Elevance Health (ELV) Q4 2025 earnings summary

Executive summary

• 2026 is positioned as a year of execution and repositioning, focusing on pricing discipline, operational rigor, and targeted investments to strengthen margins and reduce volatility, with an emphasis on Medicare margin improvement and managing Medicaid headwinds.

• Fourth quarter and full year 2025 operational results were consistent with expectations, with adjusted diluted EPS of $3.33 for Q4 and $30.29 for the year, including $3.75 of non-recurring favorable items, mainly tax-related benefits.

• Operating revenue for 2025 grew 13% to $197.6B, driven by improved premium yields, acquisitions, and Medicare Advantage growth, partially offset by Medicaid attrition.

• Strategic priorities include care coordination, analytics-driven cost management, and investments in digital and AI-enabled capabilities.

• Returned $4.1B to shareholders in 2025 through share repurchases and dividends.

Financial highlights

• Adjusted diluted EPS for Q4 2025 was $3.33 and $30.29 for the full year, with 2026 guidance at least $25.50; 2025 results included $3.75 per share of non-recurring items.

• Operating revenue for Q4 2025 was $49.3B, up 10% year-over-year; full year 2025 revenue was $197.6B, up 13%.

• Full-year operating cash flow was $4.3B, with 2026 expected to be at least $5.5B.

• 2025 benefit expense ratio increased 150 bps to 90.0%, reflecting higher cost trends across all major lines.

• 2025 adjusted operating expense ratio improved to 10.5% due to disciplined expense management.

Outlook and guidance

• 2026 adjusted EPS guidance is at least $25.50, with a return to at least 12% adjusted EPS growth expected in 2027.

• Operating revenue is expected to decline in the low single-digit % range in 2026, mainly due to a low double-digit % decline in risk-based membership.

• Consolidated medical loss ratio for 2026 is expected at 90.2% ±50 bps; adjusted operating expense ratio at 10.6% ±50 bps.

• Approximately two-thirds of 2026 adjusted EPS is expected in the first half, with 65% in Q1.

• Total medical membership expected to decline to 43.2–43.9 million in 2026.