Aveanna Healthcare Holdings, Inc. Q1 FY2025 earnings call

• First quarter revenue was approximately $559 million, a 14% increase over the prior year period. Adjusted EBITDA was $67.4 million, a 93.1% increase. - Labor environment was a primary challenge, but demand for home and community-based care remains strong. - Focused on preferred payer strategy, achieving growth in revenue and adjusted EBITDA. Achieved five rate enhancements for PDS segment in Q1. - Goal for 2025 is to increase PDS preferred pay agreements from 22 to 30, with 24 agreements currently. - In home health and hospice, goal is to maintain episodic mix above 70% and return to normalized growth. - In medical solutions, still in early stages of preferred payer strategy but expect gross margins to stabilize. - Announced acquisition of ThriveSkilled Pediatrics, on track to close in coming weeks.

Private duty services segment: Revenue for the quarter was approximately $460 million, a 16.5% increase. Home health and hospice segment: Revenue was approximately $56.7 million, a 3.9% increase over the prior year. Medical solutions segment: Produced revenue of $42.5 million, a 3.6% increase over the prior year. Private duty services represented a significant portion of total revenue, with home health and hospice and medical solutions also contributing to the overall revenue growth.

• Anticipates 2025 revenue to be greater than $2.15 billion and adjusted EBITDA to be greater than $207 million. - Improved outlook does not include impact from ThriveSkilled Pediatrics acquisition at this time, will update in August.

• Labor market challenges remain a concern. - Macro environment could impact performance. - Need to continue to manage reimbursement rates effectively.

Q: Discuss where you are in the 10 states targeted for rate increases and the remaining six in preferred payers and long-term pipeline on the rate side?

A: Jeff Shaner mentioned they expected a muted year on government affairs rate front, but have five GA rate increases and two preferred payer wins in Q1. Still expect to achieve 10 GA rate increases, with preferred payer strategy having a robust pipeline.

Q: Walk through thought on operating cash flow for the second quarter and EBITDA to cash flow conversion given margin improvement?

A: Matt Buckhalter said Q1 cash outflow was better than anticipated, expects Aveanna to generate operating cash flow and be free cash flow in 2025, will provide more updates in August when integrating ThriveSkilled Pediatrics.

Q: Comment on the Thrive acquisition, expected contribution in 2025, and densification of geographies?

A: Jeff Shaner said it's a perfect acquisition culturally and strategically, accretive and delevering, will update on contribution in August when closing is complete.