Centene Corp
Q4 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: −2.07%.
Did CNC Beat Earnings? Q4 2025 Results
Centene Corporation posted a narrower-than-feared loss in Q4 2025, with adjusted diluted EPS of $-1.19 beating the consensus estimate of $-1.22 by 2.46%, while revenue of $49.73 billion topped expectations of $47.62 billion by 4.42% and grew 21.9% year over year. The headline story, however, remained the weight of non-cash impairment charges, including a $513 million Magellan Health write-down tied to a December divestiture agreement, which contributed to a GAAP diluted loss of $-2.24 per share for the quarter. Beneath those charges, the underlying business showed signs of stabilization; Medicaid's health benefits ratio improved 40 basis points sequentially, and SG&A discipline was evident with the adjusted ratio tightening to 7.5% from 8.9% a year earlier. Deutsche Bank raised its price target on the stock following the results, though it maintained a Hold rating, reflecting cautious optimism about the recovery trajectory. Looking ahead, Centene guided for 2026 total revenues of $186.50 billion to $190.50 billion and adjusted diluted EPS greater than $3.00, implying over 40% earnings growth as management targets meaningful margin recovery.
- Premium yield and membership growth in PDP business
- Overall market growth in Marketplace business
- Rate increases and state-directed payments in Medicaid business
- Strong SG&A management with adjusted SG&A expense ratio of 7.4% for full year
- Medicaid HBR improved 40 basis points sequentially in Q4
- Commercial HBR of 95.4% was 100 basis points higher than expectations driven by net out-of-period items
“We are pleased to end a challenging year carrying positive momentum from the extensive and decisive actions taken in the back half of 2025 with the goal of restoring Marketplace profitability and stabilizing the trajectory of our Medicaid business.”
Centene CEO, on the earnings call
Forward Guidance & Outlook
For fiscal year 2026, Centene guided for total revenues of $186.5 billion to $190.5 billion, premium and service revenues of $170.0 billion to $174.0 billion, GAAP diluted EPS greater than $1.98, and adjusted diluted EPS greater than $3.00. The HBR is expected to range from 90.9% to 91.7%, reflecting meaningful improvement from 2025's 91.9%. SG&A expense ratio is guided at 7.1% to 7.7%. Additional 2026 assumptions include capital expenditures of approximately $800 million, interest expense of $620 million to $650 million, investment and other income of approximately $1.4 billion, a Medicaid net rate increase impact in the mid-4%s, effective tax rate of 27.0% to 28.0%, and diluted shares outstanding of 495.6 million to 498.6 million. Estimated 2026 segment premium and service revenues at the guidance mid-point are approximately $88 billion for Medicaid, $34.5 billion for Commercial (Marketplace), $45 billion for Medicare, and $4.5 billion for Other.
CNC YoY Financials
CNC Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.