UnitedHealth Group reported second-quarter earnings that significantly exceeded analyst expectations, prompting the company to raise its full-year earnings guidance. The results, released Thursday, highlight the healthcare giant’s ongoing financial recovery under Chief Executive Officer Stephen Hemsley, who returned to the role just over a year ago following a period of financial challenges.

For the three months ending in June 2026, UnitedHealth posted net income of $5.48 billion, or $6.04 per share, marking a 61% increase from $3.41 billion, or $3.74 per share, in the same period last year. Adjusted earnings per share reached $6.38, well above the $4.91 per share forecast by analysts surveyed by FactSet. Revenue rose slightly to $112 billion from $111.6 billion in the prior-year quarter.

In response to the strong performance, the company raised its full-year adjusted earnings outlook to a range of $19.50 to $20 per share, up from a previous minimum of $18.25 and ahead of the $18.49 consensus estimate.

UnitedHealth’s second-quarter medical-loss ratio, which measures the proportion of premiums used to pay for healthcare services, stood at 86.7%, better than analysts’ expectations of 88.4%. The company attributed this improvement to changes in plan design, including a shift from fixed copayments to coinsurance that requires enrollees to cover a percentage of costs, higher premium rates, and tighter controls on medical expenses.

Wayne DeVeydt, the company’s chief financial officer, cited the role of artificial intelligence in enhancing cost management efforts. UnitedHealth has invested approximately $1.5 billion in AI technologies this year, deploying tools to identify unusual billing patterns and counteract abuses in medical claims. The company recently announced a partnership with AI firm Anthropic to further these initiatives.

DeVeydt noted that cost trends in UnitedHealth’s Medicare segment have moderated, partly due to conservative margin assumptions that accounted for potential impacts like tariffs, which have not materialized. Medicaid costs remain roughly in line with expectations, although the segment is projected to operate at a slight loss despite increased payments from state governments.

Conversely, the employer-sponsored insurance business has experienced spending growth exceeding 11%, surpassing initial forecasts. DeVeydt highlighted escalating costs linked to a federally mandated arbitration process designed to address surprise medical bills, a system that UnitedHealth and other insurers have legally challenged over concerns about excessive and improper claims.

Since Hemsley’s return, the company has reshaped its leadership team, scaled back its extensive Optum physician network, and reduced enrollment in Medicare plans following years of rapid expansion. These strategic adjustments, combined with technological advancements and prudent cost controls, appear to be driving the current turnaround.