Personal care growth fuels Addus
- Personal Care is the core business, generating $296.0 million in Q2 2026 and 78.4% of revenue.
- Illinois remains the largest market, representing 32.1% of Q2 2026 revenue.
- The Indiana expansion closed in May 2026, advancing the goal of geographic diversification.
- Management expects the CMS 80/20 rule to be eliminated, but final federal confirmation still matters.
- Home Health remains weak, with Q2 2026 revenue down 4.8% due to lower patient volumes.
Personal care is healing
Addus showed strong momentum in Q2 2026. Personal care revenue grew 10 percent from a year ago. The company also closed its HomeCourt acquisition in Indiana, marking entry into a new state. The Illinois rate increase continues to help margins.
The next major swing factor is the CMS 80/20 rule. That rule would have required a large share of some Medicaid payments to go to caregiver pay. Management said recent communications point to this part of the rule being eliminated this year. Outside sources also point to rollback activity, but investors still need official confirmation.
The growth story relies heavily on geographic expansion. Addus successfully closed the HomeCourt deal to build density. This matters because Illinois was 32.1% of Q2 2026 revenue, which is still large but down from 37.0% for full-year 2025.
The bear case has not gone away. Addus depends on Medicare and Medicaid funding, so federal policy shifts could hit state budgets. Home Health is also not fixed yet, with Q2 revenue down 4.8 percent due to lower patient volumes.
Paid by public programs
Addus sends caregivers, nurses, therapists, and hospice teams into patients' homes. Most patients are older, disabled, or medically fragile. Many are dual eligible, which means they qualify for both Medicare and Medicaid.
The company gets paid by state agencies, federal programs, managed care organizations, insurers, and private customers. Personal Care is usually billed by the hour. Hospice is usually paid by the day. Home Health is mostly paid under Medicare rules for short episodes of skilled care.
This model can be steady because demand for home care grows as the population ages. It can also break when reimbursement rates fail to keep up with wages, or when state budgets tighten. Addus tries to reduce that risk by buying providers in more states and building local scale.
Care at home
Personal Care
This is the main business. Caregivers help with daily needs like bathing, grooming, meals, housekeeping, and other non-medical support.
Facility staffing
This sits inside Personal Care and supplies staff to places like nursing homes. It can add revenue, but it is not the main thesis driver.
Hospice
Hospice serves patients with a life expectancy of six months or less. The goal is comfort and quality of life, and Addus is paid mainly through daily rates.
Home Health nursing
This provides skilled nursing after illness or injury. It is a smaller segment and remains under pressure due to low volume.
Home Health therapy
Therapy helps patients recover strength and function at home. It could help Addus offer a fuller care model, but the segment needs better volume growth.
Q2 2026 revenue mix
Segment shares are from the three months ended June 30, 2026. Illinois remained a major concentration at 32.1% of total net service revenue, while the Illinois Department on Aging was 17.7%.
What could go wrong
Medicaid funding squeeze
High impact · Medium oddsAddus is highly tied to Medicaid-funded care. Federal Medicaid spending cuts could pressure state budgets. If states slow rate increases or cut programs, Addus may have less room to cover wages and overhead.
80/20 rule not fully removed
High impact · Low oddsManagement expects the CMS 80/20 Medicaid access provision to be eliminated this year. That would remove a major long-term margin overhang. The risk is that the final rule takes longer, changes shape, or leaves state-level wage pass-through rules in place.
Illinois concentration
Medium impact · Medium oddsIllinois was 32.1% of Q2 2026 revenue, so one state still matters a lot. The Illinois Department on Aging alone was 17.7% of revenue. Diversification is improving, but a local policy or payment issue would still show up quickly.
Acquisition integration drag
Medium impact · Medium oddsAddus uses acquisitions to enter and deepen markets. The HomeCourt deal recently added operations in Indiana. The risk is that lower-rate acquired businesses, system conversions, or local execution problems hold back margins.
Caregiver supply tightens again
Medium impact · Medium oddsAddus can only bill hours when it has caregivers available. Management has pointed to normalized wage inflation near 3% and better candidate flow, but a tighter labor market would hurt fill rates. The caregiver app may help, but it does not remove labor risk.
Small segments stay weak
Medium impact · Medium oddsHome Health was only 4.6% of Q2 2026 revenue, but it is shrinking organically due to low patient volumes. Weakness outside Personal Care makes the whole business less balanced.
In one breath
What does Addus HomeCare do?
Addus provides care in patients' homes. Its largest service is non-medical personal care, with smaller hospice and home health businesses.
Why does Illinois matter so much for ADUS?
Illinois was 32.1% of Q2 2026 revenue, and the Illinois Department on Aging was 17.7%. That makes Illinois rates, budgets, and patient census key drivers of results.
What is the CMS 80/20 rule risk?
The rule would have required a large share of some Medicaid home care payments to go to worker compensation. Addus management expects this provision to be eliminated, but investors should wait for final CMS confirmation.
Is Addus mainly a growth company or a steady care provider?
It is a mix. Demand for home care is steady, but Addus also grows by buying local providers and adding scale in states like Texas, Indiana, and Illinois.
