Oscar Health, Inc. (OSCR) Earnings & Analysis

Latest quarter

Oscar Health reported second-quarter revenue of $4.9 billion, up 70.4% from $2.9 billion a year earlier. Revenue missed the consensus by −0.92%, although both the reported result and estimate rounded to $4.9 billion. Diluted earnings per share were $1.10, compared with −$0.89 a year earlier.

The company attributed higher premium revenue to membership growth and rate increases, partly offset by a higher net risk adjustment accrual. Its filing reported approximately 3.0 million members at June 30, 2026, an approximately 46% increase from a year earlier. Oscar also said medical expenses rose as membership increased and medical costs trended higher.

Oscar reported a gross margin of 22.2%, compared with 10.9% a year earlier, and an operating margin of 7.96%, compared with −8.05%. The company attributed the decline in its medical loss ratio partly to pricing and favorable development of prior-period reserves. Free cash flow was $2.1 billion, compared with $499.8 million a year earlier.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Mark Bertolini said Oscar ended the second quarter with 2.96 million members, up 46% year-over-year, following open enrollment growth and retention. He said individual-market membership was tracking favorably against Oscar’s pricing assumptions, although the company expected further market contraction and remained cautious with only 4 months of morbidity data.

Asked about utilization, Bertolini said outpatient activity was somewhat elevated, but other categories were favorable and trends were stable. He said the risk profile of Oscar’s members was consistent with expectations. The company reported a second-quarter medical loss ratio of 79.2%, with utilization moderately favorable to its expectations.

Executive Richard Blackley said the $160 million benefit from 2025 risk adjustment was the largest part of $164 million in favorable second-quarter prior-period development. Asked about the second half, Bertolini said he expected the medical loss ratio to trend higher quarterly as members moved through their deductibles, with a seasonal pattern similar to prior years.

On member retention, Bertolini said second-quarter lapses were better than expected. He said some disenrollments related to eligibility and data issues had shifted into the second half, but described the change as timing that would not affect revenue. Oscar does not recognize revenue for members it anticipates will be disenrolled, he said.

Bertolini said Oscar’s radiology pilot used its Oswell Agent to guide members toward care sites and show estimated savings. He said the company expected to extend the capability to additional procedures and to generate tens of millions of dollars in annual savings from its technology capabilities. Asked about competition, he said Oscar priced market by market and considered the pricing environment rational so far.

Guidance

Oscar raised its FY2026 earnings from operations guidance to $500 million to $700 million, an increase of $250 million from its prior outlook, Blackley said. He said the company now expects a medical loss ratio of 81.5% to 82.5%, an improvement of 90 basis points at the midpoint. Oscar also expects an SG&A expense ratio of 15.6% to 16.1%, an improvement of 20 basis points at the midpoint, he said.