The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Meghan Holtz - Jefferies - Analyst
: Good morning, guys. This is Meghan Holtz on for Brian Tanquilut. Congrats on the quarter first off. I like to start out on the guide. As I look at the
topline growth, it's slightly above 4%, implying flat EBITDA of margins year over year. Would you consider this conservative as you've spoken to
EBITDA margin expansion in '25 previously?
Question: Meghan Holtz - Jefferies - Analyst
: Okay. Thanks. And just as a quick follow up, you guys have commented on looking to turn M&A kind of back on. I mean, can you speak to the
pipeline? What areas are you focused on and any specific characteristics you require when looking at assets?
Question: Michael Murray - RBC Capital Markets, LLC - Analyst
: Hi. This is Michael Murray on for Ben. Congrats on the quarter. Just drilling down into the PDS segment. You previously noted expectations for
some pressure in spread rate in the first quarter. How should we think about modeling the cadence of both rate growth and gross margin progression
in 2025?
Question: Michael Murray - RBC Capital Markets, LLC - Analyst
: That's helpful. And just as your cash flow increases, how are you thinking about capital allocation? I know you touched on M&A. If the right
opportunity presented itself, what sort of leverage would you be comfortable going up to? Thank you.
Question: Benjamin Rossi - JPMorgan Chase & Co. - Analyst
: Hey. Thanks for the question. Just regarding your medical solutions payer strategy, you mentioned the comments on the segment modernization
as you start this process during 2025, and the expected volume drag. I want to drill down here. Could you walk us through your approach to payer
negotiations here and how you're sizing your contract conversions and potential rate changes within there.
Question: Benjamin Rossi - JPMorgan Chase & Co. - Analyst
: Great. Really appreciate the background commentary there. And then just on the follow up on the macro Medicaid regulatory changes, I can
certainly appreciate very good here with a lot of moving pieces, but just with the broader headlines on potential program changes in Medicaid
and more details coming into the fold, curious how you're approaching these policy discussions with your regulatory counterparts and you finding
them to be receptive to some of the changing dynamics on the provider side for Medicaid and [CHIP].
Question: Scott Fidel - Stephens Inc. - Analyst
: Hi. Thanks. Good morning. Actually, going to try to stick on that topic we're just on the Medicaid reform and, Jeff, appreciate your high-level
observations there. Going to try to see if we can get you to maybe peel the onion back a little bit more and just we think about some of the different
specific options that the GOP is considering.
Obviously, it sort of changes every day, but as we think about per capita caps and changes to tax maps and provider tax reform, work requirements,
sort of the main options that they've been looking at that were also proposed by CBO, can you give us your thoughts on which of those you would
be most supportive of or which of those you could see as more disruptive to the PDS part of the market?
Question: Scott Fidel - Stephens Inc. - Analyst
: Okay. And then as my follow up, just I was hoping if we can maybe drill in a bit more on what's implied in the revenue guidance for PDS, revenue
growth within that and how you're thinking about how that splits out between rate and balls.
And then even if you want to get a little more detail on the rate side, how that may break out on yields? How you're thinking about that between
the states and then the MCOs as you guys continue to focus on the preferred payers. Thanks.
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MARCH 13, 2025 / 2:00PM, AVAH.OQ - Q4 2024 Aveanna Healthcare Holdings Inc Earnings Call
Question: Scott Fidel - Stephens Inc. - Analyst
: 30 preferred payers by the end of '25, Jeff, that's the new target.
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