Centene (CNC) Q4 2025 earnings summary

Executive summary

• 2025 adjusted diluted EPS was $2.08, while GAAP diluted loss per share was $(13.53) due to a $6.7 billion goodwill impairment and a $513 million Magellan Health impairment; Q4 adjusted diluted loss per share was $1.19, slightly ahead of expectations.

• Total revenues for 2025 increased 20% year-over-year to $194.8 billion, driven by growth in PDP and Marketplace businesses and Medicaid rate increases.

• Medicaid profitability improved in the back half of 2025, with Marketplace and Medicare segments performing in line or better than expectations; Medicaid and Medicare Advantage membership declined, while Marketplace and Medicare PDP membership grew.

• Strong SG&A management led to a full-year adjusted SG&A expense ratio of 7.4%, down from 8.5% in 2024.

• Positioned for meaningful margin improvement and adjusted EPS growth in 2026, targeting over $3 in adjusted EPS, a 40%+ year-over-year increase.

Financial highlights

• 2025 premium and service revenue reached $174.6 billion, with Q4 revenues up 23% year-over-year.

• Q4 GAAP diluted loss per share was $2.24, including a $389 million net loss from the Magellan business divestiture.

• Health benefits ratio (HBR) increased to 91.9% for 2025 from 88.3% in 2024, reflecting higher medical costs and program changes.

• Cash flow from operations was $5.1 billion for the year, up from $154 million in 2024.

• Ended 2025 with $400 million in available cash and a debt-to-capital ratio of 46.5%.

Outlook and guidance

• 2026 adjusted diluted EPS is projected to exceed $3.00, with GAAP diluted EPS above $1.98.

• 2026 revenue guidance is $186.5–$190.5 billion, with premium and service revenue projected at $170–$174 billion.

• HBR for 2026 is expected between 90.9% and 91.7%; adjusted SG&A expense ratio forecasted at 7.1%–7.7%.

• Medicaid member months projected down 5–6% in 2026; Marketplace revenue expected to decline by $8 billion due to policy changes, with membership stabilizing at 3.5 million.

• Medicare segment premium revenue to grow by $7.5 billion, mainly from PDP business and yield increases.