AI Takeaway
Centene Corporation (CNC) delivered solid Q1 2026 results with revenue up 7.1% YoY to $49.9B, net income rising 17.5% to $1.54B, and operating cash flow surging 189.1% to $4.37B, reflecting improved operational efficiency despite a modest compression in gross margin.
Revenue
$49.94B
++7.13% YoY
EPS (Basic)
$3.13
++18.56% YoY
Gross Margin
11.3%
-0.03% YoY
Operating Income
$1.86B
++21.32% YoY
Filed · Source: SEC EDGAR 10-Q filing
Revenue grew 7.1% YoY from $46.6B to $49.9B in Q1 2026, suggesting continued membership growth across Centene's managed care programs including Medicaid, Medicare, and commercial marketplace plans.
Source: Source: 10-Q Income Statement (XBRL Financial Data)
Operating income jumped 21.3% YoY to $1.86B, with operating margin expanding approximately 44 basis points to 3.73%, indicating that revenue growth is outpacing operating cost increases and SG&A discipline is paying off.
Source: Source: 10-Q Income Statement (XBRL Financial Data)
SG&A expenses rose only 1.3% YoY to $3.40B despite a 7.1% revenue increase, demonstrating effective cost management and improving administrative efficiency as a percentage of revenue.
Source: Source: 10-Q Income Statement (XBRL Financial Data)
2 more insights available
Upgrade to unlockCentene's debt-to-equity ratio stands at 2.78x, reflecting significant financial leverage relative to its equity base. The 23.2% YoY decline in stockholders' equity to $21.4B has amplified this ratio, which could constrain financial flexibility if earnings deteriorate or interest rates remain elevated.
Source: Source: 10-Q Balance Sheet (XBRL Financial Data)
Unlock 4 more detailed risk analysis
Upgrade to unlockReported EPS of $3.37 versus the $2.15 analyst consensus — a +56.4% beat for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $49.94B | $46.62B | +7.13% |
Cost of Revenue | $702M | $698M | +0.57% |
Gross Profit | $5.65B | $5.29B | +6.85% |
Operating Income | $1.86B | $1.53B | +21.32% |
Net Income | $1.54B | $1.31B | +17.54% |
EPS (Basic) | $3.13 | $2.64 | +18.56% |
EPS (Diluted) | $3.11 | $2.63 | +18.25% |
SG&A Expense | $3.4B | $3.35B | +1.31% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $81.17B | $87.04B | -6.74% |
Current Assets | $44.99B | $41.29B | +8.96% |
Total Liabilities | $59.65B | $59.02B | +1.06% |
Current Liabilities | $40.05B | $37.14B | +7.81% |
Stockholders' Equity | $21.43B | $27.92B | -23.24% |
Cash & Equivalents | $21.26B | $14.81B | +43.53% |
Long-Term Debt | $16.31B | $18.31B | -10.92% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $4.37B | $1.51B | +189.14% |
Investing Cash Flow | $89M | $-529M | +116.82% |
Financing Cash Flow | $-1.06B | $-250M | -325.20% |
Share Buybacks | $29M | $41M | -29.27% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 11.3% | 11.3% | -0.03% |
Operating Margin | 3.7% | 3.3% | +0.44% |
Net Margin | 3.1% | — | — |
ROE | 7.2% | — | — |
ROA | 1.9% | — | — |
Current Ratio | $1.123 | — | — |
Debt to Equity | $2.784 | — | — |
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Centene reported strong Q1 2026 results with revenue of $49.9B (up 7.1% YoY), net income of $1.54B (up 17.5%), and diluted EPS of $3.11 (up 18.3%). Operating cash flow was a standout, surging 189% YoY to $4.37B, reflecting significantly improved cash generation.
The key takeaways from CNC's Q1 2026 report are: revenue growth of 7.1% to $49.9B, operating margin expansion of ~44 basis points to 3.73%, and a dramatic improvement in operating cash flow to $4.37B. SG&A costs grew only 1.3% versus 7.1% revenue growth, highlighting strong cost discipline.
Yes, Centene's diluted EPS grew 18.3% YoY to $3.11 in Q1 2026, up from $2.63 in Q1 2025. This growth outpaced revenue growth of 7.1%, reflecting improving profitability and operational leverage.
Key risks for Centene include its elevated debt-to-equity ratio of 2.78x, thin gross margins of ~11.3% that leave limited buffer against medical cost spikes, and heavy dependence on government programs like Medicaid that are subject to policy and reimbursement rate changes. The 23.2% decline in stockholders' equity also warrants monitoring.
Centene's financial health appears solid with $21.3B in cash (up 43.5% YoY), a current ratio of 1.12x, and long-term debt declining 10.9% to $16.3B. However, the debt-to-equity ratio of 2.78x and thin operating margins of 3.73% mean the company has limited room for error in its core managed care operations.