Oct 28, 2026 earnings call — VITAS drives revenue and margin growth
Total Chemed revenue rose 10.6% in Q3, driven by VITAS growth and Roto Rooter momentum.
Revenue $0.7B (est $0.7B) · EPS $6.75 (est $6.44)
Key quotes
"We ended the 2026 Medicare cap year. With a cushion of more than $34 million in the Florida combined program."
"Of all leads generated during the quarter, approximately 60% were paid compared to 56% in the third quarter of 26."
"Roto Rooter reacquired multiple franchise territories in California for approximately $62.5 million Collectively, these territories encompass a population of over 12 million people."
"During the quarter, the company repurchased 125 thousand shares of stock for $66 million which equates to a cost per share of $528.24."
Analyst Q&A 6
nurse hiring and wages
Q (Brian Tanquilut · Jefferies): Analyst asked about ability to hire nurses as VITAS demand is strong and about wage inflation and temp nurse market effects.
A: Management said they are not having hiring difficulty overall and have not reached a level of concern about recruiting or retaining key clinical positions. They acknowledged national wage inflation but said it has not impeded hiring or growth and they do not see significant wage pressures now.
"In regards to inflationary pressure or wage pressure, Certainly, I think everyone is experiencing an impact of the inflationary situation that we are facing nationally within The United States." — Joel L. Wherley (CEO)
revenue and margin detail
Q (Brian Tanquilut · Jefferies): Analyst signaled he wanted revenue and margin detail, likely related to a California acquisition and its contribution.
A: There was no substantive management answer in this exchange. The operator said they would provide information from the California acquisition, but management did not add comments here.
guidance drivers (VITAS vs Roto-Rooter)
Q (Joanna Gajuk · BofA): Analyst asked whether the guidance raise is largely from VITAS outperformance versus franchise acquisitions and asked for a bridge to EPS.
A: Management said the third quarter beat by about $0.30 and that reaching the top end of guidance does not require big fourth-quarter outperformance. They noted Roto-Rooter income was a little below guidance while VITAS was higher, and they did not want to reissue detailed segment metrics each quarter.
"So saying that we are gonna be at the top end does not necessarily need to signal any huge outperformance in the fourth quarter." — Michael D. Witzeman (CFO)
marketing, AI, and contractual allowance
Q (Joanna Gajuk · BofA): Analyst asked whether marketing headwinds and AI/DIY search tools threaten Roto-Rooter leads and brand, and asked how acquired franchise margins will be improved. Also asked why VITAS contractual allowance rose.
A: Management said emergency and complex jobs are Roto-Rooter’s bread-and-butter and they do not see DIY/AI as a large headwind now. For acquired franchises, they plan to improve margins by reducing excess back-office staff, adding water restoration, and better internet marketing. On the contractual allowance, management said increased state and federal reviews tied to fraud and abuse publicity led to more files being reviewed and slightly higher write-offs, but they have strong compliance and track record of reversing challenges.
"Because of all the. All of the press and things in around fraud and abuse, we saw a very significant increase in activity around reviewing files." — Michael D. Witzeman (CFO)
lead sources and recruiting costs
Q (Ben Hendrix · RBC): Analyst asked what platforms and programs generate Roto-Rooter’s organic leads and whether recruiting costs will rise into 2027.
A: Management said they use multiple sources beyond paid Google ads, including an app, maps, commercial accounts, stickers with phone numbers, and AI-scraped free leads. They noted the app has strong downloads and generates many leads. On recruiting, management said they do not anticipate any material increase in recruiting cost looking into 2027.
"No. We do not anticipate any material increase, in recruiting cost as we look forward to 2027." — Joel L. Wherley (CEO)
VITAS growth and Roto-Rooter share
Q (UBS): Analyst asked whether VITAS growth reflects market growth or share gains, and whether Roto-Rooter’s revenue growth means market share gains versus competitors amid marketing headwinds.
A: Management said VITAS growth was balanced across Florida and non-Florida and they believe some migration occurred toward a more stable, trusted provider amid increased enforcement. For Roto-Rooter, they said they are taking some share from smaller, less sophisticated competitors and that higher average price per job helps offset marketing costs, though headwinds remain.
"we do believe there has been a migration towards a more stable, trusted partner." — Joel L. Wherley (CEO)