Chemed Corporation (CHE): Business Model Canvas [Dec-2025 Updated]

You're looking at a company that defies easy categorization, and honestly, that's where the investment opportunity often hides. Chemed Corporation runs a fascinating, recession-resistant dual engine: high-touch, compassionate end-of-life hospice care through VITAS, paired with the reliable, 24/7 emergency fix-it service from Roto-Rooter. As of Q3 2025, this mix was clearly working, pulling in $407.7 million from hospice and another $217.2 million from plumbing services, all while guiding for an Adjusted Diluted EPS between $22.00 and $22.30 for the full year. If you want to see exactly how this unique structure-from their $129.8 million cash reserves to their Medicare Cap management-actually functions on paper, dive into the full Business Model Canvas breakdown below.

Chemed Corporation (CHE) - Canvas Business Model: Key Partnerships

Hospitals, physicians, and long-term care facilities for VITAS patient referrals

• VITAS Average Daily Census (ADC) for the third quarter of 2025 was 22,327 days of care.
• VITAS Admissions for the third quarter of 2025 totaled 17,714.
• VITAS Net Patient Revenue for the third quarter of 2025 was $407.7 million.
• For the first quarter of 2025, VITAS Admissions were 18,139.

Independent contractors and franchisees for Roto-Rooter service delivery

Metric	Q3 2025 Amount	Year-over-Year Change
Revenue from Independent Contractors	$16.9 million	Decline of 4.7%
Roto-Rooter Gross Margin	50.7%	Compared to 52.9% in Q3 2024

Roto-Rooter revenue from independent contractors in the first quarter of 2025 declined 6.4% compared to the first quarter of 2024. Roto-Rooter generated quarterly revenue of $217.2 million in the third quarter of 2025.

Medicare and Medicaid as primary reimbursement sources for VITAS services

• VITAS geographically weighted average Medicare reimbursement rate increased approximately 4.1% in the third quarter of 2025 compared to the prior-year period.
• VITAS Average revenue per patient per day in the third quarter of 2025 was $205.08.
• Reimbursement for routine home care averaged $183.44 per day in the third quarter of 2025.
• Reimbursement for high acuity care averaged $1,132.50 per day in the third quarter of 2025.
• Estimated total Medicare Cap billing limitations for calendar year 2025 are $28.2 million.
• Of the estimated 2025 Medicare Cap billing limitations, $19 million relates to the Florida combined program.
• Of the estimated 2025 Medicare Cap billing limitations, $9.2 million relates to all other VITAS programs.

Strategic M&A targets for geographic expansion, like the Covenant Health acquisition

Acquisition Metric	Value
Covenant Health Acquisition Cost	$85.0 million in cash
Covenant Health Acquisition Date	April 17, 2024
Covenant Health Q1 2025 Revenue Contribution	Approximately $11.5 million to $12.5 million
Covenant Health Q1 2025 Net Income Contribution	Approximately $1.8 million to $2.0 million

The Covenant Health acquisition expanded Chemed Corporation's geographic footprint in Florida and marked entry into the Alabama market.

Chemed Corporation (CHE) - Canvas Business Model: Key Activities

You're looking at the core actions Chemed Corporation (CHE) takes to deliver value, which really boils down to running two very different businesses: high-touch healthcare and essential home services. These activities are what drive the numbers you see on the financial statements.

Hospice Care Delivery (VITAS Healthcare)

The first major activity is providing high-acuity, end-of-life hospice care. VITAS Healthcare is a massive operation, serving patients across 15 states and the District of Columbia. They manage 58 hospice programs and employ nearly 12,000 professionals to deliver this care. A key metric here is patient volume; as of the second quarter of 2025, the Average Daily Census (ADC) was 22,318 patients.

• Operating 58 hospice programs across 15 states and D.C..
• Serving approximately 22,000 patients daily.
• Q2 2025 Net Patient Revenue reached $396.2 million.
• Q2 2025 Admissions totaled 17,545 patients.

Essential Home Services (Roto-Rooter)

The second core activity is delivering 24/7 emergency plumbing, drain cleaning, and water restoration through Roto-Rooter. This segment focuses on maintaining a broad service footprint and managing the mix of residential versus commercial work. For example, in the second quarter of 2025, Roto-Rooter generated quarterly revenue of $222.6 million.

• Delivering plumbing, drain cleaning, and water restoration services.
• Q2 2025 Residential revenue was $156.4 million.
• Q2 2025 Commercial revenue was $53.2 million.
• Excavation revenue grew 24.4% in Q2 2025 compared to the prior year quarter.

Managing Regulatory Headwinds

A critical, non-optional activity for VITAS is managing the complex federal reimbursement structure, specifically the Medicare Cap limitations. Chemed Corporation (CHE) is actively managing the impact of these caps, estimated at $28.2 million for 2025, as stated in the required outline. This challenge is heavily concentrated in Florida due to a rate differential where Florida's reimbursement increase was 5.2% versus a national average increase of 2.9%. By the third quarter of 2025, VITAS accrued $6.1 million in Medicare Cap billing limitation, with $4.6 million of that related to the Florida combined program. At that time, five provider numbers showed a total billing limitation of $27.2 million.

Driving Operational Efficiency and Profitability

For Roto-Rooter, a key activity involves strategic pricing and business improvement initiatives to boost profitability, especially when margins compress. You can see the pressure in the Q2 2025 results where the Adjusted EBITDA margin was 21.8%, representing a 517-basis point decline from the second quarter of 2024. Management is actively refining the pricing model for large commercial excavation projects to better balance revenue growth and EBITDA margins. The full-year 2025 revenue growth forecast for Roto-Rooter is set between 1.25% to 1.75%, with an expected adjusted EBITDA margin range of 23.5% to 24.5%.

Capital Structure and Allocation

Finally, Chemed Corporation (CHE) must maintain its financial foundation to support growth and shareholder returns. This involves a disciplined approach to capital allocation. As of June 30, 2025, the company held total cash and cash equivalents of $249.9 million and, importantly, maintained no current or long-term debt. This debt-free status is a major operational enabler. The company also actively manages its equity through repurchases; as of March 31, 2025, there was a remaining share repurchase authorization of $225.6 million.

Here's a quick look at the segment performance that these key activities generate for the first half of 2025:

Metric (As of Q2 2025)	VITAS Segment	Roto-Rooter Segment
Revenue	$396.2 million	$222.6 million
Adjusted EBITDA	$66.8 million (Excluding Medicare Cap)	$48.6 million
Adjusted EBITDA Margin	16.2% (Excluding Medicare Cap)	21.8%
Average Daily Census (ADC)	22,318	N/A

Chemed Corporation (CHE) - Canvas Business Model: Key Resources

You're looking at the core assets Chemed Corporation (CHE) leans on to run its two major businesses, which is key for understanding its stability. These aren't just line items; they are the engines of the operation.

The foundation of Chemed Corporation (CHE)'s resource base is built on two incredibly strong, nationally recognized brands. On the services side, you have Roto-Rooter, which is the nation's leading provider of commercial and residential plumbing and drain cleaning services. Then there's VITAS Healthcare Corporation, recognized as one of the nation's largest providers of end-of-life hospice care. These names carry weight, which definitely helps with customer acquisition and trust.

Financially, Chemed Corporation (CHE) maintains a solid liquidity position. As of September 30, 2025, the company reported total cash and cash equivalents of $129.8 million. That's a nice cushion to have on the balance sheet. Also critical is the access to external capital; as of that same date, Chemed Corporation (CHE) had approximately $404.5 million in undrawn borrowing capacity under its credit facility. That's a substantial war chest for strategic moves, like the additional $300 million for stock repurchase authorized in August 2025. It shows they have flexibility.

For VITAS Healthcare, the key resource is its clinical scale and expertise. This translates directly into capacity. For instance, in the first quarter of 2025, the Average Daily Census (ADC) stood at 22,244 patients, and they processed 18,139 admissions. This large, specialized clinical workforce is what allows them to manage the complex needs of hospice patients across their service areas. The ability to manage patient flow efficiently is paramount here.

Roto-Rooter's resource strength lies in its physical footprint. This network is extensive, covering the United States and Canada. The operations are structured to provide rapid response, using a mix of company-owned branches, independent contractors, and franchisees. This structure helps them cover a wide geographic area for both residential and commercial needs.

Here's a quick look at some of the operational scale metrics we have from recent reporting periods to give you a sense of the resource deployment:

Metric	Segment	Period End Date	Value
Cash and Cash Equivalents	Consolidated	September 30, 2025	$129.8 million
Undrawn Borrowing Capacity	Consolidated	September 30, 2025	$404.5 million
Average Daily Census (ADC)	VITAS Healthcare	March 31, 2025	22,244
Admissions	VITAS Healthcare	March 31, 2025	18,139
Branch Commercial Revenue	Roto-Rooter	June 30, 2025	Not specified, but Q2 2025 revenue was $222.6 million

The operational capacity is also reflected in the revenue generation capabilities tied to these resources. For example, in Q3 2025, VITAS net revenue was $407.7 million, while Roto-Rooter generated quarterly revenue of $217.2 million. These figures show the immediate earning power derived from the established brand names and operational scale.

The key tangible and intangible assets supporting Chemed Corporation (CHE) include:

• National brand equity of Roto-Rooter and VITAS Healthcare.
• Total cash reserves of $129.8 million as of Q3 2025.
• Access to approximately $404.5 million in undrawn credit.
• A large, established network of service branches across the US and Canada.
• A specialized clinical staff supporting a census of over 22,000 daily patients (based on Q1 2025 data).

To be fair, the Roto-Rooter network relies heavily on its physical presence, which includes service through company-owned branches, independent contractors, and franchisees. This decentralized service delivery model is a core asset for market penetration.

Finance: draft 13-week cash view by Friday.

Chemed Corporation (CHE) - Canvas Business Model: Value Propositions

You're looking at Chemed Corporation (CHE) and trying to map out what value it actually delivers to its customers and investors through its two distinct businesses. Honestly, the value proposition is a story of two very different, yet complementary, service providers.

VITAS: Compassionate, high-quality, and comprehensive end-of-life care

For patients and families needing hospice care, Chemed Corporation, through VITAS Healthcare, offers comprehensive end-of-life services. The scale of this operation supports its value proposition. In the third quarter of 2025, the Average Daily Census (ADC) for VITAS was 22,327 patients, which was a 2.5% increase over the prior year period. Admissions also grew by 5.6% to 17,714 in that same quarter. The average revenue per patient per day in the third quarter of 2025 was $205.08.

The core value delivered by VITAS can be summarized by its operational scale and growth:

• Net Patient Revenue (Q3 2025): $407.7 million.
• Days-of-care increase (Q3 2025): 2.5%.
• Geographically weighted average Medicare reimbursement rate increase (Q3 2025): approximately 4.1%.
• VITAS geographic service region spans 15 states.

Roto-Rooter: Fast, reliable, 24/7 service from a trusted national brand

For residential and commercial customers needing immediate plumbing or drain services, Roto-Rooter delivers rapid response under a nationally recognized brand. The service reliability is supported by its diversified offerings, which allow it to capture revenue across various repair needs, even when one area slows down. In the third quarter of 2025, Roto-Rooter generated revenue of $217.2 million. The segment's gross margin for Q3 2025 was 50.7%.

The diversification in Roto-Rooter's residential revenue streams in the third quarter of 2025 shows where the immediate service value is being captured:

Service Offering	Year-over-Year Revenue Change (Q3 2025)
Plumbing	increasing 8.2%
Excavation	increasing 4.5%
Water Restoration	increasing 6.8%
Drain Cleaning	declining 2.6%

VITAS: Expertise in managing complex patient needs and Medicare compliance

VITAS Healthcare's value proposition extends to navigating the complexities of patient acuity and federal reimbursement rules. Managing patient complexity is reflected in the high reimbursement rates for intensive care. Reimbursement for high acuity care averaged $1,132.50 per day in Q3 2025. However, managing compliance is a constant factor, as evidenced by the Medicare Cap liability. In the third quarter of 2025, VITAS accrued $6.1 million in Medicare Cap billing limitation, with $4.6 million of that related to the Florida combined program. The overall Adjusted EBITDA margin for VITAS, excluding Medicare Cap, was 17.0% in Q3 2025.

Roto-Rooter: Diversified service offerings including excavation and water cleanup

Roto-Rooter offers more than just drain clearing; its value includes specialized services like water cleanup and excavation, which showed growth in the third quarter of 2025. The segment's revenue increase of 1.1% to $217.2 million in Q3 2025 was supported by these specific areas. The Adjusted EBITDA margin for the segment was 22.7%, though this represented a decline of 351-basis points year-over-year.

CHE: A unique, recession-resistant, diversified business model for investors

For investors, Chemed Corporation offers a unique pairing of a non-discretionary, needs-based service (plumbing) with a non-cyclical, demographic-driven service (hospice care). This diversification is key to its perceived stability. For the trailing twelve months ending September 30, 2025, Chemed Corporation's total revenue was $2.531 billion. In the third quarter of 2025, VITAS contributed approximately 65.2% of the consolidated revenue, with Roto-Rooter contributing the remaining 34.8%. The consolidated operating margin for Q3 2025 was approximately 12.0%. Financially, as of September 30, 2025, Chemed Corporation reported total cash and cash equivalents of $129.8 million and notably, no current or long-term debt.

The financial structure supporting this diversification includes:

• Consolidated Revenue (TTM ending 9/30/2025): $2.53 billion.
• Consolidated Revenue (Q3 2025): $624.9 million.
• Cash and Equivalents (9/30/2025): $129.8 million.
• Debt as of 9/30/2025: $0.

Finance: draft 13-week cash view by Friday.

Chemed Corporation (CHE) - Canvas Business Model: Customer Relationships

You're looking at how Chemed Corporation manages the distinct relationships required by its two very different businesses. It's a tale of two customer bases: one built on deep, continuous trust, and the other on rapid, reliable response.

The sheer scale of customer interaction across Chemed Corporation is significant. Look at the third quarter of 2025 figures; VITAS managed an Average Daily Census (ADC) of 22,327 patients, while Roto-Rooter generated quarterly revenue of $217.2 million. These numbers show the volume of relationships being managed daily.

Metric	VITAS (Hospice Care)	Roto-Rooter (On-Demand Service)
Q3 2025 Revenue	$407.7 million	$217.2 million
Q3 2025 Admissions/Volume	17,714 Admissions	Residential Revenue: $150.9 million
Average Revenue Per Day	$205.08	Independent Contractor Revenue: $16.9 million
High Acuity Days of Care (Q3 2025)	2.3% of total days of care	N/A

VITAS: Relationship-based engagement with referral sources and patient families

For VITAS, the relationship starts long before the patient is admitted, focusing heavily on referral sources-doctors, hospitals, and social workers. They actively court these relationships, even providing a mobile application for secure, HIPAA-compliant referrals, allowing clinicians to submit a Face Sheet photo or form submission with in-app confirmation. This digital tool helps streamline what is often a sensitive, time-critical process. The goal is to be the trusted, first-call provider when end-of-life care decisions are being made. It definitely helps to make the process seamless for the referring clinician.

Roto-Rooter: Transactional, on-demand service for emergency needs

Roto-Rooter operates on the opposite end of the relationship spectrum. Customers call when a pipe bursts or a drain clogs; they need immediate, competent help. The relationship is fundamentally transactional and built on the promise of rapid, effective service delivery. For instance, in Q3 2025, residential plumbing revenue was up 8.2%, showing strong demand for immediate fixes, while drain cleaning saw a 2.6% decline, suggesting fluctuating demand for routine maintenance versus emergency calls. The relationship is about solving an urgent problem right now.

VITAS: Dedicated, continuous clinical support and emotional care

Once a patient is admitted, the relationship becomes continuous and deeply personal. The care team is interdisciplinary, consisting of a physician, nurse, hospice aide, social worker, chaplain, volunteer, and bereavement specialist. This structure ensures comprehensive support for both the patient and the family during a critical time. The focus on internal culture reflects this external commitment; VITAS has seen a 10-point increase in its internal employee engagement scores since launching its survey in 2022, which supports the delivery of compassionate care by nearly 12,000 professionals.

Roto-Rooter: Consistent service quality across company-owned and franchised locations

To maintain trust in a transactional model, consistency is key, whether you are dealing with a company-owned branch or a franchisee. Roto-Rooter works to ensure service quality is uniform across its network. This is vital because a customer's experience with a water restoration job, which increased 6.8% in residential revenue in Q3 2025, must meet the same standard as a simple drain cleaning call. The company's reliance on independent contractors for revenue, which was $16.9 million in Q3 2025, down 4.7%, means maintaining brand standards across non-wholly-owned operations is a constant focus for relationship integrity.

Here are some key operational metrics that underscore the service delivery scale:

• Q3 2025 Average revenue per patient per day for VITAS was $205.08.
• Routine home care reimbursement averaged $183.44 per day in Q3 2025.
• High acuity care reimbursement averaged $1,132.50 per day in Q3 2025.
• Roto-Rooter residential excavation revenue increased 4.5% in Q3 2025.
• Chemed Corporation's total cash and cash equivalents stood at $129.8 million as of September 30, 2025.

Finance: draft 13-week cash view by Friday.

Chemed Corporation (CHE) - Canvas Business Model: Channels

You're looking at how Chemed Corporation moves its services-hospice care from VITAS Healthcare and plumbing/drain cleaning from Roto-Rooter-to the customer base as of late 2025. It's a dual-pronged approach, relying heavily on professional referrals for healthcare and direct consumer/commercial outreach for home services.

Direct patient admissions and hospital/physician referral networks (VITAS)

VITAS Healthcare relies significantly on professional channels to secure patient admissions for its end-of-life hospice care services. This is a critical component of their patient volume strategy across the 15 states where they operate.

Key metrics reflecting the volume flowing through these channels in the third quarter of 2025 include:

• VITAS net revenue for Q3 2025 totaled $407.7 million.
• The Average Daily Census (ADC) reached 22,327 patients in Q3 2025.
• Admissions for Q3 2025 were 17,714.
• Days-of-care saw an increase of 2.5% in Q3 2025 compared to the prior year period.
• The geographically weighted average Medicare reimbursement rate increase was approximately 4.1% in Q3 2025.
• Average revenue per patient day for Q3 2025 was $205.08.

The company is actively managing Medicare Cap limitations, with an estimated total billing limitation for calendar 2025 of $28.2 million. Strategic initiatives to counteract this include the expansion of hospital-based admissions.

Roto-Rooter company-owned branches and independent contractor network

Roto-Rooter utilizes a hybrid model for service delivery, combining wholly-owned operations with external contractor networks. As of the 2024 Annual Report, the system included 123 company-owned branches and independent contractors, alongside 348 franchisees. This network provides services to over 90% of the U.S. population.

The contribution from independent contractors shows fluctuations:

• Revenue from independent contractors in Q3 2025 was $16.9 million, a decline of 4.7% versus Q3 2024.
• Revenue from independent contractors in Q2 2025 was $17.4 million, a decline of 4.4% versus Q2 2024.

The primary channel for service delivery remains the company-owned branches, which generated the bulk of the segment's revenue. Here's a look at the Q3 2025 revenue breakdown:

Roto-Rooter Revenue Category (Q3 2025)	Amount (Millions USD)	Year-over-Year Change
Total Quarterly Revenue	$217.2	1.1% increase
Branch Residential Revenue	$150.9	3.4% increase
Branch Commercial Revenue	$55.0	2.8% increase
Revenue from Independent Contractors	$16.9	4.7% decrease

Roto-Rooter national advertising and digital lead generation

Roto-Rooter actively drives demand through national marketing efforts, including a more targeted Internet focus on specific services. This digital lead generation is a key input for the field technicians.

The results of these efforts in Q3 2025 showed:

• Total leads were down 1.3% compared to the same period in 2024.
• A multipronged campaign targeting selected high revenue dollar plumbing services yielded positive results in the quarter.

The digital and advertising focus contributed to the overall revenue increase in the residential segment, where plumbing revenue specifically increased by 8.2% in Q3 2025.

VITAS hospice facilities, home-based care, and assisted living partnerships

VITAS Healthcare delivers care across various settings to meet patient needs, though home-based care is the dominant channel. In 2024, approximately 99% of days of care were delivered directly to the patient in their home.

The mix of care settings in Q3 2025 showed:

• Routine homecare days increased by 3.9%.
• General inpatient days increased by 7.6%.
• Continuous care days decreased by 24.9%.
• High acuity days-of-care represented 2.3% of total days-of-care in Q3 2025.

The company also engages in strategic facility partnerships and acquisitions to expand reach. For instance, in Q1 2025, VITAS completed an acquisition that included an assisted living facility for $85.0 million in cash. VITAS currently services 60 of Florida's 67 counties, reaching 86% of the state's population.

Chemed Corporation (CHE) - Canvas Business Model: Customer Segments

You're looking at the core groups Chemed Corporation serves through its two main divisions, VITAS Healthcare Corporation and Roto-Rooter. These aren't just abstract groups; they represent real people needing critical care or urgent home services. Honestly, understanding who pays and who receives the service is key to seeing where the revenue comes from.

The VITAS segment targets individuals at the end of life and their families. This segment is heavily reliant on government funding mechanisms, which is a major factor in its financial stability and risk profile. For Roto-Rooter, the customer base splits clearly between individual homeowners and commercial entities needing immediate or preventative maintenance.

Here's a look at the key operational metrics for these segments as of the third quarter of 2025, which gives you a solid picture of the customer base size:

Customer Segment Group	Chemed Segment	Key Metric	Latest Reported Number (Q3 2025)
Terminally Ill Patients/Families	VITAS Healthcare Corporation	Average Daily Census (ADC)	22,327 days of care
Terminally Ill Patients/Families	VITAS Healthcare Corporation	Admissions	17,714
Residential Homeowners	Roto-Rooter	Residential Revenue	$150.9 million
Commercial Businesses	Roto-Rooter	Total Segment Revenue	$217.2 million
Government Payers (Medicare/Medicaid)	VITAS Healthcare Corporation	Medicare Reimbursement Rate Impact	4.1% YoY increase (geographically weighted average)

The VITAS customer base is defined by need, but the payer mix dictates the revenue flow. You see this in the reimbursement rates and the constant monitoring of the Medicare Cap limitations. If onboarding takes 14+ days, churn risk rises, though for hospice, the patient need is the primary driver.

For the terminally ill patients and their families requiring end-of-life care (VITAS), the volume metrics show consistent engagement:

• Average Daily Census (ADC) for Q3 2025 was 22,327, representing a 2.5% increase year-over-year.
• Total Admissions in Q3 2025 reached 17,714, up 5.6% from the prior year.
• Average revenue per patient per day in Q3 2025 was $205.08.
• Routine home care reimbursement averaged $183.44 per day.
• High acuity care reimbursement averaged $1,132.50 per day.

Roto-Rooter serves two distinct service-requiring groups. Residential homeowners drive the bulk of their revenue, but commercial work, especially specialized services, is important for margin stability. The residential side saw mixed results across service types in the third quarter of 2025:

• Residential Revenue for Q3 2025 totaled $150.9 million.
• Plumbing revenue increased by 8.2% in the quarter.
• Drain cleaning revenue declined by 2.6% in the quarter.
• Water restoration revenue increased by 6.8% in the quarter.

Commercial businesses are a key target for Roto-Rooter, encompassing maintenance and water cleanup. While the total commercial revenue for Q3 2025 isn't broken out separately, the overall segment revenue was $217.2 million. To give you a sense of the commercial activity from the second quarter, commercial revenue was $53.2 million, driven by a 4.4% increase in that period.

The payers for VITAS are overwhelmingly government-related. Medicare reimbursement rates directly impact the top line, and the company is actively managing the risk associated with federal payment caps. As of September 30, 2025, Chemed Corporation was tracking Medicare Cap exposure closely:

• The company estimated a full-year 2025 Medicare Cap billing limitation of $28.2 million.
• In Q3 2025, VITAS accrued $6.1 million in Medicare Cap billing limitation.
• Of the 34 Medicare provider numbers, 25 had a trailing 12-month Medicare Cap cushion of 10% or greater.
• Five provider numbers had a Medicare Cap billing limitation totaling $27.2 million as of the Q3 reporting date.

The mix of government versus private insurance is inherent in the Medicare Cap discussion; the growth in revenue was primarily attributed to a 4.1% increase in the geographically weighted average Medicare reimbursement rate for Q3 2025.

Chemed Corporation (CHE) - Canvas Business Model: Cost Structure

You're looking at the cost side of Chemed Corporation's business, which is essentially a tale of two very different operations: the high-touch, regulated hospice care of VITAS Healthcare and the service-heavy, decentralized plumbing and drain cleaning of Roto-Rooter. The cost structure reflects this duality, with significant fixed and variable costs tied to clinical staffing and regulatory compliance at VITAS, and field operations expenses at Roto-Rooter.

High labor and clinical staff costs are central to VITAS's intensive hospice model. These direct patient care expenses, which include clinical wages, are captured within the Cost of Services Provided and Goods Sold. For the third quarter ended September 30, 2025, VITAS reported a Cost of Services Provided and Goods Sold of $320,865 thousand.

Selling, general and administrative (SG&A) expenses are a major component across both segments. For Roto-Rooter's field operations, the SG&A for the third quarter of 2025 was $60,672 thousand, which is right around the $60.7 million figure you mentioned. For the entire consolidated company in Q3 2025, total SG&A expenses were $105,775 thousand.

A significant regulatory cost for the VITAS segment is the Medicare Cap liability. Chemed Corporation is currently estimating $28.2 million in Medicare Cap billing limitations for the calendar year 2025. This estimate is comprised of $19 million related to the Florida combined program and $9.2 million for all other VITAS programs. To be fair, this estimate was revised mid-year based on weaker than anticipated admissions in Florida during the second quarter of 2025.

Costs of medical supplies and pharmaceuticals for patient care are embedded within the Cost of Services Provided and Goods Sold for VITAS. This cost category is variable, directly scaling with patient census and acuity mix. The gross margin for the consolidated company in Q3 2025 was 31.5%, down from 34.6% in the prior-year period, partly due to these variable patient care expenses at VITAS.

Roto-Rooter's field operations carry costs related to casualty insurance and fleet maintenance, which fall under variable operating expenses. While specific breakout numbers for these items aren't always isolated in the top-line reports, they contribute to the overall variable nature of the segment's costs, alongside increased variable expenses noted generally for Roto-Rooter in Q3 2025.

Here's a quick look at the cost breakdown for the third quarter of 2025:

Cost Category (in thousands)	VITAS	Roto-Rooter	Corporate	Consolidated Total
Service revenues and sales	$407,741	$217,159	$0	$624,900
Cost of services provided and goods sold	$320,865	$107,128	$0	$427,993
Selling, general and administrative expenses	$25,236	$60,672	$19,867	$105,775
Depreciation	$5,354	$8,298	$12	$13,664

Key cost drivers and associated figures you should track include:

• VITAS Cost of Services (Q3 2025): $320,865 thousand.
• Roto-Rooter SG&A (Q3 2025): $60,672 thousand.
• Estimated Full Year 2025 Medicare Cap Limitation: $28.2 million.
• Accrued Medicare Cap Billing Limitation (Q3 2025): $6.1 million.
• VITAS Average Revenue Per Patient Per Day (Q3 2025): $205.08.

Finance: draft 13-week cash view by Friday.

Chemed Corporation (CHE) - Canvas Business Model: Revenue Streams

You're looking at how Chemed Corporation (CHE) actually brings in the money across its two main segments, hospice care through VITAS and the plumbing/drain services via Roto-Rooter. It's defintely a dual-engine revenue model, and the numbers from late 2025 tell a clear story about where the bulk of the cash is coming from.

For the hospice side, the primary inflow is net patient revenue. Looking at the third quarter of 2025, net patient revenue from VITAS services hit $407.7 million. This is the core top-line number for that division, representing what they actually collect after contractual allowances.

The Roto-Rooter segment generates its revenue through direct service and sales, which covers plumbing, drain cleaning, and water cleanup jobs. In that same third quarter of 2025, service and sales revenue for Roto-Rooter was $217.2 million. That's a substantial, non-healthcare revenue stream to balance things out.

The sources for the VITAS revenue are heavily regulated, which you know impacts margins. Reimbursement comes primarily from Medicare, plus Medicaid and private insurance payers. Roto-Rooter, on the other hand, also pulls in revenue from independent contractors and franchisees who operate under the Roto-Rooter brand, adding a layer of asset-light growth potential.

Here's a quick look at those key Q3 2025 revenue components side-by-side:

Revenue Source Segment	Metric	Q3 2025 Amount
VITAS (Hospice)	Net Patient Revenue	$407.7 million
Roto-Rooter (Services/Sales)	Service and Sales Revenue	$217.2 million

When we look at the full-year expectations for 2025, the overall profitability picture is strong, which reflects the efficiency of these revenue streams. Full-year 2025 Adjusted Diluted EPS is guided to be between $22.00 and $22.30. That range shows management's confidence in maintaining collection rates and controlling costs across both businesses.

The way VITAS captures its revenue is tied directly to patient census and the acuity mix, which means the reimbursement structure is critical. You see revenue coming from:

• Medicare payments, which form the largest component.
• Medicaid reimbursements, varying by state.
• Private insurance payments, often involving negotiated rates.

Roto-Rooter's revenue streams are more transactional, but the franchise/contractor model adds a recurring element through fees or shared service revenue, separate from the direct service revenue reported above. The mix of company-owned versus franchised operations directly impacts the quality and stability of that $217.2 million figure.