Elevance Health Q4 Earnings Call Highlights

Financial Performance - Adjusted diluted EPS for Q4 was reported at $3.33, with a full-year EPS of $30.29, benefiting from greater tax favorability and non-recurring items contributing $3.75 per share [1] - Q4 operating revenue reached $49.3 billion, reflecting a 10% year-over-year increase, driven by premium rate adjustments and acquisitions [4][7] - Operating cash flow for 2025 was $4.3 billion, with a target of at least $5.5 billion for 2026, and the company returned $4.1 billion to shareholders in 2025 [4][9] Guidance and Future Outlook - Elevance Health set a 2026 adjusted diluted EPS guidance of at least $25.50, with expectations to return to at least 12% adjusted EPS growth in 2027 [2][6][23] - The company anticipates 2026 to be a trough year for Medicaid, expecting an operating margin of approximately -1.75% and a decline of about 750,000 Medicaid members [5][10][12] - Medicare Advantage membership is expected to decline in the high teens percentage range, while targeting at least a 2% margin [5][13] Membership and Market Positioning - The company ended 2025 with 45.2 million members, a decrease of about 500,000 year-over-year, primarily due to lower Medicaid membership [8] - For the individual ACA business, Elevance expects at least 900,000 members by year-end 2026, with a 10% increase in membership coming out of open enrollment [14] - In commercial segments, employer group risk membership is projected to decline in the high single-digit percentage range due to deliberate pricing decisions [15] Operational Strategies - Executives emphasized "execution and repositioning" as key themes for 2026, focusing on portfolio actions across Medicaid, Medicare Advantage, and the individual ACA market [3] - Carelon is expected to see strong demand, particularly in high-cost areas, but near-term growth may be moderated by lower health plan membership [16] - The company updated its long-term enterprise margin target to 5%–6%, with mid-single-digit margins targeted for health benefits and Carelon segments [19][20]