DAVITA INC. — Call Transcript 2026

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 fourth quarter 2025 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'd like to withdraw your question, press star then the number two. Thank you, Mr. Eliason, you may begin your conference. Thank you and welcome to our fourth quarter conference call. 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 fourth 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, Nic. Good afternoon, everyone, and thank you for joining the call today. As we evaluate 2025, the year represents the latest evidence of our differentiated capabilities, strategy, and platform. We executed it with discipline, met challenges head-on, and delivered on our commitments we set at the beginning of the year. At the same time, we continue to invest to enhance patient care and fuel growth in the years ahead. As a result, we're well-positioned for 2026 and beyond, with opportunities to deliver clinical and financial results consistent with our longstanding track record and guidance. Today, I'll review our fourth quarter results, share insights on our clinical strategy, and wrap up with guidance for 2026. But first, as always, I will start with a clinical highlight. This quarter, I want to spotlight the clinical results achieved in our Integrated Kidney Care, or IKC, programs. Patients managed under our IKC models consistently achieve better outcomes than the broader dialysis population. Our IKC patients are 35% more likely to start dialysis with a permanent vascular access, resulting in a better patient experience and costs that are 3x lower during the first 180 days of dialysis. IKC patients also experience fewer bloodstream infections, achieve higher vaccination rates, and are more likely to choose home dialysis. We also see more than 10% improvement in treatment adherence with fewer missed treatments. Most importantly, these outcomes lead to what matters most: a better quality of life with fewer hospitalizations. Transitioning to our fourth quarter performance, we delivered results in line with our expectations. As anticipated, revenue per treatment accelerated in the quarter alongside strength in IKC. This was partially offset by higher-than-expected health benefit costs. For the full year, we achieved adjusted operating income and adjusted earnings per share in the top half of our guidance range despite the impact of cyber incident on our U.S. dialysis business. Let me elaborate briefly on our IKC performance. As we've noted previously, we analyze IKC results on a full-year basis given quarterly volatility driven by timing of revenue recognition. As we look back to our Capital Markets Day in 2021, we outline a five-year path to IKC profitability by 2026. Our strategy is centered on sustainable contract, physician partnership, and a scalable care model supported by technology. With full-year 2025 results, we're reporting our first profitable year in IKC, which is slightly ahead of schedule. This milestone reinforces two key learnings. First, our hands-on clinical models work. As reflected in the outcomes I highlighted earlier, our dedicated IKC caregivers are delivering on the promise of value-based care by keeping patients healthier and out of the hospital. Second, we've proven there's a viable business model that is good for our patients, good for the healthcare system, and can generate value for DaVita and our partners. The business will continue to evolve over time alongside changes in government policy, competitive dynamics, and innovation. Building from this 2025 benchmark, we expect to deliver an incremental $20 million of IKC operating income growth in 2026. Looking more broadly at our business, we see significant opportunities ahead and believe DaVita's uniquely positioned to deliver on them. Before turning to those opportunities, let me provide some context on our journey to date. Over the past five years, we've navigated wide-range challenges, from macro events like global pandemic and inflation to supply chain disruption and cyber incident. And through it all, we delivered on our multi-year commitments. We provided high-quality care for our patients, built a solid foundation for the future, and generated compound annual growth in line with our long-term target for adjusted operating income and adjusted EPS. This performance reflects the determination of our teammates and the resilience of our operating model. This experience also gives us the confidence as we look at the opportunities and challenges ahead of us. We're managing two near-term financial headwinds: continued pressure on treatment growth driven by elevated mortality and the revenue per treatment impact from the expiration of enhanced premium tax credits. Even with these headwinds and the reality of unknown challenges, we remain confident in our ability to sustain our track record of profit growth. That confidence starts with the most important driver of our long-term success: an unwavering focus on clinical excellence. We're executing a set of targeted initiatives designed to enhance patient care, reduce mortality and missed treatments rates, and ultimately support higher treatment volume growth. I will highlight four specific examples. First is vaccination. For many years, we achieved flu vaccination rates above 90% for our patients and clinical teammates, and we're working hard to return to that benchmark. Our patients who received a vaccination early in this flu season have shown a 9% lower risk of hospitalization and a 27% lower risk of mortality compared to their unvaccinated peers. Protecting our vulnerable patients from the flu, COVID, and pneumonia is a clinical imperative. Second is GLP-1 adoption and adherence. A growing body of evidence confirms that GLP-1s can reduce major adverse cardiac events and mortality for many dialysis patients. We're actively working with physicians to help our patients navigate the clinical, operational, and financial complexities of these drugs. Third is advancing dialysis technologies to remove middle molecules. Innovations such as medium-cutoff dialyzers and hemodiafiltration enable the clearance of a broader range of toxins from the body during the treatment. These technologies help the patients recover more quickly after dialysis and show promise of reducing mortality by as much as 20% or more. Finally, today we announced a strategic clinical partnership with Elara Caring, a leading home care provider, to establish an ESKD-focused offering. This model spans Elara's skilled home health, personal care, and hospice service lines and is designed to lower hospitalizations and missed treatment rates while improving the overall patient experience. Joel will provide more details about the investment we're making alongside this strategic partnership. Together, these clinical initiatives demonstrate how our patient-centered strategy directly supports our business objectives. By improving quality of life, reducing hospitalization, and advancing clinical outcomes, we continue to believe we're on a path back to at least 2% volume growth. In parallel, we maintain a diligent focus on costs and innovation to improve efficiency, continue sustainable U.S. dialysis margins, and deliver durable financial performance. With that backdrop, we remain confident in our ability to deliver adjusted operating income growth over the next three years that is consistent with our long-term growth target of 3%-7%. On adjusted EPS, with our current capital allocation program and removing the headwinds from our investment in Mozarc, we see an opportunity to exceed our long-term adjusted EPS guidance of 8%-14%. Taken together, these priorities reinforce our ability to generate sustainable shareholder value and continued leadership in kidney care. I'll wrap up my comments with our guidance for 2026. We expect adjusted operating income within a range of $2.085 billion-$2.235 billion, which represents 3.2% growth at the midpoint. Our guidance for adjusted earnings per share is $13.60-$15.00 even, reflecting a 33% growth at the midpoint. This guidance exceeds our long-term EPS targets, reflecting our expectation for another year of strong operating performance and the cumulative benefits of our capital allocation strategy. Finally, we expect to generate free cash flow between $1 billion and $1.25 billion. I will now turn it over to Joel to discuss our financial performance and outlook in more detail. Thank you, Javier. First, I'll provide some detail on our fourth quarter and full-year 2025 results and then share a detailed breakdown of our 2026 guidance. Fourth quarter adjusted operating income was $586 million, bringing full-year adjusted operating income to $2.094 billion. Adjusted earnings per share from continuing operations for the fourth quarter was $3.40, with full-year adjusted EPS from continuing operations of $10.78. Free cash flow was $309 million in the fourth quarter, which brings full-year free cash flow to just over $1 billion. Starting with U.S. dialysis, treatments declined about 20 basis points versus the fourth quarter of 2024. Although our total patient census growth during the quarter was as we expected, the timing of the census gain was back-end loaded in the quarter. For the full year, U.S. treatments declined by 1.1% versus 2024, in line with our expectations from the Q3 earnings call. Next, revenue per treatment growth accelerated in the fourth quarter, as anticipated, up approximately $12 sequentially. Fourth quarter growth was the result of four primary factors. First, the resolution of aged receivables consistent with what we forecasted on the Q3 call. Second, normal rate increases and improved yield. Third, private pay mix improved slightly after a dip in the third quarter. And finally, RPT benefited from the typical seasonal impact of flu vaccines. Full-year RPT was approximately $410, up 4.7% for the year. As you think about RPT for the first quarter of 2026, keep in mind that Q1 bears a typical $5 or more RPT headwind due to patient responsibility amounts early in the year. Patient care costs per treatment increased by approximately $6 sequentially. The increase was primarily the result of seasonal increases, including health benefit costs and higher supply costs. PCCs per treatment finished the year 5.9% higher than 2024, near the top end of our revised range of expectations, but lower than our original guidance for the year. As a reminder, approximately half the year-over-year increase in PCCs was from binders in the bundle. Turning to our other segments, international adjusted OI was $21 million, resulting in full-year adjusted operating income of $114 million. This reflects strong operating performance for our international business as we delivered positive organic growth and integrated the recent acquisitions in Latin America. In IKC, as Javier noted, we delivered our first profitable fiscal year. Q4 adjusted OI was $46 million, and full-year adjusted OI was $22 million. We saw strength across all three of the businesses within IKC, and final reconciliations of our 2024 performance resulted in higher-than-expected shared savings revenue. Switching to capital allocation, during the fourth quarter, we repurchased 2.7 million shares, and we repurchased an additional 1.7 million shares since the end of the quarter. As is typical, a portion of these shares were repurchased from Berkshire Hathaway pursuant to the terms of our publicly filed repurchase agreement, which formulaically results in Berkshire's ownership remaining at or below 45%. For the full year 2025, we repurchased nearly 13 million shares for approximately $1.8 billion. At year-end, our leverage ratio was 3.26x consolidated EBITDA, down from the third quarter and at the midpoint of our target leverage range of 3x-3.5x. With that, let me turn to 2026. As Javier said, we are guiding to an adjusted operating income range with a midpoint of $2.16 billion. At this midpoint, we have built in the following assumptions for U.S. dialysis. Treatment volume will be approximately flat to 2025. This assumes a flu impact consistent with what we saw in the 2023-2024 season. We are not assuming any improvement in non-flu mortality, though, as Javier outlined, we are working on a number of initiatives to actively drive down mortality among our patients. Last, on admissions, we are assuming 2026 looks similar to 2025, excluding the impact of the cyber incident. To help with modeling our treatments by quarter, we have added a table to the press release showing normalized treatment days by quarter. This number adjusts for the mix of treatment days and holiday shifts, making it the most helpful number to model quarterly treatments. For example, you'll notice a year-over-year normalized treatment day headwind in Q1 2026, which drives our expectation for negative year-over-year U.S. dialysis treatment volume growth in the first quarter of this year. Moving on to RPT. For 2026, we are forecasting growth of 1%-2%. The primary driver of this is typical rate increases. We also expect an estimated $40 million headwind from the expiration of enhanced premium tax credits for exchange plans, which is largely offset by the elimination of the $45 million headwind in 2025 from the cyber incident. We expect total U.S. dialysis costs to grow 1.25%-2.25%, mostly driven by typical wage rate increases and G&A investments, partially offset by a decline in depreciation and amortization. The net impact of all this, at the midpoint of our guidance, is an increase in adjusted operating income for the U.S. dialysis business of approximately 1.5%. Also baked into the midpoint of our adjusted OI guidance range is an expectation for each of IKC and international to contribute approximately 1% to enterprise-adjusted OI growth. Altogether, these results reflect our expectation for 3.2% adjusted operating income growth at the midpoint of our range versus 2025. For seasonality, we expect first quarter adjusted operating income will represent approximately 20% of our full-year guidance. In other words, about $430 million at the midpoint. Below the operating income line, we expect positive other income of approximately $10 million for the year. This represents significant year-over-year improvement in this line item, resulting from no further losses from our investment in Mozarc since we have now recognized cumulative losses equal to our investment. We expect debt expense to decline by $20 million-$40 million versus 2025. This is driven by lower interest rates year-over-year, both from the decline in rates and from our repricing and refinancing transactions, which lowered spreads. We expect non-controlling interest to be approximately 16% of U.S. dialysis OI, and we expect effective tax rate to be in the range of 24.5%-26.5%. Regarding capital allocation, related to Javier's comments, we announced the signing of an approximately $200 million minority investment alongside a majority investment from Ares Private Equity Funds to acquire Elara Caring. After the transaction closes, which we expect to happen mid-year, we expect this to contribute positively to our other income line. In addition, we will continue to repurchase shares in line with our typical framework, keeping in consideration our liquidity, leverage, and the price of our stock relative to our view of intrinsic value. As a reminder, a significant portion of our repurchases will continue to come via direct purchases from Berkshire Hathaway as part of our ongoing repurchase agreement. At the midpoint of the range, we are guiding to adjusted EPS in 2026 of $14.30. This does not contain any unusual or non-recurring items and is a good starting point from which to model future EPS. Our 2026 guidance represents a 33% increase over last year, which is the result of two familiar drivers: increased operating income and lower share count, plus the elimination of the headwind from our share of the losses at Mozarc, as I previously noted. Finally, on free cash flow, the midpoint of our guidance for 2026 is $1.125 billion, reflecting a resilient business with discipline in the deployment of our capital resources. That concludes my prepared remarks for today. Operator, please open the call for Q&A. Thank you, sir. 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, press star, then the number two. One moment, please. Kevin Fischbeck with Bank of America. Your line is open, sir. Great. Thanks. I wanted to get a little more color on the commentary around, I guess, the confidence in getting back to the 2%+ volume number. Obviously, I guess this number that you're looking for in the guidance for 2026 is a little bit better than 2025, but it's still well below that 2%. So is it all about executing on mortalities, or is there something else that you're kind of pointing to that gives you that confidence? Yeah, Kevin, this is Javier. I appreciate the question. The reality is it is a clinical story. If you go back and you look at the time when the industry was at its peak of growth, many people thought it was the incidents. But the reality is that it was also a clinical story throughout, meaning mortality was improving year after year. To get to that 2%, you have to assume that the things that we outline in our prepared remarks come to fruition. We think, of course, there's a lag between all of the implementation clinically and the full effect. We think that you will start to see some benefits in approximately two years, and you'd probably see the full effect by 2029 or so. Okay. That's helpful to get that timing. I forget. You gave some kind of multi-year guidance ranges. Was it three years, you said, or was it five years that you were giving those OI and EPS comments? We didn't say a year, but we think of it in a three-year or so timeframe. Okay. And then just last one on the free cash flow number. So I guess the way to think about it is that number, the $1.125 billion that's before the $200 million investment. So if we thought about share repo or so, we should take $200 million out of that to think about additional deployable capital, or is there some other adjustment that you're thinking about? Yeah, Kevin, that's the right way to think about it then. And I'd say the starting place would be with leverage level, where we came out right in the middle of the range, obviously, with EBITDA growth. If we didn't increase leverage, we'd wind up in the lower half of the range. So that would be the other thing to consider when trying to figure out what's the right number to put in for share repurchases. Okay. But there's no other obvious use of capital that's kind of the most likely use of capital after that $200 million? That's right. Okay. Great. Thank you. Thank you. Thank you. Our next caller is Andrew Mok, Barclays. You may go ahead, sir. Hi. I appreciate all the color on 2026 guidance. Can you help us understand how missed treatments and mortality trended throughout the fourth quarter? And is there any connection or causality that you've been able to draw between those two items as you've dug into this issue further? Thanks. Yeah. Nothing really to highlight on mortality during the quarter. Mistreatments were up, but typically, you'd see missed treatments up in Q4. If you looked at Q4 2025 missed treatments, you wouldn't see much difference with Q4 2024 missed treatments. Year over year, not much of a change. Our clinical folks would say there absolutely is a correlation between missed treatment rate and mortality, but with some lag between those two metrics. Great. And can you provide more detail on how you expect the ACA headwind to play out this year and maybe comment on how open enrollment performed against your expectations and what level of attrition you're expecting from here? Thanks. I'm sorry, Andrew. I missed the first part of the question. Can you give us more detail on how you expect the ACA headwind to play out this year from a cadence perspective and maybe comment on open enrollment, how that played out relative to expectations, and what level of attrition you're expecting on that ACA enrollment throughout the year? Thanks. Thank you, Andrew. So the number that we gave, we said approximately 40 million this year, 70 million next year, and 10 million the year after that. The reality is that we're seeing what you're seeing in the broader market, which is open enrollment perform better than forecasted by CBO or ourselves. And we're all waiting to see the real number, which is right now, we are measuring selection of a plan or enrollment of a plan. And then, of course, people are trying to see what the payment of the plan will be to see what the yield will be. We don't have any additional color than what you or the marketplace has on what that'll be since it's the first time that these enhanced premium tax credits have gone away. But so far, it has been more resilient than people expected. We will see once the bills start to come if people pay. We will say that our patients during the pandemic and at other time periods, because they are so ill and needing of the healthcare system, are really sophisticated understanding their insurance needs. So on average, they will go out of their way to stay insured. And that's why last call, we said that there was basically two populations: our current patient population, which we think will be more resilient, and then you have the incoming population, which is, in essence, right now, a CKD population that might not value insurance as much as someone that's already had their kidneys fail. And that's why the number grows over time. But we will obviously be watching it during the quarter, and we will see once the payments go into effect. Great. Can I just ask a follow-up on that? Do you have a sense for how many of your ACA patients receive premium assistance? Thanks. I do not because that obviously has a lot of categories from the enhanced premium tax credits to the normal ones. You get into the income levels and other things. I do not break it down into more detail. Okay. Thank you. Thank you. Thank you. Our next caller is Justin Lake with Wolfe Research. Your line is open, sir. Thanks. Good morning. A couple of things. First, on the ability to offset the exchange headwind with the tailwind or kind of the non-recurrence of that cyber headwind from 2025. My recollection was the last time you guys talked about this, that the cyber headwind this year, while it hurt the second quarter, was offset by some better collections and therefore wouldn't be as big a tailwind as it might have been in 2026. Did I remember that incorrectly, or have you found other initiatives on the reimbursement side? Yeah. So let me try and lay out all the pieces for you, Justin, here. So we called out a $70 million headwind from cyber, $25 million of that is volume, and most of that recurs because it's just census that was lost, and we're not going to get back in 2026. The balance was $45 million, and that was an RPT headwind. We think that RPT headwind is offset in 2026 basically by the enhanced premium tax credit headwind. So you don't see a year-over-year growth problem in RPT because both years have a $40 million-$45 million negative. In terms of some of the other stuff we called out, in particular around Q4 and the resolution of some older claims, there's really nothing in the year from that to call out. We have resolution of older claims every year. Looking back now, the 2025 number is roughly the same as what we saw in 2024. The 2026 number, we would expect to be similar in 2025. I wouldn't call that out as unusual in any year. What was unusual was the concentration in Q4 of 2025, which is why we called it out last quarter. Got it. Then going back to IKC, can you give us a little more color in terms of what drove the outperformance in 2024 versus what you had previously booked and the level of confidence you have that that can continue and grow from there? Sure. Let me grab that one, Justin, Javier. A couple of things that we've talked about as it relates to IKC. So just a quick housekeeping reminder: have to look at it on an annualized view because it moves pretty dramatically quarter to quarter. We think of it in three categories. The first one is dollars under management. You can think of it as volume. And that's been relatively flat. We talked about it last time. Secondly, the model of care cost and the G&A cost, which we've done a nice job of remaining flat there. And then the third category, which is the shared savings. And in that, of course, there is contracting and performance to what you're doing to add value to the system. As it relates to that 2024 reconciliation, we did better in that shared savings part that I just talked about. Does that help you? Yeah. Just how did you do better? Was it inpatient admissions, outpatients? Just curious for a little more color there and what gives you confidence that that number is going to continue at that level given how much outperformance? Yeah. I mean, look, there is a lot of little things: medication management, transitions of care, segmentation of patient population, having more access to patients earlier. We have new interventions and protocols. One of the difficulties of this business is, of course, understanding exactly what moved the needle. But rather, the cumulative portfolio is working, and that's why we felt comfortable giving a +$20 million for 2026. Got it. Thanks. Thank you. Thank you. As a reminder, that is star one if you would like to ask a question. A.J. Rice with UBS. Your line is open. Thanks. Hi, everybody. First, there's been a lot of discussion and even the talk about what you're doing with the IKC business about either people managing patients with CKD better and more effectively. And then obviously, there's discussion about some of the drugs that could have an impact. And I wondered, what are you seeing in disease progression with someone that has kidney disease, time to get to dialysis, and then are you seeing them stay longer yet on dialysis, or when do you think any of that would have an impact? Yeah. Thanks for the question. The reality is we have not seen anything shift, but you would think that that would take some time, as we've talked about. When you talk about these drugs, they're not magic drugs, but rather, it takes some time of being on them to have the effect that you're talking about. So right now, it's too early to tell. And again, we've only been managing these CKD populations for five years or so. So that will take longer to play out. Okay. Just maybe a follow-up on the Elara Caring investment. How should we think about that? Is it just a financial investment from your side? Are you going to do things operationally that might make a difference for you? Can you describe a little more of what's going on with that? Sure. Our investment thesis has two pieces to it. One is, of course, we have to have a good capital return on that $200 million. We want to be disciplined. We think it's a good-sized investment, and we want it to have good capital returns. The second one is to help our patient population. Roughly a quarter of our population uses home health. And by having a specialized kidney protocol, we think we can reduce hospitalization and readmissions and then, of course, try to reduce missed treatments. So it is connecting back to this whole loop of trying to do more for our patients while we have them in our clinic and now outside of the clinic. Okay. Thanks a lot. Thank you. Thank you. Our next caller is Peter Chickering with Deutsche Bank. Your line is open, sir. Hey. Good afternoon. Thanks for taking my questions. Can you talk about the international business for a little bit, how you should think about the top-line growth, whether it's M&A versus organic, and how you should think about margins within that segment? Yeah. I think on international, generally, I would think about the growth both top-line and bottom-line as half M&A and half organic. We would expect the margins to continue to improve as they leverage kind of the fixed overhead both at the international level as well as in the existing market. So international has proven to be a good business for us, a relatively consistent performer, and a contributor of about a point to OI growth over the last few years. And we're expecting more of the same in 2026. Okay. And then I'm going to ask Justin's question on IKC a little bit differently. But looking at the losses you guys had in 2022 and 2023 and 2024, and just refresh us on those if you could, I guess, why should we think about the rate of improvement in 2026 sort of slowing dramatically? It just seems as though the losses have compressed quite significantly as you've gotten scale. And so I'm curious why we wouldn't see the benefits grow sort of levels that we've seen in the last couple of years. Yeah. So look, your math is right. I think if you go back over the last three years, the average OI improvement has been somewhere in the $40 million-$50 million per year. Now we're calling out a slowing of that. I think it's just a natural occurrence as a business matures and gets bigger. There's just less opportunity to continue to drive the margins up. We're not expecting a high-margin business here. So I think $20 million a year is a comfortable landing spot for us right now in terms of contribution to OI growth. Okay. And then last question here, just about new starts. I think you talked about new starts in the fourth quarter and we're back-end loaded. But as you think about new starts for 2026, how do you model that? And specifically, how do you break out the payer mix of those new starts versus, say, previous years as it relates to commercial or HIX or government patients? Thanks. Yeah. So we're not calling out any dramatic change in new starts for next year, similar to mortality and to some extent missed treatment rates. When we see those things improve, we'll start calling them out. But until then, we're comfortable with flattish. In terms of mix, look, new patients have always had a higher commercial mix than the average patient. It's just the natural evolution of a patient as they get older. They tend to migrate towards Medicare. I don't see any change to that pattern going forward. Okay. So just to be super clear, the new starts that we're seeing coming in are the same commercial mix we've seen sort of for the last several years. Thank you. Yeah. With the one callout around HIX and that changing. But other than that, I don't see any other new dynamic. Great. Thanks so much. Thank you. Our next caller is Ryan Langston with TD Cowen. Your line is open. Thanks. On the flu vaccine commentary and the prepared remarks, did you say that there was an actual change in the vaccination rates this fourth quarter versus other fourth quarters, or was that just more related to seasonal or seasonality sequentially? I believe what we said in the opening remarks is that in our high, we were in the 90th percentile, and we aspired to get back to that. Just to give you a bit of sense, right now, we're at 80%, which is, from a national perspective, quite healthy, but we could do better. Got it. I know the dialysis department. Yeah. The only other thing I'd just point out is flu vaccines do go up in Q4 over Q3, and that does drive a little bit of RPT and a little bit of cost. So that's part of the Q4 over Q3 RPT dynamic as well. Yeah. That makes sense. And then just last thing. I know the dialysis population is a bit different from individual MA population, but if the kind of flat advance notice holds for 2027 and the final notice, I guess, is there any maybe just directional change in what we could assume for outlook in terms of growth for 2027? Thanks. Yeah. Thanks for the question, Ryan. One of the things that it's worthy of highlighting is that the ESRD population has its own funding pool in MA and that CMS has actually realized that there was an underfunding, so there was a catch-up. So the dialysis or ESKD population will receive a 6% increase in 2027, which, from our perspective, reflects the reality and would put an MA plan in a position to want to add these patients to the risk pool. Ryan, the one thing I'd add to that is not only is the reimbursement different, but the whole coding regime is different. So the questions around V28 and rebasing and the higher coding intensity in a given year, those are not part of or they're a much smaller part of the math for ESRD MA rates. And if you look at the notice from last week, you'd see it in there all as well. So it's all spelled out. All right. Thank you. Thank you. Thank you. At this time, I'm showing no further questions, speakers. I'll turn the call back over to you for any closing comments. Thank you, Michelle, and thank you all for joining. I hope it is 100% clear that our energy and excitement around clinical opportunities are absolutely off the charts to expand the lives of our patients. We have a powerful alignment between our clinical ambitions and our financial goals. By fulfilling our mission to deliver the best care for our patients, we can also deliver returns for our shareholders. Thank you for your interest, and thank you for joining the call today. Have a good day. Thank you. This concludes today's conference call. You may go ahead and disconnect at this time.

Speaker 8: 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 fourth quarter 2025 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'd like to withdraw your question, press star then the number two. Thank you, Mr. Eliason, you may begin your conference. Good evening, my name is Michelle and I will be your conference facilitator today. 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 fourth quarter 2025 earnings call. at this time i would like to welcome everyone to the davita fourth quarter 2025 earnings call All lines have been placed on mute to prevent any background noise. 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. 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 ask a question during this time simply press star then the number one on your telephone keypad If you'd like to withdraw your question, press star then the number two. if you'd like to withdraw your question press star then the number two Thank you, Mr. Eliason, you may begin your conference. thank you mr eliason you may begin your conference

Speaker 7: Thank you and welcome to our fourth quarter conference call. 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 fourth 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. Thank you and welcome to our fourth quarter conference call. thank you and welcome to our fourth quarter conference call I'm Nic Eliason, Group Vice President of Investor Relations, and joining me today are Javier Rodriguez, our CEO, and Joel Ackerman, our CFO. 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. 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. 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 fourth 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. for further details concerning these risks and uncertainties please refer to our fourth 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. 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. 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. 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. 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. i will now turn the call over to javier rodriguez

Speaker 3: Thank you, Nic. Good afternoon, everyone, and thank you for joining the call today. As we evaluate 2025, the year represents the latest evidence of our differentiated capabilities, strategy, and platform. We executed it with discipline, met challenges head-on, and delivered on our commitments we set at the beginning of the year. At the same time, we continue to invest to enhance patient care and fuel growth in the years ahead. As a result, we're well-positioned for 2026 and beyond, with opportunities to deliver clinical and financial results consistent with our longstanding track record and guidance. Thank you, Nic. thank you nic Good afternoon, everyone, and thank you for joining the call today. good afternoon everyone and thank you for joining the call today As we evaluate 2025, the year represents the latest evidence of our differentiated capabilities, strategy, and platform. as we evaluate 2025 the year represents the latest evidence of our differentiated capabilities strategy and platform We executed it with discipline, met challenges head-on, and delivered on our commitments we set at the beginning of the year. we executed it with discipline met challenges head-on and delivered on our commitments we set at the beginning of the year At the same time, we continue to invest to enhance patient care and fuel growth in the years ahead. at the same time we continue to invest to enhance patient care and fuel growth in the years ahead As a result, we're well-positioned for 2026 and beyond, with opportunities to deliver clinical and financial results consistent with our longstanding track record and guidance. as a result we're well-positioned for 2026 and beyond with opportunities to deliver clinical and financial results consistent with our longstanding track record and guidance Today, I'll review our fourth quarter results, share insights on our clinical strategy, and wrap up with guidance for 2026. But first, as always, I will start with a clinical highlight. This quarter, I want to spotlight the clinical results achieved in our Integrated Kidney Care, or IKC, programs. Today, I'll review our fourth quarter results, share insights on our clinical strategy, and wrap up with guidance for 2026. today i'll review our fourth quarter results share insights on our clinical strategy and wrap up with guidance for 2026 But first, as always, I will start with a clinical highlight. but first as always i will start with a clinical highlight This quarter, I want to spotlight the clinical results achieved in our Integrated Kidney Care, or IKC, programs. this quarter i want to spotlight the clinical results achieved in our integrated kidney care or ikc programs Patients managed under our IKC models consistently achieve better outcomes than the broader dialysis population. Our IKC patients are 35% more likely to start dialysis with a permanent vascular access, resulting in a better patient experience and costs that are 3x lower during the first 180 days of dialysis. IKC patients also experience fewer bloodstream infections, achieve higher vaccination rates, and are more likely to choose home dialysis. We also see more than 10% improvement in treatment adherence with fewer missed treatments. Most importantly, these outcomes lead to what matters most: a better quality of life with fewer hospitalizations. Patients managed under our IKC models consistently achieve better outcomes than the broader dialysis population. patients managed under our ikc models consistently achieve better outcomes than the broader dialysis population Our IKC patients are 35% more likely to start dialysis with a permanent vascular access, resulting in a better patient experience and costs that are 3x lower during the first 180 days of dialysis. our ikc patients are 35% more likely to start dialysis with a permanent vascular access resulting in a better patient experience and costs that are 3x lower during the first 180 days of dialysis IKC patients also experience fewer bloodstream infections, achieve higher vaccination rates, and are more likely to choose home dialysis. ikc patients also experience fewer bloodstream infections achieve higher vaccination rates and are more likely to choose home dialysis We also see more than 10% improvement in treatment adherence with fewer missed treatments. we also see more than 10% improvement in treatment adherence with fewer missed treatments Most importantly, these outcomes lead to what matters most: a better quality of life with fewer hospitalizations. most importantly these outcomes lead to what matters most a better quality of life with fewer hospitalizations Transitioning to our fourth quarter performance, we delivered results in line with our expectations. As anticipated, revenue per treatment accelerated in the quarter alongside strength in IKC. This was partially offset by higher-than-expected health benefit costs. Transitioning to our fourth quarter performance, we delivered results in line with our expectations. transitioning to our fourth quarter performance we delivered results in line with our expectations As anticipated, revenue per treatment accelerated in the quarter alongside strength in IKC. as anticipated revenue per treatment accelerated in the quarter alongside strength in ikc This was partially offset by higher-than-expected health benefit costs. this was partially offset by higher-than-expected health benefit costs For the full year, we achieved adjusted operating income and adjusted earnings per share in the top half of our guidance range despite the impact of cyber incident on our U.S. dialysis business. Let me elaborate briefly on our IKC performance. As we've noted previously, we analyze IKC results on a full-year basis given quarterly volatility driven by timing of revenue recognition. As we look back to our Capital Markets Day in 2021, we outline a five-year path to IKC profitability by 2026. Our strategy is centered on sustainable contract, physician partnership, and a scalable care model supported by technology. With full-year 2025 results, we're reporting our first profitable year in IKC, which is slightly ahead of schedule. For the full year, we achieved adjusted operating income and adjusted earnings per share in the top half of our guidance range despite the impact of cyber incident on our U.S. dialysis business. for the full year we achieved adjusted operating income and adjusted earnings per share in the top half of our guidance range despite the impact of cyber incident on our u.s dialysis business Let me elaborate briefly on our IKC performance. let me elaborate briefly on our ikc performance As we've noted previously, we analyze IKC results on a full-year basis given quarterly volatility driven by timing of revenue recognition. as we've noted previously we analyze ikc results on a full-year basis given quarterly volatility driven by timing of revenue recognition As we look back to our Capital Markets Day in 2021, we outline a five-year path to IKC profitability by 2026. as we look back to our capital markets day in 2021 we outline a five-year path to ikc profitability by 2026 Our strategy is centered on sustainable contract, physician partnership, and a scalable care model supported by technology. our strategy is centered on sustainable contract physician partnership and a scalable care model supported by technology With full-year 2025 results, we're reporting our first profitable year in IKC, which is slightly ahead of schedule. with full-year 2025 results we're reporting our first profitable year in ikc which is slightly ahead of schedule This milestone reinforces two key learnings. First, our hands-on clinical models work. As reflected in the outcomes I highlighted earlier, our dedicated IKC caregivers are delivering on the promise of value-based care by keeping patients healthier and out of the hospital. Second, we've proven there's a viable business model that is good for our patients, good for the healthcare system, and can generate value for DaVita and our partners. The business will continue to evolve over time alongside changes in government policy, competitive dynamics, and innovation. Building from this 2025 benchmark, we expect to deliver an incremental $20 million of IKC operating income growth in 2026. This milestone reinforces two key learnings. this milestone reinforces two key learnings First, our hands-on clinical models work. first our hands-on clinical models work As reflected in the outcomes I highlighted earlier, our dedicated IKC caregivers are delivering on the promise of value-based care by keeping patients healthier and out of the hospital. as reflected in the outcomes i highlighted earlier our dedicated ikc caregivers are delivering on the promise of value-based care by keeping patients healthier and out of the hospital Second, we've proven there's a viable business model that is good for our patients, good for the healthcare system, and can generate value for DaVita and our partners. second we've proven there's a viable business model that is good for our patients good for the healthcare system and can generate value for davita and our partners The business will continue to evolve over time alongside changes in government policy, competitive dynamics, and innovation. the business will continue to evolve over time alongside changes in government policy competitive dynamics and innovation Building from this 2025 benchmark, we expect to deliver an incremental $20 million of IKC operating income growth in 2026. building from this 2025 benchmark we expect to deliver an incremental $20 million of ikc operating income growth in 2026 Looking more broadly at our business, we see significant opportunities ahead and believe DaVita's uniquely positioned to deliver on them. Before turning to those opportunities, let me provide some context on our journey to date. Looking more broadly at our business, we see significant opportunities ahead and believe DaVita's uniquely positioned to deliver on them. looking more broadly at our business we see significant opportunities ahead and believe davita's uniquely positioned to deliver on them Before turning to those opportunities, let me provide some context on our journey to date. before turning to those opportunities let me provide some context on our journey to date Over the past five years, we've navigated wide-range challenges, from macro events like global pandemic and inflation to supply chain disruption and cyber incident. And through it all, we delivered on our multi-year commitments. We provided high-quality care for our patients, built a solid foundation for the future, and generated compound annual growth in line with our long-term target for adjusted operating income and adjusted EPS. This performance reflects the determination of our teammates and the resilience of our operating model. This experience also gives us the confidence as we look at the opportunities and challenges ahead of us. We're managing two near-term financial headwinds: continued pressure on treatment growth driven by elevated mortality and the revenue per treatment impact from the expiration of enhanced premium tax credits. Over the past five years, we've navigated wide-range challenges, from macro events like global pandemic and inflation to supply chain disruption and cyber incident. over the past five years we've navigated wide-range challenges from macro events like global pandemic and inflation to supply chain disruption and cyber incident And through it all, we delivered on our multi-year commitments. and through it all we delivered on our multi-year commitments We provided high-quality care for our patients, built a solid foundation for the future, and generated compound annual growth in line with our long-term target for adjusted operating income and adjusted EPS. we provided high-quality care for our patients built a solid foundation for the future and generated compound annual growth in line with our long-term target for adjusted operating income and adjusted eps This performance reflects the determination of our teammates and the resilience of our operating model. this performance reflects the determination of our teammates and the resilience of our operating model This experience also gives us the confidence as we look at the opportunities and challenges ahead of us. this experience also gives us the confidence as we look at the opportunities and challenges ahead of us We're managing two near-term financial headwinds: continued pressure on treatment growth driven by elevated mortality and the revenue per treatment impact from the expiration of enhanced premium tax credits. we're managing two near-term financial headwinds continued pressure on treatment growth driven by elevated mortality and the revenue per treatment impact from the expiration of enhanced premium tax credits Even with these headwinds and the reality of unknown challenges, we remain confident in our ability to sustain our track record of profit growth. That confidence starts with the most important driver of our long-term success: an unwavering focus on clinical excellence. We're executing a set of targeted initiatives designed to enhance patient care, reduce mortality and missed treatments rates, and ultimately support higher treatment volume growth. I will highlight four specific examples. First is vaccination. For many years, we achieved flu vaccination rates above 90% for our patients and clinical teammates, and we're working hard to return to that benchmark. Our patients who received a vaccination early in this flu season have shown a 9% lower risk of hospitalization and a 27% lower risk of mortality compared to their unvaccinated peers. Protecting our vulnerable patients from the flu, COVID, and pneumonia is a clinical imperative. Even with these headwinds and the reality of unknown challenges, we remain confident in our ability to sustain our track record of profit growth. even with these headwinds and the reality of unknown challenges we remain confident in our ability to sustain our track record of profit growth That confidence starts with the most important driver of our long-term success: an unwavering focus on clinical excellence. that confidence starts with the most important driver of our long-term success an unwavering focus on clinical excellence We're executing a set of targeted initiatives designed to enhance patient care, reduce mortality and missed treatments rates, and ultimately support higher treatment volume growth. we're executing a set of targeted initiatives designed to enhance patient care reduce mortality and missed treatments rates and ultimately support higher treatment volume growth I will highlight four specific examples. i will highlight four specific examples First is vaccination. first is vaccination For many years, we achieved flu vaccination rates above 90% for our patients and clinical teammates, and we're working hard to return to that benchmark. for many years we achieved flu vaccination rates above 90% for our patients and clinical teammates and we're working hard to return to that benchmark Our patients who received a vaccination early in this flu season have shown a 9% lower risk of hospitalization and a 27% lower risk of mortality compared to their unvaccinated peers. our patients who received a vaccination early in this flu season have shown a 9% lower risk of hospitalization and a 27% lower risk of mortality compared to their unvaccinated peers Protecting our vulnerable patients from the flu, COVID, and pneumonia is a clinical imperative. protecting our vulnerable patients from the flu covid and pneumonia is a clinical imperative Second is GLP-1 adoption and adherence. A growing body of evidence confirms that GLP-1s can reduce major adverse cardiac events and mortality for many dialysis patients. We're actively working with physicians to help our patients navigate the clinical, operational, and financial complexities of these drugs. Third is advancing dialysis technologies to remove middle molecules. Innovations such as medium-cutoff dialyzers and hemodiafiltration enable the clearance of a broader range of toxins from the body during the treatment. These technologies help the patients recover more quickly after dialysis and show promise of reducing mortality by as much as 20% or more. Finally, today we announced a strategic clinical partnership with Elara Caring, a leading home care provider, to establish an ESKD-focused offering. This model spans Elara's skilled home health, personal care, and hospice service lines and is designed to lower hospitalizations and missed treatment rates while improving the overall patient experience. Second is GLP-1 adoption and adherence. second is glp-1 adoption and adherence A growing body of evidence confirms that GLP-1s can reduce major adverse cardiac events and mortality for many dialysis patients. a growing body of evidence confirms that glp-1s can reduce major adverse cardiac events and mortality for many dialysis patients We're actively working with physicians to help our patients navigate the clinical, operational, and financial complexities of these drugs. we're actively working with physicians to help our patients navigate the clinical operational and financial complexities of these drugs Third is advancing dialysis technologies to remove middle molecules. third is advancing dialysis technologies to remove middle molecules Innovations such as medium-cutoff dialyzers and hemodiafiltration enable the clearance of a broader range of toxins from the body during the treatment. innovations such as medium-cutoff dialyzers and hemodiafiltration enable the clearance of a broader range of toxins from the body during the treatment These technologies help the patients recover more quickly after dialysis and show promise of reducing mortality by as much as 20% or more. these technologies help the patients recover more quickly after dialysis and show promise of reducing mortality by as much as 20% or more Finally, today we announced a strategic clinical partnership with Elara Caring, a leading home care provider, to establish an ESKD-focused offering. finally today we announced a strategic clinical partnership with elara caring a leading home care provider to establish an eskd-focused offering This model spans Elara's skilled home health, personal care, and hospice service lines and is designed to lower hospitalizations and missed treatment rates while improving the overall patient experience. this model spans elara's skilled home health personal care and hospice service lines and is designed to lower hospitalizations and missed treatment rates while improving the overall patient experience Joel will provide more details about the investment we're making alongside this strategic partnership. Together, these clinical initiatives demonstrate how our patient-centered strategy directly supports our business objectives. By improving quality of life, reducing hospitalization, and advancing clinical outcomes, we continue to believe we're on a path back to at least 2% volume growth. In parallel, we maintain a diligent focus on costs and innovation to improve efficiency, continue sustainable U.S. dialysis margins, and deliver durable financial performance. With that backdrop, we remain confident in our ability to deliver adjusted operating income growth over the next three years that is consistent with our long-term growth target of 3%-7%. On adjusted EPS, with our current capital allocation program and removing the headwinds from our investment in Mozarc, we see an opportunity to exceed our long-term adjusted EPS guidance of 8%-14%. Joel will provide more details about the investment we're making alongside this strategic partnership. joel will provide more details about the investment we're making alongside this strategic partnership Together, these clinical initiatives demonstrate how our patient-centered strategy directly supports our business objectives. together these clinical initiatives demonstrate how our patient-centered strategy directly supports our business objectives By improving quality of life, reducing hospitalization, and advancing clinical outcomes, we continue to believe we're on a path back to at least 2% volume growth. by improving quality of life reducing hospitalization and advancing clinical outcomes we continue to believe we're on a path back to at least 2% volume growth In parallel, we maintain a diligent focus on costs and innovation to improve efficiency, continue sustainable U.S. dialysis margins, and deliver durable financial performance. in parallel we maintain a diligent focus on costs and innovation to improve efficiency continue sustainable u.s dialysis margins and deliver durable financial performance With that backdrop, we remain confident in our ability to deliver adjusted operating income growth over the next three years that is consistent with our long-term growth target of 3%-7%. with that backdrop we remain confident in our ability to deliver adjusted operating income growth over the next three years that is consistent with our long-term growth target of 3%-7% On adjusted EPS, with our current capital allocation program and removing the headwinds from our investment in Mozarc, we see an opportunity to exceed our long-term adjusted EPS guidance of 8%-14%. on adjusted eps with our current capital allocation program and removing the headwinds from our investment in mozarc we see an opportunity to exceed our long-term adjusted eps guidance of 8%-14% Taken together, these priorities reinforce our ability to generate sustainable shareholder value and continued leadership in kidney care. I'll wrap up my comments with our guidance for 2026. We expect adjusted operating income within a range of $2.085 billion-$2.235 billion, which represents 3.2% growth at the midpoint. Our guidance for adjusted earnings per share is $13.60-$15.00 even, reflecting a 33% growth at the midpoint. This guidance exceeds our long-term EPS targets, reflecting our expectation for another year of strong operating performance and the cumulative benefits of our capital allocation strategy. Finally, we expect to generate free cash flow between $1 billion and $1.25 billion. I will now turn it over to Joel to discuss our financial performance and outlook in more detail. Taken together, these priorities reinforce our ability to generate sustainable shareholder value and continued leadership in kidney care. taken together these priorities reinforce our ability to generate sustainable shareholder value and continued leadership in kidney care I'll wrap up my comments with our guidance for 2026. i'll wrap up my comments with our guidance for 2026 We expect adjusted operating income within a range of $2.085 billion-$2.235 billion, which represents 3.2% growth at the midpoint. we expect adjusted operating income within a range of $2.085 billion-$2.235 billion which represents 3.2% growth at the midpoint Our guidance for adjusted earnings per share is $13.60-$15.00 even, reflecting a 33% growth at the midpoint. our guidance for adjusted earnings per share is $13.60-$15.00 even reflecting a 33% growth at the midpoint This guidance exceeds our long-term EPS targets, reflecting our expectation for another year of strong operating performance and the cumulative benefits of our capital allocation strategy. this guidance exceeds our long-term eps targets reflecting our expectation for another year of strong operating performance and the cumulative benefits of our capital allocation strategy Finally, we expect to generate free cash flow between $1 billion and $1.25 billion. finally we expect to generate free cash flow between $1 billion and $1.25 billion I will now turn it over to Joel to discuss our financial performance and outlook in more detail. i will now turn it over to joel to discuss our financial performance and outlook in more detail

Speaker 4: Thank you, Javier. First, I'll provide some detail on our fourth quarter and full-year 2025 results and then share a detailed breakdown of our 2026 guidance. Fourth quarter adjusted operating income was $586 million, bringing full-year adjusted operating income to $2.094 billion. Adjusted earnings per share from continuing operations for the fourth quarter was $3.40, with full-year adjusted EPS from continuing operations of $10.78. Free cash flow was $309 million in the fourth quarter, which brings full-year free cash flow to just over $1 billion. Thank you, Javier. thank you javier First, I'll provide some detail on our fourth quarter and full-year 2025 results and then share a detailed breakdown of our 2026 guidance. first i'll provide some detail on our fourth quarter and full-year 2025 results and then share a detailed breakdown of our 2026 guidance Fourth quarter adjusted operating income was $586 million, bringing full-year adjusted operating income to $2.094 billion. fourth quarter adjusted operating income was $586 million bringing full-year adjusted operating income to $2.094 billion Adjusted earnings per share from continuing operations for the fourth quarter was $3.40, with full-year adjusted EPS from continuing operations of $10.78. adjusted earnings per share from continuing operations for the fourth quarter was $3.40 with full-year adjusted eps from continuing operations of $10.78 Free cash flow was $309 million in the fourth quarter, which brings full-year free cash flow to just over $1 billion. free cash flow was $309 million in the fourth quarter which brings full-year free cash flow to just over $1 billion Starting with U.S. dialysis, treatments declined about 20 basis points versus the fourth quarter of 2024. Although our total patient census growth during the quarter was as we expected, the timing of the census gain was back-end loaded in the quarter. For the full year, U.S. treatments declined by 1.1% versus 2024, in line with our expectations from the Q3 earnings call. Starting with U.S. dialysis, treatments declined about 20 basis points versus the fourth quarter of 2024. starting with u.s dialysis treatments declined about 20 basis points versus the fourth quarter of 2024 Although our total patient census growth during the quarter was as we expected, the timing of the census gain was back-end loaded in the quarter. although our total patient census growth during the quarter was as we expected the timing of the census gain was back-end loaded in the quarter For the full year, U.S. treatments declined by 1.1% versus 2024, in line with our expectations from the Q3 earnings call. for the full year u.s treatments declined by 1.1% versus 2024 in line with our expectations from the q3 earnings call Next, revenue per treatment growth accelerated in the fourth quarter, as anticipated, up approximately $12 sequentially. Fourth quarter growth was the result of four primary factors. First, the resolution of aged receivables consistent with what we forecasted on the Q3 call. Second, normal rate increases and improved yield. Third, private pay mix improved slightly after a dip in the third quarter. And finally, RPT benefited from the typical seasonal impact of flu vaccines. Full-year RPT was approximately $410, up 4.7% for the year. As you think about RPT for the first quarter of 2026, keep in mind that Q1 bears a typical $5 or more RPT headwind due to patient responsibility amounts early in the year. Patient care costs per treatment increased by approximately $6 sequentially. The increase was primarily the result of seasonal increases, including health benefit costs and higher supply costs. Next, revenue per treatment growth accelerated in the fourth quarter, as anticipated, up approximately $12 sequentially. next revenue per treatment growth accelerated in the fourth quarter as anticipated up approximately $12 sequentially Fourth quarter growth was the result of four primary factors. fourth quarter growth was the result of four primary factors First, the resolution of aged receivables consistent with what we forecasted on the Q3 call. first the resolution of aged receivables consistent with what we forecasted on the q3 call Second, normal rate increases and improved yield. second normal rate increases and improved yield Third, private pay mix improved slightly after a dip in the third quarter. third private pay mix improved slightly after a dip in the third quarter And finally, RPT benefited from the typical seasonal impact of flu vaccines. and finally rpt benefited from the typical seasonal impact of flu vaccines Full-year RPT was approximately $410, up 4.7% for the year. full-year rpt was approximately $410 up 4.7% for the year As you think about RPT for the first quarter of 2026, keep in mind that Q1 bears a typical $5 or more RPT headwind due to patient responsibility amounts early in the year. as you think about rpt for the first quarter of 2026 keep in mind that q1 bears a typical $5 or more rpt headwind due to patient responsibility amounts early in the year Patient care costs per treatment increased by approximately $6 sequentially. patient care costs per treatment increased by approximately $6 sequentially The increase was primarily the result of seasonal increases, including health benefit costs and higher supply costs. the increase was primarily the result of seasonal increases including health benefit costs and higher supply costs PCCs per treatment finished the year 5.9% higher than 2024, near the top end of our revised range of expectations, but lower than our original guidance for the year. As a reminder, approximately half the year-over-year increase in PCCs was from binders in the bundle. Turning to our other segments, international adjusted OI was $21 million, resulting in full-year adjusted operating income of $114 million. This reflects strong operating performance for our international business as we delivered positive organic growth and integrated the recent acquisitions in Latin America. In IKC, as Javier noted, we delivered our first profitable fiscal year. Q4 adjusted OI was $46 million, and full-year adjusted OI was $22 million. We saw strength across all three of the businesses within IKC, and final reconciliations of our 2024 performance resulted in higher-than-expected shared savings revenue. PCCs per treatment finished the year 5.9% higher than 2024, near the top end of our revised range of expectations, but lower than our original guidance for the year. pccs per treatment finished the year 5.9% higher than 2024 near the top end of our revised range of expectations but lower than our original guidance for the year As a reminder, approximately half the year-over-year increase in PCCs was from binders in the bundle. as a reminder approximately half the year-over-year increase in pccs was from binders in the bundle Turning to our other segments, international adjusted OI was $21 million, resulting in full-year adjusted operating income of $114 million. turning to our other segments international adjusted oi was $21 million resulting in full-year adjusted operating income of $114 million This reflects strong operating performance for our international business as we delivered positive organic growth and integrated the recent acquisitions in Latin America. this reflects strong operating performance for our international business as we delivered positive organic growth and integrated the recent acquisitions in latin america In IKC, as Javier noted, we delivered our first profitable fiscal year. in ikc as javier noted we delivered our first profitable fiscal year Q4 adjusted OI was $46 million, and full-year adjusted OI was $22 million. q4 adjusted oi was $46 million and full-year adjusted oi was $22 million We saw strength across all three of the businesses within IKC, and final reconciliations of our 2024 performance resulted in higher-than-expected shared savings revenue. we saw strength across all three of the businesses within ikc and final reconciliations of our 2024 performance resulted in higher-than-expected shared savings revenue Switching to capital allocation, during the fourth quarter, we repurchased 2.7 million shares, and we repurchased an additional 1.7 million shares since the end of the quarter. As is typical, a portion of these shares were repurchased from Berkshire Hathaway pursuant to the terms of our publicly filed repurchase agreement, which formulaically results in Berkshire's ownership remaining at or below 45%. For the full year 2025, we repurchased nearly 13 million shares for approximately $1.8 billion. At year-end, our leverage ratio was 3.26x consolidated EBITDA, down from the third quarter and at the midpoint of our target leverage range of 3x-3.5x. Switching to capital allocation, during the fourth quarter, we repurchased 2.7 million shares, and we repurchased an additional 1.7 million shares since the end of the quarter. switching to capital allocation during the fourth quarter we repurchased 2.7 million shares and we repurchased an additional 1.7 million shares since the end of the quarter As is typical, a portion of these shares were repurchased from Berkshire Hathaway pursuant to the terms of our publicly filed repurchase agreement, which formulaically results in Berkshire's ownership remaining at or below 45%. as is typical a portion of these shares were repurchased from berkshire hathaway pursuant to the terms of our publicly filed repurchase agreement which formulaically results in berkshire's ownership remaining at or below 45% For the full year 2025, we repurchased nearly 13 million shares for approximately $1.8 billion. for the full year 2025 we repurchased nearly 13 million shares for approximately $1.8 billion At year-end, our leverage ratio was 3.26 x consolidated EBITDA, down from the third quarter and at the midpoint of our target leverage range of 3x-3.5 x. at year-end our leverage ratio was 3.26 x consolidated ebitda down from the third quarter and at the midpoint of our target leverage range of 3x-3.5 x With that, let me turn to 2026. As Javier said, we are guiding to an adjusted operating income range with a midpoint of $2.16 billion. At this midpoint, we have built in the following assumptions for U.S. dialysis. Treatment volume will be approximately flat to 2025. This assumes a flu impact consistent with what we saw in the 2023-2024 season. We are not assuming any improvement in non-flu mortality, though, as Javier outlined, we are working on a number of initiatives to actively drive down mortality among our patients. With that, let me turn to 2026. with that let me turn to 2026 As Javier said, we are guiding to an adjusted operating income range with a midpoint of $2.16 billion. as javier said we are guiding to an adjusted operating income range with a midpoint of $2.16 billion At this midpoint, we have built in the following assumptions for U.S. dialysis. at this midpoint we have built in the following assumptions for u.s dialysis Treatment volume will be approximately flat to 2025. treatment volume will be approximately flat to 2025 This assumes a flu impact consistent with what we saw in the 2023-2024 season. this assumes a flu impact consistent with what we saw in the 2023-2024 season We are not assuming any improvement in non-flu mortality, though, as Javier outlined, we are working on a number of initiatives to actively drive down mortality among our patients. we are not assuming any improvement in non-flu mortality though as javier outlined we are working on a number of initiatives to actively drive down mortality among our patients Last, on admissions, we are assuming 2026 looks similar to 2025, excluding the impact of the cyber incident. To help with modeling our treatments by quarter, we have added a table to the press release showing normalized treatment days by quarter. This number adjusts for the mix of treatment days and holiday shifts, making it the most helpful number to model quarterly treatments. For example, you'll notice a year-over-year normalized treatment day headwind in Q1 2026, which drives our expectation for negative year-over-year U.S. dialysis treatment volume growth in the first quarter of this year. Last, on admissions, we are assuming 2026 looks similar to 2025, excluding the impact of the cyber incident. last on admissions we are assuming 2026 looks similar to 2025 excluding the impact of the cyber incident To help with modeling our treatments by quarter, we have added a table to the press release showing normalized treatment days by quarter. to help with modeling our treatments by quarter we have added a table to the press release showing normalized treatment days by quarter This number adjusts for the mix of treatment days and holiday shifts, making it the most helpful number to model quarterly treatments. this number adjusts for the mix of treatment days and holiday shifts making it the most helpful number to model quarterly treatments For example, you'll notice a year-over-year normalized treatment day headwind in Q1 2026, which drives our expectation for negative year-over-year U.S. dialysis treatment volume growth in the first quarter of this year. for example you'll notice a year-over-year normalized treatment day headwind in q1 2026 which drives our expectation for negative year-over-year u.s dialysis treatment volume growth in the first quarter of this year Moving on to RPT. For 2026, we are forecasting growth of 1%-2%. The primary driver of this is typical rate increases. We also expect an estimated $40 million headwind from the expiration of enhanced premium tax credits for exchange plans, which is largely offset by the elimination of the $45 million headwind in 2025 from the cyber incident. We expect total U.S. dialysis costs to grow 1.25%-2.25%, mostly driven by typical wage rate increases and G&A investments, partially offset by a decline in depreciation and amortization. The net impact of all this, at the midpoint of our guidance, is an increase in adjusted operating income for the U.S. dialysis business of approximately 1.5%. Also baked into the midpoint of our adjusted OI guidance range is an expectation for each of IKC and international to contribute approximately 1% to enterprise-adjusted OI growth. Moving on to RPT. moving on to rpt For 2026, we are forecasting growth of 1%-2%. for 2026 we are forecasting growth of 1%-2% The primary driver of this is typical rate increases. the primary driver of this is typical rate increases We also expect an estimated $40 million headwind from the expiration of enhanced premium tax credits for exchange plans, which is largely offset by the elimination of the $45 million headwind in 2025 from the cyber incident. we also expect an estimated $40 million headwind from the expiration of enhanced premium tax credits for exchange plans which is largely offset by the elimination of the $45 million headwind in 2025 from the cyber incident We expect total U.S. dialysis costs to grow 1.25%-2.25%, mostly driven by typical wage rate increases and G&A investments, partially offset by a decline in depreciation and amortization. we expect total u.s dialysis costs to grow 1.25%-2.25% mostly driven by typical wage rate increases and g&a investments partially offset by a decline in depreciation and amortization The net impact of all this, at the midpoint of our guidance, is an increase in adjusted operating income for the U.S. dialysis business of approximately 1.5%. the net impact of all this at the midpoint of our guidance is an increase in adjusted operating income for the u.s dialysis business of approximately 1.5% Also baked into the midpoint of our adjusted OI guidance range is an expectation for each of IKC and international to contribute approximately 1% to enterprise-adjusted OI growth. also baked into the midpoint of our adjusted oi guidance range is an expectation for each of ikc and international to contribute approximately 1% to enterprise-adjusted oi growth Altogether, these results reflect our expectation for 3.2% adjusted operating income growth at the midpoint of our range versus 2025. For seasonality, we expect first quarter adjusted operating income will represent approximately 20% of our full-year guidance. In other words, about $430 million at the midpoint. Below the operating income line, we expect positive other income of approximately $10 million for the year. This represents significant year-over-year improvement in this line item, resulting from no further losses from our investment in Mozarc since we have now recognized cumulative losses equal to our investment. We expect debt expense to decline by $20 million-$40 million versus 2025. This is driven by lower interest rates year-over-year, both from the decline in rates and from our repricing and refinancing transactions, which lowered spreads. Altogether, these results reflect our expectation for 3.2% adjusted operating income growth at the midpoint of our range versus 2025. altogether these results reflect our expectation for 3.2% adjusted operating income growth at the midpoint of our range versus 2025 For seasonality, we expect first quarter adjusted operating income will represent approximately 20% of our full-year guidance. for seasonality we expect first quarter adjusted operating income will represent approximately 20% of our full-year guidance In other words, about $430 million at the midpoint. in other words about $430 million at the midpoint Below the operating income line, we expect positive other income of approximately $10 million for the year. below the operating income line we expect positive other income of approximately $10 million for the year This represents significant year-over-year improvement in this line item, resulting from no further losses from our investment in Mozarc since we have now recognized cumulative losses equal to our investment. this represents significant year-over-year improvement in this line item resulting from no further losses from our investment in mozarc since we have now recognized cumulative losses equal to our investment We expect debt expense to decline by $20 million-$40 million versus 2025. we expect debt expense to decline by $20 million-$40 million versus 2025 This is driven by lower interest rates year-over-year, both from the decline in rates and from our repricing and refinancing transactions, which lowered spreads. this is driven by lower interest rates year-over-year both from the decline in rates and from our repricing and refinancing transactions which lowered spreads We expect non-controlling interest to be approximately 16% of U.S. dialysis OI, and we expect effective tax rate to be in the range of 24.5%-26.5%. Regarding capital allocation, related to Javier's comments, we announced the signing of an approximately $200 million minority investment alongside a majority investment from Ares Private Equity Funds to acquire Elara Caring. After the transaction closes, which we expect to happen mid-year, we expect this to contribute positively to our other income line. In addition, we will continue to repurchase shares in line with our typical framework, keeping in consideration our liquidity, leverage, and the price of our stock relative to our view of intrinsic value. As a reminder, a significant portion of our repurchases will continue to come via direct purchases from Berkshire Hathaway as part of our ongoing repurchase agreement. We expect non-controlling interest to be approximately 16% of U.S. dialysis OI, and we expect effective tax rate to be in the range of 24.5%-26.5%. we expect non-controlling interest to be approximately 16% of u.s dialysis oi and we expect effective tax rate to be in the range of 24.5%-26.5% Regarding capital allocation, related to Javier's comments, we announced the signing of an approximately $200 million minority investment alongside a majority investment from Ares Private Equity Funds to acquire Elara Caring. regarding capital allocation related to javier's comments we announced the signing of an approximately $200 million minority investment alongside a majority investment from ares private equity funds to acquire elara caring After the transaction closes, which we expect to happen mid-year, we expect this to contribute positively to our other income line. after the transaction closes which we expect to happen mid-year we expect this to contribute positively to our other income line In addition, we will continue to repurchase shares in line with our typical framework, keeping in consideration our liquidity, leverage, and the price of our stock relative to our view of intrinsic value. in addition we will continue to repurchase shares in line with our typical framework keeping in consideration our liquidity leverage and the price of our stock relative to our view of intrinsic value As a reminder, a significant portion of our repurchases will continue to come via direct purchases from Berkshire Hathaway as part of our ongoing repurchase agreement. as a reminder a significant portion of our repurchases will continue to come via direct purchases from berkshire hathaway as part of our ongoing repurchase agreement At the midpoint of the range, we are guiding to adjusted EPS in 2026 of $14.30. This does not contain any unusual or non-recurring items and is a good starting point from which to model future EPS. Our 2026 guidance represents a 33% increase over last year, which is the result of two familiar drivers: increased operating income and lower share count, plus the elimination of the headwind from our share of the losses at Mozarc, as I previously noted. Finally, on free cash flow, the midpoint of our guidance for 2026 is $1.125 billion, reflecting a resilient business with discipline in the deployment of our capital resources. That concludes my prepared remarks for today. Operator, please open the call for Q&A. At the midpoint of the range, we are guiding to adjusted EPS in 2026 of $14.30. at the midpoint of the range we are guiding to adjusted eps in 2026 of $14.30 This does not contain any unusual or non-recurring items and is a good starting point from which to model future EPS. this does not contain any unusual or non-recurring items and is a good starting point from which to model future eps Our 2026 guidance represents a 33% increase over last year, which is the result of two familiar drivers: increased operating income and lower share count, plus the elimination of the headwind from our share of the losses at Mozarc, as I previously noted. our 2026 guidance represents a 33% increase over last year which is the result of two familiar drivers increased operating income and lower share count plus the elimination of the headwind from our share of the losses at mozarc as i previously noted Finally, on free cash flow, the midpoint of our guidance for 2026 is $1.125 billion, reflecting a resilient business with discipline in the deployment of our capital resources. finally on free cash flow the midpoint of our guidance for 2026 is $1.125 billion reflecting a resilient business with discipline in the deployment of our capital resources That concludes my prepared remarks for today. that concludes my prepared remarks for today Operator, please open the call for Q&A. operator please open the call for q&a

Speaker 8: Thank you, sir. 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, press star, then the number two. Thank you, sir. thank you sir 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 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, press star, then the number two. if you would like to withdraw your question press star then the number two One moment, please. Kevin Fischbeck with Bank of America. Your line is open, sir. One moment, please. one moment please Kevin Fischbeck with Bank of America. kevin fischbeck with bank of america Your line is open, sir. your line is open sir

Speaker 6: Great. Thanks. I wanted to get a little more color on the commentary around, I guess, the confidence in getting back to the 2%+ volume number. Obviously, I guess this number that you're looking for in the guidance for 2026 is a little bit better than 2025, but it's still well below that 2%. So is it all about executing on mortalities, or is there something else that you're kind of pointing to that gives you that confidence? Great. great Thanks. thanks I wanted to get a little more color on the commentary around, I guess, the confidence in getting back to the 2%+ volume number. i wanted to get a little more color on the commentary around i guess the confidence in getting back to the 2%+ volume number Obviously, I guess this number that you're looking for in the guidance for 2026 is a little bit better than 2025, but it's still well below that 2%. obviously i guess this number that you're looking for in the guidance for 2026 is a little bit better than 2025 but it's still well below that 2% So is it all about executing on mortalities, or is there something else that you're kind of pointing to that gives you that confidence? so is it all about executing on mortalities or is there something else that you're kind of pointing to that gives you that confidence

Speaker 3: Yeah, Kevin, this is Javier. I appreciate the question. The reality is it is a clinical story. If you go back and you look at the time when the industry was at its peak of growth, many people thought it was the incidents. But the reality is that it was also a clinical story throughout, meaning mortality was improving year after year. To get to that 2%, you have to assume that the things that we outline in our prepared remarks come to fruition. We think, of course, there's a lag between all of the implementation clinically and the full effect. We think that you will start to see some benefits in approximately two years, and you'd probably see the full effect by 2029 or so. Yeah, Kevin, this is Javier. yeah kevin this is javier I appreciate the question. i appreciate the question The reality is it is a clinical story. the reality is it is a clinical story If you go back and you look at the time when the industry was at its peak of growth, many people thought it was the incidents. if you go back and you look at the time when the industry was at its peak of growth many people thought it was the incidents But the reality is that it was also a clinical story throughout, meaning mortality was improving year after year. but the reality is that it was also a clinical story throughout meaning mortality was improving year after year To get to that 2%, you have to assume that the things that we outline in our prepared remarks come to fruition. to get to that 2% you have to assume that the things that we outline in our prepared remarks come to fruition We think, of course, there's a lag between all of the implementation clinically and the full effect. we think of course there's a lag between all of the implementation clinically and the full effect We think that you will start to see some benefits in approximately two years, and you'd probably see the full effect by 2029 or so. we think that you will start to see some benefits in approximately two years and you'd probably see the full effect by 2029 or so

Speaker 6: Okay. That's helpful to get that timing. I forget. You gave some kind of multi-year guidance ranges. Was it three years, you said, or was it five years that you were giving those OI and EPS comments? Okay. okay That's helpful to get that timing. that's helpful to get that timing I forget. i forget You gave some kind of multi-year guidance ranges. you gave some kind of multi-year guidance ranges Was it three years, you said, or was it five years that you were giving those OI and EPS comments? was it three years you said or was it five years that you were giving those oi and eps comments

Speaker 3: We didn't say a year, but we think of it in a three-year or so timeframe. We didn't say a year, but we think of it in a three-year or so timeframe. we didn't say a year but we think of it in a three-year or so timeframe

Speaker 6: Okay. And then just last one on the free cash flow number. So I guess the way to think about it is that number, the $1.125 billion that's before the $200 million investment. So if we thought about share repo or so, we should take $200 million out of that to think about additional deployable capital, or is there some other adjustment that you're thinking about? Okay. okay And then just last one on the free cash flow number. and then just last one on the free cash flow number So I guess the way to think about it is that number, the $1.125 billion that's before the $200 million investment. so i guess the way to think about it is that number the $1.125 billion that's before the $200 million investment So if we thought about share repo or so, we should take $200 million out of that to think about additional deployable capital, or is there some other adjustment that you're thinking about? so if we thought about share repo or so we should take $200 million out of that to think about additional deployable capital or is there some other adjustment that you're thinking about

Speaker 4: Yeah, Kevin, that's the right way to think about it then. And I'd say the starting place would be with leverage level, where we came out right in the middle of the range, obviously, with EBITDA growth. If we didn't increase leverage, we'd wind up in the lower half of the range. So that would be the other thing to consider when trying to figure out what's the right number to put in for share repurchases. Yeah, Kevin, that's the right way to think about it then. yeah kevin that's the right way to think about it then And I'd say the starting place would be with leverage level, where we came out right in the middle of the range, obviously, with EBITDA growth. and i'd say the starting place would be with leverage level where we came out right in the middle of the range obviously with ebitda growth If we didn't increase leverage, we'd wind up in the lower half of the range. if we didn't increase leverage we'd wind up in the lower half of the range So that would be the other thing to consider when trying to figure out what's the right number to put in for share repurchases. so that would be the other thing to consider when trying to figure out what's the right number to put in for share repurchases

Speaker 6: Okay. But there's no other obvious use of capital that's kind of the most likely use of capital after that $200 million? Okay. okay But there's no other obvious use of capital that's kind of the most likely use of capital after that $200 million? but there's no other obvious use of capital that's kind of the most likely use of capital after that $200 million

Speaker 4: That's right. That's right. that's right

Speaker 6: Okay. Great. Thank you. Okay. okay Great. great Thank you. thank you

Speaker 3: Thank you. Thank you. thank you

Speaker 8: Thank you. Our next caller is Andrew Mok, Barclays. You may go ahead, sir. Thank you. thank you Our next caller is Andrew Mok, Barclays. our next caller is andrew mok barclays You may go ahead, sir. you may go ahead sir

Speaker 2: Hi. I appreciate all the color on 2026 guidance. Can you help us understand how missed treatments and mortality trended throughout the fourth quarter? And is there any connection or causality that you've been able to draw between those two items as you've dug into this issue further? Thanks. Hi. hi I appreciate all the color on 2026 guidance. i appreciate all the color on 2026 guidance Can you help us understand how missed treatments and mortality trended throughout the fourth quarter? can you help us understand how missed treatments and mortality trended throughout the fourth quarter And is there any connection or causality that you've been able to draw between those two items as you've dug into this issue further? and is there any connection or causality that you've been able to draw between those two items as you've dug into this issue further Thanks. thanks

Speaker 4: Yeah. Nothing really to highlight on mortality during the quarter. Mistreatments were up, but typically, you'd see missed treatments up in Q4. If you looked at Q4 2025 missed treatments, you wouldn't see much difference with Q4 2024 missed treatments. Year over year, not much of a change. Our clinical folks would say there absolutely is a correlation between missed treatment rate and mortality, but with some lag between those two metrics. Yeah. yeah Nothing really to highlight on mortality during the quarter. nothing really to highlight on mortality during the quarter Mistreatments were up, but typically, you'd see missed treatments up in Q4. mistreatments were up but typically you'd see missed treatments up in q4 If you looked at Q4 2025 missed treatments, you wouldn't see much difference with Q4 2024 missed treatments. if you looked at q4 2025 missed treatments you wouldn't see much difference with q4 2024 missed treatments Year over year, not much of a change. year over year not much of a change Our clinical folks would say there absolutely is a correlation between missed treatment rate and mortality, but with some lag between those two metrics. our clinical folks would say there absolutely is a correlation between missed treatment rate and mortality but with some lag between those two metrics

Speaker 2: Great. And can you provide more detail on how you expect the ACA headwind to play out this year and maybe comment on how open enrollment performed against your expectations and what level of attrition you're expecting from here? Thanks. Great. great And can you provide more detail on how you expect the ACA headwind to play out this year and maybe comment on how open enrollment performed against your expectations and what level of attrition you're expecting from here? and can you provide more detail on how you expect the aca headwind to play out this year and maybe comment on how open enrollment performed against your expectations and what level of attrition you're expecting from here Thanks. thanks

Speaker 4: I'm sorry, Andrew. I missed the first part of the question. I'm sorry, Andrew. i'm sorry andrew I missed the first part of the question. i missed the first part of the question

Speaker 2: Can you give us more detail on how you expect the ACA headwind to play out this year from a cadence perspective and maybe comment on open enrollment, how that played out relative to expectations, and what level of attrition you're expecting on that ACA enrollment throughout the year? Thanks. Can you give us more detail on how you expect the ACA headwind to play out this year from a cadence perspective and maybe comment on open enrollment, how that played out relative to expectations, and what level of attrition you're expecting on that ACA enrollment throughout the year? can you give us more detail on how you expect the aca headwind to play out this year from a cadence perspective and maybe comment on open enrollment how that played out relative to expectations and what level of attrition you're expecting on that aca enrollment throughout the year Thanks. thanks

Speaker 4: Thank you, Andrew. So the number that we gave, we said approximately 40 million this year, 70 million next year, and 10 million the year after that. The reality is that we're seeing what you're seeing in the broader market, which is open enrollment perform better than forecasted by CBO or ourselves. And we're all waiting to see the real number, which is right now, we are measuring selection of a plan or enrollment of a plan. And then, of course, people are trying to see what the payment of the plan will be to see what the yield will be. We don't have any additional color than what you or the marketplace has on what that'll be since it's the first time that these enhanced premium tax credits have gone away. But so far, it has been more resilient than people expected. Thank you, Andrew. thank you andrew So the number that we gave, we said approximately 40 million this year, 70 million next year, and 10 million the year after that. so the number that we gave we said approximately 40 million this year 70 million next year and 10 million the year after that The reality is that we're seeing what you're seeing in the broader market, which is open enrollment perform better than forecasted by CBO or ourselves. the reality is that we're seeing what you're seeing in the broader market which is open enrollment perform better than forecasted by cbo or ourselves And we're all waiting to see the real number, which is right now, we are measuring selection of a plan or enrollment of a plan. and we're all waiting to see the real number which is right now we are measuring selection of a plan or enrollment of a plan And then, of course, people are trying to see what the payment of the plan will be to see what the yield will be. and then of course people are trying to see what the payment of the plan will be to see what the yield will be We don't have any additional color than what you or the marketplace has on what that'll be since it's the first time that these enhanced premium tax credits have gone away. we don't have any additional color than what you or the marketplace has on what that'll be since it's the first time that these enhanced premium tax credits have gone away But so far, it has been more resilient than people expected. but so far it has been more resilient than people expected We will see once the bills start to come if people pay. We will say that our patients during the pandemic and at other time periods, because they are so ill and needing of the healthcare system, are really sophisticated understanding their insurance needs. So on average, they will go out of their way to stay insured. And that's why last call, we said that there was basically two populations: our current patient population, which we think will be more resilient, and then you have the incoming population, which is, in essence, right now, a CKD population that might not value insurance as much as someone that's already had their kidneys fail. And that's why the number grows over time. But we will obviously be watching it during the quarter, and we will see once the payments go into effect. We will see once the bills start to come if people pay. we will see once the bills start to come if people pay We will say that our patients during the pandemic and at other time periods, because they are so ill and needing of the healthcare system, are really sophisticated understanding their insurance needs. we will say that our patients during the pandemic and at other time periods because they are so ill and needing of the healthcare system are really sophisticated understanding their insurance needs So on average, they will go out of their way to stay insured. so on average they will go out of their way to stay insured And that's why last call, we said that there was basically two populations: our current patient population, which we think will be more resilient, and then you have the incoming population, which is, in essence, right now, a CKD population that might not value insurance as much as someone that's already had their kidneys fail. and that's why last call we said that there was basically two populations our current patient population which we think will be more resilient and then you have the incoming population which is in essence right now a ckd population that might not value insurance as much as someone that's already had their kidneys fail And that's why the number grows over time. and that's why the number grows over time But we will obviously be watching it during the quarter, and we will see once the payments go into effect. but we will obviously be watching it during the quarter and we will see once the payments go into effect

Speaker 2: Great. Can I just ask a follow-up on that? Do you have a sense for how many of your ACA patients receive premium assistance? Thanks. Great. great Can I just ask a follow-up on that? can i just ask a follow-up on that Do you have a sense for how many of your ACA patients receive premium assistance? do you have a sense for how many of your aca patients receive premium assistance Thanks. thanks

Speaker 4: I do not because that obviously has a lot of categories from the enhanced premium tax credits to the normal ones. You get into the income levels and other things. I do not break it down into more detail. I do not because that obviously has a lot of categories from the enhanced premium tax credits to the normal ones. i do not because that obviously has a lot of categories from the enhanced premium tax credits to the normal ones You get into the income levels and other things. you get into the income levels and other things I do not break it down into more detail. i do not break it down into more detail

Speaker 2: Okay. Thank you. Okay. okay Thank you. thank you

Speaker 4: Thank you. Thank you. thank you

Speaker 8: Thank you. Our next caller is Justin Lake with Wolfe Research. Your line is open, sir. Thank you. thank you Our next caller is Justin Lake with Wolfe Research. our next caller is justin lake with wolfe research Your line is open, sir. your line is open sir

Speaker 5: Thanks. Good morning. A couple of things. First, on the ability to offset the exchange headwind with the tailwind or kind of the non-recurrence of that cyber headwind from 2025. My recollection was the last time you guys talked about this, that the cyber headwind this year, while it hurt the second quarter, was offset by some better collections and therefore wouldn't be as big a tailwind as it might have been in 2026. Did I remember that incorrectly, or have you found other initiatives on the reimbursement side? Thanks. thanks Good morning. good morning A couple of things. a couple of things First, on the ability to offset the exchange headwind with the tailwind or kind of the non-recurrence of that cyber headwind from 2025. first on the ability to offset the exchange headwind with the tailwind or kind of the non-recurrence of that cyber headwind from 2025 My recollection was the last time you guys talked about this, that the cyber headwind this year, while it hurt the second quarter, was offset by some better collections and therefore wouldn't be as big a tailwind as it might have been in 2026. my recollection was the last time you guys talked about this that the cyber headwind this year while it hurt the second quarter was offset by some better collections and therefore wouldn't be as big a tailwind as it might have been in 2026 Did I remember that incorrectly, or have you found other initiatives on the reimbursement side? did i remember that incorrectly or have you found other initiatives on the reimbursement side

Speaker 4: Yeah. So let me try and lay out all the pieces for you, Justin, here. So we called out a $70 million headwind from cyber, $25 million of that is volume, and most of that recurs because it's just census that was lost, and we're not going to get back in 2026. The balance was $45 million, and that was an RPT headwind. We think that RPT headwind is offset in 2026 basically by the enhanced premium tax credit headwind. So you don't see a year-over-year growth problem in RPT because both years have a $40 million-$45 million negative. In terms of some of the other stuff we called out, in particular around Q4 and the resolution of some older claims, there's really nothing in the year from that to call out. We have resolution of older claims every year. Yeah. yeah So let me try and lay out all the pieces for you, Justin, here. so let me try and lay out all the pieces for you justin here So we called out a $70 million headwind from cyber, $25 million of that is volume, and most of that recurs because it's just census that was lost, and we're not going to get back in 2026. so we called out a $70 million headwind from cyber $25 million of that is volume and most of that recurs because it's just census that was lost and we're not going to get back in 2026 The balance was $45 million, and that was an RPT headwind. the balance was $45 million and that was an rpt headwind We think that RPT headwind is offset in 2026 basically by the enhanced premium tax credit headwind. we think that rpt headwind is offset in 2026 basically by the enhanced premium tax credit headwind So you don't see a year-over-year growth problem in RPT because both years have a $40 million-$45 million negative. so you don't see a year-over-year growth problem in rpt because both years have a $40 million-$45 million negative In terms of some of the other stuff we called out, in particular around Q4 and the resolution of some older claims, there's really nothing in the year from that to call out. in terms of some of the other stuff we called out in particular around q4 and the resolution of some older claims there's really nothing in the year from that to call out We have resolution of older claims every year. we have resolution of older claims every year Looking back now, the 2025 number is roughly the same as what we saw in 2024. The 2026 number, we would expect to be similar in 2025. I wouldn't call that out as unusual in any year. What was unusual was the concentration in Q4 of 2025, which is why we called it out last quarter. Looking back now, the 2025 number is roughly the same as what we saw in 2024. looking back now the 2025 number is roughly the same as what we saw in 2024 The 2026 number, we would expect to be similar in 2025. the 2026 number we would expect to be similar in 2025 I wouldn't call that out as unusual in any year. i wouldn't call that out as unusual in any year What was unusual was the concentration in Q4 of 2025, which is why we called it out last quarter. what was unusual was the concentration in q4 of 2025 which is why we called it out last quarter

Speaker 5: Got it. Then going back to IKC, can you give us a little more color in terms of what drove the outperformance in 2024 versus what you had previously booked and the level of confidence you have that that can continue and grow from there? Got it. got it Then going back to IKC, can you give us a little more color in terms of what drove the outperformance in 2024 versus what you had previously booked and the level of confidence you have that that can continue and grow from there? then going back to ikc can you give us a little more color in terms of what drove the outperformance in 2024 versus what you had previously booked and the level of confidence you have that that can continue and grow from there

Speaker 3: Sure. Let me grab that one, Justin, Javier. A couple of things that we've talked about as it relates to IKC. So just a quick housekeeping reminder: have to look at it on an annualized view because it moves pretty dramatically quarter to quarter. We think of it in three categories. The first one is dollars under management. You can think of it as volume. And that's been relatively flat. We talked about it last time. Secondly, the model of care cost and the G&A cost, which we've done a nice job of remaining flat there. And then the third category, which is the shared savings. And in that, of course, there is contracting and performance to what you're doing to add value to the system. As it relates to that 2024 reconciliation, we did better in that shared savings part that I just talked about. Does that help you? Sure. sure Let me grab that one, Justin, Javier. let me grab that one justin javier A couple of things that we've talked about as it relates to IKC. a couple of things that we've talked about as it relates to ikc So just a quick housekeeping reminder: have to look at it on an annualized view because it moves pretty dramatically quarter to quarter. so just a quick housekeeping reminder have to look at it on an annualized view because it moves pretty dramatically quarter to quarter We think of it in three categories. we think of it in three categories The first one is dollars under management. the first one is dollars under management You can think of it as volume. you can think of it as volume And that's been relatively flat. and that's been relatively flat We talked about it last time. we talked about it last time Secondly, the model of care cost and the G&A cost, which we've done a nice job of remaining flat there. secondly the model of care cost and the g&a cost which we've done a nice job of remaining flat there And then the third category, which is the shared savings. and then the third category which is the shared savings And in that, of course, there is contracting and performance to what you're doing to add value to the system. and in that of course there is contracting and performance to what you're doing to add value to the system As it relates to that 2024 reconciliation, we did better in that shared savings part that I just talked about. as it relates to that 2024 reconciliation we did better in that shared savings part that i just talked about Does that help you? does that help you

Speaker 5: Yeah. Just how did you do better? Was it inpatient admissions, outpatients? Just curious for a little more color there and what gives you confidence that that number is going to continue at that level given how much outperformance? Yeah. yeah Just how did you do better? just how did you do better Was it inpatient admissions, outpatients? was it inpatient admissions outpatients Just curious for a little more color there and what gives you confidence that that number is going to continue at that level given how much outperformance? just curious for a little more color there and what gives you confidence that that number is going to continue at that level given how much outperformance

Speaker 4: Yeah. I mean, look, there is a lot of little things: medication management, transitions of care, segmentation of patient population, having more access to patients earlier. We have new interventions and protocols. One of the difficulties of this business is, of course, understanding exactly what moved the needle. But rather, the cumulative portfolio is working, and that's why we felt comfortable giving a +$20 million for 2026. Yeah. yeah I mean, look, there is a lot of little things: medication management, transitions of care, segmentation of patient population, having more access to patients earlier. i mean look there is a lot of little things medication management transitions of care segmentation of patient population having more access to patients earlier We have new interventions and protocols. we have new interventions and protocols One of the difficulties of this business is, of course, understanding exactly what moved the needle. one of the difficulties of this business is of course understanding exactly what moved the needle But rather, the cumulative portfolio is working, and that's why we felt comfortable giving a +$20 million for 2026. but rather the cumulative portfolio is working and that's why we felt comfortable giving a +$20 million for 2026

Speaker 5: Got it. Thanks. Got it. got it Thanks. thanks

Speaker 4: Thank you. Thank you. thank you

Speaker 7: Thank you. As a reminder, that is star one if you would like to ask a question. A.J. Rice with UBS. Your line is open. Thank you. thank you As a reminder, that is star one if you would like to ask a question. as a reminder that is star one if you would like to ask a question A.J. a.j Rice with UBS. rice with ubs Your line is open. your line is open

Speaker 1: Thanks. Hi, everybody. First, there's been a lot of discussion and even the talk about what you're doing with the IKC business about either people managing patients with CKD better and more effectively. And then obviously, there's discussion about some of the drugs that could have an impact. And I wondered, what are you seeing in disease progression with someone that has kidney disease, time to get to dialysis, and then are you seeing them stay longer yet on dialysis, or when do you think any of that would have an impact? Thanks. thanks Hi, everybody. hi everybody First, there's been a lot of discussion and even the talk about what you're doing with the IKC business about either people managing patients with CKD better and more effectively. first there's been a lot of discussion and even the talk about what you're doing with the ikc business about either people managing patients with ckd better and more effectively And then obviously, there's discussion about some of the drugs that could have an impact. and then obviously there's discussion about some of the drugs that could have an impact And I wondered, what are you seeing in disease progression with someone that has kidney disease, time to get to dialysis, and then are you seeing them stay longer yet on dialysis, or when do you think any of that would have an impact? and i wondered what are you seeing in disease progression with someone that has kidney disease time to get to dialysis and then are you seeing them stay longer yet on dialysis or when do you think any of that would have an impact

Speaker 4: Yeah. Thanks for the question. The reality is we have not seen anything shift, but you would think that that would take some time, as we've talked about. When you talk about these drugs, they're not magic drugs, but rather, it takes some time of being on them to have the effect that you're talking about. So right now, it's too early to tell. And again, we've only been managing these CKD populations for five years or so. So that will take longer to play out. Yeah. yeah Thanks for the question. thanks for the question The reality is we have not seen anything shift, but you would think that that would take some time, as we've talked about. the reality is we have not seen anything shift but you would think that that would take some time as we've talked about When you talk about these drugs, they're not magic drugs, but rather, it takes some time of being on them to have the effect that you're talking about. when you talk about these drugs they're not magic drugs but rather it takes some time of being on them to have the effect that you're talking about So right now, it's too early to tell. so right now it's too early to tell And again, we've only been managing these CKD populations for five years or so. and again we've only been managing these ckd populations for five years or so So that will take longer to play out. so that will take longer to play out

Speaker 1: Okay. Just maybe a follow-up on the Elara Caring investment. How should we think about that? Is it just a financial investment from your side? Are you going to do things operationally that might make a difference for you? Can you describe a little more of what's going on with that? Okay. okay Just maybe a follow-up on the Elara Caring investment. just maybe a follow-up on the elara caring investment How should we think about that? how should we think about that Is it just a financial investment from your side? is it just a financial investment from your side Are you going to do things operationally that might make a difference for you? are you going to do things operationally that might make a difference for you Can you describe a little more of what's going on with that? can you describe a little more of what's going on with that

Speaker 3: Sure. Our investment thesis has two pieces to it. One is, of course, we have to have a good capital return on that $200 million. We want to be disciplined. We think it's a good-sized investment, and we want it to have good capital returns. The second one is to help our patient population. Roughly a quarter of our population uses home health. And by having a specialized kidney protocol, we think we can reduce hospitalization and readmissions and then, of course, try to reduce missed treatments. So it is connecting back to this whole loop of trying to do more for our patients while we have them in our clinic and now outside of the clinic. Sure. sure Our investment thesis has two pieces to it. our investment thesis has two pieces to it One is, of course, we have to have a good capital return on that $200 million. one is of course we have to have a good capital return on that $200 million We want to be disciplined. we want to be disciplined We think it's a good-sized investment, and we want it to have good capital returns. we think it's a good-sized investment and we want it to have good capital returns The second one is to help our patient population. the second one is to help our patient population Roughly a quarter of our population uses home health. roughly a quarter of our population uses home health And by having a specialized kidney protocol, we think we can reduce hospitalization and readmissions and then, of course, try to reduce missed treatments. and by having a specialized kidney protocol we think we can reduce hospitalization and readmissions and then of course try to reduce missed treatments So it is connecting back to this whole loop of trying to do more for our patients while we have them in our clinic and now outside of the clinic. so it is connecting back to this whole loop of trying to do more for our patients while we have them in our clinic and now outside of the clinic

Speaker 1: Okay. Thanks a lot. Okay. okay Thanks a lot. thanks a lot

Speaker 4: Thank you. Thank you. thank you

Speaker 7: Thank you. Our next caller is Peter Chickering with Deutsche Bank. Your line is open, sir. Thank you. thank you Our next caller is Peter Chickering with Deutsche Bank. our next caller is peter chickering with deutsche bank Your line is open, sir. your line is open sir

Speaker 9: Hey. Good afternoon. Thanks for taking my questions. Can you talk about the international business for a little bit, how you should think about the top-line growth, whether it's M&A versus organic, and how you should think about margins within that segment? Hey. hey Good afternoon. good afternoon Thanks for taking my questions. thanks for taking my questions Can you talk about the international business for a little bit, how you should think about the top-line growth, whether it's M&A versus organic, and how you should think about margins within that segment? can you talk about the international business for a little bit how you should think about the top-line growth whether it's m&a versus organic and how you should think about margins within that segment

Speaker 4: Yeah. I think on international, generally, I would think about the growth both top-line and bottom-line as half M&A and half organic. We would expect the margins to continue to improve as they leverage kind of the fixed overhead both at the international level as well as in the existing market. So international has proven to be a good business for us, a relatively consistent performer, and a contributor of about a point to OI growth over the last few years. And we're expecting more of the same in 2026. Yeah. yeah I think on international, generally, I would think about the growth both top-line and bottom-line as half M&A and half organic. i think on international generally i would think about the growth both top-line and bottom-line as half m&a and half organic We would expect the margins to continue to improve as they leverage kind of the fixed overhead both at the international level as well as in the existing market. we would expect the margins to continue to improve as they leverage kind of the fixed overhead both at the international level as well as in the existing market So international has proven to be a good business for us, a relatively consistent performer, and a contributor of about a point to OI growth over the last few years. so international has proven to be a good business for us a relatively consistent performer and a contributor of about a point to oi growth over the last few years And we're expecting more of the same in 2026. and we're expecting more of the same in 2026

Speaker 9: Okay. And then I'm going to ask Justin's question on IKC a little bit differently. But looking at the losses you guys had in 2022 and 2023 and 2024, and just refresh us on those if you could, I guess, why should we think about the rate of improvement in 2026 sort of slowing dramatically? It just seems as though the losses have compressed quite significantly as you've gotten scale. And so I'm curious why we wouldn't see the benefits grow sort of levels that we've seen in the last couple of years. Okay. okay And then I'm going to ask Justin's question on IKC a little bit differently. and then i'm going to ask justin's question on ikc a little bit differently But looking at the losses you guys had in 2022 and 2023 and 2024, and just refresh us on those if you could, I guess, why should we think about the rate of improvement in 2026 sort of slowing dramatically? but looking at the losses you guys had in 2022 and 2023 and 2024 and just refresh us on those if you could i guess why should we think about the rate of improvement in 2026 sort of slowing dramatically It just seems as though the losses have compressed quite significantly as you've gotten scale. it just seems as though the losses have compressed quite significantly as you've gotten scale And so I'm curious why we wouldn't see the benefits grow sort of levels that we've seen in the last couple of years. and so i'm curious why we wouldn't see the benefits grow sort of levels that we've seen in the last couple of years

Speaker 4: Yeah. So look, your math is right. I think if you go back over the last three years, the average OI improvement has been somewhere in the $40 million-$50 million per year. Now we're calling out a slowing of that. I think it's just a natural occurrence as a business matures and gets bigger. There's just less opportunity to continue to drive the margins up. We're not expecting a high-margin business here. So I think $20 million a year is a comfortable landing spot for us right now in terms of contribution to OI growth. Yeah. yeah So look, your math is right. so look your math is right I think if you go back over the last three years, the average OI improvement has been somewhere in the $40 million-$50 million per year. i think if you go back over the last three years the average oi improvement has been somewhere in the $40 million-$50 million per year Now we're calling out a slowing of that. now we're calling out a slowing of that I think it's just a natural occurrence as a business matures and gets bigger. i think it's just a natural occurrence as a business matures and gets bigger There's just less opportunity to continue to drive the margins up. there's just less opportunity to continue to drive the margins up We're not expecting a high-margin business here. we're not expecting a high-margin business here So I think $20 million a year is a comfortable landing spot for us right now in terms of contribution to OI growth. so i think $20 million a year is a comfortable landing spot for us right now in terms of contribution to oi growth

Speaker 9: Okay. And then last question here, just about new starts. I think you talked about new starts in the fourth quarter and we're back-end loaded. But as you think about new starts for 2026, how do you model that? And specifically, how do you break out the payer mix of those new starts versus, say, previous years as it relates to commercial or HIX or government patients? Thanks. Okay. okay And then last question here, just about new starts. and then last question here just about new starts I think you talked about new starts in the fourth quarter and we're back-end loaded. i think you talked about new starts in the fourth quarter and we're back-end loaded But as you think about new starts for 2026, how do you model that? but as you think about new starts for 2026 how do you model that And specifically, how do you break out the payer mix of those new starts versus, say, previous years as it relates to commercial or HIX or government patients? and specifically how do you break out the payer mix of those new starts versus say previous years as it relates to commercial or hix or government patients Thanks. thanks

Speaker 3: Yeah. So we're not calling out any dramatic change in new starts for next year, similar to mortality and to some extent missed treatment rates. When we see those things improve, we'll start calling them out. But until then, we're comfortable with flattish. In terms of mix, look, new patients have always had a higher commercial mix than the average patient. It's just the natural evolution of a patient as they get older. They tend to migrate towards Medicare. I don't see any change to that pattern going forward. Yeah. yeah So we're not calling out any dramatic change in new starts for next year, similar to mortality and to some extent missed treatment rates. so we're not calling out any dramatic change in new starts for next year similar to mortality and to some extent missed treatment rates When we see those things improve, we'll start calling them out. when we see those things improve we'll start calling them out But until then, we're comfortable with flattish. but until then we're comfortable with flattish In terms of mix, look, new patients have always had a higher commercial mix than the average patient. in terms of mix look new patients have always had a higher commercial mix than the average patient It's just the natural evolution of a patient as they get older. it's just the natural evolution of a patient as they get older They tend to migrate towards Medicare. they tend to migrate towards medicare I don't see any change to that pattern going forward. i don't see any change to that pattern going forward

Speaker 9: Okay. So just to be super clear, the new starts that we're seeing coming in are the same commercial mix we've seen sort of for the last several years. Thank you. Okay. okay So just to be super clear, the new starts that we're seeing coming in are the same commercial mix we've seen sort of for the last several years. so just to be super clear the new starts that we're seeing coming in are the same commercial mix we've seen sort of for the last several years Thank you. thank you

Speaker 3: Yeah. With the one callout around HIX and that changing. But other than that, I don't see any other new dynamic. Yeah. yeah With the one callout around HIX and that changing. with the one callout around hix and that changing But other than that, I don't see any other new dynamic. but other than that i don't see any other new dynamic

Speaker 9: Great. Thanks so much. Great. great Thanks so much. thanks so much

Speaker 8: Thank you. Our next caller is Ryan Langston with TD Cowen. Your line is open. Thank you. thank you Our next caller is Ryan Langston with TD Cowen. our next caller is ryan langston with td cowen Your line is open. your line is open

Speaker 10: Thanks. On the flu vaccine commentary and the prepared remarks, did you say that there was an actual change in the vaccination rates this fourth quarter versus other fourth quarters, or was that just more related to seasonal or seasonality sequentially? Thanks. thanks On the flu vaccine commentary and the prepared remarks, did you say that there was an actual change in the vaccination rates this fourth quarter versus other fourth quarters, or was that just more related to seasonal or seasonality sequentially? on the flu vaccine commentary and the prepared remarks did you say that there was an actual change in the vaccination rates this fourth quarter versus other fourth quarters or was that just more related to seasonal or seasonality sequentially

Speaker 3: I believe what we said in the opening remarks is that in our high, we were in the 90th percentile, and we aspired to get back to that. Just to give you a bit of sense, right now, we're at 80%, which is, from a national perspective, quite healthy, but we could do better. I believe what we said in the opening remarks is that in our high, we were in the 90th percentile, and we aspired to get back to that. i believe what we said in the opening remarks is that in our high we were in the 90th percentile and we aspired to get back to that Just to give you a bit of sense, right now, we're at 80%, which is, from a national perspective, quite healthy, but we could do better. just to give you a bit of sense right now we're at 80% which is from a national perspective quite healthy but we could do better

Speaker 10: Got it. I know the dialysis department. Got it. got it I know the dialysis department. i know the dialysis department

Speaker 3: Yeah. The only other thing I'd just point out is flu vaccines do go up in Q4 over Q3, and that does drive a little bit of RPT and a little bit of cost. So that's part of the Q4 over Q3 RPT dynamic as well. Yeah. yeah the The only other thing I'd just point out is flu vaccines do go up in Q4 over Q3, and that does drive a little bit of RPT and a little bit of cost. the only other thing i'd just point out is flu vaccines do go up in q4 over q3 and that does drive a little bit of rpt and a little bit of cost So that's part of the Q4 over Q3 RPT dynamic as well. so that's part of the q4 over q3 rpt dynamic as well

Speaker 10: Yeah. That makes sense. And then just last thing. I know the dialysis population is a bit different from individual MA population, but if the kind of flat advance notice holds for 2027 and the final notice, I guess, is there any maybe just directional change in what we could assume for outlook in terms of growth for 2027? Thanks. Yeah. yeah That makes sense. that makes sense And then just last thing. and then just last thing I know the dialysis population is a bit different from individual MA population, but if the kind of flat advance notice holds for 2027 and the final notice, I guess, is there any maybe just directional change in what we could assume for outlook in terms of growth for 2027? i know the dialysis population is a bit different from individual ma population but if the kind of flat advance notice holds for 2027 and the final notice i guess is there any maybe just directional change in what we could assume for outlook in terms of growth for 2027 Thanks. thanks

Speaker 4: Yeah. Thanks for the question, Ryan. One of the things that it's worthy of highlighting is that the ESRD population has its own funding pool in MA and that CMS has actually realized that there was an underfunding, so there was a catch-up. So the dialysis or ESKD population will receive a 6% increase in 2027, which, from our perspective, reflects the reality and would put an MA plan in a position to want to add these patients to the risk pool. Yeah. yeah Thanks for the question, Ryan. thanks for the question ryan One of the things that it's worthy of highlighting is that the ESRD population has its own funding pool in MA and that CMS has actually realized that there was an underfunding, so there was a catch-up. one of the things that it's worthy of highlighting is that the esrd population has its own funding pool in ma and that cms has actually realized that there was an underfunding so there was a catch-up So the dialysis or ESKD population will receive a 6% increase in 2027, which, from our perspective, reflects the reality and would put an MA plan in a position to want to add these patients to the risk pool. so the dialysis or eskd population will receive a 6% increase in 2027 which from our perspective reflects the reality and would put an ma plan in a position to want to add these patients to the risk pool

Speaker 3: Ryan, the one thing I'd add to that is not only is the reimbursement different, but the whole coding regime is different. So the questions around V28 and rebasing and the higher coding intensity in a given year, those are not part of or they're a much smaller part of the math for ESRD MA rates. And if you look at the notice from last week, you'd see it in there all as well. So it's all spelled out. Ryan, the one thing I'd add to that is not only is the reimbursement different, but the whole coding regime is different. ryan the one thing i'd add to that is not only is the reimbursement different but the whole coding regime is different So the questions around V28 and rebasing and the higher coding intensity in a given year, those are not part of or they're a much smaller part of the math for ESRD MA rates. so the questions around v28 and rebasing and the higher coding intensity in a given year those are not part of or they're a much smaller part of the math for esrd ma rates And if you look at the notice from last week, you'd see it in there all as well. and if you look at the notice from last week you'd see it in there all as well So it's all spelled out. so it's all spelled out

Speaker 10: All right. Thank you. All right. all right Thank you. thank you

Speaker 3: Thank you. Thank you. thank you

Speaker 8: Thank you. At this time, I'm showing no further questions, speakers. I'll turn the call back over to you for any closing comments. Thank you. thank you At this time, I'm showing no further questions, speakers. at this time i'm showing no further questions speakers I'll turn the call back over to you for any closing comments. i'll turn the call back over to you for any closing comments

Speaker 3: Thank you, Michelle, and thank you all for joining. I hope it is 100% clear that our energy and excitement around clinical opportunities are absolutely off the charts to expand the lives of our patients. We have a powerful alignment between our clinical ambitions and our financial goals. By fulfilling our mission to deliver the best care for our patients, we can also deliver returns for our shareholders. Thank you for your interest, and thank you for joining the call today. Have a good day. Thank you, Michelle, and thank you all for joining. thank you michelle and thank you all for joining I hope it is 100% clear that our energy and excitement around clinical opportunities are absolutely off the charts to expand the lives of our patients. i hope it is 100% clear that our energy and excitement around clinical opportunities are absolutely off the charts to expand the lives of our patients We have a powerful alignment between our clinical ambitions and our financial goals. we have a powerful alignment between our clinical ambitions and our financial goals By fulfilling our mission to deliver the best care for our patients, we can also deliver returns for our shareholders. by fulfilling our mission to deliver the best care for our patients we can also deliver returns for our shareholders Thank you for your interest, and thank you for joining the call today. thank you for your interest and thank you for joining the call today Have a good day. have a good day

Speaker 8: Thank you. This concludes today's conference call. You may go ahead and disconnect at this time. Thank you. thank you This concludes today's conference call. this concludes today's conference call You may go ahead and disconnect at this time. you may go ahead and disconnect at this time