DaVita (DVA) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenues reached $3.264 billion, up 2.4% sequentially, with operating income of $535 million and adjusted EPS of $2.59; net income was $215 million.

• Cash flow remained robust, with $810 million in operating cash flow and $555 million in free cash flow for the quarter.

• The company repurchased 2.7 million shares in Q3 and 600,000 shares in October, totaling 7.5 million shares for $1.02 billion YTD, with $2.2 billion remaining authorized.

• The U.S. dialysis business remains the primary revenue driver, with international and ancillary services showing growth, especially from acquisitions.

• The company provided dialysis services to 265,400 patients at 3,113 centers globally as of September 30, 2024.

Financial highlights

• Q3 adjusted operating income was $535 million; adjusted EPS was $2.59; free cash flow was $555 million.

• Revenue per treatment increased by over $4 sequentially; full-year RPT growth expected at 3.5%–4%.

• Patient care costs per treatment were $257.46, with a $2 sequential increase due to labor and medical benefits.

• G&A costs increased $19 million quarter-over-quarter, mainly from IT, wages, and reimbursement operations; G&A was 12.1% of revenues.

• Operating margin was 16.4% for Q3 2024, up from 15.9% in the previous quarter.

Outlook and guidance

• 2024 adjusted operating income guidance is $1.91–$2.01 billion and adjusted EPS is $9.25–$10.05.

• Free cash flow guidance for 2024 is $950–$1,200 million.

• 2025 guidance will be provided next quarter; headwinds and tailwinds expected to largely offset at the OI line.

• Full-year treatment volume growth for 2024 expected at 0.5%–1%.

• CMS's proposed 2025 rule is expected to increase Medicare reimbursement rates for dialysis by 2.1%.