CHE · Chemed Corporation

Performance Summary

Chemed Corporation delivered solid financial results for fiscal year 2025, with service revenues and sales of $2.53 billion. The company achieved income from operations of $338.2 million and net income of $265.2 million, demonstrating effective operational management. Total costs and expenses were $2.19 billion, resulting in an operating margin of 13.4%. The company generated strong operating cash flow of $388.3 million, which supported significant capital allocation activities including $431.5 million in treasury stock purchases and $62.8 million in capital expenditures. The balance sheet shows total assets of $1.54 billion with stockholders' equity of $979.4 million, indicating a healthy financial position.

Revenue Analysis

The company operates through two business segments: VITAS and Roto-Rooter. VITAS provides hospice and palliative care services, with over 95% of its revenue derived from Medicare and Medicaid programs. The segment operates 33 Medicare provider numbers across 59 programs in 17 states and the District of Columbia. Roto-Rooter provides plumbing, drain cleaning, excavation, water restoration and related services to residential and commercial customers, operating 356 leased and owned facilities across 34 states. While specific segment revenue figures are not disclosed in the provided data, both segments contributed to the overall $2.53 billion in service revenues and sales. The company completed one franchise acquisition for Roto-Rooter in Michigan during 2025 for $225,000 in cash.

Margins & Profitability

Gross profit for fiscal year 2025 was $820 million, calculated from service revenues and sales of $2.53 billion minus cost of services provided and goods sold of $1.71 billion. The company maintained an operating margin of 13.4% with income from operations of $338.2 million. Selling, general and administrative expenses totaled $417.2 million, while depreciation and amortization expenses were $54.6 million and $10.3 million respectively. Other operating expenses showed a credit of $2.9 million. The effective tax rate was approximately 25.4% based on income before taxes of $355.8 million and income taxes of $90.5 million.

Cash Flow & Balance Sheet

Operating activities generated $388.3 million in cash flow, driven by net income of $265.2 million and adjustments including depreciation and amortization of $64.8 million. Investing activities used $59.3 million, primarily for capital expenditures of $62.8 million. Financing activities used $432.8 million, mainly for treasury stock purchases of $431.5 million and dividend payments of $31.7 million. The balance sheet shows current assets of $302.6 million including cash and equivalents of $74.5 million and accounts receivable of $182.6 million. Total liabilities were $558.8 million with current liabilities of $287.1 million. The company maintains a strong equity position with retained earnings of $2.96 billion.

Outlook

The company faces regulatory risks in its VITAS segment, particularly related to Medicare and Medicaid reimbursement rates and compliance with healthcare regulations. The Medicare hospice cap was $34,465.34 per admission for the period ending September 30, 2025, increasing to $35,361.44 for the following year. VITAS operates under extensive federal and state regulations including anti-kickback laws, false claims acts, and health information privacy requirements. Roto-Rooter faces competitive pressures in the plumbing and drain cleaning industry and is subject to environmental regulations. The company had 15,811 employees as of December 31, 2025, and emphasizes workforce safety, training, and diversity. Management continues to focus on strategic acquisitions and operational efficiency to drive shareholder value.