CENTENE CORPORATION REPORTS FIRST QUARTER 2026 RESULTS
Rhea-AI Summary
Centene (NYSE: CNC) reported Q1 2026 GAAP diluted EPS of $3.11 and adjusted diluted EPS of $3.37. Total revenues were $49.94B with premium and service revenues of $44.66B. Company reduced debt by $1.0B and raised 2026 EPS guidance floors to >$2.37 GAAP and >$3.40 adjusted.
Q1 HBR was 87.3% and SG&A ratio 7.6%. Membership declined to 26.27M, driven by lower Marketplace and Medicaid mix shifts. Cash flow from operations was $4.37B.
AI-generated analysis. Not financial advice.
Positive
- Adjusted diluted EPS of $3.37 in Q1
- $1.0B debt repurchase completed in Q1
- Cash flow from operations of $4.37B in Q1
- Raised 2026 guidance floors to >$2.37 GAAP and >$3.40 adjusted
Negative
- Total at-risk membership declined to 26.27M year-over-year
- Marketplace membership fell to 3.58M, pressuring mix
- Full-year HBR guidance of 90.9%–91.7% implies tighter margins
News Market Reaction – CNC
On the day this news was published, CNC gained 13.95%, reflecting a significant positive market reaction. Argus tracked a peak move of +19.5% during that session. Our momentum scanner triggered 161 alerts that day, indicating very high trading interest and price volatility. This price movement added approximately $3.30B to the company's valuation, bringing the market cap to $26.97B at that time. Trading volume was elevated at 2.4x the daily average, suggesting notable buying interest.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Market Reality Check
Peers on Argus
CNC gained 4.02% with strong earnings. Key peers like HUM and ELV also rose (4.10% and
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Apr 10 | Earnings call notice | Neutral | -0.7% | Announced timing and access details for Q1 2026 results call. |
| Jan 13 | Earnings call notice | Neutral | +0.9% | Scheduled Q4 2025 and year-end 2025 earnings release and call. |
| Oct 29 | Q3 2025 earnings | Negative | +12.5% | Reported large GAAP loss from $6.7B goodwill impairment, raised EPS guidance. |
| Jul 25 | Q2 2025 earnings | Negative | +6.1% | Disappointing quarter with higher HBR and adjusted loss per share. |
| Apr 25 | Q1 2025 earnings | Positive | -6.3% | Strong EPS growth, 17% revenue growth, and raised FY 2025 revenue guidance. |
Earnings-related headlines have often produced sizable but directionally mixed reactions, with several divergences from fundamental tone.
Recent earnings-related communications for CNC show a volatile pattern. In Q1 2025, strong results with adjusted EPS of $2.90 and robust revenue growth were followed by a -6.32% move. Later, disappointing Q2 2025 results and a large Q3 2025 loss tied to a $6.7B goodwill impairment saw positive reactions of 6.09% and 12.5%. Call-announcement releases in January 2026 and April 2026 had modest price changes. Today’s Q1 2026 report, with higher EPS and raised guidance, fits this backdrop of large, sometimes counterintuitive earnings reactions.
Historical Comparison
In the past year, CNC earnings-tagged news has averaged a ±2.5% move. Today’s 4.02% gain sits modestly above that typical reaction range.
Earnings history shows a shift from 2025 losses and impairment-driven volatility toward stronger profitability in 2026, with rising adjusted EPS and higher guidance floors.
Market Pulse Summary
The stock surged +13.9% in the session following this news. A strong positive reaction aligns with CNC’s Q1 2026 delivery of GAAP EPS of $3.11, adjusted EPS of $3.37, and raised full-year guidance. Historically, earnings news has produced sizeable but directionally mixed moves around ±2.5%. Investors may weigh whether improved HBR and $4,366M in operating cash flow offset prior-year volatility and if momentum can persist without overextending beyond fundamental progress.
Key Terms
health benefits ratio financial
sg&a expense ratio financial
revolving credit facility financial
non-gaap financial measures financial
adjusted effective tax rate financial
medicare advantage medical
medicare-medicaid plans medical
AI-generated analysis. Not financial advice.
-- First Quarter GAAP Diluted Earnings Per Share of
-- Increases 2026 GAAP Diluted EPS Guidance to Greater than
- Strong first quarter 2026 adjusted diluted EPS of
$3.37 $0.50 - Medicaid HBR of
93.1% , reflecting continued tangible progress managing medical costs coupled with moderate flu. - Medicare segment HBR of
84.9% , from outperformance in both Medicare Advantage and PDP. - Commercial HBR of
75.3% , slightly above expectations, primarily reflecting higher acuity among Marketplace Silver Tier members prior to anticipated future 2026 net risk adjustment benefit. Marketplace pre-tax earnings for Q1 were in-line with expectations inclusive of favorable SG&A. $1.0 billion
Total revenues (in millions) | $ 49,944 | ||
Premium and service revenues (in millions) | $ 44,655 | ||
Health benefits ratio | 87.3 % | ||
SG&A expense ratio | 7.6 % | ||
Adjusted SG&A expense ratio (1) | 7.6 % | ||
GAAP diluted earnings per share | $ 3.11 | ||
Adjusted diluted earnings per share (1) | $ 3.37 | ||
Total cash flow provided by operations (in millions) | $ 4,366 | ||
(1) | Represents a non-GAAP financial measure. A full reconciliation of the adjusted diluted earnings per share (EPS) and adjusted selling, general and administrative (SG&A) expenses is shown in the Non-GAAP Financial Presentation section of this release. | ||
"We continue to make tangible progress in our margin recovery efforts while strengthening the fundamental operations of each of our businesses," said Chief Executive Officer of Centene, Sarah M.
Awards & Community Engagement
- In March, the Centene Foundation and Carolina Complete Health, a Centene subsidiary, announced their investment in and groundbreaking of the Northeast Winston-Salem Choice Neighborhood Initiative. In partnership with McCormack Baron Salazar, the investment will help rebuild 244 affordable housing units and connect residents to essential healthcare and address community needs.
- In March, the Centene Foundation and WellCare of
Kentucky , a Centene subsidiary, launched the WellCare Food is Medicine Program to address diabetes-related needs in ruralKentucky . The program will provide eligible Medicaid enrollees with diabetes access to weekly home-delivered, medically tailored meals, recipes, and educational materials for up to three years.
- In February, Buckeye Health Plan, a Centene subsidiary, announced awards to six
Ohio healthcare providers under the Provider Accessibility Initiative, a program supported by the National Council on Independent Living's Barrier Removal Fund. The funding will be used to purchase equipment to support patients with disabilities and make ADA-compliant improvements to provider facilities, such as handrails, wheelchair ramps, and sliding doors.
- In January, Centene was named one of the World's Most Admired Companies™ by Fortune® for the eighth consecutive year. The distinction was determined based on Centene's quality of management and products, social responsibility, ability to attract talent, and more.
Membership
The following table sets forth membership by line of business:
March 31, | ||||
2026 | 2025 | |||
Traditional Medicaid (1) | 10,923,100 | 11,369,400 | ||
High Acuity Medicaid (2) | 1,503,800 | 1,589,400 | ||
Total Medicaid | 12,426,900 | 12,958,800 | ||
Marketplace | 3,582,200 | 5,626,000 | ||
Individual and Commercial Group (3) | 481,000 | 448,200 | ||
Total Commercial | 4,063,200 | 6,074,200 | ||
Medicare (4) | 1,002,200 | 1,043,200 | ||
Medicare Prescription Drug Plan (PDP) | 8,780,600 | 7,867,800 | ||
Total at-risk membership | 26,272,900 | 27,944,000 | ||
(1) | Membership includes Temporary Assistance for Needy Families (TANF), Medicaid Expansion, Children's Health Insurance Program (CHIP), Foster Care, and Behavioral Health. | |||
(2) | Membership includes Aged, Blind, or Disabled (ABD), Intellectual and Developmental Disabilities (IDD), Long-Term Services and Supports (LTSS), and Medicare-Medicaid Plans (MMP) Duals. The Company operated MMPs through December 31, 2025. In 2026 these members are included in Medicare as a result of the Centers for Medicare and Medicaid Services (CMS) transition to Dual Eligible Special Needs Plans (D-SNP) based integration. | |||
(3) | Membership includes Commercial Group, Individual Coverage Health Reimbursement Arrangement (ICHRA) and Other Off-Exchange Individual. | |||
(4) | Membership includes Medicare Advantage, Medicare Supplement, and Applicable Integrated Plans (AIPs) as a result of the CMS transition to D-SNP based integration in 2026. | |||
Premium and Service Revenues
The following table sets forth supplemental revenue information ($ in millions):
Three Months Ended March 31, | ||||||
2026 | 2025 | % Change | ||||
Medicaid | $ 23,596 | $ 22,299 | 6 % | |||
Commercial | 9,556 | 10,149 | (6) % | |||
Medicare (1) | 10,326 | 8,759 | 18 % | |||
Other | 1,177 | 1,282 | (8) % | |||
Total premium and service revenues | $ 44,655 | $ 42,489 | 5 % | |||
(1) | Medicare includes Medicare Advantage, Medicare PDP and Medicare Supplement. | |||||
Statement of Operations: Three Months Ended March 31, 2026
- For the first quarter of 2026, premium and service revenues increased
5% to$44.7 billion $42.5 billion
- Health benefits ratio (HBR) of
87.3% for the first quarter of 2026 represents a decrease from87.5% in the comparable period in 2025. The Medicaid HBR decreased by 50 basis points primarily driven by rate and revenue increases, continued tangible progress in managing medical costs and moderate flu costs. The consolidated HBR decrease was also driven by an increase to the premium deficiency reserve (PDR) in 2025 versus no PDR in 2026 for our Medicare Advantage business as a result of our progression towards profitability. The decreases were partially offset by the decline in Marketplace membership and the corresponding impact on consolidated member mix.
- The SG&A expense ratio was
7.6% for the first quarter of 2026, compared to7.9% in the first quarter of 2025. The adjusted SG&A expense ratio was7.6% for the first quarter of 2026, compared to7.9% in the first quarter of 2025. The decreases were primarily driven by strong cost management, leveraging of expenses over higher revenues and reduced Marketplace membership, which operates at a meaningfully higher SG&A expense ratio, as well as overall discipline in Marketplace SG&A. The decreases were also driven by growth in the PDP business, which operates at a meaningfully lower SG&A expense ratio as compared to the overall company.
- The effective tax rate was
26.7% for the first quarter of 2026, compared to24.7% in the first quarter of 2025. For the first quarter of 2026, our effective tax rate on adjusted earnings was26.5% , compared to24.7% in the first quarter of 2025.
- GAAP diluted EPS of
$3.11
- Adjusted diluted EPS of
$3.37
- Cash flow provided by operations for the first quarter of 2026 was
$4.4 billion
Balance Sheet
At March 31, 2026, the Company had cash, investments and restricted deposits of
During the first quarter of 2026, the Company sold a participating interest of
Outlook
Please refer to the Forward-Looking Statements, which should be reviewed in conjunction with the Company's 2026 outlook.
The Company is increasing its 2026 premium and service revenues guidance range by
The Company is updating its 2026 GAAP diluted EPS guidance floor to greater than
The Company's annual guidance for 2026 is as follows and will be discussed further on our conference call:
Full Year 2026 | ||||||
GAAP diluted EPS | > | |||||
Adjusted diluted EPS (1) | > | |||||
(1) A full reconciliation of adjusted diluted EPS is shown in the Non-GAAP Financial Presentation section of this release. | ||||||
Full Year 2026 | ||||||
Low | High | |||||
Total revenues (in billions) | $ 187.5 | $ 191.5 | ||||
Premium and service revenues (in billions) | $ 171.0 | $ 175.0 | ||||
HBR | 90.9 % | 91.7 % | ||||
SG&A expense ratio | 7.0 % | 7.6 % | ||||
Adjusted SG&A expense ratio (2) | 7.0 % | 7.6 % | ||||
Effective tax rate | 27.0 % | 28.0 % | ||||
Adjusted effective tax rate (3) | 26.0 % | 27.0 % | ||||
Diluted shares outstanding (in millions) | 495.6 | 498.6 | ||||
(2) | Adjusted SG&A expense ratio excludes severance costs of approximately | |||||
(3) | Adjusted effective tax rate excludes income tax effects of adjustments of approximately | |||||
Conference Call
As previously announced, the Company will host a conference call Tuesday, April 28, 2026, at 8:30 a.m. ET to review the financial results for the first quarter ended March 31, 2026.
Investors and other interested parties are invited to listen to the conference call by dialing 1-877-883-0383 (toll free) in the
A webcast replay will be available for on-demand listening shortly following the completion of the call for the next 12 months or until 11:59 p.m. ET on Tuesday, April 27, 2027, at the aforementioned URL. In addition, a digital audio playback will be available until 9 a.m. ET on Tuesday, May 5, 2026, by dialing 1-855-669-9658 (toll free) in
Non-GAAP Financial Presentation
The Company is providing certain non-GAAP financial measures in this release as the Company believes that these figures are helpful in allowing investors to more accurately assess the ongoing nature of the Company's operations and measure the Company's performance more consistently across periods. The Company uses the presented non-GAAP financial measures internally in evaluating the Company's performance and for planning purposes, by allowing management to focus on period-to-period changes in the Company's core business operations, and in determining employee incentive compensation. Therefore, the Company believes that this information is meaningful in addition to the information contained in the GAAP presentation of financial information. The Company strongly encourages investors to review its consolidated financial statements and publicly filed reports in their entirety and cautions investors that the non-GAAP financial measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.
Specifically, the Company believes the presentation of non-GAAP financial measures that excludes amortization of acquired intangible assets, acquisition and divestiture related expenses, as well as other items, allows investors to develop a more meaningful understanding of the Company's core performance over time.
The tables below provide reconciliations of non-GAAP items ($ in millions, except per share data):
Three Months Ended March 31, | |||
2026 | 2025 | ||
GAAP net earnings attributable to Centene | $ 1,541 | $ 1,311 | |
Amortization of acquired intangible assets | 166 | 173 | |
Other adjustments (1) | 7 | 3 | |
Income tax effects of adjustments (2) | (42) | (42) | |
Adjusted net earnings | $ 1,672 | $ 1,445 | |
(1) | Other adjustments include the following pre-tax items: | ||
2026: | |||
(a) | enterprise optimization costs of | ||
2025: | |||
(a) | a reduction to the previously reported gain on the sale of Magellan Rx of | ||
(2) | The income tax effects of adjustments are based on the effective income tax rates applicable to each adjustment. | ||
Three Months Ended March 31, | Annual Guidance | ||||
2026 | 2025 | ||||
GAAP diluted EPS attributable to Centene | $ 3.11 | $ 2.63 | greater than | ||
Amortization of acquired intangible assets | 0.33 | 0.35 | |||
Other adjustments (3) | 0.01 | 0.01 | |||
Income tax effects of adjustments (4) | (0.08) | (0.09) | |||
Adjusted diluted EPS | $ 3.37 | $ 2.90 | greater than | ||
(3) | Other adjustments include the following pre-tax items: | ||
2026: | |||
(a) | for the three months ended March 31, 2026: enterprise optimization costs of | ||
(b) | for the year ended December 31, 2026, an estimated: | ||
2025: | |||
(a) | for the three months ended March 31, 2025: a reduction to the previously reported gain on the sale of Magellan Rx of | ||
(4) | The income tax effects of adjustments are based on the effective income tax rates applicable to each adjustment. | ||
Three Months Ended March 31, | |||
2026 | 2025 | ||
GAAP selling, general and administrative expenses | $ 3,397 | $ 3,353 | |
Less: | |||
Severance | 3 | — | |
Enterprise optimization costs | 13 | — | |
Adjusted selling, general and administrative expenses | $ 3,381 | $ 3,353 | |
To provide clarity on the way management defines certain key metrics and ratios, the Company is providing a description of how the metric or ratio is calculated as follows:
- Health Benefits Ratio (HBR) (GAAP) = Medical costs divided by premium revenues.
- SG&A Expense Ratio (GAAP) = Selling, general and administrative expenses divided by premium and service revenues.
- Adjusted SG&A Expense Ratio (non-GAAP) = Adjusted selling, general and administrative expenses divided by premium and service revenues.
- Adjusted Effective Tax Rate (non-GAAP) = GAAP income tax expense (benefit) excluding the income tax effects of adjustments to net earnings divided by adjusted earnings (loss) before income tax expense.
- Adjusted Net Earnings (non-GAAP) = Net earnings less amortization of acquired intangible assets, less acquisition and divestiture related expenses, as well as adjustments for other items, net of the income tax effect of the adjustments.
- Adjusted Diluted EPS (non-GAAP) = Adjusted net earnings divided by weighted average common shares outstanding on a fully diluted basis.
- Debt to Capitalization Ratio (GAAP) = Total debt, divided by total debt plus total stockholder's equity.
- Average Medical Claims Expense (GAAP) = Medical costs for the period divided by number of days in such period. Average medical claims expense is most often calculated for the quarterly reporting period.
- Days in Claims Payable (GAAP) = Medical claims liabilities divided by average medical claims expense. Days in claims payable is most often calculated for the quarterly reporting period.
In addition, the following terms are defined as follows:
- State-directed Payments: Payments directed by a state that have minimal risk but are administered as a premium adjustment. These payments are recorded as premium revenue and medical costs at close to a
100% HBR. In many instances, the Company has little visibility to the timing of these payments until they are paid by a state.
- Pass-through Payments: Non-risk supplemental payments from a state that the Company is required to pass through to designated contracted providers. These payments are recorded as premium tax revenue and premium tax expense.
About Centene Corporation
Centene Corporation, a Fortune 500 company, is a leading healthcare enterprise that is committed to helping people live healthier lives. The Company takes a local approach with local teams to provide fully integrated, high-quality, and cost-effective services to government-sponsored and commercial healthcare programs, focusing on under-insured individuals. Centene offers affordable and high-quality products to more than 1 in 15 individuals across the nation, including Medicaid and Medicare members (including Medicare Prescription Drug Plans) as well as individuals and families served by the Health Insurance Marketplace.
Centene uses its investor relations website to publish important information about the Company, including information that may be deemed material to investors. Financial and other information about Centene is routinely posted and is accessible on Centene's investor relations website, https://investors.centene.com.
Forward-Looking Statements
All statements, other than statements of current or historical fact, contained in this press release are forward-looking statements. Without limiting the foregoing, forward-looking statements often use words such as "believe," "anticipate," "plan," "expect," "estimate," "predict," "intend," "seek," "target," "goal," "potential," "may," "will," "would," "could," "should," "can," "continue," and other similar words or expressions (and the negative thereof). Our 2026 full year guidance outlined in the section titled "Outlook" is a forward-looking statement. Centene Corporation and its subsidiaries (Centene, the Company, our or we) intends such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we are including this statement for purposes of complying with these safe-harbor provisions. In particular, these statements include, without limitation, statements about our expected future operating or financial performance, changes in laws and regulations, market opportunity, expectations concerning pricing actions, competition, expected contract start dates and terms, expected activities in connection with completed and future acquisitions and dispositions, our investments, and the adequacy of our available cash resources. These forward-looking statements reflect our current views with respect to future events and are based on numerous assumptions and assessments made by us in light of our experience and perception of historical trends, current conditions, business strategies, operating environments, future developments, and other factors we believe appropriate. By their nature, forward-looking statements involve known and unknown risks and uncertainties and are subject to change because they relate to events and depend on circumstances that will occur in the future, including economic, regulatory, competitive, and other factors that may cause our or our industry's actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties, and assumptions. All forward-looking statements included in this press release are based on information available to us on the date hereof. Except as may be otherwise required by law, we undertake no obligation to update or revise the forward-looking statements included in this press release, whether as a result of new information, future events, or otherwise, after the date hereof. You should not place undue reliance on any forward-looking statements, as actual results may differ materially from projections, estimates, or other forward-looking statements due to a variety of important factors, variables, and events including, but not limited to: our ability to design and price products that are competitive and/or actuarially sound; our ability to accurately predict and effectively manage health benefits and other operating expenses and reserves, including fluctuations in medical costs; rate cuts, insufficient rate changes or other payment reductions or delays by government payors affecting our government businesses; the effect of social, economic, and political conditions, geopolitical events and state and federal policies, including the amount and terms of state and federal funding for government-sponsored healthcare programs, including as a result of changes in
CENTENE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In millions, except shares in thousands and per share data in dollars) | |||
March 31, | December 31, | ||
(Unaudited) | |||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 21,264 | $ 17,888 | |
Premium and trade receivables | 19,426 | 18,105 | |
Short-term investments | 2,477 | 2,432 | |
Other current assets | 1,822 | 1,945 | |
Total current assets | 44,989 | 40,370 | |
Long-term investments | 16,599 | 17,035 | |
Restricted deposits | 1,432 | 1,412 | |
Property, software and equipment, net | 2,090 | 2,037 | |
Goodwill | 10,835 | 10,835 | |
Intangible assets, net | 4,364 | 4,530 | |
Other long-term assets | 866 | 528 | |
Total assets | $ 81,175 | $ 76,747 | |
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND | |||
Current liabilities: | |||
Medical claims liability | $ 20,627 | $ 20,544 | |
Accounts payable and accrued expenses | 16,832 | 13,796 | |
Return of premium payable | 1,570 | 1,592 | |
Unearned revenue | 953 | 736 | |
Current portion of long-term debt | 63 | 50 | |
Total current liabilities | 40,045 | 36,718 | |
Long-term debt | 16,308 | 17,351 | |
Deferred tax liability | 744 | 833 | |
Other long-term liabilities | 2,551 | 1,789 | |
Total liabilities | 59,648 | 56,691 | |
Commitments and contingencies | |||
Redeemable noncontrolling interests | 25 | 23 | |
Stockholders' equity: | |||
Preferred stock, | — | — | |
Common stock, | 1 | 1 | |
Additional paid-in capital | 20,823 | 20,777 | |
Accumulated other comprehensive (loss) | (171) | (58) | |
Retained earnings | 10,215 | 8,674 | |
Treasury stock, at cost (131,706 and 131,706 shares, respectively) | (9,441) | (9,441) | |
Total Centene stockholders' equity | 21,427 | 19,953 | |
Nonredeemable noncontrolling interest | 75 | 80 | |
Total stockholders' equity | 21,502 | 20,033 | |
Total liabilities, redeemable noncontrolling interests and stockholders' equity | $ 81,175 | $ 76,747 | |
CENTENE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except shares in thousands and per share data in dollars) (Unaudited) | |||
Three Months Ended March 31, | |||
2026 | 2025 | ||
Revenues: | |||
Premium | $ 43,887 | $ 41,712 | |
Service | 768 | 777 | |
Premium and service revenues | 44,655 | 42,489 | |
Premium tax | 5,289 | 4,131 | |
Total revenues | 49,944 | 46,620 | |
Expenses: | |||
Medical costs | 38,303 | 36,503 | |
Cost of services | 702 | 698 | |
Selling, general and administrative expenses | 3,397 | 3,353 | |
Depreciation expense | 134 | 142 | |
Amortization of acquired intangible assets | 166 | 173 | |
Premium tax expense | 5,381 | 4,217 | |
Total operating expenses | 48,083 | 45,086 | |
Earnings from operations | 1,861 | 1,534 | |
Other income (expense): | |||
Investment and other income | 407 | 382 | |
Debt extinguishment | (5) | — | |
Interest expense | (164) | (170) | |
Earnings before income tax | 2,099 | 1,746 | |
Income tax expense | 560 | 432 | |
Net earnings | 1,539 | 1,314 | |
(Earnings) loss attributable to noncontrolling interests | 2 | (3) | |
Net earnings attributable to Centene Corporation | $ 1,541 | $ 1,311 | |
Net earnings per common share attributable to Centene Corporation: | |||
Basic earnings per common share | $ 3.13 | $ 2.64 | |
Diluted earnings per common share | $ 3.11 | $ 2.63 | |
Weighted average number of common shares outstanding: | |||
Basic | 492,069 | 496,214 | |
Diluted | 495,591 | 498,180 | |
CENTENE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions, unaudited) | |||
Three Months Ended March 31, | |||
2026 | 2025 | ||
Cash flows from operating activities: | |||
Net earnings | $ 1,539 | $ 1,314 | |
Adjustments to reconcile net earnings to net cash provided by operating activities | |||
Depreciation and amortization | 300 | 314 | |
Stock compensation expense | 67 | 59 | |
Loss on debt extinguishment | 5 | — | |
Deferred income taxes | (53) | (27) | |
Loss on divestitures | — | 10 | |
Changes in assets and liabilities | |||
Premium and trade receivables | (1,353) | (2,684) | |
Other assets | (188) | (669) | |
Medical claims liabilities | 95 | 1,603 | |
Unearned revenue | 217 | 208 | |
Accounts payable and accrued expenses | 2,905 | 563 | |
Other long-term liabilities | 849 | 814 | |
Other operating activities, net | (17) | 5 | |
Net cash provided by operating activities | 4,366 | 1,510 | |
Cash flows from investing activities: | |||
Capital expenditures | (200) | (135) | |
Purchases of investments | (987) | (1,630) | |
Sales and maturities of investments | 1,276 | 1,236 | |
Net cash provided by (used in) investing activities | 89 | (529) | |
Cash flows from financing activities: | |||
Proceeds from long-term debt | — | 750 | |
Payments and repurchases of long-term debt | (1,046) | (958) | |
Common stock repurchases | (29) | (41) | |
Proceeds from common stock issuances | 10 | 10 | |
Other financing activities, net | 2 | (11) | |
Net cash (used in) financing activities | (1,063) | (250) | |
Net increase in cash, cash equivalents and restricted cash and cash equivalents | 3,392 | 731 | |
Cash and cash equivalents reclassified from held for sale | 4 | — | |
Cash, cash equivalents and restricted cash and cash equivalents, beginning of period | 17,957 | 14,156 | |
Cash, cash equivalents and restricted cash and cash equivalents, end of period | $ 21,353 | $ 14,887 | |
Supplemental disclosures of cash flow information: | |||
Interest paid | $ 146 | $ 129 | |
Income tax net payments (refunds) | $ (19) | $ 7 | |
The following table provides a reconciliation of cash, cash equivalents and restricted cash and cash equivalents reported within the Consolidated | |||
March 31, | |||
2026 | 2025 | ||
Cash and cash equivalents | $ 21,264 | $ 14,815 | |
Restricted cash and cash equivalents, included in restricted deposits | 89 | 72 | |
Total cash, cash equivalents and restricted cash and cash equivalents | $ 21,353 | $ 14,887 | |
CENTENE CORPORATION SUPPLEMENTAL FINANCIAL DATA | ||||||||||
Q1 | Q4 | Q3 | Q2 | Q1 | ||||||
2026 | 2025 | 2025 | 2025 | 2025 | ||||||
MEMBERSHIP | ||||||||||
Traditional Medicaid (1) | 10,923,100 | 10,932,600 | 11,115,400 | 11,227,400 | 11,369,400 | |||||
High Acuity Medicaid (2) | 1,503,800 | 1,585,800 | 1,591,000 | 1,592,300 | 1,589,400 | |||||
Total Medicaid | 12,426,900 | 12,518,400 | 12,706,400 | 12,819,700 | 12,958,800 | |||||
Marketplace | 3,582,200 | 5,541,400 | 5,828,100 | 5,862,800 | 5,626,000 | |||||
Individual and Commercial Group (3) | 481,000 | 452,500 | 447,900 | 449,700 | 448,200 | |||||
Total Commercial | 4,063,200 | 5,993,900 | 6,276,000 | 6,312,500 | 6,074,200 | |||||
Medicare (4) | 1,002,200 | 1,002,600 | 1,013,200 | 1,026,900 | 1,043,200 | |||||
Medicare PDP | 8,780,600 | 8,118,600 | 7,972,500 | 7,845,800 | 7,867,800 | |||||
Total at-risk membership | 26,272,900 | 27,633,500 | 27,968,100 | 28,004,900 | 27,944,000 | |||||
(1) | Membership includes TANF, Medicaid Expansion, CHIP, Foster Care and Behavioral Health. | |||||||||
(2) | Membership includes ABD, IDD, LTSS and MMPs. The Company operated MMPs through December 31, 2025. In 2026 these members are included in Medicare as a result of the CMS transition to D-SNP based integration. | |||||||||
(3) | Membership includes Commercial Group, ICHRA and Other Off-Exchange Individual. | |||||||||
(4) | Membership includes Medicare Advantage, Medicare Supplement and AIPs as a result of the CMS transition to D-SNP based integration in 2026. | |||||||||
NUMBER OF EMPLOYEES | 61,000 | 61,100 | 60,900 | 60,300 | 60,400 | |||||
DAYS IN CLAIMS PAYABLE | 48 | 46 | 48 | 47 | 49 | |||||
CASH, INVESTMENTS AND RESTRICTED DEPOSITS (in millions) | ||||||||||
Regulated | $ 40,239 | $ 37,289 | $ 37,574 | $ 36,403 | $ 35,922 | |||||
Unregulated | 1,533 | 1,478 | 1,259 | 1,086 | 1,042 | |||||
Total | $ 41,772 | $ 38,767 | $ 38,833 | $ 37,489 | $ 36,964 | |||||
DEBT TO CAPITALIZATION | 43.2 % | 46.5 % | 45.5 % | 39.0 % | 39.5 % | |||||
OPERATING RATIOS | Three Months Ended March 31, | ||
2026 | 2025 | ||
HBR | 87.3 % | 87.5 % | |
SG&A expense ratio | 7.6 % | 7.9 % | |
Adjusted SG&A expense ratio | 7.6 % | 7.9 % | |
HBR BY PRODUCT | Three Months Ended March 31, | |||
2026 | 2025 | |||
Medicaid | 93.1 % | 93.6 % | ||
Commercial | 75.3 % | 75.0 % | ||
Medicare (5) | 84.9 % | 86.3 % | ||
(5) | Medicare includes Medicare Advantage, Medicare PDP and Medicare Supplement. | |||
MEDICAL CLAIMS LIABILITY
The changes in medical claims liability are summarized as follows (in millions):
Balance, March 31, 2025 | $ 19,911 | |
Less: Reinsurance recoverables | 64 | |
Balance, March 31, 2025, net | 19,847 | |
Incurred related to: | ||
Current period | 161,744 | |
Prior periods | (1,972) | |
Total incurred | 159,772 | |
Paid related to: | ||
Current period | 142,498 | |
Prior periods | 16,197 | |
Total paid | 158,695 | |
Plus: Premium deficiency reserve | (270) | |
Plus: Divestitures | (109) | |
Balance, March 31, 2026, net | 20,545 | |
Plus: Reinsurance recoverables | 82 | |
Balance, March 31, 2026 | $ 20,627 |
Centene's claims reserving process utilizes a consistent actuarial methodology to estimate Centene's ultimate liability. Any reduction in the "Incurred related to: Prior periods" amount may be offset as Centene actuarially determines the "Incurred related to: Current period." Additionally, approximately
The amount of the "Incurred related to: Prior periods" above represents favorable development and includes the effects of reserving under moderately adverse conditions, new markets where we use a conservative approach in setting reserves during the initial periods of operations, receipts from other third-party payors related to coordination of benefits and lower medical utilization and cost trends for dates of service March 31, 2025, and prior.
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SOURCE Centene Corporation