Membership and Growth - As of March 31, 2025, Elevance Health serves approximately 45.8 million medical members through its affiliated health plans [152]. - The company anticipates continued growth in Public Exchange membership and has expanded into select service areas in Florida, Maryland, and Texas in 2025 [156]. - Total medical membership as of March 31, 2025, was 45,833 thousand, a decline of 216 thousand or 0.5% from March 31, 2024 [187]. - Medicare Advantage membership increased by 238 thousand or 11.8% to 2,255 thousand as of March 31, 2025 [187]. - 53% of Elevance Health's Medicare Advantage members were enrolled in plans rated at least 4.0 Stars or higher for the 2024 Star Ratings [169]. Financial Performance - Total operating revenue for the three months ended March 31, 2025, was $48,765 million, an increase of $6,492 million or 15.4% from the same period in 2024 [182]. - Net income for the three months ended March 31, 2025, was $2,184 million, a decrease of $65 million or 2.9% compared to the same period in 2024 [183]. - Health Benefits operating revenue increased by $4,173 million or 11.2% to $41,431 million, driven by higher premium yields and growth in Medicare Advantage and Individual ACA membership [203]. - CarelonRx operating revenue rose by $2,049 million or 25.4% to $10,116 million, primarily due to higher prescription volume and revenue from recent acquisitions [205]. - Carelon Services operating revenue increased by $2,527 million or 63.0% to $6,536 million, attributed to the acquisition of CareBridge and expansion of risk-based capabilities [206]. - Total operating gain for the three months ended March 31, 2025, was $3,170 million, a $154 million or 5.1% increase from $3,016 million in 2024 [202]. - The operating margin decreased to 6.5% in 2025 from 7.1% in 2024, reflecting a decline of 60 basis points [202]. Cash Flow and Liquidity - Operating cash flow for the three months ended March 31, 2025, was $1,017 million, down from $1,978 million in the same period in 2024 [185]. - Net cash provided by operating activities decreased by $961 million to $1,017 million in 2025, compared to $1,978 million in 2024 [221]. - Total sources of cash for the three months ended March 31, 2025, were $2,196 million, down $1,229 million from $3,425 million in 2024 [221]. - Total uses of cash decreased by $740 million to $2,985 million in 2025, compared to $3,725 million in 2024 [221]. - Cash, cash equivalents, and investments in fixed maturity and equity securities totaled $34,712 million as of March 31, 2025, a decrease of $1,004 million since December 31, 2024 [223]. - The company believes cash on hand and available credit will be adequate to fund expected cash disbursements over the next twelve months [235]. Debt and Capital Structure - The consolidated debt-to-capital ratio was 41.3% as of March 31, 2025, down from 43.0% as of December 31, 2024 [228]. - The company has a senior revolving credit facility of up to $4,000, maturing in April 2027, with no amounts outstanding as of March 31, 2025 [231]. - The company has an authorized commercial paper program of up to $4,000, with no commercial paper outstanding as of March 31, 2025 [232]. - Short-term borrowings from Federal Home Loan Banks were $250 as of March 31, 2025, down from $365 as of December 31, 2024 [233]. - The company intends to maintain its senior debt investment grade ratings, currently rated "A" by S&P and "BBB+" by Fitch [229]. - The company is in compliance with all debt covenants under the 5-Year Facility as of March 31, 2025 [231]. Acquisitions and Investments - Elevance Health completed the acquisition of Centers Plan for Healthy Living LLC and Centers for Specialty Care Group IPA, LLC on December 31, 2024, enhancing its Health Benefits segment [171]. - The acquisition of RSV QOZB LTSS, Inc. (CareBridge) on December 10, 2024, aligns with Carelon Services' strategy for home care management [172]. - The company made an equity investment of $2,580 in Augusta Topco Holdings, L.P. (Mosaic Health), acquiring approximately 35% ownership [173]. - Elevance Health completed the acquisition of Paragon Healthcare, Inc. on March 11, 2024, which provides infusion services and aligns with its care management vision [174]. - The sale of life and disability businesses to StanCorp Financial Group, Inc. on April 1, 2024, resulted in a gain on sale of $201 million [175]. Legal and Regulatory Matters - The company is involved in ongoing litigation related to antitrust claims against the BCBSA and Blue plans, with a settlement agreement amounting to $604 million approved in June 2024 [178]. - The company recognized an estimated payment obligation of $666 million under the Provider Settlement Agreement in September 2024 [179]. - The regulated subsidiaries exceeded all applicable mandatory risk-based capital requirements as of December 31, 2024 [234]. - There have been no material changes to long-term liquidity requirements since December 31, 2024 [236]. Tax and Expense Ratios - The benefit expense ratio increased to 86.4% for the three months ended March 31, 2025, compared to 85.6% for the same period in 2024 [190]. - The effective tax rate decreased to 21.9% for the three months ended March 31, 2025, from 23.5% in the same period in 2024 [190]. - Net investment income increased by $125 million or 26.9% to $590 million for the three months ended March 31, 2025 [190]. - CarelonRx Quarterly Adjusted Scripts increased by 6.9 million or 9.0% to 83.9 million for the three months ended March 31, 2025 [187].

Core Insights - Elevance Health reported $48.77 billion in revenue for Q1 2025, a year-over-year increase of 15.4% and a surprise of +5.95% over the Zacks Consensus Estimate of $46.03 billion [1] - The EPS for the same period was $11.97, compared to $10.64 a year ago, with an EPS surprise of +6.78% against the consensus estimate of $11.21 [1] Revenue and Membership Metrics - Total Medical Membership stood at 45.83 million, slightly below the estimated 46.24 million [4] - Medicaid Medical Membership was 8.86 million, close to the estimate of 8.89 million [4] - Medicare Medical Membership was 876 thousand, exceeding the estimate of 866.49 thousand [4] - Commercial Risk-Based Medical Membership was 3.64 million, below the estimate of 3.75 million [4] Revenue Breakdown - Premium revenues reached $40.89 billion, surpassing the average estimate of $38.70 billion, reflecting a year-over-year change of +14.5% [4] - Service fees totaled $2.07 billion, slightly below the estimate of $2.13 billion, showing a -0.4% change year-over-year [4] - Net investment income was $590 million, exceeding the estimate of $461.32 million, with a year-over-year increase of +26.9% [4] - Product revenue was $5.81 billion, above the estimate of $5.11 billion, representing a +29.1% change year-over-year [4] Operating Revenue Performance - Total operating revenue from Carelon Services was $6.54 billion, exceeding the estimate of $5.87 billion, with a year-over-year change of +63% [4] - CarelonRx generated $10.12 billion in operating revenue, surpassing the estimate of $9.40 billion, reflecting a +25.4% change year-over-year [4] - Health Benefits operating revenue was $41.43 billion, above the estimate of $39.82 billion, with a year-over-year increase of +11.2% [4] - Carelon's total operating revenue was $16.65 billion, exceeding the estimate of $15.27 billion, representing a +37.9% change year-over-year [4]

Financial Data and Key Metrics Changes - GAAP diluted earnings per share was $9.61 and adjusted diluted earnings per share was $11.97, reflecting year-over-year growth of more than 10% [18] - Operating revenue in the quarter was $48.8 billion, an increase of over 15%, driven by higher premium yields in the Health Benefits segment and growth in Medicare Advantage and individual ACA membership [19] - The consolidated benefit expense ratio was 86.4%, an increase of 80 basis points year-over-year, primarily due to higher cost trends in the Medicaid business [20] Business Line Data and Key Metrics Changes - Health Benefits operating gain was $2.2 billion, slightly declining due to higher Medicaid costs, partially offset by operating efficiencies [20] - Calon's operating gain grew 34% to $1.1 billion, driven by growth in pharmacy volumes and improved performance of deployed risk-based capabilities [21] - The company ended the quarter with 45.8 million medical members, up 99,000 from year-end, primarily driven by targeted expansion and better-than-expected retention rates in Medicare Advantage [18] Market Data and Key Metrics Changes - Individual ACA membership grew approximately 11% sequentially, but a moderation in membership is anticipated during the second quarter due to lower-than-expected effectuation rates [18] - In Medicaid, progress on rate alignment is ongoing, with April adjustments coming in as expected and discussions for the July cohort underway [12] - The company is expanding its value-based oncology care model to Medicare Advantage, following success in the commercial segment [10] Company Strategy and Development Direction - The company is focused on advancing its purpose to improve the health of humanity through investments in patient advocacy solutions and digital platforms [7][9] - Elevance Health is expanding its integrated offerings, which combine advocacy, behavioral health, pharmacy, and specialty care, to enhance employer engagement [14] - The acquisition of CareBridge strengthens the company's capabilities in home and community-based services, supporting its whole health approach [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term outlook for Medicare Advantage, citing strong retention and disciplined growth strategies [13] - The company is monitoring trends closely, particularly in Medicare costs, which remain elevated but manageable [28] - Management reiterated guidance for adjusted diluted earnings per share to be in the range of $34.15 to $34.85, with expectations for more than 60% of earnings to be realized in the first half of the year [24] Other Important Information - The company was recognized as one of Fortune's 100 best companies to work for and included in the Just 100 by Just Capital, reflecting its commitment to values and impact [17] - The debt to capital ratio was approximately 41%, preserving flexibility for strategic investments [21] Q&A Session Summary Question: Medicare Advantage trends and IRA impact - Management indicated that Medicare costs remain elevated but manageable, with no material changes to prior expectations [27][28] Question: Growth in Carillon services and cross-sales - Carillon services experienced over 60% growth, with strong internal and external expansion noted [35][36] Question: Effectuation rates and membership expectations - Effectuation rates are tracking lower than initial expectations, with projected membership attrition in the mid-single-digit percent range in early Q2 [42] Question: Medicaid MLR margin trends - Medicaid trends remain elevated but decelerated as expected, with stabilization anticipated in the latter half of the year [92] Question: Part D utilization and new normal - Management is comfortable with the mix of Medicare Advantage membership and has not observed substantial variation in Part D utilization [112]

Financial Performance - Operating revenue reached $488 billion, a 154% increase[7, 8, 10] - Health Benefits operating revenue was $41431 billion, up 112%[12, 35] - CarelonRx operating revenue was $167 billion, a 254% increase[16, 35] - Carelon Services operating revenue increased by 630% to $6536 billion[17, 35] - Adjusted operating expense improved by 60 bps[10] - Adjusted diluted earnings per share are targeted to grow at least 12% annually[21, 22, 26] Health Benefits Segment - Health Benefits membership totaled 458 million, a decrease of 05%[12, 15] - Adjusted operating margin for Health Benefits declined by 80 bps to 54%[15] Carelon Segment - Carelon Services operating revenue expanded by over 60%[17] - Adjusted scripts in CarelonRx increased by 90%[16]

Financial Data and Key Metrics Changes - In Q1 2025, GAAP diluted earnings per share was $9.61, and adjusted diluted earnings per share was $11.97, reflecting year-over-year growth of more than 10% [25] - Operating revenue for the quarter was $48.8 billion, an increase of over 15%, driven by higher premium yields in the health benefits segment and growth in Medicare Advantage and individual ACA membership [26] - The consolidated benefit expense ratio was 86.4%, an increase of 80 basis points year over year, primarily due to higher cost trends in the Medicaid business [27] Business Line Data and Key Metrics Changes - Medicaid membership is progressing with rate alignment, and the long-term care model is delivering better outcomes at lower costs [16][17] - Medicare Advantage performance was consistent with expectations, with strong retention and disciplined growth [17] - The health benefits operating gain was $2.2 billion, slightly declining due to higher Medicaid costs, while Calon's operating gain grew 34% to $1.1 billion [29] Market Data and Key Metrics Changes - Individual ACA membership grew approximately 11% sequentially, but a moderation in membership is anticipated in Q2 due to lower effectuation rates [25][56] - The company is expanding into three new states to build lifetime value through coordinated ACA and Medicaid coverage [19] Company Strategy and Development Direction - The company is focused on transforming healthcare experiences to be simpler, more affordable, and more human, with sustained investments in patient advocacy solutions and digital platforms [9][10] - Elevance Health is expanding its value-based oncology care model to Medicare Advantage, following success in the commercial sector [12] - The company aims to deepen collaboration with providers and close gaps in care through risk-based arrangements, which have driven nearly $100 in per member per month savings [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term outlook for Medicare Advantage, emphasizing strong retention and targeted growth [17] - The operating environment remains elevated, but the company is managing costs effectively and expects to see stabilization in Medicaid margins later in the year [117] - Management reiterated guidance for adjusted diluted earnings per share to be in the range of $34.15 to $34.85 [33] Other Important Information - Elevance Health was recognized as one of Fortune's 100 Best Companies to Work For and included in the Just 100 by Just Capital, reflecting its commitment to values and impact [22] - The company repurchased 2.2 million shares of common stock for approximately $880 million, demonstrating confidence in its intrinsic value [33] Q&A Session Summary Question: Concerns regarding Medicare Advantage trends - Management indicated that Medicare costs remain elevated but manageable, with no material changes in expectations [39][41] Question: Growth in Carillon Services - Carillon Services experienced over 60% growth, with strong internal and external expansion [47] Question: Effectuation rates and membership attrition - Membership attrition is projected in the mid-single digit percent range in early Q2, with expectations for stabilization thereafter [57] Question: Medicaid MLR margin trends - Medicaid trends remain elevated but decelerated as expected, with improvements anticipated in the latter half of the year [117] Question: Part D and IRA impact - Changes from the Inflation Reduction Act are expected to shift the seasonality pattern for Part D, resulting in stronger financial performance in earlier quarters [68][70] Question: New member engagement strategy - The company is focused on early engagement with new members to ensure timely care and accurate health assessments [93] Question: Group MA trends - Utilization patterns for Group MA do not indicate any meaningful acceleration in cost trends compared to expectations [133]

Financial Data and Key Metrics Changes - In Q1 2025, GAAP diluted earnings per share was $9.61, and adjusted diluted earnings per share was $11.97, reflecting year-over-year growth of more than 10% [25] - Operating revenue for the quarter was $48.8 billion, an increase of over 15%, driven by higher premium yields in the health benefits segment and growth in Medicare Advantage and individual ACA membership [26] - The consolidated benefit expense ratio was 86.4%, an increase of 80 basis points year over year, primarily due to higher cost trends in the Medicaid business [27] Business Line Data and Key Metrics Changes - Medicaid business is making progress on rate alignment, with April adjustments coming in as expected [16] - Medicare Advantage performance was consistent with expectations, with strong retention and targeted growth [17] - Health benefits operating gain was $2.2 billion, slightly declining due to higher Medicaid costs, while Calon's operating gain grew 34% to $1.1 billion [29] Market Data and Key Metrics Changes - Individual ACA membership grew approximately 11% sequentially, but a moderation in membership is anticipated in Q2 due to lower effectuation rates [25][56] - The company is expanding into three new states to support broader strategy for coordinated ACA and Medicaid coverage [19] Company Strategy and Development Direction - The company is focused on transforming healthcare experiences to be simpler, more affordable, and more human, with sustained investments in patient advocacy solutions and digital platforms [9][10] - Expansion of value-based oncology care model to Medicare Advantage is planned, following success in the commercial sector [12] - Carillon continues to be a strategic growth engine, significantly expanding relationships with external payers [20] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term outlook for Medicare Advantage, emphasizing strong retention and disciplined growth [17] - Elevated Medicare costs are manageable, with consistent tracking of claims data to identify emerging patterns [39][41] - The company remains disciplined in its approach to benefit design and risk management, ensuring alignment with healthcare needs [129] Other Important Information - The company was named to Fortune's 100 Best Companies to Work For and recognized as one of America's most innovative companies [22] - Operating cash flow totaled $1 billion, with expectations for approximately $8 billion for the year remaining unchanged [32] Q&A Session Summary Question: Medicare Advantage trends and IRA impact - Management indicated that Medicare costs remain elevated but manageable, with no material changes in expectations [39][41] Question: Carillon Services growth and cross-sales - Carillon Services experienced over 60% growth, with strong internal and external expansion [47] Question: Effectuation rates and membership attrition - Membership attrition is projected in the mid-single digit percent range in early Q2, with stabilization expected thereafter [56] Question: Medicaid MLR margin trends - Medicaid trends remain elevated but decelerated as expected, with improvements anticipated in the latter half of the year [117] Question: Part D changes and utilization behavior - Management is comfortable with the mix of Medicare Advantage membership and has not observed substantial variations in utilization [140]

Core Viewpoint - Elevance Health reported quarterly earnings of $11.97 per share, exceeding the Zacks Consensus Estimate of $11.21 per share, and showing an increase from $10.64 per share a year ago, indicating a 6.78% earnings surprise [1][2] Financial Performance - The company achieved revenues of $48.77 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 5.95%, compared to $42.27 billion in the same quarter last year [2] - Over the last four quarters, Elevance Health has exceeded consensus EPS estimates three times and topped revenue estimates four times [2] Stock Performance - Elevance Health shares have increased approximately 10.2% since the beginning of the year, contrasting with a decline of 12.3% in the S&P 500 [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $9.81 on revenues of $47.67 billion, and for the current fiscal year, it is $34.19 on revenues of $192.23 billion [7] - The trend of estimate revisions for Elevance Health is mixed, which may change following the recent earnings report [6] Industry Context - The Medical Services industry, to which Elevance Health belongs, is currently ranked in the bottom 42% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Financial Performance - 1Q 2025 operating revenue was $48.8 billion, an increase of 15.4% from 1Q 2024[5] - 1Q 2025 adjusted operating gain was $3.3 billion, up 4.1% from 1Q 2024[5] - 1Q 2025 diluted EPS was $9.61; adjusted diluted EPS was $11.97[5] - Total revenues for the three months ended March 31, 2025, increased by 14.8% to $48,891 million compared to $42,577 million in 2024[37] - Premiums rose by 14.5% to $40,887 million, while product revenue increased by 29.1% to $5,809 million[37] - Net income attributable to shareholders decreased by 2.8% to $2,183 million, with earnings per diluted share slightly up by 0.2% to $9.61[37] - Shareholders' net income for Q1 2025 was $2,183 million, a decrease of 2.8% from $2,246 million in Q1 2024[51] - Adjusted shareholders' net income increased by 7.2% to $2,719 million in Q1 2025, compared to $2,537 million in Q1 2024[51] - Operating revenue rose by 15.4% to $48,765 million in Q1 2025, up from $42,273 million in Q1 2024[54] - Reportable segments operating gain increased by 5.1% to $3,170 million in Q1 2025, compared to $3,016 million in Q1 2024[54] - Adjusted shareholders' earnings per diluted share for Q1 2025 was $11.97, reflecting a 10.5% increase from $10.83 in Q1 2024[51] - Full year 2025 outlook for shareholders' earnings per diluted share is projected to be between $28.30 and $29.00[54] Revenue Segments - Health Benefits segment operating revenue was $41.4 billion, an increase of 11% compared to the prior year quarter[15] - Operating revenue from the Health Benefits segment grew by 11.2% to $41,431 million, while Carelon Services saw a significant increase of 63.0% to $6,536 million[44] - Carelon operating revenue was $16.7 billion, an increase of 38% compared to the prior year quarter[21] Expenses and Ratios - The benefit expense ratio was 86.4%, an increase of 80 basis points year over year[9] - Total expenses increased by 16.3% to $46,094 million, with benefit expenses rising by 15.6% to $35,312 million[37] - The operating margin for total operating revenue decreased to 6.5%, down from 7.1% in the previous year[44] - Adjusted operating expense for Q1 2025 was $5,215 million, an increase of 9.2% from $4,776 million in Q1 2024[54] - The operating expense ratio improved to 10.9% in Q1 2025, down from 11.6% in Q1 2024, representing a 70 basis points improvement[54] Cash Flow and Assets - Operating cash flow was $1.0 billion, a decrease of approximately $1.0 billion year over year[11] - The company reported a net cash provided by operating activities of $1,017 million, a decrease from $1,978 million in the prior year[41] - Cash and cash equivalents at the end of the period were $7,500 million, down from $8,288 million at the beginning of the period[41] - The total assets increased to $119,717 million as of March 31, 2025, compared to $116,889 million at the end of 2024[39] Claims and Liabilities - Medical claims payable at the end of the period increased to $16,529 million from $16,183 million[47] Other Financial Metrics - Net losses on financial instruments increased to $464 million in Q1 2025 from $161 million in Q1 2024[51] - Interest expense rose to $344 million in Q1 2025, compared to $265 million in Q1 2024[51] - The company returned $1.3 billion of capital to shareholders in 1Q 2025[5] - The second quarter 2025 dividend was declared at $1.71 per share, payable on June 25, 2025[24]

Core Viewpoint - Elevance Health, Inc. is expected to report first-quarter 2025 results on April 22, with earnings estimated at $11.09 per share, reflecting a 4.2% increase year-over-year, and revenues projected at $46 billion, indicating an 8.7% growth from the previous year [1] Earnings Estimates - The earnings estimate for Q1 has seen three upward revisions in the last 30 days, with no downward movements [1] - The current earnings estimate of $11.09 per share has increased from $10.65 two months ago, showing a trend of positive revisions [2] Earnings Surprise History - Elevance Health has beaten earnings estimates in three of the last four quarters, with an average negative surprise of 2.60% [2] Earnings Prediction Model - The model indicates a likely earnings beat for Elevance Health, supported by a positive Earnings ESP of +4.75% and a Zacks Rank of 3 [3][4] Revenue Drivers - The anticipated growth in results is attributed to higher premiums driven by strong Medicare Advantage membership growth and strength in Carelon businesses [5] - The Zacks Consensus Estimate for premiums is $38.7 billion, reflecting an 8.3% increase year-over-year, while Medicare Advantage membership is expected to grow by 9.8% [6] Segment Performance - The Health Benefits segment is projected to see operating income of $2.2 billion, a decline of 2.5% year-over-year, primarily due to reduced Medicaid membership [8] - The Carelon segment is expected to report operating income of $956 million, indicating a 17.6% year-over-year growth [9] Expense Outlook - Elevated expenses are anticipated due to significant investments in digital capabilities, with total expenses expected to rise by 7.1% year-over-year [10]

Core Viewpoint - Analysts forecast Elevance Health (ELV) to report quarterly earnings of $11.09 per share, reflecting a year-over-year increase of 4.2%, with revenues expected to reach $45.93 billion, an increase of 8.7% compared to the previous year [1]. Earnings Estimates - The consensus EPS estimate has been revised downward by 1.5% over the past 30 days, indicating a collective reassessment by analysts [2]. - Changes in earnings estimates are crucial for predicting investor reactions, as empirical research shows a strong correlation between earnings estimate trends and short-term stock performance [3]. Revenue Projections - Analysts expect 'Revenues- Premiums' to be $38.66 billion, indicating a year-over-year change of +8.3% [4]. - 'Revenues- Service fees' are projected to reach $2.13 billion, reflecting a change of +2.6% from the previous year [5]. - 'Revenues- Net investment income' is expected to be $461.32 million, showing a year-over-year change of -0.8% [5]. - 'Revenues- Product revenue' is anticipated to reach $5.11 billion, indicating a change of +13.6% from the prior year [5]. Membership Metrics - Total Medical Membership is forecasted to be 46.24 million, consistent with the same quarter last year [6]. - 'Medical Membership - Medicare - Medicare Advantage' is expected to reach 2.21 million, up from 2.02 million in the same quarter last year [6]. - 'Medical Membership - Medicaid' is estimated at 8.89 million, down from 9.33 million in the previous year [7]. - 'Medical Membership - Federal Employees Health Benefits' is projected to remain at 1.66 million, unchanged from the year-ago figure [7]. - The consensus for 'Medical Membership - Total Medicare' stands at 3.08 million, up from 2.91 million last year [8]. - 'Medical Membership - Commercial Risk-Based - Individual' is expected to reach 1.42 million, compared to 1.25 million in the same quarter last year [8]. Expense Ratios - The 'Benefit Expense Ratio' is projected to be 87.3%, up from 85.6% in the same quarter last year [9]. - 'Medical Membership - Commercial Fee-Based' is expected to be 27.44 million, slightly down from 27.45 million in the previous year [9]. Stock Performance - Elevance Health shares have increased by +0.4% over the past month, contrasting with the Zacks S&P 500 composite's decline of -4.2% [9].