Molina Healthcare, Inc. (MOH) Earnings

Management highlights

· Joe discussed first quarter performance: adjusted EPS $2.35 on $10.2B premium revenue, 91.1% consolidated MCR. Medicaid MCR 92%, medical cost trend favorable. Medicare MCR 89.8%, Marketplace MCR 84% with membership at 305,000. · Reaffirmed 2026 guidance: ~$42B premium revenue, at least $5 adjusted EPS. · Talked about political and regulatory landscape: Medicaid states evaluating work requirements and redeterminations, Medicare CMS final rate notice improvement, Marketplace cautious ahead of 2027 pricing cycle. · Investor Day on May 8th to provide three-year outlook on margin expansion, revenue growth, and franchise intrinsic value.

Guidance

· Reaffirmed full-year 2026 premium revenue guidance at ~$42 billion and adjusted earnings per share guidance of at least $5. · Medicaid same-store membership decline expected at 6% (up from previous 2%), Marketplace membership expected to end at ~250,000. · Full-year consolidated MCR and segment MCRs unchanged. · Reaffirmed full-year EPS guidance of at least $5, expecting earnings seasonality front end loaded due to January 1st Medicaid rate cycle and Florida CMS contract implementation in second half.

Segment performance

In the first quarter, adjusted earnings per share was $2.35 on $10.2 billion of premium revenue. Consolidated MCR was 91.1%. Medicaid had an MCR of 92% in Q1, with January 1st rate updates as expected and medical cost trend modestly favorable. Medicare had an MCR of 89.8% in Q1. Marketplace had an MCR of 84% in Q1, membership at 305,000 and expected to end the year at ~250,000. Full-year premium revenue guidance is ~$42 billion, adjusted EPS guidance at least $5. Medicaid same-store membership decline expected at 6% (up from previous 2%), Marketplace membership expected to end at ~250,000. Medicaid full-year MCR 92.9 includes 4% rate increases and 5% medical cost trend. Medicare full-year MCR guidance 94. Marketplace full-year MCR guidance 85.5.

Risks & headwinds

· Forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from expectations. · Risks discussed in Form 10-K, 10-Q, and 8-K filings with SEC, including political, legislative, regulatory landscape impacts, Medicaid work requirements and redeterminations, medical cost and utilization trend uncertainties, and impact of RFP awards, acquisitions, and M&A activity.

Analyst Q&A

• Q: Andrew Mock asked about lower Medicaid membership driving incremental pressure and impact on MLR outlook and cadence.

  A: Joe and Mark responded that certain states like California, Illinois, New York, Texas are driving the higher attrition, and low and no utilizers are at lowest levels with no expected acuity impact.

• Q: Steven Baxter followed up on Medicaid membership, low and no utilizers.

  A: Mark explained low and no utilizers are at lowest point below pre-pandemic levels, stayers-leavers analysis shows leavers leaving close to portfolio averages.

• Q: Anne Hines asked about free cash flow and debt-to-cap.

  A: Mark said cash flow to parent is good with dividends expected, debt-to-cap at 48% but targeting low 40s.

• Q: Kevin Fishbeck asked about reaffirming guidance early.

  A: Joe said prudent to wait for two quarters of results due to volatility in medical cost inflection, Marketplace waiting for June wakelies, and new Medicare products needing more time.

• Q: Justin Lake asked about Medicaid cost trend.

  A: Mark explained 2025 trend evolved differently on pure period basis, first quarter trend annualized better than 5% for full year.

• Q: Sarah James asked about DCP and Florida kids.

  A: Mark explained DCP timing was due to payment timing, Florida Kids Program has attractive financial profile.

• Q: AJ Rice asked about quarterly trend vs consensus and marketplace membership.

  A: Joe said quarter was clean, no unusual items, Marketplace membership expected to decline with 20,000 decline per quarter.

• Q: Scott Fidel asked about Medicare MLR and MAPD exit.

  A: Joe and Mark explained Medicare has duals, DSNP, and MAPD components, MAPD exit next year, and 2027 outlook on duals.

• Q: John Stancil asked about M&A pipeline.

  A: Joe said M&A pipeline is replete with opportunities, to be discussed at Investor Day.

• Q: Erin White asked about clarity on variables and Investor Day.

  A: Joe said time-tested approach due to past inflection, Investor Day to show 2029 outlook.

• Q: Ryan Langston asked about G&A timing and MAPD exit.

  A: Joe said MAPD exit still in process, G&A timing due to lumpy expenses.

• Q: Michael Ha asked about low and no utilizers definition.

  A: Joe and Mark said low and no utilizers are down substantially with directional statistics supporting no acuity shift.

• Q: Lance Wilkes asked about state behaviors and trend favorability.

  A: Joe said states stepping up on rates and eligibility, first quarter trend favorable with inpatient and pharmacy controls.

• Q: George Hill asked about low and no utilizers drive and community engagement.

  A: Joe and Mark said market decline drove low and no utilizers out, community engagement varies by state.

• Q: Jason Casola asked about earnings seasonality.

  A: Mark said earnings seasonality front end loaded due to Medicaid rate cycle, Marketplace seasonality, and Florida CMS contract in fourth quarter