Question · Q3 2025
Brian Tanquillet from Jefferies asked for insights into VITAS Healthcare's 2026 growth algorithm, specifically regarding Medicare rates, anticipated margins, and overall growth rates, acknowledging the early stage of the budgeting process. He also questioned Kevin McNamara about competitive dynamics in Roto-Rooter and opportunities for SG&A line improvement in both Roto-Rooter and VITAS.
Answer
CFO Mike Witzeman speculated on 2026 VITAS revenue in the 8% range and EBITDA margins of 17.5% to 18%, contingent on Q4 performance and responsible growth in long-stay patients. Joel Wherley, President and CEO of VITAS Healthcare, emphasized Q4's role in determining the speed of returning to active census growth in Florida. President and CEO Kevin McNamara and CFO Mike Witzeman discussed Roto-Rooter's competitive dynamics, noting that increased spending on paid leads was yielding more leads, indicating moderating competition. They highlighted that while marketing costs increased SG&A, operational metrics remained strong, and improved lead volume could enhance pricing discipline and margins. Mike Witzeman added that VITAS's SG&A was down year-over-year in Q3 due to efficiencies and targeted cost-cutting.