Molina Healthcare — Income Statement, Cash Flows & Balance Sheet
Is Molina Healthcare profitable?
Molina Healthcare's profitability collapsed in 2025 as medical costs grew far faster than revenue.
| Metric | 2023 | 2024 | 2025 | Change (2024→2025) |
|---|---|---|---|---|
| Total revenue ($M) | $34,072 | $40,650 | $45,426 | +12% |
| Medical care costs ($M) | $28,669 | $34,428 | $39,488 | +15% |
| Medical care ratio (MCR) | 88.2% | 89.1% | 91.7% | +2.6 pts |
| Operating income ($M) | $1,573 | $1,707 | $781 | -54% |
| Net income ($M) | $1,091 | $1,179 | $472 | -60% |
| Diluted EPS | $18.77 | $20.42 | $8.92 | -56% |
Revenue grew solidly, but medical costs outpaced it, pushing the medical care ratio (the share of premium dollars spent on patient care) to nearly 92 cents of every premium dollar collected. The result was a more than 50% drop in both operating income and net income.
A meaningful but smaller prior-year reserve release cushioned the blow — the Marketplace segment was a particular drag.
| Prior-year claims development ($M) | 2023 | 2024 | 2025 |
|---|---|---|---|
| Favorable (unfavorable) development | +$427 | +$675 | +$98 |
In past years, Molina's actual claims came in well below its original estimates, releasing hundreds of millions back into earnings. In 2025 that tailwind shrank sharply, and the Marketplace segment actually developed unfavorably — meaning claims there ran higher than expected.
Where does Molina Healthcare's revenue come from?
Medicaid remains the dominant business, but Marketplace nearly doubled and became a meaningful drag on margins.
| Segment premium revenue ($M) | 2024 | 2025 | Change |
|---|---|---|---|
| Medicaid | $30,579 | $32,240 | +5% |
| Medicare | $5,542 | $6,235 | +13% |
| Marketplace | $2,506 | $4,487 | +79% |
The Marketplace surge was partly driven by the February 2025 acquisition of ConnectiCare. However, Marketplace medical margin fell sharply alongside its revenue growth, reflecting higher-than-expected member utilization.
Medicaid and Medicare both saw margin compression; Marketplace margin fell the most steeply.
| Segment medical margin ($M) | 2024 | 2025 | Change |
|---|---|---|---|
| Medicaid | $2,979 | $2,652 | -11% |
| Medicare | $603 | $475 | -21% |
| Marketplace | $617 | $423 | -31% |
Every segment earned less per premium dollar in 2025 than in 2024, with Marketplace deteriorating the most. Medicaid and Medicare together still account for the vast majority of the business and its profitability.
Does Molina Healthcare generate cash?
Operating cash flow swung to negative territory in 2025, a sharp reversal from prior years.
| Cash flow metric ($M) | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net cash from operations | $1,662 | $644 | ($535) |
| Capital expenditures | ($84) | ($100) | ($101) |
| Free cash flow (GAAP operating less capex) | $1,578 | $544 | ($636) |
The operating cash outflow was driven largely by a $591 million reduction in amounts owed to government agencies (essentially returning prior over-payments to states) and lower net income. This means Molina consumed rather than generated cash from its core business in 2025.
How strong is Molina Healthcare's balance sheet?
Debt rose substantially in 2025, and long-term debt now exceeds total stockholders' equity.
| Balance sheet metric ($M) | 2024 | 2025 | Change |
|---|---|---|---|
| Long-term debt | $2,923 | $3,766 | +$843 |
| Total stockholders' equity | $4,496 | $4,069 | -$427 |
| Debt-to-equity ratio | 0.65x | 0.93x | +0.28x |
Molina added $850 million in new senior notes (at 6.5%) during 2025, partly to refinance term loans. Combined with $1 billion in share buybacks reducing retained earnings, leverage increased meaningfully in a year when earnings fell sharply. The company also amended its credit agreement in early 2026 to temporarily relax an interest coverage covenant — a notable sign of financial stress.
Liquidity remains adequate but has tightened, with most cash locked inside regulated subsidiaries.
| Liquidity metric ($M) | 2024 | 2025 |
|---|---|---|
| Cash and investments (consolidated) | $8,987 | $8,256 |
| Parent-level cash and investments | $445 | $223 |
| Undrawn revolving credit facility | $1,250 | $1,250 |
While total cash and investments are sizeable, approximately $4.4 billion of net assets sit inside regulated health plan subsidiaries and cannot easily be moved to the parent. Freely accessible parent-level liquidity roughly halved year over year.