Centene (CNC) Q3 FY25 earnings call

Earnings call· Sep 2025 (Q3 FY25)· Health Care· Oct 29, 2025

Source: earnings call transcript

Centene delivered better-than-expected Q3 FY25 adjusted EPS, driven by sequential Medicaid HBR improvement, aided by a Florida revenue adjustment, and strong SG&A performance. The company raised its full-year adjusted EPS forecast to at least $2.00, while prudently provisioning for continued Marketplace utilization volatility. Management is focused on driving margin improvement across all segments in 2026, despite policy uncertainties and anticipated headwinds from PDP and a lower tax rate environment.

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CNC operating KPIs by quarter

CNC operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Dec 2024 Q4 FY24	Mar 2025 Q1 FY25	Jun 2025 Q2 FY25	This call Sep 2025 Q3 FY25	Dec 2025 Q4 FY25	Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Change vs prior quarter
Medical care ratio	89.6% Our Q4 consolidated HBR was 89.6%, while our full year consolidated HBR was 88.3%, consistent with our previous guidance range. Source: earnings call transcript	—	—	—	—	87.3% Our consolidated HBR was 87.3% for Q1. Source: earnings call transcript	89.6% Our consolidated HBR was 89.6% for Q2, down from 93% in Q2 of 2025. Source: earnings call transcript	+2.3 pt
Medical care ratio Medicaid	93.4% Our Q4 Medicaid HBR was 93.4%, up 30 basis points from Q3. Source: earnings call transcript	—	94.9% Our Medicaid portfolio also fell short of expectations in the second quarter, producing an unanticipated and unacceptable health benefits ratio of 94.9%. Source: earnings call transcript	93.4% Our third quarter Medicaid HBR was 93.4%, which included $150 million in Florida Children's Medical Services program revenue, of which $90 million or 40 basis points was retro. Source: earnings call transcript	—	93.1% More importantly, we demonstrated continued progress in the HBR with Q1 at 93.1%, an improvement of 50 basis points from the first quarter of 2025. Source: earnings call transcript	93.9% In Medicaid, at a 93.9% HBR, we are right on track with our prior forecast and are still expecting a full year HBR of around 93.5%. Source: earnings call transcript	+0.8 pt
Medical members Medicaid	13M Today, we serve 13 million Americans across our Medicaid portfolio, offering critical access to vital medical services and support for some of this country's most vulnerable and complex populations. Source: earnings call transcript	—	—	12.7M Medicaid membership is at $12.7 million, and we would expect slight attrition over the next few quarters. Source: earnings call transcript	12.5M As expected, we continue to see slight attrition in membership closing out 2025 at 12.5 million members. Source: earnings call transcript	12.4M Starting with Medicaid, we ended Q1 with 12.4 million members, slightly down from year-end. Source: earnings call transcript	12.1M As some of you have written about, we did continue to see attrition in our Medicaid membership, ending Q2 with 12.1 million members, and we expect some states to continue to trim Medicaid roles leading up to any OB3 implementation in 2027. Source: earnings call transcript	-2.4%
Medical members PDP	—	7.9M PDP ended the quarter at 7.9 million members, strong growth from 2024. Source: earnings call transcript	7.8M PDP membership ended the quarter at 7.8 million members, roughly flat on a sequential basis. Source: earnings call transcript	—	—	8.7M+ Our PDP business ended the quarter with just over 8.7 million members, thanks to the team's once again, thoughtful and data-driven approach to bid design and positioning. Source: earnings call transcript	—	—
Medical care ratio Medicare	—	86.3% Medicare segment HBR was 86.3% in the quarter, which, as we covered in past discussions, is expected to follow an inverted slope line compared to 2024 due to the Inflation Reduction Act program changes. Source: earnings call transcript	—	94.3% Our reported Medicare segment HBR was 94.3%, reflecting typical cost of care patterns within Medicare Advantage as well as the inverted seasonality of pharmacy costs within PDP, owing largely to changes related to the IRA. Source: earnings call transcript	—	84.9% Both Medicare Advantage and PDP exceeded expectations, producing an HBR of 84.9%, better than our previous forecast and contributing nicely to the first quarter adjusted EPS B Medicare Advantage, we continue to strategically align our membership with our Medicaid footprint and made great progress on our path to positive earnings. Source: earnings call transcript	89.5% Medicare segment results were strong in the quarter, including an HBR at 89.5%, inclusive of the 2025 item discussed a minute ago. Source: earnings call transcript	+4.6 pt
Medical care ratio Commercial	—	75% Q1 Commercial segment HBR at 75.0% was a little higher than last year's 73.3%, driven by 1.9 million new Marketplace Members in Q1. Source: earnings call transcript	—	89.9% In our Commercial segment, our HBR was on track for Q3 at 89.9%. Source: earnings call transcript	—	—	79.2% The Commercial segment, led by Marketplace, had a very strong quarter with an HBR of 79.2%, compared to prior year 90.6%, driven by the conversions of 3 positive factors. Source: earnings call transcript	—
Medical members Marketplace	—	—	5.9M We reported second quarter Marketplace membership of 5.9 million members as the book continued to grow, driving more than $10 billion of commercial premium and service revenue in the period. Source: earnings call transcript	—	—	3.58M We ended the quarter with 3.58 million members right around where we told you we expected to be after navigating sign-ups, payments and effectuation. Source: earnings call transcript	~3.5M Looking to the rest of 2026, we are jumping off a Q2 membership of roughly 3.5 million members, slightly better than previous expectations, with metal tier distribution, age and other key demographics largely unchanged from our Q1 results. Source: earnings call transcript	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

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