DaVita Inc (DVA, Financial), the largest provider of dialysis services in the United States, reported its financial and operating results for the second quarter of 2024. The company operates over 3,000 facilities worldwide, primarily in the U.S., and treats approximately 250,000 patients globally each year. Government payers dominate U.S. dialysis reimbursement, with DaVita receiving about two-thirds of U.S. sales at government reimbursement rates, primarily Medicare.
Financial Highlights
For the quarter ended June 30, 2024, DaVita Inc (DVA, Financial) reported consolidated revenues of $3.187 billion, surpassing the analyst estimate of $3.151 billion. However, the diluted earnings per share (EPS) came in at $2.50, slightly below the analyst estimate of $2.54. Adjusted diluted EPS was $2.59.
| Metric | Q2 2024 | Analyst Estimate |
|---|---|---|
| Revenue | $3.187 billion | $3.151 billion |
| Diluted EPS | $2.50 | $2.54 |
| Adjusted Diluted EPS | $2.59 | N/A |
Operational Performance
Operating income for the quarter was $506 million, representing an operating margin of 15.9%. The company also reported an operating cash flow of $799 million and free cash flow of $654 million. DaVita repurchased 2.7 million shares of its common stock at an average price of $140.14 per share.
Income Statement and Key Metrics
Net income attributable to DaVita Inc for Q2 2024 was $223 million, down from $240 million in Q1 2024. The diluted EPS for the quarter was $2.50, compared to $2.65 in the previous quarter. Adjusted net income was $230 million, with an adjusted diluted EPS of $2.59.
| Metric | Q2 2024 | Q1 2024 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Net Income | $223 million | $240 million | $462 million | $294 million |
| Diluted EPS | $2.50 | $2.65 | $5.15 | $3.17 |
| Adjusted Net Income | $230 million | $205 million | $434 million | $307 million |
| Adjusted Diluted EPS | $2.59 | $2.26 | $4.84 | $3.31 |
Challenges and Achievements
DaVita faced several challenges, including increased patient care costs and general and administrative expenses. The company incurred charges for U.S. dialysis center closures amounting to $15.3 million for the quarter. Despite these challenges, DaVita extended the maturity date for a portion of Term Loan B-1, amounting to $1.64 billion, and managed to repurchase a significant number of shares, indicating strong cash flow management.
Commentary
"On behalf of all the teammates who provide life-saving care to our patients, I am grateful for the opportunity to report another positive quarter for DaVita," said Javier Rodriguez, CEO of DaVita Inc. "We continue to enhance our clinical capabilities while optimizing our revenue operations and cost structure."
Conclusion
DaVita Inc (DVA, Financial) demonstrated robust revenue growth and effective cost management despite facing operational challenges. The company's ability to generate strong cash flows and repurchase shares highlights its financial stability. However, the slight miss on EPS indicates areas for potential improvement. Investors and analysts will be keenly watching how DaVita navigates these challenges in the coming quarters.
Explore the complete 8-K earnings release (here) from DaVita Inc for further details.
