Humana (HUM) Financials

Humana Inc. (NYSE: HUM) has shown a generally positive financial trend over the last four years, with significant recent quarterly improvements after experiencing some volatility in late 2023.

Key positive highlights:

• In Q2 2025, Humana reported consolidated net income of $543 million, up from a loss of $683 million in Q4 2024, showing a strong recovery.
• Operating revenue increased steadily from approximately $22.3 billion in Q4 2022 to over $32.1 billion in Q2 2025, highlighting solid top-line growth.
• Gross profit also improved from $3.86 billion in Q4 2022 to $4.82 billion in Q2 2025, indicating improving operational efficiency.
• Cash from continuing operating activities stood strong at $1.27 billion in Q2 2025, reflecting good cash generation capabilities.
• Total equity rose from about $15.3 billion at the end of 2022 to $18.3 billion by Q2 2025, indicating a stronger capital base.
• Humana continues to return capital to shareholders, with consistent dividend payments of around $0.885 per share reported in Q2 2025.
• Significant reduction in net cash used in financing activities from a negative $2.3 billion in Q4 2024 to negative $1.8 billion in Q2 2025, showing improving financing management.

Neutral observations:

• Depreciation and amortization expenses have remained relatively stable, indicating steady investment in property and equipment.
• Accounts receivable and other current assets have shown some fluctuations but remain within a consistent range, reflecting stable working capital needs.
• Goodwill remains substantial at over $9.6 billion in Q2 2025, reflecting past acquisitions which will require monitoring for impairment risk.

Areas of concern:

• Despite recent improvements, Q4 2024 exhibited a net loss of $683 million and negative operating cash flow, reflecting a challenging quarter.
• Interest expense remains elevated around $157 million in Q2 2025, which reduces net profitability.
• Other income (expense) net was a negative $200 million in Q2 2025, impacting pre-tax income negatively.
• Long-term debt increased from $9 billion in early 2022 to over $12.5 billion by Q2 2025, increasing financial leverage and interest obligations.
• Net cash used in financing activities was substantial at negative $1.8 billion in Q2 2025, driven by debt repayments and share repurchases which can pressure liquidity.

Summary: Humana has demonstrated solid revenue and profit growth with improving operational cash flow in 2025, following a difficult late 2023 marked by losses and negative cash flows. The company maintains a strong equity position and a disciplined capital return policy. However, the elevated debt level and consistent interest expenses coupled with volatile other income versus expense items pose risks to sustained profitability. Investors should watch for how management balances debt reduction with capital allocation to growth and returns.