Highlights

  • Second quarter total revenues rose 10% to $53.6 billion, and GAAP diluted EPS was $2.19 versus a loss of $0.51.
  • The health benefits ratio improved to 89.6% from 93.0%, while at-risk membership fell 8% to 25.9 million.
  • Centene committed to a voluntary separation program on July 27, with severance costs of $315 million to $365 million expected.
  • The company repurchased $1.3 billion of senior notes in six months, and its debt-to-capital ratio fell to 41.6%.

Centene (NYSE:CNC) shares were trading near their 52-week high at USD 70.15 on October 21, 2026, down 0.93%. The healthcare enterprise was selected in July to continue its HealthChoice Illinois Medicaid contract, committed to a voluntary separation program on July 27, and filed its second quarter 2026 report on July 28.

Based in St. Louis, Missouri, Centene is a Delaware corporation that describes itself as a healthcare enterprise serving government-sponsored and commercial programs, with a focus on under-insured and uninsured individuals. It reports four segments: Medicaid; Medicare, including Medicare Advantage and prescription drug plans; Commercial, which includes its Marketplace business; and Other, which holds pharmacy, vision and dental, clinical, behavioral health and corporate operations. Its fiscal year ends December 31.

Revenue Up 10% and a Return to Profit

Total revenues for the quarter ended June 30, 2026 were $53.6 billion, up 10% from $48.7 billion, with premium tax revenue up to $9.2 billion from $6.3 billion. GAAP net earnings attributable to Centene were $1.09 billion, or $2.19 per diluted share, against a loss of $253 million, or $0.51, a year earlier. Non-GAAP adjusted diluted EPS was $2.51 versus a loss of $0.16.

The health benefits ratio fell to 89.6% from 93.0%, helped by Marketplace pricing and risk transfer, Medicaid rate increases and no Medicare Advantage premium deficiency reserve. The final 2025 Marketplace risk adjustment results added a pre-tax benefit of $481 million in the first half. Medicaid revenue rose 14% to $32.0 billion and Medicare 17% to $11.1 billion, while Commercial revenue fell 7% to $9.4 billion.

Membership, Contracts and Legal Matters

At-risk membership was 25.9 million at June 30, down 2.1 million from a year earlier. Marketplace membership dropped to 3.5 million from 5.9 million, a decline the company links partly to the expiration of enhanced subsidies, while Medicare prescription drug plan membership rose to 8.8 million from 7.8 million.

Contract news was mixed. Meridian was chosen in July to continue Illinois Medicaid managed care under a four-year contract expected to begin in January 2027. Centene was not selected for the Florida Children's Medical Services program, whose contract ends in September 2026, and it is transitioning its Hawaii operations after non-renewals. It is protesting Medicaid awards in Georgia and Texas, and California plans to move a Medi-Cal population to fee-for-service from January 2027.

A federal securities class action filed in July 2025, with related derivative suits, alleges misstatements about 2025 earnings guidance. Centene denies wrongdoing and is defending the cases, and it had accrued no material amount for legal matters.

Debt Paydown, Liquidity and Capital Return

Operating cash flow was $8.0 billion for six months, up from $3.3 billion, reflecting earnings and the timing of pass-through payments. Centene repurchased $1.3 billion of 2027 and 2028 senior notes, leaving $14.2 billion outstanding, and borrowed nothing on its $4.0 billion revolver while carrying $2.0 billion on a term loan. Unregulated cash and investments were $1.8 billion.

No shares were repurchased in the quarter, and $1.8 billion remained under the stock repurchase authorization. Another $981 million was available for senior note repurchases.

Outlook and Planned Actions

The 10-Q does not provide full-year earnings guidance. It does set out planned items. Severance costs of approximately $315 million to $365 million are expected during the rest of 2026, mainly for the voluntary separation program, on top of $61 million of enterprise optimization costs in the first half. Centene expects roughly $600 million of net dividends from insurance subsidiaries and about $400 million of additional capital expenditures this year.

The pending sale of the remaining Magellan Health businesses, agreed in December 2025, is classified as held for sale, with $293 million of assets and liabilities. The company believes its cash, investments, operating cash flow and revolver will fund operations for at least 12 months. These are company estimates.