PresentationAll right. Good morning. My name is Justin Lake. I cover health care services here at Wolfe Research. I appreciate you all being here, especially DaVita. We've got Joel Ackerman, the company's CFO. Joel, thanks for being with us today.Before I get into my list of questions here, I thought, Joel, I'd give you a minute to kind of give us your latest thoughts on the year for DaVita, what's gone right, what could have gone better? And maybe you can talk a little bit about your positioning for 2026.J ...

DaVita (NYSE:DVA) FY Conference Summary Company Overview - **Company**: DaVita Inc. - **Industry**: Healthcare Services, specifically Dialysis Key Points and Arguments 1. Performance in 2025 - DaVita faced challenges in 2025, including a tough flu season in Q1 and a cyber incident in Q2, impacting volume and revenue per treatment [4][11][24] - Despite these challenges, DaVita maintained its guidance and continued to deliver operating results [4][5] 2. Volume and Mortality - Volume decreased by approximately 1% year-over-year, with a modest growth expected in Q4 due to seasonality [7][10] - Mortality remains a significant headwind, with elevated rates compared to pre-COVID levels, primarily due to the flu [11][12] - The company aims to improve mortality rates through better clinical operations and new technologies [6][19] 3. Mistreatment Rates - Mistreatment rates are currently about 7%, which is 100 basis points higher than historical levels of approximately 6% [13][19] - The company is exploring ways to reduce mistreatment rates, which could become a tailwind for growth if improved [19] 4. Future Growth Expectations - Long-term growth target is around 3%, with volume growth being a critical factor [20][21] - The company expects to balance revenue per treatment (RPT) growth and volume growth to achieve this target [21] 5. Impact of Enhanced Premium Tax Credits - The potential loss of enhanced premium tax credits could result in a $40 million headwind for the next year [29][30] - The company estimates that the shift from exchanges to Medicare could impact revenue by approximately $120 million over three years [32] 6. Medicare Advantage (MA) Dynamics - The growth in MA mix is leveling off, with concerns about potential shrinkage in MA enrollment [39][40] - The company does not foresee significant issues if MA enrollment remains flat year-over-year [41] 7. Capital Management and Share Buybacks - DaVita has significantly reduced its share count from 200 million in 2017 to 75 million, with substantial share buybacks totaling around $1 billion year-to-date [60][66] - The company maintains a target leverage range of 3 to 3.5 times EBITDA, using excess cash for share repurchases unless attractive M&A opportunities arise [66][68] 8. Operational Efficiency - DaVita has effectively managed costs over the years, which has been a consistent component of its strategy [22][24] - The company continues to explore new opportunities for operational improvements and cost management [26] Additional Important Insights - The company emphasizes the complexity of calculating mortality rates and the variability in historical data [12] - DaVita's approach to patient care and insurance options is tailored to the unique needs of high-utilization dialysis patients [44] - The company remains committed to transparency regarding its financial outlook and operational challenges [30][50] This summary encapsulates the key insights from DaVita's FY conference, highlighting the company's performance, challenges, and strategic outlook for the future.

Core Insights - DaVita Inc. is participating in the Wolfe Research Healthcare Conference on November 17, 2025, where CFO Joel Ackerman will engage in a fireside chat [1] - DaVita is a leading healthcare provider focused on kidney care, serving approximately 293,200 patients across 3,247 outpatient dialysis centers as of September 30, 2025 [2] Company Overview - DaVita has been a leader in clinical quality and innovation in kidney care for 25 years, providing services that range from managing kidney disease progression to supporting transplantation [2] - The company operates 2,662 centers in the United States and 585 centers in 14 other countries, demonstrating its global reach [2] - DaVita has made significant strides in reducing hospitalizations and improving mortality rates, contributing to enhanced health access and quality standards in kidney care [2] Recent Developments - DaVita is marking its 25 years of innovation with new kidney care research studies to be unveiled at the ASN Kidney Week 2025 [3]

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Core Insights - DaVita is presenting six new studies at the ASN Kidney Week 2025, focusing on advancements in kidney care, including GLP-1 receptor agonists, middle molecule clearance, and improved access to transplantation and end-of-life care [1][2][3] Research Highlights - The study titled "GLP-1 Receptor Agonist Use Associated with Improvement in Hospitalization Rates in Patients with ESKD" suggests that GLP-1 receptor agonists may reduce hospitalizations for patients with end-stage kidney disease [2] - DaVita's research emphasizes the importance of middle-molecule clearance in dialysis, addressing the removal of larger molecules linked to chronic inflammation and cardiovascular issues [3] Company Commitment - DaVita celebrates 25 years of clinical innovation, focusing on enhancing the quality of life for kidney disease patients rather than just extending life [4] - The company serves approximately 293,200 patients across 3,247 outpatient dialysis centers globally, with a significant presence in the United States [7]

Core Insights - Warren Buffett, a legendary investor, has led Berkshire Hathaway to nearly 20% annualized returns since 1965, primarily through stock market investments [1] Group 1: Berkshire Hathaway's Investments - Berkshire Hathaway's recent Form 13F filing reveals stakes in nearly 40 U.S.-listed public companies and significant investments in international stocks, especially Japanese stocks [2] - The investment strategy focuses on acquiring "wonderful businesses at fair prices," with three highlighted stocks currently out of favor: DaVita, Kraft Heinz, and Pool Corporation [3] Group 2: DaVita - DaVita operates kidney dialysis centers and has been 42.6% owned by Berkshire Hathaway for over a decade, yet it faces bearish sentiment on Wall Street due to disappointing quarterly results [5] - The stock trades at 10 times forward earnings, indicating a heavily discounted valuation despite projected earnings growth of 11% and 17% for 2025 and 2026, respectively [6] - Factors contributing to DaVita's long-term growth include aggressive share repurchase efforts and an increasing number of Americans with chronic kidney disease [7] Group 3: Kraft Heinz - Kraft Heinz, in which Berkshire Hathaway holds a 27.5% stake, offers a high dividend yield and is undergoing restructuring that could unlock its underlying value [9][10] Group 4: Pool Corporation - Pool Corporation is a recent addition to Buffett's portfolio and is considered a strong long-term holding opportunity [9]

Core Insights - DaVita Inc. reported adjusted earnings per share (EPS) of $2.51 for Q3 2025, a decrease of 3.1% year over year, missing the Zacks Consensus Estimate by 23.7% [1][9] - The company's revenues reached $3.42 billion, reflecting a year-over-year increase of 4.8%, slightly exceeding the Zacks Consensus Estimate by 0.5% [2][9] Revenue Analysis - Revenue per treatment was $410.6, up 4.1% year over year and 1.5% sequentially, driven by rate increases and higher revenue from phosphate binders, despite a negative impact from a cyber incident [2] - Dialysis patient service revenues amounted to $3.29 billion, up 5.1% year over year, while other revenues decreased by 2.3% to $122.1 million [4] Treatment and Patient Metrics - Total U.S. dialysis treatments for Q3 were 7,242,725, averaging 91,680 per day, which is a 0.4% decrease sequentially [5] - As of September 30, 2025, DaVita served approximately 293,200 patients across 3,247 outpatient dialysis centers [5][6] Margin and Expense Details - Gross profit decreased by 2.2% year over year to $1.09 billion, with a gross margin contraction of 230 basis points to 31.8% [7] - General and administrative expenses rose by 5.3% year over year to $414.4 million, contributing to a 3.4% decrease in adjusted operating profit to $517 million [7][9] Financial Position - DaVita ended Q3 2025 with cash and cash equivalents of $736.5 million, a slight decrease from $739.4 million at the end of Q2 [10] - Total debt was $10.25 billion, marginally down from $10.26 billion in the previous quarter [10] Share Repurchase Activity - During Q3 2025, DaVita repurchased 3.3 million shares for a total of $465 million [11] Guidance Update - The company updated its adjusted EPS outlook for 2025 to a range of $10.35-$11.15, down from the previous guidance of $10.20-$11.30 [12] Overall Performance Assessment - DaVita's Q3 results showed mixed performance, with revenue growth and increased revenue per treatment being positive indicators, while the decline in adjusted EPS and operating margin raised concerns [13][14]

Core Insights - The article emphasizes the importance of enabling Javascript and cookies in browsers to prevent access issues [1] Group 1 - The article suggests that users may face blocks if ad-blockers are enabled, indicating a need for users to disable them for proper access [1]

分组1 - DaVita HealthCare reported quarterly earnings of $2.51 per share, missing the Zacks Consensus Estimate of $3.29 per share, and showing a decrease from $2.59 per share a year ago, resulting in an earnings surprise of -23.71% [1] - The company posted revenues of $3.42 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.51%, and an increase from $3.26 billion year-over-year [2] - DaVita HealthCare has surpassed consensus EPS estimates three times over the last four quarters and topped consensus revenue estimates four times during the same period [2] 分组2 - The stock has underperformed, losing about 13.3% since the beginning of the year, compared to the S&P 500's gain of 17.2% [3] - The current consensus EPS estimate for the coming quarter is $2.80 on revenues of $3.44 billion, and for the current fiscal year, it is $10.93 on revenues of $13.46 billion [7] - The Zacks Industry Rank for Medical - Outpatient and Home Healthcare is in the top 16% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

Financial Performance - The company reported third quarter adjusted operating income of $517 million and adjusted earnings per share of $2.51, consistent with internal expectations [6][11] - Free cash flow for the quarter was $604 million, indicating strong cash generation capabilities [11] - Full-year adjusted operating income is anticipated to be between $2.035 billion and $2.135 billion, with adjusted earnings per share projected at $10.35 to $11.15 [8][16] Business Line Performance - U.S. dialysis treatment volume declined approximately 1.5% year-over-year, attributed to a mix of treatment days and external factors such as a severe flu season and Hurricane Helene [6][11] - Revenue per treatment increased by approximately $6 compared to the second quarter, driven by rate increases and higher revenue from phosphate binders [11][12] - Patient care costs per treatment increased by approximately $5 sequentially, primarily due to wage increases and higher pharmaceutical expenses [12][13] Market Dynamics - The company is closely monitoring the impact of enhanced premium tax credits on the commercial payer mix, which could significantly influence revenue [9][22] - The ongoing recalibration of the Medicare Advantage landscape is also a key factor affecting enrollment and insurance mix [9][22] Strategic Direction - The company is investing in technology infrastructure, including enhancements to its clinical platform and the adoption of AI solutions, aimed at improving patient care and operational efficiencies [7][10] - Long-term investments in IT and clinical innovation are expected to strengthen the company's ability to deliver superior patient care [10][61] Management Commentary - Management acknowledged the challenges posed by the government shutdown and its implications for healthcare policy, but emphasized a focus on delivering excellent care [4][6] - The company remains optimistic about its ability to navigate upcoming challenges and is committed to achieving its full-year goals [10][61] Other Important Information - The company repurchased 3.3 million shares during the third quarter and an additional 400,000 shares since, totaling approximately $1.5 billion year-to-date [15][16] - The leverage ratio at the end of the quarter was 3.37 times consolidated EBITDA, within the target range [16] Q&A Session Summary Question: Impact of one-time items on volume - Management estimated a 75 to 100 basis point headwind on 2025 volume due to Hurricane Helene, the cyber incident, and the severe flu season [18] Question: Improvement in mortality rates - Management indicated that improvements in mortality are expected to be gradual and are focusing on clinical protocols to address this issue [19] Question: Medicare Advantage enrollment dynamics - Management highlighted that shifts in membership between payers could significantly impact revenue, emphasizing the current volatility in the marketplace [20][21] Question: Treatment growth and new patient starts - Management noted that treatment volume for the quarter came in as expected, with some pressure on mistreatment rates due to the cyber attack [43] Question: Timing of Integrated Kidney Care (IKC) funds - Management explained that the timing of IKC revenue recognition is difficult to predict and is influenced by when information is received from payers and the federal government [46][47] Question: Market share trends - Management stated that there have been no significant shifts in market share, even when accounting for the impacts of the cyber incident [50][51]