ewsba.se
How Berkshire Hathaway Performed During Buffett's Final Quarter
DaVita (NYSE:DVA) reported first-quarter 2026 results that came in ahead of internal expectations, supported by balanced outperformance across treatment volume, revenue per treatment and cost per treatment, executives said on the company’s earnings call. Management also raised and narrowed full-year guidance for adjusted operating income and increased its adjusted earnings-per-share outlook.
CEO Javier Rodriguez opened the call by highlighting continued momentum in DaVita’s value-based care business, Integrated Kidney Care (IKC). In the latest results from CMS’s Comprehensive Kidney Care Contracting (CKCC) program, Rodriguez said DaVita delivered year-over-year improvements across three measurements: gross savings rates, total quality score and high-performing status.
→ Roblox Stock Slides to New Low as Safety Changes Weigh on Outlook
Buffett's Latest Portfolio Moves, and Another Secret Stock
“Economically, we generated the highest total aggregate savings of any participant,” Rodriguez said, adding that results were driven by a 4.5% improvement in gross savings rate since the beginning of the program.
CFO Joel Ackerman said first-quarter adjusted operating income was $482 million, adjusted EPS from continuing operations was $2.87, and free cash flow was $140 million. Adjusted operating income was “about $50 million ahead of our forecast,” Ackerman said, with roughly half attributed to performance and half to timing.
→ 3 Emerging Markets ETFs to Maximize Exposure to High-Potential Countries
Wall Street Is Cautious on These 2 First Half Winners
In the U.S. dialysis segment, treatments declined about 20 basis points versus the first quarter of 2025, while treatments per normalized day increased 40 basis points year over year and came in “approximately 20 basis points ahead of our expectations,” Ackerman said.
Rodriguez said quarter-end census was ahead of plan due to “better than forecasted mortality,” partially offset by lower-than-forecast admissions. He also noted census benefited from patient transfers tied to “ongoing clinic closures by Fresenius,” which he said were negligible in first-quarter volume but expected to support growth later in the year.
→ The Real SpaceX Play: 5 Chip Stocks Powering the IPO Before It Launches
As a result, the company raised its full-year volume growth expectations from flat to a range of 25 to 50 basis points. Rodriguez said about half of the increase reflects underlying performance, and half is related to transfers.
On analyst questions about durability of the mortality trend, Ackerman said flu and weather were broadly in line with DaVita’s forecast. He said weather was “about 10 basis points better than last year,” while flu’s overall impact was as expected based on cumulative hospitalizations. He added that better-than-expected mortality “was probably not about the flu … it was more around the underlying mortality,” while cautioning the changes were “rather small” and DaVita was “not ready to call out any significant underlying trend.”
Regarding the Fresenius-related transfers, Ackerman said DaVita saw what he estimated was “about half the new starts” from closures by the end of the first quarter, with the “other half” expected in the second quarter. “We’ll get probably 2/3 of a year worth of those new starts,” he said.
Ackerman said revenue per treatment declined about $5 sequentially, driven primarily by a typical first-quarter headwind from patient pay responsibility. Year-over-year revenue per treatment growth was approximately 4% in the quarter, but the company maintained its full-year expectation for revenue per treatment growth of 1% to 2%.
On the call, Ackerman attributed about two-thirds of the year-over-year revenue per treatment increase to “normal stuff” such as rate increases and mix shifts, and about $6 to timing. He told analysts there was “nothing unusual” affecting the quarter, including around drugs or binders.
He also said DaVita expects commercial mix to decline over the course of the year, which could pressure revenue per treatment and help bridge from the higher first-quarter growth rate to the full-year guidance range. When asked whether that negative impact had materialized yet, Ackerman replied, “That’s correct” that it had not through April and the company was assuming it would occur later in the year.
On costs, patient care costs per treatment were about flat versus the fourth quarter, as seasonal declines in health benefit expenses were offset by wage and other cost growth. Costs were lower than expected “largely as a result of better than expected productivity improvements,” Ackerman said. Rodriguez also pointed to first-quarter labor results coming in ahead of plan due to productivity, which he said the company expects to sustain for the rest of the year.
U.S. dialysis G&A costs declined $16 million sequentially from a seasonally high fourth quarter. However, Ackerman said year-over-year growth was about $37 million, or 13%, “the result of continued investment in technology.” Asked about specific line items mentioned in the press release, Ackerman said year-over-year decreases in health benefit expense and pharmaceutical costs, and changes in professional fees within G&A, were “as expected” and “nothing unusual.”
Ackerman also outlined DaVita’s view of overhead spending, saying management focuses on total cost rather than optimizing a single line item. He cited a five-year compound annual growth rate of 2.6% for total cost, including patient care costs, depreciation, amortization and G&A, and reiterated the company’s prior full-year cost growth guidance of 1.25% to 2.25%.
Rodriguez described a two-part technology strategy: modernizing data infrastructure, including through DaVita’s proprietary EMR platform, and deploying AI across clinical, operational and business use cases. He cited “Schedule Hub,” a tool that processes changes in center census, capacity and teammate availability to recommend patient and staffing schedules in real time. Rodriguez said the company expects it to reduce administrative burden and support caregiver experience while supporting patient care.
When asked about timing and the size of opportunities from technology investments, Rodriguez said some benefits will be related to user experience while others could help the bottom line, but he characterized it as “a little early” to detail timing. He framed the investments as supporting long-term efficiency and DaVita’s aim to sustain “3%-7% OI growth over time.”
On Affordable Care Act (ACA) plans, Rodriguez said open enrollment is “trending toward a slightly favorable outcome” compared to DaVita’s prior expectation of an approximately $40 million headwind in 2026. He said the favorability may be partially offset by more patients selecting lower-level bronze plans, which can translate into higher out-of-pocket costs and a “modest RPT headwind.” In Q&A, Rodriguez said it was “very early,” noting effectuation rates and affordability have not yet played out, and the company was holding to the $40 million figure even though it was “trending a little better than that.”
Rodriguez said DaVita raised and narrowed full-year adjusted operating income guidance to $2.15 billion to $2.25 billion and increased adjusted EPS guidance to $14.10 to $15.20 per share. He said higher volume expectations and lower patient care costs drove the update.
Ackerman added the adjusted operating income guidance range increased by $40 million at the midpoint, driven primarily by higher treatment volume expectations and secondarily by expectations for continued labor efficiencies within patient care costs. He said the company expects adjusted operating income to be “about evenly split” across the remaining three quarters, assuming a fourth-quarter-weighted IKC contribution, and that 2025’s seasonal pattern was “not typical.”
On capital allocation, Ackerman said DaVita repurchased 3 million shares during the first quarter and an additional 2 million shares after quarter end, including shares repurchased from Berkshire Hathaway under a repurchase agreement. The leverage ratio was 3.34x consolidated EBITDA at quarter end, “well within” the company’s 3x to 3.5x target range.
Below the operating income line, other income was $4 million, which Ackerman said reflected a sequential increase due to “no longer recognizing losses from our investment in Mozarc.” Debt expense in the quarter was $145 million, and Ackerman said quarterly debt expense for the remainder of the year is expected to be similar due to higher share repurchases and higher interest rate expectations, resulting in full-year debt expense about flat to last year.
Free cash flow guidance was unchanged. Rodriguez said the company did not move that figure because there is “more variability and a wider range with free cash flow,” despite the increase in operating income guidance.
In closing remarks, Rodriguez summarized three takeaways: clinical initiatives “beginning to gain traction,” strong business performance that supports financial results, and continued investment in the company’s future.
DaVita Inc (NYSE: DVA) is a leading provider of kidney care services, specializing in the management and operation of outpatient dialysis centers for patients with chronic kidney failure and end-stage renal disease. Headquartered in Denver, Colorado, the company offers a comprehensive suite of treatment modalities, including in-center hemodialysis, peritoneal dialysis, and home dialysis therapies. In addition to its core dialysis services, DaVita provides patient education, nutritional counseling, vascular access management and related laboratory services to support kidney health and overall patient well-being.
Since its formation in the mid-1990s through a clinical management services spin-off, DaVita has expanded both organically and through strategic partnerships and acquisitions.
The article "DaVita Q1 Earnings Call Highlights" was originally published by MarketBeat.