• Full-Year Adjusted Operating Income: $1.98 billion, with a year-over-year growth of 21%.
• Full-Year Adjusted EPS: $9.68, with a year-over-year growth of 26%.
• Fourth-Quarter Adjusted Operating Income: $491 million.
• Fourth-Quarter Adjusted EPS: $2.24.
• Free Cash Flow: $281 million in Q4 and $1.16 billion for the full year.
• US Treatment Volume Growth: 30 basis points increase in Q4 over the previous year.
• Revenue Per Treatment Growth: 3.7% for the full year versus 2023.
• Patient Care Costs Per Treatment: Increased by $7 sequentially in Q4.
• G&A Costs: Increased by $15 million quarter over quarter.
• Integrated Kidney Care Adjusted Operating Loss: $35 million for 2024.
• 2025 Adjusted Operating Income Guidance: $2.01 billion to $2.16 billion, with a midpoint growth of 5.2% year-over-year.
• 2025 Adjusted EPS Guidance: $10.20 to $11.30, with a midpoint growth of 11% year-over-year.
• 2025 Free Cash Flow Guidance: $1 billion to $1.25 billion.

• Warning! GuruFocus has detected 5 Warning Signs with DVA.

Release Date: February 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• DaVita Inc (NYSE:DVA) achieved full-year adjusted operating income and adjusted EPS growth of 21% and 26% respectively, finishing in the top half of their guidance range.
• The company expanded its international presence, closing three out of four acquisitions in Latin America, with Brazil expected to close mid-year 2025.
• DaVita Inc (NYSE:DVA) successfully integrated oral drugs into the dialysis benefit, potentially expanding access for up to 20% of patients who previously lacked coverage.
• The company demonstrated resilience in overcoming supply chain disruptions caused by Hurricane Helene, resuming new home patient admissions by year-end 2024.
• DaVita Inc (NYSE:DVA) continues to invest in differentiated capabilities and plans to return excess capital to shareholders through share repurchases, aiming for double-digit EPS growth.

Negative Points

• Treatment volume growth was below expectations for 2024, with a flat outlook for 2025, impacted by supply constraints and missed treatments due to severe weather.
• Mortality and mistreatment rates remained elevated in the fourth quarter, negatively affecting new patient starts.
• The company incurred a $6 million operating income impact in Q4 2024 due to supply chain disruptions, with an estimated $30 million negative impact expected in 2025.
• Integrated Kidney Care (IKC) reported an adjusted operating loss of $35 million for 2024, with flat expectations for 2025.
• A $19 million reserve was recorded against aged accounts receivable in Brazil, impacting adjusted international operating income.

Q & A Highlights

Q: Can you provide more details on the volume outlook for 2025, which you mentioned would be flat? A: Joel Ackerman, CFO, explained that there is a range associated with volume due to variability in admissions, mortality, and mistreatment rates. The 2024 volume was up 50 basis points, but for 2025, the midpoint of the range is flat due to factors like the leap year effect in 2024 and disruptions from Hurricane Helene affecting peritoneal dialysis (PD) supply.

Q: Why is there a wide range of $0 to $50 million for the operating income impact from the inclusion of oral drugs in the bundle? A: Javier Rodriguez, CEO, noted that the range is due to uncertainties in mix, volume, and adherence of phosphate binders, which are now included in the dialysis benefit. The wide range reflects the newness of this transition and the variability in patient adherence and prescription pickup.

Q: How are patient treatment costs expected to change in 2025, excluding the impact of phosphate binders? A: Joel Ackerman, CFO, stated that excluding phosphate binders, patient care costs are expected to grow by about 3.75%, driven equally by labor and other costs. The inclusion of phosphate binders adds an additional 2.75% to the growth rate.

Q: Can you comment on the impact of SGLT2 inhibitors on treatment volumes and new patient starts? A: Javier Rodriguez, CEO, mentioned that the impact of SGLT2 inhibitors on their patient population is considered low. The company attributes any changes in new patient starts more to COVID-related mortality in CKD patients rather than these medications.

Q: What is the outlook for Integrated Kidney Care (IKC) in 2025, and when do you expect it to break even? A: Javier Rodriguez, CEO, indicated that IKC is expected to be flat in 2025, with a breakeven target by 2026. The company remains focused on driving margin rather than volume growth, and the business is performing in line with their long-term model.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.