Reaffirms Full Year 2024 Earnings Guidance
Molina Healthcare, Inc. (NYSE: MOH) (the “Company”) today
reported second quarter 2024 GAAP earnings per diluted share of
$5.17 and adjusted earnings per diluted share of $5.86. Financial
results are summarized below:
Three months ended
Six months ended
June 30,
June 30,
2024
2023
2024
2023
(In millions, except per-share
results)
Premium Revenue
$
9,446
$
8,042
$
18,950
$
15,927
Total Revenue
$
9,880
$
8,327
$
19,811
$
16,476
GAAP:
Net Income
$
301
$
309
$
602
$
630
EPS – Diluted
$
5.17
$
5.35
$
10.33
$
10.87
Medical Care Ratio (MCR)
88.6
%
87.5
%
88.6
%
87.3
%
G&A Ratio
7.0
%
7.4
%
7.1
%
7.3
%
After-tax Margin
3.0
%
3.7
%
3.0
%
3.8
%
Adjusted:
Net Income
$
341
$
327
$
675
$
664
EPS – Diluted
$
5.86
$
5.65
$
11.59
$
11.45
G&A Ratio
6.9
%
7.4
%
7.0
%
7.3
%
After-tax Margin
3.5
%
3.9
%
3.4
%
4.0
%
See the Reconciliation of Unaudited
Non-GAAP Financial Measures at the end of this release.
Quarter Highlights
- As of June 30, 2024, the Company served approximately 5.6
million members, an increase of 8% compared to June 30, 2023.
- Premium revenue was approximately $9.4 billion for the second
quarter of 2024, an increase of 17% year over year.
- GAAP net income was $5.17 per diluted share for the second
quarter of 2024, a decrease of 3% year over year.
- Adjusted net income was $5.86 per diluted share for the second
quarter of 2024, an increase of 4% year over year.
- The Company reaffirmed its full year 2024 guidance with
expected premium revenue of approximately $38 billion and adjusted
earnings of at least $23.50 per diluted share.
“We are pleased with our performance in the quarter as our
flagship Medicaid business continues to perform well along with
strong contributions from both our Medicare and Marketplace
businesses,” said Joseph Zubretsky, President and Chief Executive
Officer. “We have successfully navigated the unprecedented
redetermination process, and these highly attractive businesses
provide the foundation for near and long-term sustainable
profitable growth.”
Premium Revenue
Premium revenue was approximately $9.4 billion for the second
quarter of 2024, an increase of 17% year over year. The higher
premium revenue reflects new contract wins, acquisitions, and
growth in our current footprint, partially offset by the impact of
Medicaid redeterminations.
Net Income
GAAP net income for the second quarter of 2024 was $5.17 per
diluted share, a decrease of 3% year over year. Adjusted net income
for the second quarter of 2024 was $5.86 per diluted share, an
increase of 4% year over year.
Medical Care Ratio (MCR)
- The consolidated MCR for the second quarter of 2024 was 88.6%
and reflects continued focus on managing medical costs.
- The Medicaid MCR for the second quarter of 2024 was 90.8%.
Within that result, approximately 70 basis points were due to a
one-time, retroactive premium adjustment related to the prior year.
“New store” Medicaid plans increased the reported MCR by
approximately 80 basis points. Excluding the one-time item and new
stores, the Medicaid MCR was approximately 89.3% and modestly
higher than the Company’s long-term expectations due to
redetermination-related acuity shifts.
- The Medicare MCR for the second quarter of 2024 was 84.9%,
better than the Company’s expectations, and reflects favorable risk
adjustment results, and benefit adjustments implemented for
2024.
- The Marketplace MCR for the second quarter of 2024 was 71.6%,
better than the Company’s expectations, and reflects the Company’s
favorable risk adjustment results.
General and Administrative Expense Ratio
The G&A ratio and the adjusted G&A ratio for the second
quarter of 2024 were 7.0% and 6.9%, respectively.
Balance Sheet
Cash and investments at the parent company were $235 million as
of June 30, 2024 compared to $742 million as of December 31,
2023.
Days in claims payable at June 30, 2024 was 50.
Cash Flow
Operating cash flow for the six months ended June 30, 2024 was a
use of $5 million, compared to $1,403 million for the six months
ended June 30, 2023. The decrease in cash flow for the period
year-over-year was driven mainly by the net impact of timing
differences in government receivables and payables, including
Medicare and Medicaid prepayments, risk corridor settlement
activity, and timing differences in receipts and payments of
provider payables.
2024 Guidance
Premium revenue for the full year is expected to be
approximately $38 billion, an increase of approximately 17% from
the full year 2023.
The Company reaffirms its full year adjusted earnings per
diluted share in 2024 to be at least $23.50, representing
approximately 13% growth over the full year 2023. The Medicaid
pressure experienced in the second quarter of 2024 is expected to
be offset by higher net investment income and the extension of
Virginia and Florida contracts in the second half of the year. The
Company’s known rate adjustments in the second half of the year are
expected to largely offset higher expected trend in the second half
of the year.
Conference Call
Management will host a conference call and webcast to discuss
Molina Healthcare’s second quarter results at 8:00 a.m. Eastern
Time on Thursday, July 25, 2024. The number to call for the
interactive teleconference is (877) 883-0383 and the confirmation
number is 8508329. A telephonic replay of the conference call will
be available through Thursday, August 1, 2024, by dialing (877)
344-7529 and entering confirmation number 5266367. A live audio
broadcast of this conference call will be available on Molina
Healthcare’s website, molinahealthcare.com. A 30-day online replay will
be available approximately an hour following the conclusion of the
live broadcast.
About Molina Healthcare
Molina Healthcare, Inc., a FORTUNE 500 company, provides managed
healthcare services under the Medicaid and Medicare programs and
through the state insurance marketplaces. For more information
about Molina Healthcare, please visit molinahealthcare.com.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995
This earnings release and the Company’s accompanying oral
remarks contain forward-looking statements. The Company intends
such forward-looking statements to be covered under the safe harbor
provisions for forward-looking statements contained in Section 27A
of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Forward-looking statements provide current
expectations of future events based on certain assumptions, and all
statements other than statements of historical fact contained in
this earnings release and the Company’s accompanying oral remarks
may be forward-looking statements. In some cases, you can identify
forward-looking statements by words such as “guidance,” “future,”
“anticipates,” “believes,” “embedded,” “estimates,” “expects,”
“growth,” “intends,” “plans,” “predicts,” “projects,” “will,”
“would,” “could,” “can,” “may,” or the negative of these terms or
other similar expressions. Forward-looking statements contained in
this earnings release include, but are not limited to, statements
regarding our business and financial performance, 2024 guidance and
long-term targets, expected headwinds, normal and off-cycle
Medicaid rate adjustments, and management’s plans and objectives
for future operations and business strategy.
Actual results could differ materially due to numerous known and
unknown risks and uncertainties. These risks and uncertainties are
discussed under the headings “Forward-Looking Statements,” and
“Risk Factors,” in the Company’s Annual Report on Form 10‑K for the
year ended December 31, 2023, which is on file with the U.S.
Securities and Exchange Commission (the “SEC”), and in the
Company’s other filings with the SEC, including its Quarterly
Report on Form 10-Q for the period ended June 30, 2024, to be filed
with the SEC.
These reports can be accessed under the investor relations tab
of the Company’s website or on the SEC’s website at sec.gov. Given these risks and uncertainties, the
Company can give no assurances that its forward-looking statements
will prove to be accurate, or that any other results or
developments projected or contemplated by its forward-looking
statements will in fact occur, and the Company cautions investors
not to place undue reliance on these statements. All
forward-looking statements in this release represent the Company’s
judgment as of July 24, 2024, and, except as otherwise required by
law, the Company disclaims any obligation to update any
forward-looking statement to conform the statement to actual
results or changes in its expectations.
MOLINA HEALTHCARE,
INC.
UNAUDITED CONSOLIDATED
STATEMENTS OF INCOME
Three Months Ended
Six Months Ended
June 30,
June 30,
2024
2023
2024
2023
(In millions, except per-share
amounts)
Revenue:
Premium revenue
$
9,446
$
8,042
$
18,950
$
15,927
Premium tax revenue
298
169
595
341
Investment income
115
97
223
168
Other revenue
21
19
43
40
Total revenue
9,880
8,327
19,811
16,476
Operating expenses:
Medical care costs
8,368
7,038
16,782
13,909
General and administrative expenses
691
618
1,402
1,209
Premium tax expenses
298
169
595
341
Depreciation and amortization
46
42
91
86
Other
43
17
81
33
Total operating expenses
9,446
7,884
18,951
15,578
Operating income
434
443
860
898
Interest expense
28
27
55
55
Income before income tax expense
406
416
805
843
Income tax expense
105
107
203
213
Net income
$
301
$
309
$
602
$
630
Net income per share – Diluted
$
5.17
$
5.35
$
10.33
$
10.87
Diluted weighted average shares
outstanding
58.2
57.9
58.3
58.0
MOLINA HEALTHCARE,
INC.
CONSOLIDATED BALANCE
SHEETS
June 30,
December 31,
2024
2023
Unaudited
(Dollars in millions,
except per-share
amounts)
ASSETS
Current assets:
Cash and cash equivalents
$
4,354
$
4,848
Investments
4,347
4,259
Receivables
3,231
3,104
Prepaid expenses and other current
assets
399
331
Total current assets
12,331
12,542
Property, equipment, and capitalized
software, net
305
270
Goodwill and intangible assets, net
1,913
1,449
Restricted investments
268
261
Deferred income taxes, net
232
227
Other assets
136
143
Total assets
$
15,185
$
14,892
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Medical claims and benefits payable
$
4,577
$
4,204
Amounts due government agencies
2,273
2,294
Accounts payable, accrued liabilities and
other
973
1,252
Deferred revenue
13
418
Total current liabilities
7,836
8,168
Long-term debt
2,181
2,180
Finance lease liabilities
203
205
Other long-term liabilities
122
124
Total liabilities
10,342
10,677
Stockholders’ equity:
Common stock, $0.001 par value, 150
million shares authorized; outstanding: 59 million shares at June
30, 2024, and 58 million at December 31, 2023
—
—
Preferred stock, $0.001 par value; 20
million shares authorized, no shares issued and outstanding
—
—
Additional paid-in capital
439
410
Accumulated other comprehensive loss
(85
)
(82
)
Retained earnings
4,489
3,887
Total stockholders’ equity
4,843
4,215
Total liabilities and stockholders’
equity
$
15,185
$
14,892
MOLINA HEALTHCARE,
INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended
June 30,
2024
2023
(In millions)
Operating activities:
Net income
$
602
$
630
Adjustments to reconcile net income to net
cash (used in) provided by operating activities:
Depreciation and amortization
91
86
Deferred income taxes
21
(4
)
Share-based compensation
68
55
Other, net
4
5
Changes in operating assets and
liabilities:
Receivables
(5
)
(83
)
Prepaid expenses and other current
assets
16
6
Medical claims and benefits payable
(48
)
149
Amounts due government agencies
(43
)
510
Accounts payable, accrued liabilities and
other
(307
)
(208
)
Deferred revenue
(405
)
55
Income taxes
1
202
Net cash (used in) provided by operating
activities
(5
)
1,403
Investing activities:
Purchases of investments
(594
)
(924
)
Proceeds from sales and maturities of
investments
506
546
Net cash paid in business combinations
(295
)
—
Purchases of property, equipment, and
capitalized software
(54
)
(63
)
Other, net
2
2
Net cash used in investing activities
(435
)
(439
)
Financing activities:
Common stock withheld to settle employee
tax obligations
(56
)
(59
)
Other, net
6
4
Net cash used in financing activities
(50
)
(55
)
Net (decrease) increase in cash, cash
equivalents, and restricted cash and cash equivalents
(490
)
909
Cash, cash equivalents, and restricted
cash and cash equivalents at beginning of period
4,908
4,048
Cash, cash equivalents, and restricted
cash and cash equivalents at end of period
$
4,418
$
4,957
MOLINA HEALTHCARE,
INC.
UNAUDITED SEGMENT DATA
(Dollars in millions)
June 30,
December 31,
June 30,
2024
2023
2023
Ending Membership by Segment:
Medicaid
4,942,000
4,542,000
4,741,000
Medicare
251,000
172,000
166,000
Marketplace
386,000
281,000
269,000
Total
5,579,000
4,995,000
5,176,000
Three Months Ended June
30,
2024
2023
Premium Revenue
Medical Margin
MCR (1)
Premium Revenue
Medical Margin
MCR (1)
Medicaid
$
7,378
$
683
90.8
%
$
6,485
$
756
88.3
%
Medicare
1,441
217
84.9
1,044
113
89.2
Marketplace
627
178
71.6
513
135
73.7
Consolidated
$
9,446
$
1,078
88.6
%
$
8,042
$
1,004
87.5
%
Six Months Ended June
30,
2024
2023
Premium Revenue
Medical Margin
MCR (1)
Premium Revenue
Medical Margin
MCR (1)
Medicaid
$
14,870
$
1,458
90.2
%
$
12,834
$
1,490
88.4
%
Medicare
2,883
380
86.8
2,090
239
88.6
Marketplace
1,197
330
72.4
1,003
289
71.2
Consolidated
$
18,950
$
2,168
88.6
%
$
15,927
$
2,018
87.3
%
_____________
(1)
The MCR represents medical costs as a percentage of premium
revenue.
MOLINA HEALTHCARE,
INC.
CHANGE IN MEDICAL CLAIMS AND
BENEFITS PAYABLE
(Dollars in millions)
The Company’s claims liabilities
include additional reserves to account for moderately adverse
conditions based on historical experience and other factors
including, but not limited to, variations in claims payment
patterns, changes in utilization and cost trends, known outbreaks
of disease, and large claims. The Company’s reserving methodology
is consistently applied across all periods presented. The amounts
displayed for “Components of medical care costs related to: Prior
year” represent the amounts by which the original estimates of
claims and benefits payable at the beginning of the year were more
than the actual liabilities based on information (principally the
payment of claims) developed since those liabilities were first
reported. The following table presents the components of the change
in medical claims and benefits payable for the periods
indicated:
Six Months Ended
June 30,
2024
2023
Unaudited
Medical claims and benefits payable,
beginning balance
$
4,204
$
3,528
Components of medical care costs related
to:
Current year
17,301
14,180
Prior year
(519
)
(271
)
Total medical care costs
16,782
13,909
Payments for medical care costs related
to:
Current year
13,429
11,166
Prior year
3,161
2,650
Total paid
16,590
13,816
Acquired balances, net of post-acquisition
adjustments
421
—
Change in non-risk and other payables
(240
)
56
Medical claims and benefits payable,
ending balance
$
4,577
$
3,677
Days in Claims Payable (1)
50
47
__________________
(1)
The Company calculates Days in Claims Payable using claims
incurred but not paid, or IBNP, and other fee-for-service payables
included in medical claims and benefits payable, and quarterly
fee-for-service related costs included in medical care costs within
the Company’s consolidated financial statements.
MOLINA HEALTHCARE,
INC.
RECONCILIATION OF UNAUDITED
NON-GAAP FINANCIAL MEASURES
(In millions, except per
diluted share amounts)
The Company believes that certain
non-GAAP (generally accepted accounting principles) financial
measures are useful supplemental measures to investors in comparing
the Company’s performance to the performance of other public
companies in the health care industry. The non-GAAP financial
measures are also used internally to enable management to assess
the Company’s performance consistently over time. These non-GAAP
financial measures, presented below, should be considered as
supplements to, and not as substitutes for or superior to, GAAP
measures.
Adjustments represent
additions and deductions to GAAP net income as indicated in the
table below, which include the non-cash impact of amortization of
acquired intangible assets, acquisition-related expenses, and the
impact of certain expenses and other items that management believes
are not indicative of longer-term business trends and
operations.
Adjusted G&A Ratio
represents the GAAP G&A ratio, recognizing adjustments.
Adjusted net income
represents GAAP net income recognizing the adjustments, net of tax.
The Company believes that adjusted net income is helpful to
investors in assessing the Company’s financial performance.
Adjusted net income per
diluted share represents adjusted net income divided by
weighted average common shares outstanding on a fully diluted
basis.
Adjusted after-tax margin
represents adjusted net income, divided by total revenue.
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Amount
Per Diluted Share
Amount
Per Diluted Share
Amount
Per Diluted Share
Amount
Per Diluted Share
GAAP Net income
$
301
$
5.17
$
309
$
5.35
$
602
$
10.33
$
630
$
10.87
Adjustments:
Amortization of intangible assets
$
21
$
0.36
$
22
$
0.36
$
41
$
0.71
$
43
$
0.73
Acquisition-related expenses (1)
18
0.31
2
0.03
35
0.60
2
0.03
Other (2)
14
0.24
—
—
20
0.35
—
—
Subtotal, adjustments
53
0.91
24
0.39
96
1.66
45
0.76
Income tax effect
(13
)
(0.22
)
(6
)
(0.09
)
(23
)
(0.40
)
(11
)
(0.18
)
Adjustments, net of tax
40
0.69
18
0.30
73
1.26
34
0.58
Adjusted net income
$
341
$
5.86
$
327
$
5.65
$
675
$
11.59
$
664
$
11.45
__________________
(1)
Reflects non-recurring costs associated with acquisitions,
including various transaction and certain integration costs.
(2)
The six months ended June 30, 2024 includes non-recurring
litigation costs and one-time termination benefits.
MOLINA HEALTHCARE,
INC.
RECONCILIATION OF UNAUDITED
NON-GAAP FINANCIAL MEASURES (CONTINUED)
2024 GUIDANCE
Amount
Per Diluted Share (2)
GAAP Net income
$
1,256
$
21.62
Adjustments:
Amortization of intangible assets
83
1.42
Acquisition-related expenses
44
0.75
Other
20
0.35
Subtotal, adjustments
147
2.52
Income tax effect (1)
(38
)
(0.64
)
Adjustments, net of tax
109
1.88
Adjusted net income
$
1,365
$
23.50
__________________
(1)
Income tax effect calculated at the statutory tax rate of
approximately 23.9%.
(2)
Computations assume approximately 58.1 million diluted weighted
average shares outstanding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240724464177/en/
Investor Contact: Jeffrey Geyer, Jeffrey.Geyer@molinahealthcare.com, 305-317-3012
Media Contact: Caroline Zubieta, Caroline.Zubieta@molinahealthcare.com,
562-951-1588
Molina Healthcare (NYSE:MOH)
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