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Cover and table of contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2026
OR
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _____ to _____
Commission file number: 001-31826
CENTENE CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 42-1406317 | ||||||||||
| (State or other jurisdiction of | (I.R.S. Employer | ||||||||||
| incorporation or organization) | Identification Number) | ||||||||||
| 7700 Forsyth Boulevard | |||||||||||
| St. Louis, | Missouri | 63105 | |||||||||
| (Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: (314) 725-4477
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||||
| Common Stock $0.001 Par Value | CNC | New York Stock Exchange |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files) ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☒ | Accelerated filer | ☐ | ||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ☐ | ||||||||
| Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of April 24, 2026, the registrant had 493,797 thousand shares of common stock outstanding.
CENTENE CORPORATION
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
All statements, other than statements of current or historical fact, contained in this filing are forward-looking statements. Without limiting the foregoing, forward-looking statements often use words such as "believe," "anticipate," "plan," "expect," "estimate," "predict," "intend," "seek," "target," "goal," "potential," "may," "will," "would," "could," "should," "can," "continue," and other similar words or expressions (and the negative thereof). Centene Corporation and its subsidiaries (Centene, the Company, our or we) intends such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we are including this statement for purposes of complying with these safe-harbor provisions. In particular, these statements include, without limitation, statements about our expected future operating or financial performance, changes in laws and regulations, market opportunity, expectations concerning pricing actions, competition, expected contract start dates and terms, expected activities in connection with completed and future acquisitions and dispositions, our investments, and the adequacy of our available cash resources. These statements may be found in the various sections of this filing, such as Part I, Item 2. "Management's Discussion and Analysis of Financial Condition and Results of Operations," Part II, Item 1. "Legal Proceedings," and Part II, Item 1A. "Risk Factors."
These forward-looking statements reflect our current views with respect to future events and are based on numerous assumptions and assessments made by us in light of our experience and perception of historical trends, current conditions, business strategies, operating environments, future developments, and other factors we believe appropriate. By their nature, forward-looking statements involve known and unknown risks and uncertainties and are subject to change because they relate to events and depend on circumstances that will occur in the future, including economic, regulatory, competitive, and other factors that may cause our or our industry's actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties, and assumptions.
All forward-looking statements included in this filing are based on information available to us on the date of this filing. Except as may be otherwise required by law, we undertake no obligation to update or revise the forward-looking statements included in this filing, whether as a result of new information, future events, or otherwise, after the date of this filing. You should not place undue reliance on any forward-looking statements, as actual results may differ materially from projections, estimates, or other forward-looking statements due to a variety of important factors, variables, and events including, but not limited to:
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our ability to design and price products that are competitive and/or actuarially sound;
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our ability to accurately predict and effectively manage health benefits and other operating expenses and reserves, including fluctuations in medical costs;
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rate cuts, insufficient rate changes or other payment reductions or delays by government payors affecting our government businesses;
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the effect of social, economic, and political conditions, geopolitical events and state and federal policies, including the amount and terms of state and federal funding for government-sponsored healthcare programs, including as a result of changes in U.S. presidential administrations or Congress;
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changes in federal or state laws or regulations, including changes with respect to income tax reform or government healthcare programs as well as changes with respect to the Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation Act (collectively referred to as the ACA) and any regulations enacted thereunder, including the timing and terms of renewal or modification of the Enhanced Advance Premium Tax Credits (eAPTCs) or program integrity initiatives that could have the effect of reducing membership or profitability of our products;
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unanticipated increased healthcare costs, including due to changes in consumer and provider behaviors, inflation and tariffs;
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our ability to maintain or achieve improvement in the Centers for Medicare and Medicaid Services (CMS) Star ratings and maintain or achieve improvement in other quality scores in each case that could impact revenue and future growth;
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competition, including for providers, broker distribution networks, contract reprocurements and organic growth;
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our ability to adequately anticipate demand and timely provide for operational resources to maintain service level requirements in compliance with the terms of our contracts and state and federal regulations;
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our ability to comply with the terms of our contracts and state and federal regulations and our ability to effectively oversee our third-party vendors to comply with the terms of their contracts with us and state and federal regulations;
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our ability to manage our information systems effectively;
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disruption, unexpected costs, or similar risks from business transactions, including acquisitions, divestitures, and changes in our relationships with third-party vendors;
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impairments to real estate, investments, goodwill and intangible assets;
i
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changes in senior management, loss of one or more key personnel or an inability to attract, hire, integrate and retain skilled personnel;
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membership and revenue declines or unexpected trends;
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changes in healthcare practices, new technologies, and advances in medicine;
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our ability to effectively and ethically use artificial intelligence and machine learning in compliance with applicable laws;
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changes in macroeconomic conditions, including inflation, interest rates and volatility in the financial markets;
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negative public perception of the Company and the managed care industry;
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uncertainty concerning government shutdowns, debt ceilings or funding;
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tax matters;
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disasters, climate-related incidents, acts of war or aggression or major epidemics;
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changes in expected contract start dates and terms;
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changes in provider, broker, vendor, state, federal and other contracts and delays in the timing of regulatory approval of contracts, including due to protests and our ability to timely comply with any such changes to our contractual requirements or manage any unexpected delays in regulatory approval of contracts;
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the expiration, suspension, or termination of our contracts with federal or state governments (including, but not limited to, Medicaid, Medicare or other customers);
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the difficulty of predicting the timing or outcome of legal or regulatory audits, investigations, proceedings or matters including, but not limited to, our ability to resolve claims and/or allegations on acceptable terms, or at all, or whether additional claims, reviews or investigations will be brought;
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challenges to our contract awards;
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cyber-attacks or other data security incidents or our failure to comply with applicable privacy, data or security laws and regulations;
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the exertion of management's time and our resources, and other expenses incurred and business changes required in connection with complying with the terms of our contracts and the undertakings in connection with any regulatory, governmental, or third party consents or approvals for acquisitions or dispositions;
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any changes in expected closing dates, estimated purchase price, or accretion for acquisitions or dispositions;
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losses in our investment portfolio;
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restrictions and limitations in connection with our indebtedness;
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a downgrade of our corporate family rating, issuer rating or credit rating of our indebtedness; and
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the availability of debt and equity financing on terms that are favorable to us.
This list of important factors is not intended to be exhaustive. We discuss certain of these matters more fully, as well as certain other factors that may affect our business operations, financial condition, and results of operations, in our filings with the Securities and Exchange Commission (SEC), including our annual report on Form 10-K, other quarterly reports on Form 10-Q and current reports on Form 8-K. Due to these important factors and risks, we cannot give assurances with respect to our future performance, including without limitation our ability to maintain adequate premium levels or our ability to control our future medical and selling, general and administrative (SG&A) costs.
ii
Non-GAAP Financial Presentation
The Company is providing certain non-GAAP financial measures in this report as the Company believes that these figures are helpful in allowing investors to more accurately assess the ongoing nature of the Company's operations and measure the Company's performance more consistently across periods. The Company uses the presented non-GAAP financial measures internally in evaluating the Company's performance and for planning purposes, by allowing management to focus on period-to-period changes in the Company's core business operations, and in determining employee incentive compensation. Therefore, the Company believes that this information is meaningful in addition to the information contained in the GAAP presentation of financial information. The Company strongly encourages investors to review its consolidated financial statements and publicly filed reports in their entirety and cautions investors that the non-GAAP financial measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.
Specifically, the Company believes the presentation of non-GAAP financial measures that excludes amortization of acquired intangible assets, acquisition and divestiture related expenses, as well as other items, allows investors to develop a more meaningful understanding of the Company's core performance over time.
The tables below provide reconciliations of non-GAAP items ($ in millions, except per share data):
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| GAAP net earnings attributable to Centene | $ | 1,541 | $ | 1,311 | |||||||||||||||||||
| Amortization of acquired intangible assets | 166 | 173 | |||||||||||||||||||||
| Other adjustments (1) | 7 | 3 | |||||||||||||||||||||
| Income tax effects of adjustments (2) | (42) | (42) | |||||||||||||||||||||
| Adjusted net earnings | $ | 1,672 | $ | 1,445 | |||||||||||||||||||
| GAAP diluted earnings per share (EPS) attributable to Centene | $ | 3.11 | $ | 2.63 | |||||||||||||||||||
| Amortization of acquired intangible assets | 0.33 | 0.35 | |||||||||||||||||||||
| Other adjustments (1) | 0.01 | 0.01 | |||||||||||||||||||||
| Income tax effects of adjustments (2) | (0.08) | (0.09) | |||||||||||||||||||||
| Adjusted diluted EPS | $ | 3.37 | $ | 2.90 |
(1) Other adjustments include the following pre-tax items:
2026:
(a) enterprise optimization costs of $13 million, or $0.03 per share ($0.02 after-tax), gain on sale of a provider network in the Other segment of $10 million, or $0.02 per share ($0.01 after-tax), net loss on debt extinguishment of $5 million, or $0.01 per share ($0.01 after-tax), a net gain on real estate transactions of $4 million, or $0.01 per share ($0.01 after-tax), and severance costs due to enterprise optimization and contract exits of $3 million, or $0.00 per share ($0.00 after-tax).
2025:
(a) a reduction to the previously reported gain on the sale of Magellan Rx of $10 million, or $0.02 per share ($0.02 after-tax) and a net gain on real estate transactions of $7 million, or $0.01 per share ($0.01 after-tax).
(2) The income tax effects of adjustments are based on the effective income tax rates applicable to each adjustment.
iii
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| GAAP selling, general and administrative expenses | $ | 3,397 | $ | 3,353 | |||||||||||||||||||
| Less: | |||||||||||||||||||||||
| Severance | 3 | — | |||||||||||||||||||||
| Enterprise optimization costs | 13 | — | |||||||||||||||||||||
| Adjusted selling, general and administrative expenses | $ | 3,381 | $ | 3,353 |
iv
PART I
FINANCIAL INFORMATION
Next: Item 1. Financial Statements.