DaVita (DVA) Q3 2026 Earnings Report

The call was predominantly positive, with solid third-quarter results, improved clinical outcomes, strong expanded HD adoption and rollout readiness, significant IKC earnings growth, continued international improvement and maintained full-year free cash flow expectations. These positives were tempered by higher technology spending, below-historical treatment volume growth, missed-treatment pressure, commercial-mix and ACA headwinds, higher operating costs and uncertainty around future ESRD reimbursement adjustments and policy economics.

For full year 2026, DaVita now expects adjusted operating income within a range of $2.175 billion to $2.25 billion, adjusted earnings per share within a range of $14.30 to $15.20, free cash flow between $1 billion and $1.25 billion, IKC adjusted operating income of at least $65 million, and approximately $135 million of international adjusted operating income; the company expects a $40 million year-over-year headwind from ACA exchanges, an approximately 1% headwind to fourth-quarter treatment volume from year-over-year day mix, and treatments per normalized day up more than 1% in Q4, while 2027 volume growth is expected to be higher than volume growth in 2026, pharmaceutical costs are expected to come down, and IT spend is expected to decelerate from 20-plus percent growth but continue to grow. Expanded HD is expected to have no material net impact on adjusted operating income for 2026 or 2027, with the positive impact of lower mortality and higher volume growth beginning in the back half of 2028 and supporting a path back to 2% or greater volume growth by 2029. For full year '27, the estimated net impact of the ESRD final rule is 1.5% to 2%, with 1% worth about $30 million a year, while the 40 basis points excluding TDAPA is fixed for the year and the 3.1% TDAPA component applies only to Q1 and is expected to come down significantly in Q2 and stay down and potentially further decline over the course of the year.