HUM

A month has gone by since the last earnings report for Humana (HUM). Shares have added about 7.1% in that time frame, outperforming the S&P 500. But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Humana due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for Humana Inc. before we dive into how investors and analysts have reacted as of late. Humana Q2 Earnings Beat Estimates on Medical Membership Growth Humana reported second-quarter 2026 adjusted earnings of $7.61 per share, which beat the Zacks Consensus Estimate by 22.4%. The bottom line rose 21.4% year over year. Adjusted revenues improved 26.2% year over year to $40.9 billion. The top line surpassed the consensus mark by 0.6%. The strong quarterly results benefited on the back of premium gains and a robust performance from the CenterWell segment, which saw a revenue jump supported by its primary care business. A rise in overall medical membership also contributed to the upside. However, the upside was partly offset by escalating operating expenses and a deteriorating benefit ratio. Humana’s premiums totaled $38.8 billion, which advanced 26.4% year over year, and surpassed the Zacks Consensus Estimate of $38.6 billion and our estimate of $38.1 billion. Services revenues rose 27.1% year over year to $1.8 billion, beating the consensus mark of $1.7 billion. Investment income of $253 million fell 7% year over year in the quarter under review. However, the metric beat the consensus mark of $235.3 million and our estimate of $241.9 million. The benefit ratio came in at 91.1%, which deteriorated 140 basis points (bps) year over year. Total operating expenses increased 26.3% year over year to $39.5 billion, higher than our estimate of $38.9 billion. The year-over-year increase was due to higher benefits and operating costs. The adjusted operating cost ratio of 9.7% improved 120 bps year over year. HUM’s net income increased 27.6% year over year to $693 million but beat our estimate of $562.1 million. Insurance The segment’s revenues rose 25.9% year over year to $39.1 billion in the second quarter on the back of improved per-member premiums derived from HUM’s Medicare and stand-alone PDP businesses, supported by improved Medicare Advantage benchmark funding from the Centers for Medicare and Medicaid Services and a higher Part D direct subsidy tied to the IRA. Adjusted operating income grew 7% year over year to $824 million. The benefit ratio deteriorated 130 bps year over year to 91.2%. The operating cost ratio of 7.1% improved 120 bps year over year. Total medical membership of the segment was 17.9 million as of June 30, 2026, which rose 20.7% year over year. The metric beat the Zacks Consensus Estimate of 17.5 million and our estimate of 17 million. CenterWell The unit recorded revenues of $6.8 billion in the quarter under review, which improved 22.6% year over year and surpassed the Zacks Consensus Estimate of $6.3 billion. The metric benefited from higher revenues stemming from the company’s primary care business. Adjusted operating income rose 27.2% year over year to $514 million. The operating cost ratio of 92.4% improved 30 bps year over year, driven by the ongoing maturation of the v28 risk model update within the company’s primary care business and its cost-cutting and transformation strategy. Humana exited the second quarter with cash and cash equivalents of $6.9 billion, which rose 64.1% from the 2025-end level. Total assets of $57.2 billion increased 16.9% from the figure at 2025-end. Long-term debt amounted to $12 billion, down 3.2% from the figure as of Dec. 31, 2025. Debt to capitalization deteriorated 200 bps year over year to 42.7% at the second-quarter end. Total stockholders’ equity of $19.3 billion advanced 8.8% from the 2025-end figure. HUM generated net cash from operations of $3.2 billion in the first half of 2026, which more than doubled year over year. Humana bought back shares worth $108 million in the first half of 2026. It also paid dividends of $214 million during the same period. Revenues are still projected to be a minimum of $160 billion, which implies a 23.4% increase from the 2025 reported figure. The Insurance segment’s revenues are expected to continue to be forecasted at a minimum of $155 billion. Revenues of the CenterWell segment are still expected to be at a minimum of $25 billion. Adjusted EPS is still projected to be at least $9, which indicates a 47.5% decline from the 2025 figure. GAAP EPS is now projected to be at least $6.52, down from the previously expected guidance of at least $8.36. Management still anticipates Individual Medicare Advantage membership to witness growth of around 25% in 2026. Group Medicare Advantage membership is still expected to record an increase of roughly 150,000. Membership from the Individual Medicare stand-alone PDP is still expected to increase around 1,000,000 this year. State-based contracts are still anticipated to witness membership growth within 25,000-100,000. The GAAP benefit ratio for the Insurance segment is still likely to be 92.75%, with a variability margin of plus or minus 25 basis points. The GAAP consolidated adjusted operating cost ratio is still expected to be at 10%, with a variability margin of plus or minus 25 basis points. GAAP cash flow from operations is still estimated within $2.5-$2.9 billion. Meanwhile, capital expenditures are still projected to be roughly $650 million. The adjusted effective tax rate is expected to be around 25.5%, while the weighted average share count is anticipated at around 121 million. It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -437.83% due to these changes. At this time, Humana has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a grade of B on the value side, putting it in the second quintile for value investors. Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Humana has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Humana is part of the Zacks Medical - HMOs industry. Over the past month, Molina (MOH), a stock from the same industry, has gained 2.1%. The company reported its results for the quarter ended June 2026 more than a month ago. Molina reported revenues of $10.87 billion in the last reported quarter, representing a year-over-year change of -4.8%. EPS of $1.51 for the same period compares with $5.48 a year ago. Molina is expected to post earnings of $0.73 per share for the current quarter, representing a year-over-year change of -60.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -17.4%. The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Molina. Also, the stock has a VGM Score of C. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Humana Inc. (HUM) : Free Stock Analysis Report Molina Healthcare, Inc (MOH) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Humana Inc.’s HUM Star Ratings recovery is emerging as a key catalyst for its Medicare Advantage (MA) turnaround. After facing a significant Stars-related headwind, the company is targeting a return to top-quartile performance by bonus year 2028. This recovery is important to the broader goal of achieving a sustainable pretax margin of at least 3% by 2028. Early execution signals are encouraging. The rate of improvement across 11 of 12 selected HEDIS and patient-safety measures outpaced historical trends. This suggests that investments in clinical quality and member engagement are gaining traction. Still, we should view this as positive momentum rather than a completed turnaround. The potential financial benefit is meaningful. The company defines top-quartile performance as Stars revenue per member per month 10% above the peer median. A successful recovery could improve the economics of its MA plans and complement other margin initiatives, including better plan selection and operating efficiencies. The October Centers for Medicare & Medicaid Services (“CMS”) Stars release will be the key near-term test. A meaningful rebound would validate its quality improvement efforts and provide greater confidence in its earnings trajectory. More importantly, it could strengthen the case that Humana is on a credible path toward its 2028 margin target, giving investors a stronger reason to remain optimistic about the turnaround. Peers like UnitedHealth Group Incorporated UNH and Elevance Health, Inc. ELV are also focused on strengthening Medicare Advantage quality and profitability. UnitedHealth Group maintains a strong quality profile, with roughly 75-78% of members in 4+ Star plans. This sustained performance secures Quality Bonus Payments and preserves rebate dollars, giving UNH greater flexibility to fund competitive supplemental benefits while protecting underwriting margins. Elevance Health operates with a broader commercial and Medicaid presence while working to strengthen its Medicare Advantage Stars profile through focused clinical outcomes and member engagement. Improving these quality scores could support ELV with better MA economics over time. Shares of HUM have gained 47.6% year to date, outperforming the broader industry’s 20.2% growth. Image Source: Zacks Investment Research From a valuation standpoint, HUM trades at a forward price-to-earnings ratio of 29.24X, up from the industry average of 15.98X. Humana carries a Value Score of B. Image Source: Zacks Investment Research The Zacks Consensus Estimate for HUM’s 2026 earnings implies a 47% deterioration year over year, followed by a 66.7% improvement next year. Image Source: Zacks Investment Research HUM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Humana Inc. (HUM) : Free Stock Analysis Report UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report Elevance Health, Inc. (ELV) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at health insurance providers stocks, starting with Humana (NYSE:HUM). Upfront premiums collected by health insurers lead to reliable revenue, but profitability ultimately depends on accurate risk assessments and the ability to control medical costs. Health insurers are also highly sensitive to regulatory changes and economic conditions such as unemployment. Going forward, the industry faces tailwinds from an aging population, increasing demand for personalized healthcare services, and advancements in data analytics to improve cost management. However, continued regulatory scrutiny on pricing practices, the potential for government-led reforms such as expanded public healthcare options, and inflation in medical costs could add volatility to margins. One big debate among investors is the long-term impact of AI and whether it will help underwriting, fraud detection, and claims processing or whether it may wade into ethical grey areas like reinforcing biases and widening disparities in medical care. The 12 health insurance providers stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 2.8% while next quarter’s revenue guidance was 1.7% below. Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.8% since the latest earnings results. With over 80% of its revenue derived from federal government contracts, Humana (NYSE:HUM) provides health insurance plans and healthcare services to approximately 17 million members, with a strong focus on Medicare Advantage plans for seniors. Humana reported revenues of $40.87 billion, up 26.2% year on year. This print exceeded analysts’ expectations by 0.6%. Overall, it was a satisfactory quarter for the company with a beat of analysts’ EPS estimates. Even though it had a relatively good quarter, the market seems discontent with the results. The stock is down 2.7% since reporting and currently trades at $378.11. Is now the time to buy Humana? Access our full analysis of the earnings results here, it’s free. With over 9,000 retail pharmacy locations serving as neighborhood health destinations across America, CVS Health (NYSE:CVS) operates retail pharmacies, provides pharmacy benefit management services, and offers health insurance through its Aetna subsidiary. CVS Health reported revenues of $106.1 billion, up 7.3% year on year, outperforming analysts’ expectations by 6.7%. The business had an incredible quarter with a beat of analysts’ EPS estimates and a solid beat of analysts’ full-year EPS guidance estimates. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 9.1% since reporting. It currently trades at $94.90. Is now the time to buy CVS Health? Access our full analysis of the earnings results here, it’s free. Pioneering a data-driven approach to family building that has achieved an industry-leading patient satisfaction score of +80, Progyny (NASDAQ:PGNY) provides comprehensive fertility and family building benefits solutions to employers, helping employees access quality fertility treatments and support services. Progyny reported revenues of $350.5 million, up 5.3% year on year, exceeding analysts’ expectations by 0.6%. Still, it was a slower quarter as it posted EBITDA guidance for next quarter missing analysts’ expectations significantly and full-year revenue guidance slightly missing analysts’ expectations. Progyny delivered the weakest guidance update among its peers. As expected, the stock is down 14.9% since the results and currently trades at $25.72. Read our full analysis of Progyny’s results here. Founded in 2012 to simplify the notoriously complex American healthcare system, Oscar Health (NYSE:OSCR) is a technology-focused health insurance company that offers individual and small group health plans through its cloud-native platform. Oscar Health reported revenues of $4.88 billion, up 70.4% year on year. This result surpassed analysts’ expectations by 2.9%. Overall, it was an exceptional quarter as it also produced a beat of analysts’ EPS estimates. Oscar Health pulled off the fastest revenue growth of the whole group. The stock is up 4% since reporting and currently trades at $31.33. Read our full, actionable report on Oscar Health here, it’s free. Serving nearly 1 in 15 Americans through its government healthcare programs, Centene (NYSE:CNC) is a healthcare company that manages government-sponsored health insurance programs like Medicaid and Medicare for low-income and complex-needs populations. Centene reported revenues of $53.58 billion, up 9.9% year on year. This number topped analysts’ expectations by 13.1%. Overall, it was an incredible quarter as it also put up a beat of analysts’ EPS estimates and a solid beat of analysts’ full-year EPS guidance estimates. Centene delivered the biggest analyst estimate beat and highest full-year guidance raise in the group. The company lost 387,500 customers and ended up with a total of 25.89 million. The stock is up 2.2% since reporting and currently trades at $65.50. Read our full, actionable report on Centene here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

Gotham poured $2.65B into SPY and grew its HUM stake 65-fold, pivoting hard from single-name stock-picking toward defensive market beta. General Mills' 4.4x add targets a trough valuation of 13x forward earnings and a 6% yield, as consumer sentiment sits at recessionary levels. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and KLA didn't make the cut. Grab the names FREE today. Joel Greenblatt's Gotham Asset Management disclosed a defensive tilt in its Q2 2026 13F, filed in mid-August, headlined by a $2.65 billion add to the SPDR S&P 500 ETF and outsized conviction buys in managed care, packaged foods, and Manhattan office real estate. For a quant shop built on the "magic formula" framework, the shift toward index beta and staples is the tell. Greenblatt appears to be dialing down single-name risk and buying umbrellas. The centerpiece move: SPDR S&P 500 ETF Trust (NYSEARCA:SPY) now anchors roughly 20% of the 1,791-position book. That is a striking allocation for a firm known for concentrated value screens. With SPY trading at $768.51 and up 13.31% year to date, the add functions as a hedge against factor drift while the fund reshuffles hundreds of smaller positions. Pair that with a new ~$157 million short-duration Treasury bill position, and the message is clear: dry powder and market beta over stock-picking alpha. The most aggressive individual add was Humana (NYSE:HUM), where Gotham grew its share count roughly 65-fold. The thesis is visible in the numbers. Humana posted Q2 revenue growth of 26.2% year over year, individual Medicare Advantage membership climbed meaningfully year over year, and CEO Jim Rechtin reiterated the path to a "sustainable pre-tax margin of at least 3% in 2028." The stock is up 51.18% year to date, and analysts carry a $416.43 target. Healthcare spending grew from $3,537.7B in June 2025 to $3,741.0B in June 2026, a textbook defensive tailwind. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and KLA didn't make the cut. Grab the names FREE today. General Mills (NYSE:GIS) saw a 4.4x share increase. This is a contrarian value bet: the stock is down 14.37% year to date, trades at a forward P/E of 13, and yields 6.22%. With consumer sentiment at recessionary levels of 49.5, staples exposure at trough multiples fits the playbook. Vornado Realty Trust (NYSE:VNO) got a 3.2x add, a bet on the Manhattan office recovery. Vornado's NY office occupancy climbed to 92.2%, and Chairman Steven Roth noted "Office leasing volume in Manhattan is at its highest level in 25 years." The outlier is KLA Corporation (NASDAQ:KLAC), up 8.5x. Semiconductor capital equipment is cyclical, so this looks less defensive and more like a valuation call on an AI infrastructure winner posting 42.5% operating margins and 87.5% return on equity. The defensive skeleton makes sense. Sentiment is depressed, the VIX sits at 14.25 (complacency territory), and PCE growth is decelerating. Humana offers a clear operational turnaround with a hard 2028 margin target. General Mills offers yield and a trough valuation. Vornado offers real occupancy improvement at a 23% NAV discount. The SPY position is a hedge, not a thesis. For a retirement-focused investor, the framework is instructive: pairing a market beta anchor with defensive cash flow names, holding dry powder in T-bills, and treating concentrated cyclicals like KLAC as satellite positions. Among the four conviction adds, HUM stands out where the setup, valuation, and demographic tailwind align most cleanly. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and KLA didn't make the cut. Grab the names FREE today. Contact [email protected] for any questions or corrections.

Get insights on thousands of stocks from the global community of over 7 million individual investors at Simply Wall St. Humana (HUM) is back on investors’ radar after a strong earnings beat, fresh quality gains in its insurance operations, new caregiver retention initiatives in Indiana, and a leadership hire to oversee its Medicaid unit. See our latest analysis for Humana. Humana’s recent earnings beat and operational gains have come alongside strong price momentum, with a 27.5% 90 day share price return and 47.1% year to date share price return, although the 3 year total shareholder return is still down 17.7%. If news around Humana’s care quality and Medicaid leadership has you thinking about where healthcare and technology meet, it may be worth scanning 44 healthcare AI stocks After Humana’s sharp rebound and improving quality metrics, the stock now sits far above where it started the year. Does the current valuation still leave enough upside to justify the risk buyers are taking from this point forward? Humana closed at $389.05, while the most widely followed narrative sets fair value at $308.33 using a 7.1% discount rate and detailed long term forecasts. Read the complete narrative. Want to see what kind of revenue path and margin rebuild have to line up for Humana to support that fair value? The narrative leans on compounding top line growth, a step up in profitability, and a future earnings multiple that is very different from where the stock trades today. Result: Fair Value of $308.33 (OVERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, there are still real pressure points for Humana, including uncertainty around Medicare Advantage Stars and medical cost trends that could challenge those margin and earnings assumptions. Find out about the key risks to this Humana narrative. While the analyst narrative suggests Humana appears 26.2% overvalued at $389.05 versus a $308.33 fair value, the SWS DCF model indicates a different perspective. On SWS numbers, Humana trades at a 61.2% discount to an estimated future cash flow value of $1,001.49. This raises a clear question: are analysts being too cautious, or is the DCF assuming overly optimistic long term cash generation? Look into how the SWS DCF model arrives at its fair value. Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Humana for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 50 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity. With sentiment split between opportunity and risk around Humana, it makes sense to move quickly, review the numbers for yourself, and form an independent view using the 2 key rewards and 2 important warning signs. If Humana has sharpened your focus on opportunities, do not stop here. Broaden your watchlist now so you are not chasing the next move after it happens. Target quality at a discount by checking companies flagged as 50 high quality undervalued stocks that combine stronger cash flows with more conservative balance sheets. Strengthen your income stream through 10 dividend fortresses that focus on higher yielding stocks with an emphasis on payout consistency. Reduce surprise risk by scanning 83 resilient stocks with low risk scores that highlight businesses with steadier fundamentals and fewer red flags. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include HUM. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Wednesday, July 29, 2026 at 8:00 a.m. ET President and Chief Executive Officer - Jim Rechtin Chief Financial Officer - Celeste Mellet Vice President of Investor Relations - Lisa Stoner Operator: Good day, and thank you for standing by. Welcome to Humana's Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I'd now like to hand the conference over to Lisa Stoner, Vice President of Investor Relations. Please go ahead. Lisa Stoner: Thank you, and good morning. We will begin this morning with brief remarks from Jim Rechtin, Humana's President and Chief Executive Officer; and Chief Financial Officer, Celeste Mellet. Following these remarks, we will host a question-and-answer session with industry analysts. Before we begin our discussion, I need to advise call participants of our cautionary statement. Certain of the matters discussed in this conference call are forward-looking and involve a number of risks and uncertainties. Actual results could differ materially. Investors are advised to read the detailed risk factors discussed in our latest Form 10-K, our other filings with the Securities and Exchange Commission and our second quarter 2026 earnings press release as they relate to forward-looking statements, along with other risks discussed in our SEC filings. We undertake no obligation to publicly address or update any forward-looking statements in future filings or communications regarding our business or results. Today's press release and posted remarks, our historical financial news releases and our filings with the SEC are also available on our Investor Relations site. Call participants should note that today's discussion includes financial measures that are not in accordance with generally accepted accounting principles or GAAP. Management's explanation for the use of these non-GAAP measures and reconciliations of GAAP to non-GAAP financial measures are included in today's press release. Any references to earnings per share or EPS made during this call refer to diluted earnings per common share. Finally, this call is being recorded for replay purposes. That replay will be available on the Investor Relations page of Humana's website, humana.com, later today. With that, I'll turn the call over to Jim. James Rechtin: Thanks, Lisa. Good morning, everyone, and thank you for joining us. Today's headlines are, we are pleased with our year-to-date performance, and we continue to be tracking to expectations. We expect that our approach to 2027 MA bids will drive solid progress against our goal of delivering a sustainable pretax margin of at least 3% in 2028. We believe we are on track to meet our Investor Day commitments, including our Stars commitments, and we will host a virtual investor update on December 10 to discuss the meaningful progress we have made towards those commitments. At that point, we will have full visibility into bonus year '28 Stars and some preliminary insights into '27 membership expectations. As usual, I will frame my comments today around the 4 drivers of our business: product and experience, which drive customer retention and growth; clinical excellence, which delivers clinical outcomes and medical margin, highly efficient operations and capital allocation and growth in both CenterWell and Medicaid. So let's start with product and experience. Our 2026 member growth trajectory is on track and our membership, both the new and returning membership, is performing as expected. As we look ahead to '27, our #1 priority in MA bids was to make the necessary margin progression to remain on track to deliver our '28 commitment of returning to a sustainable margin of at least 3%. We must drive sustainable earnings and appropriate returns to be able to provide excellent health outcomes and service for our members and our patients. We expect our targeted margin expansion in '27 to be driven by our ongoing focus on clinical excellence and operating efficiency work, combined with adjustments to our plan mix and benefits, which Celeste will touch on in a moment. Turning to clinical excellence. Our outlook on bonus year '28 or BY '28 Stars remains unchanged. We continue to be confident we are on the right track to return to top quartile Stars results in BY '28. I want to remind everybody that at our Investor Day, we defined top quartile Stars results as per member per month Stars revenue that is 10% above our peer group median. Stars revenue PMPM considers the quality bonus and the percentage of rebate retained at each star level. We use this metric because Stars revenue PMPM is what is important from a competitive perspective. As a result, going forward, you will hear us focus on Stars revenue PMPM instead of solely on the percent of members in 4-plus star plans. Now turning to our Stars performance. Over the last 18 months, we have said that we were making strong operational progress. I'm truly proud of how our Stars organization and the broader enterprise has risen to this challenge. Now that the measurement period for BY '28 is complete, we are pleased to be able to share some tangible examples to demonstrate the progress. I would point you to Appendix A within our posted remarks. This slide shows the rate of improvement achieved in BY '28 as compared to the previous 4 years for a selection of 12 HEDIS and Patient Safety metrics. We have de-identified the metrics for competitive reasons. What I want you to take away from this slide is that our rate of improvement outpaced and in many places, meaningfully outpaced the historical CAGR across 11 of the 12 measures. And while we do not intend to share this detail every year, we wanted to share today as it demonstrates that the operational changes and the investments we have made in our Stars program over the last 1.5 years are driving the intended results. We are driven by our North Star to improve health outcomes for our members with the goal of achieving top quartile results on a sustainable basis. Finally, as you know, we don't know industry thresholds. So while we feel good about our substantial progress, we cannot guarantee an outcome in October. And as a reminder, we will go into our annual Stars blackout period as soon as we receive the planned preview information from CMS beginning in August until the final data is released by CMS in October. For BY '29 Stars, we have maintained momentum with our member engagement efforts. Consistent with Q1, we remained 5% ahead of last year's quality improvement rate on a per member basis in key HEDIS metrics at the end of Q2. Regarding our new members, we continue to remain encouraged by their performance to date as their engagement levels remain in line and on some measures, higher than renewing members. Now let me turn to highly efficient operations. I mentioned last quarter that we were making good progress on our operating model changes. Our goals have been threefold: first, to be simpler, leaner and faster, so driving efficiencies while reducing friction for our customers; second, to lead on innovation, leveraging automation and AI and the best-performing vendors; and third, to attract the best talent and ensure effective performance management. Let me provide examples to bring these changes to life. We are centralizing certain operations to simplify process and reduce variability in outcomes. One example is utilization management, where we centralized 11 markets into one team. This is driving G&A savings, but it is also creating a more consistent experience for providers and members. We are also expanding outsourcing while improving vendor performance. This year, we increased outsourcing in our finance and HR functions, while we also continue to advance vendor optimization efforts in IT. We are also in the early stages of transforming select other vendor relationships from tactical labor-based engagements into strategic partnerships that can deliver greater business value and capabilities. Finally, we integrated our CarePlus operations. CarePlus is a legacy health plan acquisition that we integrated into our core platforms to eliminate redundancy, which drives greater value and scale while maintaining our reputable CarePlus brand in Florida. All in, we have made considerable progress in the first half of the year. Our operating model efforts have yielded hundreds of millions of dollars in value so far in 2026. Finally, let me turn to capital allocation. As we have previously noted, we have been pursuing noncore asset divestitures. We recently announced an agreement to divest our minority interest in Gentiva, which is valued at approximately $900 million. This divestiture will largely fund our recent acquisition of MaxHealth. We also continue to expand our Medicaid platform with the recent award of a statewide Illinois Medicaid managed care contract. That contract is set to go live in January of '27, and I'd like to note that Humana was the only new entrant awarded along with 5 incumbents. So in conclusion, we are performing as expected in 2026. Our member growth is expected to further fuel our ability to unlock the earnings potential of the business. We're making good progress on Stars. We expect to make meaningful progress on MA margin expansion in '27, and we remain on track to hit our Investor Day commitments in '28. Before I turn it over to Celeste, I would like to highlight our announcement this morning that Paul Smith and Fred Crawford will join Humana's Board of Directors. Paul is the Chief Commercial Officer at Anthropic, where he leads commercial strategy and global go-to-market operations. Paul brings over 30 years of experience leading global organizations through major technology transitions. Fred has deep financial and operational experience, having spent more than 30 years in the insurance and banking industries. Fred was the Chief Financial Officer of 3 publicly traded insurers and most recently served as the President and Chief Operating Officer at Aflac until his retirement in 2024. Paul and Fred will complement our Board's expertise well, bringing a unique perspective that will be invaluable as we advance along our journey of becoming a consumer health care company. With that, I will turn it to Celeste for a few remarks before we go to Q&A. Celeste Mellet: Thank you, Jim. I will start with our comments on our '26 performance and '27 MA bid approach before touching on continued progress on balance sheet efficiency and capital optimization. Starting with '26. Based on available information to date, cost trends are in line with our expectations for both new and existing members. As a reminder, we assume 2026 cost trend would be in the high single-digit range or 7% to 8%, inclusive of both medical and pharmacy. There are certain areas where we have seen slight favorability, particularly in the inpatient space. Based on approximately 4 months of completed claims data, favorability has been more heavily concentrated in members engaged with value-based providers. While the risk-sharing nature of these agreements limit the favorability that flows through to our financials, it is positive for our provider partners and we believe an additional proof point of broader stabilization in the MA trend environment. And as Jim described, our transformation and operating model work is driving the intended result. Our 2Q consolidated operating cost ratio is down 120 basis points year-over-year, and we continue to expect a full year reduction of approximately 150 basis points. Taken together, we are executing and delivering results in line with expectations and remain on track to double our individual MA pretax margin this year, excluding the Stars headwind. I will now touch on our '27 MA bids. As Jim mentioned, our #1 priority was to make the necessary progress to remain on track to deliver on our '28 commitment of returning to a sustainable margin of at least 3%. We expect meaningful progress toward our '28 margin goal next year with actual '27 results shaped by our final membership size and composition. Our expected margin expansion in 2027 will benefit from our ongoing clinical excellence and operating efficiency work as well as benefit adjustments and targeted plan exits. While it remains too early to provide many specifics regarding our bid strategy, let me provide some perspective on our approach to plan exits. To reduce benefit disruption, we will use plan exits to prioritize higher-performing plans including those with greater value-based care penetration. This approach is aligned with bid priority # 2, which is to retain as many members as possible while making the changes necessary to drive the intended margin expansion. For 2027, we anticipate these plan exits will impact approximately 600,000 members, though we will work to recapture a significant portion of that volume as we did in 2025. Turning to capital deployment and balance sheet. We have continued our efforts to increase the efficiency of our balance sheet and fortify our foundation, including the establishment of $1.5 billion in contingent capital facilities, utilizing pre-capitalized trust securities or P-Caps, enhancing our access to low-cost, long-term liquidity. We are the first in the health payer space to utilize this innovative product. We have also maintained a prudent capital deployment approach, including pursuing noncore asset divestitures. As Jim mentioned, we recently announced an agreement to divest our minority interest in Gentiva, which is valued at approximately $900 million and expected to close in the fourth quarter. More broadly, our capital and balance sheet efficiency efforts are delivering results, and we continue to evaluate a pipeline of initiatives to further strengthen the balance sheet and improve our capital efficiency. Before going to Q&A, let me reiterate what Jim started with. We are pleased with our year-to-date performance. We expect to make meaningful progress on margin expansion in 2027, and we are executing on our Investor Day commitments and delivering on the earnings power and value of the company. I will now turn the call back to Lisa to start the Q&A. Lisa Stoner: Thank you, Celeste. Before starting Q&A, just a quick reminder that in fairness to those waiting in the queue, we ask that you please limit yourself to 1 question. Operator, please introduce the first caller. Operator: Our first question comes from Justin Lake with Wolfe Research. Justin Lake: I appreciate all your comments here. I want to make sure I understand your 2027 bid posture. My impression is that your individual MA margins are about breakeven this year, and you need to get to a little over 2% by 2028 via product design and bids and then Stars gets you all the way to 3% and plus. So if you need to get 2% plus margin improvement over the next couple of years from your bids, should I read your statement in your remarks to indicate you expect to get more than half of that in 2027 via your bids? And then can you talk about your trend assumptions that you built in the bids and any potential conservatism layer you might have added there? Celeste Mellet: Yes, Justin, we are not going to comment on the specific progress from '26 to '27 in part because ultimately, where we land will be driven by the membership size and composition. As you know, we have a portfolio. There are some product with higher margin, some with mid-margin. But we do expect to make significant progress in '27 versus '26 and well on our path to 2028. In terms of what is embedded in our bids, we continue to assume trends in line with what we're seeing this year, although, as you know, the drug trend continues to be high and will tick modestly higher next year based on current expectations given the health technology pipeline or the new drugs that will be released. And then, of course, as we always do, we build in effectively contingency into our bids because we're doing it well in advance 6 months before the next year and you have a whole year to get through to account for things moving in any direction. So we believe we are well positioned to make significant progress and look forward to this year's AEP. Operator: Our next question comes from Jason Cassorla with Guggenheim Partners. Jason Cassorla: Great. Maybe if you could discuss a little bit more on what you're seeing on cost trend and your comments around inpatient. Maybe just anything else on what's driving that? And could you remind us of your site of service initiatives, how you're focusing on pushing appropriate care to lower cost settings and maybe help give a sense on how those efforts have offset underlying trend versus sort of the broader kind of industry movement due to the inpatient-only list wind down? Just any help there would be great. Celeste Mellet: Yes. So as a reminder, our all-in trend assumption for this year is high single digits or 7% to 8%. So a little bit lower on the medical cost and then in the double digit on drug costs. As we called out, things are within the range, though we are seeing favorability, particularly on inpatient. And we are seeing both lower admits per 1,000 and lower unit costs on those admits. So it's both the P and the Q on inpatient costs that are down. And I'll turn it over to Jim on site of service. James Rechtin: Yes. So site of service is absolutely one of many initiatives around medical cost management that we are focused on. And the beauty of site of service is you're actually helping members move to sites of care that have higher quality as well as lower costs. And so we are very much focused on both of those things. The types of things that we're doing range from rethinking how we do our contracting in local markets to make sure that we have access to the right sites of care to make sure that we have aligned incentives and using appropriate sites of care as well as thinking through how we design benefits in a way that create a financial incentive for our members to also use the right sites of care. So we've got a number of initiatives going on there as well as initiatives around how you nudge or educate our members around how to make those decisions. So there's a lot going on. We're not going to share specific numbers at this time. This is one of many different initiatives that are focused on helping our members move to higher quality and lower cost care options. But we've got -- we do have quite a bit of work there, and we've seen progress over the last year, and we expect to see more progress over the next year too. Operator: Our next question comes from Stephen Baxter with Wells Fargo. Stephen Baxter: I wanted to ask about the Stars color you provided. So I appreciate the commentary and the progress you're making. For these metrics that you provided, I believe this is a subset of HEDIS and patient safety measures. Could you expand a little bit on how these metrics were selected and kind of how confident we can be this is representative of the broader performance? And then if there was going to be a line on this chart for your peer group average, which is what you're ultimately trying to outperform, like what would the trends look like in that context? Would you still have outperformance versus the peer group average that ultimately is going to dictate the cut points? James Rechtin: Yes. Happy to tackle that question. And I'm going to kind of step back and hit a few things around Stars, and then I'll answer the questions that you pose there directly. So the first thing I want to say is I just want to emphasize that there's no change in our tone this quarter versus the last quarter, the quarter before that or frankly, our tone dating all the way back to the Investor Day. We feel good about our operational progress, and we have the inherent unknown of thresholds that we all have to wrestle with. The -- what we're trying to do here is simply provide a little bit more nuance or color so that you understand why our tone has been what it is. There are 2 things that are driving us as an organization. You could think of it as twin North Stars in a way. The first is we should be closing every single gap we possibly can because it's the right thing for our members. And that is the motivation that drives our teams every day. And the second is that we need at a minimum to be hitting top quartile Stars results because that is what's required to be competitive in the marketplace. And I want to reemphasize that we were very deliberate 1.5 years or a year ago back in June of '25 at our Investor Day around defining what top quartile means. Top quartile is measured on a per member per month basis. It is Stars revenue, taking into account each of the different star ratings. The reason that, that is important is because when you then look at the operational performance that we've had, what -- we know that there's going to be some variation in thresholds. We know that some are going to end up a little bit higher than we expect, some are going to end up a little bit lower than we expect. That metric does two things. One, you look back historically and you know that if you hit that metric, which is 10% above the median player among the top -- our top 5 competitors, that if you hit that, you know historically that, that says, hey, you're competitive in the marketplace. And this type of operational progress gives us confidence that even if we are off on some thresholds, we have multiple paths to get to that PMPM number that we need to get to. We have multiple ways to get there. And so there is inherently some threshold uncertainty, but we walk away with confidence that we can navigate that uncertainty because of the metric we know we need to hit and because of the operational progress that you're seeing. Specifically, the question around why these metrics. The answer, honestly, is very simple. These are the metrics that we have clear longitudinal data over the last 5 years to be able to compare. So there are some metrics that simply came in or out of the program during that 5-year period. We don't have consistent operational data. There is some data where we don't have hard data at this point. We don't -- really the survey data is held by CMS. We don't have the same level of visibility. We have some metrics where, frankly, we're even getting an early read from CMS, and we're not going to share that data because that data is private between us and CMS at this point. And so there's no magic to these numbers other than these are the metrics that we have good longitudinal data on and can share. We do believe they're representative. Like when you look at the program broadly, we believe that these metrics are representative of our performance broadly. And again, based on everything that we know today, there are obviously some things that we don't know. But based on everything we know today, we feel good that this is a pretty representative sample. And to your last question around thresholds, we're not going to share our internal estimates around thresholds. But I would point back to the comment that I made earlier. We have looked at thresholds a number of different ways. And we do believe that this operational progress puts us in a good place that even if we have some surprises on thresholds, which inevitably we will have some, we will be able -- we will have navigated to a place that is consistent with our commitment. Now of course, we can't guarantee that. Everybody knows that. But we feel pretty good. We feel confident that we have put ourselves in a position to land where we need to land. So that's how we're thinking about it, and that's why we wanted to share this data. And again, I hit two last things. We're not going to share this data every year. I just want to be clear, but we have put so much time, energy, investment. This is so important to the business right now that we thought it was important that we give you this color. And second, we are about to walk into the blackout period. So as soon as we do get plan preview data from CMS, I just want to remind everybody, we're going to go dark until the final results are actually released by CMS. So that's where we're at on Stars. Operator: The next question comes from Ann Hynes with Mizuho. Ann Hynes: Last quarter, you provided some color in your prepared remarks on the sequential IBNR growth for Q1, and I didn't see it this quarter. Can you provide any directional or similar directional update on IBNR and how it's trending coming out of Q2? I think last quarter, you noted that it increased 35% versus your membership growth of 22%. Celeste Mellet: Ann, thanks. Yes, it will be out in our Q this afternoon. And what you'll see is that the IBNR remained basically flat from last quarter. We view this as still very prudent because if you think about it, IBNR should be going down as the year progresses, all else equal, because there are more pharmacy claims given the move as we progress through the year that are processed more quickly and they do not require IBNR. We are up significantly year-over-year and versus the beginning of the year in terms of both IBNR and more importantly, more so than our membership. Operator: Our next question comes from Ben Hendrix with RBC Capital Markets. Benjamin Hendrix: I was just wondering if you could provide some more color on the strategy behind the formation of the contingent pre-capitalized trust? Any thoughts you can give on what kind of drove the decision to form that? Are there trend observations that you're seeing or anything with how you're positioned with 2027 bids that made that more of an appropriate type vehicle? Any thoughts there? Celeste Mellet: Thanks for the question. So we really like this product. So you're able to increase your liquidity without increasing balance sheet or increasing leverage unless you draw on them. At this point, we do not anticipate using them or drawing on the P-Caps in the near to medium term. It really diversifies contingent liquidity sources at a relatively low cost. In addition, you don't have counterparty risk because this is with fixed income investors, the cash is already in a pool that is holding securities. That's how they make their yield and then we pay a small premium on top of that. And it offers extended duration. So this is 10- and 30-year duration relative to the typical revolver debt duration. Ours right now is 5. Often, you'll see revolvers 1. So really great source, continues to provide flexibility, durability, strengthen our balance sheet, and we're really excited about it. Operator: Our next question comes from Kevin Fischbeck with Bank of America. Kevin Fischbeck: Can you talk a little bit more about the bidding strategy for next year? Obviously, this year, you guys kept benefits stable. But for next year, you're talking about exiting markets. So why that change in exiting markets next year versus not doing it this year? And is there anything related to Stars as far as how you chose what markets you'd be exiting and the membership losses that would be there? Or I guess just a little more color on what it means to be targeting kind of high-value plans. Celeste Mellet: Yes. So as we've talked about in the past, we have a multiyear approach to membership and benefits and I think across several years. But more importantly, from year-to-year and over the longer term, we look at specific underwriting margin targets at the plan level and continuously monitor benefit design, costs and the revenue to drive profitability. So funding is really important. And increasingly, we're very much focused on the capital returns of the plan. So we take into account that certain states have much higher capital rates, Value-based care has lower capital associated with it, while fee-for-service higher capital, obviously, you're going to adjust pricing to generate the return. And as you know, markets have been super dynamic in the last year. So we look at this every year. We did push harder on this year to let us make the margin progress that we need to and to protect our highest value plans. So I would think about it as the plans with the highest returns. So rather than cut more uniformly across the board, really remove or cut off the lower tail of profitability and returns to ensure we can protect and retain the members and the benefits associated with our high-value plans. As I called out, we expect to capture a similar portion as we did in 2025. If you remember, it's just over 40%. The majority of the plan exits were in plans with 3.5 or lower ratings for BY '27, but I wouldn't really think about this as a Stars item. As you know, we are focused on returning to top quartile Stars on a sustainable basis. So this isn't really a Stars item. Operator: Our next question comes from A.J. Rice with UBS. Albert Rice: Just 2 things on the MA book. First, and I know this is hard to compare, but your commentary about the 7% to 8% cost trend and being relatively in line with a little favorability on the hospital side. It seems like your peers, a number of the other companies are saying they also anticipate a 7% to 8% trend, but they seem to be seeing a little more favorability. I don't know if you have any view on that? Is it because of all the new members that's having some mitigating impact? It sounds like those are tracking more or less in line. But I wondered if you had any perspective on that. And then as you talk about the margin step-up for next year, I wonder if there's any way to sort of talk about things like lower commission, risk coding, your own things you control like medical cost initiatives and how much natural margin lift you have versus how much is just going to be dependent on the cost trend and what the competitive landscape looks like, et cetera? Celeste Mellet: I appreciate the question. So we did guide to 7% to 8% cost trend. My understanding is that some of our peers guided to significantly higher cost trend. I can't speak to what they're seeing other than we are in line with the range with some favorability. We also continue to build prudent reserves. We continue to be prudently reserved, especially versus the beginning of the year, we have built significant reserves this year. We have a lot of data. We continue to look at data through the end of July. In fact, it's fairly consistent. And our goal is to deliver on our commitment to you in terms of our '26 results and more importantly, continue to make progress on our 2028 commitments really focused on the long term. Obviously, we need to deliver on the short term to do that. In terms of margin progression next year, we're not going to get into a lot of specifics around the bids as we talked about, ultimately, where we land will depend on the membership size and composition. We are working on reducing cost of care more broadly. Jim talked extensively about site of care, really focused on clinical innovation. We continue to drive our transformation, which gives us nice lift. We obviously made adjustments to the benefits, and we talked about the plan exits. You do get a natural lift in terms of what we call accurate diagnosis. There isn't anything unusual in terms of what we're doing. We're obviously working to mitigate the chart review item that was included in the rate notice, and we're making good progress there. But otherwise, nothing unusual from the MRA perspective. Operator: Our next question comes from Lance Wilkes with Bernstein. Lance Wilkes: Could you talk a little bit about value-based care and looking at it from the 2 ways you can look at it. From a contracting perspective, if you could just give a little perspective on the trend differences you see fee-for-service contracting versus some of the positive things you're seeing with your value-based care contracting. And are you looking at making any sort of contracting changes in '27, either expanding that further or contracting? And then as an operator in CenterWell, if you could just talk a little about the performance differences you're seeing with a de novo versus wholly owned versus IPA styles of business and then obviously, the business that's coming in from Welsh Carson as well. Celeste Mellet: Yes. So there's a lot in there. So with value-based care -- so we guided to 7% to 8% trend. We are doing within the better end of that range. And value-based care is slightly better than the fee-for-service. So all within the range, but value-based care are doing even better, which makes sense. If you think about it, value-based providers are focused on managing the health of our members, their patients, trying to drive better health outcomes, again, ensuring that people aren't hospitalized or readmitted if they don't need to be, ensuring they're taking their meds, et cetera. In terms of contracting, we have been very focused on driving more consistency with our contracting, driving aligned incentives between us and our providers. They are obviously very important partners to us. Ensuring in the bids -- it's been a big focus, ensuring we understand the impact of our benefit changes on them. But this has been something we've been working on for the last, I guess, since Jim got here 2 years, and we continue to make very good progress and are pleased with the results we're seeing. As it relates to CenterWell, it is performing across the board, sort of in line with broader trends. We have very strong patient growth this year, driven by both organic growth as well as the acquisitions that we made. We're not going to get into the detail across the various subsegments of the CenterWell members other than to say, as you know, the de novo, which often overlap with Welsh Carson are still working through the J curve, but we're making progress there. Operator: Our next question comes from Scott Fidel with Goldman Sachs. Scott Fidel: I was hoping you could maybe toggle over and give us an update on the Part D business and talk about how underwriting performance in the Part D plans have been trending this year? And then obviously, the timing is a little bit tight here granted with it just coming out last night. But just with the announcement from CMS around sunsetting the premium stabilization program at the end of this year, did you have any visibility into that? Or was that something that was considered in your bids for 2027? Just curious around that program and the timing of CMS announcing it here after the bids have been submitted earlier. Celeste Mellet: Scott, I'll take the first part and then Jim will take the second part. So on Part D membership mix, drug trends for which, as you know, we have high visibility and member behavior are in line to slightly better than our expectations to date. We continue to operate as expected and remain confident in our pricing strategy for this year. And I'd just say for the purpose of '27 bids, we have focused also on margin here. And given the health technology pipeline, are very focused on ensuring we're pricing for that risk. Jim? James Rechtin: Yes. And on the policy side, with both the demo and the rebate data that has come out, I would just say nothing in there is outside of kind of the band of expectations we had. We knew there was a chance that the demo might get canceled. We took that into account as we were submitting our bids -- and look, the reality of the demo going away has a greater impact for better or worse, for worse on members more than it has on us. And again, the tension that I think policymakers are wrestling with, and I've said this many times, is we have a lot of fiscal pressure and we have a popular program, and they're trying to figure out how to balance those things. And I think this is another example of policymakers trying to balance those two things. But the impact is unfortunately going to be more on our members who will try to protect the best we can than it is on us. And we certainly planned for this possibility in our bid process. And similarly, the rebate information that has come back to us is kind of within our planning scenarios. It doesn't really change anything about our outlook on bids or plans for next year. Operator: Our next question comes from Andrew Mok with Barclays. Andrew Mok: I appreciate all the comments on your own Stars performance, but would love to hear your perspective on the recent litigation outcomes around the MA Stars program, how that impacts your view of the program, competitive landscape and required investment. James Rechtin: Yes. The recent litigation, we're not going to comment speculatively on the litigation itself. There's obviously a whole bunch of decisions that have to get made that we don't have control over, and we don't feel that speculating on that does much for anybody. What I would say is and just kind of reinforce for investors is this program is important, and it's important -- meaning the Stars program. It's an important part of the broader Medicare Advantage program. It is important in driving quality. It is important in driving experience for members. Our view is that we need this program to be stable. And that doesn't mean that it doesn't need to evolve that there aren't opportunities to improve it. There certainly are. We want to be a partner in making that happen. But our North Star as we make decisions around this is how do we help reinforce a stable positive program that benefits members, that works for the MA program more broadly and how do we be a good partner to CMS in making that happen. And that really is the guiding light as we kind of navigate through these things and make our decisions. And that's where we're at. Beyond that, we're going to have to let events play out as they may. Operator: Our next question comes from Ryan Langston with TD Cowen. Ryan Langston: In the prepared remarks, you mentioned medical and Rx trends in line for new and existing members. Can you give us a sense how that trended for your duals and non-duals membership? And then on the '27 bid strategy, was there any particular consideration on prioritizing capture or recapture of duals versus nonduals in your bids? Celeste Mellet: So the duals performance looked fairly consistent with the rest of the book. In relation to getting into subsegments of our bids, retaining members remains a very important priority for us on both duals and non-duals. And we very much focused on prioritizing the benefits that the members care about the most. We've done a lot of research on that. And we're not going to get into how we're positioning ourselves, particularly as we believe our competitors are listening to this call. James Rechtin: Yes. The only thing I would add to that is we do believe that we are one of the better positioned companies to be able to serve duals effectively. And that is important to us. And so we think we're good at it. We think it's important for the health care community to be providing very good services there. And so they continue to be a priority, but not in any way that is new or different from past years. Operator: Our next question comes from Whit Mayo with Leerink Partners. Benjamin Mayo: Celeste, I know that you're not giving specifics for next year on margins and targets. But just maybe remind us what the margin growth is that you'd historically expect to see from this year's new members to Humana next year, not what you expect for '27, but just again, historically, what that lift has been? Celeste Mellet: We'll just talk about the -- what would drive margin improvement from the first year to the second year. You have, one, the -- as we get to know the members better, we are better able to diagnose and manage their care. So typically, if they're properly diagnosed, you're paid appropriately for their acuity, and then we typically get -- are better at managing that. So that gives you a lift on the underwriting margin. Second, as you know, the year 1 all-in marketing and acquisition costs, co-op marketing, et cetera, onboarding costs are 2x what the second year is. So to the extent you're retaining those members, that falls away. So ultimately, how that plays out will be dependent on the membership. The retention is super important to us. We think this drives a ton of value. It's just -- and the overall size of the book and the mix of the book. Operator: Our next question comes from the line of Elizabeth Anderson with Evercore ISI. Elizabeth Anderson: I was wondering if you could help update us on sort of the cost-cutting progression. Obviously, a sort of multiyear effort, but sort of where are we on that? Like is it changing in composition or any changed assumptions on that? And then as an offshoot of that, can you also talk about sort of your expectations for the December Investor Day? Obviously, you're on your plan to '28, but could you just update us on sort of what you hope to communicate to the broader investor community on that date? Celeste Mellet: Yes. I'll hit that, and then I think Jim will jump in. Jim called out upfront that we're making significant progress on our cost-cutting efforts. We've talked a lot about a lot of the progress we made last year was more tactical. So there's figuring out where there's frankly fat or we could do things more efficiently. So pushing on contracting, consolidating vendors, et cetera. This year, much more of the progress is really on the transformational side. Jim mentioned the outsourcing. That is really important, both in terms of increasing that in our support functions in finance and HR. But as we talked about last year at the Investor Day, we had very, very many outsourcing partners across the company. A lot of the relationships weren't strategic. We're consolidating those. And what you get from that is it does help improve service. It improves consistency. And generally, if you're consolidating relationships, you have a lot more pricing power. But it's -- the primary driver is really improving the quality of service. We are a consumer health care company, who we outsource to, particularly if it touches our members and our patients is really important . You know that, Jim also talked about the operating model work more broadly, the centralization of many functions, reason number one to do it is, to improve the services that we deliver, for example, on utilization management, providing consistency across markets and across plans really matters. It also saves G&A costs. So making continued progress. We're really happy and excited about what we've seen. We're not reflecting big benefits yet from technology over time, we think there's an opportunity there, but really making good progress. And I think doing it in a way that creates value in the near term, but also ensures that the changes we're making are really sustainable. James Rechtin: Yes. And Celeste said it well, I'm just going to reinforce one thing. A lot of the cost management effort is about making this business simpler. It's about simplifying our infrastructure. It's about simplifying how we're organized. It's about simplifying accountabilities. The more that you do that is about simplifying processes, simplifying our data management. The more that we do that, the lower our cost of running the business is and the better our services, the better our services. We respond to the needs of our members and our provider network more consistently and better. And that's the journey that we're on. And while we've made progress here over the last year, 1.5 years, and we feel good about that progress, we also know that there's a clear road map over multiple years for us to continue to push on this. And so that's what we will continue to do. So back to Investor Day? Yes. Thank you. I forgot about that. On the Investor Day or investor update front, look, we're -- in December, we are 1.5 years from the Investor Day that we had last June. We'll be on the other side of BY '28 Stars results. At that point, we'll have pretty good visibility, as I noted earlier, in AEP and kind of membership trends heading into '27. We obviously won't have perfect information on that by any means, but we'll have very good leading indicators. And it feels like it is the right time to come back to you and give you an update on exactly where we think we're at. We do not have any intention of announcing a change in strategy, a change in direction. We feel good about the direction that we're in. We don't anticipate changing any of the goalposts that we've set out for you. This really is about us saying, "Hey, we're halfway-ish through a 3-year period of time, and it's time for us to pull up and give you a more comprehensive update. And that is it. And so -- that is the plan on -- in December, and we're excited to be at that point where we can do that, and we look forward to having that meeting. Celeste Mellet: I would describe it as a mark-to-market. We're marking to market our commitments to the Street. James Rechtin: So with that, I am going to wrap up. And so I want to thank everybody for joining us this morning and for your interest in Humana. And I also want to thank, as we always do, the 65,000 associates who make this place work, who serve our members, who serve our patients each and every day. We appreciate what they do, and we appreciate your support, and we hope you have a great day. So thank you. Operator: This concludes today's conference call. Thank you for participating. You may now disconnect. 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While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Humana (HUM) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

MINNEAPOLIS, Aug. 06, 2026 (GLOBE NEWSWIRE) -- CVRx, Inc. (NASDAQ: CVRX) ("CVRx"), a commercial-stage medical device company focused on developing, manufacturing and commercializing innovative neuromodulation solutions for patients with cardiovascular diseases, today announced its financial and operating results for the second quarter of 2026. Recent Highlights Total revenue for the second quarter of 2026 was $15.7 million, an increase of approximately 16% over the prior year quarter U.S. revenue for the second quarter of 2026 was $14.8 million, an increase of 21% over the prior year quarter Active implanting centers in the U.S. grew to 258 as of June 30, 2026, as compared to 240 as of June 30, 2025 Humana issued a Medicare Advantage coverage policy, effective May 1, 2026 for Barostim therapy, which is the first coverage policy of its kind for Barostim "We are pleased with the strong revenue growth and margin performance in the second quarter along with the reimbursement progress we made, including the new Medicare Advantage coverage policy from Humana. However, we are not satisfied with our updated outlook for the balance of the year, driven by fewer sales territories than anticipated, lower sales force productivity and a prolonged challenge with one of our largest payers,” said Kevin Hykes, President and Chief Executive Officer of CVRx. “We are taking direct action to address these headwinds, and our confidence in the long-term fundamentals of this business remains high, supported by strong growth observed in our most stable regions and encouraging early progress on the BENEFIT-HF trial and our broader clinical and reimbursement strategies." Second Quarter 2026 Financial and Operating Results Revenue was $15.7 million for the three months ended June 30, 2026, an increase of $2.1 million, or 16%, over the three months ended June 30, 2025. Revenue generated in the U.S. was $14.8 million for the three months ended June 30, 2026, an increase of $2.5 million, or 21%, over the three months ended June 30, 2025. Revenue units in the U.S. totaled 466 and 391 for the three months ended June 30, 2026 and 2025, respectively. The increases were primarily driven by continued growth in the U.S. HF business as a result of the expansion into new sales territories, new accounts, and increased physician and patient awareness of Barostim. As of June 30, 2026, the Company had a total of 258 active implanting centers in the U.S., as compared to 240 as of June 30, 2025. Active implanting centers are customers that have completed at least one commercial HF implant in the last 12 months. As of June 30, 2026, the number of sales territories in the U.S. is 56 as compared to 47 sales territories as of June 30, 2025. Revenue generated in Europe was $0.9 million for the three months ended June 30, 2026, a decrease of $0.4 million, or 31%, compared to the three months ended June 30, 2025. Total revenue units in Europe decreased to 40 for the three months ended June 30, 2026, from 61 in the prior year period. The number of sales territories in Europe remained consistent at five as of June 30, 2026. Gross profit was $13.7 million for the three months ended June 30, 2026, an increase of $2.3 million, or 20%, over the three months ended June 30, 2025. Gross margin was 87% and 84% for the three months ended June 30, 2026 and June 30, 2025, respectively. R&D expenses increased $0.7 million, or 27%, to $3.1 million for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. This change was driven by a $0.6 million increase in headcount expenses and a $0.1 million increase in clinical trial expenses. SG&A expenses increased $0.3 million, or 1%, to $23.6 million for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. This change was primarily driven by a $0.7 million increase in non-cash stock-based compensation expenses and a $0.5 million increase in legal expenses, partially offset by a $0.6 million decrease in advertising expenses and a $0.3 million decrease in travel expenses. Interest expense increased $0.1 million for the three months ended June 30, 2026, compared to the three months ended June 30, 2025, driven by interest expense on the increased borrowings under the term loan agreement with Innovatus Capital Partners. Other income, net was $0.6 million and $1.1 million for the three months ended June 30, 2026 and 2025, respectively. These balances consisted of interest income on our interest-bearing accounts. The decrease was primarily driven by the lower cash balance. Net loss was $14.0 million, or $0.53 per share, for the three months ended June 30, 2026, compared to a net loss of $14.7 million, or $0.57 per share, for the three months ended June 30, 2025. Net loss per share was based on 26.5 million weighted average shares outstanding for three months ended June 30, 2026 and 26.1 million weighted average shares outstanding for the three months ended June 30, 2025. As of June 30, 2026, cash and cash equivalents were $64.6 million. Net cash used in operating and investing activities was $8.9 million for the three months ended June 30, 2026, compared to $8.0 million for the three months ended June 30, 2025. Humana Medicare Advantage Coverage Policy In May 2026, Humana issued a Medicare Advantage coverage policy for Barostim therapy, effective May 1, 2026. Humana, a national health insurance company with the second largest Medicare Advantage program in the U.S., provides coverage to approximately 5.2 million Medicare Advantage members across 46 states. The policy covers Barostim for patients meeting its current FDA-approved indication as well as patients enrolled in the BENEFIT-HF trial. This is now the third significant reimbursement development for Barostim this year, following the transition to Category I CPT codes and CMS approval of Category B IDE coverage for BENEFIT-HF patients, each of which took effect in the first quarter of 2026. Business Outlook For the full year of 2026, the Company now expects: Total revenue between $58.0 million and $60.0 million; Gross margin between 86% and 87%; Operating expenses between $99.0 million and $101.0 million. For the third quarter of 2026, the Company expects to report total revenue between $13.5 million and $14.5 million. Webcast and Conference Call Information The Company will host a conference call to review its results at 4:30 p.m. Eastern Time today. A live webcast of the investor conference call will be available online at the investor relations page of the Company’s website at ir.cvrx.com. To listen to the conference call on your telephone, please dial 1-877-704-4453 for U.S. callers, or 1-201-389-0920 for international callers, approximately ten minutes prior to the start time. About CVRx, Inc. CVRx is a commercial-stage medical device company focused on developing, manufacturing and commercializing innovative neuromodulation solutions for patients with cardiovascular diseases. Barostim™ is the first medical technology approved by FDA that uses neuromodulation to improve the symptoms of patients with heart failure. Barostim is an implantable device that delivers electrical pulses to baroreceptors located in the wall of the carotid artery. The therapy is designed to restore balance to the autonomic nervous system and thereby reduce the symptoms of heart failure. Barostim received the FDA Breakthrough Device designation and is FDA-approved for use in heart failure patients in the U.S. It has been certified as compliant with the EU Medical Device Regulation (MDR) and holds CE Mark approval for heart failure and resistant hypertension in the European Economic Area. To learn more about Barostim, visit www.cvrx.com. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts are forward-looking statements, including statements regarding our future financial performance (including our financial guidance regarding full year and third quarter 2026 results), our anticipated growth strategies (including statements regarding the expected timing, enrollment, scope and outcomes of the BENEFIT-HF clinical trial, potential expansion of the Barostim indication, and anticipated benefits of Barostim therapy), anticipated trends in our industry, our business prospects and our opportunities. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “outlook,” “guidance,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words. The forward-looking statements in this press release are only predictions and are based largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. These forward-looking statements speak only as of the date of this press release and are subject to a number of known and unknown risks, uncertainties and assumptions, including, but not limited to, our expectations regarding enrollment in BENEFIT-HF and the resulting impact on our addressable market; our history of significant losses, which we expect to continue; our limited history operating as a commercial company and our dependence on a single product, Barostim; our limited commercial sales experience marketing and selling Barostim; our ability to continue demonstrating to physicians and patients the merits of our Barostim; any failure by third-party payors to provide adequate coverage and reimbursement for the use of Barostim; our competitors’ success in developing and marketing products that are safer, more effective, less costly, easier to use or otherwise more attractive than Barostim; any failure to receive access to hospitals; our dependence upon third-party manufacturers and suppliers, and in some cases a limited number of suppliers; a pandemic, epidemic or outbreak of an infectious disease in the U.S. or worldwide; product liability claims; future lawsuits to protect or enforce our intellectual property, which could be expensive, time consuming and ultimately unsuccessful; any failure to retain our key executives or recruit and hire new employees; impacts on adoption and regulatory approvals resulting from additional long-term clinical data about our product, including those resulting from the BENEFIT-HF trial; and other important factors that could cause actual results, performance or achievements to differ materially from those that are found in “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, as such factors may be updated from time to time in our other filings with the Securities and Exchange Commission. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise. Investor Contact:Mark Klausner or Mike VallieICR [email protected] Media Contact:Emily Meyers CVRx, Inc. [email protected]

This article first appeared on GuruFocus. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Delivered 16% organic growth with record volume gains across the business. Signed a definitive agreement to sell the diabetes business for $235 million, improving growth and margin profile. Expanded capitated relationship with Humana to 33 states plus D.C. and South Florida, transitioning 478,000 new members. Launched AI-powered mask fitting tool with 92% conversion rate in first two weeks, driving MyApp adoption up 56%. Restructured workforce to deliver $19 million in annualized savings while maintaining operational delivery. West Coast capitated contract missed expectations by $15 million in Q2, with $40 million expected impact in H2. A major manufacturer terminated contract and imposed immediate price increase, resulting in $30 million H2 impact. Full-year adjusted EBITDA guidance reduced by $55 million due to West Coast contract and $30 million from manufacturer price increase. Free cash flow was negative $20.9 million in Q2, driven by $166.2 million in capital expenditures. Recorded a $144.2 million non-cash goodwill impairment related to the diabetes divestiture. Warning! GuruFocus has detected 6 Warning Signs with AHCO. Is AHCO fairly valued? Test your thesis with our free DCF calculator. Q: The revised guidance includes a $30 million impact from a manufacturer price increase. What segment does this impact, and what levers do you have to offset it through contract renegotiation, passing costs to payers, or other operational actions? Over what time frame should offsets materialize?A: Suzanne Foster (CEO): We are in active negotiation, so I prefer not to specify the segment. Mid-year, we do not have the opportunity to pass through price. We are hopeful to resolve this, but in the meantime, we are looking at supplier mix and product profitability to offset it. We have CPI-U coming, but it's TBD until we get through the negotiation, which we will update at the end of this quarter. Q: Can you split out the $55 million guide-down for the West Coast capitated contract between increased sleep demand, actual demand, and logistics? Does this change your view on capitated contracts versus fee-for-service?A: Suzanne Foster (CEO) & Jason Clements (CFO): The split is roughly two-thirds volume and one-third labor. My view on capitation has not changed; the strategic value of exclusive footprints and the halo effect remain strong. We plan modest sequential improvements of about $1 million per quarter into Q3 and Q4. We believe a mix of capitated and fee-for-service is our future, not a majority of either. Q: Given the June 30 contract termination and immediate price increase from a large manufacturer, how shocking is this event? What was the magnitude of the price increase, and was there any prior visibility?A: Suzanne Foster (CEO): It is unusual and unfortunate, and it did surprise us. We are actively working to secure better price and terms in the spirit of partnership. As of today, there is no contract, so we are ordering under the new terms. We felt it would be disingenuous not to call out the risk. I sincerely hope the outcome is different when we speak next. Q: The revised guidance includes a $15 million impact from other portfolio actions. What do these entail, and should we think of this as a one-time headwind or ongoing drag?A: Jason Clements (CFO): This is a one-time headwind. We have already started shutting down sales channels for non-core wellness products. For every $1 of revenue that comes out, we drop about 35% gross profit. We are still servicing the existing patient census and transitioning them to other providers over the next couple of quarters, so this will not repeat in 2027 and beyond. Q: As you make these strategic moves, is there a direction to shrink the business? What is the end goal and how do you balance streamlining with deleveraging corporate overhead?A: Suzanne Foster (CEO): This company was built through 150+ acquisitions, leading to subscale products and inconsistent workflows. Over the past two years, we have systematically pruned the portfolio (e.g., Cottman's, Custom Rehab, Homelink Fusion, and now Diabetes and e-commerce). These were good businesses, but with looming threats like competitive bidding, we chose to shrink to our core sleep and respiratory business. This quarter completes that divestiture path, allowing us to invest all additional dollars back into our core and deploy technology and AI at a much faster pace. Q: What exactly operationally needs to be done on the West Coast contract, and are there opportunities to reprice given higher-than-expected utilization? Also, how does the Humana expansion workare you pulling business from another provider?A: Suzanne Foster (CEO): There are two main buckets: order volume/utilization and inherited messy workflows. Sleep resupply spikes were transition-related pent-up demand and are coming down. Enteral volumes need intervention. We are working with our partner to align ordering practices and introducing technology to streamline workflows. On Humana, South Florida was previously handled by Humana directly, not another provider. They RFP'd it, we won, and it's a new geography for us, but we have three years of experience with Humana and know how to operate these contracts profitably. Q: What is your target margin expectation for capitated agreements, and is that dependent on the halo effect?A: Suzanne Foster (CEO): Our capitated target is enterprise margins of 20%, which does not include any halo effect. Even with Humana or other capitated business, we target that, and the halo effect has always been upside for us. Q: Regarding the stranded corporate overhead from the Diabetes divestiture, you expect to eliminate half within 12 months. What about the other half?A: Jason Clements (CFO): For the remaining $30 million of stranded cost, we believe organic growth and accretive M&A will bring more revenue onto the rails, absorbing that overhead. We will also continue disciplined expense management, as demonstrated by the $19 million restructuring program. We are quite confident the first $30 million comes out in the first 12 months. Q: Can you explain the cybersecurity incident, any disruptions, expected remediation costs, and how it was treated in adjusted results?A: Suzanne Foster (CEO) & Jason Clements (CFO): We were notified of a threat actor that took some data. We have closed it out and moved on; there is no additional risk. The settlement expenses to close out the matter are included in our non-recurring expenses, adjusting the unit. Q: Can you break down the free cash flow guidance of $80 million to $120 million, and walk through the bridge for the back half of the year?A: Jason Clements (CFO): The first half was a use of about $47-$48 million. We expect Q3 to deliver approximately $50 million of positive free cash flow to offset the first half, with the remainder in Q4. Cash flow from ops will follow a similar shape as the past, and CapEx will dial back as overstock built for the West Coast contract and national CPAP works through the system. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Humana Inc.? Here are five stocks we like better. Humana expects 2027 Medicare Advantage margin expansion to keep it on track for a sustainable pretax margin of at least 3% by 2028, supported by clinical improvements, operating efficiencies, plan-mix changes and benefit adjustments. The company plans to exit certain 2027 Medicare Advantage plans affecting roughly 600,000 members, primarily lower-performing plans, while seeking to recapture a significant portion of those members. Humana also reported favorable inpatient cost trends and a 120-basis-point year-over-year decline in its second-quarter operating-cost ratio. Humana maintained its confidence in returning to top-quartile Stars performance and announced several strategic developments, including the planned $900 million Gentiva divestiture, a new Illinois Medicaid contract beginning in 2027 and two additions to its board. UnitedHealth Just Gave Wall Street a Clearer Turnaround Signal Humana (NYSE:HUM) said its 2026 performance is tracking in line with expectations, with management emphasizing planned Medicare Advantage margin expansion in 2027, progress in its Stars program and continued operating-cost reductions as key components of its path toward a sustainable pretax margin of at least 3% in 2028. President and Chief Executive Officer Jim Rechtin said the company’s 2026 membership growth trajectory remains on track and that both new and returning members are performing as expected. He said Humana’s priority in preparing its 2027 Medicare Advantage, or MA, bids was to make the margin progress needed to remain on course for its 2028 target. → Refiner Stocks Are Near Record Highs—Can Iran-Driven Margins Keep Them There? 3 Stocks Doing the Heavy Lifting in Healthcare’s Rebound “We expect our targeted margin expansion in 2027 to be driven by our ongoing focus on clinical excellence and operating efficiency work, combined with adjustments to our plan mix and benefits,” Rechtin said. Chief Financial Officer Celeste Mellet said Humana expects to make “significant progress” in 2027 compared with 2026, although final results will depend on the size and composition of its membership. The company did not provide a specific margin target for 2027. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now 3 Healthcare Stocks Set to Benefit From the One Big Beautiful Bill Humana expects targeted plan exits for 2027 to affect approximately 600,000 members. Mellet said the company intends to recapture a significant portion of those members, similar to its experience in 2025, when it recaptured just over 40% of affected membership. The company said it will use plan exits to preserve higher-performing plans, particularly those with greater penetration of value-based care. Mellet described the strategy as removing the lower end of profitability and returns rather than making more uniform benefit reductions across the portfolio. She said most planned exits involve plans with ratings of 3.5 Stars or below for bonus year 2027, though she said the strategy was not principally a Stars-related decision. → Oil Prices Are Surging and These 4 Stocks Are Cashing In Humana said its bids continue to assume cost trends consistent with its 2026 outlook. Mellet reiterated that the company expects all-in medical and pharmacy cost trend of 7% to 8% this year, including lower medical-cost trend and double-digit drug-cost trend. For 2027, she said drug trend is expected to increase modestly due to the health technology pipeline and newly released drugs. Management also said it incorporates contingency into its bids because they are submitted well ahead of the coverage year. Mellet said medical costs have been within Humana’s expected range, with slight favorability concentrated in inpatient care. Based on roughly four months of completed claims data, she said the favorable inpatient trend was more concentrated among members served by value-based providers. The company said it has seen both lower hospital admissions per thousand members and lower unit costs for admissions. Rechtin said Humana is pursuing site-of-service initiatives intended to steer members toward lower-cost and higher-quality settings through local contracting, provider incentives, benefit design and member education. Humana’s consolidated operating-cost ratio declined 120 basis points year over year in the second quarter, according to Mellet. The company continues to expect an approximately 150-basis-point reduction for the full year. Management said operating-model efforts have generated hundreds of millions of dollars in value during the first half of 2026. Among the actions cited by Rechtin were centralizing utilization-management operations from 11 markets into one team, expanding outsourcing in finance and human resources, optimizing information-technology vendor relationships and integrating CarePlus operations into Humana’s core platforms. Mellet said earlier cost efforts were more tactical, while current work is increasingly transformational, including simplification of operations, organizational structures, data management and vendor relationships. She said Humana is not yet reflecting major benefits from technology initiatives but sees a longer-term opportunity. Rechtin said Humana’s outlook for bonus year 2028 Stars results remains unchanged and that the company remains confident in its ability to return to top-quartile results. Humana defines that objective as Stars revenue per member per month that is 10% above the median of its peer group, rather than relying solely on the percentage of members enrolled in plans rated 4 Stars or higher. The company said its rate of improvement in 11 of 12 selected HEDIS and patient-safety measures outpaced the historical compound annual growth rate over the prior four years. Rechtin said the measures were selected because Humana had consistent longitudinal data for comparison and that management believes they are representative of broader performance. Humana said it does not know the industry thresholds that will ultimately determine Stars outcomes and therefore cannot guarantee a result when the final data are released. The company expects to enter its annual Stars blackout period once it receives plan preview information from the Centers for Medicare & Medicaid Services beginning in August, with final data expected in October. For bonus year 2029, Humana said it remained 5% ahead of last year’s quality-improvement rate on a per-member basis in key HEDIS measures at the end of the second quarter. New members’ engagement levels were in line with, and on some measures above, those of renewing members, management said. Humana plans to host a virtual investor update on Dec. 10. Rechtin said the company expects by then to have full visibility into bonus year 2028 Stars results and preliminary insights into 2027 membership trends. He characterized the event as a “mark to market” on existing commitments rather than a change in strategy or financial goals. Humana said it has agreed to divest its minority interest in Gentiva in a transaction valued at approximately $900 million and expected to close in the fourth quarter. Rechtin said proceeds will largely fund the company’s recent acquisition of MaxHealth. The company also established $1.5 billion in contingent capital facilities using pre-capitalized trust securities, or PCAPS. Mellet said the facilities provide long-duration contingent liquidity without increasing balance-sheet leverage unless drawn, and Humana does not anticipate using them in the near or medium term. In Medicaid, Humana said it was awarded a statewide Illinois Medicaid managed-care contract scheduled to begin in January 2027. Rechtin said Humana was the only new entrant awarded a contract alongside five incumbents. Separately, the company announced that Paul Smith, Anthropic’s chief commercial officer, and Fred Crawford, the former president and chief operating officer of Aflac, will join Humana’s board of directors. Humana Inc (NYSE: HUM) is a health insurance company headquartered in Louisville, Kentucky, that primarily serves individuals and groups across the United States. The company is best known for its Medicare business, offering Medicare Advantage plans and prescription drug (Part D) coverage, alongside a range of commercial and employer-sponsored group health plans. Humana's products are designed to cover medical, behavioral health and pharmacy needs for members, with particular emphasis on seniors and Medicare-eligible populations. In addition to traditional insurance products, Humana provides care-management and wellness services intended to support chronic-condition management, preventive care and care coordination. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Humana Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

The Cigna Group CI reported second-quarter 2026 adjusted earnings per share (EPS) of $7.78, which beat the Zacks Consensus Estimate by 2.6%. The bottom line improved 8.1% year over year. Adjusted revenues grew 6.6% year over year to $71.56 billion. The top line beat the consensus mark by 0.2%. The strong quarterly results were primarily driven by robust growth in the Cigna Healthcare segment, while growth in the Middle and Select markets and higher specialty volumes supported revenues. However, the upside was partly offset by higher pharmacy and other service costs. Cigna Group price-consensus-eps-surprise-chart | Cigna Group Quote Cigna’s medical customer base came in at 18.4 million as of June 30, 2026, which inched up 2% year over year and surpassed the Zacks Consensus Estimate of 18.3 million. The metric benefited from well-performing Middle and Select markets, partially offset by low membership in National Accounts. Total benefits and expenses of $69 billion increased 6% year over year in the reported quarter due to a rise in pharmacy and other service costs. The adjusted SG&A expense ratio improved 30 basis points year over year to 4.6%, primarily driven by operating efficiencies. Adjusted income from operations totaled $2.1 billion, which advanced 6.4% year over year, primarily driven by higher contributions from Cigna Healthcare. Evernorth Health Services: The unit's adjusted revenues increased 6.3% year over year to $61.5 billion in the second quarter, primarily driven by drug mix in the Pharmacy Benefit Services business and specialty volume growth in the Specialty and Care Services business. The metric, however, missed the Zacks Consensus Estimate of $61.6 billion. Adjusted operating income, on a pre-tax basis, came in at $1.7 billion, down 2% year over year and marginally ahead of the Zacks Consensus Estimate of $1.6 billion. The pre-tax margin contracted 20 basis points year over year to 2.7%. Cigna Healthcare: The segment recorded adjusted revenues of $11.7 billion, which increased 9.1% year over year in the second quarter. The growth was driven by premium rate increases to offset higher medical costs. Pre-tax adjusted operating income improved 17% year over year to $1.3 billion, surpassing the Zacks Consensus Estimate of $1.2 billion. The increase primarily reflected improved margins in the U.S. Employer business. MCR deteriorated 130 basis points year over year to 84.5%, primarily due to higher prior-year risk adjustment benefits recognized in the second quarter of 2025. Cigna exited the second quarter with cash and cash equivalents of $6.3 billion, which fell 18% from the 2025-end level. Total assets of $157.1 billion slid 0.5% from the 2025-end level. Long-term debt amounted to $29.1 billion, down 5.8% from the figure as of Dec. 31, 2025. Short-term debt totaled $2.8 billion. Total equity of $42.9 billion inched up 2.5% from the 2025-end level. Net cash provided by operating activities improved to $710 million for the first six months of 2026 from $34 million a year earlier. Adjusted EPS is now expected to be at least $30.45 for 2026, up from the prior guidance of at least $30.35. The revised outlook implies at least 2.0% growth from the 2025 reported figure. The MCR is reiterated to be in the band of 83.7-84.7%. Adjusted operating income, on a pre-tax basis, for the Evernorth Health Services segment is expected to continue at a minimum of $6.9 billion. The same metric for the Cigna Healthcare unit is presently forecasted to be a minimum of $4.550 billion, whereas the earlier projection called for it to be at least $4.525 billion. Earlier, adjusted revenues were forecasted to be around $280 billion, which indicates an improvement of around 2% from the 2025 figure. Adjusted operating income was anticipated to be a minimum of $7.95 billion. Operating cash flow was forecasted at around $9 billion. Capital expenditures were expected to be around $1.3 billion. Cigna expected total medical customers to be roughly 18.1 million. The adjusted SG&A expense ratio was estimated at around 5%. Cigna currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Here are some stocks from the broader Medical space that have also reported their quarterly results: Humana Inc. HUM, Acadia Healthcare Company, Inc. ACHC and Centene Corporation CNC. Here's how they have performed: Humana reported second-quarter 2026 adjusted earnings of $7.61 per share, which beat the Zacks Consensus Estimate by 22.4%. The bottom line rose 21.4% year over year. Adjusted revenues improved 26.2% year over year to $40.9 billion. The top line surpassed the consensus mark by 0.6%. Humana’s quarterly results benefited from premium gains and a robust performance from the CenterWell segment, which saw a revenue jump supported by its primary care business. A rise in overall medical membership also contributed to the upside. However, the upside was partly offset by escalating operating expenses and a deteriorating benefit ratio. Acadia Healthcare reported adjusted second-quarter earnings of 38 cents per share, which beat the Zacks Consensus Estimate by 15.2%. However, the bottom line declined 54% year over year. Acadia Healthcare’s top line declined 0.4% year over year to $865.8 million and surpassed the Zacks Consensus Estimate by 2.5%. The quarterly results reflected strong patient demand, as admissions increased and same-facility patient days improved. Residential Treatment Facilities also delivered double-digit revenue growth. However, lower revenue per patient day, a shorter average length of stay and higher operating expenses weighed on profitability. Centene reported second-quarter 2026 adjusted earnings per share of $2.51, which surpassed the Zacks Consensus Estimate of 89 cents. Moreover, the bottom line climbed from a loss of 16 cents per share a year ago. Revenues totaled $53.6 billion, which rose 9.9% year over year. The top line beat the consensus mark by 12.7%. Centene’s quarterly results benefited from strong premium and services revenues in Medicaid and Medicare businesses, fueled by increased premium yield, expanding membership in the Prescription Drug Plan business and rate hikes in Marketplace and Medicaid businesses. However, the upside was partly offset by a decline in total membership and an increase in medical costs. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cigna Group (CI) : Free Stock Analysis Report Humana Inc. (HUM) : Free Stock Analysis Report Centene Corporation (CNC) : Free Stock Analysis Report Acadia Healthcare Company, Inc. (ACHC) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Humana Inc. HUM reported second-quarter 2026 adjusted earnings of $7.61 per share, which beat the Zacks Consensus Estimate by 22.4%. The bottom line rose 21.4% year over year. Adjusted revenues improved 26.2% year over year to $40.9 billion. The top line surpassed the consensus mark by 0.6%. The strong quarterly results benefited on the back of premium gains and a robust performance from the CenterWell segment, which saw a revenue jump supported by its primary care business. A rise in overall medical membership also contributed to the upside. However, the upside was partly offset by escalating operating expenses and a deteriorating benefit ratio. Humana Inc. price-consensus-eps-surprise-chart | Humana Inc. Quote Humana’s premiums totaled $38.8 billion, which advanced 26.4% year over year, and surpassed the Zacks Consensus Estimate of $38.6 billion and our estimate of $38.1 billion. Services revenues rose 27.1% year over year to $1.8 billion, beating the consensus mark of $1.7 billion. Investment income of $253 million fell 7% year over year in the quarter under review. However, the metric beat the consensus mark of $235.3 million and our estimate of $241.9 million. The benefit ratio came in at 91.1%, which deteriorated 140 basis points (bps) year over year. Total operating expenses increased 26.3% year over year to $39.5 billion, higher than our estimate of $38.9 billion. The year-over-year increase was due to higher benefits and operating costs. The adjusted operating cost ratio of 9.7% improved 120 bps year over year. HUM’s net income increased 27.6% year over year to $693 million but beat our estimate of $562.1 million. The segment’s revenues rose 25.9% year over year to $39.1 billion in the second quarter on the back of improved per-member premiums derived from HUM’s Medicare and stand-alone PDP businesses, supported by improved Medicare Advantage benchmark funding from the Centers for Medicare and Medicaid Services and a higher Part D direct subsidy tied to the IRA. Adjusted operating income grew 7% year over year to $824 million. The benefit ratio deteriorated 130 bps year over year to 91.2%. The operating cost ratio of 7.1% improved 120 bps year over year. Total medical membership of the segment was 17.9 million as of June 30, 2026, which rose 20.7% year over year. The metric beat the Zacks Consensus Estimate of 17.5 million and our estimate of 17 million. The unit recorded revenues of $6.8 billion in the quarter under review, which improved 22.6% year over year and surpassed the Zacks Consensus Estimate of $6.3 billion. The metric benefited from higher revenues stemming from the company’s primary care business. Adjusted operating income rose 27.2% year over year to $514 million. The operating cost ratio of 92.4% improved 30 bps year over year, driven by the ongoing maturation of the v28 risk model update within the company’s primary care business and its cost-cutting and transformation strategy. Humana exited the second quarter with cash and cash equivalents of $6.9 billion, which rose 64.1% from the 2025-end level. Total assets of $57.2 billion increased 16.9% from the figure at 2025-end. Long-term debt amounted to $12 billion, down 3.2% from the figure as of Dec. 31, 2025. Debt to capitalization deteriorated 200 bps year over year to 42.7% at the second-quarter end. Total stockholders’ equity of $19.3 billion advanced 8.8% from the 2025-end figure. HUM generated net cash from operations of $3.2 billion in the first half of 2026, which more than doubled year over year. Humana bought back shares worth $108 million in the first half of 2026. It also paid dividends of $214 million during the same period. Revenues are still projected to be a minimum of $160 billion, which implies a 23.4% increase from the 2025 reported figure. The Insurance segment’s revenues are expected to continue to be forecasted at a minimum of $155 billion. Revenues of the CenterWell segment are still expected to be at a minimum of $25 billion. Adjusted EPS is still projected to be at least $9, which indicates a 47.5% decline from the 2025 figure. GAAP EPS is now projected to be at least $6.52, down from the previously expected guidance of at least $8.36. Management still anticipates Individual Medicare Advantage membership to witness growth of around 25% in 2026. Group Medicare Advantage membership is still expected to record an increase of roughly 150,000. Membership from the Individual Medicare stand-alone PDP is still expected to increase around 1,000,000 this year. State-based contracts are still anticipated to witness membership growth within 25,000-100,000. The GAAP benefit ratio for the Insurance segment is still likely to be 92.75%, with a variability margin of plus or minus 25 basis points. The GAAP consolidated adjusted operating cost ratio is still expected to be at 10%, with a variability margin of plus or minus 25 basis points. GAAP cash flow from operations is still estimated within $2.5-$2.9 billion. Meanwhile, capital expenditures are still projected to be roughly $650 million. The adjusted effective tax rate is expected to be around 25.5%, while the weighted average share count is anticipated at around 121 million. HUM currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. Here are some stocks from the broader Medical space that have also reported their quarterly results: Tenet Healthcare Corporation THC, Elevance Health, Inc. ELV and UnitedHealth Group Incorporated UNH. Here's how they have performed: Tenet Healthcare reported second-quarter 2026 adjusted earnings per share of $6.12, which surpassed the Zacks Consensus Estimate by 50%. The bottom line increased 52.2% year over year. THC’s net operating revenues advanced 6.8% year over year to $5.63 billion. The quarterly results were driven by strong same-facility revenue growth, higher patient acuity, disciplined expense management and higher Medicaid supplemental revenues. However, the gains were partly offset by an unfavorable payer mix due to lower exchange admissions. Elevance Health reported second-quarter 2026 adjusted earnings per share of $7.45, which surpassed the Zacks Consensus Estimate by 20.6%. However, the bottom line declined 15.7% year over year. Operating revenues advanced 0.8% year over year to $49.8 billion. ELV’s quarterly results were primarily driven by higher premium yields in the Health Benefits segment and increased CarelonRx product revenues. The gains were partly offset by a decline in overall medical membership and higher operating expenses. UnitedHealth Group reported second-quarter 2026 adjusted earnings per share of $6.38, which beat the Zacks Consensus Estimate of $4.94. The bottom line rose 56.4% year over year. Revenues rose 0.4% year over year to $112 billion. UNH’s strong quarterly results were aided by growth in commercial fee-based membership and the strength in Optum Insight. Medical cost management, pricing discipline and benefit design changes also contributed to the upside. However, weaker performance at Optum Health and Optum Rx, along with declining risk-based membership, partially offset these gains. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Humana Inc. (HUM) : Free Stock Analysis Report UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report Tenet Healthcare Corporation (THC) : Free Stock Analysis Report Elevance Health, Inc. (ELV) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research