DVA earnings analysis
What we found in DVA's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
DaVita delivered a strong Q2, with revenue of $3.554 billion rising 4.0% sequentially and operating income increasing 20.1% to $579 million, producing a 16.3% operating margin. U.S. dialysis volume and lower per-treatment care costs supported results, while IKC swung to $40 million of operating income. First-half free cash flow rose to $396 million, but commercial-mix pressure reduced revenue per treatment sequentially and receivables, borrowing, and debt expense increased. Gross margin was not disclosed in the filing; free cash flow of $396 million is for the six months ended June 30, 2026.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue accelerated sequentially
- Q2 revenue was $3.554 billion, up $138 million (4.0%) from $3.416 billion in Q1 2026. First-half revenue increased $367 million (5.6%) year over year to $6.970 billion.
- Operating leverage drove EPS beat
- Operating income rose $97 million (20.1%) sequentially to $579 million, equating to a 16.3% operating margin versus 14.1% in Q1 2026. Diluted EPS was $4.02, above the $3.88 consensus estimate.
- Volume and productivity improved
- U.S. dialysis treatments increased 197,075 (2.8%) sequentially to 7,226,600, while patient-care cost per treatment fell $2.71 (1.0%) to $277.40.
- IKC delivered a material profit swing
- Ancillary-services operating income increased to $57 million from $6 million sequentially, led by U.S. IKC income of $40 million versus a $19 million loss, principally from higher shared savings.
- Cash conversion strengthened
- First-half operating cash flow increased $307 million (60.9%) year over year to $811 million and free cash flow increased $284 million to $396 million. Maintenance plus development capex was $272 million, or 33.5% of operating cash flow.
- Substantial repurchase capacity remains
- The company repurchased 2.238 million shares for the quarter at an average $154.95 per share; approximately $1.373 billion remained authorized as of July 31, 2026.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Commercial mix pressures revenue per treatment
- U.S. dialysis revenue per treatment declined $1.72 (0.4%) sequentially to $415.87, with management attributing the decline primarily to payor-mix changes. Management says expiration of enhanced premium tax credits adversely affected ACA-exchange enrollment and commercial mix.
- Receivables and DSO increased
- U.S. dialysis accounts receivable increased $109 million to $1.719 billion since December 31, 2025, and DSO rose to 52 days from 49 days, primarily due to collection timing.
- Incremental borrowing raises financing exposure
- Debt expense rose $5 million (3.4%) sequentially to $150 million after increased revolver borrowing and incremental Term Loan B-2 activity. The company incurred a $500 million incremental Term Loan B-2 tranche and had $65 million drawn on its $1.5 billion revolver at June 30.
- Some ancillary businesses remain volatile
- International operating income declined $5 million (16.7%) sequentially to $25 million, primarily due to a loss on divested centers; U.S. other ancillary loss widened to $8 million from $6 million.
- No formal risk-factor update; reimbursement remains key
- Item 1A states there were no material changes to risk factors from the 2025 10-K. Nonetheless, management identifies a proposed 1.1% 2027 Medicare ESRD reimbursement increase, leaving final reimbursement policy and rate execution uncertain.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $4.02
- Operating margin
- 16.3%
- Segment
- U.S. dialysis revenue: $3.012 billion, +$70 million (+2.4%) versus Q1 2026; operating income: $538 million, +$32 million (+6.3%).
- Segment
- Ancillary services revenue: $557 million, +$59 million (+11.8%) versus Q1 2026; operating income: $57 million, versus $6 million.
- Segment
- U.S. IKC revenue: $162 million, +$46 million (+39.7%) versus Q1 2026; operating income: $40 million versus a $19 million loss.
- Segment
- International revenue: $386 million, +$14 million (+3.8%) versus Q1 2026; operating income: $25 million, down $5 million (-16.7%).
What they said about what is next.
The 10-Q does not provide company quantitative EPS or revenue guidance. MD&A notes that CMS's proposed 2027 ESRD rule is estimated to increase freestanding-facility average reimbursement by 1.1%, and management expects productivity efficiencies to continue through 2026.
The filing reads better than the one before it.
What came before.
- 10-Q · May 5, 2026
- DaVita Inc. reported strong Q1 2026 results with revenues of $3.416 billion and EPS of $2.87, both exceeding analyst expectations. The company also improved its guidance for adjusted operating income, indicating…
- 10-K · February 11, 2026
- DaVita emphasizes its position as a leading, vertically integrated kidney care provider: U.S. dialysis represented approximately 86% of consolidated revenues for the year ended December 31, 2025, delivered through a…
- 10-Q · May 12, 2025
- DaVita reported Q1 revenue of $3,223,529,000, up $152,974,000 (≈5.0%) vs. Q1 2024, driven by gains in both U.S. dialysis and Other — ancillary services. Operating income fell to $438,937,000 (13.6% operating margin) and…
- 10-K · February 13, 2025
- DaVita positions itself as a scale leader in kidney care, operating 2,657 U.S. outpatient dialysis centers serving approximately 200,800 U.S. patients and 509 international centers serving approximately 80,300 patients…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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