At DaVita’s dialysis centers, patient care costs per treatment fell from the first quarter to the second. Management attributes that to seasonal payroll-tax relief, higher productivity, and lower pharmaceutical costs, including phosphate binders. That is the operational detail behind a filing that shows profit acceleration, alongside a substantial share-count reduction.
Revenue for the three months ended June 30 rose 5.2% to $3.6 billion, while operating income grew 7.7% to $579.0 million. Net income jumped 33.1% to $265.4 million, and diluted EPS climbed 55.8% to $4.02.
The arithmetic has a second engine: diluted shares fell 14.6%, to 66.1 million. DaVita made more money from the business, but the per-share result also had a much smaller denominator doing some heavy lifting.
Management’s explanation for the revenue line points to pricing rather than a sudden change in the basic scale of the operation. For the six months ended June 30, the company said average revenue per U.S. dialysis treatment rose mainly because of Medicare base-rate and other annual rate increases, partly offset by payer mix.
"U.S. dialysis average patient service revenue per treatment for the six months ended June 30, 2026 increased compared to the six months ended June 30, 2025 primarily driven by Medicare base rate and other annual rate increases, as well as other normal fluctuations, partially offset by changes in payor mix."
10-Q 2026-08-04
The plain-English version: DaVita is collecting more per treatment, while the latest three-month operating result also benefited from lower costs per treatment.
"U.S. dialysis patient care costs per treatment for the second quarter of 2026 decreased from the first quarter of 2026 primarily due to decreased labor costs, stemming from a seasonal decrease in payroll taxes and increased productivity levels at our dialysis centers, as well as decreased pharmaceutical costs, including phosphate binders."
10-Q 2026-08-04
That distinction matters for margins. Operating margin widened only 0.4 percentage points year over year, to 16.3%, but net margin expanded 1.6 points, to 7.5%. The larger per-share improvement was helped by the share-count decline, while net income growth drove the net-margin expansion.
Cash adds another wrinkle. The balance ended the period at $669.0 million, down 5.6% from a year earlier, even as comparable-period cash conversion improved: free-cash-flow margin rose 4.1 percentage points and capital-spending intensity declined. DaVita says favorable collections helped versus the prior year’s cybersecurity-related collection disruption. Debt expense also increased over the six-month comparison because of the long-term debt issued in 2025, partly offset by lower effective rates.
The broader company record makes the revenue increase look familiar rather than extraordinary. Annual revenue rose from $12.8 billion in 2024 to $13.6 billion in 2025, while annual operating margin slipped from 16.3% to 15.0%. The latest three-month filing therefore shows a return to the prior margin level at the operating line, but with a large per-share boost from fewer shares.
At the latest close, DaVita shares were $227.93, down 2.4% on the day. The price context is separate from the accounting mechanics, but it puts attention on the unresolved split in the numbers: treatment costs were lower, cash remained lower, and EPS growth outran both revenue and operating income by a wide margin.
DaVita’s next quarterly report leaves one factual question on the table: will it disclose another period of lower patient-care costs per treatment alongside the same cash and debt trends?
DaVita’s 10-Q attributes higher treatment revenue to annual rate increases and lower second-quarter care costs to seasonal payroll-tax effects, productivity, and lower pharmaceutical costs.