DaVita Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Consolidated revenues were $3.578 billion for the quarter ended September 30, 2026.
• Operating income was $499 million (14.0% margin) compared to $579 million (16.3% margin) in the prior quarter; year-to-date operating income was $1.560 billion (14.8% margin) versus $1.483 billion (14.8% margin) in the prior year period.
• Adjusted operating income was $561 million (15.7% margin) for the quarter and $1.622 billion (15.4% margin) year-to-date.
• Diluted earnings per share (EPS) were $3.40 for the quarter and $10.27 year-to-date; adjusted diluted EPS were $3.82 for the quarter and $10.67 year-to-date.
• Net income attributable to DaVita Inc. was $223 million for the quarter and $686 million year-to-date.
• Operating cash flow was $519 million for the quarter and $1.330 billion year-to-date; free cash flow was $276 million for the quarter and $672 million year-to-date.
• Total debt was $10.832 billion as of September 30, 2026, with a leverage ratio of 3.38x.
• Goodwill and other asset impairment charges of $62 million were recognized related to the business in China, impacting net income by $27 million.

Guidance and Future Outlook:

• Current 2026 guidance for adjusted operating income is $2.175 billion to $2.250 billion (unchanged from prior guidance).
• Current 2026 guidance for adjusted diluted net income per share attributable to DaVita Inc. is $14.30 to $15.20 (unchanged from prior guidance).
• Current 2026 guidance for free cash flow is $1.000 billion to $1.250 billion (unchanged from prior guidance).
• The company does not provide guidance for operating income or diluted net income per share on a GAAP basis, nor a reconciliation of forward-looking non-GAAP measures to GAAP measures.
• Normalized treatment days for 2026 are projected at 312.4, compared to 313.2 in 2025.

Business Segments and Product Lines:

• U.S. dialysis volume totaled 7,329,644 treatments in the third quarter, representing a 0.1% per day increase from the second quarter and 0.4% normalized non-acquired treatment growth year-over-year.
• Revenue per treatment was $415.25 in the third quarter, down $0.62 from the prior quarter and up $11.07 year-over-year.
• Patient care costs per treatment were $280.22 in the third quarter, up $2.82 from the prior quarter and $8.01 year-over-year.
• Integrated Kidney Care (IKC) metrics showed 80,800 patients in risk-based arrangements representing $6.4 billion in annualized medical spend as of September 30, 2026.
• The company provided dialysis services to approximately 298,100 patients at 3,269 outpatient centers (2,671 in the U.S. and 598 internationally).
• U.S. dialysis segment operating income was $544 million for the quarter and $1.588 billion year-to-date.

Market and Competitive Landscape:

• Revenue drivers included normal fluctuations, increased average reimbursement rates, and improvements in payor mix, partially offset by unfavorable changes in payor mix year-to-date.
• Patient care cost increases were driven by medical supplies, compensation, insurance costs, and health benefits expenses.
• General and administrative expenses decreased $15 million quarter-over-quarter due to lower professional fees but increased $50 million year-over-year due to IT costs and compensation, partially offset by costs related to the 2025 cybersecurity incident.

Risks and Challenges:

• Risks include potential impacts from federal government policy changes, trade policies, tariffs, and supply chain disruptions affecting clinical supplies.
• The company faces risks related to the concentration of profits from commercial payor plans and downward pressure on average realized payment rates.
• Potential impacts from the One Big Beautiful Bill Act, antitrust matters, and changes in Medicare Advantage benchmark structures are noted.
• Risks associated with the implementation of Integrated Kidney Care (IKC) and Value-Based Care (VBC) initiatives, including complex patient attribution mechanics, are highlighted.
• The company continues to manage risks related to the 2025 cybersecurity incident, including billing system defects and operational disruptions.
• Labor market challenges, including shortages of skilled clinical personnel and elevated teammate turnover, remain a concern.

Management Commentary and Tone:

• Management excluded goodwill impairment charges and foreign currency fluctuations from non-GAAP measures, noting these items are not indicative of ordinary results.
• The tone indicates a focus on maintaining guidance despite one-time charges and operational fluctuations.
• Management emphasized the utility of adjusted measures for evaluating performance relative to competitors and establishing operational budgets.

Other Key Points:

• The company repurchased 0.6 million shares of common stock for $111 million during the quarter at an average price of $186.21 per share.
• Subsequent to the quarter end (through October 27, 2026), the company repurchased an additional 0.5 million shares for $87 million at an average price of $180.57 per share.
• Total share repurchases for the nine months ended September 30, 2026, were $863 million involving 5.837 million shares.
• Capital expenditures for the quarter included $112 million in maintenance and $47 million in development.
• The effective income tax rate on adjusted income attributable to DaVita Inc. was 26.6% for the quarter and 25.8% year-to-date.