Chemed is a tightly focused duopoly: VITAS Healthcare, the nation's largest end-of-life care provider, and Roto-Rooter, the nation's largest commercial-and-residential plumbing and drain cleaning franchise network. The Q2 2026 print is the cleanest test of whether the company can keep growing both businesses, and the cleanest signal is that the company raised its full-year guidance because of VITAS outperformance. Admissions growth at VITAS, the engine of the upside surprise, ran at 9% year over year. The strategic tension is whether a hospice business with a Medicare rate cycle and a plumbing business with a consumer-spending cycle can both deliver at the same time.
VITAS is doing the heavy lifting this quarter, and the underlying mechanics are unusually clean. Net patient revenue grew 11.9% on a 6.1% increase in days-of-care and a 2.4% geographically weighted Medicare rate increase, with acuity mix shift dragging 115 basis points and Medicare Cap and other contra-revenue changes adding 455 basis points. The Medicare Cap headwind, which cost VITAS $16.4 million in Q2 2025, fell to just $500,000 in Q2 2026, and 22 of 33 provider numbers now sit on a 10% cushion or better. Roto-Rooter posted 3.3% revenue growth on the back of a strong commercial quarter, with plumbing up 11.9% and drain cleaning up 6.9%.
The Q2 2026 consolidated revenue of $673.3 million, the GAAP diluted EPS of $5.13, the adjusted diluted EPS of $6.06, the VITAS Adjusted EBITDA margin expansion of 196 basis points, and the Roto-Rooter Adj EBITDA margin compression of 77 basis points anchor the print. The forward question is whether the VITAS growth pace and the Medicare Cap tailwind can be sustained through 2026, and whether Roto-Rooter can stabilize its margin as the consumer plumbing cycle normalizes.