DaVita Inc.

Good evening. My name is Michelle, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the DaVita third quarter 2026 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer period. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, please press star, then the number two. Mr. Eliason, you may begin your conference here.

Thank you and welcome to our third quarter conference call. We appreciate your continued interest in our company. I'm Nic Eliason, Group Vice President of Investor Relations, and joining me today are Javier Rodriguez, our CEO, and Joel Ackerman, our CFO. Please note that during this call we may make forward-looking statements within the meaning of the federal securities laws. All of these statements are subject to known and unknown risks and uncertainties. that could cause the actual results to differ materially from those described in the forward-looking statements. For further details concerning these risks and uncertainties, please refer to our third quarter earnings press release and our SEC filings, including our most recent annual report on Form 10-K, all subsequent quarterly reports on Form 10-Q, and other subsequent filings that we make with the SEC. Our forward-looking statements are based on information currently available to us, and we do not intend and undertake no duty to update these statements except as may be required by law. Additionally, we'd like to remind you that during this call, we will discuss some non-GAAP financial measures. A reconciliation of these non-GAAP measures to the most comparable GAAP financial measures is included in our earnings press release, furnished to the SEC, and available on our website. I will now turn the call over to Javier Rodriguez.

Thank you, Nick. Good afternoon, everyone, and thank you for joining the call today. Once again, our teammates have delivered excellent care for our patients and solid results for our shareholders. We're seeing meaningful progress across our clinical strategy with investments and innovation translating into better patient outcomes and stronger business performance. Our maturing integrated kidney care business is a prime example as it continues to deliver clinical performance for our patients while starting to demonstrate its economic potential. In the same spirit, our rollout of expanded HD dialyzer marks an exciting new chapter in how we're advancing kidney care. Today, I'll share more on these priorities, review our third quarter financial performance, provide our outlook for the remaining of the year, and briefly discuss policy. But first, as always, let's begin with our clinical highlight. Today, I will highlight our advancements in fluid management. We're often asked about the clinical drivers behind our recent mortality improvements, and fluid overload is one of those critical areas we target. Because kidney failure impairs the body's ability to shed fluid, managing fluid intake between treatment and safely removing excess fluid during dialysis requires constant vigilance from both patients and care teams. Left unmanaged, excess fluid places strain on the cardiovascular and pulmonary systems, contributing to high blood pressure, heart failure, and respiratory difficulties. By developing specialized clinical protocols combined with dedicated teammate education and proprietary digital tools, we've uniquely empowered our care teams to manage fluid more precisely. Through these integrated efforts, we've seen a 10% improvement in treatment achieving optimal fluid removal, a 5% improvement in how patients manage weight gain between treatments, and nearly 5-pound reduction in the average patient's weight. These advancements are critical drivers supporting our continued mortality improvement and enhancing our patients' daily quality of life. While we're on the topic of clinical, I will transition now to an update on our efforts to deliver enhanced care for our patients through clearance of middle molecules. Last quarter, we highlighted recent clinical evidence for expanded HD dialyzers, including the potential for greater than 20% mortality improvement, along with our plans to deploy this technology broadly across our network. We have completed pilots in 150 centers for more than 10,000 patients to ensure a smooth and successful deployment at scale. Based on this experience, here's what we've learned. First, the feedback from patients and physicians was overwhelmingly positive. As background, approximately 75% of total patient census is clinically eligible for expanded HD. This eligible pool excludes patients receiving dialysis at home or in acute care setting, pediatric patients, and patients with acute kidney injury. Adoption amongst those clinically eligible patients in the pilot was greater than 90%, exceeding our expectations. And within that cohort, patients tell us they feel better after treatment and have more energy compared to their prior therapy. One goal with expanded HD is to enhance patients' quality of life, and it is exciting to hear early feedback to support this effort. Similarly, our physician partners have been overwhelmingly supportive. The buy-in from the medical community is critical to successful innovation, and nephrologists have responded to the clinical evidence and are actively engaged to transform the standard of care. We deeply appreciate the collaboration of our physician partners in our continued efforts to innovate. Second, we are operationally ready. Our teammates, systems, supply chain are well prepared to successfully manage this transition. Over 95% of clinical teammates nationally are now trained on Expanded HD to ensure a seamless, continuity of care for our patients. As a reminder, the new Expanded HD dilators are compatible with our existing dialysis machines. As a result, we will begin our national rollout next week and expect a swift, network-wide transition, bringing expanded HD to the vast majority of eligible patients in November. Finally, from the financial perspective, we do not expect any material net impact on adjusted operating income for 2026 or 2027. We anticipate the positive impact of lower mortality and higher volume growth to begin in the back half of 2028 and grow over time. Most importantly, this innovation means more patients living longer, representing a key milestone in our path back to 2% or greater volume growth by 2029. Transition to financial performance. Third quarter adjusted operating income was $561 million and adjusted earnings per share was $3.82. Joel will provide details on the moving pieces underlying those Q3 results. Taking a step back from the quarterly numbers to look at the full year, I want to highlight two trends shaping 2026 and our future performance. Starting with technology. Over the past few years, we've invested more than a billion dollars to modernize a technology platform and strengthen our capabilities across our business. These investments are delivering tangible clinical and financial benefits, contributing to improvements in mortality, revenue operations, labor productivity, IKC care management, and pharmacy costs. I'm calling this out to highlight that our IT investments in U.S. dialysis is higher than we forecasted heading into the year, so it represents a drag on our full-year financial performance. Going forward, we expect that growth in technology investments will decelerate. The second highlight is our results on integrated kidney care, or IKC. We were above plan in the third quarter and we're on track to outperform our original IKC guidance for the year. We made meaningful progress delivering on the patient impact we began talking about in 2021, both upstream in chronic kidney disease and for existing ESKD dialysis patients. Let me provide some color on the two operating levers which contribute to IKC's financial performance. First is the medical spend under management. As we have noted in the past quarters, we have been disciplined as we seek opportunities to grow this business. We're making progress heading into the next year, including our recent announcement of Humana Partnership, which will expand upstream care to approximately 10,000 chronic kidney disease patients. This is particularly encouraging because it reflects continued gains in clinical performance as our care model matures. Our investment in technology are improving the ability of our care teams to identify where and when to intervene to help our patients be healthier. Our clinical interventions are driving reductions in avoidable hospital admissions and readmissions while achieving higher rates of planned optimal dialysis transitions. These results improve patient outcomes while generating substantial shared savings for CMS and our Medicare Advantage health plan partners. This gives us growing confidence in 2026 and the long-term economic of the IKC business. We now expect IKC to deliver at least $65 million of adjusted operating income in 2026, an increase of at least $25 million over the prior guidance. This all leads to an update on our financial outlook for the remaining of the year. With one quarter remaining in the year, we are now narrowing our full year 2026 guidance ranges. We now expect adjusted operating income within a range of $2.175 billion to $2.25 billion in adjusted earnings per share within a range of $14.30 to $15.20. This reflects the increased guidance for IKC offset by higher U.S. dialysis costs, particularly higher technology investments, as I previously noted. Before I turn it over to Joel, I want to briefly comment on two recent policy updates. First, yesterday, CMS released the ESRD Final Rule. This confirms the permanent incorporation of phosphate binders into the dialysis bundle, which is a great outcome for patients and has been a successful cost saver for the government. Within the overall rate adjustment, there are more moving pieces than in prior years. The headline rate increase for large dialysis organizations is 3.5%, which is up 1.5% from the proposed rule. Unlike prior years, this will be subject to downward quarterly adjustments after Q1. And second, a few thoughts on the Kidney Care National Plan released by HHS last week. We share the administration's goals around the earlier intervention, slowing disease progression, improving the transplant process, expanding patient choice, and improving outcomes. We also appreciate the opportunity to work with the government to create a framework to encourage further competition within this complex ecosystem. Many elements of the plan will require policy development and potentially congressional action before translating into specific actions, and we look forward to working with HHS and the relevant agencies as that work progresses. I will now turn the call over to Joel to discuss our financial performance in more detail. Thank you, Javier.