Centene (CNC) Q1 2025 earnings summary

Executive summary

• Q1 2025 adjusted diluted EPS was $2.90, up 28% year-over-year, and GAAP diluted EPS was $2.63; full-year adjusted EPS guidance reaffirmed at greater than $7.25.

• Total revenues for Q1 2025 reached $46.6 billion, up 15% year-over-year, driven by strong Medicare PDP and Marketplace growth.

• Managed care membership was 27.9 million, a 2% decrease year-over-year, mainly due to Medicaid redeterminations.

• 2025 premium and service revenue guidance was raised by $6 billion, reflecting strong enrollment and retention.

• Strategic Medicaid contract wins in Illinois and Nevada, expanding the company's footprint and reinforcing competitive positioning.

Financial highlights

• Premium and service revenues grew 17% year-over-year to $42.5 billion.

• Net earnings attributable to Centene were $1.31 billion, up from $1.16 billion in Q1 2024.

• Gross margin increased 12% to $5.29 billion, with notable Medicare segment improvement.

• Cash flow from operations was $1.5 billion in Q1 2025.

• HBR increased to 87.5% from 87.1% year-over-year, while SG&A expense ratio improved to 7.9% from 8.9%.

Outlook and guidance

• Full-year 2025 adjusted EPS guidance reiterated at greater than $7.25; GAAP diluted EPS guidance floor remains above $6.19.

• Premium and service revenue guidance midpoint raised to $165 billion from $159 billion.

• HBR expected between 88.9% and 89.5%; SG&A expense ratio between 7.7% and 8.2%.

• Lowered investment income guidance by $100 million due to cash balance and rate cut assumptions.

• Preparing for potential high single-digit price increases in 2026 marketplace due to policy changes and possible expiration of enhanced APTCs.