Centene (CNC) Q1 2025 earnings summary

Executive summary

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

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

• Premium and service revenues grew 17% to $42.5 billion, with robust membership gains in Medicaid, Medicare, and commercial segments.

• Membership increased 29% in Marketplace and 22% in Medicare PDP, while managed care membership declined 2% due to Medicaid redeterminations.

• Operating cash flow was $1.5 billion, a significant improvement from the prior year.

Financial highlights

• Premium and service revenues: $42.5 billion, up 17% year-over-year.

• Q1 adjusted diluted EPS: $2.90; GAAP diluted EPS: $2.63.

• HBR increased to 87.5% from 87.1% year-over-year; Medicaid HBR: 93.6%, Medicare HBR: 86.3%, Commercial HBR: 75.0%.

• SG&A expense ratio improved to 7.9% from 8.9% year-over-year.

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

Outlook and guidance

• Full-year 2025 adjusted EPS guidance remains >$7.25; GAAP diluted EPS guidance floor >$6.19.

• Premium and service revenue guidance midpoint raised to $165 billion (from $159 billion), with 2025 guidance increased to $164.0–$166.0 billion.

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

• 2026 pricing to reflect potential expiration of enhanced APTCs and new CMS rules, possibly driving high single-digit price increases.

• Available liquidity, cash flow, and credit facilities expected to cover operations and capital needs for at least 12 months.