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Image source: The Motley Fool. Tuesday, Aug. 4, 2026, at 9:30 a.m. ET Chief Executive Officer and Chair of the Management Board - Helen Giza Chief Financial Officer - Martin Fischer Investor Relations - Dominik Heger Operator: Ladies and gentlemen, welcome to the report on Second Quarter 2026 Earnings Release and Conference Call. I am Valentina, the Chorus Call operator. [Operator Instructions] And the conference is being recorded. [Operator Instructions] At this time, it's my pleasure to hand over to Dr. Dominik Heger. Please go ahead. Dominik Heger: Thank you, Valentina. I would like to welcome everyone to our earnings call for the second quarter of 2026. I appreciate your flexibility to join this earlier call. We felt it is more helpful to have the call earlier given that we had to publish earlier than originally planned. I do apologize for the inconvenience, in particular for those of you who are located in a different time zone or those of you who cover another company hosting a call in parallel right now. As always, I start out the call by mentioning our cautionary language that is in our safe harbor statement as well as in our presentation and in all the materials that we have distributed earlier today. For further details concerning risks and uncertainties, please refer to these documents and to our SEC filings. The call is scheduled for 1 hour. In order to give everyone the chance to ask questions, we limit the number of questions as always to two. Thank you for making this work. Let me now welcome Helen Giza, CEO and Chair of the Management Board; and Martin Fischer, our Chief Financial Officer. Helen, the floor is yours. Helen Giza: Thank you, Dominik, and welcome, everyone, and thank you for joining at this earlier time of the day. I will begin my prepared remarks on Slide 4. We continued our strong start to the year, delivering another quarter of highly profitable growth, supported by solid organic revenue development and further improvement in profitability. Operating income growth accelerated to 23%, in line with our planned phasing for the year, and we realized another quarter of margin expansion. This was also supported by the continued execution of our FME25+ transformation program, which delivered EUR 67 million of sustainable savings during the quarter. We also completed our initial EUR 1 billion share buyback program on an accelerated time line and have already launched a second EUR 1 billion program, underscoring our continued focus on disciplined capital allocation and reigniting shareholder returns. With a net leverage ratio of 2.6x, we remain around the lower end of our target corridor and continue to maintain a strong financial position. With that overview, let me turn to the key second quarter highlights across our operating segments on Slide 5. Beginning with Care Delivery. The international markets delivered 0.8% same-market treatment growth. In the U.S., same market treatment growth declined by 0.9%. At the same time, I am genuinely encouraged by the progress we are seeing where it matters most for our patients. Our continued focus on quality and patient care is making a real difference. Missed treatments and mortality improved in the quarter. These are outcomes that are deeply meaningful for the patients who rely on us every day and for all of us who are committed to their care. The same market treatment growth declined due to our own clear operational miss in our business development approach to capture our fair market share of referrals. This exposed an execution gap and led to a further softening of referrals in Q2 compared with Q1. We have promptly addressed this with an organizational change, enabling rapid implementation of the necessary prepared measures. While these measures will take a few months to gain traction, we remain confident in our path to restoring referral rates in the affected areas. Given the compounding effect of lower first half of referrals from the rest of the year, we now expect U.S. same market treatment growth in 2026 to be around the Q2 level. I also want to recognize the strong execution driving accelerating momentum across several strategic priorities under our Reignite strategy. We are making significant progress accelerating the rollout of our 5008X in our clinics in the U.S. We have a dedicated slide on high-volume HDF coming up, where I will provide a broader update. As we continue to strengthen our core operations, we remain disciplined in optimizing our clinic network. We have successfully completed the clinic footprint optimization, exiting around 100 select underperforming clinics. We are realizing favorable rates and seeing contributions from our revenue cycle management initiatives, providing further evidence that our operational improvement efforts are gaining traction. As already indicated, we are beginning to see the impact of our catheter-related bloodstream infection preventing efforts. We saw a 23% reduction in bloodstream infections over the past year, which supports lower infected-related hospitalizations and also translates into lower patient mortality risk. Next, on value-based care. We continue to build on the strong momentum we have established in this business. The quarter reflected continued positive operating income as well as an increase in member months driven by contracting growth. We are demonstrating how our vertically integrated model translates into better patient outcomes. We are seeing meaningful improvements across key clinical measures such as reduced missed treatments, lowered mortality and hospitalization rates when FME patients are managed by InterWell Health. On October 12, we will host an expert call with Tommy O'Connor, the CEO of Value-Based Care, where we will give more insights into this segment. Information about the call is available on our Investor Relations website. Turning to Care Enablement. The 5008X rollout gained also momentum for Care Enablement with growing sales supporting favorable business growth. Overall, we continue to realize positive pricing and volume development outside of China, driving momentum in our underlying business. Despite recent headwinds from regulatory changes, China remains an attractive products market for FME. With refreshed leadership, we are reviewing our strategy to win as well as our product portfolio for this market. We are navigating elevated raw material and logistics costs, driven by the conflict in the Middle East. While these external cost pressures remain a headwind and are something we are monitoring closely, they are currently absorbed in our guidance range. This further reinforces the importance of our continued execution of our FME25+ program to drive sustainable savings. Before I turn to the 5008X update, there are two other innovations that I want to highlight. Recently, we introduced -- sorry, recently, we announced the introduction of TherapyWise, a cloud-based analytics capability designed to provide retrospective program level insight into kidney replacement therapy delivered in acute and hospital critical care settings. TherapyWise reflects our continued focus on innovation and critical care by applying data analytics. This helps hospital and clinical leaders gain visibility into how kidney replacement therapy is delivered across their organizations, supporting informed discussions around workflow, consistency and quality improvement. We also launched kinexus, marking a significant milestone in our home dialysis strategy and our broader digital transformation journey. By bringing peritoneal dialysis and home hemodialysis capabilities together on a single platform, we are creating a more connected experience for patients, caregivers and clinical teams. We have already achieved our patient go live with encouraging initial feedback, and we look forward to expanding adoption as we continue to scale the platform globally. Most importantly, kinexus establishes a global digital foundation that will enable future innovation and help us advance our commitment to delivering high-quality person-centered home care. Next on Slide 6. I'm excited to update you on the progress we are making with our 5008X rollout, which is accelerating as planned. We are firmly on track to meet our 2026 targets, including converting around 20% of our machines in our own clinics. By late July, we had converted 227 clinics across 23 states, representing 10% of our machine base. Of the more than 600,000 treatments on the 5008X around 170,000 have been HDF and more than 100,000 high-volume HDF. So far, we have produced 4 million consumables for the 5008X, which is in line with our plan and is rapidly ramping up. Our extensive training efforts have covered around 5,000 renal nurses and patient care technicians. It has been a tremendous undertaking to achieve all of this, and I am proud of how much we have accomplished so far. Last Wednesday, we announced BEACON-US, which is a major research initiative designed to generate real-world evidence for high-volume HDF in routine U.S. clinical practice. This reflects our commitment to bringing innovation to patients thoughtfully, responsibly and with rigorous scientific evaluation at scale. We are encouraged by the positive early experiences we are seeing from both patients and clinicians. To give you some examples, patients report feeling better both during and after dialysis. And for example, data shows 40% fewer muscle cramps. More than 70% of treatments using AutoSub plus technology in our research cohorts are already reaching the high-volume HDF target of at least 23 liters of convective volume per session. Clinical experience suggests simplified clinician workflows, optimize resource utilization, including reduced water consumption and a much quieter overall dialysis clinic experience. Early observations are tracking consistently with previously published international, randomized and real-world studies including the landmark EU-funded CONVINCE study that collectively have associated high-volume HDF with fewer hospitalizations, fewer missed treatments and improved survival outcomes compared with conventional hemodialysis. I will now hand over to Martin to walk you through the second quarter financials in more detail. Martin Fischer: Thank you, Helen, and welcome, everyone. I will continue on Slide 8. In the second quarter, we achieved solid organic group revenue growth of 5%, supported by growth in all 3 operating segments. At constant currency, revenue increased by 4%. Regulatory pressure in China continued to pose a challenge to revenue development in Care Enablement. Divestitures negatively impacted group revenue development by 50 basis points in the second quarter. For the full year, we continue to assume an unfavorable impact on the year-over-year revenue growth of about 30 basis points from the execution of our portfolio optimization plan in '25 and '26. We significantly increased operating income by 23% at constant currency. This growth was driven by contributions from Care Delivery and value-based care segments and is in line with our planned phasing for 2026. Special items in the second quarter amounted to a negative EUR 103 million, mainly related to the TAVNEOS impact. As background, the European Commission's recommended revocation of the TAVNEOS marketing authorization led to an impairment of intangible assets at Vifor Fresenius Medical Care Renal Pharma. That resulted in a negative impact on our income from equity method investees of EUR 70 million, which was treated as a special item. Special items further include EUR 42 million FME25+ onetime costs and also positive effects from the Humacyte reevaluation. I will continue on Slide 9. Our group operating margin again expanded and further improved by 180 basis points. Care Delivery as well as value-based care contributed positively. I will cover the drivers of the segment profitability a little bit later. The greater intersegment elimination reflects the growing sales of the 5008X in our clinics in the U.S. With further advancing our rollout, this trend will continue. Corporate costs increased by EUR 47 million, mainly driven by the impact from virtual power purchase agreements and the planned cost of the strategic IT platform investments as we continue to transition to SAP S/4HANA. In addition, FX translation effects had an impact of negative EUR 19 million this quarter. The average U.S. dollar exchange rate in the second quarter was EUR 1.16 compared to EUR 1.17 in the first quarter and compared to EUR 1.13 in the second quarter of 2025. I will now walk you through the business development in each segment, starting with Care Delivery on Slide 10. Care Delivery realized 5% revenue growth at constant currency and organic revenue growth of 7%. In the U.S., organic growth of 7% was supported by the positive impact from TDAPA reimbursement regulations, favorable rate development and continued progress in revenue cycle management initiatives, further enhancing revenue yield. These benefits were partially offset by lower treatment volumes, driven by the referral dynamics Helen discussed earlier. The international business continued to contribute positively. Divestitures as part of our portfolio optimization plan negatively impacted revenue growth by around 90 basis points. The main driver here was the prior year divestment of our clinics in Brazil. Care Delivery achieved strong earnings growth in line with planned phasing for the year, accelerating operating income growth to 45% with a 390 basis point step-up in margin. Importantly, underlying operating income, excluding the TDAPA effects, improved by 34%. This improvement was driven by higher rates, FME25+ contributions, in particular from the clinic closures as well as benefits from revenue cycle management. Additionally, the growth was supported by a lower prior year base, which includes effects such as elevated medical benefit costs. This more than offset the impact from lower treatment volumes in the United States. As assumed, benefits from TDAPA reimbursement regulations for phosphate binders and catheter lock solutions were a driver of earnings with around EUR 18 million year-over-year benefit in the quarter. The TDAPA effects are assumed to be a headwind in the remainder of the year. Moving on to value-based care on Slide 11. Revenue in Value-based Care segment grew by 9% on both organic and constant currency basis. This was driven by an increased number of member months and a favorable effect from premium rates. Revenue increase was partially offset by the change of the risk type for a large contract, which resulted in a different type of accounting treatment and lower revenue recognition. Value-based care delivered a strong improvement in profitability in the second quarter, with operating income increasing to EUR 18 million from a EUR 9 million loss in the prior year. The margin improved by 500 basis points, marking another profitable quarter. Supporting favorable business growth in the quarter was an improved savings rate, reflecting the strength of our contracting. FME25+ savings additionally had a smaller, but positive effect on earnings as well. Looking ahead, due to the positive business development, we expect '26 revenue for value-based care to decline by EUR 150 million to EUR 200 million, which is lower than the initially assumed EUR 300 million decline. I will finish the segment overview with Care Enablement on Slide 12. Care Enablement delivered organic revenue growth of 3%, supported by continued positive pricing and volumes outside China. Regulatory measures and stricter tender requirements in China remained a headwind as assumed. However, the underlying momentum across the rest of the business continues to be encouraging with growing sales of the 5008X increasingly contributing to that momentum as well. Care Enablement earnings declined by 5% in the quarter, reflecting the adverse regulatory impact in China as well as increased inflationary pressure, including higher raw material costs and elevated logistic expenses related to the Middle East conflict. As the Middle East conflict continues, we are closely monitoring the increasing inflationary pressures and implementing mitigation measures where possible. Currently, these higher costs, especially for raw materials and transportation are absorbed in our guidance range. For our Care Enablement China business, as expected, we saw a headwind of around EUR 20 million in the second quarter. These negative effects were partially offset by positive volume and price effects outside of China and continued contributions from FME25+ savings. Next, I will look at cash flow growth on Slide 13. We delivered a strong increase in operating cash flow of 11% in the second quarter, primarily driven by disciplined working capital management. Free cash flow remained stable at EUR 625 million, while we increased our investments in the business, reflecting the continued strength of our underlying cash generation. Total net debt and lease liability as well as total net debt and lease liabilities increased by 6% year-over-year as expected. After canceling 8.5% of shares, which we bought back as part of the share buyback program completed in April of this year, we initiated a new share buyback program starting in May with a total volume of around a further EUR 1 billion. The new program will be executed in tranches over a 12-month period with the first tranche of up to EUR 600 million expected to be completed by mid-December. By the end of the second quarter, we already repurchased 2.5 million shares for EUR 94 million, representing 0.9% of total share capital and approximately 16% of the first tranche. After initiating our new share buyback program, we continue to maintain a net leverage ratio of 2.6x, remaining around the lower end of our target corridor of 2.5 to 3x and underscoring the strength of our balance sheet and disciplined approach to capital allocation. I will now hand back to Helen. Helen Giza: Thank you, Martin. I will pick up with our outlook on Slide 15. We continue to expect a broadly flat revenue development. For earnings, our priority is to sustain the higher level of profitability established in 2025. Accordingly, we expect operating income to remain at a consistently elevated level in 2026 with an upside, downside range of a mid-single-digit percentage change. While we do not provide quarterly phasing, we communicated that we expected a strong first half earnings contribution in 2026, supported by the mentioned underlying earnings improvement and positive TDAPA effects. TDAPA is expected to become a sizable headwind in the third and fourth quarters, resulting in negative earnings growth in the second half. For full year TDAPA contributions, we now expect a lower year-over-year headwind of around EUR 50 million compared with the previously anticipated negative impact of around EUR 100 million. The second quarter demonstrates that the strategic actions we are taking are yielding meaningful improvements in underlying profitability in Care Delivery. Despite the headwinds from lower treatment volumes in the U.S. and a tougher base in the second half of the year, we expect continued improvement in the underlying profitability of Care Delivery. Overall, we expect to deliver Care Enablement margin improvement in the second half and full year 2026 as we continue to execute our Reignite strategy while offsetting increased inflationary pressure from the Middle East conflict in our Care Enablement business. And we continue to assume value-based care to perform around breakeven for the year, reflecting the assumed phasing of contributions and prior year effects. Given our strong first half performance and current expectations for the remainder of the year, we are confirming our full year outlook. This concludes our prepared remarks, and I will now hand back to Dominik to begin the Q&A session. Dominik Heger: Thank you, Helen. Thank you, Martin. Before I hand over for the Q&A, I would like to remind everyone to limit your questions to two. If we have remaining time, we can go another round. With that, I hand it over to Valentina to open the Q&A, please. Operator: [Operator Instructions] Back over to you for the first question. Dominik Heger: Thank you, Valentina. And the first question comes from Jonathan from Barclays. Unknown Analyst: The first one is just on same market treatment growth. If you could just help us to understand really the detail on the deceleration from Q1 to Q2 in that number, specifically on the referral piece. I'm really just trying to understand what you can do to improve the inflow of patients there? And how should we think about the relative impact of clinic closures, referrals and the outflow issues of patients that you previously pointed to. And then thank you for giving the 2026 expectation. So is it fair to assume that you expect same market treatment growth in the U.S. to get worse throughout the year? How do you see the phasing? And where do you expect to exit 2027 from the same market treatment growth perspective? Helen Giza: Thanks, Jonathan. I'll take that question. And recognizing there's probably a lot of similar questions around same market treatment growth, I think it's helpful to kind of just maybe walk through that in a bit more detail than normal. As we already outlined, the same market treatment growth declined by 0.9% in the quarter. At the same time, we are encouraged by the progress we are seeing where it matters for our patients and that focus on quality and patient care is making a real difference. And we were really encouraged to see missed treatment and mortality declining in the quarter. As we discussed in Q1, we are executing a lot in parallel in the U.S. dialysis business, which is an operational stretch. We obviously exited around 100 clinics with execution speed, I would say, in half 1. We've closed clinics faster than we would -- than we ever have before. Obviously, the progress on HDF is exciting, but at the same time, that does cause a fair amount of work in the clinics that we are impacting there. And at the same time, there's been a major clinic operations we -- that touched about kind of a couple of thousand people with the whole focus here on driving profitable growth. In the same time, recognizing that we had the ACA subsidies expiring, we also have implemented some enhanced insurance verification on our patients. And while we are pleased with the quality and patient safety initiatives, obviously, rolling out these solutions did also have an impact on the operations. So all of that is really to say the clinic operations are managing significant demand in parallel. And I think we saw that emerge on referrals in Q1 with a little softness there. And I would say that there was an underestimation of the impact that created. As we came out of Q1 into Q2, it was clear that there was -- while that disruption may have been understood, it was clear that it was masking an underlying issue. And I think what we -- as I've kind of worked kind of closely with the team there and with Cassie directly, it's clear now that we have an operational miss, specifically in the business development approach, which is capturing our fair market share of referrals. We are not seeing a market issue. We are seeing a volume capture issue in terms of getting the patients that we see into our clinics. So that was the execution gap that has led to a further softening of referrals in Q2 compared to Q1. We are all over it. We've made some -- we obviously saw the organizational changes. We've also made organizational changes in the business development group. That will take a few months to gain traction. Cassie is crystal clear of those priorities, and we do remain confident in our path to restoring those referral rates in those effective areas. And obviously, we're looking at this region by region. However, given the compounding effect of the lower first half referrals on the rest of the year, that's why we are now saying we expect the same market treatment growth in '26 to be around the Q2 level. Obviously, that compounding effect has caused a gap. We also know that we've got to do work that will take time. So that's why I think we're trying to be realistic here and call the year at a similar level to Q2. Obviously, we do expect that work to take hold and for that benefit to pull through. But realistically, I think we're seeing that more into '27 than we were originally thinking in '26. In terms of kind of the exit rate for 2027, clearly, I'm not going to speak to that today. I think we can kind of see where we see '26, what '27 looks like. I need a few more quarters under our belt. And obviously, we'll be able to give that outlook when we get to February. The kind of the areas of focus, as you can appreciate, are making sure that when we get those referrals, they're accepted referrals, and we are gaining our fair share there. We had said, and I think it's fair to acknowledge this, that we didn't have an inflow issue earlier or maybe the end of last year, it was an outflow issue. I think we have done some significant work on outflows and that's really showing up in the mortality and mistreatment numbers. What we have now is not a market or a patient issue, we have an accepted referral and inflow issue that is 1,000% the focus of Cassie and the organization. So I think that answered all the pieces there. And apologies for the longer answer. I think it was one that's on a lot of people's minds. Dominik Heger: The next question comes from Veronika from Citi. Veronika Dubajova: I have 2, please. Apologies. The first one is going to be on the same market. And Helen, I just want to get a better shape of understanding of the quarter. I appreciate you don't report monthly. But I remember when you were on the road, you were talking about April being down 40 basis points, so not hugely similar, which would suggest that May and June really sort of fell off the cliff in terms of U.S.A. market treatment growth rate. I was kind of wondering if you could comment on that. And I guess if you have any early indications for how the referral piece is improving in July relative to how poor it must have been in May and June, that might be helpful to give us all a bit of a confidence in terms of the forward path. And then my second question is on the TDAPA phosphate binder assumption for the year. By my math, you're probably at around $130 million already for H1. It sounds like the new guidance is $150 million to $170 million. Just trying to understand if maybe you're being a little too conservative on that given how strong the first half of the year has come in. Helen Giza: Yes. Thanks, Veronika. I'll take the same market treatment growth, and I'll have Martin walk us through the TDAPA numbers because I know there's a lot of numbers here on that one. Yes. Look, you're right. When we were on the road in April, we were already indicating that April may be kind of a similar level coming out of the softness in Q1, I mean, don't forget, April still had the benefit of the lower flu base in 2025. So that was kind of maybe also not giving us the clear picture. There's no question, as you see the number for the quarter that May and June did deteriorate. And I think that's where the focus has been over the last couple of months is really getting under what the root cause is and where the area of focus was. I mean I can buy disruption to a point, but we also have to make sure that the underlying core operation is operating as we expect it to. And I'm the last person to want to speak to an operational miss, but clearly, we have one here. And that's why I think we're just being careful on how we guide the rest of the year. In July, I haven't seen numbers yet. But I think the fact that we are thinking of calling it for a similar level to Q2, I don't expect to see the improvement overnight, but I do expect to see it take hold as we go through the next couple of quarters here. Martin, do you want to take TDAPA? Martin Fischer: Yes. Veronika, so on TDAPA, as we said, we have seen about EUR 80 million effect in quarter 2, and also, we said that we expect after the first half tailwinds to turn into a headwind for quarter 3 and quarter 4. Now total TDAPA contribution, we are now saying will be a negative EUR 50 million overall on a year-over-year basis, and that is reduced from around EUR 100 million we had on the previous expectations. As a reminder, we had last year a EUR 310 million positive year-over-year contribution. And we said there was a EUR 90 million DefenCath. DefenCath is unchanged, positive EUR 90 million first half, negative EUR 90 million in the second half. So year-over-year, that is a wash or a zero effect. For the binders, yes, we did see in the first half around the EUR 70 million positivity year-over-year. And we expect this to turn into a headwind of around EUR 120 million year-over-year in the second half, then resulting in the EUR 50 million for the full year. The lower headwinds is predominantly driven by our Pharma business, where we see lower-than-expected headwinds, and that gives us -- or gives you an impression on the overall TDAPA picture. Veronika Dubajova: That's helpful. And Helen, can I just follow up? One of the things that really struck me this quarter is the volume growth got worse in the U.S. clinics business. But it looks like your revenue -- your mix is good, your revenue management is good. Is there a risk here that you're sort of so focused on profitability that you've ended up at a place where volume growth is suffering? Is that the issue that we're looking at? Helen Giza: No, I don't believe so. The work that we identified on rate and yield were very obvious things for us to go after where we were lagging, and we've made tremendous strides in those. And in many ways, there are different teams internally within CD as well focused on those. We will look at profitability measures like the clinic closures where we really can't see a way to make that clinic profitable. That obviously has been a profitability focus for us, but not at the detriment of the rate and the yield that you're talking about. But we clearly knew, right, that when we were closing these clinics, while we've held on to a significant portion of these patients, we knew we were giving up some of that volume, and we saw that play out in the market in Q1. I expect that to continue to play out in the market in Q2. I think the -- that was kind of a smaller piece of the overall same market treatment growth development though. But we're very mindful, Veronika, of what trade-offs we are making, and we don't go into any of them likely. But clearly, the profitability play on both the restructure and reorg and the clinic closures has been meaningful for us and a smaller part of that same market treatment growth give up. The real issue here is we're really focused to the business development area on accepted referrals, and we can see that by area. So it is isolated, which is why I'm kind of confident that we've got the right plans in place. We've got the right people now in place, and we can get at it. Dominik Heger: The next question comes from Oliver from ODDO BHF. Oliver, the floor to yours. Oliver Metzger: Two questions from my side. First about the ARR commercial mix. So would you describe that your started initiatives to improve the mix since last fall have contributed already significantly to some of this mix improvements? Second question is still very early days, but we saw recently the first indications about the bundle rate, which also caused some volatility in the share price. Could you share with us how you think about the first indications? And yes, it will still change, but it would be great to hear your view. Helen Giza: Yes. Thanks, Oliver. I think I can tackle both of those. On the commercial mix, we continue to be very encouraged by the improvements that we see there. The wage improvement is real. We've done a lot of work in that area. It is slightly down to ACA that obviously has developed in line with our expectations. But overall, really pleased with the work that has been done on the commercial mix. On the bundle rate, the 1%, always disappointing. Clearly, we're in preliminary period. We're offering up a lot of comments to the administration on the moving pieces of that. We'll see what final brings. But overall, it's always challenging when it's less than inflation. Oliver Metzger: I was less thinking about the bundle rates, but more about also the additions which come to the total rate. Helen Giza: Oh, you mean the TDAPA add-on payments for... Oliver Metzger: Yes. Yes. Helen Giza: Okay. Yes, sorry. I heard you say bundle and I thought you were talking about the PPS rate that also came out since last quarter. Oliver Metzger: No, no, no. I said since this quarter, I meant also including TDAPA, sorry. Helen Giza: Look, 2 things there. Again, some of this is preliminary. We do expect the government to continue to capture the pricing for the next couple of quarters before it comes final. So for that, we would expect that payment to come down as it brings in more quarters, reflecting the lower prices and the rebates that exist in that. So that should come down as we get to final. And I think what we would see -- we wouldn't be surprised that, that continues to develop in line with our expectations. It's high right now just because it's -- I think it's a 2-quarter lag off to what more data would come in and show. Dominik Heger: The next question comes from Aisyah from Morgan Stanley. Aisyah Noor: My first one is also, unfortunately, on the same market treatment growth, but for the International number, that number was quite weak and the weakest we've seen in 2 years. Were there any reimbursements there in the past that supported the growth and has resulted in a lower number in the quarter? And then my second question was on the ACA headwind that you expect, I guess, what was the number for the quarter, your expectations for 2026? And any early thoughts on the ACA headwind for 2027? Helen Giza: Thanks, Aisyah. On the International same market treatment growth, Clearly, we have a lot -- there's a mix effect there. Clearly, we have a lot of countries and a lot of markets that we are focusing on. I think the piece that kind of maybe gets lost in this is we have exited some markets that had higher growth rates. So that would have an effect. And it's kind of a little bit of mix on the mix in the countries, countries like Brazil and Malaysia, for example. And then as we already mentioned, the kind of the flu impact in Q2 as well. So nothing that we are overly concerned about there. On the ACA, we had kind of sized a $50 million headwind for the full year. We had been watching that very, very closely, obviously, in Q1 to see how sticky this was and what would happen once patients had to start paying their premiums. It did step up as expected in Q2, which has meant that we've seen existing patients leave the exchange plans due to the affordability issues. And then we have seen some patients move to other coverage like Medicare Advantage or Medicare. And then, of course, some are no longer treating with us. So the underlying headwind remains consistent with our initial expectation of about $50 million for the full year. What we're also seeing is that we have been able to reduce the impact on our commercial mix by expanded payer relationships and signing new contracts in other geographies. So while it starts to get really difficult to tease out what patient went where, we can see what happened on the ACA exchanges. But anything else that results from that will be picked up in business growth moving forward. So we won't continue to track this ACA move. I think we've kind of been able to ring fence it for 2026, but all kind of played out as expected, even though there was this weird dynamic between Q1 and Q2, we're back where we thought we would be. Aisyah Noor: So if I can -- if I kind of interpret your comments and assuming that this impact kind of increases over the course of the year towards the $50 million you had expected for the full year, would it be fair to assume it's something like $10 million this quarter, $50 million next quarter, $25 million the quarter after that? Or is it more kind of a linear progression? Helen Giza: Probably neither. It's been a bit lumpy because of what happened in Q1 and then some of this grace period and then kind of how patients have fallen out. So I think we're not kind of getting into the quarter-by-quarter, but just like the whole $50 million sizing for the year, but develop in line with our half 1, half 2 phasing within our guidance range. Dominik Heger: The next question comes from Hugo from BNPP. Hugo Solvet: I have 2, please. First quick one on tariff refund. Can you maybe help us quantify the impact in Q2, what you expect for the remainder of the year? I think you guys have already a marginal impact, but it would be helpful to have that number. Second, thanks for all the moving parts on 2026. But if we look forward to 2027, you guys have some tailwinds rolling off. U.S. draft reimbursement is 1% and inflation keeps running slightly above that at 3%. Could you walk us through some of the building blocks for 2027, which would lead to EBIT growth next year if that is the plan? Or is EBIT growth off the table next year? Helen Giza: Yes. Martin, why don't you take the tariff question, and I will head up the tailwinds and headwinds discussed for 2027. Martin Fischer: As we had discussed, we had a limited tariff exposure in the past because of the breadth of our supply chain network and how we managed to mitigate it. As such, we also expect a limited refund. We have not received or booked anything in the second quarter. We expect a, let's say, high single-digit kind of range in the second half year. But it is, as I said previously on the headwind rather limited. Helen Giza: Yes. Hugo, I think you can appreciate I am not going to get into the moving pieces of 2027 guidance in August of '26. What I will speak to, though, is you know our usual building blocks, right? On the positive side, business performance and volume, rate and yield, FME25, clear expectation there that we continue to expand our margins across the business as well as getting the benefits from the HDF rollout. On the negative side, of course, we have the usual inflation and merit increases. And then I think the bigger moving bucket for 2027 is the binders and the TDAPA roll-off and that headwind into 2027. Obviously, we are not able to completely size that and won't do that today. But obviously, we've got to wait for what the final pricing does on kind of the pharma pricing of what goes into the bundle. But I think there's -- I think we've got our arms around what the moving parts of this business are by now. And of course, we'll size them accordingly by February. Dominik Heger: The next question comes from Richard from Goldman Sachs. Richard Felton: I just want to follow up on the U.S. treatment growth and in particular, your comments about not capturing your fair share of referrals. What was actually sort of, I guess, in practice, what was happening to drive that? Have there been changes in your processes, your competitor processes? I just -- I guess, I'd like to understand more what the sort of the root cause of that is. And then sort of as a follow-up to that, what is going to be top of Cassie's to-do list as she sort of comes in to run that business and I suppose, tries to steady the ship. Helen Giza: Yes. Thanks, Richard. Look, at the end of the day, we could see that we were getting patients referred and we weren't getting them into the clinic. So we track incoming referrals, and we also track confirmed referrals. So when those referrals don't get confirmed, meaning a patient isn't in the chair, we know that they're going somewhere else. So we're clearly expecting share loss because those patients have gone somewhere, and we'll see how that plays out in the market this quarter, of course. What we are able to see is what those volumes and what those shares and kind of treatment volumes look like by region. And clearly, where we were falling short there, we have now targeted what area we need to make those improvements. So there is clear visibility on it. There has been leadership changes in that area as well. And I think our whole organization knows that every aspect of inflows and outflows on same market treatment growth are our #1 priority. What I am encouraged by, you know, Cassie has been with the organization, what, 3 quarters or so now. She clearly -- as we were looking through the noise of disruption and I was trying to get under the real root cause, she quickly identified that we had a business development and kind of in our own control inflow issue, if you will, and she's already working through those measures that need to be executed in. And as I mentioned, we're kind of putting the right leaders in and the right metrics to make sure that we're really focused on this particular root cause. As we know, I mean, it's a big operation. It's a complex operation. We know we've done a lot here, and I don't want to dismiss the work that has been done. And I think the work that we are pulling through on outflows speaks to that. So we're focused on it. And I think Cassie and I are very clearly aligned on the priorities and where we need to see improvement. And we'll obviously track it accordingly daily and weekly and monthly. Richard Felton: I appreciate the color. And if I could just squeeze in one follow-up. International Care delivery was pretty robust, especially in organic terms. What was driving that? Are there any one-offs that we should be aware of? Helen Giza: Martin, do you want to take that? Martin Fischer: Yes. So you saw that the fair market premium growth was at 0.8%. We did see in the International organic revenue driver, a supporting accounting topic, which had an effect there. When you look at that in the second quarter, we had certain pharmaceutical product business activities that we still had in Care Enablement. And in the second quarter, we shifted that to -- it's neutral for the overall company. And to give you a bit of let's say, framing here, this is something that had last year to about $20 million roughly in revenue and a low single-digit in profitability. That is what is supporting international organic revenue growth. And we did that in order to also have a full visibility of the global pharma P&L. Dominik Heger: Next question comes from Anna from Bank of America. Anna Ractliffe: I wanted to dig in a bit on the HVHDF rollout and how much, if at all, you saw disruption from the rollout of the clinics affecting USA market treatment growth in the quarter and what the learnings are from the rollout in the first half to take into the second half? And then I also wanted to, if possible, ask about external sales of HVHDF. I realize that's not a near-term priority. The priority for the year is the internal rollout. But I imagine those discussions are in place. Just how are they evolving? And how has that maybe changed after the mother trial data? Any incremental color there would be super helpful. Helen Giza: Yes. Thanks, Anna. As you know, it's my favorite topic and one that we're thrilled with the progress on. And as you can appreciate, something of this scale, we get a lot of learnings. What I would say is a lot of those learnings were really helpful through that pilot stage of last year. Once we got going, I think the teams have really, really stepped up. Don't forget, it's still a relatively small part of the overall clinic network that has been converted. So it's not that it's a mass disruption to the 2,600 clinic network, it is obviously an impact to the couple of hundred that we have done so far. What we have seen is as we are gathering momentum, the speed and training and staff are just getting edge. And that's why I think you're seeing the acceleration and the kind of the progress of the 10%, which is wonderful. I'd say we were clear that we wanted to track this patient cohort that was on HDF, and you saw Charles put out the BEACON U.S. press release last week, which we're thrilled with. I think it's too early at this stage to give real mortality or missed treatment data on that cohort. But what we are able to see, and I referenced it earlier, is that the clinical benefits are tracking in line with the CONVINCE study. And the fact that we've got the patients reaching the high volume relatively quickly, we know that, that mortality benefit will ramp up over the coming years as well. So we're thrilled with what we're seeing so far as well as obviously, not just the performance, but the patient feedback, the physician feedback and obviously, the kind of patients reaching out to learn more and want to be referred to a HDF clinic. As you rightly said, the external sales are minimal this year because of the allocation plan to our clinics. So obviously, we're making our machines available as we have excess capacity to other providers, but that is something that is in pilot with some of those right now. And obviously, that's up to them on what they choose to do with purchasing the machines. Obviously, if that excess capacity that we've allocated doesn't get taken up in the short term, that would mean we would allocate more to our clinics and go faster. So I think we're in good shape where we are 6 months or 2 quarters into -- I guess, 8 months, but 2 quarters in at least to the launch and things are going incredibly well. And I think the speed of the uptake on the -- reaching the high-volume levels is incredibly exciting, and we're seeing that show up in the patient response. Dominik Heger: The next question comes from Graham from UBS. Graham Doyle: Just one quick one for Martin and then a slightly longer one for Helen. Martin, just on the TDAPA, just I've had a few people ask this specific total contribution for Q2. So is it fair to think of that as about EUR 120 million of EBIT in Q2 was from the full TDAPA, so catheters and phosphates. And then Helen, just secondly, on the guidance for this year. So the midpoint would imply something like a 12%, 13% decline in EBIT in H2. And when I think of H2 '26, H1 '27 looks quite similar in terms of the TDAPA driver in terms of the comparator there. That feels like not an unsensible way to think about H1 '27, and there's still a degree of headwind in H2 '27. Is it still reasonable to think of EBIT growth in 2027? I know you don't want to comment too much on it, but it just -- it seems like those headwinds are quite big. Helen Giza: Martin, do you want to take the TDAPA one? Martin Fischer: Yes, Graham. So what we did disclose is that this quarter in 2026, we had a year-over-year improvement of EUR 80 million. We also disclosed in quarter 2 2025 that we had against the prior year period before TDAPA, an improvement year-over-year of the low end of a mid-double-digit impact. So when you take these two together, you are roughly where you said you would be and that constitutes kind of a 2x year-over-year improvement that we see. We think of it in a yearly slice normally, not as a total contribution. Does that makes sense? Graham Doyle: That's super. That's super clear. Helen Giza: Yes. And then, Graham, on your second question, obviously, I don't want to get into the 2027 guidance, but I recognize everyone is already trying to put those building blocks together. Maybe what I would refer you to is the '25 to '28 CAGR aspiration that we put out there. Obviously, on '26, we are confirming our guidance. We always said that there would be this shift between half 1 and half 2 that has completely developed in line with our expectations, which is why we are confirming. And then, of course, we've put out a '25 to '28, 3% growth CAGR aspiration, and that is obviously still there. That used 2025 as a base that had the roughly $300 million of TDAPA benefits in there. So yes, that's how we're thinking about it. And don't forget, on that 3% to 7% CAGR growth assumption, we had also said there was underlying low teens growth. So obviously, we are expecting the businesses to continue to contribute on the margin expansion here. Dominik Heger: The next question comes from James from Jefferies. James Vane-Tempest: Two, if I can, please. Firstly, you've completed 100 clinic closures this year. So I was wondering if volumes stay at around the 2Q level into next year, would you need to consider other clinic closure programs to manage your fixed costs? Or how should we think about decisions to manage your clinic capacity? And then the second question is, this quarter, you've renamed the operating cash flow line changes in other working capital and noncash items to changes in other assets and liabilities and other noncash items. So I was wondering why change the wording now? And was this purely presentational or does it better reflect the fact that a broader set of operating assets and liabilities now contribute to operating cash flow than historically? It does seem that cash flow improvements from this line in the first half were greater than the whole of the group. So it would be helpful to have some color on what's driven it is outside core operations, which otherwise would have decreased. Helen Giza: James, the clinic closure question sounds a lot easier than the second one. So I'll take the first one and Martin can clearly give him a moment to look that up while I'm answering the clinic closures. Look, what we -- this is the second round of clinic closures that we've done over the last couple of years. As we know, the deeper you go into that program on where they are operationally, the tougher they get in terms of the kind of the ROI on them. We feel really good about what we've done to date and this 100. We feel that we're well placed with our outlook on what we expect to get on volume and obviously, the benefits from HDF as they kick in. I've always said, while we're not planning for this not to kind of come back to growth, I've always said costs are not fixed indefinitely, and we would adjust capacity and overhead accordingly. And I think we've been very diligent in how we've done that and appropriate with the kind of with the outlook that we've got. So our expectation is still this underlying return to growth. Clearly, it's now picking up a little longer, but we will -- we're constantly looking at that overhead structure in line with that and would adjust if needed in the future. James Vane-Tempest: Okay. So would it be fair to say if it was more like, say, minus 1.5% or something that would kind of probably sort of trigger that sort of discussion. I guess I'm sort of trying to understand the capacity that you have in terms of this managed and how much excess there is for you to do that. So how much headroom do you have at the current run rate maybe is a better way of asking the question. Helen Giza: Yes. I feel that we are rightsized for what we expect to see through this medium-term period. Okay. Martin Fischer: So James, from my side. So there is no change in content, so to say, in the line. There's also no accounting changes that impact the line. It is only a better representation of the naming of the line. James Vane-Tempest: So that's sort of understood. But in terms of what's driven that then, just given the swing is more than the cash flow from generating the overall group. Are you able to give us a sense what's gone into that cash flow improvement? Martin Fischer: So overall, our cash flow improvement was driven by the working capital development that we had, as I pointed out, where we did improve, so to say, based on the collection side as well as on the receivable side with a strong cash velocity. And we also improved further as we also lined out already in quarter 1 on the payable side. So those were the main drivers on the capital. James Vane-Tempest: I think it's just because of the wording, it now doesn't include working capital in that particular line. That's sort of what I'm just trying to understand. I'm happy to follow up off-line if that's easier. But given the magnitude just it would be helpful to understand. Martin Fischer: So no content change. And the main drivers are the working capital. Dominik Heger: The next call comes from Falko from Deutsche Bank. Falko Friedrichs: My first question is on the Care Enablement business in China. Thanks for pointing out the headwind in Q2. I was wondering when you expect this situation to stabilize? And secondly, on the ACA topic, do you happen to have any early view on how we should think about this for 2027? And how much of an additional headwind it could potentially be next year on top of the EUR 50 million this year? Helen Giza: Yes, Falko. Martin, why don't you take the China question. I'll come back on the ACA topic. Martin Fischer: All right. Sorry for that. That was a bit of a gap. So on China, we did see the first half expectations to be as we thought. We had EUR 20 million headwind in the quarter 2. We had in the quarter 1 half of the expected less than EUR 50 million. So for the second half, we see that to be normalized, and we expect for the full year also this to remain below the EUR 50 million. I would say through the first half, we are through the most of it. And with that the EUR 50 million assumption for the full year still intact. Helen Giza: Yes. And then Falko, on your ACA question, clearly, I'm not going to size what that is for 2027 because we don't really know. What we do know is the $50 million that developed unfavorably this year was in line with expectations. But as I also mentioned in my answer to my previous question on the same topic that we also are seeing shifts in kind of contracts and where patients are going. So I think ultimately, what this will all wash up in is our business growth number, and that would kind of now be in the base. But it's -- there's moving pieces here. So not all negative because of the positive moves in coverage with different insurers. So it's just going to be impossible to track separately moving forward. So when we give a business growth number for 2027, once we roll up these entire books of business and now it all settles out, we'll be able to kind of pop it in there so that we -- it's impossible to track where these patients ultimately will end up in 2027 between the different plans. But we'll do the bottom-up book of business build that goes into that business growth number. Dominik Heger: Super. Thank you. So those were all questions we received. So there's no one waiting to ask a question. With that, I'll thank Helen and Martin for answering the questions and for all the interesting questions. And with that, we'll close the call and wish everyone a great summer. Helen Giza: Yes. Thanks, everybody. Appreciate the flexibility today on the earlier timing as well. Have a good summer, and we'll see many of you on the road soon. Thank you. Martin Fischer: Thank you. Operator: Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Fresenius Medical Care (FMS) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Fresenius Medical Care AG FMS reported second-quarter 2026 adjusted earnings per share (EPS) of 66 cents, which increased 28% year over year at constant currency (cc), supported by stronger Care Delivery profitability and share repurchases. Revenues rose 0.9% year over year to $5.65 billion (EUR 4,861 million) but missed the Zacks Consensus Estimate of $5.72 billion by 1.1%. Organic revenue growth was 5%, while U.S. same-market treatment growth declined 0.9%. Revenues were up 4% at cc. Revenues increased 1.4% year over year in terms of euro. Revenues grew 3.6% at constant currency, with unfavorable foreign exchange movements affecting all three operating segments. Divestitures reduced growth by about 50 basis points. Organic growth reflected favorable reimbursement and rate developments, increased value-based care membership and accelerating 5008X CAREsystem sales. These gains were partly offset by lower U.S. treatment volumes and regulatory pressures in China. Fresenius Medical Care AG & Co. KGaA price-consensus-eps-surprise-chart | Fresenius Medical Care AG & Co. KGaA Quote Care Delivery Care Delivery revenues increased 2.9% year over year. The metric rose 5.5% at constant currency and 7.4% organically. Divestitures reduced the segment’s revenue growth by roughly 90 basis points. U.S. revenues advanced 3%, aided by TDAPA reimbursement, favorable rates and revenue-cycle management initiatives. U.S. revenues gained 6% at cc and 7% organically. However, U.S. same-market treatment growth fell 0.9% as the company captured fewer patient referrals than expected. International revenues rose 3%, while same-market treatment growth was 0.8%. Revenues were up 5% at cc and 11% organically in international markets. Care Delivery’s adjusted operating income surged 39.5%, with its margin expanding to 15.1% from 11.2%. Favorable rates, clinic closures, revenue-cycle improvements and FME25+ savings more than offset lower U.S. treatment volumes. TDAPA reimbursement produced an approximately EUR 18 million year-over-year earnings benefit. Care Enablement Care Enablement revenues grew 2%, driven by pricing, volumes outside China and 5008X sales. Revenues were up 3% at cc as well as organically. Care Enablement’s adjusted operating income declined 5.5% as China-related regulatory pressure and inflationary costs offset business growth. Value-Based Care Value-Based Care revenues increased 6% at constant currency (cc) and 9% on an organic basis. Growth reflected more member months and favorable premium rates, partly offset by a contract’s shift to a different risk arrangement and accounting treatment. The segment reported adjusted operating income of EUR 18 million compared to an adjusted operating loss of EUR 9 million in the year-ago period. In the quarter under review, Fresenius Medical’s gross profit increased 7.8% year over year. The gross margin expanded approximately 160 basis points (bps) to 27%. Selling, general and administrative expenses decreased 7.1% on a reported basis. Research and development expenses increased 4% year over year. Adjusted operating income increased 19.6% and advanced 23.5% at constant currency. The adjusted operating margin expanded 180 basis points to 11.7%, reflecting contributions from Care Delivery and Value-Based Care. Fresenius Medical continues to expect broadly flat revenue growth for 2026 at constant currency. Adjusted operating income is expected to range from a mid-single-digit decline to a mid-single-digit increase. Management expects TDAPA reimbursement to become a substantial earnings headwind during the second half. However, the projected full-year TDAPA headwind was reduced to about EUR 50 million from the prior expectation of EUR 100 million. Care Enablement margins are expected to improve in the second half, while Value-Based Care is anticipated to breakeven this year. Fresenius Medical exited the second quarter with revenues missing the Zacks Consensus Estimate. However, adjusted earnings increased year over year, supported by stronger operating performance, margin expansion and the company’s share repurchase program. Shares of FMS remained flat during after-hours trading following the earnings release. The company’s share price improvement of 0.8% so far this year has outperformed the industry’s 10.4% decline but underperformed the S&P 500 Index’s 11.3% gain. Image Source: Zacks Investment Research Fresenius Medical Care maintained solid operational momentum, delivering 5% organic revenue growth and 23% adjusted operating income growth at constant currency. Profitability benefited from FME25+ savings, favorable reimbursement and rate developments, clinic optimization and improved revenue-cycle management. U.S. treatment volumes remained under pressure, with same-market treatment growth declining 0.9% due to weaker referral capture. China also weighed on Care Enablement through volume-based procurement and stricter tender requirements, while higher raw material and logistics costs created additional pressure. As FMS continued to execute its FME Reignite strategy, the rollout of the 5008X gained momentum. By late July, 227 clinics across 23 states had been converted, representing 10% of the company’s U.S. machine base. More than 600,000 treatments had been performed with the system, including about 170,000 hemodiafiltration treatments and more than 100,000 high-volume hemodiafiltration treatments. The FME25+ transformation program delivered EUR 67 million in sustainable savings during the quarter. Fresenius Medical completed its planned optimization of the U.S. clinic network by exiting about 100 underperforming clinics. Fresenius Medical currently has a Zacks Rank #4 (Sell). Some better-ranked stocks from the broader medical space are West Pharmaceutical WST, McKesson MCK and Cardinal Health CAH, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. West Pharmaceutical reported second-quarter 2026 adjusted earnings per share (EPS) of $2.37, which beat the Zacks Consensus Estimate by 13.9%. Revenues of $872.3 million surpassed the Zacks Consensus Estimate by 4.2%. West Pharmaceutical has an estimated long-term earnings growth rate of 16%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 17.4%. McKesson reported a fourth-quarter fiscal 2026 adjusted EPS of $11.69, which beat the Zacks Consensus Estimate by 1.1%. Revenues of $96.3 billion missed the Zacks Consensus Estimate by 5.5%. McKesson has an estimated long-term earnings growth rate of 13.7%. MCK’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.1%. Cardinal Health reported a third-quarter fiscal 2026 adjusted EPS of $3.17, which beat the Zacks Consensus Estimate by 13.2%. Revenues of $60.94 billion missed the Zacks Consensus Estimate by 2.3%. Cardinal Health has an estimated long-term earnings growth rate of 17%. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 10.3%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Fresenius Medical Care AG & Co. KGaA (FMS) : Free Stock Analysis Report Cardinal Health, Inc. (CAH) : Free Stock Analysis Report McKesson Corporation (MCK) : Free Stock Analysis Report West Pharmaceutical Services, Inc. (WST) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Fresenius Medical Care (NYSE:FMS) shares fell 8.0% to €41.285 during Tuesday’s trading session as investors looked beyond better-than-expected second-quarter results and focused instead on continued weakness in U.S. patient treatment volumes. Although the dialysis provider exceeded analyst forecasts for both revenue and profit, the disappointing treatment trends prompted a sharp sell-off, with the shares opening at €41.16 before falling as low as €40.555 during the session. Fresenius Medical Care reported second-quarter operating income, excluding special items, of €569 million, representing a 23% increase on a currency-adjusted basis and comfortably ahead of the market consensus of €515 million. Revenue also exceeded expectations, rising to €4.861 billion compared with analyst forecasts of approximately €4.792 billion. Despite the stronger financial performance, investors remained concerned about the company’s underlying operational trends. The main issue highlighted by the market was a 0.9% year-over-year decline in comparable same-market treatment volumes in the United States. Analysts viewed the decline as the most important takeaway from the earnings report, raising questions about the sustainability of future growth in Fresenius Medical Care’s largest market. JPMorgan analyst David Adlington maintained an “Underweight” rating on the stock with a €37.40 price target, arguing that management’s decision to reaffirm, rather than raise, its full-year guidance could lead analysts to lower second-half earnings forecasts. Jefferies analyst James Vane-Tempest also kept an “Underperform” recommendation and a €31 price target, identifying weaker U.S. treatment volumes as the company’s primary challenge. The broader market offered little support, with major U.S. indices posting only modest gains during the session. Fresenius Medical Care ranked among the weakest-performing stocks in the DAX as investors reacted to the combination of solid financial results and an unchanged full-year outlook. The company’s shares have traded between €34.57 and €47.86 over the past 12 months, reflecting the volatility surrounding expectations for its recovery. While improved profitability benefited from cost-saving initiatives and favourable U.S. reimbursement rates, the lack of upgraded guidance and continued decline in patient treatment volumes created a classic “sell the news” response, sending the stock well below its previous closing price of €44.86 and reversing part of its recent recovery. Fresenius Medical Care stock price

This article first appeared on GuruFocus. Revenue: Solid organic group revenue growth of 5% in Q2, with a 4% increase at constant currency. Operating Income: Increased significantly by 23% at constant currency, with growth accelerating and in line with planned phasing for 2026. Operating Margin: Group operating margin expanded by 180 basis points. Care Delivery Revenue: 5% revenue growth at constant currency and 7% organic growth, with US organic growth of 7%. Care Delivery Operating Income: Accelerated growth of 45%, with a 390 basis points step-up in margin; underlying operating income, excluding TDAPA effects, improved by 34%. Value-Based Care Revenue: Grew by 9% on both organic and constant currency basis. Value-Based Care Operating Income: Improved to EUR18 million from a EUR9 million loss in the prior year, with margin improving by 500 basis points. Care Enablement Revenue: Organic revenue growth of 3%, supported by positive pricing and volumes outside China. Care Enablement Earnings: Declined by 5% in the quarter, reflecting adverse regulatory impact in China and inflationary pressures. Operating Cash Flow: Increased by 11% in Q2, driven by disciplined working capital management. Free Cash Flow: Remained stable at EUR625 million. Same-Market Treatment Growth: International markets delivered 0.8% growth; US same-market treatment growth declined by 0.9%. FME25+ Savings: Delivered EUR67 million of sustainable savings during the quarter. Special Items: Amounted to a negative EUR103 million in Q2, mainly related to the TAVNEOS impact. Net Leverage Ratio: 2.6 times, around the lower end of the target corridor. Share Buyback: Completed initial EUR1 billion program and launched a second EUR1 billion program; repurchased 2.5 million shares for EUR94 million by end of Q2. Warning! GuruFocus has detected 4 Warning Signs with FMS. Is FMS fairly valued? Test your thesis with our free DCF calculator. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Fresenius Medical Care AG (NYSE:FMS) delivered another quarter of highly profitable growth, with operating income growth accelerating to 23% and further margin expansion. The FME25+ transformation program delivered EUR67 million in sustainable savings during the quarter, supporting profitability improvements. The company completed its initial EUR1 billion share buyback program ahead of schedule and launched a second EUR1 billion program, underscoring disciplined capital allocation and shareholder returns. The 5008X rollout is accelerating as planned, with 227 clinics converted and over 600,000 treatments performed, including positive early patient outcomes such as 40% fewer muscle cramps. Value-Based Care segment showed strong improvement, with operating income increasing to EUR18 million from a EUR9 million loss in the prior year, driven by improved savings rates and contracting strength. Operating cash flow increased by 11% in the second quarter, driven by disciplined working capital management, while free cash flow remained stable at EUR625 million. US same-market treatment growth declined by 0.9% in the second quarter due to an operational miss in capturing fair market share of referrals, leading to a further softening in Q2 compared with Q1. The company now expects US same-market treatment growth for 2026 to be around the Q2 level, reflecting the compounding effect of lower first-half referrals on the rest of the year. Care Enablement earnings declined by 5% in the quarter, impacted by adverse regulatory pressure in China and increased inflationary pressures, including higher raw material costs and elevated logistics expenses related to the Middle East conflict. The European Commission's recommended revocation of the TAVNEOS marketing authorization led to a negative special item impact of EUR71 million from the impairment of intangible assets at Vifor Fresenius Medical Care Renal Pharma. TDAPA reimbursement benefits are expected to become a sizable headwind in the third and fourth quarters, resulting in negative earnings growth in the second half of 2026. The company faces ongoing headwinds from the ACA subsidy expiration, with an expected EUR50 million negative impact for the full year, as patients leave exchange plans due to affordability issues. Q: Can you provide more detail on the deceleration in US same-market treatment growth from Q1 to Q2, specifically regarding the referrals issue, and what is the expected phasing for the rest of 2026?A: Helen Giza (CEO) explained that the decline to -0.9% was due to an "operational miss" in the business development approach to capturing fair market share of referrals, not a market issue. While quality metrics like mortality and missed treatments improved, the company underestimated the impact of executing multiple initiatives in parallel (clinic closures, HDF rollout, insurance verification). The company has made organizational changes to address the referral capture gap, but expects US same-market treatment growth for 2026 to remain around the Q2 level due to the compounding effect of lower first-half referrals. The benefits of corrective measures are expected to materialize more in 2027. Q: Given the strong first half, what is the updated full-year TDAPA contribution expectation, and how should we think about the phasing of the headwind in the second half?A: Martin Fischer (CFO) stated that the full-year TDAPA contribution is now expected to be a negative EUR50 million year-over-year, improved from the previous expectation of a negative EUR100 million. The first half saw a positive EUR80 million effect, which will turn into a headwind in Q3 and Q4. For phosphate binders specifically, the first half saw around EUR70 million positivity, which is expected to flip to a headwind of around EUR120 million in the second half. The lower overall headwind is driven by the pharma business performing better than expected. Q: Is the focus on profitability and rate/yield improvements coming at the detriment of volume growth in the US clinic business?A: Helen Giza (CEO) refuted this, stating that the rate and yield work is being handled by different teams and is not a trade-off against volume. While clinic closures did contribute to some volume loss, the primary issue is isolated to the business development area regarding accepted referrals. She expressed confidence that with the right plans and people now in place, the company can address this specific execution gap, which is visible by region. Q: What is driving the weakness in international same-market treatment growth, and what is the expected ACA headwind for 2026?A: Helen Giza (CEO) attributed the international slowdown to a mix effect from exiting higher-growth markets like Brazil and Malaysia, as well as the flu impact in Q2, stating there is nothing of major concern. On ACA, the company maintains its expectation of a EUR50 million headwind for the full year. The impact stepped up in Q2 as expected, with patients leaving exchange plans due to affordability, but the company has mitigated the impact on its commercial mix by expanding payer relationships and signing new contracts in other geographies. Q: Can you elaborate on the root cause of not capturing fair share of referrals and what will be the top priority for the new US leadership to fix this?A: Helen Giza (CEO) clarified that the company tracks incoming referrals versus confirmed referrals, and it became clear that patients were being referred but not ending up in FMC clinics, indicating share loss. The issue has been targeted by region, and leadership changes have been made in the business development area. The entire organization now prioritizes inflows and outflows for same-market treatment growth, with daily, weekly, and monthly tracking. The CEO expressed confidence that the new leadership has quickly identified the root cause and is executing measures to address it. Q: How much disruption did the high-volume HDF (5008X) rollout cause to US treatment growth, and what is the status of external sales?A: Helen Giza (CEO) stated that while the rollout is a significant undertaking, it only impacts the converted clinics (227 clinics, 10% of the machine base) and is not a mass disruption to the entire 2,600-clinic network. The rollout is accelerating as planned, with early clinical benefits tracking in line with the CONVINCE study. External sales are minimal this year due to the allocation plan for internal clinics, but the company is in pilot discussions with other providers. If excess capacity is not taken up, FMC would allocate more machines to its own clinics to go faster. Q: Can you quantify the tariff refund impact for 2026, and what are the building blocks for EBIT growth in 2027 given the TDAPA roll-off?A: Martin Fischer (CFO) stated that the tariff exposure is limited due to the breadth of the supply chain, and no refund has been booked in Q2. The company expects a high-single-digit million euro refund in the second half. Helen Giza (CEO) declined to provide 2027 guidance but outlined the building blocks: positive contributions from business performance, rates/yield, FME25 savings, and HDF rollout, offset by inflation and the TDAPA/binders headwind. She reaffirmed the 2025-2028 CAGR aspiration of 3%-7%, which assumes underlying low-teens growth. Q: What is the expected impact of the clinic closure program on volumes, and would further closures be considered if volumes remain weak?A: Helen Giza (CEO) stated that the company feels well-positioned with the 100 clinic closures completed and is right-sized for the medium-term outlook. While costs are not fixed indefinitely and capacity/overhead would be adjusted if needed, the expectation remains for an underlying return to growth. The company will constantly review its overhead structure in line with the outlook and adjust if necessary in the future. Q: When do you expect the Care Enablement business in China to stabilize, and what is the early view on the ACA headwind for 2027?A: Martin Fischer (CFO) stated that the China headwind was EUR20 million in Q2, with the first half in line with expectations. The second half is expected to normalize, keeping the full-year assumption of below EUR50 million intact. On ACA, Helen Giza (CEO) declined to size the 2027 impact, noting that while the EUR50 million headwind for 2026 is in line with expectations, patients are shifting to different coverage types (e.g., Medicare Advantage). These moving pieces will be absorbed into the business growth number for 2027, making it impossible to track separately. Q: Can you provide the total TDAPA contribution for Q2 and clarify the expected EBIT decline in H2 2026, and is EBIT growth still reasonable for 2027?A: Martin Fischer (CFO) confirmed For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Operating income growth of 23% was driven by Care Delivery and Value-Based Care, supported by EUR 67 million in FME25+ transformation savings. U.S. same-market treatment growth declined 0.9% due to an operational miss in business development and referral capture rather than broader market dynamics. Management identified an execution gap where referred patients were not being successfully confirmed and placed in chairs, prompting immediate organizational changes. The clinic footprint optimization was completed with the exit of approximately 100 underperforming clinics to prioritize long-term profitability. Care Enablement faced headwinds from regulatory changes and stricter tender requirements in China, alongside elevated logistics costs from Middle East conflicts. The 5008X rollout is accelerating, with 10% of the U.S. machine base converted and early clinical data showing a 40% reduction in patient muscle cramps. Full-year 2026 U.S. same-market treatment growth is now expected to remain around Q2 levels due to the compounding effect of lower first-half referrals. TDAPA contributions are projected to become a significant headwind in the second half of 2026, with a revised full-year negative impact of EUR 50 million. Value-Based Care revenue decline is now expected to be EUR 150 million to EUR 200 million, a narrower decline than the previously assumed EUR 300 million. Management targets converting 20% of U.S. clinic machines to the 5008X by the end of 2026 to drive clinical differentiation and operational efficiency. The 2025-2028 CAGR aspiration of 3% to 7% remains intact, predicated on underlying low-teens growth and continued margin expansion across segments. A EUR 70 million impairment was recorded following the European Commission's recommended revocation of the TAVNEOS marketing authorization. The ACA subsidy expiration created a $50 million headwind as patients transitioned from exchange plans to Medicare or other coverage due to affordability. Inflationary pressures in raw materials and transportation are currently being absorbed within the existing 2026 guidance range. A second EUR 1 billion share buyback program was launched following the accelerated completion of the initial program in April. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management clarified the issue is an 'inflow' problem of failing to confirm referrals into treatments, not an 'outflow' or mortality issue. Recovery is expected to take a few months to gain traction, with the full benefit likely pulling through in 2027 rather than late 2026. While the exit of 100 clinics resulted in some volume loss, management emphasized that these were clinics where no path to profitability existed. The company believes the current network is rightsized for the medium term and does not currently plan further mass closures. The first half saw a EUR 70 million tailwind from binders, which will reverse into a EUR 120 million headwind in the second half. Management noted that 2027 will face a significant roll-off headwind as binders move into the bundle, though exact sizing depends on final government pricing.

Interested in Fresenius Medical Care AG & Co. KGaA? Here are five stocks we like better. Fresenius Medical Care reported solid Q2 results, with organic revenue up 5% and operating income up 23% at constant currency, supported by margin expansion and EUR 67 million in FME25+ savings. The company reaffirmed its 2026 outlook for broadly flat revenue and elevated operating income. U.S. treatment volumes remain a key weakness: same-market treatment growth fell 0.9% because of referral-conversion and operational issues, leading management to expect full-year U.S. growth to remain near Q2 levels. Corrective actions are expected to have a more meaningful impact in 2027. Care Delivery earnings rose sharply, while Value-Based Care returned to profitability; however, Care Enablement earnings declined amid China-related pressures and higher costs. The company completed its initial EUR 1 billion buyback and launched a second EUR 1 billion repurchase program. Hospital Stocks - Best Hospital Stocks to Buy Fresenius Medical Care AG & Co. KGaA (NYSE:FMS) reported second-quarter 2026 organic revenue growth of 5% and a 23% increase in operating income at constant currency, while confirming its full-year outlook despite weaker U.S. treatment volumes and anticipated reimbursement-related headwinds in the second half. Chief Executive Officer Helen Giza said the company’s operating-income growth accelerated in line with its planned 2026 phasing, supported by organic revenue development, margin expansion and savings from its FME25+ transformation program. The program generated EUR 67 million of sustainable savings during the quarter, she said. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control Best Healthcare Stocks - Healthcare Stocks to Buy Now The company also completed its initial EUR 1 billion share repurchase program ahead of schedule and began a second EUR 1 billion program. Net leverage stood at 2.6 times, near the lower end of Fresenius Medical Care’s target range of 2.5 to 3 times. Care Delivery’s U.S. same-market treatment growth declined 0.9% in the second quarter, while international same-market treatment growth rose 0.8%. Giza attributed the U.S. decline to an operational shortfall in the company’s business-development process for converting patient referrals into treatments. → Financials Hit Record Highs as the AI Trade Unravels—Can They Keep Leading? “We are not seeing a market issue. We are seeing a volume capture issue in terms of getting the patients that we see into our clinics,” Giza said during the call. She said the company had undertaken several initiatives simultaneously, including the closure of about 100 underperforming clinics, the rollout of high-volume hemodiafiltration technology, operational changes and enhanced insurance verification. While the company saw progress in reducing missed treatments and mortality, it initially underestimated the effect that operational disruption could have on referrals, she said. → Why Rare Earth Processing Could Be the Real 2027 Opportunity Fresenius Medical Care has made organizational and leadership changes in its business-development function and is targeting affected regions. However, Giza said the actions will require several months to gain traction. As a result of the compounding effects of lower referral volumes in the first half, the company now expects U.S. same-market treatment growth for 2026 to remain around the second-quarter level. Giza said the company expects the benefits from its corrective actions to become more evident in 2027, but did not provide a treatment-growth outlook for that year. Care Delivery revenue increased 5% at constant currency and 7% organically. U.S. organic growth benefited from reimbursement under the Transitional Drug Add-on Payment Adjustment, or TDAPA, favorable rates and revenue-cycle management initiatives, partially offset by lower treatment volumes. Care Delivery operating income increased 45%, with margin improving 390 basis points. Excluding TDAPA effects, underlying operating income rose 34%, driven by rates, FME25+ savings, clinic closures and revenue-cycle management improvements, according to Chief Financial Officer Martin Fischer. TDAPA reimbursement for phosphate binders and catheter lock solutions contributed about EUR 80 million year over year in the second quarter. The company expects TDAPA to become a headwind in the third and fourth quarters. Fresenius Medical Care now expects a full-year TDAPA headwind of approximately EUR 50 million, compared with its previous expectation for a negative impact of about EUR 100 million. Care Enablement posted 3% organic revenue growth, helped by pricing and volumes outside China as well as growing sales of the 5008X dialysis machine. Segment earnings declined 5%, reflecting regulatory measures and stricter tender requirements in China, as well as higher raw-material and logistics costs linked to the Middle East conflict. The China business faced an approximately EUR 20 million headwind in the second quarter. Fischer said the company expects conditions to normalize in the second half and continues to expect the full-year impact to remain below EUR 50 million. The company said elevated costs related to raw materials and transportation are currently absorbed within its guidance range. Value-Based Care revenue rose 9% both organically and at constant currency, supported by more member months and favorable premium rates. Operating income improved to EUR 18 million from a EUR 9 million loss a year earlier, as the savings rate improved and the company benefited from contracting growth. The company now expects 2026 Value-Based Care revenue to decline by EUR 150 million to EUR 200 million, less than its initially expected EUR 300 million decline. Fresenius Medical Care continues to expect the business to operate around break-even for the full year. Meanwhile, the company said its 5008X rollout is proceeding as planned. By late July, it had converted 227 clinics in 23 states, representing 10% of its machine base, and remains on track to convert approximately 20% of machines in its own clinics during 2026. More than 600,000 treatments have been performed on the 5008X. About 170,000 treatments have used hemodiafiltration, including more than 100,000 high-volume HDF treatments. The company has produced 4 million 5008X consumables and trained about 5,000 renal nurses and patient care technicians. Giza said patient and clinical feedback has been encouraging, including data showing 40% fewer muscle cramps among patients in a research cohort. More than 70% of treatments using AutoSub plus technology in that cohort reached the company’s high-volume HDF target of at least 23 liters of convective volume per session. The company recently launched the BEACON-US research initiative to collect real-world evidence on high-volume HDF in U.S. clinical practice. It also introduced TherapyWise, a cloud-based analytics capability for acute and critical-care kidney replacement therapy, and launched kinexus, a digital platform combining peritoneal dialysis and home hemodialysis capabilities. Operating cash flow increased 11% in the quarter, primarily due to working-capital management, while free cash flow was stable at EUR 625 million despite increased investment. Total net debt and lease liabilities rose 6% year over year. Under the new EUR 1 billion repurchase program, Fresenius Medical Care bought back 2.5 million shares for EUR 94 million by the end of the second quarter. The first tranche, of up to EUR 600 million, is expected to be completed by mid-December. The company reiterated its 2026 outlook for broadly flat revenue and operating income at a consistently elevated level, with an upside or downside range of a mid-single-digit percentage change. Management expects a strong first half to be followed by negative earnings growth in the second half as TDAPA contributions reverse. Giza said Fresenius Medical Care continues to target margin expansion in Care Enablement for the second half and full year, while expecting continued underlying profitability improvement in Care Delivery despite lower U.S. treatment volumes. Fresenius Medical Care AG & Co KGaA is the world's largest integrated provider of products and services for individuals with renal diseases. The company's primary business activities encompass the operation of dialysis clinics and the manufacture and distribution of dialysis equipment, dialysis machines, dialyzers, consumables and related therapies. Through its global network of clinics, Fresenius Medical Care delivers comprehensive kidney care, including hemodialysis and peritoneal dialysis treatments, patient education and support services. In its products segment, the company designs and produces dialysis machines, water treatment systems and disposables such as high‐flux dialyzers and bloodlines. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Fresenius Medical Care AG & Co. KGaA Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Organic revenue growth1 of 5% with growth in all operating segments Operating income2 grew by 23%, resulting in further margin expansion to 11.7% Reported operating income grew by 10% and reported net income3 decreased by 3% Earnings per share2 (EPS) increased by 28%, supported by the share buyback program 227 U.S. clinics converted to the 5008X CAREsystem with more than 600,000 treatments4 Reaffirms FY 2026 outlook BAD HOMBURG, Germany, Aug. 3, 2026 /PRNewswire/ -- "Fresenius Medical Care delivered another quarter of highly profitable growth, driven by solid organic revenue growth and improved profitability," said Helen Giza, Chief Executive Officer of Fresenius Medical Care. "Care Delivery achieved strong operating income2 growth. Importantly, underlying operating income2 improved by 34% excluding the positive TDAPA effects, driven by rate improvements and benefits from revenue cycle management. The U.S. rollout of our innovative 5008X CAREsystem is progressing at speed, now available in 227 U.S. clinics, having performed more than 600,000 treatments. We are excited by the benefits we are seeing through early insights from our scientific research initiative BEACON-US and the potential for this therapy to significantly improve patient outcomes in the U.S.," Giza continued, "Operating income growth in the first half was in line with our planned phasing for the full year and we confirm our outlook for 2026. Through disciplined execution of the FME Reignite strategy, we are further improving the quality of patient care, investing in innovation and profitable future growth, addressing regulatory headwinds – creating long-term value for our shareholders." Key figures Q2 and H1 2026 (unaudited) Progress on FME Reignite Fresenius Medical Care, the world's leading provider of products and services for individuals with renal disease, continues the focused execution of its FME Reignite strategy. The strategy focuses on strengthening core operations, driving profitable growth and innovation, and advancing the company culture. After initiating the large-scale launch of the innovative 5008X CAREsystem in the U.S. in early 2026, the upscaling of production at Care Enablement and accelerated machine replacement at Care Delivery is progressing at speed. By today, around 10% of dialysis machines in Fresenius Medical Care clinics in the U.S. were replaced by the new system, well on track for the full year target of around 20%. As more clinics transitioned to the 5008X CAREsystem, the number of performed treatments has increased to more than 600,000, thereof around 170,000 in HDF modality and already more than 100,000 in HVHDF modality. The early U.S. experience with HVHDF is encouraging, with many patients feeling better during and after dialysis – for example data showing 40% fewer muscle cramps. Early observations are tracking consistently with previously published international, randomized and real-world studies, including the landmark, EU-funded CONVINCE study, that collectively have associated HVHDF with fewer hospitalizations, fewer missed treatments, and improved survival outcomes compared with conventional hemodialysis. During the second quarter of 2026, the FME25+ transformation program delivered EUR 67 million additional sustainable savings. Fresenius Medical Care successfully concluded the 2026 optimization plan of its U.S. dialysis clinic footprint by exiting around 100 clinics. The company retained the majority of its dialysis patients in neighboring clinics according to plan and expects the benefit of higher network efficiency to contribute to profitability in the second half of 2026. FME25+ one-time costs, including clinic closures cost, were treated as special items and amounted to EUR 42 million. The company expects EUR 250 million savings and EUR 350 million related one-time costs in 2026. FME25+ savings are expected to total EUR 1.2 billion by the end of 2027. As part of the capital allocation framework, share buyback programs complement shareholder returns through dividends. Upon successful completion of the initial share buyback program on April 30, all 24.8 million repurchased shares were cancelled, thereby reducing the share capital by 8.5%. On May 26, a second program for a total volume of around EUR 1 billion (excluding ancillary costs) was announced and is being executed in tranches within 12 months. The first tranche was initiated on May 28 and is planned to end by December 15, 2026. As of June 30, 2,454,945 shares or 0.9% of total issued shares have been repurchased for a total investment amount of EUR 94 million. Solid organic revenue growth driven by all operating segments In the second quarter of 2026, Group revenue increased by 1% compared to prior year (+4% at constant currency, +5% organic1) to EUR 4,861 million. Currency effects negatively impacted revenue development in all three operating segments. Divestitures realized as part of the portfolio optimization plan negatively affected the revenue development by 50 basis points. Care Delivery revenue increased by 3% (+5% at constant currency, +7% organic1) to EUR 3,478 million. Divestitures realized as part of the portfolio optimization plan negatively affected the revenue development by 90 basis points. In Care Delivery U.S., revenue increased by 3% (+6% at constant currency, +7% organic1) to EUR 2,897 million. TDAPA reimbursement regulations, favorable rate effects and lower implicit price concessions had a positive impact while exchange rates developed unfavorably. U.S. same market treatment growth came in at -0.9%. In Care Delivery International, revenue increased by 3% (+5% at constant currency, +11% organic1) to EUR 581 million, driven by positive organic growth1. International same market treatment growth amounted to 0.8%. Value-Based Care revenue increased by 6% (+9% at constant currency, +9% organic1) to EUR 536 million. The development in the quarter was driven by a higher number of member months and a positive effect from premium rates, partially offset by the changed risk contracting for one of the contracts. Care Enablement revenue increased by 2% (+3% at constant currency, +3% organic1) to EUR 1,371 million. Positive pricing and volume development outside China, mainly driven by the sales of 5008X CAREsystem, were partly offset by negative impacts from volume-based procurement and stricter tender requirements in China. Within Inter-segment eliminations5, revenue for services provided and products transferred between the operating segments at fair market value came in at negative EUR 524 million. In the first half of 2026, Group revenue decreased by 2% (+3% at constant currency, +4% organic¹) to EUR 9,473 million. Significant currency effects negatively impacted revenue development in all three operating segments. Divestitures realized as part of the portfolio optimization plan negatively impacted the revenue development by 50 basis points. Care Delivery revenue decreased by 1% (+5% at constant currency, +7% organic1) to EUR 6,772 million, with Care Delivery U.S. decreased by 1% (+6% at constant currency, +7% organic1) to EUR 5,662 million and Care Delivery International decreasing by 1% (+2% at constant currency, +7% organic1) to EUR 1,110 million. Divestitures realized as part of the portfolio optimization plan negatively affected the revenue development of Care Delivery by 90 basis points and the revenue development of Care Delivery International by 4,700 basis points. U.S. same market treatment growth came in at -0.6% while international same market treatment growth amounted to 1.1%. Value-Based Care revenue decreased by 1% (+6% at constant currency, +6% organic1) to EUR 1,027 million. Care Enablement revenue decreased by 2% (+2% at constant currency, +2% organic1) to EUR 2,670 million. Inter-segment eliminations came in at negative EUR 996 million. Significant earnings growth and margin expansion In the second quarter of 2026, Group operating income increased by 10% (+15% at constant currency) to EUR 466 million, resulting in a margin of 9.6% (Q2 2025: 8.9%). Operating income excluding special items significantly increased by 20% (+23% at constant currency) to EUR 569 million, resulting in a margin2 of 11.7% (Q2 2025: 9.9%). Operating income in Care Delivery increased by 26% (+33% at constant currency) to EUR 435 million, resulting in a margin of 12.5% (Q2 2025: 10.2%). Operating income excluding special items significantly increased by 40% (+45% at constant currency) to EUR 527 million, resulting in a margin2 of 15.1% (Q2 2025: 11.2%). Compared to previous year, the strong improvement was driven by positive rate effects, a positive impact from TDAPA reimbursement regulations as well as savings from the FME25+ program. Special items include EUR 71 million impacts from the recommended revocation of the TAVNEOS® marketing authorization which led primarily to an impairment of intangible assets recorded by Vifor Fresenius Medical Care Renal Pharma Ltd., resulting in a negative impact on FME AG's income from equity method investees. Operating income in Value-Based Care improved to EUR 17 million, compared to a loss of EUR 9 million in the prior year, resulting in a margin of 3.2% (Q2 2025: -1.7%) Operating income excluding special items improved to EUR 18 million compared to a loss of EUR 9 million in the prior year, resulting in a margin2 of 3.3% (Q2 2025: -1.7%) and reflecting the quarterly earnings volatility, which is inherent to the business model. The improvement was driven by an enhanced savings rate and positive contributions from the FME25+ program. Operating income in Care Enablement increased by 11% (+12% at constant currency) to EUR 99 million, resulting in a margin of 7.2% (Q2 2025: 6.6%). Operating income excluding special items decreased by 6% (-5% at constant currency) to EUR 111 million, resulting in a margin2 of 8.1% (Q2 2025: 8.7%). Compared to the previous year's quarter, positive contributions from FME25+ program, the increased sales of 5008X CAREsystem as well as positive price and volume effects outside China contributed positively. This was offset mainly by inflationary cost increases as well as negative impacts from volume-based procurement and stricter tender requirements in China. Operating income for Corporate amounted to a loss of EUR 46 million (Q2 2025: gain of EUR 7 million). Operating income excluding special items amounted to a loss of EUR 48 million (Q2 2025: loss of EUR 2 million). The development was mainly driven by the impacts from virtual power purchase agreements and the planned cost of the strategic IT platform investments. In the first half of 2026, Group operating income decreased by 1% (+5% at constant currency) to EUR 752 million, resulting in a margin of 7.9% (H1 2025: 7.8%). Operating income excluding special items increased by 11% (+17% at constant currency) to EUR 1,036 million, resulting in a margin2 of 10.9% (H1 2025: 9.6%). In Care Delivery, operating income increased by 6% (+16% at constant currency) to EUR 706 million, resulting in a margin of 10.4% (H1 2025: 9.8%). Operating income excluding special items significantly increased by 26% (+36% at constant currency) to EUR 924 million, resulting in a margin2 of 13.6% (H1 2025: 10.7%). In Value-Based Care operating income improved to EUR 6 million compared to a loss of EUR 6 million in the prior year, resulting in a margin of 0.6% (H1 2025: -0.5%). Operating income excluding special items improved to EUR 26 million compared to a loss of EUR 5 million in the prior year, resulting in a margin2 of 2.6% (H1 2025: -0.5%). In Care Enablement, operating income increased by 1% (+1% at constant currency) to EUR 186 million, resulting in a margin of 7.0% (H1 2025: 6.8%). Operating income excluding special items decreased by 3% (-2% at constant currency) to EUR 224 million, resulting in a margin2 of 8.4% (H1 2025: 8.5%). Operating income for Corporate amounted to a loss of EUR 85 million (H1 2025: loss of EUR 74 million). Operating income excluding special items amounted to a loss of EUR 77 million (H1 2025: loss of EUR 15 million). Net income3 decreased by 3% compared to prior year (+3% at constant currency) to EUR 218 million in the second quarter of 2026. Net income excluding special items increased by 13% (+17% at constant currency) to EUR 303 million. In the first half of 2026, net income3 decreased by 11% (-6% at constant currency) to EUR 336 million. Net income excluding special items increased by 8% (+13% at constant currency) to EUR 553 million. Basic earnings per share (EPS) increased by 6% compared to prior year (+13% at constant currency) to EUR 0.81 in the second quarter of 2026, based on 268,438,292 shares. Basic EPS excluding special items increased by 24% (+28% at constant currency) to EUR 1.13. In the first half of 2026, basic EPS decreased by 4% (+1% at constant currency) to EUR 1.24, based on 271,823,512 shares. Basic EPS excluding special items increased by 16% (+22% at constant currency) to EUR 2.04. Strong operating cash flow, net leverage ratio stable around lower end of target corridor In the second quarter of 2026, operating cash flow increased by 11% to EUR 860 million (Q2 2025: EUR 775 million), resulting in a margin of 17.7% (Q2 2025: 16.2%). In the first half of 2026, operating cash flow improved by 16% to EUR 1,087 million (H1 2025: EUR 938 million). The related margin came in at 11.5% (H1 2025: 9.7%). Both developments were mainly driven by favorable working capital development. Free cash flow6 remained stable at EUR 625 million in the second quarter of 2026 (Q2 2025: EUR 628 million), resulting in a margin of 12.9% (Q2 2025: 13.1%). In the first half of 2026, Fresenius Medical Care increased free cash flow by 2% to EUR 665 million (H1 2025: EUR 649 million), resulting in a margin of 7.0% (H1 2025: 6.7%). Total net debt and lease liabilities increased by 6% to EUR 9,902 million (Q2 2025: EUR 9,315 million). The net leverage ratio (net debt/EBITDA) remained stable at 2.6x in Q2 2026 (Q1 2026: 2.6x) and continues to be around the lower end of our 2.5x to 3.0x target band. Patients, clinics and employees As of June 30, 2026, Fresenius Medical Care treated 289,610 patients in 3,513 dialysis clinics worldwide and had 107,226 employees globally. Outlook 2026 reaffirmed In 2026, Fresenius Medical Care expects revenue growth1 to be broadly flat compared to prior year. The company expects operating income2 to remain on a consistent level, with a range between a positive and negative mid-single digit percent growth rate compared to prior year. The expected growth rates for 2026 are at constant currency and excluding special items in operating income. The 2025 basis for the revenue outlook is EUR 19,628 million and for the operating income outlook is EUR 2,212 million. Investor conference call Fresenius Medical Care will host a conference call for analysts and investors to discuss the results of the second quarter, on August 4, 2026, at 10 a.m. CEST / 4:00 a.m. EDT. Details are available on the Fresenius Medical Care website in the "Investors" section. A replay and a transcript will be available shortly after the call. Please refer to our statement of earnings included at the end of this press release and to the attachments as separate PDF files for a complete overview of the results of the second quarter of 2026. Our form 6-K disclosure provides more details. About Fresenius Medical Care: Fresenius Medical Care is the world's leading provider of products and services for individuals with renal diseases of which around 4.5 million patients worldwide regularly undergo dialysis treatment. Through its network of 3,513 dialysis clinics, Fresenius Medical Care provides dialysis treatments for approx. 290,000 patients around the globe. Fresenius Medical Care is also the leading provider of dialysis products such as dialysis machines or dialyzers. Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME) and on the New York Stock Exchange (FMS). For more information visit the company's website at www.freseniusmedicalcare.com. Disclaimer:This release contains forward-looking statements that are subject to various risks and uncertainties. Actual results could differ materially from those described in these forward-looking statements due to various factors, including, but not limited to, changes in business, economic and competitive conditions, legal changes, regulatory approvals, results of clinical studies, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Fresenius Medical Care's reports filed with the U.S. Securities and Exchange Commission. Fresenius Medical Care does not undertake any responsibility to update the forward-looking statements in this release. The CONVINCE study was exclusively supported by the European Commission Research & Innovation, Horizon 2020, Call H2020-SC1-2016-2017 under the topic SC1-PM-10-2017: Comparing the effectiveness of existing healthcare interventions in the adult population (grant no 754803). Media contactChristine PetersT +49 160 60 66 [email protected] Contact for analysts and investorsDr. Dominik HegerT +49 6172 609 [email protected] www.freseniusmedicalcare.com View original content to download multimedia:https://www.prnewswire.com/news-releases/fresenius-medical-care-accelerates-income-growth-to-23-in-the-second-quarter-of-2026-while-advancing-its-strategic-agenda-302841447.html

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Revenue growth of over 10% was primarily organic, fueled by broad clinical demand across physician, hospital, and consumer channels. Strategic collaborations with Corewell Health and Fresenius Medical Care contributed 9% to total volume, demonstrating the success of the Co-Lab partnership model. Revenue per requisition increased by 2.9% (excluding business mix impacts), driven by a higher number of tests per requisition and a shift toward high-value advanced diagnostics. Management attributed margin pressure to wage increases and investments in Project Nova, partially offset by productivity gains from automation and AI implementations. The physician channel saw high single-digit growth due to expanded health plan access and increased business with existing customers in prevention and wellness. Advanced diagnostics in brain health, cardiometabolic, and oncology grew by double digits, reflecting a multi-biomarker approach to chronic disease management. Operational excellence initiatives remain on track to deliver 3% annual cost savings through the Invigorate program and front-end specimen processing automation. Full-year 2026 guidance was raised for both revenue and EPS, reflecting strong first-half momentum and sustained demand for lab insights. The updated outlook assumes operating margin expansion for the full year, despite anticipated headwinds from higher fuel costs and concentrated Project Nova spending in the second half. Management expects to transition the Corewell Health relationship to a joint venture in early 2027 following the completion of a new lab facility in Michigan. Guidance includes a 30 basis point revenue headwind from the expiration of ACA exchange subsidies, though current trends show sicker patients are maintaining higher test volumes. The company plans to roll out the Flatiron Health OncoEMR integration nationwide later this year to simplify cancer test ordering for 4,700 clinicians. Adjusted EPS included a $0.10 benefit from the favorable resolution of various tax contingencies during the second quarter. Supplemental deferred compensation plans (SDCP) created a 20 basis point headwind to operating margin due to mark-to-market investment valuations. Management flagged PAMA reimbursement as a key variable, with potential outcomes ranging from new CMS rates in 2027 to the passage of the RESULTS Act or further legislative delays. New York State approval for Haystack MRD allows for commercial expansion to all 50 states, though management is pacing investment commensurate with reimbursement milestones. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management noted that while enrollment is down over 20%, revenue remains flattish because healthier individuals dropped off while sicker patients remained, increasing tests per requisition. The company is maintaining its 30 basis point headwind assumption for the full year as a precautionary measure for the second half. Management explicitly stated they are seeing no meaningful change in bad debt or deterioration in collection timing from hospitals. Patient concessions remain stable at approximately 5% of revenues, supported by tight controls and sliding scale payment programs. Growth is driven by tests per requisition increasing from a pre-COVID range of 3.5-4.0 to north of 4.5 today. High-value wellness panels in the consumer channel and advanced diagnostics like brain health and autoimmune testing are providing a structural lift to pricing mix. Management is pacing commercial spend to align with reimbursement coverage, specifically awaiting decisions from MolDx for Medicare Advantage. The New York State approval is viewed as a significant quality signal due to the state's rigorous clinical criteria.

This article first appeared on GuruFocus. Release Date: July 23, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Quest Diagnostics Inc (NYSE:DGX) reported a strong revenue growth of over 10% in the second quarter, driven by broad clinical demand and increased volume from collaborations with Corewell Health and Fresenius Medical Care. The company achieved a 19% increase in adjusted diluted earnings per share, showcasing strong financial performance. Quest Diagnostics Inc (NYSE:DGX) is leveraging automation and AI to improve quality and productivity, enhancing customer engagement and insights from lab data. The company is expanding its reach in the physician channel, delivering high single-digit revenue growth through clinical innovations and increased business with existing customers. Quest Diagnostics Inc (NYSE:DGX) is experiencing robust growth in consumer health, with QuestHealth.com generating strong revenue growth and demand for wellness panels and new services. Total revenue per requisition decreased by 2.8% compared to the prior year due to the business mix from Corewell and Fresenius. Operating income as a percentage of revenues was impacted by investments in Project NOVA and the lower operating margin rate associated with the ramp of the Corwell CoLab business. Higher supplemental deferred compensation expenses adversely impacted operating income. The company anticipates increased NOVA expenses and higher fuel costs in the second half of 2026, which could affect margins. There is a potential 30 basis point impact on revenue from ACA exchange subsidy expiration, which could affect future financial performance. Warning! GuruFocus has detected 8 Warning Signs with DGX. Is DGX fairly valued? Test your thesis with our free DCF calculator. Q: Can you elaborate on the double-digit growth in the hospital channel and how these relationships are progressing, especially considering potential headwinds like reimbursement issues? A: Jim Davis, CEO, explained that the hospital business is divided into pure reference business and co-lab business. The reference business saw mid-single-digit revenue growth, with no slowdown in reference testing. The co-lab business, excluding Corewell, also experienced mid-single-digit growth. Bad debt is not a concern, and a new relationship with a regional hospital in California was established, with a positive outlook for future collaborations. Q: What impact have ACA changes had on your business, and is there any update on potential headwinds in your guidance? A: Jim Davis, CEO, stated that the guidance remains unchanged with a 30 basis point impact expected. Although ACA enrollment is down, the business impact is minimal, with only a 2% decrease in tests and flat revenue due to a higher mix of tests per requisition. The healthier individuals likely dropped off, leaving sicker individuals who require more tests. Q: Can you discuss the expected margin improvements in the second half of the year, considering factors like NOVA expenses and fuel costs? A: Sam Samad, CFO, noted that despite a 70 basis point impact on Q2 margins from NOVA, Corwell and Fresenius, and supplemental deferred compensation plans, full-year margins are expected to improve. This is due to continued volume growth, lapping of Corwell and Fresenius impacts, and less dilutive effects in the second half. Q: Are there any changes in your full-year revenue guidance related to COVID relationships, and how does pricing impact margins? A: Sam Samad, CFO, confirmed that the Corewell relationship is expected to contribute $250 million to revenues, with margins improving from low to mid-single digits. Overall pricing remains flat, with slight positive impacts from health plans and slight negatives from the hospital reference business. Q: How are you addressing potential reimbursement risks with the upcoming PAMA implementation? A: Jim Davis, CEO, outlined three possible outcomes: CMS implementing new rates, passing the Results Act with bipartisan support, or pushing for another delay if the Results Act isn't passed. Quest Diagnostics is advocating for a third-party data collection process to ensure fair market pricing. For the complete transcript of the earnings call, please refer to the full earnings call transcript.