DaVita Q3 2026 net income rises to $223M
A $62.176 million impairment and an October Berkshire share repurchase settlement accompany DaVita's nine-month results.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
10-Q
Rhea-AI Filing Summary
DaVita Inc. (DVA) reported third-quarter 2026 consolidated revenue of $3,578.126 million, versus $3,420.227 million a year earlier, and net income attributable to DaVita Inc. of $222.931 million, versus $150.332 million. For the nine months ended September 30, 2026, revenue increased 5.2% to $10,547.758 million, operating income increased 5.2% to $1,560.148 million, and adjusted operating income increased 7.6% to $1,622 million.
U.S. dialysis treatments increased 0.5% year over year to 21,585,769 in the nine-month period, while average patient service revenue per treatment was $416.22, up 2.7%. Third-quarter goodwill and other asset impairment charges were $62.176 million, including $57.104 million of goodwill impairment in China; the China reporting unit remained at risk of goodwill impairment as of September 30, 2026. DaVita acquired a noncontrolling minority interest in Elara Caring effective July 20, 2026, for a $200 million cash payment subject to customary post-closing adjustments. On October 27, 2026, it settled its Berkshire repurchase obligation for 383,000 shares at an average $180.43 per share, for $69.026 million.
3 points · 0 major0 major · 1 point
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointNine-month consolidated revenue increased 5.2% to $10,547.758 million.
- Moderate pointNine-month operating income increased 5.2% to $1,560.148 million.
- Moderate pointNine-month adjusted operating income increased 7.6% to $1,622 million.
Negative
- Minor pointThird-quarter impairment charges totaled $62.176 million, including $57.104 million of China goodwill impairment.
Filing Explained
At September 30, the revolver amount available was borrowing capacity, not debt already drawn, while China goodwill had no valuation headroom.
This Form 10-Q is an unaudited quarterly report; at September 30, DaVita reported long-term debt of
DaVita also reported
For China, the filing reports
DaVita says the China unit remains at risk of further impairment; its sensitivity table shows potential estimated fair-value decreases of
Key Figures
Consolidated revenue: $3,578.126 million
Net income attributable to DaVita Inc.: $222.931 million
Consolidated revenue: $10,547.758 million
+5 more
8 metrics
Consolidated revenue
$3,578.126 million
Three months ended September 30, 2026; $3,420.227 million in 2025
Net income attributable to DaVita Inc.
$222.931 million
Three months ended September 30, 2026; $150.332 million in 2025
Consolidated revenue
$10,547.758 million
Nine months ended September 30, 2026; increased 5.2% year over year
Operating income
$1,560.148 million
Nine months ended September 30, 2026; increased 5.2% year over year
Adjusted operating income
$1,622 million
Nine months ended September 30, 2026; increased 7.6% year over year
Goodwill and other asset impairment charges
$62.176 million
Third quarter of 2026
Cash payment for Elara Caring interest
$200 million
Acquired effective July 20, 2026; subject to customary post-closing adjustments
Berkshire repurchase settlement
383,000 shares; $69.026 million; $180.43 per share
Settled October 27, 2026
Key Terms
Adjusted operating income, Interest rate cap agreements, Normalized non-acquired treatment growth, Risk-based integrated care arrangements
4 terms
Adjusted operating income financial
"Adjusted operating income (loss)"
Adjusted operating income is a company's profit from its main activities, excluding certain one-time or unusual costs and gains. It helps investors see how well the business is performing in its normal operations, without distractions from rare events or expenses. This way, they get a clearer picture of the company’s true profitability.
Interest rate cap agreements financial
"interest rate cap agreements are designated as cash flow hedges"
Normalized non-acquired treatment growth technical
"Normalized non-acquired treatment growth reflects year over year growth"
Risk-based integrated care arrangements technical
"patients in risk-based integrated care arrangements"
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were DVA’s third-quarter 2026 revenue and net income?
DaVita reported third-quarter 2026 consolidated revenue of $3,578.126 million, versus $3,420.227 million a year earlier. Net income attributable to DaVita Inc. was $222.931 million, compared with $150.332 million.
Why did DVA record an impairment charge in China?
DaVita recognized $62.176 million in third-quarter goodwill and other asset impairment charges. The China goodwill impairment was $57.104 million and resulted primarily from adverse reimbursement rate changes and operating developments across non-renal hospital services.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the Quarterly Period Ended September 30, 2026
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from ___________ to ___________
Commission File Number: 1-14106
| (State of incorporation) | (I.R.S. Employer Identification No.) | |||||||
Telephone number (720 ) 631-2100
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class: | Trading symbol(s): | Name of each exchange on which registered: | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated filer | ☐ | |||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
| Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒
As of October 27, 2026, the number of shares of the registrant’s common stock outstanding was approximately 62.9 million shares.
DAVITA INC.
INDEX
| Page No. | ||||||||||||||
| PART I. FINANCIAL INFORMATION | ||||||||||||||
| Item 1. | Condensed Consolidated Financial Statements: | |||||||||||||
Consolidated Statements of Income for the three and nine months ended September 30, 2026 and September 30, 2025 | 1 | |||||||||||||
Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2026 and September 30, 2025 | 2 | |||||||||||||
Consolidated Balance Sheets as of September 30, 2026 and December 31, 2025 | 3 | |||||||||||||
Consolidated Statements of Cash Flows for the nine months ended September 30, 2026 and September 30, 2025 | 4 | |||||||||||||
Consolidated Statements of Equity for the three and nine months ended September 30, 2026 and September 30, 2025 | 5 | |||||||||||||
Notes to Condensed Consolidated Financial Statements | 7 | |||||||||||||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 21 | ||||||||||||
| Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 37 | ||||||||||||
| Item 4. | Controls and Procedures | 37 | ||||||||||||
| PART II. OTHER INFORMATION | ||||||||||||||
| Item 1. | Legal Proceedings | 37 | ||||||||||||
| Item 1A. | Risk Factors | 37 | ||||||||||||
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 38 | ||||||||||||
| Item 3. | Defaults Upon Senior Securities | 38 | ||||||||||||
| Item 4. | Mine Safety Disclosures | 38 | ||||||||||||
| Item 5. | Other Information | 38 | ||||||||||||
| Item 6. | Exhibits | 39 | ||||||||||||
Signature | 40 | |||||||||||||
i
DAVITA INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(dollars and shares in thousands, except per share data)
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Dialysis patient service revenues | $ | $ | $ | $ | |||||||||||||||||||
| Other revenues | |||||||||||||||||||||||
| Total revenues | |||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Patient care costs | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Equity investment income, net | ( | ( | ( | ( | |||||||||||||||||||
| Goodwill and other asset impairment charges | |||||||||||||||||||||||
| Total operating expenses | |||||||||||||||||||||||
| Operating income | |||||||||||||||||||||||
| Debt expense | ( | ( | ( | ( | |||||||||||||||||||
| Debt extinguishment and modification costs | ( | ( | ( | ||||||||||||||||||||
| Other income (loss), net | ( | ( | |||||||||||||||||||||
| Income before income taxes | |||||||||||||||||||||||
| Income tax expense | |||||||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Less: Net income attributable to noncontrolling interests | ( | ( | ( | ( | |||||||||||||||||||
| Net income attributable to DaVita Inc. | $ | $ | $ | $ | |||||||||||||||||||
| Earnings per share attributable to DaVita Inc.: | |||||||||||||||||||||||
| Basic net income | $ | $ | $ | $ | |||||||||||||||||||
| Diluted net income | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average shares for earnings per share: | |||||||||||||||||||||||
| Basic shares | |||||||||||||||||||||||
| Diluted shares | |||||||||||||||||||||||
See notes to condensed consolidated financial statements.
1
DAVITA INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
(dollars in thousands)
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Other comprehensive income (loss), net of tax: | |||||||||||||||||||||||
| Unrealized gains (losses) on interest rate cap agreements: | |||||||||||||||||||||||
| Unrealized gains (losses) | ( | ( | |||||||||||||||||||||
| Reclassifications of net realized losses into net income | |||||||||||||||||||||||
| Unrealized (losses) gains on foreign currency translation | ( | ||||||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||||
| Total comprehensive income | |||||||||||||||||||||||
| Less: Comprehensive income attributable to noncontrolling interests | ( | ( | ( | ( | |||||||||||||||||||
| Comprehensive income attributable to DaVita Inc. | $ | $ | $ | $ | |||||||||||||||||||
See notes to condensed consolidated financial statements.
2
DAVITA INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(dollars and shares in thousands, except per share data)
| September 30, 2026 | December 31, 2025 | ||||||||||
| ASSETS | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash and equivalents | |||||||||||
| Short-term investments | |||||||||||
| Accounts receivable | |||||||||||
| Inventories | |||||||||||
| Contract assets and other receivables | |||||||||||
| Prepaid and other current assets | |||||||||||
| Income tax receivable | |||||||||||
| Total current assets | |||||||||||
Property and equipment, net of accumulated depreciation of $ | |||||||||||
| Operating lease right-of-use assets | |||||||||||
Intangible assets, net of accumulated amortization of $ | |||||||||||
| Equity method and other investments | |||||||||||
| Long-term investments | |||||||||||
| Other long-term assets | |||||||||||
| Goodwill | |||||||||||
| $ | $ | ||||||||||
| LIABILITIES AND EQUITY | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Other liabilities | |||||||||||
| Accrued compensation and benefits | |||||||||||
| Current portion of operating lease liabilities | |||||||||||
| Current portion of long-term debt | |||||||||||
| Income tax payable | |||||||||||
| Due to related party | |||||||||||
| Total current liabilities | |||||||||||
| Long-term operating lease liabilities | |||||||||||
| Long-term debt | |||||||||||
| Other long-term liabilities | |||||||||||
| Deferred income taxes | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies | |||||||||||
| Noncontrolling interests subject to put provisions | |||||||||||
| Equity: | |||||||||||
Preferred stock ($ | |||||||||||
Common stock ($ and 63,400 shares outstanding at September 30, 2026, outstanding at December 31, 2025) | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated earnings (deficit) | ( | ||||||||||
Treasury stock ( | ( | ( | |||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Total DaVita Inc. shareholders' equity deficit | ( | ( | |||||||||
| Noncontrolling interests not subject to put provisions | |||||||||||
| Total equity deficit | ( | ( | |||||||||
| $ | $ | ||||||||||
See notes to condensed consolidated financial statements.
3
DAVITA INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(dollars in thousands)
| Nine months ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Goodwill and other asset impairment charges | |||||||||||
| Loss on extinguishment of debt | |||||||||||
| Stock-based compensation expense | |||||||||||
| Deferred income taxes | |||||||||||
| Equity investment loss, net | |||||||||||
| Other non-cash losses, net | |||||||||||
| Changes in operating assets and liabilities, net of effect of acquisitions and divestitures: | |||||||||||
| Accounts receivable | ( | ( | |||||||||
| Inventories | |||||||||||
| Other current assets | ( | ( | |||||||||
| Other long-term assets | ( | ( | |||||||||
| Accounts payable | ( | ||||||||||
| Accrued compensation and benefits | ( | ||||||||||
| Other current liabilities | ( | ||||||||||
| Income taxes | ( | ||||||||||
| Other long-term liabilities | ( | ||||||||||
| Net cash provided by operating activities | |||||||||||
| Cash flows from investing activities: | |||||||||||
| Additions of property and equipment | ( | ( | |||||||||
| Acquisitions | ( | ( | |||||||||
| Proceeds from asset and business sales | |||||||||||
| Purchase of debt investments held-to-maturity | ( | ( | |||||||||
| Purchase of other debt and equity investments | ( | ( | |||||||||
| Proceeds from debt investments held-to-maturity | |||||||||||
| Proceeds from sale of other debt and equity investments | |||||||||||
| Purchase of equity method investments | ( | ( | |||||||||
| Distributions from equity method investments | |||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Cash flows from financing activities: | |||||||||||
| Borrowings | |||||||||||
| Payments on long-term debt | ( | ( | |||||||||
| Deferred and debt related financing costs | ( | ( | |||||||||
| Purchase of treasury stock from related party | ( | ( | |||||||||
| Other purchases of treasury stock | ( | ( | |||||||||
| Distributions to noncontrolling interests | ( | ( | |||||||||
| Net proceeds from issuance of common stock under employee stock plans | |||||||||||
| Payment of tax withholdings on net share settlements of equity awards | ( | ( | |||||||||
| Contributions from noncontrolling interests | |||||||||||
| Proceeds from sales of additional noncontrolling interests | |||||||||||
| Purchases of noncontrolling interests | ( | ( | |||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | ( | ||||||||||
| Net decrease in cash, cash equivalents and restricted cash | ( | ( | |||||||||
| Cash, cash equivalents and restricted cash at beginning of the year | |||||||||||
| Cash, cash equivalents and restricted cash at end of the period | $ | $ | |||||||||
See notes to condensed consolidated financial statements.
4
DAVITA INC.
CONSOLIDATED STATEMENTS OF EQUITY
(unaudited)
(dollars and shares in thousands)
| Three months ended September 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non- controlling interests subject to put provisions | DaVita Inc. shareholders’ equity deficit | Non- controlling interests not subject to put provisions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock | Additional paid-in capital | Accumulated earnings (deficit) | Treasury stock | Accumulated other comprehensive loss | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | $ | ( | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Comprehensive income: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock award plan | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-settled stock-based compensation expense | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Changes in noncontrolling interest from: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contributions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisitions and divestitures | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Partial purchases | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair value remeasurements | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Purchase of treasury stock | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Changes in share purchase obligation | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2026 | $ | $ | $ | $ | ( | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Nine months ended September 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non- controlling interests subject to put provisions | DaVita Inc. shareholders’ equity deficit | Non- controlling interests not subject to put provisions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock | Additional paid-in capital | Accumulated (deficit) earnings | Treasury stock | Accumulated other comprehensive loss | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Comprehensive income: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock award plan | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-settled stock-based compensation expense | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Changes in noncontrolling interest from: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contributions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisitions and divestitures | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Partial purchases | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair value remeasurements | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Purchase of treasury stock | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Changes in share purchase obligation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2026 | $ | $ | $ | $ | ( | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||||
5
DAVITA INC.
CONSOLIDATED STATEMENTS OF EQUITY — (continued)
(unaudited)
(dollars and shares in thousands)
| Three months ended September 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non- controlling interests subject to put provisions | DaVita Inc. shareholders’ equity deficit | Non- controlling interests not subject to put provisions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock | Additional paid-in capital | Retained Earnings | Treasury stock | Accumulated other comprehensive loss | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Comprehensive income: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock award plan | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-settled stock-based compensation expense | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Changes in noncontrolling interest from: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contributions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Partial purchases | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair value remeasurements | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Purchase of treasury stock | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Changes in share purchase obligation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Nine months ended September 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non- controlling interests subject to put provisions | DaVita Inc. shareholders’ equity (deficit) | Non- controlling interests not subject to put provisions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock | Additional paid-in capital | Retained earnings | Treasury stock | Accumulated other comprehensive loss | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
| Comprehensive income: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock award plan | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-settled stock-based compensation expense | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Changes in noncontrolling interest from: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contributions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisitions and divestitures | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Partial purchases | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair value remeasurements | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Purchase of treasury stock | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Changes in share purchase obligation | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||||
See notes to condensed consolidated financial statements.
6
DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(dollars and shares in thousands, except per share data)
Unless otherwise indicated in this Quarterly Report on Form 10-Q, "the Company", "we", "us", "our" and similar terms refer to DaVita Inc. and its consolidated subsidiaries.
1. Condensed consolidated interim financial statements
The unaudited condensed consolidated interim financial statements included in this report are prepared by the Company. In the opinion of management, all adjustments necessary for a fair presentation of the results of operations are reflected in these condensed consolidated interim financial statements. All significant intercompany accounts and transactions have been eliminated. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities, contingencies, and noncontrolling interests subject to put provisions. The most significant estimates and assumptions underlying these financial statements and accompanying notes generally involve revenue recognition and accounts receivable, certain fair value estimates, accounting for income taxes, and loss contingencies. The results of operations reflected in these interim financial statements may not necessarily be indicative of annual operating results. These condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (2025 10-K). Prior period classifications conform to the current period presentation.
2. Revenue recognition
The following tables summarize the Company's segment revenues by primary payor source:
| Three months ended September 30, 2026 | Three months ended September 30, 2025 | ||||||||||||||||||||||||||||||||||
| U.S. dialysis | Other — Ancillary services | Consolidated | U.S. dialysis | Other — Ancillary services | Consolidated | ||||||||||||||||||||||||||||||
| Dialysis patient service revenues: | |||||||||||||||||||||||||||||||||||
| Medicare and Medicare Advantage | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Medicaid and Managed Medicaid | |||||||||||||||||||||||||||||||||||
| Other government | |||||||||||||||||||||||||||||||||||
| Commercial | |||||||||||||||||||||||||||||||||||
| Other revenues: | |||||||||||||||||||||||||||||||||||
| Medicare and Medicare Advantage | |||||||||||||||||||||||||||||||||||
| Commercial | |||||||||||||||||||||||||||||||||||
Other(1) | |||||||||||||||||||||||||||||||||||
| Eliminations of intersegment revenues | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
7
DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(unaudited)
(dollars and shares in thousands, except per share data)
| Nine months ended September 30, 2026 | Nine months ended September 30, 2025 | ||||||||||||||||||||||||||||||||||
| U.S. dialysis | Other — Ancillary services | Consolidated | U.S. dialysis | Other — Ancillary services | Consolidated | ||||||||||||||||||||||||||||||
| Dialysis patient service revenues: | |||||||||||||||||||||||||||||||||||
| Medicare and Medicare Advantage | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Medicaid and Managed Medicaid | |||||||||||||||||||||||||||||||||||
| Other government | |||||||||||||||||||||||||||||||||||
| Commercial | |||||||||||||||||||||||||||||||||||
| Other revenues: | |||||||||||||||||||||||||||||||||||
| Medicare and Medicare Advantage | |||||||||||||||||||||||||||||||||||
| Medicaid and Managed Medicaid | |||||||||||||||||||||||||||||||||||
| Commercial | |||||||||||||||||||||||||||||||||||
Other(1) | |||||||||||||||||||||||||||||||||||
| Eliminations of intersegment revenues | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
(1) Consists primarily of management service fees in the Company's U.S. dialysis business and research fees, management fees, and other non-patient service revenues in the Other - ancillary services businesses.
There are significant uncertainties associated with estimating revenue, many of which take several years to resolve. These estimates are subject to ongoing insurance coverage changes, geographic coverage differences, differing interpretations of contract coverage and other payor issues, as well as patient issues, including determination of applicable primary and secondary coverage, changes in patient insurance coverage and coordination of benefits. As these estimates are refined over time, both positive and negative adjustments to revenue are recognized in the current period.
Measurements of revenue for the Company's integrated kidney care (IKC) risk-based arrangements are complex, sensitive to a number of key inputs, and require meaningful estimates for a number of factors, including but not limited to member alignment data, third-party medical claims expense, outcomes on various quality metrics, and ultimate risk adjustment factor scores. Information and other measurement limitations on these factors may constrain revenue recognition for a risk-based arrangement until a period after the Company's performance obligations have been met.
For its IKC business, the Company recognized revenues for performance obligations satisfied in previous years of $137,520 and $103,741 during the nine months ended September 30, 2026 and 2025, respectively. The delay in recognition of these amounts resulted predominantly from measurement limitations and recognition constraints on the Company's value-based care contracts with health plans, many of which are complex . Recognition of revenue from the Company's government Comprehensive Kidney Care Contracting program also has certain constraints for plan years 2025 and 2026.
Customer contract assets. The carrying value of customer contract assets, which are included in contract assets and other receivables and other long-term assets on the Company’s consolidated balance sheet, was $386,724 and $310,541 as of September 30, 2026 and December 31, 2025, respectively.
8
DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(unaudited)
(dollars and shares in thousands, except per share data)
3. Earnings per share
Basic earnings per share is calculated by dividing net income attributable to the Company by the weighted average number of common shares outstanding. Weighted average common shares outstanding include restricted stock unit awards that are no longer subject to forfeiture because the recipients have satisfied either their explicit vesting terms or retirement eligibility requirements.
Diluted earnings per share includes the dilutive effect of outstanding stock-settled stock appreciation rights and unvested stock units as computed under the treasury stock method.
The reconciliations of the numerators and denominators used to calculate basic and diluted earnings per share were as follows:
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net income attributable to DaVita Inc. | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||||
| Basic shares | |||||||||||||||||||||||
| Assumed incremental from stock plans | |||||||||||||||||||||||
| Diluted shares | |||||||||||||||||||||||
| Basic net income per share attributable to DaVita Inc. | $ | $ | $ | $ | |||||||||||||||||||
| Diluted net income per share attributable to DaVita Inc. | $ | $ | $ | $ | |||||||||||||||||||
Anti-dilutive stock-settled awards excluded from calculation(1) | |||||||||||||||||||||||
(1)Shares associated with stock plans excluded from the diluted denominator calculation because they were anti-dilutive under the treasury stock method.
4. Short-term and long-term investments
The Company’s short-term and long-term investments, consisting of debt instruments classified as held-to-maturity and equity investments with readily determinable fair values or redemption values, were as follows:
| September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| Debt securities | Equity securities | Total | Debt securities | Equity securities | Total | ||||||||||||||||||||||||||||||
| Certificates of deposit, bonds and other | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Investments in mutual funds | |||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Short-term investments | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Long-term investments | |||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
9
DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(unaudited)
(dollars and shares in thousands, except per share data)
5. Equity method and other investments
The Company maintains equity method and other minor investments in the private securities of certain other healthcare and healthcare-related businesses as follows:
| September 30, 2026 | December 31, 2025 | ||||||||||
| Equity method partnerships | $ | $ | |||||||||
| Adjusted cost method and other investments | |||||||||||
| $ | $ | ||||||||||
During the nine months ended September 30, 2026 and 2025, the Company recognized equity investment income of $24,765 and $23,135 , respectively, from its equity method investments in nonconsolidated dialysis partnerships. The Company also recognized equity investment gains (losses) from equity method investments in other businesses of $1,345 and $(95,013 ) in other income (loss), net, during the nine months ended September 30, 2026 and 2025, respectively.
Effective July 20, 2026, the Company acquired a noncontrolling minority interest in Elara Caring, a leading national provider of skilled home health, hospice, behavioral health, and personal care services with a cash payment of $200,000 , subject to certain customary post-closing adjustments. Equity method income or loss recognized from this investment is included in other income (loss), net on a one-month lag.
6. Goodwill
Changes in the carrying value of goodwill by reportable segment were as follows:
| U.S. dialysis | Other — Ancillary services | Consolidated | |||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | ||||||||||||||
| Acquisitions | |||||||||||||||||
| Foreign currency and other adjustments | |||||||||||||||||
| Balance at December 31, 2025 | |||||||||||||||||
| Acquisitions | |||||||||||||||||
| Impairment charges | ( | ( | |||||||||||||||
| Foreign currency and other adjustments | |||||||||||||||||
| Balance at September 30, 2026 | $ | $ | $ | ||||||||||||||
| Balance at September 30, 2026: | |||||||||||||||||
| Goodwill | $ | $ | $ | ||||||||||||||
| Accumulated impairment charges | ( | ( | |||||||||||||||
| $ | $ | $ | |||||||||||||||
Substantially all of the Company's operating segments described in Note 13 to the condensed consolidated financial statements represents an individual reporting unit for goodwill impairment assessment purposes.
The Company performs its annual goodwill impairment assessments at various points throughout the year for its reporting units, including in the third quarter.
During the three months ended September 30, 2026, the Company recognized goodwill impairment charges of $57,104 in its China reporting unit, of which $31,597 was allocated to noncontrolling interests. The impairment charge resulted primarily from adverse reimbursement rate changes and corresponding operating developments across non-renal hospital services. The estimated fair value of the China reporting unit was determined using an income approach based on discounted cash flow projections.
10
DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(unaudited)
(dollars and shares in thousands, except per share data)
Further changes in patient census, operating margins, reimbursement rates, or other adverse changes in expected future cash flows or valuation assumptions could result in additional goodwill impairment charges in the future for the China reporting unit, which remains at risk of goodwill impairment as of September 30, 2026:
| Reporting unit | Goodwill balance as of September 30, 2026 | Carrying amount coverage(1) | Sensitivities | |||||||||||||||||||||||
Discount rate(2) | Operating income(3) | |||||||||||||||||||||||||
| China | $ | % | ( | % | ( | % | ||||||||||||||||||||
(1)Excess of estimated fair value of the reporting unit over its carrying amount as of the latest assessment date.
(2)Potential impact on estimated fair value of an increase in discount rates of 100 basis points as of the latest assessment date.
(3)Potential impact on estimated fair value of a sustained, long-term reduction of 300 basis points in operating income as of the latest assessment date.
The Company performed various other annual impairment assessments during the nine months ended September 30, 2026, with no other impairments indicated. Except as described above, none of the Company's various other reporting units were considered at risk of significant goodwill impairment as of September 30, 2026.
7. Long-term debt
Long-term debt comprised the following:
| As of September 30, 2026 | |||||||||||||||||||||||||||||
| September 30, 2026 | December 31, 2025 | Maturity date | Interest rate | Estimated fair value(1) | |||||||||||||||||||||||||
| Senior Secured Credit Facilities: | |||||||||||||||||||||||||||||
Term Loan A-2(2) | $ | $ | $ | ||||||||||||||||||||||||||
| Term Loan B-2 | $ | ||||||||||||||||||||||||||||
Revolving line of credit(2) | SOFR + 1.50% | $ | |||||||||||||||||||||||||||
| Senior Notes: | |||||||||||||||||||||||||||||
| 4.625% Senior Notes | % | $ | |||||||||||||||||||||||||||
| 3.75% Senior Notes | % | $ | |||||||||||||||||||||||||||
| 6.875% Senior Notes | % | $ | |||||||||||||||||||||||||||
| 6.75% Senior Notes | % | $ | |||||||||||||||||||||||||||
Acquisition obligations and other notes payable(3) | % | $ | |||||||||||||||||||||||||||
Financing lease obligations(4) | % | ||||||||||||||||||||||||||||
| Total debt principal outstanding | |||||||||||||||||||||||||||||
| Discount, premium and deferred financing costs | ( | ( | |||||||||||||||||||||||||||
| Less current portion | ( | ( | |||||||||||||||||||||||||||
| $ | $ | ||||||||||||||||||||||||||||
(1)See Note 12 for discussion of the Company's fair value estimates.
(2)Outstanding Term Loan A-2 and revolving line of credit balances are due on November 24, 2030 , unless any of the 4.625 % senior notes due 2030 (the 4.625 % Senior Notes) remain outstanding 91 days prior to the 4.625 % Senior Notes maturity date, in which case the outstanding Term Loan A-2 and revolving line of credit balances become due at that 91 day date (March 2, 2030 ).
(3)The interest rate presented for acquisition obligations and other notes payable is their weighted average interest rate based on the current fixed and variable interest rate components in effect as of September 30, 2026.
(4)Financing lease obligations are measured at their approximate present values at inception. The interest rate presented is the weighted average discount rate embedded in financing leases outstanding.
11
DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(unaudited)
(dollars and shares in thousands, except per share data)
Scheduled maturities of long-term debt at September 30, 2026 were as follows:
| 2026 (remainder of the year) | $ | ||||
| 2027 | $ | ||||
| 2028 | $ | ||||
| 2029 | $ | ||||
| 2030 | $ | ||||
| 2031 | $ | ||||
| Thereafter | $ | ||||
On June 8, 2026 (the Ninth Amendment Effective Date), the Company entered into the Ninth Amendment (the Ninth Amendment) to the Credit Agreement. The Ninth Amendment modified the Credit Agreement to extend an additional incremental principal amount of $500,000 on its Term Loan B-2. The Company used the net proceeds from this transaction to repay a portion of the balance outstanding on its revolving line of credit and related accrued interest and fees. The Term Loan B-2 requires quarterly principal payments that began on June 30, 2026 of 0.25 % of the aggregate principal amount of the Term Loan B-2 outstanding on the Ninth Amendment Effective Date, with the balance due on May 9, 2031 . As a result of the Ninth Amendment, the Company recognized debt extinguishment and modification costs of $2,035 in the second quarter of 2026 comprised of fees incurred for this transaction.
During the first nine months of 2026, the Company made regularly scheduled principal payments under its senior secured credit facilities totaling $37,500 on Term Loan A-2 and $16,603 on Term Loan B-2.
As of September 30, 2026, the effective portion of the Company's interest rate cap agreements, as detailed in the table below, have the economic effect of capping the Company's maximum exposure to SOFR variable interest rate changes on equivalent amounts of the Company's floating rate debt, including all of Term Loan B-2 and a portion of Term Loan A-2. The remaining $814,456 outstanding principal balance of Term Loan A-2 and $80,000 balance outstanding on the revolving line of credit are subject to SOFR-based interest rate volatility. The Company's interest rate cap agreements are designated as cash flow hedges and, as a result, changes in their fair values are reported in other comprehensive income. The original premiums paid for the caps are amortized to debt expense on a straight-line basis over the term of each cap agreement starting from its effective date. These cap agreements do not contain credit risk-contingent features.
The following table summarizes the Company’s interest rate cap agreements outstanding as of September 30, 2026:
| Year cap agreements executed | Initial notional amount | SOFR maximum rate | Approximate effective date | Maturity date | Notional amount effective through December 31 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2027 | 2028 | 2029 | 2030 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2023 | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2023 | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | $ | 4.50%(1) | $ | 1,750,000 | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | $ | 4.00%(2) | $ | 750,000 | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | $ | 4.50%(3) | $ | 1,000,000 | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | $ | 4.25%(4) | $ | 1,000,000 | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | $ | $ | 500,000 | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total notional coverage | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Weighted average strike rate | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1)Effective December 31, 2026, the maximum rate of 4.50 % increases to 4.75 % for these interest rate caps.
(2)Effective December 31, 2026, the maximum rate of 4.00 % increases to 4.25 % for these interest rate caps.
(3)Effective December 31, 2027, the maximum rate of 4.50 % increases to 4.75 % for these interest rate caps.
(4)Effective December 31, 2027, the maximum rate of 4.25 % increases to 4.50 % for these interest rate caps.
12
DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(unaudited)
(dollars and shares in thousands, except per share data)
See Note 10 for further details on amounts reclassified from accumulated other comprehensive loss and recorded as debt expense (offset) related to the Company’s interest rate cap agreements for the three and nine months ended September 30, 2026 and 2025. See Note 12 for discussion of the Company's fair value estimates.
As a result of the variable rate cap from the Company's 2023 interest rate cap agreements, the Company’s weighted average effective interest rate on its senior secured credit facilities at the end of the third quarter of 2026 was 6.02 %, based on the current margins in effect for its senior secured credit facilities as of September 30, 2026, as detailed in the table above.
The Company’s weighted average effective interest rate on all debt, including the effect of interest rate caps and amortization of debt discount, premium and deferred financing costs was 5.54 % as of September 30, 2026.
As of September 30, 2026, the Company had $1,420,000 available and $80,000 drawn on its $1,500,000 revolving line of credit under its senior secured credit facilities. Credit available under this revolving line of credit is reduced by the amount of any letters of credit outstanding under the facility, of which there were none as of September 30, 2026. The Company also had letters of credit of approximately $184,758 outstanding under a separate bilateral secured letter of credit facility as of September 30, 2026.
8. Commitments and contingencies
The following is a description of certain lawsuits, claims, governmental investigations and audits and other legal proceedings to which the Company is subject.
Certain Governmental Inquiries and Related Proceedings
2020 U.S. Attorney New Jersey Investigation: In March 2020, the U.S. Attorney’s Office, District of New Jersey served the Company with a subpoena and a Civil Investigative Demand (CID) relating to an investigation being conducted by that office and the U.S. Attorney’s Office, Eastern District of Pennsylvania. The subpoena and CID request information on several topics, including certain of the Company’s joint venture arrangements with physicians and physician groups, medical director agreements, and compliance with its five-year Corporate Integrity Agreement, the term of which expired October 22, 2019 . In November 2022, the Company learned that, on April 1, 2022, the U.S. Attorney’s Office for the District of New Jersey notified the U.S. District Court for the District of New Jersey of its decision not to elect to intervene in the matter of U.S. ex rel. Doe v. DaVita Inc. and filed a Stipulation of Dismissal. On April 13, 2022, the U.S. District Court for the District of New Jersey dismissed the case without prejudice. On October 12, 2022, the U.S. Attorney’s Office for the Eastern District of Pennsylvania notified the U.S. District Court, Eastern District of Pennsylvania, of its decision not to elect to intervene at this time in the matter of U.S. ex rel. Bayne v. DaVita Inc., et al. The court then unsealed an amended complaint, which alleges violations of federal and state False Claims Acts, by order dated October 14, 2022. On November 8, 2023, the private party relator filed a fourth amended complaint. On November 29, 2023, the Company filed a motion to dismiss the fourth amended complaint. On
13
DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(unaudited)
(dollars and shares in thousands, except per share data)
April 29, 2025, the Court denied the Company’s motion to dismiss. On July 21, 2025, the Company answered the complaint. The Company disputes the allegations in the complaint and intends to defend this action accordingly.
2020 California Department of Insurance Investigation: In April 2020, the California Department of Insurance (CDI) sent the Company an Investigative Subpoena relating to an investigation being conducted by that office. CDI issued a superseding subpoena in September 2020 and an additional subpoena in September 2021. Those subpoenas request information on a number of topics, including but not limited to the Company’s communications with patients about insurance plans and financial assistance from the American Kidney Fund (AKF), analyses of the potential impact of patients’ decisions to change insurance providers, and documents relating to donations or contributions to the AKF. The Company is continuing to cooperate with CDI in this investigation.
2023 District of Columbia Office of Attorney General Investigation: In January 2023, the Office of the Attorney General for the District of Columbia issued a CID to the Company in connection with an antitrust investigation into the AKF. The CID covers the period from January 1, 2016 to the present. The CID requests information on a number of topics, including but not limited to the Company’s communications with the AKF, documents relating to donations to the AKF, and communications with patients, providers, and insurers regarding the AKF. The Company is cooperating with the government in this investigation.
2024 Federal Trade Commission Investigation: In April 2024, the Company received from the Federal Trade Commission (FTC) two CIDs in connection with an industry investigation under Section 5 of the Federal Trade Commission Act regarding the acquisition of medical director services and provision of dialysis services. The CIDs cover the period from January 1, 2016 to the present and generally seek information relating to restrictive covenants, such as non-competes, with physicians. The Company is cooperating with the government in this investigation.
* * *
Although the Company cannot predict whether or when proceedings might be initiated or when these matters may be resolved (other than as may be described above), it is not unusual for inquiries such as these to continue for a considerable period of time through the various phases of document and witness requests and ongoing discussions with regulators and to develop over the course of time. In addition to the inquiries and proceedings specifically identified above, the Company frequently is subject to other inquiries by state or federal government agencies. Negative findings or terms and conditions that the Company might agree to accept could result in, among other things, substantial financial penalties or awards against the Company, substantial payments made by the Company, harm to the Company’s reputation, required changes to the Company’s business practices, an impact on the Company's various relationships and/or contracts related to the Company's business, exclusion from future participation in the Medicare, Medicaid and other federal health care programs and, if criminal proceedings were initiated against the Company, members of its board of directors or management, possible criminal penalties, any of which could have a material adverse effect on the Company.
Other Proceedings
2021 Antitrust Indictment and Putative Class Action Suit: On July 14, 2021, an indictment was returned by a grand jury in the U.S. District Court, District of Colorado against the Company and its former chief executive officer in the matter of U.S. v. DaVita Inc., et al. alleging that purported agreements entered into by DaVita's former chief executive officer not to solicit senior-level employees violated Section 1 of the Sherman Act. On April 15, 2022, a jury returned a verdict in the Company’s favor, acquitting both the Company and its former chief executive officer on all counts. On April 20, 2022, the court entered judgments of acquittal and closed the case. On August 9, 2021, DaVita Inc. and its former chief executive officer were added as defendants in a consolidated putative class action complaint in the matter of In re Outpatient Medical Center Employee Antitrust Litigation in the U.S. District Court, Northern District of Illinois. This class action complaint asserts that the defendants violated Section 1 of the Sherman Act and seeks to bring an action on behalf of certain groups of individuals employed by the Company. On October 27, 2024, the plaintiffs filed a Third Amended Complaint, seeking to bring an action on behalf of certain groups of individuals employed by the Company between March 2008 and January 2021, to which the Company responded on December 20, 2024. On September 15, 2025, the plaintiffs filed a motion to certify the class. On
14
DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(unaudited)
(dollars and shares in thousands, except per share data)
June 10, 2026, the Court denied the plaintiffs’ motion for class certification. The Company disputes the allegations in the class action complaint, as well as the asserted violations of the Sherman Act, and intends to defend this action accordingly.
Additionally, from time to time the Company is subject to other lawsuits, demands, claims, governmental investigations and audits and legal proceedings that arise due to the nature of its business, including, without limitation, contractual disputes, such as with payors, suppliers and others, employee-related matters and professional and general liability claims. From time to time, the Company also initiates litigation or other legal proceedings as a plaintiff arising out of contracts or other matters.
* * *
Other than as may be described above, the Company cannot predict the ultimate outcomes of the various legal proceedings and regulatory matters to which the Company is or may be subject from time to time, including those described in this Note 8, or the timing of their resolution or the ultimate losses or impact of developments in those matters, which could have a material adverse effect on the Company’s revenues, earnings and cash flows. Further, any legal proceedings or regulatory matters involving the Company, whether meritorious or not, are time consuming, and often require management’s attention and result in significant legal expense, and may result in the diversion of significant operational resources, may impact the Company's various relationships and/or contracts related to the Company's business or otherwise harm the Company’s business, results of operations, financial condition, cash flows or reputation.
9. Shareholders' equity
Stock-based compensation
During the nine months ended September 30, 2026, the Company granted 735 stock-settled restricted and performance stock units with an aggregate grant-date fair value of $118,130 . Additionally, the Company granted 98 stock-settled stock appreciation rights with an aggregate grant-date fair value of $5,460 .
As of September 30, 2026, the Company had $165,363 in total estimated but unrecognized stock-based compensation expense under the Company's equity compensation and employee stock purchase plans. The Company expects to recognize this expense over a weighted average remaining period of 1.4 years.
Share repurchases
The following table summarizes the Company's common stock repurchases during the three and nine months ended September 30, 2026:
| Three months ended September 30, 2026 | Nine months ended September 30, 2026 | ||||||||||||||||||||||||||||||||||
| Shares repurchased | Amount paid(1) | Average amount(2) | Shares repurchased | Amount paid(1) | Average amount(2) | ||||||||||||||||||||||||||||||
| Open market repurchases: | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Berkshire repurchases: | $ | $ | |||||||||||||||||||||||||||||||||
| Total repurchases: | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
(1)Includes commissions and excise tax, as applicable. The excise tax is recorded as part of the cost basis of treasury shares repurchased and, as such, is included in stockholders’ equity.
Subsequent to September 30, 2026 through October 27, 2026, the Company repurchased 479 shares of its common stock for $86,703 at an average price paid of $180.57 per share, inclusive of the shares repurchased from Berkshire Hathaway Inc. as discussed below.
The Company is authorized to make share repurchases pursuant to prior Board authorizations. This authorization allows the Company to make purchases from time to time in the open market or in privately negotiated transactions, including without limitation, through accelerated share repurchase transactions, derivative transactions, tender offers, Rule 10b5-1 plans or any combination of the foregoing, depending upon market conditions and other considerations.
15
DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(unaudited)
(dollars and shares in thousands, except per share data)
As of October 27, 2026, the Company has a total of $1,212,423 , excluding excise taxes, available under current authorizations for additional share repurchases. Although these share repurchase authorizations do not have an expiration date, the Company remains subject to share repurchase limitations, including under the terms of its senior secured credit facilities.
Berkshire share repurchase agreement
Pursuant to the April 30, 2024 share repurchase agreement with Berkshire Hathaway Inc. on behalf of itself and its affiliates (collectively, Berkshire), the Company had a repurchase obligation at September 30, 2026 to purchase shares from Berkshire for $54,714 in the aggregate, recorded as a payable and classified as due to related party on the Company's consolidated balance sheet. Subsequent to September 30, 2026, as the Company continued open market share repurchases, the obligation to Berkshire increased. On October 27, 2026, the Company settled the Berkshire repurchase obligation in total for 383 shares of common stock for $69,026 , at an average price paid of $180.43 per share.
10. Accumulated other comprehensive loss
| Three months ended September 30, 2026 | Nine months ended September 30, 2026 | ||||||||||||||||||||||||||||||||||
| Interest rate cap agreements | Foreign currency translation adjustments | Accumulated other comprehensive loss | Interest rate cap agreements | Foreign currency translation adjustments | Accumulated other comprehensive loss | ||||||||||||||||||||||||||||||
| Beginning balance | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||
| Unrealized gains (losses) | ( | ||||||||||||||||||||||||||||||||||
| Related income tax | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| ( | |||||||||||||||||||||||||||||||||||
| Reclassification into net income | |||||||||||||||||||||||||||||||||||
| Related income tax | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Ending balance | $ | $ | ( | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||||||||
| Three months ended September 30, 2025 | Nine months ended September 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
| Defined benefit pension plan | Interest rate cap agreements | Foreign currency translation adjustments | Accumulated other comprehensive loss | Defined benefit pension plan | Interest rate cap agreements | Foreign currency translation adjustments | Accumulated other comprehensive loss | ||||||||||||||||||||||||||||||||||||||||
| Beginning balance | $ | $ | ( | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||
| Unrealized (losses) gains | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Related income tax | |||||||||||||||||||||||||||||||||||||||||||||||
| ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Reclassification into net income | |||||||||||||||||||||||||||||||||||||||||||||||
| Related income tax | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
| Ending balance | $ | $ | ( | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||
The interest rate cap agreement net realized losses reclassified into net income are recorded as debt expense (offset) in the corresponding consolidated statements of income. See Note 7 for further details.
11. Variable interest entities (VIEs)
At September 30, 2026, these condensed consolidated financial statements include total assets of VIEs of $794,532 and total liabilities and noncontrolling interests of VIEs to third parties of $172,851 . There have been no material changes in the nature of the Company's arrangements with VIEs or its judgments concerning them from those described in Note 22 to the Company's consolidated financial statements included in the 2025 10-K.
16
DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(unaudited)
(dollars and shares in thousands, except per share data)
12. Fair values of financial instruments
The Company measures the fair value of certain assets and noncontrolling interests subject to put provisions (redeemable equity interests classified as temporary equity) based upon certain valuation techniques that include observable or unobservable inputs and assumptions that market participants would use in pricing these assets, temporary equity and commitments. The Company has also classified assets and temporary equities that are measured at fair value on a recurring basis into the appropriate fair value hierarchy levels as defined by the Financial Accounting Standards Board (FASB).
The following table summarizes the Company’s assets and temporary equities measured at fair value on a recurring basis as of September 30, 2026:
| Total | Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Investments in equity securities | $ | $ | |||||||||||||||||||||
| Interest rate cap agreements | $ | $ | |||||||||||||||||||||
| Temporary equity: | |||||||||||||||||||||||
| Noncontrolling interests subject to put provisions | $ | $ | |||||||||||||||||||||
Investments in equity securities represent investments in various open-ended registered investment companies (mutual funds) and are recorded at fair value estimated based on reported market prices or redemption prices, as applicable. See Note 4 for further discussion.
Interest rate cap agreements, which are classified in other long-term assets on the Company's consolidated balance sheet, are recorded at fair value estimated from valuation models utilizing the income approach and commonly accepted valuation techniques that use inputs from closing prices for similar assets and liabilities in active markets as well as other relevant observable market inputs at quoted intervals such as current interest rates, forward yield curves, implied volatility and credit default swap pricing. The Company does not believe the ultimate amount that could be realized upon settlement of these interest rate cap agreements would be materially different from the fair value estimates currently reported. See Note 7 for further discussion.
The Company's fair value estimates for its senior secured credit facilities are based upon quoted bid and ask prices for these instruments, a level 2 input. For the Company's senior notes, fair value estimates are based on market level 1 inputs. For acquisition obligations and other notes payable, the carrying values presented approximate their estimated fair values, based on estimates of their present values typically using level 2 interest rate inputs. See Note 7 for further discussion of the Company's debt.
17
DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(unaudited)
(dollars and shares in thousands, except per share data)
13. Segment reporting
The Company’s separate operating segments include its U.S. dialysis and related lab services business (its U.S. dialysis business), its U.S. integrated kidney care business, its U.S. other ancillary services and its operations in each foreign jurisdiction (collectively, its ancillary services). The Company also maintains a corporate administrative support function.
The Company’s operating segments have been defined based on the separate financial information that is regularly produced and reviewed by the Company’s chief operating decision maker, its Chief Executive Officer, in making decisions about allocating resources to and assessing the financial performance of the Company’s various operating lines of business. The chief operating decision maker does not review total assets by segment to make decisions regarding resources; therefore, the total assets by segment disclosure has not been included.
18
DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(unaudited)
(dollars and shares in thousands, except per share data)
The following is a summary of segment revenues, segment operating margin, and a reconciliation of segment operating margin to consolidated income before income taxes:
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Segment revenues: | |||||||||||||||||||||||
| U.S. dialysis | |||||||||||||||||||||||
| Patient service revenues: | |||||||||||||||||||||||
| External sources | $ | $ | $ | $ | |||||||||||||||||||
| Intersegment revenues | |||||||||||||||||||||||
| U.S. dialysis patient service revenues | |||||||||||||||||||||||
| Other revenues | |||||||||||||||||||||||
| External sources | |||||||||||||||||||||||
| Total U.S. dialysis revenues | |||||||||||||||||||||||
| Other—Ancillary services | |||||||||||||||||||||||
| Patient service revenues | |||||||||||||||||||||||
| Other external sources | |||||||||||||||||||||||
| Intersegment revenues | |||||||||||||||||||||||
| Total ancillary services | |||||||||||||||||||||||
| Total net segment revenues | |||||||||||||||||||||||
| Elimination of intersegment revenues | ( | ( | ( | ( | |||||||||||||||||||
| Consolidated revenues | $ | $ | $ | $ | |||||||||||||||||||
| Significant segment expenses: | |||||||||||||||||||||||
| U.S. dialysis | |||||||||||||||||||||||
| Patient care costs | $ | $ | $ | $ | |||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
Other segment items(1) | ( | ( | ( | ( | |||||||||||||||||||
| U.S. dialysis segment expenses | |||||||||||||||||||||||
| Segment operating margin: | |||||||||||||||||||||||
| U.S. dialysis | |||||||||||||||||||||||
Other—Ancillary services(2) | ( | ||||||||||||||||||||||
| Total segment operating margin | |||||||||||||||||||||||
| Reconciliation of segment operating income to consolidated income before income taxes: | |||||||||||||||||||||||
| Corporate administrative support | ( | ( | ( | ( | |||||||||||||||||||
| Consolidated operating income | |||||||||||||||||||||||
| Debt expense | ( | ( | ( | ( | |||||||||||||||||||
| Debt extinguishment and modification costs | ( | ( | ( | ||||||||||||||||||||
| Other income (loss), net | ( | ( | |||||||||||||||||||||
| Income before income taxes | $ | $ | $ | $ | |||||||||||||||||||
(1)Other segment items for the Company's U.S. dialysis segment include equity income from nonconsolidated joint ventures for all periods presented.
(2)Includes depreciation and amortization of $20,828 and $21,249 for the three months ended September 30, 2026 and 2025, respectively, and $64,834 and $58,723 for the nine months ended September 30, 2026 and 2025, respectively.
19
DAVITA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(continued)
(unaudited)
(dollars and shares in thousands, except per share data)
Expenditures for property and equipment by reportable segment were as follows:
| Nine months ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| U.S. dialysis | $ | $ | |||||||||
| Other—Ancillary services | |||||||||||
| $ | $ | ||||||||||
14. New accounting standards
New standards not yet adopted
In November 2024, the Financial Accounting Standards Board issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, which requires disaggregated disclosure of income statement expenses, including purchases of inventory, employee compensation, depreciation, and amortization. The amendments in this ASU are effective for fiscal years beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The amendments in this ASU may be applied prospectively or retrospectively, and early adoption is permitted. The Company is currently assessing the effect this guidance may have on its consolidated financial statements.
In September 2025, the Financial Accounting Standards Board issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use software (Subtopic 350-40), which requires capitalization of software costs when management has authorized and committed to funding a software project and it is probable that the project will be completed and used as intended. The amendments in this ASU are effective for fiscal years beginning after December 15, 2027 and interim reporting periods within those annual reporting periods. The amendments in the ASU may be applied prospectively or retrospectively, and early adoption is permitted. The Company is currently assessing the effect this guidance may have on its consolidated financial statements.
In May 2026, the Financial Accounting Standards Board issued ASU 2026-02, Environmental Credits and Environmental Credit Obligations (Topic 818), which requires environmental credits intended for compliance or exchange to be recognized as assets and initially measured at cost, while costs for credits intended for voluntary use are expensed as incurred. Additionally, the guidance establishes impairment assessment models based on intended use and requires environmental credit obligation liabilities to be recognized based on the credits needed to settle the obligation. The amendments in this ASU are effective for fiscal years beginning after December 15, 2027 and interim reporting periods within those annual reporting periods. The amendments in this ASU must be applied using a modified retrospective approach, and early adoption is permitted. The Company is currently assessing the effect this guidance may have on its consolidated financial statements.
20
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward-looking statements
This Quarterly Report on Form 10-Q, including this Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains statements that are forward-looking statements within the meaning of the federal securities laws and as such are intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. These forward-looking statements could include, among other things, statements about our balance sheet and liquidity, our expenses, revenues, billings and collections, patient census, the impact of the cybersecurity incident experienced by the Company in 2025 (cyber incident), the impact of federal government policy changes or shutdowns on our business, including with respect to federal funding and reimbursement rates of Medicare, Medicare Advantage (MA), Medicaid and other government programs, availability or cost of supplies, including without limitation the impact of evolving trade policies and tariffs and any reduction in clinical and other supplies due to any disruptions experienced by third party vendors, including with respect to our ability to provide home dialysis services, treatment volumes, mix expectation, such as the percentage or number of patients under commercial insurance, including potential impacts to such mix as a result of U.S. administration policies, current macroeconomic, marketplace and labor market conditions, and overall impact on our patients and teammates, as well as other statements regarding our future operations, financial condition and prospects, capital allocation plans, expenses, cost saving initiatives, other strategic initiatives, use of contract labor, government and commercial payment rates, expectations related to value-based care (VBC), integrated kidney care (IKC), MA plan enrollment and our international operations, expectations regarding increased competition and marketplace changes, including those related to new or potential entrants in the dialysis and pre-dialysis marketplace and the potential impact of innovative technologies, drugs, or other treatments on the dialysis industry, and expectations regarding our share repurchase program. All statements in this report, other than statements of historical fact, are forward-looking statements. Without limiting the foregoing, statements including the words "expect," "intend," "will," "could," "plan," "anticipate," "believe" and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based on DaVita's current expectations and are based solely on information available as of the date of this report. DaVita undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of changed circumstances, new information, future events or otherwise, except as may be required by law. Actual future events and results could differ materially from any forward-looking statements due to numerous factors that involve substantial known and unknown risks and uncertainties. These risks and uncertainties include, among other things:
•external conditions, including those related to general economic, political and global health conditions, including without limitation, the impact of global events and political or governmental volatility, including in the Middle East and Ukraine; the impact of the domestic political environment and related developments on the current healthcare marketplace, our patients and on our business; the impact of infectious diseases or other adverse conditions on our financial condition, the chronic kidney disease population and our patient population; supply chain challenges and disruptions, including without limitation with respect to certain key services, critical clinical supplies and equipment we obtain from third parties, and including any impacts on our supply chain and cost of supplies as a result of global events, natural disasters or evolving trade policies, including tariffs; the impact on our patients and industry of continued increased competition from dialysis providers and others, including new or potential entrants in the dialysis and pre-dialysis marketplace; the impact of new or innovative technologies, drugs, or other treatments, including our ability to successfully implement new technologies, treatments or therapies in our business such as those related to middle molecule toxin clearance; elevated teammate turnover or labor costs; and our ability to respond to challenging U.S. and global economic and marketplace conditions, including, among other things, our ability to successfully identify cost saving opportunities and execute on related strategic initiatives;
•the concentration of profits generated by higher-paying commercial payor plans for which there is continued downward pressure on average realized payment rates; our ability to negotiate and maintain contracts with these payors on competitive terms or at all; a reduction in the number or percentage of our patients under commercial plans, including, without limitation, as a result of healthcare, immigration or other policies implemented by the U.S. administration, continuing legislative, regulatory or other efforts to restrict or prohibit the use and/or availability of charitable premium assistance, or as a result of payors implementing restrictive plan designs or resulting from negotiations with large commercial payors that we have in the past, and currently are, conducting on a concurrent basis;
•risks arising from laws, regulations or requirements applicable to us or changes thereto, including, without limitation, the One Big Beautiful Bill Act and those related to trade policy, healthcare, charitable premium assistance, privacy, antitrust matters, and acquisition, merger, joint venture or similar transactions and/or labor matters, and potential impacts of changes in interpretation or enforcement thereof or related litigation impacting, among other things, coverage or reimbursement rates for our services or the number of patients enrolled in or that select higher-paying commercial plans, and the risk that we make incorrect assumptions about how our patients will respond to any such developments;
21
•our ability to successfully implement our strategies with respect to IKC and VBC initiatives that may be impacted by, among other things, changes to the Comprehensive Kidney Care Contracting model and home based dialysis, in the desired time frame and in a complex, dynamic and highly regulated environment;
•a reduction in government payment rates under the Medicare End Stage Renal Disease program, state Medicaid or other government-based programs and the impact of the MA benchmark structure and adjustment methodologies;
•our reliance on significant suppliers, service providers and other third party vendors to provide key support to our business operations and enable our provision of services to patients, including, among others, suppliers of certain pharmaceuticals, administrative or other services or critical clinical products; and risks resulting from a closure, reduction, disruption or transition in the services or products provided to us by such suppliers, service providers and third party vendors, which may, among other things, increase our costs or expenses;
•our ability to successfully and cost-effectively maintain, operate or upgrade our information systems or those of third-party service providers upon which we rely and our ability to successfully and cost-effectively adopt or adapt to new technologies, treatments or therapies, including technologies that utilize artificial intelligence;
•legal and compliance risks, such as compliance with complex, and at times, evolving government regulations and requirements, and with additional laws that may apply to our operations as we expand geographically or enter into new lines of business;
•noncompliance by us or our business associates with any privacy or security laws or any security breach by us or a third party, such as the cyber incident, including, among other things, any such non-compliance or breach involving the misappropriation, loss or other unauthorized use or disclosure of confidential information;
•our ability to attract, retain and motivate teammates, including key leadership personnel, our ability to manage potential disruptions to our business and operations, including potential work stoppages, and our ability to manage operating cost increases or productivity decreases that may be related to political unrest, legislative or other changes, union organizing activities, or volatility and uncertainty in the current challenging and highly competitive labor market that has experienced an ongoing nationwide shortage of skilled clinical personnel, among other things;
•changes in practice patterns, pricing, or reimbursement and payment policies or processes related to pharmaceuticals, medical equipment or supplies, including with respect to oral phosphate binders, among other things;
•our ability to develop and maintain relationships with physicians and hospitals, changing affiliation models for physicians, and the emergence of new models of care or other initiatives that, among other things, may erode our patient base and impact reimbursement rates;
•our ability to complete and successfully integrate and operate acquisitions, mergers, dispositions, joint ventures or other strategic transactions on terms favorable to us or at all; and our ability to continue to successfully expand our operations and services in markets outside the United States, or to businesses or products outside of dialysis services;
•the variability of our cash flows, including, without limitation, any extended billing or collections cycles that may be due to, among other things, defects or operational issues in our billing systems such as those experienced during the cyber incident, or defects or operational issues in the billing systems or services of third parties on which we rely; the risk that we may not be able to generate or access sufficient cash in the future to service our indebtedness or to fund our other liquidity needs;
•the effects on us or others of natural or other disasters, public health crises or severe adverse weather events such as hurricanes, earthquakes, fires or flooding;
•factors that may impact our ability to repurchase stock under our share repurchase program and the timing of any such stock repurchases, as well as any use by us of a considerable amount of available funds to repurchase stock;
•our goals and disclosures related to sustainability matters, including, among other things, evolving regulatory requirements affecting environmental, social and governance standards, measurements and reporting requirements; and
•the other risk factors, trends and uncertainties set forth in our Annual Report on Form 10-K for the year ended December 31, 2025 (2025 10-K) and Quarterly Reports on Form 10-Q for the quarters ended March 31 and June 30, 2026, and the risks and uncertainties discussed in any subsequent reports that we file or furnish with the Securities and Exchange Commission (SEC) from time to time.
The following should be read in conjunction with our condensed consolidated financial statements.
22
Company Overview
Our principal business is to provide dialysis and related lab services to patients in the United States, which we refer to as our U.S. dialysis business. We also operate our U.S. integrated kidney care (IKC) business, our U.S. other ancillary services, and our international operations, which we collectively refer to as our ancillary services, as well as our corporate administrative support functions. Our U.S. dialysis business is a leading provider of kidney dialysis services in the U.S. for patients suffering from chronic kidney failure, also known as end stage renal disease (ESRD) or end stage kidney disease (ESKD).
We assess our revenue and operating performance for our U.S. dialysis business based upon several principal metrics including, among others, treatment volume, revenue per treatment and patient care costs. Each of these metrics may be impacted by a number of factors that change from period to period and over time. For example, treatment volumes may be impacted by, among other things, mortality levels, missed treatment rates and admission rates. Revenue per treatment may be impacted by, among other things, rate changes, mix of patients with commercial plans and government programs as primary payor, timing of collections and seasonal factors such as patients meeting health plan co-insurance and deductibles. Patient care costs may be impacted by, among other things, labor market conditions and cost trends in pharmaceuticals and other medical supplies. We have set forth a discussion of certain of such factors below, and we believe that information related to changes in these metrics from period to period allows investors to assess the performance of the business.
We have been and expect to continue to be impacted by external conditions, including, but not limited to, those related to general economic, political and global health conditions and changing population or demographic trends. These conditions can impact our business in a variety of ways, including, among other things, by affecting our patient census, treatment volumes, revenues, results of operations and operating and other costs. Certain of these impacts could be further intensified by global events such as the ongoing conflicts in the Middle East and Ukraine that have continued to drive sociopolitical, geopolitical and economic uncertainty; severe weather events and other natural disasters; and the impact of healthcare, immigration, trade and other policies implemented by federal, state and local governments. These conditions are generally outside of our control, cannot reasonably be predicted and are interrelated or have interdependent complex consequences. As a result, the ultimate impact of these conditions on our business over time will depend on a myriad of future developments and is highly uncertain and difficult to predict. For additional discussion of general economic, marketplace and global health conditions that could impact our business, see Part I Item 1. "Business" and Part I Item 1A. "Risk Factors" in our 2025 10-K.
In the third quarter of 2026, treatment per day volumes increased compared to the third quarter of 2025 primarily driven by patient census increases that were partially offset by a slight increase in missed treatment rates. As noted above, treatment volumes may be impacted by a number of factors including mortality levels, and these levels may be influenced by several factors such as the impact of infectious diseases on our patient population. Adverse changes in mortality rates, particularly in the ESKD and CKD populations, could adversely impact treatment volumes, admission rates, future revenues and non-acquired growth, among other things, and the magnitude of these cumulative impacts could have a material adverse impact on our results of operations, financial condition and cash flows. For additional detail on these risks, see the discussion in Part I Item 1A. "Risk Factors" of our 2025 10-K. Mortality levels may also be influenced by the availability and use of vaccines, treatments and therapies. New technologies or treatments such as those that clear middle molecules from the blood may, among other things, reduce mortality as compared to standard dialysis treatments. Two current treatment pathways that provide middle molecule clearance are expanded hemodialysis (expanded HD) and hemodiafiltration (HDF). We have been working to expand patient access to these therapies as may be prescribed by their physician, and we expect to offer expanded HD to the vast majority of our eligible patients in November. As part of this initiative, we have dedicated resources to securing supply and training our clinical teammates, and we expect to incur costs associated with supplier transitions, among other things. For additional detail on middle molecule treatments, see the discussion in Part I Item 1. “Business” of our 2025 10-K.
Global economic conditions and political and regulatory developments, including, among other things, ongoing inflationary pressures and U.S., state and local administration policies and actions have increased, and may continue to increase, our expenses and may have an impact on our revenue per treatment. For example, the decision to let enhanced premium tax credits expire at the end of 2025 has had an adverse impact on enrollment in the Affordable Care Act exchanges and our commercial mix, which in turn adversely impacts our revenue per treatment, among other things. Future policy changes that further affect commercial, including exchange, enrollment could place additional pressure on our commercial mix and revenue per treatment. These global economic conditions and political and regulatory developments also continue to exert pressure on our staffing and labor costs, which have increased year over year due to, among other factors, the continuation of inflationary conditions. While the cumulative impact of any increased staffing, labor, and supply costs and other expenses could be material, we have experienced productivity improvements and we expect these efficiencies to continue throughout the year. Our industry has also experienced increased union organizing activities. For example, union petitions have been filed at a number of our clinics in California. We have had different results with elections and are in different stages with elections and legal challenges. For additional details on the risks related to rising labor costs and union organizing activities, see the discussion in Part I Item
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1A. "Risk Factors" of our 2025 10-K under the headings, "Our business is labor intensive..." and "Global health conditions, changing population or demographic trends, severe weather events or natural disasters and general economic and political conditions..."
We have continued to invest in new technologies across our business to help modernize our technology platform and strengthen our capabilities. Over the past few years we have accelerated this investment while maintaining overall general and administrative cost discipline. In future periods, we expect to continue this overall cost discipline while decelerating the growth of the technology portion of that spend.
Legislative and Regulatory Developments
On October 20, 2026, the Department of Health and Human Services (HHS) released a 2026 Kidney Care National Plan (Plan) with three principles: (i) promote competition in the kidney marketplace; (ii) address structural impediments to transplantation; and (iii) move further upstream to prevent kidney deterioration. The Plan sets forth policy recommendations to achieve these ambitious policy principles. The Plan references and builds from the Executive Order “Advancing American Kidney Heath” issued in 2019 that directed HHS to undertake initiatives to prevent kidney failure, expand patient choice in dialysis modality and transplant access, and reform the transplant system. We will monitor Plan-related developments and guidance from HHS in order to evaluate the Plan’s potential ultimate impact.
To the extent the Plan or other government action changes the complex and dynamic regulatory environment in which we operate or otherwise impacts the reimbursement ecosystem, such changes can alter the regulatory framework of the healthcare marketplace and shape the competitive landscape for our current dialysis and ancillary businesses as well as for comprehensive and integrated kidney care markets. Such changes may require us to shift strategic priorities and initiatives to successfully compete. Considerable uncertainty exists surrounding the continued development of the Plan and any potential regulatory or policy changes to the healthcare regulatory and legislative environment, including changes that may impact our operations, healthcare access or the availability and affordability of commercial insurance over time, among other things. For additional detail on risks associated with legal, regulatory or policy changes, see the discussion in Part I Item 1A. "Risk Factors" of our 2025 Form 10-K under the headings "Our business is subject to a complex set of governmental laws, regulations and other requirements...;" "We are subject to risks associated with our participation in government healthcare programs"; and “If we are unable to compete successfully…”
Financial Results
The discussion below includes analysis of our financial condition and results of operations for the three months ended September 30, 2026 compared to the three months ended June 30, 2026, and the year-to-date periods for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025.
Consolidated results of operations
The following tables summarize our revenues, operating income (loss) and adjusted operating income (loss) by line of business. See the discussion of our results for each line of business following the tables. When multiple drivers are identified in the following discussion of results, they are listed in order of magnitude:
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| Three months ended | Q3 2026 vs. Q2 2026 | ||||||||||||||||||||||
| September 30, 2026 | June 30, 2026 | Amount | Percent | ||||||||||||||||||||
| (dollars in millions) | |||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| U.S. dialysis | $ | 3,050 | $ | 3,012 | $ | 38 | 1.3 | % | |||||||||||||||
| Other — Ancillary services | 552 | 557 | (5) | (0.9) | % | ||||||||||||||||||
| Elimination of intersegment revenues | (24) | (14) | (10) | (71.4) | % | ||||||||||||||||||
| Total consolidated revenues | $ | 3,578 | $ | 3,554 | $ | 24 | 0.7 | % | |||||||||||||||
| Operating income (loss): | |||||||||||||||||||||||
| U.S. dialysis | $ | 544 | $ | 538 | $ | 6 | 1.1 | % | |||||||||||||||
| Other — Ancillary services | (19) | 57 | (76) | (133.3) | % | ||||||||||||||||||
| Corporate administrative support | (26) | (16) | (10) | (62.5) | % | ||||||||||||||||||
| Operating income | $ | 499 | $ | 579 | $ | (80) | (13.8) | % | |||||||||||||||
Adjusted operating income (loss)(1): | |||||||||||||||||||||||
| U.S. dialysis | $ | 544 | $ | 538 | $ | 6 | 1.1 | % | |||||||||||||||
| Other — Ancillary services | 44 | 57 | (13) | (22.8) | % | ||||||||||||||||||
| Corporate administrative support | (26) | (16) | (10) | (62.5) | % | ||||||||||||||||||
| Adjusted operating income | $ | 561 | $ | 579 | $ | (18) | (3.1) | % | |||||||||||||||
Certain columns, rows or percentages may not sum due to the presentation of rounded numbers.
| Nine months ended | YTD Q3 2026 vs. YTD Q3 2025 | ||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | Amount | Percent | ||||||||||||||||||||
| (dollars in millions) | |||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| U.S. dialysis | $ | 9,004 | $ | 8,717 | $ | 287 | 3.3 | % | |||||||||||||||
| Other — Ancillary services | 1,606 | 1,355 | 251 | 18.5 | % | ||||||||||||||||||
| Elimination of intersegment revenues | (62) | (49) | (13) | (26.5) | % | ||||||||||||||||||
| Total consolidated revenues | $ | 10,548 | $ | 10,023 | $ | 525 | 5.2 | % | |||||||||||||||
| Operating income (loss): | |||||||||||||||||||||||
| U.S. dialysis | $ | 1,588 | $ | 1,529 | $ | 59 | 3.9 | % | |||||||||||||||
| Other — Ancillary services | 44 | 55 | (11) | (20.0) | % | ||||||||||||||||||
| Corporate administrative support | (72) | (101) | 29 | 28.7 | % | ||||||||||||||||||
| Operating income | $ | 1,560 | $ | 1,483 | $ | 77 | 5.2 | % | |||||||||||||||
Adjusted operating income (loss)(1): | |||||||||||||||||||||||
| U.S. dialysis | $ | 1,588 | $ | 1,554 | $ | 34 | 2.2 | % | |||||||||||||||
| Other — Ancillary services | 106 | 55 | 51 | 92.7 | % | ||||||||||||||||||
| Corporate administrative support | (72) | (101) | 29 | 28.7 | % | ||||||||||||||||||
| Adjusted operating income | $ | 1,622 | $ | 1,508 | $ | 114 | 7.6 | % | |||||||||||||||
Certain columns, rows or percentages may not sum due to the presentation of rounded numbers.
(1)For a reconciliation of adjusted operating income (loss) by reportable segment, see the "Reconciliations of Non-GAAP measures" section below.
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U.S. dialysis results of operations
Treatment volume:
| Three months ended | Q3 2026 vs. Q2 2026 | ||||||||||||||||||||||
| September 30, 2026 | June 30, 2026 | Amount | Percent | ||||||||||||||||||||
| Dialysis treatments | 7,329,644 | 7,226,600 | 103,044 | 1.4 | % | ||||||||||||||||||
| Treatment days | 79.0 | 78.0 | 1.0 | 1.3 | % | ||||||||||||||||||
| Average treatments per day | 92,780 | 92,649 | 131 | 0.1 | % | ||||||||||||||||||
Number of normalized treatment days(1) | 79.2 | 78.0 | 1.2 | 1.5 | % | ||||||||||||||||||
| Average treatments per normalized day | 92,546 | 92,649 | (103) | (0.1) | % | ||||||||||||||||||
Normalized non-acquired treatment growth(2) | 0.4 | % | 0.3 | % | |||||||||||||||||||
Certain columns, rows or percentages may not sum due to the presentation of rounded numbers.
(1)Normalized treatment days reflect treatment days adjusted to normalize for the mix of days of the week in a given period.
(2)Normalized non-acquired treatment growth reflects year over year growth in treatment volume, adjusted to exclude acquisitions and other similar transactions, and further adjusted to normalize for the number and mix of treatment days in a given quarter versus the prior year quarter.
| Nine months ended | YTD Q3 2026 vs. YTD Q3 2025 | ||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | Amount | Percent | ||||||||||||||||||||
| Dialysis treatments | 21,585,769 | 21,469,460 | 116,309 | 0.5 | % | ||||||||||||||||||
| Treatment days | 233.7 | 233.7 | — | — | % | ||||||||||||||||||
| Average treatments per day | 92,365 | 91,868 | 497 | 0.5 | % | ||||||||||||||||||
Number of normalized treatment days(1) | 233.7 | 233.7 | — | — | % | ||||||||||||||||||
| Average treatments per normalized day | 92,365 | 91,868 | 497 | 0.5 | % | ||||||||||||||||||
Certain columns, rows or percentages may not sum due to the presentation of rounded numbers.
(1)Normalized treatment days reflect treatment days adjusted to normalize for the mix of days of the week in a given quarter.
Our U.S. dialysis operating revenues and expenses are directly driven by treatment volume. The increase in our U.S. dialysis treatments for the third quarter of 2026 from the second quarter of 2026 was primarily driven by an increase in treatment days. The increase in our U.S. dialysis treatments for the nine months ended September 30, 2026 from the nine months ended September 30, 2025 was primarily driven by an increase in patient count.
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Revenues:
| Three months ended | Q3 2026 vs. Q2 2026 | ||||||||||||||||||||||
| September 30, 2026 | June 30, 2026 | Amount | Percent | ||||||||||||||||||||
| (dollars in millions, except per treatment data) | |||||||||||||||||||||||
| Total revenues | $ | 3,050 | $ | 3,012 | $ | 38 | 1.3 | % | |||||||||||||||
| Average patient service revenue per treatment | $ | 415.25 | $ | 415.87 | $ | (0.62) | (0.1) | % | |||||||||||||||
Certain columns, rows or percentages may not sum due to the presentation of rounded numbers.
| Nine months ended | YTD Q3 2026 vs. YTD Q3 2025 | ||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | Amount | Percent | ||||||||||||||||||||
| (dollars in millions, except per treatment data) | |||||||||||||||||||||||
| Total revenues | $ | 9,004 | $ | 8,717 | $ | 287 | 3.3 | % | |||||||||||||||
| Average patient service revenue per treatment | $ | 416.22 | $ | 405.15 | $ | 11.07 | 2.7 | % | |||||||||||||||
Certain columns, rows or percentages may not sum due to the presentation of rounded numbers.
U.S. dialysis average patient service revenue per treatment for the third quarter of 2026 decreased compared to the second quarter of 2026 primarily driven by normal fluctuations partially offset by increases in average reimbursement rates and improvements in payor mix.
U.S. dialysis average patient service revenue per treatment for the nine months ended September 30, 2026 increased compared to the nine months ended September 30, 2025 primarily driven by Medicare base rate and other annual rate increases and other normal fluctuations, partially offset by unfavorable changes in payor mix.
On October 28, 2026, Centers for Medicare & Medicaid Services (CMS) issued a final rule to update the Medicare ESRD Prospective Payment System (PPS) rate and policies for calendar year 2027. CMS estimates that the overall impact of the proposed rule will increase ESRD freestanding facilities’ average reimbursement by 2.7% in 2027 which includes a proposed increase to account for the incorporation of phosphate binders into the ESRD PPS base rate, and is also subject to quarterly updates of the post Transitional Drug Add-on Payment Adjustment reimbursement of certain pharmaceuticals.
Operating expenses and charges:
| Three months ended | Q3 2026 vs. Q2 2026 | ||||||||||||||||||||||
| September 30, 2026 | June 30, 2026 | Amount | Percent | ||||||||||||||||||||
| (dollars in millions, except per treatment data) | |||||||||||||||||||||||
| Patient care costs | $ | 2,054 | $ | 2,005 | $ | 49 | 2.4 | % | |||||||||||||||
| General and administrative | 316 | 331 | (15) | (4.5) | % | ||||||||||||||||||
| Depreciation and amortization | 144 | 146 | (2) | (1.4) | % | ||||||||||||||||||
| Equity investment income | (8) | (8) | — | — | % | ||||||||||||||||||
| Total operating expenses and charges | $ | 2,506 | $ | 2,474 | $ | 32 | 1.3 | % | |||||||||||||||
| Patient care costs per treatment | $ | 280.22 | $ | 277.40 | $ | 2.82 | 1.0 | % | |||||||||||||||
Certain columns, rows or percentages may not sum due to the presentation of rounded numbers.
| Nine months ended | YTD Q3 2026 vs. YTD Q3 2025 | ||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | Amount | Percent | ||||||||||||||||||||
| (dollars in millions, except per treatment data) | |||||||||||||||||||||||
| Patient care costs | $ | 6,028 | $ | 5,823 | $ | 205 | 3.5 | % | |||||||||||||||
| General and administrative | 967 | 917 | 50 | 5.5 | % | ||||||||||||||||||
| Depreciation and amortization | 446 | 470 | (24) | (5.1) | % | ||||||||||||||||||
| Equity investment income | (25) | (22) | (3) | (13.6) | % | ||||||||||||||||||
| Total operating expenses and charges | $ | 7,416 | $ | 7,188 | $ | 228 | 3.2 | % | |||||||||||||||
| Patient care costs per treatment | $ | 279.24 | $ | 271.23 | $ | 8.01 | 3.0 | % | |||||||||||||||
Certain columns, rows or percentages may not sum due to the presentation of rounded numbers.
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Charges impacting operating income - Cybersecurity incident-related charges. During the second quarter of 2025, we experienced a cybersecurity incident that impacted certain elements of our network and resulted in a temporary disruption of our operations. As a result of our efforts to remediate the incident and restore systems with the assistance of third-party cybersecurity professionals, we incurred general and administrative charges of approximately $12 million during the third quarter of 2025. During the nine months ended September 30, 2025, we incurred patient care costs of approximately $1 million and general and administrative expenses of approximately $24 million related to the incident. These costs do not include the impact related to business interruption on our results.
Patient care costs. U.S. dialysis patient care costs per treatment for the third quarter of 2026 increased from the second quarter of 2026 primarily due to increased medical supplies expenses.
U.S. dialysis patient care costs per treatment for the nine months ended September 30, 2026 increased from the nine months ended September 30, 2025 primarily due to increased compensation expenses, including increased wage rates, as well as increases in medical supplies expense, insurance costs and health benefits expense.
General and administrative expenses. U.S. dialysis general and administrative expenses in the third quarter of 2026 decreased from the second quarter of 2026 primarily due to decreased professional fees.
U.S. dialysis general and administrative expenses for the nine months ended September 30, 2026 increased from the nine months ended September 30, 2025 due to increases in IT-related costs and compensation expenses, including increased wage rates, partially offset by costs related to the cybersecurity incident, as described above.
Depreciation and amortization. U.S. dialysis depreciation and amortization expenses in the third quarter of 2026 decreased compared to the second quarter of 2026 primarily due to lower depreciation expense in the third quarter for certain leasehold improvements.
U.S. dialysis depreciation and amortization expenses for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 decreased primarily due to fully depreciated assets.
Equity investment income. U.S. dialysis equity investment income for the third quarter of 2026 was flat compared to the second quarter of 2026. Equity investment income for the nine months ended September 30, 2026 increased compared to the nine months ended September 30, 2025 due to increased profitability at certain nonconsolidated dialysis partnerships.
Operating income:
| Three months ended | Q3 2026 vs. Q2 2026 | ||||||||||||||||||||||
| September 30, 2026 | June 30, 2026 | Amount | Percent | ||||||||||||||||||||
| (dollars in millions) | |||||||||||||||||||||||
| Operating income | $ | 544 | $ | 538 | $ | 6 | 1.1 | % | |||||||||||||||
| Nine months ended | YTD Q3 2026 vs. YTD Q3 2025 | ||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | Amount | Percent | ||||||||||||||||||||
| (dollars in millions) | |||||||||||||||||||||||
| Operating income | $ | 1,588 | $ | 1,529 | $ | 59 | 3.9 | % | |||||||||||||||
Adjusted operating income(1) | $ | 1,588 | $ | 1,554 | $ | 34 | 2.2 | % | |||||||||||||||
(1)For a reconciliation of adjusted operating income by reportable segment, see the "Reconciliations of Non-GAAP measures" section below.
U.S. dialysis operating income for the third quarter of 2026 increased compared to the second quarter of 2026 as a result of all factors discussed above.
For the nine months ended September 30, 2026, U.S. dialysis operating income and adjusted operating income both increased compared to the nine months ended September 30, 2025, due to the factors discussed above. Operating income was impacted by the cybersecurity incident-related charges in 2025, as described above.
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Other—Ancillary services
Our other operations include ancillary services that are primarily aligned with our core business of providing dialysis services to our network of patients. As of September 30, 2026, these consisted principally of our U.S. IKC business, certain U.S. other ancillary businesses (including our clinical research programs, transplant software business, medical device company and venture investment group), and our international operations.
As of September 30, 2026, DaVita IKC provided integrated care and disease management services to approximately 80,800 patients in risk-based integrated care arrangements and to an additional 3,100 patients in other integrated care arrangements. We also expect to incorporate additional service offerings to our business and pursue additional strategic initiatives in the future as circumstances warrant, which could include, among other things, healthcare services not related to kidney disease.
For a discussion of the risks related to IKC and our ancillary services, see the discussion in the risk factors in Part I Item 1A. "Risk Factors" of our 2025 10-K under the heading, "We invest in strategic and operational initiatives to maintain our business and expand our capabilities in a complex, evolving and highly regulated environment..."
As of September 30, 2026, our international dialysis business owned or operated 598 outpatient dialysis centers located in 14 countries outside of the United States.
Ancillary services results of operations
| Three months ended | Q3 2026 vs. Q2 2026 | ||||||||||||||||||||||
| September 30, 2026 | June 30, 2026 | Amount | Percent | ||||||||||||||||||||
| (dollars in millions) | |||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| U.S. IKC | $ | 144 | $ | 162 | $ | (18) | (11.1) | % | |||||||||||||||
| U.S. other ancillary | 10 | 9 | 1 | 11.1 | % | ||||||||||||||||||
| International | 398 | 386 | 12 | 3.1 | % | ||||||||||||||||||
| Total ancillary services revenues | $ | 552 | $ | 557 | $ | (5) | (0.9) | % | |||||||||||||||
| Operating (loss) income | |||||||||||||||||||||||
| U.S. IKC | $ | 4 | $ | 40 | $ | (36) | (90.0) | % | |||||||||||||||
| U.S. other ancillary | (6) | (8) | 2 | 25.0 | % | ||||||||||||||||||
| International | (16) | 25 | (41) | (164.0) | % | ||||||||||||||||||
| Total ancillary services operating income | $ | (19) | $ | 57 | $ | (76) | (133.3) | % | |||||||||||||||
Adjusted operating (loss) income(1): | |||||||||||||||||||||||
| U.S. IKC | $ | 4 | $ | 40 | $ | (36) | (90.0) | % | |||||||||||||||
| U.S. other ancillary | (6) | (8) | 2 | 25.0 | % | ||||||||||||||||||
| International | 46 | 25 | 21 | 84.0 | % | ||||||||||||||||||
| Total ancillary services adjusted operating income | $ | 44 | $ | 57 | $ | (13) | (22.8) | % | |||||||||||||||
Certain columns, rows or percentages may not sum due to the presentation of rounded numbers.
(1)For a reconciliation of adjusted operating income by reportable segment, see the "Reconciliations of Non-GAAP measures" section below.
29
| Nine months ended | YTD Q3 2026 vs. YTD Q3 2025 | ||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | Amount | Percent | ||||||||||||||||||||
| (dollars in millions) | |||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| U.S. IKC | $ | 422 | $ | 352 | $ | 70 | 19.9 | % | |||||||||||||||
| U.S. other ancillary | 29 | 24 | 5 | 20.8 | % | ||||||||||||||||||
| International | 1,156 | 979 | 177 | 18.1 | % | ||||||||||||||||||
| Total ancillary services revenues | $ | 1,606 | $ | 1,355 | $ | 251 | 18.5 | % | |||||||||||||||
| Operating income (loss): | |||||||||||||||||||||||
| U.S. IKC | $ | 24 | $ | (24) | $ | 48 | 200.0 | % | |||||||||||||||
| U.S. other ancillary | (20) | (14) | (6) | (42.9) | % | ||||||||||||||||||
| International | 40 | 93 | (53) | (57.0) | % | ||||||||||||||||||
| Total ancillary services operating income | $ | 44 | $ | 55 | $ | (11) | (20.0) | % | |||||||||||||||
Adjusted operating income (loss)(1): | |||||||||||||||||||||||
| U.S. IKC | $ | 24 | $ | (24) | $ | 48 | 200.0 | % | |||||||||||||||
| U.S. other ancillary | (20) | (14) | (6) | (42.9) | % | ||||||||||||||||||
| International | 102 | 93 | 9 | 9.7 | % | ||||||||||||||||||
| Total ancillary services adjusted operating income | $ | 106 | $ | 55 | $ | 51 | 92.7 | % | |||||||||||||||
Certain columns, rows or percentages may not sum due to the presentation of rounded numbers.
(1)For a reconciliation of adjusted operating income by reportable segment, see the "Reconciliations of Non-GAAP measures" section below.
Charges impacting operating income - Goodwill and other asset impairment charges. During the third quarter of 2026, we recognized goodwill and other asset impairment charges of $62 million related to our business in China. These charges resulted from a reduction in the estimated fair value of the business driven primarily by adverse reimbursement rate changes and corresponding operating developments across non-renal hospital services.
Operating (loss) income and adjusted operating (loss) income
IKC operating income for the third quarter of 2026 decreased compared to the second quarter of 2026 primarily driven by a net decrease in shared savings. IKC operating income for the nine months ended September 30, 2026 compared to operating loss for the nine months ended September 30, 2025 was impacted by a net increase in shared savings, partially offset by decreased revenues from, and increased medical claims expense related to, our special needs plans.
U.S. other ancillary services operating loss for the third quarter of 2026 remained relatively flat compared to the second quarter of 2026. U.S. other ancillary services operating loss for the nine months ended September 30, 2026 increased compared to the nine months ended September 30, 2025 primarily due to increased operating losses in our medical device company and a reduction of the earn-out obligations related to our transplant software business in the first quarter of 2025.
International operating results were impacted by goodwill and other asset impairment charges incurred in the third quarter of 2026, as described above. International operating income and adjusted operating income for the third quarter of 2026 compared to the second quarter of 2026 were impacted by increased treatment days in the third quarter, a gain on sale of divested centers recognized in the third quarter compared to a loss recognized in the second quarter and average reimbursement rate increases in certain countries. International operating income and adjusted operating income for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 were impacted by non-acquired and acquired treatment growth and average reimbursement rate increases in certain countries, partially offset by favorable changes in the fair value of contingent consideration associated with a prior acquisition recognized in the second quarter of 2025.
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Corporate administrative support
| Three months ended | Q3 2026 vs. Q2 2026 | ||||||||||||||||||||||
| September 30, 2026 | June 30, 2026 | Amount | Percent | ||||||||||||||||||||
| (dollars in millions) | |||||||||||||||||||||||
| Corporate administrative support | $ | (26) | $ | (16) | $ | (10) | (62.5) | % | |||||||||||||||
| Nine months ended | YTD Q3 2026 vs. YTD Q3 2025 | ||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | Amount | Percent | ||||||||||||||||||||
| (dollars in millions) | |||||||||||||||||||||||
| Corporate administrative support | $ | (72) | $ | (101) | $ | 29 | 28.7 | % | |||||||||||||||
Corporate administrative support expenses for the third quarter of 2026 compared to the second quarter of 2026 increased primarily due to increased professional fees. Corporate administrative support expenses for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 decreased primarily due to decreased long-term incentive compensation and professional fees.
Corporate-level charges
| Three months ended | Q3 2026 vs. Q2 2026 | ||||||||||||||||||||||
| September 30, 2026 | June 30, 2026 | Amount | Percent | ||||||||||||||||||||
| (dollars in millions) | |||||||||||||||||||||||
| Debt expense | $ | 150 | $ | 150 | $ | — | — | % | |||||||||||||||
| Debt extinguishment and modification costs | $ | — | $ | 2 | $ | (2) | (100.0) | % | |||||||||||||||
Weighted average effective interest rate(1) | 5.54 | % | 5.43 | % | 0.11 | % | |||||||||||||||||
| Other income, net | $ | 9 | $ | 8 | $ | 1 | 12.5 | % | |||||||||||||||
| Effective income tax rate | 24.9 | % | 21.1 | % | 3.8 | % | |||||||||||||||||
Effective income tax rate attributable to DaVita Inc.(2) | 28.7 | % | 25.6 | % | 3.1 | % | |||||||||||||||||
| Net income attributable to noncontrolling interests | $ | 46 | $ | 78 | $ | (32) | (41.0) | % | |||||||||||||||
(1)Represents our overall weighted average effective interest rate on all debt, including the effect of interest rate caps and amortization of debt discount, premium and deferred financing charges as of the dates presented.
(2)For a reconciliation of our effective income tax rate attributable to DaVita Inc., see the "Reconciliations of Non-GAAP measures" section below.
| Nine months ended | YTD Q3 2026 vs. YTD Q3 2025 | ||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | Amount | Percent | ||||||||||||||||||||
| (dollars in millions) | |||||||||||||||||||||||
| Debt expense | $ | 445 | $ | 432 | $ | 13 | 3.0 | % | |||||||||||||||
| Debt extinguishment and modification costs | $ | 2 | $ | 5 | $ | (3) | (60.0) | % | |||||||||||||||
Weighted average effective interest rate(1) | 5.54 | % | 5.70 | % | (0.16) | % | |||||||||||||||||
| Other income (loss), net | $ | 22 | $ | (82) | $ | 104 | 126.8 | % | |||||||||||||||
| Effective income tax rate | 21.8 | % | 22.4 | % | (0.6) | % | |||||||||||||||||
Effective income tax rate attributable to DaVita Inc.(2) | 26.5 | % | 29.6 | % | (3.1) | % | |||||||||||||||||
| Net income attributable to noncontrolling interests | $ | 202 | $ | 235 | $ | (33) | (14.0) | % | |||||||||||||||
(1)Represents our overall weighted average effective interest rate on all debt, including the effect of interest rate caps and amortization of debt discount, premium and deferred financing charges as of the dates presented.
(2)For a reconciliation of our effective income tax rate attributable to DaVita Inc., see the "Reconciliations of Non-GAAP measures" section below.
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Debt expense
Debt expense for the third quarter of 2026 remained relatively flat compared to the second quarter of 2026. Debt expense for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 increased primarily due to an increase in our long-term debt balance related to the issuance of the 6.75% senior notes due 2033 in the second quarter of 2025, partially offset by decreased weighted average effective interest rates.
Debt extinguishment and modification costs
The three months ended June 30, 2026 and nine months ended September 30, 2026 included debt extinguishment and modification costs of $2 million composed of fees incurred in connection with the Term Loan B-2 incremental transaction that occurred in June 2026. Comparatively, the nine months ended September 30, 2025 included debt extinguishment and modification costs of $5 million composed partially of fees incurred in connection with the Term Loan B-2 transaction and partially of deferred financing costs and original issue discount written off for the extinguishment of Term Loan B-1 and partial repayment of Term Loan A-1.
Other income (loss), net
Other income for the third quarter of 2026 decreased compared to the second quarter of 2026, primarily due to gains on foreign currency transactions, partially offset by decreased net income on investments. Other income for the nine months ended September 30, 2026 compared to other loss for the nine months ended September 30, 2025 was impacted by equity investment losses at Mozarc Medical Holding LLC recognized in 2025.
Provision for income taxes
The effective income tax rate and the effective income tax rate attributable to DaVita Inc. increased for the third quarter of 2026 compared to the second quarter of 2026 primarily due to a non-deductible goodwill impairment charge recognized in the third quarter and benefits recognized in the second quarter related to the purchase of renewable energy credits.
The effective income tax rate and the effective income tax rate attributable to DaVita Inc. for the nine months ended September 30, 2026 decreased compared to the nine months ended September 30, 2025 primarily due to the write-down of a 2014 tax refund claim recognized in the second quarter of 2025, partially offset by a non-deductible goodwill impairment charge recognized in the third quarter of 2026.
Net income attributable to noncontrolling interests
The decrease in net income attributable to noncontrolling interests for the third quarter of 2026 compared to the second quarter of 2026, and for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025, was driven primarily by $34 million of goodwill and other asset impairments attributable to minority interests in our China business, as described above, partially offset by increased profitability at certain U.S. dialysis partnerships.
U.S. dialysis accounts receivable
Our U.S. dialysis accounts receivable balances at September 30, 2026 and December 31, 2025 were $1.684 billion and $1.610 billion, respectively, representing approximately 51 days and 49 days of revenue outstanding (DSO), respectively. The increase in DSO is primarily due to timing of collections. Our DSO calculation is based on the current quarter’s average revenues per day. There were no significant changes from the second quarter of 2026 to the third quarter of 2026 in the carrying value of accounts receivable outstanding over one year old.
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Liquidity and capital resources
The following table summarizes our major sources and uses of cash, cash equivalents and restricted cash:
| Nine months ended September 30, | YTD Q3 2026 vs. YTD Q3 2025 | ||||||||||||||||||||||
| 2026 | 2025 | Amount | Percent | ||||||||||||||||||||
| (dollars in millions and shares in thousands) | |||||||||||||||||||||||
| Net cash provided by operating activities: | |||||||||||||||||||||||
| Net income | $ | 888 | $ | 748 | $ | 140 | 18.7 | % | |||||||||||||||
| Non-cash items in net income | 763 | 807 | (44) | (5.5) | % | ||||||||||||||||||
| Other working capital changes | (279) | (194) | (85) | (43.8) | % | ||||||||||||||||||
| Other | (42) | (14) | (28) | (200.0) | % | ||||||||||||||||||
| $ | 1,330 | $ | 1,346 | $ | (16) | (1.2) | % | ||||||||||||||||
| Net cash used in investing activities: | |||||||||||||||||||||||
Maintenance capital expenditures(1) | $ | (309) | $ | (304) | $ | (5) | (1.6) | % | |||||||||||||||
Development capital expenditures(2) | (122) | (126) | 4 | 3.2 | % | ||||||||||||||||||
| Acquisition expenditures | (42) | (118) | 76 | 64.4 | % | ||||||||||||||||||
| Proceeds from sale of self-developed properties | 13 | 29 | (16) | (55.2) | % | ||||||||||||||||||
| Other | (293) | 28 | (321) | (1,146.4) | % | ||||||||||||||||||
| $ | (753) | $ | (492) | $ | (261) | (53.0) | % | ||||||||||||||||
| Net cash used in financing activities: | |||||||||||||||||||||||
| Debt issuances, net | $ | 490 | $ | 788 | $ | (298) | (37.8) | % | |||||||||||||||
| Deferred and debt-related financing costs | (11) | (26) | 15 | 57.7 | % | ||||||||||||||||||
| Distributions to noncontrolling interests | (244) | (233) | (11) | (4.7) | % | ||||||||||||||||||
| Contributions from noncontrolling interests | 5 | 4 | 1 | 25.0 | % | ||||||||||||||||||
| Stock award exercises and other share issuances | (54) | (16) | (38) | (237.5) | % | ||||||||||||||||||
| Share repurchases | (870) | (1,464) | 594 | 40.6 | % | ||||||||||||||||||
| Other | (71) | (13) | (58) | (446.2) | % | ||||||||||||||||||
| $ | (755) | $ | (960) | $ | 205 | 21.4 | % | ||||||||||||||||
| Total number of shares repurchased | 5,837 | 10,001 | (4,164) | (41.6) | % | ||||||||||||||||||
Free cash flow(3) | $ | 672 | $ | 716 | $ | (44) | (6.1) | % | |||||||||||||||
Certain columns or rows may not sum due to the presentation of rounded numbers.
(1)Maintenance capital expenditures represent capital expenditures to maintain the productive capacity of the business and include those made for investments in information technology, dialysis center renovations, capital asset replacements, and any other capital expenditures that are not development or acquisition expenditures.
(2)Development capital expenditures principally represent capital expenditures (other than acquisition expenditures) made to expand the productive capacity of the business and include those for new U.S. and international dialysis center developments, dialysis center expansions and relocations, and new or expanded contracted hospital operations.
(3)For a reconciliation of our free cash flow, see the "Reconciliations of Non-GAAP measures" section below.
Consolidated cash flows
Consolidated cash flows from operating activities during the nine months ended September 30, 2026 decreased compared to the nine months ended September 30, 2025. The decrease was principally from changes in working capital items partially offset by an increase in operating results.
Free cash flow during the nine months ended September 30, 2026 decreased as compared to the nine months ended September 30, 2025 primarily due to a decrease in net cash provided by operating activities, as described above, as well as a decrease in proceeds from sale of self-developed properties and an increase in distributions to noncontrolling interest.
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Significant sources of cash during the period included the incurrence of an incremental Term Loan B-2 tranche in the aggregate principal amount of $500 million and net draws on our revolving line of credit of $80 million. Significant uses of cash included regularly scheduled principal payments under our senior secured credit facilities totaling approximately $38 million on our Term Loan A-2 and $17 million on Term Loan B-2, as well as additional required payments under other debt arrangements. In addition, during the nine months ended September 30, 2026 we used cash to repurchase 5.8 million shares of our common stock.
By comparison, the same period in 2025 included the refinancing of Term Loan B-1 with a secured Term Loan B-2 facility in the aggregate principal amount of $1,878 million and issuance of the 6.75% Senior Notes in the amount of $1,000 million. Significant uses of cash during the nine months ended September 30, 2025 included the pay-off of the remaining principal balance outstanding on our Term Loan B-1 in the amount of $1,628 million, principal prepayment on our Term Loan A-1 in the amount of $250 million and repayment of $93 million in interest-free funding made available by UnitedHealth Group and its affiliates following the cybersecurity breach that affected Change Healthcare, a subsidiary of UnitedHealth Group, during the first quarter of 2025, regularly scheduled principal payments under our senior secured credit facilities totaling approximately $59 million on our Term Loan A-1, $8 million on Term Loan B-1 and $5 million on Term Loan B-2, as well as additional required payments under other debt arrangements. We also recognized financing cash outflows of $12 million in deferred financing costs related to the 6.75% Senior Notes transaction, as well as $13 million in cap premium fees for our 2025 forward interest rate cap agreements. In addition, during the nine months ended September 30, 2025 we used cash to repurchase 10.0 million shares of our common stock.
Dialysis center footprint
The table below shows the footprint of our dialysis operations by number of dialysis centers owned or operated:
| U.S. | International | ||||||||||||||||||||||
| Nine months ended September 30, | |||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Number of centers operated at beginning of period | 2,657 | 2,657 | 585 | 509 | |||||||||||||||||||
| Acquired centers | 10 | 2 | 15 | 59 | |||||||||||||||||||
| Developed centers | 7 | 12 | 3 | 6 | |||||||||||||||||||
Net change in non-owned managed or administered centers(1) | 2 | — | 6 | 27 | |||||||||||||||||||
Sold and closed centers(2) | (2) | (3) | (8) | (13) | |||||||||||||||||||
Closed centers(3) | (3) | (6) | (3) | (3) | |||||||||||||||||||
| Number of centers operated at end of period | 2,671 | 2,662 | 598 | 585 | |||||||||||||||||||
(1)Represents the change in the number of dialysis centers which we manage or provide administrative services to but in which we own a noncontrolling equity interest or which are wholly-owned by third parties.
(2)Represents dialysis centers that were sold and/or closed for which the majority of patients were not retained.
(3)Represents dialysis centers that were closed for which the majority of patients were retained and transferred to one of our other existing outpatient dialysis centers.
Available liquidity
As of September 30, 2026, we had $1.42 billion available and $80 million drawn on our $1.5 billion revolving line of credit under our senior secured credit facilities. Credit available under this revolving line of credit is reduced by the amount of any letters of credit outstanding thereunder, of which there were none as of September 30, 2026. We separately had approximately $185 million in letters of credit outstanding under a separate bilateral secured letter of credit facility.
See Note 7 to the condensed consolidated financial statements for components of our long-term debt and their interest rates.
We believe that our cash flow from operations and other sources of liquidity, including from amounts available under our senior secured credit facilities and our access to the capital markets, will be sufficient to fund our scheduled debt service under the terms of our debt agreements and other obligations for the foreseeable future, including the next 12 months. From time to time, depending on market conditions, our capital requirements and the availability of financing, among other things, we may seek to refinance our existing debt and may incur additional indebtedness. Our primary recurrent sources of liquidity are cash from operations and cash from borrowings, which are subject to general, economic, financial, competitive, regulatory and other factors that are beyond our control, as described in Part I Item 1A. "Risk Factors" of our 2025 10-K.
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Reconciliations of Non-GAAP measures
The following tables provide reconciliations of adjusted operating income (loss) to operating income (loss) as presented on a U.S. generally accepted accounting principles (GAAP) basis for our U.S. dialysis reportable segment as well as for our U.S. IKC business, our U.S. other ancillary services, our international business, and for our total ancillary services which combines them and is disclosed as our other segments category, in addition to our corporate administrative support.
These non-GAAP or "adjusted" measures are presented because management believes these measures are useful adjuncts to, but not alternatives for, our GAAP results. Specifically, management uses adjusted operating income (loss) to compare and evaluate our performance period over period and relative to competitors, to analyze the underlying trends in our business, to establish operational budgets and forecasts and for incentive compensation purposes. We believe this non-GAAP measure is also useful to investors and analysts in evaluating our performance over time and relative to competitors, as well as in analyzing the underlying trends in our business. We also believe this presentation enhances a user's understanding of our normal operating income by excluding certain items which we do not believe are indicative of our ordinary results of operations.
In addition, our effective income tax rate on income attributable to DaVita Inc. excludes noncontrolling owners' income, which primarily relates to non-tax paying entities. We believe this adjusted effective income tax rate is useful to management, investors and analysts in evaluating our performance and establishing expectations for income taxes incurred on our ordinary results attributable to DaVita Inc.
Finally, our free cash flow represents net cash provided by operating activities less distributions to noncontrolling interests, development capital expenditures, and maintenance capital expenditures; plus contributions from noncontrolling interests and proceeds from the sale of self-developed properties. Management uses this measure to assess our ability to fund acquisitions and meet our debt service obligations and we believe this measure is equally useful to investors and analysts as an adjunct to cash flows from operating activities and other measures under GAAP.
It is important to bear in mind that these non-GAAP "adjusted" measures are not measures of financial performance under GAAP and should not be considered in isolation from, nor as substitutes for, their most comparable GAAP measures.
There were no non-GAAP adjustments for the three months ended June 30, 2026.
| Three months ended September 30, 2026 | |||||||||||||||||||||||||||||||||||||||||
| U.S. dialysis | Ancillary services | Corporate administration | Consolidated | ||||||||||||||||||||||||||||||||||||||
| U.S. IKC | U.S. Other | International | Total | ||||||||||||||||||||||||||||||||||||||
| (dollars in millions) | |||||||||||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | 544 | $ | 4 | $ | (6) | $ | (16) | $ | (19) | $ | (26) | $ | 499 | |||||||||||||||||||||||||||
Goodwill and other asset impairments(1) | — | — | — | 62 | 62 | — | 62 | ||||||||||||||||||||||||||||||||||
| Adjusted operating income (loss) | $ | 544 | $ | 4 | $ | (6) | $ | 46 | $ | 44 | $ | (26) | $ | 561 | |||||||||||||||||||||||||||
| Nine months ended September 30, 2026 | |||||||||||||||||||||||||||||||||||||||||
| U.S. dialysis | Ancillary services | Corporate administration | Consolidated | ||||||||||||||||||||||||||||||||||||||
| U.S. IKC | U.S. Other | International | Total | ||||||||||||||||||||||||||||||||||||||
| (dollars in millions) | |||||||||||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | 1,588 | $ | 24 | $ | (20) | $ | 40 | $ | 44 | $ | (72) | $ | 1,560 | |||||||||||||||||||||||||||
Goodwill and other asset impairments(1) | — | — | — | 62 | 62 | — | 62 | ||||||||||||||||||||||||||||||||||
| Adjusted operating income (loss) | $ | 1,588 | $ | 24 | $ | (20) | $ | 102 | $ | 106 | $ | (72) | $ | 1,622 | |||||||||||||||||||||||||||
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| Nine months ended September 30, 2025 | |||||||||||||||||||||||||||||||||||||||||
| U.S. dialysis | Ancillary services | Corporate administration | Consolidated | ||||||||||||||||||||||||||||||||||||||
| U.S. IKC | U.S. Other | International | Total | ||||||||||||||||||||||||||||||||||||||
| (dollars in millions) | |||||||||||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | 1,529 | $ | (24) | $ | (14) | $ | 93 | $ | 55 | $ | (101) | $ | 1,483 | |||||||||||||||||||||||||||
Cybersecurity incident-related charges(2) | 25 | — | — | — | — | — | 25 | ||||||||||||||||||||||||||||||||||
| Adjusted operating income (loss) | $ | 1,554 | $ | (24) | $ | (14) | $ | 93 | $ | 55 | $ | (101) | $ | 1,508 | |||||||||||||||||||||||||||
Certain columns or rows in the above tables may not sum due to the presentation of rounded numbers.
(1)Represents non-cash goodwill and other asset impairment charges related to our business in China. These charges are excluded from our non-GAAP metrics because they do not occur in or reflect the ordinary course of our ongoing business, are inherently unpredictable and are non-cash amounts, the exclusion of which facilitates comparison of historical, current and forecasted financial results.
(2)Represents charges recognized to remediate a cybersecurity incident and restore systems during the second quarter of 2025. We have excluded these charges from our non-GAAP metrics as we do not believe they are indicative of our ordinary results of operations. See additional discussion above under the heading "Cybersecurity incident-related charges" within "U.S. dialysis results of operations".
| Three months ended | Nine months ended | ||||||||||||||||||||||
| September 30, 2026 | June 30, 2026 | September 30, 2026 | September 30, 2025 | ||||||||||||||||||||
| (dollars in millions) | |||||||||||||||||||||||
| Income before income taxes | $ | 359 | $ | 435 | $ | 1,135 | $ | 964 | |||||||||||||||
| Noncontrolling owners' income primarily attributable to non-tax paying entities | (46) | (78) | (202) | (236) | |||||||||||||||||||
| Income before income taxes attributable to DaVita Inc. | $ | 313 | $ | 357 | $ | 933 | $ | 729 | |||||||||||||||
| Income tax expense | $ | 89 | $ | 92 | $ | 247 | $ | 216 | |||||||||||||||
| Income tax benefit (expense) attributable to noncontrolling interests | 1 | (1) | — | — | |||||||||||||||||||
| Income tax expense attributable to DaVita Inc. | $ | 90 | $ | 91 | $ | 247 | $ | 216 | |||||||||||||||
| Effective income tax rate on income attributable to DaVita Inc. | 28.7 | % | 25.6 | % | 26.5 | % | 29.6 | % | |||||||||||||||
Certain columns or rows may not sum or recalculate due to the presentation of rounded numbers.
| Nine months ended | |||||||||||
| September 30, 2026 | September 30, 2025 | ||||||||||
| (dollars in millions) | |||||||||||
| Net cash provided by operating activities | $ | 1,330 | $ | 1,346 | |||||||
| Adjustments to reconcile net cash provided by operating activities to free cash flow: | |||||||||||
| Distributions to noncontrolling interests | (244) | (233) | |||||||||
| Contributions from noncontrolling interests | 5 | 4 | |||||||||
| Maintenance capital expenditures | (309) | (304) | |||||||||
| Development capital expenditures | (122) | (126) | |||||||||
| Proceeds from sale of self-developed properties | 13 | 29 | |||||||||
| Free cash flow | $ | 672 | $ | 716 | |||||||
Certain columns or rows may not sum due to the presentation of rounded numbers.
Off-balance sheet arrangements and aggregate contractual obligations
In addition to the debt obligations and operating lease liabilities reflected on our balance sheet, we have certain potential commitments associated with letters of credit, working capital funding or other financing, if necessary, to certain nonconsolidated businesses that we manage and in which we own a noncontrolling equity interest or which are wholly-owned by third parties. We also have agreed to future investments in particular equity method and other investments if certain milestones are achieved or capital calls are made, as applicable. For additional information, see Note 16 to the consolidated financial statements included in our 2025 10-K.
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We also have potential obligations to purchase the noncontrolling interests held by third parties in many of our majority-owned dialysis partnerships and other nonconsolidated entities. These obligations are in the form of put provisions that are exercisable at the third-party owners’ discretion within specified periods as outlined in each specific put provision. For additional information on these obligations and how we measure and report them, see Note 12 to the condensed consolidated financial statements included in this report and Notes 16 and 23 to the consolidated financial statements included in our 2025 10-K.
For information on the maturities and other terms of our long-term debt and outstanding letters of credit, see Note 7 to the condensed consolidated financial statements.
As of September 30, 2026, we have outstanding purchase agreements with various suppliers to purchase set amounts of dialysis equipment, parts, pharmaceuticals, supplies and technology services. If we fail to meet the minimum purchase commitments under these contracts during any year, we are required to pay the difference to the supplier, as described further in Note 16 to the consolidated financial statements included in our 2025 10-K.
New Accounting Standards
See discussion of new accounting standards in Note 14 to the condensed consolidated financial statements.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Interest rate and foreign currency sensitivity
There has been no material change in the nature of the Company's interest rate risks or foreign currency exchange risks from those described in Part II Item 7A, "Quantitative and Qualitative Disclosures about Market Risk" of our Annual Report on Form 10-K for the year ended December 31, 2025.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
As required by Exchange Act Rule 13a-15(b), our management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), conducted an evaluation of the effectiveness of our disclosure controls and procedures, as defined in Exchange Act Rule 13a-15(e), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of September 30, 2026.
Changes in Internal Control over Financial Reporting
In connection with the evaluation required by Exchange Act Rule 13a-15(d), our management, including our CEO and CFO, concluded that no changes in our internal control over financial reporting occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II.
OTHER INFORMATION
Item 1. Legal Proceedings
The information required by this Part II, Item 1 is incorporated herein by reference to the information set forth under the caption "Commitments and contingencies" in Note 8 to the condensed consolidated financial statements included in this report.
Item 1A. Risk Factors
There have been no material changes to the risk factors previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K (2025 10-K) for the year ended December 31, 2025 filed with Securities and Exchange Commission. You should carefully consider the risks included in our 2025 10-K, together with all the other information in this Quarterly Report on Form 10-Q, including the forward-looking statements in Part I, Item 2 of this Quarterly Report on Form 10-Q under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations."
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Share repurchases
The following table summarizes our repurchases of our common stock during the third quarter of 2026:
| Period | Total number of shares purchased | Average price paid per share(1) | Total number of shares purchased as part of publicly announced plans or programs | Approximate dollar value of shares that may yet be purchased under the plans or programs | ||||||||||||||||||||||
| (dollars and shares in thousands, except per share data) | ||||||||||||||||||||||||||
| July 1-31, 2026 | 183 | $ | 199.55 | 183 | $ | 1,372,960 | ||||||||||||||||||||
| August 1-31, 2026 | 180 | $ | 177.46 | 180 | $ | 1,340,955 | ||||||||||||||||||||
| September 1-30, 2026 | 231 | $ | 182.46 | 231 | $ | 1,298,950 | ||||||||||||||||||||
| 594 | $ | 186.21 | 594 | |||||||||||||||||||||||
(1)Excludes commissions and excise tax.
The Company is authorized to make share repurchases pursuant to prior Board authorizations. These authorizations allow the Company to make purchases from time to time in the open market or in privately negotiated transactions, including without limitation, through accelerated share repurchase transactions, derivative transactions, tender offers, Rule 10b5-1 plans or any combination of the foregoing, depending upon market conditions and other considerations.
As of October 27, 2026, we had approximately $1,212 million, excluding excise taxes, available under current repurchase authorizations for additional share repurchases. Although these share repurchase authorizations do not have an expiration date, we remain subject to share repurchase limitations including under our current senior secured credit facilities.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Director and Officer Trading Arrangements
| Name and Title | Date Adopted | Type of Trading Arrangement(1) | Nature of Trading Arrangement | Duration of Trading Arrangement | Aggregate Number of Securities | ||||||||||||
Javier Rodriguez, Chief Executive Officer | September 7, 2026 | Rule 10b5-1 Trading Arrangement | Sale | December 8, 2026 to August 26, 2027, or such earlier date upon which all transactions are completed or expire without execution | Up to 115,810 shares | ||||||||||||
(1)The trading arrangement marked as a “Rule 10b5-1 trading arrangement” is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act.
38
Item 6. Exhibits
| Exhibit | ||||||||
| Number | ||||||||
31.1 | Certification of the Chief Executive Officer, dated October 29, 2026, pursuant to Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. ü | |||||||
31.2 | Certification of the Chief Financial Officer, dated October 29, 2026, pursuant to Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. ü | |||||||
32.1 | Certification of the Chief Executive Officer, dated October 29, 2026, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ü | |||||||
32.2 | Certification of the Chief Financial Officer, dated October 29, 2026, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ü | |||||||
| 101.INS | XBRL Instance Document - the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. ü | |||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. ü | |||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. ü | |||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. ü | |||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. ü | |||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation, Linkbase Document. ü | |||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). ü | |||||||
| ü | Included in this filing. | ||||
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| DAVITA INC. | |||||||||||
| BY: | /s/ CHRISTOPHER M. BERRY | ||||||||||
| Christopher M. Berry | |||||||||||
| Chief Accounting Officer* | |||||||||||
Date: October 29, 2026
| * | Mr. Berry has signed both on behalf of the Registrant as a duly authorized officer and as the Registrant’s principal accounting officer. | ||||
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