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]