Aveanna Healthcare Holdings Inc.

Good morning and welcome to Aviana Healthcare Holdings, Inc. First Quarter 2026 Earnings Call. Today's call is being recorded and we have 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.

Good morning and welcome to Aviana's First Quarter 2026 Earnings Call. I am Debbie Stewart, the company's Chief Accounting Officer. With me today is Jeff Shainer, our Chief Executive Officer, and Matt Buchhalter, 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 quarterly report on Form 10-Q 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 Q1 results and how we are moving Aviana forward in 2026. My initial comments will briefly highlight our first quarter 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 our 2026 strategic initiatives and our enhanced guidance before turning the call over to Matt. Moving to highlights for the first quarter. Revenue for the first quarter was approximately $648 million, representing a 15.9% increase over the prior year period. first quarter adjusted EBITDA was $84.4 million, representing a 25.2% increase over the prior year period, primarily due to the improved rate and volume environment and continued operational efficiencies. 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 Q1 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 all three of our business segments. 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 accelerated growth rates in all three of our business segments. Since our fourth 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 the caregiver labor market, specifically As it relates to our private duty services business, our government affairs strategy for 2026 was twofold. First, we continue to advocate for Medicaid rate integrity on behalf of children with complex medical condition. Our strong advocacy presence of both federal and state legislatures across our national footprint enhances our value proposition. And second, we expect to achieve mid single-digit state rate enhancements in 2026. As of Q1, we have received three private duty services state rate wins and believe we will achieve our goals as states complete their annual budget processes. After three years of meaningful rate increases in a majority of our PDS states, we are in a very stable rate environment and are shifting our focus to cost of living and wage rate adjustments. Moving to our PDS Preferred Payer initiatives. 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. Our Preferred Payer goal for 2026 is to achieve eight additional agreements For a total of 38 preferred payers, we signed four preferred payer agreements in Q1 and are well on our way to achieving our 2026 target. Additionally, our Q1 PDS preferred payer agreements accounted for approximately 60% of our total private duty services MCO volumes, up from 57% at the end of 2025. This positive momentum in preferred payer volumes continues to highlight the shift in our caregiver capacity and recruitment efforts towards our preferred payer partners. Moving to our preferred payer progress in home health. Our goal for 2026 is to maintain our episodic payer mix above 75% while returning to a more normalized growth rate. I am pleased to report in Q1 our episodic mix was approximately 80% and our total episodic volume growth was 23.1% compared with the prior year period. The continued investment in clinical outcomes, sales resources, and a focused approach to growth is deriving results with Q1 total admissions of approximately 11,000 or 13.4% organic growth over the prior year period. Additionally, we exited 2025 with 45 preferred payer agreements in home health and expected to add five agreements in 2026 for a total of 50. As of Q1, I am pleased to report that we added four additional preferred payer agreements and are well on our way to exceeding our goal of 50 preferred payers in home health in 2026. 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 admissions and episodes, as well as improvement in our clinical and financial outcomes. Finally, as we have achieved our desired preferred payer model in private duty services and home health and hospice, we are continuing with a similar strategy in our medical solutions business. As we exited 2025, we had 18 preferred payer agreements in med solutions and expected that number to grow to 25 by the end of 2026. As of Q1, we signed two additional agreements for a total of 20 preferred payer agreements to date. 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 Q1 volume growth in med solutions of approximately 93,000 UPS or positive 4.5% over the prior year period. As we think about medical solutions growth in 2026, I would expect us to remain in the mid single digits 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 growth in our businesses. Our company has demonstrated a stable return to organic growth 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. Again, I would like to send my warm welcome to the Family First teammates. I am thrilled to continue our acquisition growth story with great companies like Thrive Skilled 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 patients' home. We continue to work through the regulatory approval process and expect the transaction will close sometime in late Q2. I look forward to updating you on our progress in the coming months. Additionally, Let me comment on our strategic plan and enhanced 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 free cash flow. And finally, engaging our leaders and employees in delivering our Aviana mission. Based on the strength of our first quarter results and the continued execution of our key strategic initiatives, we are increasing our full year revenue and adjusted EBITDA guidance to a revenue range of $2.56 to $2.58 billion and an adjusted EBITDA range of $328 to $332 million. We believe this enhanced 2026 outlook 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. As I reflect on the strong start to 2026, I want to take a moment and comment on our second annual Aviana Cares Month of Community Service. We dedicate the month of April to not only focusing on our mission, but living that mission in our 379 communities. Aviana Cares is an extension of the care we provide families every day, and we are proud to give back help others, and strengthen our communities and our teams through our volunteering efforts. We set an ambitious goal this year to serve 7,500 volunteer hours, and I am extremely proud to announce that our Aviana family completed over 9,000 total volunteer hours. Our teams held approximately 200 volunteer events nationwide and lived our core values while giving back to important local charities that support children, adults, and seniors in our communities. I look forward to raising the bar in 2027 with plans to further expand our Aviana Cares impact across the country. With that, let me turn the call over to Matt to provide further details on the quarter and our 2026 outlooks. Matt?