CHE Q1 2026 Earnings Call Summary | Stock Taper
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CHE

CHE — Chemed Corporation

NYSE

Q1 2026 Earnings Call Summary

April 24, 2026

Chemed Corporation (CHE) Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

  • VITAS Healthcare:

    • Net revenue: $420 million, up 3.1% year-over-year.
    • Average revenue per day: $210.62, a 1.46% improvement from the prior year.
    • Adjusted EBITDA (excluding Medicare Cap): $70.8 million, a 0.6% increase; EBITDA margin: 16.8%.
    • Admissions totaled 19,394, a 6.9% increase from Q1 2025.

  • Roto-Rooter:

    • Residential revenue: $16.3 million, down 1.5% year-over-year.
    • Commercial revenue: $56.5 million, down 1.9%.
    • Adjusted EBITDA: $53.5 million, down 9.6%; EBITDA margin: 22.5%.
    • Increased marketing spend by nearly $3 million compared to Q1 2025.

2. Strategic Updates and Business Highlights

  • VITAS successfully transitioned to a balanced patient mix, achieving higher-than-expected revenue growth and EBITDA margins while adding $32.5 million to the Medicare Cap cushion in Florida.
  • Roto-Rooter saw its first increase in residential plumbing and sewer revenue since Q4 2022, driven by a 3.3% increase in total leads.
  • The company repurchased franchises in San Francisco and Fort Worth for $20.6 million, expected to add $5 million to $5.5 million in revenue for the remainder of 2026.

3. Forward Guidance and Outlook

  • VITAS:

    • Full-year average daily census (ADC) growth revised to 4.5% - 5.5% (up from 3.5% - 4%).
    • Revenue growth (excluding Medicare Cap) revised to 6.5% - 7.5% (up from 5.5% - 6.5%).
    • Adjusted EBITDA margin (excluding Medicare Cap) projected at 18% - 18.5%.

  • Roto-Rooter:

    • Revenue growth guidance remains at 3% - 3.5%.
    • Adjusted EBITDA margin slightly lowered to 21.5% - 22.5% due to elevated marketing costs.

4. Bad News, Challenges, or Points of Concern

  • Roto-Rooter faced headwinds from weather disruptions that resulted in an estimated revenue loss of $3 million to $4 million.
  • Increased marketing costs due to reliance on paid leads, with a shift from organic to paid leads impacting profitability.
  • The company is navigating a challenging operating environment with ongoing competition and market pressures, particularly in the plumbing and restoration segments.

5. Notable Q&A Insights

  • Management indicated that the margin improvement at VITAS was partly due to headcount reduction, but they plan to increase staffing to support growth.
  • Concerns about fraud enforcement in California were acknowledged, with management emphasizing the need for legitimate providers to maintain access to care.
  • Roto-Rooter’s marketing strategy is under scrutiny due to changes in Google’s algorithms affecting lead generation, with management committed to adapting to these challenges.
  • The company remains open to further acquisitions in the Roto-Rooter segment, citing favorable conditions in the current market.

Overall, Chemed Corporation reported a solid quarter, particularly for VITAS, while Roto-Rooter showed signs of improvement despite facing operational challenges. The revised guidance reflects confidence in VITAS's growth trajectory, while Roto-Rooter continues to address its competitive landscape.

← Q4 2025