10-QPeriod: Q1 FY2026

CENTENE CORP Quarterly Report for Q1 Ended Mar 31, 2026

Filed April 28, 2026For Securities:CNC

Summary

Centene Corporation (CNC) reported a strong first quarter for 2026, demonstrating significant growth in total revenues, up 7% year-over-year to $49.9 billion. This revenue increase was primarily driven by growth in its Medicare Prescription Drug Plan (PDP) business and rate increases in its Medicaid segment, despite a slight overall decrease in managed care membership. The company's profitability also saw a notable improvement, with net earnings attributable to Centene Corporation increasing by 18% to $1.54 billion, and diluted EPS rising to $3.11. Key to this performance was effective cost management, reflected in a slight improvement in the Health Benefits Ratio (HBR) to 87.3% and a decrease in the Selling, General, and Administrative (SG&A) expense ratio to 7.6%. The company also generated substantial operating cash flow of $4.4 billion, indicating strong operational liquidity. Centene's strategic initiatives, including the partial sale of its Part D risk-sharing program receivables and continued focus on integrated care through Dual Eligible Special Needs Plans (D-SNPs), position it well for future growth. However, investors should note the ongoing regulatory changes impacting the healthcare landscape, particularly in the Medicaid and Marketplace segments, which continue to influence membership trends and market dynamics.

Financial Highlights

53 data points
Beta

Revenue

$49.94B

11.3% Gross Margin

Net Income

$1.54B

3.1% Net Margin

EPS (Diluted)

$3.11

Total Assets

$81.17B

Cash & Equivalents

$21.26B

Free Cash Flow

$4.17B

Financial Statements
Beta
Revenue$49.94B
Cost of Revenue$702.00M
Gross Profit$5.65B
SG&A Expenses$3.40B
Operating Expenses$48.08B
Operating Income$1.86B
Net Income$1.54B
EPS (Basic)$3.13
EPS (Diluted)$3.11
Shares Outstanding (Basic)492.07M
Shares Outstanding (Diluted)495.59M

Key Highlights

  • 1Total revenues grew 7% year-over-year to $49.9 billion, driven by Medicare PDP and Medicaid segment performance.
  • 2Net earnings attributable to Centene Corporation increased 18% to $1.54 billion, with diluted EPS rising to $3.11.
  • 3Health Benefits Ratio (HBR) improved slightly to 87.3%, and the SG&A expense ratio decreased to 7.6%, indicating effective cost management.
  • 4Operating cash flow was robust, generating $4.4 billion in the quarter.
  • 5Managed care membership decreased by 1.7 million (6%) year-over-year, primarily due to Medicaid eligibility redeterminations and Marketplace dynamics.
  • 6The company actively managed its debt, repurchasing $1.0 billion of Senior Notes due 2027.
  • 7Centene is strategically positioning for growth in Dual Eligible Special Needs Plans (D-SNPs) and continues to advocate for policies supporting healthcare affordability and coverage.

Frequently Asked Questions

Centene's total revenues grew by 7% to $49.9 billion in the first quarter of 2026, primarily driven by premium yield and membership growth in its Medicare Prescription Drug Plan (PDP) business, state-directed payments, and rate increases in the Medicaid segment to address medical trends. Increased premium tax revenue also contributed, partially offset by lower Marketplace and Medicaid membership.

Centene demonstrated effective cost management. The Health Benefits Ratio (HBR) slightly improved to 87.3% from 87.5% in the prior year, driven by rate increases and medical cost management in Medicaid, and no premium deficiency reserve for Medicare Advantage in 2026 compared to 2025. The SG&A expense ratio decreased to 7.6% from 7.9%, attributed to strong cost management, operational leverage, and a shift in membership mix towards the lower-SG&A PDP business. These efficiencies contributed to an 18% increase in net earnings attributable to Centene Corporation to $1.54 billion.

Overall managed care membership decreased by 1.7 million (6%) year-over-year to 26.3 million as of March 31, 2026. This decline was primarily concentrated in the Medicaid segment, impacted by ongoing eligibility redeterminations post-COVID-19 PHE, and the Commercial segment, influenced by the expiration of enhanced Marketplace subsidies and regulatory changes. The Medicare segment saw a slight decrease in Medicare Advantage membership but growth in Medicare PDP membership.

Centene repurchased $1.0 billion of its Senior Notes due 2027 during the quarter, as part of its debt management strategy. The company generated strong operating cash flow of $4.4 billion and ended the quarter with cash and cash equivalents of $21.3 billion. Its debt-to-capital ratio improved to 43.2% from 46.5% at year-end 2025, indicating a deleveraging trend and a solid liquidity position.