Elevance Health Q4 Earnings Beat Estimates on Increasing Premiums

Core Insights - Elevance Health, Inc. (ELV) reported Q4 2025 adjusted EPS of $3.33, exceeding the Zacks Consensus Estimate by 7.3% and reflecting a 3.1% year-over-year increase [2] - Operating revenues increased by 9.6% year over year to $49.3 billion, although this figure fell short of consensus estimates by 0.5% [2] Financial Performance - The quarterly earnings were bolstered by strong premium growth, with premiums totaling $40.7 billion, a 12.3% year-over-year increase [5][10] - The Carelon division experienced a significant revenue increase of 27% year over year, reaching $18.7 billion, driven by acquisitions and scaling risk-based services [10][11] - Health Benefits segment revenues rose 11% year over year to $41.8 billion, surpassing estimates [8] Membership and Enrollment - Medical membership stood at approximately 45.2 million as of December 31, 2025, a decline of 1.1% year over year, primarily due to a drop in Medicaid membership [4] - Medicare Advantage membership growth partially offset the decline in overall medical membership [4] Expenses and Margins - Total expenses increased by 10.5% year over year to $49.5 billion, exceeding estimates [6] - The adjusted operating margin deteriorated by 110 basis points year over year to 0.8% [6] Cash Flow and Capital Deployment - Elevance Health reported cash and cash equivalents of $9.5 billion, a 14.5% increase from the end of 2024 [13] - The company generated net cash flow from operations of $4.3 billion in 2025, a decline of 26.1% from the previous year [14] - Share buybacks amounted to $471 million in Q4, with a remaining capacity of approximately $6.7 billion [15] Full-Year Results and Outlook - For the full year 2025, revenues reached $197.6 billion, up from $175.2 billion in 2024, driven by increased premium yields [16] - The company anticipates adjusted EPS for 2026 to be at least $25.50, indicating a 15.8% decline from 2025 [17] - Operating revenues are expected to see a low-single digit decline in 2026, with medical enrollment projected between 43.2 million and 43.9 million [18]