2Q26
Filed Jul 29, 2026alphai · Earnings readHUM · 2Q26 · ended June 30, 2026
Humana Reports Second Quarter 2026 Financial Results; Affirms Full Year 2026 Adjusted Financial Guidance
✓Solid quarter
2Q26 GAAP EPS was $5.73 and Adjusted EPS was $7.61, both above 2Q25 results, while the company affirmed FY 2026 Adjusted EPS guidance of 'at least $9.00'. Revenue growth and lower operating cost ratios were offset by higher benefit ratios, the BY 2026 Star Ratings headwind, and a reduction in GAAP EPS guidance.
Revenue
$40,867
Insurance Segment
$39,140
EPS · non-GAAP
$7.61
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenuesGAAP | $40,867 | – | – |
| Revenues - Adjustednon-GAAP | $40,888 | – | – |
| Pretax resultsGAAP | $952 | – | – |
| Pretax results - Adjustednon-GAAP | $1,248 | – | – |
| EPSGAAP | $5.73 | – | – |
| EPS - Adjustednon-GAAP | $7.61 | – | – |
| Benefit ratioGAAP | 91.1 % | – | – |
| Operating cost ratioGAAP | 9.8 % | – | – |
| Operating cost ratio - Adjustednon-GAAP | 9.7 % | – | – |
| Operating cash flowsGAAP | $3,220 | – | – |
| Parent company cash and short-term investmentsother | $1,590 | – | – |
| Debt-to-total capitalizationother | 42.7 % | – | – |
| Days in Claims Payable (DCP)other | 33.1 | – | – |
| YTD revenuesGAAP | $80,515 | – | – |
| YTD revenues - Adjustednon-GAAP | $80,536 | – | – |
| YTD pretax resultsGAAP | $2,547 | – | – |
| YTD pretax results - Adjustednon-GAAP | $2,918 | – | – |
| YTD EPSGAAP | $15.55 | – | – |
| YTD EPS - Adjustednon-GAAP | $17.91 | – | – |
| YTD benefit ratioGAAP | 90.2 % | – | – |
| YTD operating cost ratioGAAP | 10.0 % | – | – |
| YTD operating cost ratio - Adjustednon-GAAP | 9.8 % | – | – |
| 2Q prior period medical claims reserve developmentother | $53 million favorable | – | – |
| YTD prior period medical claims reserve developmentother | $442 million | – | – |
| CenterWell Senior Primary Care YTD patient growthother | 130,900 patients | – | 27 percent |
| Insurance segment revenuesGAAP | $39,140 | – | – |
| Insurance segment benefit ratioGAAP | 91.2 % | – | – |
| Insurance segment operating cost ratioGAAP | 7.1 % | – | – |
| Insurance segment income from operationsGAAP | $820 | – | – |
| YTD Insurance segment revenuesGAAP | $77,199 | – | – |
| YTD Insurance segment benefit ratioGAAP | 90.3 % | – | – |
| YTD Insurance segment operating cost ratioGAAP | 7.2 % | – | – |
| YTD Insurance segment income from operationsGAAP | $2,255 | – | – |
| 2Q amortization associated with identifiable intangibles adjustment to pretax resultsnon-GAAP | 8 | – | – |
| 2Q put/call valuation adjustments associated with company's non-consolidating minority interest investmentsnon-GAAP | 211 | – | – |
| 2Q value creation initiatives adjustment to pretax resultsnon-GAAP | 56 | – | – |
| 2Q impairment charges adjustment to pretax resultsnon-GAAP | 21 | – | – |
| YTD amortization associated with identifiable intangibles adjustment to pretax resultsnon-GAAP | 19 | – | – |
| YTD put/call valuation adjustments associated with company's non-consolidating minority interest investmentsnon-GAAP | 177 | – | – |
| YTD value creation initiatives adjustment to pretax resultsnon-GAAP | 154 | – | – |
| YTD impairment charges adjustment to pretax resultsnon-GAAP | 21 | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Insurance SegmentMembership growth across the company's Medicare businesses, higher per member MA and stand-alone PDP premiums, and increased Part D direct subsidy resulting from the Inflation Reduction Act were cited as contributors to revenue. | $39,140 | – | – |
FY 2026 outlook
- NoteGAAP EPS: 'at least $6.52'
- NoteAdjusted EPS: 'at least $9.00'
- NoteInsurance segment benefit ratio: 92.75 percent, plus or minus 25 basis points
- NoteIndividual Medicare Advantage membership growth: 'approximately 25 percent' over 2025
What drove it
- Membership growth across Humana's Medicare businesses in 2026.
- Higher per member MA and stand-alone PDP premiums, largely driven by increased MA benchmark funding from CMS and increased Part D direct subsidy resulting from the Inflation Reduction Act.
- Increased payor-agnostic client base across the CenterWell platform.
- Operating leverage from increased Medicare revenue and progress on tactical cost cutting and transformation initiatives.
- 2026 individual MA pricing and ongoing clinical excellence efforts more than offset the assumption of claims trend, with largely stable benefits year over year.
- Group MA recontracting efforts for the 2026 plan year.
- New sales and improved retention from the company's customer-led benefit strategy and changes to its customer service approach supported expected individual MA membership growth.
Concerns
- The BY 2026 Star Ratings headwind reduced revenue and is expected to drive a year-over-year decline in FY 2026 Adjusted EPS, net of mitigation.
- The consolidated benefit ratio was 91.1 % in 2Q26 versus 89.7 % in 2Q25.
- New individual MA members run at a higher benefit ratio on average than retained members, excluding the BY 2026 Star Ratings headwind.
- 2Q26 favorable prior period medical claims reserve development was $53 million favorable, compared with $161 million favorable in 2Q25.
- Higher charges associated with value creation initiatives partially offset operating cost ratio improvement.
- The filing cites a higher CenterWell operating cost ratio for the YTD 2026 period.
- GAAP EPS guidance was revised to 'at least $6.52' from the previous estimate of 'at least $8.36'.
What to watch
- Execution against FY 2026 Adjusted EPS guidance of 'at least $9.00'.
- Insurance segment benefit ratio performance against FY 2026 guidance of 92.75 percent, plus or minus 25 basis points.
- Individual MA membership growth expected to be 'approximately 25 percent' over 2025.
- The effect of the BY 2026 Star Ratings headwind and mitigation actions.
- CenterWell Senior Primary Care patient growth and expansion of the payor-agnostic client base.
- The statewide Illinois Medicaid managed care contract, which is expected to go live in January 2027.
Balance sheet and cash flow
- Operating cash flows: $3,220
- Parent company cash and short-term investments: $1,590
- Debt-to-total capitalization: 42.7 %
- Days in Claims Payable (DCP): 33.1
- The company entered into $1.50 billion of pre-capitalized trust security arrangements during the quarter.
- A commercial paper issuance partially offset the impact of 2Q26 net earnings on debt-to-total capitalization.
- The favorable timing impact of an approximately $1.05 billion Medicaid state-directed payment contributed to YTD 2026 operating cash flows; the payment settled shortly after 2Q26.
Analysis
Humana reported 2Q26 revenues of $40,867, GAAP pretax results of $952, and GAAP EPS of $5.73, compared with $32,388, $741, and $4.51, respectively, in 2Q25. Adjusted revenues were $40,888, adjusted pretax results were $1,248, and Adjusted EPS was $7.61, compared with $32,388, $1,017, and $6.27 in 2Q25. YTD revenues were $80,515 and YTD Adjusted EPS was $17.91, compared with $64,500 and $17.85 in YTD 2025.
Management, verbatim
The first half of the year went well, and we're right where we said we'd be at Investor Day last year. When we get the clinical care right and run the business more efficiently, everything else follows—stronger earnings and better health and experiences for the people we serve.
Jim Rechtin, Humana President and CEO
Not in the filing
stated, not guessed- Gross profit and gross margin
- Net income
- Diluted weighted-average shares outstanding
- Free cash flow
- Share repurchases
- Dividends
- Total cash and investments
- Total debt
- FY 2026 revenue guidance
- FY 2026 gross margin guidance
- FY 2026 operating expense guidance
- FY 2026 tax-rate guidance
- Prior-quarter comparisons for consolidated revenue, pretax results, EPS, benefit ratio, operating cost ratio, operating cash flows, parent company cash and short-term investments, and Insurance segment metrics
- Insurance segment income from operations - Adjusted (non-GAAP), as the filing text ends immediately after that label
- Additional segment results and additional FY 2026 guidance points referenced as being included on page 12, which were not present in the provided filing text
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.