Elevance Health Inc
Q4 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: −1.30%.
Did ELV Beat Earnings? Q4 2025 Results
Elevance Health posted a headline beat in Q4 2025 but the results told a more complicated story beneath the surface, with earnings per share of $3.33 topping the $3.09 consensus by 7.77% and revenue of $49.31 billion clearing estimates by 1.96% on 9.5% year-over-year growth, even as margin pressure intensified across the enterprise. The benefit expense ratio climbed to 93.5% in Q4, up 110 basis points year-over-year, driven by elevated medical cost trends in Affordable Care Act plans and Medicare Part D seasonality tied to Inflation Reduction Act changes, a dynamic pressuring peers across the managed care sector as well. The Health Benefits segment swung to a $200 million operating loss from a $207 million gain a year earlier, underscoring how deeply cost trends are biting into the core insurance business. Carelon provided meaningful offset, with Q4 operating revenue surging 27% to $18.70 billion. Still, management's 2026 adjusted EPS guidance of at least $25.50, well below the $30.29 achieved in 2025, signals the recalibration has further to run before Elevance can revisit its targeted 12% earnings growth trajectory in 2027.
- Higher premium yields in Health Benefits segment
- Growth in Medicare Advantage membership (7.9% YoY)
- CarelonRx product revenue growth and 6.8% increase in quarterly adjusted scripts
- Expansion of Carelon Services risk-based solutions
- CareBridge acquisition contribution
- Elevated medical cost trends pressuring benefit expense ratio (93.5% in Q4, up 110 bps YoY)
- Higher medical cost trend in ACA health plans
- Heightened Medicare Part D seasonality from Inflation Reduction Act changes
“Elevance Health delivered fourth quarter results in line with our outlook, reflecting disciplined execution in a dynamic environment. As we enter 2026, our focus is on advancing affordability and making healthcare easier to access and navigate for the members we serve. Through pricing discipline and targeted investments, we are strengthening the earnings power of our diversified platform and remain confident in our ability to return to at least 12% adjusted EPS growth in 2027.”
Elevance Health CEO, on the earnings call
Forward Guidance & Outlook
For FY 2026, Elevance Health projects GAAP diluted EPS of at least $22.30 and adjusted diluted EPS of at least $25.50, a significant decline from FY 2025 actual adjusted diluted EPS of $30.29. Total operating revenue is expected to show a low single digit decline from $197.6 billion, with premium revenue declining mid single digits, offset by mid single digit growth in product revenue and service fees. The benefit expense ratio is guided at 90.2% +/- 50 bps, with the adjusted operating expense ratio at 10.6% +/- 50 bps. Adjusted operating gain is projected at at least $6.8 billion versus $7.5 billion in 2025. The adjusted effective tax rate is expected to increase to 22.0%-24.0% from 17.6%. Operating cash flow is projected at at least $5.5 billion. Diluted shares are expected to be 219-220 million. Total medical membership is expected to decline to 43.2-43.9 million. Health Benefits operating revenue is expected to show a low single digit decline, while CarelonRx and Carelon Services are both expected to show low single digit growth. The company reaffirmed its long-term earnings algorithm and expressed confidence in returning to at least 12% adjusted EPS growth in 2027.
ELV YoY Financials
ELV Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.