Release Date: May 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- DaVita Inc (DVA, Financial) reported adjusted operating income and adjusted earnings per share slightly ahead of expectations, driven by strong expense management and profitability from phosphate binders.
- The partnership with the YMCA for chronic kidney disease education and prevention has shown promising early results, with 30% of participants found to have previously undiagnosed CKD.
- Despite a cybersecurity incident, DaVita Inc (DVA) maintained uninterrupted dialysis care for patients, demonstrating strong operational resilience.
- The company repurchased approximately $680 million of stock, indicating a commitment to returning capital to shareholders.
- International operations showed strong performance, contributing positively to the overall financial results.
Negative Points
- A cybersecurity incident disrupted operations, requiring remediation efforts and resulting in some regulatory and legal follow-ups.
- Treatment volume underperformed expectations, partly due to an abnormally high flu season and storms, leading to a 50-basis-point decline in treatments for the year.
- The company experienced a negative free cash flow of $45 million in the first quarter.
- The cyber incident and flu season are expected to have lingering impacts on treatment volumes and admissions.
- Integrated Kidney Care (IKC) reported operating losses of $29 million, with some volatility expected in this segment.
Q & A Highlights
Q: Can you help us understand the impact of the flu and the cyberattack on the full-year treatment growth revision?
A: Joel Ackerman, CFO, explained that the flu had the largest impact, contributing to more than half of the 50-basis-point decline in full-year treatment growth. The cyberattack resulted in approximately 500 lost admissions, which, along with a higher mistreatment rate, accounted for the remainder of the decline.
Q: Will the costs related to the cyberattack be adjusted out of earnings?
A: Joel Ackerman stated that direct costs from the cyberattack, likely covered by insurance, will be non-GAAP and not included in adjusted operating income. Indirect costs will flow through the P&L and are included in the guidance.
Q: Can you provide more details on the uptake and drug mix of oral phosphate binders?
A: Javier Rodriguez, CEO, noted that the mix leaned towards iron-based binders, leading to expectations that the full-year operating income contribution from phosphate binders will be at the upper end of the $0 to $50 million guidance range.
Q: How did the commercial mix and exchange growth perform in the quarter?
A: Javier Rodriguez reported that the commercial mix remained flat in the low 11%, and the open enrollment was healthy, continuing the growth trajectory similar to the rest of the market.
Q: What are your expectations for revenue per treatment (RPT) for the year?
A: Joel Ackerman confirmed no change to the RPT guidance, which remains in the 4.5% to 5.5% range. The increase is expected to be driven equally by core business growth and contributions from oral phosphate binders.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
