01—Abstract
Summary
Summary of the 10-K filed February 18, 2025. Cited figures are marked; the original filing is the authoritative source.
Centene Corporation reported solid financial performance for the year ended December 31, 2024, with total revenues increasing by 6% to $163.1 billiona and net earnings attributable to Centene rising by 22% to $3.3 billion.
This growth was driven by a 4%b increase in total membership to 28.6 million, largely fueled by expansion in the Health Insurance Marketplace segment. The company's strategic focus on government-sponsored healthcare programs continues to be its core, with Medicaid representing 62% of its total external revenues.
Despite overall revenue growth, the Health Benefits Ratio (HBR) saw a slight increase to 88.3%c from 87.7% in the prior year, primarily due to higher acuity in the Medicaid population following redeterminations and impacts from Medicare Star rating changes. However, an improved Selling, General, and Administrative (SG&A) expense ratio of 8.5% helped offset some of these pressures.
02—Key points
Key Highlights
- Total revenues grew 6% to $163.1 billion, driven by membership growth and favorable rate adjustments.
- Net earnings attributable to Centene increased by 22% to $3.3 billion, reflecting improved operational efficiency.
- Membership increased by 4% to 28.6 million, with notable growth in the Health Insurance Marketplace segment.
- The Health Benefits Ratio (HBR) increased slightly to 88.3%, influenced by higher Medicaid acuity and Medicare Star rating impacts.
- SG&A expense ratio improved to 8.5%, demonstrating effective cost management.
- Operating cash flows of $154 million were significantly lower than the prior year ($8.1 billion), impacted by changes in working capital, particularly pharmacy receivables.
- The company continues to repurchase shares, with $2.2 billion remaining under its authorized program as of December 31, 2024.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, Centene Corp kept $0.02.
- Revenue$163.07B100.0%
- Cost of revenue−$146.00B89.5%
- Gross profit$17.07B10.5%
- Operating costs−$13.89B8.5%
- Operating income$3.17B1.9%
- Interest, other & tax$130.0M0.1%
- Net income$3.31B2.0%
Where FY2024 revenue went
$163.07B- Other operating costs: $144.77B, 89% of revenue
- Operating income: $3.17B, 1.9% of revenue
- Cost of revenue: $2.73B, 1.7% of revenue
- SG&A: $12.40B, 7.6% of revenue
Kept 1.9% as operating incomeOperating income $3.17B · 1.9%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed February 18, 2025Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $163.07B$154.00B | +5.9% |
| Cost of Revenue | $2.73B$3.56B | −23.4% |
| Gross Profit | $17.07B$17.64B | −3.2% |
| SG&A Expenses | $12.40B$12.56B | −1.3% |
| Operating Expenses | $159.90B$151.07B | +5.8% |
| Operating Income | $3.17B$2.93B | +8.4% |
| Net Income | $3.31B$2.70B | +22.3% |
| EPS (Basic) | $6.33$4.97 | +27.4% |
| EPS (Diluted) | $6.31$4.95 | +27.5% |
| Shares Outstanding (Basic) | 521.79M543.32M | −4.0% |
| Shares Outstanding (Diluted) | 523.74M545.70M | −4.0% |
05—Questions
Frequently Asked Questions
What were Centene's main drivers of revenue growth in 2024?
Centene's total revenues increased by 6% to $163.1 billion in 2024. This growth was primarily driven by an increase in Health Insurance Marketplace membership due to strong product positioning and overall market growth, coupled with favorable risk adjustment performance for the 2023 benefit year. Medicaid also contributed through rate increases and higher premium tax revenue, although this was partially offset by lower Medicaid membership due to redeterminations and divestitures in the Other segment.
How did Centene's profitability perform in 2024, and what factors impacted it?
Centene's net earnings attributable to Centene increased by 22% to $3.3 billion in 2024. This improvement was supported by a lower SG&A expense ratio of 8.5%, reflecting effective cost management. However, the Health Benefits Ratio (HBR) rose slightly to 88.3% from 87.7% in 2023. This increase was mainly attributed to higher acuity in the Medicaid population following eligibility redeterminations and the impact of lower Medicare Star quality ratings. These factors were partially offset by growth in the Marketplace business and improved margins in that segment.
What is the company's outlook for 2025, particularly regarding its Medicare business?
Centene anticipates continued focus on its core government-sponsored programs. For Medicare PDPs, membership increased significantly by 50% due to strong bid positioning. However, Medicare Advantage membership declined by 13% year-over-year, impacted by lower Star quality ratings which affected revenue and led to a premium deficiency reserve of $92 million for the 2025 plan year. The company is actively working to improve its Star ratings, with a goal of having 85% of its Medicare Advantage membership in plans rated 3.5 stars or better for rating year 2026.
06—Continue