Molina Healthcare (MOH) Q3 2024 earnings summary

Executive summary

• Q3 2024 adjusted EPS was $6.01 and GAAP EPS was $5.65, with premium revenue of $9.7B, in line with expectations and up 18% year-over-year, driven by membership growth, new contracts, and acquisitions.

• Net income for Q3 2024 was $326M, up 33% year-over-year, with after-tax margin at 3.2% and membership reaching 5.6M, an 8% increase.

• Consolidated MCR was 89.2%, higher than expected due to medical cost pressures in Medicaid and Medicare.

• Full-year 2024 premium revenue guidance reaffirmed at ~$38B, with at least $23.50 adjusted EPS.

• Growth initiatives include contract wins in Michigan and Massachusetts, and continued focus on dual-eligible and Marketplace segments.

Financial highlights

• Q3 2024 total revenue was $10.34B, with $9.7B premium revenue, and net income of $326M.

• Adjusted pre-tax margin was 4.5%, after-tax margin 3.2% (GAAP) and 3.4% (adjusted).

• Year-to-date consolidated MCR is 88.8%, slightly above the long-term target.

• Q3 Medicaid MCR was 90.5%; Medicare MCR was 89.6%; Marketplace MCR was 73%.

• Adjusted G&A ratio for Q3 was 6.4% (adjusted) and 6.5% (GAAP), reflecting operating discipline and one-time vendor credits.

Outlook and guidance

• Full-year 2024 premium revenue guidance remains at ~$38B (17% YoY growth); adjusted EPS guidance at least $23.50 (13% YoY growth).

• Full-year 2024 MCR expected at 88.7%, G&A ratio at 6.8%.

• Medicaid MCR for Q4 expected at 89%, with full-year Medicaid MCR at 90%.

• Medicare Q4 MCR expected at 90%, full-year at 88.3%.

• Marketplace Q4 MCR expected at 78.1%, full-year at 74%.

• 2025 outlook includes harvesting less than half of embedded earnings, with some headwinds from declining interest rates.