Revenue and Income - Premium revenue for Q3 2025 reached $10,841 million, a 11.8% increase from $9,694 million in Q3 2024[7] - Total revenue for the nine months ended September 30, 2025, was $34,051 million, up 12.0% from $30,151 million in the same period of 2024[7] - Net income for Q3 2025 was $79 million, a significant decline of 75.8% compared to $326 million in Q3 2024[7] - Net income for the nine months ended September 30, 2025, was $632 million, a decrease of 32% compared to $928 million in the same period of 2024[14] - Net income per share (diluted) for Q3 2025 was $1.51, down from $5.65 in Q3 2024[7] Operating Performance - Operating income for Q3 2025 decreased to $137 million, down 70.7% from $467 million in Q3 2024[7] - Comprehensive income for Q3 2025 was $98 million, down from $402 million in Q3 2024[8] - The company reported a pre-tax margin of 0.8% in Q3 2025, a decline from 4.2% in Q3 2024, reflecting the impact of increased medical costs and lower investment income[93] - The medical margin for the nine months ended September 30, 2025, was $2,985 million, compared to $3,219 million for the same period in 2024, showing a decrease of approximately 7%[80] Medical Costs - Medical care costs for Q3 2025 were $10,044 million, an increase of 16.2% from $8,643 million in Q3 2024[7] - The consolidated medical care ratio (MCR) increased to 92.6% in Q3 2025 from 89.2% in Q3 2024, reflecting ongoing challenges in medical cost trends[92] - The medical margin in the Medicaid program decreased by $91 million, or 12%, in Q3 2025 compared to Q3 2024[127] - The Medicaid MCR increased by 150 basis points to 92.0% in Q3 2025 from 90.5% in Q3 2024[128] Assets and Liabilities - Total assets as of September 30, 2025, were $15,698 million, slightly up from $15,630 million at the end of 2024[10] - Long-term debt increased to $3,664 million as of September 30, 2025, compared to $2,923 million at the end of 2024[10] - The company recorded liabilities of $641 million and $1,006 million under contract provisions for amounts due to government agencies as of September 30, 2025, and December 31, 2024, respectively[26] - The company recorded a liability of $128 million under "Amounts due government agencies" related to Medicare risk adjustment as of September 30, 2025[29] Cash Flow - Net cash used in operating activities was $(237) million for the nine months ended September 30, 2025, compared to $868 million provided in the same period of 2024[14] - Total cash, cash equivalents, and restricted cash and cash equivalents at the end of the period was $4,324 million, down from $4,879 million at the end of September 2024[24] - The company reported a net cash provided by investing activities of $82 million for the nine months ended September 30, 2025, compared to $(483) million used in the same period of 2024[14] Membership and Market Presence - The company served approximately 5.6 million members eligible for government-sponsored healthcare programs across 21 states as of September 30, 2025[16] - Membership as of September 30, 2025, was 5.6 million, an increase of 30,000, or 0.5%, compared to the previous year, driven by growth in the Marketplace segment[92] Acquisitions and Investments - The company acquired ConnectiCare for $350 million in cash, with acquisition costs amounting to $3 million for the nine months ended September 30, 2025[39] - Provisional fair values assigned to assets acquired from ConnectiCare include current assets of $464 million and goodwill of $276 million[43] - The company closed the acquisition of ConnectiCare for $350 million on February 1, 2025, expanding its presence in the Connecticut market[115] Stock Repurchase and Capital Management - The board authorized a stock repurchase program of up to $1 billion in October 2024, with $500 million used to repurchase approximately 1,679,000 shares at an average cost of $297.83 per share[72] - In April 2025, the board authorized an additional $1 billion stock repurchase program, with $500 million used to repurchase approximately 2,849,000 shares at an average cost of $175.50 per share in Q3 2025[73] - The company has accrued a stock repurchase excise tax of $18 million related to share repurchase programs as of September 30, 2025[74] Financial Risks and Compliance - The company’s earnings and financial position are exposed to financial market risk relating to changes in interest rates[168] - A hypothetical 1% increase in market interest rates would decrease the fair value of the company's fixed income investments by approximately $118 million[169] - As of September 30, 2025, the company was in compliance with all financial and non-financial covenants under the Amended Credit Agreement[158]

Core Insights - Molina Healthcare's shares dropped nearly 20% in premarket trading due to a reduction in its full-year profit forecast, attributed to rising medical costs in its government programs [1] Company Summary - Molina Healthcare has once again lowered its profit forecast for the full year, indicating ongoing challenges in managing medical costs [1] - The significant decline in share price reflects investor concerns over the company's financial outlook and operational efficiency in the current healthcare environment [1]

Financial Data and Key Metrics Changes - The company reported adjusted EPS of $1.84 on $10.8 billion of premium revenue, which was below expectations [6][17] - The consolidated MCR for the quarter was 92.6%, reflecting a challenging medical cost environment [6][17] - Year-to-date, the consolidated MCR stands at 90.8% with an adjusted pre-tax margin of 2.7% [6] Business Line Data and Key Metrics Changes - In Medicaid, which represents 75% of total premium revenue, the MCR was reported at 92% with an adjusted pre-tax margin of 2.6% [7][17] - The Medicare segment reported a third quarter MCR of 93.6%, with higher utilization in high-acuity populations [7][17] - The Marketplace segment had a significantly higher MCR of 95.6%, driven by elevated utilization [7][17] Market Data and Key Metrics Changes - The company anticipates full-year premium revenue to increase to approximately $42.5 billion [8][22] - The adjusted EPS guidance for 2025 has been revised down to approximately $14 per share, reflecting a consolidated MCR of 91.3% [8][22] - The Medicaid MCR is expected to be 91.5% for the full year, which is above the high end of the long-term target range [9][22] Company Strategy and Development Direction - The company aims to surpass the $50 billion premium revenue mark in the coming years, with a focus on winning RFPs and pursuing M&A opportunities [14][72] - The 2026 outlook anticipates growth in existing markets and new Medicaid contracts, despite potential revenue headwinds from Marketplace pricing strategies [12][25] - The company is strategically focused on the dual-eligible segment in Medicare, which is expected to drive profitable growth [15][66] Management Comments on Operating Environment and Future Outlook - Management acknowledged the challenging medical cost environment and the impact on earnings, particularly in the Marketplace segment [6][10] - The company remains optimistic about future Medicaid rates keeping pace with medical cost trends, citing responsiveness from state partners [40][42] - Management believes that the current high medical cost trends will eventually stabilize, allowing for a return to target margins [59][62] Other Important Information - The company has a strong capital foundation, with RBC ratios at 340% and total subsidiary capital 70% above state minimums [20] - The company repurchased approximately 2.8 million shares at a cost of $500 million, indicating confidence in long-term value [21] - The embedded earnings are estimated at $8.65 per share, with expectations for realization over time [60][62] Q&A Session Summary Question: Can you elaborate on the drivers of ACA MCR pressure in the quarter? - Management indicated that the pressure was due to increased medical cost trends across all categories, with a higher percentage of special enrollment membership contributing to the trend [32][33] Question: Are you expecting Medicaid rates to be in excess of the 7% cost trend? - Management expressed optimism that rates will at least keep pace with the trend, citing responsiveness from states and a solid baseline for rate projections [39][41] Question: How does the expiration of subsidies affect your pricing assumptions for Marketplace? - Management stated that pricing is based on the expiration of subsidies, with a focus on achieving break-even or better margins [44][45] Question: What is the outlook for Medicare performance next year? - Management noted that the Medicare business is rejuvenating, particularly with the transition of MMPs to FIDEs and HIDEs, and expects slight margin erosion but overall stability [66][67] Question: How is the M&A pipeline developing? - Management highlighted a full pipeline of actionable opportunities, particularly among smaller health plans facing operational difficulties, and emphasized disciplined capital allocation [71][72]

Financial Data and Key Metrics Changes - The company reported adjusted EPS of $1.84 on $10.8 billion of premium revenue, which was below expectations [7][19] - The consolidated MCR for the quarter was 92.6%, reflecting a challenging medical cost environment [7][19] - Year-to-date, the consolidated MCR stands at 90.8% with an adjusted pre-tax margin of 2.7% [7] Business Line Data and Key Metrics Changes - In Medicaid, which represents 75% of total premium revenue, the MCR was reported at 92% with an adjusted pre-tax margin of 2.6% [8][19] - The Medicare segment reported a third quarter MCR of 93.6%, with higher utilization in high-acuity populations [8][20] - The Marketplace segment had a significantly higher-than-expected MCR of 95.6%, driven by elevated utilization [8][21] Market Data and Key Metrics Changes - The company anticipates full-year premium revenue to increase to approximately $42.5 billion [9][24] - The adjusted EPS guidance for 2025 has been revised down to approximately $14 per share, reflecting a consolidated MCR of 91.3% [9][24] - The medical cost trend for Medicaid is now expected to be 7%, which is 100 basis points higher than previous guidance [10][25] Company Strategy and Development Direction - The company aims to surpass the $50 billion premium revenue mark in the coming years, with a focus on winning RFPs and pursuing M&A opportunities [16] - The strategy includes reducing exposure in the Marketplace while stabilizing the risk pool [17] - The company is optimistic about Medicaid rates keeping pace with medical cost trends, with expectations for slight improvements [42][44] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging medical cost environment but expressed confidence in the long-term growth potential of the business [17][18] - The company views the current operating environment as temporary and expects rates to eventually align with medical cost trends [17][60] - Management highlighted the importance of state responsiveness to rate adjustments in light of increased medical costs [42][44] Other Important Information - The company has a strong capital foundation, with RBC ratios at 340% and total subsidiary capital 70% above state minimums [22] - Share repurchases totaled approximately 2.8 million shares at a cost of $500 million, reflecting confidence in the company's long-term value [23] - The company has an active pipeline of $54 billion in new opportunities over the next few years [16] Q&A Session Summary Question: Can you elaborate on the drivers of ACA MCR pressure in the quarter? - Management indicated that the pressure was due to increased medical cost trends across all categories, with a higher percentage of special enrollment membership contributing to the trend [34][35] Question: Are you expecting Medicaid rates to be in excess of the 7% cost trend? - Management expressed optimism that rates will at least keep pace with the trend, citing state responsiveness and a solid baseline for rate projections [41][42] Question: How does the expiration of subsidies affect your pricing assumptions? - Management stated that pricing was conservatively set to account for the expiration of subsidies, with an aim to break even or better in the Marketplace segment [46][47] Question: What is the outlook for embedded earnings? - Management indicated that embedded earnings are expected to be realized over time, with some components contributing positively in the upcoming year [62][65] Question: Can you discuss the M&A pipeline and capital allocation priorities? - Management confirmed that capital priorities remain focused on organic growth, inorganic growth, and returning capital to shareholders, with a full pipeline of actionable M&A opportunities [71][74]

Financial Data and Key Metrics Changes - The company reported adjusted earnings per share of $1.84 on premium revenue of $10.8 billion, which was below expectations [5][20] - The consolidated Medical Care Ratio (MCR) was 92.6%, reflecting a challenging medical cost environment [5][20] - Year-to-date, the consolidated MCR stands at 90.8% with an adjusted pretax margin of 2.7% [5][20] - The full-year 2025 adjusted earnings per share guidance has been revised down to approximately $14, which is $5 below prior guidance of $19 per share [7][27] Business Line Data and Key Metrics Changes - In Medicaid, which represents 75% of total premium revenue, the MCR was reported at 92% with an adjusted pretax margin of 2.6% [5][21] - The Medicare segment reported a third-quarter MCR of 93.6%, with higher utilization in high-acuity populations [6][21] - The marketplace segment had a significantly higher MCR of 95.6%, indicating elevated utilization compared to risk adjustment revenue [7][21] Market Data and Key Metrics Changes - The company anticipates premium revenue growth in its current footprint and new Medicaid contracts in Georgia and Texas, targeting $46 billion in revenue for 2026 [12][31] - The marketplace business is expected to face revenue headwinds due to pricing strategies aimed at reducing exposure [13][31] Company Strategy and Development Direction - The company aims to surpass $50 billion in premium revenue in the coming years, with a strong pipeline of $54 billion in new opportunities [17][91] - The acquisition pipeline is robust, focusing on smaller health plans that may consider strategic options due to current operating challenges [18][91] - The company is strategically reducing its footprint in the marketplace to stabilize risk pools and improve margins [32][91] Management's Comments on Operating Environment and Future Outlook - Management noted that the medical cost trend is higher than expected, driven by increased utilization across various categories [6][21] - The company remains optimistic about Medicaid rates keeping pace with cost trends, citing responsiveness from state partners [49][51] - The outlook for 2026 suggests a potential return to target margins as rates are expected to improve [60][62] Other Important Information - The effective tax rate in the third quarter dropped significantly due to federal tax credits and lower non-deductible expenses [22] - The company repurchased approximately 2.8 million shares at a cost of $500 million, indicating confidence in the value of its shares [25][91] Q&A Session Summary Question: Can you elaborate on the drivers of ACA MLR pressure in the quarter? - The pressure was strictly related to increased medical cost trends across all categories, with a higher percentage of special enrollment membership contributing to the trend [40][41] Question: Are you expecting Medicaid rates to be in excess of the 7% cost trend? - Management expressed optimism that rates will at least keep pace with the trend, citing responsive state actions and visibility into cost categories [48][49] Question: How does the expiration of subsidies affect your pricing assumptions? - The company has priced for the expiration of subsidies, targeting breakeven or better margins, with significant price increases planned [54][56] Question: What is the outlook for embedded earnings? - The company has $8.65 in embedded earnings, with expectations for a portion to emerge in 2026, although the timing may be affected by current margin levels [77][80] Question: Can you break down the performance of the Medicare business? - The Medicare business is undergoing rejuvenation, with expectations for slight margin erosion in MMPs transitioning to Phydes and Hydes, but overall starting at margin neutral for next year [82][87] Question: How is the M&A pipeline developing? - The M&A pipeline is full of actionable opportunities, with a focus on acquiring revenue streams from struggling local health plans at or near book value [89][91]

Core Insights - Premarket trading is showing notable activity with significant price movements indicating potential investment opportunities before the market opens [1] Premarket Gainers - Ventyx Biosciences, Inc. (VTYX) increased by 108% to $8.05 - Brera Holdings PLC (SLMT) rose by 49% to $12.50 - Safe & Green Holdings Corp. (SGBX) gained 39% to $3.18 - American Rebel Holdings, Inc. (AREB) up by 26% to $2.71 - Tango Therapeutics, Inc. (TNGX) increased by 18% to $10.25 - Garrett Motion Inc. (GTX) rose by 14% to $14.30 - ETHZilla Corporation (ETHZ) gained 12% to $17.61 - D-Wave Quantum Inc. (QBTS) increased by 11% to $30.40 - IonQ, Inc. (IONQ) rose by 10% to $61.04 - Megan Holdings Limited (MGN) up by 7% to $2.31 [3] Premarket Losers - Splash Beverage Group, Inc. (SBEV) decreased by 21% to $2.06 - Molina Healthcare, Inc. (MOH) down by 18% to $158.44 - SCHMID Group N.V. (SHMD) fell by 18% to $3.18 - Beyond Meat, Inc. (BYND) decreased by 18% to $2.91 - Agencia Comercial Spirits Ltd (AGCC) down by 16% to $5.07 - Super League Enterprise, Inc. (SLE) fell by 13% to $2.25 - Armata Pharmaceuticals, Inc. (ARMP) decreased by 12% to $5.99 - Applied DNA Sciences, Inc. (BNBX) down by 12% to $4.19 - Ribbon Communications Inc. (RBBN) fell by 12% to $3.49 - Tamboran Resources Corporation (TBN) decreased by 11% to $21.81 [4]

Core Insights - Molina Healthcare shares experienced a decline of approximately 20% in premarket trading following the company's announcement of a reduced annual profit forecast for the third time this year, attributed to rising medical costs [1] Company Summary - Molina Healthcare has revised its annual profit forecast downward for the third time in 2023, indicating ongoing challenges in managing medical expenses [1] - The significant drop in share price reflects investor concerns regarding the company's financial outlook and operational efficiency in the face of increasing medical costs [1]

Core Insights - Molina Healthcare Inc. shares experienced a significant decline of 19.34% to $157.39 in after-hours trading following the release of its third-quarter earnings [1] Financial Performance - The company reported third-quarter GAAP earnings of $1.51 per diluted share, a decrease from $5.65 in the same quarter last year [2] - Adjusted earnings were $1.84 per share, down from $6.01 year-over-year [2] - Premium revenue increased by 12% year-over-year, reaching $10.8 billion [2] Medical Care Ratios - The consolidated medical care ratio (MCR) for Q3 rose to 92.6%, up from 89.2% a year earlier [3] - Medicaid MCR was reported at 92.0%, Medicare at 93.6%, and Marketplace at 95.6% [3] Earnings Contribution - Medicaid contributed $3.52 per diluted share to adjusted earnings, while losses from Medicare and Marketplace amounted to $1.68 per share [4] Full-Year Guidance - The company revised its premium revenue forecast to approximately $42.5 billion and expects full-year 2025 adjusted earnings of around $14 per diluted share [5] - The outlook change is attributed to rising medical costs across all segments, with the Marketplace business facing "unprecedented" cost trends [5] Preliminary Outlook for 2026 - The preliminary outlook for adjusted earnings per share in 2026 is expected to be similar to the full-year 2025 guidance, with reduced exposure to the Marketplace [6] Stock Performance - Molina Healthcare's stock has declined 32.96% year-to-date in 2025, trading within a range of $151.95 to $359.97 [7] - The company has a market capitalization of $10.58 billion, an average daily volume of 1.04 million shares, and a price-to-earnings ratio of 9.62 [7]

The complaint alleges that, throughout the Class Period, Defendants made false and/or misleading statements and/or failed to disclose: (1) material, adverse facts concerning Molina's "medical cost trend assumptions"; (2) that Molina was experiencing a "dislocation between premium rates and medical cost trend"; (3) that Molina's near term growth was dependent on a lack of "utilization of behavioral health, pharmacy, and inpatient and outpatient services"; (4) as a result, Molina's financial guidance for fisc ...

Core Insights - Molina (MOH) reported $11.48 billion in revenue for Q3 2025, marking an 11% year-over-year increase, but EPS fell to $1.84 from $6.01 a year ago, indicating a significant decline in profitability [1] - The revenue exceeded the Zacks Consensus Estimate of $10.9 billion by 5.28%, while the EPS fell short of the consensus estimate of $3.97 by 53.65% [1] Financial Performance Metrics - Molina's total Membership Care Ratio (MCR) was 92.6%, surpassing the average estimate of 90.3% [4] - The MCR for Medicare was reported at 93.6%, exceeding the estimated 87% [4] - The MCR for Marketplace was 95.6%, compared to the estimated 84.7% [4] Membership and Revenue Breakdown - Total ending membership was 5.63 million, slightly below the average estimate of 5.74 million [4] - Medicaid membership stood at 4.64 million, compared to the estimated 4.8 million [4] - Premium revenue reached $10.84 billion, exceeding the estimate of $10.31 billion, reflecting an 11.8% increase year-over-year [4] - Premium tax revenue was $506 million, slightly above the estimate of $474.87 million, but showed a year-over-year decline of 0.4% [4] - Medicare premium revenue was $1.61 billion, surpassing the estimate of $1.48 billion, with a year-over-year increase of 17.8% [4] - Medicaid premium revenue was $8.02 billion, exceeding the estimate of $7.66 billion, reflecting a 4.5% year-over-year increase [4] - Marketplace premium revenue was $1.2 billion, significantly above the estimate of $1.1 billion, showing an impressive 81.6% increase year-over-year [4] - Investment income was reported at $108 million, exceeding the estimate of $99.93 million, but reflecting an 8.5% year-over-year decline [4] - Other revenue was $22 million, slightly above the estimate of $21.47 million, with a year-over-year increase of 10% [4] Stock Performance - Molina's shares have returned +7.8% over the past month, outperforming the Zacks S&P 500 composite's +1.1% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]