Chemed (CHE) Q2 2026 earnings summary

Executive summary

• VITAS exceeded expectations in Q2 2026, with strong admissions growth, lower labor costs, and resolution of Medicare Cap issues in Florida, driving higher revenue and EBITDA margins.

• Roto-Rooter performed as anticipated, with commercial sales and water restoration collections surpassing expectations, though marketing costs and independent contractor business remain challenging.

• Consolidated revenue grew 8.8% year-over-year in Q2 2026, with adjusted diluted EPS up 41.9%.

• For the first half of 2026, service revenues increased 5.1% year-over-year, adjusted net income rose 8.0%, and adjusted diluted EPS grew 18.3%.

• Full-year guidance was raised, mainly due to VITAS outperformance and share repurchases.

Financial highlights

• VITAS net revenue was $443.3 million in Q2 2026, up 11.9% year-over-year, driven by a 6.1% increase in days of care and a 2.4% Medicare reimbursement rate increase.

• Adjusted EBITDA for VITAS (excluding Medicare Cap) was $80.6 million, up 20.6% year-over-year, with an 18.2% margin.

• Roto-Rooter branch commercial revenue rose 6.8% to $56.8 million; residential revenue increased 1.7% to $159.1 million.

• Roto-Rooter adjusted EBITDA was $48.5 million, flat year-over-year, with a 21.1% margin.

• Consolidated cash flow from operations exceeded $173 million in Q2 2026.

Outlook and guidance

• VITAS full-year ADC growth guidance raised to 5.75%-6.25%; revenue growth (ex-Medicare Cap) to 8.25%-9.25%; EBITDA margin (ex-Medicare Cap) to 19%-19.5%.

• Roto-Rooter full-year revenue growth expected at 3%-3.5%, with adjusted EBITDA margin of 21.5%-22.5%.

• Full-year 2026 adjusted EPS guidance is $25-$25.75, a 17.8% increase from 2025.

• Management emphasizes continued organic growth, strategic acquisitions, and capital allocation toward share buybacks and dividends.