Humana (HUM) Q1 2026 earnings summary

Executive summary

• First quarter results met expectations, with membership growth and operational execution on track for 2026 targets; reported 1Q26 GAAP EPS of $9.83 and Adjusted EPS of $10.31, at the high end of guidance.

• Net income attributable to shareholders was $1.19 billion ($9.83 per diluted share) for Q1 2026, down from $1.24 billion ($10.30 per diluted share) in Q1 2025, reflecting higher benefit expenses and charges for value creation initiatives.

• 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.

• Leadership transitions underway in the Insurance Segment, with succession plans and new appointments effective mid-2026.

Financial highlights

• Medicare Advantage (MA) membership grew 22.6% to 6.39 million, performing in line to better than guidance, with risk scores and claims metrics favorable.

• Premiums revenue increased 23.6% to $37.7 billion, with Medicare businesses as the primary driver.

• Benefit ratio increased to 89.4% from 87.0% year-over-year, mainly due to Star Ratings headwinds and new member mix; operating cost ratio improved to 10.2% from 10.6%.

• CenterWell primary care saw sequential patient growth of 22.5%, aided by the MaxHealth acquisition.

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

Outlook and guidance

• On track to double individual MA margin in 2026, adjusted for Stars, and targeting a sustainable 3% margin by 2028.

• Full-year 2026 Adjusted EPS guidance affirmed at at least $9.00, with GAAP EPS guidance revised to at least $8.36.

• 2Q MLR (medical loss ratio) guided slightly above 91, with less pronounced seasonality than prior years.

• Benefit adjustments expected in 2027 to bridge the gap between funding and medical cost trend, with retention prioritized over growth.

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