UnitedHealth(UNH) - 2025 Q2 - Quarterly Results

Executive Summary & 2025 Outlook Re-establishment Overall Company Performance and Strategic Direction UnitedHealth Group re-established its full-year 2025 outlook after a temporary suspension, reflecting first-half performance and anticipated care trends, aiming for a rigorous path back to high performance and strengthening operating disciplines for growth in 2026 and beyond, while continuing to support patients, physicians, and customers - UnitedHealth Group re-established its 2025 outlook, previously suspended on May 13, 2025, reflecting first-half performance and higher realized/anticipated care trends[3] - The company expects to return to earnings growth in 2026, focusing on strengthening operating disciplines[3] UnitedHealth Group 2025 Outlook The updated full-year 2025 outlook projects revenues between $445.5 billion and $448.0 billion, with net earnings of at least $14.65 per share and adjusted earnings of at least $16.00 per share, with Optum and UnitedHealthcare expected to contribute significantly to these figures UnitedHealth Group 2025 Outlook ($ in millions, except per share data) | UnitedHealth Group 2025 Outlook ($ in millions, except per share data) | Revenue | Operating Earnings | | :--- | :--- | :--- | | Optum | $266,000 - $267,500 | $12,550 - $12,850 | | UnitedHealthcare | $344,000 - $345,500 | $9,000 - $9,300 | | Eliminations | ($164,500) - ($165,000) | — | | Total UnitedHealth Group | $445,500 - $448,000 | $21,550 - $22,150 | | | Diluted | Adjusted (a) | | Net Earnings per Share | At least $14.65 | At least $16.00 | - Full Year 2025 Revenue Outlook is $445.5 Billion to $448.0 Billion[6] - Full Year 2025 Earnings Outlook is at least $14.65 Per Share, with Adjusted Earnings of at least $16.00 Per Share[6] Consolidated Financial Performance - Second Quarter 2025 Key Financial Highlights UnitedHealth Group reported second quarter 2025 revenues of $111.6 billion, a $12.8 billion year-over-year increase, though earnings from operations decreased to $5.2 billion and net margin declined to 3.1%, impacted by unfavorable discrete items and higher medical cost trends Quarterly Financial Performance (Consolidated) | Quarterly Financial Performance | June 30, 2025 | June 30, 2024 | March 31, 2025 | | :--- | :--- | :--- | :--- | | Revenues | $111.6 billion | $98.9 billion | $109.6 billion | | Earnings from Operations | $5.2 billion | $7.9 billion | $9.1 billion | | Net Margin | 3.1% | 4.3% | 5.7% | - Second quarter 2025 revenues grew $12.8 billion year-over-year to $111.6 billion, driven by growth in UnitedHealthcare and Optum[7] - Second quarter earnings from operations were $5.2 billion, and adjusted net earnings were $4.08 per share, including $1.2 billion of unfavorable discrete impacts[7] Operational Metrics and Trends The consolidated medical care ratio increased significantly to 89.4% due to medical cost trends exceeding pricing and Medicare funding reductions, while the operating cost ratio improved to 12.3%, benefiting from business mix changes and reduced cyberattack impacts, and the company increased its quarterly dividend by 5% and returned $4.5 billion to shareholders - The second quarter consolidated medical care ratio increased 430 basis points year-over-year to 89.4%, primarily due to medical cost trends significantly exceeding pricing trends and Medicare funding reductions[7] - The second quarter 2025 operating cost ratio improved to 12.3% (vs. 13.3% YoY), reflecting business mix, reduced impacts from the Change Healthcare cyberattack, and cost management activities[7] - The company increased its quarterly dividend rate by 5% to $2.21 and returned $4.5 billion to shareholders through dividends and share repurchases in Q2 2025[7] UnitedHealthcare Segment Overview and 2025 Outlook UnitedHealthcare provides global health care benefits, aiming to improve value, quality, and affordability, with 2025 expectations of revenues between $344.0 billion and $345.5 billion, operating earnings between $9.0 billion and $9.3 billion, and an anticipated increase of up to 1.135 million people served with medical benefits, primarily in senior and complex needs categories UnitedHealthcare 2025 Outlook | UnitedHealthcare 2025 Outlook | Revenues | Operating Earnings | Operating Margin | | :--- | :--- | :--- | :--- | | Employer & Individual | $79,600 - $80,100 | | | | Medicare & Retirement | $170,200 - $170,700 | | | | Community & State | $94,200 - $94,700 | | | | Total UnitedHealthcare Revenue | $344,000 - $345,500 | $9,000 - $9,300 | 2.6% - 2.7% | | UnitedHealthcare People Served | Growth in People Served | Total People Served | | | Total Medical | 1,135 | 50,480 | | - Full year 2025 revenues for UnitedHealthcare are expected to grow over 15% from 2024, ranging from $344.0 billion to $345.5 billion[10] - The number of people served with medical benefits is expected to increase by up to 1.135 million over 2024, led by serving seniors and people with complex needs[10] Second Quarter 2025 Business Results UnitedHealthcare's Q2 2025 revenue grew 17% year-over-year to $86.1 billion, serving 50 million people, but operating earnings significantly declined to $2.1 billion, with the operating margin falling to 2.4%, primarily due to higher-than-expected medical cost trends across businesses and Medicare funding reductions UnitedHealthcare Quarterly Financial Performance | Quarterly Financial Performance | June 30, 2025 | June 30, 2024 | March 31, 2025 | | :--- | :--- | :--- | :--- | | Revenues | $86.1 billion | $73.9 billion | $84.6 billion | | Earnings from Operations | $2.1 billion | $4.0 billion | $5.2 billion | | Operating Margin | 2.4% | 5.4% | 6.2% | - UnitedHealthcare's Q2 2025 revenue grew $12.2 billion or 17% year-over-year to $86.1 billion, serving 50 million people[12] - Q2 2025 operating earnings for UnitedHealthcare were $2.1 billion, down from $4.0 billion in Q2 2024, with operating margin declining to 2.4% (vs. 5.4% YoY) due to higher medical cost trends and Medicare funding reductions[12] Employer & Individual UnitedHealthcare Employer & Individual revenues increased to $19.8 billion in Q2 2025, driven by commercial offerings, and the number of people served grew by 400,000 year-over-year, primarily from employer self-funded offerings, despite attrition in individual and group fully-insured products - UnitedHealthcare Employer & Individual Q2 2025 revenues were $19.8 billion, up from $19.2 billion in Q2 2024, driven by commercial offerings[12] - People served in this segment increased by 400,000 year-over-year, with growth in employer self-funded offerings (695,000) partially offset by attrition in individual and group fully-insured products[12] Medicare & Retirement UnitedHealthcare Medicare & Retirement revenues grew 22% year-over-year to $42.6 billion in Q2 2025, primarily due to Part D IRA impacts and growth in people served, with individual and group Medicare Advantage offerings seeing significant growth, while Medicare Supplement and Standalone Part D plans contracted - UnitedHealthcare Medicare & Retirement Q2 2025 revenues of $42.6 billion grew $7.7 billion or 22% year-over-year, driven by Part D IRA impacts and growth in people served[12] - People served with individual and group Medicare Advantage offerings grew 505,000 through the first half of 2025[12] - Medicare Supplement contracted by 30,000 and Standalone Part D plans decreased by 250,000 through the first half of 2025[12] Community & State UnitedHealthcare Community & State revenues increased 20% year-over-year to $23.7 billion in Q2 2025, driven by growth in serving people with complex needs and Medicaid rate improvements, with members served growing by 55,000 through the first half of 2025 - UnitedHealthcare Community & State Q2 2025 revenues of $23.7 billion grew 20% year-over-year, driven by growth in serving people with complex needs and Medicaid rate improvements[12] - Members served grew by 55,000 through the first half of 2025 to a total of 7.5 million people[12] Optum Segment Overview and 2025 Outlook Optum, UnitedHealth Group's health services business, aims to improve health system performance through technology and data, with 2025 expectations of total revenues between $266.0 billion and $267.5 billion and operating earnings between $12.55 billion and $12.85 billion, though the CEO acknowledged that Optum's performance has not met expectations and is refocusing on fundamental execution Optum 2025 Outlook ($ in millions) | Optum 2025 Outlook ($ in millions) | Revenues | Operating Earnings | Operating Margin | | :--- | :--- | :--- | :--- | | Optum Health | $101,100 - $101,600 | $3,000 - $3,100 | 3.0% - 3.1% | | Optum Insight | $19,000 - $19,500 | $3,550 - $3,650 | 18.2% - 19.2% | | Optum Rx | $151,000 - $151,500 | $6,000 - $6,100 | 4.0% | | Eliminations | ($5,100) | | | | Total Optum | $266,000 - $267,500 | $12,550 - $12,850 | 4.7% - 4.8% | - Optum's CEO stated that performance has not met expectations and the focus is on fundamental execution to improve the health system[14] - Full year 2025 Optum Rx revenues are expected to be $151.0 billion to $151.5 billion, a significant increase from $133.2 billion a year ago, driven by strong customer growth[17] Second Quarter 2025 Business Results Optum's Q2 2025 revenue increased to $67.2 billion, but earnings from operations decreased to $3.1 billion, and the operating margin declined to 4.6%, with performance varying across its sub-segments, as Optum Health experienced a revenue decline, while Optum Insight and Optum Rx showed revenue growth Optum Quarterly Financial Performance | Quarterly Financial Performance | June 30, 2025 | June 30, 2024 | March 31, 2025 | | :--- | :--- | :--- | :--- | | Revenues | $67.2 billion | $62.9 billion | $63.9 billion | | Earnings from Operations | $3.1 billion | $3.9 billion | $3.9 billion | | Operating Margin | 4.6% | 6.2% | 6.1% | - Optum's Q2 2025 revenue was $67.2 billion, an increase from $62.9 billion in Q2 2024[19] - Q2 2025 earnings from operations for Optum were $3.1 billion, down from $3.9 billion in Q2 2024, with operating margin at 4.6% (vs. 6.2% YoY)[19] Optum Health Optum Health's Q2 2025 revenue decreased 7% year-over-year to $25.2 billion, primarily due to legacy customer contract revisions and Medicare Advantage funding cuts, with operating earnings significantly declining to $636 million and margins at 2.5%, impacted by higher medical care activity and underpriced health plan offerings - Optum Health's Q2 2025 revenue of $25.2 billion decreased $1.8 billion or 7% year-over-year, driven by legacy customer contract revisions and Medicare Advantage funding cuts[23] - Q2 2025 operating earnings were $636 million (vs. $1.9 billion YoY), with operating margins at 2.5% (vs. 7.1% YoY), due to higher medical care activity and underpriced health plan offerings[23] Optum Insight Optum Insight's Q2 2025 revenue increased 6% year-over-year to $4.8 billion, driven by its diverse portfolio, with operating earnings significantly improving to $998 million and margins at 20.7%, benefiting from reduced impacts of the Change Healthcare cyberattack, a favorable service mix, and improved operating efficiencies, and the contract revenue backlog stood at $32.1 billion - Optum Insight's Q2 2025 revenue of $4.8 billion increased 6% year-over-year, driven by a diverse portfolio of technology and data-driven offerings[23] - Q2 2025 operating earnings were $998 million (vs. $546 million YoY), with operating margins at 20.7% (vs. 12.0% YoY), due to reduced cyberattack impacts, favorable service mix, and improved operating efficiencies[23] - The contract revenue backlog was $32.1 billion[23] Optum Rx Optum Rx's Q2 2025 revenue increased 19% year-over-year to $38.5 billion, driven by new client growth and existing client expansion, with operating earnings remaining stable at $1.4 billion, but operating margins declining to 3.7% due to increased fulfillment of high-cost drugs and the initial launch of the private label business, and adjusted scripts grew to 414 million - Optum Rx's Q2 2025 revenue of $38.5 billion increased 19% year-over-year, driven by growth in new clients and expansion in existing client relationships[23] - Earnings from operations for Q2 2025 were $1.4 billion (stable YoY), but operating margins declined to 3.7% (vs. 4.3% YoY) due to higher revenue offset by increased fulfillment of high-cost drugs and the private label business launch[23] - Adjusted scripts grew to 414 million compared to 399 million last year[23] Company Information and Disclosures About UnitedHealth Group UnitedHealth Group operates through two distinct businesses: Optum, which delivers technology and data-aided care, and UnitedHealthcare, which offers a full range of health benefits, with a mission to help people live healthier lives and improve the health system - UnitedHealth Group operates through two complementary businesses: Optum (technology and data-aided care) and UnitedHealthcare (health benefits)[24] - The company's mission is to help people live healthier lives and make the health system work better for everyone[24] Earnings Conference Call UnitedHealth Group hosted a conference call for investors and analysts on July 29, 2025, at 8:00 a.m. ET to discuss results, strategy, and future outlook, with a webcast replay available on the Investor Relations page until August 12, 2025 - A conference call for investors and analysts was held on July 29, 2025, at 8:00 a.m. ET[25] - A live webcast and replay are available on the company's Investor Relations website[25] Non-GAAP Financial Information This release includes non-GAAP financial measures, such as adjusted net earnings per share, which are provided as a complement to GAAP results, with reconciliations to the most directly comparable GAAP measures included in the accompanying tables - The news release presents non-GAAP financial information, such as adjusted net earnings per share, as a complement to GAAP results[26][49] - Adjustments include intangible amortization, South American impacts, and direct response costs related to the cyberattack, as these are not considered representative of underlying business performance[49][50][51] Forward-Looking Statements The document contains forward-looking statements subject to various risks and uncertainties, including medical cost management, regulatory changes, cyberattacks, and competitive pressures, where actual results may differ materially from expectations, and the company does not undertake to update these statements except as required by law - The document contains forward-looking statements, identified by words like 'believe,' 'expect,' 'intend,' and 'estimate,' which involve risks and uncertainties[27] - Actual results could differ materially due to factors such as the ability to manage medical costs, changes in healthcare laws, cyberattacks, and competitive pressures[27] - The company does not undertake to update or revise any forward-looking statements, except as required by law[28] Supplemental Financial Schedules 2025 Outlook This section provides a detailed breakdown of the projected full-year 2025 financial outlook, including revenues and earnings from operations for Optum and UnitedHealthcare, consolidated totals, and key financial ratios such as medical care ratio, operating cost ratio, and tax rate UNITEDHEALTH GROUP SUPPLEMENTAL FINANCIAL INFORMATION - 2025 OUTLOOK | | Projected Year Ended December 31, 2025 | | :--- | :--- | | Revenues: | | | Optum | $266,000 - $267,500 | | UnitedHealthcare | 344,000 - 345,500 | | Eliminations | (164,500) - (165,000) | | Total consolidated revenue | $445,500 - $448,000 | | Earnings from operations: | | | Optum | $12,550 - $12,850 | | UnitedHealthcare | 9,000 - 9,300 | | Total consolidated operating earnings | $21,550 - $22,150 | | Net earnings attributable to UnitedHealth Group common shareholders | At least $13,350 | | Diluted earnings per share attributable to UnitedHealth Group common shareholders | At least $14.65 | | Adjusted earnings per share attributable to UnitedHealth Group common shareholders (a) | At least $16.00 | | Medical care ratio | 89.25% +/- 25 bps | | Operating cost ratio | 12.75% +/- 25 bps | | Operating margin | 4.8% - 5.0% | | Tax rate | ~18.5% | | Cash flows from operations | ~$16,000 | Condensed Consolidated Statements of Operations This statement presents the consolidated revenues, operating costs, earnings from operations, and net earnings for the three and six months ended June 30, 2025, compared to the same periods in 2024, highlighting changes in premiums, products, services, and various cost components Condensed Consolidated Statements of Operations | | Three Months Ended | | Six Months Ended | | | :--- | :--- | :--- | :--- | :--- | | | June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | | Revenues | | | | | | Premiums | $87,905 | $76,897 | $174,439 | $154,885 | | Products | 13,564 | 12,211 | 26,600 | 24,120 | | Services | 9,039 | 8,750 | 18,011 | 17,638 | | Investment and other income | 1,108 | 997 | 2,141 | 2,008 | | Total revenues | 111,616 | 98,855 | 221,191 | 198,651 | | Operating costs | | | | | | Medical costs | 78,585 | 65,458 | 151,996 | 131,193 | | Operating costs | 13,778 | 13,162 | 27,372 | 27,239 | | Cost of products sold | 13,019 | 11,340 | 25,409 | 22,396 | | Depreciation and amortization | 1,084 | 1,020 | 2,145 | 2,017 | | Total operating costs | 106,466 | 90,980 | 206,922 | 182,845 | | Earnings from operations | 5,150 | 7,875 | 14,269 | 15,806 | | Interest expense | (1,027) | (985) | (2,025) | (1,829) | | Loss on sale of subsidiary and subsidiaries held for sale | (41) | (1,225) | (56) | (8,311) | | Earnings before income taxes | 4,082 | 5,665 | 12,188 | 5,666 | | Provision for income taxes | (510) | (1,244) | (2,142) | (2,466) | | Net earnings | 3,572 | 4,421 | 10,046 | 3,200 | | Earnings attributable to noncontrolling interests | (166) | (205) | (348) | (393) | | Net earnings attributable to UnitedHealth Group common shareholders | $3,406 | $4,216 | $9,698 | $2,807 | | Diluted earnings per share attributable to UnitedHealth Group common shareholders | $3.74 | $4.54 | $10.61 | $3.02 | | Adjusted earnings per share attributable to UnitedHealth Group common shareholders (a) | $4.08 | $6.80 | $11.29 | $13.71 | | Diluted weighted-average common shares outstanding | 910 | 928 | 914 | 929 | Condensed Consolidated Balance Sheets This statement provides a snapshot of the company's financial position as of June 30, 2025, compared to December 31, 2024, detailing assets, liabilities, redeemable noncontrolling interests, and equity Condensed Consolidated Balance Sheets | | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and short-term investments | $32,020 | $29,113 | | Accounts receivable, net | 24,142 | 22,365 | | Other current assets | 37,537 | 34,301 | | Total current assets | 93,699 | 85,779 | | Long-term investments | 52,466 | 52,354 | | Other long-term assets | 162,408 | 160,145 | | Total assets | $308,573 | $298,278 | | Liabilities, redeemable noncontrolling interests and equity | | | | Medical costs payable | $38,427 | $34,224 | | Short-term borrowings and current maturities of long-term debt | 5,698 | 4,545 | | Other current liabilities | 66,656 | 65,000 | | Total current liabilities | 110,781 | 103,769 | | Long-term debt, less current maturities | 73,495 | 72,359 | | Other long-term liabilities | 19,513 | 19,559 | | Redeemable noncontrolling interests | 4,315 | 4,323 | | Equity | 100,469 | 98,268 | | Total liabilities, redeemable noncontrolling interests and equity | $308,573 | $298,278 | Condensed Consolidated Statements of Cash Flows This statement outlines the cash flows from operating, investing, and financing activities for the six months ended June 30, 2025, compared to the same period in 2024, showing the net increase in cash and cash equivalents Condensed Consolidated Statements of Cash Flows | | Six Months Ended | | | :--- | :--- | :--- | | | June 30, 2025 | June 30, 2024 | | Operating Activities | | | | Net earnings | $10,046 | $3,200 | | Cash flows from operating activities | 12,644 | 7,890 | | Investing Activities | | | | Cash flows used for investing activities | (1,516) | (13,757) | | Financing Activities | | | | Cash flows (used for) from financing activities | (7,848) | 7,035 | | Net increase in cash and cash equivalents | 3,284 | 859 | | Cash and cash equivalents, end of period | $28,596 | $26,286 | Supplemental Financial Information - Businesses This section provides a detailed breakdown of revenues, earnings from operations, and operating margins for UnitedHealthcare and Optum segments, including their sub-segments, for the three and six months ended June 30, 2025, and 2024 Supplemental Financial Information - Businesses | | Three Months Ended | | Six Months Ended | | | :--- | :--- | :--- | :--- | :--- | | | June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | | Revenues | | | | | | UnitedHealthcare | $86,103 | $73,866 | $170,720 | $149,223 | | Optum | 67,225 | 62,879 | 131,110 | 123,931 | | Total consolidated revenues | $111,616 | $98,855 | $221,191 | $198,651 | | Earnings from Operations | | | | | | UnitedHealthcare | $2,075 | $4,004 | $7,301 | $8,399 | | Optum (a) | 3,075 | 3,871 | 6,968 | 7,407 | | Total consolidated earnings from operations | $5,150 | $7,875 | $14,269 | $15,806 | | Operating Margin | | | | | | UnitedHealthcare | 2.4 % | 5.4 % | 4.3 % | 5.6 % | | Optum | 4.6 % | 6.2 % | 5.3 % | 6.0 % | | Consolidated operating margin | 4.6 % | 8.0 % | 6.5 % | 8.0 % | Supplemental Financial Information - People Served and Performance Metrics This section provides key operational metrics, including the number of people served by UnitedHealthcare across various segments (Commercial, Medicare Advantage, Medicaid, Medicare Supplement) and Optum's performance metrics such as consumers served, contract backlog, and adjusted scripts UnitedHealthcare Customer Profile (in thousands) | People Served | June 30, 2025 | March 31, 2025 | December 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Commercial: | | | | | | Risk-based | 8,440 | 8,410 | 8,845 | 8,735 | | Fee-based | 21,530 | 21,590 | 20,885 | 20,835 | | Total Commercial | 29,970 | 30,000 | 29,730 | 29,570 | | Medicare Advantage | 8,350 | 8,245 | 7,845 | 7,770 | | Medicaid | 7,490 | 7,570 | 7,435 | 7,410 | | Medicare Supplement (Standardized) | 4,305 | 4,310 | 4,335 | 4,335 | | Total Community and Senior | 20,145 | 20,125 | 19,615 | 19,515 | | Total UnitedHealthcare - Medical | 50,115 | 50,125 | 49,345 | 49,085 | | Supplemental Data | | | | | | Medicare Part D stand-alone | 2,800 | 2,835 | 3,050 | 3,065 | | South American businesses held for sale | 1,165 | 1,160 | 1,330 | 1,330 | Optum Performance Metrics | Optum Performance Metrics | June 30, 2025 | March 31, 2025 | December 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Optum Health Consumers Served (in millions) | 98 | 99 | 100 | 104 | | Optum Insight Contract Backlog (in billions) | $32.1 | $32.9 | $32.8 | $32.6 | | Optum Rx Quarterly Adjusted Scripts (in millions) | 414 | 408 | 422 | 399 | Reconciliation of Non-GAAP Financial Measure This section provides a reconciliation of adjusted net earnings per share, a non-GAAP financial measure, to the most directly comparable GAAP measure, detailing adjustments for intangible amortization, South American impacts, and direct response costs related to the Change Healthcare cyberattack, explaining why these exclusions provide a more useful comparison of underlying business performance - Adjusted net earnings per share is a non-GAAP financial measure provided to complement GAAP results, with adjustments for intangible amortization, South American impacts, and direct response costs from the cyberattack[49][50][51] Reconciliation of Adjusted Net Earnings Per Share | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Projected Year Ended December 31, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Net earnings attributable to UnitedHealth Group common shareholders | $3,406 | $4,216 | $9,698 | $2,807 | At least $13,350 | | Intangible amortization | 409 | 417 | 826 | 816 | ~1,625 | | Tax effect of intangible amortization | (99) | (103) | (201) | (201) | ~(400) | | South American impacts | — | 1,340 | — | 8,426 | — | | Tax effect of South American impacts | — | (157) | — | (157) | — | | Direct response costs - cyberattack | — | 776 | — | 1,369 | — | | Tax effect of direct response costs - cyberattack | — | (182) | — | (323) | — | | Adjusted net earnings attributable to UnitedHealth Group common shareholders | $3,716 | $6,307 | $10,323 | $12,737 | At least $14,575 | | Diluted earnings per share | $3.74 | $4.54 | $10.61 | $3.02 | At least $14.65 | | Adjusted diluted earnings per share | $4.08 | $6.80 | $11.29 | $13.71 | At least $16.00 |