UnitedHealth Stock Tumbles After Earnings Despite Revenue Surge

UnitedHealth Group, the nation’s largest health insurer, delivered its much-anticipated fourth quarter and full-year 2025 financial results on January 26, 2026, sending shockwaves through Wall Street and the broader healthcare sector. Despite reporting robust revenue growth and laying out an optimistic outlook for 2026, UnitedHealth’s stock plummeted by 19% following the earnings release, according to Barron’s. The market’s reaction reflected not only concerns about soft revenue but also deeper structural issues and one-off charges that weighed heavily on investor sentiment.

The numbers themselves were striking. For the fourth quarter of 2025, UnitedHealth Group posted total revenues of $113.2 billion, up from $100.8 billion in the same period a year ago. However, net earnings attributable to common shareholders came in at just $10 million, or $0.01 per share—a dramatic fall from $5.54 billion, or $5.98 per share, in the prior year’s quarter. Adjusted earnings per share (EPS) also tumbled to $2.11 from $6.81 a year earlier. For the full year 2025, revenues totaled $447.6 billion, a 12% increase over 2024, while net earnings per share settled at $13.23, with adjusted net earnings per share at $16.35.

Stephen Hemsley, UnitedHealth Group’s chief executive officer, struck a determined tone in the company’s official statement, saying, “We confronted challenges directly and finished 2025 as a much stronger company, giving us the momentum to better serve those who count on us and continue to improve our core performance.” According to Business Wire, Hemsley’s remarks were intended to reassure both investors and customers that UnitedHealth had taken decisive action in response to a turbulent year.

Those challenges were, indeed, formidable. The company absorbed a massive fourth quarter charge of $1.6 billion net of taxes, or $1.78 per share, related to the final direct costs of a major cyberattack, portfolio divestitures, business exits, and sweeping restructuring efforts. This charge, largely non-cash, was excluded from adjusted earnings and adjusted EPS, but its impact was still deeply felt. According to UnitedHealth’s public filings, the breakdown included $799 million in cyberattack costs, $442 million in net portfolio divestitures, and $2.5 billion for restructuring and other actions.

Operationally, UnitedHealth’s two main business segments—UnitedHealthcare and Optum—delivered divergent results. UnitedHealthcare, which provides health benefits to individuals, employers, and government program beneficiaries, reported full-year revenues of $344.9 billion, up 16% year-over-year. The segment served 49.8 million people in 2025, an increase of 415,000 from the previous year. However, earnings from operations for UnitedHealthcare fell to $9.4 billion from $15.6 billion in 2024, with the operating margin shrinking to 2.7% from 5.2%. These declines were attributed primarily to the effects of Medicare funding reductions enacted during the Biden administration and the impacts of the Inflation Reduction Act, as well as rising medical cost trends.

Breaking down UnitedHealthcare’s performance further, the Employer & Individual business saw revenues of $79.2 billion but experienced a net loss of 80,000 people served year-over-year. The Medicare & Retirement division was a bright spot, with revenues rising 23% to $171.3 billion and 755,000 net new people served, reflecting growth in Medicare Advantage and related programs. Meanwhile, the Community & State business grew revenues by 17% to $94.4 billion, though it saw a contraction of 55,000 people served due to state eligibility changes.

Optum, UnitedHealth’s technology and data-driven health services arm, expanded revenues by 7% to $270.6 billion, supporting more than 123 million consumers across its businesses. The results within Optum’s subsegments were mixed. Optum Health’s revenues slipped 3% to $102.0 billion, and it recorded an operating loss of $278 million, a sharp reversal from the $7.8 billion in operating earnings the prior year. This decline was driven by ongoing reimbursement pressures from Medicare funding cuts and higher medical costs. Optum Insight, focused on analytics and consulting, grew revenues by 4% to $19.4 billion, with operating earnings of $2.6 billion. Optum Rx, the pharmacy benefit manager, had a banner year, with revenues up 16% to $154.7 billion and operating earnings of $7.2 billion, propelled by growth in pharmacy services and script volume, which increased to 1.66 billion scripts from 1.62 billion in 2024.

Amid these operational results, several key financial metrics stood out. UnitedHealth’s reported medical care ratio for 2025 was 89.1%, with an adjusted ratio of 88.9%—a 340 basis point increase year-over-year, reflecting both policy changes and cost trends. The operating cost ratio was 13.3%, or 12.9% when adjusted for the one-time charge, flat compared to the previous year. Cash flows from operations were $19.7 billion, or 1.5 times net income, exceeding expectations largely due to the timing of certain payments. The company’s debt-to-capital ratio stood at 43.9% as of year-end, with a stated target of reducing this to 40% in 2026.

Looking ahead, UnitedHealth Group issued a cautiously optimistic outlook for 2026. The company projects total revenues exceeding $439 billion, a slight decline from 2025’s record high due to planned right-sizing and strategic adjustments. Earnings from operations are expected to surpass $24 billion, with a net margin of approximately 3.6%. Adjusted EPS is projected to top $17.75, and cash flows from operations are forecast to be greater than $18 billion. These guidance figures reflect management’s confidence in the durability of the business, even as membership in certain segments is expected to contract due to policy and market pressures.

Wayne DeVeydt, UnitedHealth Group’s chief financial officer, emphasized the company’s renewed focus on operational discipline and margin expansion, saying, “UnitedHealth Group’s 2026 outlook reflects a business delivering durable performance improvement and margin expansion through greater operating discipline and precise execution.” He highlighted expectations for margin stability and growth across all four operating segments, underpinned by ongoing investments in technology and artificial intelligence to improve care accessibility and affordability.

Yet the market’s reaction underscored lingering doubts. As Barron’s reported, the 19% drop in UnitedHealth’s stock price was not solely about soft revenue. Investors appeared rattled by the confluence of rising medical costs, regulatory headwinds, and the scale of one-off charges related to cyberattacks, restructuring, and divestitures. The company’s transparency initiatives—including the publication of independent business practice reviews—may help restore some confidence, but UnitedHealth faces a challenging path as it seeks to balance growth, operational efficiency, and the demands of an evolving healthcare landscape.

UnitedHealth Group’s latest results and guidance paint a picture of a company at a crossroads: financially resilient and operationally ambitious, yet buffeted by policy shifts, technological disruptions, and market skepticism. How it navigates these headwinds in 2026 will be closely watched not just by investors, but by the millions of Americans who depend on its services.