01—Abstract
Summary
Summary of the 10-K filed February 21, 2024. Cited figures are marked; the original filing is the authoritative source.
Elevance Health, Inc. (ELV) reported strong revenue growth for the fiscal year ended December 31, 2023, with total operating revenue increasing by 9.3% to $170.2 billiona.
This growth was primarily driven by premium rate increases in its Health Benefits segment and expansion in its CarelonRx pharmacy business, including the acquisition of BioPlus. Net income saw a modest increase of 1.7% to $5.99 billionb, resulting in diluted earnings per share of $25.22, up 3.9%. The company experienced a decline in Medicaid membership due to the resumption of eligibility redeterminations, but this was offset by growth in Individual Public Exchange and Medicare Advantage membership.
Elevance Health continues to manage healthcare costs effectively through various programs and pricing strategies, while also investing in digital transformation and expanding its Carelon brand for healthcare services. The company's financial health remains solid, with a debt-to-capital ratio of 38.9%c as of December 31, 2023. Elevance Health also announced strategic acquisitions and a pending divestiture, signaling ongoing efforts to refine its business portfolio and enhance its market position.
02—Key points
Key Highlights
- Total operating revenue increased by 9.3% to $170.2 billion, driven by premium rate increases and growth in the CarelonRx pharmacy business.
- Net income grew by 1.7% to $5.99 billion, with diluted EPS increasing by 3.9% to $25.22.
- Medicaid membership declined due to eligibility redeterminations, but this was offset by growth in Individual Public Exchange and Medicare Advantage segments.
- The company's debt-to-capital ratio stood at a healthy 38.9% as of year-end 2023.
- Elevance Health is actively pursuing strategic growth through acquisitions (e.g., Paragon Healthcare, Centers Plan for Healthy Living) and divesting non-core businesses (life and disability).
- The company reported a significant reduction in Medicare Advantage plans with 4.0+ Star ratings for 2024, which is expected to impact 2025 bonus payments by approximately $500 million.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2023, Elevance Health, Inc. kept $0.03.
- Revenue$171.34B100.0%
- Cost of revenue−$17.29B10.1%
- Gross profit$154.05B89.9%
- Operating costs−$145.55B84.9%
- Operating income$8.50B5.0%
- Interest, other & tax−$2.51B1.5%
- Net income$5.99B3.5%
Where FY2023 revenue went
$171.34B- Other operating costs: $125.46B, 73% of revenue
- Net income: $5.99B, 3.5% of revenue
- Cost of revenue: $17.29B, 10% of revenue
- SG&A: $20.09B, 12% of revenue
- Interest, other & tax: $2.51B, 1.5% of revenue
Kept 3.5% as net incomeNet income $5.99B · 3.5%Interest, other & tax $2.51B · 1.5%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2023filed February 21, 2024Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $171.34B$156.59B | +9.4% |
| Cost of Revenue | $17.29B$13.04B | +32.7% |
| Gross Profit | $154.05B$143.56B | +7.3% |
| SG&A Expenses | $20.09B$17.70B | +13.5% |
| Operating Income | $8.50B$8.28B | +2.6% |
| Interest Expense | $1.03B$851.00M | +21.0% |
| Net Income | $5.99B$5.89B | +1.7% |
| EPS (Basic) | $25.38$24.56 | +3.3% |
| EPS (Diluted) | $25.22$24.28 | +3.9% |
| Shares Outstanding (Basic) | 235.90M240.00M | −1.7% |
| Shares Outstanding (Diluted) | 237.40M242.80M | −2.2% |
05—Questions
Frequently Asked Questions
What were the main drivers of Elevance Health's revenue growth in 2023?
Elevance Health's revenue growth was primarily driven by premium rate increases implemented in its Health Benefits segment to better reflect the cost of care. Additionally, growth in its CarelonRx pharmacy product revenue, fueled by an increase in external pharmacy members and the acquisition of BioPlus in Q1 2023, contributed significantly to the overall revenue increase.
What is the outlook for Elevance Health's membership in the Medicaid segment?
Elevance Health experienced a decline in Medicaid membership during 2023, largely attributed to the resumption of eligibility redeterminations following the end of the COVID-19 Public Health Emergency. While this has impacted the segment, the company anticipates that members no longer eligible for Medicaid will seek coverage in its commercial plans, including those offered through Public Exchanges, potentially offsetting some of the decline over time.
How will the change in Medicare Advantage Star ratings affect Elevance Health?
Elevance Health reported a decrease in the percentage of its Medicare Advantage members in plans with 4.0+ Star ratings for 2024 compared to 2023. This shift is expected to negatively impact its Medicare quality bonus payments and plan-level rebates beginning in 2025, with an estimated reduction in operating revenue of approximately $500 million. The company is implementing strategies to mitigate this financial impact.
06—Continue