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Elevance Health Q3 Earnings Beat Estimates on Strong MA Membership
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Key Takeaways
ELV posted Q3 EPS of $6.03, beating estimates by 21.1% despite a 29.9% year-over-year decline.
Revenues rose 12% to $50.1B, driven by strong premiums, product sales and net investment income.
Carelon revenues surged 33% on buyouts and scaling services, while MA growth offset Medicaid declines.
Elevance Health, Inc. (ELV - Free Report) reported third-quarter 2025 adjusted earnings per share (EPS) of $6.03, which surpassed the Zacks Consensus Estimate by 21.1%. The bottom line dropped 29.9% year over year.
Operating revenues advanced 12% year over year to $50.1 billion. The top line beat the consensus mark by 1.2%.
The quarterly results benefited on the back of strong growth in premiums, product revenues and net investment income. Segment-wise, the Carelon division posted a robust revenue surge, aided by buyouts and scaling risk-based services, while Health Benefits saw increased premium yields and Medicare Advantage membership growth. However, the upside was partly offset by a decline in overall medical membership due to Medicaid reverifications and an elevated expense level.
Elevance Health, Inc. Price, Consensus and EPS Surprise
Medical membership of Elevance Health was around 45.4 million as of Sept. 30, 2025, which dipped 0.9% year over year. The decrease was due to a decline in Medicaid membership as a result of eligibility reverifications, partially offset by growth in Medicare Advantage. The reported figure missed the Zacks Consensus Estimate and our estimate of 45.6 million.
Premiums totaled $41.8 billion in the quarter under review, which improved 13.5% year over year, and outpaced the consensus mark of $41 billion and our estimate of $40.2 billion. Product revenues grew 4.6% year over year to $6.2 billion. The metric missed the Zacks Consensus Estimate of $6.3 billion but beat our estimate of $6.1 billion.
Net investment income advanced 13.4% year over year to $625 million, which surpassed the consensus mark of $449 million and our estimate of $476.5 million. Adjusted operating margin of 2.7% deteriorated 280 basis points (bps) year over year.
Total expenses escalated 12.7% year over year to $49.3 billion in the third quarter, higher than our estimate of $47.7 billion. The year-over-year increase was due to higher benefit expenses, cost of products sold and interest expenses. Operating expense ratio came in at 10.5%, which improved 130 bps year over year. The benefit expense ratio deteriorated 180 bps year over year to 91.3%.
Q3 Segmental Results of ELV
Health Benefits
The unit recorded operating revenues of $42.2 billion in the third quarter, which rose 10% year over year and beat the Zacks Consensus Estimate of $41.5 billion as well as our estimate of $40.2 billion. The segment benefited from increased premium yields, rising Medicare Advantage membership and buyouts.
Operating gain plunged 62.5% year over year to $0.6 billion, lower than the consensus mark of $0.9 billion. The operating margin of 1.4% deteriorated 280 bps year over year.
Carelon
The segment’s operating revenues soared 33% year over year to $18.3 billion in the quarter under review, higher than the Zacks Consensus Estimate of $18 billion and our estimate of $17.4 billion. The year-over-year improvement was driven by buyouts in home health and pharmacy services, higher CarelonRx product revenues and the scaling of risk-based capabilities in Carelon Services.
The unit’s operating gain of $0.8 billion remained unchanged year over year. The operating margin deteriorated 160 bps year over year to 4.2%.
Corporate & Other
Operating revenues more than doubled year over year to $149 million in the third quarter. The unit incurred an operating loss of $81 million, narrower than the prior-year quarter’s loss of $999 million.
ELV’s Financial Details (as of Sept. 30, 2025)
Elevance Health exited the third quarter with cash and cash equivalents of $8.7 billion, which advanced 5.1% from the 2024-end level. Total assets of $122.7 billion increased 5% from the figure at 2024-end.
Long-term debt, less the current portion, amounted to $31.2 billion, up 6.7% from the figure as of Dec. 31, 2024. Short-term borrowings at the third-quarter end were $180 million, while the current portion of the long-term debt amounted to $749 million.
Total equity of $44.1 billion fell 6.4% from the 2024-end level.
Elevance Health generated net cash flow from operations of $4.2 billion in the first nine months of 2025, which fell 17.6% from the prior-year comparable period.
ELV: Capital Deployment Update
Elevance Health bought back shares worth $875 million in the third quarter. It had a leftover capacity of around $7.2 billion under its share buyback authorization as of Sept. 30, 2025.
Elevance Health paid a quarterly dividend of $1.71 per share, adding up to a cash distribution worth $381 million.
ELV’s 2025 Outlook
The company reiterates its adjusted EPS to be around $30, which indicates a 9.2% decline from the 2024 reported figure. Management maintains its view for benefit expense ratio at around 90%
The operating margin for the Health Benefits segment was earlier estimated to witness a decrease of 50-25 basis points (bps) from the 2024 reported figure.
Also, the operating margin for CarelonRx was expected to see 0-20 bps growth, while the same for Carelon Services was estimated to witness a decrease of 100-50 bps.
Management earlier expected operating revenues to witness high-single to low-double-digit growth in 2025 from the 2024 level. Premium revenues were earlier estimated to witness low-double-digit growth from the 2024 level. Medical enrollment was forecasted to be between 45.8 million and 46.6 million in 2025.
Net investment income was earlier anticipated to be $1.9 billion. Interest expenses were forecasted to be $1.5 billion in 2025, while operating cash flow was likely to be approximately $8 billion. Diluted shares were earlier estimated at 225-226 million.
ELV’s Zacks Rank
Elevance Health currently has a Zacks Rank #5 (Strong Sell).
Here are three other companies from the Medical space that are likely to report their respective quarterly earnings soon.
Exact Sciences Corporation (EXAS - Free Report) has an Earnings ESP of +56.25% and a Zacks Rank #1 at present. The Zacks Consensus Estimate for EXAS’ third-quarter 2025 earnings is pegged at 10 cents per share. A loss of 21 cents per share was incurred in the prior-year quarter.
Exact Sciences’ earnings beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 329.87%.
ANI Pharmaceuticals, Inc. (ANIP - Free Report) has an Earnings ESP of +6.24% and a Zacks Rank of 2 at present. The Zacks Consensus Estimate for ANIP’s third-quarter 2025 earnings is $1.74 per share, implying 29.9% growth from the year-ago quarter’s figure.
ANI Pharmaceuticals’ earnings beat estimates in each of the trailing four quarters, the average surprise being 22.66%.
Zimmer Biomet Holdings, Inc. (ZBH - Free Report) currently has an Earnings ESP of +3.53% and a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for ZBH’s third-quarter 2025 earnings is pegged at $1.88 per share, indicating a 8.1% rise from the prior-year quarter’s number.
Zimmer Biomet’s earnings beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 1.81%.
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Elevance Health Q3 Earnings Beat Estimates on Strong MA Membership
Key Takeaways
Elevance Health, Inc. (ELV - Free Report) reported third-quarter 2025 adjusted earnings per share (EPS) of $6.03, which surpassed the Zacks Consensus Estimate by 21.1%. The bottom line dropped 29.9% year over year.
Operating revenues advanced 12% year over year to $50.1 billion. The top line beat the consensus mark by 1.2%.
The quarterly results benefited on the back of strong growth in premiums, product revenues and net investment income. Segment-wise, the Carelon division posted a robust revenue surge, aided by buyouts and scaling risk-based services, while Health Benefits saw increased premium yields and Medicare Advantage membership growth. However, the upside was partly offset by a decline in overall medical membership due to Medicaid reverifications and an elevated expense level.
Elevance Health, Inc. Price, Consensus and EPS Surprise
Elevance Health, Inc. price-consensus-eps-surprise-chart | Elevance Health, Inc. Quote
ELV’s Q3 Operational Update
Medical membership of Elevance Health was around 45.4 million as of Sept. 30, 2025, which dipped 0.9% year over year. The decrease was due to a decline in Medicaid membership as a result of eligibility reverifications, partially offset by growth in Medicare Advantage. The reported figure missed the Zacks Consensus Estimate and our estimate of 45.6 million.
Premiums totaled $41.8 billion in the quarter under review, which improved 13.5% year over year, and outpaced the consensus mark of $41 billion and our estimate of $40.2 billion. Product revenues grew 4.6% year over year to $6.2 billion. The metric missed the Zacks Consensus Estimate of $6.3 billion but beat our estimate of $6.1 billion.
Net investment income advanced 13.4% year over year to $625 million, which surpassed the consensus mark of $449 million and our estimate of $476.5 million. Adjusted operating margin of 2.7% deteriorated 280 basis points (bps) year over year.
Total expenses escalated 12.7% year over year to $49.3 billion in the third quarter, higher than our estimate of $47.7 billion. The year-over-year increase was due to higher benefit expenses, cost of products sold and interest expenses.
Operating expense ratio came in at 10.5%, which improved 130 bps year over year. The benefit expense ratio deteriorated 180 bps year over year to 91.3%.
Q3 Segmental Results of ELV
Health Benefits
The unit recorded operating revenues of $42.2 billion in the third quarter, which rose 10% year over year and beat the Zacks Consensus Estimate of $41.5 billion as well as our estimate of $40.2 billion. The segment benefited from increased premium yields, rising Medicare Advantage membership and buyouts.
Operating gain plunged 62.5% year over year to $0.6 billion, lower than the consensus mark of $0.9 billion. The operating margin of 1.4% deteriorated 280 bps year over year.
Carelon
The segment’s operating revenues soared 33% year over year to $18.3 billion in the quarter under review, higher than the Zacks Consensus Estimate of $18 billion and our estimate of $17.4 billion. The year-over-year improvement was driven by buyouts in home health and pharmacy services, higher CarelonRx product revenues and the scaling of risk-based capabilities in Carelon Services.
The unit’s operating gain of $0.8 billion remained unchanged year over year. The operating margin deteriorated 160 bps year over year to 4.2%.
Corporate & Other
Operating revenues more than doubled year over year to $149 million in the third quarter. The unit incurred an operating loss of $81 million, narrower than the prior-year quarter’s loss of $999 million.
ELV’s Financial Details (as of Sept. 30, 2025)
Elevance Health exited the third quarter with cash and cash equivalents of $8.7 billion, which advanced 5.1% from the 2024-end level. Total assets of $122.7 billion increased 5% from the figure at 2024-end.
Long-term debt, less the current portion, amounted to $31.2 billion, up 6.7% from the figure as of Dec. 31, 2024. Short-term borrowings at the third-quarter end were $180 million, while the current portion of the long-term debt amounted to $749 million.
Total equity of $44.1 billion fell 6.4% from the 2024-end level.
Elevance Health generated net cash flow from operations of $4.2 billion in the first nine months of 2025, which fell 17.6% from the prior-year comparable period.
ELV: Capital Deployment Update
Elevance Health bought back shares worth $875 million in the third quarter. It had a leftover capacity of around $7.2 billion under its share buyback authorization as of Sept. 30, 2025.
Elevance Health paid a quarterly dividend of $1.71 per share, adding up to a cash distribution worth $381 million.
ELV’s 2025 Outlook
The company reiterates its adjusted EPS to be around $30, which indicates a 9.2% decline from the 2024 reported figure. Management maintains its view for benefit expense ratio at around 90%
The operating margin for the Health Benefits segment was earlier estimated to witness a decrease of 50-25 basis points (bps) from the 2024 reported figure.
Also, the operating margin for CarelonRx was expected to see 0-20 bps growth, while the same for Carelon Services was estimated to witness a decrease of 100-50 bps.
Management earlier expected operating revenues to witness high-single to low-double-digit growth in 2025 from the 2024 level. Premium revenues were earlier estimated to witness low-double-digit growth from the 2024 level. Medical enrollment was forecasted to be between 45.8 million and 46.6 million in 2025.
Net investment income was earlier anticipated to be $1.9 billion. Interest expenses were forecasted to be $1.5 billion in 2025, while operating cash flow was likely to be approximately $8 billion. Diluted shares were earlier estimated at 225-226 million.
ELV’s Zacks Rank
Elevance Health currently has a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Medical Sector Releases
Here are three other companies from the Medical space that are likely to report their respective quarterly earnings soon.
Exact Sciences Corporation (EXAS - Free Report) has an Earnings ESP of +56.25% and a Zacks Rank #1 at present. The Zacks Consensus Estimate for EXAS’ third-quarter 2025 earnings is pegged at 10 cents per share. A loss of 21 cents per share was incurred in the prior-year quarter.
Exact Sciences’ earnings beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 329.87%.
ANI Pharmaceuticals, Inc. (ANIP - Free Report) has an Earnings ESP of +6.24% and a Zacks Rank of 2 at present. The Zacks Consensus Estimate for ANIP’s third-quarter 2025 earnings is $1.74 per share, implying 29.9% growth from the year-ago quarter’s figure.
ANI Pharmaceuticals’ earnings beat estimates in each of the trailing four quarters, the average surprise being 22.66%.
Zimmer Biomet Holdings, Inc. (ZBH - Free Report) currently has an Earnings ESP of +3.53% and a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for ZBH’s third-quarter 2025 earnings is pegged at $1.88 per share, indicating a 8.1% rise from the prior-year quarter’s number.
Zimmer Biomet’s earnings beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 1.81%.