Home healthcare provider Addus HomeCare (NASDAQ: ADUS) reported Q2 CY2025 results exceeding the market’s revenue expectations, with sales up 21.8% year on year to $349.4 million. Its non-GAAP profit of $1.49 per share was 1.8% above analysts’ consensus estimates.

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Commenting on the results, Dirk Allison, Chairman and Chief Executive Officer, said, “Addus delivered another strong financial and operating performance for the second quarter of 2025, as we continued to execute our strategy with consistent and favorable results. Notably, our net service revenue for the second quarter of 2025 was up 21.8% year-over-year, and adjusted EBITDA increased 24.5% over the same period last year. These results reflect solid organic growth and include the additional revenue from the personal care operations of Gentiva, which we acquired on December 2, 2024. We continue to see robust demand for our services, reflecting the growing recognition of the value and cost-effectiveness of home-based care. With our proven operating model across the continuum of care and expanding scale in key markets, Addus is well positioned to meet this demand and continue to capitalize on additional growth opportunities.

Company Overview

Serving approximately 66,000 clients across 22 states with a focus on "dual eligible" Medicare and Medicaid beneficiaries, Addus HomeCare (NASDAQ: ADUS) provides in-home personal care, hospice, and home health services to elderly, chronically ill, and disabled individuals.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Thankfully, Addus HomeCare’s 11.6% annualized revenue growth over the last five years was decent. Its growth was slightly above the average healthcare company and shows its offerings resonate with customers.

Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Addus HomeCare’s annualized revenue growth of 12.9% over the last two years is above its five-year trend, suggesting its demand recently accelerated.

We can better understand the company’s revenue dynamics by analyzing its number of average billable patients, which reached 50,404 in the latest quarter. Over the last two years, Addus HomeCare’s average billable patients averaged 12% year-on-year growth. Because this number is in line with its revenue growth, we can see the company kept its prices fairly consistent.

This quarter, Addus HomeCare reported robust year-on-year revenue growth of 21.8%, and its $349.4 million of revenue topped Wall Street estimates by 0.8%.

Looking ahead, sell-side analysts expect revenue to grow 12.9% over the next 12 months, similar to its two-year rate. This projection is healthy and suggests the market is baking in success for its products and services.

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Operating Margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Addus HomeCare was profitable over the last five years but held back by its large cost base. Its average operating margin of 8.1% was weak for a healthcare business.

On the plus side, Addus HomeCare’s operating margin rose by 2.6 percentage points over the last five years, as its sales growth gave it operating leverage. Zooming in on its more recent performance, we can see the company’s trajectory is intact as its margin has also increased by 1.3 percentage points on a two-year basis.

This quarter, Addus HomeCare generated an operating margin profit margin of 9.4%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Addus HomeCare’s spectacular 13.4% annual EPS growth over the last five years aligns with its revenue performance. This tells us its incremental sales were profitable.

In Q2, Addus HomeCare reported adjusted EPS at $1.49, up from $1.35 in the same quarter last year. This print beat analysts’ estimates by 1.8%. Over the next 12 months, Wall Street expects Addus HomeCare’s full-year EPS of $5.59 to grow 14.7%.

Key Takeaways from Addus HomeCare’s Q2 Results

It was good to see Addus HomeCare narrowly top analysts’ revenue and EPS expectations this quarter. On the other hand, its sales volume slightly missed. Overall, this was still a decent quarter. The stock traded up 1.5% to $108.75 immediately after reporting.

So do we think Addus HomeCare is an attractive buy at the current price? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.