DaVita's Q1 2025 Earnings Call: Unpacking Key Contradictions on Volume Growth, Cyberattack Costs, and Mortality Trends

Volume outlook and impact of flu season, cyberattack impact and cost handling, impact of phosphate binders inclusion, mortality trends and volume growth, guidance adjustments and volume growth are the key contradictions discussed in DaVita's latest 2025Q1 earnings call.



Cybersecurity Incident Impact:
- DaVita experienced a cybersecurity incident in April 2025, impacting its operations.
- Despite initial concerns, the company maintained uninterrupted dialysis care and restored most systems. The incident did result in lower-than-normal admissions and some regulatory and legal follow-ups.
- Financial impacts include one-time costs recognized in Q2, but guidance remains unchanged.

First-Quarter Financial Performance:
- DaVita reported adjusted operating income of $439 million and adjusted EPS of $2.
- The performance was driven by outperformance in patient-care costs and phosphate binders, partially offset by lower-than-expected treatment volume due to a severe flu season.
- The company also experienced a strong contribution from its international business.

Phosphate Binders Income and Mix:
- Phosphate binders contributed positively to Q1 results, with an expected full-year operating income impact of $0 million to $50 million, now trending toward the higher end.
- The mix leaned towards iron-based binders, benefiting patients with more effective medications, but causing initial variability.

Treatment Growth and Patient Admissions:
- US treatments per day declined by 40 basis points, with a further 50 basis points revision for the year due to flu season and cyber incident impacts.
- The company reported strong patient admissions in Q1, supporting the hypothesis that previous admission growth weakness was due to normal variability.
- Admissions are expected to be lower for the remainder of the year due to the flu-related census impact and the cyber incident.

Capital Allocation and Share Repurchases:
- DaVita repurchased approximately $680 million in stock since the last earnings call, accelerating share repurchases.
- The company prioritized capital allocation for innovation and high-return growth opportunities, with continued share repurchases expected to be front-loaded in 2025.