Chemed Revenue Jumps 10.6% to $690.9 Million in Third Quarter

Key Facts

Chemed reported results on October 27 for the third quarter ended September 30, 2026, with consolidated revenue of $690.9 million, up 10.6% year over year. GAAP diluted EPS was $5.45, up 22.2%, while adjusted EPS rose 28.1% to $6.75. Revenue growth was faster than the 3.1% increase recorded in the third quarter of 2025, when revenue was $624.9 million. Adjusted EPS also swung from a 6.6% decline to strong growth, compared with $5.27 in the year-earlier period. Performance diverged between the company's two segments, as VITAS healthcare activity accelerated while Roto-Rooter revenue grew more slowly than its operating earnings.

VITAS was the leading growth driver, with an average daily census of 24,428, up 9.4%, and admissions of 18,995, up 7.2%. The company said days of care increased 9.4%, while the geographically weighted Medicare reimbursement rate rose about 2.2%. Changes in patient acuity mix negatively affected revenue growth by 25 basis points, while the effects of the Medicare Cap and other associated revenue items added 85 basis points. VITAS recorded no Medicare Cap liability for the Florida shared program during the quarter, and the company does not expect a liability for the program in fiscal 2026. The accrued liability was $828,000, compared with $6.1 million in the third quarter of 2025. VITAS gross margin excluding the Medicare Cap rose to 25.4%, up 221 basis points from the same period a year earlier.

VITAS's activity was reflected in operating earnings, as the segment's net income, excluding certain discrete items, rose 44.7% to $70.8 million. Adjusted earnings before interest, taxes, depreciation and amortization, excluding the Medicare Cap, increased 31.4% to $92.5 million. The margin on this measure was 20.2% during the quarter. Patient and care-day figures point to an expansion in activity, while the higher reimbursement rate supported revenue. But changes in patient acuity mix limited growth by 25 basis points. By contrast, the Medicare Cap and associated revenue items had a positive effect of 85 basis points, according to the company's disclosure.

Roto-Rooter posted revenue of $233.5 million, up 7.5%, but sales growth did not translate into higher earnings. Net income, excluding certain discrete items, fell 1.8% to $33.3 million, and adjusted earnings before interest, taxes, depreciation and amortization dropped 2.5% to $48.2 million. Adjusted earnings margin fell 213 basis points to 20.6%. Selling, general and administrative expenses rose to $71.0 million, up 17.1% from the year-earlier period. At the branch level, commercial revenue increased 9.0% to $59.9 million, while residential revenue rose 5.2% to $158.8 million. The divergence shows that the segment's revenue growth came alongside pressure on expenses and margins.

In a move to expand its company-owned operations, Roto-Rooter reacquired multiple franchise territories in California for about $62.5 million. The territories have a combined population of more than 12 million. Chemed said slightly more than half of the revenue associated with these territories will shift to company-owned and operated branches. This comes alongside growth in commercial and residential branch revenue, although segment earnings declined during the quarter. At the parent-company level, Chemed repurchased 125,000 shares for $66.0 million, at an average cost of $528.24 per share. About $73.7 million remained under the share repurchase authorization on September 30, 2026.

Chemed said it expects adjusted EPS for 2026 to reach the high end of the guidance range issued on July 28, or slightly exceed it. In July, the company had raised its range to $25.00–$25.75 per share, from $24.00–$24.75, with the midpoint expected to represent an increase of 17.8% over 2025. The update follows the company's second-quarter report of revenue of $673.3 million, up 8.8%, and adjusted EPS of $6.06, up 41.9%. Cash and cash equivalents totaled $48.4 million, while long-term debt reached $236.0 million on September 30. CHE shares closed at $512.9 on October 26, before the results were announced. The company is scheduled to hold its earnings call by phone and webcast on October 28 at 10 a.m. Eastern Time to discuss the results and provide a business update.