CHE · Chemed Corporation

Chemed's Q1 2026 results showed modest consolidated revenue growth of 1.6% to $657.5 million, driven by VITAS strength offsetting Roto-Rooter softness. VITAS delivered solid top-line expansion with net patient revenue up 3.1% to $420.0 million, fueled by 2.2% higher average daily census to 22,723 and 6.9% more admissions at 19,394, plus a 2.6% Medicare reimbursement uplift, though partially offset by acuity mix shift and Medicare cap impacts. Adjusted EBITDA excluding Medicare cap rose 0.6% to $70.8 million at a 16.8% margin, with gross margin at 22.9%. Roto-Rooter revenue dipped 0.9% to $237.5 million amid weather disruptions costing $3-4 million and higher marketing spend up $2 million from paid internet leads, leading to adjusted EBITDA down 9.6% to $53.5 million at 22.5% margin despite stable gross margins near 51%. Management highlighted VITAS' quicker-than-expected recovery from 2025 Medicare cap issues, prompting upward revisions to full-year guidance: VITAS ADC growth to 4.5-5.5%, revenue growth ex-cap to 6.5-7.5%, EBITDA margin ex-cap to 18.0-18.5%; Roto-Rooter revenue steady at 3.0-3.5% but EBITDA margin trimmed to 21.5-22.5% due to persistent marketing costs. Consolidated adjusted EPS guidance lifted to $24.00-24.75, a 13% midpoint increase from 2025's $21.55. Balance sheet remains solid with $16.9 million cash, $91.2 million long-term debt, and new $450 million credit facility providing $313.3 million undrawn capacity. Aggressive capital return via $197.7 million share repurchase of 500,000 shares at $395.36 average, with $229.6 million authorization left, plus $20.6 million acquisitions of San Francisco and Fort Worth Roto-Rooter franchises expected to add $5.0-5.5 million remaining-year revenue, aligning with strategy to enhance productivity and market share.