tapebrief
HUM · Q1 2026

HUM · Q2 2026 Earnings

Cautious

Humana

Reported July 29, 2026

30-second summary

Humana beat on Q2 revenue ($40.87B, +26.1% YoY, +0.8% vs $40.56B consensus) and non-GAAP EPS ($7.61 vs $6.97, +9.2%), with the Insurance segment benefit ratio at 91.2% — well below the 92.75% ±25bps FY guide midpoint and consistent with new-cohort costs not yet stressing the book. The substantive change is a second consecutive mid-year GAAP EPS cut: FY2026 GAAP now "at least $6.52," down $1.84 from the $8.36 set in Q1 (which itself was cut $0.53 from $8.89 at Q4). Non-GAAP EPS held at $9.00+, MA growth held at ~25%, and the benefit-ratio range held — meaning the GAAP/non-GAAP wedge has now widened to $2.48/share in FY2026 (vs $0.64 at Q1 and $7.30 absolute in FY2025), with the incremental gap absorbed via items management classifies as non-recurring.

Headline numbers

EPS

Q2 FY2026

$7.61

+9.2% vs est.

Revenue

Q2 FY2026

$40.87B

+26.1% YoY

+0.8% vs est.

Operating margin

Q2 FY2026

3.3%

Key financials

Q2 FY2026
MetricQ2 FY2026Q2 FY2025YoYQ1 FY2026QoQ
Revenue$40.87B$32.39B+26.2%$39.65B+3.1%
EPS$7.61$6.27+21.4%$10.31-26.2%
Operating margin3.3%——4.4%-110bps

Guidance

Guidance broadly reaffirmed except for significant GAAP EPS downward revision to $6.52+ (from $8.36+) reflecting Star Ratings headwinds, while Non-GAAP EPS remains at $9.00+.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Changes to prior guidance

MetricPeriodPrior guideNew guideΔResult
GAAP EPS
FY2026
at least $8.36at least $6.52-$1.84 below prior guideLowered

Reaffirmed unchanged this quarter: Consolidated Revenue (at least $160 billion), Insurance Segment Revenue (at least $155 billion), CenterWell Segment Revenue (at least $25 billion), Individual Medicare Advantage Membership Growth (approximately 25 percent), Insurance Segment Benefit Ratio (92.75% +/- 25 bps), Consolidated Operating Cost Ratio (10.0% +/- 25 bps), CenterWell Segment Income from Operations (GAAP) ($1.3B to $1.8B), CenterWell Segment Income from Operations (Non-GAAP) ($1.5B to $2.0B), Non-GAAP EPS (at least $9.00)

Segment KPIs

Q2 FY2026
SegmentQ2 FY2026Q2 FY2025YoY
Insurance Segment$39.14B$31.094B+25.9%
CenterWell Segment$6.79B$5.537B+22.6%
Individual Medicare Advantage$28.875B$22.764B+26.8%
Medicare Stand-alone PDP$2.995B—+74.1%
Group Medicare Advantage$2.851B$2.26B+26.2%

Other KPIs

Q2 FY2026
SegmentQ2 FY2026Q2 FY2025YoY
Insurance Segment Benefit Ratio91.2%89.9%—
Insurance Segment Operating Cost Ratio7.1%8.3%—
Individual Medicare Advantage Membership6,453.7K5,229.3 thousand members—
Total Medicare Advantage Membership7,180.9K——
Medicare Stand-alone PDP Membership3,946.4K——
CenterWell Senior Primary Care YTD Growth130,900 patients (+27%)——
Individual MA Membership Growth (YoY)+23.4% vs Q2 2025——
Days in Claims Payable (DCP)33.1 days——

Management tone

No transcript was available for this quarter; tone shifts inferred from the press release, guidance change pattern, and prior-quarter arc.

Q2 2025 cautious bounded confidence → Q3 2025 retention/LTV pivot → Q4 2025 explicit 2026 trough acknowledgment → Q1 2026 margin-first 2027 bid framework → Q2 2026 second GAAP cut as Stars charge stack proves recurring.

The Q1 brief flagged that the Q4 GAAP charge stack (impairments, value-creation costs, put/call adjustments, loss on sale of business) was being treated as non-recurring while widening the FY2026 GAAP/non-GAAP wedge — and asked whether management would decompose it. Two quarters later, no decomposition has arrived, and the GAAP guide has been cut a second time. The persistent Q1→Q2 pattern of "Stars headwind net of mitigation, non-GAAP unchanged" is now a three-quarter drumbeat, and each cut has been larger than the prior. The tone shift is not in what management is saying but in what the numbers say against what management said before: the "net of mitigation" framing implied a bounded, one-time reset at Q1, and the Q2 cut invalidates that read.

The operational side of the print pushes the opposite direction. Insurance benefit ratio at 91.2% with YTD comfortably inside the corridor, Insurance OCR at 7.1%, and CenterWell primary care patient growth running +27% YTD are all better-than-plan indicators. The company is executing on the operational levers that support the 2028 ≥3% margin target while simultaneously conceding that the FY2026 GAAP earnings floor keeps sliding. That combination — operational beats plus recurring GAAP cuts — is the tension of this quarter.

The reaffirmation of every non-GAAP line item is itself a tone signal: management is doubling down on the $9.00+ adjusted number as the trade credentialing the 2028 story, while allowing the GAAP number to absorb whatever Stars-related items appear each quarter. Whether the market accepts that framing indefinitely is the second-order question this print does not answer.

Answers to last quarter's watch list

2H benefit ratio step-up to the 92.75% ±25bps FY range — Q2 benefit ratio printed 91.2%, up 180bps from Q1's 89.4% but still 155bps below the FY guide midpoint. YTD is now comfortably inside the corridor, and the mechanical 2H exit run-rate needed to land the FY range has moderated from ~94%+ (implied at Q1) to a still-elevated but achievable band. Management reaffirmed the range.
Continue monitoring
Whether the consolidated operating cost ratio breaches the 10.25% ceiling — Insurance segment operating cost ratio improved to 7.1% in Q2 from 7.3% in Q1. The consolidated GAAP figure was not isolated in the disclosures reviewed, but the direction of travel in the largest cost pool argues against a breach.
Continue monitoring
2027 bid disclosure specifics — no county-footprint or benefit-redesign specifics disclosed on this print. Management continues to reaffirm "approximately 25 percent" FY2026 MA growth and cites "continued strategic expansion of CenterWell and Medicaid footprints" but has not quantified the 2027 posture.
Not resolved
Resolution of the GAAP/non-GAAP wedge — the wedge has widened materially. Prior FY2026 spread was $0.64 ($9.00 non-GAAP vs $8.36 GAAP); the new spread is $2.48 ($9.00 vs $6.52), with the incremental $1.84 GAAP cut absorbed via items still being classified as non-recurring. No explicit decomposition of value creation charges, impairments, or put/call adjustments has been provided this quarter.
Resolved negatively
IBNR adequacy as the new-member cohort ages — days in claims payable moved to 33.1 in Q2 from 33.9 in Q1, a partial reversal of the Q1 build. No adverse or favorable PYD was disclosed on this print. With benefit ratio tracking below guidance, the Q1 reserving posture appears to have been adequate rather than over-reserved.
Continue monitoring
Updated quantification of the 2026 Stars headwind — no gross-headwind, mitigation magnitude, or 4+ star contract mix disclosure on this print. Management continues to use the "net of mitigation" framing, and the $1.84 additional GAAP cut suggests either the gross headwind is larger than sized or the mitigation is landing lighter — but the components remain undisclosed. The $3.5B net figure given at Q4 FY2025 remains the only quantitative anchor.
Not resolved

What to watch into next quarter

Whether the GAAP EPS guide is cut a third time on the Q3 print — cuts have compounded ($0.53 at Q1, $1.84 at Q2). Any further reduction would definitively invalidate the "one-time reset" framing management has used since Q4 FY2025. Watch whether the $6.52 floor holds through year-end or whether a Q3 revision brings the FY GAAP number below $6.00.

Explicit decomposition of the $2.48 FY2026 GAAP/non-GAAP wedge — with the spread now nearly 4x wider than a quarter ago, the 10-Q and any Q3 supplementary disclosure should identify the specific value creation, impairment, and put/call components. If the decomposition shows the wedge is dominated by recurring items, the non-GAAP $9.00 defense weakens materially.

Q3 Insurance benefit ratio landing zone — Q3 FY2025 printed 91.1% pre-guided; the FY2026 analogue needs to be in a ~92–93% band to keep YTD inside the 92.75% ±25bps corridor. Watch whether new-cohort claims development stresses the ratio above the guide midpoint or whether the current cushion (155bps below midpoint at Q2) persists.

Individual MA membership trajectory into the AEP2027 setup — Q2 individual MA at 6,453.7k, +23.4% YoY vs Q2 FY2025's 5,229.3k, is tracking in line with the ~25% FY target. Watch whether the Q3 disclosure includes any early 2027 bid posture (county exits, benefit adjustments) that would signal the "growth is a distant third" framing translating into quantified headcount pressure.

CenterWell Primary Care patient growth sustainability — YTD +130,900 patients (+27%) is running well ahead of the FY2025 full-year +100,600 organic pace. Watch whether Q3 sustains the trajectory (implying a >200k organic FY2026 outcome) or whether growth normalizes back toward the historical 50–70k annual range.

Q3 Stars disclosure milestone — management flagged the hybrid season completion in Q2 FY2026 as when more Bonus Year 2028 Stars color would be shared, and the October CMS release traditionally drives Bonus Year 2027 disclosure. Watch whether Q3 breaks the quiet period with quantitative 4+ star contract mix updates or reverts to the "net of mitigation" formulation.

Sources

  1. Humana Q2 2026 detailed press release (8-K Ex. 99.2): https://www.sec.gov/Archives/edgar/data/49071/000004907126000045/hum-2026q2xex99x2detailedx.htm
  2. Consensus estimates: tradefeeds, as of 2026-07-29

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