Molina Healthcare, Inc.

Molina reported Q2 2026 adjusted EPS of $1.51 on $10.2 billion of premium revenue. Consolidated MCR was 92.2%, adjusted pretax margin was 1%, and year-to-date adjusted pretax margin was 1.3%. Medicaid Q2 MCR was 92.7%, Medicare Q2 MCR was 90.7%, and Marketplace Q2 MCR was 88.9% (87.3% normalized excluding prior-year items). For full year 2026, premium revenue guidance remains approximately $42 billion and adjusted EPS guidance increased to at least $5.25; consolidated MCR guidance is 92.6%. Segment guidance calls for Medicaid MCR of 92.9% and about $5.75 per share, Medicare MCR of 92.2% and about $0.25 per share, and Marketplace MCR of 90% and a loss of $0.75 per share. Management also said 2027 premium revenue is now expected to be approximately $46.5 billion before remaining items, down from the prior $48 billion view, and said the EPS building blocks sum to more than $10 per share before Medicaid MCR improvement.

Joe Zubretsky framed the quarter as evidence that Medicaid and Medicare duals are the core growth engines, while Marketplace is being intentionally deemphasized. He said Medicaid trend has stabilized around 5% and that 2026 looks like the trough year for Medicaid pretax margins, while duals are performing better than expected and may reach target margins sooner. His tone was confident about 2027, 2029 targets, and contract retention, but notably cautious on Marketplace and willing to keep shrinking that business to limit capital at risk.

Mark Keim focused on the numbers behind the guidance changes: Q2 adjusted EPS of $1.51, a 6.5% adjusted G&A ratio, $788 million of operating cash flow for the first six months, $290 million of parent cash at quarter-end, and about 47% debt-to-cap. He said parent cash is expected to rise to about $600 million by year-end and debt-to-cap to 44%. On guidance, he highlighted unchanged Medicaid rate and trend assumptions of 4% and 5%, Medicare MCR guidance improving to 92.2% mainly from duals, and Marketplace EPS guidance moving to a $0.75 loss because of prior-year items and current-year acuity mix. He also reiterated that embedded earnings remain $9 per share, with about half expected to emerge in 2027.

Analysts focused on the Marketplace underperformance, asking whether the issue was product design, pricing, risk adjustment, or seasonal utilization. Management said it is mostly a mix problem in a shrinking book: higher-cost members are sticking, many costs are not fully risk-adjustable, and the original pricing under-estimated that behavior; they do not see this as a formulary or metallic-tier design issue. Questions on Medicaid centered on work requirements, state RFP timing, and rate setting; management said the expected membership decline from work rules remains gradual, RFP timing looks intact, and states have room to incorporate acuity shifts into future rates. On Florida CMS, management said the new contract should be a $6 billion annual program at run-rate and the current build looks financially viable, with the 2026 drag largely nonrecurring.