Humana Inc. reported third‑quarter 2025 results on November 5, 2025, posting revenue of $32.65 billion—an 11.0% year‑over‑year increase—while adjusted earnings per share rose to $3.24, beating the consensus estimate of $2.91 by $0.33 (or 11.4%). The company’s Medicare Advantage benefit ratio climbed to 91.1% from 89.9% a year earlier, and the company confirmed that its Medicare Advantage enrollment remains near the 5.2 million‑member level, with a revised forecast of a 425,000‑member decline for FY 2025.
The revenue growth was driven largely by the CenterWell primary‑care and pharmacy businesses, which added 56,600 patients—about 15% growth—while Medicare Advantage mix shifted toward higher‑margin stand‑alone prescription drug plans and state‑based contracts. Higher per‑member premiums and a favorable mix shift offset modest headwinds in legacy Medicare Advantage contracts, allowing the company to maintain a strong top line despite rising medical costs.
Margin performance reflected a tightening cost environment. The benefit ratio’s rise to 91.1% indicates medical costs consumed a larger share of premiums, while operating expenses increased 11.75% year‑over‑year, driven by higher provider and pharmacy costs. The company’s operating income margin contracted slightly, but the adjusted earnings beat was largely attributable to disciplined cost control and the favorable mix shift, which preserved profitability even as medical costs rose.
Humana reaffirmed its full‑year 2025 adjusted earnings guidance at $17.00 per share, but it lowered its GAAP EPS guidance to $12.26 from the prior $13.77, citing one‑time charges and strategic exits that will reduce GAAP profitability. The guidance revision signals management’s caution about near‑term cost pressures while maintaining confidence in the adjusted earnings trajectory.
CEO Jim Rechtin emphasized that the company’s consumer‑centric strategy is delivering results, noting that “our strategy of putting the consumer at the heart of everything we do is working, with solid year‑to‑date performance and strong momentum heading into the Annual Election Period.” He added that Humana remains on track to achieve its 2027 Medicare Advantage margin target of 3% and is investing in CenterWell and Medicaid expansion to diversify revenue streams.
Investors reacted cautiously, focusing on the GAAP earnings miss and the downward revision of GAAP guidance. The divergence between adjusted and GAAP results highlighted the impact of one‑time charges and strategic exits, prompting a more measured market response despite the adjusted earnings beat.
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