Humana Inc. (HUM) Earnings

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Sep 2026upcoming

Next quarter

Reports Nov 4, 2026.

Consensus is -$1.00 EPS for Sep 2026 across 10 estimates, ranging -$1.18 to -$0.61.

HUM Jun 2026

Reported Jul 29, 2026

: 22.35%
: +0.34%

: $6.22
: $7.61
: —
: —

Highlights

Earnings beat: Reported EPS was $7.61 versus the $6.22 consensus, a 22.35% surprise; GAAP diluted EPS in the 10-Q was $5.73, up from $4.51 a year ago.
Revenue growth: Total revenue increased 26.2% year over year to $40.87 billion, led by premiums up 26.4% to $38.83 billion and services revenue up 27.1% to $1.78 billion.
Insurance scale: Total medical membership rose 20.7% to 17.9 million, including individual Medicare Advantage growth of 23.4% to 6.45 million and stand-alone PDP growth of 62.6% to 3.95 million.
Medical-cost pressure: The consolidated benefit ratio worsened 140 basis points to 91.1%, reflecting the 2026 Star Ratings headwind, higher-cost new MA members and less favorable prior-period reserve development.
Administrative leverage: The operating cost ratio improved 120 basis points to 9.8%, as revenue growth, higher MA benchmark funding, increased Part D subsidies and transformation initiatives offset higher program charges.
CenterWell momentum: CenterWell external revenue grew 32.4% to $1.58 billion and operating income rose 35.5% to $466 million, with primary care revenue up 63.5% to $839 million.
Cash generation and investment: Operating cash flow reached $3.22 billion in the first half versus $1.60 billion a year ago, while Humana spent $908 million on the MaxHealth acquisition and ended June with $6.89 billion of cash.
Capital structure: Humana issued $1.0 billion of junior subordinated notes, had $1.32 billion of commercial paper outstanding at quarter-end and retained $5.0 billion of undrawn revolving credit capacity.
Ongoing charges and risk: Second-quarter value-creation charges were $56 million, while a $21 million minority-investment impairment and $211 million of put/call valuation adjustments affected pretax results.

Analysis

Humana’s June 2026 quarter was a strong earnings beat against the $6.22 consensus, with reported EPS of $7.61, or 22.35% above expectations. The 10-Q reports $5.73 of GAAP diluted EPS, versus $4.51 in the year-ago quarter, while net income attributable to Humana rose 27.3% to $694 million. Total revenue climbed 26.2% to $40.87 billion, but the quarter was sequentially softer than Q1’s $9.83 diluted EPS and $1.19 billion of net income, reflecting Humana’s seasonal earnings pattern and higher second-quarter medical costs.

The print was defined by exceptional Medicare membership and premium growth, improving administrative efficiency and continued CenterWell expansion, offset by medical-cost pressure. Insurance membership increased 20.7% to 17.9 million, while premiums grew 26.4%; however, the benefit ratio rose 140 basis points to 91.1%. The operating cost ratio fell 120 basis points to 9.8%, helping operating income rise 23.9% year over year to $1.36 billion. CenterWell operating income increased 35.5% to $466 million. Cash flow was also notably strong, with $3.22 billion generated in the first half, although liquidity benefited from working-capital timing and the company added debt to support acquisitions and capital needs.

Medicare growth and margins

Humana continued to add members rapidly across its Medicare businesses, but the mix and Star Ratings environment placed pressure on underwriting margins. Individual Medicare Advantage membership increased 1.22 million, or 23.4%, to 6.45 million, while stand-alone PDP membership rose 1.52 million, or 62.6%, to 3.95 million. Total Medicare membership reached 11.13 million, up 35.3% year over year.

Premium growth: Medicare premiums increased 29.8% to $34.72 billion in the quarter. Management attributed the increase to membership gains, higher per-member MA and PDP premiums, increased CMS benchmark funding and the Inflation Reduction Act’s higher Part D direct subsidy, partly offset by the 2026 Star Ratings headwind.
Benefit ratio: The Insurance segment benefit ratio increased 130 basis points to 91.2%, as newer AEP and OEP members carried higher average costs, favorable prior-period development declined to $53 million from $161 million, and Star Ratings reduced revenue.
Cost efficiency: The Insurance operating cost ratio improved 120 basis points to 7.1%, reflecting operating leverage and cost-cutting initiatives. Insurance operating income rose 7.0% to $820 million in the quarter, though first-half operating income declined 3.6% to $2.26 billion.

CenterWell expansion

CenterWell was the clearest operating growth engine in the quarter. External services revenue rose 32.4% to $1.58 billion, driven by a larger payor-agnostic client base and recent primary care acquisitions. Total CenterWell revenue, including intersegment activity, increased 22.6% to $6.79 billion.

Primary care: External primary care revenue increased 63.5% to $839 million, while first-half revenue rose 65.7% to $1.63 billion. The MaxHealth acquisition, completed in February for approximately $908 million net of cash acquired, contributed to the expansion.
Profitability: CenterWell operating income increased $122 million to $466 million, a 35.5% gain. Its operating cost ratio improved 30 basis points to 92.4% in the quarter, although the first-half ratio worsened 140 basis points to 93.4% because of acquisition and integration costs and the phase-in of the v28 risk model revision.
Integration model: Approximately 4.12 million, or 64%, of Humana’s individual MA members were in value-based relationships at June 30, compared with 3.54 million, or 68%, a year earlier. The lower percentage reflects faster growth in the overall membership base.

Cash flow and capital

Humana generated substantially more cash in the first half, but the increase was driven partly by working-capital timing and accompanied by greater financing activity. Cash and equivalents rose to $6.89 billion at June 30 from $4.20 billion at year-end 2025.

Operating cash flow: Six-month operating cash flow increased to $3.22 billion from $1.60 billion a year earlier. The improvement reflected higher benefits payable, the timing of a roughly $1.05 billion Medicaid state-directed payment and modestly higher earnings.
Investment spending: Investing cash flow was negative $2.83 billion, including the $908 million MaxHealth purchase, $253 million of capital expenditures and $1.67 billion of net purchases of investment securities.
Financing: Humana issued $1.0 billion of junior subordinated notes and raised $1.3 billion net through commercial paper. Debt at June 30 included $2.27 billion of short-term debt and $11.98 billion of long-term debt, while the company had $5.0 billion of unused revolver capacity.
Shareholder returns: First-half share repurchases totaled $103 million and dividends totaled $214 million. The remaining share repurchase authorization was $2.7 billion as of July 28.

Transformation and unusual items

Reported earnings continued to include several items that complicate the underlying comparison. Humana’s multi-year transformation program is intended to realign its cost structure, operating model and technology footprint, but it is generating additional near-term charges.

Transformation charges: Humana recorded $56 million of value-creation charges in the quarter and $154 million in the first half, compared with $29 million and $53 million in the corresponding 2025 periods. The charges primarily covered severance, associate exits, asset impairments and external consulting.
Investment valuation: Put/call valuation adjustments associated with non-consolidating minority investments totaled $211 million in pretax expense in the quarter. The related put liability was $1.6 billion at June 30, up from $1.4 billion at year-end.
Other items: Humana recorded a $21 million impairment related to minority-interest investments. Together with value-creation and other adjustments, management identified $288 million of second-quarter pretax items, equivalent to $1.83 per diluted share after the cumulative net tax impact.

Regulatory and legal exposure

The company remains exposed to material regulatory uncertainty around Medicare Advantage risk adjustment, Star Ratings and marketing practices. Humana’s Medicare products represented approximately 86% of premiums and services revenue in the first half, making policy and reimbursement changes central to the earnings outlook.

RADV litigation: A federal district court vacated CMS’s Final RADV Rule in September 2025, including its elimination of the fee-for-service adjuster, but the government appealed. The appeal, captioned Humana v Kennedy, remains pending in the Fifth Circuit.
Other proceedings: Humana continues to face securities and derivative shareholder actions, a DOJ-intervened False Claims Act case involving broker call-center payments and a TCPA class action. The filing states that potential losses beyond accrued amounts cannot currently be estimated.
Balance-sheet sensitivity: Humana held $17.63 billion of debt securities at fair value, with $989 million of gross unrealized losses. Approximately 97% of the portfolio was investment grade, but a 1% increase in interest rates would generally reduce securities fair value by about $766 million.

Humana Inc.

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