DaVita Inc. 1st Quarter 2024 Results

DENVER, May 2, 2024

"Through the first quarter, we continued building on the momentum generated through 2023, demonstrating operational discipline while continuing to find opportunities to invest, innovate and most importantly deliver clinical excellence," said Javier Rodriguez, CEO of DaVita Inc.

Financial and operating highlights for the quarter ended March 31, 2024:

• Consolidated revenues were $3.071 billion.
• Operating income was $484 million and adjusted operating income was $463 million.
• Diluted earnings per share was $2.65 and adjusted diluted earnings per share was $2.38.
• Operating cash flow was $(135) million and free cash flow was $(327) million.
• Repurchased 2.1 million shares of our common stock at an average price paid of $112.76 per share.

	Three months ended
	March 31, 2024		December 31, 2023		March 31, 2023 ARIVA.DE Börsen-Geflüster Kurse DaVita 147,12 $ -0,01%
Net income attributable to DaVita Inc.:	(dollars in millions, except per share data)
Net income	$                      240		$                      151		$                      116
Diluted per share	$                     2.65		$                     1.62		$                     1.25
Adjusted net income(1)	$                      215		$                      173		$                      146
Adjusted diluted per share(1)	$                     2.38		$                     1.87		$                     1.58

U.S. dialysis metrics:

Volume: Total U.S. dialysis treatments for the first quarter of 2024 were 7,151,512, or an average of 92,159 treatments per day, representing a per day decrease of (0.4)% compared to the fourth quarter of 2023. Normalized non-acquired treatment growth in the first quarter of 2024 compared to the first quarter of 2023 was 0.4%.

Primary drivers of the changes in the table above were as follows:

Revenue: The quarter change was primarily due to a seasonal decline from co-insurance and deductibles, partially offset by an increase in the Medicare base rate and other annual rate increases, favorable changes in mix and a seasonal increase in hospital inpatient dialysis treatments. The year to date change was primarily driven by the increase in average reimbursement rates from revenue cycle improvements and normal annual rate increases including Medicare rate increases, favorable changes in mix, and an increase in hospital inpatient dialysis rates.

Patient care costs: The quarter change was primarily due to decreases in health benefit expense, other direct operating expenses associated with our dialysis centers, contributions to charitable organizations and pharmaceutical unit costs. These decreases we partially offset by increased compensation expenses, decreased treatments in the first quarter of 2024, as well as increases in travel costs and professional fees. The year to date change was primarily due to decreased other direct operating expenses associated with our dialysis centers, center closure costs, as described below, contract wages, contributions to charitable organizations and pharmaceutical unit costs. In addition, our fixed other direct operating expenses favorably impacted patient care costs per treatment due to increased treatments in 2024. These decreases were partially offset by increased compensation expenses and medical supplies expense.

General and administrative: The quarter change was primarily due to seasonal decreases in purchased services and health benefit expense, as well as decreases in contributions to our charitable foundation, professional fees and travel costs. These decreases were partially offset by increased compensation expenses and center closure costs, as described below. The year to date change was primarily due to a refund received in 2023 related to 2022 advocacy costs and increases in compensation expenses. Other drivers of this change include increased IT-related costs and professional fees. These increases were partially offset by decreased severance costs, as described below.

Certain items impacting the quarter:

Gain on changes in ownership interest. During the first quarter of 2024, we acquired a controlling interest in a previously nonconsolidated dialysis partnership. As a result of this transaction, we consolidated this partnership and recognized a non-cash gain of $35.1 million on our previously held ownership interest in this partnership. 

Closure costs. During the third quarter of 2023, we continued the strategic review of our outpatient clinic capacity requirements and utilization, which have been impacted both by declines in our patient census in some markets due to the COVID-19 pandemic, as well as by our initiatives toward, and advances in, increasing the proportion of our home dialysis patients. This continuing review, which began in the third quarter of 2022, has resulted in higher than normal charges for center capacity closures over the last number of quarters. These capacity closure costs include net losses on assets retired, lease costs, asset impairments and accelerated depreciation and amortization.

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