Molina Healthcare Inc
Q3 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: −0.45%.
Did MOH Beat Earnings? Q3 2025 Results
Molina Healthcare delivered a deeply disappointing third quarter, with adjusted EPS of $1.84 falling short of the $3.89 consensus estimate by 52.73%, even as revenue of $11.48 billion grew 11.0% year over year and topped expectations by 4.49%. The culprit was an accelerating medical cost crisis, most acutely in the Marketplace segment, where the medical care ratio ballooned to 95.6% from 73.0% a year ago, helping push the consolidated MCR to 92.6% from 89.2% and collapsing GAAP net income to $79.00 million versus $326.00 million in Q3 2024. Premium revenue expanded 12% to roughly $10.84 billion on acquisitions and rate increases, but top-line momentum was overwhelmed by medical cost escalation across all three business segments. The company responded by cutting its full-year 2025 adjusted EPS guidance to approximately $14.00 per diluted share, implying a barely positive Q4, and has since drawn scrutiny from securities class action attorneys examining disclosures made earlier in 2025. Molina's preliminary 2026 outlook also guides to roughly $14.00 in adjusted EPS, with reduced Marketplace exposure intended to stabilize profitability.
- Premium revenue grew 12% YoY driven by recent acquisitions, rate increases, and footprint expansion
- Medicaid contributed $3.52 per diluted share in adjusted earnings but was offset by $1.68 per diluted share loss from Medicare and Marketplace
- Marketplace MCR surged to 95.6% from 73.0% YoY due to utilization far exceeding risk adjustment revenue
- Medicare MCR increased to 93.6% from 89.6% due to higher utilization among high-acuity members, particularly for long-term services and supports and pharmacy
- Medicaid MCR rose to 92.0% from 90.5% due to continued high levels of utilization, partially offset by rate updates
- G&A ratio and adjusted G&A ratio of 6.4% and 6.3% reflecting continued operating discipline
“Our Medicaid business continues to perform well in a challenging medical cost trend environment. The headline for the quarter is that approximately half of our underperformance is driven by the Marketplace business, and that Medicaid, while experiencing some pressure, is producing strong margins. We continue to grow, we believe the margin challenges will not persist, and we are encouraged by the margin improvement potential in 2026.”
Molina Healthcare CEO, on the earnings call
Forward Guidance & Outlook
Molina revised its full-year 2025 guidance, now expecting premium revenue of approximately $42.5 billion (up ~10% YoY), total revenue of approximately $44.5 billion, GAAP EPS of approximately $11.90, and adjusted EPS of approximately $14.00 per diluted share. The full-year consolidated MCR is guided at 91.3%. The implied Q4 2025 adjusted EPS is approximately $0.35, with Medicaid expected to contribute ~$3.00 per diluted share offset by a loss of ~$2.65 from Medicare and Marketplace. The updated guidance reflects higher medical cost trends across all segments, disproportionately from unprecedented Marketplace medical cost trends expected to persist through year-end, partially offset by operating leverage, a lower effective tax rate, and share repurchases. For 2026, the preliminary outlook expects adjusted EPS to approximate the full-year 2025 guidance level (~$14.00), with reduced Marketplace exposure and at least breakeven Marketplace segment earnings. New store embedded earnings of $8.65 per diluted share are expected to be realized between 2026 and 2028.
MOH YoY Financials
MOH Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.