10-QPeriod: Q1 FY2025

Elevance Health, Inc. Quarterly Report for Q1 Ended Mar 31, 2025

Filed April 22, 2025For Securities:ELV

Summary

Elevance Health, Inc. (ELV) reported its first-quarter 2025 financial results, demonstrating robust top-line growth driven by premium rate increases and membership gains in key segments like Medicare Advantage and Individual ACA. Total operating revenue increased by 15.4% year-over-year to $48.8 billion, while net income saw a slight decrease of 2.9% to $2.18 billion. This dip in net income was influenced by increased benefit expenses reflecting higher medical cost trends, and a rise in net losses on financial instruments. Despite these pressures, the company maintained its competitive position with a solid operating gain and a slight increase in diluted earnings per share to $9.61. The company continues to execute its strategic growth initiatives, including key acquisitions in the long-term care and home and community-based services sectors, reinforcing its diversified healthcare offerings.

Financial Highlights

50 data points
Beta

Revenue

$48.89B

89.8% Gross Margin

Net Income

$2.18B

4.5% Net Margin

EPS (Diluted)

$9.61

Total Assets

$119.72B

Cash & Equivalents

$7.50B

Free Cash Flow

$821.00M

Financial Statements
Beta
Revenue$48.89B
Cost of Revenue$4.98B
Gross Profit$43.91B
SG&A Expenses$5.30B
Operating Income$3.17B
Net Income$2.18B
EPS (Basic)$9.64
EPS (Diluted)$9.61
Shares Outstanding (Basic)226.40M
Shares Outstanding (Diluted)227.20M

Key Highlights

  • 1Total operating revenue grew 15.4% to $48.8 billion, driven by premium rate increases and membership growth in Medicare Advantage and Individual ACA.
  • 2Net income decreased by 2.9% to $2.18 billion, primarily due to increased benefit expenses from higher medical cost trends and higher net losses on financial instruments.
  • 3Diluted earnings per share (EPS) increased slightly to $9.61, up 0.2% year-over-year, supported by a reduction in diluted shares outstanding.
  • 4The Health Benefits segment experienced a 3.1% decrease in operating gain, primarily due to Medicaid rates being insufficient to cover medical cost trends.
  • 5CarelonRx and Carelon Services segments showed strong operating gain growth of 15.1% and 69.3%, respectively, driven by increased prescription volume and strategic acquisitions.
  • 6Medical membership saw a slight overall decline of 0.5%, mainly from Medicaid attrition, but was partially offset by growth in Medicare Advantage and Individual ACA.
  • 7The company completed several strategic acquisitions, including Centers Plan for Healthy Living LLC and CareBridge, enhancing its long-term care and home-based services capabilities.

Frequently Asked Questions

The substantial 15.4% increase in total operating revenue to $48.8 billion was primarily driven by premium rate increases in the Health Benefits segment to account for medical cost trends, contributions from recent acquisitions, growth in Medicare Advantage and Individual ACA membership, and an increase in product revenue from CarelonRx. These positive factors were partially offset by membership attrition in the Medicaid business.

Net income saw a 2.9% decrease to $2.18 billion primarily due to an increase in benefit expenses, reflecting higher medical cost trends across all lines of business. Additionally, net losses on financial instruments increased, and the Health Benefits segment experienced a lower operating gain due to Medicaid rates not fully covering medical cost trends. These factors outweighed improvements in other segments and increased net investment income.

Elevance Health employs various medical management programs to mitigate medical cost trends, including care and condition management, program integrity, specialty pharmacy management, and utilization management. They also utilize benefit design changes. However, factors such as changes in service utilization, unit costs, regulatory changes, and the emergence of new high-cost treatments continue to influence these trends.

The recent acquisitions, such as Centers Plan for Healthy Living LLC and CareBridge, are strategically aligned with growing the Health Benefits and Carelon Services segments. These acquisitions enhance the company's capabilities in serving Medicaid and dual-eligible populations, expanding its long-term care and home and community-based services offerings, and reinforcing its commitment to providing integrated healthcare solutions.