AI Takeaway
CNC (Centene Corporation) reported a dramatic swing to a net loss of $6.67B in FY2025 despite a 19.4% revenue surge to $194.8B, driven by a sharp collapse in gross and operating margins that overwhelmed top-line growth.
Revenue
$194.78B
++19.44% YoY
EPS (Basic)
$-13.53
-313.74% YoY
Gross Margin
7.3%
-3.17% YoY
Operating Income
$-7.62B
-340.09% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-K filing
Revenue grew 19.4% year-over-year from $163.1B to $194.8B in FY2025, suggesting significant membership or premium growth across Centene's managed care programs. This top-line expansion reflects the company's scale in government-sponsored healthcare programs such as Medicaid and Medicare.
Source: Source: 10-K Income Statement (XBRL Financial Data)
Gross margin fell sharply from 10.5% to 7.3% (-3.2 percentage points), and operating margin collapsed from +1.9% to -3.9%, resulting in an operating loss of $7.62B versus operating income of $3.18B in the prior year. This dramatic deterioration suggests medical cost ratios rose substantially faster than premium revenue.
Source: Source: 10-K Income Statement & Key Ratios (XBRL Financial Data)
The company swung from a net income of $3.31B to a net loss of $6.67B, a decline of over 300% year-over-year. Basic EPS fell from $6.33 to -$13.53, reflecting the full impact of elevated medical costs and potential goodwill or asset impairments on shareholder returns.
Source: Source: 10-K Income Statement (XBRL Financial Data)
2 more insights available
Upgrade to unlockThe collapse in gross margin from 10.5% to 7.3% strongly implies that medical costs (claims) rose disproportionately relative to premiums collected. In managed care, sustained medical cost ratio increases can rapidly erode profitability and may reflect inadequate premium pricing, higher-than-expected utilization, or adverse member mix in Medicaid redetermination cycles.
Source: Source: 10-K Key Ratios & Income Statement (XBRL Financial Data)
Unlock 4 more detailed risk analysis
Upgrade to unlockReported EPS of $-1.19 versus the $-1.24 analyst consensus — a +3.7% beat for FY2025.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $194.78B | $163.07B | +19.44% |
Cost of Revenue | $2.67B | $2.73B | -2.16% |
Gross Profit | $14.21B | $17.07B | -16.76% |
Operating Income | $-7.62B | $3.17B | -340.09% |
Net Income | $-6.67B | $3.31B | -301.94% |
EPS (Basic) | $-13.53 | $6.33 | -313.74% |
EPS (Diluted) | $-13.53 | $6.31 | -314.42% |
SG&A Expense | $12.9B | $12.4B | +4.06% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $76.75B | $82.44B | -6.91% |
Current Assets | $40.37B | $38B | +6.24% |
Total Liabilities | $56.69B | $55.94B | +1.35% |
Current Liabilities | $36.7B | $34.26B | +7.11% |
Stockholders' Equity | $19.95B | $26.41B | -24.45% |
Cash & Equivalents | $17.89B | $14.06B | +27.20% |
Long-Term Debt | $17.49B | $18.64B | -6.15% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $5.09B | $154M | +3203.90% |
Investing Cash Flow | $472M | $-1.05B | +144.87% |
Financing Cash Flow | $-1.62B | $-2.41B | +32.63% |
Share Buybacks | $475M | $3.12B | -84.80% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 7.3% | 10.5% | -3.17% |
Operating Margin | -3.9% | 1.9% | -5.86% |
Net Margin | -3.4% | — | — |
ROE | -33.4% | — | — |
ROA | -8.7% | — | — |
Current Ratio | $1.1 | — | — |
Debt to Equity | $2.841 | — | — |
Other companies in Managed Health Care
CNC reported a net loss of $6.67B in FY2025, swinging from net income of $3.31B the prior year, primarily due to a severe collapse in gross and operating margins — gross margin fell from 10.5% to 7.3% and operating margin turned negative at -3.9%. This suggests medical costs (claims) rose significantly faster than premium revenue, a common challenge in managed care when utilization spikes or pricing is inadequate. Notably, operating cash flow of $5.09B suggests large non-cash charges such as impairments also contributed to the accounting loss.
Yes, CNC's revenue grew strongly by 19.4% year-over-year, rising from $163.1B to $194.8B in FY2025, likely driven by membership expansion in Medicaid, Medicare, and ACA marketplace plans. However, this top-line growth was more than offset by rising medical costs, resulting in a net loss despite the record revenue level.
CNC's financial health showed mixed signals in FY2025: while cash and equivalents rose 27.2% to $17.9B and operating cash flow surged to $5.09B, stockholders' equity fell 24.4% to $20.0B and the debt-to-equity ratio rose to 2.84x. The current ratio of 1.10x indicates adequate but thin short-term liquidity, and the company significantly reduced share buybacks by 84.8% to $475M to preserve capital.
CNC's gross margin fell from 10.5% to 7.3% in FY2025, a decline of approximately 3.2 percentage points, reflecting that medical benefit costs grew faster than premium revenue. In managed care, this typically occurs when member utilization rises unexpectedly, when premium rates are set too low relative to actual claims, or when the member mix shifts toward higher-cost populations — all of which are heightened risks during Medicaid redetermination cycles.
Despite the $6.67B net loss, CNC's operating cash flow surged dramatically from $154M to $5.09B in FY2025, a 3,203.9% increase, indicating that substantial non-cash charges (likely goodwill impairments or large amortization) drove the accounting loss rather than actual cash outflows. Total cash and equivalents increased by $3.94B to $17.9B, suggesting the company maintained strong underlying liquidity even during a difficult earnings year.