PART I - Financial Information [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents the unaudited consolidated financial statements and accompanying notes for the periods ended June 30, 2025 [Consolidated Statements of Income](index=3&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20INCOME) **Three Months Ended June 30, 2025 vs. 2024 (in millions):** | Metric | 2025 | 2024 | Change | % Change | | :-------------------------- | :----- | :----- | :----- | :------- | | Premium revenue | $10,868 | $9,446 | $1,422 | 15.05% | | Total revenue | $11,427 | $9,880 | $1,547 | 15.66% | | Medical care costs | $9,829 | $8,368 | $1,461 | 17.46% | | Operating income | $373 | $434 | $(61) | -14.06% | | Net income | $255 | $301 | $(46) | -15.28% | | Net income per share - Diluted | $4.75 | $5.17 | $(0.42) | -8.12% | **Six Months Ended June 30, 2025 vs. 2024 (in millions):** | Metric | 2025 | 2024 | Change | % Change | | :-------------------------- | :----- | :----- | :----- | :------- | | Premium revenue | $21,496 | $18,950 | $2,546 | 13.44% | | Total revenue | $22,574 | $19,811 | $2,763 | 13.95% | | Medical care costs | $19,308 | $16,782 | $2,526 | 15.05% | | Operating income | $806 | $860 | $(54) | -6.28% | | Net income | $553 | $602 | $(49) | -8.14% | | Net income per share - Diluted | $10.19 | $10.33 | $(0.14) | -1.36% | [Consolidated Statements of Comprehensive Income](index=3&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME) **Comprehensive Income (in millions):** | Period | 2025 | 2024 | | :-------------------------- | :----- | :----- | | Three Months Ended June 30 | $273 | $301 | | Six Months Ended June 30 | $600 | $599 | - Other comprehensive gain (loss), net of tax, for the three months ended June 30, 2025, was **$18 million**, compared to **$0 million** in 2024. For the six months ended June 30, 2025, it was a gain of **$47 million**, compared to a loss of **$3 million** in 2024[8](index=8&type=chunk) [Consolidated Balance Sheets](index=4&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) **Balance Sheet Highlights (in millions):** | Metric | June 30, 2025 | December 31, 2024 | Change | | :---------------------------------- | :------------ | :---------------- | :----- | | Total assets | $16,209 | $15,630 | $579 | | Total liabilities | $11,606 | $11,134 | $472 | | Total stockholders' equity | $4,603 | $4,496 | $107 | | Cash and cash equivalents | $4,499 | $4,662 | $(163) | | Investments | $4,310 | $4,325 | $(15) | | Medical claims and benefits payable | $4,885 | $4,640 | $245 | | Long-term debt | $3,375 | $2,923 | $452 | [Consolidated Statements of Stockholders' Equity](index=5&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20STOCKHOLDERS'%20EQUITY) **Stockholders' Equity Changes (in millions, except shares):** | Metric | Dec 31, 2024 | Mar 31, 2025 | Jun 30, 2025 | | :-------------------------- | :----------- | :----------- | :----------- | | Shares Outstanding | 56 | 54 | 54 | | Total Stockholders' Equity | $4,496 | $4,310 | $4,603 | | Net income (Q1 2025) | - | $298 | - | | Net income (Q2 2025) | - | - | $255 | | Common stock purchases | - | $(500) | - | | Other comprehensive income, net (Q1 2025) | - | $29 | - | | Other comprehensive income, net (Q2 2025) | - | - | $18 | - The company repurchased **2 million shares** of common stock in Q1 2025, reducing total outstanding shares from **56 million** at December 31, 2024, to **54 million** at March 31, 2025, and June 30, 2025[12](index=12&type=chunk) [Consolidated Statements of Cash Flows](index=6&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) **Cash Flow Summary (Six Months Ended June 30, in millions):** | Activity | 2025 | 2024 | Change | | :-------------------------------------------------- | :----- | :----- | :----- | | Net cash used in operating activities | $(112) | $(5) | $(107) | | Net cash provided by (used in) investing activities | $5 | $(435) | $440 | | Net cash used in financing activities | $(42) | $(50) | $8 | | Net decrease in cash, cash equivalents, and restricted cash and cash equivalents | $(149) | $(490) | $341 | | Cash, cash equivalents, and restricted cash and cash equivalents at end of period | $4,592 | $4,418 | $174 | [Notes to Consolidated Financial Statements (Unaudited)](index=7&type=section&id=NOTES%20TO%20CONSOLIDATED%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) [1. Organization and Basis of Presentation](index=7&type=section&id=1.%20Organization%20and%20Basis%20of%20Presentation) - Molina Healthcare, Inc. provides managed healthcare services under Medicaid, Medicare, and state insurance marketplaces, serving approximately **5.7 million members** across 22 states as of June 30, 2025[15](index=15&type=chunk)[16](index=16&type=chunk) - The company operates with four reportable segments: **Medicaid, Medicare, Marketplace, and Other**, consistent with its business management and market view[15](index=15&type=chunk) [2. Significant Accounting Policies](index=7&type=section&id=2.%20Significant%20Accounting%20Policies) **Receivables from Government Agencies (in millions):** | Date | Amount | | :---------------- | :----- | | June 30, 2025 | $2,662 | | December 31, 2024 | $2,223 | - The company recognizes premium revenue as earned, subject to adjustments from Minimum MLR, medical cost corridors, and profit-sharing provisions, with liabilities recorded under 'Amounts due government agencies'[26](index=26&type=chunk) **Liabilities for Premium Adjustments (in millions):** | Program | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Medicaid (MLR/Corridors/Profit Sharing) | $771 | $1,006 | | Medicare (Minimum MLR) | $40 | $32 | | Marketplace (Minimum MLR) | $35 | $30 | | Medicare (Risk Adjustment/Part D) | $117 | $115 | | Marketplace (Net Risk Adjustment Payable) | $293 | $98 | [3. Net Income Per Share](index=10&type=section&id=3.%20Net%20Income%20Per%20Share) **Net Income Per Share (Diluted):** | Period | 2025 | 2024 | | :-------------------------- | :----- | :----- | | Three Months Ended June 30 | $4.75 | $5.17 | | Six Months Ended June 30 | $10.19 | $10.33 | **Diluted Weighted Average Shares Outstanding (in millions):** | Period | 2025 | 2024 | | :-------------------------- | :----- | :----- | | Three Months Ended June 30 | 53.7 | 58.2 | | Six Months Ended June 30 | 54.3 | 58.3 | [4. Business Combinations](index=10&type=section&id=4.%20Business%20Combinations) - Effective February 1, 2025, Molina Healthcare acquired 100% of ConnectiCare Holding Company, Inc. for **$350 million in cash**. The acquisition costs were **$3 million** for the six months ended June 30, 2025[38](index=38&type=chunk) **Provisional Fair Values of ConnectiCare Acquisition (in millions):** | Category | Amount | | :------------------------------------------ | :----- | | Current assets | $461 | | Goodwill | $222 | | Intangible assets | $61 | | Other long-term assets | $40 | | Medical claims and benefits payable | $(295) | | Amounts due government agencies | $(28) | | Accounts payable, accrued and other long-term liabilities | $(111) | | **Fair value of net assets acquired** | **$350** | - **Goodwill of $222 million** was assigned to the Marketplace segment and is not deductible for income tax purposes. Acquired intangible assets, totaling **$61 million**, include contract rights (member list), trade name, and provider network, with a weighted-average amortization period of **9.8 years**[41](index=41&type=chunk)[43](index=43&type=chunk) [5. Fair Value Measurements](index=11&type=section&id=5.%20Fair%20Value%20Measurements) - The company's financial instruments measured at fair value on a recurring basis primarily consist of corporate debt securities, mortgage-backed securities, and asset-backed securities, all classified as **Level 2** (directly or indirectly observable inputs)[44](index=44&type=chunk)[45](index=45&type=chunk) **Fair Value of Investments (in millions):** | Type of Security | June 30, 2025 | December 31, 2024 | | :---------------------- | :------------ | :---------------- | | Corporate debt securities | $2,643 | $2,744 | | Mortgage-backed securities | $980 | $914 | | Asset-backed securities | $424 | $431 | | Municipal securities | $196 | $183 | | U.S. Treasury notes | $20 | $5 | | Other | $47 | $48 | | **Total assets** | **$4,310** | **$4,325** | **Carrying Amount vs. Fair Value of Notes Payable (in millions):** | Notes | June 30, 2025 (Carrying) | June 30, 2025 (Fair Value) | Dec 31, 2024 (Carrying) | Dec 31, 2024 (Fair Value) | | :------------------ | :----------------------- | :------------------------- | :---------------------- | :------------------------ | | 4.375% Notes due 2028 | $796 | $782 | $795 | $759 | | 3.875% Notes due 2030 | $645 | $603 | $645 | $578 | | 3.875% Notes due 2032 | $743 | $683 | $743 | $648 | | 6.250% Notes due 2033 | $741 | $763 | $740 | $741 | | Term Loan | $450 | $450 | — | — | | **Total** | **$3,375** | **$3,281** | **$2,923** | **$2,726** | [6. Investments](index=12&type=section&id=6.%20Investments) **Available-for-Sale Investments (June 30, 2025, in millions):** | Type of Security | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | | :---------------------- | :------------- | :--------------------- | :---------------------- | :------------------- | | Corporate debt securities | $2,630 | $28 | $15 | $2,643 | | Mortgage-backed securities | $1,003 | $6 | $29 | $980 | | Asset-backed securities | $425 | $2 | $3 | $424 | | Municipal securities | $197 | $2 | $3 | $196 | | U.S. Treasury notes | $20 | — | — | $20 | | Other | $48 | — | $1 | $47 | | **Total** | **$4,323** | **$38** | **$51** | **$4,310** | - Total gross unrealized losses on available-for-sale investments decreased from **$89 million** at December 31, 2024, to **$51 million** at June 30, 2025. These losses are primarily due to fluctuating interest rates, not credit deterioration, and the company does not intend to sell these investments before recovery of amortized cost[49](index=49&type=chunk)[50](index=50&type=chunk) **Contractual Maturities of Current Investments (June 30, 2025, in millions):** | Maturity Period | Amortized Cost | Estimated Fair Value | | :-------------------------- | :------------- | :------------------- | | Due in one year or less | $602 | $600 | | Due after one year through five years | $1,958 | $1,966 | | Due after five years through ten years | $578 | $583 | | Due after ten years | $1,185 | $1,161 | | **Total** | **$4,323** | **$4,310** | - Restricted investments held-to-maturity amounted to **$291 million** at June 30, 2025, with **$261 million** maturing in one year or less. These are carried at amortized cost, approximating fair value[53](index=53&type=chunk)[54](index=54&type=chunk) [7. Medical Claims and Benefits Payable](index=14&type=section&id=7.%20Medical%20Claims%20and%20Benefits%20Payable) **Medical Claims and Benefits Payable (Six Months Ended June 30, 2025, in millions):** | Segment | Beginning Balance | Total Medical Care Costs | Total Paid | Acquired Balances, net | Change in non-risk | Ending Balance | | :---------------- | :---------------- | :----------------------- | :--------- | :--------------------- | :----------------- | :------------- | | Medicaid | $3,667 | $14,671 | $14,959 | — | $260 | $3,639 | | Medicare | $722 | $2,743 | $2,844 | $128 | — | $749 | | Marketplace | $251 | $1,846 | $1,749 | $125 | — | $473 | | Other | — | $48 | $66 | $42 | — | $24 | | **Consolidated** | **$4,640** | **$19,308** | **$19,618** | **$295** | **$260** | **$4,885** | - The company experienced a favorable prior year development of approximately **$201 million** for medical claims and benefits payable as of June 30, 2025, primarily due to reserving under moderately adverse conditions, lower than expected utilization, and improved operating performance in the Medicaid segment[57](index=57&type=chunk)[58](index=58&type=chunk) [8. Debt](index=16&type=section&id=8.%20Debt) **Outstanding Debt Obligations (in millions):** | Debt Type | June 30, 2025 | December 31, 2024 | | :---------------------- | :------------ | :---------------- | | 4.375% Notes due 2028 | $800 | $800 | | 3.875% Notes due 2030 | $650 | $650 | | 3.875% Notes due 2032 | $750 | $750 | | 6.250% Notes due 2033 | $750 | $750 | | Term Loan | $450 | — | | Deferred debt issuance costs | $(25) | $(27) | | **Total** | **$3,375** | **$2,923** | - On February 19, 2025, the company entered into an Amended Credit Agreement, establishing a **$500 million Term Loan** (maturing Feb 2027) and a **$1.25 billion revolving credit facility** (maturing Sep 2029)[61](index=61&type=chunk) - As of June 30, 2025, **$450 million** was outstanding under the Term Loan, and no amount was outstanding under the Credit Facility. The company was in compliance with all financial and non-financial covenants[62](index=62&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk) [9. Stockholders' Equity](index=17&type=section&id=9.%20Stockholders'%20Equity) - In Q1 2025, the company purchased approximately **1.679 million shares for $500 million** under a **$1 billion stock repurchase program** authorized in October 2024, exhausting the funds[70](index=70&type=chunk) - In April 2025, the board authorized an additional **$1 billion common stock repurchase program**, extending through December 31, 2026. No shares have been repurchased under this new program as of June 30, 2025[72](index=72&type=chunk) [10. Segments](index=17&type=section&id=10.%20Segments) - Molina Healthcare operates four reportable segments: **Medicaid, Medicare, Marketplace, and Other**. The 'Other' segment includes long-term services and supports consultative services and the commercial portion of the ConnectiCare acquisition[73](index=73&type=chunk)[74](index=74&type=chunk) - Key metrics for assessing segment performance are **revenue, medical margin** (revenue minus medical care costs), and **Medical Care Ratio (MCR)**[75](index=75&type=chunk) **Segment Revenue and Margin (Three Months Ended June 30, 2025, in millions):** | Segment | Premium Revenue | Medical Care Costs | Medical Margin | | :---------- | :-------------- | :----------------- | :------------- | | Medicaid | $8,029 | $7,332 | $697 | | Medicare | $1,608 | $1,447 | $161 | | Marketplace | $1,200 | $1,025 | $175 | | Other | $31 | $25 | $6 | | **Total** | **$10,868** | **$9,829** | **$1,039** | **Segment Revenue and Margin (Six Months Ended June 30, 2025, in millions):** | Segment | Premium Revenue | Medical Care Costs | Medical Margin | | :---------- | :-------------- | :----------------- | :------------- | | Medicaid | $16,159 | $14,671 | $1,488 | | Medicare | $3,076 | $2,743 | $333 | | Marketplace | $2,204 | $1,846 | $358 | | Other | $57 | $48 | $9 | | **Total** | **$21,496** | **$19,308** | **$2,188** | [11. Commitments and Contingencies](index=20&type=section&id=11.%20Commitments%20and%20Contingencies) - The healthcare industry is subject to extensive laws and regulations, with potential penalties including fines, exclusion from public programs, and repayment of revenues. The company is involved in various legal actions in the ordinary course of business and accrues liabilities for probable and estimable losses[81](index=81&type=chunk)[82](index=82&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Provides management's analysis of financial condition, operational results, liquidity, and key business trends [Forward-Looking Statements](index=21&type=section&id=FORWARD-LOOKING%20STATEMENTS) - The report contains forward-looking statements covered under safe harbor provisions, providing expectations of future events based on assumptions. Readers are cautioned against undue reliance due to numerous known and unknown risks and uncertainties[84](index=84&type=chunk) - Key risks include Medicaid rate adjustments, federal/state regulatory changes, budget pressures, Marketplace dynamics, contract retention, acquisition integration, medical cost management, cyber-attacks, and the impact of AI investments[85](index=85&type=chunk) [Overview](index=23&type=section&id=OVERVIEW) - Molina Healthcare, Inc. is a FORTUNE 500 company providing managed healthcare services under Medicaid, Medicare, and state insurance marketplaces, serving approximately **5.7 million members** across 22 states as of June 30, 2025[89](index=89&type=chunk) [Second Quarter 2025 Highlights](index=23&type=section&id=SECOND%20QUARTER%202025%20HIGHLIGHTS) **Q2 2025 Financial Highlights:** | Metric | Value | | :-------------------------- | :---------- | | Net income | $255 million | | Diluted EPS | $4.75 | | Membership (June 30, 2025) | 5.7 million (3.0% YoY increase) | | Premium revenue | $10.9 billion (15% YoY increase) | | Consolidated MCR | 90.4% (vs. 88.6% in Q2 2024) | | G&A ratio | 6.2% (vs. 7.0% in Q2 2024) | | Pre-tax margin | 2.8% | - Membership growth was primarily driven by the **Marketplace segment**, including the ConnectiCare acquisition, partially offset by a modest contraction in Medicaid[90](index=90&type=chunk) - The increase in **MCR** reflects a challenging medical cost trend environment across all segments, while the improved **G&A ratio** is due to reduced incentive compensation, operating discipline, and fixed cost leverage[90](index=90&type=chunk) [Consolidated Financial Summary](index=24&type=section&id=CONSOLIDATED%20FINANCIAL%20SUMMARY) **Consolidated Results Summary (in millions, except per-share amounts):** | Metric | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :-------------------------------- | :------ | :------ | :------ | :------ | | Premium revenue | $10,868 | $9,446 | $21,496 | $18,950 | | Medical margin | $1,039 | $1,078 | $2,188 | $2,168 | | MCR | 90.4% | 88.6% | 89.8% | 88.6% | | General and administrative expenses | $711 | $691 | $1,485 | $1,402 | | G&A ratio | 6.2% | 7.0% | 6.6% | 7.1% | | Operating income | $373 | $434 | $806 | $860 | | Net income | $255 | $301 | $553 | $602 | | Net income per share – Diluted | $4.75 | $5.17 | $10.19 | $10.33 | | Ending Membership (millions) | 5.7 | 5.6 | 5.7 | 5.6 | | Effective income tax rate | 21.5% | 25.8% | 22.7% | 25.2% | | Pre-tax margin | 2.8% | 4.1% | 3.2% | 4.1% | [Consolidated Results](index=24&type=section&id=CONSOLIDATED%20RESULTS) [Net Income and Operating Income](index=24&type=section&id=NET%20INCOME%20AND%20OPERATING%20INCOME) - Net income decreased to **$255 million ($4.75 diluted EPS)** in Q2 2025 from **$301 million ($5.17 diluted EPS)** in Q2 2024, and to **$553 million ($10.19 diluted EPS)** for the six months ended June 30, 2025, from **$602 million ($10.33 diluted EPS)** in the prior year period[93](index=93&type=chunk) - The decline in net income and operating income was primarily due to an **increased Medical Care Ratio (MCR)**, higher interest costs, and lower investment income, partially offset by higher membership and G&A expense efficiencies[95](index=95&type=chunk) [Premium Revenue](index=25&type=section&id=PREMIUM%20REVENUE) - Premium revenue increased by **$1.4 billion (15%)** in Q2 2025 and **$2.5 billion (13%)** for the six months ended June 30, 2025, driven by new contract wins, acquisitions, growth in existing footprint, and rate increases, partially offset by Medicaid redeterminations[96](index=96&type=chunk) [Medical Care Ratio](index=25&type=section&id=MEDICAL%20CARE%20RATIO) - The consolidated MCR increased to **90.4%** in Q2 2025 (up 180 basis points YoY) and **89.8%** for the six months ended June 30, 2025 (up 120 basis points YoY), reflecting a challenging medical cost trend environment across all segments[97](index=97&type=chunk) - The MCR for the six months ended June 30, 2025, is **above the company's long-term target range**[97](index=97&type=chunk) [Premium Tax Revenue and Expenses](index=25&type=section&id=PREMIUM%20TAX%20REVENUE%20AND%20EXPENSES) - The premium tax ratio increased to **3.8%** in Q2 2025 (from 3.1% in Q2 2024) and **3.7%** for the six months ended June 30, 2025 (from 3.0% in 2024), mainly due to state mix changes in the Medicaid segment[99](index=99&type=chunk) [Investment Income](index=25&type=section&id=INVESTMENT%20INCOME) - Investment income decreased to **$106 million** in Q2 2025 (from $115 million in Q2 2024) and **$214 million** for the six months ended June 30, 2025 (from $223 million in 2024), primarily due to a decline in interest rates, partially offset by increased average invested balances[100](index=100&type=chunk) [Other Revenue](index=25&type=section&id=OTHER%20REVENUE) - Other revenue remained stable at **$22 million** in Q2 2025 (vs. $21 million in Q2 2024) and **$45 million** for the six months ended June 30, 2025 (vs. $43 million in 2024), mainly from long-term services and supports consultative services in Wisconsin[101](index=101&type=chunk) [G&A Expenses](index=25&type=section&id=G&A%20EXPENSES) - The G&A expense ratio improved to **6.2%** in Q2 2025 (from 7.0% in Q2 2024) and **6.6%** for the six months ended June 30, 2025 (from 7.1% in 2024), reflecting reduced incentive compensation, operating discipline, and operating leverage from business growth[102](index=102&type=chunk) [Depreciation and Amortization](index=25&type=section&id=DEPRECIATION%20AND%20AMORTIZATION) - Depreciation and amortization increased to **$58 million** in Q2 2025 (from $46 million in Q2 2024) and **$106 million** for the six months ended June 30, 2025 (from $91 million in 2024), primarily due to the ConnectiCare acquisition[103](index=103&type=chunk) [Other Operating Expenses](index=25&type=section&id=OTHER%20OPERATING%20EXPENSES) - Other operating expenses decreased by **$18 million** in Q2 2025 and **$31 million** for the six months ended June 30, 2025, compared to prior year periods. This reduction is attributed to lower non-recurring acquisition costs and litigation expenses incurred in 2024[104](index=104&type=chunk)[105](index=105&type=chunk) [Interest Expense](index=26&type=section&id=INTEREST%20EXPENSE) - Interest expense increased to **$48 million** in Q2 2025 (from $28 million in Q2 2024) and **$91 million** for the six months ended June 30, 2025 (from $55 million in 2024), driven by new borrowings under the Credit Facility and Term Loan in Q1 2025, and the issuance of **$750 million 6.250% Notes** in November 2024[106](index=106&type=chunk) [Income Taxes](index=26&type=section&id=INCOME%20TAXES) - The effective income tax rate decreased to **21.5%** in Q2 2025 (from 25.8% in Q2 2024) and **22.7%** for the six months ended June 30, 2025 (from 25.2% in 2024). This is due to increased tax benefits from transferable federal tax credits, lower nondeductible expenses, reduced state and local income taxes, and differences in discrete tax benefits[107](index=107&type=chunk) [Trends and Uncertainties](index=26&type=section&id=TRENDS%20AND%20UNCERTAINTIES) [Regulatory Developments and Related Trends](index=26&type=section&id=REGULATORY%20DEVELOPMENTS%20AND%20RELATED%20TRENDS) - The 'One Big Beautiful Bill Act' (OBBBA), signed in July 2025, introduces Medicaid changes (work requirements, frequent redeterminations, cost sharing for Expansion program) expected to reduce enrollment by **15-20%** for **1.3 million** expansion members, phased from 2027-2029[108](index=108&type=chunk) - OBBBA also limits state provider taxes and caps Medicaid provider payments, with uncertain long-term impacts starting in 2028. Additionally, it restricts Marketplace premium tax credits for certain legal aliens and requires pre-enrollment verification, expected to reduce national Marketplace enrollment from 2026-2028[108](index=108&type=chunk) - The Marketplace Program Integrity and Affordability Rule, finalized in June 2025, shortens the open enrollment period, eliminates a special enrollment period for low-income individuals, and tightens eligibility verification, expected to reduce Marketplace enrollment in 2026[109](index=109&type=chunk) [Other Recent Developments (RFPs and Acquisitions)](index=26&type=section&id=OTHER%20RECENT%20DEVELOPMENTS) - Molina secured new Medicaid contracts in **Mississippi** (commenced July 1, 2025) and **Nevada** (expected Jan 1, 2026)[110](index=110&type=chunk)[111](index=111&type=chunk) - The company was awarded a contract in **Illinois** to provide a Fully Integrated Dual Eligible Special Needs Plan, replacing an existing program, effective January 1, 2026[112](index=112&type=chunk) - The acquisition of ConnectiCare Holding Company, Inc., a health plan in Connecticut serving approximately **140,000 members**, closed on February 1, 2025, for **$350 million**[113](index=113&type=chunk) - Molina's **Virginia Medicaid contract terminated** effective June 30, 2025, after the company withdrew its legal action protesting the non-award of a new contract[116](index=116&type=chunk) [Reportable Segments](index=27&type=section&id=REPORTABLE%20SEGMENTS) [How We Assess Performance](index=27&type=section&id=HOW%20WE%20ASSESS%20PERFORMANCE) - The company's primary revenue source is health insurance premiums from state Medicaid agencies and the federal government. Performance is assessed using **revenue, medical margin, and Medical Care Ratio (MCR)**[119](index=119&type=chunk)[120](index=120&type=chunk) [Segment Membership](index=28&type=section&id=SEGMENT%20MEMBERSHIP) **Membership by Segment (in thousands):** | Segment | June 30, 2025 | December 31, 2024 | June 30, 2024 | | :---------- | :------------ | :---------------- | :------------ | | Medicaid | 4,774 | 4,890 | 4,942 | | Medicare | 267 | 242 | 251 | | Marketplace | 690 | 403 | 386 | | Other | 15 | — | — | | **Total** | **5,746** | **5,535** | **5,579** | - Total membership increased by **167,000 (3.0%)** from June 30, 2024, to June 30, 2025, primarily driven by growth in the Marketplace segment, including the ConnectiCare acquisition, partially offset by a modest contraction in Medicaid[90](index=90&type=chunk)[122](index=122&type=chunk) [Segment Financial Performance](index=28&type=section&id=SEGMENT%20FINANCIAL%20PERFORMANCE) **Segment MCR (Three Months Ended June 30):** | Segment | 2025 | 2024 | Change (bps) | | :---------- | :--- | :--- | :----------- | | Medicaid | 91.3% | 90.8% | +50 | | Medicare | 90.0% | 84.9% | +510 | | Marketplace | 85.4% | 71.6% | +1380 | | Other | 82.7% | — | — | | **Total** | **90.4%** | **88.6%** | **+180** | **Segment MCR (Six Months Ended June 30):** | Segment | 2025 | 2024 | Change (bps) | | :---------- | :--- | :--- | :----------- | | Medicaid | 90.8% | 90.2% | +60 | | Medicare | 89.2% | 86.8% | +240 | | Marketplace | 83.7% | 72.4% | +1130 | | Other | 85.0% | — | — | | **Total** | **89.8%** | **88.6%** | **+120** | - **Medicaid:** Premium revenue increased **9%** for both Q2 and 6M 2025, driven by new contracts (New Mexico, Texas expansions) and rate increases, partially offset by redeterminations. MCR increased due to higher medical costs from acuity shifts, product mix changes, and increased utilization (high-cost drugs, behavioral health, inpatient/outpatient)[124](index=124&type=chunk)[125](index=125&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk) - **Medicare:** Premium revenue increased **12%** in Q2 and **7%** in 6M 2025, mainly from the ConnectiCare acquisition, partially offset by exiting MAPD in thirteen states. MCR increased significantly due to higher-than-expected utilization among high-acuity members, particularly for LTSS benefits and high-cost pharmacy drugs[128](index=128&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk) - **Marketplace:** Premium revenue increased significantly (**$573M in Q2, $1.0B in 6M 2025**) due to membership growth (**304,000 members YoY to 690,000**), including the ConnectiCare acquisition and redeterminations. MCR increased substantially due to higher utilization relative to risk adjustment revenue, prior year member reconciliations, and higher initial MCRs from the ConnectiCare acquisition, alongside an elevated overall risk pool[131](index=131&type=chunk)[132](index=132&type=chunk)[133](index=133&type=chunk) [Liquidity, Financial Condition and Capital Resources](index=29&type=section&id=LIQUIDITY%2C%20FINANCIAL%20CONDITION%20AND%20CAPITAL%20RESOURCES) [Liquidity](index=29&type=section&id=LIQUIDITY) - Molina Healthcare manages liquidity at both regulated health plan subsidiaries and the parent company level. Subsidiaries meet needs through operating cash flows (premium revenue), investment income, and parent company capital contributions[135](index=135&type=chunk)[137](index=137&type=chunk) - The parent company's cash, cash equivalents, and investments decreased from **$445 million** at December 31, 2024, to **$100 million** at June 30, 2025, primarily due to **$500 million** in stock repurchases, **$350 million** for the ConnectiCare acquisition, and capital contributions to subsidiaries, partially offset by dividends from subsidiaries and net borrowing activity[139](index=139&type=chunk) - In the three and six months ended June 30, 2025, the parent company received **$260 million** and **$370 million**, respectively, in dividends and return of capital from regulated health plan subsidiaries[138](index=138&type=chunk) [Investments](index=30&type=section&id=INVESTMENTS) - The company invests excess cash from regulated subsidiaries in longer-term, investment-grade, and marketable debt securities, adhering to board-approved policies and state regulations. The overall portfolio rating is **AA-**[140](index=140&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk) - Restricted investments are held-to-maturity, primarily in cash, cash equivalents, U.S. Treasury securities, and corporate debt securities, and are carried at amortized cost[143](index=143&type=chunk) [Cash Flow Activities](index=31&type=section&id=CASH%20FLOW%20ACTIVITIES) **Cash Flow Activities (Six Months Ended June 30, in millions):** | Activity | 2025 | 2024 | Change | | :-------------------------------------------------- | :----- | :----- | :----- | | Net cash used in operating activities | $(112) | $(5) | $(107) | | Net cash provided by (used in) investing activities | $5 | $(435) | $440 | | Net cash used in financing activities | $(42) | $(50) | $8 | | Net decrease in cash, cash equivalents, and restricted cash and cash equivalents | $(149) | $(490) | $341 | - The increase in cash flow from investing activities by **$440 million** was primarily due to net proceeds from investments of **$296 million** in 2025 (vs. net purchases of $88 million in 2024) and lower net cash used in business combinations (**$245 million** in 2025 vs. $295 million in 2024)[147](index=147&type=chunk) - Financing activities in 2025 included **$500 million** in common stock purchases and **$650 million** in combined borrowings under the Credit Facility and Term Loan, partially offset by **$200 million** in repayments[148](index=148&type=chunk) [Financial Condition](index=31&type=section&id=FINANCIAL%20CONDITION) - Working capital increased to **$5.2 billion** at June 30, 2025, from **$4.9 billion** at December 31, 2024. Cash and investments totaled **$9.1 billion** at June 30, 2025, down from **$9.3 billion** at December 31, 2024[150](index=150&type=chunk) - Net unrealized losses on available-for-sale investments decreased to **$13 million** at June 30, 2025, from **$75 million** at December 31, 2024, primarily due to fluctuating interest rates[150](index=150&type=chunk) [Regulatory Capital and Dividend Restrictions](index=32&type=section&id=REGULATORY%20CAPITAL%20AND%20DIVIDEND%20RESTRICTIONS) - Regulated subsidiaries must maintain minimum statutory capital, estimated at **$3.0 billion** at June 30, 2025. Aggregate capital and surplus exceeded these requirements[152](index=152&type=chunk) - Dividends payable by subsidiaries without prior regulatory approval were approximately **$430 million** in aggregate as of June 30, 2025[153](index=153&type=chunk) [Debt Ratings](index=32&type=section&id=DEBT%20RATINGS) - The company's senior notes are rated **'BB'** by Standard & Poor's and **'Ba2'** by Moody's Investor Service, Inc. A downgrade could negatively impact borrowing capacity and costs[155](index=155&type=chunk) [Financial Covenants](index=32&type=section&id=FINANCIAL%20COVENANTS) - The Amended Credit Agreement includes customary non-financial and financial covenants (net leverage ratio, interest coverage ratio). As of June 30, 2025, the company was **in compliance with all covenants**[156](index=156&type=chunk)[157](index=157&type=chunk) [Future Sources and Uses of Liquidity](index=32&type=section&id=FUTURE%20SOURCES%20AND%20USES%20OF%20LIQUIDITY) - Primary liquidity sources include premium revenue from regulated subsidiaries and dividends from subsidiaries. The Amended Credit Agreement provides a **$1.25 billion revolving credit facility**, with **$1.25 billion available** as of June 30, 2025[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk) - Future uses of liquidity include common stock purchases, with an additional **$1 billion authorization** through December 31, 2026, and targeted acquisitions that offer strategic fit and operational synergies[161](index=161&type=chunk)[162](index=162&type=chunk)[163](index=163&type=chunk) [Contractual Obligations](index=33&type=section&id=CONTRACTUAL%20OBLIGATIONS) - There were no significant changes to contractual obligations and commitments not otherwise disclosed or outside the ordinary course of business during the six months ended June 30, 2025[165](index=165&type=chunk) [Critical Accounting Estimates](index=33&type=section&id=CRITICAL%20ACCOUNTING%20ESTIMATES) - Critical accounting estimates include medical costs, claims and benefits payable, premium revenue recognition and amounts due government agencies (especially risk adjustment), and business combinations (goodwill and intangible assets)[166](index=166&type=chunk)[169](index=169&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Discusses exposure to interest rate risk affecting investment income and the fair value of fixed income investments - The company is exposed to interest rate risk, which could decrease the fair value of fixed income investments if market interest rates rise. A hypothetical **1% increase in rates** at June 30, 2025, would decrease the fair value of investments by approximately **$118 million**[167](index=167&type=chunk) - Declines in interest rates over time would reduce investment income. Borrowings under the Amended Credit Agreement bear variable interest, while senior notes have specified fixed rates[167](index=167&type=chunk)[168](index=168&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Confirms the effectiveness of disclosure controls and reports no material changes in internal control over financial reporting - Management, including the CEO and CFO, concluded that disclosure controls and procedures were **effective** at the reasonable assurance level as of June 30, 2025[170](index=170&type=chunk) - There were **no changes** in internal control over financial reporting during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, these controls[171](index=171&type=chunk) PART II - Other Information [Item 1. Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) Refers to Note 11, 'Commitments and Contingencies,' for detailed information on legal proceedings - For information regarding legal proceedings, refer to Notes to Consolidated Financial Statements, Note 11, 'Commitments and Contingencies'[172](index=172&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) Directs readers to the comprehensive risk factors detailed in the company's 2024 Annual Report on Form 10-K - Readers should carefully consider the risk factors discussed under the caption 'Risk Factors' in the 2024 Annual Report on Form 10-K, as they may have a material adverse effect on the company's business, financial condition, cash flows, results of operations, or stock price[172](index=172&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details common stock purchases during Q2 2025 and references information on stock repurchase programs **Issuer Purchases of Equity Securities (Q2 2025):** | Period | Total Number of Shares Purchased | Average Price Paid per Share | Approximate Dollar Value Remaining Under Plans | | :---------------- | :----------------------------- | :--------------------------- | :--------------------------------------------- | | April 1 - April 30 | 1,000 | $327.71 | $1,000,000,000 | | May 1 - May 31 | — | — | $1,000,000,000 | | June 1 - June 30 | — | — | $1,000,000,000 | | **Total** | **1,000** | **$327.71** | | - During Q2 2025, approximately **1,000 shares** of common stock were withheld to settle employee income tax obligations. An additional **$1 billion stock repurchase program** was authorized in April 2025, extending through December 31, 2026[173](index=173&type=chunk) [Item 5. Other Information](index=34&type=section&id=Item%205.%20Other%20Information) States no Rule 10b5-1(c) or non-Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers - No director or officer adopted or terminated any Rule 10b5-1(c) trading plan or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[176](index=176&type=chunk) [Item 6. Exhibits](index=36&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with the Form 10-Q, including certifications and Inline XBRL Taxonomy documents - Exhibits include the Molina Healthcare, Inc. 2025 Equity Incentive Plan, Section 302 Certifications of the CEO and CFO, Section 906 Certifications of the CEO and CFO, and various Inline XBRL Taxonomy documents[177](index=177&type=chunk) [Signatures](index=37&type=section&id=Signatures) Contains the certifying signatures of the Chief Executive Officer and Chief Financial Officer - The report is signed by Joseph M. Zubretsky, Chief Executive Officer, and Mark L. Keim, Chief Financial Officer and Treasurer, on July 24, 2025[178](index=178&type=chunk)

Financial Data and Key Metrics Changes - The company reported adjusted earnings per share of $5.48 on premium revenue of $10.9 billion for Q2 2025 [6][28] - The consolidated Medical Care Ratio (MCR) was 90.4%, reflecting a challenging medical cost trend environment, with a year-to-date MCR of 89.8% [7][28] - The adjusted pre-tax margin was 3.3% for Q2, with a year-to-date margin of 3.6% [7][28] Business Line Data and Key Metrics Changes - In Medicaid, the MCR was 91.3%, above the long-term target range, with ongoing medical cost pressures in behavioral health, pharmacy, and inpatient care [7][29] - The Medicare segment reported an MCR of 90%, also above the long-term target range, driven by higher utilization among high-acuity populations [10][29] - The Marketplace segment had an MCR of 85.4%, significantly higher than expected, influenced by new store impacts and member reconciliations [11][30] Market Data and Key Metrics Changes - The company noted unprecedented medical cost increases across all segments, with behavioral health costs rising due to increased demand and supply-side constraints [8][94] - The overall market risk pool is trending higher, with an 8% increase in acuity year-over-year, affecting risk adjustment [56][95] Company Strategy and Development Direction - The company aims to achieve premium revenue of approximately $46 billion in 2026 and $52 billion in 2027, focusing on growth in current markets and recent Medicaid and Medicare dual RFP wins [19][20] - The company is strategically focused on managing costs and advocating for appropriate rate adjustments in Medicaid to restore funding levels [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to manage costs despite the challenging environment, noting that the dislocation between rates and trends in Medicaid is temporary [25][26] - The company anticipates modest impacts from the recently passed budget bill, with gradual changes expected in the Medicaid program [21][22] Other Important Information - The full-year 2025 premium revenue guidance remains unchanged at approximately $42 billion, with adjusted earnings per share guidance revised to no less than $19 [11][35] - The company continues to have a strong capital foundation, with a cash balance of approximately $100 million at the end of the quarter [32][33] Q&A Session Summary Question: Confidence in Medicaid margins improvement despite higher reimbursement rates - Management indicated that observed trends are slightly outpacing known rates, but previous guidance included rate adjustments for Q3 and Q4, which should help [44][46] Question: Required premium increases for ACA to account for trends - Management stated that rate models must catch up with underperformance and include a healthy dose of medical cost trend adjustments [48][49] Question: Adjustments to marketplace pricing in light of recent trends - Management noted that states are allowing more flexibility in pricing adjustments this year, with ongoing discussions about trend assumptions [52][54] Question: Understanding elevated trends across products - Management explained that the increase in trends is due to a combination of higher prevalence of conditions, pent-up demand post-pandemic, and supply-side factors [92][94] Question: Timing of rate updates and achieving target margins - Management emphasized the importance of using a recent baseline for rate updates to capture cost inflections and expressed hope for adequate trend inclusion in future rates [97][98]

Financial Data and Key Metrics Changes - The company reported adjusted earnings per share of $5.48 on premium revenue of $10.9 billion for Q2 2025 [4][5] - The consolidated Medical Care Ratio (MCR) was 90.4%, reflecting a challenging medical cost trend environment, with a year-to-date MCR of 89.8% [5][25] - The adjusted pre-tax margin for Q2 was 3.3%, with a year-to-date margin of 3.6% [5][25] Business Line Data and Key Metrics Changes - In Medicaid, the MCR was 91.3%, above the long-term target range, with ongoing medical cost pressures in behavioral health, pharmacy, and inpatient/outpatient care [5][6][25] - The Medicare segment reported an MCR of 90%, also above the long-term target range, driven by higher utilization among high acuity populations [8][26] - The Marketplace segment had an MCR of 85.4%, significantly higher than expected, influenced by new store impacts and member reconciliations [9][27] Market Data and Key Metrics Changes - The company anticipates full-year premium revenue guidance to remain unchanged at approximately $42 billion, with adjusted earnings per share guidance revised to no less than $19 [10][31] - The Medicaid MCR guidance was raised from 89.9% to 90.9%, reflecting the expectation that trends will exceed rates [31][32] - The Marketplace MCR guidance was increased from 80% to 85%, accounting for prior year reconciliations and new store impacts [34] Company Strategy and Development Direction - The company aims to achieve premium revenue targets of $46 billion in 2026 and $52 billion in 2027, focusing on growth in current markets and recent Medicaid and Medicare dual RFP wins [17][18] - The company is strategically focused on managing costs and maintaining profitability despite the challenging operating environment [24][36] - The company plans to prioritize margin stability over growth in the Marketplace segment, limiting its exposure to 10% of the portfolio [16][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to manage medical cost trends and maintain profitability despite the challenging environment [24][36] - The company anticipates gradual impacts from the recently passed budget bill on Medicaid membership and risk pool acuity [19][20] - Management acknowledged the unprecedented medical cost increases and emphasized the importance of effective cost control protocols [6][8] Other Important Information - The company reported a strong capital foundation, with a cash balance of approximately $100 million and reduced debt levels [29] - The adjusted G&A ratio for the quarter was 6.1%, reflecting lower incentive compensation and continued productivity enhancements [9][28] - The company is actively pursuing M&A opportunities in the current challenging environment [18] Q&A Session Summary Question: Confidence in Medicaid margins improvement - Management indicated that observed trends are slightly outpacing known rates, but they have factored in previous guidance for rate updates [40][41] Question: Required premium increases for ACA - Management stated that rate models must account for underperformance and medical cost trends, with a significant increase in trend assumptions from 7% to 11% [44][45] Question: Marketplace pricing adjustments - Management noted that states are allowing more flexibility in pricing adjustments this year, with ongoing discussions about trend assumptions and acuity shifts [49][50] Question: Market-wide enrollment decline in 2026 - Management refrained from providing specific projections but acknowledged that the dynamics vary significantly by state [56][59] Question: Elevated trends across products - Management explained that the elevated trends are driven by increased prevalence of conditions and pent-up demand post-pandemic, affecting all segments [90][92]

Core Insights - Molina Healthcare reported strong revenue growth in Q2 2025, with GAAP total revenue reaching $11.43 billion, surpassing analyst expectations of $10.95 billion [1][2] - Adjusted earnings per share (EPS) for Q2 2025 were $5.48, below the estimate of $5.62, indicating margin pressures due to rising medical costs [1][2] - The company reduced its full-year 2025 earnings guidance, reflecting ongoing challenges in profit management despite revenue expansion [1][8] Financial Performance - Q2 2025 diluted EPS (Non-GAAP) was $5.48, down 6.5% from $5.86 in Q2 2024, while GAAP diluted EPS was $4.75, an 8.1% decrease from $5.17 [2] - Revenue increased by 15.7% year-over-year, from $9.88 billion in Q2 2024 to $11.43 billion in Q2 2025 [2] - The medical care ratio (MCR) rose to 90.4% from 88.6% year-over-year, indicating higher medical expenses relative to premium revenue [2][7] Membership Trends - Total membership increased by 167,000 year-over-year, reaching approximately 5.7 million as of June 30, 2025 [6] - Medicaid membership decreased by 116,000 from December 31, 2024, primarily due to national eligibility redeterminations [6] - Marketplace membership grew by 304,000 from June 30, 2024, to June 30, 2025, aided by acquisitions [6] Business Strategy - Molina Healthcare focuses on providing health insurance through government-sponsored programs, with a significant portion of revenue derived from government contracts [3][4] - The company aims to strengthen its presence in key states through contract wins, re-procurement efforts, and strategic acquisitions [4] - Key priorities include managing medical costs, integrating acquired businesses, and ensuring compliance with regulatory requirements [4] Future Outlook - The company lowered its full-year 2025 adjusted EPS guidance to no less than $19.00 per diluted share and GAAP EPS to no less than $16.90 [8] - Premium revenue guidance remains at $42 billion, reflecting a 9% increase from the previous year, but a higher medical care ratio of 90.2% is now anticipated [8] - Investors are advised to monitor medical cost management, membership trends, and the company's contract pipeline as indicators of future revenue strength [9]

Core Insights - Molina reported revenue of $11.43 billion for the quarter ended June 2025, reflecting a year-over-year increase of 15.7% and a surprise of +5.43% over the Zacks Consensus Estimate of $10.84 billion [1] - The company's EPS was $5.48, down from $5.86 in the same quarter last year, with an EPS surprise of -0.36% compared to the consensus estimate of $5.50 [1] Financial Performance Metrics - Molina's total Membership Care Ratio (MCR) was 90.4%, exceeding the estimated 88.9% [4] - The MCR for Medicare was 90%, surpassing the estimated 85.4% [4] - The MCR for Marketplace was 85.4%, above the estimated 77.5% [4] - Total ending membership was 5.75 million, slightly below the estimated 5.79 million [4] - Medicaid membership stood at 4.77 million, below the estimated 4.88 million [4] Revenue Breakdown - Premium tax revenue reached $431 million, exceeding the average estimate of $377.16 million, marking a year-over-year increase of +44.6% [4] - Premium revenue totaled $10.87 billion, above the estimated $10.44 billion, with a year-over-year change of +15.1% [4] - Medicare premium revenue was $1.61 billion, exceeding the estimate of $1.47 billion, reflecting an +11.6% change year-over-year [4] - Other revenue was reported at $22 million, slightly below the estimated $24 million, with a +4.8% change year-over-year [4] - Medicaid premium revenue was $8.03 billion, surpassing the estimate of $7.74 billion, with a year-over-year increase of +8.8% [4] - Investment income was $106 million, above the estimate of $101.04 million, but down -7.8% year-over-year [4] - Marketplace premium revenue reached $1.2 billion, exceeding the estimate of $1.05 billion, with a significant year-over-year increase of +91.4% [4] Stock Performance - Molina's shares have declined -38.7% over the past month, contrasting with the Zacks S&P 500 composite's +5.9% change [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Viewpoint - Molina's quarterly earnings of $5.48 per share missed the Zacks Consensus Estimate of $5.5 per share, representing a year-over-year decline from $5.86 per share [1] - The company reported revenues of $11.43 billion for the quarter, exceeding the Zacks Consensus Estimate by 5.43% and showing an increase from $9.88 billion a year ago [2] Financial Performance - The earnings surprise for the latest quarter was -0.36%, while the previous quarter saw a positive surprise of +3.75% with actual earnings of $6.08 against an expectation of $5.86 [1][2] - Over the last four quarters, Molina has surpassed consensus EPS estimates two times and revenue estimates three times [2] Stock Performance - Molina shares have declined approximately 37.9% since the beginning of the year, contrasting with the S&P 500's gain of 7.3% [3] - The current Zacks Rank for Molina is 5 (Strong Sell), indicating expectations of underperformance in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is $5.93 on revenues of $10.9 billion, while the estimate for the current fiscal year is $22.08 on revenues of $44.06 billion [7] - The outlook for the Medical - HMOs industry is currently unfavorable, ranking in the bottom 4% of over 250 Zacks industries, which may impact Molina's stock performance [8]

Core Viewpoint - Molina (MOH) is expected to report quarterly earnings of $5.50 per share, a decline of 6.1% year-over-year, with revenues projected at $10.84 billion, reflecting a 9.7% increase compared to the previous year [1]. Earnings Estimates - Over the past 30 days, the consensus EPS estimate has been revised downward by 3.8%, indicating a reassessment by analysts [2]. - Revisions to earnings estimates are significant indicators for predicting investor actions regarding the stock, with empirical research showing a strong correlation between earnings estimate trends and short-term stock performance [3]. Revenue Projections - Analysts estimate 'Revenue- Premium tax revenue' at $377.16 million, a year-over-year increase of 26.6% [5]. - The consensus for 'Revenue- Premium revenue' is $10.44 billion, indicating a 10.5% increase from the prior year [5]. - 'Revenue- Premium revenue- Medicare' is projected to reach $1.47 billion, reflecting a 1.9% increase year-over-year [5]. - 'Revenue- Other revenue' is expected to be $22.84 million, an 8.8% increase from the previous year [6]. Membership and MCR Metrics - 'MCR - Total' is projected at 88.9%, up from 88.6% in the same quarter last year [6]. - 'MCR - Medicare' is expected to reach 85.4%, compared to 84.9% a year ago [6]. - 'MCR - Marketplace' is forecasted at 77.5%, an increase from 71.6% year-over-year [7]. - 'Ending Membership by Program - Total' is estimated at 5.79 million, up from 5.58 million in the same quarter last year [7]. - 'Ending Membership by Program - Medicaid' is projected at 4.88 million, slightly down from 4.94 million a year ago [7]. - 'Ending Membership by Program - Medicare' is expected to be 261.48 thousand, up from 251.00 thousand last year [8]. - 'Ending Membership by Program - Marketplaces' is projected at 629.31 thousand, significantly up from 386.00 thousand in the previous year [8]. - 'MCR - Medicaid' is expected to reach 91.2%, compared to 90.8% a year ago [9]. Stock Performance - Molina shares have decreased by 37.8% over the past month, contrasting with a 5.4% increase in the Zacks S&P 500 composite [9].

Core Insights - Molina Healthcare, Inc. (MOH) is scheduled to report its second-quarter 2025 results on July 23, 2025, with earnings estimated at $5.56 per share and revenues at $10.84 billion [1][2] Financial Performance - The second-quarter earnings estimate has seen three downward revisions recently, indicating a year-over-year decrease of 5.1% in earnings, while revenues are expected to grow by 9.7% year-over-year [2] - For the full year 2025, the revenue estimate stands at $44.06 billion, reflecting an 8.4% increase year-over-year, but the earnings per share estimate is $22.58, showing a slight decline of 0.3% [5] - Molina Healthcare has beaten consensus estimates in three of the last four quarters, with an average surprise of negative 1.6% [5] Membership and Premiums - The Zacks Consensus Estimate for premiums indicates a growth of 10.1% year-over-year in Q2, with Medicaid premiums expected to grow by 4.1% [7] - Medicaid membership is projected to decrease by 1.2% year-over-year, while Medicare membership is expected to grow by 4.2% [9] - Marketplace membership is anticipated to surge by 63% compared to the previous year [9] Cost and Income Trends - The medical care ratio (MCR) for the Marketplace is expected to rise to 77.49%, up from 71.60% a year ago, while the total MCR is projected at 88.86%, slightly up from 88.60% [9] - Rising costs and lower investment income are contributing to uncertainty regarding an earnings beat, with investment income expected to decline by 12.1% year-over-year [10] - Total operating expenses are predicted to increase by more than 8% from the previous year due to higher medical care costs and general administrative expenses [10] Market Position - The company currently holds a Zacks Rank of 5 (Strong Sell) and an Earnings ESP of -1.09%, indicating a lower likelihood of an earnings beat this quarter [6]

Core Viewpoint - Molina (MOH) is anticipated to report a year-over-year decline in earnings despite an increase in revenues for the quarter ended June 2025, with the actual results being a significant factor influencing its near-term stock price [1][2]. Earnings Expectations - The consensus estimate for Molina's quarterly earnings is $5.81 per share, reflecting a year-over-year decrease of 0.9%, while revenues are projected to reach $10.83 billion, representing a 9.7% increase from the previous year [3]. - The earnings report is expected to be released on July 23, and the stock may rise if the reported numbers exceed expectations, whereas a miss could lead to a decline [2]. Estimate Revisions - Over the past 30 days, the consensus EPS estimate has been revised down by 2.52%, indicating a collective reassessment by analysts regarding the company's earnings prospects [4]. - The Most Accurate Estimate for Molina is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -5.26%, suggesting a bearish outlook from analysts [12]. Earnings Surprise History - In the last reported quarter, Molina was expected to post earnings of $5.86 per share but exceeded this with actual earnings of $6.08, resulting in a positive surprise of 3.75% [13]. - Over the last four quarters, Molina has beaten consensus EPS estimates three times, indicating some historical resilience [14]. Predictive Models - The Zacks Earnings ESP model indicates that a positive reading is a strong predictor of an earnings beat, particularly when combined with a favorable Zacks Rank [10]. - However, a negative Earnings ESP reading does not necessarily indicate an earnings miss, and stocks with negative readings are difficult to predict for earnings beats [11]. Conclusion - Molina does not currently appear to be a compelling candidate for an earnings beat, and investors should consider other factors when making decisions regarding the stock ahead of its earnings release [17].

Health insurer Elevance Health Inc. ELV is scheduled to release its second quarter 2025 financial results on July 17.Analysts estimate adjusted earnings of $9.197 per share on sales of $48.24 billion, as per data from Benzinga Pro.UnitedHealth Group Inc. UNH has been the first major health insurer to report quarterly earnings for several quarters. However, this quarter, the insurance giant will release its second quarter 2025 financial results on July 29.As it’s the biggest player in the industry, Forbes wr ...