Molina Healthcare (MOH) Q4 2024 earnings summary

Executive summary

• Reported adjusted EPS of $5.05 for Q4 and $22.65 for full year 2024, with 8.5% year-over-year EPS growth and $38.6 billion in premium revenue, up 19% year-over-year.

• Q4 and full-year results fell below guidance due to higher-than-expected medical cost trends, especially in Medicaid and Medicare, but operating discipline and growth initiatives remain strong.

• Ended 2024 with 5.5 million members; 2025 guidance targets $42 billion premium revenue and adjusted EPS of at least $24.50.

• Major growth initiatives included the ConnectiCare acquisition, new Medicaid contract wins in Georgia, and dual-eligible contract expansions, supporting a clear path to $46 billion premium revenue in 2026 and $52 billion in 2027.

• Embedded earnings power increased to $7.75 for 2026 and beyond, with 2025 guidance reflecting $1.50 realization of embedded earnings.

Financial highlights

• Q4 premium revenue was $10 billion; full-year premium revenue reached $38.6 billion, up 19% year-over-year; total revenue for 2024 was $40.7 billion.

• Q4 consolidated MCR was 90.2%, higher than expected due to medical cost pressures; full-year consolidated MCR was 89.1%.

• Full-year pre-tax margin was 4.3%, within long-term target range; after-tax margin was 2.9% (GAAP) and 3.2% (adjusted).

• Adjusted G&A ratio for 2024 was 6.7%, reflecting disciplined cost management and vendor contract renegotiations.

• Operating cash flow for 2024 was $644 million, lower than 2023 due to risk corridor payments and timing of government receivables and payables.

Outlook and guidance

• 2025 premium revenue guidance is approximately $42 billion, representing 9% growth from 2024; total revenue expected at $44 billion.

• Adjusted EPS guidance for 2025 is at least $24.50, reflecting 8% year-over-year growth, with $1 of contract implementation costs included.

• Projected 2025 consolidated MCR is 88.7%, Medicaid MCR at 89.9%, Medicare MCR at 89%, and Marketplace MCR at 79%.

• Adjusted G&A ratio guidance for 2025 is 7%, with normalized ratio at 6.6%; GAAP G&A ratio expected at 7.2%.

• Year-end 2025 membership expected at 5.9 million, with 5.0 million Medicaid, 250,000 Medicare, and 580,000 Marketplace members.