AVAH Filings — Aveanna Healthcare Holdings Inc. - FilingSpy
AVAH
Aveanna Healthcare Holdings Inc.
A one-stop home healthcare provider, Aveanna sends nurses into private homes to care for medically complex children and adults—many ventilator-dependent or needing round-the-clock attention—alongside home health, hospice, and enteral nutrition for seniors. It was created in 2017 when two home-care firms, Epic Health Services and PSA Healthcare, merged. Caregivers often stay with the same families for years, letting medically fragile children grow up at home rather than in hospitals.
PDS spread rate fell 11% to $12.88, the fourth straight quarterly decline, as caregiver costs rose faster than reimbursement rates.
The core spread that drove last year's profit rebound continued to erode. rose 13.7% to $670.5 million and increased 49.1% to $40.3 million, helped by a $9.4 million drop in after debt refinancing, but the Private Duty Services fell 11.1% to $12.88 as caregiver labor and liability costs grew faster than reimbursement rates. The company closed the Family First Homecare acquisition, adding volume, while the profitability of each hour of care it delivers keeps narrowing.
Key takeaways
The Private Duty Services (PDS) fell 11.1% to $12.88 per hour, the fourth consecutive quarterly decline from the Q2 FY2025 peak of $14.29, as the cost of rate rose 7.8% on higher caregiver labor, general and professional liability reserves, and the absence of a prior-year $6.2 million legal settlement release, while the revenue rate increased only 1.7%.
Consolidated rose 13.7% to $670.5 million, with PDS up 14.0% on a 12.3% increase in hours of care — reflecting the Family First Homecare acquisition, which closed June 1, 2026 — and a 1.7% increase in the revenue rate per hour.
Section summaries
Management's Discussion and Analysis
Revenue grew 13.7% to $670.5M in Q2 2026, driven by volume and rate gains across all segments, but gross margin contracted 320 bps to 32.6% due to higher caregiver labor and liability costs.
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Consolidated Q2 2026 rose 13.7% to $670.5M, with PDS up 14.0% on 12.3% higher hours and a 1.7% higher revenue rate, HHH up 14.8% on 18.5% more total episodes, and MS up 9.4% on 4.4% more unique patients and a 5.0% higher revenue rate.
contracted 3.2 percentage points to 32.6%, as the PDS cost of rate increase outpaced the revenue rate gain, and margin fell 2.4 percentage points to 18.1%.
rose 49.1% to $40.3 million, driven by a $9.4 million decline in net to $26.5 million after refinancing and repricing lowered the from 9.0% to 6.6%, and a $3.0 million favorable swing in other income from lower derivative valuation losses.
rose 56.9% to $80.9 million, and the company ended the quarter with $97.2 million in cash and $335.5 million in total borrowing capacity under its revolving and securitization facilities.
The company completed the $173.7 million cash acquisition of Family First Homecare on June 1, 2026, funded with cash on hand, which contributed to the 12.3% increase in PDS hours of care.
What changed
The PDS continued its decline, falling to $12.88 from $11.54 in Q1 FY2026 and $12.62 in Q3 FY2025, confirming that the one-time collections benefits that lifted the rate to $14.29 in Q2 FY2025 have fully faded and the rate is now settling at a lower level.
The CMS proposed 6.4% home health payment cut for CY2026, flagged in prior quarters, remained unresolved as of this filing, with the company noting no material change to risk factors from the FY2025 10-K.
rose to $80.9 million, up from $4.3 million in Q1 FY2026 and $51.6 million in Q2 FY2025, moving well above the $30-million-plus quarterly run rate that prior summaries identified as the threshold for consistent self-funding.
The Family First Homecare acquisition, flagged in Q1 FY2026 as a $175.5 million deal expected to close in Q2, closed on June 1 for $173.7 million and contributed to the 12.3% increase in PDS hours of care, though its impact on the cannot yet be isolated.
What to watch
Whether the PDS stabilizes near $12.88 or continues to decline in Q3 FY2026, indicating whether the cost of rate increases are moderating or still outpacing reimbursement gains.
The outcome of the CMS proposed 6.4% home health payment cut for CY2026 and any federal Medicaid spending reductions, and their impact on the Home Health & Hospice 's and the PDS reimbursement rate trajectory.
The integration and margin impact of the Family First Homecare acquisition, and whether the added volume contributes to without further pressuring the PDS .
Whether can sustain a run rate above $30 million per quarter after the $80.9 million Q2 result, confirming the transition to consistent self-funding rather than a quarter driven by timing.
percentage fell 320 to 32.6%, primarily from an 11.1% decline in PDS to $12.88 as cost of rate rose 7.8% on higher caregiver labor, general and professional liability reserves, and the absence of a prior-year $6.2M legal settlement release.
margin decreased 240 to 18.1%, as the decline was partially offset by a 0.8% reduction in branch and regional administrative expenses as a percentage of , reflecting from acquisitions.
increased 49.1% to $40.3M, helped by a $9.4M drop in net to $26.5M after refinancing and repricing reduced the weighted average interest rate from 9.0% to 6.6%, and a $3.0M swing in other income from lower derivative valuation losses.
The Company completed the $173.7M cash acquisition of Family First Homecare on June 1, 2026, funded with cash on hand, and ended the quarter with $97.2M in cash and $335.5M in total borrowing capacity under its revolving and securitization facilities.
Quantitative and Qualitative Disclosures About Market Risk
We have exposure to changing interest rates under our Securitization Facility and the 2026 Refinancing Term Facility, both of which currently bear interest at variable rates based on SOFR. As of July 4, 2026, the total amount of outstanding variable rate debt was $1.5 billion. A…
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We have exposure to changing interest rates under our Securitization Facility and the 2026 Refinancing Term Facility, both of which currently bear interest at variable rates based on SOFR. As of July 4, 2026, the total amount of outstanding variable rate debt was $1.5 billion.
As of July 4, 2026, we had multiple interest rate cap agreements with an aggregate notional amount of $1,400.0 million and cap rates of 2.96% and 4.00%, effective for $880.0 million and $520.0 million of the notional amounts, respectively. The 2027 and 2029 cap agreements have an expiration dates of February 28, 2027 and December 31, 2029, respectively. We do not enter into such arrangements for trading purposes.
Based on our outstanding indebtedness and the effect of our interest rate cap agreements at July 4, 2026, a 100 basis point increase in interest rates associated with the approximately $83.4 million of unhedged variable rate debt as of July 4, 2026 would cause interest expense to increase by approximately $2.7 million annually.
See Note 5 - Long-Term Obligations, Note 6 - Securitization Facility, and Note 8 - Derivative Financial Instruments, to the unaudited interim consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for information on the material terms of our indebtedness and derivative financial instruments.
Information in response to this Item is included in “Part I – Item 1 - Note 11 – Commitments and Contingencies” and is incorporated by reference into this Part II, Item 1 of this Quarterly Report on Form 10-Q.
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Information in response to this Item is included in “Part I – Item 1 - Note 11 – Commitments and Contingencies” and is incorporated by reference into this Part II, Item 1 of this Quarterly Report on Form 10-Q.
There have been no material changes to the risk factors described in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended January 3, 2026.
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There have been no material changes to the risk factors described in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended January 3, 2026.