DaVita Inc. Q4 FY2025 earnings call

• Clinical Highlights: IKC patients have better outcomes: 35% more likely to start with permanent vascular access, 3x lower costs in first 180 days, fewer bloodstream infections, higher vaccination rates, more home dialysis choices, 10%+ improvement in treatment adherence, and fewer hospitalizations. - 2025 Performance: Delivered results in line with expectations, adjusted operating income and EPS in top half of guidance range despite cyber incident. - Clinical Initiatives: Focus on vaccination (patients vaccinated early in flu season have lower hospitalization and mortality risk), GLP-1 adoption/adherence, advancing dialysis technologies to remove middle molecules, and strategic partnership with Elara Caring for ESKD-focused offering. - Capital Allocation: Repurchased nearly 13 million shares in 2025 for ~$1.8 billion, leverage ratio at 3.26x consolidated EBITDA, midpoint of target range.

U.S. dialysis: Treatments declined 1.1% in 2025 vs 2024. Revenue per treatment (RPT) grew 4.7% full year to ~$410. Patient care cost per treatment (PCC) increased 5.9% vs 2024. International: Adjusted operating income was $21 million in Q4 2025, full year $114 million, showing strong organic growth and integration of Latin America acquisitions. IKC: Delivered first profitable fiscal year, Q4 adjusted OI $46 million, full year $22 million, with strength across businesses and higher-than-expected shared savings revenue.

• Adjusted operating income expected in range $2.085 billion to $2.235 billion (3.2% growth midpoint). - Adjusted EPS guidance $13.60 to $15 even (33% growth midpoint). - Free cash flow expected between $1 billion and $1.25 billion. - U.S. dialysis treatment volume flat to 2025, RPT growth 1%-2% in 2026, U.S. dialysis costs growth 1.25%-2.25%, IKC and International each contributing ~1% to enterprise adjusted OI growth.

• Cyber incident impact on U.S. dialysis business in 2025. - Elevated mortality and expiration of enhanced premium tax credits impacting treatment growth and revenue per treatment. - Uncertainty around ACA enrollment and its impact on revenue.

Q: Get color on confidence in getting back to 2%+ volume number.

A: It's a clinical story; benefits from clinical initiatives will take time, with expected full effect by ~2029.

Q: Detail on ACA headwind playout.

A: ~$40 million headwind in 2026, open enrollment performed better than forecasted, patients are sophisticated about insurance needs.

Q: Color on IKC outperformance in 2024 and confidence in continuation.

A: Driven by dollars under management flat, model of care costs flat, and better shared savings; $20 million contribution to OI growth expected in 2026.

Q: Disease progression and impact of drugs on kidney disease.

A: Too early to tell as it takes time for drugs to have effect, and CKD populations have been managed for ~5 years.

Q: Elara Caring investment details.

A: $200 million investment with aim for good capital return and to help patient population by reducing hospitalizations and missed treatments.

Q: International business growth and margins.

A: Growth half from M&A, half organic; margins expected to improve by leveraging fixed overhead.

Q: New starts modeling and payer mix.

A: New starts expected to be flat, new patients have higher commercial mix, migrating to Medicare as they age.

Q: Flu vaccine commentary.

A: Vaccination rates at 80%, aspire to get back to 90%, flu vaccines drive Q4 RPT and cost dynamics.

Q: 2027 outlook for ESRD population.

A: CMS realized underfunding, ESRD population to receive 6% increase in 2027, rebasing and coding regime details also factor in.