Elevance Health Q4 Revenue Up 10%, 2026 Profit Forecast Falls Short
Elevance Health’s Q4 operating revenue climbed 10% to $49.3 billion, driven by higher premiums, Medicare Advantage membership growth and acquisitions, while operating margin shrank to 0.6%. It forecast 2026 profit below estimates due to elevated medical costs and deployed $471 million for buybacks alongside a $1.72 dividend.
1. Fourth Quarter and Full Year Financial Results
Elevance Health reported fourth quarter 2025 operating revenue of $49.3 billion, up 10 percent year-over-year, driven by higher premium yields, Medicare Advantage membership growth and acquisition contributions. The company delivered a GAAP operating gain of $0.3 billion (operating margin 0.6 percent) versus $0.7 billion in Q4 2024, and an adjusted operating gain of $0.4 billion (adjusted margin 0.8 percent). For full year 2025, operating revenue reached $197.6 billion (up 13 percent), with an adjusted operating gain of $7.5 billion (adjusted margin 3.8 percent), reflecting disciplined pricing and disciplined expense management despite elevated medical cost trends.
2. Segment Performance and Membership Trends
The Health Benefits segment generated Q4 operating revenue of $41.8 billion, an 11 percent increase, but recorded an adjusted operating loss of $0.2 billion (adjusted margin –0.5 percent), pressured by higher medical cost trends in ACA plans and Medicaid attrition that reduced membership by 0.5 million to 45.2 million. Carelon produced Q4 revenue of $18.7 billion, up 27 percent on growth in CarelonRx and risk-based services, with an adjusted operating gain of $0.6 billion (adjusted margin 3.3 percent). Full year Carelon revenue rose 33 percent to $71.7 billion, and adjusted gain climbed 10 percent to $3.4 billion.
3. Capital Allocation and Balance Sheet
During Q4, Elevance repurchased 1.4 million common shares for $471 million at an average price of $335.64 and paid $377 million in dividends ($1.71 per share). At year-end, the company had $2.6 billion in parent-company cash and investments and $6.7 billion of share repurchase authorization remaining. Operating cash flow totaled $4.3 billion for 2025, representing 0.8 times GAAP net income and underscoring strong free cash generation.
4. 2026 Outlook and Strategic Priorities
Elevance forecasts adjusted EPS growth to remain below historical levels in 2026, reflecting expectations for persistent medical cost inflation, particularly in Medicare Part D due to Inflation Reduction Act dynamics. Management plans to offset headwinds through targeted premium increases, expense discipline and investments in technology and Carelon’s risk-based solutions. The board declared a first-quarter 2026 dividend of $1.72 per share, payable March 25 to holders of record March 10.