmental programs accounted for 12.2% and 6.0% for the three months ended March 31, 2026 and 2025, respectively. Home health services provided to Medicare beneficiaries are paid under the Medicare Home Health Prospective Payment System, which uses national, standardized 30-day period payment rates for periods of care. CMS uses the PDGM as the case-mix classification model to place periods of care into payment categories, classifying patients based on clinical characteristics. An outlier adjustment may be paid for periods of care in which costs exceed a specific threshold amount.

Current wording

The home health segment generates net service revenues by providing home health services on a short-term, intermittent or episodic basis to individuals, generally to treat an illness or injury. Net service revenues from Medicare accounted for 63.5% and 69.4%, managed care organizations accounted for 25.7% and 23.6%, and state, local, and other governmental programs accounted for 7.7% and 4.4% for the three months ended June 30, 2026 and 2025, respectively. Net service revenues from Medicare accounted for 62.3% and 69.7%, managed care organizations accounted for 24.7% and 22.4%, and state, local, and other governmental programs accounted for 9.9% and 5.2% for the six months ended June 30, 2026 and 2025, respectively. Home health services provided to Medicare beneficiaries are paid under the Medicare Home Health Prospective Payment System, which uses national, standardized 30-day period payment rates for periods of care. CMS uses the PDGM as the case-mix classification model to place periods of care into payment categories, classifying patients based on clinical characteristics. An outlier adjustment may be paid for periods of care in which costs exceed a specific threshold amount.

Previous wording

Gross profit, expressed as a percentage of net service revenues, was 45.3% and 40.0% for the three months ended March 31, 2026 and 2025, respectively. For thethree months ended March 31, 2026, the increase was mainly attributed to a decrease in direct wages, taxes and benefit costs as a percentage of net service revenues, as cost of services revenues decreased at a greater rate than net service revenues, compared to thethree months ended March 31, 2025.

Current wording

Gross profit, expressed as a percentage of net service revenues, was 44.5% and 45.9% for the three months ended June 30, 2026 and 2025, respectively, and 44.9% and 42.9% for the six months ended June 30, 2026 and 2025, respectively. The decrease for the three months ended June 30, 2026 was primarily attributable to an increase in direct wages, taxes and benefit costs as a percentage of net service revenues. The increase for the six months ended June 30, 2026 was primarily attributable to a decrease in direct wages, taxes and benefit costs as a percentage of net service revenues.

Previous wording

The home health segment’s general and administrative expenses primarily consist of administrative employee wage, tax and benefit costs, rent, information technology, and office expenses. General and administrative expenses, expressed as a percentage of net service revenues, were 26.4% and 23.2% for the three months ended March 31, 2026 and 2025.

Current wording

The home health segment’s general and administrative expenses primarily consist of administrative employee wage, tax and benefit costs, rent, information technology, and office expenses. General and administrative expenses, expressed as a percentage of net service revenues, were 25.4% and 21.6% for the three months ended June 30, 2026 and 2025, respectively, and 25.9% and 22.4% for the six months ended June 30, 2026 and 2025, respectively.

Previous wording

Our primary sources of liquidity are cash on hand and cash from operations and borrowings under our credit facility. At March 31, 2026 and December 31, 2025, we had cash balances of $103.1 million and $81.6 million, respectively. At March 31, 2026, we had a$650.0 million revolving credit facility and a $150.0 million incremental loan facility, which may be for term loans or an increase to the revolving loan commitments. The maturity of this credit facility was extended to July 30, 2028.

Current wording

Our primary sources of liquidity are cash on hand and cash from operations and borrowings under our credit facility. At June 30, 2026 and December 31, 2025, we had cash balances of $99.6 million and $81.6 million, respectively. At June 30, 2026, we had a$650.0 million revolving credit facility and a$150.0 million incremental loan facility, which may be for term loans or an increase to the revolving loan commitments. The maturity of this credit facility was extended to July 30, 2028.

Previous wording

During the three months ended March 31, 2026, we repaid $30.0 million under our revolving credit facility. As of March 31, 2026, we had a total of $94.3 million in revolving loans, with an interest rate of 5.43% outstanding on our credit facility and after giving effect to the amount drawn on our credit facility, approximately$7.9 million of outstanding letters of credit and borrowing limits based on an advance multiple of adjusted EBITDA (as defined in the Credit Agreement), we had $650.0 million of capacity and$547.8 million available for borrowing under our credit facility. At December 31, 2025, we had a total of $124.3 million revolving credit loans, with an interest rate of 5.48%, outstanding on our credit facility.

Current wording

During the six months ended June 30, 2026, we repaid$60.0 million under our revolving credit facility. As of June 30, 2026, we had a total of $64.3 million in revolving loans, with an interest rate of 5.40% outstanding on our credit facility and after giving effect to the amount drawn on our credit facility, approximately$7.9 million of outstanding letters of credit and borrowing limits based on an advance multiple of adjusted EBITDA (as defined in the Credit Agreement), we had $650.0 million of capacity and$577.8 million available for borrowing under our credit facility. At December 31, 2025, we had a total of $124.3 million revolving credit loans, with an interest rate of 5.48%, outstanding on our credit facility.

Previous wording

To mitigate the fiscal effects of the COVID-19 public health emergency, the ARPA provided for a 10 percentage point increase in federal matching funds for Medicaid HCBS from April 1, 2021, through March 31, 2022, provided the state satisfied certain conditions. States must submit periodic HCBS spending plans to CMS regarding the federal and state funds tied to the increase in federal matching funds. Although states were generally permitted to use the associated state funds by March 31, 2025, CMS granted extensions to several states and some state spending plans continue through September 30, 2026.

Current wording

To mitigate the fiscal effects of the COVID-19 public health emergency, the ARPA provided for a 10 percentage point increase in federal matching funds for Medicaid HCBS from April 1, 2021, through March 31, 2022, provided the states satisfied certain conditions. States must submit periodic HCBS spending plans to CMS regarding the federal and state funds tied to the increase in federal matching funds. Although states were generally permitted to use the associated state funds by March 31, 2025, CMS granted extensions to several states and some state spending plans continue through September 30, 2026.

Previous wording

HCBS spending plans for the additional matching funds vary by state, but common initiatives in which the Company is participating include those aimed at strengthening the provider workforce (e.g., efforts to recruit, retain, and train direct service providers). The Company is required to properly and fully document the use of such funds in reports to the state in which the funds originated. Funds may be subject to recoupment if not expended or if they are expended on non-approved uses.

Current wording

HCBS spending plans for the additional matching funds vary by state, but common initiatives in which the Company participates include those aimed at strengthening the provider workforce (e.g., efforts to recruit, retain, and train direct service providers). The Company is required to properly and fully document the use of such funds in reports to the state in which the funds originated. Funds may be subject to recoupment if not expended or if they are expended on non-approved uses.

Previous wording

During the three months ended March 31, 2026, the Company received additional state funding provided by the ARPA of $6.2 million. Of the total state funding received by the Company pursuant to the ARPA through March 31, 2026, the Company utilized $3.2 million during the three months ended March 31, 2026, primarily for caregivers and adding support to recruiting and retention efforts, included as a reduction of cost of service revenues in the Company’s Unaudited Condensed Consolidated Statements of Income. As of March 31, 2026, the deferred portion of ARPA funding of $14.6 million is included within Government stimulus advances on the Company’s Unaudited Condensed Consolidated Balance Sheets.

Current wording

During thethree and six months ended June 30, 2026, the Company received additional state funding provided by the ARPA of $0.1 million and $6.3 million, respectively. Of the total state funding received by the Company pursuant to the ARPA through June 30, 2026, the Company utilized $2.4 million and $5.6 million during thethree and six months ended June 30, 2026, respectively, primarily for caregivers and adding support to recruiting and retention efforts, included as a reduction of cost of service revenues in the Company’s Unaudited Condensed Consolidated Statements of Income. As of June 30, 2026, the deferred portion of ARPA funding of $12.4 million is included within Government stimulus advances on the Company’s Unaudited Condensed Consolidated Balance Sheets.

Previous wording

Cash flows from operating activities represent the inflow of cash from our payors and the outflow of cash for payroll and payroll taxes, operating expenses, interest, and taxes. Net cash provided by operating activities was $52.4 million for the three months ended March 31, 2026, compared to net cash provided by operating activities of $18.9 million for the same period in 2025. The increase in cash provided by operations was primarily due to the timing of receipts on accounts receivable and the timing of receipt and utilization of government stimulus funds. The changes in accounts receivable were primarily related to the growth in revenue and a decrease in days sales outstanding (“DSO”) during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The related receivables due from the Illinois Department on Aging represented 23.1% and 18.5% of the Company’s net accounts receivable at March 31, 2026 and March 31, 2025, respectively.

Current wording

Cash flows from operating activities represent the inflow of cash from our payors and the outflow of cash for payroll and payroll taxes, operating expenses, interest, and taxes. Net cash provided by operating activities was$92.4 million for the six months ended June 30, 2026, compared to net cash provided by operating activities of $41.5 million for the same period in 2025. The increase in cash provided by operations was primarily due to the timing of receipts on accounts receivable and the timing of payments related to payroll and accounts payable. The changes in accounts receivable were primarily related to the growth in revenue and a decrease in days sales outstanding (“DSO”) during the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. The related receivables due from the Illinois Department on Aging represented 13.2% and 18.6% of the Company’s net accounts receivable at June 30, 2026 and June 30, 2025, respectively.

Previous wording

Net cash used in investing activities for the three months ended March 31, 2026, primarily consisted of $1.7 million of cash used for property and equipment purchases, primarily related to our ongoing investments in technology infrastructure fixed assets. Net cash used in investing activities for the three months ended March 31, 2025 primarily consisted of $3.4 million of net cash used for the Jacksonville Acquisition and the Great Lakes Acquisition, $1.9 million of cash used for property and equipment purchases, primarily related to our ongoing investments in technology infrastructure fixed assets, offset by $3.8 million in proceeds received relating to the New York Asset Sale.

Current wording

Net cash used in investing activities for the six months ended June 30, 2026, primarily consisted of $12.2 million of net cash used for the HomeCourt Acquisition and$3.1 million of cash used for property and equipment purchases, primarily related to our ongoing investments in technology infrastructure fixed assets. Net cash used in investing activities for the six months ended June 30, 2025 primarily consisted of$3.4 million of net cash used for the Jacksonville Acquisition and the Great Lakes Acquisition, $3.1 million of cash used for property and equipment purchases, primarily related to our ongoing investments in technology infrastructure fixed assets, offset by $3.8 million in proceeds received relating to the New York Asset Saleand $2.9 million in proceeds received relating to the December 2024 acquisition of the personal care business of Curo Health Services, LLC, a Delaware limited liability company that does business as Gentiva.

Previous wording

Net cash used in financing activities for the three months ended March 31, 2026, primarily consisted of $30.0 million payment on our revolving credit facility, offset by cash received from the exercise of stock options of $0.8 million. Net cash provided by financing activities for the three months ended March 31, 2025 primarily consisted of $20.0 million payment on our revolving credit facility, offset by cash received from the exercise of stock options of $0.5 million.

Current wording

Net cash used in financing activities for the six months ended June 30, 2026, primarily consisted of $60.0 million payment on our revolving credit facility, offset by cash received from the exercise of stock options of $0.8 million. Net cash used in financing activities for the six months ended June 30, 2025 primarily consisted of $50.0 million payment on our revolving credit facility, offset by cash received from the exercise of stock options of $0.5 million.

Previous wording

Outstanding accounts receivable, net of the allowance for credit losses as of March 31, 2026 and December 31, 2025 were approximately $144.8 million and $151.7 million, respectively, decreased by $6.9 million as of March 31, 2026 as compared to December 31, 2025. Accounts receivable for the Illinois Department on Aging decreased approximately $4.2 million during the three months ended March 31, 2026. Our collection procedures include review of account aging and direct contact with our payors. We have historically not used collection agencies. An uncollectible amount is written off to the allowance account after reasonable collection efforts have been exhausted.

Current wording

Outstanding accounts receivable, net of the allowance for credit losses as of June 30, 2026 and December 31, 2025 were approximately$145.1 million and $151.7 million, respectively, decreased by $6.6 million as of June 30, 2026 as compared to December 31, 2025. Accounts receivable for the Illinois Department on Aging decreased approximately$18.6 million during the six months ended June 30, 2026. Our collection procedures include review of account aging and direct contact with our payors. We have historically not used collection agencies. An uncollectible amount is written off to the allowance account after reasonable collection efforts have been exhausted.

Previous wording

We calculate our DSO by taking the trade accounts receivable outstanding, net of allowance for credit losses for doubtful accounts, divided by the net service revenues for the last quarter, multiplied by the number of days in that quarter. Our DSOs were 36 days and 38 days at March 31, 2026 and December 31, 2025, respectively. The DSOs for our largest payor, the Illinois Department on Aging, were 47 days and 55 days at March 31, 2026 and December 31, 2025, respectively.

Current wording

We calculate our DSO by taking the trade accounts receivable outstanding, net of allowance for credit losses for doubtful accounts, divided by the net service revenues for the last quarter, multiplied by the number of days in that quarter. Our DSOs were 36 days and 38 days at June 30, 2026 and December 31, 2025, respectively. The DSOs for our largest payor, the Illinois Department on Aging, were 27 days and 55 days at June 30, 2026 and December 31, 2025, respectively.