Chemed (CHE) Q4 2025 earnings summary

Executive summary

• Fourth quarter 2025 results missed expectations, with consolidated Q4 revenue flat at $639.3M and both subsidiaries facing operational and market challenges.

• Service revenues and sales grew 4.1% year-over-year to $2.53 billion in 2025, with VITAS contributing 64% and Roto-Rooter 36%.

• Adjusted net income declined 11.3% to $311.6M, and adjusted diluted EPS fell 6.8% to $21.55; Q4 adjusted EPS was $6.42, down 6%.

• Management expects improved performance in 2026, driven by operational adjustments, new market entries, and enhanced lead generation, with 55% of adjusted net income and EBITDA expected in the second half.

Financial highlights

• VITAS Q4 net revenue was $418.8M (up 1.9%); adjusted EBITDA (ex-Medicare cap) was $91.6M (down 1.7%), margin 21.7% (down 79 bps).

• Roto-Rooter Q4 revenue was $220.6M (down 3.7%); adjusted EBITDA was $47.5M (down 21.1%), margin 21.5% (down 477 bps).

• Full-year adjusted EBITDA was $458.7M (down 8.8%), margin 18.1% (down 2.6 pts); net income was $265.2M (down from $302.0M in 2024).

• Capital expenditures increased 26.8% to $62.8M; cash and cash equivalents at year-end were $74.5M, with no debt.

• $2.4M Medicare cap billing limitation accrued for VITAS in Q4; none for Florida.

Outlook and guidance

• VITAS 2026 revenue (pre-Medicare cap) expected to grow 5.5%-6.5%; ADC up 3.5%-4%; EBITDA margin (pre-cap) projected at 17.5%-18%.

• Roto-Rooter 2026 revenue growth forecast at 3%-3.5%; adjusted EBITDA margin expected at 22.5%-23%.

• 2026 adjusted EPS guidance is $23.25-$24.25, up from $21.55 in 2025; 55% of adjusted net income and EBITDA expected in the second half.

• Focus remains on organic growth and acquisitions in both segments; continued industry consolidation expected in hospice.