HUM earnings analysis
What we found in HUM's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Humana delivered strong 2Q26 top-line growth, with revenue up 26.2% to $40.867 billion and GAAP diluted EPS up 27.1% to $5.73 year over year, driven by Medicare enrollment and CenterWell expansion. However, profitability quality was mixed: the benefit ratio worsened 140 basis points to 91.1%, sequential EPS fell from $9.83 in 1Q26, and lower reserve-development favorability and Star Ratings pressure remain headwinds. Liquidity improved substantially, with cash rising to $6.9 billion and six-month operating cash flow of $3.220 billion, but cash conversion included a $1.05 billion payment-timing benefit and receivables increased to $5.695 billion.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue rose 26% year over year
- Second-quarter revenue increased $8.479 billion, or 26.2% year over year, to $40.867 billion. This also represents a $1.217 billion, or 3.1%, increase from 1Q26 revenue of $39.650 billion.
- Year-over-year EPS growth, sequential decline
- Diluted EPS rose $1.22, or 27.1%, year over year to $5.73 from $4.51. Net income attributable to Humana increased $149 million to $694 million; EPS nevertheless declined from $9.83 in 1Q26.
- Insurance enrollment drove profit growth
- Insurance segment operating income increased $54 million, or 7.0%, to $820 million. Individual Medicare Advantage membership grew 1,224,400 members, or 23.4%, to 6,453,700, while stand-alone PDP membership rose 1,519,300, or 62.6%, to 3,946,400.
- CenterWell posted strong quarterly growth
- CenterWell operating income rose $122 million, or 35.5%, to $466 million. External revenue increased $387 million, or 32.4%, to $1.581 billion, led by primary-care revenue growth of $326 million, or 63.5%, to $839 million.
- Administrative leverage offset medical-cost pressure
- Operating-cost efficiency improved: the consolidated operating-cost ratio fell 120 basis points to 9.8% from 11.0%, helping operating income rise $262 million, or 23.9%, to $1.360 billion despite a higher medical-cost ratio.
- Cash generation strengthened materially
- Six-month operating cash flow doubled to $3.220 billion from $1.602 billion. After $253 million of year-to-date capital expenditures, implied six-month free cash flow was approximately $2.967 billion, although the filing does not provide standalone quarterly free cash flow.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Medical-cost ratio deteriorated
- The consolidated benefit ratio increased 140 basis points year over year to 91.1%, as benefits expense rose 28.3% to $35.370 billion, faster than the 26.2% increase in revenue. Management cites the BY 2026 Star Ratings headwind, higher-cost new MA members and lower favorable reserve development.
- Less favorable reserve development
- Favorable prior-period medical-claims reserve development fell to $53 million in 2Q26 from $161 million in 2Q25, a $108 million reduction in a source of benefit-cost favorability.
- Higher debt costs and funding reliance
- Interest expense rose $40 million, or 25.5%, to $197 million, reflecting higher average debt and financing actions. Humana issued $1.0 billion of 6.625% junior subordinated notes in March and generated $1.3 billion of net commercial-paper proceeds in the first six months.
- Transformation charges remain ongoing
- Transformation/value-creation charges were $56 million in the quarter, up from $29 million a year earlier, and management expects additional charges. The quarter also included a $21 million minority-investment impairment charge.
- Working-capital benefit may reverse
- Receivables increased $2.425 billion to $5.695 billion from year-end, including a $2.283 billion increase in Medicare receivables. Operating cash flow benefited from timing, including a $1.05 billion Medicaid state-directed payment settled shortly after June 30.
- No formal risk-factor update; rate sensitivity persists
- Item 1A reports no changes to the risk factors in the 2025 Form 10-K. Separately, a 1% interest-rate increase would reduce the fair value of securities by approximately $766 million; the investment portfolio had $1.0 billion of gross unrealized losses at June 30.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $5.73
- Gross margin
- 13.4%
- Operating margin
- 3.3%
- Segment
- Insurance: external revenue $39.033 billion; income from operations $820 million.
- Segment
- CenterWell: external revenue $1.581 billion; total revenue including intersegment sales $6.790 billion; income from operations $466 million.
What they said about what is next.
The 10-Q contains no quantitative earnings or revenue outlook. Management states that existing liquidity resources are adequate for operating and regulatory requirements, acquisitions, capital expenditures, debt refinancing/repayment and share repurchases for at least the next 12 months.
The filing reads about the same as the one before it.
What came before.
- 10-Q · April 29, 2026
- Humana reported Q1 2026 earnings, with revenue of $39.65 billion, an increase of 23.5% compared to the prior year. Gross margins decreased to 92.5%, and operating margins fell slightly to 4.4%, while diluted EPS came in…
- 10-K · February 19, 2026
- Humana’s 2025 Form 10‑K emphasizes an integrated care delivery strategy (Insurance + CenterWell) anchored in Medicare/Medicaid contracts and owned care capabilities (primary care, home health, pharmacy). Revenue grew to…
- 10-Q · November 5, 2025
- Humana reported Q3 2025 revenue of $32,649,000,000 (up $3,252,000,000 or +11.1% vs Q3 2024's $29,397,000,000) but operating income and EPS declined materially; income from operations fell to $400 million from $728…
- 10-Q · April 26, 2023
- Humana reported Q1 2023 revenues of $26,742 million (up $2,772 million or 11.6% vs Q1 2022) and GAAP diluted EPS of $9.87 (up $2.58 or 35.4% vs $7.29 in Q1 2022). Operating income was $1,719 million (operating margin…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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