Aveanna Healthcare (AVAH) 2026 Jefferies Healthcare Services and Technology Conference summary

Business performance and growth outlook

• Achieved strong Q2 results and updated long-term growth algorithm based on positive OBBA impact and state budget clarity.

• California Medicaid rate increase effective 1/1/2027 marks the 32nd state rate win, supporting updated guidance and long-term planning.

• Continued execution on preferred payer and state government affairs strategies, focusing on efficiency, free cash flow, and deleveraging.

• Home health and hospice segment, about 12% of revenue, is growing organically at 15%-16%, outpacing the market.

• Updated PDS segment growth from 3%-5% to 5%-6%, with future growth driven mainly by volume and COLA-type rate adjustments.

State rate increases and payer strategy

• Seven state rate wins in H1, with more expected in H2; 32 Medicaid states now covered, aiming for 40 in coming years.

• Rate increases now expected every few years, with COLA-type adjustments and occasional large outliers like Wisconsin's 38% increase.

• Preferred payer agreements now cover 65% of PDS volume, with runway to reach 70%-80% and expansion into new states.

• Value-based care agreements remain a small but growing part of reimbursement, focused on shared savings and improved outcomes.

Operational efficiency and financial discipline

• Free cash flow generation reached $75 million in H1, with similar expectations for H2 and a full-year target of $150 million.

• Deleveraging remains a priority, targeting sub-3x leverage in the near term.

• Automation in revenue cycle management has reduced DSO and reserve rates to historic lows across all divisions.

• Integration of recent acquisitions, such as Family First, is on track to be completed by year-end.