DaVita (DVA) Q3 2024 earnings summary

Executive summary

• Q3 2024 consolidated revenues were $3.264 billion, up 2.4% sequentially, with operating income of $535 million and adjusted EPS of $2.59; net income attributable to DaVita Inc. was $214.7 million.

• The company demonstrated resilience amid hurricane disruptions and supply chain challenges, with most centers reopening quickly and minimal patient impact.

• U.S. dialysis remains the primary revenue driver, while international and ancillary services showed growth, especially from acquisitions.

• 2.7 million shares were repurchased in Q3, with 600,000 more post-quarter; $2.2 billion remains authorized for future repurchases.

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

Financial highlights

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

• Q3 2024 revenues increased 2.4% sequentially and 4.6% year-over-year for the nine months; net income for the nine months was $677 million.

• Patient care costs per treatment were $257.46; revenue per treatment was $394.49; RPT increased by over $4 sequentially.

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

• Leverage at Q3 end was 3.17x EBITDA, with net debt of $8.553 billion and a weighted average effective interest rate of 5.69%.

Outlook and guidance

• 2024 adjusted operating income guidance is $1.91–$2.01 billion, adjusted EPS at $9.25–$10.05, and free cash flow at $950–$1,200 million.

• Q4 expected to see $10–$20 million impact from hurricane-related supply costs and lower PD starts, with some effects continuing into 2025.

• 2025 guidance to be provided next quarter; headwinds include elevated mortality, ongoing supply issues, and higher interest expense.

• Tailwinds for 2025 include declining center closure costs and positive international OI from Latin America acquisitions.

• RPT and patient care cost growth expected to remain above pre-COVID levels in 2025, though RPT growth may be slightly lower than 2024.