DaVita expands operating margins as treatment volumes rise
The kidney care provider reported consolidated revenues of $3.554 billion for the second quarter.
DaVita Inc. (DVA), the kidney care provider, reported consolidated revenues of $3.554 billion for the second quarter. The result followed a sequential increase from $3.416 billion in the first quarter and a year-over-year increase from $3.380 billion.
The company saw a trajectory of margin expansion during the period. Operating margin rose to 16.3% in the second quarter, up from 14.1% in the first quarter and 14.8% in the second quarter of the prior year.
Growth in the core dialysis business accelerated. Normalized non-acquired treatment growth for the second quarter was 0.3% year-over-year, an increase from 0.1% in the first quarter. U.S. dialysis treatment volume increased by 1.09% per day compared to the first quarter, averaging 92,649 treatments per day.
Revenue per treatment fell to $415.87 from $417.59 in the first quarter, though it remained higher than the $402.38 recorded in the second quarter of 2024. Patient care costs per treatment decreased to $277.40 from $280.11 in the first quarter, although costs rose from $270.05 in the prior-year period.
The Integrated Kidney Care segment expanded its footprint. Risk-based patients grew to 64,900 from 62,600 in the first quarter, and annualized risk-based spend increased to $5.8 billion from $5.4 billion.
Cash flow metrics improved sequentially. Operating cash flow rose to $490 million from $321 million in the first quarter, while free cash flow increased to $256 million from $140 million.
DaVita provided full-year 2024 guidance, projecting adjusted operating income between $2.15 billion and $2.25 billion and adjusted diluted net income per share between $14.10 and $15.20. The company expects free cash flow to range from $1.0 billion to $1.25 billion.
In June 2024, the company incurred a new $500 million Term Loan B-2 tranche to repay its revolving line of credit and provide cash for general corporate purposes. DaVita repurchased 2.2 million shares at an average price of $154.95 during the quarter, compared to 3.0 million shares at $133.70 in the first quarter.