Humana (HUM) Q4 2024 earnings summary

Executive summary

• Achieved 2024 Adjusted EPS of $16.21, meeting guidance, with 2025 Adjusted EPS guidance set at approximately $16.25, reflecting incremental investments for operational excellence and Stars improvement.

• FY 2024 revenues grew to $117.8B, up from $106.4B in FY 2023, driven by higher Medicare premiums and membership growth in Medicare Advantage and state-based contracts.

• New executive team members introduced to drive transformation and operational improvements.

• Announced exit from certain unprofitable Medicare Advantage plans and counties, resulting in an expected 10% decline (~550,000 members) in individual Medicare Advantage membership for 2025.

• CenterWell and Medicaid strategies expected to drive mid- and long-term earnings growth, with CenterWell Primary Care adding 48 centers and nearly 100,000 patients in 2024.

Financial highlights

• FY 2024 consolidated revenues were $117.8B, up 10.7% year-over-year; 4Q24 revenues were $29.2B.

• FY 2024 consolidated pretax income was $1.7B (GAAP), down from $3.4B in FY 2023; adjusted pretax income was $2.7B.

• Operating expense ratio improved by 40 basis points in 2024 through care model optimization and streamlining.

• Debt-to-total capitalization at year-end 2024 was 41.9%, nearly flat year-over-year.

• Days in claims payable decreased to 37.8 from 41.4 year-over-year, driven by lower reserve requirements and processed claims inventory.

Outlook and guidance

• FY 2025 GAAP EPS guidance is approximately $15.88; adjusted EPS guidance is approximately $16.25, in line with 2024 results.

• 2025 consolidated revenue guidance: $126–$128 billion, ~8% year-over-year growth at midpoint.

• Individual Medicare Advantage membership expected to decline by ~550,000; group Medicare Advantage flat; stand-alone PDP to grow by ~200,000.

• Medicaid membership projected to grow by 150,000–250,000 in 2025, with incremental margin improvement.

• CenterWell Primary Care expects to add 20–30 centers and 30,000–50,000 patients in 2025.