01—Abstract
Summary
Summary of the 10-Q filed April 29, 2026. Cited figures are marked; the original filing is the authoritative source.
Humana Inc. reported first-quarter 2026 net income attributable to Humana of $1.19 billiona, or $9.83 per diluted common share, compared with $1.24 billion, or $10.30 per diluted common share, in the 2025 quarter.
Total revenues rose to $39.6 billionb from $32.1 billion, driven primarily by premiums revenue of $37.7 billion, up from $30.5 billion, reflecting Medicare membership growth and higher per member premiums. Earnings were held back by a higher benefit ratio of 89.4% versus 87.0%, which management attributed mainly to the Bonus Year 2026 Star Ratings revenue headwind and growth in individual Medicare Advantage membership. Income from operations fell to $1.75 billion from $2.01 billion.
Put/call valuation adjustments and value creation initiative charges ($98 millionc in 2026) affected comparability. Membership grew sharply: total medical membership reached 17.7 million, up 19.4%, with stand-alone PDP membership up 58.7% and individual Medicare Advantage membership up 22.6%. The CenterWell segment's external services revenue rose 32.0%, largely from primary care, including the MaxHealth acquisition completed February 13, 2026 for approximately $908 million net of cash acquired.
Cash flow from operations was $1.25 billiond versus $331 million a year earlier, and cash and equivalents rose to $4.95 billion. Leverage increased during the quarter.
Humana issued $1.0 billion of 6.625% junior subordinated notes due 2056 with net proceeds of about $990 million, and short-term debt rose to $1.72 billion, including $700 million of commercial paper. The company also disclosed ongoing RADV audit and Final RADV Rule litigation, a pending Star Ratings appeal, and several DOJ and class action matters, none of which carry an estimate of loss beyond amounts accrued.
02—Key points
Key Highlights
- Net income attributable to Humana was $1.19 billion ($9.83 diluted EPS) versus $1.24 billion ($10.30) in Q1 2025.
- Total revenues increased to $39.65 billion from $32.11 billion, with premiums revenue up 23.6% to $37.71 billion.
- Benefit ratio rose to 89.4% from 87.0%, primarily reflecting the Bonus Year 2026 Star Ratings headwind and new individual MA members running at higher benefit ratios.
- Total medical membership grew 19.4% to 17.7 million, led by a 58.7% increase in stand-alone PDP members and a 22.6% increase in individual Medicare Advantage members.
- Operating cash flow improved to $1.25 billion from $331 million, driven by favorable working capital activity.
- Humana issued $1.0 billion of 6.625% junior subordinated notes due 2056 (about $990 million net proceeds) and carried $700 million of commercial paper at quarter end.
- Unresolved RADV audit litigation, including the appeal of the vacated Final RADV Rule before the Fifth Circuit, remains a material risk the filing identifies.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed April 29, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $39.65B$32.11B | +23.5% |
| SG&A Expenses | $4.02B$3.38B | +19.1% |
| Operating Income | $1.75B$2.01B | −12.9% |
| Net Income | $1.19B$1.24B | −4.7% |
| EPS (Basic) | $9.85$10.31 | −4.5% |
| EPS (Diluted) | $9.83$10.30 | −4.6% |
| Shares Outstanding (Basic) | 120.33M120.67M | −0.3% |
| Shares Outstanding (Diluted) | 120.65M120.84M | −0.2% |
05—Questions
Frequently Asked Questions
Why did earnings per share decline year over year?
Diluted EPS fell to $9.83 from $10.30. Income from operations declined to $1.75 billion from $2.01 billion, mainly because the benefit ratio rose to 89.4% from 87.0%. The filing attributes this to the Bonus Year 2026 Star Ratings revenue headwind, growth in new individual MA members who run at higher benefit ratios, and lower favorable prior-period reserve development ($389 million in 2026 versus $477 million in 2025). Other income also shifted, with other (income) expense, net of $(34) million compared with $163 million, reflecting put/call valuation adjustments.
How strong was membership growth?
Total medical membership reached 17,711,400 at March 31, 2026, up 2,872,400 or 19.4% from a year earlier. Individual Medicare Advantage members rose to 6,393,300, and stand-alone PDP members rose to 3,860,600, an increase of 58.7%. Medicare Supplement membership and specialty membership also grew, while state-based contracts and other membership declined 2.9%.
What did Humana do with its capital structure this quarter?
Humana issued $1.0 billion of junior subordinated notes at 6.625% due September 15, 2056, with net proceeds of about $990 million. It also entered a Rule 10b5-1 plan to repurchase portions of several senior note series through July 31, 2026, and repurchased $10 million of 1.350% notes due 2027. Commercial paper outstanding was $700 million at quarter end. Total debt capacity under its revolving credit agreement was $4.990 billion, and the debt-to-capitalization ratio was 43.0% against a 60% covenant.
What are the main legal and regulatory risks disclosed?
The most significant item is the RADV audit litigation. A district court vacated the Final RADV Rule on September 25, 2025, and the government has appealed to the Fifth Circuit. CMS has also begun RADV audits for payment years 2018 through 2020. Other matters include a Star Ratings appeal, a Department of Justice False Claims Act complaint in partial intervention, a certified TCPA class action, and securities and derivative lawsuits. The filing states that no estimate of loss beyond accrued amounts can be made, and that outcomes could have a material adverse effect.
How did the MaxHealth acquisition affect results?
Humana acquired MaxHealth, a Florida primary care organization, on February 13, 2026, for about $908 million net of cash acquired. The preliminary purchase price allocation included about $800 million of goodwill and $71 million of other intangible assets. CenterWell external services revenue rose 32.0%, and management cited transaction and integration costs as a factor in the CenterWell operating cost ratio increasing to 94.5% from 91.1%.
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