CENTENE CORPORATION REPORTS SECOND QUARTER 2026 RESULTS
Rhea-AI Summary
Centene (NYSE: CNC) reported second quarter 2026 total revenues of $53.6 billion, including premium and service revenues of $44.4 billion, up 4% year over year. GAAP diluted EPS was $2.19 and adjusted diluted EPS was $2.51, compared with a loss in 2025.
The consolidated health benefits ratio improved to 89.6% from 93.0%, while the SG&A expense ratio declined to 7.0% and adjusted SG&A to 6.9%. Cash flow from operations reached $3.6 billion. Centene raised full-year 2026 guidance to GAAP diluted EPS greater than $3.11 and adjusted diluted EPS greater than $4.80, and expects total 2026 revenues of $193.5–$197.5 billion.
Positive
- Premium and service revenues up 4% year over year to $44.4 billion
- GAAP net earnings $1.1 billion vs. $253 million loss in Q2 2025
- Adjusted diluted EPS $2.51 vs. $(0.16) in Q2 2025
- Health benefits ratio improved to 89.6% from 93.0%
- Operating cash flow $3.6 billion in Q2 2026
- 2026 EPS guidance raised: GAAP > $3.11; adjusted > $4.80
Negative
- Total at-risk membership declined to 25.9 million from 28.0 million
- Marketplace membership fell to 3.5 million from 5.9 million
- Commercial premium and service revenues down 7% year over year to $9.4 billion
- Other premium and service revenues down 2% year over year to $1.2 billion
- 2026 restructuring-related severance costs estimated at $355–$405 million
News Explained
Centene reported 25,885,400 at-risk members versus 28,004,900 a year earlier and repurchased $260 million of senior notes during the quarter.
Centene reported its second-quarter results for the period ended
Adjusted diluted EPS is a non-GAAP measure that excludes specified items, including acquired-intangible amortization, acquisition and divestiture expenses, and other adjustments after tax. The company attributed the guidance increase to underlying strength while also identifying approximately
At-risk membership was 25,885,400 on
At
Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Apr 28 | First-quarter earnings | Positive | +13.9% | Raised EPS guidance and reported strong quarterly earnings with debt reduction |
| Oct 29 | Third-quarter earnings | Negative | +12.5% | Goodwill impairment produced a large quarterly loss despite higher guidance |
| Jul 25 | Second-quarter earnings | Negative | +6.1% | Higher medical costs and health benefits ratio accompanied a quarterly loss |
| Apr 25 | First-quarter earnings | Positive | -6.3% | Revenue growth and stronger adjusted EPS supported increased annual guidance |
| Oct 25 | Third-quarter earnings | Positive | +4.2% | Membership growth and share repurchases accompanied reaffirmed earnings guidance |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
CNC's tag-specific earnings history was usually aligned with positive price reactions, with one notable divergence.
Key Terms
sg&a expense ratio financial
d-snp regulatory
AI-generated analysis. How Rhea-AI works. Not financial advice.
-- Second Quarter GAAP Diluted Earnings Per Share of
-- Increases 2026 GAAP Diluted EPS Guidance: Greater than
- Commercial HBR of
79.2% , demonstrating significant year-over-year improvement in profitability. - Medicare segment HBR of
89.5% , including fundamental outperformance in both Medicare Advantage and PDP. - Medicaid HBR of
93.9% , in-line with expectations and reflecting continued execution in management of medical cost trend. - Guidance increase resulting from underlying strength of the business, including approximately
$0.50
Total revenues (in millions) | $ 53,579 | ||
Premium and service revenues (in millions) | $ 44,375 | ||
Health benefits ratio | 89.6 % | ||
SG&A expense ratio | 7.0 % | ||
Adjusted SG&A expense ratio (1) | 6.9 % | ||
GAAP diluted earnings per share | $ 2.19 | ||
Adjusted diluted earnings per share (1) | $ 2.51 | ||
Total cash flow provided by operations (in millions) | $ 3,590 | ||
(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. | ||
"Our second quarter results and improved full-year outlook represent meaningful milestones on our path to restoring profitability and increasing shareholder value," said Chief Executive Officer of Centene, Sarah M.
Membership
The following table sets forth membership by line of business:
June 30, | ||||
2026 | 2025 | |||
Traditional Medicaid (1) | 10,745,800 | 11,227,400 | ||
High Acuity Medicaid (2) | 1,364,900 | 1,592,300 | ||
Total Medicaid | 12,110,700 | 12,819,700 | ||
Marketplace | 3,494,700 | 5,862,800 | ||
Individual and Commercial Group (3) | 497,000 | 449,700 | ||
Total Commercial | 3,991,700 | 6,312,500 | ||
Medicare (4) | 980,000 | 1,026,900 | ||
Medicare Prescription Drug Plan (PDP) | 8,803,000 | 7,845,800 | ||
Total at-risk membership | 25,885,400 | 28,004,900 | ||
(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 June 30, | ||||||
2026 | 2025 | % Change | ||||
Medicaid | $ 22,766 | $ 21,723 | 5 % | |||
Commercial | 9,356 | 10,070 | (7) % | |||
Medicare (1) | 11,057 | 9,450 | 17 % | |||
Other | 1,196 | 1,224 | (2) % | |||
Total premium and service revenues | $ 44,375 | $ 42,467 | 4 % | |||
(1) | Medicare includes Medicare Advantage, Medicare PDP and Medicare Supplement. | |||||
Statement of Operations: Three Months Ended June 30, 2026
- For the second quarter of 2026, premium and service revenues increased
4% to$44.4 billion $42.5 billion - Health benefits ratio (HBR) of
89.6% for the second quarter of 2026 represents a decrease from93.0% in the comparable period in 2025. The consolidated HBR benefited from a lower Marketplace HBR resulting from improved pricing and risk transfer reflecting the acuity of the Marketplace membership. The HBR also decreased due to rate and revenue increases and continued tangible progress in managing medical costs in the Medicaid business. The HBR benefited by the favorable resolution of programmatic elements for the 2025 benefit year in Medicare and 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 SG&A expense ratio was
7.0% for the second quarter of 2026, compared to7.1% in the second quarter of 2025. The adjusted SG&A expense ratio was6.9% for the second quarter of 2026, compared to7.1% in the second 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
26.9% for the second quarter of 2026. For the second quarter of 2026, our effective tax rate on adjusted earnings was26.5% . - GAAP diluted EPS of
$2.19 - Adjusted diluted EPS of
$2.51 - Cash flow provided by operations for the second quarter of 2026 was
$3.6 billion
Balance Sheet
At June 30, 2026, the Company had cash, investments and restricted deposits of
During the second quarter of 2026, the Company repurchased
Outlook
Please refer to the Forward-Looking Statements, which should be reviewed in conjunction with the Company's 2026 outlook.
The Company is increasing total 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 | ||||||
Full Year 2026 | ||||||
Low | High | |||||
Total revenues (in billions) | $ 193.5 | $ 197.5 | ||||
Premium and service revenues (in billions) | $ 173.0 | $ 177.0 | ||||
HBR | 90.5 % | 91.3 % | ||||
SG&A expense ratio | 7.2 % | 7.8 % | ||||
Adjusted SG&A expense ratio (2) | 6.9 % | 7.5 % | ||||
Effective tax rate | 26.5 % | 27.5 % | ||||
Adjusted effective tax rate (3) | 25.5 % | 26.5 % | ||||
Diluted shares outstanding (in millions) | 497.0 | 500.0 | ||||
(2) Adjusted SG&A expense ratio excludes severance costs due to enterprise optimization and contract exits of | ||||||
(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, July 28, 2026, at 8:30 a.m. ET to review the financial results for the second quarter ended June 30, 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, July 27, 2027, at the aforementioned URL. In addition, a digital audio playback will be available until 9 a.m. ET on Tuesday, August 4, 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 June 30, | Six Months Ended June 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
GAAP net earnings (loss) attributable to Centene | $ 1,091 | $ (253) | $ 2,632 | $ 1,058 | |||
Amortization of acquired intangible assets | 161 | 173 | 327 | 346 | |||
Acquisition and divestiture related expenses | — | 1 | — | 1 | |||
Other adjustments (1) | 46 | 58 | 53 | 61 | |||
Income tax effects of adjustments (2) | (50) | (58) | (92) | (100) | |||
Adjusted net earnings (loss) | $ 1,248 | $ (79) | $ 2,920 | $ 1,366 | |||
(1) | Other adjustments include the following pre-tax items: | ||
2026: | |||
(a) | for the three months ended June 30, 2026: enterprise optimization costs of | ||
(b) | for the six months ended June 30, 2026: enterprise optimization costs of | ||
2025: | |||
(a) | for the three months ended June 30, 2025: intangible asset impairment related to the wind-down of certain contracts in the Other segment of | ||
(b) | for the six months ended June 30, 2025: intangible asset impairment related to the wind-down of certain contracts in the Other segment of | ||
(2) | The income tax effects of adjustments are based on the effective income tax rates applicable to each adjustment. | ||
Three Months Ended | Six Months Ended June 30, | Annual Guidance | |||||||
2026 | 2025 | 2026 | 2025 | ||||||
GAAP diluted earnings (loss) per share attributable to | $ 2.19 | $ (0.51) | $ 5.30 | $ 2.13 | greater than | ||||
Amortization of acquired intangible assets | 0.32 | 0.35 | 0.66 | 0.70 | |||||
Other adjustments (3) | 0.09 | 0.12 | 0.11 | 0.12 | |||||
Income tax effects of adjustments (4) | (0.09) | (0.12) | (0.19) | (0.20) | |||||
Adjusted diluted earnings (loss) per share | $ 2.51 | $ (0.16) | $ 5.88 | $ 2.75 | greater than | ||||
(3) | Other adjustments include the following pre-tax items: | ||
2026: | |||
(a) | for the three months ended June 30, 2026: enterprise optimization costs of | ||
(b) | for the six months ended June 30, 2026: enterprise optimization costs of | ||
(c) | for the year ended December 31, 2026, an estimated: | ||
2025: | |||
(a) | for the three months ended June 30, 2025: intangible asset impairment related to the wind-down of certain contracts in the Other segment of | ||
(b) | for the six months ended June 30, 2025: intangible asset impairment related to the wind-down of certain contracts in the Other segment of | ||
(4) | The income tax effects of adjustments are based on the effective income tax rates applicable to each adjustment. | ||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
GAAP selling, general and administrative expenses | $ 3,103 | $ 3,036 | $ 6,500 | $ 6,389 | |||
Less: | |||||||
Acquisition and divestiture related expenses | — | 1 | — | 1 | |||
Severance | 15 | — | 18 | — | |||
Enterprise optimization costs | 37 | — | 50 | — | |||
Adjusted selling, general and administrative expenses | $ 3,051 | $ 3,035 | $ 6,432 | $ 6,388 | |||
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, including our estimated severance costs in connection with the voluntary separation program, 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) | |||
June 30, | December 31, | ||
(Unaudited) | |||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 24,151 | $ 17,888 | |
Premium and trade receivables | 18,076 | 18,105 | |
Short-term investments | 2,906 | 2,432 | |
Other current assets | 1,552 | 1,945 | |
Total current assets | 46,685 | 40,370 | |
Long-term investments | 16,302 | 17,035 | |
Restricted deposits | 1,487 | 1,412 | |
Property, software and equipment, net | 2,130 | 2,037 | |
Goodwill | 10,835 | 10,835 | |
Intangible assets, net | 4,203 | 4,530 | |
Other long-term assets | 1,370 | 528 | |
Total assets | $ 83,012 | $ 76,747 | |
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND | |||
Current liabilities: | |||
Medical claims liability | $ 20,262 | $ 20,544 | |
Accounts payable and accrued expenses | 17,965 | 13,796 | |
Return of premium payable | 1,751 | 1,592 | |
Unearned revenue | 706 | 736 | |
Current portion of long-term debt | 75 | 50 | |
Total current liabilities | 40,759 | 36,718 | |
Long-term debt | 16,030 | 17,351 | |
Deferred tax liability | 756 | 833 | |
Other long-term liabilities | 2,810 | 1,789 | |
Total liabilities | 60,355 | 56,691 | |
Commitments and contingencies | |||
Redeemable noncontrolling interests | 23 | 23 | |
Stockholders' equity: | |||
Preferred stock, | — | — | |
Common stock, | 1 | 1 | |
Additional paid-in capital | 20,890 | 20,777 | |
Accumulated other comprehensive (loss) | (194) | (58) | |
Retained earnings | 11,306 | 8,674 | |
Treasury stock, at cost (131,706 and 131,706 shares, respectively) | (9,441) | (9,441) | |
Total Centene stockholders' equity | 22,562 | 19,953 | |
Nonredeemable noncontrolling interest | 72 | 80 | |
Total stockholders' equity | 22,634 | 20,033 | |
Total liabilities, redeemable noncontrolling interests and stockholders' equity | $ 83,012 | $ 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 | Six Months Ended June 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
Revenues: | |||||||
Premium | $ 43,582 | $ 41,740 | $ 87,469 | $ 83,452 | |||
Service | 793 | 727 | 1,561 | 1,504 | |||
Premium and service revenues | 44,375 | 42,467 | 89,030 | 84,956 | |||
Premium tax | 9,204 | 6,275 | 14,493 | 10,406 | |||
Total revenues | 53,579 | 48,742 | 103,523 | 95,362 | |||
Expenses: | |||||||
Medical costs | 39,029 | 38,808 | 77,332 | 75,311 | |||
Cost of services | 729 | 641 | 1,431 | 1,339 | |||
Selling, general and administrative expenses | 3,103 | 3,036 | 6,500 | 6,389 | |||
Depreciation expense | 139 | 141 | 273 | 283 | |||
Amortization of acquired intangible assets | 161 | 173 | 327 | 346 | |||
Premium tax expense | 9,220 | 6,346 | 14,601 | 10,563 | |||
Impairment | — | 55 | — | 55 | |||
Total operating expenses | 52,381 | 49,200 | 100,464 | 94,286 | |||
Earnings (loss) from operations | 1,198 | (458) | 3,059 | 1,076 | |||
Other income (expense): | |||||||
Investment and other income | 435 | 371 | 842 | 753 | |||
Gain on debt extinguishment | 6 | — | 1 | — | |||
Interest expense | (153) | (170) | (317) | (340) | |||
Earnings (loss) before income tax | 1,486 | (257) | 3,585 | 1,489 | |||
Income tax expense | 399 | 2 | 959 | 434 | |||
Net earnings (loss) | 1,087 | (259) | 2,626 | 1,055 | |||
Loss attributable to noncontrolling interests | 4 | 6 | 6 | 3 | |||
Net earnings (loss) attributable to Centene Corporation | $ 1,091 | $ (253) | $ 2,632 | $ 1,058 | |||
Net earnings (loss) per common share attributable to Centene Corporation: | |||||||
Basic earnings (loss) per common share | $ 2.21 | $ (0.51) | $ 5.34 | $ 2.14 | |||
Diluted earnings (loss) per common share | $ 2.19 | $ (0.51) | $ 5.30 | $ 2.13 | |||
Weighted average number of common shares outstanding: | |||||||
Basic | 493,819 | 493,548 | 492,949 | 494,896 | |||
Diluted | 497,637 | 493,548 | 496,605 | 496,328 | |||
CENTENE CORPORATION AND SUBSIDIARIES | |||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||
(In millions, unaudited) | |||
Six Months Ended June | |||
2026 | 2025 | ||
Cash flows from operating activities: | |||
Net earnings | $ 2,626 | $ 1,055 | |
Adjustments to reconcile net earnings to net cash provided by operating activities | |||
Depreciation and amortization | 600 | 629 | |
Stock compensation expense | 126 | 94 | |
Impairment | — | 55 | |
(Gain) loss on debt extinguishment | (1) | — | |
Deferred income taxes | (34) | (116) | |
Loss on divestitures | — | 10 | |
Changes in assets and liabilities | |||
Premium and trade receivables | (6) | (1,801) | |
Other assets | (488) | (543) | |
Medical claims liabilities | (268) | 1,809 | |
Unearned revenue | (30) | 21 | |
Accounts payable and accrued expenses | 4,249 | 209 | |
Other long-term liabilities | 1,162 | 1,857 | |
Other operating activities, net | 20 | 16 | |
Net cash provided by operating activities | 7,956 | 3,295 | |
Cash flows from investing activities: | |||
Capital expenditures | (374) | (343) | |
Purchases of investments | (2,328) | (3,593) | |
Sales and maturities of investments | 2,438 | 2,508 | |
Net cash (used in) investing activities | (264) | (1,428) | |
Cash flows from financing activities: | |||
Proceeds from long-term debt | — | 750 | |
Payments and repurchases of long-term debt | (1,304) | (1,707) | |
Common stock repurchases | (33) | (473) | |
Proceeds from common stock issuances | 18 | 18 | |
Other financing activities, net | (3) | (12) | |
Net cash (used in) financing activities | (1,322) | (1,424) | |
Net increase in cash, cash equivalents and restricted cash and cash equivalents | 6,370 | 443 | |
Cash and cash equivalents reclassified (to) held for sale | (73) | — | |
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 | $ 24,254 | $ 14,599 | |
Supplemental disclosures of cash flow information: | |||
Interest paid | $ 302 | $ 320 | |
Income tax net payments (refunds) | $ (225) | $ 504 | |
The following table provides a reconciliation of cash, cash equivalents and restricted cash and cash equivalents reported within the Consolidated | |||
June 30, | |||
2026 | 2025 | ||
Cash and cash equivalents | $ 24,151 | $ 14,513 | |
Restricted cash and cash equivalents, included in restricted deposits | 103 | 86 | |
Total cash, cash equivalents and restricted cash and cash equivalents | $ 24,254 | $ 14,599 | |
CENTENE CORPORATION | ||||||||||
SUPPLEMENTAL FINANCIAL DATA | ||||||||||
Q2 | Q1 | Q4 | Q3 | Q2 | ||||||
2026 | 2026 | 2025 | 2025 | 2025 | ||||||
MEMBERSHIP | ||||||||||
Traditional Medicaid (1) | 10,745,800 | 10,923,100 | 10,932,600 | 11,115,400 | 11,227,400 | |||||
High Acuity Medicaid (2) | 1,364,900 | 1,503,800 | 1,585,800 | 1,591,000 | 1,592,300 | |||||
Total Medicaid | 12,110,700 | 12,426,900 | 12,518,400 | 12,706,400 | 12,819,700 | |||||
Marketplace | 3,494,700 | 3,582,200 | 5,541,400 | 5,828,100 | 5,862,800 | |||||
Individual and Commercial Group (3) | 497,000 | 481,000 | 452,500 | 447,900 | 449,700 | |||||
Total Commercial | 3,991,700 | 4,063,200 | 5,993,900 | 6,276,000 | 6,312,500 | |||||
Medicare (4) | 980,000 | 1,002,200 | 1,002,600 | 1,013,200 | 1,026,900 | |||||
Medicare PDP | 8,803,000 | 8,780,600 | 8,118,600 | 7,972,500 | 7,845,800 | |||||
Total at-risk membership | 25,885,400 | 26,272,900 | 27,633,500 | 27,968,100 | 28,004,900 | |||||
(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 | ||||||||||
(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 | 59,800 | 61,000 | 61,100 | 60,900 | 60,300 | |||||
DAYS IN CLAIMS PAYABLE | 47 | 48 | 46 | 48 | 47 | |||||
CASH, INVESTMENTS AND RESTRICTED DEPOSITS (in millions) | ||||||||||
Regulated | $ 43,015 | $ 40,239 | $ 37,289 | $ 37,574 | $ 36,403 | |||||
Unregulated | 1,831 | 1,533 | 1,478 | 1,259 | 1,086 | |||||
Total | $ 44,846 | $ 41,772 | $ 38,767 | $ 38,833 | $ 37,489 | |||||
DEBT TO CAPITALIZATION | 41.6 % | 43.2 % | 46.5 % | 45.5 % | 39.0 % | |||||
OPERATING RATIOS | Three Months Ended June 30, | Six Months Ended June 30, | |||||
2026 | 2025 | 2026 | 2025 | ||||
HBR | 89.6 % | 93.0 % | 88.4 % | 90.2 % | |||
SG&A expense ratio | 7.0 % | 7.1 % | 7.3 % | 7.5 % | |||
Adjusted SG&A expense ratio | 6.9 % | 7.1 % | 7.2 % | 7.5 % | |||
HBR BY PRODUCT | Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2026 | 2025 | 2026 | 2025 | |||||
Medicaid | 93.9 % | 94.9 % | 93.5 % | 94.2 % | ||||
Commercial | 79.2 % | 90.6 % | 77.2 % | 82.8 % | ||||
Medicare (5) | 89.5 % | 90.9 % | 87.3 % | 88.6 % | ||||
(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, June 30, 2025 | $ 20,117 | |
Less: Reinsurance recoverables | 60 | |
Balance, June 30, 2025, net | 20,057 | |
Incurred related to: | ||
Current period | 161,849 | |
Prior periods | (1,737) | |
Total incurred | 160,112 | |
Paid related to: | ||
Current period | 142,602 | |
Prior periods | 16,854 | |
Total paid | 159,456 | |
Plus: Premium deficiency reserve | (389) | |
Plus: Divestitures | (109) | |
Balance, June 30, 2026, net | 20,215 | |
Plus: Reinsurance recoverables | 47 | |
Balance, June 30, 2026 | $ 20,262 |
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 June 30, 2025, and prior.
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SOURCE Centene Corporation