Executive Summary

Adjusted EPS of $11.58 beat S&P Global consensus ($10.07) as timing of administrative spend and CenterWell outperformance lifted results; GAAP EPS was $10.30 . Revenue of $32.112B was essentially in line (slightly below) consensus ($32.222B) .*
Insurance segment benefit ratio improved to 87.4% (vs 89.3% a year ago) and was in line with the company’s ~87.5% expectation .
FY25 adjusted EPS guidance reaffirmed at ~$16.25; GAAP EPS lowered to ~$14.68 from ~$15.88 (mix of non-core items), while Insurance segment benefit ratio guidance of 90.1–90.5% was maintained .
Management flagged earnings seasonality (Q2 ~35% of FY) due to IRA-related Part D dynamics and reiterated commitment to ≥3% individual MA pretax margin over time; Investor Day set for June 16 as a potential stock catalyst .

What Went Well and What Went Wrong

What Went Well
- EPS beat driven by timing of opex and CenterWell outperformance; favorable specialty mix and higher primary care patient growth contributed to upside. “About 1/3 of our beat in the quarter was driven by CenterWell” (PCO and pharmacy), with some potentially durable components (specialty mix, patient growth) .
- Medical cost trends tracked in line (mid-single-digit medical, low double-digit pharmacy), with IRA/Part D tracking as expected; MA pricing and benefit design changes supported a lower benefit ratio YoY .
- Strategic progress: CenterWell Primary Care patients +27,300 q/q to ~417,800; selected as fulfillment pharmacy for NovoCare’s weight loss medication; Illinois intent to award FIDE SNP, expanding Medicaid platform .
What Went Wrong
- Revenue was marginally below consensus; consolidated operating cost ratio up YoY due to mix and lower individual MA membership, partly offset by value creation initiatives .*
- Individual MA membership declined ~446k YTD (in line with plan) with FY decline of ~550k still expected, reflecting exited unprofitable plans and counties; Stars headwinds/uncertainty persist pending litigation outcome .
- GAAP EPS guidance cut to ~$14.68 (from ~$15.88) due to non-core adjustments (e.g., put/call valuation adjustments), though adjusted EPS held at ~$16.25 .

Financial Results

Metric	Q1 2024	Q4 2024	Q1 2025
Revenue ($B)	$29.611	$29.213	$32.112
GAAP EPS ($)	$6.11	($5.76)	$10.30
Adjusted EPS ($)	$7.23	($2.16)	$11.58
Benefit Ratio – Consolidated (%)	88.9%	91.5%	87.0%
Benefit Ratio – Insurance (%)	89.3%	92.1%	87.4%
Operating Cost Ratio – Consolidated (%)	10.4%	14.4%	10.6%

Segment breakdown

Segment	Metric	Q1 2024	Q1 2025
Insurance	Revenue ($B)	$28.699	$30.937
Insurance	Income from Ops ($M, GAAP)	$898	$1,574
Insurance	Income from Ops ($M, Adjusted)	$903	$1,578
Insurance	Benefit Ratio (%)	89.3%	87.4%
Insurance	Operating Cost Ratio (%)	8.3%	8.2%
CenterWell	Revenue ($B)	$4.818	$5.095
CenterWell	Income from Ops ($M, GAAP)	$282	$392
CenterWell	Income from Ops ($M, Adjusted)	$335	$451
CenterWell	Operating Cost Ratio (%)	93.0%	91.1%

KPIs and operating metrics

KPI	Q1 2024	Q4 2024	Q1 2025
Individual MA Members (M)	5.549	5.662	5.216
PDP Members (M)	2.347	2.288	2.433
State-based Contracts Members (M)	1.261	1.460	1.608
Days in Claims Payable (days)	42.5	37.8	38.8
Debt-to-Total Capitalization (%)	45.1%	41.9%	42.8%
CenterWell Primary Care Patients (K)	318.0	390.5	417.8

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
GAAP EPS	FY 2025	~$15.88	~$14.68	Lowered
Adjusted EPS	FY 2025	~$16.25	~$16.25	Maintained
Insurance Benefit Ratio	FY 2025	90.1%–90.5%	90.1%–90.5%	Maintained
Consolidated Revenues	FY 2025	$126–$128B (implied)	$126–$128B	Maintained
Insurance Revenues	FY 2025	$121–$123B (implied)	$121–$123B	Maintained
CenterWell Revenues	FY 2025	$20.5–$21.5B (implied)	$20.5–$21.5B	Maintained
Individual MA Membership	FY 2025	~−550k	~−550k	Maintained
PDP Membership	FY 2025	~+200k	~+200k	Maintained
Medicaid Membership	FY 2025	+175k to +250k	+175k to +250k	Maintained
Consolidated OpEx Ratio	FY 2025	11.3%–11.7% (GAAP)	11.3%–11.7% (GAAP)	Maintained
Insurance Seg. Inc. from Ops	FY 2025	$1.5–$2.0B	$1.5–$2.0B	Maintained
CenterWell Inc. from Ops	FY 2025	$1.0–$1.5B GAAP; $1.2–$1.7B Non-GAAP	Same	Maintained
Effective Tax Rate	FY 2025	~25%	~25%	Maintained
Cash from Ops	FY 2025	$2.4–$2.9B	$2.4–$2.9B	Maintained
Capital Expenditures	FY 2025	~$650M	~$650M	Maintained
Dividend	Next Payable	—	$0.885/sh payable Jul 25, 2025	Declared

Note: Company stated “no changes from initial guidance provided as of Feb. 11, 2025, with the exception of GAAP EPS” .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3’24 and Q4’24)	Current Period (Q1’25)	Trend
Stars/Quality	Warned of significant 2025 Star rating decline and 2026 bonus risk; reaffirmed 2025 outlook	Litigation timing unknown; operational progress on Stars; diversification strategy; internal targets with buffers	Stabilizing operationally; litigation unresolved
MA Margin Path	2025 adjusted EPS to be ≥ 2024; margin normalization framed as multi-year	Reiterated ≥3% individual MA pretax margin over time; outcome timing tied to Stars	Focused execution; contingent on Stars
IRA/Part D Dynamics	2024 commentary acknowledged IRA impacts	Trends in line; earnings front-loaded; Q2 ~35% of FY; ‘Doc Fix’ assumed late year	Predictable seasonality under IRA
CenterWell Growth	Continued growth in Pharmacy/PCO/Home	Outperformed (PCO/pharmacy); primary care patients +27.3k q/q; specialty mix favorable	Improving
Group MA	Multi-year pricing cycle pressure (referenced from prior)	Performing as expected; re-contracting opportunity in 2026+	Stable; margin repair targeted 2026+
Medicaid	Expanding footprint	+106k YTD; visibility to ~76% of 2025 rates; Illinois FIDE SNP intent to award	Growing; rate visibility improving
Operating Efficiency/AI	Value creation initiatives in 2024	G&A timing; AI in contact centers improving efficiency	Improving leverage

Management Commentary

Strategic posture: “We are pleased with a solid start to 2025… some of the outperformance in the quarter is timing related… while there are still challenges to navigate, there are no surprises” (CEO) .
Margin goals and guidance: “We remain committed to achieving individual Medicare Advantage pretax margin of ‘at least 3%’ over time” and reaffirmed FY25 adjusted EPS of ~$16.25 and Insurance benefit ratio 90.1%–90.5% .
Seasonality: “We expect second quarter earnings to be approximately 35% of expected full year 2025 Adjusted earnings” .
CenterWell momentum: “CenterWell outperformed our expectations in the quarter” with pharmacy selected for NovoCare’s weight loss medication fulfillment and strong PCO growth .
Capital and balance sheet: “We raised $1.5 billion in the debt markets during the first quarter… debt to capitalization… 42.8%” with a long-term ~40% target; no buybacks contemplated near-term .

Q&A Highlights

Investment timing and MLR: Only ~10 bps of Stars investments impacted Q1 MLR; spend to skew to Q2–Q4, consistent with “few hundred million dollars” plan .
Path to ≥3% MA margin: No change in strategy; timing depends on Stars; better-than-expected 2026 rate notice improves stability .
Part D/Oncology trends: Mid-single-digit medical trend; low double-digit pharmacy trend; oncology higher but within plan .
Risk adjustment and membership mix: More non-D-SNP switchers from other plans aids MRA; V28 headwind tracking as expected (~160 bps incremental vs industry for HUM) .
CenterWell drivers: ~1/3 of the beat from CenterWell (PCO/pharmacy); some durable tailwinds (specialty mix, patient growth); some PPD favorability not expected to repeat .
Medicaid visibility: ~76% of 2025 rates visible; modest margin improvement expected; Illinois FIDE SNP intent to award expands dual-eligible opportunity .
Earnings cadence: Front-loaded earnings due to IRA; “Doc Fix” assumed late-year and could pressure Q4 but included in guidance .

Estimates Context

Q1 2025 vs S&P Global consensus: Adjusted EPS beat; revenue essentially in line; EBITDA above expectations. Management attributed EPS outperformance to timing of opex and CenterWell strength, with underlying medical/pharmacy trends tracking to plan .

Metric	Consensus	Actual	Beat/(Miss)
Adjusted EPS ($)	10.07*	11.58	+$1.51
Revenue ($B)	32.222*	32.112	($0.110)
EBITDA ($B)	1.923*	2.253*	+$0.330

*Values retrieved from S&P Global.

Key Takeaways for Investors

Adjusted EPS beat with reaffirmed FY25 adjusted guide suggests disciplined execution despite membership resets and Stars uncertainty; watch for Q2 seasonality (35% of FY) and late-year “Doc Fix” effects .
IRA/Part D dynamics are tracking as expected; earnings cadence is now a structural feature, important for trading setups into Q2/Q3 .
CenterWell is a growing contributor with improving operating metrics (PCO patients, specialty mix); upside lever if favorability proves durable .
Individual MA membership decline remains on plan and supports underlying margin improvement; 2026 rate notice and re-contracting cycle in Group MA set up medium-term margin recovery, contingent on Stars .
Balance sheet strengthened with $1.5B debt raise; capital return (buybacks) paused pending Stars mitigation and 2026 pricing clarity .
Near-term catalysts: June 16 Investor Day (earnings power and milestones), Q2 results (seasonality and spend timing), any Stars litigation developments .

Additional Notes and Disclosures

Non-GAAP adjustments in Q1: amortization ($0.12), put/call valuation adjustments ($1.35), value creation initiatives ($0.20), cumulative net tax impact (−$0.39), reconciling GAAP EPS $10.30 to adjusted $11.58 .
Dividend: Board declared $0.885 per share payable July 25, 2025, to holders of record June 27, 2025 .

Citations: Press release and detailed 8-K/statistical schedules ; prepared remarks and seasonality/balance sheet color ; Q3 and Q4 2024 for prior-period context ; earnings call transcript for management commentary and Q&A .

HUMANA INC (HUM)·Q1 2025 Earnings Summary