Elevance Health Reports Fourth Quarter and Full Year 2025 Results; Sets Full Year 2026 Outlook

Key Terms

operating margin financial

Operating margin shows how much profit a company makes from its core business activities after paying for costs like wages and materials. It’s useful because it tells you how efficiently a company is running—higher margins mean it keeps more money from each dollar of sales, which can indicate better management or stronger products.

adjusted operating margin financial

Adjusted operating margin shows how much profit a company makes from its core business activities, after removing unusual or one-time costs and income. It helps investors see the company's true profitability by providing a clearer picture, similar to removing unexpected expenses to understand the regular performance. This metric is useful for comparing companies or tracking performance over time, as it highlights consistent earning power.

benefit expense ratio financial

Benefit expense ratio measures the share of an insurer’s income (typically premiums or program revenue) that is paid out as benefits, claims or direct customer payouts. It matters to investors because a high ratio means more of the company’s revenue is going to cover obligations rather than profit or growth—like watching how much of your paycheck goes to rent versus savings, it signals cost pressure and sustainability.

days in claims payable financial

Days in claims payable measures the average number of days a company takes to settle insurance or patient claims after they are recorded as owed. Think of it like how long a person leaves a bill in their inbox before paying: longer times can free up cash short-term but may signal backlogs, understaffing, or growing unpaid obligations; shorter times suggest smoother operations and more predictable cash flow—both matter to investors assessing liquidity and risk.

operating cash flow financial

Operating cash flow is the amount of money a company earns from its main business activities, like selling products or services. It shows how well the company can generate cash to pay bills, invest in growth, or return money to shareholders. This figure helps investors understand if the company’s core operations are healthy and sustainable.

medicare advantage regulatory

Medicare Advantage is a type of health insurance plan offered by private companies that covers services traditionally provided by government-run Medicare. Think of it as a bundled package that combines hospital, doctor, and other medical care into one plan, often with added benefits. For investors, it matters because the popularity and profitability of these plans can influence healthcare companies and the broader health insurance industry.

medicaid regulatory

Medicaid is a government-funded health insurance program that provides medical coverage to low-income individuals, families, elderly people and people with disabilities, administered jointly by the federal government and state governments in the United States. For investors, Medicaid matters because changes in eligibility, funding, or payment rules can alter patient volume and the prices hospitals, nursing homes, insurers and medical suppliers receive—similar to how a large customer or contract can shift a company’s revenue outlook.

risk-based solutions technical

Risk-based solutions are products, services or strategies designed around an assessment of the specific risks a business faces—such as fraud, regulatory noncompliance, credit losses or cyberattacks—and allocate resources where the potential harm is greatest. Like a tailor-made safety plan or selective insurance, they help companies reduce unexpected costs and meet rules more efficiently, making operations more predictable and protecting profit margins, which matters to investors evaluating sustainability and downside exposure.

• 4Q 2025 operating revenue of $49.3 billion; FY 2025 of $197.6 billion
• 4Q 2025 diluted EPS¹ of $2.47; adjusted diluted EPS² of $3.33
• FY 2025 diluted EPS¹ of $25.21; adjusted diluted EPS² of $30.29
• Projected FY 2026 GAAP diluted EPS¹ to be at least $22.30
• Projected FY 2026 adjusted diluted EPS² to be at least $25.50
• Returned $4.1 billion of capital to shareholders in 2025
• Reaffirming long-term earnings algorithm; recalibrating segment margin targets

INDIANAPOLIS--(BUSINESS WIRE)-- Elevance Health, Inc. (NYSE: ELV) reported fourth quarter and full year 2025 results.

"Elevance Health delivered fourth quarter results in line with our outlook, reflecting disciplined execution in a dynamic environment. As we enter 2026, our focus is on advancing affordability and making healthcare easier to access and navigate for the members we serve. Through pricing discipline and targeted investments, we are strengthening the earnings power of our diversified platform and remain confident in our ability to return to at least 12% adjusted EPS growth in 2027."

Gail K. Boudreaux
President and Chief Executive Officer

1.		Earnings per diluted share ("EPS").
2.		Refer to GAAP reconciliation tables herein for reconciliation of GAAP to adjusted measures.

	Elevance Health
	Consolidated Enterprise Highlights
	(Unaudited)
	(In billions)	Three Months Ended				Twelve Months Ended
		December 31, 2025		December 31, 2024		December 31, 2025		December 31, 2024
	Operating Revenue1	$49.3		$45.0		$197.6		$175.2
	Operating Gain1,2	$0.3		$0.7		$7.2		$7.9
	Adjusted Operating Gain1,3	$0.4		$0.8		$7.5		$9.3
	Operating Margin1	0.6%		1.5%		3.6%		4.5%
	Adjusted Operating Margin1,3	0.8%		1.9%		3.8%		5.3%

1.		See “Basis of Presentation.”
2.		Operating Gain for the three and twelve months ended December 31, 2025, and December 31, 2024, includes items that are excluded from adjusted shareholders' net income. See "GAAP Reconciliation."
3.		Adjusted Operating Gain for the three and twelve months ended December 31, 2025, and December 31, 2024, excludes items that are excluded from adjusted shareholders' net income. See "GAAP Reconciliation."

Operating revenue was $49.3 billion in the fourth quarter of 2025, an increase of $4.3 billion, or 10 percent compared to the prior year quarter. Operating revenue was $197.6 billion in 2025, an increase of $22.4 billion, or 13 percent. The increase in revenue for the quarter and year was driven by higher premium yields in our Health Benefits segment, contributions from acquisitions, and growth in Medicare Advantage membership, partially offset by membership attrition in our Medicaid business.

The benefit expense ratio was 93.5 percent in the fourth quarter, an increase of 110 basis points compared to the prior year period, reflecting higher medical cost trend primarily in our Affordable Care Act health plans and heightened Medicare Part D seasonality driven by Inflation Reduction Act changes. For the year, our benefit expense ratio was 90.0 percent, an increase of 150 basis points year over year, driven by elevated medical cost trends.

Days in Claims Payable was 41.3 days as of December 31, 2025, a decrease of 0.1 days from September 30, 2025, and a decrease of 1.9 days compared to December 31, 2024.

The operating expense ratio was 11.0 percent in the fourth quarter and 10.6 percent for the full year. On an adjusted basis, the corresponding operating expense ratios were 10.8 percent and 10.5 percent. We maintained expense discipline while investing to support and strengthen our workforce, scale Carelon's capabilities, and accelerate technology adoption across the enterprise.

Cash Flow & Balance Sheet

Operating cash flow was $4.3 billion in 2025, approximately 0.8 times GAAP net income. As of December 31, 2025, cash and investments at the parent company totaled approximately $2.6 billion.

During the fourth quarter of 2025, the Company repurchased 1.4 million shares of its common stock for $471 million, at a weighted average price of $335.64, and paid a quarterly dividend of $1.71 per share, representing a distribution of cash totaling $377 million. As of December 31, 2025, the Company had approximately $6.7 billion of Board approved share repurchase authorization remaining.

Health Benefits is comprised of Individual, Employer Group risk-based, Employer Group fee-based, BlueCard^®, Medicare, Medicaid, and Federal Employee Program businesses.

	Health Benefits
	Reportable Segment Highlights
	(Unaudited)
	(In billions)	Three Months Ended				Twelve Months Ended
		December 31, 2025		December 31, 2024		December 31, 2025		December 31, 2024
	Operating Revenue1	$41.8		$37.6		$167.1		$150.3
	Operating Gain1,2	($0.2)		$0.2		$4.2		$6.2
	Adjusted Operating Gain1,3	($0.2)		$0.2		$4.2		$6.3
	Operating Margin1	(0.5%)		0.6%		2.5%		4.2%
	Adjusted Operating Margin1	(0.5%)		0.6%		2.5%		4.2%

1.		See “Basis of Presentation.”
2.		Operating Gain for the three and twelve months ended December 31, 2024 includes items that are excluded from adjusted shareholders' net income. See "GAAP Reconciliation."
3.		Adjusted Operating Gain for three and twelve months ended December 31, 2024 excludes $16 and $66 million, respectively, of 2024 business dispositions and related items adjusted out of adjusted shareholders' net income for the Health Benefits segment.

Health Benefits segment operating revenue was $41.8 billion in the fourth quarter of 2025, an increase of $4.3 billion, or 11 percent compared to the fourth quarter of 2024. Operating revenue was $167.1 billion in 2025, an increase of $16.8 billion, or 11 percent. The increases for the quarter and year were driven primarily by higher premium yields, contributions from acquisitions, and growth in our Medicare Advantage membership, partially offset by membership attrition in our Medicaid business.

The Company reported an adjusted operating loss of $0.2 billion in the fourth quarter of 2025 and an adjusted operating gain of $4.2 billion for the full year. Adjusted operating results in both periods were impacted primarily by higher medical cost trend.

Medical membership totaled approximately 45.2 million as of December 31, 2025, a decrease of 0.5 million, or 1 percent, year over year, driven by attrition in our Medicaid business.

Carelon is comprised of CarelonRx and Carelon Services.

	Carelon
	Reportable Segment Highlights
	(Unaudited)
	(In billions)	Three Months Ended				Twelve Months Ended
		December 31, 2025		December 31, 2024		December 31, 2025		December 31, 2024
	Operating Revenue1,2	$18.7		$14.7		$71.7		$53.9
	Operating Gain1,3	$0.6		$0.6		$3.4		$2.9
	Adjusted Operating Gain1,4,5	$0.6		$0.6		$3.4		$3.1
	Operating Margin1	3.1%		3.9%		4.7%		5.4%
	Adjusted Operating Margin1	3.3%		4.4%		4.8%		5.8%

1.		See “Basis of Presentation.”
2.		Operating revenue for the three and twelve months ended December 31, 2024 includes $0.2 and $0.8 billion, respectively, of revenue related to 2024 business dispositions and related items that have been excluded from adjusted operating gain.
3.		Operating Gain for the three and twelve months ended December 31, 2025, and December 31, 2024, includes items that are excluded from adjusted shareholders' net income. See "GAAP Reconciliation."
4.		Adjusted Operating Gain for three and twelve months ended December 31, 2025 excludes $38 million of 2025 business dispositions and related items adjusted out of adjusted shareholders' net income for the Carelon segment.
5.		Adjusted Operating Gain for the three and twelve months ended December 31, 2024 excludes $74 and $215 million, respectively, of 2024 business dispositions and related items adjusted out of adjusted shareholders' net income for the Carelon segment.

Operating revenue for Carelon was $18.7 billion in the fourth quarter of 2025, an increase of $3.9 billion, or 27 percent compared to the prior year period, driven by growth in CarelonRx product revenue, the expansion of Carelon Services risk-based solutions, and the acquisition of CareBridge. Operating revenue was $71.7 billion in 2025, an increase of $17.8 billion, or 33 percent.

Adjusted operating gain for Carelon totaled $0.6 billion in the fourth quarter, approximately flat year over year. On a full year basis, adjusted operating gain was $3.4 billion in 2025, an increase of $0.3 billion, or 10 percent, driven by improved CarelonRx performance and growth in Carelon Services risk-based solutions.

Quarterly Dividend

On January 27, 2026, the Audit Committee of the Company's Board of Directors declared a first quarter 2026 dividend to shareholders of $1.72 per share. The first quarter dividend is payable on March 25, 2026 to shareholders of record at the close of business on March 10, 2026.

About Elevance Health

Elevance Health is a lifetime, trusted health partner whose purpose is to improve the health of humanity. The company supports consumers, families, and communities across the entire healthcare journey – connecting them to the care, support, and resources they need to lead better lives. Elevance Health’s companies serve approximately 104 million consumers through a diverse portfolio of industry-leading medical, pharmacy, behavioral, clinical, home health, and complex care solutions. For more information, please visit www.elevancehealth.com or follow us @ElevanceHealth on X and Elevance Health on LinkedIn.

Conference Call and Webcast

Management will host a conference call and webcast today at 8:30 a.m. Eastern Standard Time (“EST”) to discuss the company’s fourth quarter and full year 2025 results and 2026 outlook. The conference call should be accessed at least 15 minutes prior to the start of the call with the following numbers:

888-947-9963 (Domestic)					888-566-0046 (Domestic Replay)
312-470-0178 (International)					203-369-3677 (International Replay)

The access code for today's conference call is 3972058. There is no access code for the replay. The replay will be available from 11:30 a.m. EST today, until the end of the day on February 27, 2026. The call will also be available through a live webcast at www.elevancehealth.com under the “Investors” link. A webcast replay will be available following the call.

Basis of Presentation

1. Operating revenue and operating gain/loss are the key measures used by management to evaluate performance in each of its reporting segments, allocate resources, set incentive compensation targets and to forecast future operating performance. Operating gain/loss is calculated as total operating revenue less benefit expense, cost of products sold and operating expense. It does not include net investment income, net gains/losses on financial instruments, interest expense, amortization of other intangible assets, gains/losses on extinguishment of debt or income taxes, as these items are managed in a corporate shared service environment and are not the responsibility of operating segment management. Refer to the GAAP reconciliation tables.
2. Operating margin is defined as operating gain divided by operating revenue.

Elevance Health
Earnings Release Financial Schedules and Supplementary Information
Quarter & Year Ended December 31, 2025

• Membership and Other Metrics
• Quarterly & Full Year Consolidated Statements of Income
• Condensed Consolidated Balance Sheet
• Condensed Consolidated Statement of Cash Flows
• Supplemental Financial Information - Reportable Segments
• Supplemental Financial Information - Reconciliation of Medical Claims Payable
• Reconciliation of Non-GAAP Financial Measures
• Financial Guidance Summary
• Membership Guidance Summary

Elevance Health
Membership and Other Metrics
(Unaudited)
							Change from
Medical Membership (in thousands)	December 31, 2025		December 31, 2024		September 30, 2025		December 31, 2024		September 30, 2025
Individual	1,307		1,287		1,354		1.6%		(3.5%)
Employer Group Risk-Based	3,617		3,713		3,616		(2.6%)		—%
Commercial Risk-Based	4,924		5,000		4,970		(1.5%)		(0.9%)
BlueCard®	6,509		6,630		6,394		(1.8%)		1.8%
Employer Group Fee-Based	20,583		20,569		20,608		0.1%		(0.1%)
Commercial Fee-Based	27,092		27,199		27,002		(0.4%)		0.3%
Medicare Advantage	2,230		2,066		2,245		7.9%		(0.7%)
Medicare Supplement	882		891		877		(1.0%)		0.6%
Total Medicare	3,112		2,957		3,122		5.2%		(0.3%)
Medicaid	8,500		8,917		8,645		(4.7%)		(1.7%)
Federal Employee Program	1,604		1,661		1,630		(3.4%)		(1.6%)
Total Medical Membership	45,232		45,734		45,369		(1.1%)		(0.3%)
Other Metrics (in millions)
CarelonRx Quarterly Adjusted Scripts	88.5		82.9		85.0		6.8%		4.1%
Carelon Services Consumers Served	91.8		101.1		97.6		(9.2%)		(5.9%)

Elevance Health
Consolidated Statements of Income
(Unaudited)
(In millions, except per share data)	Three Months Ended December 31									Twelve Months Ended December 31
		2025			2024		Change				2025			2024		Change
Revenues
Premiums	$	40,690		$	36,245		12.3%			$	164,639		$	144,166		14.2%
Product revenue		6,460			6,714		(3.8%)				24,470			22,630		8.1%
Service fees		2,161			2,030		6.5%				8,475			8,408		0.8%
Total operating revenue		49,311			44,989		9.6%				197,584			175,204		12.8%
Net investment income		493			527		(6.5%)				2,194			2,051		7.0%
Net losses on financial instruments		(57)			(74)		NM				(653)			(445)		NM
Gain on sale of business		—			—		NM				—			201		NM
Total revenues		49,747			45,442		9.5%				199,125			177,011		12.5%
Expenses
Benefit expense		38,065			33,500		13.6%				148,223			127,567		16.2%
Cost of products sold		5,522			6,012		(8.2%)				21,178			19,750		7.2%
Operating expense		5,415			4,804		12.7%				20,984			20,025		4.8%
Interest expense		366			340		7.6%				1,402			1,185		18.3%
Amortization of other intangible assets		164			180		(8.9%)				628			580		8.3%
Total expenses		49,532			44,836		10.5%				192,415			169,107		13.8%
Income before income tax expense		215			606		(64.5%)				6,710			7,904		(15.1%)
Income tax expense (benefit)		(331)			193		NM				1,049			1,933		(45.7%)
Net income		546			413		32.2%				5,661			5,971		(5.2%)
Net loss attributable to noncontrolling interests		1			5		NM				1			9		NM
Shareholders' net income	$	547		$	418		30.9%			$	5,662		$	5,980		(5.3%)
Shareholders' earnings per diluted share	$	2.47		$	1.81		36.5%			$	25.21		$	25.68		(1.8%)
Diluted shares		221.8			231.1		(4.0%)				224.6			232.9		(3.6%)
Benefit expense as a percentage of premiums		93.5%			92.4%		110 bp				90.0%			88.5%		150 bp
Operating expense as a percentage of total operating revenue		11.0%			10.7%		30 bp				10.6%			11.4%		(80) bp
Income before income tax expense as a percentage of total revenue		0.4%			1.3%		(90) bp				3.4%			4.5%		(110) bp
"NM" = calculation not meaningful

Elevance Health
Condensed Consolidated Balance Sheet
(In millions)	December 31, 2025		December 31, 2024
Assets	(Unaudited)
Current assets:
Cash and cash equivalents	$9,491		$8,288
Fixed maturity and equity securities	26,624		26,393
Premium and other receivables	21,542		19,071
Other current assets	5,344		4,700
Assets held for sale	—		490
Total current assets	63,001		58,942
Long-term investments	11,960		10,784
Property and equipment, net	4,679		4,652
Goodwill and other intangible assets	39,544		40,371
Other noncurrent assets	2,310		2,140
Total assets	$121,494		$116,889
Liabilities and equity
Liabilities
Current liabilities:
Medical claims payable	$17,084		$15,746
Short-term borrowings	150		365
Current portion of long-term debt	1,099		1,649
Other current liabilities	22,702		22,668
Liabilities held for sale	—		153
Total current liabilities	41,035		40,581
Long-term debt, less current portion	30,797		29,218
Other noncurrent liabilities	5,636		5,664
Total liabilities	77,468		75,463
Total shareholders’ equity	43,882		41,315
Noncontrolling interests	144		111
Total equity	44,026		41,426
Total liabilities and equity	$121,494		$116,889

Elevance Health
Condensed Consolidated Statement of Cash Flows
(Unaudited)
(In millions)	Twelve Months Ended December 31
		2025				2024
Operating activities
Net income	$	5,661			$	5,971
Depreciation and amortization		1,546				1,393
Share-based compensation		276				191
Changes in operating assets and liabilities		(3,680	)			(1,719	)
Other non-cash items		487				(28	)
Net cash provided by operating activities		4,290				5,808
Investing activities
Proceeds from sale of investments, net of maturities		69				586
Net purchases of subsidiaries, net of cash acquired/sold		88				(4,446	)
Purchases of property and equipment		(1,116	)			(1,256	)
Other, net		(385	)			(51	)
Net cash used in investing activities		(1,344	)			(5,167	)
Financing activities
Net change in short-term and long-term borrowings		629				6,200
Repurchase and retirement of common stock		(2,605	)			(2,900	)
Cash dividends		(1,529	)			(1,508	)
Other, net		1,767				(599	)
Net cash provided by (used in) financing activities		(1,738	)			1,193
Effect of foreign exchange rates on cash and cash equivalents		(5	)			(6	)
Change in cash and cash equivalents		1,203				1,828
Cash and cash equivalents at beginning of period		8,288				6,526
Cash and equivalents included in assets held for sale at end of period		—				(66	)
Cash and cash equivalents at end of period	$	9,491			$	8,288

REPORTABLE SEGMENTS

Elevance Health has four reportable segments: Health Benefits (comprised of Individual, Employer Group risk-based, Employer Group fee-based, BlueCard^®, Medicare, Medicaid, and Federal Employee Program businesses); CarelonRx; Carelon Services; and Corporate & Other (comprised of businesses that do not individually meet the quantitative thresholds for an operating division as well as corporate expenses not allocated to our other reportable segments).

	Elevance Health
	Reportable Segment Details
	(Unaudited)
	(In millions)	Three Months Ended December 31						Twelve Months Ended December 31
		2025		2024		Change		2025		2024		Change
	Operating Revenue
	Health Benefits	$41,835		$37,580		11.3%		$167,094		$150,275		11.2%
	CarelonRx	11,644		9,977		16.7%		43,400		35,961		20.7%
	Carelon Services	7,015		4,769		47.1%		28,316		17,961		57.7%
	Corporate & Other	(83)		(14)		NM6		463		309		49.8%
	Eliminations	(11,100)		(7,323)		NM6		(41,689)		(29,302)		NM6
	Total Operating Revenue1	$49,311		$44,989		9.6%		$197,584		$175,204		12.8 %
	Operating Gain (Loss)
	Health Benefits2	($220)		$207		NM6		$4,158		$6,243		(33.4%)
	CarelonRx3	724		533		35.8%		2,418		2,172		11.3%
	Carelon Services2,3	(150)		35		NM6		960		717		33.9%
	Corporate & Other2,3	(45)		(102)		NM6		(337)		(1,270)		NM6
	Total Operating Gain1,4	$309		$673		(54.1%)		$7,199		$7,862		(8.4%)
	Operating Margin
	Health Benefits	(0.5%)		0.6%		(110) bp		2.5%		4.2%		(170) bp
	CarelonRx	6.2%		5.3%		90 bp		5.6%		6.0%		(40) bp
	Carelon Services	(2.1%)		0.7%		(280) bp		3.4%		4.0%		(60) bp
	Total Operating Margin1	0.6%		1.5%		(90) bp		3.6%		4.5%		(90) bp
	Health Benefits Revenue Details
	(In millions)	Three Months Ended December 31						Twelve Months Ended December 31
		2025		2024		Change		2025		2024		Change
	Health Benefits Operating Revenue
	Commercial	$12,747		$11,851		7.6%		$50,401		$46,816		7.7%
	Individual5	2,248		2,117		6.2%		9,295		8,295		12.1%
	Medicare	10,762		9,054		18.9%		44,752		36,795		21.6%
	Medicaid	14,500		12,755		13.7%		56,620		51,937		9.0%
	Federal Employee Program	3,826		3,920		(2.4%)		15,321		14,727		4.0%
	Total Health Benefits Operating Revenue1	$41,835		$37,580		11.3%		$167,094		$150,275		11.2%

1.		See “Basis of Presentation.”
2.		Operating Gain for the three and twelve months ended December 31, 2024 included $90 and $281 million, respectively, of 2024 business dispositions and related items; including $74 and $215 million, respectively, for the Carelon Services segment; and $16 and $66 million, respectively, for the Health Benefits segment. Operating Gain for the three and twelve months ended December 31, 2024 included $66 and $224 million, respectively, of transaction and integration related costs, $12 and $692 million, respectively, of litigation and settlement expenses, and $0 and $268 million, respectively, of business optimization charges, all of which reside in the Corporate & Other reportable segment.
3.		Operating Gain for the three and twelve months ended December 31, 2025 included $41 million of 2025 business dispositions and related items; including $45 million for the CarelonRx segment; ($7) million for the Carelon Services segment; and $3 million for the Corporate & Other segment. Operating Gain for the three and twelve months ended December 31, 2025 included $54 and $236 million, respectively, of transaction and integration related costs, $5 and $24 million, respectively, of litigation and settlement expenses, and ($34) and ($38) million, respectively, of business optimization charges, all of which reside in the Corporate & Other reportable segment.
4.		Operating Gain for the three and twelve months ended December 31, 2025, and December 31, 2024, included items excluded from adjusted shareholders' net income. See "GAAP Reconciliation."
5.		The Individual business, including ACA products, is reported as part of Commercial Operating Revenue.
6.		"NM" = calculation not meaningful.

Elevance Health
Reconciliation of Medical Claims Payable
	Years Ended December 31
		2025				2024				2023
(In millions)	(Unaudited)
Gross medical claims payable, beginning of year	$	15,580			$	15,865			$	15,348
Ceded medical claims payable, beginning of year		(13	)			(7	)			(6	)
Net medical claims payable, beginning of year		15,567				15,858				15,342
Business combinations and purchase adjustments		344				143				—
Net incurred medical claims:
Current year		145,566				125,370				121,798
Prior years redundancies1		(1,290	)			(1,731	)			(1,571	)
Total net incurred medical claims		144,276				123,639				120,227
Net payments attributable to:
Current year medical claims		130,265				110,930				107,146
Prior years medical claims		13,141				13,143				12,565
Total net payments		143,406				124,073				119,711
Net medical claims payable, end of year		16,781				15,567				15,858
Ceded medical claims payable, end of year		48				13				7
Gross medical claims payable, end of year2	$	16,829			$	15,580			$	15,865
Current year medical claims paid as a percentage of current year net incurred medical claims		89.5	%			88.5	%			88.0	%
Prior year redundancies in the current year as a percentage of prior year net medical claims payable less prior year redundancies in the current year		9.0	%			12.3	%			11.4	%
Prior year redundancies in the current year as a percentage of prior year net incurred medical claims		1.0	%			1.4	%			1.4	%
Negative amounts reported for net incurred medical claims related to prior years result from claims being settled for amounts less than originally estimated. Excludes insurance lines other than short duration.

Elevance Health
GAAP Reconciliation
(Unaudited)

This document references non-GAAP measures, including “Adjusted Shareholders’ Net Income,” “Adjusted Shareholders’ Net Income Per Share,” “Adjusted EPS,” “Adjusted Operating Gain,” “Adjusted Operating Expense” and “Adjusted Operating Expense Ratio,” which are non-GAAP measures. These non-GAAP measures are intended to aid investors when comparing Elevance Health’s financial results among periods and are not intended to be alternatives to any measure calculated in accordance with GAAP. Reconciliations of these non-GAAP measures to the most directly comparable measures calculated in accordance with GAAP are available below. In addition to these non-GAAP measures, references are made to the measures “Operating Revenue” and “Operating Gain/Loss,” “Operating Margin” and “Adjusted EPS”. Operating revenue and operating gain/loss are the key measures used by management to evaluate performance in each of its reportable segments, allocate resources, set incentive compensation targets and to forecast future operating performance. Operating gain/loss is calculated as total operating revenue less benefit expense, cost of products sold and operating expense. It does not include net investment income, net gains/losses on financial instruments, interest expense, amortization of other intangible assets and gains/losses on extinguishment of debt or income taxes, as these items are managed in a corporate shared service environment and are not the responsibility of operating segment management. Each of these measures is provided to further aid investors in understanding and analyzing Elevance Health’s operating and financial results. A reconciliation of Operating Revenue to Total Revenue is set forth in the Consolidated Statements of Income herein. A reconciliation of the non-GAAP measures to the most directly comparable measures calculated in accordance with GAAP, together with a reconciliation of reportable segments operating gain to income before income tax expense, is provided below. Prior amounts may be grouped differently to conform to the current presentation. Net adjustment items per share may not sum due to rounding. A reconciliation of Operating Revenue to Total Revenue is set forth in the Consolidated Statements of Income herein.

	Three Months Ended December 31											Twelve Months Ended December 31
(In millions, except per share data)		2025				2024			Change				2025				2024			Change
Shareholders' net income	$	547			$	418			30.9	%		$	5,662			$	5,980			(5.3	%)
Add / (Subtract):
Amortization of other intangible assets		164				180							628				580
Net losses on financial instruments		57				74							653				445
Transaction and integration related costs1		54				66							236				224
Business dispositions and related items2		41				90							41				281
Litigation and settlement expenses1		5				12							24				692
Gain on sale of business		—				—							—				(201	)
Business optimization charges1		(34	)			—							(38	)			268
Tax impact of non-GAAP adjustments		(95	)			(93	)						(402	)			(575	)
Net adjustment items		192				329							1,142				1,714
Adjusted shareholders' net income	$	739			$	747			(1.1	%)		$	6,804			$	7,694			(11.6	%)
Shareholders' earnings per diluted share	$	2.47			$	1.81			36.5	%		$	25.21			$	25.68			(1.8	%)
Add / (Subtract):
Amortization of other intangible assets		0.74				0.78							2.80				2.49
Net losses on financial instruments		0.26				0.32							2.91				1.91
Transaction and integration related costs1		0.24				0.29							1.05				0.96
Business dispositions and related items2		0.18				0.39							0.18				1.21
Litigation and settlement expenses1		0.02				0.05							0.11				2.97
Gain on sale of business		—				—							—				(0.86	)
Business optimization charges1		(0.15	)			—							(0.17	)			1.15
Tax impact of non-GAAP adjustments		(0.43	)			(0.40	)						(1.79	)			(2.47	)
Net adjustment items		0.86				1.42							5.08				7.36
Adjusted shareholders' earnings per diluted share	$	3.33			$	3.23			3.1	%		$	30.29			$	33.04			(8.3	%)
	Three Months Ended December 31											Twelve Months Ended December 31
(In millions)		2025				2024			Change				2025				2024			Change
Income before income tax expense	$	215			$	606			(64.5	%)		$	6,710			$	7,904			(15.1	%)
Net investment income		(493	)			(527	)						(2,194	)			(2,051	)
Gain on sale of business		—				—							—				(201	)
Net losses on financial instruments		57				74							653				445
Interest expense		366				340							1,402				1,185
Amortization of other intangible assets		164				180							628				580
Reportable segments operating gain	$	309			$	673			(54.1	%)		$	7,199			$	7,862			(8.4	%)

1.		Adjustment item resides in the Corporate & Other reportable segment.
2.		Adjustment item resides in the Health Benefits, CarelonRx, Carelon Services, and Corporate & Other reportable segments.

Elevance Health GAAP Reconciliation (Unaudited)
	Three Months Ended December 31											Twelve Months Ended December 31
(In millions)		2025				2024			Change				2025				2024			Change
Reportable segments operating gain	$	309			$	673			(54.1	%)		$	7,199			$	7,862			(8.4	%)
Add / (Subtract):
Transaction and integration related costs1		54				66							236				224
Business dispositions and related items2		41				90							41				281
Litigation and settlement expenses1		5				12							24				692
Business optimization charges1		(34	)			—							(38	)			268
Net adjustment items		66				168							263				1,465
Reportable segments adjusted operating gain	$	375			$	841			(55.4	%)		$	7,462			$	9,327			(20.0	%)
	Three Months Ended December 31											Twelve Months Ended December 31
(In millions)		2025				2024			Change				2025				2024			Change
Operating expense	$	5,415			$	4,804			12.7	%		$	20,984			$	20,025			4.8	%
Add / (Subtract):
Transaction and integration related costs1		(54	)			(66	)						(236	)			(224	)
Business dispositions and related items2		(41	)			(90	)						(41	)			(281	)
Litigation and settlement expenses1		(5	)			(12	)						(24	)			(692	)
Business optimization charges1		34				—							38				(268	)
Net adjustment items		(66	)			(168	)						(263	)			(1,465	)
Adjusted operating expense	$	5,349			$	4,636			15.4	%		$	20,721			$	18,560			11.6	%
Operating revenue	$	49,311			$	44,989			9.6	%		$	197,584			$	175,204			12.8	%
Operating expense ratio		11.0	%			10.7	%		30 bp				10.6	%			11.4	%		(80) bp
Adjusted operating expense ratio		10.8	%			10.3	%		50 bp				10.5	%			10.6	%		(10) bp
	Full Year 2026 Outlook
Shareholders' earnings per diluted share	At least $22.30
Add / (Subtract):
Amortization of other intangibles3	$2.00
Net losses on financial instruments3	$1.15
Transaction and integration related costs1,3	$0.90
Litigation and settlement expenses1,3	$0.10
Tax impact of non-GAAP adjustments3	Approximately ($0.95)
Net adjustment items	$3.20
Adjusted shareholders' earnings per diluted share	At least $25.50

1.		Adjustment item resides in the Corporate & Other reportable segment.
2.		Adjustment item resides in the Health Benefits, CarelonRx, Carelon Services, and Corporate & Other reportable segments.
3.		Adjustment item represents the midpoint of a projected range and serves as the estimated full year adjustment amount.

Elevance Health
Financial Guidance Summary
(Unaudited)
		Full Year 2025 Actual		Full Year 2026 Outlook
Premium Revenue		$164.6 billion		Mid single digit decline
Product Revenue		$24.5 billion		Mid single digit growth
Service Fees		$8.5 billion		Mid single digit growth
Total Operating Revenue		$197.6 billion		Low single digit decline
Benefit Expense Ratio		90.0%		90.2% +/- 50 bps
Adjusted Operating Expense Ratio		10.5%		10.6% +/- 50 bps
Adjusted Operating Gain		$7.5 billion		At least $6.8 billion
Other Pre-Tax Items:
Net Investment income		$2,194 million		$1,875 million
Interest Expense		($1,402) million		($1,530) million
Amortization of Intangible Assets		($628) million		($440) million
Adjusted Effective Tax Rate		17.6%		22.0% - 24.0%
GAAP Diluted EPS		$25.21		At least $22.30
Adjusted Diluted EPS		$30.29		At least $25.50
Diluted Shares		224.6 million		219-220 million
Operating Cash Flow		$4.3 billion		At least $5.5 billion
Segment Level Guidance Metrics
Operating Revenue Growth Rate
Health Benefits		$167.1 billion		Low single digit decline
CarelonRx		$43.4 billion		Low single digit growth
Carelon Services		$28.3 billion		Low single digit growth
GAAP Operating Margin vs. 2025
Health Benefits		2.5%		(50) - (25) bps
CarelonRx		5.6%		(25) - 0 bps
Carelon Services		3.4%		0 - 25 bps

Elevance Health
Membership Guidance Summary
(Unaudited)
		Full Year 2025 Actual		Full Year 2026 Outlook
Year-End Medical Enrollment (in 000s)
Commercial Fee-Based		27,092		27,200 - 27,500
Commercial Risk-Based		4,924		4,150 - 4,250
Medicaid		8,500		7,650 - 7,850
Medicare Advantage		2,230		1,775 - 1,875
Medicare Supplement		882		Approximately 850
Federal Employee Program		1,604		Approximately 1,550
Fee-Based		27,092		27,200 - 27,500
Risk-Based		18,140		15,975 - 16,375
Total		45,232		43,175 - 43,875

Forward-Looking Statements

This document contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect our views about future events and financial performance and are generally not historical facts. Words such as “expect,” “feel,” “believe,” “will,” “may,” “should,” “anticipate,” “intend,” “estimate,” “project,” “forecast,” “plan,” “potential,” “predict” and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to: financial projections and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. You are also urged to carefully review and consider the various risks and other disclosures discussed in our reports filed with the U.S. Securities and Exchange Commission from time to time, which attempt to advise interested parties of the factors that affect our business. Except to the extent required by law, we do not update or revise any forward-looking statements to reflect events or circumstances occurring after the date hereof. These risks and uncertainties include, but are not limited to: trends in healthcare costs and utilization rates; reduced enrollment; our ability to secure and implement sufficient premium rates; the impact of large scale medical emergencies, such as public health epidemics and pandemics, and other catastrophes; the impact of new or changes in existing federal, state and international laws or regulations, including laws and regulations impacting healthcare, insurance, pharmacy services and other diversified products and services, or their enforcement or application; the impact of cyber-attacks or other privacy or data security incidents or our failure to comply with any privacy, data or security laws or regulations, including any investigations, claims or litigation related thereto; failure to effectively maintain and modernize our information systems; failure of our information systems or technology, including artificial intelligence, to operate as intended; failure to effectively maintain the availability and integrity of our data; changes in economic and market conditions, as well as regulations that may negatively affect our liquidity and investment portfolios; competitive pressures and our ability to adapt to changes in the industry and develop and implement strategic growth opportunities; risks and uncertainties regarding Medicare and Medicaid programs, including those related to non-compliance with the complex regulations imposed thereon; our ability to maintain and achieve improvement in Centers for Medicare and Medicaid Services Star Ratings and other quality scores and funding risks with respect to revenue received from participation therein; a negative change in our healthcare product mix; costs and other liabilities associated with litigation, government investigations, audits or reviews; our ability to contract with providers on cost-effective and competitive terms; risks associated with providing healthcare, pharmacy and other diversified products and services, including medical malpractice or professional liability claims and non-compliance by any party with the pharmacy services agreement between us and CaremarkPCS Health, L.L.C.; the effects of any negative publicity or sentiment related to the health benefits industry in general or us in particular; risks associated with mergers, acquisitions, joint ventures and strategic alliances; possible impairment of the value of our intangible assets if future results do not adequately support goodwill and other intangible assets; possible restrictions in the payment of dividends from our subsidiaries and increases in required minimum levels of capital; our ability to repurchase shares of our common stock and pay dividends on our common stock due to the adequacy of our cash flow and earnings and other considerations; the potential negative effect from our substantial amount of outstanding indebtedness and the risk that increased interest rates or market volatility could impact our access to or further increase the cost of financing; a downgrade in our financial strength ratings; events that may negatively affect our licenses with the Blue Cross and Blue Shield Association; intense competition to attract and retain employees; risks associated with our international operations; and various laws and provisions in our governing documents that may prevent or discourage takeovers and business combinations.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260127316603/en/

Elevance Health Contacts:

Investor Relations

Nathan Rich

Investor.Relations@elevancehealth.com

Media

Leslie Porras

Leslie.Porras@elevancehealth.com

Source: Elevance Health, Inc.