Chemed Corporation Q1 FY2026 earnings call

VITAS performance exceeded expectations with 2.2% days of care increase and Medicare reimbursement rate increase. Roto-Rooter saw core residential service revenue increase, added 18 new commercial business managers. VITAS added over $32.5 million to cap cushion in Florida combined program. Roto-Rooter acquired franchises in SF and Fort Worth, expected to add $5 - $5.5 billion revenue in 2026.

VITAS: Net revenue was $420 million in Q1 2026, up 3.1% y-o-y. Revenue increase due to 2.2% days of care increase and ~2.6% Medicare reimbursement rate increase. Average revenue per day was $210.62. Adjusted EBITDA excluding Medicare cap was $70.8 million, up 0.6% y-o-y, margin 16.8%. Roto-Rooter: Branch commercial revenue $56.5 million, down 1.9% y-o-y. Residential revenue $166.3 million, down 1.5% y-o-y. Adjusted EBITDA $53.5 million, down 9.6% y-o-y, margin 22.5%, down 218 basis points.

Full year ADC growth for 2026 updated to 4.5% - 5.5% from 3.5% - 4%. Anticipated revenue growth excluding Medicare cap revised to 6.5% - 7.5% from 5.5% - 6.5%. EBITDA margin excluding Medicare cap 18% - 18.5%. Roto-Rooter revenue growth unchanged at 3 - 3.5%, adjusted EBITDA margin 21.5% - 22.5%.

Roto-Rooter affected by weather events, Google algorithm changes, independent contractor performance, water restoration price per job issues.

Q: On VITA margins and headcount, A: Averaged ~100 FTEs below budget, intend to add 60 FTEs per month.

Q: On Roto-Rooter marketing costs, A: Spent $3 million more in Q1, expect marketing costs to continue.

Q: On Florida cushion and rate update, A: Rate increase in Florida might be slightly lower than national average, still crunching numbers.