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UnitedHealth Group Reports Second Quarter 2023 Results

  • Revenues of $92.9 Billion Grew 16% Year-Over-Year
  • Earnings from Operations Grew 13%
  • Cash Flows from Operations were $11.0 Billion
  • Earnings were $5.82 Per Share, Adjusted Earnings $6.14 Per Share

Strong and well-balanced growth continued across UnitedHealth Group (NYSE: UNH) in the second quarter of 2023.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20230714555613/en/

UnitedHealth Group corporate headquarters (Photo: Business Wire)

UnitedHealth Group corporate headquarters (Photo: Business Wire)

“Our diverse health care capabilities and dedicated colleagues are enabling us to meet the needs of more people in more ways, driving substantial growth and expanding our opportunities to serve well into the future,” said Andrew Witty, chief executive officer of UnitedHealth Group.

Growth in the second quarter was balanced across the company’s businesses. Based upon the first half performance as well as durable growth and operating expectations, the company strengthened the range of its full year net earnings outlook to $23.45 to $23.75 per share and adjusted net earnings to $24.70 to $25.00 per share.

Quarterly Financial Performance

 

Three Months Ended

 

 

June 30,

2023

June 30,

2022

March 31,

2023

 

 

Revenues

$92.9 billion

$80.3 billion

$91.9 billion

Earnings from Operations

$ 8.1 billion

$ 7.1 billion

$ 8.1 billion

Net Margin

5.9%

6.3%

6.1%

  • UnitedHealth Group’s second quarter 2023 revenues grew 16% to $92.9 billion year-over-year, including double-digit growth at both Optum and UnitedHealthcare.
  • Second quarter 2023 earnings from operations were $8.1 billion, an increase of 13%, with strong contributions from Optum and UnitedHealthcare even as the company continued to invest to support growth.
  • The second quarter 2023 medical care ratio at 83.2% compared to 81.5% last year, driven by previously noted outpatient care activity, primarily among seniors, and business mix. Days claims payable were 48.2, compared to 47.8 in the first quarter 2023 and 50.6 in the second quarter 2022. Favorable medical reserve development of $480 million compared to $470 million in the first quarter 2023 and $890 million in the year-ago second quarter.
  • The second quarter 2023 operating cost ratio of 14.9% increased from 14.6% last year due to business mix and the company’s continued investments to accelerate and support future opportunities, partially offset by continued productivity improvements.
  • Cash flows from operations for the second quarter 2023 were $11.0 billion or 2-times net income and $10.4 billion or 1.8-times net income adjusted for CMS payment timing. The company returned $4.8 billion to shareholders in the second quarter through dividends and share repurchases and increased its annual dividend rate by 14% in June. Return on equity of 26.8% in the quarter reflected the company’s consistent, broad-based earnings profile and efficient capital structure.

UnitedHealthcare provides health care benefits globally, serving individuals and employers, and Medicare and Medicaid beneficiaries. UnitedHealthcare is dedicated to improving the value customers and consumers receive by improving health and wellness, enhancing the quality of care received, simplifying the health care experience and reducing the total cost of care.

Quarterly Financial Performance

 

Three Months Ended

 

June 30,

2023

June 30,

2022

March 31,

2023

 

 

Revenues

$70.2 billion

$62.1 billion

$70.5 billion

Earnings from Operations

$ 4.4 billion

$ 3.9 billion

$ 4.3 billion

Operating Margin

6.2%

6.2%

6.2%

  • UnitedHealthcare second quarter revenues grew 13% to $70.2 billion, reflecting growth in the number of people served, and operating earnings grew 13% to $4.4 billion.
  • Year-to-date, total people served by UnitedHealthcare with medical benefits has increased by over 1.1 million, with growth across the company’s commercial and public sector program offerings. The number of consumers served with commercial benefit offerings grew by nearly 500,000 in the first half of 2023, reflecting the company’s focus on innovative and affordable benefit plans. The number of people served by the company’s senior and community offerings grew by 625,000 due to responsive product and benefit designs tailored to meet the specific needs of senior populations and people who often are underserved and have limited economic resources.

Optum’s health services businesses serve the global health care marketplace, including payers, care providers, employers, governments, life sciences companies and consumers. Using market-leading information, analytics and technology to yield clinical insights, Optum helps improve overall health system performance: optimizing care quality, reducing care costs and improving the consumer experience.

Quarterly Financial Performance

 

Three Months Ended

 

June 30,

2023

June 30,

2022

March 31,

2023

 

 

Revenues

$56.3 billion

$45.1 billion

$54.1 billion

 

Earnings from Operations

$ 3.7 billion

$ 3.3 billion

$ 3.7 billion

 

Operating Margin

6.6%

7.3%

6.9%

 

  • Optum second quarter revenues grew 25% to $56.3 billion and operating earnings grew 13% to $3.7 billion. Operating margin of 6.6% compares to 7.3% in the prior year, reflecting investments in services provided to patients and customers to support growth.
  • Optum Health revenue per consumer served increased 33% over last year, driven by growth of more than 900,000 patients served under value-based care arrangements and the continued expansion of the types and levels of care services offered. The operating results reflect the previously noted higher care activity patterns and continued investments to improve patient health outcomes and support growth.
  • Optum Insight revenue backlog increased nearly $8 billion to over $31 billion, compared to a year ago, in part due to the addition of Change Healthcare and growth in its comprehensive managed services offerings for health systems. Optum Insight continues to focus on building and expanding upon offerings to meet the increasing needs of care providers and health plans.
  • Optum Rx revenue growth of 15% in the second quarter resulted from strong growth in serving new clients, expanding membership of existing clients and double-digit growth across its home delivery, specialty, infusion, and community-based pharmacy offerings. Adjusted scripts grew to 381 million compared to 357 million last year.

About UnitedHealth Group

UnitedHealth Group (NYSE: UNH) is a health care and well-being company with a mission to help people live healthier lives and help make the health system work better for everyone through two distinct and complementary businesses. Optum delivers care aided by technology and data, empowering people, partners and providers with the guidance and tools they need to achieve better health. UnitedHealthcare offers a full range of health benefits, enabling affordable coverage, simplifying the health care experience and delivering access to high-quality care. Visit UnitedHealth Group at www.unitedhealthgroup.com and follow @UnitedHealthGrp on Twitter.

Earnings Conference Call

As previously announced, UnitedHealth Group will discuss the company’s results, strategy and future outlook on a conference call with investors at 8:45 a.m. Eastern Time today. UnitedHealth Group will host a live webcast of this conference call from the Investor Relations page of the company’s website (www.unitedhealthgroup.com). Following the call, a webcast replay will be on the Investor Relations page and at https://uhg.com/Replay through July 28, 2023. This earnings release and the Form 8-K dated July 14, 2023, can also be accessed from the Investor Relations page of the company’s website.

Non-GAAP Financial Information

This news release presents non-GAAP financial information provided as a complement to the results provided in accordance with accounting principles generally accepted in the United States of America (“GAAP”). A reconciliation of the non-GAAP financial information to the most directly comparable GAAP financial measure is provided in the accompanying tables found at the end of this release.

Forward-Looking Statements

The statements, estimates, projections, guidance or outlook contained in this document include “forward-looking” statements which are intended to take advantage of the “safe harbor” provisions of the federal securities law. The words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “forecast,” “outlook,” “plan,” “project,” “should” and similar expressions identify forward-looking statements. These statements may contain information about financial prospects, economic conditions and trends and involve risks and uncertainties. Actual results could differ materially from those that management expects, depending on the outcome of certain factors including: our ability to effectively estimate, price for and manage medical costs; new or changes in existing health care laws or regulations, or their enforcement or application; reductions in revenue or delays to cash flows received under government programs; changes in Medicare, the CMS star ratings program or the application of risk adjustment data validation audits; the DOJ’s legal action relating to the risk adjustment submission matter; our ability to maintain and achieve improvement in quality scores impacting revenue; failure to maintain effective and efficient information systems or if our technology products do not operate as intended; cyberattacks, other privacy/data security incidents, or our failure to comply with related regulations; risks and uncertainties associated with our businesses providing pharmacy care services; competitive pressures, including our ability to maintain or increase our market share; changes in or challenges to our public sector contract awards; failure to achieve targeted operating cost productivity improvements; failure to develop and maintain satisfactory relationships with health care payers, physicians, hospitals and other service providers; the impact of potential changes in tax laws and regulations; increases in costs and other liabilities associated with litigation, government investigations, audits or reviews; failure to complete, manage or integrate strategic transactions; risks associated with public health crises arising from large-scale medical emergencies, pandemics, natural disasters and other extreme events; failure to attract, develop, retain, and manage the succession of key employees and executives; our investment portfolio performance; impairment of our goodwill and intangible assets; failure to protect proprietary rights to our databases, software and related products; downgrades in our credit ratings; and our ability to obtain sufficient funds from our regulated subsidiaries or from external financings to fund our obligations, maintain our debt to total capital ratio at targeted levels, maintain our quarterly dividend payment cycle, or continue repurchasing shares of our common stock.

This above list is not exhaustive. We discuss these matters, and certain risks that may affect our business operations, financial condition and results of operations, more fully in our filings with the SEC, including our reports on Forms 10-K, 10-Q and 8-K. By their nature, forward-looking statements are not guarantees of future performance or results and are subject to risks, uncertainties and assumptions that are difficult to predict or quantify. Actual results may vary materially from expectations expressed or implied in this document or any of our prior communications. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. We do not undertake to update or revise any forward-looking statements, except as required by law.

UNITEDHEALTH GROUP
 
Earnings Release Schedules and Supplementary Information
Quarter Ended June 30, 2023
 
- Condensed Consolidated Statements of Operations
 
- Condensed Consolidated Balance Sheets
 
- Condensed Consolidated Statements of Cash Flows
 
- Supplemental Financial Information - Businesses
 
- Supplemental Financial Information - Business Metrics
 
- Reconciliation of Non-GAAP Financial Measures
UNITEDHEALTH GROUP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
(unaudited)
 

Three Months Ended

June 30,

Six Months Ended

June 30,

2023

2022

2023

2022

Revenues
Premiums

$

72,474

 

$

63,896

 

$

145,260

 

$

127,966

 

Products

 

10,651

 

 

9,496

 

 

20,918

 

 

18,836

 

Services

 

8,663

 

 

6,645

 

 

16,743

 

 

13,017

 

Investment and other income

 

1,115

 

 

295

 

 

1,913

 

 

662

 

 
Total revenues

 

92,903

 

 

80,332

 

 

184,834

 

 

160,481

 

 
Operating costs
Medical costs

 

60,268

 

 

52,093

 

 

120,113

 

 

104,616

 

Operating costs

 

13,809

 

 

11,709

 

 

27,434

 

 

23,110

 

Cost of products sold

 

9,748

 

 

8,596

 

 

19,153

 

 

17,083

 

Depreciation and amortization

 

1,021

 

 

802

 

 

1,991

 

 

1,590

 

 
Total operating costs

 

84,846

 

 

73,200

 

 

168,691

 

 

146,399

 

 
Earnings from operations

 

8,057

 

 

7,132

 

 

16,143

 

 

14,082

 

 
Interest expense

 

(828

)

 

(467

)

 

(1,582

)

 

(900

)

 
Earnings before income taxes

 

7,229

 

 

6,665

 

 

14,561

 

 

13,182

 

 
Provision for income taxes

 

(1,572

)

 

(1,466

)

 

(3,130

)

 

(2,835

)

 
Net earnings

 

5,657

 

 

5,199

 

 

11,431

 

 

10,347

 

 
Earnings attributable to noncontrolling interests

 

(183

)

 

(129

)

 

(346

)

 

(250

)

 
Net earnings attributable to UnitedHealth Group common shareholders

$

5,474

 

$

5,070

 

$

11,085

 

$

10,097

 

 
Diluted earnings per share attributable to
UnitedHealth Group common shareholders

$

5.82

 

$

5.34

 

$

11.77

 

$

10.61

 

 
Adjusted earnings per share attributable to
UnitedHealth Group common shareholders (a)

$

6.14

 

$

5.57

 

$

12.39

 

$

11.06

 

 
Diluted weighted-average common shares outstanding

 

940

 

 

950

 

 

942

 

 

952

 

 
 

(a) See page 6 for a reconciliation of the non-GAAP measure

UNITEDHEALTH GROUP
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)
(unaudited)
 

June 30,

December 31,

2023

2022

Assets
Cash and short-term investments

$

46,279

$

27,911

Accounts receivable, net

 

17,952

 

17,681

Other current assets

 

25,638

 

23,477

 
Total current assets

 

89,869

 

69,069

 
Long-term investments

 

45,988

 

43,728

Other long-term assets

 

144,307

 

132,908

 
Total assets

$

280,164

$

245,705

 
 
Liabilities, redeemable noncontrolling interests and equity
Medical costs payable

$

31,947

$

29,056

Short-term borrowings and current maturities of long-term debt

 

6,321

 

3,110

Other current liabilities

 

74,713

 

57,071

 
Total current liabilities

 

112,981

 

89,237

 
Long-term debt, less current maturities

 

59,268

 

54,513

Other long-term liabilities

 

15,759

 

15,608

Redeemable noncontrolling interests

 

4,788

 

4,897

Equity

 

87,368

 

81,450

 
Total liabilities, redeemable noncontrolling interests and equity

$

280,164

$

245,705

UNITEDHEALTH GROUP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
 

Six Months Ended

June 30,

2023

2022

Operating Activities
Net earnings

$

11,431

 

$

10,347

 

Noncash items:
Depreciation and amortization

 

1,991

 

 

1,590

 

Deferred income taxes and other

 

(573

)

 

200

 

Share-based compensation

 

604

 

 

504

 

Net changes in operating assets and liabilities

 

13,906

 

 

(451

)

 
Cash flows from operating activities

 

27,359

 

 

12,190

 

 
Investing Activities
Purchases of investments, net of sales and maturities

 

(1,574

)

 

(3,366

)

Purchases of property, equipment and capitalized software

 

(1,589

)

 

(1,212

)

Cash paid for acquisitions, net

 

(8,161

)

 

(7,150

)

Other, net

 

(424

)

 

(532

)

 
Cash flows used for investing activities

 

(11,748

)

 

(12,260

)

 
Financing Activities
Common share repurchases

 

(5,000

)

 

(5,000

)

Dividends paid

 

(3,284

)

 

(2,908

)

Net change in short-term borrowings and long-term debt

 

7,695

 

 

6,162

 

Other, net

 

3,320

 

 

4,996

 

 
Cash flows from financing activities

 

2,731

 

 

3,250

 

 
Effect of exchange rate changes on cash and cash equivalents

 

106

 

 

57

 

 
Increase in cash and cash equivalents

 

18,448

 

 

3,237

 

 
Cash and cash equivalents, beginning of period

 

23,365

 

 

21,375

 

 
Cash and cash equivalents, end of period

$

41,813

 

$

24,612

 

UNITEDHEALTH GROUP
SUPPLEMENTAL FINANCIAL INFORMATION - BUSINESSES
(in millions, except percentages)
(unaudited)
 

Three Months Ended

June 30,

Six Months Ended

June 30,

2023

2022

2023

2022

Revenues
UnitedHealthcare

$

70,231

 

$

62,105

 

$

140,699

 

$

124,700

 

Optum

 

56,344

 

 

45,082

 

 

110,403

 

 

88,341

 

Eliminations

 

(33,672

)

 

(26,855

)

 

(66,268

)

 

(52,560

)

 
Total consolidated revenues

$

92,903

 

$

80,332

 

$

184,834

 

$

160,481

 

 
Earnings from Operations
UnitedHealthcare

$

4,358

 

$

3,850

 

$

8,701

 

$

7,648

 

Optum (a)

 

3,699

 

 

3,282

 

 

7,442

 

 

6,434

 

 
Total consolidated earnings from operations

$

8,057

 

$

7,132

 

$

16,143

 

$

14,082

 

 
Operating Margin
UnitedHealthcare

 

6.2

%

 

6.2

%

 

6.2

%

 

6.1

%

Optum

 

6.6

%

 

7.3

%

 

6.7

%

 

7.3

%

Consolidated operating margin

 

8.7

%

 

8.9

%

 

8.7

%

 

8.8

%

 
 
Revenues
UnitedHealthcare Employer & Individual - Domestic

$

16,759

 

$

15,567

 

$

33,303

 

$

31,389

 

UnitedHealthcare Employer & Individual - Global

 

2,325

 

 

2,247

 

 

4,488

 

 

4,380

 

UnitedHealthcare Employer & Individual - Total

 

19,084

 

 

17,814

 

 

37,791

 

 

35,769

 

UnitedHealthcare Medicare & Retirement

 

32,440

 

 

28,625

 

 

65,446

 

 

57,725

 

UnitedHealthcare Community & State

 

18,707

 

 

15,666

 

 

37,462

 

 

31,206

 

 
Optum Health

$

23,917

 

$

17,583

 

$

46,921

 

$

34,265

 

Optum Insight

 

4,674

 

 

3,282

 

 

9,170

 

 

6,501

 

Optum Rx

 

28,646

 

 

24,805

 

 

56,064

 

 

48,716

 

Optum eliminations

 

(893

)

 

(588

)

 

(1,752

)

 

(1,141

)

 

(a)

Earnings from operations for Optum for the three and six months ended June 30, 2023 included $1,525 and $3,301 for Optum Health; $968 and $1,875 for Optum Insight; and $1,206 and $2,266 for Optum Rx, respectively. Earnings from operations for Optum for the three and six months ended June 30, 2022 included $1,399 and $2,765 for Optum Health; $839 and $1,686 for Optum Insight; and $1,044 and $1,983 for Optum Rx, respectively.
UNITEDHEALTH GROUP
SUPPLEMENTAL FINANCIAL INFORMATION - BUSINESS METRICS
 
 
UNITEDHEALTHCARE CUSTOMER PROFILE
(in thousands)
 
People Served

June 30, 2023

March 31, 2023

December 31, 2022

June 30, 2022

 
Commercial - Domestic:
Risk-based

 

8,035

 

8,025

 

8,045

 

8,010

Fee-based

 

19,140

 

19,325

 

18,640

 

18,480

 
Total Commercial - Domestic

 

27,175

 

27,350

 

26,685

 

26,490

 
Medicare Advantage

 

7,590

 

7,545

 

7,105

 

6,945

Medicaid

 

8,355

 

8,380

 

8,170

 

7,990

Medicare Supplement (Standardized)

 

4,330

 

4,320

 

4,375

 

4,355

 
Total Community and Senior

 

20,275

 

20,245

 

19,650

 

19,290

Total UnitedHealthcare - Domestic Medical

 

47,450

 

47,595

 

46,335

 

45,780

 
Commercial - Global

 

5,385

 

5,295

 

5,360

 

5,465

 
Total UnitedHealthcare - Medical

 

52,835

 

52,890

 

51,695

 

51,245

 
 
Supplemental Data
 
Medicare Part D stand-alone

 

3,355

 

3,380

 

3,295

 

3,330

 
 
 
OPTUM PERFORMANCE METRICS
 

June 30, 2023

March 31, 2023

December 31, 2022

June 30, 2022

 
Optum Health Consumers Served (in millions)

 

103

 

103

 

102

 

101

Optum Insight Contract Backlog (in billions)

$

31.4

$

30.7

$

30.0

$

23.6

Optum Rx Quarterly Adjusted Scripts (in millions)

 

381

 

378

 

370

 

357

 
 
Note: UnitedHealth Group served 152 million unique individuals across all businesses at June 30, 2023.
UNITEDHEALTH GROUP
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in millions, except per share data)
(unaudited)
 
ADJUSTED NET EARNINGS PER SHARE(a)
 

Three Months Ended

June 30,

Six Months Ended

June 30,

Projected Year Ended

December 31,

2023

2022

2023

2022

2023

GAAP net earnings attributable to UnitedHealth Group common shareholders

$

5,474

 

$

5,070

 

$

11,085

 

$

10,097

 

$22,025 - $22,400
Intangible amortization

 

398

 

 

292

 

 

786

 

 

573

 

~1,565
Tax effect of intangible amortization

 

(100

)

 

(72

)

 

(196

)

 

(141

)

~(390)
Adjusted net earnings attributable to UnitedHealth Group common shareholders

$

5,772

 

$

5,290

 

$

11,675

 

$

10,529

 

$23,200 - $23,575
 
GAAP diluted earnings per share

$

5.82

 

$

5.34

 

$

11.77

 

$

10.61

 

$23.45 - $23.75
Intangible amortization per share

 

0.42

 

 

0.31

 

 

0.83

 

 

0.60

 

~1.65
Tax effect per share of intangible amortization

 

(0.10

)

 

(0.08

)

 

(0.21

)

 

(0.15

)

~(0.40)
Adjusted diluted earnings per share

$

6.14

 

$

5.57

 

$

12.39

 

$

11.06

 

$24.70 - $25.00
 
ADJUSTED CASH FLOWS FROM OPERATIONS(a)

Three Months Ended

June 30, 2023

Six Months Ended

June 30, 2023

GAAP cash flows from operations

$

11,032

 

$

27,359

 

Add: April CMS premium payments received in March

 

11,196

 

 

-

 

Less: July CMS premium payments received in June

 

(11,808

)

 

(11,808

)

Adjusted cash flows from operations

$

10,420

 

$

15,551

 

(a)

Adjusted net earnings per share and adjusted cash flows from operations are non-GAAP financial measures. Non-GAAP financial measures should be considered in addition to, but not as a substitute for, or superior to, financial measures prepared in accordance with GAAP.



Adjusted net earnings per share excludes from the relevant GAAP metric, as applicable, intangible amortization and other items, if any, that do not relate to the Company's underlying business performance. Management believes that the use of adjusted net earnings per share provides investors and management useful information about the earnings impact of acquisition-related intangible asset amortization. As amortization fluctuates based on the size and timing of the Company’s acquisition activity, management believes this exclusion provides a more useful comparison of the Company's underlying business performance and trends from period to period. While intangible assets contribute to the Company’s revenue generation, the intangible amortization is not directly related. Therefore, the related revenues are included in adjusted earnings per share.



Management believes the use of adjusted cash flows from operations provides investors and management with useful information to compare our cash flows from operations for the current period to other periods, when the Company does not receive its monthly payment from the Centers for Medicare and Medicaid Services (CMS) in the applicable quarter. CMS generally remits their monthly payments on the first calendar day of the applicable month. However, if the first calendar day of the month falls on a weekend or a holiday, CMS has typically paid the Company on the last business day of the preceding calendar month. Adjusted cash flows from operating activities presents operating cash flows assuming all CMS payments were received on the first calendar day of the applicable month.

 

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