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 were $216 million in 3Q26 versus $134 million in 3Q25; YTD 2026 pretax results were $2.763 billion versus $2.566 billion in YTD 2025.
• Adjusted pretax results were a loss of $104 million in 3Q26 versus a profit of $527 million in 3Q25; YTD 2026 Adjusted pretax results were $2.814 billion versus $3.437 billion in YTD 2025.
• Consolidated revenues were $41.155 billion in 3Q26 versus $32.649 billion in 3Q25; YTD 2026 revenues were $121.670 billion versus $97.149 billion in YTD 2025.
• Insurance segment GAAP benefit ratio was 93.7% in 3Q26, favorable to management's guidance of slightly above 94%.
• Consolidated operating cost ratio was 11.3% in 3Q26 (GAAP) and 11.2% (Adjusted), compared to 12.6% (GAAP) and 11.8% (Adjusted) in 3Q25.
• Insurance segment operating cost ratio was 7.7% in 3Q26 (GAAP and Adjusted), compared to 9.1% (GAAP) and 9.0% (Adjusted) in 3Q25.
• Insurance segment GAAP income from operations was a loss of $303 million in 3Q26 versus a profit of $251 million in 3Q25; YTD 2026 segment income was $1.952 billion versus $2.591 billion in YTD 2025.
• Insurance segment Adjusted income from operations was a loss of $299 million in 3Q26 versus a profit of $270 million in 3Q25; YTD 2026 Adjusted income was $1.964 billion versus $2.619 billion in YTD 2025.
• Significant non-cash adjustments impacting results included a $358 million loss on put/call valuation adjustments in 3Q26 (vs. $97 million gain in 3Q25) and $25 million in value creation initiatives in 3Q26 (vs. $267 million in 3Q25).

Guidance and Future Outlook:

• Raised FY 2026 Adjusted EPS guidance to "at least $9.50" from "at least $9.00".
• Revised FY 2026 GAAP EPS guidance to "at least $15.09" from "at least $6.52".
• FY 2026 Adjusted EPS guidance anticipates a year-over-year decline due to Star Ratings headwinds for Bonus Year 2026, net of mitigation.
• Management noted potential changes to FY 2026 GAAP EPS guidance due to ongoing value creation and strategic initiatives, but does not expect changes to Adjusted EPS guidance.

Business Segments and Product Lines:

• CenterWell Senior Primary Care YTD growth reached 146,800 patients, representing a 30% increase.
• Medicaid membership grew by 103,600 patients (7%) YTD, largely driven by the start of integrated Duals programs in Michigan, Illinois, and South Carolina.
• Announced a joint venture with BlackRock (HPS Investment Partners) to replace previous joint ventures with Welsh, Carson, Anderson & Stowe, enhancing balance sheet efficiency and reducing cost of capital.
• Insurance segment operating cost ratios improved year-over-year in both GAAP and Adjusted terms.

Market and Competitive Landscape:

• The company faces a Star Ratings headwind for Bonus Year 2026 resulting from a significant decline in 4-star or higher Medicare Advantage plans in 2025.
• Humana filed a lawsuit to set aside 2025 Star Ratings; the court rejected the challenge on October 14, 2025, and the company has appealed the decision.
• The company continues strategic expansion of its CenterWell and Medicaid footprints.

Risks and Challenges:

• Potential negative impact on 2026 quality bonus payments, revenues, operating results, and cash flows if the Star Ratings decline is not successfully challenged or improved.
• Risks related to data integrity, cybersecurity, and the implementation of AI/ML systems.
• Exposure to government contract risks, including audits, investigations, and changes to payment rates or risk-adjustment models (e.g., RADV Rule).
• Risks associated with the failure to effectively implement operational and strategic initiatives, including Medicare and CenterWell growth strategies.
• Potential for litigation, provider contract disputes, and regulatory changes affecting profitability and operations.

Management Commentary and Tone:

• 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 excluded the initial option liability associated with the BlackRock joint venture from Adjusted EPS guidance, citing it as a non-cash impact resulting from transaction ownership structure.

Other Key Points:

• The 3Q26 GAAP to Adjusted EPS reconciliation does not foot due to a $0.01 impact from share count differences between GAAP and Adjusted calculations.
• A noncash reversal of a net put liability of approximately $1.2 billion was reflected in the September 30, 2026 balance sheet, associated with the previous CenterWell Senior Primary Care joint ventures.
• The initial option liability for the new BlackRock joint venture is expected to be recorded in the fourth quarter of 2026.
• The company posted prepared management remarks and financial tables to its Investor Relations page ahead of the 8:00 a.m. ET conference call.