Humana (HUM) Q1 2025 earnings summary

Executive summary

• Q1 2025 net income rose to $1.2 billion ($10.30 per diluted share), up from $0.7 billion ($6.11 per share) in Q1 2024, driven by improved benefit and operating cost ratios, and value creation initiatives.

• Q1 2025 Adjusted EPS was $11.58, with full-year 2025 Adjusted EPS guidance reaffirmed at approximately $16.25.

• Revenues increased 8.4% year-over-year to $32.1 billion, with premiums revenue up 8.0% and services revenue up 25.6%, reflecting higher Medicare premiums and primary care growth.

• Exited certain unprofitable Medicare Advantage plans and counties, impacting membership but improving profitability; expects individual Medicare Advantage membership decline of about 550,000.

• CenterWell Pharmacy selected as fulfillment partner for NovoCare's weight loss medication for cash pay customers.

Financial highlights

• Q1 2025 consolidated pretax income was $1,691M (GAAP) and $1,893M (Adjusted), up from $1,014M and $1,191M in Q1 2024, respectively.

• Premiums revenue grew by $2.3 billion to $30.5 billion, mainly due to higher per member Medicare and state-based contract premiums, and membership growth in stand-alone PDP and state-based contracts.

• Services revenue increased by $272 million to $1.3 billion, driven by primary care business growth.

• Insurance segment income from operations (Adjusted) was $1,578M in Q1 2025, up from $903M in Q1 2024.

• Cash and cash equivalents increased to $4.3 billion at March 31, 2025, from $2.2 billion at year-end 2024.

Outlook and guidance

• Full-year 2025 Adjusted EPS guidance reaffirmed at approximately $16.25; GAAP EPS guidance revised to $14.68.

• Insurance segment benefit ratio guidance for FY 2025 remains at 90.1% to 90.5%.

• Earnings expected to be front-loaded in 2025 due to IRA, with higher Q1 and lower subsequent quarters.

• Management believes current cash balances, investment securities, operating cash flows, and available credit provide adequate resources for ongoing operations, expansion, and capital needs for at least the next twelve months.

• Targeting a return to 3% MA margin by 2027, contingent on Stars outcomes.