Wayne DeWitt will walk through the details of our full-year 2025 financial performance and 2026 outlook before we turn to Q&A. These actions and others are intended to improve the value we offer to all those we serve and drive sustainable growth for many years to come. We finished 2025 with adjusted earnings per share of $16.35, which was slightly ahead of our expectations. Full year 2025 results exclude a $1.6 billion net of tax and largely non-cash charge, very consistent with what we discussed on our third quarter earnings call.

Addressing the elements of this charge was important in setting a solid foundation for returning to the historical earnings quality and growth you've come to expect from us. Looking to 2026, we expect adjusted earnings per share of greater than $17.75 for growth of at least 8.6%. Our initial outlook reflects measured growth across all four of our reporting business segments, with double-digit improvements at UnitedHealthcare and low to high single-digit adjusted growth across our Optum segments. UnitedHealthcare finished 2025, having made progress to more effectively serve our members and network partners, another important element in building sustainable growth.

We closed the year with medical care patterns in each business in line with our updated outlook and ultimately supportive of our pricing decisions for 2026. We now expect UHC Medicare Advantage contraction will be in the range of 1.3 million-1.4 million members for the full year, including group, individual, and dual special needs plans. Our 2026 approach favored margin recovery, and these membership trends are a result of these actions. We will continue to work with CMS to ensure an appropriate final growth rate calculation to avoid a profoundly negative impact on seniors' benefits and access to care.

What went well
  • Full-year 2025 adjusted EPS of $16.35 came in slightly ahead of expectations.
  • Initial 2026 outlook of greater than $17.75 adjusted EPS implies growth of at least 8.6%, with double-digit improvement expected at UnitedHealthcare.
  • UnitedHealthcare successfully repriced its insurance businesses, targeting ~13% adjusted operating earnings growth and about 40 bps of margin expansion in 2026.
  • Full-year 2025 revenues were nearly $448 billion, up 12%, supported by strong cash flows of $19.7 billion (about 1.5x net income).
  • Optum Health established a stronger foundation, narrowing its affiliated network by nearly 20%, streamlining risk membership by about 15% and consolidating from 18 EMRs to three.
  • Optum Rx onboarded more than 800 new clients with over 95% of customers electing full rebate pass-through in 2026; on track to reach the 40% debt-to-capital target before year-end.
What went wrong
  • Results excluded a $1.6 billion net-of-tax, largely non-cash charge ($1.78/share), including a cyber-attack true-up, portfolio optimization and roughly $2.5 billion of restructuring with about $625 million of lost-contract reserve.
  • UHC Medicare Advantage membership is expected to contract 1.3-1.4 million in 2026, greater than originally anticipated due to intensely competitive AEP dynamics.
  • Medicaid is expected to see incremental margin pressure in 2026 from state funding shortfalls, with membership contraction of approximately 565,000-715,000.
  • The 2027 Advance Notice was described as not reflecting the reality of medical utilization and cost trends.
  • Full-year MCR of 89.1% and operating cost ratio of 13.3% both carried charge-related impacts (~20 bps and ~40 bps respectively), the latter including roughly $800 million of employee incentives and Foundation funding.

Guidance Changes

MetricPeriodCurrent guidance
Adjusted EPSFY2026greater than $17.75 (>=8.6% growth) (initiated)
Net EPSFY2026at least $17.10 (initiated)
RevenuesFY2026approximately $440 billion
Medical care ratioFY202688.8% ±50 bps (improving)
Operating cost ratioFY202612.8% ±50 bps (improving)
Cash flow from operationsFY2026at least $18 billion (~1.1x net income)
AI investmentFY2026nearly $1.5 billion (at least as much in 2027)
Medicaid membershipFY2026contraction ~565,000-715,000

Performance Breakdown

MetricYoYNote
Adjusted EPS (FY2025) $16.35, slightly ahead of expectations continued solid execution across the enterprise
Revenues (FY2025) +12% to nearly $448 billion domestic membership growth of over 415,000 people
Medical care ratio (FY2025) 89.1%, slightly better than expected includes ~20 bps of negative charge impact from the lost-contract reserve
Operating cost ratio (FY2025) 13.3% ~40 bps of charge-related impacts including ~$800 million of incentives and Foundation funding
Cash flow (FY2025) $19.7 billion (~1.5x net income) strong operating performance
Q4 Optum Health adjusted earnings ~$1.5 billion new baseline (came in below the ~$3 billion guide) fourth-quarter restructuring actions and one-time items now behind the business

Earnings Call Themes & Trends

TopicPrevious mentionCurrent periodTrend
Medicare Advantage trend and margins2025 trend ~7.5%2026 priced at 10% trend, expecting ~50 bps MA margin improvementRecovering
Optum Health turnaroundQ3 restructuring plan~$1.5 billion baseline, ~9% earnings growth and ~30 bps margin expansion expected in 2026Stabilizing
Optum Financial realignmentannounced in Q3moved into Optum Insight to capture technology and fintech synergiesImplemented
AI and technologyaccelerating investmentnearly $1.5 billion in 2026, ~$1 billion UHC operating cost reductions, 80%+ of calls leverage AIScaling
Transparency and governanceindependent reviews launchedwill publish prior-auth, claim approval, rebate and other metrics in 2026Expanding
2027 MA rate environment—Advance Notice viewed as insufficient; will engage CMS to avoid benefit and access cutsHeadwind

Q&A Summary

Are we at the bottom of the MA cycle, and how important is the core MA book to Optum Health? (Josh Raskin, Nephron)
Hemsley said MA is important to Optum Health and Rx but the Optum businesses are also complementary to many payers; Tim Noel added that 2026 focused on margin over membership, expects ~50 bps MA margin recovery, and called the 2027 Advance Notice disappointing given ~$130 billion of funding cuts over three years, declining to give 2027 point estimates.
What drove the Q4 Optum Health miss versus the ~$3 billion guide, and what gives confidence in 2026 stability? (Justin Lake, Wolfe Research)
Kristen Gil said Q4 was slightly disappointing but reflected the fourth-quarter restructuring and one-time items now behind the business; excluding those and the Optum Financial move, adjusted earnings are about $1.5 billion, the new baseline, with confidence rooted in the reoriented integrated value-based care model.
Would the 2027 risk-model and chart coding cuts (~3.3% headwind) hit UNH worse than the industry, and is the 5% VBC margin still achievable? (Kevin Fishbeck, BofA)
Tim Noel said modeling shows the impact consistent with industry averages, not worse; Kristen Gil affirmed the 6%-8% Optum Health target is intact, citing a large Texas market (750,000+ patients, 4.5-star plan, ~30% better total cost of care) and about 30% of mature VBC patients already at or above the target range.
Are Medicaid rates coming in better, and has the 2026 margin assumption changed? (Stephen Baxter, Wells Fargo)
Management said the 2026 view is unchanged, projecting aggregate rate increases of 6%-7% that remain below medical trend, with some margin contraction and membership contraction expected.
Why are Optum Insight and Optum Rx more back-half weighted, and what is behind the 800 new Rx clients? (Lisa Gill, JPMorgan)
Wayne DeVeydt attributed Insight's slope to decommissioning legacy products and reinvesting in AI, and Rx to onboarding timing; John Rex said the strong selling season plus high-90s retention backfilled more than half of the UHC membership loss, supporting ~2% Rx earnings growth, with wins driven by affordability, transparency and execution.
How do the 1.3-1.4 million declining commercial risk lives break out, and what are 2026 margins? (Scott Fidel, Goldman Sachs)
Tim Noel said over 500,000 of the decline is exchange business with the remainder from general market decline, margin-focused pricing and migration to self-funded/level-funded; the exchange business should turn to about a 1% margin (±1%) and group should close more than half the gap to its historical range in 2026.

More on Unitedhealth Group Inc

Reported 2026-01-27 · figures from the Unitedhealth Group Inc Q4 2025 earnings call.

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