Humana (HUM) investor relations material

Executive summary

• Year-to-date and Q2 2026 performance are tracking to expectations, with strong revenue and membership growth driven by Medicare and operational progress supporting long-term goals.

• Net income attributable to shareholders was $694 million ($5.73 per diluted share) for Q2 2026, up from $545 million ($4.51 per diluted share) in Q2 2025; YTD 2026 GAAP EPS was $15.55 and Adjusted EPS was $17.91, both up year-over-year.

• The company remains on track to deliver a sustainable pre-tax margin of at least 3% by 2028, with meaningful progress expected in 2027.

• Stars program improvements and value-based care are driving quality metrics above historical trends and supporting financial results.

• Strategic expansion continued with the MaxHealth acquisition for $908 million, new contracts, and Board additions, enhancing expertise and growth.

Financial highlights

• Q2 2026 consolidated revenues rose to $40.9 billion, up 26.2% year-over-year, with premiums revenue at $38.83 billion and services revenue at $1.78 billion.

• Consolidated operating cost ratio decreased by 120 basis points year-over-year in Q2, with a full-year reduction of approximately 150 basis points expected.

• Operating expenses rose 26.3% to $39.51 billion for Q2 2026, with benefits expense up 28.3% to $35.37 billion.

• Cash and cash equivalents increased to $6.9 billion at June 30, 2026, from $4.2 billion at year-end 2025.

• Individual MA pre-tax margin is on track to double this year, excluding the Stars headwind.

Outlook and guidance

• FY 2026 Adjusted EPS guidance is affirmed at at least $9.00; GAAP EPS guidance revised down to at least $6.52 due to Star Ratings headwinds.

• Margin expansion in 2027 will be driven by clinical excellence, operating efficiency, benefit adjustments, and targeted plan exits.

• Plan exits in 2027 are expected to impact about 600,000 members, with efforts to recapture a significant portion.

• Drug cost trends are expected to tick modestly higher in 2027 due to the health technology pipeline.

• The company is confident in its ability to achieve top quartile Stars results and meet 2028 commitments.