Good day, and welcome to the Addus HomeCare's Fourth Quarter and Year-End 2025 Earnings Conference Call. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Dru Anderson. Please go ahead.

Thank you. Good morning, and welcome to the Addus HomeCare Corporation Fourth Quarter and 2025 Earnings Conference Call. Today's call is being recorded. To the extent of 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 and 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 in its fourth quarter 2025 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 now like to turn the call over to the company's Chairman and Chief Executive Officer, Mr. Dirk Allison. Please go ahead, sir.

Thank you, Dru. Good morning, and welcome to our 2025 fourth quarter earnings call. With me today are Brian Poff, our Chief Financial Officer; and Heather Dixon, our President and Chief Operating Officer. As we do on each of our quarterly earnings call, I'll begin with a few overall comments, and then Brian will discuss the fourth quarter results in more detail. Following our comments, the 3 of us would be happy to respond to any questions. As we announced yesterday afternoon, our total revenue for the fourth quarter of 2025 was $373.1 million an increase of 25.6% as compared to $297.1 million for the fourth quarter of 2024. This revenue growth resulted in adjusted earnings per share of $1.77 as compared to adjusted earnings per share for the fourth quarter of 2024 of $1.38 and an increase of 28.3%. Our adjusted EBITDA was $50.3 million compared to $37.8 million for the fourth quarter of 2024, an increase of 33.3%. For 2025, our total revenue was approximately $1.4 billion, which is an increase of 23.2% as compared to approximately $1.1 billion for 2024. This revenue growth resulted in adjusted earnings per share of $6.23 as compared to adjusted earnings per share for 2024 of $5.26, an increase of 18.4%. Our adjusted EBITDA for 2025 was $180 million as compared to $140.3 million for 2024 an increase of 28.3%. For the fourth quarter of 2025, cash flow from operations was $18.8 million as of December 31, 2025, and we had cash on hand of approximately $81.6 million. We ended the fourth quarter with bank debt of $124.3 million, leaving us with a net leverage of under 1x adjusted EBITDA, allowing us flexibility, we continue to evaluate and pursue acquisition opportunities that meet our ongoing strategy of creating geographic density and scale…

Thank you, Dirk, and good morning to everyone. The fourth quarter of 2025 marked a strong finish to another year of growth and progress for Addus. Our results for the year reflect the continuing execution of our strategy, which allows us to both deliver consistent organic growth and realize the benefit of our recent acquisitions. Our results were highlighted by 25.6% top line revenue growth and a 33.3% increase in adjusted EBITDA compared with the fourth quarter last year. Our Personal Care Services segment was the primary driver of our business with a solid 6.3% organic revenue growth rate over the same period last year, above our normal expected range of 3% to 5%. Our results were supported by stable hiring trends and favorable rate support for personal care services in some of our larger markets, including a 9.9% rate increase in Texas that was effective September 1, 2025. The State of Illinois, which represents our largest personal care market, had previously approved a 3.9% increase that became effective January 1, 2026, and is expected to add approximately $17.5 million in annualized revenue for Addus with margins consistent in the low 20% range. Our Personal Care results include the Gentiva Personal Care operations, our largest acquisition to date, which we completed on December 2, 2024. The results also include Great Lakes Home Care acquired on March 1, 2025, Helping Hands Home Care Services acquired on August 1, 2025, and the personal care operations of Del Cielo Home Care acquired on October 1, 2025. Additionally, during the fourth quarter, we had a benefit of approximately $1.9 million related to accounts receivable settlements from our previously divested New York operations. This was reflected as a positive revenue adjustment and has been excluded from our adjusted results and same-store metrics. We continue to…

[Operator Instructions] The first question today comes from Ben Hendrix with RBC Capital Markets.

Just a quick question on the rate backdrop. I appreciate all your commentary about state receptivity to the PC setting amid the OBBBA headwinds. But outside of Texas and Illinois, can you give a little bit of context of how your rate conversations are going? I'm thinking particularly in states like New Mexico and Tennessee.

Ben, this is Brian. Yes, I think it's still a little early in the year, but some of the legislative sessions that have already started for states that have mid-year fiscals, we've gotten some information. I think probably the key one there being New Mexico, our understanding is there is what we estimate to be probably between a 4% and 5% rate increase has been passed through the legislature, was waiting for the governor's signature. We don't have any reason to believe that it won't be signed, but that we would anticipate that to benefit us in the back half of this year. So I think we had mentioned last year, New Mexico was a state that had considered one, kind of held PAT with OB3 and kind of some of the noise there, but we were hopeful that they would readdress that this year. So nice to see that it looks like that may actually come through. Outside of that, I think nothing else really to report on a lot of other states. I know in Illinois, Governor Pritzker has kind of put out his initial view on the budget, currently does not have a rate increase in there for us for next year, but would point out that's consistent with where he started last year, and we did get something toward the end, not to say that we will necessarily this year, but something that we'll continue to watch as the legislative session goes through their process. But that's probably the 2 that I would flag out for the moment.

The next question comes from Brian Tanquilut with Jefferies.

Congrats on the quarter and the year. Maybe, Brian, just to follow up on Ben's question on New Mexico. How do we think about the pass-through there in terms of margin flow-through? I know New Mexico, I think, if I'm not mistaken, is -- doesn't have a mandatory pass-through rule. So just curious how you're thinking about that.

Yes. There is a mandatory pass-through rule. It's not similar to like an Illinois or Texas where it's formulaic. So I think we're probably still in the early stages of making some decisions on what and where we'll pass through some of that to caregivers in the form of salaries and additional wages. So probably still early that our team is continuing to assess, but fair to say there will be some portion of that definitely will be passed through to caregivers.

Okay. That makes sense. And then maybe as we talk about caregivers, just curious what you're seeing on the labor market. Obviously, things are different today versus a year ago. So just curious what recruiting looks like and retention for your caregivers.

Brian, it's Heather. I'll take that question. Dirk mentioned that our hires per day for Q4 were right at 101. And that's typically what we would expect to see from Q3 to Q4 as we move and see the effects of seasonality because November, December, the holidays impact some of our hiring activities. Dirk mentioned also that in January, we had a strong start to the month as we would expect after we come back from that holiday period, but then some slower volumes for hiring towards the back half of the month when we saw some geographies that were impacted by the weather that passed through the country. But then so far in February, we are seeing strong hiring trends, and we would expect to finish the month in a really good position for hiring overall. We're not -- to your question about are we seeing any impacts or difficulties hiring, we are not seeing anything to point out. We continue to see stability. The numbers point to that, but also just in our hiring efforts in the markets. We always have small pockets here and there, usually in more densely populated urban areas, not all of them, but a couple of them. And those are usually related to specific jobs on the clinical side, but nothing really to call out. We're seeing consistency. We're seeing good progress on the hiring front there.

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

Just first of all, part of the long-term growth algorithm for Addus has been tuck-in deals. And we had a little bit of a slowdown in the back half of last year. I wonder if you could comment a little further on what you're seeing in the pipeline, prospects for transactions, tuck-ins or even bigger transactions, where you're seeing opportunities?

A.J., I think where we sit today kind of early this year, we've heard from a lot of folks that I think are optimistic there's going to be more opportunities this year. I think we've said before, we've heard that before as well. But I think where we sit today is probably looking at more things in our pipeline that are comparable to the deals that we closed last year. So probably more -- mostly in markets that we're in today, maybe some adjacencies to create density. I think our understanding is, and we've alluded to this, I think, on some prior calls, there are some potential larger personal care assets that we think will be coming to market and would be available. Right now, I think our estimate is those are probably midyear or towards the back half of the year based on the timing that we're hearing. So obviously, we'll be looking at those. But I think in the interim, we'll still continue to be focused on the type of deals that we did in 2025. We'd love to have a little more of a cadence on those. Our guys are out working really hard to try to find deals that make sense for us in the right spaces. But hopefully, we're able to be successful in that.

Okay. And then I just wanted to ask you about the adult home care business. Obviously, the industry was geared up that it might have to absorb a 6.5% hit. It ended up getting phased or rolled back significantly to 1.5%. I wonder -- that may be immaterial to you guys, but I wondered if that was a little bit of a tailwind you could look forward to in '26 that you geared up for a much more significant cut that didn't materialize. And then the other thing I wanted to ask you about with that was it does seem like some of the players in the space are seeing whatever CMS is trying to say in that final rule as incremental clarity that allows them to go out and start to look at acquisitions in that area. Obviously, we saw the Enhabit go-private transaction announced yesterday. I just wanted to put a finer point on it. Are you guys now open to being a little more actively there? It sounds like in your prepared remarks, you're still somewhat cautious.

A.J., I appreciate the question. This is Dirk. Listen, we've always been a little bit cautious as we look at acquisitions out there. We want to make sure that they meet our strategy and that we do so thoughtfully as far as the valuation of what we're able to pay. That being said, look, we're encouraged by the final rule that came out. That's kind of interesting to say when it was still a rate reduction, but it was positive movement, and I think it was due to a lot of very strong work by both companies in the industry as they worked with the federal government to try to prove that there is real value to home health care services. And so we agree with that. We support that theory. We will continue to look at opportunities in home health. And if the larger transaction comes up that we think can make sense for us as far as valuation strategy where it fits geographically, we will certainly look at that. But again, there's still a couple of things out there we would like to see them finalize. And hopefully, maybe they'll give a little more clarity this coming year on some potential clawback.

The next question comes from Andrew Mok with Barclays.

Same-store billable census was down 1.1% year-over-year, and you mentioned that it was down slightly sequentially. But I think you also said that you're seeing growth in a majority of your key states. So can you help us understand that dynamic and provide more detail on the geographies and items that are weighing on the portfolio?

Andrew, I'll take that question. Yes, I'll give some color on what we're seeing in terms of volume and census. We've mentioned that same-store hours increased 2.4% and were roughly in line with Q3 as well. And during 2025, we've mentioned before that we had a focus on serving to authorized hours as well as census. And we've seen some positive movement in terms of the service percentage year-over-year. Again, it was essentially flat on a sequential basis just as a result of normal seasonality that we would expect. But then as we think about census growth, we have seen some trajectory that we like that we're seeing. We've seen sequential census growth. We've been focused on that for 2025, and we have seen that each quarter during 2025 until a slight tick down in Q4, again, from the holidays as we would have expected. We're closing that census gap on a same-store basis. And as we move into the second half of 2026, I would expect that we would start to see positive year-over-year growth, particularly as we continue to consistently see admissions and starts of care outpacing discharges.

Great. And just as a follow-up, there's been heightened attention recently on fraud, waste and abuse in the personal care space. Can you talk about how states are approaching this issue and what steps you're taking to ensure that you're aligned with the evolving policy and guidelines?

Yes, Andrew, one of the things that we, as a management team, tried to do 10 years ago now, almost 11 years ago, when we came into Addus at that time, we wanted to really have a very strong compliance program. And so we spent a lot of dollars building this program up. We have a leader there who's very familiar with the various aspects that goes on in both the clinical side and the non-clinical side as it relates to various audits by the state and the federal government. So for us, when people talk about fraud and abuse, we understand that, that does occur in all levels of care in which we operate. I think the important thing for you to understand is we are -- we like the fact that there is a focus on fraud and abuse because we believe we spend extra dollars and extra time and make sure we're trying to comply with what is out there and not -- some of the smaller players may not have that ability to make those investments. So for us, as people look as states look at fraud and abuse, it may give us the opportunity to grow our business as maybe some of the smaller mom-and-pops realize that there are things they need to do that maybe they can't afford to do and they look and get out of the business. So for us, we're pleased with the focus on fraud and abuse, and we will continue internally to always focus on making sure that we're as compliant as we can be.

The next question comes from Matthew Gillmor with KeyBanc.

You all have done a good job driving penetration of authorized hours, particularly in Illinois you've rolled out the caregiver app. I was curious how the rollout has gone in New Mexico, just where that stands? And can you help us think through the sort of future opportunity in terms of driving greater penetration of authorized hours as you roll out to New Mexico and other states?

Sure. Matthew, it's nice to hear from you. I'll address that. So you are correct that we are seeing some very nice momentum in terms of service percentage that I just talked about. We are seeing that momentum in Illinois specifically, where we've had the caregiver app rolled out for the entire year of 2025. We have seen that service percentage rate up in the upper 80th percentile consistently. And we believe that is in large amount due to the app that we rolled out. We've also seen utilization by the caregivers in that market of flex hours on a pretty steady basis, which is also very encouraging. As you mentioned, we did begin to roll that out in 2025 to New Mexico, and we're making steady progress there. We are also beginning to deploy in Texas here imminently in Q1, and we are aiming to have that complete in Texas by the end of Q2 or early into Q3. And we believe that our greater opportunity to capture some momentum will be in that Texas market just due to some of the market dynamics and how some of the EVV is submitted in Texas versus in others -- in New Mexico or in Illinois. So we are pleased with what we're seeing, and we are still carrying that momentum forward to continue to roll it out.

That's great. And then as a follow-up, I was curious, this may be a Brian question. But as we think about Gentiva rolling into the same-store base, will that be sort of additive to the same-store growth? You [ reported ] Gentiva growing sort of in line to below sort of the corporate average? Just wanted to get a sense for how -- when Gentiva rolls into the same-store base that influence your same-store growth metric.

Yes, Matt, I think it's fair to say Gentiva probably is following a fairly similar path to the remainder of our business. So not probably expecting material uptick or downtick from putting Gentiva in that number. It should be fairly consistent in our view.

The next question comes from Jared Haase with William Blair.

Maybe just to unpack the comments on the personal care labor side a little bit more. I'm curious how much of the strong hiring trends that you've experienced over the last couple of months would you attribute to, I guess, things Addus can control. So thinking, obviously, just having a good caregiver experience, maybe some improvement around the onboarding process to get caregivers matched up with patients efficiently as opposed to maybe just broader macro trends that might be bringing incremental caregivers into the market?

Sure, I'll take that. It's definitely a mix of both. I think maybe starting in reverse order from a macro perspective, we're certainly seeing some trends that are working in our favor that are helping with our results from a hiring perspective. But from our perspective, we are absolutely focused on what we can control, and that includes sort of from beginning to end of the process with how we source and recruit caregivers all the way through to how we can ensure that they are getting a schedule and are ready to go very quickly after they have been through the hiring and training process to make sure that we capture that momentum. So all of the things in between as well. But I would say it's a mix of both of those things.

Okay. Great. That's really helpful. And then this is maybe for Brian, but I'm just curious, are there any guardrails or sort of puts and takes we should be thinking about relative to your opportunity to expand margins year-over-year in 2026 EBITDA margins, I'm thinking?

Yes. I mean I think our thesis has always been, as we continue to see consistent top line growth, we should get leverage, particularly on G&A. So with everything being said, looking at the landscape right now in '26, we would expect to see something similar occur this year. So we've finished last year in a pretty good spot. I think a couple of years ago where we had maybe some higher wage pressures coming out of COVID with some of the nursing shortages and the like. We haven't seen that in the last couple of years. Don't expect to see that this year. So I think that's reasonable to think just from an EBITDA perspective, top line growth should continue to drive some bottom line additional leverage for sure.

The next question comes from Sean Dodge with BMO Capital Markets.

This is Thomas Keller on for Sean. I wanted to follow up on the caregiver app, and I might have just missed it, but are you able to more specifically quantify the volume lift that you've seen that you think is directly attributable to the app?

So I'll point to sort of how we measure it internally. And it's -- I'll start by saying we can't directly attribute specific pieces of growth to the app. That's not something that's possible to track. But what we can see are a couple of different metrics, which are encouraging. The first is the number of caregivers that are utilizing the app. We see that has grown throughout the year in Illinois and has stabilized at a rate that, frankly, I think means most caregivers we've captured and they are using the app. The second metric would be the frequency of utilization of the app. So we can see if someone is using the app regularly versus if they just downloaded it once and haven't really been interacting with it, we're actually seeing increasing utilization as well. And then the final thing that I'll mention -- I mentioned briefly before is the utilization of flex hours. And effectively, that is where a caregiver can go into the app and they can see incremental hours that they can serve and capture those so that they can make sure they're serving their clients to the authorized level. And also for them, it's an opportunity to earn some more hours for the period. So we're tracking that as well, and we're seeing some nice movement and continued utilization at pretty strong rates there. And you see that coming through in the service percentage that we've been talking about. So hopefully, that helps you think or understand how we think about the benefits from that app. But again, it's not possible for us to give you a direct number because of the different moving pieces.

Yes. That's helpful. And then on the Homecare Homebase CMR transition in PCS, is there any update on the time line there? And how soon after the integration should that start to drive more clinical referrals and value-based opportunities?

Yes. I think where we are with Homecare Homebase, we've been obviously working with them for quite some time. We've got probably 30-plus of our locations are on the system today over a few different states as we move through just developing the software. I think we've got a schedule for a more enterprise-wide rollout. But as we've always talked in the past, we're going to take a very measured approach to that. So we'll be working on that over '26 and probably into the better part of '27 before we get all of our personal care business over onto that platform. So again, we'll be looking to market-to-market one at a time to make sure that goes very smoothly. But that's kind of the existing expectation on time line today.

The next question comes from Ryan Langston with TD Cowen.

Dirk, you mentioned you believe the 80/20 will ultimately be repealed. And I think you actually said specifically in the near future. Are you hearing anything specific from CMS or your lobbyists that give you the confidence they're going to ultimately repeal that rule?

Well, Ryan, first understand that anything we hear is always subject to change, as you know. But yes, we've been hearing good things. Our team has been working with our lobbyists, working with CMS. We believe that they're in the process of looking at these rules and making some changes. We've had some indication that the timing will be sooner rather than later. But again, I want to caution, this is a rule that doesn't take effect for a number of years. So there's not that immediacy to it. However, from what we're hearing, it should be -- that rule should change, and we're hoping will change in the near future, which we believe will just send a signal to the industry and to various investors in the industry that, that is not an issue anybody has to worry about anymore.

The next question comes from Clarke Murphy with Truist.

Just had a question on your payer mix in the quarter, specifically in personal care, shifting a little bit towards managed care. Just kind of wanted to get a sense for was that by design? Or is that kind of just happenstance? And anything that we should be thinking about as it relates to personal care payer mix would be helpful.

Clarke, that was just a direct result of the Del Cielo acquisition we did in Texas. Texas is a heavy managed Medicaid state. So that is what impacted the mix in the fourth quarter with that acquisition.

Okay. Great. And then just as my follow-up, can you give us an update on the home health and hospice bridging program that you guys have in place, kind of how much more wood there is to chop on that front? And if we could start to see a potential return to growth in 2026 on the restart side?

Sure. Sure. Let me take those in a couple of pieces. So first, on the bridging program, we continue to have a heavy focus on that program because we do see the benefits. First, it's providing the right levels of care to our clients and our patients in sort of the setting and the utilization that they need, but also because it's a really good source for us to be able to serve patients when they are ready for hospice as opposed to home health. We have seen, as we've mentioned, some nice transitions and referrals coming from home health into hospice in the markets where we have density and where we have been really focused on this program for a bit of time. New Mexico specifically, we have density. We're co-located in most of our locations there between home health, hospice and PCS. And so we have really good opportunities, and we are -- it's just part of the program. And so we continue to see nice results, and we would expect for that to continue as we focus on it with our operations team and sales teams. Tennessee, we rolled that out in 2025 and began to do the same work there from a bridging perspective. That is a little bit of a newer program, but we're seeing nice returns on what we have been focused on and what we're implementing with the bridge program in Tennessee. So in order for us to continue to see that program flourish, we'll continue to drive it in the markets where we have density. And then as we have opportunities for growth in specific markets for home health and for hospice, I think that's going to become very useful for us to grow the programs. And then secondly, if I turn…

The next question comes from John Ransom with Raymond James.

Hard to just come up with a clever question, 54 minutes into a call. I just want to explain that. So my question is, a lot of companies are getting asked about technology, AI, et cetera. It wouldn't appear from the outside that there's a ton of opportunity there. I know you rolled out the caregiver app, but I'm thinking in terms of back office automation and AI. Is there a technology lever longer term that we're not thinking about that the company is working on?

Yes, John. I think in a couple of places, we see there's some opportunity, and we're working with our vendors to see if there are ways to see some AI implementation. But I think the 2 we would flag out, obviously, you referenced this back office rev cycle. There should be some opportunities there that we're looking at. I think the other large one for us is just, we think about scheduling and the logistics of our personal care business. Can we use some AI there to help automate some of those processes on the front end rather than having to have as many manual interventions. So I think those are probably the 2 big areas. But I would say we've got a an AI committee internally formed across multiple of our disciplines led by our CIO, that is looking at ways to implement AI in a way that would benefit and work well for the company, but all things that we're looking at.

Okay. And then just kind of speaking of your rate negotiations, is it different when you're talking to a Medicaid payer versus directly to the state? Do the payers seem more rational? Or is it kind of the same conversation regardless of where it comes from?

It depends on the state. I think, as you know, most states, even if they have managed Medicaid, the payers really have no voice in that because it's a rate set by the state. They're acted more as a TPA. So there's not really a lot of opportunity to talk rates with them. I think the one difference we have is in New Mexico, we actually have the ability there to negotiate directly with the 3 large MCOs. I referenced earlier that the state increase will be kind of across the board to the MCOs and then we have the ability to go have conversations with the MCOs and get some leverage. But I think we've been very successful in New Mexico. I think we've done well. We're obviously the largest in the state, so have a pretty good leverage. And I think with all 3 lines of care, I think that's also a benefit for us, but really kind of isolated to that state and those conversations with payers on the personal care side today.

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

And actually, I want to follow up on this last commentary around payers because we actually do hear so managed Medicaid plans calling out higher LTSS and that includes home care spending. It sounds like you have a good relationship in New Mexico, but any incremental changes you're seeing there from any of your payers at the state level? I'm thinking anything about denials or just delaying payments or anything else that maybe you're watching?

Not that we've seen, Joanna. I think in all the other states where they kind of are acting in that kind of TPA role, we haven't seen any changes in behavior, haven't seen any shifts in utilization or authorized hours. Those are all processes that the state usually has somebody independently go in and assess what the needs are in the patient's homes. So I haven't seen any change or pressure there. That would be something that the state would control, but not today. No changes that we've noticed.

And as it relates also to payers, in the past, we talked about some opportunity there in managing the dual population because that's more underserved and high cost. So maybe give us an update where you stand there? Are you engaging any specific contracting that targets the dual population? And could this be an opportunity for you guys?

Yes. We've been doing some things what we call on the value-based side, where we are working with managed Medicaid, where they have some high-risk populations that they're responsible for. I think we've shown some fairly compelling results if you're leading with personal care and mitigation of some of the costs for those high-risk patients. So I think New Mexico, obviously, the market where we've been doing that the longest and have some pretty mature data. We've been implementing those as well in Illinois and have started in Tennessee, probably still a little earlier there, but I think early on seeing similar results. So probably isn't going to be something just from a contractor perspective that's going to turn into like a sizable revenue opportunity. But I think the information that we're gathering the data and the savings that we're showing when you lead with personal care, we think is fairly compelling and it should be helpful in conversations in the future.

And last one, different topic. I don't know if I missed it, but did you guys talk about the winter storms in late January? Have you seen much of an impact on how I guess the rescheduling or catching up on that occurred in February.

Yes. With the storms in late January kind of coming through the Midwest, we probably saw a little bit of pressure. I think -- you think personal care, we tried to schedule as many visits as we could in advance. We all knew the storm was coming and tried to make up as many as we could on the other side, but a variable, you're probably going to miss a few visits just as a result. So again, nothing we think is material, but definitely did see a little bit of impact from those storms coming through in late January.

And any observation in February after the storms?

Not that we've noticed. If you think about where most of that is hitting, we really don't have a lot of operations up in that part of the country. So nothing that we're seeing at the moment, no.

The next question comes from Raj Kumar with Stephens.

Maybe just kind of focusing on hospice length of stay. 4Q tends to be a seasonal high point, but it was a nice sequential bump. So I'm just kind of curious on what were kind of the underlying drivers, maybe kind of referral normalization or further play out of that? And then I guess maybe just any commentary around comfortability around kind of cap space on the hospice payment front as well.

Sure. I'll take that, Raj. So we've mentioned before, and I'll just go into a little bit more detail that we are -- we've had a focus for 2025 on really diversifying and ensuring that we have the right mix of referral sources in each market. Each market is a little bit different. As you point out, we have differing lengths of stay depending on the patients that we have been caring for. And so we are very intentionally focusing on a market-by-market basis on the correct referral sources there. I think that's driving what we can see as some nice trends in the length of stay. It's driving nice trends in terms of the mix of patients and also admissions of new patients has grown very nicely throughout 2025 and that will also contribute to the mix that we're seeing. In terms of cap, we did see improvements in Q4 in the overall cap position. We actually had a little bit of a benefit, nothing material overall, but it was a material positive movement in terms of its relation to the total cap position that we had seen. And I think that's in large part to the efforts and the refocused efforts of the sales team in terms of diversifying that referral mix.

Got it. And then maybe just one more kind of broader question around kind of labor environment and then potential tailwinds from Medicaid work requirements. And I guess just thinking about the Arkansas book and how that state has had Medicaid work requirements. Any way to kind of contextualize that kind of labor market in Arkansas in terms of, if there has been kind of any benefit -- significant benefit on the hiring and labor front from an statement of Medicaid work requirements as you think about other states start to implement that towards the back half of '26 and the implications around that?

Sure. There's nothing I would point to specifically in relation to Arkansas. I know they've had those in place before, and that's been part of how they operate, but we haven't seen really anything to point out in terms of what our hiring prospects have looked like as a result of that. We actually see the opportunity, I think, as you were alluding to here for us in terms of the work requirements as being something that could benefit us as people are looking for work, they're looking for incremental work or even flexible or part-time work, we can help with that. And so we don't see it as something that we need to be cautious of. We see it as potentially an opportunity.

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

Thank you, operator. I want to thank each of you today for taking the time to join us on our call, and I hope you have a great week.

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