On April 22, 2025, Elevance Health Inc (ELV, Financial) released its 8-K filing detailing its financial performance for the first quarter of 2025. Elevance Health, a leading health insurer in the US, provides medical benefits to 46 million members and operates as the largest single provider of Blue Cross Blue Shield branded coverage in 14 states.
Elevance Health reported operating revenue of $48.8 billion for Q1 2025, marking a 15.4% increase from the same quarter in 2024. This figure exceeded the analyst estimate of $46,290.07 million. The growth was driven by higher premium yields, recent acquisitions, and increased membership in Medicare Advantage and Individual ACA plans. However, the company's diluted EPS of $9.61 fell short of the estimated $10.73. The adjusted diluted EPS was $11.97, surpassing expectations.
The company's operating gain increased by 4.1% to $3.3 billion, reflecting strategic growth initiatives. Despite this, the operating margin decreased to 6.5% from 7.1% in the previous year, indicating rising costs, particularly in Medicaid medical expenses. The benefit expense ratio rose to 86.4%, highlighting challenges in managing medical cost trends.
In the Health Benefits segment, operating revenue rose by 11% to $41.4 billion, driven by premium increases and membership growth. However, the operating gain decreased slightly to $2.2 billion due to higher medical costs in Medicaid. The Carelon segment saw a significant 38% increase in operating revenue to $16.7 billion, fueled by acquisitions and growth in CarelonRx product revenue.
Operating cash flow was $1.0 billion, a decrease from the previous year due to timing-related working capital impacts. Elevance Health returned $1.3 billion to shareholders through share repurchases and dividends, maintaining a robust capital return strategy.
Days in Claims Payable increased slightly to 44.0 days, reflecting adjustments for recent acquisitions. The operating expense ratio improved to 10.9%, demonstrating effective cost management. These metrics are crucial for evaluating the company's operational efficiency and financial health.
“At Elevance Health, our purpose—to improve the health of humanity—drives everything we do. In the first quarter, we made measurable progress reimagining the healthcare experience with personalized support, real-time digital solutions, and a whole-health model that improves outcomes and reduces cost.” - Gail K. Boudreaux, President and CEO
Elevance Health's Q1 2025 results highlight strong revenue growth and strategic advancements, although challenges in managing costs persist. The company's ability to navigate these challenges while expanding its market presence will be critical for sustaining its growth trajectory in the competitive healthcare plans industry.
Explore the complete 8-K earnings release (here) from Elevance Health Inc for further details.
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