Chemed’s recent guidance update reflects significant upward revisions for VITAS’ revenue growth and EBITDA margins for 2026, driven by strong Q1 performance.
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What are the details of Chemed's guidance change for Q1 2026, particularly regarding revenue growth and EBITDA margins for VITAS?
Chemed said it was updating full-year fiscal 2026 guidance because VITAS performance in Q1 2026 materially exceeded expectations and because of the level of share repurchases in Q1 2026. 1
Chemed increased its full-year 2026 ADC (average daily census) growth guidance to 4.5%–5.5%, versus original guidance of 3.5%–4%. 1
Chemed also increased its anticipated revenue growth, excluding the impact of the Medicare Cap to 6.5%–7.5%, versus original guidance of 5.5%–6.5%. 1
Interpretation: In management’s framing, the upward ADC and revenue-growth ranges are tied to better-than-anticipated VITAS performance in Q1. 1 Chemed’s Q1 commentary highlights that VITAS achieved this despite a “tough comparison” from ongoing patient-mix transition between short-stay and long-stay patients. 2
Chemed’s guidance update includes two different EBITDA-margin concepts:
Chemed revised “revised EBITDA margin, excluding the impact of the Medicare Cap” to 18.0%–18.5%, compared with original guidance of 17.5%–18.5%. 1
Key takeaway: This is a margin floor increase (from 17.5% to 18.0%) while the upper end remains 18.5%. 1
Chemed also stated that for full-year 2026 it lowered “Estimated adjusted EBITDA margin” to 21.5%–22.5% (from 22.5%–23%). 1 Management attributed that decline “primarily due to elevated marketing costs now expected to persist” for the remainder of the year. 1
How to reconcile A vs B:
Chemed stated that VITAS “exceeded even the high end of our expectations” in Q1 2026, helped by:
Chemed also quantified Q1 VITAS performance:
Separately, Chemed’s CFO explained that for Q1 and into the full year, marketing costs were a key driver of margin pressure, including:
At the same time, Chemed cautioned that overall adjusted EBITDA margin guidance (company-level) was lowered because elevated marketing costs were expected to persist. 1
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Answer outline
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