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Elevance Health Q4 Earnings Beat Estimates on Increasing Premiums
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Key Takeaways
Elevance Health posted Q4 adjusted EPS of $3.33, beating consensus by 7.3% despite revenues missing estimates.
ELV's premiums rose 12.3% year over year, driven by higher yields and Medicare Advantage membership growth.
Carelon revenues jumped 27% on buyouts and risk-based services, while overall medical membership declined.
Elevance Health, Inc. (ELV - Free Report) reported fourth-quarter 2025 adjusted earnings per share (EPS) of $3.33, which surpassed the Zacks Consensus Estimate by 7.3%. The bottom line rose 3.1% year over year.
Operating revenues advanced 9.6% year over year to $49.3 billion. However, the top line missed the consensus mark by 0.5%.
The quarterly earnings benefited on the back of strong growth in premiums. Segment-wise, the Carelon division posted a robust revenue surge, aided by buyout 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 and an elevated expense level.
Elevance Health, Inc. Price, Consensus and EPS Surprise
Medical membership of Elevance Health was around 45.2 million as of Dec. 31, 2025, which dipped 1.1% year over year. The decrease was due to a decline in Medicaid membership, partially offset by growth in Medicare Advantage. The reported figure missed the Zacks Consensus Estimate and our estimate of 45.4 million.
Premiums totaled $40.7 billion in the quarter under review, which improved 12.3% year over year and surpassed our estimate of $39.8 billion. Product revenues fell 3.8% year over year to $6.5 billion. The metric missed the Zacks Consensus Estimate of $6.8 billion and our estimate of $6.9 billion.
Net investment income declined 6.5% year over year to $493 million. The metric surpassed the consensus mark of $469.7 million and our estimate of $485 million. Adjusted operating margin of 0.8% deteriorated 110 basis points (bps) year over year.
Total expenses escalated 10.5% year over year to $49.5 billion in the fourth quarter, higher than our estimate of $48.6 billion. The year-over-year increase was due to higher benefit expenses, operating expenses and interest expenses.
Operating expense ratio came in at 11%, which deteriorated 30 bps year over year. The benefit expense ratio deteriorated 110 bps year over year to 93.5%.
Q4 Segmental Results of ELV
Health Benefits
The unit recorded operating revenues of $41.8 billion in the fourth quarter, which rose 11% year over year and beat the Zacks Consensus Estimate of $41.3 billion as well as our estimate of $40.2 billion. The segment benefited from increased premium yields, rising Medicare Advantage membership and buyouts.
The unit incurred an operating loss of $220 million against the prior-year quarter’s gain of $207 million. It missed the consensus mark of an operating gain of $232 million. The operating margin deteriorated 110 basis points year over year to negative 0.5%.
Carelon
The segment’s operating revenues rose 27% year over year to $18.7 billion in the quarter under review, beating the Zacks Consensus Estimate of $18.6 billion and our estimate of $18.1 billion. The year-over-year increase was driven by the buyout of CareBridge, higher CarelonRx product revenues and the scaling of risk-based capabilities in Carelon Services.
The unit’s operating gain of $0.6 billion remained unchanged year over year. The operating margin deteriorated 80 bps year over year to 3.1%.
Corporate & Other
Operating revenues came in at negative $83 million in the fourth quarter. The unit incurred an operating loss of $45 million, narrower than the prior-year quarter’s loss of $102 million.
ELV’s Financial Details (As of Dec. 31, 2025)
Elevance Health exited the fourth quarter with cash and cash equivalents of $9.5 billion, which advanced 14.5% from the 2024-end level. Total assets of $121.5 billion increased 3.9% from the figure at 2024-end.
Long-term debt, less the current portion, amounted to $30.8 billion, up 5.4% from the figure as of Dec. 31, 2024. Short-term borrowings at the fourth-quarter end were $150 million, while the current portion of the long-term debt amounted to $1.1 billion.
Total equity of $44 billion grew 6.3% from the 2024-end level.
Elevance Health generated net cash flow from operations of $4.3 billion in 2025, which fell 26.1% from the prior-year comparable period.
ELV: Capital Deployment Update
Elevance Health bought back shares worth $471 million in the fourth quarter. It had a leftover capacity of around $6.7 billion under its share buyback authorization as of Dec. 31, 2025.
Elevance Health paid a quarterly dividend of $1.71 per share, adding up to a cash distribution worth $377 million.
Full-Year 2025 Results of ELV
ELV’s 2025 revenues of $197.6 billion rose from $175.2 billion a year ago, benefiting from increased premium yields in the Health Benefits unit and growth in Medicare Advantage membership.
Full-year 2025 EPS of $30.29 declined from $33.04 in 2024.
ELV’s 2026 Outlook
The company expects adjusted EPS to be at least $25.50, which indicates a 15.8% decline from the 2025 reported figure.
The operating margin for the Health Benefits segment is estimated to witness a decrease of 50-25 bps from the 2025 reported figure. Also, the operating margin for CarelonRx is expected to see a 25-0 bps decline, while the same for Carelon Services is estimated to witness an increase of 0-25 bps.
Management anticipates operating revenues to witness a low-single digit decline in 2026 from the 2025 level. Premium revenues are estimated to witness a mid-single digit decline from the 2025 level. Medical enrollment is forecasted to be between 43.2 million and 43.9 million in 2026.
Net investment income is expected to be $1.9 billion. Interest expenses are forecasted to be $1.5 billion in 2026, while operating cash flow is projected to be at least $5.5 billion. Diluted shares are estimated at 219-220 million.
The Zacks Consensus Estimate for Fortress Biotech’s current-year earnings of 71 cents per share has witnessed one upward revision in the past 60 days against no movement in the opposite direction. Fortress Biotech beat earnings estimates in two of the trailing four quarters and missed twice, with the average surprise being 33.8%. The consensus estimate for current-year revenues is pegged at $80.7 million, suggesting 39.9% year-over-year growth.
The Zacks Consensus Estimate for Harmony Biosciences’ current-year earnings of $3.16 per share has witnessed one upward revision in the past seven days against no movement in the opposite direction. Harmony Biosciences beat earnings estimates in two of the trailing four quarters and missed twice, with the average surprise being 7.2%. The consensus estimate for current-year revenues is pegged at $867.9 million, suggesting 21.4% year-over-year growth.
The Zacks Consensus Estimate for Veracyte’s current-year earnings of $1.66 per share has witnessed one upward revision in the past 30 days against no movement in the opposite direction. Veracyte beat earnings estimates in each of the trailing four quarters, with an average surprise being 45.1%. The consensus estimate for current-year revenues is pegged at $510.1 million, suggesting 14.4% year-over-year growth.
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Elevance Health Q4 Earnings Beat Estimates on Increasing Premiums
Key Takeaways
Elevance Health, Inc. (ELV - Free Report) reported fourth-quarter 2025 adjusted earnings per share (EPS) of $3.33, which surpassed the Zacks Consensus Estimate by 7.3%. The bottom line rose 3.1% year over year.
Operating revenues advanced 9.6% year over year to $49.3 billion. However, the top line missed the consensus mark by 0.5%.
The quarterly earnings benefited on the back of strong growth in premiums. Segment-wise, the Carelon division posted a robust revenue surge, aided by buyout 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 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 Q4 Operational Update
Medical membership of Elevance Health was around 45.2 million as of Dec. 31, 2025, which dipped 1.1% year over year. The decrease was due to a decline in Medicaid membership, partially offset by growth in Medicare Advantage. The reported figure missed the Zacks Consensus Estimate and our estimate of 45.4 million.
Premiums totaled $40.7 billion in the quarter under review, which improved 12.3% year over year and surpassed our estimate of $39.8 billion. Product revenues fell 3.8% year over year to $6.5 billion. The metric missed the Zacks Consensus Estimate of $6.8 billion and our estimate of $6.9 billion.
Net investment income declined 6.5% year over year to $493 million. The metric surpassed the consensus mark of $469.7 million and our estimate of $485 million. Adjusted operating margin of 0.8% deteriorated 110 basis points (bps) year over year.
Total expenses escalated 10.5% year over year to $49.5 billion in the fourth quarter, higher than our estimate of $48.6 billion. The year-over-year increase was due to higher benefit expenses, operating expenses and interest expenses.
Operating expense ratio came in at 11%, which deteriorated 30 bps year over year. The benefit expense ratio deteriorated 110 bps year over year to 93.5%.
Q4 Segmental Results of ELV
Health Benefits
The unit recorded operating revenues of $41.8 billion in the fourth quarter, which rose 11% year over year and beat the Zacks Consensus Estimate of $41.3 billion as well as our estimate of $40.2 billion. The segment benefited from increased premium yields, rising Medicare Advantage membership and buyouts.
The unit incurred an operating loss of $220 million against the prior-year quarter’s gain of $207 million. It missed the consensus mark of an operating gain of $232 million. The operating margin deteriorated 110 basis points year over year to negative 0.5%.
Carelon
The segment’s operating revenues rose 27% year over year to $18.7 billion in the quarter under review, beating the Zacks Consensus Estimate of $18.6 billion and our estimate of $18.1 billion. The year-over-year increase was driven by the buyout of CareBridge, higher CarelonRx product revenues and the scaling of risk-based capabilities in Carelon Services.
The unit’s operating gain of $0.6 billion remained unchanged year over year. The operating margin deteriorated 80 bps year over year to 3.1%.
Corporate & Other
Operating revenues came in at negative $83 million in the fourth quarter. The unit incurred an operating loss of $45 million, narrower than the prior-year quarter’s loss of $102 million.
ELV’s Financial Details (As of Dec. 31, 2025)
Elevance Health exited the fourth quarter with cash and cash equivalents of $9.5 billion, which advanced 14.5% from the 2024-end level. Total assets of $121.5 billion increased 3.9% from the figure at 2024-end.
Long-term debt, less the current portion, amounted to $30.8 billion, up 5.4% from the figure as of Dec. 31, 2024. Short-term borrowings at the fourth-quarter end were $150 million, while the current portion of the long-term debt amounted to $1.1 billion.
Total equity of $44 billion grew 6.3% from the 2024-end level.
Elevance Health generated net cash flow from operations of $4.3 billion in 2025, which fell 26.1% from the prior-year comparable period.
ELV: Capital Deployment Update
Elevance Health bought back shares worth $471 million in the fourth quarter. It had a leftover capacity of around $6.7 billion under its share buyback authorization as of Dec. 31, 2025.
Elevance Health paid a quarterly dividend of $1.71 per share, adding up to a cash distribution worth $377 million.
Full-Year 2025 Results of ELV
ELV’s 2025 revenues of $197.6 billion rose from $175.2 billion a year ago, benefiting from increased premium yields in the Health Benefits unit and growth in Medicare Advantage membership.
Full-year 2025 EPS of $30.29 declined from $33.04 in 2024.
ELV’s 2026 Outlook
The company expects adjusted EPS to be at least $25.50, which indicates a 15.8% decline from the 2025 reported figure.
The operating margin for the Health Benefits segment is estimated to witness a decrease of 50-25 bps from the 2025 reported figure. Also, the operating margin for CarelonRx is expected to see a 25-0 bps decline, while the same for Carelon Services is estimated to witness an increase of 0-25 bps.
Management anticipates operating revenues to witness a low-single digit decline in 2026 from the 2025 level. Premium revenues are estimated to witness a mid-single digit decline from the 2025 level. Medical enrollment is forecasted to be between 43.2 million and 43.9 million in 2026.
Net investment income is expected to be $1.9 billion. Interest expenses are forecasted to be $1.5 billion in 2026, while operating cash flow is projected to be at least $5.5 billion. Diluted shares are estimated at 219-220 million.
ELV’s Zacks Rank & Key Picks
ELV currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the Medical space are Fortress Biotech, Inc. (FBIO - Free Report) , Harmony Biosciences Holdings, Inc. (HRMY - Free Report) and Veracyte, Inc. (VCYT - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Fortress Biotech’s current-year earnings of 71 cents per share has witnessed one upward revision in the past 60 days against no movement in the opposite direction. Fortress Biotech beat earnings estimates in two of the trailing four quarters and missed twice, with the average surprise being 33.8%. The consensus estimate for current-year revenues is pegged at $80.7 million, suggesting 39.9% year-over-year growth.
The Zacks Consensus Estimate for Harmony Biosciences’ current-year earnings of $3.16 per share has witnessed one upward revision in the past seven days against no movement in the opposite direction. Harmony Biosciences beat earnings estimates in two of the trailing four quarters and missed twice, with the average surprise being 7.2%. The consensus estimate for current-year revenues is pegged at $867.9 million, suggesting 21.4% year-over-year growth.
The Zacks Consensus Estimate for Veracyte’s current-year earnings of $1.66 per share has witnessed one upward revision in the past 30 days against no movement in the opposite direction. Veracyte beat earnings estimates in each of the trailing four quarters, with an average surprise being 45.1%. The consensus estimate for current-year revenues is pegged at $510.1 million, suggesting 14.4% year-over-year growth.