Humana Inc. — Third Quarter 2026 Earnings Summary

Financial Performance

• Reported 3Q26 GAAP earnings per share (EPS) of $1.33, down from $1.62 in 3Q25; year-to-date (YTD) 2026 GAAP EPS was $16.84, up from $16.43 in YTD 2025.
• Reported 3Q26 Adjusted (non-GAAP) loss per share of $0.70, compared to Adjusted EPS of $3.24 in 3Q25; YTD 2026 Adjusted EPS was $17.17, down from $21.10 in YTD 2025.
• Consolidated pretax results (GAAP) for 3Q26 were $216 million, up from $134 million in 3Q25; YTD 2026 pretax results were $2,763 million, up from $2,566 million in YTD 2025.
• Consolidated revenues for 3Q26 were $41,155 million, up from $32,649 million in 3Q25; YTD 2026 revenues were $121,670 million, up from $97,149 million in YTD 2025.
• Insurance segment GAAP benefit ratio for 3Q26 was 93.7 percent, which was favorable to management's guidance of slightly above 94 percent.
• Consolidated operating cost ratio (GAAP) for 3Q26 was 11.3 percent, down from 12.6 percent in 3Q25; YTD 2026 was 10.4 percent, down from 11.4 percent in YTD 2025.
• Insurance segment GAAP income from operations for 3Q26 was a loss of $303 million, compared to income of $251 million in 3Q25; YTD 2026 income was $1,952 million, down from $2,591 million in YTD 2025.
• Consolidated Adjusted (non-GAAP) pretax results for 3Q26 were a loss of $104 million, compared to income of $527 million in 3Q25; YTD 2026 Adjusted pretax results were $2,814 million, down from $3,437 million in YTD 2025.
• Significant non-cash adjustments impacting 3Q26 results included a $358 million loss from put/call valuation adjustments on non-consolidating minority interest investments and $3 million in impairment charges.

Guidance and Future Outlook

• Raised FY 2026 Adjusted EPS guidance to "at least $9.50," up from the previous expectation of "at least $9.00."
• Revised FY 2026 GAAP EPS guidance to "at least $15.09," up from the previous estimate of "at least $6.52."
• FY 2026 Adjusted EPS guidance anticipates a year-over-year decline due to Star Ratings headwinds for Bonus Year (BY) 2026, net of mitigation.
• Management expects potential changes to FY 2026 GAAP EPS guidance due to ongoing value creation and other strategic initiatives, but does not expect changes to Adjusted EPS guidance.
• The initial option liability associated with the new BlackRock joint venture (approx. $2.14 per share impact) is expected to be recorded in the fourth quarter of 2026.

Business Segments and Product Lines

• CenterWell Senior Primary Care saw YTD 2026 patient growth of 146,800, representing a 30 percent increase.
• Medicaid membership grew by 103,600 (7 percent) YTD 2026, largely driven by the start of integrated Duals programs in Michigan, Illinois, and South Carolina.
• The company announced a joint venture with BlackRock (HPS Investment Partners) to replace previous joint ventures with Welsh, Carson, Anderson & Stowe, enhancing balance sheet efficiency and providing greater financial flexibility at a reduced cost of capital.
• Insurance segment Adjusted (non-GAAP) income from operations for 3Q26 was a loss of $299 million, compared to $270 million in 3Q25; YTD 2026 Adjusted income was $1,964 million, down from $2,619 million in YTD 2025.

Market and Competitive Landscape

• The company faces a headwind from the decline in the number of Humana's Medicare Advantage plans rated 4-star or higher in 2025, which negatively impacts 2026 quality bonus payments from CMS.
• Humana filed a lawsuit to set aside the 2025 Star Ratings; the court rejected the challenge in October 2025, and the company has appealed the decision with no assurance of success.
• The company notes significant competition in attracting and retaining talented employees and managing pharmacy business supply chain risks.
• Changes to the risk-adjustment model utilized by CMS (Final RADV Rule) and potential restrictions on profitability in government programs present ongoing market challenges.

Risks and Challenges

• Profitability could be materially adversely affected if premiums are insufficient to cover healthcare service costs or if benefit expense estimates are inadequate.
• Failure to effectively implement operational and strategic initiatives, including Medicare initiatives and the integrated care delivery model, poses a risk to business performance.
• Cyber-security attacks, data breaches, or failure to maintain information system integrity could materially affect the business.
• The company is exposed to risks from government audits, investigations, and potential changes to government healthcare programs, including payment rates and regulatory restrictions.
• Downgrades in debt ratings or volatility in securities and credit markets could adversely affect the business and investment portfolio value.

Management Commentary and Tone

• President and CEO Jim Rechtin stated, "Humana is delivering positive results for our members, our patients and their health," and noted the company is "increasingly driving financial and operating performance toward being 'ahead' of our plan."
• Management emphasized the strategic expansion of CenterWell and Medicaid footprints as key drivers of growth.
• The tone regarding the BlackRock joint venture highlighted enhanced balance sheet efficiency and reduced cost of capital.

Other Key Points

• The company published prepared management remarks on its Investor Relations page ahead of the 8:00 a.m. ET Q&A session.
• A live conference call and webcast were hosted for analysts to discuss the financial results and future expectations.
• The press release includes detailed reconciliations of GAAP to Adjusted (non-GAAP) financial measures, including specific adjustments for amortization, put/call valuation, value creation initiatives, and impairment charges.
• The company filed a current report on Form 8-K with the SEC regarding these results.