10-QPeriod: Q3 FY2025

CENTENE CORP Quarterly Report for Q3 Ended Sep 30, 2025

Filed October 29, 2025For Securities:CNC

Summary

Centene Corporation (CNC) reported a significant net loss of $6.63 billion 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 $0.50, 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% 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.

Financial Highlights

53 data points
Beta

Revenue

$49.69B

6.7% Gross Margin

Net Income

-$6.63B

-13.3% Net Margin

EPS (Diluted)

$-13.50

Total Assets

$82.09B

Cash & Equivalents

$17.06B

Free Cash Flow

$1.15B

Financial Statements
Beta
Revenue$49.69B
Cost of Revenue$651.00M
Gross Profit$3.35B
SG&A Expenses$3.15B
Operating Expenses$56.64B
Operating Income-$6.95B
Net Income-$6.63B
EPS (Basic)$-13.50
EPS (Diluted)$-13.50
Shares Outstanding (Basic)491.14M
Shares Outstanding (Diluted)491.14M

Key Highlights

  • 1Total revenues grew 18% year-over-year to $49.7 billion, driven by strong performance in PDP and Marketplace segments.
  • 2Reported a significant net loss of $6.63 billion, largely due to a $6.7 billion non-cash goodwill impairment charge.
  • 3Adjusted diluted EPS was $0.50, demonstrating underlying operational profitability excluding the impairment.
  • 4Health Benefits Ratio (HBR) increased to 92.7% from 89.2% in the prior year, reflecting higher medical costs.
  • 5Selling, General, and Administrative (SG&A) expense ratio improved to 7.0% from 8.3% year-over-year, indicating cost efficiencies.
  • 6Managed care membership decreased by 2% year-over-year to 28.0 million, primarily due to Medicaid redeterminations.
  • 7The company is actively navigating evolving regulatory landscapes, including changes from the 'One Big Beautiful Bill Act' and impacts on Marketplace subsidies.

Frequently Asked Questions

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.

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.

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.

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.