Contact: Investor Relations Inquiries Media Inquiries
Contact: Investor Relations Inquiries Media Inquiries Jennifer Gilligan Sara Garland Senior Vice President, Finance & Chief Communications Officer Investor Relations (212) 549-1306 (314) 445-0790
GAAP Diluted Loss Per Share of $(0.14); Adjusted Diluted Earnings Per Share of $0.58 --
-- Increases 2026 GAAP Diluted EPS Guidance: Greater than $3.46 & Adjusted Diluted EPS Greater than $5.20 --
Consolidated HBR of 92.7% in the third quarter, better than expectations, driven by the Medicare segment, with Medicaid and Marketplace on track.
Debt reduced by $1.1 billion since June 30, 2026, including full redemption of 2027 Senior Notes in October.
ST. LOUIS, October 27, 2026 -- Centene Corporation (NYSE: CNC) (the Company) announced today its financial results for the third quarter ended September 30, 2026. In summary, the 2026 third quarter results were as follows:
Total revenues (in millions) $ 50,647 Premium and service revenues (in $ 45,105 millions) Health benefits ratio 92.7 % SG&A expense ratio 7.2 % Adjusted SG&A expense 6.5 % ratio(1) GAAP diluted loss per share $ -0.14 Adjusted diluted earnings $ 0.58 per share(1) Total cash flow (used in) operations (in $ -3,669 millions) Represents a non-GAAP financial measure. A full reconciliation of the adjusted diluted earnings (loss) per share and (1) adjusted selling, general and administrative (SG&A) expenses is shown in the Non-GAAP Financial Presentation section of this release.
"Solid underlying fundamentals within our core businesses have powered a faster recovery to our earnings trajectory than previously anticipated," said Chief Executive Officer of Centene, Sarah M. London. "We are pleased with the progress our teams have made in delivering increased margin to power our mission of transforming the health of the communities we serve, one person at a time. We remain focused on a strong finish to 2026 and building on this progress in 2027." 1
September 30, 2026 2025 Traditional 10,544,300 11,115,400 Medicaid(1) High Acuity 1,351,600 1,591,000 Medicaid(2) Total 11,895,900 12,706,400 Medicaid Marketplace 3,403,300 5,828,100 Individual and 497,400 447,900 Commercial Group(3) Total 3,900,700 6,276,000 Commercial Medicare(4) 954,400 1,013,200 Medicare Prescripti… 8,947,200 7,972,500 Drug Plan (PDP) Total at-risk 25,698,200 27,968,100 membership Membership includes Temporary Assistance for Needy Families (TANF), Medicaid (1) Expansion, Children's Health Insurance Program (CHIP), Foster Care, and Behavioral Health. Membership includes Aged, Blind, or Disabled (ABD), Intellectual and Developmental Disabilities (IDD), Long-Term Services and Supports (LTSS), and Medicare-Med… Plans (MMP) Duals. The Company (2) operated MMPs through December 31, 2025. In 2026 these members are included in Medicare as a result of the Centers for Medicare and Medicaid Services (CMS) transition to Dual Eligible Special Needs Plans (D-SNP) based integration. Membership includes Commercial Group, CHOICE Arrangements (formerly Individual (3) Coverage Health Reimbursement Arrangement, or ICHRA) and Other Off-Exchange Individual. Membership includes Medicare Advantage, Medicare Supplement, and (4) Applicable Integrated Plans (AIPs) as a result of the CMS transition to D-SNP based integration in 2026.
The following table sets forth supplemental revenue information ($ in millions):
• For the third quarter of 2026, premium and service revenues increased 0.5% to $45.1 billion from $44.9 billion in the comparable period of 2025. The increase was primarily driven by premium yield and membership growth in the PDP business, rate increases in Marketplace and in the Medicaid business to address medical trend, Marketplace risk adjustment revenue transfer for the 2026 benefit year, and state directed payments. The increases were partially offset by lower Marketplace and Medicaid membership.
• Health benefits ratio (HBR) of 92.7% for the third quarter of 2026, unchanged from 92.7% in the comparable period in 2025. The consolidated HBR benefited from a lower Marketplace HBR resulting from improved pricing and risk transfer reflecting the acuity of the Marketplace membership as well as strong fundamental performance in both the Medicare Advantage and PDP businesses. The HBR in 2025 was positively impacted by a decrease to the premium deficiency reserve versus no premium deficiency reserve in 2026 for our Medicare Advantage business as a result of our progression towards profitability. 2 • The SG&A expense ratio was 7.2% for the third quarter of 2026, compared to 7.0% in the third quarter of 2025. The adjusted SG&A expense ratio was 6.5% for the third quarter of 2026, compared to 7.0% in the third quarter of 2025. The increase in the SG&A expense ratio was primarily driven by enterprise optimization severance and vendor costs. The decrease in the adjusted SG&A expense ratio was driven by strong cost management, leveraging of expenses over higher revenues and reduced Marketplace membership, which operates at a meaningfully higher SG&A expense ratio. The decrease was also driven by growth in the PDP business, which operates at a meaningfully lower SG&A expense ratio as compared to the overall company.
• The effective tax rate was 46.7% for the third quarter of 2026, compared to 0.6% in the third quarter of 2025. For the third quarter of 2026, our effective tax rate on adjusted earnings was 14.5%, compared to 2.5% in the third quarter of 2025. The GAAP and adjusted effective tax rates for 2026 reflect a decrease to the estimated annual effective tax rate applied to year-to-date operating results. The GAAP and adjusted effective tax rates for 2025 reflect the impact of estimating interim period taxes on the year-to-date tax method. The effective tax rate for 2025 also reflects the non-deductible nature of the goodwill impairment.
• Adjusted diluted earnings per share (EPS) of $0.58 for the third quarter of 2026.
• Cash flow used in operations for the third quarter of 2026 was $3.7 billion, primarily driven by the timing of pass through, premium and other payments, as expected.
At September 30, 2026, the Company had cash, investments and restricted deposits of $39.9 billion and maintained $175 million of cash available for general corporate use. Medical claims liabilities totaled $21.5 billion. The Company's days in claims payable (DCP) was 48 days, an increase of one day as compared to the second quarter of 2026.
During the third quarter of 2026, the Company repurchased $558 million of the Company's par value senior notes due 2027 and 2028. Following the senior note repurchase, total debt was $15.5 billion, which included no borrowings on the $4.0 billion Revolving Credit Facility at quarter end. In October 2026, the debt repurchase program was increased by $2.0 billion and subsequently the Company repurchased the remaining $569 million of its par value Senior Notes due 2027. With the increase and subsequent repurchase, there was $1.9 billion available under the senior note debt repurchase program as of October 27, 2026.
Please refer to the Forward-Looking Statements , which should be reviewed in conjunction with the Company's 2026 outlook.
The Company is updating its 2026 GAAP diluted EPS guidance floor to greater than $3.46 and its 2026 adjusted diluted EPS guidance floor to greater than $5.20. Additionally, the Company is decreasing its HBR guidance range to 90.4% to 91.1% and its interest expense guidance range to $600 million to $620 million. 3 The Company's annual guidance for 2026 is as follows and will be discussed further on our conference call:
A full reconciliation of adjusted diluted EPS is Full Year GAAP diluted shown in the 2026 EPS Non-GAAP > $3.46 Adjusted Financial > $5.20 diluted Presentation Full Year EPS(1) section of 2026 (1) this release. Low High ────────────────────────────────────────────────────────────────────────────── Total revenues (in $ 196.5 $ 200.5 billions) Premium and service $ 173.0 $ 177.0 revenues (in billions) HBR 90.4 % 91.1 % SG&A expense 7.2 % 7.8 % ratio Adjusted SG&A expense 6.9 % 7.5 % ratio(2) Effective tax 26.5 % 27.5 % rate Adjusted effective tax 25.5 % 26.5 % rate(3) Diluted shares 497.0 500.0 outstanding (in millions) Adjusted SG&A expense ratio excludes severance costs due to enterprise optimization and contract exits of approximately $355 million to $405 million, enterprise (2) optimization third-party vendor costs of approximately $85 million to $115 million and acquisition and divestiture related expenses of approximately $1 million. Adjusted effective tax rate excludes income tax (3) effects of adjustments of approximately $266 million to $270 million.
As previously announced, the Company will host a conference call Tuesday, October 27, 2026, at 8:30 a.m. ET to review the financial results for the third quarter ended September 30, 2026.
Investors and other interested parties are invited to listen to the conference call by dialing 1-877-883-0383 (toll free) in the U.S. and Canada; +1-412-902-6506 (toll) from abroad, including the following Elite Entry Number: 1565730 to expedite caller registration; or via a live, audio webcast on the Company's website at www.centene.com , under the Investors section.
A webcast replay will be available for on-demand listening shortly following the completion of the call for the next 12 months or until 11:59 p.m. ET on Tuesday, October 26, 2027, at the aforementioned URL. In addition, a digital audio playback will be available until 9 a.m. ET on Tuesday, November 3, 2026, by dialing 1-855-669-9658 (toll free) in North America, or +1-412-317-0088 (toll) from abroad, and entering access code 581422.
The Company is providing certain non-GAAP financial measures in this release as the Company believes that these figures are helpful in allowing investors to more accurately assess the ongoing nature of the Company's operations and measure the Company's performance more consistently across periods. The Company uses the presented non-GAAP financial measures internally in evaluating the Company's performance and for planning purposes, by allowing management to focus on period-to-period changes in the Company's core business operations, and in determining employee incentive compensation. Therefore, the Company believes that this information is meaningful in addition to the information contained in the GAAP presentation of financial information. The Company strongly encourages investors to review its consolidated financial statements and publicly filed reports in their entirety and cautions investors that the non-GAAP financial measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.
Specifically, the Company believes the presentation of non-GAAP financial measures that excludes amortization of acquired intangible assets, acquisition and divestiture related expenses, as well as other items, allows investors to develop a more meaningful understanding of the Company's core performance over time. 4 The tables below provide reconciliations of non-GAAP items ($ in millions, except per share data):
2026 : (a) for the three months ended September 30, 2026: severance costs due to enterprise optimization and contract exits of $276 million, enterprise optimization third-party vendor costs of $35 million, a net gain on real estate transactions of $18 million, an additional loss associated with a prior divestiture of $15 million, and a net gain on debt extinguishment of $1 million;
(b) for the nine months ended September 30, 2026: severance costs due to enterprise optimization and contract exits of $294 million, enterprise optimization third-party vendor costs of $85 million, a net gain on real estate transactions of $22 million, an additional loss associated with a prior divestiture of $15 million, a gain on sale of a provider network in the Other segment of $10 million, and a net gain on debt extinguishment of $2 million.
(a) for the three months ended September 30, 2025: goodwill impairment of $6,723 million, real estate impairment of $22 million, and exit costs related to the wind-down of certain contracts in the Other segment of $9 million;
(b) for the nine months ended September 30, 2025: goodwill impairment of $6,723 million, intangible asset impairment related to the wind-down of certain contracts in the Other segment of $55 million, a net loss on real estate transactions of $18 million, a reduction to the previously reported gain on the sale of Magellan Rx of $10 million, and exit costs related to the wind-down of certain contracts in the Other segment of $9 million.
(2) The income tax effects of adjustments are based on the effective income tax rates applicable to each adjustment. The three and nine months ended September 30, 2025, include a tax benefit of $4 million related to tax adjustments on previously reported divestitures and impacts of the One Big Beautiful Bill Act (OBBBA).
(a) for the three months ended September 30, 2026: severance costs due to enterprise optimization and contract exits of $0.56 per share ($0.42 after-tax), enterprise optimization third-party vendor costs of $0.07 per share ($0.06 after-tax), a net gain on real estate transactions of $0.04 per share ($0.03 after-tax), and an additional loss associated with a prior divestiture of $0.03 per share ($0.03 after-tax); 5 (b) for the nine months ended September 30, 2026: severance costs due to enterprise optimization and contract exits of $0.59 per share ($0.45 after-tax), enterprise optimization third-party vendor costs of $0.17 per share ($0.13 after-tax), a net gain on real estate transactions of $0.05 per share ($0.04 after-tax), an additional loss associated with a prior divestiture of $0.03 per share ($0.03 after-tax), and a gain on sale of a provider network in the Other segment of $0.02 per share ($0.02 after-tax);
(c) for the year ended December 31, 2026, an estimated: $0.76 per share ($0.57 after-tax) of severance costs due to enterprise optimization and contract exits, $0.22 per share ($0.17 after-tax) of enterprise optimization third-party vendor costs, $0.01 per share ($0.01 after-tax) net gain on real estate transactions, $0.03 per share ($0.03 after-tax) of an additional loss associated with a prior divestiture, and $0.02 per share ($0.01 after-tax) gain on sale of a provider network in the Other segment.
(a) for the three months ended September 30, 2025: goodwill impairment of $13.69 per share ($13.67 after-tax), real estate impairment of $0.04 per share ($0.04 after-tax), and exit costs related to the wind-down of certain contracts in the Other segment of $0.02 per share ($0.02 after-tax);
(b) for the nine months ended September 30, 2025: goodwill impairment of $13.62 per share ($13.61 after-tax), intangible asset impairment related to the wind- down of certain contracts in the Other segment of $0.11 per share ($0.08 after- tax), a net loss on real estate transactions of $0.04 per share ($0.03 after- tax), a reduction to the previously reported gain on the sale of Magellan Rx of $0.02 per share ($0.02 after-tax), and exit costs related to the wind-down of certain contracts in the Other segment of $0.02 per share ($0.01 after-tax).
(4) The income tax effects of adjustments are based on the effective income tax rates applicable to each adjustment. The three and nine months ended September 30, 2025, include a tax benefit of $0.01 per share, related to tax adjustments on previously reported divestitures and impacts of the OBBBA.
(5) Reflects the $0.01 impact of using 499,436 thousand shares in the calculation of adjusted diluted EPS for the three months ended September 30, 2026. The additional 5,293 thousand shares for the three months ended September 30, 2026, were excluded from the calculation of the GAAP net loss per share and related adjustments due to their anti-dilutive effect.
Reflects the $0.00 and $0.01 impact of using 491,636 thousand and 494,763 thousand shares in the calculation of adjusted diluted EPS for the three and nine months ended September 30, 2025, respectively. The additional 495 thousand and 1,119 thousand shares for the three and nine months ended September 30, 2025, respectively, were excluded from the calculation of the GAAP net loss per share and related adjustments due to their anti-dilutive effect.
To provide clarity on the way management defines certain key metrics and ratios, the Company is providing a description of how the metric or ratio is calculated as follows:
= Selling, general and administrative expenses divided by premium and service revenues.
= Adjusted selling, general and administrative expenses divided by premium and service revenues. 6 •
= GAAP income tax expense (benefit) excluding the income tax effects of adjustments to net earnings divided by adjusted earnings (loss) before income tax expense.
) = Net earnings less amortization of acquired intangible assets, less acquisition and divestiture related expenses, as well as adjustments for other items, net of the income tax effect of the adjustments.
= Adjusted net earnings divided by weighted average common shares outstanding on a fully diluted basis.
= Medical costs for the period divided by number of days in such period. Average medical claims expense is most often calculated for the quarterly reporting period.
= Medical claims liabilities divided by average medical claims expense. Days in claims payable is most often calculated for the quarterly reporting period.
• State-directed Payments: Payments directed by a state that have minimal risk but are administered as a premium adjustment. These payments are recorded as premium revenue and medical costs at close to a 100% HBR. In many instances, the Company has little visibility to the timing of these payments until they are paid by a state.
• Pass-through Payments: Non-risk supplemental payments from a state that the Company is required to pass through to designated contracted providers. These payments are recorded as premium tax revenue and premium tax expense.
Centene Corporation, a Fortune 500 company, is a leading healthcare enterprise that is committed to helping people live healthier lives. The Company takes a local approach with local teams to provide fully integrated, high-quality, and cost-effective services to government-sponsored and commercial healthcare programs, focusing on under-insured individuals. Centene offers affordable and high-quality products to more than 1 in 15 individuals across the nation, including Medicaid and Medicare members (including Medicare Prescription Drug Plans) as well as individuals and families served by the Health Insurance Marketplace.
Centene uses its investor relations website to publish important information about the Company, including information that may be deemed material to investors. Financial and other information about Centene is routinely posted and is accessible on Centene's investor relations website, https://investors.centene.com.
All statements, other than statements of current or historical fact, contained in this press release are forward-looking statements. Without limiting the foregoing, forward-looking statements often use words such as "believe," "anticipate," "plan," "expect," "estimate," "predict," "intend," "seek," "target," "goal," "potential," "may," "will," "would," "could," "should," "can," "continue," and other similar words or expressions (and the negative thereof). Our 2026 full year guidance, including our estimated severance costs in connection with the voluntary separation program, is a forward-looking statement. Centene Corporation and its subsidiaries (Centene, the Company, our or we) intends such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we are including this statement for purposes of complying with these safe-harbor provisions. In particular, these statements include, without limitation, statements about our expected future operating or financial performance, changes in laws and regulations, market opportunity, expectations concerning pricing actions, competition, expected contract start dates and terms, expected activities in connection with completed and future acquisitions and dispositions, our investments, and the adequacy of our available cash resources. These forward-looking statements reflect our current views with respect to future events and are based on numerous assumptions and assessments made by us in light of our experience and perception of historical trends, current conditions, business strategies, operating environments, future developments, and other factors we believe appropriate. By their nature, forward-looking statements involve known and unknown risks and uncertainties and are subject to change because they relate to events and depend on circumstances that will occur in the future, including economic, regulatory, 7 competitive, and other factors that may cause our or our industry's actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by these forward- looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties, and assumptions. All forward-looking statements included in this press release are based on information available to us on the date hereof. Except as may be otherwise required by law, we undertake no obligation to update or revise the forward-looking statements included in this press release, whether as a result of new information, future events, or otherwise, after the date hereof. You should not place undue reliance on any forward-looking statements, as actual results may differ materially from projections, estimates, or other forward-looking statements due to a variety of important factors, variables, and events including, but not limited to: our ability to design and price products that are competitive and/or actuarially sound; our ability to accurately predict and effectively manage health benefits and other operating expenses and reserves, including fluctuations in medical costs; rate cuts, insufficient rate changes or other payment reductions or delays by government payors affecting our government businesses; the effect of social, economic, and political conditions, geopolitical events and state and federal policies, including the amount and terms of state and federal funding for government-sponsored healthcare programs, including as a result of changes in U.S. presidential administrations or Congress; changes in federal or state laws or regulations, including changes with respect to income tax reform or government healthcare programs as well as changes with respect to the Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation Act (collectively referred to as the ACA) and any regulations enacted thereunder, including the timing and terms of renewal or modification of the Enhanced Advance Premium Tax Credits (eAPTCs) or program integrity initiatives that could have the effect of reducing membership or profitability of our products; unanticipated increased healthcare costs, including due to changes in consumer and provider behaviors, inflation and tariffs; our ability to successfully execute on our enterprise optimization initiatives, including any separation programs; our ability to maintain or achieve improvement in the Centers for Medicare and Medicaid Services (CMS) Star ratings and maintain or achieve improvement in other quality scores in each case that could impact revenue and future growth; competition, including for providers, broker distribution networks, contract reprocurements and organic growth; our ability to adequately anticipate demand and timely provide for operational resources to maintain service level requirements in compliance with the terms of our contracts and state and federal regulations; our ability to comply with the terms of our contracts and state and federal regulations and our ability to effectively oversee our third-party vendors to comply with the terms of their contracts with us and state and federal regulations; our ability to manage our information systems effectively; disruption, unexpected costs, or similar risks from business transactions, including acquisitions, divestitures, and changes in our relationships with third-party vendors; impairments to real estate, investments, goodwill and intangible assets; changes in senior management, loss of one or more key personnel or an inability to attract, hire, integrate and retain skilled personnel; membership and revenue declines or unexpected trends; changes in healthcare practices, new technologies, and advances in medicine; our ability to effectively and ethically use artificial intelligence and machine learning in compliance with applicable laws; changes in macroeconomic conditions, including inflation, interest rates and volatility in the financial markets; negative public perception of the Company and the managed care industry; uncertainty concerning government shutdowns, debt ceilings or funding; tax matters; disasters, climate-related incidents, acts of war or aggression or major epidemics; changes in expected contract start dates and terms; changes in provider, broker, vendor, state, federal and other contracts and delays in the timing of regulatory approval of contracts, including due to protests and our ability to timely comply with any such changes to our contractual requirements or manage any unexpected delays in regulatory approval of contracts; the expiration, suspension, or termination of our contracts with federal or state governments (including, but not limited to, Medicaid, Medicare or other customers); the difficulty of predicting the timing or outcome of legal or regulatory audits, investigations, proceedings or matters including, but not limited to, our ability to resolve claims and/or allegations on acceptable terms, or at all, or whether additional claims, reviews or investigations will be brought; challenges to our contract awards; cyber-attacks or other data security incidents or our failure to comply with applicable privacy, data or security laws and regulations; the exertion of management's time and our resources, and other expenses incurred and business changes required in connection with complying with the terms of our contracts and the undertakings in connection with any regulatory, governmental, or third-party consents or approvals for acquisitions or dispositions; any changes in expected closing dates, estimated purchase price, or accretion for acquisitions or dispositions; losses in our investment portfolio; restrictions and limitations in connection with our indebtedness; a downgrade of our corporate family rating, issuer rating or credit rating of our indebtedness; the availability of debt and equity financing on terms that are favorable to us and risks and uncertainties discussed in the reports that Centene has filed with the Securities and Exchange Commission (SEC). This list of important factors is not intended to be exhaustive. We discuss certain of these matters more fully, as well as certain other factors that may affect our business operations, financial condition, and results of operations, in our filings with the SEC, including our annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Due to these important factors and risks, we cannot give assurances with respect to our future performance, including without limitation our ability to maintain adequate premium levels or our ability to control our future medical and selling, general and administrative (SG&A) costs. 8
September 30, 2026 December 31, 2025 ────────────────────────────────────────────────────────────────────────────── -Unaudited ASSETS Current assets: Cash and cash $ 20,700 $ 17,888 equivalents Premium and trade 20,329 18,105 receivables Short-term 2,886 2,432 investments Other current 1,546 1,945 assets Total current 45,461 40,370 assets Long-term 14,794 17,035 investments Restricted 1,470 1,412 deposits Property, software and 2,109 2,037 equipment, net Goodwill 10,835 10,835 Intangible 4,042 4,530 assets, net Other long-term 569 528 assets Total assets $ 79,280 $ 76,747 LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS' EQUITY Current liabilities: Medical claims $ 21,495 $ 20,544 liability Accounts payable and accrued 15,459 13,796 expenses Return of premium 1,346 1,592 payable Unearned revenue 680 736 Current portion 88 50 of long-term debt Total current 39,068 36,718 liabilities Long-term debt 15,454 17,351 Deferred tax 719 833 liability Other long-term 1,732 1,789 liabilities Total liabilities 56,973 56,691 Commitments and contingencies Redeemable noncontrolling 24 23 interests Stockholders' equity: Preferred stock, $0.001 par value; authorized 10,000 shares; no shares issued or — — outstanding at September 30, 2026 and December 31, 2025 Common stock, $0.001 par value; authorized 800,000 shares; 626,679 issued and 494,973 outstanding at 1 1 September 30, 2026, and 623,463 issued and 491,757 outstanding at December 31, 2025 Additional 20,926 20,777 paid-in capital Accumulated other comprehensive -514 -58 (loss) Retained earnings 11,235 8,674 Treasury stock, at cost (131,706 and -9,441 -9,441 131,706 shares, respectively) Total Centene stockholders' 22,207 19,953 equity Nonredeemable noncontrolling 76 80 interest Total stockholders' 22,283 20,033 equity Total liabilities, redeemable noncontrolling $ 79,280 $ 76,747 interests and stockholders' equity
Nine Months Ended Cash flows from September 30, operating activities: 2026 2025 ────────────────────────────────────────────────────────────────────────────── Net earnings (loss) $ 2,561 $ -5,577 Adjustments to reconcile net earnings (loss) to net cash provided by operating activities Depreciation and 899 946 amortization Stock compensation 178 146 expense Impairment — 6,798 (Gain) loss on debt -2 — extinguishment Deferred income taxes 35 13 (Gain) loss on 15 10 divestitures, net Changes in assets and liabilities Premium and trade -2,262 -3,338 receivables Other assets 403 -245 Medical claims 1,024 3,176 liabilities Unearned revenue -56 -5 Accounts payable and 1,178 2,681 accrued expenses Other long-term 163 38 liabilities Other operating 151 8 activities, net Net cash provided by operating 4,287 4,651 activities Cash flows from investing activities: Capital expenditures -568 -554 Purchases of investments -3,511 -3,765 Sales and maturities of 4,728 4,131 investments Divestiture proceeds, net of divested 3 — cash Net cash provided by (used in) investing 652 -188 activities Cash flows from financing activities: Proceeds from long-term — 750 debt Payments and repurchases of long-term -1,872 -1,708 debt Common stock repurchases -57 -473 Proceeds from common 26 29 stock issuances Purchase of — -19 noncontrolling interest Other financing -3 -13 activities, net Net cash (used in) -1,906 -1,434 financing activities Net increase in cash, cash equivalents 3,033 3,029 and restricted cash and cash equivalents Cash and cash equivalents reclassified -103 — (to) held for sale Cash, cash equivalents and restricted cash and cash 17,957 14,156 equivalents,beginning of period Cash, cash equivalents and restricted cash and cash $ 20,887 $ 17,185 equivalents,end of period Supplemental disclosures of cash flow information: Interest paid $ 438 $ 458 Income taxes paid, net $ 15 $ 540 The following table provides a reconciliation of cash, cash equivalents and restricted cash and cash equivalents reported within the Consolidated Balance Sheets to the totals above:
September 30, 2026 2025 Cash and cash $ 20,700 $ 17,058 equivalents Restricted cash and cash equivalents, 187 127 included in restricted deposits Total cash, cash equivalents and $ 20,887 $ 17,185 restricted cash and cash equivalents
The changes in medical claims liability are summarized as follows (in millions):
Balance, September 30, 2025 $ 21,493 Less: Reinsurance recoverables 73 Balance, September 30, 2025, net 21,420 Incurred related to: Current period 161,795 Prior periods -1,564 Total incurred 160,231 Paid related to: Current period 141,483 Prior periods 18,332 Total paid 159,815 Plus: Premium deficiency reserve -282 Plus: Divestitures -109 Balance, September 30, 2026, net 21,445 Plus: Reinsurance recoverables 50 Balance, September 30, 2026 $ 21,495
Centene's claims reserving process utilizes a consistent actuarial methodology to estimate Centene's ultimate liability. Any reduction in the "Incurred related to: Prior periods" amount may be offset as Centene actuarially determines the "Incurred related to: Current period." Additionally, approximately $51 million was recorded as a reduction to premium revenues resulting from development within "Incurred related to: Prior periods" due to minimum HBR and other return of premium programs.
The amount of the "Incurred related to: Prior periods" above represents favorable development and includes the effects of reserving under moderately adverse conditions, new markets where we use a conservative approach in setting reserves during the initial periods of operations, receipts from other third- party payors related to coordination of benefits and lower medical utilization and cost trends for dates of service September 30, 2025, and prior. 13
Full text with the tables
Exhibit 99.1
N E W S R E L E A S E
Contact: Investor Relations Inquiries Media Inquiries
Jennifer Gilligan Sara Garland
Senior Vice President, Finance & Chief Communications Officer
Investor Relations
(212) 549-1306 (314) 445-0790
FOR IMMEDIATE RELEASE
CENTENE CORPORATION REPORTS THIRD QUARTER
2026 RESULTS
-- Third Quarter
GAAP Diluted Loss Per Share of $(0.14); Adjusted Diluted Earnings Per Share of
$0.58 --
-- Increases 2026 GAAP Diluted EPS Guidance: Greater than $3.46 & Adjusted
Diluted EPS Greater than $5.20 --
•
Increases 2026 full year adjusted diluted EPS guidance by $0.40.
•
Consolidated HBR of 92.7% in the third quarter, better than expectations, driven
by the Medicare segment, with Medicaid and Marketplace on track.
•
Full year 2026 HBR mid-point expectation improved by 15 basis points to 90.75%.
•
Debt reduced by $1.1 billion since June 30, 2026, including full redemption of
2027 Senior Notes in October.
ST. LOUIS, October 27, 2026 -- Centene Corporation (NYSE: CNC) (the Company)
announced today its financial results for the third quarter ended September 30,
2026. In summary, the 2026 third quarter results were as follows:
Total revenues (in millions) $ 50,647
Premium and service revenues
(in $ 45,105
millions)
Health benefits ratio 92.7 %
SG&A expense ratio 7.2 %
Adjusted SG&A expense 6.5 %
ratio(1)
GAAP diluted loss per share $ -0.14
Adjusted diluted earnings $ 0.58
per share(1)
Total cash flow (used in)
operations (in $ -3,669
millions)
Represents a non-GAAP
financial measure. A full
reconciliation of the
adjusted diluted earnings
(loss) per share and
(1) adjusted selling, general
and administrative (SG&A)
expenses is shown in the
Non-GAAP Financial
Presentation section of this
release.
"Solid underlying fundamentals within our core businesses have powered a faster
recovery to our earnings trajectory than previously anticipated," said Chief
Executive Officer of Centene, Sarah M. London. "We are pleased with the progress
our teams have made in delivering increased margin to power our mission of
transforming the health of the communities we serve, one person at a time. We
remain focused on a strong finish to 2026 and building on this progress in
2027."
1
Membership
The following table sets forth membership by line of business:
September
30,
2026 2025
Traditional 10,544,300 11,115,400
Medicaid(1)
High Acuity 1,351,600 1,591,000
Medicaid(2)
Total 11,895,900 12,706,400
Medicaid
Marketplace 3,403,300 5,828,100
Individual
and 497,400 447,900
Commercial
Group(3)
Total 3,900,700 6,276,000
Commercial
Medicare(4) 954,400 1,013,200
Medicare
Prescripti… 8,947,200 7,972,500
Drug Plan
(PDP)
Total
at-risk 25,698,200 27,968,100
membership
Membership
includes
Temporary
Assistance
for Needy
Families
(TANF),
Medicaid
(1) Expansion,
Children's
Health
Insurance
Program
(CHIP),
Foster Care,
and
Behavioral
Health.
Membership
includes
Aged, Blind,
or Disabled
(ABD),
Intellectual
and
Developmental
Disabilities
(IDD),
Long-Term
Services and
Supports
(LTSS), and
Medicare-Med…
Plans (MMP)
Duals. The
Company
(2) operated MMPs
through
December 31,
2025. In 2026
these members
are included
in Medicare
as a result
of the
Centers for
Medicare and
Medicaid
Services
(CMS)
transition to
Dual Eligible
Special Needs
Plans (D-SNP)
based
integration.
Membership
includes
Commercial
Group, CHOICE
Arrangements
(formerly
Individual
(3) Coverage
Health
Reimbursement
Arrangement,
or ICHRA) and
Other
Off-Exchange
Individual.
Membership
includes
Medicare
Advantage,
Medicare
Supplement,
and
(4) Applicable
Integrated
Plans (AIPs)
as a result
of the CMS
transition to
D-SNP based
integration
in 2026.
Premium and Service Revenues
The following table sets forth supplemental revenue information ($ in millions):
Three
Months
Ended
September
30, 2026 2025 % Change
──────────────────────────────────────────────────────────────────────────────
Medicaid $ 24,039 $ 23,171 4 %
Commerci… 8,700 10,992 -21 %
Medicare… 11,263 9,391 20 %
Other 1,103 1,344 -18 %
Total
premium
and $ 45,105 $ 44,898 0.5 %
service
revenues
Medicare
includes
Medicare
(1) Advantage,
Medicare
PDP and
Medicare
Supplement.
Statement of Operations: Three Months Ended September 30, 2026
• For the third quarter of 2026, premium and service revenues increased 0.5% to
$45.1 billion from $44.9 billion in the comparable period of 2025. The increase
was primarily driven by premium yield and membership growth in the PDP business,
rate increases in Marketplace and in the Medicaid business to address medical
trend, Marketplace risk adjustment revenue transfer for the 2026 benefit year,
and state directed payments. The increases were partially offset by lower
Marketplace and Medicaid membership.
• Health benefits ratio (HBR) of 92.7% for the third quarter of 2026, unchanged
from 92.7% in the comparable period in 2025. The consolidated HBR benefited from
a lower Marketplace HBR resulting from improved pricing and risk transfer
reflecting the acuity of the Marketplace membership as well as strong
fundamental performance in both the Medicare Advantage and PDP businesses. The
HBR in 2025 was positively impacted by a decrease to the premium deficiency
reserve versus no premium deficiency reserve in 2026 for our Medicare Advantage
business as a result of our progression towards profitability.
2
• The SG&A expense ratio was 7.2% for the third quarter of 2026, compared to
7.0% in the third quarter of 2025. The adjusted SG&A expense ratio was 6.5% for
the third quarter of 2026, compared to 7.0% in the third quarter of 2025. The
increase in the SG&A expense ratio was primarily driven by enterprise
optimization severance and vendor costs. The decrease in the adjusted SG&A
expense ratio was driven by strong cost management, leveraging of expenses over
higher revenues and reduced Marketplace membership, which operates at a
meaningfully higher SG&A expense ratio. The decrease was also driven by growth
in the PDP business, which operates at a meaningfully lower SG&A expense ratio
as compared to the overall company.
• The effective tax rate was 46.7% for the third quarter of 2026, compared to
0.6% in the third quarter of 2025. For the third quarter of 2026, our effective
tax rate on adjusted earnings was 14.5%, compared to 2.5% in the third quarter
of 2025. The GAAP and adjusted effective tax rates for 2026 reflect a decrease
to the estimated annual effective tax rate applied to year-to-date operating
results. The GAAP and adjusted effective tax rates for 2025 reflect the impact
of estimating interim period taxes on the year-to-date tax method. The effective
tax rate for 2025 also reflects the non-deductible nature of the goodwill
impairment.
• GAAP diluted loss per share of $(0.14) for the third quarter of 2026.
• Adjusted diluted earnings per share (EPS) of $0.58 for the third quarter of
2026.
• Cash flow used in operations for the third quarter of 2026 was $3.7 billion,
primarily driven by the timing of pass through, premium and other payments, as
expected.
Balance Sheet
At September 30, 2026, the Company had cash, investments and restricted deposits
of $39.9 billion and maintained $175 million of cash available for general
corporate use. Medical claims liabilities totaled $21.5 billion. The Company's
days in claims payable (DCP) was 48 days, an increase of one day as compared to
the second quarter of 2026.
During the third quarter of 2026, the Company repurchased $558 million of the
Company's par value senior notes due 2027 and 2028. Following the senior note
repurchase, total debt was $15.5 billion, which included no borrowings on the
$4.0 billion Revolving Credit Facility at quarter end. In October 2026, the debt
repurchase program was increased by $2.0 billion and subsequently the Company
repurchased the remaining $569 million of its par value Senior Notes due 2027.
With the increase and subsequent repurchase, there was $1.9 billion available
under the senior note debt repurchase program as of October 27, 2026.
Outlook
Please refer to the Forward-Looking Statements , which should be reviewed in
conjunction with the Company's 2026 outlook.
The Company is updating its 2026 GAAP diluted EPS guidance floor to greater than
$3.46 and its 2026 adjusted diluted EPS guidance floor to greater than $5.20.
Additionally, the Company is decreasing its HBR guidance range to 90.4% to 91.1%
and its interest expense guidance range to $600 million to $620 million.
3
The Company's annual guidance for 2026 is as follows and will be discussed
further on our conference call:
A full
reconciliation
of adjusted
diluted EPS is Full Year
GAAP diluted shown in the 2026
EPS Non-GAAP > $3.46
Adjusted Financial > $5.20
diluted Presentation Full Year
EPS(1) section of 2026
(1) this release. Low High
──────────────────────────────────────────────────────────────────────────────
Total
revenues (in $ 196.5 $ 200.5
billions)
Premium and
service $ 173.0 $ 177.0
revenues (in
billions)
HBR 90.4 % 91.1 %
SG&A expense 7.2 % 7.8 %
ratio
Adjusted SG&A
expense 6.9 % 7.5 %
ratio(2)
Effective tax 26.5 % 27.5 %
rate
Adjusted
effective tax 25.5 % 26.5 %
rate(3)
Diluted
shares 497.0 500.0
outstanding
(in millions)
Adjusted SG&A
expense ratio
excludes
severance
costs due to
enterprise
optimization
and contract
exits of
approximately
$355 million
to $405
million,
enterprise
(2) optimization
third-party
vendor costs
of
approximately
$85 million to
$115 million
and
acquisition
and
divestiture
related
expenses of
approximately
$1 million.
Adjusted
effective tax
rate excludes
income tax
(3) effects of
adjustments of
approximately
$266 million
to $270
million.
Conference Call
As previously announced, the Company will host a conference call Tuesday,
October 27, 2026, at 8:30 a.m. ET to review the financial results for the third
quarter ended September 30, 2026.
Investors and other interested parties are invited to listen to the conference
call by dialing 1-877-883-0383 (toll free) in the U.S. and Canada;
+1-412-902-6506 (toll) from abroad, including the following Elite Entry Number:
1565730 to expedite caller registration; or via a live, audio webcast on the
Company's website at www.centene.com , under the Investors section.
A webcast replay will be available for on-demand listening shortly following the
completion of the call for the next 12 months or until 11:59 p.m. ET on Tuesday,
October 26, 2027, at the aforementioned URL. In addition, a digital audio
playback will be available until 9 a.m. ET on Tuesday, November 3, 2026, by
dialing 1-855-669-9658 (toll free) in North America, or +1-412-317-0088 (toll)
from abroad, and entering access code 581422.
Non-GAAP Financial Presentation
The Company is providing certain non-GAAP financial measures in this release as
the Company believes that these figures are helpful in allowing investors to
more accurately assess the ongoing nature of the Company's operations and
measure the Company's performance more consistently across periods. The Company
uses the presented non-GAAP financial measures internally in evaluating the
Company's performance and for planning purposes, by allowing management to focus
on period-to-period changes in the Company's core business operations, and in
determining employee incentive compensation. Therefore, the Company believes
that this information is meaningful in addition to the information contained in
the GAAP presentation of financial information. The Company strongly encourages
investors to review its consolidated financial statements and publicly filed
reports in their entirety and cautions investors that the non-GAAP financial
measures used by the Company may differ from similar measures used by other
companies, even when similar terms are used to identify such measures. The
presentation of non-GAAP financial measures is not intended to be considered in
isolation or as a substitute for the financial information prepared and
presented in accordance with GAAP.
Specifically, the Company believes the presentation of non-GAAP financial
measures that excludes amortization of acquired intangible assets, acquisition
and divestiture related expenses, as well as other items, allows investors to
develop a more meaningful understanding of the Company's core performance over
time.
4
The tables below provide reconciliations of non-GAAP items ($ in millions,
except per share data):
Three Nine
Months Months
Ended Ended
September Septemb…
2026 30, 2025 2026 30, 2025
──────────────────────────────────────────────────────────────────────────────
GAAP
net
earnin…
(loss) $ -71 $ -6,631 $ 2,561 $ -5,573
attrib…
to
Centene
Amorti…
of
acquir… 161 170 488 516
intang…
assets
Acquis…
and
divest… — — — 1
related
expens…
Other 307 6,754 360 6,815
adjust…
Income
tax
effects -107 -48 -199 -148
of
adjust…
Adjust…
net $ 290 $ 245 $ 3,210 $ 1,611
earnin…
(1) Other adjustments include the following pre-tax items:
2026 :
(a) for the three months ended September 30, 2026: severance costs due to
enterprise optimization and contract exits of $276 million, enterprise
optimization third-party vendor costs of $35 million, a net gain on real estate
transactions of $18 million, an additional loss associated with a prior
divestiture of $15 million, and a net gain on debt extinguishment of $1 million;
(b) for the nine months ended September 30, 2026: severance costs due to
enterprise optimization and contract exits of $294 million, enterprise
optimization third-party vendor costs of $85 million, a net gain on real estate
transactions of $22 million, an additional loss associated with a prior
divestiture of $15 million, a gain on sale of a provider network in the Other
segment of $10 million, and a net gain on debt extinguishment of $2 million.
2025 :
(a) for the three months ended September 30, 2025: goodwill impairment of $6,723
million, real estate impairment of $22 million, and exit costs related to the
wind-down of certain contracts in the Other segment of $9 million;
(b) for the nine months ended September 30, 2025: goodwill impairment of $6,723
million, intangible asset impairment related to the wind-down of certain
contracts in the Other segment of $55 million, a net loss on real estate
transactions of $18 million, a reduction to the previously reported gain on the
sale of Magellan Rx of $10 million, and exit costs related to the wind-down of
certain contracts in the Other segment of $9 million.
(2) The income tax effects of adjustments are based on the effective income tax
rates applicable to each adjustment. The three and nine months ended September
30, 2025, include a tax benefit of $4 million related to tax adjustments on
previously reported divestitures and impacts of the One Big Beautiful Bill Act
(OBBBA).
Three Nine
Mont… Mont…
Ended Ended
Sept… Sept…
2026 30, 2025 2026 30, 2025
──────────────────────────────────────────────────────────────────────────────
GAAP
dilu…
earn…
(los… grea…
per $ -0.14 $ -13.50 $ 5.15 $ -11.29 than
share $3.46
attr…
to
Cent…
Amor…
of
acqu… 0.33 0.35 0.98 1.05 ~$1.…
inta…
asse…
Other 0.62 13.75 0.72 13.81 ~$0.…
adju…
Inco…
tax
effe… -0.22 -0.10 -0.40 -0.30 ~$(0…
of
adju…
Effe…
of
basic -0.01 — — -0.01 ~$—
to
dilu…
shar…
Adju… grea…
dilu… $ 0.58 $ 0.50 $ 6.45 $ 3.26 than
EPS $5.20
(3) Other adjustments include the following pre-tax items:
2026 :
(a) for the three months ended September 30, 2026: severance costs due to
enterprise optimization and contract exits of $0.56 per share ($0.42 after-tax),
enterprise optimization third-party vendor costs of $0.07 per share ($0.06
after-tax), a net gain on real estate transactions of $0.04 per share ($0.03
after-tax), and an additional loss associated with a prior divestiture of $0.03
per share ($0.03 after-tax);
5
(b) for the nine months ended September 30, 2026: severance costs due to
enterprise optimization and contract exits of $0.59 per share ($0.45 after-tax),
enterprise optimization third-party vendor costs of $0.17 per share ($0.13
after-tax), a net gain on real estate transactions of $0.05 per share ($0.04
after-tax), an additional loss associated with a prior divestiture of $0.03 per
share ($0.03 after-tax), and a gain on sale of a provider network in the Other
segment of $0.02 per share ($0.02 after-tax);
(c) for the year ended December 31, 2026, an estimated: $0.76 per share ($0.57
after-tax) of severance costs due to enterprise optimization and contract exits,
$0.22 per share ($0.17 after-tax) of enterprise optimization third-party vendor
costs, $0.01 per share ($0.01 after-tax) net gain on real estate transactions,
$0.03 per share ($0.03 after-tax) of an additional loss associated with a prior
divestiture, and $0.02 per share ($0.01 after-tax) gain on sale of a provider
network in the Other segment.
2025 :
(a) for the three months ended September 30, 2025: goodwill impairment of $13.69
per share ($13.67 after-tax), real estate impairment of $0.04 per share ($0.04
after-tax), and exit costs related to the wind-down of certain contracts in the
Other segment of $0.02 per share ($0.02 after-tax);
(b) for the nine months ended September 30, 2025: goodwill impairment of $13.62
per share ($13.61 after-tax), intangible asset impairment related to the wind-
down of certain contracts in the Other segment of $0.11 per share ($0.08 after-
tax), a net loss on real estate transactions of $0.04 per share ($0.03 after-
tax), a reduction to the previously reported gain on the sale of Magellan Rx of
$0.02 per share ($0.02 after-tax), and exit costs related to the wind-down of
certain contracts in the Other segment of $0.02 per share ($0.01 after-tax).
(4) The income tax effects of adjustments are based on the effective income tax
rates applicable to each adjustment. The three and nine months ended September
30, 2025, include a tax benefit of $0.01 per share, related to tax adjustments
on previously reported divestitures and impacts of the OBBBA.
(5) Reflects the $0.01 impact of using 499,436 thousand shares in the
calculation of adjusted diluted EPS for the three months ended September 30,
2026. The additional 5,293 thousand shares for the three months ended September
30, 2026, were excluded from the calculation of the GAAP net loss per share and
related adjustments due to their anti-dilutive effect.
Reflects the $0.00 and $0.01 impact of using 491,636 thousand and 494,763
thousand shares in the calculation of adjusted diluted EPS for the three and
nine months ended September 30, 2025, respectively. The additional 495 thousand
and 1,119 thousand shares for the three and nine months ended September 30,
2025, respectively, were excluded from the calculation of the GAAP net loss per
share and related adjustments due to their anti-dilutive effect.
Three Nine
Months Months
Ended Ended
September September
2026 30, 2025 2026 30, 2025
──────────────────────────────────────────────────────────────────────────────
GAAP
selling,
general $ 3,235 $ 3,145 $ 9,735 $ 9,534
and
adminis…
expenses
Less:
Acquisi…
and
divesti… — — — 1
related
expenses
Severan… 276 9 294 9
Enterpr…
optimiz… 35 — 85 —
costs
Real
estate — 2 — 2
transac…
costs
Adjusted
selling,
general $ 2,924 $ 3,134 $ 9,356 $ 9,522
and
adminis…
expenses
To provide clarity on the way management defines certain key metrics and ratios,
the Company is providing a description of how the metric or ratio is calculated
as follows:
•
Health Benefits Ratio (HBR) (GAAP)
= Medical costs divided by premium revenues.
•
SG&A Expense Ratio (GAAP)
= Selling, general and administrative expenses divided by premium and service
revenues.
•
Adjusted SG&A Expense Ratio (non-GAAP)
= Adjusted selling, general and administrative expenses divided by premium and
service revenues.
6
•
Adjusted Effective Tax Rate (non-GAAP)
= GAAP income tax expense (benefit) excluding the income tax effects of
adjustments to net earnings divided by adjusted earnings (loss) before income
tax expense.
•
Adjusted Net Earnings (non-GAAP
) = Net earnings less amortization of acquired intangible assets, less
acquisition and divestiture related expenses, as well as adjustments for other
items, net of the income tax effect of the adjustments.
•
Adjusted Diluted EPS (non-GAAP)
= Adjusted net earnings divided by weighted average common shares outstanding on
a fully diluted basis.
•
Debt to Capitalization Ratio (GAAP)
= Total debt, divided by total debt plus total stockholder's equity.
•
Average Medical Claims Expense (GAAP)
= Medical costs for the period divided by number of days in such period. Average
medical claims expense is most often calculated for the quarterly reporting
period.
•
Days in Claims Payable (GAAP)
= Medical claims liabilities divided by average medical claims expense. Days in
claims payable is most often calculated for the quarterly reporting period.
In addition, the following terms are defined as follows:
• State-directed Payments: Payments directed by a state that have minimal risk
but are administered as a premium adjustment. These payments are recorded as
premium revenue and medical costs at close to a 100% HBR. In many instances, the
Company has little visibility to the timing of these payments until they are
paid by a state.
• Pass-through Payments: Non-risk supplemental payments from a state that the
Company is required to pass through to designated contracted providers. These
payments are recorded as premium tax revenue and premium tax expense.
About Centene Corporation
Centene Corporation, a Fortune 500 company, is a leading healthcare enterprise
that is committed to helping people live healthier lives. The Company takes a
local approach with local teams to provide fully integrated, high-quality, and
cost-effective services to government-sponsored and commercial healthcare
programs, focusing on under-insured individuals. Centene offers affordable and
high-quality products to more than 1 in 15 individuals across the nation,
including Medicaid and Medicare members (including Medicare Prescription Drug
Plans) as well as individuals and families served by the Health Insurance
Marketplace.
Centene uses its investor relations website to publish important information
about the Company, including information that may be deemed material to
investors. Financial and other information about Centene is routinely posted and
is accessible on Centene's investor relations website,
https://investors.centene.com.
Forward-Looking Statements
All statements, other than statements of current or historical fact, contained
in this press release are forward-looking statements. Without limiting the
foregoing, forward-looking statements often use words such as "believe,"
"anticipate," "plan," "expect," "estimate," "predict," "intend," "seek,"
"target," "goal," "potential," "may," "will," "would," "could," "should," "can,"
"continue," and other similar words or expressions (and the negative thereof).
Our 2026 full year guidance, including our estimated severance costs in
connection with the voluntary separation program, is a forward-looking
statement. Centene Corporation and its subsidiaries (Centene, the Company, our
or we) intends such forward-looking statements to be covered by the safe-harbor
provisions for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995, and we are including this statement for purposes
of complying with these safe-harbor provisions. In particular, these statements
include, without limitation, statements about our expected future operating or
financial performance, changes in laws and regulations, market opportunity,
expectations concerning pricing actions, competition, expected contract start
dates and terms, expected activities in connection with completed and future
acquisitions and dispositions, our investments, and the adequacy of our
available cash resources. These forward-looking statements reflect our current
views with respect to future events and are based on numerous assumptions and
assessments made by us in light of our experience and perception of historical
trends, current conditions, business strategies, operating environments, future
developments, and other factors we believe appropriate. By their nature,
forward-looking statements involve known and unknown risks and uncertainties and
are subject to change because they relate to events and depend on circumstances
that will occur in the future, including economic, regulatory,
7
competitive, and other factors that may cause our or our industry's actual
results, performance, or achievements to be materially different from any future
results, performance, or achievements expressed or implied by these forward-
looking statements. These statements are not guarantees of future performance
and are subject to risks, uncertainties, and assumptions. All forward-looking
statements included in this press release are based on information available to
us on the date hereof. Except as may be otherwise required by law, we undertake
no obligation to update or revise the forward-looking statements included in
this press release, whether as a result of new information, future events, or
otherwise, after the date hereof. You should not place undue reliance on any
forward-looking statements, as actual results may differ materially from
projections, estimates, or other forward-looking statements due to a variety of
important factors, variables, and events including, but not limited to: our
ability to design and price products that are competitive and/or actuarially
sound; our ability to accurately predict and effectively manage health benefits
and other operating expenses and reserves, including fluctuations in medical
costs; rate cuts, insufficient rate changes or other payment reductions or
delays by government payors affecting our government businesses; the effect of
social, economic, and political conditions, geopolitical events and state and
federal policies, including the amount and terms of state and federal funding
for government-sponsored healthcare programs, including as a result of changes
in U.S. presidential administrations or Congress; changes in federal or state
laws or regulations, including changes with respect to income tax reform or
government healthcare programs as well as changes with respect to the Patient
Protection and Affordable Care Act and the Health Care and Education
Affordability Reconciliation Act (collectively referred to as the ACA) and any
regulations enacted thereunder, including the timing and terms of renewal or
modification of the Enhanced Advance Premium Tax Credits (eAPTCs) or program
integrity initiatives that could have the effect of reducing membership or
profitability of our products; unanticipated increased healthcare costs,
including due to changes in consumer and provider behaviors, inflation and
tariffs; our ability to successfully execute on our enterprise optimization
initiatives, including any separation programs; our ability to maintain or
achieve improvement in the Centers for Medicare and Medicaid Services (CMS) Star
ratings and maintain or achieve improvement in other quality scores in each case
that could impact revenue and future growth; competition, including for
providers, broker distribution networks, contract reprocurements and organic
growth; our ability to adequately anticipate demand and timely provide for
operational resources to maintain service level requirements in compliance with
the terms of our contracts and state and federal regulations; our ability to
comply with the terms of our contracts and state and federal regulations and our
ability to effectively oversee our third-party vendors to comply with the terms
of their contracts with us and state and federal regulations; our ability to
manage our information systems effectively; disruption, unexpected costs, or
similar risks from business transactions, including acquisitions, divestitures,
and changes in our relationships with third-party vendors; impairments to real
estate, investments, goodwill and intangible assets; changes in senior
management, loss of one or more key personnel or an inability to attract, hire,
integrate and retain skilled personnel; membership and revenue declines or
unexpected trends; changes in healthcare practices, new technologies, and
advances in medicine; our ability to effectively and ethically use artificial
intelligence and machine learning in compliance with applicable laws; changes in
macroeconomic conditions, including inflation, interest rates and volatility in
the financial markets; negative public perception of the Company and the managed
care industry; uncertainty concerning government shutdowns, debt ceilings or
funding; tax matters; disasters, climate-related incidents, acts of war or
aggression or major epidemics; changes in expected contract start dates and
terms; changes in provider, broker, vendor, state, federal and other contracts
and delays in the timing of regulatory approval of contracts, including due to
protests and our ability to timely comply with any such changes to our
contractual requirements or manage any unexpected delays in regulatory approval
of contracts; the expiration, suspension, or termination of our contracts with
federal or state governments (including, but not limited to, Medicaid, Medicare
or other customers); the difficulty of predicting the timing or outcome of legal
or regulatory audits, investigations, proceedings or matters including, but not
limited to, our ability to resolve claims and/or allegations on acceptable
terms, or at all, or whether additional claims, reviews or investigations will
be brought; challenges to our contract awards; cyber-attacks or other data
security incidents or our failure to comply with applicable privacy, data or
security laws and regulations; the exertion of management's time and our
resources, and other expenses incurred and business changes required in
connection with complying with the terms of our contracts and the undertakings
in connection with any regulatory, governmental, or third-party consents or
approvals for acquisitions or dispositions; any changes in expected closing
dates, estimated purchase price, or accretion for acquisitions or dispositions;
losses in our investment portfolio; restrictions and limitations in connection
with our indebtedness; a downgrade of our corporate family rating, issuer rating
or credit rating of our indebtedness; the availability of debt and equity
financing on terms that are favorable to us and risks and uncertainties
discussed in the reports that Centene has filed with the Securities and Exchange
Commission (SEC). This list of important factors is not intended to be
exhaustive. We discuss certain of these matters more fully, as well as certain
other factors that may affect our business operations, financial condition, and
results of operations, in our filings with the SEC, including our annual report
on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.
Due to these important factors and risks, we cannot give assurances with respect
to our future performance, including without limitation our ability to maintain
adequate premium levels or our ability to control our future medical and
selling, general and administrative (SG&A) costs.
8
CENTENE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions, except shares in thousands and per share data in dollars)
September 30, 2026 December 31, 2025
──────────────────────────────────────────────────────────────────────────────
-Unaudited
ASSETS
Current assets:
Cash and cash $ 20,700 $ 17,888
equivalents
Premium and trade 20,329 18,105
receivables
Short-term 2,886 2,432
investments
Other current 1,546 1,945
assets
Total current 45,461 40,370
assets
Long-term 14,794 17,035
investments
Restricted 1,470 1,412
deposits
Property,
software and 2,109 2,037
equipment, net
Goodwill 10,835 10,835
Intangible 4,042 4,530
assets, net
Other long-term 569 528
assets
Total assets $ 79,280 $ 76,747
LIABILITIES,
REDEEMABLE
NONCONTROLLING
INTERESTS AND
STOCKHOLDERS'
EQUITY
Current
liabilities:
Medical claims $ 21,495 $ 20,544
liability
Accounts payable
and accrued 15,459 13,796
expenses
Return of premium 1,346 1,592
payable
Unearned revenue 680 736
Current portion 88 50
of long-term debt
Total current 39,068 36,718
liabilities
Long-term debt 15,454 17,351
Deferred tax 719 833
liability
Other long-term 1,732 1,789
liabilities
Total liabilities 56,973 56,691
Commitments and
contingencies
Redeemable
noncontrolling 24 23
interests
Stockholders'
equity:
Preferred stock,
$0.001 par value;
authorized 10,000
shares; no shares
issued or — —
outstanding at
September 30,
2026 and December
31, 2025
Common stock,
$0.001 par value;
authorized
800,000 shares;
626,679
issued and
494,973
outstanding at 1 1
September 30,
2026, and 623,463
issued
and 491,757
outstanding at
December 31,
2025
Additional 20,926 20,777
paid-in capital
Accumulated other
comprehensive -514 -58
(loss)
Retained earnings 11,235 8,674
Treasury stock,
at cost (131,706
and -9,441 -9,441
131,706 shares,
respectively)
Total Centene
stockholders' 22,207 19,953
equity
Nonredeemable
noncontrolling 76 80
interest
Total
stockholders' 22,283 20,033
equity
Total
liabilities,
redeemable
noncontrolling $ 79,280 $ 76,747
interests and
stockholders'
equity
9
CENTENE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except shares in thousands and per share data in dollars)
(Unaudited)
Three Nine
Months Months
Ended Ended
Septem… Septe…
30, 30,
Reve… 2026 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
Prem… $ 44,370 $ 44,126 $ 131,839 $ 127,5…
Serv… 735 772 2,296 2,276
Prem…
and 45,105 44,898 134,135 129,8…
serv…
reve…
Prem… 5,542 4,792 20,035 15,198
tax
Total 50,647 49,690 154,170 145,0…
reve…
Expe…
Medi… 41,128 40,902 118,460 116,2…
costs
Cost
of 675 651 2,106 1,990
serv…
Sell…
gene…
and 3,235 3,145 9,735 9,534
admi…
expe…
Depr… 138 147 411 430
expe…
Amor…
of
acqu… 161 170 488 516
inta…
asse…
Prem…
tax 5,617 4,886 20,218 15,449
expe…
Impa… — 6,743 — 6,798
Total
oper… 50,954 56,644 151,418 150,9…
expe…
Earn…
(los… -307 -6,954 2,752 -5,878
from
oper…
Other
inco…
(exp…
Inve…
and 333 450 1,175 1,203
other
inco…
Gain
on 1 — 2 —
debt
exti…
Inte… -149 -170 -466 -510
expe…
Earn…
(los…
befo… -122 -6,674 3,463 -5,185
inco…
tax
Inco…
tax -57 -42 902 392
(ben…
expe…
Net
earn… -65 -6,632 2,561 -5,577
(los…
(Ear…
loss
attr… -6 1 — 4
to
nonc…
inte…
Net
earn…
(los…
attr… $ -71 $ -6,631 $ 2,561 $ -5,573
to
Cent…
Corp…
Net
earn…
(los…
per
comm…
share
attr…
to
Cent…
Corp…
Basic
earn…
(los… $ -0.14 $ -13.50 $ 5.19 $ -11.29
per
comm…
share
Dilu…
earn…
(los… $ -0.14 $ -13.50 $ 5.15 $ -11.29
per
comm…
share
Weig…
aver…
numb…
of
comm…
shar…
outs…
Basic 494,1… 491,141 493,351 493,6…
Dilu… 494,1… 491,141 497,643 493,6…
10
CENTENE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions, unaudited)
Nine Months Ended
Cash flows from September 30,
operating activities: 2026 2025
──────────────────────────────────────────────────────────────────────────────
Net earnings (loss) $ 2,561 $ -5,577
Adjustments to reconcile
net earnings
(loss) to net cash
provided by operating
activities
Depreciation and 899 946
amortization
Stock compensation 178 146
expense
Impairment — 6,798
(Gain) loss on debt -2 —
extinguishment
Deferred income taxes 35 13
(Gain) loss on 15 10
divestitures, net
Changes in assets and
liabilities
Premium and trade -2,262 -3,338
receivables
Other assets 403 -245
Medical claims 1,024 3,176
liabilities
Unearned revenue -56 -5
Accounts payable and 1,178 2,681
accrued expenses
Other long-term 163 38
liabilities
Other operating 151 8
activities, net
Net cash provided by
operating 4,287 4,651
activities
Cash flows from
investing activities:
Capital expenditures -568 -554
Purchases of investments -3,511 -3,765
Sales and maturities of 4,728 4,131
investments
Divestiture proceeds,
net of divested 3 —
cash
Net cash provided by
(used in) investing 652 -188
activities
Cash flows from
financing activities:
Proceeds from long-term — 750
debt
Payments and repurchases
of long-term -1,872 -1,708
debt
Common stock repurchases -57 -473
Proceeds from common 26 29
stock issuances
Purchase of — -19
noncontrolling interest
Other financing -3 -13
activities, net
Net cash (used in) -1,906 -1,434
financing activities
Net increase in cash,
cash equivalents 3,033 3,029
and restricted cash and
cash equivalents
Cash and cash
equivalents reclassified -103 —
(to) held for sale
Cash, cash equivalents
and restricted
cash and cash 17,957 14,156
equivalents,beginning of
period
Cash, cash equivalents
and restricted
cash and cash $ 20,887 $ 17,185
equivalents,end of
period
Supplemental disclosures
of cash flow
information:
Interest paid $ 438 $ 458
Income taxes paid, net $ 15 $ 540
The following table
provides a
reconciliation of cash,
cash equivalents
and restricted cash and
cash equivalents
reported within the
Consolidated Balance
Sheets to the totals
above:
September 30,
2026 2025
Cash and cash $ 20,700 $ 17,058
equivalents
Restricted cash and cash
equivalents, 187 127
included in restricted
deposits
Total cash, cash
equivalents and $ 20,887 $ 17,185
restricted cash and cash
equivalents
11
CENTENE CORPORATION
SUPPLEMENTAL FINANCIAL DATA
M…
i…
T…
M…
E…
C…
F…
C…
a…
B…
H…
M…
i…
A…
I…
L…
a…
M…
T…
C…
o…
M…
t…
D…
3…
2…
In
2…
t…
m…
a…
i…
in
M…
as
a
r…
of
t…
… C…
… t…
… to
… D…
… b…
… i…
… M…
… i…
… C…
… G…
… C…
… A…
… (…
… I…
… a…
… O…
… O…
… I…
… M…
… i…
… M…
… A…
… M…
… S…
… a…
… A…
… as
… a
… r… 1… 1… 1… 1… …
… of 1… 1… 1… 1… …
… t… 1… 1… 1… 1… …
… C… 3… 3… 3… 5… …
… t… 4… 4… 4… 4… …
… to 3… 3… 4… 5… …
… D… 9… 9… 1… 1… …
… b… 8… 8… 8… 8… …
… i… 2… 2… 2… 2… …
… in Q3 5… Q2 5… Q1 6… Q4 6… Q3 …
… 2… 2… 48 2… 47 2… 48 2… 46 2… …
──────────────────────────────────────────────────────────────────────────────
… $ 3… $ 4… $ 4… $ 3… $ …
… 1… 1… 1… 1… …
… $ 3… $ 4… $ 4… $ 3… $ …
…
… 4… % 4… % 4… % 4… % 4… %
…
Three Nine
OPER… Months Mont…
RATI… Ended Ended
Septe… Sept…
30, 30,
2026 2025 2026 2025
HBR 92.7 % 92.7 % 89.9 % 91.1 %
SG&A
expe… 7.2 % 7.0 % 7.3 % 7.3 %
ratio
Adju…
SG&A 6.5 % 7.0 % 7.0 % 7.3 %
expe…
ratio
Thr… Nine
HBR Mon… Mon…
BY End… End…
PR… Sep… Sep…
30, 30,
2026 2025 2026 2025
Me… 93.6 % 93… % 93… % 93… %
Co… 89.0 % 89… % 80… % 85… %
Me… 93.8 % 94… % 89… % 90… %
Med…
inc…
Med…
Adv…
(5) Med…
PDP
and
Med…
Sup…
12
MEDICAL CLAIMS LIABILITY
The changes in medical claims liability are summarized as follows (in millions):
Balance, September 30, 2025 $ 21,493
Less: Reinsurance recoverables 73
Balance, September 30, 2025, net 21,420
Incurred related to:
Current period 161,795
Prior periods -1,564
Total incurred 160,231
Paid related to:
Current period 141,483
Prior periods 18,332
Total paid 159,815
Plus: Premium deficiency reserve -282
Plus: Divestitures -109
Balance, September 30, 2026, net 21,445
Plus: Reinsurance recoverables 50
Balance, September 30, 2026 $ 21,495
Centene's claims reserving process utilizes a consistent actuarial methodology
to estimate Centene's ultimate liability. Any reduction in the "Incurred related
to: Prior periods" amount may be offset as Centene actuarially determines the
"Incurred related to: Current period." Additionally, approximately $51 million
was recorded as a reduction to premium revenues resulting from development
within "Incurred related to: Prior periods" due to minimum HBR and other return
of premium programs.
The amount of the "Incurred related to: Prior periods" above represents
favorable development and includes the effects of reserving under moderately
adverse conditions, new markets where we use a conservative approach in setting
reserves during the initial periods of operations, receipts from other third-
party payors related to coordination of benefits and lower medical utilization
and cost trends for dates of service September 30, 2025, and prior.
13