Chemed Corporation — Third Quarter 2026 Earnings Summary

Financial Performance:

• Consolidated revenue increased 10.6% year-over-year to $690.9 million.
• GAAP diluted earnings per share (EPS) rose 22.2% to $5.45.
• Adjusted diluted EPS increased 28.1% to $6.75.
• VITAS segment net patient revenue grew 12.2% to $457.4 million.
• VITAS net income, excluding certain discrete items, increased 44.7% to $70.8 million.
• VITAS adjusted EBITDA, excluding Medicare Cap, rose 31.4% to $92.5 million, with an adjusted EBITDA margin of 20.2% (up 318 basis points).
• Roto-Rooter segment revenue increased 7.5% to $233.5 million.
• Roto-Rooter net income, excluding certain discrete items, declined 1.8% to $33.3 million.
• Roto-Rooter adjusted EBITDA decreased 2.5% to $48.2 million, with an adjusted EBITDA margin of 20.6% (down 213 basis points).
• Consolidated selling, general and administrative (SG&A) expenses were $111.5 million.
• As of September 30, 2026, total cash and cash equivalents were $48.4 million, and long-term debt stood at $236.0 million.

Guidance and Future Outlook:

• The company estimates full-year 2026 adjusted EPS will be at or slightly above the high-end of the guidance issued in July 2026.

Business Segments and Product Lines:

• VITAS:
  • Average Daily Census (ADC) increased 9.4% to 24,428.
  • Total admissions increased 7.2% to 18,995.
  • Revenue growth was driven by a 9.4% increase in days-of-care and a 2.2% geographically weighted average Medicare reimbursement rate increase.
  • Acuity mix shift negatively impacted revenue growth by 25 basis points.
  • Medicare Cap and other contra revenue changes positively impacted revenue growth by 85 basis points.
  • Accrued Medicare Cap billing limitation was $828,000, compared to $6.1 million in the prior-year quarter.
  • No Medicare Cap billing limitation was recorded for the Florida combined program in the quarter, and none is anticipated for the 2026 fiscal period.
  • Of 33 Medicare provider numbers, 21 have a 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, up 196 basis points from the prior year.
  • Gross margin, excluding Medicare Cap, was 25.4%, an increase of 221 basis points.
  • SG&A expenses were $23.1 million.
• Roto-Rooter:
  • Branch commercial revenue totaled $59.9 million, up 9.0%, driven by plumbing (10.6%), drain cleaning (6.8%), excavation (5.5%), and water restoration (30.7%).
  • Branch residential revenue totaled $158.8 million, up 5.2%, driven by excavation (7.8%), plumbing (5.9%), water restoration (6.2%), and drain cleaning (4.5%).
  • Revenue from independent contractors was $16.9 million, flat year-over-year.
  • Gross margin was 50.3%, down from 50.7% in the prior year.
  • SG&A expenses increased 17.1% to $71.0 million.
  • Re-acquired multiple franchise territories in California for approximately $62.5 million, covering a population of over 12 million.
  • Two new branches will be established in Sacramento and San Diego, while other territories will be absorbed by existing branches or integrated into the independent contractor model.

Market and Competitive Landscape:

• VITAS is the nation's largest provider of end-of-life care.
• Roto-Rooter is the nation's largest commercial and residential plumbing and drain cleaning services provider.
• Roto-Rooter operates through company-owned branches, independent contractors, and franchisees in the United States and Canada, with licensed master franchisees in Indonesia, Singapore, and the Philippines.

Risks and Challenges:

• Forward-looking statements are subject to risks including the impact of laws and regulations on operations, specifically Medicare Cap and Medicare reimbursement rates.
• Risks include estimates of the effect of Medicare Cap on VITAS revenues and future prospects, patient mix expectations, and demand for Roto-Rooter services.
• Actual results may differ materially from forward-looking statements due to uncertainties and factors outside the company's control.

Management Commentary and Tone:

• Management provided an update on business operations and financial results, noting the strong performance in VITAS revenue and earnings driven by volume and reimbursement rates.
• Management highlighted the successful re-acquisition of California territories and the strategic integration of these assets.
• The tone regarding full-year guidance is confident, projecting results at or above the high end of previous expectations.

Other Key Points:

• In April 2026, Chemed entered into a new five-year $450 million Amended and Restated Credit Agreement, consisting of a $450 million revolving line of credit and a $250 million expansion feature.
• The Credit Agreement carries a floating interest rate of SOFR plus 100 basis points.
• Approximately $166.7 million of undrawn borrowing capacity remained under the Credit Agreement after excluding $47.3 million for Letters of Credit.
• During the quarter, the company repurchased 125,000 shares of Chemed stock for $66.0 million, at a cost of $528.24 per share.
• Over the trailing 12 months, the company repurchased 1,235,000 shares at an average price of $427.62 per share.
• As of September 30, 2026, approximately $73.7 million of share repurchase authorization remained.
• A conference call and webcast were scheduled for October 28, 2026, at 10 a.m. ET to discuss results.