Chemed beats, ups guidance, hospice outperforms, cap risk recedes

 

Chemed beats Q2 estimates with EPS $6.06, raises 2026 EPS and VITAS margin guidance as hospice outperforms, cap risk recedes

• Consolidated revenue grew 8.8% YoY; adjusted diluted EPS rose 41.9% YoY.
• Q2 2026 revenue was $673.3M, +9% YoY, and non-GAAP EPS $6.06, both beating estimates.
• VITAS revenue $443.3 million, +11.9% YoY, with days of care up 6.1%.
• Florida Medicare cap issue resolved; no 2026 cap accrual expected, versus $16.4m last year.
• VITAS Q2 adjusted EBITDA $80.6m, 18.2% margin; 2026 margin guidance raised to 19–19.5%.
• 2026 adjusted EPS guidance increased to $25–$25.75, implying 17.8% growth over 2025.
• Roto-Rooter margins pressured by higher marketing; Q2 adjusted EBITDA $48.5m, 21.1% margin.
• Paid leads now 59% of Roto-Rooter volume, versus 54% last year, raising acquisition costs.
• Hospice regulatory backdrop: more program-integrity oversight expected, but no major reimbursement structural changes anticipated.
• Strong cash generation, over $173m Q2 operating cash flow, supports franchise acquisitions and share repurchases.
• Management highly confident VITAS can sustain high-single-digit revenue growth and double-digit earnings growth.
• Main concern: Structural shift toward paid digital leads continues to pressure Roto-Rooter margins and growth.

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