Financial Data and Key Metrics Changes - The fourth quarter of 2025 saw VITAS' net revenue at $418.8 million, a 1.9% increase compared to the prior year, driven by a 1.3% increase in days of care and a 2.2% increase in Medicare reimbursement rates [14] - Roto-Rooter revenue declined by 3.7% in the fourth quarter of 2025 compared to the same period in 2024, with branch residential revenue decreasing by 3.1% [9][16] - Adjusted EBITDA for VITAS was $91.6 million, a decline of 1.7% year-over-year, while Roto-Rooter's adjusted EBITDA totaled $47.5 million, a decrease of 21.1% compared to the prior year [15][21] Business Line Data and Key Metrics Changes - VITAS admissions totaled 17,419 in the fourth quarter, reflecting a 6% improvement from the same period in 2024, with hospital-based admissions making up 44.8% of total admissions [4][5] - Roto-Rooter branch commercial revenue increased by 1.6%, while residential revenue declined by 3.1%, with water restoration revenue declining by 10.3% [9][16][19] - The average revenue per patient day for VITAS was $288.01, an increase of 86 basis points from the prior year [15] Market Data and Key Metrics Changes - The average daily census for VITAS was 22,462 patients, an increase of 1.3%, with hospital-directed admissions increasing by 9.9% [26] - The company received a certificate of need to operate in Manatee County, Florida, which represents a significant growth opportunity [8][28] Company Strategy and Development Direction - VITAS is focusing on balancing its admission patterns to improve revenue growth and EBITDA margins, particularly by increasing long-stay patient admissions [8][27] - Roto-Rooter is expanding its commercial business by hiring commercial business managers, which has shown positive preliminary results [9][19] - The company plans to centralize billing and collections for water restoration to improve efficiency and reduce write-offs [18][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that the Florida Medicare cap issue is behind them and anticipates a transition year for both VITAS and Roto-Rooter in 2026 [11][12] - The company expects VITAS revenue to grow by 5.5%-6.5% in 2026, while Roto-Rooter is forecasted to achieve revenue growth of 3%-3.5% [22][23] - Management acknowledged the challenges faced by Roto-Rooter due to increased marketing costs and write-offs but remains optimistic about future growth opportunities [12][41] Other Important Information - The company repurchased 400,000 shares of Chemed stock at an average price of $436.39, funded by free cash flow from both subsidiaries [21] - The estimated earnings per diluted share for 2026 is projected to be in the range of $23.25-$24.25, compared to $21.55 for 2025 [24] Q&A Session Summary Question: Confidence in Roto-Rooter revenue growth in 2026 - Management highlighted improvements in paid leads and a transition from free leads to paid leads as key factors for expected revenue growth [32][34] Question: VITAS revenue and EBITDA progression - Management indicated that the focus on short-stay admissions has impacted revenue growth, but a return to a normalized growth rate is expected as patient mix is adjusted [50][51] Question: Structural changes in Roto-Rooter and the plumbing industry - Management acknowledged challenges from private equity and changes in lead generation but expressed confidence in Roto-Rooter's ability to adapt and grow [53][56]

Core Insights - There is a significant change in traffic patterns for product-led growth and direct sales companies due to shifts in search engine optimization (SEO) and artificial intelligence (AI) engine optimization [1] Group 1 - Investors are increasingly inquiring about the impact of changing search patterns on companies' go-to-market strategies [1] - The decline in traditional SEO effectiveness is prompting companies to adapt their marketing approaches [2]

Core Insights - There is a noticeable shift in search patterns impacting product-led growth and direct sales companies, particularly due to changes in search engine optimization (SEO) and artificial intelligence (AI) engine optimization [1] Group 1 - Investors are increasingly inquiring about the effects of changing traffic patterns on large companies [1] - The decline in traditional SEO is prompting companies to adapt their go-to-market strategies [2]