Humana (HUM) Q1 2026 earnings summary

Executive summary

• First quarter 2026 Adjusted EPS was $10.31, at the high end of guidance, with GAAP EPS at $9.83; full-year Adjusted EPS guidance affirmed at at least $9.00, though GAAP EPS guidance was revised down to at least $8.36.

• Net income attributable to shareholders was $1.19 billion for Q1 2026, down from $1.24 billion in Q1 2025, reflecting higher benefit expenses and transformation charges.

• Revenue grew 23.5% year-over-year to $39.6 billion, driven by strong Medicare membership growth and higher per member premiums.

• Strategic priorities include product and experience, clinical excellence, operational efficiency, and disciplined capital allocation, with leadership transitions underway in the Insurance Segment.

• The acquisition of MaxHealth for $908 million expanded CenterWell's reach and contributed to significant patient growth.

Financial highlights

• Premiums revenue increased 23.6% to $37.7 billion, with Medicare businesses as the primary driver; services revenue rose 25.7% to $1.7 billion, reflecting CenterWell expansion.

• Insurance segment benefit ratio was 89.4%, slightly better than guidance, mainly due to Star Ratings headwinds and new member mix.

• Operating cost ratio improved to 10.2% GAAP (10.0% Adjusted), reflecting operating leverage and cost efficiencies.

• CenterWell Primary Care patient count grew by 110,500 (22%) to 601,600, including 59,000 from MaxHealth; Medicaid membership increased by 50,000, driven by new programs in Michigan, Illinois, and South Carolina.

• Cash and cash equivalents rose to $5.0 billion at March 31, 2026, from $4.2 billion at year-end 2025.

Outlook and guidance

• FY26 Adjusted EPS guidance affirmed at at least $9.00, with GAAP EPS guidance revised to at least $8.36; Insurance segment benefit ratio guidance for FY26 remains at 92.75% ±25 bps.

• Medicare and Medicaid membership growth expectations reaffirmed, with individual MA membership expected to grow approximately 25% over 2025.

• Second quarter earnings expected to be 80%-85% of FY26 Adjusted earnings; Insurance segment benefit ratio expected slightly above 91%.

• Ongoing focus on pricing discipline, benefit adjustments, and cost management to bridge funding and medical cost trend gaps.

• Management expects continued charges related to transformation and cost-saving initiatives.