### At a GlanceCentene Q2 2026 adjusted EPS of $2.51 beat expectations, and management raised its full-year adjusted EPS guidance from >$3.40 to >$4.80, driven by strong performance in Marketplace and Medicare Part D.

Key Data: Q2 consolidated health benefit ratio (HBR) was 89.6%, down 340 basis points year-over-year; the full-year Medicaid HBR guidance remained at 93.5%; the full-year Marketplace pre-tax margin guidance was raised from 3% to 4.5%-5%.

Business Developments: Medicaid membership fell to 12.1 million, with a full-year expected decline of 8%-9%, but the July 1 rate update was better than expected, raising the full-year rate impact from 4.5% to approximately 5%. Medicare Part D benefited from post-IRA stability and risk adjustment settlements, with the full-year pre-tax margin guidance raised from 2% to >3%. The Marketplace business confirmed a relative risk adjustment advantage, with Q2 cost trends below expectations and receipt of a $180 million final risk adjustment settlement for 2025. The company is advancing enterprise optimization, including AI applications and cost structure improvements.

Guidance & Outlook: Full-year adjusted EPS guidance was raised to >$4.80, but approximately $0.50 of this comes from one-time settlement items for 2025. Q3 is expected to be slightly above breakeven, while Q4 is expected to be a loss due to seasonality.

Risk/Highlight Signals: Management believes the implementation of the OB3 work requirement is smaller in scale than the PHE redetermination, and states are considering rate adjustments in advance, giving confidence in Medicaid margin recovery. However, acuity increases from membership attrition remain a focus for the second half of the year.