In This Article:
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Adjusted Diluted EPS (Q1 2025): $2.90
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Full Year 2025 Adjusted EPS Expectation: Greater than $7.25
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Premium and Service Revenue (Q1 2025): $42.5 billion
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Medicaid Membership: Stable at 12.9 million to 13 million members
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Medicaid HBR (excluding excess influenza costs): Approximately 93%
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Medicare Advantage and PDP Membership: Outperformed expectations, contributing $1 billion to 2025 revenue guidance
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Commercial Segment HBR (Q1 2025): 75.0%
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Adjusted SG&A Expense Ratio (Q1 2025): 7.9%
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Cash Flow from Operations (Q1 2025): $1.5 billion
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Debt-to-Adjusted EBITDA (Q1 2025): 2.8 times
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Medical Claims Liability (Q1 2025): $19.9 billion
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Days in Claims Payable (Q1 2025): 49 days
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Full Year 2025 Premium and Service Revenue Guidance: Midpoint of $165 billion, up from $159 billion
Release Date: April 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Centene Corp (NYSE:CNC) reported strong premium and service revenue of $42.5 billion for Q1 2025, indicating a good start to the year.
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The company maintained its full-year 2025 adjusted EPS outlook of greater than $7.25, reflecting confidence in its financial performance.
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Centene Corp (NYSE:CNC) experienced better-than-expected Medicare Advantage membership retention, contributing an additional $1 billion to its 2025 revenue outlook.
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The Commercial segment, including the Marketplace business, showed strong growth with higher-than-anticipated new enrollment and retention.
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Centene Corp (NYSE:CNC) secured key Medicaid contract wins in Illinois and Nevada, expanding its service footprint and demonstrating the competitiveness of its service model.
Negative Points
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The company faced $130 million in unexpected medical expenses due to a more active flu season, impacting Medicaid performance.
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Medicaid rates, while showing progress, are still inadequate in certain areas, such as long-term care and high-cost drugs, indicating ongoing challenges in rate alignment.
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The Medicare segment's HBR is expected to follow an inverted slope line due to Inflation Reduction Act changes, leading to lower earnings later in the year.
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High utilization of specialty drugs in the PDP segment is causing pressure, although partially mitigated by a risk corridor.
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Centene Corp (NYSE:CNC) is facing challenges with potential policy changes, including the expiration of enhanced premium tax credits and new marketplace integrity rules, which could impact future market dynamics.
Q & A Highlights
Q: Can you provide more details about the flu-related costs and confirm if these are isolated to Medicaid? A: Sarah London, CEO: The $130 million in excess costs for Q1 in Medicaid is due to flu and influenza-like illnesses, tracked consistently over the last eight years. While some flu was seen in Marketplace and Medicare, the $130 million impact was specific to Medicaid and is considered a Q1 isolated event.