Humana(US:HUM)2026-02-11 11:40Financial Performance - Humana reported a 4Q25 net loss per share of $6.61 on a GAAP basis and an adjusted net loss per share of $3.96, with FY 2025 EPS of $9.84 on a GAAP basis and $17.14 on an adjusted basis[4]. - FY 2025 consolidated revenues were $129.664 billion, up from $117.761 billion in FY 2024, reflecting a year-over-year increase of approximately 10.2%[10]. - Humana Inc. reported consolidated revenues of $32,515 million for Q4 2025, a 11.8% increase from $29,213 million in Q4 2024[61]. - The adjusted consolidated revenues for FY 2025 were $129,789 million, up 10.7% from $117,210 million in FY 2024[61]. - The net loss per share for Q4 2025 was $6.61, compared to a loss of $5.76 per share in Q4 2024[63]. - Operating cash flows for FY 2025 were $921 million, significantly lower than $2,966 million in FY 2024[65]. - The company reported a net income of $1,203 million for FY 2025, slightly down from $1,214 million in FY 2024[65]. - For the year ended December 31, 2025, total revenues were $129,664 million, compared to $117,761 million in 2024, marking a growth of 10.1%[68][69]. - The income from operations for the year ended December 31, 2025, was $2,704 million, compared to $2,562 million in 2024, reflecting an increase of 5.5%[68][69]. Membership Growth - The company expects approximately 25% growth in individual Medicare Advantage membership for FY 2026, driven by new sales and improved retention strategies[4]. - CenterWell Senior Primary Care grew by 100,600 patients, or over 25%, in 2025, including approximately 32,000 patients from the acquisition of The Villages Health[4]. - The individual Medicare Advantage membership increased by 20% to approximately 6,280,000 in January 2026, reflecting net membership gains during the 2026 Annual Election period[31]. - Group Medicare Advantage membership rose by 28% to approximately 730,000 in January 2026, driven by net membership additions from the 2026 selling season[32]. - As of December 31, 2025, Humana's total Medicare Advantage membership reached 5,817.7 thousand, a decrease of 6.3% from 6,207.5 thousand in 2024[70]. - The Individual Medicare Advantage membership included 760,500 Dual Eligible Special Need Plans (D-SNP) members, reflecting a net decrease of 176,600 members or 19% from 937,100 in 2024[71]. - The company anticipates a growth of approximately 25% in year-end medical membership and an increase of about 150,000 in Group Medicare Advantage membership for FY 2026[57]. Cost and Efficiency - The GAAP operating cost ratio improved to 13.7% in 4Q25 from 14.4% in 4Q24, driven by higher premiums and membership growth in state-based contracts[10]. - The operating cost ratio for the insurance segment improved slightly to 10.8% in 4Q25 from 11.0% in 4Q24, while FY 2025 was 9.1%, down from 9.2% in FY 2024[21]. - The operating cost ratio for the year ended December 31, 2025, was 12.0%, compared to 11.8% in 2024, indicating a slight increase[68][69]. - The company anticipates continued administrative cost efficiencies and operating leverage from increased revenues due to the impact of the IRA[22]. - The consolidated operating cost ratio is expected to be 10.0% +/- 25 basis points for FY 2026[57]. Insurance Segment Performance - The 4Q25 Insurance segment GAAP benefit ratio was 93.1%, while the FY 2025 benefit ratio was 90.4%, slightly better than the guidance range of 90.1% to 90.5%[4]. - Insurance segment revenues for 4Q25 reached $31,343 million, a 11.5% increase from $28,170 million in 4Q24, and FY 2025 revenues were $124,563 million, up 9.5% from $113,764 million in FY 2024[21]. - The benefit ratio for the insurance segment was 93.1% in 4Q25, compared to 92.1% in 4Q24, and remained stable at 90.4% for both FY 2025 and FY 2024[21]. - Insurance segment reported a GAAP loss from operations of $927 million in 4Q25, compared to a loss of $646 million in 4Q24, while adjusted (non-GAAP) loss was $923 million[48]. - The benefit ratio for the insurance segment is projected at 92.75% +/- 25 basis points for FY 2026[57]. Debt and Capitalization - Humana's debt-to-total capitalization increased to 41.1% at December 31, 2025, up from 40.3% at September 30, 2025, primarily due to the net loss in 4Q25[18]. - The debt-to-total capitalization ratio improved to 41.1% in FY 2025 from 41.9% in FY 2024[64]. Future Projections - Humana anticipates FY 2026 GAAP EPS guidance of at least $8.89 and at least $9.00 on an adjusted basis, reflecting a year-over-year decline due to Star Ratings headwinds[8]. - For FY 2026, the company projects total revenues of at least $160 billion, with the insurance segment expected to generate at least $155 billion[57]. - The effective tax rate for FY 2026 is projected to be approximately 25.5%[57]. - Cash flows from operations are expected to be between $2.5 billion and $2.9 billion for FY 2026[57]. CenterWell Segment Performance - CenterWell segment revenues for 4Q25 were $5,962 million, a 16.2% increase from $5,130 million in 4Q24, and FY 2025 revenues were $22,473 million, up 12.7% from $19,936 million in FY 2024[34]. - CenterWell segment's GAAP income from operations for FY 2025 was $1.339 billion, slightly up from $1.329 billion in FY 2024, with adjusted (non-GAAP) income at $1.558 billion[50]. - The operating cost ratio for the CenterWell segment increased to 94.2% in 4Q25 from 92.5% in 4Q24, while FY 2025 was 93.1%, up from 92.2% in FY 2024[34]. Operational Metrics - Days in claims payable (DCP) decreased to 31.9 days at December 31, 2025, down from 37.8 days at December 31, 2024[18]. - Total assets increased to $48,909 million as of December 31, 2025, compared to $46,479 million a year earlier[64]. - The total primary care patients served increased to 491,100 as of December 31, 2025, a year-over-year growth of 25.8% from 390,500 in 2024[75]. - The total admissions for same-store home solutions grew by 2.3% year-over-year, reaching 428,342 for the year ended December 31, 2025[77]. - The generic dispense rate for Medicare was 90.5% for the year ended December 31, 2025, slightly down from 91.0% in 2024[74]. - The CenterWell segment's pharmacy solutions generated $12,959 million in revenue for the year ended December 31, 2025, up from $11,628 million in 2024, marking a 11.4% increase[74].