Molina Healthcare(MOH)2025-04-24 14:04Financial Performance - Total revenue for Q1 2025 was $11,147 million, a 12.2% increase from $9,931 million in Q1 2024[7] - Premium revenue increased to $10,628 million, up 11.8% from $9,504 million year-over-year[7] - Net income for Q1 2025 was $298 million, slightly down from $301 million in Q1 2024, resulting in a diluted net income per share of $5.45[7][8] - Operating income for the quarter was $433 million, compared to $426 million in the same period last year, reflecting a 1.6% increase[7] - Comprehensive income for Q1 2025 was $327 million, up from $298 million in Q1 2024[8] - The consolidated medical care ratio (MCR) was 89.2%, up from 88.5% in Q1 2024, primarily due to higher medical benefits utilization[88] - General and administrative expense (G&A) ratio improved to 6.9% from 7.2% in Q1 2024, indicating better operating discipline[88] Membership and Service Expansion - Molina Healthcare served approximately 5.8 million members across 22 states as of March 31, 2025[16] - Membership increased to 5.8 million as of March 31, 2025, reflecting a growth of 25,000 members, or 0.4%, compared to the previous year[88] - The company is focused on expanding its operations in new states and integrating acquisitions to support growth[83] Medical Care Costs - The company reported a decrease in medical care costs to $9,479 million from $8,414 million year-over-year, reflecting improved cost management[7] - For the three months ended March 31, 2025, total medical care costs amounted to $9,479 million, a decrease from $9,665 million in the prior year[57] - Medical care costs totaled $9,479 billion in Q1 2025, compared to $8,414 billion in Q1 2024[88] Assets and Liabilities - Total assets increased to $16,386 million from $15,630 million at the end of 2024, marking a 4.8% growth[10] - Long-term debt rose to $3,574 million, up from $2,923 million at the end of 2024, indicating a significant increase in leverage[10] - Cash and cash equivalents at the end of the period were $4,955 million, compared to $4,572 million at the end of Q1 2024[14] - The ending balance of medical claims and benefits payable as of March 31, 2025, was $4,804 million, compared to $4,571 million as of March 31, 2024[57] Acquisitions - The acquisition of ConnectiCare was completed for $350 million in cash, with acquisition costs amounting to $2 million recorded as general and administrative expenses[38] - The provisional fair value of assets acquired in the ConnectiCare acquisition included current assets of $450 million and goodwill of $197 million[41] - The company closed the acquisition of ConnectiCare for $350 million on February 1, 2025, expanding its presence in the Marketplace and Medicare segments[109] Cash Flow and Financing Activities - Net cash provided by operating activities was $190 million in Q1 2025, down from $214 million in Q1 2024, mainly due to timing differences in payments[137] - Net cash used in investing activities was $123 million in Q1 2025, a decrease of $365 million compared to $488 million in Q1 2024, reflecting changes in investment activity[138] - Net cash provided by financing activities was $147 million in Q1 2025, an increase of $209 million compared to a cash outflow of $62 million in Q1 2024[139] Stock Repurchase - The company repurchased approximately 1,679,000 shares for $500 million in the first quarter of 2025, exhausting the $1 billion repurchase authorization from October 2024[69] - The company has authorized an additional $1 billion for stock repurchases in April 2025, extending through December 31, 2026[71] Tax and Regulatory Considerations - The effective tax rate may fluctuate due to various factors, including projected pretax earnings and changes in tax laws[34] - The effective income tax rate decreased to 23.7% in Q1 2025 from 24.5% in Q1 2024, influenced by increased tax benefits and lower state taxes[104] Future Risks - Future risks include potential Medicaid funding reductions and regulatory changes impacting the healthcare industry[83]