Molina Healthcare, Inc.: Q1 FY2026 earnings call

What management said about Q1 FY2026, from the documents filed with the SEC on 22 April 2026: press release. Guidance figures: 1 raised, 4 lowered, 2 new, 4 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Premium revenue fell 4%: Premium revenue was $10.2 billion, down 4% from a year earlier. Total revenue was $10.8 billion against $11.1 billion. Source
• Adjusted EPS fell 61%: Adjusted diluted EPS was $2.35 against $6.08, and adjusted net income was $120 million against $333 million. Source
• Marketplace membership fell: Marketplace members fell to 305,000 from 655,000 at December 31, 2025. Management attributed the decrease to the product and pricing strategy. Source
• Consolidated MCR rose to 91.1%: The consolidated MCR was 91.1% against 89.2%. Medical margin was $902 million against $1,149 million. Source
• Marketplace MCR lifted by CMS items: About 450 basis points of the 84.0% Marketplace MCR came from prior-year risk adjustment and CMS program integrity work. Excluding these items, the MCR was about 79.5%. Source
• Operating cash flow rose to $1,082M: Operating cash flow was $1,082 million against $190 million. Management said the increase was driven mainly by the timing of government receivables and payables. Source
• MAPD exit for 2027: Management said the MAPD exit for 2027 does not align with its shift to focus exclusively on dual eligible members in Medicare. Source

“We are pleased with our first quarter results and continued disciplined approach to medical cost management”

Joseph Zubretsky, President and Chief Executive Officer

Guidance

What changed from last quarter

• Guidance lowered: Full-year 2026 GAAP EPS guidance was lowered to at least $1.90 per diluted share from at least $3.20. Source
• Guidance kept: Premium revenue guidance of about $42 billion and adjusted EPS guidance of at least $5.00 were reaffirmed. Source
• New: A $93 million impairment of intangible assets was recorded, linked to the planned exit of the MAPD product for 2027. Source
• Ended: The Medicaid contract in Virginia expired, which reduced premium revenue in the quarter. Source

Quarter results and drivers

• Premium revenue fell 4%: Premium revenue was $10.2 billion, down 4% from a year earlier. Total revenue was $10.8 billion against $11.1 billion. Source
• Adjusted EPS fell 61%: Adjusted diluted EPS was $2.35 against $6.08, and adjusted net income was $120 million against $333 million. Source
• GAAP net income declined sharply: GAAP diluted EPS was $0.27 against $5.45, and GAAP net income was $14 million against $298 million. The reconciliation lists the items that separate GAAP from adjusted results. Source
• Pre-tax margins narrowed: Adjusted pre-tax margin was 1.6% against 3.9%. GAAP pre-tax margin was 0.3% against 3.5%. Source

Segments and membership

• Medicaid premium and MCR: Medicaid premium revenue was $7,927 million against $8,130 million. The Medicaid MCR was 92.0% against 90.3%. Source
• Medicare premium and MCR rose: Medicare premium revenue was $1,517 million against $1,468 million, and the Medicare MCR was 89.8% against 88.3%. Source
• Marketplace membership fell: Marketplace members fell to 305,000 from 655,000 at December 31, 2025. Management attributed the decrease to the product and pricing strategy. Source
• Lower premium from market contraction: Management attributed lower premium revenue to lower Medicaid membership from general market contraction, alongside the Marketplace decline. Source

“Medical cost trend was modestly favorable to our expectations, and our reaffirmed full year 2026 premium revenue and adjusted earnings guidance reflect a prudent view of full year results at this early point in the year.”

Joseph Zubretsky, President and Chief Executive Officer

Medical costs and margins

• Consolidated MCR rose to 91.1%: The consolidated MCR was 91.1% against 89.2%. Medical margin was $902 million against $1,149 million. Source
• Medicaid cost trend below plan: Management said the Medicaid MCR of 92.0% reflected the January 1 rate cycle and medical cost trend moderately favorable to its expectations. Source
• Marketplace MCR lifted by CMS items: About 450 basis points of the 84.0% Marketplace MCR came from prior-year risk adjustment and CMS program integrity work. Excluding these items, the MCR was about 79.5%. Source
• Prior-year reserve development favorable: Prior-year development reduced medical care costs by $253 million, against $186 million in the first quarter of 2025. Source

Cash flow and balance sheet

• Operating cash flow rose to $1,082M: Operating cash flow was $1,082 million against $190 million. Management said the increase was driven mainly by the timing of government receivables and payables. Source
• Parent company cash slightly lower: Cash and investments at the parent company were $213 million at March 31, 2026, against $223 million at December 31, 2025. Source
• Days in claims payable at 44: Days in claims payable were 44 at March 31, 2026, against 46 a year earlier. Management said this was lower than typical because of payment timing at quarter end. Source
• No share repurchases in quarter: The cash flow statement shows no common stock purchases in the first quarter of 2026, against $500 million a year earlier. Shares withheld for employee taxes were $14 million. Source
• Consolidated cash rose: Cash and cash equivalents were $5,314 million at March 31, 2026, against $4,248 million at December 31, 2025. Source

Strategy and portfolio focus

• MAPD exit for 2027: Management said the MAPD exit for 2027 does not align with its shift to focus exclusively on dual eligible members in Medicare. Source
• Acquisition costs and amortization: Acquisition-related expenses were $21 million against $23 million a year earlier. Amortization of intangible assets was $10 million against $21 million. Source
• Goodwill and intangibles reduced: Goodwill and intangible assets, net were $2,092 million at March 31, 2026, against $2,195 million at December 31, 2025. Source

Share count and reconciling items

• Termination benefits in other items: The $21 million of other non-GAAP adjustments in the quarter primarily consisted of non-recurring termination benefits. Source
• Diluted share count lower: Diluted weighted average shares outstanding were 51.0 million against 54.8 million a year earlier. Source

Coming up, as management said on 22 April 2026

• Full-year guidance update with Q2: Management said it will update full-year 2026 guidance when it reports second quarter results, reflecting the first and second quarter actuals. Source
• Investor Day on May 8: Management plans to update its three-year plan at an Investor Day event on Friday, May 8. Source

Figures management reported

Risks management discussed

• Regulatory: Marketplace results include effects of prior-year risk adjustment and CMS program integrity initiatives, which management identified as a factor in the MCR. Source
• Financial: Days in claims payable and operating cash flow both reflect the timing of payments and government receivables and payables at quarter end. Source
• Demand: Management cited general market contraction as reducing Medicaid membership and premium revenue. Source

Earlier plans management reported on

• On track: The Medicare MCR of 89.8% was described as in line with the Company's expectation, reflecting 2026 pricing and benefit adjustments. Source
• On track: Excluding prior-year risk adjustment and program integrity items, the Marketplace MCR was about 79.5%, described as in line with expectations. Source
• Ahead: Management described Medicaid medical cost trend as moderately favorable to its expectations for the quarter. Source

Other quarters

• Q2 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.