01—Abstract
Summary
Summary of the 10-K filed February 17, 2026. Cited figures are marked; the original filing is the authoritative source.
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 billiona, 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 $2.08b. 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.
02—Key points
Key Highlights
- Total revenues grew 19% year-over-year to $194.8 billion, driven by Medicaid, Medicare, and Commercial segments.
- Health Benefits Ratio (HBR) increased to 91.9% in 2025 from 88.3% in 2024, indicating higher medical costs relative to premiums.
- A 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.
- Managed care membership decreased by 3% to 27.6 million, largely due to Medicaid redeterminations.
- Operating cash flow saw a substantial increase, rising to $5.1 billion in 2025 from $154 million in 2024.
- The 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.
- Divestiture of remaining Magellan Health businesses was agreed upon in December 2025.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2025, Centene Corp lost $0.03.
- Revenue$194.78B100.0%
- Cost of revenue−$180.57B92.7%
- Gross profit$14.21B7.3%
- Operating costs−$21.83B11.2%
- Operating income−$7.62B3.9%
- Interest, other & tax$949.0M0.5%
- Net income−$6.67B3.4%
04—Financials
Financial Highlights
Figures from 10-KFY2025filed February 17, 2026Financial Statements
FY2025 against FY2024
| Line item | FY2025FY2024 | Change |
|---|---|---|
| Revenue | $194.78B$163.07B | +19.4% |
| Cost of Revenue | $2.67B$2.73B | −2.2% |
| Gross Profit | $14.21B$17.07B | −16.8% |
| SG&A Expenses | $12.90B$12.40B | +4.1% |
| Operating Expenses | $202.40B$159.90B | +26.6% |
| Operating Income | -$7.62B$3.17B | −340.1% |
| Net Income | -$6.67B$3.31B | −301.9% |
| EPS (Basic) | $-13.53$6.33 | −313.7% |
| EPS (Diluted) | $-13.53$6.31 | −314.4% |
| Shares Outstanding (Basic) | 493.12M521.79M | −5.5% |
| Shares Outstanding (Diluted) | 493.12M523.74M | −5.8% |
05—Questions
Frequently Asked Questions
What were the primary drivers of Centene's revenue growth in 2025?
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.
What led to the significant goodwill impairment charge of $6.7 billion in 2025?
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.
How did regulatory changes, such as the OBBBA and IRA, impact Centene's operations?
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.
What is Centene's outlook for its Medicare Advantage Dual Eligible Special Needs Plans (D-SNPs)?
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.
06—Continue