Centene (CNC) Q4 2025 earnings summary

Executive summary

• 2025 adjusted diluted EPS was $2.08, with a GAAP diluted loss per share of $(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.

• 2026 guidance projects total revenues of $186.5–$190.5 billion, with premium and service revenues of $170.0–$174.0 billion and adjusted diluted EPS above $3.00, targeting over 40% year-over-year growth.

• Medicaid net rate increase anticipated in the mid-4% range, supporting revenue growth.

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 a Magellan business divestiture.

• Full-year adjusted SG&A expense ratio was 7.4%, down from 8.5% in 2024; 2026 forecast is 7.1%–7.7%.

• Cash flow from operations was $5.1 billion for 2025, 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 revenue guidance is $186.5–$190.5 billion, with premium and service revenue expected between $170 billion and $174 billion.

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

• Medicaid premium revenue projected to decline by $2 billion due to member attrition, partially offset by rate increases.

• Marketplace revenue expected to decrease by $8 billion, reflecting policy changes and expiration of Enhanced APTCs.

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

• HBR for 2026 forecasted at 90.9%–91.7%, with cost of services expense ratio between 91.4% and 92.0%.

• SG&A expense ratio expected between 7.1% and 7.7%.

• Effective tax rate projected at 27.0%–28.0%, with adjusted effective tax rate at 26.0%–27.0%.

• No share buybacks included in guidance; continued focus on debt reduction.