Aveanna Healthcare Raises 2025 Outlook, Unveils Prudent 2026 Guidance at J.P. Morgan Event

Key Points

• Raised 2025 guidance and prudent 2026 outlook: Aveanna lifted 2025 revenue to $2.425–$2.445 billion and adjusted EBITDA to $318–$322 million, and issued initial 2026 guidance of $2.54–$2.56 billion revenue with the same adjusted EBITDA range; management anchors "normalized" 2025 EBITDA at $300 million, attributing roughly $20 million of the difference to timing-related items not expected to recur.
• Preferred-payer expansion and segment trends: The company is scaling its preferred-payer strategy (PDS reached 30 preferred payers, Medical Solutions 18), achieved Medicaid rate wins in at least 10 states with a target of 10 more, and said Private Duty Services comprises roughly 82% of revenue while continuing to pursue value-based agreements and tuck-in acquisitions.
• Stronger liquidity and cash-generation focus: Aveanna reported about $478 million of liquidity (including ~$146M cash), leverage of ~4.6x with a near-term goal under 4x, generated $86.2 million of free cash flow through Q3 and expects >$100 million for full-year 2025, helped by a term-loan refinance that cuts ~$14 million of annual interest.

Aveanna Healthcare NASDAQ: AVAH updated investors on its 2025 performance and provided initial 2026 guidance during a presentation at a J.P. Morgan healthcare event, led by CEO Jeff Shaner and CFO Matthew Buckhalter. Management also referenced a Form 8-K and press release filed earlier in the morning that detailed revised 2025 guidance, a bridge to “normalized” adjusted EBITDA, and preliminary 2026 outlook.

Company footprint and strategic priorities

Shaner described Aveanna as a scaled national provider of home-based healthcare services with a diversified platform spanning pediatric, adult, and geriatric care. The company operates 366 locations across 38 states and employs nearly 30,000 caregivers.

The company highlighted its recent acquisition of Thrive Skilled Pediatrics, which expanded Aveanna’s pediatric footprint into Kansas and New Mexico. Shaner said integration efforts are “substantially completed,” and he added that performance has been satisfactory, positioning Thrive as a model for future tuck-in acquisitions.

Management also emphasized payer diversification, noting no single payer represents more than 10% of total revenue, and cited a five-year revenue CAGR of 10.3%. The company’s “preferred payer” strategy remains a central growth driver, with 93 preferred payer agreements as of the third quarter.

Operational highlights: preferred payers, rates, and segment trends

Management framed 2025 as year three of Aveanna’s strategic transformation plan, pointing to partnerships with preferred payers and government partners, cost efficiencies, modernization efforts, and capital structure improvements. In discussing key performance indicators by segment, the company provided several updates:

• Private Duty Services (PDS): Aveanna increased preferred payer agreements to 30 in 2025, meeting its stated goal, and expects that figure to rise in 2026. The company is also expanding value-based agreements in addition to enhanced reimbursement rates. On Medicaid reimbursement, management said it achieved rate wins in at least 10 states in 2025 and is targeting at least 10 more state wins in 2026, with most expected to be cost-of-living-adjustment-like increases. Executives noted California remains the primary outlier where rates have not been addressed, and Shaner said advocacy efforts are ongoing and that the company does not plan to exit the state.
• Home Health and Hospice: Aveanna said its goal was to keep episodic payer mix above 70% while returning to a more normalized growth rate. Management said the episodic mix remains well above 70% and noted year-over-year episodic growth of 14.2% in the third quarter. Executives said they expect the current double-digit growth to moderate during 2026.
• Medical Solutions: Aveanna reported 18 preferred payer agreements to date and described a modernization initiative expected to wrap up in the first half of 2026. Management said it expects Medical Solutions to return to its historical organic growth range of 8% to 10% in 2026 and cited a targeted gross margin range of 42% to 44% for the segment, along with a focus on cash collections.

By revenue mix, management stated Private Duty Services represents approximately 82% of total revenue, Medical Solutions approximately 8%, and Home Health and Hospice about 10%. Aveanna reiterated a longer-term organic growth goal of 5% to 7%, with tuck-in acquisitions potentially adding an additional 2% to 3% annually.

Capital structure, liquidity, and free cash flow

On liquidity and leverage, management reported more than $478 million of liquidity as of the third quarter, including approximately $146 million in cash, $106 million available under its securitization facility, and around $227 million available on its revolving credit facility.

The company reported approximately $1.49 billion of variable-rate debt, “nearly all of which is hedged through caps and swaps,” according to Shaner. Management said leverage was approximately 4.6x at the end of the third quarter, reflecting about three turns of leverage reduction through the first three quarters of 2025, and reiterated a near-term goal of less than 4x.

Aveanna generated $86.2 million of free cash flow through the third quarter and said it expects the fourth quarter to add further free cash flow. Management also noted it refinanced its term loan facility into a single Term Loan B with a 2032 maturity, which Shaner said resulted in annual interest savings of about $14 million.

Updated 2025 guidance and “normalized” EBITDA bridge

Based on what management described as positive momentum in fourth-quarter and year-to-date results, Aveanna raised its 2025 guidance. The company now expects:

• 2025 revenue: $2.425 billion to $2.445 billion (up from prior guidance of greater than $2.375 billion)
• 2025 adjusted EBITDA: $318 million to $322 million (up from prior guidance of greater than $300 million)

Management also discussed how it is thinking about “normalized” adjusted EBITDA, anchoring to a $300 million baseline for 2025. Shaner said an approximately $20 million difference from the updated 2025 adjusted EBITDA guidance relates to timing-related items that are not expected to recur in 2026, including about $11 million of retro rate increases and improved collections on previously reserved accounts receivable discussed in the first quarter, and about $9 million of similar items plus value-based payment true-ups discussed in the second quarter.

Initial 2026 outlook: revenue growth with steady EBITDA guidance

For 2026, Aveanna issued initial guidance of revenue between $2.54 billion and $2.56 billion and adjusted EBITDA between $318 million and $322 million. Management described the 2026 outlook as “prudent” and said guidance does not include any impact from future mergers or acquisitions.

Executives indicated they expect growth to be driven more by volume than rate across most of the business, with Medical Solutions still in the midst of its preferred payer modernization. Buckhalter also addressed margin expectations, stating the company continues to target an EBITDA margin of 12% to 13% after normalizing for timing-related items.

On cash flow, Buckhalter said the company expects to exceed $100 million in free cash flow in 2025 and suggested 2026 free cash flow should look “very similar” to 2025, citing relatively low capital expenditures and continued focus on cash collections. Management also said it is using technology, including artificial intelligence and automation, to improve collections efficiency.

In closing remarks, executives reiterated their focus on scaling preferred payer and government partner relationships, maintaining operational efficiency, generating free cash flow, and pursuing selective tuck-in acquisitions while continuing to prioritize deleveraging toward a sub-4x leverage profile.

About Aveanna Healthcare NASDAQ: AVAH

Aveanna Healthcare, Inc NASDAQ: AVAH is a national provider of in-home health care services, specializing in pediatric skilled nursing, therapy, and related support for medically complex and chronically ill children. The company delivers a range of clinical and therapeutic solutions designed to enable patients to receive care in the comfort of their own homes, reducing the need for hospital stays and long-term institutional care. Aveanna's offerings include registered nursing, physical, occupational and speech therapy, behavioral health counseling, and durable medical equipment coordination.

In addition to pediatric home health services, Aveanna operates adult home health and personal care support programs, assisting elderly and disabled adults with daily living activities, medication management, and rehabilitation therapies.

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