Centene Q3 2025: Revenue Climbs 18% Amidst a $6.7B Goodwill Impairment Loss

Centene Corporation, a major force in the U.S. managed healthcare sector focusing on government-sponsored programs, recently released its financial results for the third quarter of 2025. To understand the company's performance, let's delve into the details of its latest quarterly report filed with the SEC. The numbers reveal a period of strong revenue growth overshadowed by a significant write-down that dramatically impacted the bottom line.

A visual breakdown of the company's revenue and expenses for the three months ending September 30, 2025, offers a clear overview of its financial flows.

In the flow diagram, you'll notice a significant portion of revenue labeled "Unallocated." This primarily consists of $4.8 billion in "Premium tax revenue," which Centene collects alongside premiums but does not assign to its specific business segments like Medicaid or Medicare in its internal reporting.

Revenue Growth Amidst Deep Losses

At first glance, Centene's top line looks robust. The company posted total revenues of $49.7 billion for the quarter, an impressive 18% increase from the same period last year. This growth was fueled by its core business lines, with the Medicare segment showing a remarkable 66% revenue jump and the Commercial segment growing by 26%.

However, the story changes dramatically as we move down the income statement. Centene reported a staggering net loss of $6.6 billion, a stark reversal from the $713 million net profit recorded in Q3 2024. The single largest reason for this loss was a massive $6.7 billion non-cash goodwill impairment charge.

So, what is a goodwill impairment? When a company acquires another, it often pays more than the fair value of the tangible assets. This premium is recorded as "goodwill" on the balance sheet. An impairment charge is a write-down, essentially an admission by the company that the expected future value from those past acquisitions is no longer as high as previously thought. In this case, the filing notes that the vast majority of this impairment, nearly $6.2 billion, was attributed to its largest segment: Medicaid.

A Look at Segment Profitability

While the impairment dominated the quarter, looking at the "gross margin" for each segment—what's left after paying for medical costs—provides insight into their operational health.

• Medicaid: Despite being the source of the large impairment, this segment's gross margin actually increased by 4% to $1.5 billion. It remains the company's revenue engine, bringing in nearly $28 billion for the quarter.
• Medicare & Commercial: These segments, which drove much of the revenue growth, saw their gross margins shrink significantly. Medicare's margin fell 20% to $538 million, and the Commercial segment's margin dropped 36% to $1.1 billion. This indicates that the cost of providing medical services in these plans grew faster than the premiums collected, squeezing profitability.

The Path Forward

Centene's third-quarter results present a complex picture. The strong revenue growth is a positive sign, but it's completely eclipsed by the goodwill impairment. This large write-down in the core Medicaid business raises questions about the long-term value of past strategic moves. Furthermore, the shrinking margins in the growing Medicare and Commercial segments highlight the persistent challenge of managing rising healthcare costs. For a company like Centene, navigating the competitive landscape of government healthcare contracts requires a keen focus on both growth and cost control, and this quarter's results underscore the difficulty of balancing the two.