Centene(US:CNC)2025-10-29 00:02Financial Performance - Total revenues for Q3 2025 were $49.69 billion, with premium and service revenues at $44.90 billion, representing a 22% increase from $36.90 billion in Q3 2024[2][11] - Adjusted diluted EPS for Q3 2025 was $0.50, benefiting from a low adjusted effective tax rate of 0.6% compared to 22.9% in Q3 2024[4][11] - The company updated its full year 2025 adjusted diluted EPS forecast to at least $2.00, an increase of $0.25 from previous guidance[4][10] - Total revenues for the three months ended September 30, 2025, increased to $49,690 million, up from $42,023 million in the same period of 2024, representing a growth of 18.9%[33] - Premium revenues for the nine months ended September 30, 2025, reached $127,578 million, compared to $106,784 million in 2024, reflecting a year-over-year increase of 19.4%[33] - Net loss attributable to Centene Corporation for the three months ended September 30, 2025, was $6,631 million, compared to a net income of $713 million in the same period of 2024[33] Expenses and Liabilities - The GAAP diluted loss per share was $(13.50), primarily due to a non-cash goodwill impairment of $6.7 billion[4][11] - The adjusted selling, general and administrative expenses for the nine months ended September 30, 2025, were $9,522 million, compared to $9,081 million for the same period in 2024, reflecting an increase of approximately 4.9%[23] - The total GAAP selling, general and administrative expenses for the three months ended September 30, 2025, were $3,145 million, compared to $3,057 million for the same period in 2024[23] - Total liabilities increased to $61,032 million as of September 30, 2025, from $55,935 million at December 31, 2024, reflecting a rise of 9.4%[31] - The company reported an impairment charge of $6,743 million for the three months ended September 30, 2025, compared to no impairment in the same period of 2024[33] Membership and Market Position - Total Medicaid membership decreased to 12.71 million from 13.07 million year-over-year, while Marketplace membership increased to 5.83 million from 4.50 million[5][11] - Total commercial membership increased to 6,276,000 in Q3 2025, up 7.1% from 4,927,900 in Q3 2024[37] - The company serves over 1 in 15 individuals across the nation, focusing on under-insured and uninsured individuals through government-sponsored and commercial healthcare programs[25] Operational Efficiency - The health benefits ratio (HBR) for Medicaid was 93.4%, reflecting a 40 basis point benefit from a retroactive revenue adjustment[4][11] - The Health Benefits Ratio (HBR) is calculated as medical costs divided by premium revenues, which is a key metric for assessing operational efficiency[24] - The medical claims liability balance increased to $21,493 million as of September 30, 2025, up from $17,995 million on September 30, 2024[38] - The incurred medical claims for the current period totaled $150,533 million, while total paid claims amounted to $144,535 million[38] - The Health Benefits Ratio (HBR) for Medicaid was 93.4% in Q3 2025, slightly up from 93.1% in Q3 2024[37] Cash Flow and Capital Structure - Cash flow provided by operations for Q3 2025 was $1.36 billion, primarily driven by the timing of claims and other payments[11] - Cash flows from operating activities for the nine months ended September 30, 2025, were $4,651 million, significantly higher than $741 million in the same period of 2024[35] - Total current assets as of September 30, 2025, amounted to $44,062 million, up from $37,999 million at December 31, 2024, indicating a growth of 15.4%[31] - Cash and cash equivalents at the end of the period were $17,185 million, compared to $14,650 million at the end of September 2024, showing an increase of 10.4%[35] - Total debt stood at $17.6 billion, with a debt-to-capital ratio of 45.5% as of September 30, 2025[4][9] Employee and Corporate Recognition - The company was recognized in the 2025 Forbes® America's Best Employers for Company Culture™ list, highlighting high employee satisfaction[3] - The number of employees increased to 60,900 in Q3 2025 from 60,300 in Q2 2025[37] Regulatory and Strategic Considerations - The company anticipates potential impacts from changes in federal or state laws or regulations, which could affect its government-sponsored healthcare programs[27] - The company emphasizes the importance of maintaining adequate premium levels and controlling future medical and administrative costs to ensure financial stability[28] - Favorable development in prior periods resulted in a reduction of approximately $106 million in premium revenues due to minimum HBR and return of premium programs[39]