third quarter 2026
Filed Oct 26, 2026Third Quarter GAAP Diluted Loss Per Share of $(0.14); Adjusted Diluted Earnings Per Share of $0.58; increases 2026 GAAP diluted EPS guidance to greater than $3.46 and adjusted diluted EPS guidance to greater than $5.20.
Premium and service revenues increased 0.5% to $45.1 billion, adjusted diluted EPS was $0.58 versus $0.50, adjusted SG&A expense ratio fell to 6.5% from 7.0%, and the Company increased its adjusted diluted EPS guidance floor by $0.40. GAAP results remained a loss of $(0.14) per diluted share and total at-risk membership declined to 25,698,200 from 27,968,100.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenues, three months ended September 30GAAP | $50.65B | – | – |
| Premium and service revenues, three months ended September 30GAAP | $45.10B | – | 0.5% |
| Premium revenues, three months ended September 30GAAP | $44.37B | – | – |
| Service revenues, three months ended September 30GAAP | $735M | – | – |
| Premium tax revenues, three months ended September 30GAAP | $5.54B | – | – |
| Health benefits ratio, three months ended September 30GAAP | 92.7% | – | unchanged |
| SG&A expense ratio, three months ended September 30GAAP | 7.2% | – | – |
| Adjusted SG&A expense ratio, three months ended September 30non-GAAP | 6.5% | – | – |
| Selling, general and administrative expenses, three months ended September 30GAAP | $3.23B | – | – |
| Adjusted selling, general and administrative expenses, three months ended September 30non-GAAP | $2.92B | – | – |
| Earnings (loss) from operations, three months ended September 30GAAP | −$307M | – | – |
| Net earnings (loss) attributable to Centene Corporation, three months ended September 30GAAP | −$71M | – | – |
| Adjusted net earnings, three months ended September 30non-GAAP | $290M | – | – |
| Diluted earnings (loss) per common share attributable to Centene Corporation, three months ended September 30GAAP | $(0.14) | – | – |
| Adjusted diluted EPS, three months ended September 30non-GAAP | $0.58 | – | – |
| Effective tax rate, three months ended September 30GAAP | 46.7% | – | – |
| Adjusted effective tax rate, three months ended September 30non-GAAP | 14.5% | – | – |
| Total cash flow (used in) operations, three months ended September 30GAAP | −$3.67B | – | – |
| Total revenues, nine months ended September 30GAAP | $154.2B | – | – |
| Premium and service revenues, nine months ended September 30GAAP | $134.1B | – | – |
| Net earnings attributable to Centene Corporation, nine months ended September 30GAAP | $2.56B | – | – |
| Adjusted net earnings, nine months ended September 30non-GAAP | $3.21B | – | – |
| Diluted earnings per common share attributable to Centene Corporation, nine months ended September 30GAAP | $5.15 | – | – |
| Adjusted diluted EPS, nine months ended September 30non-GAAP | $6.45 | – | – |
| Net cash provided by operating activities, nine months ended September 30GAAP | $4.29B | – | – |
| Capital expenditures, nine months ended September 30GAAP | −$568M | – | – |
| Total at-risk membershipother | 25,698,200 | – | – |
| Debt to capitalizationGAAP | 41.1% | – | – |
| Days in claims payableGAAP | 48 days | an increase of one day | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Medicaid premium and service revenues, three months ended September 30The Company cited rate increases in the Medicaid business to address medical trend and state directed payments, partly offset by lower Medicaid membership. | $24.04B | – | 4% |
| Commercial premium and service revenues, three months ended September 30The Company cited lower Marketplace membership as a partial offset to premium and service revenue growth. | $8.7B | – | (21)% |
| Medicare premium and service revenues, three months ended September 30The increase was driven by premium yield and membership growth in the PDP business. | $11.26B | – | 20% |
| Other premium and service revenues, three months ended September 30No specific driver was provided for the Other revenue change. | $1.10B | – | (18)% |
Full Year 2026 outlook
- RevenueTotal revenues (in billions): $196.5 to $200.5; Premium and service revenues (in billions): $173.0 to $177.0
- Operating expensesSG&A expense ratio: 7.2% to 7.8%; Adjusted SG&A expense ratio: 6.9% to 7.5%; interest expense: $600 million to $620 million
- Tax rateEffective tax rate: 26.5% to 27.5%; Adjusted effective tax rate: 25.5% to 26.5%
- NoteGAAP diluted EPS: greater than $3.46
- NoteAdjusted diluted EPS: greater than $5.20
- NoteHBR: 90.4% to 91.1%
- NoteDiluted shares outstanding (in millions): 497.0 to 500.0
- NoteSeverance costs due to enterprise optimization and contract exits: approximately $355 million to $405 million
- NoteEnterprise optimization third-party vendor costs: approximately $85 million to $115 million
- NoteAcquisition and divestiture related expenses: approximately $1 million
- NoteIncome tax effects of adjustments: approximately $266 million to $270 million
Capital returns
- During the third quarter of 2026, the Company repurchased $558 million of the Company's par value senior notes due 2027 and 2028.
- In October 2026, the Company repurchased the remaining $569 million of its par value Senior Notes due 2027.
- Common stock repurchases were $(57) million for the nine months ended September 30, 2026.
What drove it
- Premium and service revenue growth was driven by premium yield and PDP membership growth, Marketplace and Medicaid rate increases to address medical trend, Marketplace risk adjustment revenue transfer for the 2026 benefit year, and state directed payments.
- The consolidated HBR benefited from a lower Marketplace HBR, improved pricing, risk transfer reflecting Marketplace-member acuity, and strong fundamental performance in Medicare Advantage and PDP.
- Adjusted SG&A expense ratio improvement reflected strong cost management, expense leverage over higher revenues, reduced Marketplace membership, and PDP growth.
- The third-quarter operating cash outflow was primarily driven by the timing of pass through, premium and other payments.
Concerns
- Total at-risk membership was 25,698,200, compared with 27,968,100 at September 30, 2025, while Marketplace membership was 3,403,300 compared with 5,828,100.
- GAAP diluted loss per share was $(0.14), and GAAP net loss attributable to Centene Corporation was $(71) million.
- The SG&A expense ratio increased to 7.2% from 7.0%, primarily driven by enterprise optimization severance and vendor costs.
- Commercial premium and service revenues declined (21)% to $8,700 million.
- The effective tax rate was 46.7%, compared to 0.6% in the third quarter of 2025.
What to watch
- Full-year HBR guidance was decreased to 90.4% to 91.1%, with the Company stating its HBR mid-point expectation improved by 15 basis points to 90.75%.
- Execution against the increased full-year GAAP diluted EPS guidance floor of greater than $3.46 and adjusted diluted EPS guidance floor of greater than $5.20.
- The trajectory of Medicaid and Marketplace membership, which partly offset revenue growth, and PDP membership growth.
- The remaining $1.9 billion available under the senior note debt repurchase program as of October 27, 2026.
- Enterprise optimization costs, including estimated full-year severance costs of approximately $355 million to $405 million and third-party vendor costs of approximately $85 million to $115 million.
Balance sheet and cash flow
- At September 30, 2026, cash, investments and restricted deposits were $39.9 billion, including $175 million of cash available for general corporate use.
- Cash and cash equivalents were $20,700 million at September 30, 2026, versus $17,888 million at December 31, 2025.
- Total debt was $15.5 billion following the third-quarter senior note repurchase, with no borrowings on the $4.0 billion Revolving Credit Facility at quarter end.
- Medical claims liabilities totaled $21.5 billion.
- Net cash provided by operating activities was $4,287 million for the nine months ended September 30, 2026, versus $4,651 million in 2025.
- Net cash used in financing activities was $(1,906) million for the nine months ended September 30, 2026, including $(1,872) million of payments and repurchases of long-term debt.
Analysis
Centene reported third-quarter total revenues of $50,647 million and premium and service revenues of $45,105 million, compared with $49,690 million and $44,898 million, respectively, in the prior-year period. Premium and service revenue increased 0.5%, with PDP premium yield and membership growth, rate increases in Marketplace and Medicaid, Marketplace risk adjustment revenue transfer, and state directed payments offset in part by lower Marketplace and Medicaid membership. Medicare premium and service revenues increased 20% to $11,263 million, while Commercial declined (21)% to $8,700 million.
Underlying operating indicators showed margin progress. Consolidated HBR was 92.7%, unchanged from the prior-year quarter, supported by Marketplace pricing and risk transfer as well as Medicare Advantage and PDP performance. Adjusted SG&A expense ratio improved to 6.5% from 7.0%, while reported SG&A expense ratio increased to 7.2% from 7.0% because of enterprise optimization severance and vendor costs. The Company reported a GAAP net loss attributable to Centene Corporation of $(71) million and GAAP diluted loss per share of $(0.14), but adjusted net earnings were $290 million and adjusted diluted EPS was $0.58, compared with $245 million and $0.50.
Membership remains the principal volume pressure. Total at-risk membership was 25,698,200, compared with 27,968,100 at September 30, 2025, and 25,885,400 in the prior quarter. Marketplace membership was 3,403,300 and Medicaid membership was 11,895,900. In contrast, Medicare PDP membership was 8,947,200, compared with 7,972,500 at September 30, 2025, supporting the Medicare revenue increase and the adjusted SG&A ratio improvement.
The balance sheet showed $39.9 billion of cash, investments and restricted deposits, medical claims liabilities of $21.5 billion, and total debt of $15.5 billion after $558 million of senior-note repurchases during the quarter. The Company also repurchased the remaining $569 million of 2027 Senior Notes in October. Third-quarter operating cash flow was a use of $3.7 billion, driven by payment timing, while nine-month operating cash flow was $4,287 million.
Management increased the 2026 GAAP diluted EPS guidance floor to greater than $3.46 and adjusted diluted EPS guidance floor to greater than $5.20. It decreased the HBR guidance range to 90.4% to 91.1% and interest expense guidance to $600 million to $620 million. The release identifies sustained HBR execution, the membership trajectory in Medicaid and Marketplace, PDP growth, and enterprise optimization costs as the key items shaping the full-year outcome.
Management, verbatim
Solid underlying fundamentals within our core businesses have powered a faster recovery to our earnings trajectory than previously anticipated.
Sarah M. London, Chief Executive Officer
We are pleased with the progress our teams have made in delivering increased margin to power our mission of transforming the health of the communities we serve, one person at a time.
Sarah M. London, Chief Executive Officer
We remain focused on a strong finish to 2026 and building on this progress in 2027.
Sarah M. London, Chief Executive Officer
Not in the filing
stated, not guessed- Previous-release outlook was not provided; therefore, prior-guidance comparisons are unavailable.
- Gross margin was not reported.
- Quarterly free cash flow was not reported.
- Dividend information was not reported.
- Prior-quarter revenue, earnings, EPS, operating income, and cash-flow figures were not reported on the corresponding line items.
- A year-over-year percentage change was not reported for total revenues, GAAP net loss, GAAP EPS, adjusted EPS, operating income, or nine-month financial-statement line items.
- Segment operating income or profitability was not reported.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.