Oscar Health Q2 Earnings Call Highlights

Oscar Health NYSE: OSCR reported record profitability for the first half of 2026 and raised its full-year operating outlook, citing membership growth, disciplined pricing, favorable utilization trends and lower administrative expense ratios. Chief Executive Officer Mark Bertolini said the company generated $1.1 billion in earnings from operations and $1 billion in net income during the first six months of the year. In the second quarter, revenue rose 70% year over year to $4.9 billion, while the medical loss ratio, or MLR, improved by nearly 12 percentage points to 79.2%.

Second-quarter earnings from operations totaled $389 million, compared with a loss in the prior-year period, while net income was $362 million. Adjusted EBITDA was $415 million. The company ended the quarter with 2.96 million effectuated members, up 46% from a year earlier, driven by above-market open enrollment growth and retention.

Chief Financial Officer Scott Blackley said Oscar raised its full-year 2026 earnings-from-operations forecast to between $500 million and $700 million, representing a $250 million increase from its prior outlook. The company maintained its revenue outlook of $18.7 billion to $19 billion. Full-year MLR is now expected to be 81.5% to 82.5%, a 90-basis-point improvement at the midpoint from prior guidance. The SG&A expense ratio is expected to be 15.6% to 16.1%, an improvement of 20 basis points at the midpoint. Adjusted EBITDA is still expected to be roughly $115 million above earnings from operations. The company’s SG&A expense ratio reached a record low of 14.2% in the second quarter, improving 450 basis points year over year. Blackley attributed the improvement to expense discipline, fixed-cost leverage and technology and artificial intelligence initiatives that reduced variable costs, partly offsetting higher taxes and exchange fees. Oscar expects its SG&A ratio to remain relatively stable in the third quarter before increasing in the fourth quarter, when it typically invests in preparation for the following year’s enrollment cycle.

Oscar received its final 2025 CMS risk-adjustment report during the quarter, which was approximately $160 million favorable to its first-quarter accruals and was fully recognized in the second quarter. The company also received an initial 2026 risk-adjustment report based on claims through April that showed market morbidity tracking favorably to pricing assumptions. However, management said it recognized only a small portion of that favorability because the available claims data covered only four months. Risk adjustment represented about 20% of direct premiums during the first half, consistent with Oscar’s expectation fo...