01—Abstract
Summary
Summary of the 10-Q filed October 29, 2025. Cited figures are marked; the original filing is the authoritative source.
Centene Corporation (CNC) reported a significant net loss of $6.63 billiona for the third quarter of 2025, primarily driven by a substantial non-cash goodwill impairment charge of $6.7 billion.
This impairment was attributed to evolving market conditions, including potential membership impacts from the 'One Big Beautiful Bill Act' and changes in Marketplace enhanced Advance Premium Tax Credits. Despite the GAAP loss, the company reported an adjusted diluted EPS of $0.50b, indicating operational profitability excluding the impairment. Total revenues saw robust growth of 18% year-over-year to $49.7 billion, fueled by strong performance in the Prescription Drug Plan (PDP) business, market growth in the Health Insurance Marketplace, and increased Medicaid rates.
However, the Health Benefits Ratio (HBR) increased to 92.7%c from 89.2% in the prior year, reflecting higher medical costs in Marketplace and Medicaid segments, as well as impacts from the Inflation Reduction Act on the PDP business. The company's strategic focus remains on managing medical costs, adapting to regulatory changes, and driving operational efficiency, as evidenced by an improved SG&A expense ratio.
02—Key points
Key Highlights
- Total revenues grew 18% year-over-year to $49.7 billion, driven by strong performance in PDP and Marketplace segments.
- Reported a significant net loss of $6.63 billion, largely due to a $6.7 billion non-cash goodwill impairment charge.
- Adjusted diluted EPS was $0.50, demonstrating underlying operational profitability excluding the impairment.
- Health Benefits Ratio (HBR) increased to 92.7% from 89.2% in the prior year, reflecting higher medical costs.
- Selling, General, and Administrative (SG&A) expense ratio improved to 7.0% from 8.3% year-over-year, indicating cost efficiencies.
- Managed care membership decreased by 2% year-over-year to 28.0 million, primarily due to Medicaid redeterminations.
- The company is actively navigating evolving regulatory landscapes, including changes from the 'One Big Beautiful Bill Act' and impacts on Marketplace subsidies.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q3 FY2025, Centene Corp lost $0.13.
- Revenue$49.69B100.0%
- Cost of revenue−$46.34B93.3%
- Gross profit$3.35B6.7%
- Operating costs−$10.30B20.7%
- Operating income−$6.95B14.0%
- Interest, other & tax$323.0M0.7%
- Net income−$6.63B13.3%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2025filed October 29, 2025Financial Statements
Q3 FY2025 against Q3 FY2024
| Line item | Q3 FY2025Q3 FY2024 | Change |
|---|---|---|
| Revenue | $49.69B$42.02B | +18.2% |
| Cost of Revenue | $651.00M$692.00M | −5.9% |
| Gross Profit | $3.35B$4.01B | −16.5% |
| SG&A Expenses | $3.15B$3.06B | +2.9% |
| Operating Expenses | $56.64B$41.36B | +37.0% |
| Operating Income | -$6.95B$665.00M | −1145.7% |
| Net Income | -$6.63B$713.00M | −1030.0% |
| EPS (Basic) | $-13.50$1.37 | −1085.4% |
| EPS (Diluted) | $-13.50$1.36 | −1092.6% |
| Shares Outstanding (Basic) | 491.14M521.97M | −5.9% |
| Shares Outstanding (Diluted) | 491.14M523.54M | −6.2% |
05—Questions
Frequently Asked Questions
What caused the significant net loss in the third quarter of 2025?
The substantial net loss of $6.63 billion reported for the third quarter of 2025 was primarily due to a non-cash goodwill impairment charge of $6.7 billion. This charge was a result of a goodwill impairment analysis performed due to evolving market conditions, including potential membership impacts from new legislation and changes in government subsidies.
How did the company's revenue perform in the quarter?
Centene experienced robust revenue growth, with total revenues increasing by 18% year-over-year to $49.7 billion. This growth was driven by strong performance in its Prescription Drug Plan (PDP) business, overall market growth in the Health Insurance Marketplace, and rate increases in the Medicaid segment.
What is the reason for the increase in the Health Benefits Ratio (HBR)?
The HBR increased to 92.7% in the third quarter of 2025 from 89.2% in the prior year. This rise is attributed to higher medical costs in the Marketplace and Medicaid segments, lower estimated risk adjustment revenue for the Marketplace, and changes within the PDP business related to the Inflation Reduction Act.
What is the outlook for Centene's membership?
Managed care membership decreased by 2% year-over-year to 28.0 million. This decrease is largely due to ongoing Medicaid redeterminations and the company is adapting to regulatory changes that may affect eligibility and subsidies in both Medicaid and the Health Insurance Marketplace.
06—Continue