10-Q · April 28, 2026
Centene reported a strong Q1 2026: total revenues of $49,944 million (+7% YoY) and GAAP diluted EPS of $3.11 (+18% YoY). Medical cost trends remained elevated but margins ticked modestly better (HBR 87.3% vs 87.5%)…
Earnings analysis · 10-Q
CNC earnings analysis
Filed July 27, 2026 · Our reading of the company's report
The latest report
Centene delivered a strong year-over-year recovery in Q2 2026: revenue increased 10% to $53.579 billion, GAAP EPS improved to $2.19 from a $(0.51) loss, and operating income reached $1.198 billion versus a $458 million…
Read full summary
Centene delivered a strong year-over-year recovery in Q2 2026: revenue increased 10% to $53.579 billion, GAAP EPS improved to $2.19 from a $(0.51) loss, and operating income reached $1.198 billion versus a $458 million loss. Margin improvement was driven by Marketplace pricing and risk-adjustment benefits, Medicaid rate and medical-cost management, and improved Medicare profitability, although EPS and operating margin moderated sequentially from Q1. Cash generation and leverage improved materially, but shrinking membership, the expected loss of approximately 250,000 California Medicaid members in 2027, and $315 million to $365 million of expected severance costs remain key offsets.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $2.19
What stood out
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Revenue growth accelerated to $53.6B
Q2 total revenue was $53.579 billion, up 10% from $48.742 billion in Q2 2025. Sequentially, revenue increased from an implied $49.944 billion in Q1 2026, based on $103.523 billion of first-half revenue, or approximately 7%.
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EPS returned to profitability
GAAP diluted EPS recovered to $2.19 from a $(0.51) loss in Q2 2025, a $2.70-per-share improvement. EPS declined sequentially from an implied $3.11 in Q1 2026, based on first-half EPS of $5.30.
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Operating margin sharply better year over year
Operating income was $1.198 billion, versus a $458 million operating loss a year earlier; operating margin improved to 2.2% from negative 0.9%. The margin was lower than the implied 3.7% in Q1 2026, when operating income was $1.861 billion on $49.944 billion of revenue.
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Medical-cost improvement expanded margins
Gross margin was $4.617 billion, or 10.4% of premium and service revenue, compared with $3.018 billion, or 7.1%, in Q2 2025. The 330-basis-point expansion reflected an HBR of 89.6%, down from 93.0%.
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Cash generation strengthened materially
Operating cash flow was $7.956 billion in the first six months of 2026, up from $3.295 billion a year earlier. After $374 million of capital expenditures, implied first-half free cash flow was $7.582 billion and capex was 4.7% of operating cash flow.
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Working capital and leverage improved
Liquidity and leverage improved: working capital rose to $5.9 billion from $3.7 billion at December 31, 2025, while debt-to-capital fell to 41.6% from 46.5% following $1.3 billion of senior-note repurchases.
What to watch
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Membership contraction remains substantial
Managed-care membership fell 2.1 million, or 8%, year over year to 25.9 million. Commercial membership declined to 4.0 million from 6.3 million, including Marketplace membership falling to 3.5 million from 5.9 million.
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California transition threatens 250,000 members
California's January 2027 transition of the Medi-Cal UIS population to fee-for-service is expected to affect approximately 250,000 Health Net members, reducing California Medicaid membership and associated premium revenue.
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Severance program creates near-term charges
The company expects $315 million to $365 million of severance costs during the remainder of 2026 under its voluntary separation program, with possible additional 2027 enterprise-optimization charges not yet estimable.
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Part D receivables present cash-timing risk
Centene has $2.7 billion of eligible 2025 Part D risk-sharing receivables still outstanding at June 30, 2026. It sold a $1.0 billion participating interest in March for $970 million of proceeds, incurring a $30 million pre-tax loss, illustrating timing and monetization risk around CMS payments.
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No formal risk-factor updates; rate exposure persists
The filing states that there were no material changes to the risk factors in the 2025 Form 10-K. However, a hypothetical immediate 1% rate increase would reduce fixed-income investment fair value by approximately $618 million.
Management's outlook
The 10-Q does not provide an updated quantitative revenue or EPS outlook. Management expects approximately $600 million of insurance-subsidiary dividends and approximately $400 million of additional capital expenditures during the remainder of 2026; it also estimates $315 million to $365 million of severance costs during the remainder of 2026.
Earlier filings 4
10-K · February 17, 2026
Centene reported full-year 2025 revenues of $194.8 billion and membership of 27.6 million, reflecting continued scale as the nation's largest Medicaid and Marketplace insurer. However, GAAP results were materially…
10-Q · July 25, 2025
Centene reported strong top-line growth with total revenues of $48,742 million for Q2 2025, up $8,906 million versus Q2 2024 ($39,836 million), but profitability deteriorated: operating loss was $(458) million and GAAP…
10-Q · July 26, 2024
Centene beat consensus in Q2 with revenues of $39,836 million (up $2,228 million or 5.9% vs Q2 2023) and GAAP diluted EPS of $2.16 (up $0.24 or 12.5% vs Q2 2023). Operating income was $1,229 million (operating margin…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.