tapebrief
DVA · Q4 2025

DVA · Q1 2026 Earnings

Neutral

DaVita

Reported May 5, 2026

30-second summary

SENTIMENT: Constructive Q1 revenue of $3.42B (+5.9% YoY) came in ahead of management's internal plan, with adjusted EPS of $2.87 and adjusted OI of $482M described by management as roughly $50M ahead of forecast (about half performance, half timing). FY2026 adjusted EPS guidance was raised to $14.10–$15.20 (midpoint +$0.35) and adjusted OI to $2,150–$2,250M (midpoint +$40M), driven by a higher volume forecast (treatment growth raised from flat to +25–50bps) and continued labor efficiencies. Normalized non-acquired treatment growth printed +0.1% — the first non-negative read in the dataset — and patient care cost per treatment held at $280.11, just above the $280 watch threshold. FCF guidance was reaffirmed at $1,000–$1,250M despite Q1 FCF of only $140M, which management attributed to FCF's wider variability range. Note: the prior-quarter qualitative comment that "revenue would grow 13% to 16% year over year next quarter" cannot be reconciled to either the Q1 press release or management's commentary on this call — neither source references that range or a miss against it. Flagging the discrepancy rather than treating it as an applicable guide.

Headline numbers

EPS

Q1 FY2026

$2.87

Revenue

Q1 FY2026

$3.42B

+5.9% YoY

Free cash flow

Q1 FY2026

$0.14B

Operating margin

Q1 FY2026

14.1%

Key financials

Q1 FY2026
MetricQ1 FY2026YoYQ4 FY2025QoQ
Revenue$3.42B+5.9%$3.62B-5.6%
EPS$2.87—$3.40-15.6%
Operating margin14.1%—15.5%-140bps
Free cash flow$0.14B—$0.31B-54.7%

Guidance

DaVita raised FY2026 EPS guidance (low +3.7%, high +1.3%) and operating income guidance, reaffirming FCF targets, signaling confidence in full-year delivery after solid Q1 execution with 5.9% revenue growth YoY.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Changes to prior guidance

MetricPeriodPrior guideNew guideΔResult
Adjusted diluted EPS (non-GAAP)
FY2026
$13.60 to $15.00$14.10 to $15.20low end +$0.50, high end +$0.20, midpoint +$0.35Raised
Adjusted operating income
FY2026
$2,085 million to $2,235 million$2,150 million to $2,250 millionlow end +$65M, high end +$15MRaised

Reaffirmed unchanged this quarter: Free cash flow ($1,000 million to $1,250 million)

Segment KPIs

Q1 FY2026
SegmentQ1 FY2026YoY
U.S. Dialysis$2.942B+4.2%
International Dialysis$0.372B+23.2%
Integrated Kidney Care (IKC)$0.116B+10.5%

Other KPIs

Q1 FY2026
SegmentQ1 FY2026
U.S. Dialysis Treatments (Q1 total)7,029,525
Average Treatments Per Day91,650
Normalized YoY Non-Acquired Treatment Growth0.1%
Revenue Per Treatment$417.59
Patient Care Cost Per Treatment$280.11
Total Patients Served296,300
Risk-Based IKC Patients62,600
Annualized Risk-Based Medical Spend$5.4B

Management tone

Management's framing was confident and ahead-of-plan across each U.S. dialysis lever — volume, RPT, and cost per treatment — what Javier Rodriguez called the "trilogy." That confidence translated directly into the volume guide raise and the OI/EPS raise.

On normalized NAG, the framing of the +0.1% print was deliberately understated. Asked by Andrew Mock how mortality was isolated from other variables, Joel Ackerman said the changes were "rather small" and management was "not ready to call out any significant underlying trend" — though the improvement was captured in the higher volume guide. The first quarter of positive prints produced measured caution rather than a victory lap.

The Fresenius clinic closure narrative shifted from a forward catalyst to an in-progress event with measurable phasing. Management told Tito Chickering that ~50% of the annual Fresenius new-start benefit was captured by end of Q1 with another ~50% expected in Q2, totaling roughly two-thirds of the annual benefit by mid-year. About half of the volume guide raise was attributed to Fresenius transfers and half to underlying performance.

On technology and operating leverage, management was explicit with AJ Rice that it is "willing to trade efficiency now for long-term sustainability of 3%–7% OI growth" and declined to put timing on technology-driven margin benefit. Some initiatives are user-experience focused; others will help the bottom line. The willingness to defer near-term efficiency for long-term durability is a defensible posture but extends the timeline on the cost lever investors expected.

On ACA, management said open enrollment is trending slightly favorable to the prior ~$40M 2026 headwind assumption, partially offset by more patients selecting bronze plans (higher out-of-pocket costs and modest RPT pressure). Guidance was held given limited visibility on effectuation rates and mix.

Q&A highlights

Kevin Fishbeck · Bank of America

Break out weather impact, improved mortality (flu vs underlying trends), and durability of better mortality for the rest of the year

Weather came in as expected, about 10 bps better than last year. Flu season impact was in line with forecast (built in at two-year-ago levels). Better-than-expected mortality was driven by underlying trends, not flu, which came in as expected. Mortality improvements are modest and company is not calling out significant underlying trend yet.

Weather: ~10 bps better than prior year, in line with forecastFlu season: in line with forecast, patterned like two years agoMortality improvements attributed to underlying trends, not flu seasonality

Tito Chickering · Deutsche Bank

New starts trajectory in Q1, timing of Fresenius patient transfers (immediate ramp vs. normalized), and phasing of treatment growth through the year

About half of Fresenius new starts captured in Q1, other half expected in Q2 (~two-thirds of annual new start benefit realized). Treatments per normalized day currently at 40 bps positive, expected to grow throughout year to 50-75 bps average, ending higher. Treatment volume guidance 25-50 bps with 25-day headwind translates to 50-75 bps normalized treatment growth.

Fresenius new starts: ~50% in Q1, ~50% expected in Q2Two-thirds annual new start benefit expected by end of yearNormalized treatment per day: currently 40 bps, guidance range 50-75 bps average, ending higher

Andrew Mock · Barclays

Market share capture positioning from Fresenius clinic closures and visibility into gains; underlying mortality performance drivers

Fresenius closures involve small centers; company competing via chair availability and physician access. Underlying mortality changes are small and company not ready to call out significant trend. Clinic closures tracked separately from mortality as they impact admissions. Management emphasizes difficulty in isolating individual variables (mortality, admissions, mistreatments, transfers) which are all small in magnitude; prefers to provide guidance ranges rather than false precision on component drivers.

Fresenius closures involve small centersUnderlying mortality changes are modest; no significant trend identifiedVolume guidance incorporates all variables (seasonality, mortality, admissions, mistreatment, transfers) with ranges to avoid false precision

AJ Rice · UBS

Sizing technology investment opportunities, timing of operating results impact, and reinvestment strategy

Management taking long-term view ensuring clinicians are well-positioned; willing to trade efficiency now for long-term sustainability of 3%-7% OI growth. Technology moving quickly; some initiatives enhance user experience while others drive bottom-line impact. Too early to specify timing of operating results, but focus is on sustainability and outperformance.

Technology investments intended to sustain 3%-7% OI growth long-termSome tech initiatives are user experience enhancements, others drive bottom-line impactToo early to provide timing of technology-driven operational benefit realization

Ryan Langston · TD Cowan

Free cash flow guidance unchanged despite OI and EPS guidance raises; broader administration focus on fraud, waste, abuse impact on dialysis

FCF guidance unchanged due to greater variability and wider range vs. OI. Dialysis better insulated from FWA concerns due to non-controversial diagnosis and bundled payment structure simplifying compliance. Management takes compliance seriously but limited commentary on broader regulatory environment.

FCF guidance not updated due to wider variability range vs. OIDialysis non-controversial diagnosis and bundled payment structure provide inherent compliance advantagesManagement focused on regulatory compliance but cannot broadly comment on administration's FWA priorities

Answers to last quarter's watch list

Patient care cost per treatment above or below $280 — Right at the line. Q1 printed $280.11 vs. Q4 $279.60. However, the print was below management's internal forecast on better-than-expected productivity, and labor efficiency is expected to sustain. Combined with the FY OI guide raise, the cost line is tracking better than the headline number suggests.
Resolved positively
Normalized NAG inflection — Yes, marginally. NAG printed +0.1% YoY vs. -0.6% in Q3/Q4. This is the first non-negative read in the dataset and de-risks the volume thesis modestly. Caveat: management called the underlying mortality move small and ~50% of the Fresenius new-start tailwind sits within the Q1 print. The structural improvement is real but smaller than the headline suggests. Status: Resolved positively (with caveats).
ACA attrition vs. the $40M 2026 headwind assumption — Trending slightly favorable per management commentary, though guidance is unchanged pending effectuation and mix data. Bronze-plan selection is a partial offset via RPT. Status: Continue monitoring; directionally positive.
IKC OI tracking toward the $20M FY2026 target — Q1 IKC adjusted OI loss of $19M was in line with plan, with phasing skewed to Q4. Risk-based patient count contracted sequentially to 62,600 from 66,000, and annualized managed spend fell to $5.4B from $5.6B. Sequential contraction is unfavorable directionally but management still expects Q4-weighted IKC OI.
Continue monitoring

What to watch into next quarter

Patient care cost per treatment direction — Q1 at $280.11 just breached the watch threshold, though Q1 was better than plan on productivity. A step-up to $282+ in Q2 would erode the OI guide raise and complicate the labor-efficiency narrative.

Whether normalized NAG sustains positive once the Fresenius new-start tailwind is fully absorbed by Q3 — management said two-thirds of the annual Fresenius benefit comes by mid-year. The cleaner read of underlying volume is the H2 print. A Q3 NAG that slips back below zero would expose how much of the Q1 inflection was competitor-closure mechanics rather than mortality improvement.

IKC risk-based patient count and managed spend recovery — Q1's contraction to 62,600 patients and $5.4B annualized spend from Q4's 66,000 / $5.6B is the first sequential decline in this dataset. A second sequential contraction in Q2 would call the FY +$20M IKC OI target into question.

Q2 FCF run-rate against the implied $860M–$1.11B Q2–Q4 requirement — Q1 FCF of $140M means the back-half conversion needs to be material. A Q2 FCF below ~$200M would put the reaffirmed $1.0–1.25B FY range under pressure within one more quarter.

ACA effectuation and mix as enrollment data matures — management is trending favorable to the $40M headwind but held guidance. Cleaner visibility by mid-year could be a source of further guide tweaks.

Sources

  1. DaVita Inc. Q1 FY2026 Earnings Press Release (SEC Form 8-K Exhibit 99.1), filed 2026-05-05.
  2. DaVita Inc. Q1 FY2026 Earnings Call prepared remarks and Q&A transcript, 2026-05-05.

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