Executive Summary

Q3 2025 tracked internal plans but missed Street on adjusted EPS while revenue was roughly in line: revenue $3.42B (+4.8% YoY; +1.2% QoQ), adjusted EPS $2.51; GAAP EPS $2.04 . Street EPS was $3.17* and revenue $3.43B*, implying a material EPS miss and slight revenue miss (details below).
Management narrowed FY25 guidance: adjusted OI $2.035–$2.135B (midpoint reaffirmed), adjusted EPS $10.35–$11.15 (midpoint reaffirmed) and FCF $1.0–$1.25B . CFO outlined a Q4 uplift of ~+$60M OI driven by day‑mix tailwind, IKC timing and higher RPT, partly offset by seasonal costs .
U.S. dialysis RPT rose sequentially by ~$6 to $410.59, supported by rate increases and phosphate binders; PCC per treatment rose ~$5 to $273.54; normalized non‑acquired growth remained slightly negative (‑0.6% YoY) .
Strategic/investment narrative: continued IT modernization and adoption of AI across systems; ongoing research push around middle‑molecule clearance (MODEL/MEMOIRS) to improve outcomes .
Capital allocation remains active: $465M repurchases (3.3M shares) in Q3 and 0.4M more post‑quarter; leverage 3.37x LTM “Consolidated EBITDA,” within 3.0–3.5x target range .

What Went Well and What Went Wrong

What Went Well

Sequential revenue and RPT improvement: revenue up to $3.420B; RPT increased to $410.59 (+$6 QoQ) on higher reimbursement and phosphate binders, partially offset by payer mix .
Cost management and productivity: despite a $5 sequential increase in PCC per treatment to $273.54, management highlighted cost discipline and productivity as continuing supports to profitability and outlook .
Guidance discipline and Q4 bridge: FY25 midpoint reaffirmed with narrower ranges; CFO detailed a clear Q4 OI bridge: +$50M RPT (vaccines, rate increases, claim resolutions), +$25M IKC timing, +$15M day‑mix tailwind, offset by ~‑$30M seasonal costs .
Quote: “Our third quarter performance was in line with our expectations and keeps us on track to achieve our full‑year guidance” — CEO Javier Rodriguez .

What Went Wrong

Street miss on EPS and EBITDA: adjusted EPS $2.51 vs $3.17* and EBITDA ~$685M vs ~$751M*, driven by quarterly phasing, day‑mix headwind and IKC timing (phased revenues earlier in Q2), plus cyber‑related effects earlier in the year .
Volume softness and mistreatments: U.S. treatments per day declined 1.5% YoY; normalized non‑acquired growth was ‑0.6%; management cited lingering mistreatment rates and earlier flu/cyber disruptions; Q3 average treatments/day 91,680 (down vs Q2) .
G&A pressure from IT/cyber: G&A $322M; Q3 included ~$11.7M in cyber remediation costs (excluded from adjusted metrics) and broader IT investments; these weigh on margins near term .

Financial Results

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($, Billions)	$3.224	$3.380	$3.420
GAAP Diluted EPS ($)	$2.00	$2.58	$2.04
Adjusted Diluted EPS ($)	$2.00	$2.95	$2.51
Operating Income ($, Millions)	$439	$538	$506
Adjusted Operating Income ($, Millions)	$439	$551	$517
Operating Margin (%)	13.6%	15.9%	14.8%
Adjusted Operating Margin (%)	13.6%	16.3%	15.1%

Vs. Wall Street (S&P Global) consensus

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue – Actual ($B)	$3.2235	$3.3795	$3.4202
Revenue – Consensus ($B)	$3.2069*	$3.3631*	$3.4349*
Result	Beat	Beat	Miss (‑$0.015B)
Adjusted EPS – Actual ($)	$2.00	$2.95	$2.51
Adjusted EPS – Consensus ($)	$2.02*	$2.75*	$3.17*
Result	Slight miss	Beat	Miss

Key operating KPIs

KPI	Q2 2025	Q3 2025	Commentary
U.S. Treatments	7,186,217	7,242,725	Per‑day down in Q3 due to day mix; mistreatments discussed on call
Avg Treatments/Day	92,131	91,680	Down 0.5% QoQ
Normalized non‑acquired growth	(0.8)%	(0.6)%	Slight improvement
Revenue per Treatment ($)	$404.58	$410.59	+$6.01 QoQ, rates + binders; mix partially offset
PCC per Treatment ($)	$268.36	$273.54	+$5.18 QoQ (wages, pharma, health benefits)
AR DSO (days)	58	53	Collection trend improved
FCF ($M)	$157	$604	Cash generation seasonally stronger in Q3

Segment breakdown (Q3 2025)

Segment	Revenue ($M)	Operating Income ($M)
U.S. Dialysis	$2,980	$530 (Adj $542)
Integrated Kidney Care (IKC)	$94	$(21)
Other U.S. Ancillary	$9	$(4)
International	$352	$27
Eliminations / Corp	$(15)	Corporate $(26)
Total	$3,420	$506

Balance sheet and leverage (select)

Total debt $10.31B; net debt $9.60B; LTM “Consolidated EBITDA” $2.84B; leverage ratio 3.37x (max permitted 5.0x) .
Share repurchases: 3.3M shares for $465M in Q3; additional 0.4M for $54M post‑quarter .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted Operating Income ($B)	FY 2025	$2.010 – $2.160	$2.035 – $2.135	Narrowed; midpoint reaffirmed
Adjusted Diluted EPS ($)	FY 2025	$10.20 – $11.30	$10.35 – $11.15	Narrowed; midpoint reaffirmed
Free Cash Flow ($B)	FY 2025	$1.00 – $1.25	$1.00 – $1.25	Maintained

Management notes guidance excludes cyber costs, impair certificated equity losses, FX, and similar non‑GAAP items; adjusted tax rate excludes noncontrolling owners’ income .

Earnings Call Themes & Trends

Topic	Q1 2025 (May)	Q2 2025 (Aug)	Q3 2025 (Oct)	Trend
AI/technology & systems	No specific AI callouts in release; focus on stable ops	CEO highlighted IT/AI as part of “new wave of clinical innovation”	Investing in revenue ops tech, replacing scheduling; adopting AI across platform	Increasing emphasis; spend in G&A near term
Cyber incident	Not applicable	~$13.5M cyber remediation (non‑GAAP); negative impacts to RPT & mistreatments in Q2; FY volume revised lower	~$11.7M additional cyber G&A (non‑GAAP); residual volume impacts discussed, cost excluded from adjusted metrics	Impact fading; mostly in Q2; minor in Q3/Q4 per mgmt
Volume/mistreatments	NAG ‑0.6%	Treatments/day ‑1.1% YoY; mistreatments elevated post‑cyber	Treatments/day ‑1.5% YoY; per‑day down 0.5% QoQ; mgmt aims to lower mortality, improve mistreatments	Stabilizing; Q4 day‑mix tailwind expected
RPT & binders	RPT $400.14; binders added to bundle	RPT +$4.5 QoQ; binders volume lower than expected; net ~$50M FY OI from binders maintained	RPT $410.59 (+$6 QoQ); mix drag; expect Q4 step‑up from vaccines, rates, claims	RPT trending up; mix variability remains
IKC (value‑based care)	Patients 62.1k risk‑based	IKC +$26M adj OI due to timing; FY still ~$(20)M	Q3 IKC adj OI $(21)M; FY flat or better vs 2024; CKCC 2024 performance timing could shift 2025/2026	Timing variability persists
Regulatory/policy	FY25 guide set; general risks cited	2026 ESRD proposed rule ~+2% in line; reiterated risks	Monitoring enhanced premium tax credits, MA dynamics; FY guide narrowed; gov’t shutdown commentary	Elevated uncertainty into 2026
Middle‑molecule clearance	—	CEO discussed device innovation & middle‑molecule clearance broadly	Launched MODEL & MEMOIRS studies; ~9,000 patients over 2 years	Building clinical evidence base

Management Commentary

Strategy/operations: “Our third quarter performance was in line with our expectations and keeps us on track to achieve our full‑year guidance” — CEO .
Technology/AI investments: “We’re adopting AI solutions across our platform… investments are critical to advancing clinical care… and driving long‑term cost efficiencies.” — CEO .
Q4 bridge: “To hit the midpoint… we’d need about a $60M uplift in OI… ~$(30)M seasonal costs offset by +$15M day‑mix, +$25M IKC, +$50M RPT (vaccines, rate increases, resolution of older claims)” — CFO .
Mortality/volume focus: “We really have to lower our mortality… [working on] middle molecule clearance… GLP‑1s… protocols to predict hospitalization.” — CEO .

Q&A Highlights

Volume headwinds: Mistreatments elevated in H1 from flu/cyber; 2025 treatments guided down 75–100 bps; structurally, 2026 could improve by ~50–75 bps vs 2025 as discrete headwinds fade (non‑guidance framing) .
Premium tax credits (exchanges): Potential ~$120M OI headwind over three years if enhanced credits lapse, with $40M/$70M/$10M phasing; significant uncertainty remains given policy debate .
Q4 drivers/variability: Day‑mix tailwind (~~$15M), IKC timing (~~$25M), RPT uplift (~~$50M) weighed against seasonal costs (~~$30M); RPT uplift partly from aged claims; variability around RPT and IKC drives range .
Mozarc equity loss: Q3 included $51.3M equity losses incl. $25.9M impairment; CFO said charge largely eliminates P&L drag in 2026 (non‑operating) .
Mix dynamics: Commercial mix ~11%, down ~15 bps sequentially (normal variability); management views commercial mix as a larger swing factor than MA mix .

Estimates Context

Q3 vs Street: Adjusted EPS $2.51 vs $3.17* (miss); revenue $3.420B vs $3.435B* (slight miss); EBITDA ~$685M vs ~$751M* (miss). Drivers: day‑mix headwind, IKC timing earlier in Q2, cyber‑related effects earlier in year, and small mix headwinds .
Prior quarters: Q2 EPS $2.95 vs $2.75* (beat) and revenue $3.380B vs $3.363B* (beat); Q1 EPS $2.00 vs $2.02* (slight miss) and revenue $3.224B vs $3.207B* (beat) .
FY25 context: Guidance midpoint EPS $10.75 vs FY25 consensus $10.70* (aligned); FY26 EPS consensus $12.67* underscores expected multi‑year earnings growth if execution holds .

Values marked with an asterisk (*) are retrieved from S&P Global.

Key Takeaways for Investors

Q3 outcome: modest revenue in‑line but meaningful adjusted EPS miss vs Street; narrative hinges on a Q4 OI uplift from day mix, IKC timing and RPT seasonality/resolutions .
RPT tailwinds vs mix: sequential RPT improvement aided by rates and binders; payer mix modestly negative; management expects further Q4 uplift (vaccines/rates/claims) .
Volume remains the swing: mistreatment rates and mortality are the core levers; discrete 2025 headwinds (flu/cyber/hurricane) should fade, offering a better 2026 base .
IKC timing: quarterly phasing remains variable; FY 2024 CKCC performance timing could land in late‑2025 or 2026, influencing intra‑year comparisons .
Policy watch: enhanced premium tax credits and MA recalibration create 2026 mix uncertainty; management sizes a potential $120M three‑year OI headwind if credits lapse .
Cash and capital allocation: strong Q3 FCF ($604M) supports ongoing buybacks; leverage at 3.37x within target range .
Trading implications: near‑term sentiment sensitive to EPS miss and confidence in the Q4 uplift; medium‑term thesis rests on RPT durability, volume normalization, operational efficiency, and policy trajectory .

Appendix: Additional Details and Reconciliations

Non‑GAAP adjustments: cyber remediation ($11.7M in Q3; $24.2M YTD), Mozarc impairment/restructuring ($25.9M in Q3 within other loss), prior‑period tax item in Q2—all excluded from adjusted metrics .
Cash flow: Q3 OCF $842M; FCF $604M (LTM FCF $996M) .
Debt & rates: weighted average effective interest rate ~5.70% during and at quarter end; 97% of debt fixed or capped .

DAVITA INC. (DVA)·Q3 2025 Earnings Summary