Molina Healthcare (MOH) Q4 2025 earnings summary

Executive summary

• Reported an adjusted loss per share of $2.75 in Q4 2025 on $10.7B premium revenue, with full-year adjusted EPS of $11.03 and GAAP EPS of $8.92, both down year-over-year due to trend pressures and retroactive Medicaid items.

• Full-year 2025 premium revenue reached $43.1B, up 11% year-over-year, but pretax margin was 1.6%, below long-term targets.

• Medicaid remains the flagship business, representing 75% of total premium revenue, with industry-leading margins despite headwinds.

• Significant RFP wins in Florida, Wisconsin, Georgia, and Texas, with a 90% renewal win rate and 80% new contract win rate, supporting future growth.

• 2026 guidance anticipates premium revenue of ~$42B and adjusted EPS of at least $5, burdened by $2.50 per share from new Medicaid contract startup costs and Medicare Part D underperformance.

Financial highlights

• Q4 2025 Medicaid MCR was 93.5%, Medicare MCR 97.5%, and Marketplace MCR 99%, all impacted by elevated utilization and retroactive items.

• Full-year 2025 Medicaid MCR was 91.8%, Medicare MCR 92.4%, Marketplace MCR 90.6%, and consolidated MCR 91.7%.

• Adjusted G&A ratio was 6.9% in Q4 and 6.5% for the year, reflecting disciplined cost management.

• Operating cash flow for 2025 was an outflow of $535M, mainly due to Medicaid risk corridor settlements and lower H2 performance.

• Full-year 2025 GAAP net income was $472M; adjusted net income was $584M, both down from prior year.

Outlook and guidance

• 2026 premium revenue projected at ~$42B, a 2% decline from 2025, with adjusted EPS guidance of at least $5, burdened by new contract startup costs and MAPD underperformance.

• Underlying 2026 earnings, excluding these items, estimated at ~$7.50 per share.

• Medicaid 2026 MCR guidance is 92.9%, with a 1.2% pre-tax margin on $33.4B premium; Medicare MCR at 94% with -1.7% pre-tax margin; Marketplace MCR at 85.5% with 1.7% pre-tax margin.

• Embedded earnings now exceed $11 per share, reflecting future contract revenue at target margins.

• Company will exit the traditional Medicare Advantage Part D product in 2027, focusing on dual eligible Medicare business.