10-QPeriod: Q1 FY2023

Elevance Health, Inc. Quarterly Report for Q1 Ended Mar 31, 2023

Filed April 19, 2023For Securities:ELV

Summary

Elevance Health, Inc. (ELV) reported strong financial results for the first quarter of 2023, exceeding the previous year's performance. Total operating revenue increased by 10.6% to $41.9 billion, driven by robust membership growth across key segments including Medicaid, Medicare Advantage, and commercial fee-based plans. Net income saw a significant jump of 12.6% to $2.0 billion, translating to a diluted EPS of $8.30, up 13.4% year-over-year. This growth was supported by improved operating gains in its business segments, particularly Health Benefits and CarelonRx, alongside higher net investment income. The company also reported a substantial increase in operating cash flow, nearly tripling to $6.5 billion, bolstered by early premium receipts from CMS and positive working capital movements. Strategically, Elevance Health continues to evolve its brand portfolio and operational structure, with a new segment reporting alignment implemented in Q1 2023. The company also announced two significant M&A activities: the agreement to acquire Blue Cross Blue Shield of Louisiana and the pending sale of its life and disability businesses. These moves underscore Elevance Health's commitment to its long-term strategy of becoming a trusted health partner and expanding its integrated care solutions.

Financial Highlights

52 data points
Beta

Revenue

$42.17B

91.7% Gross Margin

Net Income

$2.00B

4.8% Net Margin

EPS (Diluted)

$8.30

Total Assets

$109.04B

Cash & Equivalents

$10.14B

Free Cash Flow

$6.17B

Financial Statements
Beta
Revenue$42.17B
Cost of Revenue$3.48B
Gross Profit$38.69B
SG&A Expenses$4.80B
Operating Income$2.83B
Interest Expense$251.00M
Net Income$2.00B
EPS (Basic)$8.37
EPS (Diluted)$8.30
Shares Outstanding (Basic)237.50M
Shares Outstanding (Diluted)239.70M

Key Highlights

  • 1Total operating revenue increased 10.6% to $41.9 billion, driven by strong membership growth and premium rate adjustments.
  • 2Net income rose 12.6% to $2.0 billion, with diluted EPS growing 13.4% to $8.30.
  • 3Operating cash flow surged to $6.5 billion from $2.5 billion in the prior year, indicating improved operational liquidity.
  • 4Total medical membership increased by 1.3 million (2.9%) to 48.1 million, primarily in Medicaid and Medicare Advantage.
  • 5Announced agreement to acquire Blue Cross Blue Shield of Louisiana, strengthening its market presence.
  • 6Entered into an agreement to sell its life and disability businesses, refocusing its portfolio.
  • 7Implemented a new segment reporting structure to align with its evolving brand strategy and operational focus.

Frequently Asked Questions

Revenue growth was primarily driven by higher premiums resulting from membership increases in Medicaid and Medicare Advantage, along with premium rate adjustments in the Health Benefits segment to better reflect current healthcare costs. Growth in CarelonRx pharmacy product revenue also contributed significantly due to an increase in integrated medical and standalone pharmacy customers.

Profitability improved significantly. Net income increased by 12.6% to $2.0 billion, and diluted earnings per share (EPS) grew by 13.4% to $8.30. This improvement was attributed to higher operating gains across business segments, increased net investment income, and a reduction in net losses on financial instruments.

Elevance Health announced two major strategic initiatives: the agreement to acquire Blue Cross Blue Shield of Louisiana, which will expand its market reach, and the agreement to sell its life and disability businesses, which aims to streamline its portfolio. The company also implemented a new segment reporting structure to better align with its evolving brand and business strategy.

Medical membership increased by 2.9% to 48.1 million members. Growth was particularly strong in the Medicaid segment (up 8.9%), Medicare Advantage (up 6.9%), and Individual Public Exchange products (up 15.2%). This growth is expected to continue as individuals exit Medicaid and seek other coverage options.