Aveanna Healthcare Holdings Inc.

Good morning and welcome to Aviana Healthcare Holdings fourth quarter 2025 earnings call. Today's call is being recorded and we've allocated one hour for prepared remarks and Q&A. At this time, I'd like to turn the call over to Debbie Stewart, Aviana's chief accounting officer. Thank you. You may begin.

Thank you and good morning and welcome to Aviana's fourth quarter 2025 earnings call. I am Debbie Stewart, the company's Chief Accounting Officer. With me today is Jeff Shainer, our Chief Executive Officer, and Matt Buckhalter, our Chief Financial Officer. During this call, we will make forward-looking statements. Risk factors that may impact those statements and could cause actual future results to differ materially from currently projected results are described in this morning's press release and the reports we file at the SEC. The company does not undertake any duty to update such forward-looking statements. Additionally, during today's call, we will discuss certain non-GAAP measures, which we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of these measures can be found in this morning's press release, which is posted on our website, aviana.com. and in our most recent annual report on Form 10-K when filed. With that, I will turn the call over to Aviana's Chief Executive Officer, Jeff Shainer. Jeff?

Thank you, Debbie. Good morning, and thank you for joining us today. We appreciate each of you investing your time this morning to better understand our Q4 and full year 2025 results and how we are moving Aviana forward in 2026. My initial comments will briefly highlight our fourth quarter and full year 25 results, along with the steps we are taking to address the labor markets and our ongoing efforts with government and preferred payers to create additional capacity. I will then provide updates on the recently announced Family First home care acquisition and how we are thinking about 2026 strategic initiatives and our full year 26 guidance before turning the call over to Matt. Now moving to highlights of the fourth quarter and full year 2025. Revenue for the fourth quarter was approximately $662 million, representing a 27.4% increase over the prior year period. Fourth quarter adjusted EBITDA was $85 million, representing a 54% increase over the prior year period, primarily due to the improved rate and volume environment and continued cost savings initiatives. Revenue for the full year 2025 was approximately $2.433 billion, representing a 20.2% increase over the prior year period. And full year 2025 adjusted EBITDA was $320.8 million, representing a 74.8% increase over the prior year period. As a reminder, Our fourth quarter and full year 2025 results did benefit from the 53rd week due to our accounting calendar. As we sunset 2025, I think it's important to reflect on the three-year strategic transformation that we have successfully navigated. I am proud of the Aviana team of leaders, employees, and caregivers that believe in our mission and helped execute the key strategies that returned Aviana to our current performance. As we look forward, we remain deeply committed to our preferred payer and government affairs strategies that continue to drive our growth in all three operating divisions. As we have previously discussed, the labor environment represented the primary challenge that we needed to address to see Aviana resume the growth trajectory that we believed our company could achieve. It is important to note that our industry does not have a demand problem. The demand for home and community-based care continues to be strong, with both state and federal governments and managed care organizations asking for solutions that create more capacity while reducing the total cost of care. Our Q4 and full-year 2025 results highlight that we continue to align our objectives with those of our preferred payers and government partners. By focusing our clinical capacity on our preferred payers, we achieved solid year-over-year growth in revenue and adjusted EBITDA. We also experienced improvement in our caregiver hiring and retention trends by aligning our efforts with those payers willing to engage with us on enhanced reimbursement rates and value-based agreements. While we continue to operate in a challenging environment our preferred payer strategy supports our ability to achieve normalized growth rates in all three of our business segments. Since our third quarter earnings call, I am pleased with the continued progress we have made on several of our rate improvement initiatives with both government and payer partners, as well as continued signs of improvement in our caregiver labor market. Specifically, as it relates to our private duty services business, Our government affairs strategy for 2025 was twofold. First, we advanced our legislative agenda to improve reimbursement rates in at least 10 states. And second, we continued to advocate for Medicaid rate integrity on behalf of children with complex medical conditions. Our strong advocacy presence with both federal and state legislatures, as well as solid support from our governors across our national footprint provided significant value in 2025. As it relates to private duty services rate updates, we achieved 10 rate enhancements in 2025, which was in line with our expectations. As we reset our legislative goals for the new year, we expect to achieve high single-digit state rate enhancements for 2026. After three years of meaningful rate movement in our PDS states, We are generally in a good place as we navigate 2026 and focus on cost of living type rate and wage adjustments moving forward. Now moving on to our preferred payer initiatives. Our goal for 2025 was to increase the number of private duty services preferred payer agreements from 22 to 30. We added eight additional preferred payer agreements in 2025, achieving our goal of 30. Aviana's preferred payer strategy continues to gain momentum and allows us to invest in caregiver wages and recruitment efforts to accelerate hiring and staffing of nurses for our patients. As we reset our preferred payer goals for 2026, we believe there is still ample room to grow in our current geography, as well as new states that we enter through acquisitions. With that in mind, Our goal for 2026 is to add eight additional agreements with a target of 38 preferred payers by the end of 2026. Additionally, our Q4 preferred payer agreements accounted for approximately 57% of our total private duty services MCO volumes. This positive momentum in preferred payer volumes continues to highlight the shift in our caregiver capacity and recruitment efforts towards our preferred payer partners. We believe this important value metric will grow to the low 60% in 2026 as we continue to align our capacity with our payer partners. Moving to our preferred payer progress in home health. Our goal for 2025 was to maintain our episodic payer mix above 70% while returning to a more normalized growth rate. I am extremely pleased to report in Q4 Our episodic mix was 78% and our total episodic volume growth was 25% compared with the prior year period. The continued investment in clinical outcomes, sales resources, and a focused approach to growth is paying dividends with Q4 total admissions of 10,400 or 22.4% growth over the prior year period. We ended 2025 with 45 preferred pay agreements in home health. Our dedicated focus on aligning our home health caregiver capacity with those payers willing to reimburse us on an episodic basis has led to double-digit year-over-year growth in home health total episodes and improvement in our clinical and financial outcomes. As we reset expectations in home health and hospice for 2026, we believe our episodic payer mix will remain above 75% with organic growth rates approaching double digits. We also expect to sign additional preferred payer agreements in home health and are now targeting more than 50 agreements by the end of 2026. Finally, as we have achieved our desired preferred payer model in private duty services and home health and hospice, we are proceeding with a similar strategy in our medical solutions business. We're in the late stages of implementing our preferred payer strategy in MedSolutions and believe it will be fully realized in 2026. At year-end 2025, we have 18 preferred payers, and we expect that number to grow with a target of 25 total agreements in 2026 as we achieve our desired preferred payer model. Our gross margins have stabilized in our desired range as we align our clinical capacity with those payers that value our services and pay us in a timely fashion. I am pleased with our Q4 volume growth of approximately 92,000 unique patients served or positive 3.4% over the prior year period. As we think about medical solutions revenue growth in 2026, I would expect us to remain in the mid single digits growth for the next few quarters and then return to double digit growth by the end of the year. We are encouraged by our rate increases, preferred payer agreements, and subsequent recruiting results. Our business has demonstrated solid signs of recovery as we achieve our rate goals previously discussed. Home and community-based care will continue to grow, and Aviana is a comprehensive platform with a diverse payer base, providing cost-effective, high-quality alternatives to higher-cost care settings. Now, turning to our recently announced transaction to acquire Family First Home Care, a Florida-based company with a great reputation for quality in-home pediatric care. I want to extend a warm welcome to our Family First teammates. I am thrilled to continue our acquisition growth story with great companies like ThriveSkill Pediatrics and Family First Home Care. Both companies continue to build upon the Aviana brand of high-quality, compassionate care in the most cost-effective setting, the comfort of our patient's home. We expect the Family First transaction to close sometime in Q2 with normal regulatory approvals. I look forward to updating you on our progress over the coming quarters. Before I turn the call over to Matt, let me comment on our strategic plan and outlook for 2026. We will focus our efforts on five primary strategic initiatives. First, strengthening our partnerships with government partners and preferred payers to create additional capacity and growth. Second, improving clinical outcomes and customer engagement scores while lowering the total cost of care. Third, implementing high priority artificial intelligence and automation efforts to improve operational efficiency and productivity gains. Fourth, growing through acquisitions while improving net leverage and generating positive free cash flow. And finally, engaging our leaders and employees and delivering our Aviana mission. Based on the strength of our fourth quarter and full year 2025 results and the continued execution of our key strategic initiatives, we anticipate 2026 revenue range of 2.54 to 2.56 billion and adjusted EBITDA range of $318 to $322 million. We believe this 26th outlet provides a prudent view considering the challenges we still face with the evolving environment and does not include the impact of the Family First acquisition. In closing, I'm incredibly proud of our Aviana team and their dedication to executing our strategic plan while holding our mission at the core of everything we do. We offer a cost-effective patient preferred and clinically sophisticated solution for our patients and families. Furthermore, we are the right solution for our payers, referral sources, and government partners. With that, let me turn the call over to Matt to provide further details on the quarter and our 26 outlook.