Exchange: NYSE | Sector: Healthcare | Industry: Medical Healthcare Plans
Q4 2024
Published: Feb 27, 2025
Earnings Highlights
Revenue of $100.81B up 8.1% year-over-year
EPS of $5.98 increased by 1.4% from previous year
Gross margin of 21.1%
Net income of 5.54B
"'We deliver on our commitments to the people we serve, including our investors.' - Andrew Witty" - Andrew Witty
UnitedHealth Group Incorporated (UNH) Q4 2024 Financial Results: Navigating Challenges with Strategic Growth
Executive Summary
In Q4 2024, UnitedHealth Group achieved revenues of approximately $100.8 billion, a year-over-year increase of 8.11%. Although the net income dipped to $5.54 billion, indicating a decline of 1.61% year-on-year, the performance was solid within the company’s guidance amid various macroeconomic pressures, including CMS Medicare rate cuts. Management highlighted significant operational efficiencies and strategic investments aimed at enhancing consumer experiences and expanding value-based care models. The company remains steadfast in its commitment to continuous improvement and innovations in digitized healthcare delivery, anticipating strong performance leading into 2025.
Key Performance Indicators
Revenue
100.81B
QoQ: 1.64% | YoY:8.11%
Gross Profit
21.31B
21.14% margin
QoQ: -0.36% | YoY:2.33%
Operating Income
7.77B
QoQ: -10.74% | YoY:1.09%
Net Income
5.54B
QoQ: -8.46% | YoY:1.61%
EPS
5.98
QoQ: -8.84% | YoY:1.36%
Revenue Trend
Margin Analysis
Key Insights
**Revenue**: $100.8 billion (YoY increase of 8.11% and QoQ increase of 1.64%)
**Net Income**: $5.54 billion (YoY decrease of 1.61%)
**Earnings Per Share (EPS)**: $5.98 (YoY increase of 1.36%)
**Operating Income**: $7.77 billion with an operating margin of 7.71%
**Medical Care Ratio (MLR)**: Expected 86.5% in FY 2025; driven by anticipated IRA impacts and the second year of Medicare funding cuts.
Financial Highlights
- Revenue: $100.8 billion (YoY increase of 8.11% and QoQ increase of 1.64%)
- Net Income: $5.54 billion (YoY decrease of 1.61%)
- Earnings Per Share (EPS): $5.98 (YoY increase of 1.36%)
- Operating Income: $7.77 billion with an operating margin of 7.71%
- Medical Care Ratio (MLR): Expected 86.5% in FY 2025; driven by anticipated IRA impacts and the second year of Medicare funding cuts.
- Free Cash Flow: $1.46 billion
- Debt to Capitalization: 45.4%
These metrics illustrate a sturdy financial position despite challenges, featuring a successful response to unforeseen pressures and continued prioritization of key growth areas such as Optum Health and digital engagement tools.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
100.81B
8.11%
1.64%
Gross Profit
21.31B
2.33%
-0.36%
Operating Income
7.77B
1.09%
-10.74%
Net Income
5.54B
1.61%
-8.46%
EPS
5.98
1.36%
-8.84%
Key Financial Ratios
currentRatio
0.83
grossProfitMargin
21.1%
operatingProfitMargin
7.71%
netProfitMargin
5.5%
returnOnAssets
1.86%
returnOnEquity
5.98%
debtEquityRatio
0.83
operatingCashFlowPerShare
$2.56
freeCashFlowPerShare
$1.57
dividendPayoutRatio
34.9%
priceToBookRatio
5.06
priceEarningsRatio
21.15
Net Income vs. Revenue
Expense Breakdown
Management Commentary
- Strategy & Market Position: 'We need to build on the unique foundational strengths of healthcare in America and address areas we can make work better.' – Andrew Witty
- Consumer Experience: 'We're enhancing digital tools for consumers... This past year, we saw an extraordinary increase in the use of these modern channels.' – Andrew Witty
- Outlook on Medicare: 'Our focus has always been on providing consumer stability and sustainable value, a factor that has built confidence and trust over the long-term.' – John Rex
- Growth Forecast: Optum Health is projected to serve 5.4 million value-based care patients in 2025, with revenues expected to approach $117 billion.
'We deliver on our commitments to the people we serve, including our investors.' - Andrew Witty
— Andrew Witty
'In 2025, we expect cash flow from operations will approach $33 billion or 1.2 times net income.' - John Rex
— John Rex
Forward Guidance
Management guidance for 2025 indicates ambitious revenue growth projections with overall revenues expected to reach $400 billion. Notably, UnitedHealthcare anticipates expanding its membership, especially within the Medicare Advantage segment, which will be critical due to the expected growth of approximately 800,000 new members. There is an explicit commitment to further invest in value-based care systems as well as digital tools for consumers, enhancing their healthcare experience while simultaneously lowering operational costs. Key factors to monitor include regulatory impacts from Medicare and Medicaid that may affect overall margins and performance.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
UNH Focus
21.14%
7.71%
5.98%
21.15%
CI
1.00%
3.06%
3.47%
13.48%
HUM
1.00%
-1.86%
-4.23%
-11.02%
ELV
1.00%
N/A
1.01%
50.19%
CNC
20.40%
0.43%
1.07%
27.92%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
UnitedHealth Group represents a compelling buy for investors seeking exposure to the healthcare sector. The company's diversified business model and proactive management strategy to adapt to changing healthcare needs—notably through digital health innovations—position it well for future growth. Despite challenges in operating margins and industry regulatory dynamics, the management’s commitment to transparency, efficiency, and enhancements in consumer interactions underlines a focused path for recovery and expansion. Investors should monitor key performance indicators such as membership growth, margins in core segments, and cash flow generation as determinants for ongoing commitment.
Key Investment Factors
Growth Potential
UnitedHealth Group is positioned well to leverage the growing demand for healthcare services, particularly in Medicare and clinically-driven pharmacy care. The continued expansion in digital health services and value-based care serves as significant growth catalysts.
Profitability Risk
Potential risks include ongoing regulatory changes in healthcare reimbursement policies, competition from other healthcare providers, and challenges associated with integrating newly acquired assets in an evolving digital landscape. Additionally, the impact of external economic factors can affect profitability and consumer engagement.
Financial Position
The company maintains a robust balance sheet with total assets at $298 billion, a healthy cash position of $25.31 billion, and reasonable debt levels amounting to $76.9 billion, positioning it well to absorb any external shocks and continue growth investments.
SWOT Analysis
Strengths
Strong brand recognition and market positioning as a leader in healthcare and insurance sectors.
Diversified portfolio across health plans, pharmacy services, and care delivery systems enhances overall stability and reduces risk exposure.