Molina Healthcare(US:MOH)2025-10-23 14:08Revenue 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]