Perfect. Thank you. Hello, everyone. Thanks so much for joining us. My name is Joanna Gajuk, Healthcare Facilities and Managed Care. Thanks so much for joining the conference and the session. Now we have a very short presentation, but hopefully very punchy from Aveanna Healthcare. Yeah, please introduce yourself and go ahead.
Very glad to be here. I'm Jeff Shaner, the CEO of Aveanna Healthcare. I'm here with Matt Buckhalter, our Chief Financial Officer. Thank you for your time today. We're excited to tell you a little bit about our Aveanna story and how we're thinking about insights on 2025 and an update on year three of our strategic transformation plans. Really starting with our transformation of how we think of the value of home care. I think first and foremost, what is key to us is we believe scale and density of services are key in the home care market. We think it helps create value for our payer and government partners. At Aveanna, we are a leading scaled national provider of home care services. I'd start there. We're a diversified platform, as you'll see.
We provide both pediatric, adult, and geriatric home care services, so that makes us unique. We serve over 80,000 patients any given day and week. Our national footprint is really what is dedicated to driving high-quality, cost-effective clinical outcomes and reducing total cost of healthcare for our payer and our government partners. I'll end the slide by saying we believe deeply in aligning our interests to those of our payer and government partners. We believe by doing that, we can improve access to cost-effective, innovative care in the comfort of our patients' home. Just touching on a couple of company highlights and updates. I mentioned we're a national footprint. You'll see our map here. We have just over 340 locations in 34 states and growing, and I'll talk about that.
We just recently announced plans to acquire Thrive Skilled Pediatric Care, and that will further enhance our pediatric footprint. Specifically, it'll add two additional states, Medicaid states. It'll add both New Mexico and Kansas to our current footprint and take us to 36 states, as well as it will continue to help densify five core states today: Arizona, Georgia, North Carolina, Texas, and Virginia. Really excited. We talked last week on our earnings call. We expect to close that transaction here in the next few weeks. Our diversified payer mix helps support our impressive 7.5% revenue CAGR over the last five years. I'll point out that no single payer contributes more than 10% of our total revenue. That happens to be Medicare. It's one of our smaller payer groups.
Lastly, on this slide, I'll just point to we recently updated our guidance, both revenue and adjusted EBITDA guidance, and our Q1 results. We now expect 2025 revenue to be greater than $2.15 billion and 2025 adjusted EBITDA to be greater than $207 million. Excited about coming out of the year strong, a strong beat and raise in Q1, and ready to upgrade guidance right out of the year. I'll end this with this slide with our business plan is underpinned by thousands of dedicated clinicians and caregivers who provide compassionate care to our nation's most vulnerable patients. That is the Aveanna mission. Just a comment or two on the things as we think about year three of our strategic transformation. We continue to focus on the things that have helped right-size our business over the last two years.
There are five things that are primarily five strategic initiatives that are primary drivers for 2025. They are, first, to enhance our partnerships with government partners and preferred payers to create additional capacity and growth. That is at the core of our preferred payer and government affairs strategy. Second is to continue identifying cost efficiencies and synergies that allow us to leverage our growth. That's been key to Matt and I's tenure at Aveanna. Third is to modernize our Medical Solutions. You'll hear the word modernized used quite a bit with Matt and I in our businesses. We're focused on Medical Solutions this year to achieve our target operating model in our Medical Solutions business. Fourth, managing our capital structure and collecting our cash while producing positive free cash flow. It's very important to us.
Fifth, and it's probably most important, engaging our leaders and our employees at Aveanna and delivering our mission every day. Those five core strategies are what really underpins our business plan for 2025 and how we think about the continued progress of the company. I do think it's important to note when we talk about our business plans that our business, as Joanna knows, our industry does not have a demand problem. Demand for our services, for home and community-based care, continues to be strong with both state and federal governments and managed care organizations looking for solutions that create more capacity while reducing the total cost of care. I think, as you'll hear us talk about, it's really leveraging and leaning into those partners. Talking about our success with our preferred payers and government partners, this slide really highlights the success over the last three years.
First of all, in all three of our business segments, both Private Duty Services, Home Health and Hospice, and Medical Solutions, we have a dedicated preferred payer and government affairs strategy for each of our businesses. On the left side of this chart, you'll see this is dedicated to our Private Duty Services preferred payer goal. Our goal for 2025 is to increase the number of preferred payer agreements from 22- 30. We achieved two additional preferred payer agreements in Q1, so we're well under our way of reaching a goal of 30. You'll see over the three years we've gone from 7 initially in our first year to now 22 at the end of 2024, so almost 3x growth with an additional 8 focused on 2025.
I'll add to that that our PDS MCO volumes, another key indicator that we report, moved from 50% at the end of the year in 2024 to 54% at the end of Q1. Matt and I would tell you, we expect that to reach the high 50% by the end of 2025. Our clinical capacity is aligning with our preferred payers. Accompanying that is the need for value-based agreements. It's important for us to add value-based agreements to our preferred payers. We start with enhanced reimbursement rates to attract nurses and attract caregivers through additional wages. The addition of value-based agreements, which are bonus-oriented for achieving specific clinical outcomes and cost targets, are important. Continued evolution from originally three back in 2022 to 8 at the end of 2024 with a goal of reaching twelve at the end of this year.
Excited about the continued growth of that. As we move over to our government affairs strategy for 2025, it is twofold. First, it's to continue to execute on our legislative agenda to improve reimbursement rates in at least 10 states. At least 10 states. We had 5 in the first quarter, so a really nice start to the year with 5 state rate increases in our PDS business coming into the beginning of this 2025. Off to a nice start for 2025. Secondly, it is really to focus on the continue to advocate for Medicaid rate integrity on behalf of the children with complex medical conditions. We think it's critically important for us to advocate on behalf of our families, especially in the current Medicaid rate environment. Lastly, I'll touch on Home, Health, and Hospice.
We put a tremendous amount of focus on this business in the last two years. Our goal for 2025 was to maintain our episodic payer mix above 70% while returning to a more normalized growth rate in that business. In Q1, our episodic mix was 77%. We also currently set up 45 preferred payer agreements for home health. Really nice momentum in our home health business. We are well- positioned for growth in 2025 and beyond. Finally, although it's not on here, I talked about our Medical Solutions business. As we have achieved our desired preferred payer model in both Private Duty S ervices and Home, Health, and Hospice , we now have embarked on a similar strategy in our Medical Solutions business.
To date, we have 17 preferred payers in Medical Solutions, and we do expect that number to grow as we achieve our desired preferred payer model in all three of our businesses. Lastly, before I hand it over to Matt, just touch on our growth plan for Aveanna. Our core organic growth at Aveanna target is 5%-7%. And that is really underpinned by the two strategies we just talked about, both the preferred payer and the government affairs strategies. By aligning our clinical capacity with those government and payer partners that value our services, we can achieve accelerated growth in our business. Also, with the addition of value-based agreements, that gives us the potential for both upside to earn bonuses and achieve metrics and cost savings and accelerated growth. Lastly, how do we get from kind of 7% growth annually to 10%?
It's really tucking in M&A, deals like Thrive Skilled Pediatric Care, and other Home, Heath, and Hospice tuck-ins that we could do would allow us to really move from kind of that 7, 7.5, 8% growth rate organically that we've achieved the last five years and push us beyond the 10% growth rate on an annual basis. Really excited about where Aveanna's position right now from a growth standpoint and being underpinned by over 7% growth organically is a great place to be. Matt will add some color on our capital structure and how we continue to delever as our revenue and EBITDA grows. I guess the last thing I'll say before I turn it over to Matt really is I'm incredibly optimistic about our future. We offer a cost-effective, patient-preferred, and clinically sophisticated solution for our patients and our families.
We are the right solutions for our payers, referral sources, and government partners. With that, let me turn it over to Matt. He's going to touch on our capital structure and liquidity. Matt.
Thanks, Shaner. Now let's get into it and talk a couple of numbers here really quickly and start boring everybody on some of that. Just a quick overview of our operating segments. Aveanna has three primary operating divisions. Our largest division is PDS or Private Duty Services. This represents approximately 82% of our total company revenue. Historically, this division has grown in a 3%-5% range in a stable market. However, we are currently experiencing accelerated growth in this division. That's mostly being driven by that government affairs strategy and payer relation strategy that Jeff alluded to earlier. Our Medical Solutions segment, which we're very excited about, has a much higher trajectory and growth trajectory historically. It's an 8%-10% organic growth business h as been consistently for quite some time.
We will expect that to be a little bit muted in 2025 on a volume aspect, not necessarily on a revenue aspect, but on volume as we execute on this modernization strategy that Jeff talked about earlier. Lastly, but surely not least, our Home, Heath, and Hospice segment makes up the remaining 10% of our total revenue. We believe HHH can grow in that 5%-7% organic range. We are very, very committed, though, to episodic growth, and we believe that has the right outcomes for our patients and our families. It not only produces better financial outcomes for the organization, but much better clinical outcomes for the organization as well. As a whole, really excited about all three of these divisions. They continue to operate at a very, very high level.
As Jeff talked about previously, we'll strategically bring in tuck-in acquisitions through M&A when appropriate and when it makes sense to our geography. Let's chat some numbers really quick. Taking a brief view at Q1 financials here, we saw revenues rise 14% year- over- year. That's all organic growth that we saw. We achieved year-over-year revenue growth in all three of our operating divisions. PDS services was the leader of the pack there at the 16.5% organic growth that we saw. That 3%-5% range that I alluded to earlier, we're seeing quite that enhancement driven by that preferred payers and government affairs strategy in this division. Consolidated adjusted EBITDA of $67.4 million was up 93.1% year- over- year. This was definitely driven by that payer relations and government affairs strategy and driving great clinical outcomes for this organization.
Our preferred payer strategy is focused on delivering these results continuously. It not only enhances, once again, those financial outcomes, but also those clinical outcomes. It really does position ourselves to be a best and leading-class home care provider. Quick view at our capital structure just for everybody. We maintain a strong liquidity excess of $260 million. That is kind of spread between cash, securitization facility, and our revolver, which was undrawn at the end of the quarter. A variable- rate we have got about $1.47 billion of variable- rate , most of all of which is hedged with fixed rate or with caps and swaps. This leads us to any volatility to the rate market out there. We are really proud of our organization and generating free cash flow and continue to generate free cash flow. We did in 2023 and 2024.
We expect to be in 2025 as well on a standalone basis. Last but not least, I also want to highlight that we will continue to deliver this organization significantly. We did a full turn in Q1 on an LTM basis. We are executing the strategy at a very, very high level. That is driven by exceptional growth, cost management, and really, really effective cash collections. With 15 seconds left, I will just kind of close this out really quickly. Thanks again for everybody's time. As we outlined and Jeff did a great job of outlining, we are going to continue to execute on a very high level and stay very, very focused on a disciplined strategy built around scale, clinical excellence, and strong partnerships in government and payer relations.
With a growing national footprint, balanced capital structure, and strong momentum in 2025, Aveanna is well positioned to deliver long-term value to patients, families, and our stakeholders. Matt and Jeff, rest of the Aveanna management team, thanks for the time, guys. I look forward to updating you after Q2.
Thank you.
Thank you. Appreciate it.