Centene Earnings Call Transcripts
Fiscal Year 2026
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Q1 2026 delivered strong EPS and revenue growth, driven by Medicaid and Medicare outperformance and disciplined cost management. Full-year EPS guidance was raised, with Marketplace margins conservatively set pending further risk adjustment data.
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Management reaffirmed 2026 EPS guidance, with all core business lines tracking to plan. Marketplace membership is declining as expected, Medicaid trends are improving, and Medicare Advantage is on a path to breakeven by 2027. Fraud prevention and risk adjustment remain key focus areas.
Fiscal Year 2025
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2025 ended with adjusted EPS of $2.08 and improved Medicaid profitability, despite a challenging year. 2026 guidance targets over $3 in adjusted EPS, driven by Medicaid stability, Marketplace margin recovery, and Medicare PDP growth, with continued focus on cost control and operational efficiency.
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Q3 results surpassed expectations, driving a raised full-year outlook and continued margin focus. The company is managing the Florida CMS contract loss, extending its PBM partnership, and preparing for policy shifts in Medicaid and Marketplace. Margin improvement and growth in government programs remain central.
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Q3 adjusted EPS exceeded expectations, driven by Medicaid improvements and a positive Florida adjustment, while a $6.7B goodwill impairment led to a GAAP loss. 2025 adjusted EPS guidance was raised to at least $2, with 2026 expected to see margin gains in Marketplace and Medicare, and stable Medicaid profitability.
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Full-year EPS guidance was reaffirmed, with Medicaid and Medicare segments tracking to improvement targets and 2026 rate filings covering 95% of Marketplace membership. Margin recovery is a key focus across all business lines, with proactive rate management and cost controls in place.
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Q2 2025 saw a $0.16 adjusted per-share loss and a sharp reduction in full-year EPS guidance to $1.75, driven by a $2.4B Marketplace risk adjustment shortfall and elevated Medicaid costs. Aggressive repricing and interventions are underway to restore profitability in 2026.
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Q1 2025 results met expectations with $2.90 adjusted EPS and $42.5B revenue, prompting a $6B increase in full-year revenue guidance. Medicaid and Medicare segments showed strong membership and rate progress, while specialty drug costs and policy changes remain key risks.
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Management reaffirmed 2025 EPS guidance above $7.25, with Q1 EPS expected above consensus despite higher flu costs. Policy discussions focus on Medicaid reform and ACA subsidies, while operational updates highlight strong exchange enrollment and scenario planning for potential subsidy changes.
Fiscal Year 2024
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Q4 and full-year 2024 results exceeded guidance, with strong EPS and revenue growth across Medicaid, Medicare, and Marketplace segments. 2025 revenue guidance was raised by $4 billion, while EPS guidance remains above $7.25, reflecting confidence in operational execution and membership stability.
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2025 guidance sets a new EPS floor above $7.25, with strong growth in Medicaid, Medicare, and Marketplace. Duals and ICHRA are highlighted as major disruptive opportunities, while embedded earnings power and margin expansion are expected from rate recapture, Medicare turnaround, and PDP margin growth. Political and market dynamics favor continued bipartisan support for core programs.
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Q3 adjusted diluted EPS exceeded expectations, driven by timing of tax benefits and strong segment performance. Medicaid rate alignment is progressing, Marketplace and Medicare segments are stable, and 2024 EPS guidance is reaffirmed above $6.80.
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Strong international growth and pipeline expansion are driving performance, with Keytruda and Gardasil leading revenue gains. Diversification into cardiovascular, immunology, and vaccines, along with strategic partnerships, positions the company for sustained growth.
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Q3 performance is consistent with Q2, with strong Marketplace results offsetting Medicaid pressure from redeterminations. Medicaid margins may normalize by 2026 after multiple rate cycles, while operational efficiencies and strategic focus on quality and margin preservation continue across all lines.
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Q2 2024 adjusted diluted EPS rose 15% year-over-year to $2.42, driven by strong Marketplace performance and offset by Medicaid redetermination pressures. Full-year premium and service revenue guidance increased by $5 billion, with Medicaid rate improvements expected to boost H2 margins.