Molina Healthcare (MOH) Q2 2024 earnings summary

Executive summary

• Q2 2024 premium revenue rose 17% year-over-year to $9.4 billion, driven by new contracts, acquisitions, and organic growth, partially offset by Medicaid redeterminations.

• Membership reached approximately 5.6 million as of June 30, 2024, up 8% from the prior year, supported by new Medicaid contracts, acquisitions, and organic growth.

• Adjusted EPS for Q2 2024 was $5.86, up 4% year-over-year; GAAP EPS was $5.17, down 3% year-over-year.

• Full-year 2024 guidance reaffirmed: premium revenue of ~$38B and adjusted EPS of at least $23.50, representing 13% EPS growth and 17% revenue growth.

• Strong Medicare and Marketplace performance offset Medicaid cost pressures.

Financial highlights

• Q2 2024 total revenue: $9.88 billion, up from $8.33 billion in Q2 2023.

• Q2 consolidated MCR was 88.6%, with adjusted pre-tax margin at 4.6% and after-tax margin at 3.5%.

• Q2 2024 GAAP net income: $301 million (vs. $309 million in Q2 2023); adjusted net income: $341 million (vs. $327 million in Q2 2023).

• Adjusted G&A ratio for Q2 was 6.9%, reflecting operating discipline and fixed cost leverage.

• Investment income increased 19% year-over-year to $115 million in Q2 2024.

Outlook and guidance

• Full-year premium revenue guidance unchanged at ~$38B; adjusted EPS guidance at least $23.50.

• Medicaid MCR guidance for 2024 increased slightly to 89.3% due to a one-time California item.

• Medicare MCR guidance remains at 88%; Marketplace MCR expected at 78% for the year.

• Embedded earnings from new store additions now expected at $5 per share, with half to emerge in 2025.

• Expect to retain approximately 40% of Medicaid membership gained since March 2020 after redeterminations.