DAVITA INC. — Call Transcript 2026

It's my pleasure to be hosting the meeting with DaVita. We have Joel Ackerman, who's the CFO of the company, as well as Nic Eliason, who's president of the capital markets and investor relations. I think we're just gonna jump right in if you're good with that. All right, excellent. I know your favorite topic is volumes, maybe we should start with volumes. Sounds good. I guess, Q1, you know, incremental treatment guidance was raised from flat to kinda up, you know, call it 25, 50 basis points. You know, what drove the increase there, and how confident are you in the durability of that improvement? Sure. First, good afternoon, everyone, and thanks for having us, Kevin. We really divided the increase in the guide into two buckets. First is increased census from Fresenius clinic closures. They have announced the closing of about 100 clinics, we expect to get our fair share of the patients that they don't retain. That would be about half the volume increase. The second is just what we observed during Q1. Our treatment volume came in about 20 basis points better than expected, largely as a result of census being ahead of plan and we expect that to continue. You know, you can look across all the different inputs and tweak any one of them. The one I'd highlight as that really came in above plan was mortality. As you know, mortality has been elevated since COVID relative to pre-COVID levels, and it's nice to see it starting to come back down, and we would hope it will continue to come down given all the great clinical work our team is doing. Yes. How do you separate the improvement in mortality relative to, like, the light flu season, which I think would also kinda lift the mortality side of things? Yeah. First, you're absolutely right. Relative to last year, flu was easier and less of a headwind on mortality. I would remind everyone it was still relative to the last 15 years, it was still quite a tough flu season. We think we've gotten pretty good at modeling the impact flu has on mortality, so we can look through that, not just in Q1, but over the last few quarters, and believe we see some signal in what is a relatively noisy number. Okay. I guess, like, Fresenius was closing sites through kind of the quarter. I think they're still maybe even doing it into this quarter. Does the benefit, they're gonna be more back-end loaded or ramp more? How do we think about next year as the starting point? Like, is it the half that we should kinda think about as the starting point for next year, or is it, you know, just ramping? Yeah. We saw almost no benefit in Q1. They did start closing clinics in the quarter, but it was very much back-end loaded. Almost none of the volume performance in Q1 above plan was related to that. What they have announced is that they expect the clinics to be largely closed by the end of Q2. Our expectation, if you wanted to kind of decide from when to annualize this, it would probably be the end of April or the end of May. We would expect to get most of the benefit this year, but there'd be a bit of a tailwind again next year. All right. When you think about the core growth, like, is this the improvement in mortality, is that something you expect to build as the year goes on as well? Or, you know, can you pinpoint anything that drove the improvement in mortality if it's not flu? Yeah. I'd start with the history of the industry. If you go back to a timeframe, call it 2000 to 2015, when the industry was growing 3%, 4%, 5% a year. I think there's a misperception that the growth then was because of increasing incidence of diabetes and obesity and all that, and that really is not the major driver of volume growth in those periods. The major driver growth, about two-thirds of the growth, was declining mortality in the industry. The industry investing in better clinical outcomes to drive better mortality is really the history of volume growth. Our belief is we are at the beginning of seeing that reinvigorated. It's about new medications. It's about higher flu vaccination rates. It's about time on therapy and other clinical interventions. Middle molecule clearance is coming, and we think that's largely what's gonna drive the mortality improvement. Timing is hard to predict. There is certainly a delay in some or all of these interventions between when you successfully drive the metric and when you start seeing it in mortality. We called out we would expect to get back to the 2-plus percent growth rate by 2029. What that curve looks like between now and then is hard to predict. I think that when people see weak volumes, they think GLP-1s and how that impacts things. I mean, can you talk a little bit about how you're seeing the impact there? I think in the quarter you said something along the lines of that the mortality improved, but the admissions were down. Was there anything, is that just noise, or was there anything to that side of the equation? We haven't called out any trends with admissions. It is a noisy number, and Q1 was noisy. In terms of GLP-1s and SGLT2 inhibitors, they're two sides to the same coin. What we called out when this growth in the GLP-1s started was that, absolutely, these will delay progression for CKD4 patients who are taking these drugs. We think that there's a lot of clinical evidence to demonstrate that. There's equally good clinical evidence to say CKD4 patients will have lower mortality. Most CKD4 patients will unfortunately pass away before they're ever incident to ESRD because of their diabetes or their heart disease or some other issue. We see these two dynamics, slower progression offset by lower mortality, as roughly evening each other out. We've re-looked at the data since we initially rolled out that hypothesis in late 2023, and our clinicians continue to believe that's the right way to think about it, with maybe a slight positive that our patients, ESRD patients who are taking GLP-1s, might benefit from lower mortality when they're on dialysis. That would be a bit of a tailwind. It's probably too early to really be seeing that effect though yet. What percentage of your people are taking GLP-1s now? Roughly high single digits of our patients are on GLP-1s right now. Is there a way to is it something that everyone could be or should be taking, or is it we broke it that number ago? No. It is not something everyone should be taking. Again, I'm not a clinician, so I'm maybe getting a little out over my skis here. Generally, you'd think of patients who are diabetic as being the ones. Roughly 60% of our patients are diabetic, and about 40% are on ESRD because they're diabetic. That might be a way to think about GLP-1s. GLP-1s, remember though, have been available to these patients for a lot longer than they've been available just for weight loss. When you—I know you said you weren't quite ready to talk about the progression back to 2% by 2029, but let's see if I can pitch on hole you into something. I mean, is there a reason? You shouldn't warn me you're gonna do that. No, no. Is there a reason why it wouldn't be more ratable? Like, like, what would the reason why it would be happen sooner versus the reason why it would happen later? You know, I'd start with the middle molecule clearance, which are either new machines or new dialyzers. They're not widely available yet, that will grow over time. I think there's reasonable evidence, and if you look at the CONVINCE trial, you can see it there, that it takes about 18 months from when this clinical intervention starts, when the better clinical care starts, till you really see the curve separate and the better mortality show up. There is a delay between the implementation of better clinical care and when you'll start seeing it in mortality. That delay is different depending on the intervention. It might be a lot quicker, for example, for higher vaccination rates. It's that reason and some of the questions around what that path will look like that we would expect will have to wait a bit till we get back to the 2-plus percent. Okay. Let me maybe talk about the middle molecule then. Just so you know, Fresenius has a new device. They're very excited about it, but they're kinda doing it to themselves first. They are selling it externally. Like, how do you think about your potential adoption or the rate of your adoption of that? Start there. I'd start with we're very excited about this new modality. Everything I know says it's gonna be great for patients and extend their lifetime and they feel better. It's not just about living longer. The reports are that patients who've had middle molecule clearance, they're less tired, and they just feel better, and that could have other benefits. It might mean patients miss fewer treatments, for example. There are two paths forward here. There's the new machine, high-volume HDF, and that's the machine you're referencing. There are also dialyzers that could potentially deliver a similar benefit of middle molecule clearance. We are watching the data carefully to see what these different paths have to offer clinically. There are other considerations as well. There are supply chain considerations. There are operational considerations as well. We're testing both out, and we're excited to see where this goes and the benefits it can deliver to our patients. Yeah. I think, you know, they're talking about a 2030 kind of full penetration to themselves. Is if this other option of the dialyzers, you know, potentially delivering similar efficacy, like, is that something that could happen much sooner? When could you start to roll that out? Well, it depends on a whole bunch of things. It depends on the FDA. It depends on supply chain and the manufacturer's ability to create it as well. I think it's a little early to speculate what sort of speed that could happen at. Okay. Can you talk a little bit about it always seems like there's something new from the reimbursement side of things, like phosphate binders or calcimimetics or what have you. I guess maybe just start with phosphate binders. Like, how much is that going to be adding to your kind of OI this year, and how should we think about it into next year? Is there some next drug that you're kind of looking at and saying, "This has an opportunity to be meaningful"? Yeah. Last year, we called out $50 million of contribution from OI. We expect this year to be something similar to that. In terms of 2027, it is too early to tell. There are a lot of dynamics yet to play out, largely from CMS about how they're gonna think about binders next year and when they fully bring them into the bundle and how they fully bring them into the bundle. I would expect we'll get a lot more clarity on that when the preliminary rule comes out, typically at the end of June or early July. TBD on that one. In terms of other drugs coming down the pipeline, what I would observe is DaVita has, I believe, a core competency in terms of how we manage drugs to deliver great care to our patients, deliver great savings to the systems, but also deliver OI to our shareholders. I think you saw that with calcimimetics. You're seeing it with binders now. You can see it with how we're able to manage down the cost of EPO over time, I think this will continue to deliver. There's no specific drug I would call out, I do think as we think about how we continue to maintain our margins and deliver cost savings for our payers in the system, I think there will be more pharma opportunities going forward. Yeah. Then, like, the RPT number in the quarter was pretty strong, 4%. I guess is there a way to break that out, as to why it would only be 1% or 2% kind of for the year? Sure. RPT is a source of a lot of variability from quarter to quarter, and we've called that out. We called it out in Q4, called it out in Q3 about Q4, and it came out as we expected. Q1 benefited from positive variability this year. It also suffered from negative variability in Q1 of 2025. Those two things combine to partially explain the high growth in Q1. There are twoother dynamics that you have to think about in terms of progression for the year. One is enhanced premium tax credits, and as we've called out about a $40 million headwind from lower commercial mix as patients leave the exchanges, that's a number that will grow over the course of the year. That's one reason you would expect lower RPT growth later in the year. The second would be binders. We think RPT contribution from binders will come down over the course of the year. No impact to OI because we think costs will come down as well. That would be the other thing. I said about variability, Q4 had very positive variability in 2025. We called that out. You would expect Q4 of 2026 to have a very tough comp as well. Is the binder impact, is that just a natural result of the way that the rates are based off of ASP on a lag? Is it because I guess there's, like, a new generic that's coming out this year? Like, is that influencing that or is that separate? Yeah. You're right about both. It's more the former than the latter. There is a new generic AURYXIA, which has been approved, but there isn't much supply of it, so it's really not having an impact on ASP. Just talk a bit about the rate updates that you're getting because I guess the Medicare rate is, you know, 2%, so, you know, why is it only 1%-2% overall? You're right. 2% is probably a more typical average rate increase we would get. The big headwind is on the binders, that the decline in ASP in the binders is about a 40 basis point headwind for us in the year, which is why we're at 1%-2% rather than 1.5%-2.5%. I would remind you, as I said before, that has no impact on OI because cost per treatment is coming down with that. Yeah. The commercial side is in that 2% range as well. Why aren't you able to get something more than that? I ask our payer partnerships team that every day. Look, it is full contact sport, as our former CEO used to say. We would love to get better rates. I think we're comfortable forecasting 2%, and that's kinda where we are. Although, you know, the market has been very much focused on volumes, you guys have been pretty confident in your ability to do your 3%-7% OI growth, even if, you know, volumes are a little bit lighter. Can you talk a little bit about the cost side of the equation? What gives you confidence in being able to manage costs down to deliver that? It's been a strength of DaVita's for a very long time. We are a provider with a national footprint at scale, and there's no doubt that gives some advantages on the cost side. We benefit from just staying ahead of the curve. We have been investing in IT for many, many years now, even through some of the more challenging years in 2022 and 2023. We did not take our eye off the ball in investing in the future. The best example is CWOW, which is our electronic medical record system. What you see in our P&L is true this year and has been true in the past, and I think will be true in the future. We continue to invest in IT and our future, and you see the benefits of that in other parts of the P&L. You see it in cost per treatment. You see it in revenue per treatment through better revenue operations, and we think that will continue. I guess, like, Say 50 basis points of volume growth. How do we get from 50 basis points of volume growth plus 1% or 2% pricing to 3%-7% OI? I'd start with 1 point of OI growth from international and a point of OI growth from IKC, our value-based care business. They won't be exactly a point every year, but as you think about the theoretical model, I think you can count on call it $20 million or so of OI from each of those. You know, you're dependent on, you know, 1%-5% from the U.S. dialysis business. To get to 3%, you need, call it, two points of RPT growth and a point of volume growth and constant margins. There are other equations you can get there. We got there with zero volume growth by tweaking some of the other components of our trilogy. There's no doubt it gets easier as volume growth comes back. How durable is the 1% from each segment? I guess internationally you can keep investing potentially. Theoretically, the value-based care side probably has a upper limit to where that could be. How many more years do we have of that? Yeah. International is just inherently a higher we're in higher growth markets than in the U.S., and we've got more room to run on margin improvement. I think the model there is relatively easy to see. On IKC, we've had a lot of strength in delivering shared savings, and that continues to improve. What I think you will see over time is growth in lives under management and dollars under management and some fixed cost leverage which doesn't lead me to worry that somehow this $20 million a year model is gonna fall apart in IKC anytime soon. I think we've got a few years of visibility to continue to deliver that. Why is international so interesting? It seems like, you know, Fresenius, obviously some of the clinics you bought was from them. They were getting out of some markets, you were getting into those markets. What makes it interesting to you and why were you able to make that work for you? I'm reluctant to speculate about why Fresenius chose those, chose to sell those markets. I think based on what they've said publicly, they were solving for its lower leverage and higher margins. Neither of those were issues that we were solving for. We were solving for return on capital and OI growth. We're quite happy with the markets we bought from them. It's been enough time right now where I feel like those were good investments for us. We expect higher returns internationally because of the risk and we are getting those. I like the international markets. We're cautious. We're hesitant when we get into new markets to make sure they meet our criteria. The thing that I would emphasize that I think I and Robert Lang, the head of international, are all very proud of is in every single market that we enter, we demonstrably improve the quality of the clinical care. Great. Maybe just pivoting back to the ACA for a minute. You guys talked about the impact of that growing, you know, bigger to 27. Correct Into dialysis, not having coverage. Like, is there a way to think about how that will progress for the rest of the year? Is that kind of like a growing number each quarter? What are you seeing now? I don't know. We're now in May, it seems like with the effectuation rates, maybe you'd start to have some color on how that's trending. Yeah. It's still early to tell on exactly how it's trending, but what you called out is exactly right, that the way we expect this to really play out would be our newly incident patients, you said, won't have coverage, just to be clear. We would expect they'll have Medicare coverage. They won't have commercial coverage, and we get a lower rate on Medicare, as you know. That's the impact. We would expect that to continue to build over the rest of the year and into 2027. The big question is: What has happened to CKD4 patients, and how many of them have retained coverage on the exchanges despite the higher premiums? Because that ultimately will dictate what the incident commercial mix rate is for us. To be clear, you're basically assuming that exchanges go back to 2019 as a percentage total, or is it different than that? Yes. Well, yeah, using our numbers, we are expecting that roughly 1% of our patients were on the exchanges as a result of enhanced premium tax credits, and we would expect that number to go away. Over multiple years. Three-year period. Over the three-year period. Correct. Yeah. Okay. Then, one of the things that everyone seems to be really excited about is AI. Can you talk a little bit about what you guys see AI as, what the opportunity is for you? Is there anything that maybe the market gets too excited about, gets all their skis on? I'm not gonna touch the second part of that question. Look, AI is something that we are absolutely leaning in on. We're investing a lot in it, both in the infrastructure that is ultimately needed to deliver AI, and that's both having clean data and having good systems because I'd say in general, our AI benefits will come through our core systems. For example, the AI benefits I would expect to see in accounting would largely come through our Oracle system rather than some standalone AI system. I would expect similar things for a lot of our technology. We're excited about it. We are moving, I think, at a judicious pace, recognizing there's a lot of infrastructure that needs to be put in so we can really take advantage of AI. We would expect benefits in lower software development cost, better revenue operations. Labor productivity is an area where we're excited about call centers, so in line with what I think most people are looking at initially, then ultimately opportunities in clinical care. Can you give a little sense of timing of when we should start to see some of these things? The fact that ultimately clinical care makes it seem like it's a farther out thing. Is there a way to think about timing? Well, I think each of these things has many, many sub-projects, and there are areas of clinical care that are, you know, dosing being one of them, that you could attribute benefits to AI already today. I would say using a CFO's lens, I would expect AI to be a net cost to us at least for 2026 and probably much of 2027 before the benefits start outweighing the expense. I guess when you think about the best ROI, what's the best ROI of the things that you kind of mentioned? I mean, a lot of them are quite inexpensive to implement, so I'm not sure ROI is the right lens. It'd be more about what's the total dollar savings you could benefit from. I would say right now the largest ones would be software development, productivity, and revenue operations. Those aren't necessarily about the percentage savings, just two of those things, revenue operations and labor productivity in particular, are just very big items on our P&L. When we look at the P&L, you know, probably the cost number that jumps out the most is that G&A has been up a couple hundred basis points over the last several years. On the call, Javier was kinda saying he didn't really care where the cost per treatment came from, as long as you keep it in that 2-2.5% range. I mean, the outside debt looks high, but is that not the case, or is there opportunity to bring that G&A number down? I think the point Javier was making is that if we can invest $20 million in G&A to drive $40 million of better revenue collections or $40 million of lower labor costs, we don't care if G&A goes up for that reason. We're investing in G&A, and the returns are excellent. We will continue to do that. I think most of our AI and technology costs wind up in G&A, and they generally result in savings that are in another line or benefits that are in another line in the P&L. We're comfortable with G&A going up as long as we're getting the right return for those investments. DaVita for many, many years that certainly preceded my time as CFO has been praised for its cost management. I think it's well deserved. We bring the same lens to G&A, but we are comfortable with G&A growing as long as we're getting the value for it. Right. When we think about capital deployment, because I think it was one of the things that probably wasn't well understood by the market when you guys came out with Q4 results and just kinda showed how much cash you have and how much share repo you could be doing. You guys have invested in some things along the way, whether it was a, you know, device JV and then a home health investment. Like, how should we think about share repo versus some of these ancillary things, is there a view that there should be another leg to the stool, or how should we think about that? Yeah. Share repurchases are the last thing on the list. When we don't have other appropriate good uses of capital where we're investing in our future at good risk-adjusted returns, we'll buy back stock. I love finding other uses like, you know, the Mozarc, the joint venture you mentioned, or Elara, the home health investment. We will continue to do those. I don't think of either of these as another leg to the stool. These are supportive of our dialysis and kidney care strategy. In terms of are we out looking to put billions of dollars of work to diversify, the answer is no, we are not. Maybe just the last question on that. How do you think about leverage? You know, obviously, you're growing OI now, so do we think about leverage as something that you plan to use for share repo or like, would you use it for share repo? Yeah. We think about it differently. We think about our comfort is with our leverage in the 3 to 3.5 turns range. If EBITDA is growing, and it has been growing, to stay in 3 to 3.5 times, we have to take on more debt. We don't do it because we wanna buy back more shares. We do it because of a fundamental view on how we're gonna fund the business between debt and equity. To keep in that 3 to 3.5 times, we borrow more money. We don't generally like to have a lot of cash sitting around on the balance sheet, so if we can't find other uses for it, we buy back stock. It's not that we're taking on debt to buy back stock. We're taking on debt to keep our leverage levels where we want them to be. As we think about what are we gonna do with that cash, buying back stock happens to be the option we end up needing. That's all we have time for. Thank you very much. Great. Thank you, Kevin.

Speaker 2: It's my pleasure to be hosting the meeting with DaVita. We have Joel Ackerman, who's the CFO of the company, as well as Nic Eliason, who's president of the capital markets and investor relations. I think we're just gonna jump right in if you're good with that. All right, excellent. I know your favorite topic is volumes, maybe we should start with volumes. It's my pleasure to be hosting the meeting with DaVita. it's my pleasure to be hosting the meeting with davita We have Joel Ackerman, who's the CFO of the company, as well as Nic Eliason, who's president of the capital markets and investor relations. we have joel ackerman who's the cfo of the company as well as nic eliason who's president of the capital markets and investor relations I think we're just gonna jump right in if you're good with that. i think we're just gonna jump right in if you're good with that All right, excellent. all right excellent I know your favorite topic is volumes, maybe we should start with volumes. i know your favorite topic is volumes maybe we should start with volumes

Speaker 1: Sounds good. Sounds good. sounds good

Speaker 2: I guess, Q1, you know, incremental treatment guidance was raised from flat to kinda up, you know, call it 25, 50 basis points. You know, what drove the increase there, and how confident are you in the durability of that improvement? I guess, Q1, you know, incremental treatment guidance was raised from flat to kinda up, you know, call it 25, 50 basis points. i guess q1 you know incremental treatment guidance was raised from flat to kinda up you know call it 25 50 basis points You know, what drove the increase there, and how confident are you in the durability of that improvement? you know what drove the increase there and how confident are you in the durability of that improvement

Speaker 1: Sure. First, good afternoon, everyone, and thanks for having us, Kevin. We really divided the increase in the guide into two buckets. First is increased census from Fresenius clinic closures. They have announced the closing of about 100 clinics, we expect to get our fair share of the patients that they don't retain. That would be about half the volume increase. The second is just what we observed during Q1. Our treatment volume came in about 20 basis points better than expected, largely as a result of census being ahead of plan and we expect that to continue. You know, you can look across all the different inputs and tweak any one of them. The one I'd highlight as that really came in above plan was mortality. Sure. sure First, good afternoon, everyone, and thanks for having us, Kevin. first good afternoon everyone and thanks for having us kevin We really divided the increase in the guide into two buckets. we really divided the increase in the guide into two buckets First is increased census from Fresenius clinic closures. first is increased census from fresenius clinic closures They have announced the closing of about 100 clinics, we expect to get our fair share of the patients that they don't retain. they have announced the closing of about 100 clinics we expect to get our fair share of the patients that they don't retain That would be about half the volume increase. that would be about half the volume increase The second is just what we observed during Q1. the second is just what we observed during q1 Our treatment volume came in about 20 basis points better than expected, largely as a result of census being ahead of plan and we expect that to continue. our treatment volume came in about 20 basis points better than expected largely as a result of census being ahead of plan and we expect that to continue You know, you can look across all the different inputs and tweak any one of them. you know you can look across all the different inputs and tweak any one of them The one I'd highlight as that really came in above plan was mortality. the one i'd highlight as that really came in above plan was mortality As you know, mortality has been elevated since COVID relative to pre-COVID levels, and it's nice to see it starting to come back down, and we would hope it will continue to come down given all the great clinical work our team is doing. As you know, mortality has been elevated since COVID relative to pre-COVID levels, and it's nice to see it starting to come back down, and we would hope it will continue to come down given all the great clinical work our team is doing. as you know mortality has been elevated since covid relative to pre-covid levels and it's nice to see it starting to come back down and we would hope it will continue to come down given all the great clinical work our team is doing

Speaker 2: Yes. How do you separate the improvement in mortality relative to, like, the light flu season, which I think would also kinda lift the mortality side of things? Yes. yes How do you separate the improvement in mortality relative to, like, the light flu season, which I think would also kinda lift the mortality side of things? how do you separate the improvement in mortality relative to like the light flu season which i think would also kinda lift the mortality side of things

Speaker 1: Yeah. First, you're absolutely right. Relative to last year, flu was easier and less of a headwind on mortality. I would remind everyone it was still relative to the last 15 years, it was still quite a tough flu season. We think we've gotten pretty good at modeling the impact flu has on mortality, so we can look through that, not just in Q1, but over the last few quarters, and believe we see some signal in what is a relatively noisy number. Yeah. yeah First, you're absolutely right. first you're absolutely right Relative to last year, flu was easier and less of a headwind on mortality. relative to last year flu was easier and less of a headwind on mortality I would remind everyone it was still relative to the last 15 years, it was still quite a tough flu season. i would remind everyone it was still relative to the last 15 years it was still quite a tough flu season We think we've gotten pretty good at modeling the impact flu has on mortality, so we can look through that, not just in Q1, but over the last few quarters, and believe we see some signal in what is a relatively noisy number. we think we've gotten pretty good at modeling the impact flu has on mortality so we can look through that not just in q1 but over the last few quarters and believe we see some signal in what is a relatively noisy number

Speaker 2: Okay. I guess, like, Fresenius was closing sites through kind of the quarter. I think they're still maybe even doing it into this quarter. Does the benefit, they're gonna be more back-end loaded or ramp more? How do we think about next year as the starting point? Like, is it the half that we should kinda think about as the starting point for next year, or is it, you know, just ramping? Okay. okay I guess, like, Fresenius was closing sites through kind of the quarter. i guess like fresenius was closing sites through kind of the quarter I think they're still maybe even doing it into this quarter. i think they're still maybe even doing it into this quarter Does the benefit, they're gonna be more back-end loaded or ramp more? does the benefit they're gonna be more back-end loaded or ramp more How do we think about next year as the starting point? how do we think about next year as the starting point Like, is it the half that we should kinda think about as the starting point for next year, or is it, you know, just ramping? like is it the half that we should kinda think about as the starting point for next year or is it you know just ramping

Speaker 1: Yeah. We saw almost no benefit in Q1. They did start closing clinics in the quarter, but it was very much back-end loaded. Almost none of the volume performance in Q1 above plan was related to that. What they have announced is that they expect the clinics to be largely closed by the end of Q2. Our expectation, if you wanted to kind of decide from when to annualize this, it would probably be the end of April or the end of May. We would expect to get most of the benefit this year, but there'd be a bit of a tailwind again next year. Yeah. yeah We saw almost no benefit in Q1. we saw almost no benefit in q1 They did start closing clinics in the quarter, but it was very much back-end loaded. they did start closing clinics in the quarter but it was very much back-end loaded Almost none of the volume performance in Q1 above plan was related to that. almost none of the volume performance in q1 above plan was related to that What they have announced is that they expect the clinics to be largely closed by the end of Q2. what they have announced is that they expect the clinics to be largely closed by the end of q2 Our expectation, if you wanted to kind of decide from when to annualize this, it would probably be the end of April or the end of May. our expectation if you wanted to kind of decide from when to annualize this it would probably be the end of april or the end of may We would expect to get most of the benefit this year, but there'd be a bit of a tailwind again next year. we would expect to get most of the benefit this year but there'd be a bit of a tailwind again next year

Speaker 2: All right. When you think about the core growth, like, is this the improvement in mortality, is that something you expect to build as the year goes on as well? Or, you know, can you pinpoint anything that drove the improvement in mortality if it's not flu? All right. all right When you think about the core growth, like, is this the improvement in mortality, is that something you expect to build as the year goes on as well? when you think about the core growth like is this the improvement in mortality is that something you expect to build as the year goes on as well Or, you know, can you pinpoint anything that drove the improvement in mortality if it's not flu? or you know can you pinpoint anything that drove the improvement in mortality if it's not flu

Speaker 1: Yeah. I'd start with the history of the industry. If you go back to a timeframe, call it 2000 to 2015, when the industry was growing 3%, 4%, 5% a year. I think there's a misperception that the growth then was because of increasing incidence of diabetes and obesity and all that, and that really is not the major driver of volume growth in those periods. The major driver growth, about two-thirds of the growth, was declining mortality in the industry. The industry investing in better clinical outcomes to drive better mortality is really the history of volume growth. Our belief is we are at the beginning of seeing that reinvigorated. It's about new medications. It's about higher flu vaccination rates. It's about time on therapy and other clinical interventions. Yeah. yeah I'd start with the history of the industry. i'd start with the history of the industry If you go back to a timeframe, call it 2000 to 2015, when the industry was growing 3%, 4%, 5% a year. if you go back to a timeframe call it 2000 to 2015 when the industry was growing 3% 4% 5% a year I think there's a misperception that the growth then was because of increasing incidence of diabetes and obesity and all that, and that really is not the major driver of volume growth in those periods. i think there's a misperception that the growth then was because of increasing incidence of diabetes and obesity and all that and that really is not the major driver of volume growth in those periods The major driver growth, about two-thirds of the growth, was declining mortality in the industry. the major driver growth about two-thirds of the growth was declining mortality in the industry The industry investing in better clinical outcomes to drive better mortality is really the history of volume growth. the industry investing in better clinical outcomes to drive better mortality is really the history of volume growth Our belief is we are at the beginning of seeing that reinvigorated. our belief is we are at the beginning of seeing that reinvigorated It's about new medications. it's about new medications It's about higher flu vaccination rates. it's about higher flu vaccination rates It's about time on therapy and other clinical interventions. it's about time on therapy and other clinical interventions Middle molecule clearance is coming, and we think that's largely what's gonna drive the mortality improvement. Timing is hard to predict. There is certainly a delay in some or all of these interventions between when you successfully drive the metric and when you start seeing it in mortality. We called out we would expect to get back to the 2-plus percent growth rate by 2029. What that curve looks like between now and then is hard to predict. Middle molecule clearance is coming, and we think that's largely what's gonna drive the mortality improvement. middle molecule clearance is coming and we think that's largely what's gonna drive the mortality improvement Timing is hard to predict. timing is hard to predict There is certainly a delay in some or all of these interventions between when you successfully drive the metric and when you start seeing it in mortality. there is certainly a delay in some or all of these interventions between when you successfully drive the metric and when you start seeing it in mortality We called out we would expect to get back to the 2-plus percent growth rate by 2029. we called out we would expect to get back to the 2-plus percent growth rate by 2029 What that curve looks like between now and then is hard to predict. what that curve looks like between now and then is hard to predict

Speaker 2: I think that when people see weak volumes, they think GLP-1s and how that impacts things. I mean, can you talk a little bit about how you're seeing the impact there? I think in the quarter you said something along the lines of that the mortality improved, but the admissions were down. Was there anything, is that just noise, or was there anything to that side of the equation? I think that when people see weak volumes, they think GLP-1s and how that impacts things. i think that when people see weak volumes they think glp-1s and how that impacts things I mean, can you talk a little bit about how you're seeing the impact there? i mean can you talk a little bit about how you're seeing the impact there I think in the quarter you said something along the lines of that the mortality improved, but the admissions were down. i think in the quarter you said something along the lines of that the mortality improved but the admissions were down Was there anything, is that just noise, or was there anything to that side of the equation? was there anything is that just noise or was there anything to that side of the equation

Speaker 1: We haven't called out any trends with admissions. It is a noisy number, and Q1 was noisy. In terms of GLP-1s and SGLT2 inhibitors, they're two sides to the same coin. What we called out when this growth in the GLP-1s started was that, absolutely, these will delay progression for CKD4 patients who are taking these drugs. We think that there's a lot of clinical evidence to demonstrate that. There's equally good clinical evidence to say CKD4 patients will have lower mortality. Most CKD4 patients will unfortunately pass away before they're ever incident to ESRD because of their diabetes or their heart disease or some other issue. We see these two dynamics, slower progression offset by lower mortality, as roughly evening each other out. We haven't called out any trends with admissions. we haven't called out any trends with admissions It is a noisy number, and Q1 was noisy. it is a noisy number and q1 was noisy In terms of GLP-1s and SGLT2 inhibitors, they're two sides to the same coin. What we called out when this growth in the GLP-1s started was that , absolutely, these will delay progression for CKD4 patients who are taking these drugs. in terms of glp-1s and sglt2 inhibitors they're two sides to the same coin. what we called out when this growth in the glp-1s started was that , absolutely these will delay progression for ckd4 patients who are taking these drugs We think that there's a lot of clinical evidence to demonstrate that. we think that there's a lot of clinical evidence to demonstrate that There's equally good clinical evidence to say CKD4 patients will have lower mortality. there's equally good clinical evidence to say ckd4 patients will have lower mortality Most CKD4 patients will unfortunately pass away before they're ever incident to ESRD because of their diabetes or their heart disease or some other issue. most ckd4 patients will unfortunately pass away before they're ever incident to esrd because of their diabetes or their heart disease or some other issue We see these two dynamics, slower progression offset by lower mortality, as roughly evening each other out. we see these two dynamics slower progression offset by lower mortality as roughly evening each other out We've re-looked at the data since we initially rolled out that hypothesis in late 2023, and our clinicians continue to believe that's the right way to think about it, with maybe a slight positive that our patients, ESRD patients who are taking GLP-1s, might benefit from lower mortality when they're on dialysis. That would be a bit of a tailwind. It's probably too early to really be seeing that effect though yet. We've re-looked at the data since we initially rolled out that hypothesis in late 2023, and our clinicians continue to believe that's the right way to think about it, with maybe a slight positive that our patients, ESRD patients who are taking GLP-1s, might benefit from lower mortality when they're on dialysis. we've re-looked at the data since we initially rolled out that hypothesis in late 2023 and our clinicians continue to believe that's the right way to think about it with maybe a slight positive that our patients esrd patients who are taking glp-1s might benefit from lower mortality when they're on dialysis That would be a bit of a tailwind. that would be a bit of a tailwind It's probably too early to really be seeing that effect though yet. it's probably too early to really be seeing that effect though yet

Speaker 2: What percentage of your people are taking GLP-1s now? What percentage of your people are taking GLP-1s now? what percentage of your people are taking glp-1s now

Speaker 1: Roughly high single digits of our patients are on GLP-1s right now. Roughly high single digits of our patients are on GLP-1s right now. roughly high single digits of our patients are on glp-1s right now

Speaker 2: Is there a way to is it something that everyone could be or should be taking, or is it we broke it that number ago? Is there a way to is it something that everyone could be or should be taking, or is it we broke it that number ago? is there a way to is it something that everyone could be or should be taking or is it we broke it that number ago

Speaker 1: No. It is not something everyone should be taking. Again, I'm not a clinician, so I'm maybe getting a little out over my skis here. Generally, you'd think of patients who are diabetic as being the ones. Roughly 60% of our patients are diabetic, and about 40% are on ESRD because they're diabetic. That might be a way to think about GLP-1s. GLP-1s, remember though, have been available to these patients for a lot longer than they've been available just for weight loss. No. no It is not something everyone should be taking. it is not something everyone should be taking Again, I'm not a clinician, so I'm maybe getting a little out over my skis here. again i'm not a clinician so i'm maybe getting a little out over my skis here Generally, you'd think of patients who are diabetic as being the ones. generally you'd think of patients who are diabetic as being the ones Roughly 60% of our patients are diabetic, and about 40% are on ESRD because they're diabetic. roughly 60% of our patients are diabetic and about 40% are on esrd because they're diabetic That might be a way to think about GLP-1s. that might be a way to think about glp-1s GLP-1s, remember though, have been available to these patients for a lot longer than they've been available just for weight loss. glp-1s remember though have been available to these patients for a lot longer than they've been available just for weight loss

Speaker 2: When you—I know you said you weren't quite ready to talk about the progression back to 2% by 2029, but let's see if I can pitch on hole you into something. I mean, is there a reason? When you—I know you said you weren't quite ready to talk about the progression back to 2% by 2029, but let's see if I can pitch on hole you into something. when you—i know you said you weren't quite ready to talk about the progression back to 2% by 2029 but let's see if i can pitch on hole you into something I mean, is there a reason? i mean is there a reason

Speaker 1: You shouldn't warn me you're gonna do that. You shouldn't warn me you're gonna do that. you shouldn't warn me you're gonna do that

Speaker 2: No, no. Is there a reason why it wouldn't be more ratable? Like, like, what would the reason why it would be happen sooner versus the reason why it would happen later? No, no. no no Is there a reason why it wouldn't be more ratable? is there a reason why it wouldn't be more ratable Like, like, what would the reason why it would be happen sooner versus the reason why it would happen later? like like what would the reason why it would be happen sooner versus the reason why it would happen later

Speaker 1: You know, I'd start with the middle molecule clearance, which are either new machines or new dialyzers. They're not widely available yet, that will grow over time. I think there's reasonable evidence, and if you look at the CONVINCE trial, you can see it there, that it takes about 18 months from when this clinical intervention starts, when the better clinical care starts, till you really see the curve separate and the better mortality show up. There is a delay between the implementation of better clinical care and when you'll start seeing it in mortality. That delay is different depending on the intervention. It might be a lot quicker, for example, for higher vaccination rates. You know, I'd start with the middle molecule clearance, which are either new machines or new dialyzers. you know i'd start with the middle molecule clearance which are either new machines or new dialyzers They're not widely available yet, that will grow over time. they're not widely available yet that will grow over time I think there's reasonable evidence, and if you look at the CONVINCE trial, you can see it there, that it takes about 18 months from when this clinical intervention starts, when the better clinical care starts, till you really see the curve separate and the better mortality show up. i think there's reasonable evidence and if you look at the convince trial you can see it there that it takes about 18 months from when this clinical intervention starts when the better clinical care starts till you really see the curve separate and the better mortality show up There is a delay between the implementation of better clinical care and when you'll start seeing it in mortality. there is a delay between the implementation of better clinical care and when you'll start seeing it in mortality That delay is different depending on the intervention. that delay is different depending on the intervention It might be a lot quicker, for example, for higher vaccination rates. it might be a lot quicker for example for higher vaccination rates It's that reason and some of the questions around what that path will look like that we would expect will have to wait a bit till we get back to the 2-plus percent. It's that reason and some of the questions around what that path will look like that we would expect will have to wait a bit till we get back to the 2-plus percent. it's that reason and some of the questions around what that path will look like that we would expect will have to wait a bit till we get back to the 2-plus percent

Speaker 2: Okay. Let me maybe talk about the middle molecule then. Just so you know, Fresenius has a new device. They're very excited about it, but they're kinda doing it to themselves first. They are selling it externally. Like, how do you think about your potential adoption or the rate of your adoption of that? Start there. Okay. okay Let me maybe talk about the middle molecule then. let me maybe talk about the middle molecule then Just so you know, Fresenius has a new device. just so you know fresenius has a new device They're very excited about it, but they're kinda doing it to themselves first. they're very excited about it but they're kinda doing it to themselves first They are selling it externally. they are selling it externally Like, how do you think about your potential adoption or the rate of your adoption of that? like how do you think about your potential adoption or the rate of your adoption of that Start there. start there

Speaker 1: I'd start with we're very excited about this new modality. Everything I know says it's gonna be great for patients and extend their lifetime and they feel better. It's not just about living longer. The reports are that patients who've had middle molecule clearance, they're less tired, and they just feel better, and that could have other benefits. It might mean patients miss fewer treatments, for example. There are two paths forward here. There's the new machine, high-volume HDF, and that's the machine you're referencing. There are also dialyzers that could potentially deliver a similar benefit of middle molecule clearance. We are watching the data carefully to see what these different paths have to offer clinically. There are other considerations as well. There are supply chain considerations. I'd start with we're very excited about this new modality. i'd start with we're very excited about this new modality Everything I know says it's gonna be great for patients and extend their lifetime and they feel better. everything i know says it's gonna be great for patients and extend their lifetime and they feel better It's not just about living longer. it's not just about living longer The reports are that patients who've had middle molecule clearance, they're less tired, and they just feel better, and that could have other benefits. the reports are that patients who've had middle molecule clearance they're less tired and they just feel better and that could have other benefits It might mean patients miss fewer treatments, for example. it might mean patients miss fewer treatments for example There are two paths forward here. there are two paths forward here There's the new machine, high-volume HDF, and that's the machine you're referencing. there's the new machine high-volume hdf and that's the machine you're referencing There are also dialyzers that could potentially deliver a similar benefit of middle molecule clearance. there are also dialyzers that could potentially deliver a similar benefit of middle molecule clearance We are watching the data carefully to see what these different paths have to offer clinically. we are watching the data carefully to see what these different paths have to offer clinically There are other considerations as well. there are other considerations as well There are supply chain considerations. there are supply chain considerations There are operational considerations as well. We're testing both out, and we're excited to see where this goes and the benefits it can deliver to our patients. There are operational considerations as well. there are operational considerations as well We're testing both out, and we're excited to see where this goes and the benefits it can deliver to our patients. we're testing both out and we're excited to see where this goes and the benefits it can deliver to our patients

Speaker 2: Yeah. I think, you know, they're talking about a 2030 kind of full penetration to themselves. Is if this other option of the dialyzers, you know, potentially delivering similar efficacy, like, is that something that could happen much sooner? When could you start to roll that out? Yeah. yeah I think, you know, they're talking about a 2030 kind of full penetration to themselves. i think you know they're talking about a 2030 kind of full penetration to themselves Is if this other option of the dialyzers, you know, potentially delivering similar efficacy, like, is that something that could happen much sooner? is if this other option of the dialyzers you know potentially delivering similar efficacy like is that something that could happen much sooner When could you start to roll that out? when could you start to roll that out

Speaker 1: Well, it depends on a whole bunch of things. It depends on the FDA. It depends on supply chain and the manufacturer's ability to create it as well. I think it's a little early to speculate what sort of speed that could happen at. Well, it depends on a whole bunch of things. well it depends on a whole bunch of things It depends on the FDA. it depends on the fda It depends on supply chain and the manufacturer's ability to create it as well. it depends on supply chain and the manufacturer's ability to create it as well I think it's a little early to speculate what sort of speed that could happen at. i think it's a little early to speculate what sort of speed that could happen at

Speaker 2: Okay. Can you talk a little bit about it always seems like there's something new from the reimbursement side of things, like phosphate binders or calcimimetics or what have you. I guess maybe just start with phosphate binders. Like, how much is that going to be adding to your kind of OI this year, and how should we think about it into next year? Is there some next drug that you're kind of looking at and saying, "This has an opportunity to be meaningful"? Okay. okay Can you talk a little bit about it always seems like there's something new from the reimbursement side of things, like phosphate binders or calcimimetics or what have you. can you talk a little bit about it always seems like there's something new from the reimbursement side of things like phosphate binders or calcimimetics or what have you I guess maybe just start with phosphate binders. i guess maybe just start with phosphate binders Like, how much is that going to be adding to your kind of OI this year, and how should we think about it into next year? like how much is that going to be adding to your kind of oi this year and how should we think about it into next year Is there some next drug that you're kind of looking at and saying, "This has an opportunity to be meaningful"? is there some next drug that you're kind of looking at and saying "this has an opportunity to be meaningful"

Speaker 1: Yeah. Last year, we called out $50 million of contribution from OI. We expect this year to be something similar to that. In terms of 2027, it is too early to tell. There are a lot of dynamics yet to play out, largely from CMS about how they're gonna think about binders next year and when they fully bring them into the bundle and how they fully bring them into the bundle. I would expect we'll get a lot more clarity on that when the preliminary rule comes out, typically at the end of June or early July. TBD on that one. Yeah. yeah Last year, we called out $50 million of contribution from OI. last year we called out $50 million of contribution from oi We expect this year to be something similar to that. we expect this year to be something similar to that In terms of 2027, it is too early to tell. in terms of 2027 it is too early to tell There are a lot of dynamics yet to play out, largely from CMS about how they're gonna think about binders next year and when they fully bring them into the bundle and how they fully bring them into the bundle. there are a lot of dynamics yet to play out largely from cms about how they're gonna think about binders next year and when they fully bring them into the bundle and how they fully bring them into the bundle I would expect we'll get a lot more clarity on that when the preliminary rule comes out, typically at the end of June or early July. i would expect we'll get a lot more clarity on that when the preliminary rule comes out typically at the end of june or early july TBD on that one. tbd on that one In terms of other drugs coming down the pipeline, what I would observe is DaVita has, I believe, a core competency in terms of how we manage drugs to deliver great care to our patients, deliver great savings to the systems, but also deliver OI to our shareholders. I think you saw that with calcimimetics. You're seeing it with binders now. You can see it with how we're able to manage down the cost of EPO over time, I think this will continue to deliver. There's no specific drug I would call out, I do think as we think about how we continue to maintain our margins and deliver cost savings for our payers in the system, I think there will be more pharma opportunities going forward. In terms of other drugs coming down the pipeline, what I would observe is DaVita has, I believe, a core competency in terms of how we manage drugs to deliver great care to our patients, deliver great savings to the systems, but also deliver OI to our shareholders. in terms of other drugs coming down the pipeline what i would observe is davita has i believe a core competency in terms of how we manage drugs to deliver great care to our patients deliver great savings to the systems but also deliver oi to our shareholders I think you saw that with calcimimetics. i think you saw that with calcimimetics You're seeing it with binders now. you're seeing it with binders now You can see it with how we're able to manage down the cost of EPO over time, I think this will continue to deliver. you can see it with how we're able to manage down the cost of epo over time i think this will continue to deliver There's no specific drug I would call out, I do think as we think about how we continue to maintain our margins and deliver cost savings for our payers in the system, I think there will be more pharma opportunities going forward. there's no specific drug i would call out i do think as we think about how we continue to maintain our margins and deliver cost savings for our payers in the system i think there will be more pharma opportunities going forward

Speaker 2: Yeah. Then, like, the RPT number in the quarter was pretty strong, 4%. I guess is there a way to break that out, as to why it would only be 1% or 2% kind of for the year? Yeah. yeah Then, like, the RPT number in the quarter was pretty strong, 4%. then like the rpt number in the quarter was pretty strong 4% I guess is there a way to break that out, as to why it would only be 1% or 2% kind of for the year? i guess is there a way to break that out as to why it would only be 1% or 2% kind of for the year

Speaker 1: Sure. RPT is a source of a lot of variability from quarter to quarter, and we've called that out. We called it out in Q4, called it out in Q3 about Q4, and it came out as we expected. Q1 benefited from positive variability this year. It also suffered from negative variability in Q1 of 2025. Those two things combine to partially explain the high growth in Q1. There are twoother dynamics that you have to think about in terms of progression for the year. One is enhanced premium tax credits, and as we've called out about a $40 million headwind from lower commercial mix as patients leave the exchanges, that's a number that will grow over the course of the year. That's one reason you would expect lower RPT growth later in the year. Sure. sure RPT is a source of a lot of variability from quarter to quarter, and we've called that out. rpt is a source of a lot of variability from quarter to quarter and we've called that out We called it out in Q4, called it out in Q3 about Q4, and it came out as we expected. we called it out in q4 called it out in q3 about q4 and it came out as we expected Q1 benefited from positive variability this year. q1 benefited from positive variability this year It also suffered from negative variability in Q1 of 2025. it also suffered from negative variability in q1 of 2025 Those two things combine to partially explain the high growth in Q1. those two things combine to partially explain the high growth in q1 There are two other dynamics that you have to think about in terms of progression for the year. there are two other dynamics that you have to think about in terms of progression for the year One is enhanced premium tax credits, and as we've called out about a $40 million headwind from lower commercial mix as patients leave the exchanges, that's a number that will grow over the course of the year. one is enhanced premium tax credits and as we've called out about a $40 million headwind from lower commercial mix as patients leave the exchanges that's a number that will grow over the course of the year That's one reason you would expect lower RPT growth later in the year. that's one reason you would expect lower rpt growth later in the year The second would be binders. We think RPT contribution from binders will come down over the course of the year. No impact to OI because we think costs will come down as well. That would be the other thing. I said about variability, Q4 had very positive variability in 2025. We called that out. You would expect Q4 of 2026 to have a very tough comp as well. The second would be binders. the second would be binders We think RPT contribution from binders will come down over the course of the year. we think rpt contribution from binders will come down over the course of the year No impact to OI because we think costs will come down as well. no impact to oi because we think costs will come down as well That would be the other thing. that would be the other thing I said about variability, Q4 had very positive variability in 2025. i said about variability q4 had very positive variability in 2025 We called that out. we called that out You would expect Q4 of 2026 to have a very tough comp as well. you would expect q4 of 2026 to have a very tough comp as well

Speaker 2: Is the binder impact, is that just a natural result of the way that the rates are based off of ASP on a lag? Is it because I guess there's, like, a new generic that's coming out this year? Like, is that influencing that or is that separate? Is the binder impact, is that just a natural result of the way that the rates are based off of ASP on a lag? is the binder impact is that just a natural result of the way that the rates are based off of asp on a lag Is it because I guess there's, like, a new generic that's coming out this year? is it because i guess there's like a new generic that's coming out this year Like, is that influencing that or is that separate? like is that influencing that or is that separate

Speaker 1: Yeah. You're right about both. It's more the former than the latter. There is a new generic AURYXIA, which has been approved, but there isn't much supply of it, so it's really not having an impact on ASP. Yeah. yeah You're right about both. you're right about both It's more the former than the latter. it's more the former than the latter There is a new generic AURYXIA, which has been approved, but there isn't much supply of it, so it's really not having an impact on ASP. there is a new generic auryxia which has been approved but there isn't much supply of it so it's really not having an impact on asp

Speaker 2: Just talk a bit about the rate updates that you're getting because I guess the Medicare rate is, you know, 2%, so, you know, why is it only 1%-2% overall? Just talk a bit about the rate updates that you're getting because I guess the Medicare rate is, you know, 2%, so, you know, why is it only 1%-2% overall? just talk a bit about the rate updates that you're getting because i guess the medicare rate is you know 2% so you know why is it only 1%-2% overall

Speaker 1: You're right. 2% is probably a more typical average rate increase we would get. The big headwind is on the binders, that the decline in ASP in the binders is about a 40 basis point headwind for us in the year, which is why we're at 1%-2% rather than 1.5%-2.5%. I would remind you, as I said before, that has no impact on OI because cost per treatment is coming down with that. You're right. 2% is probably a more typical average rate increase we would get. you're right 2% is probably a more typical average rate increase we would get The big headwind is on the binders, that the decline in ASP in the binders is about a 40 basis point headwind for us in the year, which is why we're at 1%-2% rather than 1.5%-2.5%. the big headwind is on the binders that the decline in asp in the binders is about a 40 basis point headwind for us in the year which is why we're at 1%-2% rather than 1.5%-2.5% I would remind you, as I said before, that has no impact on OI because cost per treatment is coming down with that. i would remind you as i said before that has no impact on oi because cost per treatment is coming down with that

Speaker 2: Yeah. The commercial side is in that 2% range as well. Why aren't you able to get something more than that? Yeah. yeah The commercial side is in that 2% range as well. the commercial side is in that 2% range as well Why aren't you able to get something more than that? why aren't you able to get something more than that

Speaker 1: I ask our payer partnerships team that every day. Look, it is full contact sport, as our former CEO used to say. We would love to get better rates. I think we're comfortable forecasting 2%, and that's kinda where we are. I ask our payer partnerships team that every day. i ask our payer partnerships team that every day Look, it is full contact sport, as our former CEO used to say. look it is full contact sport as our former ceo used to say We would love to get better rates. we would love to get better rates I think we're comfortable forecasting 2%, and that's kinda where we are. i think we're comfortable forecasting 2% and that's kinda where we are

Speaker 2: Although, you know, the market has been very much focused on volumes, you guys have been pretty confident in your ability to do your 3%-7% OI growth, even if, you know, volumes are a little bit lighter. Can you talk a little bit about the cost side of the equation? What gives you confidence in being able to manage costs down to deliver that? Although, you know, the market has been very much focused on volumes, you guys have been pretty confident in your ability to do your 3%-7% OI growth, even if, you know, volumes are a little bit lighter. although you know the market has been very much focused on volumes you guys have been pretty confident in your ability to do your 3%-7% oi growth even if you know volumes are a little bit lighter Can you talk a little bit about the cost side of the equation? can you talk a little bit about the cost side of the equation What gives you confidence in being able to manage costs down to deliver that? what gives you confidence in being able to manage costs down to deliver that

Speaker 1: It's been a strength of DaVita's for a very long time. We are a provider with a national footprint at scale, and there's no doubt that gives some advantages on the cost side. We benefit from just staying ahead of the curve. We have been investing in IT for many, many years now, even through some of the more challenging years in 2022 and 2023. We did not take our eye off the ball in investing in the future. The best example is CWOW, which is our electronic medical record system. What you see in our P&L is true this year and has been true in the past, and I think will be true in the future. It's been a strength of DaVita's for a very long time. it's been a strength of davita's for a very long time We are a provider with a national footprint at scale, and there's no doubt that gives some advantages on the cost side. we are a provider with a national footprint at scale and there's no doubt that gives some advantages on the cost side We benefit from just staying ahead of the curve. we benefit from just staying ahead of the curve We have been investing in IT for many, many years now, even through some of the more challenging years in 2022 and 2023. we have been investing in it for many many years now even through some of the more challenging years in 2022 and 2023 We did not take our eye off the ball in investing in the future. we did not take our eye off the ball in investing in the future The best example is CWOW, which is our electronic medical record system. the best example is cwow which is our electronic medical record system What you see in our P&L is true this year and has been true in the past, and I think will be true in the future. what you see in our p&l is true this year and has been true in the past and i think will be true in the future We continue to invest in IT and our future, and you see the benefits of that in other parts of the P&L. You see it in cost per treatment. You see it in revenue per treatment through better revenue operations, and we think that will continue. We continue to invest in IT and our future, and you see the benefits of that in other parts of the P&L. we continue to invest in it and our future and you see the benefits of that in other parts of the p&l You see it in cost per treatment. you see it in cost per treatment You see it in revenue per treatment through better revenue operations, and we think that will continue. you see it in revenue per treatment through better revenue operations and we think that will continue

Speaker 2: I guess, like, Say 50 basis points of volume growth. How do we get from 50 basis points of volume growth plus 1% or 2% pricing to 3%-7% OI? I guess, like, Say 50 basis points of volume growth. i guess like say 50 basis points of volume growth How do we get from 50 basis points of volume growth plus 1% or 2% pricing to 3%-7% OI? how do we get from 50 basis points of volume growth plus 1% or 2% pricing to 3%-7% oi

Speaker 1: I'd start with 1 point of OI growth from international and a point of OI growth from IKC, our value-based care business. They won't be exactly a point every year, but as you think about the theoretical model, I think you can count on call it $20 million or so of OI from each of those. You know, you're dependent on, you know, 1%-5% from the U.S. dialysis business. To get to 3%, you need, call it, two points of RPT growth and a point of volume growth and constant margins. There are other equations you can get there. We got there with zero volume growth by tweaking some of the other components of our trilogy. There's no doubt it gets easier as volume growth comes back. I'd start with 1 point of OI growth from international and a point of OI growth from IKC, our value-based care business. i'd start with 1 point of oi growth from international and a point of oi growth from ikc our value-based care business They won't be exactly a point every year, but as you think about the theoretical model, I think you can count on call it $20 million or so of OI from each of those. they won't be exactly a point every year but as you think about the theoretical model i think you can count on call it $20 million or so of oi from each of those You know, you're dependent on, you know, 1%-5% from the U.S. dialysis business. you know you're dependent on you know 1%-5% from the u.s dialysis business To get to 3%, you need, call it, two points of RPT growth and a point of volume growth and constant margins. to get to 3% you need call it two points of rpt growth and a point of volume growth and constant margins There are other equations you can get there. there are other equations you can get there We got there with zero volume growth by tweaking some of the other components of our trilogy. we got there with zero volume growth by tweaking some of the other components of our trilogy There's no doubt it gets easier as volume growth comes back. there's no doubt it gets easier as volume growth comes back

Speaker 2: How durable is the 1% from each segment? I guess internationally you can keep investing potentially. Theoretically, the value-based care side probably has a upper limit to where that could be. How many more years do we have of that? How durable is the 1% from each segment? how durable is the 1% from each segment I guess internationally you can keep investing potentially. i guess internationally you can keep investing potentially Theoretically, the value-based care side probably has a upper limit to where that could be. theoretically the value-based care side probably has a upper limit to where that could be How many more years do we have of that? how many more years do we have of that

Speaker 1: Yeah. International is just inherently a higher we're in higher growth markets than in the U.S., and we've got more room to run on margin improvement. I think the model there is relatively easy to see. On IKC, we've had a lot of strength in delivering shared savings, and that continues to improve. What I think you will see over time is growth in lives under management and dollars under management and some fixed cost leverage which doesn't lead me to worry that somehow this $20 million a year model is gonna fall apart in IKC anytime soon. I think we've got a few years of visibility to continue to deliver that. Yeah. yeah International is just inherently a higher we're in higher growth markets than in the U.S., and we've got more room to run on margin improvement. international is just inherently a higher we're in higher growth markets than in the u.s and we've got more room to run on margin improvement I think the model there is relatively easy to see. i think the model there is relatively easy to see On IKC, we've had a lot of strength in delivering shared savings, and that continues to improve. on ikc we've had a lot of strength in delivering shared savings and that continues to improve What I think you will see over time is growth in lives under management and dollars under management and some fixed cost leverage which doesn't lead me to worry that somehow this $20 million a year model is gonna fall apart in IKC anytime soon. what i think you will see over time is growth in lives under management and dollars under management and some fixed cost leverage which doesn't lead me to worry that somehow this $20 million a year model is gonna fall apart in ikc anytime soon I think we've got a few years of visibility to continue to deliver that. i think we've got a few years of visibility to continue to deliver that

Speaker 2: Why is international so interesting? It seems like, you know, Fresenius, obviously some of the clinics you bought was from them. They were getting out of some markets, you were getting into those markets. What makes it interesting to you and why were you able to make that work for you? Why is international so interesting? why is international so interesting It seems like, you know, Fresenius, obviously some of the clinics you bought was from them. it seems like you know fresenius obviously some of the clinics you bought was from them They were getting out of some markets, you were getting into those markets. they were getting out of some markets you were getting into those markets What makes it interesting to you and why were you able to make that work for you? what makes it interesting to you and why were you able to make that work for you

Speaker 1: I'm reluctant to speculate about why Fresenius chose those, chose to sell those markets. I think based on what they've said publicly, they were solving for its lower leverage and higher margins. Neither of those were issues that we were solving for. We were solving for return on capital and OI growth. We're quite happy with the markets we bought from them. It's been enough time right now where I feel like those were good investments for us. We expect higher returns internationally because of the risk and we are getting those. I like the international markets. We're cautious. We're hesitant when we get into new markets to make sure they meet our criteria. I'm reluctant to speculate about why Fresenius chose those, chose to sell those markets. i'm reluctant to speculate about why fresenius chose those chose to sell those markets I think based on what they've said publicly, they were solving for its lower leverage and higher margins. i think based on what they've said publicly they were solving for its lower leverage and higher margins Neither of those were issues that we were solving for. neither of those were issues that we were solving for We were solving for return on capital and OI growth. we were solving for return on capital and oi growth We're quite happy with the markets we bought from them. we're quite happy with the markets we bought from them It's been enough time right now where I feel like those were good investments for us. it's been enough time right now where i feel like those were good investments for us We expect higher returns internationally because of the risk and we are getting those. we expect higher returns internationally because of the risk and we are getting those I like the international markets. i like the international markets We're cautious. we're cautious We're hesitant when we get into new markets to make sure they meet our criteria. we're hesitant when we get into new markets to make sure they meet our criteria The thing that I would emphasize that I think I and Robert Lang, the head of international, are all very proud of is in every single market that we enter, we demonstrably improve the quality of the clinical care. The thing that I would emphasize that I think I and Robert Lang, the head of international, are all very proud of is in every single market that we enter, we demonstrably improve the quality of the clinical care. the thing that i would emphasize that i think i and robert lang the head of international are all very proud of is in every single market that we enter we demonstrably improve the quality of the clinical care

Speaker 2: Great. Maybe just pivoting back to the ACA for a minute. You guys talked about the impact of that growing, you know, bigger to 27. Great. great Maybe just pivoting back to the ACA for a minute. maybe just pivoting back to the aca for a minute You guys talked about the impact of that growing, you know, bigger to 27. you guys talked about the impact of that growing you know bigger to 27

Speaker 1: Correct Correct correct

Speaker 2: Into dialysis, not having coverage. Like, is there a way to think about how that will progress for the rest of the year? Is that kind of like a growing number each quarter? What are you seeing now? I don't know. We're now in May, it seems like with the effectuation rates, maybe you'd start to have some color on how that's trending. Into dialysis, not having coverage. into dialysis not having coverage Like, is there a way to think about how that will progress for the rest of the year? like is there a way to think about how that will progress for the rest of the year Is that kind of like a growing number each quarter? is that kind of like a growing number each quarter What are you seeing now? what are you seeing now I don't know. i don't know We're now in May, it seems like with the effectuation rates, maybe you'd start to have some color on how that's trending. we're now in may it seems like with the effectuation rates maybe you'd start to have some color on how that's trending

Speaker 1: Yeah. It's still early to tell on exactly how it's trending, but what you called out is exactly right, that the way we expect this to really play out would be our newly incident patients, you said, won't have coverage, just to be clear. We would expect they'll have Medicare coverage. They won't have commercial coverage, and we get a lower rate on Medicare, as you know. That's the impact. We would expect that to continue to build over the rest of the year and into 2027. The big question is: What has happened to CKD4 patients, and how many of them have retained coverage on the exchanges despite the higher premiums? Because that ultimately will dictate what the incident commercial mix rate is for us. Yeah. yeah It's still early to tell on exactly how it's trending, but what you called out is exactly right, that the way we expect this to really play out would be our newly incident patients, you said, won't have coverage, just to be clear. it's still early to tell on exactly how it's trending but what you called out is exactly right that the way we expect this to really play out would be our newly incident patients you said won't have coverage just to be clear We would expect they'll have Medicare coverage. we would expect they'll have medicare coverage They won't have commercial coverage, and we get a lower rate on Medicare, as you know. they won't have commercial coverage and we get a lower rate on medicare as you know That's the impact. that's the impact We would expect that to continue to build over the rest of the year and into 2027. we would expect that to continue to build over the rest of the year and into 2027 The big question is: What has happened to CKD4 patients, and how many of them have retained coverage on the exchanges despite the higher premiums? the big question is what has happened to ckd4 patients and how many of them have retained coverage on the exchanges despite the higher premiums Because that ultimately will dictate what the incident commercial mix rate is for us. because that ultimately will dictate what the incident commercial mix rate is for us

Speaker 2: To be clear, you're basically assuming that exchanges go back to 2019 as a percentage total, or is it different than that? To be clear, you're basically assuming that exchanges go back to 2019 as a percentage total, or is it different than that? to be clear you're basically assuming that exchanges go back to 2019 as a percentage total or is it different than that

Speaker 1: Yes. Well, yeah, using our numbers, we are expecting that roughly 1% of our patients were on the exchanges as a result of enhanced premium tax credits, and we would expect that number to go away. Yes. yes Well, yeah, using our numbers, we are expecting that roughly 1% of our patients were on the exchanges as a result of enhanced premium tax credits, and we would expect that number to go away. well yeah using our numbers we are expecting that roughly 1% of our patients were on the exchanges as a result of enhanced premium tax credits and we would expect that number to go away

Speaker 2: Over multiple years. Three-year period. Over the three-year period. Over multiple years. over multiple years Three-year period. three-year period Over the three-year period. over the three-year period

Speaker 1: Correct. Correct. correct

Speaker 2: Yeah. Okay. Then, one of the things that everyone seems to be really excited about is AI. Can you talk a little bit about what you guys see AI as, what the opportunity is for you? Is there anything that maybe the market gets too excited about, gets all their skis on? Yeah. yeah Okay. okay Then, one of the things that everyone seems to be really excited about is AI. then one of the things that everyone seems to be really excited about is ai Can you talk a little bit about what you guys see AI as, what the opportunity is for you? can you talk a little bit about what you guys see ai as what the opportunity is for you Is there anything that maybe the market gets too excited about, gets all their skis on? is there anything that maybe the market gets too excited about gets all their skis on

Speaker 1: I'm not gonna touch the second part of that question. Look, AI is something that we are absolutely leaning in on. We're investing a lot in it, both in the infrastructure that is ultimately needed to deliver AI, and that's both having clean data and having good systems because I'd say in general, our AI benefits will come through our core systems. For example, the AI benefits I would expect to see in accounting would largely come through our Oracle system rather than some standalone AI system. I would expect similar things for a lot of our technology. We're excited about it. We are moving, I think, at a judicious pace, recognizing there's a lot of infrastructure that needs to be put in so we can really take advantage of AI. I'm not gonna touch the second part of that question. i'm not gonna touch the second part of that question Look, AI is something that we are absolutely leaning in on. look ai is something that we are absolutely leaning in on We're investing a lot in it, both in the infrastructure that is ultimately needed to deliver AI, and that's both having clean data and having good systems because I'd say in general, our AI benefits will come through our core systems. we're investing a lot in it both in the infrastructure that is ultimately needed to deliver ai and that's both having clean data and having good systems because i'd say in general our ai benefits will come through our core systems For example, the AI benefits I would expect to see in accounting would largely come through our Oracle system rather than some standalone AI system. for example the ai benefits i would expect to see in accounting would largely come through our oracle system rather than some standalone ai system I would expect similar things for a lot of our technology. i would expect similar things for a lot of our technology We're excited about it. we're excited about it We are moving, I think, at a judicious pace, recognizing there's a lot of infrastructure that needs to be put in so we can really take advantage of AI. we are moving i think at a judicious pace recognizing there's a lot of infrastructure that needs to be put in so we can really take advantage of ai We would expect benefits in lower software development cost, better revenue operations. Labor productivity is an area where we're excited about call centers, so in line with what I think most people are looking at initially, then ultimately opportunities in clinical care. We would expect benefits in lower software development cost, better revenue operations. we would expect benefits in lower software development cost better revenue operations Labor productivity is an area where we're excited about call centers, so in line with what I think most people are looking at initially, then ultimately opportunities in clinical care. labor productivity is an area where we're excited about call centers so in line with what i think most people are looking at initially then ultimately opportunities in clinical care

Speaker 2: Can you give a little sense of timing of when we should start to see some of these things? The fact that ultimately clinical care makes it seem like it's a farther out thing. Is there a way to think about timing? Can you give a little sense of timing of when we should start to see some of these things? can you give a little sense of timing of when we should start to see some of these things The fact that ultimately clinical care makes it seem like it's a farther out thing. the fact that ultimately clinical care makes it seem like it's a farther out thing Is there a way to think about timing? is there a way to think about timing

Speaker 1: Well, I think each of these things has many, many sub-projects, and there are areas of clinical care that are, you know, dosing being one of them, that you could attribute benefits to AI already today. I would say using a CFO's lens, I would expect AI to be a net cost to us at least for 2026 and probably much of 2027 before the benefits start outweighing the expense. Well, I think each of these things has many, many sub-projects, and there are areas of clinical care that are, you know, dosing being one of them, that you could attribute benefits to AI already today. well i think each of these things has many many sub-projects and there are areas of clinical care that are you know dosing being one of them that you could attribute benefits to ai already today I would say using a CFO's lens, I would expect AI to be a net cost to us at least for 2026 and probably much of 2027 before the benefits start outweighing the expense. i would say using a cfo's lens i would expect ai to be a net cost to us at least for 2026 and probably much of 2027 before the benefits start outweighing the expense

Speaker 2: I guess when you think about the best ROI, what's the best ROI of the things that you kind of mentioned? I guess when you think about the best ROI, what's the best ROI of the things that you kind of mentioned? i guess when you think about the best roi what's the best roi of the things that you kind of mentioned

Speaker 1: I mean, a lot of them are quite inexpensive to implement, so I'm not sure ROI is the right lens. It'd be more about what's the total dollar savings you could benefit from. I would say right now the largest ones would be software development, productivity, and revenue operations. Those aren't necessarily about the percentage savings, just two of those things, revenue operations and labor productivity in particular, are just very big items on our P&L. I mean, a lot of them are quite inexpensive to implement, so I'm not sure ROI is the right lens. i mean a lot of them are quite inexpensive to implement so i'm not sure roi is the right lens It'd be more about what's the total dollar savings you could benefit from. it'd be more about what's the total dollar savings you could benefit from I would say right now the largest ones would be software development, productivity, and revenue operations. i would say right now the largest ones would be software development productivity and revenue operations Those aren't necessarily about the percentage savings, just two of those things, revenue operations and labor productivity in particular, are just very big items on our P&L. those aren't necessarily about the percentage savings just two of those things revenue operations and labor productivity in particular are just very big items on our p&l

Speaker 2: When we look at the P&L, you know, probably the cost number that jumps out the most is that G&A has been up a couple hundred basis points over the last several years. On the call, Javier was kinda saying he didn't really care where the cost per treatment came from, as long as you keep it in that 2-2.5% range. I mean, the outside debt looks high, but is that not the case, or is there opportunity to bring that G&A number down? When we look at the P&L, you know, probably the cost number that jumps out the most is that G&A has been up a couple hundred basis points over the last several years. when we look at the p&l you know probably the cost number that jumps out the most is that g&a has been up a couple hundred basis points over the last several years On the call, Javier was kinda saying he didn't really care where the cost per treatment came from, as long as you keep it in that 2-2.5% range. on the call javier was kinda saying he didn't really care where the cost per treatment came from as long as you keep it in that 2-2.5% range I mean, the outside debt looks high, but is that not the case, or is there opportunity to bring that G&A number down? i mean the outside debt looks high but is that not the case or is there opportunity to bring that g&a number down

Speaker 1: I think the point Javier was making is that if we can invest $20 million in G&A to drive $40 million of better revenue collections or $40 million of lower labor costs, we don't care if G&A goes up for that reason. We're investing in G&A, and the returns are excellent. We will continue to do that. I think most of our AI and technology costs wind up in G&A, and they generally result in savings that are in another line or benefits that are in another line in the P&L. We're comfortable with G&A going up as long as we're getting the right return for those investments. DaVita for many, many years that certainly preceded my time as CFO has been praised for its cost management. I think it's well deserved. I think the point Javier was making is that if we can invest $20 million in G&A to drive $40 million of better revenue collections or $40 million of lower labor costs, we don't care if G&A goes up for that reason. i think the point javier was making is that if we can invest $20 million in g&a to drive $40 million of better revenue collections or $40 million of lower labor costs we don't care if g&a goes up for that reason We're investing in G&A, and the returns are excellent. we're investing in g&a and the returns are excellent We will continue to do that. we will continue to do that I think most of our AI and technology costs wind up in G&A, and they generally result in savings that are in another line or benefits that are in another line in the P&L. i think most of our ai and technology costs wind up in g&a and they generally result in savings that are in another line or benefits that are in another line in the p&l We're comfortable with G&A going up as long as we're getting the right return for those investments. we're comfortable with g&a going up as long as we're getting the right return for those investments DaVita for many, many years that certainly preceded my time as CFO has been praised for its cost management. davita for many many years that certainly preceded my time as cfo has been praised for its cost management I think it's well deserved. i think it's well deserved We bring the same lens to G&A, but we are comfortable with G&A growing as long as we're getting the value for it. We bring the same lens to G&A, but we are comfortable with G&A growing as long as we're getting the value for it. we bring the same lens to g&a but we are comfortable with g&a growing as long as we're getting the value for it

Speaker 2: Right. When we think about capital deployment, because I think it was one of the things that probably wasn't well understood by the market when you guys came out with Q4 results and just kinda showed how much cash you have and how much share repo you could be doing. You guys have invested in some things along the way, whether it was a, you know, device JV and then a home health investment. Like, how should we think about share repo versus some of these ancillary things, is there a view that there should be another leg to the stool, or how should we think about that? Right. right When we think about capital deployment, because I think it was one of the things that probably wasn't well understood by the market when you guys came out with Q4 results and just kinda showed how much cash you have and how much share repo you could be doing. when we think about capital deployment because i think it was one of the things that probably wasn't well understood by the market when you guys came out with q4 results and just kinda showed how much cash you have and how much share repo you could be doing You guys have invested in some things along the way, whether it was a, you know, device JV and then a home health investment. you guys have invested in some things along the way whether it was a you know device jv and then a home health investment Like, how should we think about share repo versus some of these ancillary things, is there a view that there should be another leg to the stool, or how should we think about that? like how should we think about share repo versus some of these ancillary things is there a view that there should be another leg to the stool or how should we think about that

Speaker 1: Yeah. Share repurchases are the last thing on the list. When we don't have other appropriate good uses of capital where we're investing in our future at good risk-adjusted returns, we'll buy back stock. I love finding other uses like, you know, the Mozarc, the joint venture you mentioned, or Elara, the home health investment. We will continue to do those. I don't think of either of these as another leg to the stool. These are supportive of our dialysis and kidney care strategy. In terms of are we out looking to put billions of dollars of work to diversify, the answer is no, we are not. Yeah. yeah Share repurchases are the last thing on the list. share repurchases are the last thing on the list When we don't have other appropriate good uses of capital where we're investing in our future at good risk-adjusted returns, we'll buy back stock. when we don't have other appropriate good uses of capital where we're investing in our future at good risk-adjusted returns we'll buy back stock I love finding other uses like, you know, the Mozarc, the joint venture you mentioned, or Elara, the home health investment. i love finding other uses like you know the mozarc the joint venture you mentioned or elara the home health investment We will continue to do those. we will continue to do those I don't think of either of these as another leg to the stool. i don't think of either of these as another leg to the stool These are supportive of our dialysis and kidney care strategy. these are supportive of our dialysis and kidney care strategy In terms of are we out looking to put billions of dollars of work to diversify, the answer is no, we are not. in terms of are we out looking to put billions of dollars of work to diversify the answer is no we are not

Speaker 2: Maybe just the last question on that. How do you think about leverage? You know, obviously, you're growing OI now, so do we think about leverage as something that you plan to use for share repo or like, would you use it for share repo? Maybe just the last question on that. maybe just the last question on that How do you think about leverage? how do you think about leverage You know, obviously, you're growing OI now, so do we think about leverage as something that you plan to use for share repo or like, would you use it for share repo? you know obviously you're growing oi now so do we think about leverage as something that you plan to use for share repo or like would you use it for share repo

Speaker 1: Yeah. We think about it differently. We think about our comfort is with our leverage in the 3 to 3.5 turns range. If EBITDA is growing, and it has been growing, to stay in 3 to 3.5 times, we have to take on more debt. We don't do it because we wanna buy back more shares. We do it because of a fundamental view on how we're gonna fund the business between debt and equity. To keep in that 3 to 3.5 times, we borrow more money. We don't generally like to have a lot of cash sitting around on the balance sheet, so if we can't find other uses for it, we buy back stock. It's not that we're taking on debt to buy back stock. Yeah. yeah We think about it differently. we think about it differently We think about our comfort is with our leverage in the 3 to 3.5 turns range. we think about our comfort is with our leverage in the 3 to 3.5 turns range If EBITDA is growing, and it has been growing, to stay in 3 to 3.5 times, we have to take on more debt. if ebitda is growing and it has been growing to stay in 3 to 3.5 times we have to take on more debt We don't do it because we wanna buy back more shares. we don't do it because we wanna buy back more shares We do it because of a fundamental view on how we're gonna fund the business between debt and equity. we do it because of a fundamental view on how we're gonna fund the business between debt and equity To keep in that 3 to 3.5 times, we borrow more money. to keep in that 3 to 3.5 times we borrow more money We don't generally like to have a lot of cash sitting around on the balance sheet, so if we can't find other uses for it, we buy back stock. we don't generally like to have a lot of cash sitting around on the balance sheet so if we can't find other uses for it we buy back stock It's not that we're taking on debt to buy back stock. it's not that we're taking on debt to buy back stock We're taking on debt to keep our leverage levels where we want them to be. As we think about what are we gonna do with that cash, buying back stock happens to be the option we end up needing. We're taking on debt to keep our leverage levels where we want them to be. we're taking on debt to keep our leverage levels where we want them to be As we think about what are we gonna do with that cash, buying back stock happens to be the option we end up needing. as we think about what are we gonna do with that cash buying back stock happens to be the option we end up needing

Speaker 2: That's all we have time for. Thank you very much. That's all we have time for. that's all we have time for Thank you very much. thank you very much

Speaker 1: Great. Thank you, Kevin. Great. great Thank you, Kevin. thank you kevin