Core Viewpoint - DaVita Inc. has initiated a private offering of $750 million in senior notes due 2033 to manage its financial obligations and support corporate activities [1][2]. Group 1: Offering Details - The offering consists of $750 million aggregate principal amount of senior notes due in 2033 [1]. - The net proceeds from the offering will be used to repay outstanding revolving credit facility borrowings, cover related costs, and for general corporate purposes, including stock repurchases and capital expenditures [2]. Group 2: Regulatory Compliance - The 2033 notes are being offered only to qualified institutional buyers under Rule 144A and to certain non-U.S. persons in compliance with Regulation S [3]. - The offer and sale of the 2033 notes have not been registered under the Securities Act and cannot be sold in the U.S. without registration or an exemption [3][4]. Group 3: Company Overview - DaVita is a healthcare provider focused on transforming care delivery to enhance the quality of life for patients globally, particularly in kidney care [5]. - The company has been a leader in clinical quality and innovation for 25 years, providing care at every stage of kidney health [5].

Company Overview - DaVita Inc. is a leading provider of dialysis services in the U.S. for patients suffering from chronic kidney failure, also known as end-stage renal disease (ESRD) [13] - The company operates kidney dialysis centers and provides related medical services primarily in dialysis centers and contracted hospitals across the U.S. [13] Investment Ratings - DaVita has a Zacks Rank of 3 (Hold) and a VGM Score of A, indicating a solid position in the market [14] - The company is considered a top pick for growth investors, with a Growth Style Score of B, forecasting year-over-year earnings growth of 11.2% for the current fiscal year [14] Earnings Estimates - One analyst revised their earnings estimate higher in the last 60 days for fiscal 2025, with the Zacks Consensus Estimate increasing by $0 to $10.76 per share [14] - DaVita boasts an average earnings surprise of 3.6%, suggesting a positive trend in earnings performance [14] Conclusion - With a solid Zacks Rank and top-tier Growth and VGM Style Scores, DaVita should be on investors' short list for potential investment opportunities [15]

Core Insights - DaVita Inc. reported adjusted earnings per share (EPS) of $2.00 for Q1 2025, a decrease of 11.5% year over year, but exceeded the Zacks Consensus Estimate by 14.3% [1] - The company's revenues reached $3.22 billion, marking a 4.9% increase year over year and surpassing the Zacks Consensus Estimate by 0.4% [2] Revenue Analysis - Revenue per treatment was $400.1 million, up 4.1% year over year, driven by the inclusion of phosphate binders in the payment system and other rate increases [3] - Dialysis patient service revenues were $3.10 billion, reflecting a 5.5% year-over-year increase, while other revenues decreased by 6.6% to $120.5 million [5] Treatment and Patient Metrics - Total U.S. dialysis treatments for Q1 2025 were 7,040,519, averaging 91,793 treatments per day, a slight sequential increase of 0.01% [6] - As of March 31, 2025, DaVita served approximately 282,000 patients across 3,173 outpatient dialysis centers [6] Operational Changes - During Q1 2025, DaVita acquired one, opened six, and closed four dialysis centers in the U.S., and also acquired one and closed two centers internationally [7] Financial Performance - Gross profit declined by 0.8% year over year to $983.9 million, with a gross margin contraction of 177 basis points to 30.5% [8] - General & administrative expenses rose by 3.2% year over year to $374.1 million, while adjusted operating profit fell by 3.1% to $609.8 million [9] Cash Flow and Debt - DaVita ended Q1 2025 with cash and cash equivalents of $511.9 million, down from $845.9 million at the end of 2024, and total debt increased to $9.74 billion [10] - Net cash provided by operating activities was $180 million, compared to a net cash used of $134.8 million in the previous year [11] Guidance and Outlook - The company reiterated its adjusted EPS outlook for 2025, projecting a range of $10.20 to $11.30, with the Zacks Consensus Estimate at $10.76 [12] - Management expressed optimism regarding the revenue contribution from phosphate binders to the full-year operating income [14] Market Reaction - DaVita's shares fell nearly 0.4% in after-hours trading following the earnings report [4]

Company Performance - DaVita HealthCare reported quarterly earnings of $2 per share, exceeding the Zacks Consensus Estimate of $1.75 per share, but down from $2.38 per share a year ago, representing an earnings surprise of 14.29% [1] - The company posted revenues of $3.22 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.38% and up from $3.07 billion year-over-year [2] - Over the last four quarters, DaVita has surpassed consensus EPS estimates three times and topped revenue estimates four times [2] Stock Outlook - DaVita HealthCare shares have declined approximately 3.9% since the beginning of the year, compared to a 3.8% decline in the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $2.89 on revenues of $3.3 billion, and for the current fiscal year, it is $10.76 on revenues of $13.46 billion [7] Industry Context - The Medical - Outpatient and Home Healthcare industry, to which DaVita belongs, is currently ranked in the top 18% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that industry outlook can significantly impact stock performance [5][8]

Financial Data and Key Metrics Changes - First quarter adjusted operating income was $439 million, adjusted EPS was $2, and free cash flow was negative $45 million, with adjusted operating income above guidance due to strong expense management and international performance [18][25] - Revenue per treatment increased by $4, with approximately $10 attributed to new reimbursement for phosphate binders, partially offset by a $5 decline due to seasonal patient responsibility [21][40] - Patient care cost per treatment increased by $7 sequentially, driven by new costs associated with phosphate binders [21] Business Line Data and Key Metrics Changes - Adjusted international operating income increased by $29 million compared to the previous quarter, with a strong performance across various markets [22] - Integrated Kidney Care (IKC) reported operating losses of $29 million, in line with expectations, with seasonally stronger performance anticipated in the second half of the year [22] Market Data and Key Metrics Changes - Treatments per day declined by 40 basis points year-over-year and were approximately 50 basis points below forecast, primarily due to a higher missed treatment rate from a severe flu season [19] - The company expects an approximately 50 basis point decline in treatments for the year, influenced by flu-related impacts and the cyber incident [20] Company Strategy and Development Direction - The company remains committed to investing available capital in innovation and high-return growth opportunities, including a recent acquisition in Latin America [13] - The capital allocation strategy includes returning capital to shareholders through share repurchases, with approximately $680 million repurchased since the last earnings call [13] Management's Comments on Operating Environment and Future Outlook - Management highlighted the resilience of operations despite a cybersecurity incident that disrupted parts of the business, with uninterrupted patient care maintained [9][10] - The company reiterated its 2025 guidance range for adjusted operating income and adjusted EPS, despite headwinds from the cyber incident and a challenging flu season [16][25] Other Important Information - The company launched a community-based collaboration with the YMCA to support chronic kidney disease education and prevention, with early results showing 30% of participants screened had previously undiagnosed CKD [6][7] - The company is addressing regulatory and legal follow-ups related to the cyber incident, with most costs expected to be one-time items recognized in the second quarter [10][31] Q&A Session Summary Question: Impact of flu and cyber attack on treatment volume - The flu had a significant impact on the full year treatment volume, accounting for more than half of the 50 basis point revision, while the cyber incident contributed to a loss of approximately 500 admissions [29][30] Question: Costs related to the cyber attack - Majority of costs from the cyber attack will be one-time items recognized in Q2, with some direct costs likely covered by insurance and not included in adjusted operating income [31] Question: Phosphate binders uptake and drug mix - The mix leaned towards iron-based binders, leading to an increase in guidance for operating income contribution from phosphate binders to the upper end of the previous range [32][33] Question: Revenue per treatment expectations - Revenue per treatment is expected to remain within the previously guided range of 4.5% to 5.5%, with half of the increase coming from core business and half from orals [43][44] Question: International market performance - International operations had a strong quarter, with a significant year-over-year increase, and the company feels positive about the new acquisition's performance [58]

Financial Data and Key Metrics Changes - First quarter adjusted operating income was $439 million, adjusted EPS was $2, and free cash flow was negative $45 million, with adjusted operating income above previous guidance due to strong expense management and international performance [18][25] - Revenue per treatment increased by $4, with approximately $10 attributed to new reimbursement for phosphate binders, partially offset by a $5 decline due to seasonal patient responsibility [21][39] - Patient care cost per treatment increased by $7 sequentially, driven by approximately $8 per treatment of new costs associated with phosphate binders [21] Business Line Data and Key Metrics Changes - Adjusted international operating income increased by $29 million compared to the fourth quarter, with strong performance across various markets [22] - Integrated Kidney Care (IKC) reported operating losses of $29 million, in line with expectations, with seasonally stronger performance anticipated in the second half of the year [22] Market Data and Key Metrics Changes - Treatments per day declined by 40 basis points compared to Q1 2024, primarily due to a higher missed treatment rate caused by a severe flu season [19] - The company expects an approximately 50 basis point decline in treatments for the year, influenced by flu-related impacts and a cyber incident [20] Company Strategy and Development Direction - The company remains committed to investing available capital in innovation and high-return growth opportunities, including a recent acquisition in Latin America [13] - The capital allocation strategy includes returning capital to shareholders through share repurchases, with approximately $680 million repurchased since the last earnings call [13] Management's Comments on Operating Environment and Future Outlook - Management highlighted the resilience of operations despite a cybersecurity incident that disrupted parts of the business, with uninterrupted patient care maintained [9][10] - The company reiterated its 2025 guidance range for adjusted operating income and adjusted EPS, despite headwinds from the cyber incident and a challenging flu season [16][25] Other Important Information - The company launched a community-based collaboration with the YMCA to support chronic kidney disease education and prevention, with early results showing 30% of participants screened had previously undiagnosed CKD [6][7] - The majority of costs related to the cyber incident are expected to be one-time items recognized in the second quarter [31] Q&A Session Summary Question: Impact of flu and cyber attack on treatment growth - Management indicated that the flu had a more significant impact on the full year guidance, with the census decline in Q1 affecting the full year [29] Question: Costs related to the cyber attack - Management clarified that some costs will be direct and non-GAAP, likely covered by insurance, while others will flow through the P&L and are included in guidance [31] Question: Phosphate binders uptake and drug mix - The mix leaned towards iron-based binders, leading to an adjustment in guidance to the upper end of the previous range [33] Question: Revenue per treatment and managed care increases - Management confirmed that revenue per treatment guidance remains unchanged, with increases expected from both core business and oral medications [42] Question: IKC patient treatment and competitive pricing - Management noted that the financials are playing out as expected, with a disciplined approach to patient care and financial modeling despite competitive pressures [51] Question: International performance outlook - International operations had a strong quarter, with positive contributions from various markets and a successful acquisition [57]

Financial Data and Key Metrics Changes - First quarter adjusted operating income was $439 million and adjusted EPS was $2, with free cash flow at negative $45 million, indicating strong expense management and profitability from orals in the bundle [16][24] - Revenue per treatment increased by $4, with approximately $10 of this increase attributable to new reimbursement for phosphate binders [20][38] - Patient care cost per treatment increased by $7 sequentially, driven by approximately $8 per treatment of new costs associated with phosphate binders [20][38] Business Line Data and Key Metrics Changes - Adjusted international operating income increased by $29 million compared to the fourth quarter, with strong performance noted in various markets [21] - Integrated Kidney Care (IKC) reported operating losses of $29 million, consistent with expectations, and is anticipated to have stronger performance in the second half of the year [21][60] Market Data and Key Metrics Changes - Treatments per day declined by 40 basis points compared to the first quarter of 2024, primarily due to a higher missed treatment rate caused by a severe flu season [17][19] - The company expects an approximately 50 basis point decline in treatments for the year, influenced by the flu season and a cyber incident [19][28] Company Strategy and Development Direction - The company remains committed to investing available capital in innovation and high-return growth opportunities, including a recent acquisition in Latin America [12] - The capital allocation strategy includes returning capital to shareholders through share repurchases, with approximately $680 million of stock repurchased since the last earnings call [12] Management's Comments on Operating Environment and Future Outlook - Management highlighted the impact of a cybersecurity incident that disrupted operations but emphasized the commitment to patient care and the restoration of major systems [7][9] - Despite challenges from the flu season and the cyber incident, the company maintains its 2025 guidance range for adjusted operating income and adjusted EPS [15][24] Other Important Information - The company launched a community-based collaboration with the YMCA to support chronic kidney disease education and prevention, with early results showing 30% of participants screened had previously undiagnosed CKD [5][6] - The company is advocating for patients at state and federal levels regarding policy changes, with no material financial impact expected from recent tariff or Medicaid reforms [13][14] Q&A Session Summary Question: Impact of flu and cyber attack on treatment growth - The flu had a more significant impact on the full year, with over half of the 50 basis point revision attributed to census decline in the first quarter, while the cyber incident accounted for roughly equal contributions from mistreatment rates and lost admissions [26][27] Question: Costs related to the cyber attack - Majority of costs from the cyber attack will be one-time items recognized in the second quarter, with some direct costs likely covered by insurance and not included in adjusted operating income forecasts [29] Question: Phosphate binders uptake and drug mix - The mix leaned towards iron-based binders, leading to an increase in guidance for operating income contribution from phosphate binders to the upper end of the previous range [31] Question: Revenue per treatment expectations - Revenue per treatment is expected to remain within the previously guided range of 4.5% to 5.5%, with half of the increase coming from core business and half from orals [41][42] Question: International market performance - International markets had a strong quarter, with a noted $50 million year-over-year increase and an additional $10 million in Q1 [54]

For the transition period from ___________ to ___________ Commission File Number: 1-14106 DAVITA INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Delaware 51-0354549 (State of incorporation) (I.R.S. Employer Identification No.) 2000 16th Street ...

"Our strong first quarter performance demonstrates the stability and consistency of our operating model" said Javier Rodriguez, CEO of DaVita Inc. "We maintain a steadfast commitment to being the provider, employer and partner of choice and returning value to our shareholders." Financial and operating highlights for the quarter ended March 31, 2025: | | Three months ended | | | | | | | --- | --- | --- | --- | --- | --- | --- | | | March 31, 2025 December 31, 2024 | | | | | March 31, 2024 | | Net income attr ...

Core Insights - DaVita Inc. reported strong financial performance for Q1 2025, emphasizing the stability of its operating model and commitment to shareholder value [1][2]. Financial Performance - Net income for Q1 2025 was $163 million, down from $240 million in Q1 2024, with diluted earnings per share at $2.00 compared to $2.65 in the previous year [1][19]. - Operating income decreased to $439 million, with an operating margin of 13.6%, down from 17.2% in Q4 2024 and 15.8% in Q1 2024 [2][23]. - Total consolidated revenues reached $3.224 billion, an increase from $3.071 billion in Q1 2024 [19][23]. Cost and Expense Analysis - Patient care costs per treatment rose to $271.77, up from $255.13 in Q1 2024, while general and administrative expenses were $374 million, compared to $362 million in the same period last year [4][25]. - The increase in costs was primarily driven by higher pharmaceutical expenses, particularly for phosphate binders, and compensation expenses [5][6]. Dialysis Metrics - Total U.S. dialysis treatments for Q1 2025 were 7,040,519, averaging 91,793 treatments per day, reflecting a slight increase of 0.01% from Q4 2024 [3][24]. - Normalized non-acquired treatment growth was reported at (0.6)% compared to Q1 2024 [3][24]. Share Repurchase Activity - The company repurchased 3.7 million shares for $550 million at an average price of $148.94 per share during Q1 2025 [8][26]. - Subsequent to Q1, an additional 1.7 million shares were repurchased for $259 million [8]. Integrated Kidney Care Metrics - As of March 31, 2025, DaVita had approximately 62,100 patients in risk-based integrated care arrangements, representing an annualized medical spend of about $5.2 billion [12][24]. Cash Flow and Capital Structure - Operating cash flow for Q1 2025 was $180 million, a significant improvement from a cash outflow of $135 million in Q1 2024 [9][26]. - Free cash flow was reported at $(45) million, compared to $(327) million in the same period last year [9][26]. Outlook - The company provided guidance for 2025, projecting adjusted operating income between $2.010 billion and $2.160 billion, and adjusted diluted net income per share between $10.20 and $11.30 [14].