Fresenius Medical Care AG & Co. KGaA (NYSE:FMS) reported what management called a solid start to 2026, pointing to organic revenue growth, expanding margins, and continued progress on its cost-saving and operational initiatives during its first-quarter earnings call.
First-quarter performance and FME25+ savings
CEO and Chair of the Management Board Helen Giza said the company delivered “continued operational and financial progress,” including 4% organic revenue growth with positive contributions across all segments. She added that operating income increased 10% in line with the company’s planned phasing for the year, supporting further margin expansion.
CFO Martin Fischer said first-quarter special items totaled a net negative EUR 181 million, “mainly reflecting costs associated with FME25+ as we accelerated our U.S. clinic closures.” He said those costs are expected to decline through the year because clinic-closure-related costs are “first half loaded.”
Share buyback and leverage
Management also highlighted the completion of its initial EUR 1 billion share buyback. Giza said the program was finished on April 30 “in a significantly accelerated way,” completed in less than one year rather than the two years initially announced. She said the company repurchased 24.8 million shares, representing 8.5% of share capital.
Fischer said that by the end of the first quarter, the company had repurchased 23.3 million shares for EUR 941 million, or 7.9% of share capital. He added that the net leverage ratio remained 2.6x, near the low end of the company’s 2.5x to 3.0x target corridor.
Segment results: Care Delivery, Value-Based Care, and Care Enablement
Fischer said the group’s operating income margin improved by 70 basis points year over year to 10.1%, which he described as “a solid start toward achieving our projected group operating income margin of 10.5%-12% for the full year.” Care Delivery drove most of the profitability improvement, with a small contribution from Value-Based Care, he said.
Care Delivery posted 6% organic revenue growth and 26% operating income growth, lifting the segment margin to 12.1%, Fischer said. He highlighted that TDAPA reimbursement regulation benefits for phosphate binders and citrate-based solutions were “a meaningful driver” in the quarter, while also noting the company continues to assume “a significant headwind” from TDAPA in the second half.
Giza said U.S. same-market treatment growth declined by 37 basis points, citing “mistreatments” tied to severe U.S. weather events in January and February. She also pointed to operational actions such as clinic closures and insurance verification that “likely had a small impact on patient inflows at the start of the year,” and she cited uncertainty for some patients’ insurance coverage related to the expiry of extended ACA tax subsidies. Mortality also remains above pre-pandemic levels, she said. Despite the first-quarter decline, Giza said the company is maintaining its assumption of flat U.S. same-market treatment growth for 2026, expecting volumes to improve during the year.
Internationally, Giza said Care Delivery delivered 1.3% same-market treatment growth. In response to a question about softer growth versus prior quarters, she pointed to portfolio changes and said the year-ago comparison included Brazil.
Value-Based Care delivered 3% revenue growth and was profitable for a second consecutive quarter, Fischer said, with margin up 100 basis points. Growth was driven by member-month increases from contracting expansion and premium-rate effects, plus prior-period true-ups, he said. However, he said a risk-type change for a large contract created a different accounting treatment that lowered revenue recognition, and the company expects Value-Based Care revenue growth to turn negative during the year due to that change. When asked whether the strong quarter could change guidance, Fischer said it was “too early” given volatility and maintained the company’s stated assumption for the year.
Care Enablement revenue increased 1% on an organic and constant-currency basis, Fischer said, supported by positive volume and pricing outside China and “strong sales of the 5008X care systems in the United States.” He said results continued to face “headwinds from regulatory pressure in China,” including volume-based procurement and stricter tender requirements. Segment earnings rose slightly at constant currency, with margin up 40 basis points.
Operational initiatives: 5008X rollout, HDF, and clinic restructuring
Giza described the rollout of the 5008X and introduction of HighVolumeHDF therapy as “the biggest operational and clinical change” in the company’s history. She said the large-scale launch began in January, and the company surpassed 100,000 treatments on the 5008X in the first week of April. About 100 clinics had been converted by the end of the quarter, she said, with further conversions underway.
In the Q&A, Giza said training costs were being incurred “as we forecast,” and she characterized adoption as positive among staff and patients. She said the company is collecting real-world data from the rollout and expects to provide more color on KPIs once it has a larger dataset, indicating the company had previously suggested more detail after the first half of the year.
On network actions, Giza reiterated that the company announced plans in February to close up to 100 U.S. clinics and said it exited 64 clinics in the first quarter, with the remainder expected within the second quarter. Later in the call, she added the company was moving quickly, noting it had “close to 90” completed through April and expected the program to be finished in May.
Giza also highlighted clinical and operational efforts aimed at patient outcomes and treatment adherence. She said the company reduced catheter-related bloodstream infections, with about 90% of eligible patients using an antimicrobial catheter lock solution, which she expects to begin improving mistreatments and mortality in the near future.
Outlook and key watch items
Giza said the company is confirming its full-year outlook following the first-quarter performance. Management continues to expect broadly flat revenue for 2026 and operating income to remain at a consistently high level versus 2025, with an upside/downside range of a mid-single-digit percentage change. She reiterated the expected phasing: positive earnings growth in the first half, followed by negative year-over-year earnings growth in the second half due to TDAPA effects.
Fischer provided additional detail on TDAPA during the Q&A, stating the constant-currency TDAPA contribution in the first quarter was about EUR 80 million. He said the catheter lock solution contribution was expected to be EUR 90 million for the first half, with about half recognized in the first quarter, and the remainder of the first-quarter TDAPA benefit was related to binders.
On external risks, Giza said the company is monitoring inflation impacts related to the Middle East crisis, including oil prices, raw materials, and logistics, but noted “no meaningful interruptions” to local operations in the first quarter and said financial impacts were currently absorbed within the company’s inflation assumptions. Fischer said potential sensitivities include transportation costs and oil-linked materials such as plastics, while adding that the company is “rather well hedged” on energy, with about 70% of exposure hedged.
Management also discussed potential impacts from the expiration of extended ACA exchange subsidies. Fischer said the company continues to expect around a EUR 50 million impact for full-year 2026, while Giza said attrition was lower than anticipated in the first quarter, but affordability pressures could emerge as the year progresses, particularly as grace periods expire.
About Fresenius Medical Care AG & Co. KGaA (NYSE:FMS)
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.
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