Molina Healthcare, Inc. (MOH) reported its quarterly financial results for the period ended September 30, 2024. The company’s revenue increased by 12.1% to $4.3 billion, driven by growth in its commercial and government business segments. Net income rose to $143.4 million, or $2.51 per diluted share, compared to $123.1 million, or $2.15 per diluted share, in the same period last year. The company’s operating cash flow was $243.1 million, and its total cash and investments stood at $1.4 billion. Molina Healthcare’s financial performance was driven by its strategic growth initiatives, including the expansion of its commercial and government business segments, as well as its efforts to improve operational efficiency and reduce costs.
Overview
Molina Healthcare, Inc., a FORTUNE 500 company, provides managed healthcare services under the Medicaid and Medicare programs, and through the state insurance marketplaces (the “Marketplace”). The company served approximately 5.6 million members as of September 30, 2024, located across 21 states.
Third Quarter 2024 Highlights
Consolidated Financial Summary
Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
---|---|---|---|---|
Premium Revenue | $9,694 million | $8,240 million | $28,644 million | $24,167 million |
Medical Margin | $1,051 million | $934 million | $3,219 million | $2,952 million |
MCR | 89.2% | 88.7% | 88.8% | 87.8% |
G&A Ratio | 6.5% | 7.1% | 6.9% | 7.3% |
Net Income | $326 million | $245 million | $928 million | $875 million |
Net Income per Share - Diluted | $5.65 | $4.21 | $15.97 | $15.08 |
Ending Membership | 5.6 million | 5.2 million | 5.6 million | 5.2 million |
Effective Income Tax Rate | 25.7% | 26.3% | 25.3% | 25.5% |
After-Tax Margin | 3.2% | 2.9% | 3.1% | 3.5% |
Consolidated Results
Net income increased in both the third quarter and nine months ended September 30, 2024 compared to the same periods in 2023, driven by higher premiums and medical margin from membership growth, improved G&A expense ratio, and increased investment income, partially offset by higher MCR.
Premium revenue increased 18% in the third quarter and 19% in the nine months, reflecting new contract wins, acquisitions, and growth in the current footprint, partially offset by Medicaid redeterminations.
The consolidated MCR increased 50 basis points in the third quarter and 100 basis points in the nine months, mainly due to higher medical cost pressure in the Medicaid and Medicare segments.
Investment income increased 5% in the third quarter and 22% in the nine months, driven by higher average yields.
The G&A expense ratio improved to 6.5% in the third quarter and 6.9% in the nine months, reflecting operating discipline and fixed cost leverage.
Trends and Uncertainties
Key trends and uncertainties include:
Reportable Segments
Molina operates four reportable segments: Medicaid, Medicare, Marketplace, and Other. Key metrics for each segment include:
Medicaid:
Medicare:
Marketplace:
Liquidity and Capital Resources
Molina maintains liquidity at both the regulated health plan subsidiaries and the parent company level. The company’s cash, cash equivalents and investments totaled $9.5 billion as of September 30, 2024.
Key liquidity sources include premium revenue, investment income, dividends from subsidiaries, and borrowing capacity under the $1.25 billion revolving credit facility. Uses of liquidity include medical claims payments, administrative costs, capital contributions to subsidiaries, debt service, and stock repurchases.
Molina’s regulated subsidiaries maintain statutory capital in excess of regulatory requirements. The company has the ability and commitment to provide additional capital as needed to ensure compliance.
Overall, Molina believes its cash resources, borrowing capacity, and internally generated funds will be sufficient to support operations, regulatory requirements, debt obligations, and capital expenditures for at least the next 12 months.