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.
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.
U.S. Treatment Growth Declines on Referral Execution Gap
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.
“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.
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 Earnings Rise, While China and Costs Pressure Care Enablement
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 Turns Profitable and 5008X Rollout Advances
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.
Cash Flow, Buybacks and Outlook
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.
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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