Chemed Flags Full-Year Adjusted EPS at High End of Range

The Tip Desk · November 8, 2026 · 3 min read

Third-quarter revenue rose 10.6% to $690.9 million as VITAS adjusted EBITDA excluding Medicare Cap reached $92.5 million.

Chemed Corporation (CHE), which operates VITAS Healthcare Corporation, the nation’s largest providers of end-of-life care, and Roto-Rooter, the nation’s largest commercial and residential plumbing and drain cleaning services provider, said it estimates full-year 2026 adjusted earnings will be at or slightly above the high end of the range it issued with second-quarter results.

Consolidated revenue for the quarter ended September 30, 2026, was $690.9 million, up 10.6% from a year earlier. GAAP diluted earnings were $5.45 a share. Adjusted diluted EPS was $6.75, up 28.1%.

VITAS net patient revenue was $457.4 million, up 12.2%. Average daily census rose 9.4% to 24,428. Admissions increased 7.2% to 18,995. The company said the revenue increase comprised primarily a 9.4% increase in days of care and a geographically weighted average Medicare reimbursement rate increase of approximately 2.2%. Acuity mix shift negatively impacted revenue growth 25 basis points. Medicare Cap and other contra-revenue changes positively impacted revenue growth by 85 basis points.

VITAS net income excluding certain discrete items was $70.8 million, up 44.7%. Adjusted EBITDA excluding Medicare Cap was $92.5 million, up 31.4%, for a 20.2% margin, a 318-basis-point increase. Gross margin excluding Medicare Cap was 25.4%, a 221-basis-point increase. Selling, general and administrative expenses were $23.1 million.

The hospice operator accrued $828,000 in Medicare Cap billing limitation in the third quarter, versus $6.1 million a year earlier. No Medicare Cap billing limitation was recorded for the Florida combined program, and none is anticipated for the 2026 fiscal period. Of 33 Medicare provider numbers, 21 have an anticipated full-year cushion of 10% or greater, seven have a cushion between 0% and 10%, and five have a billing limitation totaling $6.1 million. Average revenue per patient per day was $209.11. Routine home care and high-acuity care averaged $187.69 and $1,147.26, respectively. High-acuity days of care were 2.2% of total days of care.

Roto-Rooter revenue was $233.5 million, up 7.5%. Branch commercial revenue was $59.9 million, up 9.0%, with plumbing up 10.6%, drain cleaning up 6.8%, excavation up 5.5% and water restoration up 30.7%. Branch residential revenue was $158.8 million, up 5.2%. Revenue from independent contractors was $16.9 million, flat.

Roto-Rooter net income excluding certain discrete items was $33.3 million, down 1.8%. Adjusted EBITDA was $48.2 million, down 2.5%, for a 20.6% margin, a 213-basis-point decline. Gross margin was 50.3%. Selling, general and administrative expenses were $71.0 million, up 17.1%.

During the quarter, Roto-Rooter re-acquired multiple franchise territories in California for approximately $62.5 million. Collectively, those territories include a population of over 12 million people. Slightly over half of the revenue associated with acquired territories will become part of owned and operated branch locations. Two new branches will be established in Sacramento and San Diego while other territories will be absorbed by existing branches. The remaining locations will become part of the independent contractor operating model.

Chemed repurchased 125,000 shares for $66.0 million, or $528.24 a share. Over the trailing 12 months it had repurchased 1,235,000 shares at an average $427.62 a share. Remaining share-repurchase authorization was approximately $73.7 million. Cash and cash equivalents were $48.4 million and long-term debt was $236.0 million. A five-year $450 million credit agreement, with a $250 million expansion feature, had approximately $166.7 million undrawn borrowing capacity after excluding $47.3 million for letters of credit.