DaVita 2025 Q2 Earnings Mixed Performance as Net Income Falls 8.2%

DaVita Inc. reported second-quarter 2025 earnings on August 5, 2025, showing a revenue increase but a decline in net income. The company faced a cybersecurity incident that impacted operations and added costs during the quarter.

Revenue
DaVita's total revenue for the second quarter of 2025 increased by 4.8% year-over-year to $3.21 billion, driven primarily by strong performance in U.S. dialysis services, which accounted for the largest share of revenue at $2.91 billion. Additional contributions came from external sources, with $2.89 billion attributed to services provided to external patients and $5.97 million from other external sources. Ancillary services, including integrated kidney care and other U.S. operations, generated $485.69 million and $316.16 million, respectively. Intersegment and elimination adjustments accounted for $16.72 million and a $19.55 million reduction, while international dialysis services added $5.97 million. Consolidated revenues for the quarter were reported at $3.38 billion.

Earnings/Net Income
Earnings per share (EPS) for the quarter rose to $2.62, an increase of 2.3% compared to $2.56 in the same period of 2024. Despite the positive EPS growth, DaVita's net income declined by 8.2% year-over-year to $275.22 million from $299.75 million in 2024 Q2. This reduction was attributed to the cybersecurity incident, which incurred $13.5 million in charges and led to increased patient care costs and general and administrative expenses.

Post Earnings Price Action Review
A buy-and-hold strategy implemented after DaVita's revenue growth report delivered strong performance over the past three years. The strategy, which involved purchasing shares post-earnings and holding for 30 days, yielded a 55.53% return. This outperformed the benchmark by 6.95%, with a CAGR of 16.47% and a maximum drawdown of 0.00%. The Sharpe ratio of 0.47 and a volatility of 35.14% indicated solid risk-adjusted returns.

CEO Commentary
Javier Rodriguez, CEO of DaVita Inc., highlighted the company's strong second-quarter performance, emphasizing its focus on patient care and disciplined financial execution. He noted the delivery of exceptional clinical outcomes, a positive caregiver experience, and consistent financial results. Business performance was driven by stable operating income of $538 million and adjusted operating income of $551 million, alongside free cash flow of $157 million. Rodriguez expressed confidence in managing challenges, including the cybersecurity incident, and continuing to deliver on financial commitments.

Guidance
DaVita did not provide explicit forward-looking guidance for future periods in this filing. Instead, the company summarized recent financial outcomes, including consolidated revenues of $3.380 billion, diluted earnings per share of $2.58, and adjusted diluted earnings per share of $2.95 for the second quarter. The company also issued $1 billion in senior notes and repurchased 3.1 million shares at an average price of $144.00 per share.

Additional News
DaVita issued $1 billion in senior notes in May 2025, using a portion of the proceeds to repay the balance on its revolving credit line. In the same quarter, the company repurchased 3.1 million shares of its stock at $144.00 per share. Looking ahead, DaVita will hold a conference call on August 5, 2025, at 5:00 p.m. Eastern Time to discuss the second-quarter results. The company also reported that its dialysis services reached 283,100 patients at 3,175 outpatient centers across the U.S. and 13 other countries. As of June 30, 2025, the company had 64,400 patients in risk-based integrated care arrangements, representing $5.3 billion in annualized medical spend.