Centene (CNC) Q4 2024 earnings summary

Executive summary

• 2024 adjusted diluted EPS was $7.17, up 7% year-over-year, with Q4 adjusted diluted EPS at $0.80, exceeding prior guidance, despite industry headwinds.

• Entering 2025 with strong momentum, clear strategy, and operational improvements across all business lines.

• 2025 premium and service revenue guidance increased by $4 billion to $158–$160 billion, reflecting strong Medicaid and Medicare enrollment.

• Membership grew 12% in Marketplace and 50% in Medicare PDP sequentially from Q3 2024.

• $3 billion in share repurchases executed in 2024.

Financial highlights

• Full-year 2024 premium and service revenues increased 4% to $145.5 billion; Q4 premium and service revenue reached $36.3 billion.

• Full-year 2024 adjusted EPS was $7.17, including a $0.29 net benefit from a Marketplace CSR settlement.

• Q4 consolidated HBR was 89.6%; full-year consolidated HBR was 88.3%, up from 87.7% in 2023.

• Adjusted SG&A expense ratio improved to 8.9% in Q4 from 9.7% last year; full-year SG&A was 8.5%.

• Cash flow from operations for 2024 was $154 million, down from $8.1 billion in 2023, impacted by pharmacy receivables and risk adjustment payables.

Outlook and guidance

• 2025 adjusted diluted EPS guidance floor reiterated at greater than $7.25; GAAP diluted EPS floor at greater than $6.19.

• 2025 premium and service revenue guidance raised to $158–$160 billion, reflecting Medicaid, Medicare Advantage, and PDP outperformance.

• Marketplace membership expected to peak above 5 million in Q1, with year-end attrition to mid-4 million.

• Medicare segment premium revenue expected to be $2.5 billion higher in 2025 than previously forecast.

• PDP business expected to generate $16 billion in 2025 revenue with a 1% target margin.