10-QPeriod: Q1 FY2024

Elevance Health, Inc. Quarterly Report for Q1 Ended Mar 31, 2024

Filed April 18, 2024For Securities:ELV

Summary

Elevance Health, Inc. reported solid financial results for the first quarter of 2024, demonstrating resilience and strategic execution in a dynamic healthcare landscape. Total revenues saw a modest increase of 1.0% to $42.6 billion, driven by premium rate adjustments and growth in its CarelonRx segment. Net income rose by a significant 12.2% to $2.25 billion, leading to a diluted Earnings Per Share (EPS) of $9.59, a 15.5% increase year-over-year. This performance was supported by improved operating gains across its Health Benefits, Carelon Services, and CarelonRx segments, coupled with a decrease in amortization of intangible assets and higher net investment income. Operationally, the company experienced a 3.9% decline in total medical membership, largely due to Medicaid redetermination effects and some attrition in employer group and Medicare segments. However, this was partially offset by growth in Individual, Employer Group fee-based, BlueCard, and FEHB memberships. Strategic acquisitions, such as Paragon Healthcare, Inc., and pending acquisitions like Centers Plan for Healthy Living LLC, underscore Elevance Health's commitment to expanding its care delivery capabilities and market reach. The company also announced the divestiture of its life and disability businesses, signaling a sharpened focus on its core health insurance and healthcare services operations.

Financial Highlights

52 data points
Beta

Revenue

$42.58B

91.0% Gross Margin

Net Income

$2.25B

5.3% Net Margin

EPS (Diluted)

$9.59

Total Assets

$111.89B

Cash & Equivalents

$6.23B

Free Cash Flow

$1.70B

Financial Statements
Beta
Revenue$42.58B
Cost of Revenue$3.83B
Gross Profit$38.75B
SG&A Expenses$4.89B
Operating Income$3.02B
Interest Expense$265.00M
Net Income$2.25B
EPS (Basic)$9.65
EPS (Diluted)$9.59
Shares Outstanding (Basic)232.70M
Shares Outstanding (Diluted)234.20M

Key Highlights

  • 1Total revenues increased by 1.0% to $42.58 billion for the three months ended March 31, 2024.
  • 2Net income grew by 12.2% to $2.25 billion for the three months ended March 31, 2024.
  • 3Diluted EPS increased by 15.5% to $9.59 for the three months ended March 31, 2024.
  • 4Total medical membership decreased by 3.9% to 46.2 million, primarily due to Medicaid attrition.
  • 5The company completed the acquisition of Paragon Healthcare, Inc. on March 11, 2024.
  • 6Elevance Health divested its life and disability businesses effective April 1, 2024.
  • 7The company's debt-to-capital ratio remained strong at 39.4% as of March 31, 2024.

Frequently Asked Questions

The increase in net income was primarily driven by improved operating gain performance in its Health Benefits, Carelon Services, and CarelonRx businesses. Additionally, lower amortization of other intangible assets and increased net investment income contributed to the rise. Higher income before taxes also played a role, which was partially offset by increased income tax expense.

The decline in total medical membership was primarily attributed to Medicaid membership attrition, stemming from eligibility redeterminations and certain market exits. Lapses in the Employer Group risk-based and Medicare segments also contributed to the decrease. These were partially offset by gains in other business lines like Employer Group fee-based, Individual, BlueCard, and FEHB.

Key strategic events include the completion of the Paragon Healthcare, Inc. acquisition, which expands its infusion services and injectable therapies capabilities. The company also completed the sale of its life and disability businesses, sharpening its focus. Looking ahead, pending acquisitions of Centers Plan for Healthy Living LLC and a strategic partnership with Clayton, Dubilier & Rice (CD&R) in a new entity are notable.

Elevance Health classifies its fixed maturity securities as available-for-sale and reports them at fair value. While the company experienced unrealized losses on some securities, primarily due to rising interest rates, it has not recognized these as impairments as it does not intend to sell these investments and does not expect to be required to sell them before recovery. The company also actively manages its investment income and has seen an increase in net investment income this quarter.