UNH

UNH's headline growth masks a two-year profitability collapse. Revenue compounded from $288B (FY2021) to $448B (FY2025, +11.8% YoY), but net income peaked at $22.4B in FY2023 and has fallen every year since to $12.1B (-16.3% YoY), with net margin compressing from ~6% to 2.7%. Operating income fell 41.3% in a single year to $19.0B, operating cash flow dropped 18.6% to $19.7B, and ROE has slid to 12.0%. This is the opposite of consistent, profitable growth — top-line scale is being added while the economics of each dollar of premium erode.

The filing explains why, and warns it isn't over. Risk-based premiums are ~80% of revenue, and the 10-K's risk factors stress that 'relatively small differences between predicted and actual medical costs... have resulted and in the future may result in significant changes in our financial results' — the medical-cost-trend problem that has already burned the company. The MD&A details a Q4-2025 $2.5B restructuring (including $746M of workforce cuts) plus $799M of added Change Healthcare cyberattack reserves. Most telling, management established a $623M loss-contract reserve 'related to anticipated future losses in 2026 for certain value-based care businesses' — a forward-looking admission that the margin pressure extends into next year.