Aveanna Lifts 2026 Outlook After 25% Earnings Jump

Aveanna Healthcare (NASDAQ:AVAH) raised its full-year 2026 outlook after third-quarter revenue grew 11.8% to $695.5 million and adjusted earnings rose 25%. The company now expects full-year revenue above $2.695 billion and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) above $374 million, with third-quarter adjusted EBITDA already at $100.1 million.

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

Where the growth came from

All three business lines expanded during the quarter:

• Private Duty Services: revenue up 11.6% to roughly $574 million, on about 13 million hours of care, a 10.2% increase. Revenue per hour rose 1.4% to $44.09, according to CFO Matt Buckhalter.
• Home Health and Hospice: revenue up 15.6% to approximately $72.1 million, with about 16,000 episodes of care, up 24%, and a 53.3% gross margin.
• Medical Solutions: revenue up 9.1% to $49.2 million, serving roughly 98,000 unique patients.

Shaner called the Home Health and Hospice growth organic but cautioned that 20% to 25% growth would not be sustainable indefinitely. For private-duty operators, the quarter illustrates how payer mix now drives margins as directly as labor supply.

The company ended the quarter with 38 preferred payer agreements in Private Duty Services, meeting its 2026 target, and expects the count to approach 40 by year-end. Those agreements covered 65% of the segment's managed care organization volumes, up from 57% at the end of 2025, Shaner said. Aveanna added two more such agreements in Medical Solutions, bringing that segment's total to 22.

What is happening with California rates?

Aveanna has secured eight state rate enhancements year to date in Private Duty Services and is shifting its advocacy work toward 2027. California remains the priority, but the company wants clarity on how long an expected private duty nursing rate increase will last.

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

Aveanna is pushing for a permanent increase, arguing 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 higher reimbursement will continue. Instead, Aveanna is preparing temporary retention and engagement payments for California nurses and intends to have an approach ready for Jan. 1.

What does the balance sheet allow?

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 closed. Year-to-date operating cash flow was $157.5 million, with free cash flow of $141.2 million.

The company reconfirmed 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 organic growth combined with acquisitions can support annual double-digit revenue growth.

Aveanna completed essentially all back-office integration work for its Family First Homecare acquisition, closed in June, during the third quarter and expects to finish most remaining integration by year-end. Management plans to direct more acquisition capital toward Home Health and Hospice while pursuing smaller Private Duty Services deals to enter additional states. Shaner said the company intends to keep reducing leverage as it acquires, targeting a ratio below three times in 2027.

Asked about the fourth quarter, Shaner noted that holiday weeks typically create volatility. He said the company targets adjusted EBITDA in the mid-$90 million range for the quarter, while acknowledging it could come in higher.

Aveanna Healthcare Holdings provides home-based care for children and adults with complex medical needs, including private-duty nursing, personal care, home health nursing, therapy, hospice and medical supplies such as enteral nutrition products, operating across multiple states.