Humana Q2 2026 Results Beat, Cuts GAAP Outlook
Humana Q2 2026 results beat estimates on adjusted EPS and revenue, but a lower Star Ratings outlook trimmed GAAP EPS and may alter investor positioning.
KEY TAKEAWAYS
- Humana reported Q2 adjusted EPS $7.61 and revenue $40.9 billion, beating estimates.
- Company cut FY GAAP EPS guidance to at least $6.52 and affirmed adjusted guidance of at least $9.00.
- Lower Medicare Advantage Star Ratings reduce quality bonus payments and weigh on GAAP profit.
HIGH POTENTIAL TRADES SENT DIRECTLY TO YOUR INBOX
Add your email to receive our free daily newsletter. No spam, unsubscribe anytime.
Humana Inc. (HUM) reported Q2 2026 results on July 29, 2026, with revenue and adjusted earnings exceeding expectations. The company lowered its full-year GAAP earnings per share (EPS) outlook, citing weaker Medicare Advantage Star Ratings that will reduce quality bonus payments and pressure 2026 GAAP profit.
Quarter Results and Guidance
For the quarter ended June 30, Humana reported GAAP diluted EPS of $5.73, up from $4.51 a year earlier, and adjusted EPS of $7.61 versus $6.27. Net income rose to $694 million from $545 million, while total revenue increased about 26% to $40.9 billion. These results surpassed analyst estimates for adjusted earnings and revenue.
Despite the strong quarter, Humana cut its full-year GAAP EPS guidance to at least $6.52 from at least $8.36 but reaffirmed adjusted EPS guidance at at least $9.00 and consolidated revenue guidance of at least $160 billion. The company maintained its insurance-segment benefit ratio guidance at 92.75% plus or minus 25 basis points. Management attributed the GAAP outlook revision to a headwind from Medicare Advantage Star Ratings for Bonus Year 2026, which lowers quality bonus payments and weighs on GAAP profit. CEO Jim Rechtin said, "The first half of the year went well, and we’re right where we said we’d be at Investor Day last year."
Medicare Advantage Costs and Membership
Humana’s insurance-segment GAAP benefit ratio—the share of premiums spent on medical care—rose to 91.2% in Q2 2026 from 89.7% a year earlier, aligning with management’s expectation of slightly above 91%. The quarterly medical cost ratio matched analyst projections near 91.2%. Management said medical and pharmacy costs for new and existing members are tracking to high single-digit increases. Favorable inpatient care trends, especially among members engaged with value-based providers, contributed to cost control.
Individual Medicare Advantage membership grew about 23% during the quarter. Humana reaffirmed its expectation of roughly 25% full-year membership growth over 2025, driven by new sales, improved retention, and customer-led benefit design and service changes. The company’s CenterWell care and pharmacy unit expanded, adding 130,900 senior primary-care patients year-to-date and broadening its Medicaid footprint with a new Illinois contract.
The quarter highlighted how membership growth and CenterWell’s expansion support revenue and operating targets. Meanwhile, the reduction in bonus revenue tied to Star Ratings remains the primary factor behind the GAAP outlook cut and will influence Humana’s GAAP profitability through 2026.
