Elevance Health (ELV) Q4 2025 earnings summary

Executive summary

• 2026 is positioned as a year of execution and repositioning, with a focus on pricing discipline, operational rigor, and targeted investments to strengthen margins and reduce volatility, particularly in Medicare, Medicaid, and ACA segments.

• 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 12.8% to $197.6 billion, driven by premium rate adjustments, acquisitions, and Medicare Advantage growth, partially offset by Medicaid attrition.

• Confidence remains in returning to at least 12% adjusted EPS growth in 2027, leveraging a diversified platform and multiple earnings levers.

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

Financial highlights

• Adjusted diluted EPS was $3.33 for Q4 and $30.29 for the full year 2025, with $3.75 per share from non-recurring items.

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

• Full-year operating cash flow was $4.3 billion, impacted by Medicaid payment timing, with 2026 cash flow expected at least $5.5 billion.

• 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 diluted EPS guidance is at least $25.50; projected GAAP diluted EPS of at least $22.30.

• 2026 operating revenue expected to decline in the low single-digit % range due to risk-based membership declines, partially offset by higher premium yields and Carelon growth.

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

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

• Long-term EPS growth algorithm of at least 12% annually reaffirmed for 2027 and beyond.