UnitedHealth Group Incorporated Q1 FY2026 earnings call

• First quarter unfolded largely as expected, all major business segments exceeded plan. • UnitedHealthcare pricing improving, affordability initiatives positive; Optum Health operational improvements and return to value-based care; Optum Insight AI-first products gaining interest. • Investing in AI-enabled modernization, aiming to invest nearly $1.5 billion in AI-related initiatives in 2026. • Refocused on U.S. healthcare, exited non-U.S. businesses; refreshed top 100 leadership roles; strengthened governance; redoubled community engagement. • In UnitedHealthcare, Medicare and retirement results strong, Medicaid focused on cost management, commercial business membership and trends in line; efforts to improve patient and clinician experience, including reducing prior authorization friction, growing member adoption of digital tools. • In Optum Health, adjusted earnings from pricing and operational improvements, focus on value-based care and operational focus improving outcomes; OptumRx onboarding new clients, reducing call center volume, improving prescription approval; Optum Insight AI-first products gaining traction and acquiring Allegis Technologies

UnitedHealthcare: Pricing improving relative to elevated healthcare cost trends, affordability initiatives generating positive momentum; Medicare and retirement results reflect disciplined pricing and stable medical trend; Community and state results within expected range; Commercial and ACA results consistent with pricing and trend assumptions, but individual ACA business continuing to contract. Optum Health: Adjusted earnings of $1.3 billion reflect pricing and operational improvements, return to disciplined, integrated value-based care model; serving over 20 million patients in care models, including over 4 million in fully value-based arrangements. Optum Insight: New AI-first products gaining traction, OptumReal helping payers and care providers with administrative functions, Optum Financial Services performing well and acquiring Allegis Technologies. Total revenues in the quarter were $111.7 billion, reflecting 2% growth year-over-year, with adjusted earnings per share of $7.23

• Updated full-year outlook to greater than $18.25 per share. • Earnings cadence remains consistent with prior expectations, approximately two-thirds in first half, one-third in second half. • UnitedHealthcare earnings over 75% weighted to first half; OptumHealth earnings to moderate from Q1 levels with majority in first half; OptumInsight and OptumRx more naturally weighted to back half. • Intend to deploy at least $2 billion by end of second quarter for share repurchases. • Continue to balance near-term performance with discipline investment and longer-term strategic priorities

Q: Drill down on trend in Medicare Advantage, specifically cost trend and how it compares to previous expectations and what's driving it.

A: Tim says trend progressing in line with expectation, 7-8% trend in Medicare Advantage with pricing assumption around 10%, seeing modest favorability in government programs but utilization patterns at elevated levels.

Q: Size trend component from acuity dynamic and how to address it across products.

A: Tim says trend drivers consistent with 2025, have tools to early identify outlier patterns, engage with clinical and payment integrity programs, take network actions, and focus on affordability across product lines.

Q: Unpack outperformance in Optum Health this quarter, driver of profits and why majority earnings in first half.

A: Krista says outperformance due to medical from prior periods restating favorably and operating performance improvement, Optum Health resembles risk business in terms of seasonality so majority earnings in first half.

Q: About Optum Insight and OptumRx weight, PBM legislation impact.

A: Wayne says OptumInsight slowly decommissioning old products and reinvesting in AI, OptumRx onboarding new clients with majority impact in back half; Patrick says accounted for PBM impacts in guidance, concerned about Tennessee legislation harming access for certain populations, but have initiatives for independent pharmacy stability, consumer affordability, patient provider experience, and payer transparency.

Q: Update on Optum Health Omni PDR and lives in value-based care.

A: Wayne says PDR estimated north of $600 million, team in active negotiations; Krista says in active negotiations, partnering with payer partners, working on product and benefit design, network opportunities, recalibrating rates.

Q: AI investment targets, cost savings and revenue impact.

A: Sandeep says spending $1.5 billion in AI, examples in consumer experience, administrative simplification, clinical workflows, functions; OptumInsight AI first products seeing traction.

Q: AI savings acceleration, capital deployment.

A: Wayne says no guidance on compounding effect of AI changes, but investing strategically; on capital deployment, original guidance $2.5 billion back half loaded, now deploying $2 billion earlier.

Q: Quantify PYD impact and break out between UHC and OH.

A: George says PYD on net basis around north of $500 million, prudent to have patience.

Q: Contribution to United Health Foundation from OptumInsight and MA risk model recalibration impact.

A: Wayne says $400 million contribution from OptumInsight gains; Bobby and Krista say supportive of MA program modernization, committed to value-based care, but too early to suggest impact of 2028 recalibration.

Q: Unpack MLR outperformance under cost categories and traction from clinical programs.

A: Tim says a little early for specific utilization patterns, modest outperformance in government programs across board; Patrick says OptumRx helps manage drug costs, OptumHealth programs decrease admissions and keep patients in better settings