Chemed Corporation Reports Fourth Quarter and Full-Year 2025 Results; Announces Investor Conference Call

Key Highlights and Financial Performance

• Q4 Net Income: \$76.8 million, or \$5.48 per diluted share, compared to \$90.3 million, or \$6.02 per share, in Q4 2024.
• Full-Year Net Income: \$265.2 million, or \$18.34 per diluted share, versus \$302.0 million, or \$19.89 per share, in 2024.
• Adjusted Net Income (Non-GAAP): \$311.6 million for 2025, or \$21.55 per diluted share; 2024 was \$351.2 million, or \$23.13 per share.
• Revenue: Full-year consolidated service revenues and sales reached \$2.19 billion, up from \$2.06 billion in 2024.
• Adjusted EBITDA: \$458.7 million for 2025, down slightly from \$503.0 million in 2024.
• Operating Cash Flow: \$417.5 million for 2025, compared to \$424.0 million in 2024.

Segment Performance

VITAS Segment (Hospice)

• VITAS reported net income of \$204.0 million for 2025, down from \$216.8 million in 2024.
• Revenue for the segment increased, but cost pressures and changes in patient mix affected margins.
• Operating statistics and Medicare-related reimbursement remain key factors for this business line.

Roto-Rooter Segment (Plumbing and Drain Services)

• Roto-Rooter reported net income of \$135.5 million for 2025, down from \$160.0 million a year earlier.
• Revenue growth was noted, but margins tightened due to higher SG&A expenses and market value adjustments related to deferred compensation plans.

Balance Sheet and Capital Allocation

• Total Assets: \$1.54 billion as of December 31, 2025 (\$1.67 billion in 2024).
• Total Stockholders’ Equity: \$979.4 million at year-end (\$1.12 billion in 2024).
• Aggressive Share Repurchases: The company spent \$431.5 million repurchasing its own shares in 2025, up from \$361.4 million in 2024. This action significantly reduced average shares outstanding, supporting EPS but also reducing equity.
• Dividends Paid: \$31.7 million in 2025, up from \$27.1 million in 2024.

Adjusted Measures and Non-GAAP Reconciliations

• Chemed continues to report adjusted EBITDA and adjusted diluted EPS to give investors a clearer picture of ongoing operations, excluding costs such as stock option expense, long-term incentives, and market value adjustments on deferred compensation plans.
• Adjusted EBITDA margin for 2025 was calculated at 20.9% of service revenues and sales.
• Adjusted diluted EPS for 2025 was \$21.55 compared to \$23.13 in 2024.

Significant One-Time Items

• 2025 results included substantial non-operating charges that reduced reported earnings, including \$32.7 million in stock option expense and \$5.6 million in long-term incentive compensation.
• Market value adjustments related to deferred compensation plans and legal settlements also impacted results.
• Management highlighted these items to clarify core operating performance.

Forward-Looking Guidance and Conference Call

• Chemed management will provide additional perspective and guidance on growth initiatives and margin improvement projects during its investor call on Thursday, February 26, 2026, at 10:00 a.m. ET.
• Investors can access the live webcast and taped replay through the company’s investor relations website.

Key Risks and Shareholder Considerations

• Chemed flagged several risks that could materially impact results:
  • Regulatory changes, especially regarding Medicare Cap and reimbursement rates for VITAS.
  • Potential volatility in patient mix and demand for services in both core segments.
  • Ongoing cost pressures, including labor and SG&A, are compressing margins.
• Shareholders should note the company’s aggressive share repurchase strategy, which boosts per-share metrics but reduces equity and may impact long-term capital flexibility.
• Full-year performance showed resilience in revenue but declining margins and earnings, a trend that could affect future valuation and share performance depending on management’s ability to restore margins and deliver growth.

Summary for Investors

Chemed Corporation delivered steady revenue growth in 2025, but higher expenses and significant one-time charges led to lower reported and adjusted earnings compared to 2024. The company’s aggressive capital return strategy through share buybacks and dividends supports per-share results but reduces overall equity. Investors should closely follow management’s updates on cost control, margin improvement, and regulatory risks, particularly in the VITAS segment. The upcoming investor call may provide additional details that could further impact market perceptions and the company’s share price.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult with their financial advisor before making investment decisions. Chemed’s forward-looking statements are subject to risk and uncertainty; actual results may differ materially from projections.

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