10-KPeriod: FY2025

CENTENE CORP Annual Report, Year Ended Dec 31, 2025

Filed February 17, 2026For Securities:CNC

Summary

Centene Corporation (CNC) reported its 2025 fiscal year results, characterized by significant revenue growth and a substantial increase in medical costs. Total revenues reached $194.8 billion, a 19% increase year-over-year, driven by membership growth in the PDP business, marketplace expansion, and Medicaid rate increases. However, the Health Benefits Ratio (HBR) rose to 91.9% from 88.3% in the prior year, largely due to lower marketplace risk adjustment revenue, increased marketplace medical costs, and higher medical costs in Medicaid, particularly in behavioral health, home health, and high-cost drugs. A notable event for 2025 was the substantial goodwill impairment of $6.7 billion, primarily impacting the Medicaid and Commercial reporting units, contributing to a GAAP diluted loss per share of $(13.53). Adjusted diluted EPS stood at $2.08. The company also experienced a decrease in overall membership by 3% to 27.6 million, largely due to Medicaid redeterminations. Despite these challenges, Centene's operating cash flow improved significantly to $5.1 billion, and the company continued to manage its debt, with $1.8 billion remaining under its stock repurchase program as of year-end.

Financial Highlights

53 data points
Beta

Revenue

$194.78B

7.3% Gross Margin

Net Income

-$6.67B

-3.4% Net Margin

EPS (Diluted)

$-13.53

Total Assets

$76.75B

Cash & Equivalents

$17.89B

Free Cash Flow

$4.32B

Financial Statements
Beta
Revenue$194.78B
Cost of Revenue$2.67B
Gross Profit$14.21B
SG&A Expenses$12.90B
Operating Expenses$202.40B
Operating Income-$7.62B
Net Income-$6.67B
EPS (Basic)$-13.53
EPS (Diluted)$-13.53
Shares Outstanding (Basic)493.12M
Shares Outstanding (Diluted)493.12M

Key Highlights

  • 1Total revenues grew 19% year-over-year to $194.8 billion, driven by Medicaid, Medicare, and Commercial segments.
  • 2Health Benefits Ratio (HBR) increased to 91.9% in 2025 from 88.3% in 2024, indicating higher medical costs relative to premiums.
  • 3A significant goodwill impairment of $6.7 billion was recorded in Q3 2025, primarily impacting the Medicaid and Commercial reporting units, leading to a large GAAP loss per share.
  • 4Managed care membership decreased by 3% to 27.6 million, largely due to Medicaid redeterminations.
  • 5Operating cash flow saw a substantial increase, rising to $5.1 billion in 2025 from $154 million in 2024.
  • 6The company continues to advocate for favorable policies and is positioning itself for growth in the Medicare Advantage Dual Eligible Special Needs Plans (D-SNPs) market.
  • 7Divestiture of remaining Magellan Health businesses was agreed upon in December 2025.

Frequently Asked Questions

Centene's total revenues increased by 19% to $194.8 billion in 2025. This growth was primarily driven by an increase in premium yield and membership in the Medicare Prescription Drug Plan (PDP) business, overall market growth in the Health Insurance Marketplace, rate increases in the Medicaid business, and higher premium tax revenue. The expansion of its Marketplace product, Ambetter Health, into new counties also contributed to the growth.

Centene recorded a $6.7 billion goodwill impairment charge in the third quarter of 2025 due to market conditions. These conditions included the passage of the One Big Beautiful Bill Act (OBBBA), which could impact Medicaid membership, and the non-renewal of Marketplace Enhanced Advance Premium Tax Credits (APTCs). The company also cited a decline in its stock price as contributing factors to the impairment analysis for its Medicaid and Commercial reporting units.

The One Big Beautiful Bill Act (OBBBA) introduced potential membership reductions in Medicaid Expansion programs through work or community engagement requirements and more frequent eligibility redeterminations, which could increase overall morbidity. The Inflation Reduction Act (IRA) significantly changed Medicare Part D by eliminating the coverage gap and capping out-of-pocket costs, shifting cost-sharing responsibilities and increasing Centene's premiums. In the Commercial segment, the expiration of enhanced APTCs at the end of 2025, along with new Marketplace rules and the OBBBA's restrictions on APTCs, are anticipated to reduce Marketplace membership and increase population morbidity.

Centene views D-SNPs as a significant growth opportunity. The company has one of the highest concentrations of D-SNP members among its peers and is aligning its Medicare footprint more closely with its Medicaid presence to offer integrated care solutions. CMS regulations require greater integration for dual-eligible beneficiaries, and Centene believes its existing capabilities position it well to capitalize on this trend, aiming to advance care management and improve affordability.