The following discussion and analysis provides information we believe is relevant to an assessment and understanding of our results of operations, financial condition, liquidity and cash flows for the periods presented below. This discussion should be read in conjunction with the interim unaudited consolidated financial statements and related notes contained elsewhere in this Quarterly Report on Form 10-Q and in conjunction with the audited consolidated financial statements and related notes, our “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in each case included in our Annual Report on Form 10-K for the fiscal year ended January 3, 2026 filed with the SEC. As discussed in the section above titled “Cautionary Note Regarding Forward-Looking Statements,” the following discussion contains forward-looking statements that are based upon our current expectations, including with respect to our future revenues and operating results. Our actual results may differ materially from those anticipated in such forward-looking statements as a result of various factors. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended January 3, 2026. Unless otherwise provided, “Aveanna,” “we,” “our” and the “Company” refer to Aveanna Healthcare Holdings Inc. and its consolidated subsidiaries. Our fiscal year ends on the Saturday that is closest to December 31 of a given year, resulting in either a 52-week or 53-week fiscal year. “Fiscal year 2026” refers to the 52-week fiscal year ending on January 2, 2027. “Fiscal year 2025” refers to the 53-week fiscal year ended on January 3, 2026. The “three-month period ended July 4, 2026”, or “second quarter of 2026” refers to the 13-week fiscal quarter ended on July 4, 2026. The “three-month period ended June 28, 2025” or “second quarter of 2025” refers to the 13-week fiscal quarter ended on June 28, 2025. The "six-month period ended July 4, 2026", or "first six months of 2026", refers to the period from January 4, 2026 through July 4, 2026. The "six-month period ended June 28, 2025", or "first six months of 2025", refers to the period from December 29, 2024 through June 28, 2025. Overview We are a leading, diversified home care platform focused on providing care to medically complex, high-cost patient populations. We directly address the most pressing challenges facing the U.S. healthcare system by providing safe, high-quality care in the home, the lower cost care setting preferred by patients. Our patient-centered care delivery platform is designed to improve the quality of care our patients receive, which allows them to remain in their homes and minimizes the overutilization of high-cost care settings such as hospitals. Our clinical model is led by our caregivers, primarily skilled nurses, who provide specialized care to address the complex needs of each patient we serve across the full range of patient populations: newborns, children, adults and seniors. We have invested significantly in our platform to bring together best-in-class talent at all levels of the organization and support such talent with industry leading training, clinical programs, infrastructure and technology-enabled systems, which are increasingly essential in an evolving healthcare industry. We believe our platform creates sustainable competitive advantages that support our ability to continue driving rapid growth, both organically and through acquisitions, and positions us as the partner of choice for the patients we serve. Segments We deliver our services to patients through three segments: Private Duty Services (“PDS”); Home Health & Hospice (“HHH”); and Medical Solutions (“MS”). The following table summarizes the revenues generated by each of our segments for the three-month periods ended July 4, 2026 and June 28, 2025, respectively: (dollars in thousands) Consolidated PDS HHH MS For the three-month period ended July 4, 2026 $ 670,483 $ 553,929 $ 69,023 $ 47,531 Percentage of consolidated revenue 83 % 10 % 7 % For the three-month period ended June 28, 2025 $ 589,553 $ 486,012 $ 60,112 $ 43,429 Percentage of consolidated revenue 83 % 10 % 7 % The following table summarizes the revenues generated by each of our segments for the six-month periods ended July 4, 2026 and June 28, 2025, respectively: (dollars in thousands) Consolidated PDS HHH MS For the six-month period ended July 4, 2026 $ 1,318,398 $ 1,089,581 $ 135,632 $ 93,185 Percentage of consolidated revenue 83 % 10 % 7 % For the six-month period ended June 28, 2025 $ 1,148,777 $ 946,010 $ 116,845 $ 85,922 Percentage of consolidated revenue 82 % 10 % 8 % 19 PDS Segment Private Duty Services predominantly includes private duty nursing services (“PDN Services”), as well as pediatric therapy services (“Therapy Services”). PDN Services patients typically enter our service as children, as our most significant referral sources for new patients are children’s hospitals. It is common for PDN Services patients to continue to receive our services into adulthood, as approximately 30% of our PDN Services patients are over the age of 18. PDN Services involve the provision of clinical and non-clinical hourly care to patients in their homes, which is the preferred setting for patient care. PDN Services typically last four to 24 hours a day, provided by our registered nurses, licensed practical nurses, home health aides, and other non-clinical caregivers who are focused on providing high-quality short-term and long-term clinical care to medically complex children and adults with a wide variety of serious illnesses and conditions. Patients who typically qualify for PDN Services include those with the following conditions: •Tracheotomies or ventilator dependence; •Dependence on continuous nutritional feeding through a “G-tube” or “NG-tube”; •Dependence on intravenous nutrition; •Oxygen-dependence in conjunction with other medical needs; and •Complex medical needs such as frequent seizures. PDN Services include: •In-home skilled nursing services to medically complex children and adults; •Nursing services in school settings in which our caregivers accompany patients to school; •Services to patients in our Pediatric Day Healthcare Centers (“PDHC”); and •Non-clinical care, including programs such as support services and personal care services. Therapy Services provide a valuable multidisciplinary approach that we believe serves all of a child’s therapy needs. We provide both in-clinic and home-based therapy services to our patients. Therapy Services include physical, occupational and speech services. We regularly collaborate with physicians and other community healthcare providers, which allows us to provide more comprehensive care. HHH Segment Our Home Health and Hospice segment predominantly includes home health services (“HH Services”), as well as hospice and specialty program services. Our HHH patients typically enter our service as seniors, and our most significant referral sources for new patients are hospitals, physicians and long-term care facilities. HH Services involve the provision of in-home services to our patients by our clinicians, which may include nurses, therapists, social workers and home health aides. Our caregivers work with our patients’ physicians to deliver a personalized plan of care to our patients in their homes. Home healthcare can help our patients recover after a hospitalization or surgery and assist patients in managing chronic illnesses. We also help our patients manage their medications. Through our care, we help our patients recover more fully in the comfort of their own homes, while remaining as independent as possible. HH Services include: in-home skilled nursing services; physical, occupational and speech therapy; medical social services and aide services. Our hospice services involve a supportive philosophy and concept of care for those nearing the end of life. Our hospice care is a positive, empowering form of care designed to provide comfort and support to our patients and their families when a life-limiting illness no longer responds to cure-oriented treatments. The goal of hospice is to neither prolong life nor hasten death, but to help our patients live as dignified and pain-free as possible. Our hospice care is provided by a team of specially trained professionals in a variety of living situations, including at home, at the hospital, a nursing home, or an assisted living facility. MS Segment Through our Medical Solutions segment, we offer a comprehensive line of enteral nutrition supplies and other products to adults and children, delivered on a periodic or as-needed basis. We provide our patients with access to one of the largest selections of enteral formulas, supplies and pumps in our industry, with more than 300 nutritional formulas available. Our registered nurses, registered dietitians and customer service technicians support our patients 24 hours per day, 365 days per year, in-hospital, at-home, or remotely to help ensure that our patients have the best nutrition assessments, change order reviews and formula selection expertise. 20 Recent Developments Acquisition of Family First Homecare On June 1, 2026, the Company completed the acquisition of Family First Holding, LLC, a scaled, multi-state provider of pediatric home care that primarily provides skilled Private Duty Nursing services with 27 locations in seven states including Florida, Illinois, Iowa, Pennsylvania, South Dakota, Texas, and North Carolina. The Company paid $173.7 million in cash as consideration, after customary adjustments for working capital and other items, funded with cash on hand. The operating results of Family First Holding, LLC subsequent to the acquisition date are included in our PDS operating segment. Important Operating Metrics We review the following important metrics on a segment basis and not on a consolidated basis: PDS and MS Segment Operating Metrics Volume Volume represents PDS hours of care provided and MS unique patients served, which is how we measure the amount of our patient services provided. We review the number of hours of PDS care provided on a weekly basis and the number of MS unique patients served on a weekly basis. We believe volume is an important metric because it helps us understand how the Company is growing in each of these segments through strategic planning and acquisitions. We also use this metric to inform strategic decision making in determining opportunities for growth. Revenue Rate For our PDS and MS segments, revenue rate is calculated as revenue divided by PDS hours of care provided or the number of MS unique patients served, respectively. We believe revenue rate is an important metric because it represents the amount of revenue we receive per PDS hour of patient service or per individual MS patient transaction and helps management assess the amount of fees that we are able to bill for our services. Management uses this metric to assess how effectively we optimize reimbursement rates. Cost of Revenue Rate For our PDS and MS segments, cost of revenue rate is calculated as cost of revenue divided by PDS hours of care provided or the number of MS unique patients served, respectively. We believe cost of revenue rate is an important metric because it helps us understand the cost per PDS hour of patient service or per individual MS patient transaction. Management uses this metric to understand how effectively we manage labor and product costs. Spread Rate For our PDS and MS segments, spread rate represents the difference between the respective revenue rates and cost of revenue rates. Spread rate is an important metric because it helps us better understand the margins being recognized per PDS hour of patient service or per individual MS patient transaction. Management uses this metric to assess how successful we have been in optimizing reimbursement rates, managing labor and product costs, and assessing opportunities for growth. HHH Segment Operating Metrics Home Health Total Admissions and Home Health Episodic Admissions Home health total admissions represents the number of new patients who have begun receiving services. We review the number of home health admissions on a daily basis as we believe it is a leading indicator of our growth. We measure home health admissions by reimbursement structure, separating them into home health episodic admissions, which are reimbursed for a fixed duration of care - 21 typically 30 days, and other admissions, which primarily follow a per-visit reimbursement model. This allows us to better understand the payor mix of our home health business. Home Health Total Episodes Home health total episodes represents the number of episodic admissions and episodic recertifications to capture patients who have either started to receive services or have been recertified for another episode of care. Management reviews home health total episodes on a monthly basis as to understand the volume of patients who were authorized to receive care during the month. Home Health Episodic Mix Home health episodic mix is calculated by dividing the total home health episodic admissions by the home health total admissions. Management monitors home health episodic mix as a simplified metric representing our home health admissions by reimbursement structure, which allows us to better understand the payer mix of our home health business. Home Health Revenue Per Completed Episode Home health revenue per completed episode is calculated by dividing total payments received from completed episodes by the number of completed episodes during the period. Episodic payments are determined by multiple factors including type of referral source, patient diagnoses, and utilization. Management tracks home health revenue per completed episode over time to evaluate both the clinical and financial profile of the business in a single metric. 22 Results of Operations Three-Month Period Ended July 4, 2026 Compared to the Three-Month Period Ended June 28, 2025 The following table summarizes our consolidated results of operations, including Field contribution, which is a non-GAAP measure (see “Non-GAAP Financial Measures” below), for the three-month periods indicated: For the three-month periods ended (dollars in thousands) July 4, 2026 % of Revenue June 28, 2025 % of Revenue Change % Change Revenue $ 670,483 100.0 % $ 589,553 100.0 % $ 80,930 13.7 % Cost of revenue, excluding depreciation and amortization 451,958 67.4 % 378,753 64.2 % 73,205 19.3 % Gross margin $ 218,525 32.6 % $ 210,800 35.8 % $ 7,725 3.7 % Branch and regional administrative expenses 97,079 14.5 % 90,069 15.3 % 7,010 7.8 % Field contribution $ 121,446 18.1 % $ 120,731 20.5 % $ 715 0.6 % Corporate expenses 34,083 5.1 % 34,529 5.9 % (446 ) -1.3 % Depreciation and amortization 2,849 0.4 % 2,617 0.4 % 232 8.9 % Acquisition-related costs 4,390 0.7 % 3,400 0.6 % 990 29.1 % Other operating expense 144 0.0 % 151 0.0 % (7 ) -4.6 % Operating income $ 79,980 11.9 % $ 80,034 13.6 % $ (54 ) -0.1 % Interest expense, net (26,517 ) (35,874 ) 9,357 -26.1 % Other income (expense) 3,010 (22 ) 3,032 NM Income tax expense (16,180 ) (17,113 ) 933 -5.5 % Net income $ 40,293 $ 27,025 $ 13,268 49.1 % NM = A percentage calculation that is not meaningful due to a percentage change greater than 1000%. The following table summarizes our consolidated key performance measures, including Field contribution and Field contribution margin, which are non-GAAP measures (see “Non-GAAP Financial Measures” below), for the three-month periods indicated: For the three-month periods ended (dollars in thousands) July 4, 2026 June 28, 2025 Change % Change Revenue $ 670,483 $ 589,553 $ 80,930 13.7 % Cost of revenue, excluding depreciation and amortization 451,958 378,753 73,205 19.3 % Gross margin $ 218,525 $ 210,800 $ 7,725 3.7 % Gross margin percentage 32.6 % 35.8 % -3.2 % (1) Branch and regional administrative expenses 97,079 90,069 7,010 7.8 % Field contribution $ 121,446 $ 120,731 $ 715 0.6 % Field contribution margin 18.1 % 20.5 % Corporate expenses $ 34,083 $ 34,529 $ (446 ) -1.3 % As a percentage of revenue 5.1 % 5.9 % Operating income $ 79,980 $ 80,034 $ (54 ) -0.1 % As a percentage of revenue 11.9 % 13.6 % (1)Represents the change in margin percentage quarter over quarter. 23 The following tables summarize our key performance measures by segment for the three-month periods indicated: PDS For the three-month periods ended (dollars and hours in thousands) July 4, 2026 June 28, 2025 Change % Change Revenue $ 553,929 $ 486,012 $ 67,917 14.0 % Cost of revenue, excluding depreciation and amortization 394,047 328,078 65,969 20.1 % Gross margin $ 159,882 $ 157,934 $ 1,948 1.2 % Gross margin percentage 28.9 % 32.5 % -3.6 % (4) Hours 12,413 11,053 1,360 12.3 % Revenue rate $ 44.62 $ 43.97 $ 0.65 1.7 % (1) Cost of revenue rate $ 31.74 $ 29.68 $ 2.06 7.8 % (2) Spread rate $ 12.88 $ 14.29 $ (1.41 ) -11.1 % (3) HHH For the three-month periods ended (dollars and admissions/episodes in thousands) July 4, 2026 June 28, 2025 Change % Change Revenue $ 69,023 $ 60,112 $ 8,911 14.8 % Cost of revenue, excluding depreciation and amortization 31,837 27,048 4,789 17.7 % Gross margin $ 37,186 $ 33,064 $ 4,122 12.5 % Gross margin percentage 53.9 % 55.0 % -1.1 % (4) Home health total admissions (5) 10.5 9.8 0.7 7.1 % Home health episodic admissions (6) 8.5 7.3 1.2 16.4 % Home health total episodes (7) 14.7 12.4 2.3 18.5 % Home health episodic mix (8) 81.0 % 74.5 % 6.5 % (10) Home health revenue per completed episode (9) $ 3,202 $ 3,231 $ (29 ) -0.9 % MS For the three-month periods ended (dollars and UPS in thousands) July 4, 2026 June 28, 2025 Change % Change Revenue $ 47,531 $ 43,429 $ 4,102 9.4 % Cost of revenue, excluding depreciation and amortization 26,074 23,627 2,447 10.4 % Gross margin $ 21,457 $ 19,802 $ 1,655 8.4 % Gross margin percentage 45.1 % 45.6 % -0.5 % (4) Unique patients served (“UPS”) 95 91 4 4.4 % Revenue rate $ 500.33 $ 477.24 $ 23.09 5.0 % (1) Cost of revenue rate $ 274.46 $ 259.64 $ 14.82 6.0 % (2) Spread rate $ 225.87 $ 217.60 $ 8.27 4.0 % (3) (1)Represents the period over period change in revenue rate, plus the change in revenue rate attributable to the change in volume. (2)Represents the period over period change in cost of patient services rate, plus the change in cost of patient services rate attributable to the change in volume. (3)Represents the period over period change in spread rate, plus the change in spread rate attributable to the change in volume. (4)Represents the change in margin percentage quarter over quarter. (5)Represents home health episodic and other admissions. (6)Represents home health episodic admissions. (7)Represents episodic admissions and recertifications. (8)Represents the ratio of home health episodic admissions to home health total admissions. (9)Represents Medicare revenue per completed episode. (10)Represents the change in home health episodic mix quarter over quarter. The following discussion of our results of operations should be read in conjunction with the foregoing tables summarizing our consolidated results of operations and key performance measures, as well as our audited consolidated financial statements contained in our Annual Report on Form 10-K for the fiscal year ended January 3, 2026. Summary Operating Results 24 Operating Income Operating income was $80.0 million, or 11.9% of revenue, for the three-month period ended July 4, 2026, as compared to operating income of $80.0 million, or 13.6% of revenue, for the three-month period ended June 28, 2025. Operating income for the second quarter of 2026 was positively impacted by an increase of $0.7 million, or 0.6%, in Field contribution, as compared to the second quarter of 2025. The $0.7 million increase in Field contribution resulted from an $80.9 million, or 13.7%, increase in consolidated revenue, offset by a 2.4% decrease in our Field contribution margin to 18.1% for the second quarter of 2026 from 20.5% for the second quarter of 2025. The primary driver of our lower Field contribution margin over the comparable quarter was a 3.2% decrease in gross margin percentage, partially offset by a 0.8% decrease in branch and regional administrative expenses as a percentage of revenue to 14.5% for the second quarter of 2026 from 15.3% for the second quarter of 2025. The following items primarily contributed to the comparable change in operating income over the comparable second quarter period: •the previously discussed $0.7 million increase in Field contribution, and •a $0.4 million decrease in corporate expenses; offset by •a $1.0 million increase in acquisition-related costs, and •a $0.2 million increase in depreciation and amortization. Net Income Net income for the three-month period ended July 4, 2026 was $40.3 million, as compared to net income of $27.0 million for the three-month period ended June 28, 2025. The $13.3 million increase in net income was primarily driven by the following: •the previously discussed $0.1 million decrease in operating income; offset by •a $9.4 million decrease in interest expense, net of interest income, •an aggregate $3.0 million decrease in valuation losses on interest rate derivatives and net settlements received from interest rate derivative counterparties included in other income (expense); and •a $0.9 million decrease in tax expense. Revenue Revenue was $670.5 million for the three-month period ended July 4, 2026, as compared to $589.6 million for the three-month period ended June 28, 2025, an increase of $80.9 million, or 13.7%. This increase resulted from the following segment activity: •a $67.9 million, or 14.0%, increase in PDS revenue; •a $8.9 million, or 14.8%, increase in HHH revenue; and •a $4.1 million, or 9.4%, increase in MS revenue. Our PDS segment revenue growth of $67.9 million, or 14.0%, for the three-month period ended July 4, 2026 was attributable to a 12.3% increase in volume and a 1.7% increase in revenue rate. The 12.3% increase in volume was primarily attributable to growth in demand for non-clinical services and comparatively higher volumes attributable to the Family First and Thrive acquisitions which were completed on June 1, 2026 and June 2, 2025, respectively. The 1.7% increase in PDS revenue rate for the three-month period ended July 4, 2026, as compared to the three-month period ended June 28, 2025, resulted primarily from reimbursement rate increases issued by various state Medicaid programs and Managed Medicaid payers and improved implicit price concessions. Reimbursement rate increases in the second quarter of 2026 exceeded the second quarter of 2025 which benefited from certain rate increases applied retroactively for services provided during the first quarter of 2025. Our HHH segment revenue growth of $8.9 million, or 14.8%, for the three-month period ended July 4, 2026, as compared to the three-month period ended June 28, 2025, resulted primarily from a 18.5% increase in total episodes compared to the second quarter of 2025. The $4.1 million, or 9.4%, increase in MS segment revenue for the three-month period ended July 4, 2026, as compared to the three-month period ended June 28, 2025, was attributable to a 4.4% increase in volume and a 5.0% increase in revenue rate compared to the second quarter of 2025. Cost of Revenue, Excluding Depreciation and Amortization 25 Cost of revenue, excluding depreciation and amortization, was $452.0 million for the three-month period ended July 4, 2026, as compared to $378.8 million for the three-month period ended June 28, 2025, an increase of $73.2 million, or 19.3%. This increase resulted from the following segment activity: •a $66.0 million, or 20.1%, increase in PDS cost of revenue; •a $4.8 million, or 17.7%, increase in HHH cost of revenue; and •a $2.4 million, or 10.4%, increase in MS cost of revenue. The 20.1% increase in PDS cost of revenue for the three-month period ended July 4, 2026 resulted from the previously described 12.3% increase in PDS volume combined with a 7.8% increase in PDS cost of revenue rate. The 7.8% increase in cost of revenue rate primarily resulted from higher caregiver labor costs, including the pass-through of reimbursement rate increases and higher general and professional liability reserves in the second quarter of 2026. The second quarter of 2025 also contained a $6.2 million reduction in professional liability reserves resulting from the release of certain accrued legal settlements which did not reoccur in the three-month period ended July 4, 2026. The 17.7% increase in HHH cost of revenue for the three-month period ended July 4, 2026 was driven primarily by higher home health total episodes. The 10.4% increase in MS cost of revenue for the three-month period ended July 4, 2026 was driven primarily by the previously noted increase in volume, and higher product costs. Gross Margin and Gross Margin Percentage Gross margin was $218.5 million, or 32.6% of revenue, for the three-month period ended July 4, 2026, as compared to $210.8 million, or 35.8% of revenue, for the three-month period ended June 28, 2025. Gross margin increased $7.7 million, or 3.7%, from the comparable prior year quarter. The 3.2% decrease in gross margin percentage for the three-month period ended July 4, 2026 resulted from the combined changes in our revenue rates and cost of revenue rates in each of our segments, which we refer to as the change in our spread rate, as follows: •a 11.1% decrease in PDS spread rate from $14.29 to $12.88 driven by the 1.7% increase in PDS revenue rate, net of the 7.8% increase in PDS cost of revenue rate; •a 4.0% increase in MS spread rate from $217.60 to $225.87 driven by the 5.0% increase in MS revenue rate, net of the 6.0% increase in MS cost of revenue rate; and •a 1.1% decrease in gross margin percentage in our HHH segment. Branch and Regional Administrative Expenses Branch and regional administrative expenses were $97.1 million, or 14.5% of revenue, for the three-month period ended July 4, 2026, as compared to $90.1 million, or 15.3% of revenue, for the three-month period ended June 28, 2025, an increase of $7.0 million, or 7.8%. The 7.8% increase in branch and regional administrative expenses for the three-month period ended July 4, 2026, as compared to the three-month period ended June 28, 2025, was primarily due to the additional branch operations associated with the acquisition of Thrive and Family First, and costs associated with integrating the acquired operations into our operating footprint. The overall 0.8% decrease in branch and regional administrative expenses as a percentage of revenue for the three-month period ended July 4, 2026, as compared to the three-month period ended June 28, 2025 is the result of leveraging our operating support model to effectively incorporate increased volume from acquisitions and higher demand driven from our existing operating footprint. Field Contribution and Field Contribution Margin Field contribution was $121.4 million, or 18.1% of revenue, for the three-month period ended July 4, 2026, as compared to $120.7 million, or 20.5% of revenue, for the three-month period ended June 28, 2025. Field contribution increased $0.7 million, or 0.6%, for the three-month period ended July 4, 2026, as compared to the three-month period ended June 28, 2025. The 2.4% decrease in Field contribution margin for the three-month period ended July 4, 2026 resulted from the following: •a 3.2% decrease in gross margin percentage for the three-month period ended July 4, 2026, as compared to the three-month period ended June 28, 2025; offset by •a 0.8% decrease in branch and regional administrative expenses as a percentage of revenue for the three-month period ended July 4, 2026, as compared to the three-month period ended June 28, 2025. 26 Field contribution and Field contribution margin are non-GAAP financial measures. See “Non-GAAP Financial Measures” below. Corporate Expenses Corporate expenses as a percentage of revenue for the three-month periods ended July 4, 2026 and June 28, 2025 were as follows: For the three-month periods ended July 4, 2026 June 28, 2025 (dollars in thousands) Amount % of Revenue Amount % of Revenue Revenue $ 670,483 $ 589,553 Corporate expense components: Compensation and benefits $ 19,052 2.8 % $ 19,334 3.3 % Non-cash share-based compensation 2,523 0.4 % 3,436 0.6 % Professional services 7,147 1.1 % 6,231 1.1 % Rent and facilities expense 3,052 0.5 % 2,933 0.5 % Office and administrative 400 0.1 % 527 0.1 % Other 1,909 0.3 % 2,068 0.3 % Total corporate expenses $ 34,083 5.1 % $ 34,529 5.9 % Corporate expenses were $34.1 million, or 5.1% of revenue, for the three-month period ended July 4, 2026, as compared to $34.5 million, or 5.9% of revenue, for the three-month period ended June 28, 2025. Depreciation and Amortization Depreciation and amortization was $2.8 million for the three-month period ended July 4, 2026, as compared to $2.6 million for the three-month period ended June 28, 2025, an increase of $0.2 million, driven primarily from an increase in amortization expense related to acquired tradenames from Thrive. Acquisition-related costs Acquisition-related costs were $4.4 million for the three-month period ended July 4, 2026, as compared to $3.4 million for the three-month period ended June 28, 2025. Acquisition-related costs in the second quarter of 2026 primarily related to costs associated with the acquisition of Family First. Acquisition-related costs in the second quarter of 2025 primarily related to the costs associated with the acquisition of Thrive. Other Operating Expense Other operating expense was $0.1 million for the three-month period ended July 4, 2026, as compared to other operating expense of $0.2 million for the three-month period ended June 28, 2025. Other operating expense in the comparable periods primarily resulted from the value associated with the impairment of certain licenses. Interest Expense, net of Interest Income Interest expense, net of interest income was $26.5 million for the three-month period ended July 4, 2026, as compared to $35.9 million for the three-month period ended June 28, 2025, a decrease of $9.4 million, or 26.1%. The decrease was primarily driven by a lower U.S. federal funds rate over the comparable periods, the positive effect of the refinancing of our credit facility in the third quarter of 2025, and the successful repricing of our credit facility during the second quarter of 2026. The drivers above reduced our weighted average interest rate from 9.0% as of June 28, 2025 to 6.6% as of July 4, 2026, resulting in lower interest expense. See further analysis under Liquidity and Capital Resources below. Other Income (Expense) Other income was $3.0 million for the three-month period ended July 4, 2026, as compared to other expense of less than $0.1 million for the three-month period ended June 28, 2025. We realized a $5.4 million decrease in non-cash valuation losses associated with interest rate derivatives resulting from changes in market expectations of future interest rates as of the comparable quarter-end valuation date, partially offset by a $2.4 million decrease in net settlements with interest rate derivative counterparties as interest rates decreased compared to the prior year fiscal quarter due to lower market interest rates. Details of other expense included the following: 27 For the three-month periods ended (dollars in thousands) July 4, 2026 June 28, 2025 Valuation loss, net to state interest rate derivatives at fair value $ (583 ) $ (5,978 ) Net settlements received from interest rate derivative counterparties 3,650 6,050 Other (57 ) (94 ) Total other income (expense) $ 3,010 $ (22 ) Income Taxes We record income tax expense during interim periods based on our estimate of the annual effective income tax rate, adjusted each quarter for discrete items. We analyze various factors to determine the estimated annual effective income tax rate, including projections of our annual earnings, the impact of state and local income taxes, our ability to use tax credits and net operating loss carryforwards, and available tax planning alternatives. We incurred income tax expense of $16.2 million for the three-month period ended July 4, 2026, as compared to income tax expense of $17.1 million for the three-month period ended June 28, 2025. This decrease in tax expense was primarily driven by including the full estimated effect of the OBBBA which was enacted on July 4, 2025, partially offset by differences in our projections of annual earnings at the end of each comparable three-month period, as well as changes in federal and state valuation allowances, and changes to federal and state current tax expense due to certain non-deductible expenses, most notably interest expense and executive compensation. 28 Six-Month Period Ended July 4, 2026 Compared to the Six-Month Period Ended June 28, 2025 The following table summarizes our consolidated results of operations, including Field contribution, which is a non-GAAP measure (see “Non-GAAP Financial Measures” below), for the six-month periods indicated: For the six-month periods ended (dollars in thousands) July 4, 2026 % of Revenue June 28, 2025 % of Revenue Change % Change Revenue $ 1,318,398 100.0 % $ 1,148,777 100.0 % $ 169,621 14.8 % Cost of revenue, excluding depreciation and amortization 894,445 67.8 % 754,419 65.7 % 140,026 18.6 % Gross margin $ 423,953 32.2 % $ 394,358 34.3 % $ 29,595 7.5 % Branch and regional administrative expenses 192,871 14.6 % 181,456 15.8 % 11,415 6.3 % Field contribution $ 231,082 17.5 % $ 212,902 18.5 % $ 18,180 8.5 % Corporate expenses 68,239 5.2 % 72,034 6.3 % (3,795 ) -5.3 % Depreciation and amortization 5,893 0.4 % 5,211 0.5 % 682 13.1 % Acquisition-related costs 7,500 0.6 % 3,506 0.3 % 3,994 113.9 % Other operating expense 144 0.0 % 316 0.0 % (172 ) -54.4 % Operating income $ 149,306 11.3 % $ 131,835 11.5 % $ 17,471 13.3 % Interest expense, net (54,017 ) (72,077 ) 18,060 -25.1 % Other income (expense) 6,159 (5,472 ) 11,631 -212.6 % Income tax expense (19,502 ) (22,068 ) 2,566 -11.6 % Net income $ 81,946 $ 32,218 $ 49,728 154.3 % NM = A percentage calculation that is not meaningful due to a percentage change greater than 1000%. The following table summarizes our consolidated key performance measures, including Field contribution and Field contribution margin, which are non-GAAP measures (see “Non-GAAP Financial Measures” below), for the six-month periods indicated: For the six-month periods ended (dollars in thousands) July 4, 2026 June 28, 2025 Change % Change Revenue $ 1,318,398 $ 1,148,777 $ 169,621 14.8 % Cost of revenue, excluding depreciation and amortization 894,445 754,419 140,026 18.6 % Gross margin $ 423,953 $ 394,358 $ 29,595 7.5 % Gross margin percentage 32.2 % 34.3 % -2.1 % (1) Branch and regional administrative expenses 192,871 181,456 11,415 6.3 % Field contribution $ 231,082 $ 212,902 $ 18,180 8.5 % Field contribution margin 17.5 % 18.5 % Corporate expenses $ 68,239 $ 72,034 $ (3,795 ) -5.3 % As a percentage of revenue 5.2 % 6.3 % Operating income $ 149,306 $ 131,835 $ 17,471 13.3 % As a percentage of revenue 11.3 % 11.5 % (1)Represents the change in margin percentage period over period. 29 The following tables summarize our key performance measures by segment for the six-month periods indicated: PDS For the six-month periods ended (dollars and hours in thousands) July 4, 2026 June 28, 2025 Change % Change Revenue $ 1,089,581 $ 946,010 $ 143,571 15.2 % Cost of revenue, excluding depreciation and amortization 780,464 653,391 127,073 19.4 % Gross margin $ 309,117 $ 292,619 $ 16,498 5.6 % Gross margin percentage 28.4 % 30.9 % -2.5 % (4) Hours 24,469 21,940 2,529 11.5 % Revenue rate $ 44.53 $ 43.12 $ 1.41 3.7 % (1) Cost of revenue rate $ 31.90 $ 29.78 $ 2.12 7.9 % (2) Spread rate $ 12.63 $ 13.34 $ (0.71 ) -5.9 % (3) HHH For the six-month periods ended (dollars and admissions/episodes in thousands) July 4, 2026 June 28, 2025 Change % Change Revenue $ 135,632 $ 116,845 $ 18,787 16.1 % Cost of revenue, excluding depreciation and amortization 62,670 53,041 9,629 18.2 % Gross margin $ 72,962 $ 63,804 $ 9,158 14.4 % Gross margin percentage 53.8 % 54.6 % -0.8 % (4) Home health total admissions (5) 21.5 19.5 2.0 10.3 % Home health episodic admissions (6) 17.4 14.8 2.6 17.6 % Home health total episodes (7) 29.6 24.5 5.1 20.8 % Home health episodic mix (8) 80.9 % 75.9 % 5.0 % (10) Home health revenue per completed episode (9) $ 3,185 $ 3,193 $ (8 ) -0.3 % MS For the six-month periods ended (dollars and UPS in thousands) July 4, 2026 June 28, 2025 Change % Change Revenue $ 93,185 $ 85,922 $ 7,263 8.5 % Cost of revenue, excluding depreciation and amortization 51,311 47,987 3,324 6.9 % Gross margin $ 41,874 $ 37,935 $ 3,939 10.4 % Gross margin percentage 44.9 % 44.2 % 0.7 % (4) Unique patients served (“UPS”) 188 180 8 4.4 % Revenue rate $ 495.66 $ 477.34 $ 18.32 4.1 % (1) Cost of revenue rate $ 272.93 $ 266.59 $ 6.34 2.5 % (2) Spread rate $ 222.73 $ 210.75 $ 11.98 6.0 % (3) (1)Represents the period over period change in revenue rate, plus the change in revenue rate attributable to the change in volume. (2)Represents the period over period change in cost of patient services rate, plus the change in cost of patient services rate attributable to the change in volume. (3)Represents the period over period change in spread rate, plus the change in spread rate attributable to the change in volume. (4)Represents the change in margin percentage period over period. (5)Represents home health episodic and other admissions. (6)Represents home health episodic admissions. (7)Represents episodic admissions and recertifications. (8)Represents the ratio of home health episodic admissions to home health total admissions. (9)Represents Medicare revenue per completed episode. (10) Represents the change in home health episodic mix period over period. The following discussion of our results of operations should be read in conjunction with the foregoing tables summarizing our consolidated results of operations and key performance measures, as well as our audited consolidated financial statements contained in our Annual Report on Form 10-K for the fiscal year ended January 3, 2026. Summary Operating Results 30 Operating Income Operating income was $149.3 million for the six-month period ended July 4, 2026, as compared to operating income of $131.8 million for the six-month period ended June 28, 2025, an increase of $17.5 million, or 13.3%. Operating income for the six-month period of 2026 was positively impacted by an increase of $18.2 million, or 8.5%, in Field contribution as compared to the six-month period of 2025. The $18.2 million increase in Field contribution resulted from a $169.6 million, or 14.8%, increase in consolidated revenue partially offset by a 1.0% decrease in our Field contribution margin to 17.5% for the six-month period of 2026 from 18.5% for the six-month period of 2025. The primary driver of our lower Field contribution margin year over year was a decrease in gross margin percentage from 34.3% for the six-month period of 2025 to 32.2% for the six-month period of 2026, partially offset by a 1.2% decrease in branch and regional administrative expenses as a percentage of revenue to 14.6% for the six-month period of 2026 from 15.8% for the six-month period of 2025. The following items primarily contributed to the $17.5 million increase in operating income compared to the first six months of 2025 primarily consists of: •the previously discussed $18.2 million increase in Field contribution; •a $3.8 million decrease in corporate expenses; and •a $0.2 million decrease in other operating expense; offset by •a $0.7 million increase in depreciation and amortization; and •a $4.0 million increase in acquisition-related costs associated with the acquisition of Family First. Net Income Net income for the six-month period ended July 4, 2026 was $81.9 million, as compared to net income of $32.2 million for the six-month period ended June 28, 2025. The $49.7 million increase in net income was primarily driven by the following: •the previously discussed $17.5 million increase in operating income; •an $18.1 million decrease in interest expense, net of interest income; •an aggregate $11.6 million decrease in valuation losses on interest rate derivatives and net settlements received from interest rate derivative counterparties included in other income (expense); and •a $2.6 million decrease in income tax expense. Revenue Revenue was $1,318.4 million for the six-month period ended July 4, 2026, as compared to $1,148.8 million for the six-month period ended June 28, 2025, an increase of $169.6 million, or 14.8%. This increase resulted from the following segment activity: •a $143.6 million, or 15.2%, increase in PDS revenue; •an $18.8 million, or 16.1%, increase in HHH revenue; and •a $7.3 million, or 8.5%, increase in MS revenue. Our PDS segment revenue growth of $143.6 million, or 15.2%, for the six-month period ended July 4, 2026 was attributable to a 11.5% increase in volume and a 3.7% increase in revenue rate. The 11.5% increase in volume was primarily attributable to growth in demand for non-clinical services and new volumes attributable to the Thrive and Family First acquisitions which were completed on June 2, 2025 and June 1, 2026, respectively. The 3.7% increase in PDS revenue rate for the six-month period ended July 4, 2026, as compared to the six-month period ended June 28, 2025, resulted primarily from reimbursement rate increases issued by various state Medicaid programs and Managed Medicaid payers and improved implicit price concessions. Reimbursement rate increases in the six-month period ended July 4, 2026 exceeded the six-month period ended June 28, 2025, which benefited from certain rate increases applied retroactively for services provided since July 1, 2024, and January 1, 2025. Our HHH segment revenue increase of $18.8 million, or 16.1%, for the six-month period ended July 4, 2026 resulted primarily from a 20.8% increase in total episodes compared to the first six months of 2025. The increase in HHH segment revenue was also driven by home health episodic mix, which increased from 75.9% for the first six months of 2025 to 80.9% for the first six months of 2026. 31 Our MS segment revenue growth of $7.3 million, or 8.5%, for the six-month period ended July 4, 2026, as compared to the six-month period ended June 28, 2025, was attributable to an increase in volume of 4.4% compared to the first six months of 2025 and an increase in revenue rate of 4.1%. Cost of Revenue, Excluding Depreciation and Amortization Cost of revenue, excluding depreciation and amortization, was $894.4 million for the six-month period ended July 4, 2026, as compared to $754.4 million for the six-month period ended June 28, 2025, an increase of $140.0 million, or 18.6%. This increase resulted from the following segment activity: •a $127.1 million, or 19.4%, increase in PDS cost of revenue; •a $9.6 million, or 18.2%, increase in HHH cost of revenue; and •a $3.3 million, or 6.9%, increase in MS cost of revenue. The 19.4% increase in PDS cost of revenue for the six-month period ended July 4, 2026 resulted from the previously described 11.5% increase in PDS volume combined with a 7.9% increase in PDS cost of revenue rate. The 7.9% increase in cost of revenue rate primarily resulted from higher caregiver labor costs, including the pass-through of reimbursement rate increases and higher general and professional liability expense over the comparable periods. The six-month period ended June 28, 2025 also included a $6.2 million release of certain accrued legal settlements which did not reoccur in the six-month period ended July 4, 2026. The 18.2% increase in HHH cost of revenue for the six-month period ended July 4, 2026 was driven primarily by higher home health total episodes over the comparable periods. The 6.9% increase in MS cost of revenue for the six-month period ended July 4, 2026 was driven by the previously described 4.4% increase in MS volumes and a 2.5% increase in cost of revenue rate. Gross Margin and Gross Margin Percentage Gross margin was $424.0 million, or 32.2% of revenue, for the six-month period ended July 4, 2026, as compared to $394.4 million, or 34.3% of revenue, for the six-month period ended June 28, 2025. Gross margin increased $29.6 million, or 7.5%, from the comparable prior year quarter. The 2.1% decrease in gross margin percentage for the six-month period ended July 4, 2026 resulted from the combined changes in our revenue rates and cost of revenue rates in each of our segments, which we refer to as the change in our spread rate in our PDS and MS segments, and the change in gross margin percentage in our HHH segment, as follows: •a 5.9% decrease in PDS spread rate from $13.34 to $12.63 driven by the 3.7% increase in PDS revenue rate, net of the 7.9% increase in PDS cost of revenue rate; •a 6.0% increase in MS spread rate from $210.75 to $222.73 driven by the 4.1% increase in MS revenue rate, net of the 2.5% increase in MS cost of revenue rate; and •our HHH segment, in which gross margin percentage decreased by 0.8%. Branch and Regional Administrative Expenses Branch and regional administrative expenses were $192.9 million, or 14.6% of revenue, for the six-month period ended July 4, 2026, as compared to $181.5 million, or 15.8% of revenue, for the six-month period ended June 28, 2025, an increase of $11.4 million, or 6.3%. The 6.3% increase in branch and regional administrative expenses for the six-month period ended July 4, 2026, as compared to the six-month period ended June 28, 2025, was primarily due to increased costs related to the acquisitions of Thrive and Family First, which were completed on June 2, 2025 and June 1, 2026, respectively, and increased our operating footprint, including adding new locations and support personnel. The overall 1.2% decrease in branch and regional administrative expenses as a percentage of revenue for the six-month period ended July 4, 2026, as compared to the six-month period ended June 28, 2025 is the result of leveraging our operating support model to effectively incorporate increased volume from acquisitions and higher demand driven from our existing operating footprint. Field Contribution and Field Contribution Margin Field contribution was $231.1 million, or 17.5% of revenue, for the six-month period ended July 4, 2026, as compared to $212.9 million, or 18.5% of revenue, for the six-month period ended June 28, 2025. Field contribution increased $18.2 million, or 8.5%, for the six-month period ended July 4, 2026, as compared to the six-month period ended June 28, 2025. The 1.0% decrease in Field contribution margin for the six-month period ended July 4, 2026 resulted from the following: 32 •a 2.1% decrease in gross margin percentage in the six-month period ended July 4, 2026, as compared to the six-month period ended June 28, 2025; offset by •a 1.2% decrease in branch and regional administrative expenses as a percentage of revenue in the six-month period ended July 4, 2026, as compared to the six-month period ended June 28, 2025. Field contribution and Field contribution margin are non-GAAP financial measures. See “Non-GAAP Financial Measures” below. Corporate Expenses Corporate expenses as a percentage of revenue for the six-month periods ended July 4, 2026 and June 28, 2025 were as follows: For the six-month periods ended July 4, 2026 June 28, 2025 (dollars in thousands) Amount % of Revenue Amount % of Revenue Revenue $ 1,318,398 $ 1,148,777 Corporate expense components: Compensation and benefits $ 37,894 2.9 % $ 38,466 3.3 % Non-cash share-based compensation 5,075 0.4 % 10,879 0.9 % Professional services 14,039 1.1 % 11,672 1.0 % Rent and facilities expense 6,436 0.5 % 6,012 0.5 % Office and administrative 793 0.1 % 917 0.1 % Other 4,002 0.3 % 4,088 0.4 % Total corporate expenses $ 68,239 5.2 % $ 72,034 6.3 % Corporate expenses were $68.2 million, or 5.2% of revenue, for the six-month period ended July 4, 2026, as compared to $72.0 million, or 6.3% of revenue, for the six-month period ended June 28, 2025. The $3.8 million, or 5.3%, decrease in corporate expenses resulted primarily from lower non-cash share-based compensation costs, primarily due to the acceleration of the SMRP in the first quarter of 2025, partially offset by higher professional services expense in the six-month period ended July 4, 2026 related to modification costs associated with the repricing of the applicable interest rate margins of our Existing Credit Facility. Depreciation and Amortization Depreciation and amortization was $5.9 million for the six-month period ended July 4, 2026, as compared to $5.2 million for the six-month period ended June 28, 2025, an increase of $0.7 million, or 13.1%. The $0.7 million increase primarily resulted from an increase in amortization expense related to acquired tradenames from Thrive. Acquisition-related costs Acquisition related costs were $7.5 million for the six-month period ended July 4, 2026, as compared to $3.5 million for the six-month period ended June 28, 2025, an increase of $4.0 million. Acquisition-related costs during the comparable periods were primarily related to the completed acquisitions of Thrive and Family First, which were completed on June 2, 2025 and June 1, 2026, respectively. Other Operating Expense Other operating expenses were $0.1 million for the six-month period ended July 4, 2026, as compared to $0.3 million for the six-month period ended June 28, 2025. Other operating expense in the comparable periods primarily resulted from the value associated with the impairment of certain licenses. Interest Expense, net of Interest Income Interest expense, net of interest income was $54.0 million for the six-month period ended July 4, 2026, as compared to $72.1 million for the six-month period ended June 28, 2025, a decrease of $18.1 million, or 25.1%. The decrease was primarily driven by a lower U.S. federal funds rate during the six-month period ended July 4, 2026 compared to the six-month period ended June 28, 2025, the positive effect of the refinancing of our credit facility in the third quarter of 2025, and the successful repricing of our credit facility during the second quarter of 2026. The drivers above reduced our weighted average interest rate from 9.0% as of June 28, 2025 to 6.6% as of July 33 4, 2026, resulting in lower interest expense. Further, our interest income increased $2.7 million over the comparable periods due to improved liquidity. See further analysis under Liquidity and Capital Resources below. Other Income (Expense) Other income was $6.2 million for the six-month period ended July 4, 2026, as compared to other expense of $5.5 million for the six-month period ended June 28, 2025. We realized a $16.4 million decrease in non-cash valuation losses on interest rate derivatives resulting from changes in market expectations of future interest rates as of the comparable valuation dates, offset by a $4.7 million decline in net settlements with interest rate derivative counterparties as interest rates decreased compared to the prior year period due to lower market interest rates. Details of other income (expense) included the following: For the six-month periods ended (dollars in thousands) July 4, 2026 June 28, 2025 Valuation loss, net to state interest rate derivatives at fair value $ (1,230 ) $ (17,580 ) Net settlements received from interest rate derivative counterparties 7,401 12,057 Other (12 ) 51 Total other income (expense) $ 6,159 $ (5,472 ) Income Taxes We record income tax expense during interim periods based on our estimate of the annual effective income tax rate, adjusted each quarter for discrete items. We analyze various factors to determine the estimated annual effective income tax rate, including projections of our annual earnings, the impact of state and local income taxes, our ability to use tax credits and net operating loss carryforwards, and available tax planning alternatives. We incurred income tax expense of $19.5 million for the six-month period ended July 4, 2026, as compared to income tax expense of $22.1 million for the six-month period ended June 28, 2025. This decrease in tax expense was primarily driven by a discrete benefit that was partially offset by differences in our projections of annual earnings at the end of each comparable six-month periods, as well as the changes to federal and state current tax expense and the changes in federal and state valuation allowances due to certain non-deductible expenses, most notably interest expense and executive compensation, while also including the effect of the OBBBA, which was enacted on July 4, 2025. Non-GAAP Financial Measures In addition to our results of operations prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), which we have discussed above, we also evaluate our financial performance using EBITDA, Adjusted EBITDA, Field contribution and Field contribution margin. EBITDA and Adjusted EBITDA EBITDA and Adjusted EBITDA are non-GAAP financial measures and are not intended to replace financial performance measures determined in accordance with U.S. GAAP, such as net income or loss. Rather, we present EBITDA and Adjusted EBITDA as supplemental measures of our performance. We define EBITDA as net income or loss before interest expense, net; income tax expense or benefit; and depreciation and amortization. We define Adjusted EBITDA as EBITDA, adjusted for the impact of certain other items that are either non-recurring, infrequent, non-cash, unusual, or items deemed by management to not be indicative of the performance of our core operations, including impairments of goodwill, intangible assets, and other long-lived assets; non-cash, share-based compensation, and associated employer payroll taxes; loss on extinguishment of debt; fees related to debt modifications; the effect of interest rate derivatives; acquisition-related and integration costs; legal costs and settlements associated with acquisition matters; restructuring costs; other legal matters; other system transition costs, professional fees; and other costs including gains and losses on acquisitions and dispositions of certain businesses. As non-GAAP financial measures, our computations of EBITDA and Adjusted EBITDA may vary from similarly termed non-GAAP financial measures used by other companies, making comparisons with other companies on the basis of this measure impracticable. Management believes our computations of EBITDA and Adjusted EBITDA are helpful in highlighting trends in our core operating performance. In determining which adjustments are made to arrive at EBITDA and Adjusted EBITDA, management considers both (1) certain non-recurring, infrequent, non-cash or unusual items, which can vary significantly from year to year, as well as (2) certain other items that may be recurring, frequent, or settled in cash but which management does not believe are indicative of our core operating performance. We use EBITDA and Adjusted EBITDA to assess operating performance and make business decisions. We have incurred substantial acquisition-related costs and integration costs. The underlying acquisition activities take place over a defined timeframe, have distinct project timelines and are incremental to activities and costs that arise in the ordinary course of our 34 business. Therefore, we believe it is important to exclude these costs from our Adjusted EBITDA because it provides management a normalized view of our core, ongoing operations after integrating our acquired companies, which is an important measure in assessing our performance. Given our determination of adjustments in arriving at our computations of EBITDA and Adjusted EBITDA, these non-GAAP measures have limitations as analytical tools and should not be considered in isolation or as substitutes or alternatives to net income or loss, revenue, operating income or loss, cash flows from operating activities, total indebtedness or any other financial measures calculated in accordance with U.S. GAAP. The following table reconciles net income to EBITDA and Adjusted EBITDA for the periods indicated: For the three-month periods ended For the six-month periods ended (dollars in thousands) July 4, 2026 June 28, 2025 July 4, 2026 June 28, 2025 Net income $ 40,293 $ 27,025 $ 81,946 $ 32,218 Interest expense, net 26,517 35,874 54,017 72,077 Income tax expense 16,180 17,113 19,502 22,068 Depreciation and amortization 2,849 2,617 5,893 5,211 EBITDA 85,839 82,629 161,358 131,574 Goodwill, intangible and other long-lived asset impairment 145 153 121 319 Non-cash share-based compensation 4,135 5,159 8,282 16,155 Fees related to debt modifications 1,504 - 1,504 - Interest rate derivatives (1) (3,067 ) (72 ) (6,171 ) 5,523 Acquisition-related costs (2) 4,390 3,400 7,500 3,507 Integration costs (3) 1,246 2,269 2,669 2,543 Legal costs and settlements associated with acquisition matters (4) 1,362 639 3,418 1,678 Restructuring (5) - 80 - 416 Other legal matters (6) 3 (6,014 ) 28 (5,938 ) Other adjustments (7) (122 ) 131 1,077 (50 ) Total adjustments (8) $ 9,596 $ 5,745 $ 18,428 $ 24,153 Adjusted EBITDA $ 95,435 $ 88,374 $ 179,786 $ 155,727 (1)Represents valuation adjustments and settlements associated with interest rate derivatives that are not included in interest expense, net. Such items are included in other income (expense). (2)Represents transaction costs incurred in connection with planned, completed, or terminated acquisitions, which include investment banking fees, legal diligence and related documentation costs, and finance and accounting diligence and documentation, as presented on the Company’s consolidated statements of operations. (3)Represents (i) costs associated with our Integration Management Office, which focuses on our integration efforts and transformational projects such as systems conversions and implementations, material cost reduction and restructuring projects, among other things, of $0.5 million and $0.9 million for the three and six-month periods ended July 4, 2026, respectively, and $0.5 million and $0.7 million for the three and six-month periods ended June 28, 2025, respectively; and (ii) transitionary costs incurred to integrate acquired companies into our field and corporate operations of $0.7 million and $1.8 million for the three and six-month periods ended July 4, 2026, respectively, and $1.8 million for both the three and six-month periods ended June 28, 2025, respectively. Transitionary costs incurred to integrate acquired companies include IT consulting costs and related integration support costs; salary, severance and retention costs associated with duplicative acquired company personnel until such personnel are exited from the Company; accounting, legal and consulting costs; expenses and impairments related to the closure and consolidation of overlapping markets of acquired companies, including lease termination and relocation costs; costs associated with terminating legacy acquired company contracts and systems; and one-time costs associated with rebranding our acquired companies and locations to the Aveanna brand. (4)Represents legal and forensic costs, as well as settlements associated with resolving legal matters arising during or as a result of our acquisition-related activities. This primarily includes (i) costs of $1.1 million and $2.6 million for the three and six-month periods ended July 4, 2026, respectively, and $0.4 million and $1.3 million for the three and six-month periods ended June 28, 2025, respectively, to comply with the U.S. Department of Justice, Antitrust Division’s grand jury subpoena related to nurse wages and hiring activities in certain of our markets, in connection with a terminated transaction. (5)Represents costs associated with restructuring our branch and regional administrative footprint as well as our corporate overhead infrastructure costs in order to appropriately size our resources to current volumes, including: (i) branch and regional 35 salary and severance costs; (ii) corporate salary and severance costs; and (iii) rent and lease termination costs associated with the closure of certain office locations. (6)Represents activity related to accrued legal settlements and the related costs and expenses associated with certain judgments and arbitration awards rendered against the Company where certain insurance coverage is in dispute. The Company released a legal reserve related to a certain accrued legal settlement during the three and six-month period ended June 28, 2025. (7)Represents: (i) other costs or (income) that are either non-cash or non-core to the Company’s ongoing operations of $(0.1) million and $1.1 million for the three and six-month periods ended July 4, 2026, respectively, and $0.1 million and $(0.1) million for the three and six-month periods ended June 28, 2025, respectively. (8)The table below reflects the increase or decrease, and aggregate impact, to the line items included in our consolidated statements of operations based upon the adjustments used in arriving at Adjusted EBITDA from EBITDA for the periods indicated: Impact to Adjusted EBITDA For the three-month periods ended For the six-month periods ended (dollars in thousands) July 4, 2026 June 28, 2025 July 4, 2026 June 28, 2025 Cost of revenue, excluding depreciation and amortization $ 345 $ (5,878 ) $ (13 ) $ (5,578 ) Branch and regional administrative expenses 1,485 1,599 3,504 4,837 Corporate expenses 6,243 6,451 13,453 15,599 Acquisition-related costs 4,390 3,400 7,500 3,506 Other operating expense - 109 - 47 Other income (expense) (2,867 ) 64 (6,016 ) 5,742 Total adjustments $ 9,596 $ 5,745 $ 18,428 $ 24,153 Field Contribution and Field Contribution Margin Field contribution and Field contribution margin are non-GAAP financial measures and are not intended to replace financial performance measures determined in accordance with U.S. GAAP, such as gross margin and gross margin percentage. Rather, we present Field contribution and Field contribution margin as supplemental measures of our performance. We define Field contribution as gross margin less branch and regional administrative expenses. Field contribution margin is Field contribution as a percentage of revenue. As non-GAAP financial measures, our computations of Field contribution and Field contribution margin may vary from similarly termed non-GAAP financial measures used by other companies, making comparisons with other companies on the basis of these measures impracticable. Field contribution and Field contribution margin have limitations as analytical tools and should not be considered in isolation or as substitutes or alternatives to gross margin, gross margin percentage, net income or loss, revenue, operating income or loss, cash flows from operating activities, total indebtedness, or any other financial measures calculated in accordance with U.S. GAAP. Management believes Field contribution and Field contribution margin are helpful in highlighting trends in our core operating performance and evaluating trends in our branch and regional results, which can vary from year to year. We use Field contribution and Field contribution margin to make business decisions and assess the operating performance and results delivered by our core field operations, prior to corporate and other costs not directly related to our field operations. These metrics are also important because they guide us in determining whether or not our branch and regional administrative expenses are appropriately sized to support our caregivers and direct patient care operations. Additionally, Field contribution and Field contribution margin determine how effective we are in managing our field supervisory and administrative costs associated with supporting our provision of services and sale of products. The following table reconciles gross margin to Field contribution and Field contribution margin for the periods indicated: For the three-month periods ended For the six-month periods ended (dollars in thousands) July 4, 2026 June 28, 2025 July 4, 2026 June 28, 2025 Gross margin $ 218,525 $ 210,800 $ 423,953 $ 394,358 Gross margin percentage 32.6 % 35.8 % 32.2 % 34.3 % Branch and regional administrative expenses 97,079 90,069 192,871 181,456 Field contribution $ 121,446 $ 120,731 $ 231,082 $ 212,902 Field contribution margin 18.1 % 20.5 % 17.5 % 18.5 % Revenue $ 670,483 $ 589,553 $ 1,318,398 $ 1,148,777 36 Liquidity and Capital Resources Overview Our principal sources of cash have historically been from cash provided by operating activities. Our principal source of liquidity in addition to cash provided by operating activities, or when we have used net cash in our operating activities, has historically been from proceeds from our credit facilities and issuances of common stock. Our principal uses of cash and liquidity have historically been for acquisitions, interest and principal payments under our credit facilities, payments under our interest rate derivatives, and financing of working capital. Acquisitions and payment of interest and related fees under our credit facilities is currently the most significant use of our operating cash flow. Our continued goal is to use cash flow provided by operations primarily as a source of cash to supplement the purchase price for acquisitions. At July 4, 2026 we had $97.2 million in cash on hand, $110.0 million available to us under our Securitization Facility and approximately $225.5 million of borrowing capacity under the 2026 Refinancing Revolving Credit Facility. Available borrowing capacity under the 2026 Refinancing Revolving Credit Facility is subject to a maintenance leverage covenant that becomes effective if more than 40% of the total commitment is utilized. We believe that our operating cash flows, available cash on hand, and availability under our Securitization Facility and 2026 Refinancing Revolving Credit Facility will be sufficient to meet our cash requirements for at least the next twelve months. Our future capital requirements will depend on many factors that are difficult to predict, including the size, timing and structure of any future acquisitions, future capital investments and future results of operations. We cannot assure you that cash provided by operating activities or cash and cash equivalents on hand will be sufficient to meet our future needs. If we are unable to generate sufficient cash flows from operations in the future, we may have to obtain additional financing. If we obtain additional capital by issuing equity, the interests of our existing stockholders will be diluted. If we incur additional indebtedness, that indebtedness may contain significant financial and other covenants that may significantly restrict our operations. We cannot assure you that we could obtain refinancing or additional financing on favorable terms or at all. Cash Flow Activity The following table sets forth a summary of our cash flows from operating, investing, and financing activities for the six-month periods presented: For the six-month periods ended (dollars in thousands) July 4, 2026 June 28, 2025 Net cash provided by operating activities $ 85,277 $ 42,937 Net cash used in investing activities $ (179,924 ) $ (18,330 ) Net cash used in financing activities $ (1,417 ) $ (8,157 ) Operating Activities The primary sources or uses of our operating cash flow are operating income or operating losses, as well as any other significant non-cash items such as depreciation, amortization and share-based compensation, and cash paid for interest. The timing of collections of accounts receivable and the payment of accounts payable, other accrued liabilities and accrued payroll can also impact and cause fluctuations in our operating cash flow. Cash provided by operating activities increased by $42.3 million for the six-month period ended July 4, 2026 compared to the six-month period ended June 28, 2025, primarily due to: •improvements in operating income over the prior year period; •decreases in interest expense over the prior year period; and •the provision of cash associated with operating assets and liabilities during the first six months of 2026, including the timing of collections of accounts receivable and payments of certain accrued payroll and employee benefits. Days Sales Outstanding (“DSO”) DSO provides us with a gauge to measure the timing of cash collections against accounts receivable and related revenue. DSO is derived by dividing our average patient accounts receivable for the fiscal period by our average daily revenue for the fiscal period. The collection cycle for our HHH segment is generally longer than that of our PDS segment, primarily due to longer billing cycles for HHH, which is generally billed in thirty-day increments. The following table presents our trailing five quarter DSO for the periods presented below: June 28, 2025 September 27, 2025 January 3, 2026 April 4, 2026 July 4, 2026 Days Sales Outstanding 47.2 46.0 46.3 45.4 45.5 37 Investing Activities Net cash used in investing activities was $179.9 million for the six-month period ended July 4, 2026, as compared to $18.3 million for the six-month period ended June 28, 2025. The primary driver of the $161.6 million increase in cash used in the current period was the acquisition of Family First and cash paid for the interest rate cap of $4.6 million. Financing Activities Net cash used in financing activities decreased by $6.7 million, from $8.2 million net cash used in financing activities for the six-month period ended June 28, 2025 to $1.4 million net cash used in financing activities for the six-month period ended July 4, 2026. The $6.7 million decrease in net cash used in financing activities was primarily attributable to less cash used to cover employee taxes on vesting of restricted stock and lower principal payments on term loans net of issuances from term loans during the six-month period ended July 4, 2026. Indebtedness We typically incur term loan indebtedness to finance our acquisitions, and we borrow under our Securitization Facility and Revolving Credit Facility from time to time for working capital purposes, as well as to finance acquisitions, as needed. The following table presents our current and long-term obligations under our credit facilities as of July 4, 2026 and January 3, 2026, as well as related interest expense for the six-month periods ended July 4, 2026 and June 28, 2025, respectively: Current and Long-term Interest Expense (dollars in thousands) Obligations For the six-month periods ended Instrument July 4, 2026 January 3, 2026 Interest Rate as of July 4, 2026 July 4, 2026 June 28, 2025 2026 Term Loans (1) $ 1,318,375 $ 1,321,687 S + 3.00% $ 48,397 $ 37,029 Second Lien Term Loan (2) - - N/A - 24,201 2026 Refinancing Revolving Credit Facility (1) - - S + 3.00% 488 349 Securitization Facility 165,000 (1) 165,000 (3) S + 2.50% 5,492 6,599 Amortization of debt issuance costs - - 1,948 3,350 Other - - 609 810 Total Indebtedness $ 1,483,375 $ 1,486,687 $ 56,934 $ 72,338 Less: unamortized debt issuance costs (20,494 ) (21,785 ) Total current and long-term obligations, net of unamortized debt issuance costs $ 1,462,881 $ 1,464,902 Weighted Average Interest Rate (4) 6.6 % 7.3 % (1)Variable rate debt instrument which accrues interest at a rate equal to the SOFR rate, plus an applicable margin. (2)The Second Lien Term Loan was paid in full as part of the Refinancing Amendment in the third quarter of 2025. (3)Variable rate debt instrument which accrues interest at a rate equal to the SOFR rate, plus a credit spread adjustment ("CSA"), plus an applicable margin. (4)Represents the weighted average annualized interest rate based upon the outstanding balances at July 4, 2026 and January 3, 2026, respectively, and the applicable interest rates at that date. On May 26, 2026, Aveanna Healthcare LLC (the “Borrower”), a wholly owned subsidiary of the Company, entered into the thirteenth amendment (the "Amendment") to its First Lien Credit Agreement, dated as of March 16, 2017 (as further amended, supplemented, or otherwise modified from time to time, the "Existing Credit Agreement"), which constituted a repricing of the facilities under the Existing Credit Agreement resulting in a 0.50% reduction to applicable interest rate margins (the Existing Credit Agreement, as amended by the Amendment, the "Credit Agreement"). Pursuant to the Amendment, the outstanding senior secured term loans under the Existing Credit Agreement were refinanced with new senior secured term loans in an aggregate principal amount of $1.3 billion (the “2026 Term Loans”) and the existing $250.0 million senior secured revolving credit facility was refinanced with a new $250.0 million senior secured revolving credit facility (the “2026 Refinancing Revolving Credit Facility” and, together with the 2026 Term Loans, the “2026 Facilities”). On May 28, 2026, based on certain terms of the Amendment, and as the result of a favorable credit agency rating improvement, the applicable interest rate margins were decreased by an additional 0.25%. 38 We were in compliance with all financial covenants and restrictions related to existing credit facilities at July 4, 2026. Subsequent to the end of the second quarter of 2026, on July 6, 2026, in accordance with certain required minimum funding provisions in the Securitization Facility Agreement, as amended, we increased borrowings under the Securitization Facility by $41.3 million to $206.3 million. Available borrowing capacity under the Securitization Facility was $68.7 million subsequent to the required minimum borrowing. Contractual Obligations Our contractual obligations consist primarily of long-term debt obligations, interest payments, and operating leases. These contractual obligations impact our short-term and long-term liquidity and capital needs. As of July 4, 2026, there were no material changes to our contractual obligations from those described in our Annual Report on Form 10-K for the fiscal year ended January 3, 2026. Critical Accounting Estimates See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates” and our consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended January 3, 2026 for accounting policies and related estimates we believe are the most critical to understanding our consolidated financial statements, financial condition and results of operations and which require complex management judgment and assumptions, or involve uncertainties. These critical accounting estimates include patient services and product revenue; business combinations; goodwill; and insurance reserves. There have been no changes to our critical accounting estimates or their application since the date of our Annual Report on Form 10-K for the fiscal year ended January 3, 2026.