DVA · Q4 2025 Earnings

Cautious

DaVita

Reported February 2, 2026

30-second summary

DaVita closed FY2025 with adjusted EPS of $10.78 inside the previously lowered $10.35–$11.15 range, and management raised the FY2026 adjusted OI guide to $2,085–$2,235M (midpoint $2,160M vs. prior $2,085M) while introducing a Q1 FY2026 revenue growth guide of +13–16% YoY — a sharp acceleration from FY2025's 6.5% organic growth. The catch: Q4 normalized non-acquired treatment growth was still -0.6% YoY, the cyber-incident volume loss of $25M is permanently lost (not recovered), and ACA premium tax credit expiration creates a $40M / $70M / $10M three-year headwind starting 2026. The growth optics come from non-organic drivers; the underlying volume problem persists.

Headline numbers

EPS

Q4 FY2025

$3.40

Revenue

Q4 FY2025

$3.62B

+9.9% YoY

Free cash flow

Q4 FY2025

$0.31B

Operating margin

Q4 FY2025

15.5%

Key financials

Q4 FY2025

Metric	Q4 FY2025	YoY	Q3 FY2025	QoQ
Revenue	$3.62B	+9.9%	$3.42B	+5.8%
EPS	$3.40	—	$2.51	+35.5%
Operating margin	15.5%	—	14.8%	+70bps
Free cash flow	$0.31B	—	$0.60B	-48.8%

Guidance

DaVita raised FY2026 adjusted operating income guidance and provided forward Q1 FY2026 revenue growth guidance of 13–16% YoY, reflecting stronger operational momentum, while reaffirming free cash flow and delivering FY2025 EPS in-line with prior guidance.

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

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Adjusted Diluted EPS (Non-GAAP)	FY2025	$10.35 to $11.15	$10.78	in-line (within prior guidance range)	Beat

New guidance

Metric	Period	Guide	YoY
Revenue Growth (Year-over-Year)	Q1 FY2026	13% to 16% YoY	13% to 16%

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Adjusted Operating Income	FY2025	$2,035 million to $2,135 million	$2,085 million to $2,235 million	+$50M high end (5% increase); midpoint raised from $2,085M to $2,160M	Raised

Reaffirmed unchanged this quarter: Free Cash Flow ($1,000 million to $1,250 million)

Segment KPIs

Q4 FY2025

Segment	Q4 FY2025	YoY
U.S. Dialysis	$3.076B	+3.2%
Integrated Kidney Care (IKC)	$0.19B	+102.1%
International	$0.367B	+4.3%

Other KPIs

Q4 FY2025

Segment	Q4 FY2025
U.S. Dialysis Treatments (Q4)	7,264,520
Average Treatments Per Day	91,608
Per Day Year-over-Year Change	-0.2%
Normalized Non-Acquired Treatment Growth (Q4 YoY)	-0.6%
Revenue Per Treatment	$422.60
Patient Care Cost Per Treatment	$279.60
Risk-Based IKC Patients	66,000
Risk-Based Annualized Medical Spend	$5.6 billion

Management tone

Q1 cyber shock → Q2 defensive recalibration → Q3 quiet downward narrowing → Q4 growth re-framing on non-organic drivers.

Three quarters ago the cyber incident was framed as a discrete one-time event that would unwind. This quarter the company conceded in Q&A (via Justin Lake's exchange) that the $25M cyber volume loss is permanent — census is not being recovered — and the $45M RPT cyber headwind in 2026 is roughly offset by a $40M ACA premium tax credit headwind, leaving cyber as net-neutral rather than a tailwind. The shift from "behind us on admits" (Q2) to "the volume is lost" (Q4) closes a thread management had previously left ambiguous.

Q4 NAG of -0.6% did not improve from Q3, and the new Q1 FY2026 revenue guide of +13–16% YoY notably says nothing about volume acceleration — it implies the growth is coming from RPT, IKC, M&A, and ACA-cliff effects rather than from underlying census. The forward revenue acceleration optics are loud; the volume disclosure is quietly unchanged.

The most candid moment came on IKC. Pito Chickering pressed on why IKC OI growth is decelerating from $40–50M/year historically to just $20M in FY2026. Management's answer — that IKC is not expected to evolve into a high-margin business and $20M is a "comfortable landing spot" for a maturing business — is a significant reset of expectations for a segment that had been framed as a strategic growth driver.

On mortality and the 2%+ volume growth aspiration, the new framing pushed full benefit out to 2029 (per Kevin Fishback's exchange): an approximately two-year lag on clinical initiatives, with full effect by 2029. The 2026–2028 window is essentially a holding pattern on volumes.

Q&A highlights

Kevin Fishback · Bank of America

How confident is management in achieving 2%+ volume growth when 2026 guidance shows only flat-to-slightly-positive treatment volumes? What specific drivers give confidence that mortality improvements will materialize?

Javier emphasized it is fundamentally a clinical story. Management expects benefits from outlined initiatives (vaccination, GLP-1 adoption, medium cutoff dialyzers, Alara Caring partnership) to emerge over approximately two years, with full effect by 2029. Acknowledged that historical industry growth was driven by mortality improvements, not just incidence.

Expecting ~2-year lag before full clinical benefits materializeFull effect expected by 2029Three-year guidance timeframe for multi-year recommendations

Andrew Moglet · Barclays

What is the expected cadence of the ACA premium tax credit headwind ($40M in 2026, $70M in 2027, $10M in 2028)? How did open enrollment perform relative to expectations and what attrition is expected?

Management disclosed specific year-by-year headwind amounts. Open enrollment performed better than CBO forecasts and internal expectations. Current ACA patient population expected to be more resilient than incoming CKD population due to higher insurance value awareness. Payment performance will be key data point once bills arrive. No additional granularity available on enhanced premium tax credit distribution.

$40M ACA headwind in 2026, $70M in 2027, $10M in 2028Open enrollment performed better than forecastedCurrent dialysis patients more sophisticated in maintaining insurance vs. incoming CKD population

Justin Lake · Wolf Research

How much of the 2025 cyber incident headwind ($70M total: $25M volume, $45M RPT) will actually recur as a tailwind in 2026? Are there additional reimbursement offsets beyond the stated $40-45M tax credit headwind equivalency?

Of the $70M cyber headwind, only $45M is RPT-related and offsets the $40M enhanced premium tax credit headwind in 2026; the $25M volume component is lost permanently as census is not recovered. Resolution of older claims in Q4 2025 was concentration timing, not unusual—2026 expected to be similar to 2025 on this metric. No additional reimbursement offsets identified.

$25M cyber volume loss permanent; not recovered in 2026$45M cyber RPT headwind offset by $40M ACA headwind (net neutral)Older claims resolution in 2026 expected similar to 2025 (~$25-30M range implied)

Pito Chickering · Deutsche Bank

Why is IKC operating income growth decelerating from prior-year $40-50M annual improvements to just $20M in 2026? What explains the slowdown in margin expansion as losses compress?

Management attributed slower IKC margin improvement to natural business maturation as scale increases, resulting in fewer remaining opportunities to expand margins. $20M annual contribution viewed as comfortable landing spot for a maturing business not expected to achieve high-margin status.

Prior 3-year average IKC OI improvement: $40-50M/year2026 guidance: $20M IKC OI growthIKC not expected to evolve into a high-margin business

AJ Rice · UBS

What is management's investment thesis for the $200M Alara Caring minority investment? Is it purely financial or does it include operational integration with DaVita's dialysis business?

Two-part thesis: (1) financial returns on the $200M investment capital with disciplined underwriting, and (2) clinical/operational benefit to DaVita patient population, targeting roughly 25% of dialysis patients using home health to reduce hospitalizations and mistreatments through specialized kidney protocols.

$200M minority investment in Alara Caring~25% of DaVita dialysis population uses home health servicesExpected to reduce hospitalizations, readmissions, and mistreatments

Answers to last quarter's watch list

Does Q4 deliver and clear the lowered $10.35–$11.15 EPS range — Yes. Q4 adjusted EPS of $3.40 brought FY adjusted EPS to $10.78, mid-range of the lowered guide.

Resolved positively

2026 NAG starting point in the formal FY2026 guide — Management did not publish an explicit FY2026 NAG figure; Q4 NAG was -0.6% (unchanged from Q3), and the Q1 FY2026 revenue guide of +13–16% YoY relies on RPT, IKC and ACA-cliff effects rather than volume.

Resolved negatively

Patient care cost per treatment trajectory — Q4 printed $279.60, up from $273.54 in Q3. The cost-per-treatment cushion that funded FY 2025 OI is fully gone heading into 2026.

Resolved negatively

IKC Q4 revenue run-rate and FY OI outcome — Q4 IKC revenue rebounded sequentially to $190M from Q3's $94M; FY2026 IKC OI guide is only +$20M vs. historical $40–50M/year pace. Management reset IKC as a low-margin maturing business. The revenue line recovered; the profitability framing did not.

Resolved negatively

Commercial mix in Q4 — Not specifically quantified in the disclosed materials; ACA-related Q&A focused on policy headwinds ($40M/$70M/$10M three-year cadence) rather than current mix percentage.

Continue monitoring

What to watch into next quarter

Whether Q1 FY2026 revenue actually delivers the +13–16% YoY guide — this is the largest single forward disclosure of the print; an in-line print validates the acceleration narrative, a miss exposes how much rests on RPT and acquired growth vs. organic.

Patient care cost per treatment above or below $280 — Q4 at $279.60 already breached the prior $275 threshold; another step-up in Q1 would force OI guide pressure regardless of the revenue acceleration.

Normalized NAG inflection — Q4 stayed at -0.6%. Watch whether Q1 prints positive or remains negative; management's 2029 full-effect framing implies negative NAG through 2026, but any positive Q1 print would meaningfully de-risk the clinical-initiative thesis.

ACA attrition vs. the $40M 2026 headwind assumption — payment-performance data once bills arrive (mid-year) will be the first hard test of whether the dialysis-patient population retains insurance better than the incoming CKD population, as management argued.

IKC OI tracking toward the $20M FY2026 target — Q1 IKC revenue post-rebound is the cleanest forward look. If IKC trends below the $20M OI improvement pace, FY2026 OI midpoint of $2,160M faces immediate pressure.

Sources

DaVita Inc. Q4 2025 Earnings Press Release (SEC Form 8-K Exhibit 99.1), filed 2026-02-02.
DaVita Inc. Q4 2025 Earnings Call Q&A transcript.

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