Molina Healthcare — Financial Results
Profits Collapsed Even as Revenue Grew 12%
| Metric | 2025 | 2024 |
|---|---|---|
| Total revenue | $45.4B | $40.5B |
| Net income | $472M | $1,179M |
| Net income per share | $8.92 | $20.42 |
| Pre-tax margin | 1.3% | 3.9% |
Revenue grew strongly, but profitability fell off a cliff. Net income dropped 60% year-over-year, and earnings per share fell from $20.42 to $8.92. The core problem: medical costs are rising faster than the premiums Molina collects, squeezing the margin between what comes in and what goes out.
Medical Costs Are Running Dangerously High Across Every Business Line
| Segment | 2025 MCR | 2024 MCR |
|---|---|---|
| Medicaid | 91.8% | 90.3% |
| Medicare | 92.4% | 89.1% |
| Marketplace | 90.6% | 75.4% |
| Consolidated | 91.7% | 89.1% |
The medical care ratio (MCR) — the share of premium revenue spent on actual healthcare — rose in every single segment and now sits above Molina's own long-term target range. That means for every $1 collected in premiums, about $0.92 goes straight to medical bills, leaving very little for other costs and profit. Management flagged higher-than-expected patient utilization and a sicker member mix as the primary drivers.
The Marketplace Segment Is the Biggest MCR Surprise
The Marketplace segment's MCR jumped from 75.4% to 90.6% — a 15-percentage-point deterioration in a single year. Membership grew by 252,000 (a 63% increase) partly through the ConnectiCare acquisition, but this new and Special Enrollment Period membership brought higher medical costs than Molina had priced for. Government program integrity reviews also forced Molina to cover medical costs for members who were later disenrolled, further distorting the ratio.
$9 Billion in New Medicaid Contract Wins Signal Future Revenue Growth
Despite the margin pressure, Molina had a strong year winning government contracts. New Request for Proposal (RFP) wins in Florida, Wisconsin, Georgia, and Texas together represent over $9 billion in incremental annual Medicaid premium revenue. The Florida contract alone is expected to add roughly $6 billion annually and commence in late 2026. These wins have not yet contributed to revenue, meaning they represent a meaningful potential tailwind ahead.
Cash Flow Turned Sharply Negative
| 2025 | 2024 | |
|---|---|---|
| Operating cash flow | -$535M | +$644M |
Molina swung from generating $644 million in operating cash to burning $535 million — a $1.18 billion reversal. The decline reflects lower profits, timing differences in government payments, and settlements related to Marketplace risk adjustment. The company also spent $1 billion buying back its own shares during the year, which further reduced the parent company's cash balance from $445 million to $223 million.
Debt Covenants Were Quietly Amended — a Yellow Flag
In February 2026, Molina amended its credit agreement to temporarily lower the minimum interest coverage ratio (a measure of how comfortably earnings can cover interest payments) required by its lenders. This suggests earnings are tight enough relative to interest costs that the original threshold needed relaxing. Interest expense itself nearly doubled, rising from $118 million to $192 million, partly due to new debt issued at higher rates (6.25%–6.50%) compared to older borrowings.