MOH

Molina Healthcare came into this earnings day on a quiet win streak, with the stock up over the past month, and then promptly dropped 3.5% to about US$209 after its Q3 2026 release. The move suggests frustration with profit pressure rather than surprise on growth. The headline is simple and uncomfortable. The insurer reported US$10.6b in quarterly revenue yet produced only US$38m in net income and a 0.6% adjusted pretax margin, while the consolidated medical cost ratio sat near 93%. For a managed care story built on disciplined Medicaid execution, that kind of squeeze is what the market is now repricing. Love Molina Healthcare's scale but concerned about a 0.6% pretax margin on US$10.6b of quarterly revenue and a medical cost ratio near 93%? Compare that profile with our screener of sturdier operators in the list of solid balance sheet and fundamentals stocks (25 results) - Revenue (Q3 2026 vs. Q3 2025): US$10,582m vs. US$10,971m (top line lower year on year) - Net Income (Q3 2026 vs. Q3 2025): US$38m vs. US$79m (profit roughly cut in half) - Basic EPS (Q3 2026 vs. Q3 2025): US$0.74 vs. US$1.50 (earnings per share down sharply) - Consolidated Medical Cost Ratio, or MCR (Q3 2026 vs. full year 2026 guidance): 92.9% in Q3 vs. 92.6% guided for 2026 (medical costs running slightly above the annual target) Tired of scrolling through dense earnings tables and margin figures? See Molina Healthcare's full financial picture with a clear view of its profitability trends in our interactive company report for Molina Healthcare. The bullish script hangs on Molina Healthcare quietly building earnings firepower inside current contracts and mix shifts. "Embedded earnings that management estimates at $9 per share, compared with at least $5.25 of 2026 adjusted EPS guidance and at least $7.75 of estimated 2026 earnings power once Marketplace losses, MAPD drag and Florida CMS start up effects are stripped out, create room for Molina Healthcare to convert already committed contracts and margin actions into higher reported EPS." Q3 results keep that math alive but unproven. Adjusted EPS of US$0.89 and a 0.6% pretax margin sit far below the implied earnings capacity. However, guidance for at least US$5.25 in 2026 and management's reaffirmed US$9 of embedded earnings show the uplift target has not been walked back, only delayed by timing on Georgia, Texas and the Florida CMS ramp. One Narrative has put a figure on that disagreement. → See the Narrative with its lower Fair Value, assumptions and all. The bearish view argues that shrinking membership will mute Molina Healthcare's embedded earnings story. "Although Molina Healthcare is quantifying about $9 per share of embedded earnings tied to future contracted premium and margin uplift, the ongoing decline in consolidated membership by 565,000 lives across the first half of 2026 risks leaving some of that capacity underutilized and could mean revenue and earnings fall short of those embedded expectations." Q3 confirms the enrollment hit has not fully cleared. Management still expects about a 6% membership decline for 2026, and 2027 premium guidance has been trimmed to at least US$45b as Georgia and Texas contract ramps slip. The Florida CMS win adds volume but starts at a planned loss, so the print leans toward the bearish concern that backlog is offsetting churn rather than clearly expanding earnings power yet. Molina Healthcare shows how headline revenue and reported profit can diverge in quarterly results. The real opportunity is researching stocks that could be undervalued before the market updates their earnings alignment. - Company 1 - 34% below our estimate - converts long term AI infrastructure and multicloud database contracts into recurring subscription revenue from heavier workloads. - Company 2 - 42% below our estimate - scales storage, inverter and non tracker equipment so delayed solar projects secure higher margin hardware and software packages. - Company 3 - 39% below our estimate - pushes coconut based drinks into mainstream shelves as retailers add private label lines alongside existing branded offerings. Three companies from the same screener. Open all 27 potentially undervalued companies → This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include MOH. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Molina Healthcare (MOH) just posted third quarter 2026 results that topped analyst revenue and earnings forecasts, reaffirmed full year guidance and pointed to early signs of improving Medicaid margins as medical costs begin to stabilize. That earnings beat lands at a time when Molina Healthcare's share price has climbed 13.31% over the past month and 21.39% year to date. The 1-year total shareholder return of 34.56% contrasts sharply with a 3-year total shareholder return that declined 34.63%, hinting at rebuilding momentum after a tougher stretch. Spot fresh momentum stories like Molina Healthcare by scanning our hand-picked 30 high quality undervalued stocks, which combines resilient cash generation with balance sheets built to handle tougher medical cost cycles. Molina Healthcare now looks like a solid Medicaid operator trying to turn the cost corner while its stock has already sprinted ahead. The next question is simple: Are you overpaying for that repair story today? Molina Healthcare closed at $216.64 compared with a narrative fair value of $209.12, so the story in the market is now about how much of the Medicaid margin recovery and earnings rebuild is already baked into that gap. Already won Medicaid contracts and embedded revenue, including large programs in Florida, Georgia, Texas and Illinois, together with management's plan to reach $64b of premium by 2029 from $42b in 2026, describe a pipeline of growth that can feed revenue and earnings without relying solely on new wins. See why 64 investors see Molina Healthcare as 4% overvalued. Result: Fair Value of $209.12 (OVERVALUED) Still, two pressure points hang over the Molina Healthcare story: the weak 2026 ACA Marketplace guidance swing and the risk of tougher Medicaid funding decisions. Find out about the key risks to this Molina Healthcare narrative. Analysts currently view Molina Healthcare as about 4% overvalued relative to their $209.12 fair value, yet the market is valuing the company at a P/S ratio of 0.3x. This is significantly lower than both the US Healthcare industry average of 1.3x and an estimated fair ratio of 0.8x. This suggests a wide valuation gap that could narrow either through changes in the share price or through shifts in the company's fundamentals over time. Which side of that trade do you think changes first? See what the numbers indicate about this price in our valuation breakdown, starting with the See what the numbers say about this price — find out in our valuation breakdown. The Molina Healthcare story reflects a mixed mood, with valuation questions on one side and Medicaid optimism on the other. If you want to move quickly and rely on your own judgment rather than anyone else's narrative, start by weighing the upside case in the 3 key rewards If Molina Healthcare has you thinking harder about price versus potential, do not stop there. Broader context from other stocks can sharpen your next move. Use the Simply Wall Street Screener to pressure test your convictions against other opportunities and avoid leaving strong ideas on the table. - Spot potential mispricings early by scanning a curated set of 20 high quality undiscovered gems that combine solid fundamentals with limited market attention. - Strengthen capital protection by focusing on companies in the 30 resilient stocks with low risk scores that pair resilient balance sheets with lower historical risk scores. - Target sturdier financial footing by reviewing the list of solid balance sheet and fundamentals (26 results) and zeroing in on businesses built to handle tougher market conditions. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include MOH. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Molina Healthcare's third quarter results reflected continued pressure from a challenging medical cost environment, with year-on-year declines in revenue and membership. Management pointed to operational execution on recent contracts and modest margin stability as key drivers, despite persistent utilization pressure in Medicaid and Medicare. CEO Joe Zubretsky described the quarter's Medicaid pre-tax margin as a "trough" in a multi-year cycle, emphasizing that recent rate updates helped offset higher medical costs. Zubretsky added, "The imbalance between rates and trend appears to have stabilized, which supports our view that current Medicaid margins represent the trough in a multi-year cycle." Is now the time to buy MOH? Find out in our full research report (it's free). - Revenue: $11.08 billion vs analyst estimates of $10.87 billion (3.4% year-on-year decline, 2% beat) - Adjusted EPS: $0.89 vs analyst estimates of $0.79 (12% beat) - Management reiterated its full-year Adjusted EPS guidance of $5.25 at the midpoint - Operating Margin: 1%, in line with the same quarter last year - Customers: 4.86 million, down from 4.93 million in the previous quarter - Market Capitalization: $11.29 billion While we enjoy listening to the management's commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. - Andrew Mok (Barclays) asked about the drivers behind Medicaid margin improvement and sequential EPS strength. CEO Joe Zubretsky attributed the improvement to recent rate updates and normal seasonality, while CFO Mark Keim clarified that without the Florida CMS drag, margins would look even better. - Kevin Fischbeck (Bank of America) questioned the impact of work requirements on Medicaid member acuity. Zubretsky explained that most states are interpreting federal guidance in ways that promote continued enrollment, with Nebraska serving as an early example of a more moderate impact than expected. - John Stansel (J.P. Morgan) sought insight on the early performance and break-even path of the Florida CMS contract. Zubretsky described the implementation as "nearly flawless" and expects operational improvements to drive a transition from initial losses to break-even by year two. - A.J. Rice (UBS) pressed on the breadth of margin recovery opportunities across Molina's Medicaid portfolio. Zubretsky noted that while most states remain slightly underfunded, broad-based rate cycle improvements are expected to gradually restore actuarial soundness. - Sarah James (Cantor Fitzgerald) inquired about the pacing of Medicaid membership losses from work requirements. Keim clarified that approximately 6% attrition is expected in 2027, with additional reductions stretching into 2028 and 2029 as states phase in new policies. In the coming quarters, our analysts will focus on (1) the pace at which Medicaid margins recover as new rate cycles take effect, (2) the operational and financial ramp-up of the Florida CMS contract, and (3) the timing and outcome of legal proceedings affecting large contract implementations in Georgia and Texas. Trends in medical cost utilization and state-level policy changes regarding eligibility will also be key signals to monitor. Molina Healthcare currently trades at $213.60, in line with $214.79 just before the earnings. Is there an opportunity in the stock? See for yourself in our full research report (it's free for active Edge members). ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time. Find out which stocks our AI platform is flagging this week. See this week's Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.

- Molina Healthcare reported Q3 2026 revenue of US$11.08b and GAAP EPS of US$0.73, with adjusted EPS of US$0.89 and full year premium and earnings guidance reaffirmed. - The sharp year to date earnings drop, together with management commentary on stabilizing medical cost trends, highlights how Medicaid pricing and utilization remain central to Molina Healthcare's profit recovery effort. - We will now look at how Molina Healthcare's investment narrative lines up with the reaffirmed guidance and early Medicaid margin stabilization. Scan how Molina Healthcare's Q3 reset compares with peers facing the same Medicaid utilization and pricing questions by zeroing in on 30 resilient stocks with low risk scores built to weather medical cost swings. To own Molina Healthcare, you need to believe that Medicaid margin repair, Medicare mix shift, and tighter ACA Marketplace exposure can offset recent earnings pressure. The sharp drop in year to date net income and EPS puts execution under a spotlight. In the short term, the key catalyst is whether emerging signs of stabilizing medical cost trends actually hold through 2026 and into the 2027 rate year. The biggest risk right now is that Medicaid funding, rate adequacy, or utilization drift erodes that recovery path before it fully shows up in results. Q3 earnings, while profitable, kept that tension intact rather than resolving it. The reaffirmed targets suggest the latest quarter does not materially change the near term balance between risk and reward. The most relevant fresh data point is Molina Healthcare reaffirming 2026 premium revenue of about US$42b and adjusted earnings of at least US$5.25 per diluted share, alongside GAAP EPS guidance of at least US$2.38. That matters because it anchors the Medicaid margin recovery and ACA resizing story in a specific near term earnings yardstick. With Q3 adjusted EPS of US$0.89 and nine month GAAP EPS of US$2.19, the bar for the rest of the year is clearly defined. For you as an investor, the operational question is whether cost discipline, rate updates, and ACA pullbacks can deliver that earnings floor while avoiding further strain from underfunded Medicaid markets, weaker Marketplace performance, or slower than planned contribution from acquired health plans. Molina Healthcare's narrative ties analyst expectations for roughly US$54.0b of revenue and US$768.1m of earnings by 2029 to an 8.3% yearly revenue growth rate and an earnings swing of about US$775m, from a loss of US$7.0m today to that 2029 consensus level. Uncover why Molina Healthcare's fair value indicates a 3% potential downside to its current price, which leaves little room for error. Some of the most optimistic Molina Healthcare analysts focused on Medicaid repricing as the big differentiator. Before this Q3 report, the bullish camp was modeling revenue of about US$58.7b and earnings near US$1.0b by 2029, far above the consensus US$54.0b and US$768.1m. You can treat today's results as a fresh test of those pre news assumptions and explore which version you find more credible. Explore 6 other Molina Healthcare fair value estimates, including one that suggests potential upside of as much as 243% from the current price. Don't just follow the ticker, dig into the data and build a conviction that's truly your own. - A great starting point for your Molina Healthcare research is our analysis highlighting 3 key rewards that could impact your investment decision. - See our latest analysis for Molina Healthcare. The report includes a comprehensive fundamental analysis summarized in a single visual, the Snowflake, making it easy to evaluate Molina Healthcare's overall financial health at a glance. Once you have a view on Molina Healthcare, it can help to widen the lens and compare it with other companies that fit different risk and return profiles using the Simply Wall St Screener. - If capital preservation is high on your list, focus on resilient companies with steadier balance sheets by scanning a 30 resilient stocks with low risk scores that prioritise lower risk scores. - For investors who want income on top of potential price gains, look at companies with stronger yields and more robust payouts through 7 dividend fortresses built around higher dividend streams. - If you are hunting for future leaders before they are widely followed, start with 21 high quality undiscovered gems that combine solid fundamentals with lighter analyst coverage. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include MOH. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. - Management believes the Medicaid business has reached its margin trough, with recent rate updates beginning to correct the temporary imbalance between medical cost trend and state reimbursement. - The 92.9% consolidated MCR reflects a challenging medical cost environment characterized by elevated utilization in LTSS, behavioral health, and high-cost drugs. - Performance for the quarter was driven by solid execution in Medicaid and the duals-focused Medicare strategy, which helped offset losses in the MAPD and Marketplace segments. - Strategic positioning was bolstered by the successful implementation of the $6 billion Florida CMS contract, which management views as a critical high-acuity growth engine despite initial margin drag. - Management noted that states are increasingly incorporating recent high-cost claims data into their rating baselines, signaling a shift toward more actuarially sound rate-setting for 2027. - The Marketplace segment's underperformance was attributed to legacy pricing and footprint decisions that are being aggressively corrected for the 2027 plan year. - Preliminary 2027 adjusted earnings are projected to exceed $9.50 per share, driven by $4.00 in harvested embedded earnings, which includes the elimination of current-year MAPD losses. - Medicaid rate increases for 2027 are estimated at approximately 6%, based on known draft rates for 80% of the January 1st renewal cohort. - Medical cost trend for 2027 is projected between 5.5% and 6.0%, which includes a 50 basis point buffer for conservatism and a 1% allowance for acuity shifts. - The 2027 premium revenue outlook was revised to at least $45 billion due to judicial delays in Georgia and Texas contract implementations, shifting $1.3 billion in expected revenue. - Management expects a 6% reduction in Medicaid membership next year due to work requirements, though the impact is expected to be gradual due to flexible state-level exemptions. - The Florida CMS contract implementation created a $1.00 per share drag in the fourth quarter, primarily due to one-time reserve requirements (PFAD and LAE) and initial high-acuity management costs. - Molina is exiting the MAPD business entirely in 2027 to focus resources on the more profitable and strategically aligned dual-eligible (D-SNP) market. - Judicial proceedings in Georgia and Texas have delayed contract starts, though management remains confident that initial awards will be upheld in state court. - CMS program integrity initiatives in the Marketplace segment had a non-material impact on the third quarter MCR but remain a monitored variable for risk score stability. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. - Management confirmed that excluding the Florida contract drag, the legacy Medicaid MCR is improving by 50-60 basis points sequentially due to the timing of rate cycles. - The fourth quarter guidance reflects normal seasonality and the benefit of recent off-cycle rate updates that are now fully flowing through the financials. - Early data from Nebraska shows 90% of renewing members are successfully re-enrolling, with 20% qualifying via medical frailty exemptions, which is higher than anticipated. - Management is assuming a 1% acuity shift impact within their 5.5% trend projection, noting that 80% of their states are adopting policies that favor enrollment over disenrollment. - The contract is expected to move from a 5% pre-tax loss in Q4 2026 to break-even in 2027 by eliminating one-time reserves and optimizing clinical protocols. - Management expects to achieve target margins by the second full year of the contract, leveraging their expertise in managing high-acuity, complex behavioral health populations. - Molina requires only a fraction of the 300 basis point industry-wide underfunding correction to reach its long-term 2.5% pre-tax margin target. - Six states have already built explicit prospective adjustments for work requirements into their January 1st rates, following CMS guidance to anticipate acuity shifts.

This article first appeared on GuruFocus. - Premium Revenue (Q3 2026): $10.5 billion. - Adjusted EPS (Q3 2026): $0.89. - Consolidated MCR (Q3 2026): 92.9%. - Adjusted G&A Ratio (Q3 2026): 6.3%. - Adjusted Pre-Tax Margin (Q3 2026): 0.6%; 1.1% year-to-date. - Medicaid MCR (Q3 2026): 93%, in line with expectations as rate updates largely offset trend. - Medicare MCR (Q3 2026): 93%, with strong duals performance. - Marketplace MCR (Q3 2026): 92.5%, including minor CMS program integrity impact. - Medicaid Membership: Down ~4.5% year-to-date; full-year 2026 decline of 6% expected before Florida CMS membership addition. - Subsidiary Dividends Harvested (Q3 2026): $185 million. - Parent Company Cash: ~$600 million at quarter end. - Operating Cash Flow (First Nine Months 2026): $629 million. - Net Debt-to-Cap Ratio: 45% at quarter end. - Days in Claims Payable: 44 at quarter end. - Full-Year 2026 Premium Revenue Guidance: ~$42 billion (reaffirmed). - Full-Year 2026 Adjusted EPS Guidance: At least $5.25 (reaffirmed); implies Q4 adjusted EPS of $0.50. - Full-Year 2026 Consolidated MCR Guidance: 92.6%; adjusted G&A ratio 6.4% (both unchanged). - Full-Year 2026 Medicaid MCR Guidance: 92.9% (unchanged); Q4 expected at 93.6%. - Full-Year 2026 Medicare MCR Guidance: 92.2% (unchanged); Q4 expected at 94.7%; duals MCR ~92% excluding MAPD. - Full-Year 2026 Marketplace MCR Guidance: 90% (unchanged); Q4 expected at 96.1%. - 2026 Rate and Trend Outlook: Rates raised to 4.5% and medical cost trend raised to 5.5% (each up 50 bps). - Segment Earnings Contribution (2026): Medicaid ~$5.75/share (legacy Medicaid 1.6% pre-tax margin); Medicare ~$0.25/share (duals +$1.25, MAPD -$1.00); Marketplace -$0.75/share. - Embedded Earnings: ~$9/share; $4/share expected to be harvested in 2027. - 2027 Premium Revenue Outlook: At least $45 billion (down from prior $46.5 billion on Georgia/Texas delays); known tailwinds ~$6 billion, known headwinds ~$3 billion. - 2027 EPS Building Blocks: More than $9.50/share from known items, excluding any legacy Medicaid or Medicare MCR improvement. - 2027 Medicaid Rate/Trend Outlook: Rates ~6%; trend 5.5%6% (includes 50 bps conservatism); every 100 bps of Medicaid MCR worth ~$5/share. - Warning! GuruFocus has detected 6 Warning Signs with MOH. - Is MOH fairly valued? Test your thesis with our free DCF calculator. Release Date: October 22, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. - Molina Healthcare Inc (NYSE:MOH) reaffirmed full-year 2026 adjusted EPS guidance of at least $5.25 and premium revenue of approximately $42 billion. - Medicaid rate outlook improved to 4.5% from 4%, with January 1 renewal rates averaging ~7%, supporting margin recovery. - Preliminary 2027 EPS building blocks exceed $9.50 per share, driven by embedded earnings and growth initiatives. - The Florida CMS contract implementation was nearly flawless, and the program is expected to reach breakeven or better in 2027. - Medicare duals business performed well, contributing $1.25 per share in 2026, and the company is exiting the unprofitable MAPD business for 2027. - Molina Healthcare Inc (NYSE:MOH) reported a low adjusted pre-tax margin of 0.6% in Q3 2026 and 1.1% year-to-date. - Medicaid medical cost trend increased to 5.5% from 5%, reflecting elevated utilization and acuity shift. - The new Medicaid contracts in Georgia and Texas are delayed, postponing $1.3 billion of premium revenue to later in 2027 or 2028. - The Marketplace segment is expected to incur a loss of approximately $0.75 per share in 2026. - Medicare MAPD business is projected to lose $1 per share in 2026, and the company is exiting the product for 2027. Q: Excluding the Florida CMS drag, it looks like underlying Medicaid MLR would improve sequentially and Q4 EPS would be up sequentially. What's driving the Medicaid MLR improvement and the stronger-than-usual Q4 EPS performance?A: CEO Joe Zubretsky confirmed the numbers, noting the legacy Medicaid book improves about 50 basis points in Q4 on recent rate updates offset by normal seasonality, with nothing unusual in the quarter. CFO Mark Keim added that absent Florida CMS, the Q4 MCR is roughly 60 basis points better on the rate cycle and seasonality, and the $1 of Florida CMS drag explains the $0.50 implied Q4 EPS. Q: Rates seem to be getting better, but enrollment is expected to decline from work requirements. What have you seen so far in Nebraska on the acuity shift within the stayers, and how should we think about that next leg of enrollment drop-off?A: CEO Joe Zubretsky said Nebraska shows an interpretation of CMS guidance leaning toward enrollment rather than disenrollment, citing a 300-page medical frailty exemption list and deliberate ex parte efforts to keep members enrolled; about 80% of states lean the same way. Molina still projects a 6% membership loss in 2027 with only a half-year revenue effect, and its trend outlook assumes 4.5% core plus 1% acuity shift. CFO Mark Keim noted 90% of renewing Nebraska members re-enrolled, 20% for frailty, a moderate impact so far. Q: What are the levers to ramp the new Florida CMS contract to breakeven over the next year, and how do you balance things like continuity of care?A: CEO Joe Zubretsky called the first 22 days nearly flawless operationally, with 115,000 members and a $6 billion revenue run rate, and said rates appear to capture program costs, supporting breakeven next year and full target margin in year two. CFO Mark Keim quantified the path: Q4 guidance assumes a 99% MLR and 5% pre-tax loss, with about 200 basis points from one-time PFAD and LAE reserves and the remaining 300 basis points from MCR and G&A improvements as operations settle. Q: On Florida G&A, is Q4 higher than Q3? And on cost trend going from 5% to 5.5%, does that imply a 6% back-half run rate into next year?A: CEO Joe Zubretsky said the 5.5% full-year trend is the right jump-off point for 2027, with the 50-basis-point increase split evenly between core trend and a re-estimate of acuity shift and spread through the year, not back-end weighted. CFO Mark Keim said Florida CMS carries about $100 million of expense in Q4 versus very little before, consistent with $1 of the $1.50 loss in Q4 and $0.50 in Q2-Q3. Q: With legacy Medicaid at roughly a 1.6% pre-tax margin, better than peers, is margin recovery concentrated in a subset of the portfolio or broad-based across states?A: CEO Joe Zubretsky said the 1.6% margin is strong given three years of trend outpacing rates, and Molina needs only about 90 basis points of improvement to reach its 2.5% 2029 target versus the 300 basis points the market needs for actuarial soundness. Most states are slightly underfunded, and he is encouraged by the January 1 rate cycle, with 2025 data entering baselines, acuity shifts being rated prospectively, and high-cost drugs, LTSS and behavioral rated up. CFO Mark Keim said variation across states is more about rate cycle timing than outliers. Q: Why is holding the 1% acuity assumption stable for 2027 conservative, and how much of that shift comes from work requirements versus legacy contribution?A: CEO Joe Zubretsky noted Medicaid trend was 6.5%, 7.5% and 5.5% in 2024-2026, with core trend of 4% to 5% and acuity shift of 1% to 2.5%; the recent 4.5% core and 1% acuity is a good jumping-off point, with 50 basis points of added conservatism given it is October. CFO Mark Keim said 2026 same-store membership is tracking a 6% decline with about 1% acuity shift, and 2027 assumes another 6% attrition with acuity of 1% to 1.5%. Q: Can you frame the trajectory of overall Medicaid pre-tax margins in the first half versus Q3 and Q4, and how that sets up 2027?A: CEO Joe Zubretsky said calling out the $6 billion Florida CMS contract is warranted given its materiality on a $30 billion base and its high-acuity population, despite new contracts being dilutive at the start. CFO Mark Keim said total Medicaid pre-tax margin is 1.2% including the 99% Florida MLR, or 1.6% excluding it, and 2027 could see a flat MLR if rates equal trend, with G&A leverage from growth as upside. Q: How are you pacing the work-requirement membership losses between the first and second half of 2027 and 2028?A: CFO Mark Keim said Molina expects about a 10% cumulative membership loss over several years, consistent with the 3% CAGR cited at Investor Day, with a 6% impact in year one (2027), a little more in 2028 and possibly 2029. Q: State actuaries typically base rates on completed claims data, and state budgets are under pressure. What form are prospective rate bumps for acuity taking, and how are states funding them?A: CEO Joe Zubretsky said a handful of states have included explicit prospective acuity adjustments, while others would entertain a mid-cycle review, using stayers, leavers and joiners data from three years of experience. CFO Mark Keim added that six states in the January 1 cohort have built in explicit adjustments for work requirements and redeterminations, and CMS has encouraged state actuaries to anticipate acuity shift from disenrollment. Q: How might the California Medicaid asset limit cut, effective July 2027, affect membership, and what is the remaining downside exposure under the corridors?A: For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Image source: The Motley Fool. Thursday, Oct. 22, 2026 - Investor Relations - Jeffrey Geyer - President and CEO - Joe Zubretsky - CFO - Mark Keim Operator: Good day, and welcome to the Molina Healthcare third quarter 2026 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Jeffrey Geyer. Please go ahead. Jeff Geyer: The conference is now being recorded. The conference has not been initiated. You will be placed on hold until a chairperson arrives. Good morning, and welcome to Molina Healthcare's third quarter 2026 earnings call. Joining me today are Molina's President and CEO, Joe Zubretsky, and our CFO, Mark Keim. A press release announcing our third quarter 2026 earnings was distributed after the market closed yesterday and is available on our investor relations website. Shortly after the conclusion of this call, a replay will be available for 30 days. The numbers to access the replay are in the earnings release. For those of you who listen to the rebroadcast of this presentation, we remind you that all of the remarks are made as of today, Thursday, October 22nd, 2026, and have not been updated subsequent to the initial earnings call. On this call, we will refer to certain Non-GAAP measures. A reconciliation of these measures with the most directly comparable GAAP measures can be found in the earnings release. During the call, we will be making certain forward-looking statements, including, but not limited to, statements regarding our 2026 guidance and expected segment performance, rates and medical cost trend, the implementation and performance of the Florida CMS contract, our preliminary 2027 premium and earnings outlook and related building blocks, Marketplace pricing, footprint, and program integrity initiatives, Medicare Stars and duals performance, Medicaid work requirements and reverifications and associated medical costs, our RFP awards and implementation timing, our long-term financial targets, and the amount and realization of embedded earnings. Listeners are cautioned that all of our forward-looking statements are subject to certain risks and uncertainties that could cause our actual results to differ materially from our current expectations. We advise listeners to review the risk factors discussed in our Form 10-K annual report filed with the SEC, as well as our risk factors listed in our Form 10-Q and Form 8-K filings with the SEC. After the completion of our prepared remarks, we will open the call to take your questions. I will now turn the call over to our Chief Executive Officer, Joe Zubretsky. Joe? Joe Zubretsky: Thank you, Jeff, and good morning. Today, I will discuss several topics: our third quarter results, our reaffirmed full year 2026 guidance, and our preliminary 2027 premium and earnings outlook. Let me start with our third quarter performance. Last night, we reported adjusted earnings per share of $0.89 billion on $10.5 billion of premium revenue. Our 92.9% consolidated MCR reflects solid operating performance as we continue to navigate a challenging medical cost environment. We produced a 0.6% adjusted pre-tax margin in the quarter and 1.1% year to date. In Medicaid, the business produced an MCR of 93% in the third quarter. The result was in line with our expectations as rate updates largely offset a slight increase in medical costs. In Medicare, we reported a third quarter MCR of 93%. Results were in line with our expectations as our duals business performed well, giving us a very positive start for our duals-focused Medicare strategy. In Marketplace, the third quarter MCR was 92.5% and in line with our expectations. The result includes the impact of the latest CMS program integrity initiatives, which was not material. Turning now to our 2026 guidance. Our full year 2026 premium revenue guidance remains approximately $42 billion. We also reaffirmed 2026 adjusted earnings guidance of at least $5.25 per share. Our full year guidance on the medical cost ratio and G&A ratio is unchanged. In Medicaid, our full year MCR guidance remains 92.9%, unchanged from our prior guidance. We increased our full year rate outlook from 4%-4.5% due to the combination of off-cycle and on-cycle rate updates in the third and fourth quarters. We also increased our full year medical cost trend outlook from 5%-5.5% to account for slightly elevated utilization and acuity shift throughout the year. We are encouraged by states continuing to incorporate periods of high cost trend into the medical cost baseline used for rating. The imbalance between rates and trend appears to have stabilized, which supports our view that current Medicaid margins represent the trough in a multi-year cycle. With near term rate increases, which we will speak to in a few moments, the temporary imbalance between rates and trend is gradually being corrected. Our Medicaid business is expected to contribute approximately $5.75 per share for the full year. The legacy Medicaid business is projected to achieve a 1.6% pre-tax margin for the full year, a strong result given the current rate environment. In Medicare, full year MCR guidance remains 92.2%, and the segment is expected to contribute approximately $0.25 per share. Within the Medicare segment, the duals product is core to our Medicare strategy and expected to produce a pre-tax margin of 1.4% and earn $1.25 per share this year. We expect a loss of $1 per share in our MAPD business, which we are exiting for 2027. In Marketplace, full year MCR guidance remains 90%. The segment is expected to produce a loss of approximately $0.75 per share, a result which, due to our reduced footprint and pricing strategy for 2027, is not expected to recur. Our embedded earnings, the earnings contribution from known backlogs revenue, remains at $9 per share. Now, some updated commentary on the outlook for 2027. Our 2027 premium revenue is expected to be at least $45 billion. We now expect the new Medicaid contracts in Georgia and Texas to be delayed from our previously expected implementation dates, which delays $1.3 billion of premium. In Georgia, the various RFP protests were denied, and our award was twice upheld at the administrative review level. Both the Georgia and Texas awards are being evaluated in state court, and these judicial proceedings are taking longer than originally expected. We remain confident in both initial awards being upheld and the contracts commencing later in 2027 or in 2028. The preliminary 2027 earnings per share building blocks sum to more than $9.50 per share from known items and do not yet assume any improvement in the legacy Medicaid or Medicare MCRs at this very early stage. Mark will elaborate more on the building blocks, but let me offer a few high-level comments on the Medicaid rate and trend environment. With respect to rates, our January 1st renewal cohort represents 55% of full year premium. We know draft rates on 80% of this cohort, and they average approximately 7%. When we combine those known January 1 rates with the carryover of rates from late 2026, we know the rates on 70% of our full year 2027 premium. These known rates, along with an estimation of rates we do not yet know, provide an early indication that overall 2027 rate increases may approximate 6%. Several dynamics give us confidence in the continuation of stronger rates. States will continue to incorporate more recent medical claims data into the baseline period when setting rates, and states are expected to grant prospective rate adjustments in anticipation of acuity shifts caused by the implementation of work requirements. With regard to medical cost trend for 2027, we project medical cost trend in a range of 5.5%-6%, which at this early stage includes 50 basis points of conservatism. Using the upper end of the trend range, we take the early view that rates should, at a minimum, capture trend for 2027, and our legacy Medicaid MCR should at least be flat year-over-year, with the potential for margin improvement. We will update this view in our initial 2027 guidance in February. In Medicare, our duals business is building on strong 2026 performance as we look to grow profitably. We are pleased with our 2027 bids, and our supplemental benefits are competitive in most of our markets. In Marketplace, we will reduce our footprint to seven states, but we will maintain adequate scale in each market. This will ensure we enter 2027 with risk scores commensurate with the acuity of the retained population. Finally, we remain bullish on our RFP pipeline. Recall, we just implemented the $6 billion Florida CMS contract, which is off to a great start. Among the near term prospects, we submitted a bid on the Texas STAR Kids program, a process which is on hold in the state. We have also submitted bids in Missouri and Arizona, and our bid for Indiana will be finalized very soon. In total, these RFPs represent approximately $26 billion of the $90 billion total opportunity that we highlighted at our Investor Day. We have great confidence in favorable RFP award outcomes. 2027 will also be the first year in which our industry is impacted by work requirements and biannual reverifications. States continue to prepare for the implementation of federal work requirements and more frequent eligibility verifications. In Nebraska, an early adopter, the rollout of work requirements is in the very early stages, but progressing in line with our initial expectations. We are working closely with all our state partners on readiness and administrative execution of work requirements. Most of our states are selecting policies that should limit disenrollment, such as the use of certain ex parte reviews, flexible medical or hardship exemptions, and allowing self-attestations. The ultimate timing and impact on membership will vary by state, and the phased approach that states are taking will delay some disenrollments to 2028. We continue to expect membership reductions to emerge gradually and to produce a minor acuity impact, all of which is contemplated in our 2027 premium outlook and the 2029 targets we presented at our Investor Day. In summary, we are pleased with our third quarter results in this challenging environment and reaffirm full year guidance of at least $5.25 per share. We are also pleased that without yet counting on any improvement in legacy Medicaid margins, our preliminary 2027 building blocks reach more than $9.50 per share of adjusted earnings. With the apparent plateauing of medical cost trend, which remains at elevated levels, and the strength of recent rate updates, we believe we are likely observing the beginning of the turn in Medicaid margins. With that, I will turn the call over to Mark for some additional color on the financials. Mark? Mark Keim: Thanks, Joe, and good morning, everyone. Today, I will discuss additional details on our third quarter performance, the balance sheet and reserves, our 2026 guidance, and the building blocks for 2027. Beginning with our third quarter results. For the quarter, we reported approximately $10.5 billion of premium revenue with adjusted EPS of $0.89. Consolidated MCR was 92.9%, adjusted G&A ratio was 6.3%, and adjusted pre-tax margin was 0.6%. In Medicaid, our third quarter MCR was 93%, in line with our expectations as rate updates largely offset trend. We saw another small decline in membership in the quarter, with year-to-date membership now down about 4.5%, consistent with our full year 2026 expectation of a 6% decline before the addition of Florida CMS membership. Trend in LTSS and behavioral health remained elevated but stable, while outpatient and high-cost drugs were slightly higher. In Medicare, our third quarter MCR was 93%, also in line with our expectations. The result reflects normal seasonality and continued strong performance in our duals products. Trend is in line with expectations in most categories, but higher for professional office visits and LTSS. In Marketplace, our third quarter MCR was 92.5%, also consistent with our expectations. Within that result, with normal seasonality, as well as a minor impact from statewide risk scores stemming from CMS program integrity efforts in the quarter. Turning to the balance sheet. Our capital foundation remains strong. In the quarter, we harvested $185 million of subsidiary dividends, and our parent company cash balance was approximately $600 million at the end of the quarter. Our operating cash flow for the first nine months of 2026 was $629 million. At the end of the quarter, our net debt-to-cap ratio was 45%. We continue to have ample cash and access to capital to support our growth initiatives. Days in claims payable at the end of the quarter were 44. We remain confident in the strength and consistency of our actuarial process and reserve position. Turning to 2026 guidance. We continue to expect full year premium revenue of approximately $42 billion. Full year consolidated MCR guidance remains at 92.6% and adjusted G&A ratio at 6.4%. We reaffirm adjusted EPS guidance of at least $5.25. The year-to-date results imply fourth quarter adjusted EPS of $0.50, reflecting normal seasonality in our businesses and a dollar drag due to the implementation of the Florida CMS contract. At the segment level, we expect fourth quarter Medicaid MCR of 93.6%, and the full year MCR guidance of 92.9% is unchanged. Excluding the new store impact of Florida CMS, we expect fourth quarter MCR of 92.5% and the full year MCR of 92.6%. With the first three quarters behind us, our outlook for full year 2026 rates and medical cost trends each increased by 50 basis points. Guidance now includes rates at 4.5% and trend at 5.5%. Our rate update is driven by improvements, some retrospective, some prospective, in several states. We continue to see a willingness from states to discuss off-cycle rate adjustments as data develops, but we do not include speculative updates in our guidance. Our updated view on full year trend increases from 5%-5.5% and reflects elevated utilization in several medical cost categories and a slight acuity shift throughout the year. In Medicare, we expect fourth quarter MCR of 94.7%, and the full year MCR guidance remains at 92.2%. Excluding MAPD, the full year duals MCR is approximately 92%. The Medicare segment is expected to contribute $0.25 per share for the year. Within that result, duals are expected to contribute $1.25 per share, while MAPD is expected to lose $1 before the product is discontinued for 2027. In Marketplace, we expect fourth quarter MCR of 96.1%. The full year Marketplace MCR guidance remains at 90%, and the outlook results in a loss of $0.75 per share. We expect the fourth quarter G&A ratio to fall below 6% due to the impact of operating leverage on the additional Florida CMS revenue and disciplined cost management. The full year G&A ratio is unchanged, expected at approximately 6.4%. Turning to embedded earnings. Embedded earnings remains approximately $9 per share. Recall, embedded earnings are the projected impact to future earnings that emerge from known strategic initiatives, including RFP wins and acquisitions. Embedded earnings do not include legacy business margin recovery. We now expect to harvest $4 per share of embedded earnings in 2027. The components include $1.50 of current year losses on the new Florida CMS contract, which we expect to run at breakeven or better next year. Also, a dollar of current year MAPD losses, which will not recur in 2027. Higher revenues will drive $1.50 of operating leverage next year. The amount we expect to harvest in 2027 is $0.50 lower than our prior estimate due to the potential timing of the full benefit of operating leverage on the Georgia and Texas contracts. As Joe Zubretsky discussed, our preliminary 2027 premium outlook is now at least $45 billion, lower than our prior outlook of $46.5 billion. The change reflects the delay of Georgia and Texas STAR and CHIP. The building blocks to $45 billion include known tailwinds totaling $6 billion with several components. First is modest growth in our current Medicaid segment, as rate expectations should more than offset our initial view of Medicaid member attrition stemming from work requirements and semiannual reverifications. Second, strong growth in our Medicaid duals business, including state program changes in Ohio, Texas, and California. Third, the annualization of the Florida CMS contract. Known headwinds total approximately $3 billion and include the MAPD exit, the reduction in our Marketplace footprint, and the state's termination of the California UIS program. Preliminary EPS building blocks for 2027 sum to more than $9.50 per share. To get there, we begin with full year 2026 guidance of at least $5.25 per share. Add approximately $4 of known embedded earnings realization that I just outlined, then add $0.75, assuming Marketplace reaches at least breakeven next year. Finally, California's termination of the UIS program will be a slight headwind. These building blocks do not yet include any impact of the new rate cycle and trend on the legacy Medicaid MCRs. As Joe mentioned, at this early stage, we project 2027 Medicaid rates will approximate 6%, and the trend will be in a range of 5.5%-6%. Any improvement in legacy Medicaid MCR would be upside to our 2027 outlook, as every 100 basis points of Medicaid MCR is worth approximately $5 per share. These building blocks position us well for profitable growth in 2027. This concludes our prepared remarks. Operator, we are now ready to take questions. Operator: We will now begin the question and answer session. To ask a question, you may press star then one on your touch tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. Please limit yourself to one question. At this time, we will pause momentarily to assemble our roster. The first question today comes from Andrew Mok with Barclays. Please go ahead. Andrew Mok: Hi. Good morning. If we exclude the dollar EPS burden from the new Florida contract in 4Q, it looks like underlying Medicaid MLR would improve sequentially and EPS would also be up sequentially. Can you walk us through what's driving the Medicaid MLR improvement and the stronger than usual 4Q EPS performance? Particularly given the normal ACA seasonality. Thanks. Joe Zubretsky: Sure. Your numbers are accurate. The underlying, the core, the legacy book of business is improving by 50 basis points in the quarter, a function of the recent rate updates, offset by or embed by normal seasonality of the business. As we've indicated in our prepared remarks, the trend assumption for the full year at 5.5% is a good jumping-off point for 2027. There is nothing going on in the fourth quarter that's unusual. It's the function of normal seasonality, a function of the rate updates, and the fact that the underlying Medicaid MCR is improving by 50 basis points is a good fact. Mark, anything to add? Mark Keim: Andrew, I think you got it right. There's a $1 of drag from CMS, so outside of that, you'd add a $1 to the fourth quarter implied guidance. Just on the MCR, exactly as I think you implied, absent Florida CMS, we're 50 basis points, 60 basis points better in the fourth quarter just on the rate cycle and the seasonality that we expect. So you put those things together, it puts the $0.50 of implied guidance for the quarter in context. I think you got it right. Operator: The next question comes from Kevin Fischbeck with Bank of America. Please go ahead. Kevin Fischbeck: Great. Thanks. I guess, I think one of the big questions that investors have right now is just rates seem to be getting better, but there is the expected decline in enrollment from work requirements. I think your point about it probably ramping up through the year is a good one. Can you give it any color about what you've seen so far in Nebraska as far as the acuity shift that's happening within the stayers versus the leavers there? Because I think that is probably the biggest variable, I think, in people's minds. How should we think about what kind of acuity shift happens when that next leg of enrollment drops off? Thanks. Joe Zubretsky: I think on balance, what we're seeing in Nebraska is an interpretation of the guidance given by CMS that leans more toward enrollment rather than disenrollment. The medical frailty exemption list is 300 pages long on diagnosis codes that qualify for medical frailty. We're seeing a very deliberate effort to find ex parte information to keep members enrolled. Not only are we seeing that in Nebraska, we're seeing that in 80% of our states have what I would say are interpretations of the guidance that lean more toward enrollment than disenrollment. But we're still projecting a 6% membership loss next year. Bear in mind, that only has a half year effect on revenue. In our preliminary trend outlook for next year, our 5.5% at the bottom of the range, we're saying that 4.5% of that is core and 1% of that is due to the acuity shift. At this point in time, I have no reason to believe that's not true, that's not going to happen, but the states are leaning toward more liberal interpretations of the rules that promote enrollment rather than disenrollment. Mark, anything to add? Mark Keim: No, I think that's right. Joe's summarizing, I think we're seeing a more gentle interpretation of this. It's too soon to make that conclusion, but everything tells us there's a more gentle interpretation of this. Nebraska so far, we're only a few months in, but Nebraska so far, many of us are surprised the impact is rather moderate. What the state itself said is that 90% of renewing members are re-enrolled. Within that, the one that caught my attention was 20% of them are for frailty, which is much more than you might otherwise have expected. So I think, as Joe mentioned, most of our markets are taking a very gentle approach on this. We'll update our guidance in February, but I think a 6% assumption for next year on membership attrition is probably appropriate. Joe Zubretsky: Just to put a point on it, since the final tally on trend for 2026 is 5.5%, 4.5% of which is core and 1% acuity shift, carrying that forward into next year to account for the acuity shift due to OBBBA makes perfect sense to us. In fact, throwing in the 50 basis points of conservatism because it is October, even gives us more comfort that we have got trend adequately captured, both for core trend and for the potential for an acuity shift due to OBBBA. Operator: The next question comes from John Stansel with J.P. Morgan. Please go ahead. John Stansel: Great. Thanks for taking the question. Just want to quickly touch on early days with the Florida CMS contract. Obviously, only been 22 days, but as you look at that contract and kind of ramping it to break even over the next year, what are the levers that you have? How do you balance things like continuity of care? Just what you are looking at as you kind of have gotten in and kind of fully ramped the program. Thanks. Joe Zubretsky: We are very encouraged in the first 22 days of the program. The implementation was nearly the operational and clinical implementation was nearly flawless. We took on 115,000 members, a run rating of $6 billion of revenue, if you recall. These are challenged children with complex medical and behavioral conditions. But the operational implementation of the program, as I said, nearly flawless. Now, our view of the program is that it is structurally intact, that rates appear to capture the cost of the program. We have certain clinical protocols that are pursuant to the contract that we have to deliver. Nothing at this point tells us that the break-even forecast for next year and full target margin in year two of the contract, nothing tells us that cannot be achieved. Off to a great start. Certainly, because it is a new program, we have to be cautious in our outlook. Mark will tell you that one of the reasons why we're a little cautious with our fourth quarter guide is it's a new program. A $1.5 billion revenue comes in, 115,000 new members, and you just have to be flexible at the start to know exactly what the early read will be from a financial perspective. Great program for us. We're really good at managing high acuity programs. This will be a great contributor in the second full year of contract. Mark, anything to add? Mark Keim: Yeah, John, I'll just give you a couple numbers which will help you with your analysis. In the fourth quarter, our guidance includes Florida CMS for $1.5 billion of revenue, which tracks to the $6 billion of full year run rate. In the fourth quarter, I expect about a 99% MCR and a 5% pre-tax loss. To get the 5% pre-tax loss to zero next year, I got to find 500 basis points at least. 200 basis points just comes from the one-time PFAD and LAE reserves I have to put up. I'm sure you're familiar from an accounting perspective, when you put on new revenue, you have to put up one-time reserves. 2% of our 99% MCR is just the one-time reserves, which I need to find another 300 basis points, and I think between G&A and MCR, as we settle in and get our operations in run rate condition, that's high confidence on that. I would expect most of it to come from MCR, some of it from G&A. That's the path from a 5% pre-tax loss to break even or better next year. Operator: The next question comes from Justin Lake with Wolfe Research. Please go ahead. Justin Lake: Thanks. Good morning. Just a couple numbers questions here. First, on the Florida G&A, can you talk about the third quarter versus the fourth quarter? Meaning, does the fourth quarter have incremental G&A versus 3Q, or did you have to ramp up and therefore it is kind of similar in both periods? Secondly, on cost trend, going from 5%-5.5% in the back half of the year, mathematically, it would imply that the back half is actually 6%. Is that the right way to think about it in terms of that is the run rate going into next year? If so, now you are assuming improvement? Just want to kind of dig through that. Thanks. Joe Zubretsky: I will answer the second part first, and then I will kick it to Mark Keim on the Florida G&A question. No, the 5.5% for the full year is the right way of looking at the jump-off point into next year. The increase was spread throughout the year, some in the third, some in the fourth, but the first and second quarters restated slightly. The 50 basis point increase was half due to core trend and half due to a re-estimate of the acuity shift. So I would think about the 5.5% as being throughout the year, a good jumping off point for 2027. There is nothing going on in the back half that would cause you to think about a higher jump-off point and therefore putting more pressure on 2027. Mark, anything to add to that and Florida G&A question please? Mark Keim: I would just repeat, Joe, what you said is that increase in trend is not necessarily a back-end weighted concept. It is fairly spread through the year. We are seeing pretty even trends quarter to quarter. On the first part of your question, Justin, if you back into the numbers I just ran through, you will see we had about $100 million expense in the fourth quarter on the Florida CMS. There was very little expense before that. We had suggested, remember, that of the $1.50 of loss this year, that a dollar was in the fourth quarter and $0.50 was roughly in the prep, Q2 and Q3 as we ramped up. So you can probably put some numbers around that to better answer your question. Operator: The next question comes from A.J. Rice with UBS. Please go ahead. A.J. Rice: Hi, everybody. I was thinking if you're in a pre-tax margin of roughly 1.6% now, that's significantly better than what some of your major peers are talking about. When you think about margin recovery from here, is it relatively concentrated in a subset of your portfolio, or is the opportunity still pretty broad-based across most states in your portfolio? Joe Zubretsky: Thanks for asking the question, and that is the right context. I would say that our relative performance needs to be taken in context of in this 2026 trough, where three straight years of medical cost trend and rates lagging behind it. In this trough, we are producing a 1.6% pre-tax margin on our same store Medicaid book context. Now when it comes to improvements, think about Investor Day and us projecting forward to margins that get to 2.5% in 2029. 90 basis points of improvement, 30 basis points a year for three years. The market needs 300 to get back to actuarial soundness, and we only need a fraction of that to get back to our target. So, the context of the starting point is very important. I would say that in the portfolio, most states are slightly underfunded, some more than others. We have rate advocacy efforts that we engage in along with our competitors and through state associations. But for the most part, I would say that most states are slightly underfunded. But the good news is when you look at the rating dynamics that created a 7% rate increase on the 1/1s we know about, key data point. What happened? The 2025 year starting to be introduced to the baseline, number one. Two, acuity shifts being recognized, including specifically rating for a prospective acuity shift due to OBBBA. That has entered the rating dialogue. Third, as I've said many times, what are the cost pressures on medical cost trend? High cost drugs, LTSS, and behavioral. Those are discrete rating components, very transparent in the rating methodology, and those are being rated up to account for the recent cost inflection in those three categories. All in, I would say that the rate cycle, we are very encouraged by what we're seeing for the 1/1 rate cycle. Most states are underfunded to some extent, and we're very encouraged by what we see. Mark, anything to add? Mark Keim: Yeah, I build on that. Variations among our states that we are seeing are less about specific outliers and more just about the timing of the rate cycle. As Joe mentioned, we are very encouraged by what we are seeing for January 1st, with an aggregate 7% on the ones we know about, which of course is much better than the ones back in 2026 on the midyear, which somewhat disappointed us. The variation is more about the timing of the rate cycle. Very encouraged about January 1st. Operator: The next question comes from Stephen Baxter with Wells Fargo. Please go ahead. Stephen Baxter: Yeah. Hi, thanks. I wanted to come back to the early 2027 assumptions for Medicaid cost trend and acuity. I guess I am trying to understand, as you are thinking about it, why the 1% acuity assumption, holding that stable is a conservative point of view. I guess I am trying to understand whether any of the current or non-work requirement acuity shift is expected to continue into 2027 in your thinking, or is essentially that going to go to zero, and then the 1% that you have is entirely driven by the upcoming work requirements? I guess, how should we think about the balance of the 1% acuity shift and what comes from work requirements versus maybe legacy contribution? Thanks. Joe Zubretsky: Well, I think a contextual statement is being October, in this environment, we are being conservative in forecasting medical cost trend for next year. But a little bit of history is actually really important here. Each of the last 3 years, 2024, 2025, and 2026, if memory serves me correct, Medicaid trend was 6.5%, 7.5%, and 5.5%. Core trend during that period ranged from 4%-5%, and the acuity shift ranged from 1%-2.5%. Now, the recent data point where core trend is 4.5% and the acuity shift is 1%, seemed to be not just out of convenience, but a very good jumping-off point. You go in and parse all your cost categories. You look at where the costs are. High cost drugs are certainly elevated, but they have plateaued. Certain cost categories seem to have plateaued. We are very comfortable at this early stage saying that 2027 trend at the lower end of the range of 5.5% is consistent with 2026. Because it is October and because we were hesitant to call any Medicaid MCR improvement for next year at this early stage, we put in 50 basis points of additional conservatism for the vagaries of medical cost trend. We will give a refined estimate when we give February guidance, but the early indicators, both on rate and trend, are very positive. Mark Keim: The only thing I will add is just repeat the numbers. We are tracking in 2026 to a 6% same-store membership decline. Trend, we are estimating at 5.5%, of which we think roughly 1% is acuity shift. Looking forward to 2027, my best pick on membership attrition at this early stage is another 6%. Rolling the same core trend to 4.5% forward and acuity of 1%-1.5%, just to be conservative, is a range that gets us to the numbers we told you. I think that is a fair accounting for what we might see on the membership loss next year, essentially more like this year with a little bit of a conservative range put on it. Operator: The next question comes from Scott Fidel with Goldman Sachs. Please go ahead. Scott Fidel: Hi, thanks. Good morning. I was hoping maybe we could just go back to the Medicaid trajectory question and just try to include the whole business, not carving out any sort of new blocks of business because you guys looking to be a growth company, you always have new sort of blocks of business that are more dilutive. I just thought it would be helpful just to sort of frame sort of the trajectory of your Medicaid margins, especially because you talked about some higher trend in the first half of this year. Joe and Mark, maybe if you want to sort of walk us through your adjusted pre-tax margin for the overall Medicaid business in the first half, and then in the third and the fourth quarter, and then how your setup that you are talking about, what that implies for the adjusted pre-tax margin into 2027. I think for the whole Medicaid business, that would be really helpful. Thank you. Joe Zubretsky: I will kick it to Mark, but Scott, I will give you a context of why we did what we did, and we talk about it the way we do. You are right. We are going to be successful winning $500 million contracts here, a billion dollars worth of contracts there. At the end of the day, that is the cost of growth when they start out running higher than your normal run rate. Bear in mind, $6 billion of revenue new coming in on a $30 billion base in a high acuity population is a very unusual growth phenomenon. One, by the way, we are enjoying a lot, but a very unusual growth phenomenon. If there was ever a reason to call out a new contract, this is it, due to the materiality of it and due to the complexity of the program and the acuity of the population. Mark, do you want to go through the tale of the tape on the Medicaid trajectory, please? Mark Keim: Absolutely. Just to repeat what Joe said, the magnitude of that contract coming in is not business as usual. That is $1.5 billion on top of what normally would be $8 billion, $8.5 billion. At a 99% MCR, that is certainly a skew for the quarter. We call it out, I think appropriately so. On Medicaid total, we will report a pre-tax margin of 1.2%, barring the 99% on the Florida contract, that would be a 1.6%. Looking into next year, we are not ready to give you guidance, but what Joe said in his prepared remarks is you can see a scenario where trend is at least maybe equal to rates and maybe a little bit better. Assuming we hold rates equal to trend, expect a flat MLR year-over-year. Even with that, we are pointing out the G&A leverage that we will add because of the growth next year. The building blocks help you with that. I am sure we will get to that a little bit later in the call. I think if there is optimism on rates versus trend, you can start to model in a benefit on MLR, but we are not quite ready to guide you there. That is something we will tell you in February. Operator: The next question comes from Sarah James with Cantor Fitzgerald. Please go ahead. Sarah James: Thank you. I appreciate the comments that you have made around 2027 Medicaid enrollment and the slower pace assumed in your 2027 commentary for the work requirement losses, but I just wanted to see if we could put a finer point on that. When you say slower, are you talking about second half being more losses than first half, or are you talking about the mix between 2027 and 2028? Because there are some self-attestation changes that come in 2028 and put some pressure. How do you think about the pacing of the losses from work requirement, as you have built it into your 2027 guidance assumptions? Mark Keim: Thanks for the question, Sarah. What we said earlier is that cumulatively, we can see about a 10% loss over the next bunch of years. At Investor Day, we actually said and applied 3% CAGR over the next three years. Call it 9%-10% total from work requirements, and semi-annual re-verification. What we are suggesting today is our initial pick for year one, 2027, is a 6% impact to membership, which implies most of it is in 2027 with a little more in 2028 and maybe even 2029. That is our best guess right now. I think consistent with many outside data points. Does that help? Jeff Geyer: Next question, please. Operator: The next question comes from Dave Windley with Jefferies. Please go ahead. Dave Windley: Hi. Good morning. Thanks for taking my question. I wanted to ask around your comments on some prospective rate adjustment for acuity. The two things that we consistently hear from folks in the Medicaid space are that state actuaries want to base rates on completed claims data with as much as six months of run-out. And two, that state budgets are under a lot of pressure, general revenue, SNAP error rates, Medicaid, et cetera. I am interested in a little more detail around what form those prospective rate bumps for acuity are taking. How are those conversations going, and who are the ones or how are the ones that are able to or seem to be wanting to give a prospective rate bump? How are they coming up with that money? Thanks. Joe Zubretsky: A handful of states have specifically included an allowance, a prospective rating adjustment for the potential for an acuity shift. A handful of other states have said that while they may not put it in initial rates, they would certainly entertain a mid-cycle review. And they have history. Stayers, leavers, joiners. It is not a difficult model to come to grips with. You have stayers, leavers, and joiners, and we have three straight years where the acuity shift, not related to OBBBA, obviously, on what it means when people leave the program with lower than portfolio average MCRs means to the program. So the data does exist on leavers, stayers, and joiners, and that is what they are using to put in adjustments for the prospective nature of an acuity shift due to disenrollment. So we are encouraged by what we see. And we will obviously look how membership goes, and we will be reporting during the year on what we are seeing. Mark, anything to add? Mark Keim: Yeah. When we talked about the prospective and retrospective in Q3, Q4, most of those rate updates were more about the existing gap of underfunding. When we moved to the January 1s, that is where there has been explicit assumptions on next year's work requirements and redeterminations. And I will tell you, six of our states on January 1st have built in explicit adjustments for what they are expecting on work requirements and redeterminations. So I think that is very encouraging. Joe Zubretsky: And in the latest rating bulletin put out by CMS, they strongly encouraged state actuaries to anticipate and capture the effects of acuity shift due to disenrollment. Operator: The next question comes from Ryan Langston with TD Cowen. Please go ahead. Ryan Langston: Thanks. Good morning. On the Florida Kids contract, I understand it is early and the expectation is to hit break even overall next year, but any insight into how the underlying performance of that contract might pace through 2027? Is there any reason to think the seasonality is different versus the legacy business, just in terms of building up to that sort of full-year break even for the year? Thank you. Mark Keim: The nature of the membership base is less about seasonality, because this is kind of continual month-to-month programs in regularly scheduled appointments. I think the seasonality of the underlying business is less of a driver. Given that we are expecting to go from a -5% pre-tax in the fourth quarter to break even, you might expect there to be a linear progression through the year as we kind of settle into our MCR and G&A. I am not ready to give you a quarter-to-quarter outlook. Perhaps we will do that in February. But you can expect some linear improvement throughout the year. Operator: The next question comes from Lance Wilkes with Bernstein. Please go ahead. Lance Wilkes: Great. Could you talk a little bit about puts and takes with respect to 3Q MCR, in particular in Medicaid? I am just interested in if the acuity shift hit all and represented in 3Q MLR, and how prior period development impacted 3Q. Thanks. Joe Zubretsky: Mark? Mark Keim: Sure. What you had in 3Q was pretty much normal trend. We had, as Joe mentioned, a little bit of prior period development, not meaningfully. I saw a couple of the analysts commented on prior year development being a bigger contributor this year. I think that's probably somewhat misguided. Compared to last year, that's true, but as you know, last year, prior year development was significantly lower than it normally would be. So a normal contribution from prior year development for second and third quarters progression of trend. What Joe made clear was that moving trend from 5%-5.5% was not a Q3 or Q4 specific item, but more our observation of development of Q1, Q2, and our expectations for Q3 and Q4, both on the underlying core trend, but the acuity of the membership losses that we are seeing. I don't think anything particularly notable to observe other than a little bit of a creep on core and just an expectation that acuity is just maybe a little bit higher than we thought. Operator: The next question comes from Michael Ha with Baird. Please go ahead. Michael Ha: Hi, thank you. With the California Medicaid asset limit being lowered starting in July of next year, I think the limit for one person's falling over something like over 80%. How are you thinking about the impact this could pose to your Medicaid membership? Do you have any data on asset limits, how much your Medicaid members own, and how many of those lives and off your D-SNP lives could be exposed above the threshold? And then also a quick one on California. Could you also help us understand your remaining downside exposure under the corridors? If costs were to deteriorate further, how much of that incremental pressure would be absorbed by corridor offsets versus flowing through to earnings? Thank you. Joe Zubretsky: Michael, can you please repeat the first part of your question? Mark and I want to make sure we understand it and we can be responsive. Can you repeat the first part of your question, please? Michael Ha: Yeah, of course. With the California Medicaid asset limit being lowered starting in July of 2027, I think the asset limit for one person's falling over 80%. I think it's what you can own from 130,000 down to something like 20,000. Just wondering if you have any thoughts about how that might impact your Medicaid and even your D-SNP lives if they fall above that threshold. Joe Zubretsky: Now I understand your question. Any eligibility rules in any state, this is built bottoms up. This is not a top-down. When we give outlooks and forecasts and guidance and membership projections, everything is built bottoms up. Anything that happens within a state with respect to eligibility requirements is fully contemplated in our outlook. So yes, the asset limitations were fully contemplated. On the corridors, I would just say that our corridor accounting, we've gotten pretty good at this. Corridors have been introduced in many states, including California. We conservatively account for corridors. I'll kick it to Mark here, but I wouldn't expect anything unusual. We account for it as experience emerges, and if experience changes, we adjust the accounting. Mark Keim: Hey, the only thing I'll add is, on current year membership, we've seen most of our membership declines in three states, which one of them is California. I would expect our modeling for next year will be similar, where we'll probably see disproportionate declines in memberships in a handful of states, California being one of them. So that will partly reflect the matter you just raised. Other than that, I don't see a meaningful impact for MLR. Operator: The next question comes from George Hill with Deutsche Bank. Please go ahead. George Hill: Yeah. Good morning, guys, and thanks for taking the question. Joe, you talked a little bit about the implementation of work requirements and community engagement requirements in Nebraska. I guess, can you talk about I want to think about the range of outcomes in the other states that you guys participate in, and I'm thinking about this on reflecting on A.J.'s question. Nebraska seems to be a pretty benign implementation. I guess, can you talk about the range of what you're seeing across the states from where the implementations look like they're more arduous and could have a greater impact versus where they'll have a lesser impact? Thanks. Joe Zubretsky: At this early stage, it's fair to say, as of 10 days ago when I last checked, many of the states haven't even decided on their tier 1 definitions of medical frailty, which are the diagnosis codes that by themselves would constitute medical frailty. So some of these things haven't even been decided yet. As we work with our states and look at the range of possibilities, the range of flexibility that states have in interpreting CMS guidelines, I would say that on balance, 80% of our states are leaning toward policies that promote enrollment rather than disenrollment. Whether it comes to how hard are we going to look for information that determines an ex parte eligibility? Are we going to accept self-attestation or not? Medical frailty and the other types of exemptions within a range of possible outcomes, are we going to be more conservative or more liberal? So I would say it's leaning toward promoting enrollment rather than disenrollment. But we've learned nothing in the process that causes us to change our 6% outlook next year for reduction in membership and the acuity shift impact that we put into our trend assumption of 1%. In Nebraska, I would say that the results here to date have actually been lower disenrollment than anybody forecast. In fact, on renewal enrollments, I think that 90% of the applications have been upheld on people that are already in the program, are up for renewal, run them through the process, 90% of them renew, which is far greater than anybody anticipated. Mark Keim: And within that 20% for frailty, which is significantly higher than most of us thought. George Hill: Right. Thank you. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Before you buy stock in Molina Healthcare, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Molina Healthcare wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Molina Healthcare (MOH) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

- Interested in Molina Healthcare, Inc? Here are five stocks we like better. - Molina reaffirmed its 2026 outlook, maintaining expectations for about $42 billion in premium revenue and adjusted EPS of at least $5.25, despite elevated medical costs and a 92.9% consolidated medical care ratio in Q3. - The company's preliminary 2027 earnings framework exceeds $9.50 per share, supported by roughly 6% Medicaid rate increases, the maturation of new contracts, reduced Marketplace losses and the planned exit from its unprofitable MAPD business. - Molina expects 2027 Medicaid membership to decline about 6% because of work requirements and eligibility reviews, while the new Florida CMS contract is expected to weigh on 2026 earnings by approximately $1.50 per share before reaching breakeven or better in 2027. - 3 Sectors to Buy While They're Down and 1 to Walk Away From Molina Healthcare (NYSE:MOH) reaffirmed its full-year 2026 adjusted earnings outlook while outlining preliminary 2027 earnings building blocks exceeding $9.50 per share, supported by anticipated rate increases, the maturation of new contracts and the planned exit from its Medicare Advantage prescription drug business. Speaking on the company's third-quarter earnings call, President and CEO Joe Zubretsky said Molina generated $10.5 billion in premium revenue and adjusted earnings per share of $0.89 during the quarter. The company reported a consolidated medical care ratio, or MCR, of 92.9%, an adjusted general and administrative expense ratio of 6.3%, and an adjusted pretax margin of 0.6%. → Aurora Rejects Curaleaf's Higher Bid, But the Takeover Fight Isn't Over - Why Centene Stock Dropped 40% — And Whether It's a Buy Now Zubretsky said third-quarter results reflected "solid operating performance" amid a challenging medical cost environment. Molina maintained its full-year premium revenue forecast of about $42 billion and its adjusted EPS guidance of at least $5.25. Molina's Medicaid MCR was 93% in the third quarter, in line with management's expectations as rate updates largely offset higher medical costs. The company raised its outlook for full-year Medicaid rate increases to 4.5%, from a prior range of 4% to 4.5%, while also increasing its medical-cost trend assumption to 5.5%, from 5% to 5.5%. → Could Quantinuum's Breakthrough Make Its Sell-Off a Bargain? - 3 Health Insurance Stocks Holding Green in Market Turmoil Management cited elevated utilization in several care categories and a modest shift in member acuity. Long-term services and supports and behavioral health trends remained elevated but stable, while outpatient costs and high-cost drugs rose somewhat, CFO Mark Keim said. The company expects its legacy Medicaid business to produce a 1.6% pretax margin for 2026. Zubretsky said the business is at what management views as the low point of a multiyear margin cycle, as state rate-setting increasingly incorporates periods of elevated cost trends into the baseline used for pricing. → IonQ's Bold Expansion Could Leave Shareholders Paying the Price For 2027, Molina's preliminary outlook calls for Medicaid rates to rise about 6%, while medical-cost trend is projected at 5.5% to 6%. The company said it knows draft rates for 80% of its Jan. 1 renewal cohort, representing 55% of full-year premium, and those rates average about 7%. Management said the early outlook assumes legacy Medicaid MCRs will remain at least flat year over year. Any improvement would represent upside to its preliminary earnings view. Keim said every 100 basis points of improvement in the Medicaid MCR would be worth approximately $5 per share. Molina expects federal work requirements and more frequent eligibility reverifications to reduce membership gradually. The company's preliminary assumptions include a 6% membership decline in 2027, after anticipating a 6% decline in 2026 before the addition of members from the Florida CMS contract. Zubretsky said early experience in Nebraska, an early adopter of work requirements, has been more moderate than some observers expected. He said states covering about 80% of Molina's markets appear to be adopting interpretations that favor continued enrollment, including medical-frailty exemptions, ex parte reviews and self-attestation policies. Keim said Nebraska reported that 90% of renewing members had been reenrolled, including 20% through frailty exemptions. Molina nevertheless continues to include an expected acuity shift in its cost-trend assumptions. Management estimated that 4.5% of its 2027 medical-cost trend projection reflects core trend and roughly 1% to 1.5% reflects acuity changes associated with membership attrition. Molina began its Florida CMS contract during the third quarter, taking on 115,000 members with an annualized revenue run rate of about $6 billion. Zubretsky characterized the first 22 days of implementation as nearly flawless operationally and clinically, though he said the company remains cautious because it is a new, high-acuity program. The contract is expected to create a $1.50-per-share earnings drag in 2026, including approximately $1 in the fourth quarter. Keim said Molina expects the Florida business to have a roughly 99% MCR and a 5% pretax loss in the fourth quarter, before improving to breakeven or better in 2027. A portion of the initial loss reflects one-time reserve requirements associated with new revenue, he said. In Medicare, Molina reported a third-quarter MCR of 93%. Its dual-eligible products continued to perform well and are expected to contribute $1.25 per share in 2026, while its Medicare Advantage prescription drug, or MAPD, business is projected to lose $1 per share before Molina exits that product line in 2027. Marketplace MCR was 92.5% during the quarter. Molina expects the segment to lose about $0.75 per share in 2026 but said the loss is not expected to recur after the company reduces its Marketplace footprint to seven states and adjusts pricing for 2027. Molina now expects at least $45 billion in premium revenue for 2027, down from an earlier outlook of $46.5 billion. The reduction reflects delayed implementation of Medicaid contracts in Georgia and Texas, which together account for $1.3 billion of premium revenue. The awards are being evaluated in state court, though management said it remains confident the awards will be upheld and commence later in 2027 or in 2028. The company's preliminary earnings building blocks for 2027 start with at least $5.25 per share of 2026 adjusted EPS and add about $4 per share from known embedded earnings. Those contributions include eliminating losses on the Florida CMS and MAPD businesses, as well as operating leverage from higher revenue. Molina also expects Marketplace to reach at least breakeven, adding about $0.75 per share. Molina highlighted additional bidding activity in Texas, Missouri, Arizona and Indiana. Those opportunities represent about $26 billion of the $90 billion RFP opportunity discussed at its Investor Day, Zubretsky said. Molina Healthcare, Inc is a managed-care company that provides health insurance and related services primarily through government-sponsored programs. Its offerings include Medicaid, Medicare, Medicare-Medicaid dual-eligible plans and health plans sold through government marketplaces under the Affordable Care Act. The company's services generally include medical care coordination, behavioral health support, pharmacy benefits and, depending on the plan and state, dental and vision benefits. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Molina Healthcare Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.

Healthcare plan provider Centene Corporation CNC is set to report third-quarter 2026 results on Oct. 27, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter's earnings is currently pegged at 7 cents per share on revenues of $47.06 billion. The third-quarter earnings estimate remained stable over the past 60 days. However, the bottom-line projection indicates a year-over-year decline from 50 cents per share. The Zacks Consensus Estimate for quarterly revenues also suggests a year-over-year decline of 5.3%. Image Source: Zacks Investment Research For 2026, the Zacks Consensus Estimate for Centene's revenues is pegged at $196.29 billion, implying an increase of 0.8% year over year. Meanwhile, the consensus mark for 2026 EPS is pegged at $4.89, signaling growth of 135.1% year over year. Centene beat earnings estimates in each of the last four quarters, with the average surprise being 151.3%. This is depicted in the figure below. CNO Financial Group, Inc. price-eps-surprise | CNO Financial Group, Inc. Quote Our proven model does not conclusively predict an earnings beat for the company this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. That's not the case here. CNC has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter. You can see the complete list of today's Zacks #1 Rank stocks here. The Zacks Consensus Estimate for the company's total commercial memberships indicates a 38.2% year-over-year decrease, primarily due to a decline in the commercial marketplace. The consensus estimate for the company's total Medicaid memberships indicates a 6.9% decline from a year ago. As such, the Zacks Consensus Estimate for total membership indicates an 8.8% year-over-year decline, which reflects its portfolio optimization efforts. However, the consensus mark for Medicare PDP memberships signals 10.6% growth from the year-ago quarter. The consensus estimate projects CNC's service revenue growth of 4% year over year. The consensus mark for the company's investment and other income indicates a 23.7% year-over-year decline from $450 million. Moreover, the projection for premium revenues indicates a 3.4% fall from the year-ago quarter's figure. These are likely to have affected the third-quarter top line. The Zacks Consensus Estimate for the Commercial health benefits ratio is pegged at 87.6%, down from 89.9% in the year-ago period, meaning a higher portion of premiums remain in hand after paying claims. Centene stock has gained 70.7% in the year-to-date period compared with the industry's growth of 29%. Its peers, such as Humana Inc. HUM and Molina Healthcare, Inc. MOH, have jumped 66.1% and 23.8%, respectively, during this time. Meanwhile, the S&P 500 has only increased 12.2%. Image Source: Zacks Investment Research CNC is trading at 13.37X forward 12-month earnings, above its five-year median of 11.33X. But it is still below the industry's average of 16.37X. In comparison, Humana and Molina Healthcare are currently trading at 28.97X and 24.15X, respectively. Image Source: Zacks Investment Research Centene presents a mixed investment picture, with improving Medicaid margins and Marketplace profitability offset by declining memberships and persistent cost pressures. The Medicaid business is benefiting from favorable rate adjustments and medical-cost management initiatives, supporting underwriting profitability. Meanwhile, effective repricing, moderating medical trends and improved risk-adjustment positioning are strengthening Marketplace margins. These developments could support earnings growth and reinforce the company's turnaround efforts. However, shrinking commercial and Medicaid memberships, rising operating expenses and regulatory uncertainties remain major concerns. Medical cost pressures and changing enrollment trends could also challenge sustained margin expansion. CNC's shares have outperformed the industry and broader market, reflecting investor optimism. Although the stock trades at a discount to the industry, its valuation remains elevated against historical levels, limiting near-term upside potential. Given improving fundamentals but lingering uncertainties, existing investors may retain their positions, while new investors could await a more attractive entry point. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Centene Corporation (CNC) : Free Stock Analysis Report Humana Inc. (HUM) : Free Stock Analysis Report Molina Healthcare, Inc (MOH) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

For the quarter ended September 2026, Molina (MOH) reported revenue of $11.08 billion, down 3.4% over the same period last year. EPS came in at $0.89, compared to $1.84 in the year-ago quarter. The reported revenue represents a surprise of +1.42% over the Zacks Consensus Estimate of $10.93 billion. With the consensus EPS estimate being $0.72, the EPS surprise was +23.61%. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately. Here is how Molina performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: - MCR - Medicaid: 93% versus the three-analyst average estimate of 93%. - MCR - Medicare: 93% compared to the 92.8% average estimate based on three analysts. - MCR - Marketplace: 92.5% compared to the 93.3% average estimate based on three analysts. - Ending Membership by Program - Total: 4.86 million versus 4.91 million estimated by three analysts on average. - Ending Membership by Program - Medicaid: 4.37 million versus 4.42 million estimated by three analysts on average. - Revenue- Premium revenue- Marketplace: $642 million versus $570 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a -46.4% change. - Revenue- Premium tax revenue: $500 million versus the three-analyst average estimate of $509 million. The reported number represents a year-over-year change of -1.2%. - Revenue- Premium revenue- Medicaid: $8.2 billion versus the three-analyst average estimate of $8.16 billion. The reported number represents a year-over-year change of +2.3%. - Revenue- Premium revenue- Medicare: $1.62 billion versus $1.57 billion estimated by three analysts on average. Compared to the year-ago quarter, this number represents a +0.4% change. - Revenue- Premium revenue: $10.46 billion versus the three-analyst average estimate of $10.31 billion. The reported number represents a year-over-year change of -3.5%. - Revenue- Other revenue: $23 million versus the two-analyst average estimate of $23.26 million. The reported number represents a year-over-year change of +4.6%. - Revenue- Investment income: $102 million compared to the $100.43 million average estimate based on two analysts. The reported number represents a change of -5.6% year over year. View all Key Company Metrics for Molina here>>> Shares of Molina have returned +14.9% over the past month versus the Zacks S&P 500 composite's +1% change. The stock currently has a Zacks Rank #4 (Sell), indicating that it could underperform the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Molina Healthcare, Inc (MOH) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Reaffirms Full Year 2026 Earnings Guidance LONG BEACH, Calif., October 21, 2026--(BUSINESS WIRE)--Molina Healthcare, Inc. (NYSE: MOH) (the "Company") today reported third quarter 2026 GAAP income per diluted share of $0.73 and adjusted income per diluted share of $0.89. Financial results are summarized below: | Three months ended | | Nine months ended | September 30, | | September 30, | 2026 | | 2025 | | 2026 | | 2025 | | | | | | | (In millions, except per-share results) Premium Revenue | $10,457 | | $10,841 | | $30,873 | | $32,337 Total Revenue | $11,082 | | $11,477 | | $32,752 | | $34,051 | | | | | | | GAAP: | | | | | | | Net Income | $38 | | $79 | | $112 | | $632 EPS – Diluted | $0.73 | | $1.51 | | $2.19 | | $11.79 Medical Care Ratio (MCR) | 92.9% | | 92.6% | | 92.1% | | 90.8% G&A Ratio | 6.4% | | 6.4% | | 6.8% | | 6.5% Pre-tax Margin | 0.5% | | 0.8% | | 0.5% | | 2.4% | | | | | | | Adjusted: | | | | | | | Net Income | $46 | | $97 | | $243 | | $724 EPS – Diluted | $0.89 | | $1.84 | | $4.74 | | $13.49 G&A Ratio | 6.3% | | 6.3% | | 6.6% | | 6.4% Pre-tax Margin | 0.6% | | 1.0% | | 1.1% | | 2.7% | | | | | | | See the Reconciliation of Unaudited Non-GAAP Financial Measures at the end of this release. Quarter Highlights - As of September 30, 2026, the Company served approximately 4.9 million members. - Premium revenue was approximately $10.5 billion for the third quarter of 2026. - Third quarter 2026 GAAP income per diluted share was $0.73 and adjusted income per diluted share was $0.89. - The Company reaffirmed its full year 2026 guidance of expected premium revenue of approximately $42 billion and adjusted earnings of at least $5.25 per diluted share. "We are pleased with our third quarter results in this challenging environment and reaffirm our full year guidance," said Joseph Zubretsky, President and Chief Executive Officer. "With the apparent plateauing of medical cost trend, which remains at elevated levels, and the strength of recent rate updates for 2027, we believe we are likely observing the beginning of the turn in Medicaid margins." Premium Revenue Premium revenue was approximately $10.5 billion for the third quarter of 2026, a decrease of 4% year over year. The lower premium revenue reflects the impact of lower membership in Medicaid and Marketplace, partially offset by rate updates. Net Income GAAP net income for the third quarter of 2026 was $38 million, or $0.73 per diluted share, a decrease of 52% year over year. Adjusted net income for the third quarter of 2026 was $46 million, or $0.89 per diluted share, a decrease of 53% year over year. The decrease is attributed mainly to a higher consolidated MCR. Medical Care Ratio (MCR) - The consolidated MCR for the third quarter of 2026 was 92.9%. - The Medicaid MCR for the third quarter of 2026 was 93.0% and in line with the Company's expectations, reflecting rate updates and stable medical cost trend. - The Medicare MCR for the third quarter of 2026 was 93.0% and in line with the Company's expectations, reflecting stable medical cost trend. - The Marketplace MCR for the third quarter of 2026 was 92.5% and in line with normal seasonality and the Company's expectations. General and Administrative Expense Ratio The G&A ratio and the adjusted G&A ratio for the third quarter of 2026 were 6.4% and 6.3%, respectively, reflecting continued operating discipline. Balance Sheet Cash and investments at the parent company were approximately $608 million as of September 30, 2026, compared to $223 million as of December 31, 2025. Days in claims payable at September 30, 2026, was 44, consistent with June 30, 2026. Cash Flow Operating cash flow for the nine months ended September 30, 2026, was $629 million, compared to an outflow of $237 million for the nine months ended September 30, 2025. The increase compared to the prior year was driven mainly by lower government receivable and payable settlements in 2026. 2026 Guidance Premium revenue guidance for the full year is unchanged at approximately $42 billion. The Company expects its full year 2026 GAAP earnings to be at least $2.38 per diluted share and reaffirmed its full year 2026 adjusted earnings of at least $5.25 per diluted share. Guidance metrics across all segments are also reaffirmed. Full year earnings guidance includes a loss of $1.50 per share due to the implementation of the new Florida Medicaid contract in the fourth quarter of 2026 and a loss of $1.00 per share due to performance of the traditional MAPD product, which the Company previously announced it will exit for 2027. Conference Call Management will host a conference call and webcast to discuss Molina Healthcare's third quarter ended September 30, 2026 results, at 8:00 a.m. Eastern Time on Thursday, October 22, 2026. The number to call for the interactive teleconference is (877) 883-0383 and the confirmation number is 6534841. A telephonic replay of the conference call will be available through Thursday, October 29, 2026, by dialing (855) 669-9658 and entering confirmation number 4361465. A live audio broadcast of this conference call will be available on Molina Healthcare's investor relations website, investors.molinahealthcare.com. A 30-day online replay will be available approximately an hour following the conclusion of the live broadcast. About Molina Healthcare Molina Healthcare, Inc., a FORTUNE 500 company, provides managed healthcare services under the Medicaid and Medicare programs and through the state insurance marketplaces. For more information about Molina Healthcare, please visit molinahealthcare.com. Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 This earnings release and the Company's accompanying oral remarks contain forward-looking statements. The Company intends such forward-looking statements to be covered under the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements provide current expectations of future events based on certain assumptions, and all statements other than statements of historical fact contained in this earnings release and the Company's accompanying oral remarks may be forward-looking statements. In some cases, you can identify forward-looking statements by words such as "guidance," "future," "anticipates," "assumes," "believes," "embedded," "estimates," "expects," "growth," "intends," "plans," "predicts," "projects," "will," "would," "could," "can," "may," or the negative of these terms or other similar expressions. Forward-looking statements contained in this earnings release include, but are not limited to, statements regarding the Company's 2026 guidance and long-term performance outlook, trends with respect to rates, pretax margins, utilization, and medical costs, including the timing thereof and the anticipated impact on the Company's business, and our management's plans and objectives for future operations and business strategy. Actual results could differ materially due to numerous known and unknown risks and uncertainties. These risks and uncertainties are discussed under the headings "Forward-Looking Statements," and "Risk Factors," in the Company's Annual Report on Form 10‑K for the year ended December 31, 2025, which is on file with the U.S. Securities and Exchange Commission (the "SEC"), and in the Company's other filings with the SEC, including its Quarterly Reports on Form 10-Q for the period ended March 31, 2026 and June 30, 2026 filed with the SEC and Quarterly Report on Form 10-Q for the period ended September 30, 2026, to be filed with the SEC. These reports can be accessed under the investor relations tab of the Company's website or on the SEC's website at sec.gov. Given these risks and uncertainties, the Company can give no assurances that its forward-looking statements will prove to be accurate, or that any other results or developments projected or contemplated by its forward-looking statements will in fact occur, and the Company cautions investors not to place undue reliance on these statements. All forward-looking statements in this release represent the Company's judgment as of October 21, 2026, and, except as otherwise required by law, the Company disclaims any obligation to update any forward-looking statement to conform the statement to actual results or changes in its expectations. MOLINA HEALTHCARE, INC. UNAUDITED CONSOLIDATED STATEMENTS OF INCOME | | | | Three Months Ended | | Nine Months Ended | September 30, | | September 30, | 2026 | | 2025 | | 2026 | | 2025 | | | | | | | | (In millions, except per-share amounts) Revenue: | | | | | | | Premium revenue | $ | 10,457 | | $ | 10,841 | | $ | 30,873 | | $ | 32,337 Premium tax revenue | | 500 | | | 506 | | | 1,509 | | | 1,325 Investment income | | 102 | | | 108 | | | 301 | | | 322 Other revenue | | 23 | | | 22 | | | 69 | | | 67 Total revenue | | 11,082 | | | 11,477 | | | 32,752 | | | 34,051 Operating expenses: | | | | | | | Medical care costs | | 9,719 | | | 10,044 | | | 28,429 | | | 29,352 General and administrative expenses | | 710 | | | 729 | | | 2,213 | | | 2,214 Premium tax expenses | | 500 | | | 506 | | | 1,509 | | | 1,325 Depreciation and amortization | | 38 | | | 45 | | | 117 | | | 151 Impairment | | — | | | — | | | 93 | | | — Other | | 9 | | | 16 | | | 57 | | | 66 Total operating expenses | | 10,976 | | | 11,340 | | | 32,418 | | | 33,108 Operating income | | 106 | | | 137 | | | 334 | | | 943 Interest expense | | 53 | | | 49 | | | 161 | | | 140 Income before income tax expense | | 53 | | | 88 | | | 173 | | | 803 Income tax expense | | 15 | | | 9 | | | 61 | | | 171 Net income | $ | 38 | | $ | 79 | | $ | 112 | | $ | 632 | | | | | | | Net income per share – Diluted | $ | 0.73 | | $ | 1.51 | | $ | 2.19 | | $ | 11.79 | | | | | | | Diluted weighted average shares outstanding | | 51.5 | | | 52.5 | | | 51.3 | | | 53.6 | | | | | | | | | | | MOLINA HEALTHCARE, INC. CONSOLIDATED BALANCE SHEETS | | | | September 30, | | December 31, | 2026 | | 2025 | Unaudited | | | (Dollars in millions,except per-share amounts) ASSETS Current assets: | | | Cash and cash equivalents | $ | 4,479 | | | $ | 4,248 Investments | | 4,100 | | | | 4,008 Receivables | | 3,359 | | | | 3,533 Prepaid expenses and other current assets | | 576 | | | | 655 Total current assets | | 12,514 | | | | 12,444 Property, equipment, and capitalized software, net | | 324 | | | | 301 Goodwill and intangible assets, net | | 2,073 | | | | 2,195 Restricted investments | | 345 | | | | 299 Deferred income taxes, net | | 267 | | | | 178 Other assets | | 129 | | | | 147 Total assets | $ | 15,652 | | | $ | 15,564 | | | LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: | | | Medical claims and benefits payable | $ | 4,988 | | | $ | 4,887 Amounts due government agencies | | 1,141 | | | | 1,326 Accounts payable, accrued liabilities and other | | 1,183 | | | | 1,093 Deferred revenue | | 82 | | | | 66 Total current liabilities | | 7,394 | | | | 7,372 Long-term debt | | 3,771 | | | | 3,766 Finance lease liabilities | | 179 | | | | 184 Other long-term liabilities | | 153 | | | | 173 Total liabilities | | 11,497 | | | | 11,495 Stockholders' equity: | | | Common stock, $0.001 par value, 150 million shares authorized; outstanding: 52 million shares at September 30, 2026, and 51 million at December 31, 2025 | | — | | | | — Preferred stock, $0.001 par value; 20 million shares authorized, no shares issued and outstanding | | — | | | | — Additional paid-in capital | | 536 | | | | 452 Accumulated other comprehensive (loss) income | | (95 | ) | | | 15 Retained earnings | | 3,714 | | | | 3,602 Total stockholders' equity | | 4,155 | | | | 4,069 Total liabilities and stockholders' equity | $ | 15,652 | | | $ | 15,564 | | | MOLINA HEALTHCARE, INC. UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS | | Nine Months Ended | September 30, | 2026 | | 2025 | | | | (In millions) Operating activities: | | | Net income | $ | 112 | | | $ | 632 | Adjustments to reconcile net income to net cash provided by (used in) operating activities: | | | Depreciation and amortization | | 117 | | | | 151 | Deferred income taxes | | (54 | ) | | | 37 | Share-based compensation | | 85 | | | | 27 | Impairment | | 93 | | | | — | Other, net | | (21 | ) | | | (2 | ) Changes in operating assets and liabilities: | | | Receivables | | 174 | | | | (118 | ) Prepaid expenses and other current assets | | 11 | | | | (25 | ) Medical claims and benefits payable | | 101 | | | | (157 | ) Amounts due government agencies | | (185 | ) | | | (467 | ) Accounts payable, accrued liabilities and other | | 88 | | | | (195 | ) Deferred revenue | | 16 | | | | (44 | ) Income taxes | | 92 | | | | (76 | ) Net cash provided by (used in) operating activities | | 629 | | | | (237 | ) Investing activities: | | | Purchases of investments | | (1,245 | ) | | | (607 | ) Proceeds from sales and maturities of investments | | 1,020 | | | | 1,017 | Purchases of property, equipment, and capitalized software | | (94 | ) | | | (102 | ) Net cash paid in business combinations | | — | | | | (245 | ) Other, net | | (9 | ) | | | 19 | Net cash (used in) provided by investing activities | | (328 | ) | | | 82 | Financing activities: | | | Proceeds from borrowings under credit facility and term loans | | — | | | | 1,100 | Common stock purchases | | — | | | | (1,000 | ) Repayment of credit facility and term loans | | — | | | | (360 | ) Common stock withheld to settle employee tax obligations | | (15 | ) | | | (37 | ) Other, net | | (16 | ) | | | 35 | Net cash used in financing activities | | (31 | ) | | | (262 | ) Net increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents | | 270 | | | | (417 | ) Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period | | 4,348 | | | | 4,741 | Cash, cash equivalents, and restricted cash and cash equivalents at end of period | $ | 4,618 | | | $ | 4,324 | | | | MOLINA HEALTHCARE, INC. UNAUDITED SEGMENT DATA (Dollars in millions) | | | | | | | | September 30, | | December 31, | | September 30, | | 2026 | | 2025 | | 2025 Ending Membership by Segment: | | | | | Medicaid | 4,372,000 | | 4,568,000 | | 4,639,000 Medicare | 222,000 | | 262,000 | | 266,000 Marketplace | 267,000 | | 655,000 | | 713,000 Other | | 1,000 | | 6,000 | | 10,000 Total | 4,862,000 | | 5,491,000 | | 5,628,000 | | | | | | | Three Months Ended September 30, | 2026 | | 2025 | Premium Revenue | | Medical Margin | | MCR (1) | | Premium Revenue | | Medical Margin | | MCR (1) | | | | | Medicaid | $ | 8,199 | | $ | 577 | | 93.0 | % | | $ | 8,015 | | $ | 639 | | 92.0 | % Medicare | | 1,616 | | | 113 | | 93.0 | | | | 1,610 | | | 103 | | 93.6 | Marketplace | | 642 | | | 48 | | 92.5 | | | | 1,197 | | | 53 | | 95.6 | Other (2) | | — | | | — | | NM | | | | 19 | | | 2 | | NM | Consolidated | $ | 10,457 | | $ | 738 | | 92.9 | % | | $ | 10,841 | | $ | 797 | | 92.6 | % | | | | | | | | | | | | Nine Months Ended September 30, | 2026 | | 2025 | Premium Revenue | | Medical Margin | | MCR (1) | | Premium Revenue | | Medical Margin | | MCR (1) | | | | | Medicaid | $ | 24,175 | | $ | 1,793 | | 92.6 | % | | $ | 24,174 | | $ | 2,127 | | 91.2 | % Medicare | | 4,698 | | | 413 | | 91.2 | | | | 4,686 | | | 436 | | 90.7 | Marketplace | | 1,994 | | | 233 | | 88.3 | | | | 3,401 | | | 411 | | 87.9 | Other (2) | | 6 | | | 5 | | NM | | | | 76 | | | 11 | | NM | Consolidated | $ | 30,873 | | $ | 2,444 | | 92.1 | % | | $ | 32,337 | | $ | 2,985 | | 90.8 | % _____________ | | | | | | | | | | | (1) The MCR represents medical costs as a percentage of premium revenue. (2) The Other MCRs are not meaningful. MOLINA HEALTHCARE, INC. CHANGE IN MEDICAL CLAIMS AND BENEFITS PAYABLE (Dollars in millions) The Company's claims liabilities include additional reserves to account for moderately adverse conditions based on historical experience and other factors including, but not limited to, variations in claims payment patterns, changes in utilization and cost trends, known outbreaks of disease, and large claims. The Company's reserving methodology is consistently applied across all periods presented. The amounts displayed for "Components of medical care costs related to: Prior year" represent the amounts by which the original estimates of claims and benefits payable at the beginning of the year were more than the actual liabilities based on information (principally the payment of claims) developed since those liabilities were first reported. The following table presents the components of the change in medical claims and benefits payable for the periods indicated: | Nine Months Ended | September 30, | 2026 | | 2025 | | | | Unaudited Medical claims and benefits payable, beginning balance | $ | 4,887 | | | $ | 4,640 | Components of medical care costs related to: | | | Current year | | 28,781 | | | | 29,476 | Prior year | | (352 | ) | | | (124 | ) Total medical care costs | | 28,429 | | | | 29,352 | Payments for medical care costs related to: | | | Current year | | 24,692 | | | | 25,425 | Prior year | | 3,963 | | | | 4,059 | Total paid | | 28,655 | | | | 29,484 | Acquired balances, net of post-acquisition adjustments | | — | | | | 361 | Change in non-risk and other payables | | 327 | | | | (25 | ) Medical claims and benefits payable, ending balance | $ | 4,988 | | | $ | 4,844 | | | | Days in Claims Payable (1) | | 44 | | | | 46 | _____________ (1) | | The Company calculates Days in Claims Payable using claims incurred but not paid, or IBNP, and other fee-for-service payables included in medical claims and benefits payable, and quarterly fee-for-service related costs included in medical care costs within the Company's consolidated financial statements. | | MOLINA HEALTHCARE, INC. RECONCILIATION OF UNAUDITED NON-GAAP FINANCIAL MEASURES (In millions, except per diluted share amounts) The Company believes that certain non-GAAP (generally accepted accounting principles) financial measures are useful supplemental measures to investors in comparing the Company's performance to the performance of other public companies in the health care industry. The non-GAAP financial measures are also used internally to enable management to assess the Company's performance consistently over time. These non-GAAP financial measures, presented below, should be considered as supplements to, and not as substitutes for or superior to, GAAP measures. Adjustments represent additions and deductions to GAAP net income as indicated in the table below, which include the non-cash impact of amortization of acquired intangible assets, acquisition-related expenses, impairments, and the impact of certain expenses and other items that management believes are not indicative of longer-term business trends and operations. Adjusted G&A Ratio represents the GAAP G&A ratio, recognizing adjustments. Adjusted net income represents GAAP net income recognizing the adjustments, net of tax. The Company believes that adjusted net income is helpful to investors in assessing the Company's financial performance. Adjusted net income per diluted share represents adjusted net income divided by weighted average common shares outstanding on a fully diluted basis. Adjusted pre-tax margin represents adjusted income before income tax expense, divided by total revenue. | Three Months Ended September 30, | | Nine Months Ended September 30, 2026 | | 2025 | | 2026 | | 2025 | Amount | | Per Diluted Share | | Amount | | Per Diluted Share | | Amount | | Per Diluted Share | | Amount | | Per Diluted Share GAAP Net income | $ | 38 | | | $ | 0.73 | | | $ | 79 | | | $ | 1.51 | | | $ | 112 | | | $ | 2.19 | | | $ | 632 | | | $ | 11.79 | Adjustments: | | | | | | | | | | | | | | | Amortization of intangible assets | $ | 10 | | | $ | 0.19 | | | $ | 20 | | | $ | 0.37 | | | $ | 29 | | | $ | 0.56 | | | $ | 73 | | | $ | 1.35 | Acquisition-related expenses (1) | | — | | | | — | | | | 4 | | | | 0.07 | | | | 33 | | | | 0.61 | | | | 46 | | | | 0.86 | Impairment (2) | | — | | | | — | | | | — | | | | — | | | | 93 | | | | 1.82 | | | | — | | | | — | Other (3) | | — | | | | — | | | | (1 | ) | | | (0.01 | ) | | | 21 | | | | 0.44 | | | | 1 | | | | 0.02 | Subtotal, adjustments | | 10 | | | | 0.19 | | | | 23 | | | | 0.43 | | | | 176 | | | | 3.43 | | | | 120 | | | | 2.23 | Income tax effect | | (2 | ) | | | (0.03 | ) | | | (5 | ) | | | (0.10 | ) | | | (45 | ) | | | (0.88 | ) | | | (28 | ) | | | (0.53 | ) Adjustments, net of tax | | 8 | | | | 0.16 | | | | 18 | | | | 0.33 | | | | 131 | | | | 2.55 | | | | 92 | | | | 1.70 | Adjusted net income | $ | 46 | | | $ | 0.89 | | | $ | 97 | | | $ | 1.84 | | | $ | 243 | | | $ | 4.74 | | | $ | 724 | | | $ | 13.49 | _____________ (1) | | Reflects non-recurring costs associated with acquisitions, including various transaction and certain integration costs. (2) | | This impairment charge results from the Company's decision to exit the Medicare Advantage Prescription Drug product for 2027 as that product does not align with the Company's strategic shift to focus exclusively on dual eligible members in Medicare. (3) | | The nine months ended September 30, 2026 primarily includes non-recurring termination benefits, and the nine months ended September 30, 2025 includes non-recurring litigation costs. | | MOLINA HEALTHCARE, INC. RECONCILIATION OF UNAUDITED NON-GAAP FINANCIAL MEASURES (CONTINUED) 2026 GUIDANCE | | | | Amount | | Per Diluted Share (2) GAAP Net income | $ | 122 | | | $ | 2.38 | Adjustments: | | | Acquisition-related expenses | | 48 | | | | 0.89 | Amortization of intangible assets | | 36 | | | | 0.70 | Impairment | | 93 | | | | 1.82 | Other | | 21 | | | | 0.44 | Subtotal, adjustments | | 198 | | | | 3.85 | Income tax effect (1) | | (50 | ) | | | (0.98 | ) Adjustments, net of tax | | 148 | | | | 2.87 | Adjusted net income | $ | 270 | | | $ | 5.25 | _____________ (1) | | Income tax effect calculated at the statutory tax rate of approximately 25.5%. (2) | | Computations assume approximately 51.4 million diluted weighted average shares outstanding. View source version on businesswire.com: https://www.businesswire.com/news/home/20261021455974/en/ Contacts Investor Contact: Jeffrey Geyer, [email protected], 305-317-3012 Media Contact: Caroline Zubieta, [email protected], 562-542-1845