Addus HomeCare Corporation (ADUS): Business Model Canvas [Dec-2025 Updated]

You need to know if Addus HomeCare Corporation (ADUS) can sustain its growth when the labor market is this tight. The quick answer is yes, but it's a high-wire act: their business is fundamentally built on massive, reliable volume from government payers like Medicaid and Managed Care Organizations (MCOs). The risk is clear-caregiver wages and benefits are the single largest operating expense, often consuming over 70% of revenue, which means every state rate negotiation is a fight for margin. Still, their scale, with a distributed network of over 40,000 caregivers across 30+ states, gives them a powerful, cost-effective alternative to institutional care. It's a volume-over-margin strategy, and the full canvas below shows exactly where the next acquisition or rate hike will hit.

Addus HomeCare Corporation (ADUS) - Canvas Business Model: Key Partnerships

The core of Addus HomeCare Corporation's operating model rests on a dense network of partnerships, primarily with government payors and Managed Care Organizations (MCOs), which fund the vast majority of its services. These partnerships are not just transactional; they are strategic anchors, securing the revenue base that reached approximately $1.0 billion in net service revenues for the first nine months of 2025. Your ability to forecast ADUS's stability depends entirely on understanding these relationships.

State Medicaid programs; they are the largest payer source

State Medicaid remains the single most critical partner and the largest payer source for Addus, particularly within the Personal Care segment, which accounted for 76.5% of the total business in the first quarter of 2025. The company's financial health is directly tied to favorable state reimbursement rates, which is why recent legislative wins are so important.

For example, new state budgets for fiscal year 2026 are providing a significant revenue boost. The State of Illinois, the company's largest personal care market, finalized a 3.9% increase in the base hourly reimbursement rate, raising it to $30.80 per hour and is expected to generate approximately $17.5 million in additional annual revenue for Addus. Similarly, a 9.9% rate increase in Texas, effective September 1, 2025, is anticipated to add roughly $17.7 million in annual revenue. This is a clear map of near-term opportunity.

Managed Care Organizations (MCOs); for delegated administrative services

Managed Care Organizations (MCOs) are increasingly vital partners, acting as intermediaries (delegated administrative services) between the state and the provider. While all of Addus's payor clients include MCOs, the company has been navigating a fundamental industry shift where government payors are transitioning business to MCOs, which aligns with the industry trend toward coordinated care.

Historically, MCOs have represented a substantial portion of the revenue mix, accounting for 46.3% of net service revenues in 2022. The ongoing discussions and contract renewals with these MCOs-like UnitedHealth Group, Humana, and others-represent a key risk, but also an opportunity to secure long-term, value-based contracts that reward efficient, home-based care. The goal is to prove that home-based personal care reduces overall acute care costs for the MCOs.

Hospitals and skilled nursing facilities; for patient discharge referrals

Partnerships with acute and post-acute care providers-hospitals and skilled nursing facilities (SNFs)-are the lifeblood for the Home Health and Hospice segments. These facilities are critical referral sources, especially for patients transitioning home after a hospitalization (post-acute care). The quality of these relationships directly impacts the company's census growth.

A concrete example of a structured referral partnership is the company's 'Bridge Program,' which is a significant contributor to hospice referrals, particularly in key markets like New Mexico and Tennessee. This program facilitates a smooth handoff from facility-based care to home-based hospice services, keeping the patient out of the expensive institutional setting.

Local caregiver training and recruitment agencies; to maintain staffing pipeline

The staffing pipeline is a perpetual challenge in home care, so partners who help maintain the workforce are essential. Addus's strategy here is two-fold: internal recruiting and leveraging family-as-caregiver models. The company employs its own recruiting teams ('Home Care Location Recruiter' roles) but also relies on an existing, non-traditional partner base.

Here's the quick math: approximately 35% to 40% of the company's caregivers are family members, especially in states like Texas. This is a massive, built-in recruitment pipeline that reduces reliance on external agencies. For the remaining staff, the company focuses on internal incentives like 'Daily Pay' to attract and retain workers.

Technology vendors; for Electronic Visit Verification (EVV) compliance

Compliance with federal and state mandates for Electronic Visit Verification (EVV) requires deep technology partnerships. These vendors ensure that all Medicaid-reimbursed personal care visits are accurately tracked, which is essential for billing and avoiding fraud penalties.

The company's primary technology partners for its enterprise platform and EVV compliance are:

• Homecare Homebase (HCHB): Partnered to develop an integrated, enterprise-level software solution for all service lines (personal care, home health, hospice).
• CellTrak: The current primary EVV technology provider, whose functionality is being integrated into the broader HCHB platform.

This integration is a defintely smart move, consolidating multiple systems into one unified patient record, which streamlines scheduling, authorization management, and the overall billing process for its 62,000 consumers.

Key Partnership Type	Strategic Function	2025 Financial/Operational Impact
State Medicaid Programs	Largest Payer Source & Rate Setter	Personal Care Segment (primarily Medicaid) is 76.5% of Q1 2025 revenue. Rate increase in Texas (9.9%) is expected to add $17.7 million in annual revenue.
Managed Care Organizations (MCOs)	Delegated Payer & Cost Manager	Accounted for 46.3% of net service revenues in 2022 (proxy for MCO scale). Key to coordinated care and reducing acute care costs.
Hospitals & Skilled Nursing Facilities	Referral Source for Clinical Services	Feeds the Home Health and Hospice segments. The 'Bridge Program' is a specific mechanism for hospice referrals in states like New Mexico.
Caregiver Recruitment (Internal/External)	Staffing Pipeline Maintenance	35%-40% of caregivers are family members, reducing external recruitment costs. Internal recruiting focuses on retention tools like 'Daily Pay.'
Technology Vendors (EVV)	Compliance, Billing, & Efficiency	Partnerships with Homecare Homebase and CellTrak are crucial for federal EVV compliance and streamlining operations across 260 locations.

Addus HomeCare Corporation (ADUS) - Canvas Business Model: Key Activities

Non-medical personal care service delivery; core business and volume driver

The primary key activity for Addus HomeCare Corporation is the actual delivery of non-medical personal care services (PCS), which is the bedrock of their revenue stream. This involves providing assistance with activities of daily living (ADLs) like bathing, grooming, and meal preparation to elderly, chronically ill, or disabled individuals in their homes. This segment is the volume engine, representing a massive $\mathbf{76.1}$% of the total Q3 2025 net service revenues, which hit $\mathbf{\$362.3}$ million for the quarter. The organic revenue growth in this core segment was a solid $\mathbf{6.6}$% in Q3 2025, driven by both volume increases and favorable state rate adjustments.

Here's the quick math on scale: Personal Care generated $\mathbf{\$275.8}$ million in Q3 2025 alone. That's a clear signal of where the company focuses its operational muscle. You have to nail the basics of scheduling and service quality when your business is this volume-dependent.

Complex care coordination; managing multiple patient needs and payers

While personal care is the core, a critical activity is integrating their three service lines-Personal Care, Hospice, and Home Health-to offer a continuum of care. This is complex care coordination, and it's how they move patients seamlessly to the right level of service. For example, their Home Health segment, though smaller at $\mathbf{4.9}$% of Q3 2025 revenue, acts as an important clinical partner to the core personal care and hospice segments.

This coordination is essential for managing multiple payers (Medicaid, Medicare, and Managed Care) and keeping patients out of higher-cost institutional settings. A key component of this is the Bridge Program, which is defintely contributing to hospice referrals, especially in markets like New Mexico and Tennessee.

• Personal Care: $\mathbf{76.1}$% of Q3 2025 revenue
• Hospice Care: $\mathbf{19}$% of Q3 2025 revenue
• Home Health: $\mathbf{4.9}$% of Q3 2025 revenue

Caregiver recruitment, training, and retention; high-volume, high-turnover management

The biggest operational challenge in home care is labor, so recruitment and retention are paramount key activities. Addus HomeCare has shown strong hiring performance, reporting $\mathbf{113}$ hires per business day in Q3 2025, which was the highest level seen all year. Still, the industry is tough, and the company's fill rate (the percentage of authorized hours actually served) stands at $\mathbf{83}$%-$\mathbf{83.5}$%, with a goal to push that into the mid-$\mathbf{80}$s.

They are investing in technology to help, specifically a Caregiver App that's been successfully rolled out in Illinois and is expanding to New Mexico and Texas. This app helps caregivers manage schedules and access information, which directly impacts their satisfaction and, hopefully, retention. To be fair, a large portion of their workforce, between $\mathbf{35}$% and $\mathbf{40}$%, are family caregivers, which helps stabilize the labor pool in certain markets like Texas.

Regulatory compliance and billing; navigating complex state and federal rules

Navigating the labyrinth of state and federal regulations, particularly around Medicaid and Medicare, is a non-negotiable key activity. The business relies heavily on government funding-for example, $\mathbf{96.7}$% of the Personal Care segment's revenue comes from managed care and state/local programs. This means meticulous billing and compliance are essential to cash flow.

A key win in 2025 was securing rate increases in major markets. In Illinois, their largest personal care market, a $\mathbf{5.5}$% rate increase took effect on January 1, 2025. Combined with other state rate increases, including those in Texas, this is expected to contribute approximately $\mathbf{\$35.2}$ million in annualized revenue. Plus, they are actively monitoring Medicaid redeterminations in key states like Illinois, New Mexico, and Texas, which are expected to boost census growth.

Strategic acquisitions and integration; expanding geographic and service footprint

Strategic mergers and acquisitions (M&A) are a core growth driver, not just a finance function. Addus HomeCare targets $\mathbf{\$100}$ million in annual revenue through M&A, focusing on smaller, strategic acquisitions that complement their existing footprint. This strategy is about expanding both geography and service offerings, often by adding clinical services (Home Health/Hospice) to their established personal care base.

The integration of acquired entities, such as the major Gentiva personal care operations acquired in late 2024 (anticipated to bring in nearly $\mathbf{\$280}$ million in annualized revenue), is a huge undertaking. In 2025, they continued this pace with key deals:

Acquisition Target	Closing Date (2025)	Annualized Revenue Impact	Purchase Price	Strategic Rationale
Helping Hands Home Care Service, Inc.	August 1, 2025	Approximately $\mathbf{\$16.7}$ million	$\mathbf{\$21.3}$ million	Expands personal care, home health, and hospice in Western Pennsylvania.
Del Cielo Home Care Services (Personal Care Ops)	October 1, 2025	$\mathbf{\$12.7}$ million	Undisclosed	Expands personal care presence in South Texas.
Gentiva Personal Care Operations	December 2, 2024	Anticipated $\mathbf{\$280}$ million	$\mathbf{\$350}$ million	Largest acquisition; significantly expanded market coverage, especially in Texas.

Addus HomeCare Corporation (ADUS) - Canvas Business Model: Key Resources

The core of Addus HomeCare Corporation's value proposition isn't just capital; it's a massive, distributed human network and the systems that manage it. You need to think of these resources as the foundation that allows them to scale and reliably secure government and Managed Care Organization (MCO) contracts.

Large, distributed network of over 33,000 caregivers

The single most critical asset is the company's extensive human capital. As of late 2025, Addus HomeCare employs over 33,000 dedicated employees, a number that has grown through organic hiring and strategic acquisitions like the Gentiva personal care operations in late 2024 and Helping Hands Home Care Service in August 2025. This workforce is the direct link to the patient, serving approximately 62,000 consumers weekly across the United States. Maintaining a strong caregiver base is defintely the biggest operational challenge, so they invest in retention and hiring tools.

Here's the quick math on the scale of their operation:

• Employees: Over 33,000
• Patients Served: Approximately 62,000 per week
• Locations: Over 260 physical branches
• Geographic Reach: Operations across 23 states

State-specific operating licenses and certifications; essential for service delivery

Operating in the highly regulated home-based care industry means that state-specific licenses are non-negotiable physical resources. Addus HomeCare maintains the necessary licenses and certifications to deliver a full continuum of care, including Personal Care, Home Health, and Hospice services. These licenses are the legal and regulatory 'keys' to their markets, and compliance is a continuous, intensive resource requirement. The company's ability to maintain compliance across 23 states is a significant barrier to entry for smaller competitors.

Proprietary IT and Electronic Health Record (EHR) systems; for operations and billing

The company relies on intellectual and physical IT assets to manage its vast, dispersed operations. This includes proprietary technology that enables HomeCare Aides to communicate changes in a member's condition, which is crucial for early intervention and better health outcomes. These systems are essential for:

• Accurate and efficient service billing.
• Providing robust data reports to payor partners.
• Managing a more efficient care scheduling platform.
• Supporting caregiver hiring and retention efforts.

Strong relationships with key state and MCO payers; securing reimbursement contracts

These are intangible but financially critical resources. Addus HomeCare's payer relationships are the primary source of its revenue streams. The company holds more than 300 contracts with a diverse mix of government agencies and private insurers. This diversification helps manage risk across different funding sources.

The financial impact of these relationships is clear in the 2025 fiscal year data, especially in the Personal Care segment, which is highly dependent on government funding:

Key Payer/Revenue Metric (Q3 2025)	Amount/Percentage	Significance
Q3 2025 Net Service Revenues	$362.3 Million	Total quarterly revenue driven by contracts.
Personal Care Revenue Share (Q3 2025)	76.1%	Dominant segment reliant on state/MCO contracts.
Texas Rate Increase (Sept 2025)	9.9%	Concrete benefit from favorable state funding support.
Total Payer Contracts	>300	Breadth of funding sources (Federal, State, MCOs).

Experienced local branch management teams; driving operational efficiency

The success of a decentralized model hinges on the quality of its local management. These teams are the human resource that translates corporate strategy into local execution, managing the day-to-day complexities of caregiver scheduling, local compliance, and quality control across over 260 locations. Their expertise in navigating state-specific regulatory environments and managing a large, distributed workforce is a core competitive advantage that drives operational efficiency and helps maintain the adjusted EBITDA margin of 12.5% recorded in Q3 2025.

Addus HomeCare Corporation (ADUS) - Canvas Business Model: Value Propositions

The core value proposition of Addus HomeCare Corporation is simple: delivering a comprehensive continuum of care at home that is significantly more cost-effective than institutional alternatives, which is crucial for their payor partners like Managed Care Organizations (MCOs) and state Medicaid programs.

This model is validated by the company's financial performance, with Net Service Revenues reaching $1.0 billion for the first nine months of 2025, demonstrating the massive, growing demand for in-home services.

Cost-effective alternative to institutional care; keeping patients at home

For payors and families, the primary value is avoiding the high cost of facility-based care while keeping patients in their preferred setting. This isn't just a preference; it's a major financial differentiator. For a patient with moderate care needs in 2025, the national median annual cost of in-home care is approximately $54,912.

Here's the quick math on the alternative: a semi-private room in a skilled nursing facility costs a median of $9,555 per month, or over $114,665 annually. That's a potential cost avoidance of nearly $60,000 per year for the payor or family. Even assisted living facilities average between $5,900 and $6,077 per month in 2025. Home care, for many patients, is defintely the cheaper option.

Comprehensive non-medical and skilled home care services; bundled offering

Addus HomeCare Corporation offers a full continuum of care, which is a key value for both patients and referral sources because it allows for seamless transitions as a patient's needs change. This bundled model is segmented into three primary services, with Personal Care dominating the revenue mix in Q3 2025.

• Personal Care: The largest segment, accounting for 76.1% of total Q3 2025 revenue, providing non-medical assistance with daily living.
• Hospice Care: End-of-life support and comfort, which generated 19.0% of Q3 2025 revenue.
• Home Health: Skilled medical services like nursing and therapy, representing 4.9% of Q3 2025 revenue.

This integrated approach is a powerful selling point-one partner handles everything from light housekeeping to skilled nursing, simplifying the care coordination process for families and MCO case managers.

High-quality, personalized care plans; tailored to individual patient needs

The company's value is rooted in high-touch, tailored service delivery. They currently serve approximately 62,000 consumers weekly through a network of over 33,000 employees. This scale is built on the promise of personalized care plans for individuals who are at risk of hospitalization or institutionalization, including the elderly and chronically ill.

The Personal Care segment's organic revenue growth of 6.6% in Q3 2025, supported by volume increases, shows that this personalized, high-demand service is resonating with consumers and payors.

Reliability and scale across 23 states (approximate geographic reach)

While the market is highly fragmented, Addus HomeCare Corporation is a leading national platform, offering a level of operational reliability and scale that smaller, local providers cannot match. The company operates across 23 states with approximately 260 locations.

This geographic breadth is a critical value for national or regional MCOs that need a single, reliable partner to manage their members across multiple states. They can rely on a consistent operating model and a large, established workforce.

Reduced hospital readmissions; a key metric for MCO and hospital partners

The most strategic value proposition, especially to MCOs and hospitals, is the ability of in-home services to lower overall healthcare spending by preventing costly acute care episodes. The CEO specifically noted that personal care services deliver real value to managed care partners through a reduction in the overall costs of care.

This value is measurable against industry benchmarks. For example, Hospital-at-Home (HaH) programs, which are a proxy for high-acuity in-home care, demonstrate that the average cost per admission is around $5,800, which is substantially lower than the $7,700 for traditional inpatient care. By providing proactive, post-acute, and chronic care management in the home, Addus HomeCare Corporation acts as a crucial partner in achieving better patient outcomes and lower costs for the entire healthcare system.

Addus HomeCare Corporation (ADUS) - Canvas Business Model: Customer Relationships

High-touch, personalized case management; for complex patient needs

Addus HomeCare Corporation's relationship model is inherently high-touch, especially for complex patient needs that span personal care, home health, and hospice services. The core of this is the development of a personalized care plan (PCP), which is a non-cliched term for a tailored service agreement. This approach is critical because the company's personal care segment, which is the most intimate form of care, accounted for 77.0% of total revenue in the second quarter of 2025.

The high-touch model is essential for the approximately 62,000 patients and consumers Addus serves across 23 states. It's not a one-size-fits-all service; it's a case-by-case assessment to ensure the care provided aligns with the patient's specific needs, which is what drives their reported 92% client satisfaction rate in 2024. Honestly, in home care, you can't automate empathy.

Dedicated, local branch support teams; for scheduling and immediate issues

The company maintains a highly decentralized structure with a network of 260 local operating locations. This physical presence is the backbone of their customer relationship, ensuring that local branch support teams are close to the patients and caregivers. This local focus is key for managing the day-to-day logistics, like scheduling adjustments or immediate service issues, which is where most service breakdowns happen.

These local teams are responsible for ensuring the 'fill rate'-the ratio of hours served to authorized hours-remains high. As of November 2025, the consolidated fill rate is around 83% to 83.5%, with the goal to push that into the mid-80s. Here's the quick math: a higher fill rate means fewer missed care hours, which directly translates to better patient trust and retention.

Long-term, trust-based relationships; essential for continuous care

The nature of personal care, hospice, and home health services requires long-term, trust-based relationships, as the services are often continuous for the elderly, chronically ill, and disabled. The business model is built around retaining both the patient and the caregiver to maintain consistency of care.

A key metric here is caregiver turnover, which, while an industry-wide challenge, Addus has historically managed better than the average. The company's turnover rate was reported to be 'just a little below 55%,' significantly lower than industry highs, demonstrating a higher level of stability in the caregiver-patient relationship. This stability is defintely a competitive advantage.

Standardized digital communication; through patient and family portals

While the care is personal, the coordination is increasingly digital. Addus is investing in systems and tools to support both hiring and retention, which includes a more efficient care scheduling platform. This technology provides a standardized, reliable channel for communication, even if explicit patient/family portals aren't always the headline.

The digital infrastructure is designed to streamline operations and support the local teams, not replace them.

• Improve caregiver scheduling efficiency.
• Coordinate demand with caregiver availability.
• Ensure more consistent care for patients.

Empathetic and reliable caregiver-patient matching; reducing turnover

The quality of the caregiver-patient match is the single most important factor for a successful, long-term customer relationship in home care. Addus focuses on this match to reduce caregiver turnover, which is a primary driver of patient dissatisfaction and churn.

The company's strategy involves increasing the hours for existing caregivers, which makes the job more attractive and also ensures patients receive more consistent care from fewer people. This focus on the employee experience is a direct investment in the customer relationship. For example, the acquisition of Gentiva's personal care operations, which brought in Texas as the second-largest personal care market, also increased the proportion of 'family caregivers' from over 30% to between 35% and 40% of their total caregiver base. This type of family-based care is the ultimate empathetic match.

The table below summarizes the core operational metrics that underpin the customer relationship strategy as of the 2025 fiscal year.

Customer Relationship Metric	Latest 2025 Fiscal Year Data (Q3 2025 or latest)	Impact on Customer Relationship
Net Service Revenues (9 Months Ended 9/30/2025)	$1.049.5 million	Scale to invest in quality and technology for patient support.
Total Patients/Consumers Served	Approximately 62,000	Indicates the size of the high-touch service base.
Number of Local Operating Locations	260 across 23 states	Enables dedicated, local branch support and rapid response.
Client Satisfaction Rate	92% (2024 data)	Direct measure of the success of personalized care plans.
Caregiver Fill Rate (Hours Served to Authorization)	83% to 83.5% (November 2025)	Measures reliability and consistency of service delivery.
Caregiver Turnover Rate	Just below 55% (Latest reported figure)	Lower rate ensures more stable, trust-based caregiver-patient matches.

Addus HomeCare Corporation (ADUS) - Canvas Business Model: Channels

Addus HomeCare Corporation's channels are fundamentally dual-track: a high-volume, government-driven channel for Personal Care, and a clinical, referral-based channel for its Hospice and Home Health segments. The core channel strategy is leveraging the Personal Care segment's scale-which accounted for 76.1% of Q3 2025 revenue-to cross-sell and drive referrals to the higher-margin clinical services.

The company serves approximately 62,000 patients and consumers weekly across 265 locations in 23 states, making its local office network a critical physical channel for service delivery and community connection.

Channel Type	Primary Payor / Revenue Source (Q3 2025 Personal Care)	Strategic Function
State & MCO Contracts	State, Local, & Gov't Programs: 50.5%	High-volume, stable base for Personal Care services.
State & MCO Contracts	Managed Care Organizations (MCOs): 45.3%	Growth vector for Personal Care; MCOs are key partners in value-based care initiatives.
Direct Patient Referrals	Clinical Services (Hospice/Home Health): 23.9% of Q3 2025 Revenue	Drives high-margin clinical volume; relies on relationship-based sales.
Acquisitions	New Patient Volume/Revenue: Targeting $100 million in annualized M&A revenue	Immediate geographic expansion and census density.

Direct patient referrals; from hospitals, physicians, and discharge planners

This is the primary channel for the company's clinical services-Hospice (19.0% of Q3 2025 revenue) and Home Health (4.9% of Q3 2025 revenue). Patient volume here is driven by relationships with institutional and professional gatekeepers, not direct consumer advertising.

A key internal channel is the 'Bridge Program,' which facilitates patient transitions from Addus HomeCare's Home Health segment to its Hospice segment. In markets like New Mexico and Tennessee, this internal cross-referral mechanism is highly effective, with approximately 25% to 30% of the Hospice admission volume coming from their own Home Health segment. This integration is a defintely a competitive advantage.

The company has invested in new sales leadership and business development plans specifically for the Hospice segment to improve external admission volumes and diversify its referral base.

State and MCO contracts; securing patient volume through large-scale agreements

The financial backbone of Addus HomeCare's channel strategy is its deep integration with government and managed care payors. For the dominant Personal Care segment, this channel accounts for nearly all of the revenue, providing a stable, high-volume base of approximately 62,000 consumers.

• Governmental Programs: State, local, and other governmental programs contributed 50.5% of Personal Care revenue in Q3 2025. This channel is highly sensitive to state budgets, such as the recent 9.9% rate increase in Texas effective September 1, 2025, which provides a significant boost.
• Managed Care Organizations (MCOs): MCOs accounted for 45.3% of Personal Care revenue in Q3 2025. This channel is growing as states shift Medicaid beneficiaries into Managed Medicaid programs, requiring Addus HomeCare to secure and maintain favorable contracts with large national and regional MCOs.

The shift to Managed Care is a near-term opportunity, but it also carries the risk of reimbursement changes and competitive contract negotiations.

Local community outreach and marketing; targeting seniors and families

For the Personal Care segment, which serves the majority of their patients, the channel extends directly into the local community. This is a low-cost, high-touch channel focused on grassroots engagement and visibility.

• Community Liaisons: The company utilizes community liaisons and local market business development plans to drive organic growth, particularly for its clinical services.
• Engagement Events: A tangible example of this channel's activity is the facilitation of over 2,000 client participation events in 2024, which builds brand trust and connects clients with local social opportunities.
• Caregiver Network: The large network of caregivers, with 35% to 40% being family members in some markets like Texas, acts as an organic, word-of-mouth referral channel within the community.

Online presence and informational websites; for initial inquiries

The digital channel serves primarily as an informational and administrative touchpoint rather than a direct, high-volume sales channel, though it is vital for credibility and convenience.

The corporate website, Addus.com, is the main digital hub, offering key functions:

• Service Information: Detailed pages on Home Care, Home Health, and Hospice services.
• Administrative Tools: Features like an online bill pay system and a funding sources resource page for patient convenience.
• Recruitment: The career center is a critical channel for attracting the 33,000+ employees needed to serve 62,000+ patients.

Acquired agencies' existing referral networks; immediate volume gain

Acquisitions are a core channel strategy for rapid market penetration and density, immediately bringing in established referral relationships and patient census. The company targets roughly half of its annual growth through mergers and acquisitions (M&A).

• Recent Acquisitions (2025): The acquisition of Del Cielo Home Care Services on October 1, 2025, immediately bolstered the company's presence in Texas, its second-largest personal care market. Helping Hands Home Care Service, Inc., acquired on August 1, 2025, added annualized revenues of approximately $16.7 million and 600 patients a day in Western Pennsylvania.
• M&A Target: Addus HomeCare targets acquiring approximately $100 million in annualized revenue through M&A, primarily focusing on smaller, strategic tuck-in acquisitions that expand its geographic density.

Addus HomeCare Corporation (ADUS) - Canvas Business Model: Customer Segments

The customer segments for Addus HomeCare Corporation are not a single, monolithic group; they are a highly specific set of beneficiaries defined primarily by their eligibility for government-funded healthcare programs like Medicaid and Medicare. This heavy reliance on government and managed care payors, which accounted for over 96% of the Personal Care segment's revenue in the third quarter of 2025, is the core of their business model.

Your investment thesis must start with this reality: Addus HomeCare is a government-reimbursement play, not a private-pay luxury service. The company's strength lies in its ability to manage high-volume, low-margin personal care services for the most vulnerable populations across 23 states, serving approximately 62,000 consumers as of early 2025.

Dual-eligible beneficiaries (Medicare and Medicaid); a primary, high-volume segment

The vast majority of Addus HomeCare's customer base are dual-eligible beneficiaries, meaning they qualify for both Medicare (federal program, typically for those aged 65+ or with certain disabilities) and Medicaid (state and federal program for low-income adults, children, and people with disabilities).

This group is the primary revenue engine for the Personal Care segment, which generated $275.8 million in revenue in the third quarter of 2025.

Here's the quick math on the Personal Care segment's payor mix for Q3 2025:

• State, Local, and Other Governmental Programs (primarily Medicaid): 50.5% of segment revenue.
• Managed Care Organizations (MCOs): 46.2% of segment revenue.
• This means over 96% of the largest business segment's revenue is tied to government funding streams, either directly through state Medicaid or indirectly through MCOs managing those Medicaid funds.

Elderly and physically disabled individuals; requiring long-term daily assistance

This is the demographic profile of the core customer. The services provided, mainly non-medical personal care, are aimed at individuals who are at risk of institutionalization-a costly alternative for the state.

The care is focused on activities of daily living (ADLs), which include things like bathing, dressing, and meal preparation. This long-term, non-clinical assistance is crucial for keeping costs low for state Medicaid programs. The company's total net service revenue for the first nine months of 2025 reached $1.0 billion, demonstrating the massive scale of this essential service.

Managed Care Organization (MCO) members; covered under capitated agreements

MCOs are a critical and growing customer segment. These organizations contract with state governments to manage the healthcare services for Medicaid enrollees, often under a fixed per-member, per-month (capitated) payment.

In Q3 2025, MCOs accounted for 46.2% of the Personal Care segment's revenue, totaling approximately $127.42 million for the quarter. This shift toward managed care is a key trend, and Addus HomeCare's ability to secure and manage these contracts is a major competitive advantage, especially in large markets like Illinois, which contributed 42.1% of the Personal Care segment revenue.

Veterans and other government-funded programs; specialized contract services

Beyond Medicaid, the company also serves customers through specialized government channels. The Hospice segment, which accounted for 19.0% of total Q3 2025 revenue, is overwhelmingly funded by the federal government's Medicare program, representing 93.1% of that segment's revenue.

Similarly, the Home Health segment, though the smallest at 4.9% of Q3 2025 revenue, also relies on government funding, with Medicare accounting for 65.9% of its revenue. These clinical segments offer higher-margin, specialized care to a different subset of the government-funded population.

Private pay individuals; seeking non-reimbursed, flexible care options

The private pay customer base, while important for margin and service flexibility, is a small fraction of the overall revenue. This segment includes individuals or families who pay out-of-pocket for non-reimbursed, flexible care. To be fair, this is a defintely a niche market for the company.

In the Personal Care segment for Q3 2025, the combined Private Duty and Commercial payors represented only 3.2% of the segment's revenue, an estimated $8.83 million of the $275.8 million total.

Addus HomeCare Corporation Q3 2025 Revenue Breakdown by Segment and Key Payor

Segment / Customer Group	Q3 2025 Net Service Revenue	% of Total Q3 2025 Revenue	Primary Payor Source	Key Payor % of Segment Revenue
Personal Care	$275.8 million	76.1%	State/Local (Medicaid) & MCOs	96.7% (Combined)
Hospice	~$68.84 million	19.0%	Medicare	93.1%
Home Health	~$17.75 million	4.9%	Medicare	65.9%
Private Pay (Personal Care Only)	~$8.83 million	~2.4% (of Total Revenue)	Private Duty & Commercial	3.2% (of Personal Care Segment)

Addus HomeCare Corporation (ADUS) - Canvas Business Model: Cost Structure

The cost structure for Addus HomeCare Corporation is fundamentally labor-driven, meaning most of your spending is variable and directly tied to service delivery. For the first nine months of 2025, the total net service revenue hit $1.0 billion, but a massive chunk of that goes right back out the door to your caregivers and operational support.

You need to view this cost base as a lever, not just an expense. The biggest risks here are wage inflation and regulatory changes, but those same factors are also where you find your margin opportunities.

Caregiver wages and benefits; the single largest operating expense, often over 70% of revenue

This is the core of your cost structure. Your direct cost of service revenue-which is primarily caregiver wages and benefits-accounted for approximately 68.1% of net service revenue in the first quarter of 2025. That is a tight margin business, so every dollar matters. Here's the quick math: with $1.0 billion in net service revenue for the first nine months of 2025, roughly $681.0 million went directly to the cost of care.

The labor market pressures are real. As of November 2025, the average hourly pay for an Addus Caregiver is around $15.09 nationally. Plus, you have to contend with state-mandated minimums, like the Illinois requirement that 77.0% of the Medicaid reimbursement rate must go to caregiver wages and benefits, which is a key compliance cost baked into your operations.

General and administrative (G&A) overhead; including branch and corporate staff

G&A is your fixed and semi-fixed cost base that supports the distributed care model. For the first nine months of 2025, your G&A expenses totaled $229.667 million. This covers everything from your Frisco, Texas corporate office to the local branch managers and administrative staff who handle scheduling, billing, and compliance across 23 states. Keeping this number low as a percentage of revenue is how you realize economies of scale from acquisitions.

Regulatory compliance and legal costs; high due to state-specific requirements

The home care business is highly regulated, and compliance costs are a constant headwind. These costs aren't always a line item on the income statement but are often embedded in G&A and direct labor costs. For instance, the recent 9.9% rate increase in Texas and the 3.9% increase in Illinois were tied to mandates for higher caregiver pay, which is a direct cost of compliance. You're constantly monitoring state legislative sessions for these changes.

Specific cost drivers include:

• Mandatory state-level training and certification for caregivers.
• Auditing and reporting for Medicaid and Medicare (the primary payors).
• Non-recurring costs, like the $0.06 per diluted share in restructuring and other non-recurring costs reported in the third quarter of 2025.

Acquisition and integration expenses; non-recurring but significant capital outlay

Acquisitions are a core growth strategy, but they come with significant, non-recurring expenses. In 2025, you completed the acquisition of Helping Hands Home Care Service, Inc. for a purchase price of $21.3 million in August, and the Del Cielo Home Care Services acquisition for $7.4 million in October. These deals drive integration expenses, which are excluded from adjusted earnings but are real cash outflows.

Here's a snapshot of the non-GAAP acquisition expenses per diluted share for 2025:

• Q1 2025: $0.13 per diluted share
• Q2 2025: $0.11 per diluted share
• Q3 2025: $0.08 per diluted share

This is a necessary capital outlay to expand market density and service lines. The integration of the Gentiva Electronic Medical Record (EMR) system is a major, ongoing integration cost that will defintely drive future efficiencies.

Technology and IT infrastructure maintenance; supporting distributed operations

Your business relies on a distributed technology infrastructure to manage thousands of caregivers across hundreds of locations. The capital cost of this infrastructure is reflected in the depreciation and amortization expense, which totaled $12.264 million for the first nine months of 2025. You are actively investing in new tools.

The focus is on using technology to drive caregiver utilization and operational efficiency, for example, through the successful rollout of your Caregiver App in Illinois, with expansion plans for New Mexico and Texas. This investment is critical to keeping G&A from swelling as the company scales.

Addus HomeCare Corporation Key Cost Metrics (9 Months Ended September 30, 2025)

Cost Category	Amount (9 Months 2025)	Nature	Commentary
Net Service Revenue	$1.0 billion	N/A	Basis for all cost percentages.
Caregiver Wages & Benefits (Cost of Service Revenue)	$\approx$$681.0 million	Variable	Estimated at 68.1% of Net Service Revenue (based on Q1 2025 Gross Margin).
General and Administrative (G&A) Expenses	$229.667 million	Fixed/Semi-Fixed	Covers corporate and branch overhead.
Depreciation and Amortization	$12.264 million	Fixed	Proxy for capital cost of IT and physical assets.
Acquisition Expenses (Non-GAAP Adjustment)	Varies by Quarter	Non-Recurring	Q3 2025 adjustment was $0.08 per diluted share.
Major Acquisition Capital Outlay (2025)	$21.3 million (Helping Hands)	Non-Recurring	Purchase price for Helping Hands Home Care Service, Inc. on August 1, 2025.

Finance: draft a 13-week cash view by Friday that explicitly models the impact of the $18.75 Illinois minimum wage and the $17.13 Texas rate on your weekly payroll, not just the revenue increase.

Addus HomeCare Corporation (ADUS) - Canvas Business Model: Revenue Streams

The revenue model for Addus HomeCare Corporation is fundamentally tied to government-funded programs, with the dominant source being Medicaid and its associated Managed Care Organizations (MCOs). This structure means the company's financial health is highly sensitive to state budgets and reimbursement rate changes, but it also benefits from the non-cyclical, growing demand for long-term home care services.

For the first nine months of 2025, Addus HomeCare Corporation reported total net service revenues of approximately $1.0494 billion, reflecting a strong year-over-year increase. The core of this revenue is the Personal Care segment, which accounted for 76.1% of total revenue in the third quarter of 2025, or $275.8 million of the quarter's total $362.3 million. It's a high-volume, lower-margin business, but it's defintely the engine.

Medicaid reimbursement; the dominant source, tied to state budgets and rates

Direct Medicaid reimbursement, often categorized as state, local, and other governmental programs, remains the single largest payer category for the core Personal Care segment. This revenue stream is fee-for-service (FFS), meaning the company is paid a fixed rate per service hour, and it is directly exposed to state budgetary pressures.

In the first half of 2025, these direct state and local programs accounted for 51.5% of the Personal Care segment's revenue. This concentration means that rate increases, like the one in Illinois (Addus HomeCare Corporation's largest personal care market) which saw a 5.5% increase effective January 1, 2025, are critical for margin expansion.

Managed Care Organization (MCO) contracts; fixed rates per service hour

The shift from direct government payment to Managed Care Organizations (MCOs) is a major trend, and Addus HomeCare Corporation is actively pursuing this channel. MCOs are insurance companies that contract with states to manage the Medicaid population, paying Addus HomeCare Corporation a contracted rate per hour of service.

This revenue stream is substantial and growing, accounting for 35.6% of the company's total net service revenues for the six months ended June 30, 2025. This move helps stabilize revenue against volatile state legislative cycles, but it introduces the risk of MCO rate negotiations. Here's the quick math on the current payer mix:

Payer Source (Consolidated)	% of Total Net Service Revenue (H1 2025)	Estimated Revenue (Q3 2025)	Primary Service Segment
Managed Care Organizations (MCOs)	35.6%	~$128.98 million	Personal Care, Home Health, Hospice
State/Local Government (Direct Medicaid/Other)	~40% - 45% (Estimated)	N/A (Directly reported as part of Personal Care)	Personal Care
Medicare	N/A (Primary payor for Hospice/Home Health)	N/A (Primary payor for Hospice/Home Health)	Hospice, Home Health
Private Pay, Commercial Insurance, & Other	Remainder	N/A	All Segments

Medicare reimbursement; primarily for skilled home health services

Medicare is the primary federal payor for the company's clinical services: Hospice Care and Home Health. This is a higher-margin, more clinical revenue stream compared to personal care.

The Hospice Care segment, which is largely Medicare-funded, accounted for 19.0% of total revenue in Q3 2025, or $68.9 million. The Home Health segment, also primarily Medicare-funded, is the smallest business line, representing 4.9% of Q3 2025 revenue, or $17.6 million. What this estimate hides is the regulatory risk: the Centers for Medicare & Medicaid Services (CMS) proposed a 6.4% aggregate reduction in Medicare payments to home health agencies for 2026, which is a significant headwind for that segment.

Private pay revenue; direct payments from patients or families

Private pay revenue, which includes direct payments from patients or their families, is not a primary driver for Addus HomeCare Corporation, but it offers the highest gross margin. This revenue stream is typically bundled with commercial insurance and other non-governmental payors.

For the Personal Care segment, which drives the vast majority of the business, the combination of private duty, commercial insurance, and other payors represented a small but important 3.2% of segment revenue in the first half of 2025. This small percentage reflects the company's primary focus on the Medicaid-eligible, dual-eligible (Medicare and Medicaid) consumer base. Still, it provides a buffer against government rate volatility.

• Personal Care (Q3 2025): $275.8 million (76.1% of total revenue).
• Hospice Care (Q3 2025): $68.9 million (19.0% of total revenue).
• Home Health (Q3 2025): $17.6 million (4.9% of total revenue).

Other government programs (e.g., Veterans Affairs); specific contract funding

Revenue from other government programs, such as the Veterans Affairs (VA) system, is generally included within the broader 'State, local, and other governmental programs' category in the company's financial reporting. These contracts provide specific, non-Medicaid funding for services.

While not broken out separately, these programs contribute to the 51.5% share of non-MCO government funding in the Personal Care segment. This diversification is strategic, as it allows Addus HomeCare Corporation to serve a wider range of high-need, government-supported consumers beyond the traditional Medicaid fee-for-service model.