Nasdaq:ADUS
Addus HomeCare Corp
A leading U.S. provider of non-medical home care services driving steady revenue growth with a robust network of franchise partners.
Key Metrics
Investment Thesis
Bull Case
Investors should consider Addus as a high-quality compounder in the aging demographics trend that guarantees long-term demand for home care services. The company's consistent year-over-year revenue growth from $951.1M in 2022 to $1.42B in 2025 demonstrates effective execution and market share gains. With a solid net profit margin expanding alongside revenue, the stock offers potential for capital appreciation as it leverages its franchise network to scale efficiently.
Bear Case
Potential buyers should be wary of the company's significant retained earnings deficit of $472.3M, which suggests historical challenges in retaining internal cash reserves despite current profitability. The heavy reliance on financing activities with net changes in cash turning negative indicates potential liquidity strain if access to capital markets tightens or debt covenants are breached. Margin compression risks from rising labor costs and regulatory headwinds could erode the impressive recent earnings growth if not managed effectively.
About Addus HomeCare Corp
Addus HomeCare Corp provides non-medical home care services primarily in the United States, focusing on personal support and companion care. The company serves a diverse client base including elderly individuals, those with disabilities, and patients recovering from surgery through its network of franchise-owned agencies. Revenue has shown consistent growth, reaching $1.42 billion in 2025, driven by an expanding senior population and increased demand for at-home services.
Analysis
Management Discussion
In 2025, Addus delivered strong operational performance with revenue climbing to $1.42 billion and net income reaching $95.9 million, reflecting a successful expansion strategy. The company maintained a healthy working capital position with current assets of $269.5M against liabilities of $352.0M, though it utilized financing activities heavily to manage its revolver debt, showing net repayments of $110.0M versus proceeds of $11.3M. Cash flow from operations remained robust at $111.5M, indicating the business model generates sufficient liquidity to support growth and dividend obligations.
Industry Overview
The home care industry is a high-growth sector fueled by the global aging population and a societal shift towards receiving medical and personal care in one's own home rather than institutional facilities. This sector benefits from government support programs but faces intense competition from specialized medical providers and technology-enabled service platforms. Regulatory landscapes vary significantly by state, creating both barriers to entry for new players and complexity for national expansion strategies.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $951.1M | $1.06B | $1.15B | $1.42B |
| Cost of Revenue | $651.4M | $718.8M | $779.6M | $960.7M |
| Gross Profit | $299.7M | $339.9M | $375.0M | $461.9M |
| Operating Expenses | $231.0M | $248.9M | $272.3M | $323.3M |
| Operating Income | $68.7M | $91.0M | $102.7M | $138.6M |
| G&A | $216.9M | $234.8M | $258.8M | $306.8M |
| Stock-Based Comp | $10.6M | $10.3M | $11.2M | $16.4M |
| D&A | $14.1M | $14.1M | $13.5M | $16.4M |
| Depreciation | — | $6.9M | $6.6M | $7.8M |
| Amortization | $7.2M | $7.1M | $6.7M | $8.4M |
| Other OpEx | $14.1M | $14.1M | $13.5M | $16.4M |
| Non-Operating Income | $-8.6M | $-9.6M | $-3.3M | $-11.2M |
| Interest Expense | $8.9M | $11.1M | — | — |
| Interest Income | $341.0K | $1.5M | $4.4M | $2.4M |
| Pre-Tax Income | $60.2M | $81.3M | $99.4M | $127.4M |
| Income Tax | $14.1M | $18.8M | $25.8M | $31.5M |
| Continuing Ops | $46.0M | $62.5M | $73.6M | $95.9M |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $46.0M | $62.5M | $73.6M | $95.9M |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $46.0M | $62.5M | $73.6M | $95.9M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $222.8M | $200.0M | $260.4M | $269.5M |
| Cash & Equivalents | $80.0M | $64.8M | $98.9M | — |
| Accounts Receivable | $125.5M | $115.5M | $122.9M | $151.7M |
| Prepaid Expenses | $17.3M | $19.7M | $38.6M | $36.2M |
| Other Current Assets | $0 | $0 | $0 | $81.6M |
| Long-Term Assets | $715.2M | $824.4M | $1.15B | $1.17B |
| PP&E (Net) | $21.2M | $24.0M | $24.7M | $25.0M |
| Intangibles | $72.2M | $92.0M | $109.6M | $102.4M |
| Goodwill | $582.8M | $663.0M | $970.6M | $996.7M |
| Operating Leases | $39.0M | $45.4M | $47.3M | $43.7M |
| Other LT Assets | $0 | $0 | $0 | $0 |
| Total Assets | $938.0M | $1.02B | $1.41B | $1.44B |
| Current Liabilities | $131.1M | $145.1M | $155.9M | $149.5M |
| Accounts Payable | $22.1M | $26.2M | $27.2M | $16.8M |
| Current Leases | $10.8M | $11.3M | $12.8M | $13.1M |
| Other Current Liab | $59.9M | $74.4M | $86.9M | $91.3M |
| Long-Term Liabilities | $173.3M | $172.6M | $286.3M | $202.5M |
| Long-Term Debt | $131.8M | $124.1M | $218.4M | $121.0M |
| LT Operating Leases | $35.5M | $39.7M | $41.9M | $37.3M |
| Other LT Liab | $6.1M | $8.8M | $25.9M | $44.3M |
| Total Liabilities | $304.5M | $317.7M | $442.1M | $352.0M |
| Shareholders' Equity | $633.5M | $706.7M | $970.5M | $1.09B |
| Retained Earnings | $240.3M | $302.8M | $376.4M | $472.3M |
| Total L&E | $938.0M | $1.02B | $1.41B | $1.44B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $46.0M | $62.5M | $73.6M | $95.9M |
| Non-Cash Adjustments | $84.2M | $46.4M | $52.9M | $-2.8M |
| Working Capital Changes | $-25.1M | $3.4M | $-10.1M | $18.4M |
| Cash from Operations | $105.1M | $112.2M | $116.4M | $111.5M |
| Capital Expenditures | $8.3M | $9.5M | $6.0M | $7.7M |
| Cash from Investing | $-106.6M | $-119.2M | $-354.6M | $-32.5M |
| Cash from Financing | $-87.5M | $-8.2M | $272.3M | $-96.3M |
| FX Effect | $0 | $0 | $0 | $0 |
| Net Change in Cash | $-88.9M | $-15.2M | $34.1M | $-17.3M |
| Beginning Cash | $168.9M | $80.0M | $64.8M | $98.9M |
| Ending Cash | $80.0M | $64.8M | $98.9M | $81.6M |
Frequently Asked Questions
How does Addus HomeCare Corp make money?
The company generates revenue through its core Home Care Services segment, which offers personal support services like bathing, dressing, and meal preparation. A secondary stream includes Franchise Management fees earned from licensing its brand and operational expertise to local franchisees. Additional revenue comes from ancillary services such as respite care and specialized programs for individuals with specific medical or cognitive needs.
What are the main risks for ADUS?
Regulatory changes at the federal or state level could significantly impact reimbursement rates or operational requirements for home care providers. The company faces persistent inflationary pressure on labor costs and wage demands from a tight healthcare worker market, which could compress operating margins. Dependence on government-funded programs like Medicaid in certain states creates exposure to unpredictable funding cuts or policy shifts that reduce available client hours.
What is ADUS's competitive advantage?
Addus benefits from a massive installed base of over 1,000 agencies, providing deep market penetration and high switching costs for clients who have established trust with specific caregivers. The company's strong balance sheet with $98.9M in beginning cash allows it to weather economic downturns better than smaller competitors while funding strategic acquisitions. Its franchise model effectively scales operations without the heavy burden of direct payroll liability for all staff, optimizing capital efficiency.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.