Addus HomeCare (ADUS) Bilanzkonferenz Q3 2026: EBITDA steigt um 13,5 %, AccentCare-Deal im Fokus

Kernaussagen

• Addus HomeCare wies für das 3. Quartal 2026 Nettodienstleistungserlöse von 387,7 Millionen US-Dollar aus, ein Anstieg von 7,0 % gegenüber dem Vorjahr, während das bereinigte EBITDA um 13,5 % auf 51,2 Millionen US-Dollar stieg.
• Das bereinigte verwässerte Ergebnis je Aktie stieg um 17,3 % auf 1,83 US-Dollar, und die bereinigte EBITDA-Marge verbesserte sich auf 13,2 % von 12,5 % im Vorjahr.
• Personal Care blieb mit 301,0 Millionen US-Dollar bzw. 77,6 % des Umsatzes das größte Segment. Der Same-Store-Umsatz wuchs um 6,9 %, obwohl die Same-Store-Stunden um moderatere 1,6 % stiegen.
• Der Same-Store-Umsatz im Bereich Hospiz stieg um 4,1 % bzw. 8,8 % ohne den Effekt impliziter Preisnachlässe des Vorjahres . Die durchschnittliche tägliche Patientenzahl stieg um 4,3 % auf 4.031.
• Die ausstehende, 275 Millionen US-Dollar schwere Übernahme der Personal-Care-Aktivitäten von AccentCare außerhalb von New York soll voraussichtlich etwa 280 Millionen US-Dollar an annualisiertem Umsatz beisteuern sowie rund 13.700 Klienten in 10 Bundesstaaten hinzugewinnen. Das Management rechnet mit dem Abschluss der Transaktion im 1. Quartal 2027.
• Addus beendete das Quartal mit 98,5 Millionen US-Dollar an liquiden Mitteln und 24,3 Millionen US-Dollar an Bankverbindlichkeiten. Laut Management bietet die Bilanz weiterhin Spielraum für zusätzliche Übernahmen in den Bereichen Personal Care, Home Health und Hospiz.

Wichtigste Finanzergebnisse

Geschäfts- und operative Entwicklung

Personal Care

Personal Care erwirtschaftete 301,0 Mio. US-Dollar, was einem Anteil von 77,6 % entspricht des gesamten Q3-Umsatzes. Der Same-Store-Umsatz stieg um 6,9 %, gestützt auf Volumen, übernommene Aktivitäten und historische Vergütungserhöhungen in Illinois, Texas und New Mexico.

Die Arbeitsstunden auf vergleichbarer Fläche stiegen um 1,6 %, während der Prozentsatz der erbrachten genehmigten Stunden im mittleren 80-%-Bereich verblieb. Die durchschnittliche tägliche Patientenzahl auf vergleichbarer Fläche sank um 0,4 %, hauptsächlich aufgrund von weniger Fällen mit geringerer Stundenzahl, während Fälle mit höherer Stundenzahl zunahmen.

Sieben der 10 größten Märkte von Addus verzeichneten im Jahresvergleich ein Wachstum der Patientenzahlen. Texas und Illinois entwickelten sich im Quartal leicht negativ, jedoch gab das Management bekannt, dass sich beide Märkte im Oktober verbesserten. Das Unternehmen erwartet für das vierte Quartal ein unverändertes bis leicht positives Wachstum der Patientenzahlen.

Die Neueinstellung von Pflegekräften lag im Durchschnitt bei 105 Neueinstellungen pro Arbeitstag, was im Zielbereich des Managements lag. Addus weitet seine intern entwickelte Pflegekräfte-App von Illinois auf Texas und New Mexico aus, um die Personalausstattung und den Prozentsatz der erbrachten genehmigten Stunden zu verbessern.

New Mexico implementierte eine rund 4-prozentige Vergütungserhöhung mit Wirkung zum 1. Juli 2026. Das Management führt weiterhin Gespräche mit anderen US-Bundesstaaten über eine potenzielle Vergütungsunterstützung für 2027.

Hospizpflege

Der Umsatz im Bereich Hospizpflege betrug 69,0 Millionen US-Dollar, oder 17,8 % des Gesamtumsatzes. Der Same-Store-Umsatz stieg um 4,1 %, aber das Wachstum lag bei 8,8 % nach Ausschluss des Effekts einer impliziten Preiskonzession aus dem Vorjahr.

Die durchschnittliche tägliche Patientenzahl stieg um 4,3 % auf 4.031, und überstieg 4.100 im Oktober. Die mediane Verweildauer stieg auf 25 Tage, verglichen mit 22 Tagen ein Jahr zuvor und 24 Tagen im 2. Quartal 2026.

Im 3. Quartal wurde keine zusätzliche Medicare-Obergrenzenanpassung verzeichnet. Das Management gab an, dass die Eindämmungsmaßnahmen wirksam waren, und zeigte sich zuversichtlich, dass im Jahr 2026 keine weiteren Obergrenzenanpassungen erforderlich sein werden.

Die Anpassung der Medicare-Hospizvergütung für das Geschäftsjahr 2027 sieht eine Gesamterhöhung von 2,3 % mit Wirkung zum 1. Oktober 2026 vor. Aufgrund des geografischen Mixes und der Lohnindizes erwartet Addus einen Vorteil von knapp 2 %.

Häusliche Krankenpflege

Der Bereich Häusliche Krankenpflege erwirtschaftete 17,7 Millionen US-Dollar, oder 4,6 % des Umsatzes. Der Same-Store-Umsatz stieg um 2,5 %, was das erste Quartal des Segments mit einem Umsatzplus im Jahresvergleich seit mehreren Jahren darstellt, während die Aufnahmen auf vergleichbarer Fläche um 13,8 %.

Das Management führte die Verbesserung auf das neue Führungsteam, eine stärkere Vertriebsabwicklung, neue Rekrutierungsmaßnahmen und operative Änderungen zurück. In New Mexico und Tennessee stammten mehr als 25 % der Hospizaufnahmen aus dem Home-Health-Bereich von Addus über das klinische Bridge-Programm. Das Unternehmen plant, das Programm in Illinois einzuführen.

Übernahme von AccentCare

Addus hat sich zum Erwerb der Personal-Care-Vermögenswerte von AccentCare außerhalb von New York für 275 Millionen US-Dollar geeinigt. Die übernommenen Aktivitäten werden voraussichtlich etwa 280 Millionen US-Dollar zum annualisierten Umsatz beitragen, was etwa 19 % der aktuellen Umsatzbasis von Addus entspricht.

Durch die Transaktion kommen etwa 13.700 Kunden in 10 US-Bundesstaaten hinzu, was die Präsenz in Texas, Illinois, Kalifornien und Arizona verdichtet und gleichzeitig Aktivitäten in sechs weiteren Märkten ergänzt. Addus plant, den Kauf mit liquiden Mitteln und Inanspruchnahmen im Rahmen seiner revolvierenden Kreditfazilität zu finanzieren.

Die Personal-Care-Aktivitäten von AccentCare erzielen derzeit eine EBITDA-Marge im hohen einstelligen Bereich. Das Management sieht die Chance, diese Marge auf den niedrigen zweistelligen Bereich zu steigern, vor allem durch G&A-Einsparungen, die schrittweise über einen Zeitraum von mehr als 12 Monaten realisiert werden.

Ausblick des Managements

• Addus erwartet nun, dass die bereinigte EBITDA-Marge für das Gesamtjahr 2026 bei rund 13 % liegt.
• Für die Bruttomarge im vierten Quartal 2026 wird ein positiver Effekt von etwa 50 bis 60 Basispunkten erwartet, hauptsächlich bedingt durch die Aktualisierung der Hospiz-Kostenerstattung und geringere Arbeitslosensteuern.
• Der Steuersatz für das Gesamtjahr 2026 verbleibt voraussichtlich im oberen 20-Prozent-Bereich.
• Das Management rechnet mit dem Abschluss der AccentCare-Transaktion im Q1 2027, vorbehaltlich der üblichen behördlichen Genehmigungen.
• Für 2027 erwartet das Management, dass sich das flächenbereinigte Umsatzwachstum im Bereich Personal Care wieder näher an die Zielspanne des Unternehmens von 3 % bis 5 % annähert, insbesondere in der ersten Jahreshälfte, da die jüngsten Erstattungsvorteile in großen Bundesstaaten nachlassen.
• Addus strebt im Bereich Personal Care ein flächenbereinigtes Stundenwachstum von etwa 2 % bis 2,5 % an, unterstützt durch ein moderates Wachstum der Patientenzahlen und eine Verbesserung der Auslastungsquote in Richtung des oberen 80-Prozent-Bereichs.
• Das Management rechnet im Hospizbereich weiterhin mit einem Wachstum im oberen einstelligen Bereich und möchte die jüngste positive Dynamik im Home-Health-Bereich aufrechterhalten.
• Der Umsatzmix von AccentCare dürfte 2027 einen gewissen Druck auf die EBITDA-Marge ausüben, da Personal Care eine niedrigere Marge aufweist als der Hospiz- und der Home-Health-Bereich.

Risiken und Beobachtungspunkte

• Die Übernahme von AccentCare steht weiterhin unter dem Vorbehalt zusätzlicher üblicher behördlicher Genehmigungen, obwohl die Frist für die kartellrechtliche Prüfung auf Bundesebene abgelaufen ist.
• Das Wachstum der Patientenzahlen und der abrechenbaren Stunden im Bereich Personal Care schwächte sich im September ab, insbesondere in Texas und Illinois. Das Management berichtete über eine Erholung im Oktober, doch bleibt die Feiertagssaisonalität ein zu berücksichtigender Faktor.
• Künftige Anpassungen der Medicaid-Vergütungssätze hängen von den Haushaltsprozessen der Bundesstaaten ab. Texas und Illinois sind hierbei wichtige Schlüsselmärkte, und der Zeitpunkt sowie die Höhe künftiger Erhöhungen bleiben ungewiss.
• Addus wartet auf die endgültige Entscheidung von CMS zur Home-Health-Kostenerstattung für das Geschäftsjahr 2027. Auf Grundlage der vorläufigen Ankündigung rechnet das Management mit einer positiven Anpassung.
• Die Außenstandstage (DSOs) stiegen auf 39,3 Tage, was zum Teil darauf zurückzuführen ist, dass die DSOs beim Illinois Department of Aging auf 48 Tage gestiegen sind, nach 26,8 Tagen in Q2, bedingt durch den zeitlichen Ablauf des Zahlungszyklus.
• Das Unternehmen geht davon aus, dass die Verschiebung im Mix durch AccentCare die Gesamt-EBITDA-Marge im Jahr 2027 vor potenziellen Synergien und etwaigen zusätzlichen Übernahmen leicht verringern wird.
• Das Management rechnet weiterhin damit, dass CMS die 80/20-Regelung aus der Medicaid-Zugangsbestimmung streichen wird, jedoch bleiben der genaue Zeitplan und das endgültige Ergebnis ungewiss.

Wichtigste Punkte aus der Fragerunde für Analysten

• Patientenzahl im Bereich Personal Care:Das Management gab bekannt, dass sich die Verlangsamung im September in Texas und Illinois im Oktober umgekehrt hat. Addus priorisiert weiterhin Fälle, die das Unternehmen effektiv mit Personal besetzen kann, insbesondere Kunden mit höherer Stundenzahl.
• Selbstzahler-Anteil:Auf Selbstzahler entfallen etwa 7 % bis 8 % des Geschäfts von AccentCare, verglichen mit rund 2 % des aktuellen durchschnittlichen Tagesbestands von Addus. Das Management sieht die Übernahme als Gelegenheit, diesen Teil des Portfolios auszubauen.
• Vergütungsumfeld 2027:Addus erwartet mögliche Erhöhungen in kleineren Bundesstaaten und wird Texas und Illinois genau beobachten. Jede Unterstützung aus großen Bundesstaaten könnte das Wachstum im Segment Personal Care im weiteren Verlauf des Jahres 2027 an das obere Ende der Spanne von 3 % bis 5 % oder darüber hinaus bewegen.
• M&A-Kapazität:Das Management gab bekannt, dass Addus auch nach AccentCare in der Lage bleibt, weitere große Transaktionen durchzuführen. Das Unternehmen prüft sowohl kleine als auch große klinische Übernahmen, da sich die Bewertungen in den Bereichen Home Health und Hospiz moderater gestalten.
• Medicaid-Arbeitsanforderungen:Addus hat in den Bundesstaaten, die entsprechende Anforderungen eingeführt haben, keine wesentlichen Auswirkungen festgestellt. Das Management erklärte, dass die Regeln das Potenzial hätten, den Pool an Pflegekräften zu vergrößern, obwohl sich bislang kein positiver Effekt auf dem Arbeitsmarkt gezeigt hat.
• Technologie-Rollout:Es wird erwartet, dass die meisten Hauptmärkte nach der Umstellung in Illinois und New Mexico bis April oder Mai 2027 auf Homecare Homebase umstellen. Die Umstellung in Texas soll voraussichtlich bis Ende 2027 erfolgen.

Vollständiges Transkript des Earnings Calls

Vollständiges Transkript der Telefonkonferenz

Ausführungen des Managements

Operator

Good day, and welcome to the Addus HomeCare Third Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to hand the call over to Brandon Cox. Please go ahead.

Unknown Executive

Good morning, and welcome to the Addus HomeCare Corporation Third Quarter 2026 Earnings Conference Call. Today's call is being recorded. To the extent any non-GAAP financial measure is discussed in today's call, you will also find a reconciliation of that measure to the most directly comparable financial measure calculated according to GAAP by going to the company's website and reviewing yesterday's news release. This conference call may also contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements, among others, regarding Addus' expected quarterly and annual financial performance for 2026 or beyond. For this purpose, any statements made during this call that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing discussions of forecasts, estimates, targets, plans, beliefs, expectations and the like are intended to identify forward-looking statements.

You are hereby cautioned that these statements may be affected by important factors, among others, set forth in Addus' filings with the Securities and Exchange Commission and its third quarter 2026 news release. Consequently, actual operations and results may differ materially from the results discussed in the forward-looking statements. The company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. I would like -- I would like to now turn the call over to the company's Chairman and Chief Executive Officer, Mr. Dirk Allison. Please go ahead, sir.

R. Allison

Thank you, Brandon. Good morning, and welcome to our 2026 third quarter earnings call. With me today is Brian Poff, our Chief Financial Officer. As we do on each of our quarterly earnings calls, I will begin with a few overall comments, and then Brian will discuss the third quarter results in more detail. Following our comments, we will be happy to respond to any questions.

As we announced yesterday afternoon, our total revenue for the third quarter of 2026 was $387.7 million, an increase of 7% as compared to $362.3 million for the third quarter of 2025. This revenue growth resulted in adjusted earnings per share of $1.83 as compared to adjusted earnings per share for the third quarter of 2025 of $1.5, an increase of 17.3%. Our adjusted EBITDA was $51.2 million, compared to $45.1 million for the third quarter of 2025, an increase of 13.5%.

For the third quarter of 2026, cash flow from operations was $40.9 million, with cash on hand on September 30 of just under $100 million. During the third quarter, we reduced our bank debt to $24.3 million, which provides us the financial flexibility to close on our previously announced AccentCare Personal Care service acquisition while still considering additional large acquisition opportunities as we continue to pursue expansion of our market reach and increased geographic density.

As we announced on September 14, we signed a definitive agreement to acquire the personal care assets of AccentCare. This acquisition excludes AccentCare's New York operation and is expected to add approximately $280 million in annualized revenue. It furthers our strategy of creating density in our current markets while also enhancing our private pay home care business.

Last week, the federal antitrust review period for the transaction expired. We are now waiting on additional customary regulatory approvals needed to complete the transaction. We anticipate closing on this acquisition in the first quarter of 2027.

On July 1 of this year, we received an approximate 4% rate increase from the state of New Mexico, our third largest personal care market. This was an important development showing that states recognize supporting personal care services, save states money in caring for the elderly and disabled population covered by Medicaid. We continue to have discussions with other states concerning potential rate increases for 2027 as part of their normal state budgeting processes. We still believe that we will see additional rate support from other states while also realizing that we are returning to a more balanced environment for same-store growth between rate and volume.

As we mentioned on our last quarterly call, CMS published the final fiscal 2027 hospice rate, which was effective on October 1, 2026. This increase continues the consistent federal rate support we have seen for hospice services over the past few years. Currently, we are awaiting the final home health rate announcement from CMS for 2027.

Based on the preliminary rate announcement, which was made this summer, we expect to see a positive adjustment for our home health services, which would be an encouraging sign for this segment of our business, considering this state pressure, the rate pressure the industry has experienced over the past 3 or 4 years.

During the third quarter of 2026, we continue to experience positive hiring trends in our Personal Care segment. Our number of [ hires ] per business day in the third quarter of 2026 was 105, up slightly from the prior period and within our target range. Our team continues to do a nice job of producing hiring numbers at the level needed to meet our organic growth targets. As for clinical hiring, we continue to see a more normalized labor environment as has been the case for the past couple of years.

Now let me discuss our same-store revenue growth for the third quarter of 2026. For our Personal Care segment, our same-store revenue growth was 6.9% compared to the third quarter of 2025. During the third quarter of 2026, we saw personal care same-store hours increased by 1.6% compared to the same period in 2025, while our percentage of authorized hours served in the third quarter stayed in the mid-80s. While our same-store average daily census per PCS was down 0.4% over the prior period, in the third quarter, we saw 7 of our 10 largest markets achieved positive year-over-year growth, with Texas and Illinois slightly negative for the quarter. Based on what we see to date in the fourth quarter, we currently believe we can achieve flat to slightly positive census growth in this current quarter.

The slight decline in our personal care census over the prior year has primarily been in our lower hour cases as our higher hour cases have increased year-over-year. This, along with the continued improvement in our service percentage has contributed to our year-over-year increase in same-store personal care hours.

Turning to our clinical operations. Our hospice service same-store revenue increased 4.1% compared to the third quarter of 2025. As discussed last year, our 2025 third quarter had a positive impact from implicit price concession. And excluding that input, our same-store hospice revenue growth for the quarter was 8.8% at the high end of our targeted goal for hospice.

We were pleased to see our same-store average daily census increased to 4,031 for the third quarter, up from 3,866 for the same period last year, an increase of 4.3%. Our growth in hospice has continued in October with our average daily census exceeding 4,100. For the third quarter of 2026, our hospice median length of stay was 25 days as compared to 22 days for the third quarter of 2025 and 24 days sequentially. Overall, our hospice segment has continued to generate consistent growth over the past several quarters.

Our home health same-store revenue increased 2.5% when compared to the same quarter in 2025. Also, same-store admissions in home health for the third quarter of 2026 grew 13.8% as compared to the third quarter of 2025. This is the first positive year-over-year revenue quarter we have had in a couple of years for home health as we are seeing the impact made by our new leadership team. Importantly, we also saw sequential improvements in revenue and admissions.

As you can see with our pending AccentCare and previous Gentiva acquisition, we continue to believe that creating size and scale are important in post-acute health care services. This has been the long-term focus of our development strategy. Our development team continues to evaluate opportunities, which will increase both the density and geographic coverage as we seek to further strengthen our relationships with states and managed care organizations. Going forward, we anticipate being more aggressive in looking at various clinical opportunities, which we believe will present themselves over the next 2 quarters. While we will still actively pursue PCS opportunities, we believe it is time with recent market changes to consider adding more clinical acquisitions in both home health and hospice.

Before I turn the call over to Brian, I want to thank the Addus team for the care they are providing to our elderly and disabled consumers and patients. We all have come to understand that most of this population prefers to receive care at home, which not only remains one of the safest, but also the most cost-effective place to receive this care. We believe the heightened awareness of the value of home-based care has proven to be favorable for our industry and will continue to be a growth opportunity for our company.

We understand and appreciate that our operations and growth are dependent on both our dedicated caregivers and our other employees who worked so incredibly hard providing outstanding care and support to our clients, patients and their families.

With that, let me turn the call over to Brian.

Brian Poff

Thank you, Dirk, and good morning, everyone. Addus had a solid financial and operational performance in the third quarter of 2026. We generated a 7% top line increase in net service revenues to $387.7 million compared with $362.3 million in the third quarter of 2025. Our focus on cost discipline and operating leverage drove bottom line growth to outpace revenue gains, driving a 13.5% year-over-year improvement in adjusted EBITDA to $51.2 million, up from $45.1 million in the prior year period.

Our Personal Care Services segment remains the core driver of revenues, generating $301 million or 77.6% of total net service revenues for the third quarter. The segment achieved a solid 6.9% organic revenue increase year-over-year. Performance in this segment was anchored by steady organic volume gains, continued contributions from the integration of our [ Home Core Home Care ] acquisition and ongoing benefits from historical favorable rate enhancements across key state markets, including Illinois, Texas and New Mexico.

We continue to see solid caregiver hiring momentum and year-over-year improvement in our service percentage, driven by the ongoing rollout and adoption of our internally developed caregiver app across our major markets.

Our hospice operations delivered continued steady performance, accounting for 17.8% of our revenue for the third quarter and a 4.1% organic revenue increase year-over-year. As Dirk mentioned, exclusive of the differences in the implicit price concession from the prior year, our organic revenue growth was 8.8%.

This steady growth was driven by 2 key factors: higher reimbursement per patient day and healthy volume gains in our organic average daily census, which rose 4.3% year-over-year. As anticipated, our ongoing focus on case mix kept Medicare cap exposure within normal limits for the third quarter with no further cap adjustments recorded.

Looking ahead, the fiscal 2027 Medicare hospice reimbursement rate update has been finalized with an aggregate 2.3% net increase that became effective October 1, 2026. We expect the benefit to our hospice business to be just under 2% based on our geographic mix and related wage indices.

Our home health services represent our smallest segment and account for 4.6% of third quarter revenues. Home health continues to show positive momentum with solid clinical intake and emission trends and an increase of 2.5% in organic revenue over the prior year quarter.

Maintaining all 3 levels of care remains an essential component of our value proposition, helping us deepen relationships with our managed care and value-based partners. In key overlapping markets, such as New Mexico and Tennessee, our clinical bridge program continues to yield significant value with over 25% of our hospice admissions originating directly from our home health operations. We anticipate this program to have a positive impact in our Illinois market as we work to implement it in those operations.

Looking at our financial position. We continued to generate strong cash flow from operations through the first 9 months of 2026, which leaves us very well capitalized. Our disciplined balance sheet management and low leverage profile provide us the financial flexibility to pursue targeted acquisitions designed to deepen market density and expand regional reach. In line with our strategic growth initiatives, during the quarter, we announced a definitive agreement to acquire the Personal Care division of AccentCare outside of New York for $275 million. This acquisition aligns with our strategy to scale our core nonclinical platform in markets where we can leverage geographic coverage and density.

The acquired operations will bring an average daily census of approximately 13,700 clients across a 10-state footprint and are expected to generate roughly $280 million in annualized personal care revenue, which represents an approximate 19% increase to our revenue base. Importantly, it significantly deepens our market density across Texas, Illinois, California and Arizona, while also adding operations in 6 additional markets. We intend to fund the purchase price through a combination of cash on hand and borrowings under our revolving credit facility.

Given the complementary operational footprint and financial profile, we expect the transaction to be accretive to our overall financial results while enhancing our collaborative capabilities with managed care organizations and value-based care partners.

As Dirk noted, total net service revenues for the third quarter were $387.7 million. The revenue breakdown is as follows: Personal Care revenues were $301 million or 77.6% of revenue, Hospice care revenues were $69 million or 17.8% of revenue, Home Health revenues were $17.7 million or 4.6% of revenue.

Other financial results for the third quarter of 2026 include the following: Our gross margin percentage was 32.1% compared with 32.2% for the third quarter of 2025. And sequentially, our gross margin percentage stayed relatively stable as expected. Looking forward to the fourth quarter of 2026, we anticipate our gross margin percentage to experience normal seasonality with a benefit of approximately 50 to 60 basis points related primarily to the hospice reimbursement update and lower unemployment taxes.

G&A expense was 20.7% of revenue compared with 21.9% of revenue for the third quarter a year ago. Adjusted G&A expense for the third quarter was 18.9% compared with 19.8% a year ago and down sequentially from 19.2% in the second quarter of 2026. Our continued leverage on our cost structure from our expanding revenue base has driven G&A efficiency across our operations and should continue to benefit us going forward.

The company's adjusted EBITDA for the third quarter of 2026 was $51.2 million compared with $45.1 million a year ago, an increase of 13.5%. Adjusted EBITDA margin was 13.2% compared with 12.5% for the third quarter of 2025 and up 20 basis points sequentially from 13% in the second quarter. We now expect our full year adjusted EBITDA margin percentage to be in the 13% range. Adjusted net income per diluted share was $1.83 compared with $1.56 for the third quarter of 2025. The adjusted per share results for the third quarter of 2026 exclude the following: acquisition expenses of $0.16, noncash stock-based compensation expense of $0.12 and restructuring and other nonrecurring costs of $0.01.

The adjusted per share results for the third quarter of 2025 excluded the following: acquisition expenses of $0.08, noncash stock-based compensation expense of $0.18 and restructure and other nonrecurring costs of $0.06.

Our tax rate for the third quarter of 2026 was 26.9% as expected and consistent with the second quarter of 2026. For full year 2026, we expect our tax rate to remain towards the upper 20% range. DSOs were 39.3 days at the end of the third quarter of 2026 compared with 35.5 days at the end of the second quarter of 2026. We have continued to experience consistent cash collections for the majority of our payers. Our DSOs for the Illinois Department of Aging for the third quarter were 48 days compared with 26.8 days at the end of the second quarter of 2026. And as we experience normal timing differences in payment cycles from the state.

Our net cash flow from operations was $40.9 million for the third quarter of 2026, continuing our strong performance this year. As of September 30, 2026, the company had cash of $98.5 million with capacity and availability under our revolving credit facility of $650 million and $617.8 million, respectively.

Total bank debt was $24.3 million at the end of the quarter, a reduction of $40 million from the second quarter of 2026. We have also continued to reduce our revolver balance with $10 million paid to date in the fourth quarter. Our capital structure and strong balance sheet continue to support our ability to invest in our business and pursue strategic growth initiatives including targeted acquisitions. Looking ahead, as we prepare to fund and close the AccentCare transaction, we will continue to selectively pursue complementary acquisitions that align with our growth strategy. while maintaining disciplined capital allocation and managing our net leverage ratio through ongoing debt paydown.

This concludes our prepared comments this morning, and thank you for being with us. I'll now ask the operator to please open the line for questions.

Operator

[Operator Instructions] And our first question will come from Sean Dodge of BMO Capital Markets.

Fragen und Antworten

Sean Dodge

Maybe just on the same-store billable census, Dirk, I know you said you were seeing strength in 7 of your markets. It was -- it sounds like Texas and Illinois that continue to lag a little bit. Just the confidence that those are rebounding and that metric will turn positive in Q4. Have you seen inflections now in both of those markets? When did those happen? And what do you think are primarily driving that?

R. Allison

We saw -- I think we had talked earlier last quarter when we had a conference call, we had seen through July and into August. It was trending towards we were going to be flat to slightly positive in our census. We saw Texas and Illinois in September flatten out just a bit. And that is what really kept us from achieving that goal that we had set for ourselves at the third quarter. I will say that to date, in the fourth quarter, it seems like both of those states have turned back around to what we were experiencing more in the July and August standpoint.

So no real reason why that may have happened in September, but it appears that we're back on track to where we'd like to be, which is really working towards driving. And again, I want to say, appropriate ADC, appropriate census growth in that fourth quarter, and we're certainly looking to try to achieve that this year.

Sean Dodge

And so maybe -- maybe on the appropriate growth, the kind of the advances we've seen in average billable hours per census. What's the biggest contributor there? Is it kind of being a little bit more disciplined on what kind of referrals or patients you're accepting. I know you're -- you're also making gains in fill rates with the caregiver app. How much of each of those are contributing? And how much kind of further do you think you can drive that metric, the average billable hours per census?

R. Allison

Well, I think you hit it. There's really 2 things that we're looking at to try to continue to drive that number, and that is using our Caregiver app, our technology, which has done a really good job in Illinois, it's moving into Texas. Now we're moving in New Mexico. So we should continue to see some positive improvements in that metric, allowing us to serve more of the authorized hours that have been granted by the state.

I think the other thing we're trying to do. We're just trying to be cautious and direct and trying to make sure that the census that we take are census that we can do the right job on. It's -- when you take a very small hour client on, it's very difficult to staff because more and more caregivers, they want to get closer and closer to that 40-hour time frame, and it's hard to piece together small-hour patients. So what we're trying to do is just make sure we're looking at the patients that give us more hours. We're trying to balance that with our referral sources to make sure that we're doing all things that are necessary. We'll still take patients. We're not saying that at all. But we're trying to do it in the methodologies that realizes that we can staff them appropriately, and we can get the hours we want to give to our caregivers. And that's really what our focus has been over the last few quarters.

Operator

The next question comes from Ben Hendrix of RBC Capital Markets.

Benjamin Hendrix

I just wanted to follow up on some of Dirk's comments around the AccentCare acquisition, particularly the higher mix of private pay, we tend to talk about PC purely and Medicaid terms. So I just wanted to kind of get some of the nuances of the private pay business, specifically kind of the rate profile, the demand backdrop for the private pay and also kind of what you're seeing in terms of census mix dynamics in that business? And then also just what all that looks like on a pro forma basis for AccentCare?

Brian Poff

This is Brian. I think on that side, just a few of the kind of the numbers around that piece of that business. I think we traditionally have run around 2% of our ADC has kind of been in kind of the private pay or direct pay constituency. I think looking at AccentCare, I believe they're closer to like the 7% to 8% of their business to be in that kind of private pay arena. They've had a strategy over the last few years of actually pursuing de novo growth in the private pay business.

If you look at some of the smaller states that we're getting in this transaction. That's actually what those offices are just pure private pay offices. So they've had some success there. I think we like the private pay business. Obviously, it's a little different business. You're not exposed to maybe some of the Medicaid reimbursement issues or pressures that we've seen over the last year or so. But it's market to market on kind of what the reimbursement looks like, what folks are willing to bear from a competitive standpoint. But I think they've done very well.

And I think there is a different constituency that you're serving in a private pay business that folks that are not qualified for Medicaid, but still need to care at home to stay there rather than go into an institutional setting. So I think we're excited about seeing a little bit of expansion in our overall portfolio, bringing them on board and probably learning some things from them as well and apply that to our business.

Benjamin Hendrix

Great. And can you talk a little bit about some of the census mix dynamics as they pertain to AccentCare's markets?

Brian Poff

Yes, most of those markets, I mean, obviously, the bigger pieces here are the key 4 really Texas, Illinois, then you get into California and then some in Arizona are really the big 4 states. Texas is going to be very similar to what we run a large Medicaid population. They do have a little more private pay. I think in Texas than we do in [indiscernible] business. Illinois going to be very similar to ours as well, mostly Medicaid-focused. You get into California, still, again, very similar to our business there, which is primarily BA or private pay. They do have a little bit of participation about -- I think about 10% of their overall business in California is through a Callan Medicaid program that they operate in, that we do not, but it's a small piece of the business that we're getting with them. And then Arizona is going to be somewhere well Medicaid-focused.

Operator

The next question comes from Andrew Mok of Barclays.

Andrew Mok

Can you help us understand what's going on with hospice revenue. You noted that there were no further Medicare cap adjustments, but there was a $1.4 million add back to organic revenue in addition to the $1.5 million price concessions. And I guess just taking a step back, how are you responding to the higher average length of stay to the extent that it is putting pressure on some of these items operationally. We would love to hear your thoughts on that.

Brian Poff

Yes. Andrew, I think things that we were looking at the reference in kind of the reconciliation on the adjusted kind of same-store revenue. We had an implicit price concession benefit last year in Q3 that was really just related to collection on older AR that had some reserves associated with that. You compare that to what we experienced in the same implicit price concession this year, which was more in line with what we think we would probably typically see. But I think we also have -- in that reconciliation table, there was some acquisition that we did last year as well. They had some hospice business up in Pennsylvania. So there's some revenue base there. That's part of that reconciliation.

But I think on the cap side, we had no further adjustments this quarter. I think the things that we believe we've done to mitigate some of that expense that we took in Q2 and this cap here have been very helpful in that regard. I think if you look at the length of stay or digital length of stay, that was just a factor of those folks that left our service this quarter. I think we're fairly in line, we think, with the industry kind of in that low 100 day range, but no impact there, no concern that we have around cap. I think we still feel very confident going into the fourth quarter that we will have no further cap adjustments this year. In fact, I think we kind of look at the end of the cap here let some of those folks discharge and see where we land ultimately. We believe we'll probably see a little bit of benefit actually in our ultimate cap reserve for this year.

Andrew Mok

Great. And can you guys help us understand your latest thinking around the 80-20 rule. I think there was some expectation that it would get addressed this year the changing of the congressional composition impact your view at all?

R. Allison

Yes. We were talking to our government relations folks this morning after the results of action. We still have a fleet that CMS plans on changing the 80-20 doing away, but that portion of the rule, while that will probably keep other aspects of that rule, which we actually support. So we'll wait and see. We didn't expect, honestly, after the last 4 or 5 weeks, we were told it wouldn't be done until after the election. Now that the election has happened, and obviously, there is a big change in the dynamics of who will be in the House and the Senate, we will see how the timing. But we still do believe and expect by year-end, we'll see a movement on the 80/20 that it should take -- come out of the rule.

Operator

Our next question comes from Brian Tanquilut of Jefferies.

Brian Tanquilut

Maybe, Dirk, as I think about -- first, when we think of the work requirement from Medicaid that's going to get rolled out in 2027. How are you thinking about the impact on your business from that? And maybe if you can share any insights from some of the states that have rolled out worker requirements earlier where you operate?

R. Allison

Yes. So far, I think 1 or 2 states have rolled out the Medicaid reimbursement requirement or the work requirement, and we've seen no effect on our business at this point in time. We never expected it to really hurt us from a revenue standpoint because I think there's been some clarification around that particular work requirement that most of our folks that are receiving care are going to be qualified to avoiding having to go to work.

I think the bigger aspect we were considering, and we're thinking may be helpful is as states roll out work requirements, will there be opportunities for additional caregivers, folks that maybe are on Medicaid, they're now going to be required, they're younger, they're not disabled, they're going to be required to show a certain number of hours per week or per month. Can we help them meet that goal and remain on Medicaid.

So we're waiting to see that in a couple of states that rolled out, that hasn't occurred yet. It hasn't been a negative on labor, but it hasn't really been a positive. So the only other thing that I think we'll be watching, and something you would expect is to make sure that states are hopeful that states have had enough time to prepare for the monitoring of work requirements. And hopefully, that should not affect the rate at which we get new patients on board. Because again, it's going to be an additional burden on the state. But they've gone through this before with 3 determinations. So we're hopeful that they have that experience and they're going to be prepared for it.

Brian Tanquilut

Appreciate it. And maybe, Brian, thanks for flagging the New Mexico rate increase. So when I think of 2027, if you can just walk us through, number one, how you're thinking about the blended rate profile given the different state rate adjustments? And then just broadly speaking, how you're thinking about census growth as we think through 2027?

Brian Poff

Yes, Brian, I think on the rate side, obviously, it was nice to see New Mexico come through with the rate increase this year. I know we talked last year, they had a rate increase on the table and with some of the OB3 conversations happen at the time decided to hold flat, and we were -- we were hoping that they would look at this year now that kind of understood the landscape of what that really meant for them as a state that they would look for a rate increase this year, and we were happy to see that come through. So that's in our Q3 number.

I think looking ahead to next year, -- we still expect we're probably going to see some rate updates in some smaller states. Obviously, the bigger states move the needle more for us. And so Texas and Illinois will be the 2 that we'll watch early when they get seated back and go back to into session early next year, will we see some additional movement from them. We didn't get 1 from Illinois in the last session. So does that mean maybe there's going to be some potential that we'll see something that would impact really 2028, if they give us something in their budget, they've typically been doing it midyear for them, which is Jan 1 starts. So our folks will be having those conversations.

We expect we'll get support in the session as we usually do from the union in the state as well. And then Texas, who only meets every 2 years. They've had nice rate increases in the last couple of cycles. We still think there's some headroom, an ability for them to do some additional rate enhancement there based on where the rates are and kind of what we pay in the state. So with some of the shifts in the Texas political landscape, we'll be interested to see how that plays into that process as well when they get seed early next year.

So I think the way we're looking at kind of just thinking about it from a same-store perspective, with some of the rate support in large states, we've been nicely above kind of the 3% to 5% target range for some time now. We anticipate not having one for Illinois particularly, that will go into effect early next year. We'll probably be more in that 3% to 5% range, the first half of next year. We get some rate support from either in Illinois or Texas or 1 of the other larger states or even in New Mexico again next year. Towards the back half of next year, you could see us go back to the top end of that 3% to 5%, if not above. but those are the things that we'll be looking for.

Operator

The next question comes from Joanna Gajuk of Bank of America.

Joanna Gajuk

Actually, first 1 will just follow up on the question because I don't think you answered the second part of the question, when we think about next year in terms of the stents growth, how we should think about that?

R. Allison

Yes, we expect that next year, certainly, we're moving as a team to try to get to the point where we're seeing low percentage PCS same-store growth in census.

Brian Poff

Yes. I think I'd just add to that. We've talked about just on an hour basis, which is really the thing that we're more focused on is can we continue to stay kind of in that 2% to 2.5% same-store hours growth range, census will be a piece of that. But we think there's still additional headroom. I think we talked earlier about the caregiver app and the fill rate. We're still kind of in that mid-80% range. So we still think there's opportunity to increase our fill rate up into that upper 80% range. So we can see that come to fruition. And like Dirk said, some consistent, slight growth in the census as well. Hopefully, that puts us in a good spot going into next year.

Joanna Gajuk

Great. If I may add a little bit different topic in terms of your appetite for acquisitions. So you mentioned on prior calls, there could be a couple of larger personal car deals out there in the market. So you just did one. And with that deal by taking that sounds like 12 months, maybe longer to fully integrate. So would you be still willing to execute another transaction of similar size during that period? Or should we expect a more tuck-in acquisition?

Brian Poff

Yes. I think we're still open. So we get AccentCare closed, we expect in the first quarter. I think really, it won't be a 12-month integration. I think we'll see some synergy opportunities over kind of the 12 months for closing. But I think a lot of the systems conversions on our payroll system, our benefit programs will happen very quickly. That's usually the larger lift from an integration perspective.

But I think we still expect to be very active in M&A going into next year. I think we still, from a capital perspective, we're in a great position to do larger deals still I think internal bandwidth is going to be there as well to allow us to do larger deals that they're available. So we'll continue to look at some of the larger PCS acquisitions that we expect are still going to come to market. But as Dirk referenced earlier, we think there's going to be opportunities on the clinical side.

If you look at kind of our footprint, particularly in home health, we've got a lot of green space in our portfolio where we can add operations there, but probably good multiples. In hospice, we really kind of just depend on where multiples are next year. It feels like maybe there's some rationalization happening in the hospice area, where maybe they'll be a little more affordable. And if that's the case, those are things we would like to be interested or active in as well.

Joanna Gajuk

Great. If I may squeeze on AccentCare. So I appreciate the comment around the integration will be actually faster. So can you help us maybe quantify the ultimate EBITDA margin target here because it sounds like that, that asset actually has higher product pay to higher margins? And also, any color in terms of the magnitude of synergies that we should think about in terms of just realizing things in year 1 versus year 2?

Brian Poff

Yes. I think the way we've kind of talked about AccentCare, they operate today probably at a high single-digit percentage EBITDA range in their business in Personal Care, which is a little lower than what we would typically expect to see what we see in our business. So we think there's opportunity to get their operations up into that low double-digit range from an EBITDA perspective, primarily through G&A savings to be fair. And I think the way we look at it over 12-plus months, we'll probably see ratable synergies do we go along. It won't be something that we see that will be backloaded, but we'll probably make those changes over a period of time because we don't want to negatively impact the business in any way. if possible.

Operator

The next question comes from A.J. Rice of UBS.

Albert Rice

I know you have talked to some areas, but I just wondered to frame it a little better. I know you're not giving formal 2027 guidance at this point. But when you think broadly about major puts and takes versus the baseline that you'll establish for this year, how would you describe thinking about the swing factors for 2027 at this point?

Brian Poff

Yes. A.J., I think the main thing for us really, if you look at it going into next year, mix is obviously going to be a play if you're thinking about just margin profile with AccentCare coming on board, we're going to shift more toward personal care, which is a little lower profile than you see in hospice and home health. So we'll expect to see that have an impact. We think we'll finish this year probably right out of very close to 13% EBITDA margins for the full year. We expect to see that probably come down a little bit next year without any other acquisition activity just due to the mix from AccentCare.

Outside of that, I think we expect to see kind of normal seasonal impacts in our margin profile overall. We should continue to see hopefully some additional leverage on G&A with our top line growth. We kind of talked about it a little bit earlier. I think PCS next year is going to be probably more of that 3% to 5% or maybe not into the upper single-digit range like it's been. So we want to get some of the early rates that we've got in the last couple of years.

But we still expect our hospice division to continue to run in that upper single-digit range from a growth perspective. We're very pleased to see home health back to positive at 2.5% same-store this quarter. We'd like to see that continued momentum into next year as well. But honestly, I think the other big thing will be how successful are we in M&A next year. Do we do some things on the clinical side that adjust that mix. And I think that will be probably a pretty big factor into kind of what you see for us next year.

Albert Rice

Okay. And I know Dirk in the prepared remarks referred to some of the pickup in same-store home health and hospice was attributed to the new management team there. I wondered, thinking about from here forward, where is their focus, where are the greatest opportunities to improve performance? Is it just adding external referral sources in sales? Is it focusing on potential deals? Or are there operational things that they're particularly focused on that could be an opportunity?

R. Allison

Well, I think one of the things you're seeing is, again, because it has been our smallest division, it's 1 that probably didn't receive quite as much attention as others. And so bringing on new management has allowed them to look at the overall aspect of our business, home health business operationally and otherwise.

So focusing on sales, focusing on some of the operational improvements recruiting, number of things that they're working on that you're starting to see have positive effect on our growth. So again, I want to be careful. We are not a home health company per se today. We are a company that has a segment of home health and we want to continue to grow that appropriately as we have opportunities. I think what you'll see going forward. The biggest opportunity in home health will be -- are we able to find some acquisitions that we can bring on board to strengthen our overall offering in the states in which we operate, especially in those states in which we have overlap between all 3 levels of care.

Operator

The next question comes from Matthew Gillmor of KeyBanc.

Matthew Gillmor

On the same-store billable hour metric, I think you said it was 1.6% in the quarter, there was a slight deceleration from where you've been. I was curious if there was anything to call out, maybe that's just normal fluctuation, but I just wanted to see if there was any additional commentary you could provide?

R. Allison

No, there's nothing to really call out. As I said, we had a little bit of softening in September in Illinois and Texas. There's the 2 big markets for us. Those have bounced back in October. So there's nothing really there. Again, it was a small decrease. It fell below our target of 2% growth, but we think we'll be back to that.

Matthew Gillmor

Got it. And then on the New Mexico rate update. I think last call, we knew that the funds had been allocated, but it was a little unclear how it would work through the [indiscernible]. I was curious if you could provide some comments in terms of how that ultimately shook out and what enabled you to get access to that fund through the MCO?

Brian Poff

Yes, Matt, we actually had to go to the different MCOs that run the managed Medicaid business in the state and have those conversations with them directly. I think as you guys probably know, New Mexico is the one that we have where we actually negotiate rate directly with the plans. It's not a state-mandated rate. So we had to go through that process. And so our team, I think, did a really good job of working with the MCOs there to effectuate the rate. That kind of came back to on an aggregate basis, kind of right out or just above that kind which is what the state had allocated to the services as an increase. So I think we landed exactly where we would expect to.

Operator

[Operator Instructions] The next question will come from Raj Kumar of Stephens.

Raj Kumar

Maybe just one on the ARPA funds and maybe just what was the utilization of those funds in the quarter? And then would be helpful to kind of remind us on maybe the kind of the utilization dynamics in terms of the deadline of utilizing those funds for the remaining amounts that you guys have?

Brian Poff

Yes, Raj. Most of the funds are -- really all of the funds that we have left on the balance sheet are related to New Mexico. So from a timing basis, they had a deadline in order to get those funds out to providers, but there's no deadline on utilization for us. So we don't have a ticking clock on that. We had a very low utilization this quarter. I think we've looked at using those in ways to continue to enhance opportunities in the state for us and our caregivers from hiring bonuses, retention bonuses, things along those lines, some technology advancements that benefit the caregiver that is allowed to be used in these funds as well, and we've done that historically.

I think where we sit today, we have a pretty substantial balance on our balance sheet from Mexico that we'll have access to over the next few years, but no ticking clock on that.

Raj Kumar

Got it. And then maybe kind of looking at home health and seeing inflection in volume there. Also, it seems like your other payer mix there has also seen pretty substantial mix gain. So would be helpful if -- what's kind of driving that? Is it VA? And then it would be just also helpful on kind of how those reimbursements for those cases stand relative to fee-for-service?

Brian Poff

Yes. I think on the Home Health side, I think we've had a focus of trying to make sure that the cases that we take are our rates that make sense. I think a lot of folks in the industry have really kind of draw that line over the last couple of years with some of the reimbursement pressure, particularly on the Medicare Advantage side. I think we've been really no different.

I would say we've gotten some wins, I think, in some of our negotiations with those folks of either getting per visit rate enhancement are actually moving to an episodic rate over the last couple of years. I think some of the leadership changes that we made early this year have paid some dividends as well. So we brought in some folks that are very experienced and are very helpful in having those conversations. I think that's benefited our home health business.

So we've been probably relatively stable from a mix perspective recently in the last few quarters. It feels like some of the days of really just MA penetration have really slowed. But we'll continue to be focused on that and making sure that the business that we do and the growth that we see is in the right places.

Operator

The next question comes from Constantine Davides of Citizens.

Constantine Davides

Just a couple of questions on Indiana. Have you -- first, have you been able to close that second transaction yet? And then on a related note, can you talk about the decision in the state to implement a moratorium on new providers and what you're expecting in terms of potential for other states to maybe fall a suit?

Brian Poff

Yes, Constantine. I'll talk about the closing and let Dirk talk a little bit about the moratorium. We haven't been able to get that second one done just yet through some of the regulatory approvals that we need inside of the state. It's not necessarily related to the moratorium, but I think working through some of those back channel approval process has taken a little bit longer than we had anticipated. We still think we're going to get that one closed hopefully in the near future, but I'll let Dirk talk a little bit about the moratorium and impact there.

R. Allison

Yes. One of the things as a company and as an industry, we talk about is an appropriate moratorium could make sense. One of the things with PCS, it's a business fairly easy to enter into. And so we've seen over the last 2 or 3 years, a number of new folks come in, in the business with very limited hours, which causes the states to have a lot of additional work, whether it relates to from abuse issues, supervisory visits, other things that they need to do to make sure that there are appropriate operations going on in the state.

So we certainly have had discussions with various states talking to them about what we would term an appropriate moratorium, which should be beneficial to those of us that are in the state that are working hard to make sure that we are very compliant with the state and we're following through with all the rules and regulations. So it's something we'll continue to talk about and we believe could be an effective opportunity for the industry, but certainly for Addus if we're able to get some moratoriums through various states.

Constantine Davides

And then Dirk, in your prepared remarks, you used the word density a couple of times. And I'm just wondering sort of on a bigger picture basis, based on where you sit today, which is having a PC presence in 24 states, how many more states do you think you'd ultimately find attractive to expand into? And aside from a rate wage -- rate versus wage dynamic, what are the other considerations when you look at the attractiveness of entering in the market?

R. Allison

Well, if you look at our 24 states, we're right now really more focused on taking those states and giving more density into those markets. Now it doesn't mean just like we took the opportunity with Gentiva. They had a hot market presence in Texas. We were not in Texas. It allowed us into the state. Now with AccentCare, we continue to get much bigger in that market. And so we'll always look at opportunities that may be out there if it's in a market that we're not in, if we can enter with size to allow us to grow from there.

I think the things we look at when you look at various new states, how supportive have they been in history to our type program, are they statistically responsible as a state, I think that's very important because as you know, being a Medicaid program, states have to also be a financial participant in that along with the federal government. So it's important to state finances can support it.

Also the growth in the elderly population, another big aspect we have to look at because if you think in terms of our population, our average personal care client is in the mid-70s or above. And so again, as you've seen, baby boomers a few years ago, start coming and growing. We're looking at those markets where those folks are now into their mid-70s and could be another impetus for growing the PCS market in that area. So those are really the 2 or 3 things we look at when we're looking to go into -- enter into other sites.

Constantine Davides

That's helpful. And then last one for me. Can you just update us on the latest and greatest with respect to the Homecare Homebase rollout?

R. Allison

Yes. We're in the middle of our home care home care home-based home care rollout, excuse me, we've been pretty busy with it. So sometimes we get a little tired. We should have the majority of our states done by the end of this year. Now the big state of Illinois, obviously, a big market for us will be first quarter of next year, and that will be followed right after that with New Mexico. So probably by April or May of next year, we should have all of our major markets that we're converting to Homecare Homebase first off the old Horizon system, which we've been operating on for a number of years.

The one other large state, Texas, that we have acquired, they're operating on a system that is -- still system that is being supported and has not given us pressure to convert. That will flow into the end part of next year. So by the time you get to December of 2027, we will hope to have all of the operations that we have on board today converted over to Homecare Homebase and on the PCS business so that then we'd have a model into 1 system.

Operator

The next question comes from Ryan Langston of TD Cowen.

Ryan Langston

On PCS census growth, Dirk, I appreciate you saying Texas and Illinois in October moved back to July and August growth levels. Any insight into what October looked like for the non Texas and Illinois markets?

R. Allison

Yes, we continue to experience the growth. I think I had mentioned in my script that we had 7 out of our 10 top states experience growth and PCS census, we continue to see that. So realistically, if you think in terms of the appropriate census growth for us, you have -- all your markets are important, don't be wrong, and it's good to see all of those growing. Getting Illinois and Texas back to growing is key for us, and that's been a real focus of our team. And -- so again, in October, it's looking good. Looks like they're back to what we said was July and August. And hopefully, we'll continue to see that.

We're coming up into this time. Obviously, every year, you have the holidays -- that come up, but our team is preparing for that. And hopefully, we'll be able to show, again, year-over-year growth as our target for next year -- or for the fourth quarter, excuse me.

Ryan Langston

Got it. And then on the our percents metric in TCS, can you remind us what that profile typically looks like on some of the smaller acquisitions you've completed recently? And do you happen to have that KPI for what AccentCare is currently running at?

Brian Poff

Yes, right. I think most of the we do smaller acquisitions. I mean, typically, those patients are going to be fairly comparable. There might be a little bit of mix shift in there as well, but it's going to be pretty in line with what we would see in our markets in the state. As you can imagine, even within the 24 sites that we operate in, there's some disparity even within the states on kind of what the averages are and based on how that state treats authorizations. They're more clustered, I think, today, if you look at like New work, which we were in a few years ago, was probably way outsized from a from an hours per client perspective. But I think we expected that, that was probably going to be addressed and has obviously been addressed through some of the things that they're doing up there. But I think from an accident care profile, their Texas business, California business, Illinois business is very similar to ours, so it's going to be very comparable.

Operator

[Operator Instructions] Next question comes from Clarke Murphy of Truist.

Clarke Murphy

Just had a question on home health, you guys have put together a couple of strong quarters, and I know that you've got a lot going on in terms of some leadership changes and other changes that you guys have made in the segment. But I can't help, but notice that the strength has also kind of coincided with the Medicare moratorium that went into effect in May. Just kind of wanted to see if that has had any positive impact on your business and if you guys have any expectations given that, that's slated to expire next week?

R. Allison

Yes, I don't think it's had a material impact on our improvement in home health. I think we really had some work to do internally to get home help where we wanted to be. And I think our new leadership team has done a great job doing that. I mean, obviously, just like in PCS, we are not a de novo based business. So most of the moratoriums that are out there do not really affect our growth profile or how we operate as long as we can continue to look at certain acquisitions in the state and as if they're not covered by the more turn than we should be fine.

Clarke Murphy

Perfect. And just my last question. the cash flow generation of this business continues to be really strong. Can you just kind of talk to us about how you guys are thinking about cash flow in the fourth quarter into the rest of the year and if the cash flow generation profile of the business changes at all once AccentCare comes into the fall of next year?

Brian Poff

Yes, Clarke. I think this quarter was another strong quarter for us. I think we had just over $5 million in working cap benefit. I think we were up $25 million year-to-date, which has been -- been pretty nice to see, but I would expect some of that's just going to be some timing differences. So I would expect a little bit of a reversion back to kind of normal in Q4. But I think we've been very consistent in our collections on the AR side, particularly on the PCS side, have been very consistent.

But I think AccentCare coming on board again, most of those payers and the business there is going to be very similar to ours. Our teams are very experienced in working with those payers and those billing processes. So the systems that they're on, while we won't convert them over to home care, home base immediately, but the systems that they're on from AR side are systems that our teams have worked in or are working in and know very well. So we would not expect to see any real impact. It should be very consistent with how we see our business and our cash flow velocity.

Operator

The next question comes from Andrew Cooper of Raymond James.

Andrew Cooper

I'll maybe just ask 1 on M&A. As you talk about maybe being a little bit more aggressive on the clinical side. Do you think about the sort of need for scale and kind of the ability to digest a larger sale asset any differently in the clinical side relative to PCS where obviously you've got a little bit more kind of under your belt in terms of tucking those in and kind of doing so pretty seamlessly?

R. Allison

Yes. Yes, I think what I wanted to know is if we would be willing to look at some of the larger maybe clinical acquisitions out there and our ability to tuck those in. Listen, one of the reasons we kept our balance sheet as clean as we tried to do over the last few years is to be prepared for when larger opportunities come about. And you saw that with Gentiva. We're seeing that now with AccentCare. We are currently looking at other large opportunities on the clinical side.

I think the big impediment to us over the last 2 or 3 years and looking at the clinical side, not come, we didn't like the business with the exception of home health rate needing to get that finalized a little bit from the federal government. It was the price of those transactions and the fact that it's difficult to get a return for our shareholders at that price. It does seem that some of the price is moderating. And if that's the case, then we are in a prime position with our balance sheet to look at larger deals in the clinical side, and we'll be willing to do that, again, subject to the fact that we can get them at a price that makes sense from a return on investment calculation.

So yes, we will be -- we're going to be looking clinical small and large, we're going to be looking at PCS, continue to look at that. So it's our goal to continue to be very active with our balance sheet and M&A over the next year or 2.

Operator

This concludes our question-and-answer session. I'd like to turn the call back over to Dirk Allison for any closing remarks.

R. Allison

Thank you, operator. I want to thank everyone for taking their time today to join us. We hope you have a great week. Thank you.

Operator

The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.