Chemed Corporation Q2 2026 Earnings Call Summary
Chemed Corporation reported strong performance in its second quarter of fiscal year 2026, driven by improved admissions and operational efficiency across both VITAS and Roto-Rooter segments. VITAS exceeded expectations with accelerated hospice admissions from non-preadmission locations and sustained hospital-based admissions, leading to higher revenue and EBITDA margins despite controlled labor costs. Meanwhile, Roto-Rooter's commercial segment outperformed due to its business manager program, which contributed to a 13% increase in branch revenues where managers were deployed. The company also made progress on cost management initiatives, including centralizing billing for water restoration services at Roto-Rooter, reducing write-offs by $1.3 million and improving efficiency. However, the segment faces challenges with declining free internet leads, prompting a strategic shift toward paid advertising channels. Chemed used its strong cash flow to repurchase franchises worth $33.5 million in Q2 2026. Looking ahead, management raised full-year ADC growth guidance for VITAS and expects EBITDA margins between 19%–19.5%. Roto-Rooter's guidance remains unchanged as the company plans to offset marketing costs through higher-margin services like excavation and water restoration.
Topics: franchise repurchases hospice services operational efficiency plumbing services