Aveanna Healthcare has revealed a robust financial performance for the second quarter of 2026, showcasing significant growth across its key business segments. The company's strategic focus on strengthening partnerships with preferred payers and governmental bodies, alongside a commitment to enhancing caregiver support and operational efficiencies, has been pivotal in driving these impressive results. A notable achievement includes a substantial rate increase for private duty nursing services in California, a culmination of years of advocacy, which is set to profoundly impact the company's future growth trajectory and the well-being of medically fragile patients.
The second quarter of 2026 saw Aveanna Healthcare achieve a consolidated revenue of $670.5 million, marking a 13.7% increase from the previous year. Adjusted EBITDA also climbed by 8% to $95.4 million, underscoring the company's improved financial health. This growth was not isolated, with all three core segments—Private Duty Services, Home Health and Hospice, and Medical Solutions—contributing positively. Private Duty Services revenue reached $553.9 million, growing 14%, while Home Health and Hospice saw a 14.8% increase to $69.0 million, and Medical Solutions expanded by 9.4% to $47.5 million. These figures reflect an improved rate and volume environment, coupled with increased operational efficiencies.
A significant highlight of the quarter was the successful integration of Family First Homecare, an acquisition funded entirely by existing cash reserves, demonstrating Aveanna's strong liquidity and strategic acquisition capabilities. Furthermore, the company effectively repriced its term loan, leading to an anticipated annual interest expense reduction of approximately $10 million. These financial maneuvers, combined with strong operating cash flow of $85.3 million and free cash flow of $75.4 million for the first half of 2026, reinforce Aveanna's stable financial footing.
A cornerstone of Aveanna's strategy is its engagement with preferred payers and governmental partners. The company's private duty services segment saw 64% of its Managed Care Organization (MCO) volumes sourced from preferred payers, an increase from 60% in the first quarter, indicating a successful shift in caregiver capacity towards these partnerships. In the home health sector, the company exceeded its 2026 goal by securing 50 preferred payer agreements, maintaining an episodic mix of 81%, well above its 75% target. This focus on episodic care has led to double-digit year-over-year growth in home health admissions and episodes, alongside improvements in clinical and financial outcomes.
The announcement of a legislated rate increase for pediatric private duty nursing in California, effective January 1, 2027, stands as a monumental victory. After nearly a decade without significant adjustments, this rate increase is expected to dramatically improve Aveanna's ability to attract and retain nurses in California, address the substantial unmet demand for services, and facilitate timely patient discharges from hospitals. The company plans to proactively adjust nurse wages in California ahead of this official rate increase, ensuring a smooth transition and enhanced service delivery. This achievement validates Aveanna's long-term government affairs strategy and positions it for sustained organic growth.
Looking ahead, Aveanna Healthcare has raised its full-year revenue guidance to greater than $2.68 billion and adjusted EBITDA guidance to greater than $365 million, signaling strong confidence in its continued performance. The company also updated its long-term organic growth rates for Private Duty Services (from 3-5% to 5-6%) and Home Health and Hospice (from 5-7% to 8-10%), reflecting improved rate stability and successful preferred payer strategies. Aveanna aims to continue its strategic growth through both organic expansion and thoughtful mergers and acquisitions, particularly in the home health and hospice sectors, with a long-term goal of achieving double-digit annual revenue growth and reducing its net leverage.
Aveanna's impressive second-quarter results and upward revised outlook underscore the effectiveness of its strategic initiatives. The company's dedication to improving caregiver conditions through enhanced wages and streamlined operations, fostering strong relationships with payers, and pursuing targeted acquisitions positions it for sustained success in the evolving home healthcare landscape. The landmark California rate increase is a testament to its advocacy efforts and a promising indicator for future growth and patient care enhancements.
