Humana (HUM) Q1 2026 earnings summary

Executive summary

• First quarter results met expectations, with membership growth and operational performance on track for full-year goals.

• 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.

• Reported 1Q26 GAAP EPS of $9.83 and Adjusted EPS of $10.31, at the high end of guidance for the quarter.

• Strategic priorities include product and experience, clinical excellence, operational efficiency, and disciplined capital allocation.

Financial highlights

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

• Medicare Advantage (MA) membership grew 22.6% to 6.39 million, with new and returning members performing in line or better than guidance.

• Medicaid membership increased by approximately 50,000, driven by new programs in Michigan, Illinois, and South Carolina.

• 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%, reflecting operating leverage and cost efficiencies.

Outlook and guidance

• Committed to achieving a 3%+ sustainable margin in 2028, with significant progress in 2027.

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

• 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.

• Individual Medicare Advantage membership expected to grow approximately 25% over 2025.