Introduces Full Year 2024 Revenue and Earnings
Guidance
Molina Healthcare, Inc. (NYSE: MOH) (the “Company”) today
reported fourth quarter 2023 GAAP earnings per diluted share of
$3.70 and adjusted earnings per diluted share of $4.38. The Company
also reported full year 2023 GAAP earnings per diluted share of
$18.77 and adjusted earnings per diluted share of $20.88. Financial
results are summarized below:
Three months ended
Year ended
December 31,
December 31,
2023
2022
2023
2022
(In millions, except per-share
results)
Premium Revenue
$8,362
$7,917
$32,529
$30,883
Total Revenue
$9,048
$8,223
$34,072
$31,974
GAAP:
Net Income
$216
$56
$1,091
$792
EPS – Diluted
$3.70
$0.96
$18.77
$13.55
Medical Care Ratio (MCR)
89.1%
88.3%
88.1%
88.0%
G&A Ratio
7.1%
7.6%
7.2%
7.2%
After-tax Margin
2.4%
0.7%
3.2%
2.5%
Adjusted:
Net Income
$255
$240
$1,213
$1,048
EPS – Diluted
$4.38
$4.10
$20.88
$17.92
G&A Ratio
7.0%
7.5%
7.2%
7.1%
After-tax Margin
2.8%
2.9%
3.6%
3.3%
See the Reconciliation of Unaudited
Non-GAAP Financial Measures at the end of this release.
Full Year Highlights
- As of December 31, 2023, the Company served approximately 5.0
million members.
- Premium revenue was approximately $32.5 billion for the full
year 2023, an increase of 5% year over year.
- GAAP net income was $18.77 per diluted share for the full year
2023, an increase of 39% year over year.
- Adjusted net income was $20.88 per diluted share for the full
year 2023, an increase of 17% year over year.
- The Company issued its full year 2024 earnings guidance with
expected premium revenue of approximately $38 billion and adjusted
earnings of at least $23.50 per diluted share.
“We are very pleased with our fourth quarter and full year
results,” said Joseph Zubretsky, President and Chief Executive
Officer. “Our 2023 performance reflects the successful execution of
our growth strategy which positions us to achieve sustainable and
profitable growth in 2024 and beyond.”
Premium Revenue Premium revenue was approximately $32.5
billion for the full year 2023, an increase of 5% year over year.
The higher premium revenue reflects the impact of acquisitions and
new RFP wins, partially offset by Medicaid redeterminations.
Net Income GAAP net income for the full year 2023 was
$18.77 per diluted share, an increase of 39% year over year.
Adjusted net income for the full year 2023 was $20.88 per diluted
share, an increase of 17% year over year.
Medical Care Ratio (MCR)
- The consolidated MCR for the full year 2023 was 88.1%,
consistent with expectation and in line with the Company’s
long-term target range.
- The Medicaid MCR for the full year 2023 was 88.7%, in line with
the Company’s expectation and long-term target range. The full year
MCR includes the moderate impact from the net effect of
redetermination acuity shifts and risk corridors, as well as the
impact of new store additions which typically run above portfolio
average in the first year.
- The Medicare MCR for the full year 2023 was 90.7%, above the
Company’s long‑term target range, reflecting higher utilization of
supplemental benefits, in-home services, and high-cost drugs
throughout the year.
- The Marketplace MCR for the full year 2023 was 75.3%, below the
Company’s long-term target range, reflecting the success of the
Company’s product and pricing strategy to return the business to
target margins.
General and Administrative Expense Ratio The G&A
ratio and the adjusted G&A ratio for the full year 2023 were
both 7.2%, reflecting continued cost discipline and new business
implementation spending throughout the year relating to new
contract wins.
Balance Sheet Cash and investments at the parent company
were $742 million as of December 31, 2023 compared to $375 million
as of December 31, 2022.
Days in claims payable at December 31, 2023 was 50.
Cash Flow Operating cash flow for the year ended December
31, 2023 was $1,662 million, compared to $773 million for the year
ended December 31, 2022. The increase in 2023 cash flow was due to
the growth in operations and net earnings from organic and new RFP
starts and acquisitions, accompanied by the net impact of timing
differences in government receivables and 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 expects its full year adjusted earnings per share in
2024 to be at least $23.50 per share, representing approximately
13% growth over the full year 2023.
Guidance reflects the continued realization of embedded earnings
and underlying organic growth. Guidance metrics are summarized
below:
Full Year 2024
Guidance
Premium Revenue
$38.0B
Total Revenue
$39.6B
GAAP Net Income
$1,278M
Adjusted Net Income
$1,366M
GAAP EPS – Diluted
>$22.00
Adjusted EPS – Diluted
>$23.50
Diluted weighted average shares
58.1M
Year End Total Membership
5.7M
Medicaid
5.1M
Medicare
270K
Marketplace
370K
MCR
88.2%
GAAP G&A Ratio
7.1%
Adjusted G&A Ratio
7.0%
Effective Tax Rate
25.7%
GAAP After-tax Margin
3.2%
Adjusted After-tax Margin
3.4%
See the Reconciliations of Unaudited
Non-GAAP Financial Measures at the end of this release.
Conference Call Management will host a conference call
and webcast to discuss Molina Healthcare’s fourth quarter and year
ended December 31, 2023 results at 8:00 a.m. Eastern Time on
Thursday, February 8, 2024. The number to call for the interactive
teleconference is (877) 883-0383 and the confirmation number is
4221213. A telephonic replay of the conference call will be
available through Thursday, February 15, 2024, by dialing (877)
344-7529 and entering confirmation number 3687293. 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 its 2024 guidance, expectations
with respect to continued realization of embedded earnings and
underlying organic growth, and our 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, 2022, 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
Reports on Form 10-Q for the periods ended March 31, 2023, June 30,
2023, and September 30, 2023, which are on file with the SEC, and
its Annual Report on Form 10-K for the year ended December 31,
2023, 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 February 7, 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
Year Ended
December 31,
December 31,
2023
2022
2023
2022
(In millions, except per-share
amounts)
Revenue:
Premium revenue
$
8,362
$
7,917
$
32,529
$
30,883
Premium tax revenue
552
227
1,069
873
Investment income
114
61
394
143
Other revenue
20
18
80
75
Total revenue
9,048
8,223
34,072
31,974
Operating expenses:
Medical care costs
7,454
6,992
28,669
27,175
General and administrative expenses
645
629
2,462
2,311
Premium tax expenses
552
227
1,069
873
Depreciation and amortization
43
47
171
176
Impairment
—
208
—
208
Other
38
15
128
58
Total operating expenses
8,732
8,118
32,499
30,801
Operating income
316
105
1,573
1,173
Other expenses, net:
Interest expense
27
27
109
110
Total other expenses, net
27
27
109
110
Income before income tax expense
289
78
1,464
1,063
Income tax expense
73
22
373
271
Net income
$
216
$
56
$
1,091
$
792
Net income per share – Diluted
$
3.70
$
0.96
$
18.77
$
13.55
Diluted weighted average shares
outstanding
58.2
58.4
58.1
58.5
MOLINA HEALTHCARE, INC.
CONSOLIDATED BALANCE SHEETS
December 31,
2023
2022
Unaudited
(Dollars in millions,
except per-share
amounts)
ASSETS
Current assets:
Cash and cash equivalents
$
4,848
$
4,006
Investments
4,259
3,499
Receivables
3,104
2,302
Prepaid expenses and other current
assets
331
277
Total current assets
12,542
10,084
Property, equipment, and capitalized
software, net
270
259
Goodwill and intangible assets, net
1,449
1,390
Restricted investments
261
238
Deferred income taxes, net
227
220
Other assets
143
123
Total assets
$
14,892
$
12,314
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Medical claims and benefits payable
$
4,204
$
3,528
Amounts due government agencies
2,294
2,079
Accounts payable, accrued liabilities and
other
1,252
889
Deferred revenue
418
359
Total current liabilities
8,168
6,855
Long-term debt
2,180
2,176
Finance lease liabilities
205
215
Other long-term liabilities
124
104
Total liabilities
10,677
9,350
Stockholders’ equity:
Common stock, $0.001 par value, 150
million shares authorized; outstanding: 58 million shares at each
of December 31, 2023, and December 31, 2022
—
—
Preferred stock, $0.001 par value; 20
million shares authorized, no shares issued and outstanding
—
—
Additional paid-in capital
410
328
Accumulated other comprehensive loss
(82
)
(160
)
Retained earnings
3,887
2,796
Total stockholders’ equity
4,215
2,964
Total liabilities and stockholders’
equity
$
14,892
$
12,314
MOLINA HEALTHCARE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
Year Ended
December 31,
2023
2022
(In millions)
Operating activities:
Net income
$
1,091
$
792
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
171
176
Deferred income taxes
(31
)
(66
)
Share-based compensation
115
103
Impairment
—
208
Other, net
2
8
Receivables
(778
)
(95
)
Prepaid expenses and other current
assets
(69
)
(124
)
Medical claims and benefits payable
580
153
Amounts due government agencies
196
(428
)
Accounts payable, accrued liabilities and
other
328
55
Deferred revenue
59
(11
)
Income taxes
(2
)
2
Net cash provided by operating
activities
1,662
773
Investing activities:
Purchases of investments
(1,433
)
(1,913
)
Proceeds from sales and maturities of
investments
772
1,398
Net cash paid in business combinations
(3
)
(134
)
Purchases of property, equipment, and
capitalized software
(84
)
(91
)
Other, net
4
(50
)
Net cash used in investing activities
(744
)
(790
)
Financing activities:
Common stock withheld to settle employee
tax obligations
(60
)
(54
)
Common stock purchases
—
(400
)
Contingent consideration liabilities
settled
—
(20
)
Other, net
2
33
Net cash used in financing activities
(58
)
(441
)
Net increase (decrease) in cash, cash
equivalents, and restricted cash and cash equivalents
860
(458
)
Cash, cash equivalents, and restricted
cash and cash equivalents at beginning of period
4,048
4,506
Cash, cash equivalents, and restricted
cash and cash equivalents at end of period
$
4,908
$
4,048
MOLINA HEALTHCARE, INC.
UNAUDITED SEGMENT DATA (Dollars in millions)
December 31,
2023
2022
Ending Membership by Segment:
Medicaid
4,542,000
4,754,000
Medicare
172,000
156,000
Marketplace
281,000
348,000
Total
4,995,000
5,258,000
Three Months Ended December
31,
2023
2022
Premium
Revenue
Medical
Margin
MCR (1)
Premium
Revenue
Medical
Margin
MCR (1)
Medicaid
$
6,782
$
731
89.2
%
$
6,421
$
813
87.3
%
Medicare
1,057
71
93.3
948
77
91.8
Marketplace
523
106
79.8
548
35
93.8
Consolidated
$
8,362
$
908
89.1
%
$
7,917
$
925
88.3
%
Year Ended December
31,
2023
2022
Premium
Revenue
Medical
Margin
MCR (1)
Premium
Revenue
Medical
Margin
MCR (1)
Medicaid
$
26,327
$
2,973
88.7
%
$
24,827
$
2,981
88.0
%
Medicare
4,179
388
90.7
3,795
437
88.5
Marketplace
2,023
499
75.3
2,261
290
87.2
Consolidated
$
32,529
$
3,860
88.1
%
$
30,883
$
3,708
88.0
%
__________________
(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:
Year Ended
December 31,
2023
2022
Unaudited
Medical claims and benefits payable,
beginning balance
$
3,528
$
3,363
Components of medical care costs related
to:
Current year
29,096
27,459
Prior year
(427
)
(284
)
Total medical care costs
28,669
27,175
Payments for medical care costs related
to:
Current year
25,615
24,345
Prior year
2,734
2,670
Total paid
28,349
27,015
Acquired balances, net of post-acquisition
adjustments
96
12
Change in non-risk and other provider
payables
260
(7
)
Medical claims and benefits payable,
ending balance
$
4,204
$
3,528
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 December
31,
Year Ended December
31,
2023
2022
2023
2022
Amount
Per
Diluted
Share
Amount
Per
Diluted
Share
Amount
Per
Diluted
Share
Amount
Per
Diluted
Share
GAAP Net income
$
216
$
3.70
$
56
$
0.96
$
1,091
$
18.77
$
792
$
13.55
Adjustments:
Amortization of intangible assets
$
22
$
0.37
$
21
$
0.35
$
85
$
1.47
$
77
$
1.32
Acquisition-related expenses (1)
3
0.05
11
0.18
7
0.12
49
0.83
Impairment
—
—
208
3.57
—
—
208
3.56
Other (2)
27
0.47
—
—
68
1.17
—
—
Subtotal, adjustments
52
0.89
240
4.10
160
2.76
334
5.71
Income tax effect
(13
)
(0.21
)
(56
)
(0.96
)
(38
)
(0.65
)
(78
)
(1.34
)
Adjustments, net of tax
39
0.68
184
3.14
122
2.11
256
4.37
Adjusted net income
$
255
$
4.38
$
240
$
4.10
$
1,213
$
20.88
$
1,048
$
17.92
__________________
(1)
Reflects non-recurring costs associated
with acquisitions, including various transaction and certain
integration costs.
(2)
The year ended December 31, 2023, reflects
a non-recurring credit loss on 2022 Marketplace risk adjustment
receivables due to the insolvency of an issuer in the Texas risk
pool, non-recurring litigation costs and one-time termination
benefits. The year ended December 31, 2022, includes certain
non-recurring costs associated with gain on lease termination and
disposal of fixed assets.
MOLINA HEALTHCARE, INC.
RECONCILIATION OF UNAUDITED NON-GAAP FINANCIAL MEASURES (CONTINUED)
2024 GUIDANCE
Amount
Per
Diluted
Share (2)
GAAP Net income
$
1,278
$
22.00
Adjustments:
Amortization of intangible assets
94
1.62
Acquisition-related expenses
21
0.35
Subtotal, adjustments
115
1.97
Income tax effect (1)
(27
)
(0.47
)
Adjustments, net of tax
88
1.50
Adjusted net income
$
1,366
$
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/20240207058929/en/
Investor Contact: Joseph Krocheski
Joseph.Krocheski@molinahealthcare.com 562-549-4100
Media Contact: Caroline Zubieta
Caroline.Zubieta@molinahealthcare.com 562-951-1588
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