Executive Summary

Consolidated Q4 2024 revenue rose 9.2% to $640.0M; GAAP diluted EPS was $6.02 and adjusted diluted EPS was $6.83, both up year over year; VITAS drove outperformance while Roto-Rooter was softer .
VITAS net patient revenue grew 17.4% to $411.0M on 14.6% days-of-care growth and a 3.5% weighted average Medicare rate increase; adjusted EBITDA was $93.2M with a 22.5% margin, down 112 bps due to a one-time 2023 vacation policy tailwind .
Roto-Rooter revenue declined 2.9% to $229.0M; adjusted EBITDA margin was 26.3% (-120 bps YoY); management sees momentum in commercial and expects stabilization in 2025 with residential demand uncertain .
2025 guidance: adjusted EPS $24.95–$25.45, VITAS revenue growth 10.5–11.3% (pre-cap) and ADC +8.5–9.0%; Roto-Rooter revenue +2.4–3.0%; guidance is weighted to the second half .
Capital allocation: $212.8M buybacks in Q4 (388,235 shares at $548.13), cash $178.4M, no debt; dividend maintained at $0.50/share .

What Went Well and What Went Wrong

What Went Well
- VITAS delivered robust volume growth: ADC 22,179 (+14.6% YoY) and admissions 16,427 (+3.5% YoY) with Covenant acquisition contributing $11–$12M revenue and ~$2.1–$2.3M net income .
- Medicare pricing tailwind and mix: weighted average reimbursement +3.5%; average revenue per day rose to $206.23; continuous care reimbursement saw focus from CMS .
- Management confidence in Florida growth: “Florida is very important…VITAS has always been preeminent…we continue to get new CONs. We’re growing.” (Kevin McNamara) .
What Went Wrong
- VITAS margin compression: adjusted EBITDA margin 22.5% (-112 bps YoY), impacted by absence of 2023 vacation roll-over benefit and Medicare cap rate differential (3.5% reimbursement vs 2.9% cap) .
- Roto-Rooter revenue weakness: total -2.9% YoY; residential -2.0% and plumbing -9.6%; call volumes down and paid search competition remained a headwind .
- Medicare Cap cushion pressure: company projects $9.5M cap billing limitation in 2025, and cap cushion reduced in several programs (including Florida), necessitating mix actions that moderate margins .

Financial Results

Consolidated Revenue and EPS (YoY and QoQ comparison)

Metric	Q4 2023	Q3 2024	Q4 2024
Revenue ($USD Millions)	$585.9	$606.2	$640.0
Diluted EPS ($)	$5.90	$5.00	$6.02
Adjusted Diluted EPS ($)	$6.60	$5.64	$6.83

Segment Revenue Breakdown

Segment Revenue ($USD Millions)	Q4 2023	Q3 2024	Q4 2024
VITAS Net Revenue	$350.0	$391.4	$411.0
Roto-Rooter Revenue	$235.9	$214.8	$229.0
Consolidated	$585.9	$606.2	$640.0

VITAS KPIs

KPI	Q2 2024	Q3 2024	Q4 2024
Average Daily Census (ADC)	21,036	21,785	22,179
Admissions	17,334	16,775	16,427
Avg Revenue per Patient per Day ($)	$200.03	$199.16	$206.23
High Acuity Days (% of total)	2.6%	2.5%	2.5%

Segment Profitability (Margins and EBITDA)

Metric	Q3 2024	Q4 2024	Δ vs PY (Q4 2023)
VITAS Adjusted EBITDA ($M, ex Medicare Cap)	$73.1	$93.2	Margin -112 bps (to 22.5%)
VITAS Adjusted EBITDA Margin (%)	18.6%	22.5%	-112 bps YoY
Roto-Rooter Adjusted EBITDA ($M)	$56.4	$60.3	Margin -120 bps (to 26.3%)
Roto-Rooter Adjusted EBITDA Margin (%)	26.3%	26.3%	-120 bps YoY
Consolidated Adjusted EBITDA ($M)	$123.0	$145.5	—

VITAS Revenue Composition

VITAS Net Revenue ($000)	Q4 2023	Q4 2024
Homecare	$303,883	$358,507
Inpatient	$28,107	$31,307
Continuous Care	$22,620	$25,451
Other	$3,844	$5,556
Subtotal	$358,454	$420,821
Room & Board, net	$(2,535)	$(3,867)
Contractual Allowances	$(3,546)	$(3,521)
Medicare Cap Allowance	$(2,375)	$(2,425)
Net Revenue	$349,998	$411,008

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EPS ($)	FY 2024	$23.00–$23.15 (revised on Oct 29)	—	—
Adjusted EPS ($)	FY 2024	$23.55–$23.80 (raised on Jul 24)	—	—
Adjusted EPS ($)	FY 2025	—	$24.95–$25.45	New
VITAS Revenue Growth (pre Medicare Cap)	FY 2025	—	10.5%–11.3%	New
VITAS ADC Growth	FY 2025	—	8.5%–9.0%	New
VITAS Adj. EBITDA Margin (pre Cap)	FY 2025	—	18.4%–18.9%	New
Medicare Cap Billing Limitations	Calendar 2025	—	$9.5M	New
Roto-Rooter Revenue Growth	FY 2025	—	2.4%–3.0%	New
Roto-Rooter Adj. EBITDA Margin	FY 2025	—	25.7%–26.3%	New
Effective Tax Rate (adj)	FY 2025	—	24.0%	New
Diluted Share Count (assumed)	FY 2025	—	14.8M	New
Dividend per Share	Quarterly	$0.50 (Dec 2024)	$0.50 (Mar 14, 2025 payable)	Maintained

Note: 2025 earnings trajectory weighted to H2; VITAS margins/volume will be moderated in Q2–Q3 by Medicare cap mitigation actions; Roto-Rooter expected to accelerate over 2025 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3 2024)	Current Period (Q4 2024)	Trend
Medicare Cap management	Highlighted cushion and forecasting; $8.5M 2024 cap estimate; explained rate differential and market pressures	2025 cap $9.5M; 3.5% reimbursement vs 2.9% cap increase reduces cushion; proactive hospital-admission mix to moderate margins	Ongoing constraint; mix shift continues
Florida expansion & CONs	Pasco CON awarded; strategy to accelerate de novo and acquisition-led growth	First patient in Pasco; new CON in Marion County; guidance excludes Marion census for 2025	Strengthening footprint; future growth catalyst
Hurricanes impact	Helene/Milton caused Q3 admission slowdown (60–100 patients)	Estimated Q4 admissions impact 150–175 patients; operations resilient	Transient headwind; mitigated
Roto-Rooter demand & marketing	SEM agency change and ramp costs; commercial retraining initiatives; call count down 11.7% in Q3	QoQ momentum improving intra-quarter; focus on commercial wins, water restoration conversions; still competitive paid search landscape	Gradual improvement; competitive pressures persist
M&A pipeline (VITAS)	Active pipeline in restricted states/counties; valuation discipline	Covenant integration on track; contribution detailed; pipeline implied	Accretive opportunities maintained

Management Commentary

“We are cautiously optimistic that Roto-Rooter has turned the corner despite some continued difficult operating conditions.” (Kevin McNamara) .
“This 60 basis point average differential between the reimbursement rate increase and the Medicare cap increase has reduced Medicare Cap cushion…including the Florida program.” (Michael Witzeman) .
“The primary component of this strategy is to increase our emphasis on hospital-based admissions in select programs…this has the overall effect of moderating both revenue growth and margin growth but also provides additional cap cushion.” (Nicholas Westfall) .
“No share repurchases are built into the guidance…we intend on a quarterly basis to do some level of programmatic share repurchases…while still maintaining 0 leverage.” (Kevin McNamara) .
“Our 2025 guidance assumes that momentum accelerates with Roto-Rooter’s commercial business…[and] VITAS’ revenue growth and EBITDA margin…will be adversely impacted [Q2–Q3] by initiatives required to moderate the impact of the Medicare cap rate differential.” (Michael Witzeman) .

Q&A Highlights

Roto-Rooter turnaround confidence driven by intra-quarter improvements and commercial momentum; guidance seen as reasonable; limited impact from new marketing firm so far amid tough Google environment .
VITAS margin guidance lower versus 2024 highs due to Medicare cap mitigation mix (more hospital admits reducing LOS), but still “significantly above average historical growth” .
Medicare Cap outlook: $9.5M in 2025, similar to 2024; cap management considered normal operations; cushion pressured in high-reimbursement markets like California .
Capital allocation: no buybacks embedded in guidance; ongoing programmatic repurchases and dividend with zero leverage; opportunistic larger repurchases possible .
Seasonality: Roto-Rooter typically stronger in Q1/Q4; 2025 first half comps tough due to strong Q1 2024, but building positive comparisons through the year .

Estimates Context

Attempts to retrieve Q4 2024 S&P Global consensus (EPS, revenue, EBITDA) were unsuccessful due to API daily request limits; therefore, explicit comparisons to Wall Street consensus are unavailable at this time. Values would normally be anchored to S&P Global consensus; absence noted. [GetEstimates error]

Where estimates may need to adjust: VITAS volume and revenue strength vs margin moderation suggests Street models should tilt toward higher ADC/days-of-care with slightly lower EBITDA margins in Q2–Q3, while Roto-Rooter assumptions may need higher commercial contribution and flat EBITDA margins near ~26% in 2025 .

Key Takeaways for Investors

VITAS remains the core growth engine: robust ADC and admissions supported by Covenant and Florida expansion; expect continued above-historical growth with margin moderation due to Medicare cap strategy in Q2–Q3 2025 .
Mix management is deliberate: hospital-based admissions to manage cap risk will slightly compress margins but sustain scalable growth and cap cushion, especially in high-reimbursement markets .
Roto-Rooter stabilizing: commercial initiatives and improved conversions support modest revenue growth in 2025; residential demand remains competitive amid paid search dynamics—model flattish to low-single-digit growth with ~26% EBITDA margin .
H2-weighted 2025: earnings cadence back-half weighted by Roto-Rooter acceleration and VITAS margin actions—position for potential beat opportunities later in the year if commercial momentum sustains .
Capital returns and flexibility: $178.4M cash, no debt, ongoing dividend ($0.50) and programmatic buybacks underpin shareholder returns, with opportunistic repurchases possible .
Watch regulatory/pricing: Medicare rate vs cap differential (3.5% vs 2.9%) tightens cushion; monitor CMS updates and state-level CON developments for Florida growth trajectory .
Near-term catalysts: Marion County CON ramp, Pasco trajectory, VITAS sustained hiring/retention, and visible commercial wins at Roto-Rooter; hurricanes impacts are transitory .

Sources: Q4 2024 press release and 8-K (Item 2.02) including exhibits and financial statements ; Q4 2024 earnings call transcript -; prior quarter materials Q3 press release and call - -; Q2 press release and call - -; dividend press release .

CHEMED CORP (CHE)·Q4 2024 Earnings Summary