CENTENE CORP SEC 10-Q Report

Centene Corp, a leading multi-national healthcare enterprise, has released its Form 10-Q report for the second quarter of 2025. The report provides a comprehensive overview of the company's financial performance and operational highlights, reflecting significant growth in revenues and various strategic business initiatives despite facing some challenges.

Financial Highlights

Total Revenues: $48,742 million, representing a 22% growth year-over-year, primarily driven by premium and membership growth in the PDP business and overall market growth in the Marketplace business.

Gross Margin: $3,018 million, a decrease of 33% compared to the same period in 2024, primarily due to higher medical costs and a reduction in the net 2025 Marketplace risk adjustment transfer estimate.

Earnings (loss) from operations: $(458) million, compared to $1,229 million in the same period in 2024, reflecting increased medical costs and a reduction in Marketplace risk adjustment revenue.

Net earnings (loss) attributable to Centene Corporation: $(253) million, compared to $1,146 million in the same period in 2024, primarily driven by a reduction in the net 2025 Marketplace risk adjustment revenue transfer estimate.

Diluted earnings (loss) per common share: $(0.51), compared to $2.16 in the same period in 2024, primarily driven by a reduction in the net 2025 Marketplace risk adjustment revenue transfer estimate.

Business Highlights

Medicaid Segment Performance: The Medicaid segment experienced a 16% increase in total revenues for the three months ended June 30, 2025, compared to the same period in 2024. This growth was primarily driven by rate increases, although it was partially offset by a decrease in membership due to redeterminations.

Medicare Segment Performance: The Medicare segment saw a 58% increase in total revenues for the three months ended June 30, 2025, compared to the same period in 2024. This was largely due to increased premiums and membership in the PDP business, despite a decline in Medicare Advantage membership.

Commercial Segment Performance: The Commercial segment reported an 18% increase in total revenues for the three months ended June 30, 2025, compared to the same period in 2024. This was driven by a 33% growth in Marketplace membership, although it was offset by lower Marketplace net risk adjustment revenue.

Other Segment Performance: The Other segment's total revenues increased by 1% for the three months ended June 30, 2025, compared to the same period in 2024. However, the gross margin decreased due to the expiration of the TRICARE Managed Care Support Contract in December 2024.

Medicaid Membership Trends: Medicaid membership decreased due to redeterminations, impacting the overall membership numbers. The company continues to work with state partners to adjust rates to match post-redetermination acuity.

Medicare Advantage and PDP Changes: The company recorded a premium deficiency reserve related to the 2025 Medicare Advantage contract year, which was increased during the year based on earnings progression. The PDP membership increased by 19% year-over-year due to strong bid positioning.

Marketplace Expansion: The Marketplace product, Ambetter Health, expanded its geographic footprint by adding 60 new counties across 10 states, including expansion into Iowa. This contributed to a 33% increase in Marketplace membership year-over-year.

Future Medicaid Contracts: The company has secured several future Medicaid contracts, including a new contract in Iowa and a continuation of services in Mississippi, Nevada, and Pennsylvania, with terms ranging from four to eight years.

Regulatory Changes Impact: The One Big Beautiful Bill Act (OBBBA) and other regulatory changes are expected to impact Medicaid and Marketplace operations, potentially affecting member eligibility and reimbursement models.

Operational Challenges and Initiatives: The company is addressing increased medical cost trends through new clinical initiatives, care management plans, and network design, while also refiling 2026 policy year rates to reflect higher projected Marketplace morbidity.

SEC Filing: CENTENE CORP [ CNC ] - 10-Q - Jul. 24, 2025