01—Abstract
Summary
Summary of the 10-Q filed November 5, 2025. Cited figures are marked; the original filing is the authoritative source.
Humana Inc. reported net income attributable to Humana of $195 milliona, or $1.62 per diluted common share, for the three months ended September 30, 2025, compared with $480 million, or $3.98 per diluted share, in the 2024 quarter.
For the nine months ended September 30, 2025, net income attributable to Humana was $1.98 billionb, or $16.43 per diluted share, versus $1.90 billion, or $15.72 per diluted share, a year earlier. Total revenues rose to $32.6 billion in the quarter from $29.4 billion, and to $97.1 billion for the nine months from $88.5 billion. The company attributes the comparisons to put/call valuation adjustments on non-consolidating minority interest investments, value creation initiative charges ($267 million in the quarter, $320 million year to date), a $63 million loss on sale of a business, a $32 million indefinite-lived intangible impairment, and a $15 million litigation settlement expense.
The benefit ratio rose to 91.1% in the quarter from 89.9%, and the operating cost ratio rose to 12.6% from 11.5%. Cash and cash equivalents increased to $5.4 billionc at September 30, 2025 from $2.2 billion at December 31, 2024, and operating cash flow for the nine months was $2.6 billion versus $3.5 billion, which the filing attributes mainly to unfavorable working capital. Long-term debt rose to $12.6 billion from $11.1 billion after new senior notes were issued in March 2025.
The company's Medicare Advantage individual membership declined 7.5%d year over year, while Medicare stand-alone PDP and state-based contract membership grew. The filing also discloses that on September 25, 2025, a court vacated CMS's Final RADV Rule, and that a Star Ratings lawsuit was rejected by the court on October 14, 2025, with Humana considering its options.
The company reported $1.9 billion of parent-company cash at quarter end and a remaining share repurchase authorization of $2.8 billion as of November 4, 2025. Management states it believes existing resources are adequate for at least the next twelve months.
02—Key points
Key Highlights
- Diluted EPS of $1.62 for Q3 2025 versus $3.98 in Q3 2024; nine-month diluted EPS of $16.43 versus $15.72.
- Total revenues of $32.6 billion in Q3 2025 (up from $29.4 billion) and $97.1 billion year to date (up from $88.5 billion).
- Value creation initiative charges of $267 million in Q3 2025 and $320 million year to date, plus a $63 million loss on sale of a business.
- Benefit ratio rose to 91.1% in Q3 2025 from 89.9%; operating cost ratio rose to 12.6% from 11.5%.
- Individual Medicare Advantage membership fell 421,900 members (7.5%) to 5,237,300, while stand-alone PDP membership grew 5.6%.
- Cash and cash equivalents rose to $5.4 billion from $2.2 billion at year-end 2024; operating cash flow fell to $2.6 billion from $3.5 billion for the nine months.
- On September 25, 2025, a court vacated the Final RADV Rule; the company's 2025 Star Ratings challenge was rejected on October 14, 2025.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2025filed November 5, 2025Financial Statements
Q3 FY2025 against Q3 FY2024
| Line item | Q3 FY2025Q3 FY2024 | Change |
|---|---|---|
| Revenue | $32.65B$29.40B | +11.1% |
| SG&A Expenses | $4.08B$3.34B | +22.3% |
| Operating Income | $400.00M$728.00M | −45.1% |
| Net Income | $195.00M$480.00M | −59.4% |
| EPS (Basic) | $1.62$3.99 | −59.4% |
| EPS (Diluted) | $1.62$3.98 | −59.3% |
| Shares Outstanding (Basic) | 120.27M120.41M | −0.1% |
| Shares Outstanding (Diluted) | 120.75M120.76M | 0.0% |
05—Questions
Frequently Asked Questions
Why did Humana's earnings decline sharply in the third quarter of 2025?
Net income attributable to Humana fell to $195 million from $480 million. The filing cites higher benefits expense relative to premiums (benefit ratio of 91.1% versus 89.9%), higher operating costs including $267 million of value creation initiative charges, a $63 million loss on sale of a business, and a $97 million put/call valuation adjustment on non-consolidating minority interest investments.
How did membership change across Humana's segments?
Individual Medicare Advantage membership decreased 421,900 members, or 7.5%, to 5,237,300, reflecting the exit of certain unprofitable plans and counties. Medicare stand-alone PDP membership rose 5.6% and state-based contracts and other membership rose 14.7%. Military services membership fell 23.0%.
What happened with the RADV audit and Star Ratings litigation?
On September 25, 2025, the court granted Humana's motion for summary judgment and vacated the Final RADV Rule as procedurally invalid under the APA. Separately, on October 14, 2025, the court rejected Humana's challenge to its 2025 Star Ratings; the company is considering its options and states there is no assurance it will ultimately prevail.
How is Humana's liquidity and capital position?
Cash and cash equivalents were $5.4 billion at September 30, 2025, and parent-company cash was $1.9 billion. Long-term debt was $12.6 billion, with a debt-to-capitalization ratio of 40.3% against a covenant maximum of 60%. The company had $4.99 billion of remaining borrowing capacity under its revolving credit agreement and $2.8 billion of remaining share repurchase authorization.
06—Continue