Chemed Corporation reported third‑quarter 2025 financial results, with consolidated revenue of $624.9 million, up 3.1% year‑over‑year, driven by growth in both VITAS Healthcare and Roto‑Rooter segments.
VITAS Healthcare generated $407.7 million in net revenue, up 4.2% YoY, while Roto‑Rooter reported $217.2 million in revenue, up 1.1% YoY. Consolidated adjusted EBITDA was $109 million, down 3.8% from $112.5 million in the same quarter last year, missing analyst estimates of $113.9 million.
VITAS posted a gross margin of 22.5% (excluding Medicare Cap) and adjusted EBITDA of $70.4 million, a 3.8% decline YoY. Roto‑Rooter achieved a 50.7% gross margin and adjusted EBITDA of $49.4 million, down 12.4% YoY. Gross margins fell 2.61 percentage points for VITAS and 2.2 percentage points for Roto‑Rooter.
The company’s cash balance stood at $129.8 million at quarter‑end, with no debt. Chemed repurchased 407,500 shares for $180.8 million, averaging $443.62 per share, and still has $301.8 million of share‑repurchase authorization remaining.
GAAP diluted earnings per share were $4.46, down 10.8% YoY, and adjusted diluted EPS were $5.27, down 6.6% YoY. Consolidated revenue slightly missed analyst estimates of $626.03 million, and adjusted EPS missed estimates of $5.37.
Medicare Cap billing limitations totaled $6.1 million, with $4.6 million attributable to the Florida combined program and $1.5 million to other programs, primarily in California. The limitation reduced VITAS revenue growth by 124 basis points.
Management reiterated its 2025 guidance of $22.00 to $22.30 per share, excluding non‑cash items, assuming no Medicare Cap related to the Florida combined program for the fiscal year 2026 that began on October 1, 2025.
Wall Street analysts noted the earnings miss and margin pressure, leading to a slight downgrade in consensus price target from $584.50 to $567, while maintaining a "strong buy" rating. Analysts highlighted Chemed’s strong cash position and share‑repurchase program as positive factors.
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