What Aveanna Healthcare (AVAH) Said on Its Q3 Earnings Call

Key Points

• Aveanna raised its 2026 outlook after Q3 revenue grew 11.8% to $695.5 million and adjusted EBITDA rose 25% to $100.1 million. It now expects full-year revenue above $2.695 billion and adjusted EBITDA above $374 million.
• Revenue increased across all three business lines, led by 15.6% growth in Home Health and Hospice; Private Duty Services revenue rose 11.6% and Medical Solutions revenue increased 9.1%. Preferred payer agreements and improved reimbursement, volume and operating efficiency supported results.
• Management plans to prioritize acquisitions in Home Health and Hospice while reducing leverage, targeting less than three times in 2027. In California, the company is seeking a permanent nursing rate increase, but expects the currently validated funding to cover only January through June 2027.

Aveanna Healthcare NASDAQ: AVAH raised its full-year 2026 outlook after reporting third-quarter revenue growth across all three of its businesses and a 25% increase in adjusted earnings.

The home-based care provider expects full-year revenue above $2.695 billion and adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, above $374 million. Third-quarter revenue rose 11.8% from a year earlier to $695.5 million, while adjusted EBITDA reached $100.1 million.

CEO Jeff Shaner attributed the results in part to better reimbursement rates, higher volumes and operating efficiencies. He said Aveanna has directed caregiver capacity toward preferred payers willing to offer enhanced rates or value-based agreements, helping the company improve hiring and retention.

Growth Across Business Lines

Private Duty Services revenue increased 11.6% to approximately $574 million. The segment delivered roughly 13 million hours of care, up 10.2% from a year earlier, while revenue per hour increased 1.4% to $44.09, CFO Matt Buckhalter said.

Aveanna had 38 preferred payer agreements in the Private Duty Services business at the end of the third quarter, meeting its 2026 target, and expects the number to approach 40 by year-end. Those agreements accounted for 65% of the segment’s managed care organization volumes, up from 57% at the end of 2025, Shaner said.

Home Health and Hospice revenue rose 15.6% to approximately $72.1 million. The business delivered about 16,000 episodes of care, up 24%, and reported a 53.3% gross margin. Shaner said the segment’s growth was organic but cautioned that growth of 20% to 25% would not be sustainable indefinitely.

In Medical Solutions, revenue climbed 9.1% to $49.2 million as the business served approximately 98,000 unique patients. Aveanna added two preferred payer agreements during the quarter, bringing its total in the segment to 22.

California Rate Increase in Focus

Shaner said Aveanna had secured eight state rate enhancements year to date in Private Duty Services and was shifting its advocacy work toward 2027. California remains a priority, although the company is seeking clarification about how long an expected private duty nursing rate increase will last.

According to Shaner, California’s Department of Health Care Services has validated approximately $30 million in state funding for the increase, with an expected federal match bringing the total investment to $60 million. The department views the increase as a supplemental payment for January through June 2027, he said.

Aveanna is advocating for a permanent rate increase, arguing that a temporary payment will not resolve long-standing workforce shortages. Buckhalter said the company cannot make meaningful increases to nurses’ base wages without certainty that the higher reimbursement will continue.

Instead, Aveanna is working on temporary retention and engagement payments for California nurses. Buckhalter said the company does not expect the issue to affect its long-range plans and intends to have a payment approach ready for Jan. 1.

Outlook and Acquisition Plans

Aveanna reconfirmed its long-term organic revenue growth targets of 5% to 6% for Private Duty Services and 8% to 10% each for Home Health and Hospice and Medical Solutions. Shaner said the company believes organic growth and acquisitions can support annual double-digit revenue growth.

The company completed essentially all back-office integration work for its Family First Homecare acquisition during the third quarter and expects to finish most remaining integration work by year-end, Shaner said. Aveanna closed the acquisition in June.

Management said it plans to direct more acquisition capital toward Home Health and Hospice while pursuing smaller Private Duty Services deals to enter additional states. Shaner said Aveanna intends to continue reducing leverage as it makes acquisitions, with a goal of bringing leverage below three times in 2027.

At quarter-end, Aveanna reported $492 million in liquidity and approximately $1.52 billion in variable-rate debt. Buckhalter said effectively all of that debt is hedged through December 2029, including an additional interest-rate cap arranged after the quarter ended. Year-to-date operating cash flow was $157.5 million, and free cash flow was $141.2 million.

Asked about the fourth-quarter outlook, Shaner said holiday weeks typically create volatility in the business. He said the company was targeting adjusted EBITDA in the mid-$90 million range for the quarter, while noting that it could be higher.

About Aveanna Healthcare (NASDAQ:AVAH)

Aveanna Healthcare Holdings Inc. is a U.S. provider of home-based healthcare services for children and adults with complex medical needs. Its services include private-duty nursing and personal care, home health nursing and therapy, and hospice care, helping patients receive support in their homes and communities. The company also provides medical supplies and related services, including products used for enteral nutrition. Aveanna serves patients and families across multiple states through a network of clinicians, caregivers, and local operations.

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