10-KPeriod: FY2024

CENTENE CORP Annual Report, Year Ended Dec 31, 2024

Filed February 18, 2025For Securities:CNC

Summary

Centene Corporation reported solid financial performance for the year ended December 31, 2024, with total revenues increasing by 6% to $163.1 billion and net earnings attributable to Centene rising by 22% to $3.3 billion. This growth was driven by a 4% 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% 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.

Financial Highlights

54 data points
Beta

Revenue

$163.07B

10.5% Gross Margin

Net Income

$3.31B

2.0% Net Margin

EPS (Diluted)

$6.31

Total Assets

$82.44B

Cash & Equivalents

$14.06B

Free Cash Flow

-$490.00M

Financial Statements
Beta
Revenue$163.07B
Cost of Revenue$2.73B
Gross Profit$17.07B
SG&A Expenses$12.40B
Operating Expenses$159.90B
Operating Income$3.17B
Net Income$3.31B
EPS (Basic)$6.33
EPS (Diluted)$6.31
Shares Outstanding (Basic)521.79M
Shares Outstanding (Diluted)523.74M

Key Highlights

  • 1Total revenues grew 6% to $163.1 billion, driven by membership growth and favorable rate adjustments.
  • 2Net earnings attributable to Centene increased by 22% to $3.3 billion, reflecting improved operational efficiency.
  • 3Membership increased by 4% to 28.6 million, with notable growth in the Health Insurance Marketplace segment.
  • 4The Health Benefits Ratio (HBR) increased slightly to 88.3%, influenced by higher Medicaid acuity and Medicare Star rating impacts.
  • 5SG&A expense ratio improved to 8.5%, demonstrating effective cost management.
  • 6Operating cash flows of $154 million were significantly lower than the prior year ($8.1 billion), impacted by changes in working capital, particularly pharmacy receivables.
  • 7The company continues to repurchase shares, with $2.2 billion remaining under its authorized program as of December 31, 2024.

Frequently Asked Questions

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.

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.

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.