On April 25, 2025, Centene Corp (CNC, Financial) released its 8-K filing detailing its financial results for the first quarter of 2025. Centene, a managed care organization specializing in government-sponsored healthcare plans, reported a significant increase in earnings and revenue, surpassing analyst expectations. The company, which serves 22 million medical members primarily through Medicaid, Medicare, and individual exchanges, demonstrated strong growth across its core business segments.
Financial Performance and Key Metrics
Centene Corp (CNC, Financial) reported a GAAP diluted earnings per share (EPS) of $2.63, exceeding the analyst estimate of $2.20. The adjusted diluted EPS was $2.90, reflecting a 28% increase from $2.26 in the first quarter of 2024. Total revenues for the quarter reached $46.62 billion, surpassing the estimated $43.36 billion. Premium and service revenues grew by 17% year-over-year to $42.49 billion, driven by robust membership growth in the Marketplace and Medicare Prescription Drug Plan (PDP) segments.
Membership Growth and Revenue Expansion
Centene experienced a 29% increase in Marketplace membership and a 22% rise in Medicare PDP membership compared to the first quarter of 2024. This growth contributed to the company's decision to raise its 2025 premium and service revenues guidance by $6.0 billion, highlighting the strength of its core businesses. The company's health benefits ratio (HBR) increased slightly to 87.5%, while the SG&A expense ratio improved to 7.9% from 8.9% in the previous year, indicating better cost management.
Income Statement and Cash Flow Highlights
For the first quarter of 2025, Centene's total cash flow provided by operations was $1.51 billion, primarily driven by net earnings and an increase in medical claims liabilities. The company's effective tax rate was 24.7%, up from 21.4% in the first quarter of 2024, reflecting changes in tax effects related to divestitures. Centene's balance sheet showed cash, investments, and restricted deposits totaling $37.0 billion, with medical claims liabilities at $19.9 billion.
Strategic Developments and Future Outlook
Centene's strategic initiatives included securing contracts with the Nevada Department of Health and Human Services and the Illinois Department of Healthcare and Family Services, expanding its Medicaid and Medicare services. The company also received recognition from Fortune® Magazine as one of America's Most Innovative Companies for the second consecutive year. Looking ahead, Centene reiterated its full-year 2025 adjusted diluted EPS guidance of greater than $7.25, reflecting confidence in its growth trajectory.
Our first quarter results demonstrate the resiliency of Centene's platform and the progress we are making as an organization while navigating a dynamic policy landscape," said Chief Executive Officer of Centene, Sarah M. London.
Conclusion
Centene Corp (CNC, Financial) has delivered a strong performance in the first quarter of 2025, driven by significant membership growth and effective cost management. The company's ability to exceed analyst expectations and raise its revenue guidance underscores its strategic positioning in the healthcare plans industry. As Centene continues to expand its services and enhance its operational efficiency, it remains well-positioned to capitalize on future growth opportunities.
Explore the complete 8-K earnings release (here) from Centene Corp for further details.
