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- **Revenue Beat**: Q3 2025 adjusted EPS $0.50 vs. $1.75 prior guidance, driven by Florida CMS retroactive revenue and cost control. Full year EPS updated to $2.00+.
- **Marketplace 2026 Strategy**: Rates +30% YoY, pricing for eAPTC expiration and program integrity shifts. 2026 margin recovery assumes eAPTCs expire as current law.
- **Medicaid Stability**: 2026 HBR expected flat at 93.7%, with levers like high-cost drug carve-outs and state rate advocacy. 2027 margin normalization path with CMS Star rating improvements.
- **Risk Factors**: eAPTC policy uncertainty, 15-30% 2026 Marketplace contraction, and state work requirement implementation delays.
- **Liquidity Strength**: $357M unregulated cash, $1.4B Q3 cash flow. 2026 guidance: flat Medicaid, breakeven Medicare, and 2026 PDP positioning within risk corridors.


**【CEO Summary Section】**
- **Revenue Growth**: Q3 2025 revenue grew 15% YoY, driven by Medicaid HBR improvement (93.4%) and a $150 million Florida CMS retroactive revenue adjustment. Full year adjusted EPS updated to at least $2.00, up from $1.75.
- **Medicaid Margin Strategy**: Focused on rate advocacy, clinical policy changes (e.g., high-cost drug carve-outs), and fraud reduction. 2026 Medicaid profitability expected to remain stable at 2025 levels, with potential upside from state program reforms.
- **Marketplace 2026 Outlook**: Rates increased mid-30s YoY, pricing for eAPTC expiration and program integrity shifts. 2026 margin expansion expected, assuming eAPTCs expire as current law.
- **Medicare Progress**: Star ratings improved, with 60% of members in 3.5+ star plans. Medicare Advantage on track for breakeven in 2027, PDP performance within risk corridors.

**【CFO Financial Commentary】**
- **Q3 Financials**: GAAP net loss $13.50/share (due to $6.7B non-cash goodwill charge), adjusted EPS $0.50. Medicaid HBR 93.4%, Marketplace HBR 89.9%, Medicare HBR 94.3%.
- **Cost Control**: SG&A ratio 7.0%, down 130bps YoY. Investment income $79M, driven by unrealized gains; may harvest losses in Q4 for 2026 reinvestment.
- **2026 Guidance**: Flat Medicaid profitability, Marketplace margin recovery, Medicare breakeven. Full year 2025 cash flow $1.4B, unregulated cash $357M.

**【Q&A Highlights】**
- **eAPTC Uncertainty**: Open enrollment begins with eAPTCs as current law; potential 15-30% market contraction. 2026 rates priced for expiration, but Congress action could trigger special enrollment periods.
- **Competitor Exit Risk**: Marketplace stable with 95%+ membership repriced. No material impact from small competitor exits; focus on member retention through digital tools.
- **Work Requirements**: 2027 implementation likely; states delaying start dates due to CMS guidance delays. Minimal 2026 impact, but long-term margin risk if states tighten eligibility.
- **Florida CMS Sustainability**: Q4 2025 rates +5.5% YoY, with 30% of 2026 premium tied to 1/1/26 rate adjustments. State collaboration on ABA service definitions reducing outlier payments by 45%.
- **PDP Risk Corridors**: Q3 PDP performance within risk corridors, limiting downside. 2026 PDP positioning against subsidy benchmarks, with focus on high-cost drug management (e.g., GLP-1 carve-outs) and member engagement tools.


Centene Corporation (CNC) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

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Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

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Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

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Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

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Net Income from Continuing Operations

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Net Income

Net Income Attributable to Minority Interests

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Preferred Stock Dividends

Other Adjustments

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Other Comprehensive Income

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Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

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CNC

CNC fundamentals

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