Chemed Reports Third-Quarter 2026 Results

Chemed delivered strong Q3 growth, with double-digit revenue and EPS gains.

What the company is saying

Chemed Corporation is highlighting robust financial performance for the third quarter of 2026, emphasizing a 10.6% increase in consolidated revenue to $690.9 million and a 22.2% rise in GAAP diluted EPS to $5.45. The company frames its narrative around operational strength in both its VITAS Healthcare and Roto-Rooter segments, with VITAS showing a 12.2% revenue increase and a 44.7% jump in net income (excluding discrete items). Management attributes VITAS revenue growth primarily to higher days-of-care and a 2.2% Medicare reimbursement rate increase, while also noting a significant reduction in Medicare Cap billing limitation from $6.1 million to $828,000 year-over-year. Roto-Rooter’s messaging focuses on a 7.5% revenue increase and the strategic re-acquisition of California franchise territories for $62.5 million, which will expand company-owned operations. The announcement also stresses capital allocation discipline, citing $66.0 million in share repurchases during the quarter and the establishment of a new $450 million credit agreement. The tone is confident, with management projecting full-year adjusted EPS at or above the high end of prior guidance.

What the data suggests

The disclosed figures show Chemed’s consolidated revenue grew to $690.9 million, up 10.6% year-over-year, and GAAP diluted EPS rose to $5.45, a 22.2% increase. Adjusted diluted EPS reached $6.75, up 28.1%. VITAS segment net patient revenue was $457.4 million, up 12.2%, with admissions up 7.2% and average daily census up 9.4%. VITAS net income (excluding discrete items) climbed 44.7% to $70.8 million, and adjusted EBITDA (excluding Medicare Cap) rose 31.4% to $92.5 million, with margin expanding by 318 basis points to 20.2%. The Medicare Cap billing limitation dropped sharply to $828,000 from $6.1 million. Roto-Rooter revenue increased 7.5% to $233.5 million, with commercial and residential branch revenues up 9.0% and 5.2%, respectively. However, Roto-Rooter’s net income (excluding discrete items) fell 1.8% to $33.3 million, and adjusted EBITDA declined 2.5% to $48.2 million, with margin compressing by 213 basis points. The $62.5 million franchise re-acquisition in California adds scale but is not yet quantified for earnings impact. Chemed ended the quarter with $48.4 million in cash, $236.0 million in long-term debt, and $166.7 million undrawn on its $450 million credit facility. Share buybacks were significant, with 125,000 shares repurchased for $66.0 million in Q3 and 1,235,000 shares over the past year at an average price of $427.62. The company’s updated guidance suggests results will meet or exceed the high end of full-year adjusted EPS targets.

Analysis

The announcement is highly factual, with nearly all key claims supported by realised, audited financial and operational data for the third quarter of 2026. Both revenue and profitability metrics (GAAP and adjusted EPS, net income, EBITDA, margins) are disclosed for the consolidated company and both segments, satisfying the Disclosure Completeness Rule for a strong_positive signal. The only forward-looking statements are minor and relate to anticipated Medicare Cap cushions, which are clearly separated from the realised results. The tone is positive but proportionate to the strong underlying performance, with no exaggerated language or unsupported projections. The $62.5 million franchise re-acquisition is disclosed as completed, not merely planned, and the new credit facility is already in place. There is no evidence of narrative inflation or overstatement.

Risk flags

• ●Roto-Rooter’s net income and adjusted EBITDA declined despite revenue growth, with margin compression of 213 basis points. This signals potential cost pressures or operational inefficiencies that could persist if not addressed.
• ●The $62.5 million outlay for California franchise re-acquisition increases capital at risk, and the financial contribution from these territories is not yet quantified. If integration or market capture underperforms, returns on this investment could lag expectations.
• ●Chemed’s long-term debt stands at $236.0 million, and while liquidity is strong with $166.7 million undrawn on the credit facility, rising leverage could constrain future flexibility if earnings growth slows or large acquisitions continue.
• ●Medicare reimbursement rates and Cap limitations remain a structural risk for VITAS, as regulatory changes or adverse shifts in patient mix could quickly impact revenue and margins, despite the current year’s favorable trends.
• ●Share repurchases have been aggressive, with $66.0 million spent in Q3 and $528.24 average cost per share this quarter. If operating performance weakens or market conditions shift, this capital deployment could be questioned.

Bottom line

Chemed’s Q3 2026 results show strong operational momentum, with double-digit revenue and EPS growth driven by both VITAS and Roto-Rooter, though the latter’s margin decline warrants monitoring. The company is deploying capital actively, acquiring new territories and buying back shares, supported by a robust balance sheet and expanded credit facility. While management’s confidence in meeting or exceeding full-year EPS guidance is credible given realised results, investors should watch for margin recovery at Roto-Rooter and the financial impact of the California franchise integration. Regulatory risk remains for VITAS, but Medicare Cap constraints eased substantially this quarter. The most important takeaway is that Chemed is delivering on growth and capital return, but continued vigilance on segment margins and capital allocation discipline is essential.

Announcement summary

(NYSE:CHE) Chemed Corporation reported consolidated revenue of $690.9 million for the third quarter ended September 30, 2026, representing a 10.6% increase over the prior-year period. GAAP Diluted Earnings-per-Share (EPS) were $5.45, up 22.2%, and Adjusted Diluted EPS were $6.75, up 28.1%. The VITAS segment generated net patient revenue of $457.4 million, a 12.2% increase, with an average daily census of 24,428 (up 9.4%) and admissions of 18,995 (up 7.2%). VITAS net income, excluding certain discrete items, was $70.8 million, up 44.7%, and Adjusted EBITDA, excluding Medicare Cap, was $92.5 million, up 31.4%, with an Adjusted EBITDA margin of 20.2%, a 318-basis point increase. VITAS accrued $828,000 in Medicare Cap billing limitation in Q3 2026, compared to $6.1 million in Q3 2025. Of VITAS’ 33 Medicare provider numbers, 21 have an anticipated full-year Medicare Cap cushion of 10% or greater, seven have a cushion between 0% and 10%, and five have a Medicare Cap billing limitation totaling $6.1 million. Average revenue per patient per day was $209.11, with routine home care reimbursement at $187.69 and high-acuity care at $1,147.26. VITAS selling, general and administrative expenses were $23.1 million in Q3 2026, down from $25.2 million in Q3 2025. The Roto-Rooter segment reported revenue of $233.5 million, up 7.5%, with branch commercial revenue at $59.9 million (up 9.0%) and branch residential revenue at $158.8 million (up 5.2%). Roto-Rooter net income, excluding certain discrete items, was $33.3 million (down 1.8%), and Adjusted EBITDA was $48.2 million (down 2.5%), with an Adjusted EBITDA margin of 20.6%, a 213-basis point decline. Roto-Rooter re-acquired multiple franchise territories in California for approximately $62.5 million, covering a population of over 12 million, and will establish new branches in Sacramento and San Diego. Chemed had $48.4 million in cash and cash equivalents and $236.0 million in long-term debt as of September 30, 2026. In April 2026, Chemed entered into a new five-year $450 million Amended and Restated Credit Agreement, including a $450 million revolving line of credit and a $250 million expansion feature, with a floating interest rate currently at SOFR plus 100-basis points. There is approximately $166.7 million undrawn borrowing capacity under the Credit Agreement after excluding $47.3 million for Letters of Credit. During the quarter, Chemed repurchased 125,000 shares for $66.0 million at a cost per share of $528.24, and over the trailing 12 months, repurchased 1,235,000 shares at an average price of $427.62 per share. As of September 30, 2026, $73.7 million of share repurchase authorization remained. For the three months ended September 30, 2026, service revenues and sales were $690,940,000, cost of services provided and goods sold were $457,978,000, selling, general and administrative expenses were $111,469,000, depreciation was $14,427,000, amortization was $2,974,000, other operating expense was $7,670,000, and total costs and expenses were $594,518,000. Income from operations was $96,422,000, interest expense was $2,097,000, other income-net was $2,383,000, income before income taxes was $96,708,000, income taxes were $25,060,000, and net income was $71,648,000. Earnings per share for the quarter were $5.49, and diluted earnings per share were $5.45, with an average of 13,135 diluted shares outstanding. Chemed operates in the United States, Canada, Indonesia, and the Philippines.

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