Centene Corporation (CNC)

Centene reported third-quarter 2026 results on 27 October, with a GAAP loss of $0.14 per share and adjusted earnings of $0.58 per share 1. Total revenues were $50,647 million 1.

The company raised its 2026 adjusted earnings guidance by $0.40, to a floor of more than $5.20 per share 1. The health benefits ratio, medical costs as a share of premiums, was 92.7 percent 1. Management said the Medicare segment drove a result better than expected, with Medicaid and Marketplace on track 1.

The customer base is smaller 1. Total at-risk membership was 25,698,200 at quarter end, against 27,968,100 a year earlier, and Marketplace membership fell to 3,403,300 from 5,828,100 1. Debt fell by $1.1 billion since 30 June, including full redemption of the 2027 senior notes 1.

Open questions remain 2. In October, the government's Medicare Plan Finder showed about 42 percent of Medicare Advantage members in plans rated 3.5 stars or higher, down from about 60 percent 2. Those ratings feed 2028 plan year revenue 2.

Centene began as a single health plan 3. The first plan started operating in Wisconsin in 1984, the company was organized in 1993 as its holding company, and it moved its legal home to Delaware in 2001 3. Its stock has traded on the New York Stock Exchange as CNC since 16 October 2003 3.

The company was built as a Medicaid manager, a private firm paid by a state to run care for low-income residents 3. On 23 January 2020 Centene completed its purchase of WellCare, which brought the Medicare brand, and each WellCare share received 3.38 Centene shares plus $120 in cash 83. Centene then said it served more than 24 million members in all 50 states 8.

The next large step was behavioral health: Centene completed its acquisition of Magellan Health on 4 January 2022 9. The company said Magellan would operate independently under its Health Care Enterprises umbrella 9. Sarah London became chief executive in March 2022 after serving as vice chairman 3.

From 2022 the company sold pieces it no longer wanted 3. It sold Magellan Rx for $1.3 billion in December 2022 and Magellan Specialty Health for $646 million in January 2023 3. It sold Circle Health for $931 million in January 2024 and Collaborative Health Systems in October 2024 3.

The pandemic reshaped Medicaid membership 3. From the start of the public health emergency through March 2023, it rose by 3.6 million members 3. Since 31 March 2023, eligibility reviews called redeterminations have been the main cause of decline 3.

Medical costs then rose against premiums: in 2025 the health benefits ratio was 91.9 percent, against 88.3 percent in 2024 3. On 1 July 2025 the company withdrew its 2025 guidance after a first look at industry Marketplace data 6. It cut its expected risk adjustment revenue by about $1.8 billion, about $2.75 per share, and cited a step-up in Medicaid cost trend 6.

Risk adjustment moves money between insurers according to how sick each one's members are 6. The company had assumed a lower market sickness level than the data showed 6. In the third quarter of 2025 it recorded a non-cash goodwill impairment of $6.7 billion, leaving a 2025 GAAP loss of $13.53 per share 3.

Revenue still grew 3. Total revenues for 2025 were $194.8 billion, up 19 percent, and operating cash flow was $5.1 billion against $154 million in 2024 3. In December 2025 Centene agreed to divest the remaining Magellan Health businesses, with impairment charges of $513 million 3.

Recovery came through 2026 7. In July 2026 the company reported second-quarter adjusted earnings of $2.51 per share and set an adjusted guidance floor above $4.80 7. The Marketplace had been repriced for 2026 in states covering 95 percent of its membership 3.

Medicaid

Medicaid is the public health insurance program for low-income people, funded by the federal government and the states 3. Centene is the largest Medicaid insurer in the country, with 12.5 million members in 30 states at the end of 2025 3. Medicaid made up 57 percent of total external revenues in 2025 3.

Medicaid premium and service revenues were $24,039 million in the third quarter, up 4 percent 1. Medicaid membership was 11,895,900 at quarter end, down from 12,706,400 1. The Medicaid health benefits ratio was 93.9 percent in the second quarter 7.

Contracts are moving 2. California will shift its Medi-Cal UIS group to fee-for-service from 1 January 2027, and the Hawaii contracts were not renewed 2. Meridian was picked in July 2026 to keep serving Illinois, under a four-year contract expected to begin in January 2027 2.

Marketplace and commercial plans

The Health Insurance Marketplace is the federal exchange where individuals buy subsidized plans 3. Centene sells there as Ambetter Health and was the largest carrier, with 5.5 million members in 29 states at the end of 2025 3. Commercial premium and service revenues fell 21 percent to $8,700 million in the third quarter 1.

The enhanced subsidies expired at the end of 2025, and the company expects fewer members and a sicker group 3. Health Net will stop its commercial group offerings in 2027 2. Off-exchange plans built for employer reimbursement accounts, called ICHRA, grew from 6 states in 2025 to 13 states in 2026 3.

Medicare Advantage and Part D drug plans

Medicare Advantage is the private-plan version of Medicare 3. Centene served 1.0 million members in 32 states at the end of 2025, mostly under the Wellcare brand 3. It is also the largest stand-alone Part D drug plan provider, with 8.1 million members in 50 states and the District of Columbia 3.

Medicare premium and service revenues rose 20 percent to $11,263 million in the third quarter 1. Drug plan membership was 8,947,200 at quarter end, up from 7,972,500 1. Medicare Advantage and drug plans both did better than the company's own expectations in the second quarter 7.

Other businesses

The Other segment holds AcariaHealth, a specialty pharmacy for complex conditions, vision and dental programs, and Community Medical Group, a Florida primary-care provider 3. Magellan Health is under a sale agreement, and its assets and liabilities are each $312 million on the balance sheet 2.

People and workforce

Sarah London has been chief executive since March 2022, and the company had about 61,100 team members at the end of 2025 3. Chief financial officer Drew Asher told the company on 12 August 2026 that he intends to retire from the role on 31 December 2026 5. Chris Neczypor, formerly chief financial officer of Lincoln National, is due to take the role on 1 January 2027 54.

Rivals and problems

Centene competes with other managed care companies, specialty providers and new entrants for state, county, federal and commercial contracts 3. Winning depends on pricing, provider networks and quality ratings 3.

The 10-Q cites cost pressure from rising demand, wider access to care and new high-cost drugs 2. The company is protesting procurement awards in Georgia and Texas, and its Arizona long-term care award was cancelled and rebid 2. Cash flow from operations was negative $3,669 million in the third quarter, which the company tied to the timing of pass-through payments 1.

The umbrella, in words

Centene sells under local brands 3. Ambetter Health is the Marketplace brand and Wellcare the Medicare brand 3. State Medicaid plans include Sunshine Health in Florida, Meridian in Illinois and Michigan, and Magnolia Health in Mississippi 32.

Exhibit 21 to the annual report lists the subsidiaries as of 31 December 2025, among them Absolute Total Care, AcariaHealth, Inc. and Ambetter Health of Florida 10. Most are state insurers, pharmacies and clinics 10. It is a list of subsidiaries, not of stakes in other companies 10.

Centene owns its corporate headquarters buildings and land in St. Louis, Missouri, and generally leases space in the states where its plans operate 3. There were 944 holders of record on 13 February 2026 3. Vanguard Capital Management reported owning 7.3 percent of the common stock, 35,946,964 shares, in a Schedule 13G as of 31 March 2026 11.

The company's October release gives guidance for 2026 1. It expects adjusted diluted earnings per share above $5.20 and GAAP diluted earnings per share above $3.46 1. It expects total revenues of $196.5 billion to $200.5 billion and a health benefits ratio of 90.4 percent to 91.1 percent 1.

Chief executive Sarah London said in the October release that the company remains focused on a strong finish to 2026 and on building on this progress in 2027 1. The company also expects interest expense of $600 million to $620 million for 2026 1.

On debt, the company increased its senior note repurchase program by $2.0 billion in October and repurchased the remaining $569 million of its 2027 notes 1. It said $1.9 billion was available under the program as of 27 October 1.

Leadership changes on 1 January 2027, when Chris Neczypor is due to become chief financial officer 4. Drew Asher is to remain with the company through the end of 2027 as a strategic advisor 5.

California moves its Medi-Cal UIS group out of managed care on 1 January 2027, and Hawaii members move to new plans the same day 2. Illinois begins in January 2027 2. Arizona expects an award in early 2027, with a new contract effective in October 2027 2.

Health Net policy end dates for commercial group are expected between 28 February 2027 and 28 December 2027 2. Medicare rules require dual-eligible members to get integrated care through one company's plans from 2030, with some limits from 2027 2.

The 2025 federal budget law may raise Medicaid Expansion costs largely from 2027, because of work requirements and more frequent eligibility checks 3. Cuts tied to provider taxes and state directed payments begin in 2028 3. The Magellan sale agreed last December is still pending 2.

Past

Centene's revenue grew from $41 billion in fiscal 2016 to $195 billion in fiscal 2025, up 19% a year, and rose in 9 of 9 years with no fall from a peak. Net income was positive in 9 of 10 of those years. Over the 3 fiscal years to 2025-12-31, the diluted share count shrank about 5.4% a year, and dividends and buybacks returned about 39% of operating cash flow over 3 years. Officers and directors filed 5 sales and 0 purchases of their own stock on the open market in the year to 2026-10-15. Centene's filings since 2017 show no warning events: no bankruptcy or receivership notice, no debt default notice, no exchange listing notice, no restatement warning, no auditor change, no material cyber incident and no late-report notice. 1

Present

In fiscal 2025, Centene reported revenue of $195 billion and a loss of $6.7 billion. In fiscal 2025, return on equity was -33%, meaning the company lost about 33 cents for every dollar of shareholders' money; gross profitability was 19 cents per dollar of assets owned; leverage was 74 cents owed per dollar of assets; and the share count shrank 5.8% over the year. By revenue of $195 billion, Centene ranks in the top 35% of its industry family by size, but with a net margin of -3.4% ranks in the bottom 25%. Chief Executive Officer Sarah London has been filing under that title since 2022-03-31, 4.6 years; the 19 officers and directors filing in the last fifteen months have a median of 4.8 years on record; 14 officer or director changes were reported on Form 8-K since 2023-10-21, against 19 people in charge now. 21

Future

A quarterly report for the quarter ending 2026-09-30 is due by 2026-11-09 under the SEC's rules. An annual report for the fiscal year ending 2026-12-31 is due by 2027-03-01 under the SEC's rules. Cash of $18 billion against debt of $17 billion leaves 0.7% of assets as net cash in the bottom 45% of its family; cash from operations less capital spending is 2.2% of revenue in the bottom 45%; gross margin is 7.3% in the bottom 8%. Revenue grew 10.5% a year over the last three filed years against 19% over all 10, slowing, while the newest year grew 19.5% and capital spending fell 8.6% a year. 31

How the company operates

Centene is an insurance business, classed by the SEC under Hospital & Medical Service Plans. In fiscal 2025, revenue came from Medicaid at 57%, Commercial at 22%, Medicare at 19%, and All Other at 3%. Centene reported 4 lines of business in fiscal 2025: Medicaid at $110 billion, Commercial at $42 billion, Medicare at $37 billion, and 1 more; all 4 grew against the year before. 21

New moves

On 2026-10-08, Centene filed Form 8-K for an other event. On 2026-09-16, the company filed Form 8-K for a disclosure to investors under Regulation FD. On 2026-08-17, Centene filed Form 8-K reporting an officer or director change and a disclosure to investors under Regulation FD. On 2026-07-28, the company filed Form 8-K reporting results released, an officer or director change, and a disclosure to investors under Regulation FD. 3