Chemed Corporation Shines in Q1 2025 with Strong VITAS Performance and Resilient Roto-Rooter Results
The first quarter of 2025 has been a significant period for Chemed Corporation, with the company reporting impressive results across its two main business segments: VITAS Healthcare Corporation and Roto-Rooter.
According to Kevin McNamara, President and Chief Executive Officer of Chemed Corporation, VITAS continued its strong operating performance during the first quarter of 2025. Admissions during the quarter totaled 18,139, a 7.3% improvement from the same period in 2024. The company's average daily census (ADC) also expanded to 22,244, an increase of 13.1% when compared to the prior year quarter.
McNamara attributed the success to the $85 million acquisition of Covenant Health, which was closed on April 17, 2024. The acquisition has met all internal financial projections developed at the time of the purchase, and VITAS management continues to successfully execute strategies required to navigate the Medicare cap at certain locations.
One key strategy is to increase hospital-based admissions, which generally come later in a patient's disease trajectory. While these short-stay patients put a limiting factor on revenue and EBITDA margin growth, they do provide additional Medicare cap cushion. Despite this headwind, VITAS achieved above-average growth in revenue and EBITDA.
The company also continues to grow its ambitions in Pasco County, Florida, with new programs launched in the state's Pasco and Marion counties aimed at mitigating Medicare cap issues in 2025 and beyond. "We continue to work diligently to expand our operating scope within Florida as well as other states that have some form of certificate of need restrictions," said McNamara.
Roto-Rooter, Chemed Corporation's plumbing and drain service business, also reported strong results in the first quarter of 2025. Total revenue increased by 1.8% compared to the prior year quarter, driven by gross branch revenue growth of 3.1%. Residential revenue grew by 1.7%, while commercial revenue jumped 7.3%.
While total leads were down 7.8% in the first quarter of 2025 compared to the same period in 2024, the revenue improvements are a direct result of initiatives undertaken during 2024. These include a more focused sales approach for commercial business, maximizing opportunities from received leads, and an emphasis on quicker response times to residences with possible water restoration opportunities.
Overall, Chemed Corporation's Q1 2025 results demonstrate the company's ability to deliver strong performance across its two main business segments. With VITAS continuing to thrive and Roto-Rooter showing resilience in a competitive market, investors can expect further growth and success from this healthcare-focused company.
