Executive Summary
UnitedHealth Group Incorporated (UNH) reported its Q2 2024 financial results elucidating diversified revenue growth amidst a challenging operational landscape, significantly impacted by a recent cyberattack. Total revenues for the quarter reached $97.86 billion, marking a YoY increase of 6.61%, but a marginal QoQ decline of 0.94%. Net income saw a pronounced decline of 22.98% YoY, amounting to $4.22 billion, influenced largely by the financial ramifications of the cyber incident that have introduced unexpected costs. The management remains confident in the strategic positioning for future growth, reinforcing the adjusted EPS guidance for the year of $27.50 to $28.00 despite absorbing $0.60 to $0.70 per share in disruption costs related to the cyberattack. CEO Andrew Witty emphasizes the company’s commitment to expansive growth with significant contributions from core business areas, particularly Optum.
Key Performance Indicators
QoQ: 399.22% | YoY:-22.98%
QoQ: 399.35% | YoY:-22.24%
Key Insights
**Revenue:** $97.86 billion (YoY: +6.61%, QoQ: -0.94%)
**Gross Profit:** $21.06 billion (YoY: -3.27%, QoQ: -4.25%)
**Operating Income:** $7.88 billion (YoY: -2.26%, QoQ: -0.71%)
**Net Income:** $4.22 billion (YoY: -22.98%, QoQ: +399.22%)
**EPS:** $4.58 (YoY: -22.24%, QoQ: +399.35%)
**Cash Flow from Operations:** $6.74 billion
**Medical Care Ratio:** Expected at 84.5% excluding one-time impacts.
Notable is the strength seen in Optum with revenue growth of 13%, indicating a stron...
Financial Highlights
Revenue: $97.86 billion (YoY: +6.61%, QoQ: -0.94%)
Gross Profit: $21.06 billion (YoY: -3.27%, QoQ: -4.25%)
Operating Income: $7.88 billion (YoY: -2.26%, QoQ: -0.71%)
Net Income: $4.22 billion (YoY: -22.98%, QoQ: +399.22%)
EPS: $4.58 (YoY: -22.24%, QoQ: +399.35%)
Cash Flow from Operations: $6.74 billion
Medical Care Ratio: Expected at 84.5% excluding one-time impacts.
Notable is the strength seen in Optum with revenue growth of 13%, indicating a strong response to market demand for differentiated health services.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
97.86B |
6.61% |
-0.94% |
| Gross Profit |
21.06B |
-3.27% |
-4.25% |
| Operating Income |
7.88B |
-2.26% |
-0.71% |
| Net Income |
4.22B |
-22.98% |
399.22% |
| EPS |
4.58 |
-22.24% |
399.35% |
Key Financial Ratios
operatingProfitMargin
8.05%
operatingCashFlowPerShare
$7.32
freeCashFlowPerShare
$6.4
dividendPayoutRatio
45.9%
Management Commentary
Growth Strategy: Andrew Witty noted, "The second quarter results we reported today reflect diversified and durable growth...as we absorb $0.60 to $0.70 per share in business disruption impacts related to the cyberattack."
Market Position: Witty highlighted the continued selection of UnitedHealth offerings by "thoughtful buyers of health benefits and services, such as large employers, unions, states, seniors, reiterating that our effort in reducing fragmentation improves health outcomes."
Value Proposition: Management underscored the cost savings associated with Medicare Advantage programs, stating, "A recent study by Milliman found that the cost to taxpayers of Medicare Advantage is 4% less than traditional fee-for-service Medicare."
"We aspire to return to baseline performance in '25 and to grow strongly from there." - Andrew Witty
— Andrew Witty
"The revenue backlog increased to nearly $33 billion, growth of over $1 billion from a year ago, driven by business process and information technology services for health systems." - John Rex
— John Rex
Forward Guidance
UnitedHealth's management reaffirmed an adjusted EPS guidance for 2024 within the range of $27.50 to $28.00. This optimism is rooted in their expectation of stabilized Medicaid memberships and anticipated recovery in revenues post-cyberattack. As noted by CFO John Rex, "The overarching theme I hope you leave with today is that UnitedHealth Group continues to deliver broadly diversified growth with expanding opportunities." Management forecasts balanced pacing in the second half of the year, with continued emphasis on innovative care delivery and growing engagement in value-based care.