Aveanna at Jefferies Conference: Strategic Growth and Challenges

Aveanna Healthcare Holdings (NASDAQ:AVAH) presented a robust strategic outlook during the Jefferies 2025 Healthcare Services Conference on Tuesday, 30 September 2025. The leadership highlighted both the company’s ongoing transformation and the challenges it faces. Aveanna, a major player in U.S. home healthcare, is experiencing accelerated growth but acknowledges potential industry headwinds.

Key Takeaways

• Aveanna is targeting high single-digit growth, with a focus on partnerships with preferred payers.
• The company is successfully reducing its capital costs through refinancing.
• Expansion plans include strategic acquisitions and modernizing its Medical Solutions division.
• Aveanna aims to increase transparency with payers to secure better reimbursement rates.
• The company is addressing staffing constraints to meet growing service demand.

Financial Results

• Revenue exceeded $2.3 billion, with a focus on achieving 5% to 7% organic growth.
• Q2 EBITDA stood at $88 million.
• A successful refinancing has led to annual cash savings of approximately $14 million.
• The company is working towards reducing its leverage from around 5x to below 4x.

Operational Updates

• Aveanna is the largest provider of in-home care across 38 states.
• The preferred payer strategy is expanding, with 55% of Private Duty Services (PDS) volume tied to preferred payers, aiming for 75% to 80%.
• The Thrive acquisition is enhancing market density and expanding into New Mexico and Kansas.
• Modernization of the Medical Solutions segment is expected to drive growth in 2026 and 2027.

Future Outlook

• Aveanna plans to continue its growth across all business segments, with expectations of achieving double-digit rate wins.
• The company anticipates one to two acquisitions per year to bolster its market position.
• A hyper-growth model is projected for the latter half of 2025, transitioning to more stable growth rates by 2026.

Q&A Highlights

• Acquisition multiples vary across segments, with PDS acquisitions under 10x pre-synergy.
• Modernization efforts include initiatives like "TSA Pre-Check" to improve referral processes.
• Cross-selling opportunities are being explored, particularly in Medical Solutions.

Readers are encouraged to refer to the full transcript for detailed insights into Aveanna’s strategic direction and financial performance.

Full transcript - Jefferies 2025 Healthcare Services Conference:

Brian, Jefferies: Good afternoon. Trying to wake everyone up here a little bit. It’s our second to the last presentation of the day. Aveanna Healthcare Holdings, largest operator of, I mean, how to describe your business, PDS, and a few other business lines. Joining us this afternoon are Jeff Shaner and Matt Buckhalter, CEO and CFO respectively. Maybe Jeff, I’ll pass it to you to describe the business lines because I think there are some folks here who are not too familiar with the business. Maybe like a little bit of a State of the Union.

Jeff Shaner, CEO, Aveanna Healthcare Holdings: Yep. Oh, great. Thanks, Brian. Good to see everybody this afternoon. We’re going to give you a rowdy ending to a busy day here. As Brian said, we’re the largest provider of in-home pediatric, adult, and geriatric home care in the United States, 38 states, just shy of 400 locations, and just over $2.3 billion of revenue generated. I guess State of the Union, things are good. I’ll start with things are good. We’re halfway through year three of our transformation strategy we implemented back in Q1 of 2023. We’ve done a lot of work over the last 10 quarters, and it’s really built up to the success that we’re seeing in 2025. Accelerated growth, organic growth in all three of our businesses. Matt will talk about Medical Solutions a little bit later.

We’re doing a modernization effort in our Medical Solutions business, but our PDS business, which is generally our pediatric business focus, Medicaid focus, is growing above our long-term growth rates and really proud of that business. Our Home Health and Hospice is operating at a very high level in a very difficult reimbursement time. We’re pleased with our Medical Solutions business. Lastly, as I think most everyone knows, we just finished our refinancing. We had a very successful refinancing that’s lowered our total cost of capital, giving us seven years of capital structure stability. Good things are happening. We’re generating meaningful cash flow at this point. It’s been a great three years, a hard three years, as Brian knows, but a strategic focus on where we are today. I’ll end this question by saying we’re just as excited about the next couple of quarters and going into 2026.

There’s a lot of headwinds in healthcare today, but we are very excited about what the business can generate in 2026 and beyond.

Brian, Jefferies: Matt, maybe I’ll pass it to you. As we think about, Jeff just alluded to the back half of the year and the excitement there, right? You’ve had a good first half of the year. What gives you that confidence that the back half looks good and feels good for you guys?

Matt Buckhalter, CFO, Aveanna Healthcare Holdings: Yeah, great question, Brian. I think it’s the continued momentum that we’ve had. There’s still a lot of wood to chop in front of us as an organization. Between all three divisions, we’re operating at, I’ll say, all-time highs, but there’s still great growth rates in front of us and good normalization. The wonderful thing about all three of our businesses is that the demand for our services outweighs the supply that we can provide at any time. It really does well that we’ve been able to incorporate this preferred payer strategy that Jeff will probably talk about a little bit later. We have that in all three of our divisions, whether it be Private Duty Services, Home Health and Hospice, or Medical Solutions. That demand for our services is so great that we’re going to continue that momentum.

Top to bottom on our organization, it’s what we drive every single day. Whether you’re a caregiver, whether you’re a sales rep, whether you’re the Chief Executive Officer, everybody is driving to the outcome of a preferred payer in those relationships.

Jeff Shaner, CEO, Aveanna Healthcare Holdings: I’ll also say Matt’s very good at being conservative in our expectations. Anytime Matt gives you a number, you know, we know we’re going to beat it. A lot of momentum in the second half of the year. I think, you know, we’re 10 quarters in a row of beating raised expectations. We like setting realistic expectations and beating them. I think more coming Q3 and Q4.

Matt Buckhalter, CFO, Aveanna Healthcare Holdings: 11, Jeff.

Jeff Shaner, CEO, Aveanna Healthcare Holdings: Sorry, 11.

Brian, Jefferies: Jeff, maybe I’ll start before I go deeper into some of these things that you guys just mentioned. When you think of the growth algorithm for the business, what is the right way to think about that? What are the drivers there?

Jeff Shaner, CEO, Aveanna Healthcare Holdings: Yeah, it’s a great point, Brian. Certainly right now we’re experiencing accelerated growth. I think we’re 16, roughly 16% year over year. Part of that is being driven by the Thrive acquisition that we just closed back in June, but also part of that is just the rates, the rate and volume success of the last three years. I think as we talk to investors, we really point towards an internal growth algorithm that’s in kind of the 5% to 7% range of organic growth long term, and it’s driven by different metrics within three businesses. Fundamentally, we’ve been on the upper end of that range now for about four quarters. Truth be told, we’ll be on the upper end of that range in Q3 and Q4.

As we think about rate clarity, we have very good rate clarity in a very tremulous year, you know, a year of uncertainty in Medicaid in 2025. We’ve had 11 rate wins, state rate wins, two federal rate wins, so 13 in total. We have good rate clarity the second half of the year. We think that those trends ultimately, as we look out two and three years, will settle in that higher end of that 5% to 7% range organically, most of it being driven by volume, most of that being driven by volume in, you know, 1% to 2% rate. We think Tuck and M&A, Brian, will lead to another kind of, you know, 2% to 4% to kind of leave us in that high single digit year-over-year growth rate pushing 10% to 11%.

Brian, Jefferies: That’s awesome. Maybe as I think about just taking a step back on Medicaid, right? The key patient population here is Medicaid. I’m not sure everyone understands what exactly you guys do in the sense of why you’re not impacted by changes to Medicaid or why you are important to the Medicaid program. If we can touch on that.

Jeff Shaner, CEO, Aveanna Healthcare Holdings: Yeah, and you know, 80%, 78% of our revenues are in our Private Duty Services segment. That segment is primarily our pediatric Private Duty segment. It’s the largest, by far the largest business segment within PDS. As Brian said, it’s a relatively protected class. Think of this group as an incredibly fragile child, pediatric child, most likely born with some kind of comorbidities at birth. Many of our patients have vent or trach or both, so that they breathe on a ventilator, receive intranutrition for their nutrition needs, and then have many, many medications. It’s functionally an ICU bed at home is what our PDS business is. The macro difference in healthcare is acute care setting is about $6,000. Studies show about $6,000 a day for our pediatric patients. At home is about $600 a day with pediatric nursing. That’s 10x savings.

When you think of that population, nobody in government is trying to take money from you from that population. They’re trying to, in both the federal, the state, MCO, commercial level, they’re trying to invest in that business because they really want that patient to end up in the home. We’ve got a nice protected business, one that is on the right side of healthcare and truly bends the cost of care. Matt, anything to add?

Matt Buckhalter, CFO, Aveanna Healthcare Holdings: Yeah, I just add that it can be a little emotional too whenever you’re bringing these families home for the first time. I mean, they’re spending the first six months, a year, 18 months of their child’s life in the home. They’re born with these high comorbidities, cerebral palsy, they’re vent, trach dependent, you know, oxygen coming in, preemie babies. That moment whenever we’re able to take a family home for the very first time, it’s magical. It really is. Not to get corny on everybody, but it’s so amazing to actually see it. It can be a little intimidating when you’re not on the nursing side of it to walk into that home for the first time. You walk in and there’s a vent in the corner, you know, there’s incontinence on the side over here, there’s a hospital bed set up.

You’re just like, wow, it feels like a hospital. You know, I’m really walking into a hospital. Until you look down and Big Brother’s tugging on your suit jacket. He’s like, "Hey, who are you? Why are you in my house?" You look back and the walls are pink and there’s Mickey Mouse or Minnie Mouse on the TV and there’s princess posters. Oh, this is a kid’s room, you know, and this is the first time that you’re really able to allow that family to be a family. No more mom running back to the hospital every single day. No more dad, hey, I’m spending the night tonight so you can actually go get a couple hours of sleep. By the way, the economic benefit of the $6,000 a day that’s been eating on that system for 18 months is so significant.

That’s years and years and years of home care that we’re able to provide and just those cost savings too.

Jeff Shaner, CEO, Aveanna Healthcare Holdings: I’d like the record to reflect that’s a CFO with a passion and compassion and a heart.

Brian, Jefferies: That’s great to have, right?

Matt Buckhalter, CFO, Aveanna Healthcare Holdings: Wonderful.

Brian, Jefferies: Maybe just to touch on that, like it’s like you’re saying, Jeff, the demand is strong and it really is more supply constraint than anything else, right? Why can’t we grow faster?

Jeff Shaner, CEO, Aveanna Healthcare Holdings: Yeah, to Brian’s point, Matt said it earlier, on all of our businesses, we have a scarcity of resources. In two of the three of our businesses, it’s nursing or it’s caregiver-oriented. That’s why the preferred payer strategy is so effective, right? Our preferred payer strategy fundamentally is leaning in and partnering with payers who will partner with us. By allocating our capacity to those payers who value us, and when I say value, I mean pay us an above-market rate and are willing to engage with us on value-based either bonuses or metrics and reimbursement, we’re able to meaningfully move the needle for those payers. It doesn’t take MCOs long. MCOs quickly understand both in the pediatric, but Brian, as you know, and geriatric as well, what their total cost of care is.

If we can eliminate, you know, $5,000 a day of cost for an MCO, they quickly can move to an HR with us. Obviously, our size and scale matter. We are the largest, we believe we’re the largest provider of pediatric PDS services in the United States. Partnering with us, you get scale, you get density of services, and you get a relevant provider who leans into our payers. The preferred payer strategy has been very successful for us. It’s taken time. Not every payer gets there overnight. It takes some payers a little bit of time. We have found with 25 current preferred payers in our PDS segment growing, we report 55% of our available volumes in our PDS segment is now with a preferred payer. We think that number ultimately can get to 75% to 80% over the next couple of years. A lot of bandwidth left.

As you know, we pull this strategy across to Home Health and Hospice, to Medical Solutions. It’s a similar strategy. It’s a similar thesis. Align your capacity with those payers that are willing to partner with you and pay you an appropriate amount. We talked in Q2 about some of our results that drove us. We did $88 million in EBITDA. That was pretty strong for us. Some of that was driven by just wonderful cash collections, retro cash collections. That’s all part of the preferred payer strategy. When you have a relationship with a payer that you can reach out and engage with them on past collections and get payment, that’s all part of being a partner. That’s what a preferred payer strategy is all about.

Brian, Jefferies: No, that’s awesome. Matt, maybe just to follow up on that, right? As you’re succeeding with a preferred payer strategy and you’re getting the rate increases, how is that translating or how does that normally translate into, number one, labor expansion? Number two, if you can touch on the spread, because I know one of the questions we get asked a lot is the margin opportunity, but a lot of this is really set spread between what you’re paid and what you pay the clinician. If we can walk through all those dynamics.

Matt Buckhalter, CFO, Aveanna Healthcare Holdings: It’s been really refreshing having relationships with the payers this time. Historically, vendor-payer, they’ve rubbed against each other at all times. Given the economic benefit between it, we’ve been able to really lean in and have relationships and solve problems and bend the cost of care, bend that total cost of care. That’s the main thing they’re asking for us to do at any given time. We have preferred payers and sometimes multiple preferred payers in certain markets, and they all seem to coalesce around the same reimbursement rate. We’re not sharing that with anybody, and we’re not saying, "Hey, you’ve got to be a, you know, fee for service or, you know, fee schedule plus 20% or 25%," but everybody ends up in the same area. It’s really the transparency we’re having on the wage side of things.

I would say historically, providers probably kept that a little bit close to the chest and said, "Hey, this is our secret sauce over here. We’re not going to tell you what’s going on." Just being honest and transparent, "Hey guys, it’s going to cost $33.50 to hire a caregiver in this market on our end. It’s going to cost me $28.80 to go hire an LPN. That’s what I need to take to be able to pull in a 28% gross margin, you know, and put increments on top of that and to run an honest business, a good business." Just putting that out there has been really helpful. I would also say that the transparency that a lot of our listings are on wages through Indeed, through other platforms we put on, we’re putting those on there internally when we put open shifts.

"Hey, this is what this shift specifically is paying." These preferred payers are able to see not only are we taking more cases home, we’re staffing more cases, we’re reducing hospitalizations, we’re bending HBR or total cost spend over there as well, and we’re getting started cares or increasing significantly at the same time. All of that’s coming, coalescing to be a really successful thing for us. On the spread piece of it, we’ll say that we’ll end up being in that 27, 28% gross margin on our PDS side of the business. The other ones are obviously a little bit higher. We’re a little hot right now, but not overly once you do some of the one-times that Jeff talked about in Q2. We’re going to be thoughtful about where we’re able to pass those through to get more patients home.

Jeff Shaner, CEO, Aveanna Healthcare Holdings: We’re at a point, one, it’s refreshing to be transparent with your payer partners. You know, Tim and I talked about for so many years, you just kept everything behind a veil of secrecy. When you tell them the truth, you tell them exactly what it takes to hire a nurse in that market. They get it. They understand, okay, the majority of what I’m giving you is going right through to wage. As long as you continue to take on more capacity, it’s a win-win. The second part is we’re far enough into this strategy where the majority of the wage fix is done. Now we’re down to really hyper markets where, like, we always talk about Austin, Texas. It’s a very, very difficult, Nashville is a great example, very, very difficult market to hire nurses. We’re down to weekends, holidays, nights, difficult, difficult homes.

We’re able to be a little bit more nuanced and micro-focused on where the wage pass-through is going, which is nice. I think that is part of why that spread has been a little bit higher. We do guide people to, we do expect spread to continue to kind of moderate through the second half of this year. We think it’ll take us probably most of 2026 for that spread to kind of settle back down into historical levels that we’re used to in that, you know, $11 to $12 range. Matt always brings me back to, at the end of the day, our Medicaid gross margin is still sub 30%. That’s an appropriate place for a Medicaid gross margin to be.

Brian, Jefferies: Jeff, $11 to $12, you think, is where it settles out.

Jeff Shaner, CEO, Aveanna Healthcare Holdings: Most likely.

Brian, Jefferies: As we get into 2026.

Jeff Shaner, CEO, Aveanna Healthcare Holdings: Most likely, with being able to continue the growth pattern that we’re currently at as well, because this is passing through to get that night shift, that 7:00 P.M. to 7:00 A.M. Sunday shift. That’s very difficult to fill, being able to fill that and grow volume at the same time.

Brian, Jefferies: Matt, that’s my follow-up for you, right? As I think about the fact that you have more dollars to gross profit dollars to give back to the clinicians, should we be expecting above average volume growth at 2026?

Matt Buckhalter, CFO, Aveanna Healthcare Holdings: I think that’s what you’re currently seeing right now. I mean, last, you know, for volume side on PDS, we were 6.9% year over year in Q2 itself. I mean, we’re going to continue a hyper growth model in the back half of this year and into 2026. Back to Jeff’s point, that business will still eventually get back down to that 3% to 5% organic piece of it. Obviously, you know, Home Health and Hospice is going to be a little bit higher than that, closer to your 5% to 7%. You know, and Medical Solutions, our fastest growing organic business, close to 10%. You know, so that kind of coalesces back to that 5% to 7% organic growth that we’re expecting out of our total business, and then you sprinkle in that 2% to 3% of kind of tuck-in M&A with some of that free cash flow generation.

Will be a really nice story to get us to the double digits.

Brian, Jefferies: That makes sense. Jeff, maybe shifting gears a little bit. I mean, as we think about the Medicaid programs again, obviously OBBBA is chipping out the Medicaid program. We’re hearing some eligibility tightening that’s happening in some states. How are you thinking about that? How do you weigh, you know, managed Medicaid versus traditional Medicaid programs?

Jeff Shaner, CEO, Aveanna Healthcare Holdings: Yeah, it’s a great question, Brian. First, you know, the OBBBA was an incredibly scary time for Medicaid, right? Because, you know, it was saber rattling at just a macro level. I’m so proud of our teams. Our government affairs teams this year will have generated 11 state rate wins, as I said earlier. In a year that we operated in, think about how difficult it was for a state Medicaid director or governor to make a commitment to anything, to any rate, because they didn’t know what their CMS match was going to be, you know. I think that’s reminiscent. People ask us, how do you feel good about 2026? The answer is, I feel good about 2026 because I know 2025, you know, history is the best predictor of the future. We think we’ll stay in that double-digit rate wins.

We think the rate wins will be smaller in nature. What we saw this year is more smaller 2%, 2.5%, 1.5%. Smaller rate increases, but still important in the total scheme of things. As we think forward about Medicaid and, you know, big picture of the OBBBA, every state, the beauty and the beast of Medicaid is there’s 50 individual programs. They’re going to implement it 50 different ways, right? Are they having to be thoughtful about their spend? Absolutely. Do I feel like pediatric PDN or even adult PDN is going to be a focus of that? I don’t. The economics are just too great in the savings for the states. Might we have a temporary, you know, 1% or 2% temporary cut? Sure, that could happen. I think macro level, the states are going to continue to invest in something that saves them a 10x return.

Your second part of your question about MCOs is we like the movement of Medicaid to Medicaid MCOs, primarily driven on the fact that MCOs can make decisions quickly. Where it takes you a year or two or three of really teaching and advocating at a state to get change. Of course, in CMS, it might take you two or three decades. At a state, you can get done in a couple of years. MCOs, you can sit down, you can have a great conversation, you can show results, numbers, cost figures, and you can get to an answer in a matter of months. The continued movement of our patient population from Medicaid to Medicaid MCOs, it’s been happening over the last 15, 20 years. We like it. If anything, we would like to even accelerate it. By the way, it’s still good for the families.

They still get the appropriate services. They’re getting great customer satisfaction service. The movement to MCOs for us is a good thing.

Brian, Jefferies: Matt, just in terms of the patient qualifications, anything you would comment on that, the feeding tube qualifications?

Matt Buckhalter, CFO, Aveanna Healthcare Holdings: Nothing impactful that we’ve seen at all. I mean, you just go back to the cost savings that we keep preaching over here. We haven’t seen anybody, if anything, Brian, I would say we’ve seen more and everybody’s asked for more. Even with our preferred payer strategies that we have, it’s like clockwork. We sign a contract, they come back and they say they got to take a little bit of a leap of faith here. All right, guys, we’re going to pay you X dollars more so you can go hire more and take care of more. Six months later, they come back and like, this is the best thing ever. Can you take 600 more patients? We’re like, let’s try 30, let’s work our way up there. They just keep pushing and needing more.

Every single one of our markets, regardless of our preferred payer contracts or not, there’s still excess demand that’s going on. We haven’t felt it in any way, shape, or form.

Jeff Shaner, CEO, Aveanna Healthcare Holdings: To Matt’s point, we don’t have a single payer or even state government saying do less, not one. Remember, our payers want us to fill more hours. They want to spend more money with us so they save more money, which is, I know it’s difficult to comprehend, but it’s the truth. They want us to fill more hours of the authorized hours, knowing that every time, every hour a nurse is in a home, the likelihood of a rehospitalization is decreased by 50%. It’s a win-win, and it’s good for us that the payers continue to lead in and want to do more with us.

Brian, Jefferies: Jeff, is this also the situation where having this scale and the national presence that you have allows you to have those higher-level conversations with the payers, whereas that’s probably harder with government employees?

Jeff Shaner, CEO, Aveanna Healthcare Holdings: Yeah, I think so. I mean, at the end of the day, three years ago when we started with this, you know, we started at a very, very low level in the payers and just started, you know, introduced who we were. You know, to today, we were talking earlier, you know, we now are networking state plan presidents to our presidents within our business. We’re working with some of the Chief Operating Officers and the Chief Clinical Officers, Chief Medical Officers of these national plans. For the first time ever, we had a national plan ask us to go to a state. It happened to be Kansas, and thank God we acquired Thrive because that got us into Kansas. It’s very common now for the national MCOs to be pulling us across another state.

That was part of what some of the CEOs said to us early on, like, listen, when you’re doing a great job, I’ll know because my plan CEOs will tell me. Go focus on the plan CEOs state by state and focus on driving value. I think we’ve done a good job of that. Yes, it is pulling us up into the national offices slowly. I think as we think about the next three years, our goal is to, on the Private Duty Services side, fill in a couple of those states, like Ohio, like West Virginia, like Kentucky. We talk about that area often where we don’t have a presence today from a Medicaid standpoint. Filling in those last four or five states that our payer partners need us in is important for our future growth.

Brian, Jefferies: Matt, as I think about the Thrive acquisition, it’s amazing how, gosh, like two years ago, we probably wouldn’t be talking about a decent-sized acquisition, right? I mean, you guys have really driven improvement in margins and cash generation. How are you thinking about the balance sheet now? Obviously you’ve done the refi, but maybe for you too, Jeff, right? Like weighing acquisitions versus step pay down versus whatever else.

Matt Buckhalter, CFO, Aveanna Healthcare Holdings: Yeah, so getting the refi done a couple of weeks ago was a great momentum driver for us. Really shored up our balance sheet, gave us longevity and long line of sight. Seven-year maturities out there, upsized the revolver from $170 million to $250 million, consolidated that second lien into the first lien. Just good solid solidification of our balance sheet itself. Also reduced our total cost of capital out there. I mean, about $14 million plus of annual cash savings, which just is adding on to our, I would like to say, pretty impressive free cash flow generation from our EBITDA. Just cleanliness of EBITDA has really been a big piece of that as well.

Coming back to where that money goes, at the end of the day, I think the biggest takeaway you could say is we’re going to be thoughtful and we’re just going to continue to be thoughtful as an organization. If that is being able to take it and do an acquisition like Thrive, which is a great deal, a good organization with good people, good culture, good density in markets that we’re already in, preferred payer markets, and expansion into New Mexico and Kansas too, which are good Medicaid states for us as well. That’s something that works, but doing that with cash and equity, it was a deleveraging event for us as well to be able to pull in that team. We think that was a really great deal. We’d like to do a couple of those a year.

At the end of the day, I will go back to the word, we’re going to be thoughtful and do whatever is the best thing for Aveanna and the long-term success for us.

Jeff Shaner, CEO, Aveanna Healthcare Holdings: I’m not going to contradict him. He may be shocked, but deleveraging has been one of our key strategies. The fact that we’re down now to, you know, around five times leverage and can see ourselves to sub four is an important part of our story and strategy. We certainly like these levels a lot better than 10 and 11 times leverage. That was not fun. We’re here now and we can see a clear path to sub four and being, you know, in the threes of leverage. We also, and Matt said, and I agree, we think our equity is the best currency we have. To be, you know, with the Thrive deal, to be able to offer Summit Partners both equity and cash was a great outcome for them and for us. They’re participating in our upside. If we can do that again, we would do that again.

I think you should, I would expect Aveanna to be doing one or two of these a year moving forward. They may not be the exact size of Thrive from a revenue standpoint, but we’d like to do a couple a year moving forward and, again, continue to scale our Private Duty Services, but also our Home Health. We are long-term believers in Home Health and we’d like to continue to scale our Home Health business.

Brian, Jefferies: Maybe I’ll ask the audience if there are questions before I keep shooting questions at you.

Can you detail acquisition multiples by business line?

Jeff Shaner, CEO, Aveanna Healthcare Holdings: Yeah, the question was acquisition multiples by business line. I think in our, the PDS business is so fragmented. Unlike Home Health or Hospice, there’s not a crystal clear set. I will tell you where we are buyers at. We are buyers of high single digits, sub 10 times in the Medicaid space, pre-Synergy. I think the Thrive deal is a great way for us to think about it. At north of $100 million in revenue, it was a scaled asset. We’ll ultimately have bought it for under seven times on a post-Synergy basis. We absolutely want to be in the sub 10 times. We’re a big believer in Home Health. Obviously, we want to see the next 45 days play out. I know many of my peers who are here today do as well. Home Health multiples are mid-single digits, literally.

If you can get a Home Health deal done right now, they’re probably five to eight, five to seven. We’re not a buyer of Hospice. We’re one of the few people in America who are not buying hospices. Not because we don’t love it. We do love Hospice. We’re just not, we’re not a buyer at 5x north of what we trade at. Hospice I think is trading between, well, you would know better than me, but let’s call it 12 and 200. I’m being facetious, but say 12 and 20. I’m not sure there’s a market for Medical Solutions. There’s really no Medical Solutions. I would certainly say Medical Solutions trades more like a DME. Probably six to eight. Our two areas of focus are continue to scale PDN, PDS services, which we think we can do in single digits.

As the Home Health rule finalizes, we just think we’re well positioned to scale that business. Our Home Health business is operating at an incredibly high level right now. Our team is doing an amazing job and we want to continue. We’re a regional provider today. We’d like to continue to scale that over the next three to five years. Great question. This is Meghan.

Matt Buckhalter, CFO, Aveanna Healthcare Holdings: This is a planned one.

Brian, Jefferies: A planned question.

Jeff Shaner, CEO, Aveanna Healthcare Holdings: Yeah, let me start with it. Let me touch on the modernization. The question, Meghan’s question, was the cross-selling opportunity between Medical Solutions. We’ve been in the Medical Solutions business for a long time, almost, you know, 10 years as a combined Aveanna. More than 50%, I don’t know the exact percentage, but more than half of our pediatric PDN patients receive intranutrition through some form of G-tube or oral supplement, and the majority of them receive that from us. Obviously, our PDN business is the biggest referral source to our intranutrition. More than 50% of our intranutrition business is to adults that are non-Aveanna patients. We’re one of the few companies that focus on this business. We’re the largest provider of intranutrition in America, and it’s tough. There’s a reason other people don’t do it because it’s tough. It’s a tough billion collections business.

It’s a low dollar, it’s, you know, sub $500 per UPS per shipment. It’s a lot of work to do that for, you know, and to make an appropriate margin. Both our PDN business and, we found over time, our geriatric business has intranutrition needs as well. It’s just a nice complement business. We’re in 27, 28 states, so we’re in the majority of states. We’ll continue to expand that business. I do want Matt to touch on the modernization because I think it’s an important part of our story, how we think of that business post-modernization.

Matt Buckhalter, CFO, Aveanna Healthcare Holdings: Yeah, you know, currently we’re going through the modernization efforts in our Medical Solutions. That’s a word we’ve thrown around a lot over the past three years, but it’s something we’ve been really successful about. We get together at the beginning of the year and we put our strategic plan together. In 2023, modernizing Home Health and Hospice was a big piece of it. What you’re seeing in that division are the results of that effort that we went through. There were some efficiencies and cost takeout, but also just right-sizing the preferred payer strategy. Similar to this year in Private Duty Services, you’re seeing that occur as well because we put that on the board in 2024 and said, "Hey, we’re going to modernize that with the help of our COO, Christy," was able to get it done. This year was the idea of Medical Solutions.

All right, guys, let’s go function on this one and let’s go really put this one on, we call it putting on the lift. Hey, let’s take the engine out, let’s, you know, take this car apart. It was the way we’re going to establish to be more scalable. At any given time, we have like over 5,000 referrals pending and ready to get through the pipeline. We just said, "Hey, we need to be thoughtful about who we’re letting in and how we’re letting them in." Unfortunately, you can grow yourself quickly out of business or out of profitability in that one. We’re in the process of defining our preferred payer strategy there. We’re at 18 preferred payers.

Once we get through this modernization effort, which will mostly be done here in 2025, I think we’ll see exponential growth in 2026 and 2027 in this division, similar to what you saw in Private Duty Services and in Home Health after we were able to complete them.

Jeff Shaner, CEO, Aveanna Healthcare Holdings: Matt calls it the TSA Pre-Check. That we’re implementing the TSA Pre-Check in our Medical Solutions business.

Brian, Jefferies: Jeff, we’re at the end of our time here, but one question for you. What do you think is underappreciated by investors about the Aveanna story? What do you want to leave the audience with in terms of thoughts on the name?

Jeff Shaner, CEO, Aveanna Healthcare Holdings: Yeah, let me start with Brian. Thanks for having us here. It’s a great conference and we’re glad to be here with Jefferies’ team. I think investors are coming around to our story, especially in the last 90 days. I think what investors are coming around to is this company has been rebuilding itself for the last three years. We didn’t get here overnight. We’ve been working incredibly hard at it. The thing to remember about Aveanna is it is an incredibly well-diversified healthcare platform, meaning no payer at Aveanna makes up more than 10% of our revenues. In 38 states, 366 locations, tens of thousands of caregivers, we’re well-diversified, we’re well-protected against reimbursement headwinds as we’ve seen. The pent-up demand for our services is producing an above-scale revenue growth, which I think is going to stick around for a while.

Now the fact that we are a cash-flow-generating company, we are deleveraging, I think the pieces of the story have all come together for us to really be an incredibly relevant place for people to invest in over the next five to ten years. We’re just getting started. What I want people to know is, yes, it’s been a great three years, but we’re just getting started. I mean, we see this company scaling for the next ten years into, Matt will kill me, but billions and billions of dollars over the next five to ten years. We’re going to be here a while in the post-acute space. I think investors are catching up to our story and are excited about it, but we’re putting our heads down and just continuing to focus on doing the right thing.

Brian, Jefferies: Awesome. Thank you, guys.

Jeff Shaner, CEO, Aveanna Healthcare Holdings: Thank you, sir. Appreciate it.

Matt Buckhalter, CFO, Aveanna Healthcare Holdings: Thanks, Michael.

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