Molina Healthcare, Inc.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 22 July 2026: press release. Guidance figures: 4 raised, 1 lowered, 1 new, 2 kept. The quarter’s numbers.

Read the filing

Key takeaways

• GAAP EPS fell to $1.19: GAAP net income was $60 million, or $1.19 per diluted share, down 76% from the prior year, against $4.75 a year earlier. Source
• Adjusted EPS fell to $1.51: Adjusted net income was $77 million, or $1.51 per diluted share, down 74% year over year, against $5.48 in the second quarter of 2025. Source
• Net income decline tied to premiums: Management attributed the lower net income mainly to lower premium revenue and a higher medical care ratio. Source
• Premium revenue down 6%: Premium revenue was about $10.2 billion, down 6% year over year, reflecting lower membership partly offset by rate updates. Source
• Consolidated MCR rose to 92.2%: The consolidated medical care ratio was 92.2%, up from 90.4% in the second quarter of 2025. Source
• Medicaid MCR in line: Medicaid MCR was 92.7%, which management described as in line with its expectation, against 91.3% a year earlier. Source
• Marketplace MCR rose to 88.9%: Marketplace MCR was 88.9% against 85.4% a year earlier, on premium of $628 million against $1,200 million. Source

“Our second quarter results and full year guidance reflect solid performance in our Medicaid and Medicare segments,”

Joseph Zubretsky, President and Chief Executive Officer

Guidance

What changed from last quarter

• Guidance raised: Full-year adjusted EPS guidance raised by $0.25 to at least $5.25 from at least $5.00. Source
• Guidance raised: Full-year GAAP EPS guidance raised to at least $2.15 from at least $1.90. Source
• Guidance kept: Full-year premium revenue guidance is unchanged at approximately $42 billion. Source
• Guidance lowered: Marketplace component of full-year guidance was revised down by $1.50 per share. Source
• New guidance: Full-year guidance now includes a $1.50 per share loss tied to the new Florida Medicaid contract, which begins in Q4 2026. Source
• New: Medicare Advantage Prescription Drug exit is tied to a strategic shift to dual eligible members only. Source

Results and earnings

• GAAP EPS fell to $1.19: GAAP net income was $60 million, or $1.19 per diluted share, down 76% from the prior year, against $4.75 a year earlier. Source
• Adjusted EPS fell to $1.51: Adjusted net income was $77 million, or $1.51 per diluted share, down 74% year over year, against $5.48 in the second quarter of 2025. Source
• Net income decline tied to premiums: Management attributed the lower net income mainly to lower premium revenue and a higher medical care ratio. Source
• Six-month EPS well below 2025: Six-month GAAP diluted EPS was $1.46 against $10.19 in 2025; six-month adjusted EPS was $3.86 against $11.56. Source
• Medicaid first-half performance lifted guidance: The earnings guidance increase reflects first-half Medicaid performance, according to the release. Source

Segments and membership

• Premium revenue down 6%: Premium revenue was about $10.2 billion, down 6% year over year, reflecting lower membership partly offset by rate updates. Source
• Membership about 4.9 million: The company served about 4.9 million members at June 30, 2026, against 5.7 million a year earlier and 5.5 million at year-end 2025. Source
• Marketplace and Medicare membership fell: Marketplace members were 283,000 against 690,000 a year earlier; Medicare 224,000 against 267,000; Medicaid 4,418,000 against 4,774,000. Source
• Medicaid premium edged up: Medicaid premium revenue was $8,049 million against $8,029 million, and Medicaid medical margin was $585 million against $697 million. Source

“This reinforces our belief that 2026 is the trough year for Medicaid pretax margins.”

Joseph Zubretsky, President and Chief Executive Officer

Medical costs and MCR

• Consolidated MCR rose to 92.2%: The consolidated medical care ratio was 92.2%, up from 90.4% in the second quarter of 2025. Source
• Medicaid MCR in line: Medicaid MCR was 92.7%, which management described as in line with its expectation, against 91.3% a year earlier. Source
• Medicare MCR at 90.7%: Medicare MCR was 90.7%, up from 90.0% a year earlier, with premium of $1,565 million against $1,608 million. Source
• Marketplace MCR rose to 88.9%: Marketplace MCR was 88.9% against 85.4% a year earlier, on premium of $628 million against $1,200 million. Source

Costs and G&A ratio

• G&A ratio rose to 6.7%: The G&A ratio was 6.7% against 6.2% a year earlier; the adjusted G&A ratio was 6.5% against 6.1%. Source
• Adjusted pre-tax margin 1.0%: Adjusted pre-tax margin was 1.0% for the quarter against 3.3% a year earlier; six-month figures were 1.3% and 3.6%. Source
• Operating income and interest expense: Operating income was $145 million against $373 million; interest expense was $54 million against $48 million. Source

“We remain confident in our disciplined approach to medical cost management and believe the premium and EPS building blocks position us well for profitable growth in 2027.”

Joseph Zubretsky, President and Chief Executive Officer

Cash, balance sheet and reserves

• Operating cash flow turned positive: Six-month operating cash flow was $788 million, against an outflow of $112 million a year earlier. Source
• Government timing drove cash flow: Management said the year-over-year increase in operating cash flow was driven mainly by timing of government receivables and payables. Source
• Parent company cash rose to $290M: Parent company cash and investments were about $290 million at June 30, 2026, against $223 million at December 31, 2025. Source
• Days in claims payable at 44: Days in claims payable were 44 at June 30, 2026, with medical claims and benefits payable of $4,841 million against $4,885 million a year earlier. Source

Strategy and portfolio changes

• $93 million MAPD impairment: The company recorded a $93 million impairment in the six months, tied to its decision to exit the Medicare Advantage Prescription Drug product for 2027. Source
• Focus shifts to dual eligibles: Management said the MAPD product does not align with a strategic shift to focus exclusively on dual eligible members in Medicare. Source
• Quarter adjustments to adjusted results: Quarter adjustments totalled $21 million before tax, or $0.41 per diluted share, and $17 million, or $0.32 per share, after tax. Source

Figures management reported

Risks management discussed

• Financial: Management said the imbalance between Medicaid rates and medical cost trend has stabilized and expects correction through future rate increases. Source
• Regulatory: Marketplace MCR was above expectations, which management linked to prior year risk adjustment, program integrity initiatives and current year member acuity mix. Source

Earlier plans management reported on

• Not stated: The first-quarter release said full-year guidance would be updated with second-quarter results; the second-quarter release gives the revised guidance.
• Ahead: Management said Medicare MCR was better than its expectation, reflecting lower cost trend and pricing implemented for 2026. Source
• On track: Management said Medicaid MCR was in line with its expectation, reflecting rate updates and stable medical cost trend. Source

Other quarters

• Q1 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.