Elevance Health, Inc.: Q1 FY2026 earnings call

What management said about Q1 FY2026, from the documents filed with the SEC on 22 April 2026: press release. Guidance figures: 1 raised, 1 lowered, 1 new, 1 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Operating revenue rose 1.5 percent: Operating revenue was $49.5 billion, up $0.7 billion. The increase came from higher premium yields in Health Benefits and CarelonRx product revenue growth, partly offset by declines in risk membership. Source
• Adjusted EPS higher on investment income: Adjusted diluted EPS was $12.58, up 5.1 percent. The company said this included about $1 per share of non-recurring investment income. GAAP diluted EPS was $8.00, down 16.8 percent. Source
• Health Benefits operating gain eased: Health Benefits operating revenue rose 2.6 percent to $42.5 billion. Operating gain was $2.2 billion, down 2.7 percent, and the operating margin was 5.1 percent. Source
• Medical membership up 186 thousand: Medical membership was about 45.4 million at March 31, 2026, up 186 thousand from year-end 2025. Commercial fee-based growth more than offset declines in Medicare Advantage and Employer Group risk membership. Source
• Days in claims payable rose: Days in claims payable were 46.6 at March 31, 2026, up 5.3 days from December 31, 2025 and up 3.8 days year over year. Source
• CMS notice drives $935 million accrual: The company recorded a $935 million accrual, its current best estimate of potential exposure on historical Medicare Advantage risk adjustment data under a CMS notice. Source
• Operating cash flow up $3.3 billion: Operating cash flow was $4.3 billion in the quarter, up $3.3 billion year over year. The company cited underlying business strength and favorable working capital. Source

“Our first quarter results exceeded expectations, reflecting underlying business strength and improving claims experience.”

Gail K. Boudreaux President and Chief Executive Officer

Guidance

What changed from last quarter

• Guidance lowered: GAAP diluted EPS guidance moved from at least $22.30 to at least $19.85, with the company's estimate for the CMS matter included. Source
• Guidance raised: Adjusted diluted EPS guidance moved from at least $25.50 to at least $26.75. Source
• Guidance kept: Operating cash flow guidance of at least $5.5 billion was reaffirmed. Source
• New: A $935 million accrual was recorded for certain historical Medicare Advantage risk adjustment data under a CMS notice dated February 27, 2026. Source
• New: A business optimization program was started, with $129 million of charges recorded to simplify and enhance the organizational structure. Source

Results and earnings drivers

• Operating revenue rose 1.5 percent: Operating revenue was $49.5 billion, up $0.7 billion. The increase came from higher premium yields in Health Benefits and CarelonRx product revenue growth, partly offset by declines in risk membership. Source
• Adjusted EPS higher on investment income: Adjusted diluted EPS was $12.58, up 5.1 percent. The company said this included about $1 per share of non-recurring investment income. GAAP diluted EPS was $8.00, down 16.8 percent. Source
• Shareholders' net income declined 19.2 percent: Shareholders' net income was $1,764 million, compared with $2,183 million a year earlier. Income before income tax expense was $2,304 million, down 17.6 percent. Source
• Segment operating gain fell 34.2 percent: Reportable segments operating gain was $2,086 million, against $3,170 million a year earlier. Adjusted segment operating gain was $3,204 million, down 1.6 percent, excluding the listed items. Source
• Net investment income rose 29.7 percent: Net investment income was $765 million, up from $590 million. Net losses on financial instruments narrowed to $78 million from $464 million. Source

Segment results and margins

• Health Benefits operating gain eased: Health Benefits operating revenue rose 2.6 percent to $42.5 billion. Operating gain was $2.2 billion, down 2.7 percent, and the operating margin was 5.1 percent. Source
• Medicaid cost trend lifted benefit ratio: The benefit expense ratio was 86.8 percent, up 40 basis points. Expected higher Medicaid cost trend was partly offset by Medicare performance. Source
• Carelon operating gain declined 3.8 percent: Carelon operating revenue was $18.0 billion, up 7.9 percent. Operating gain was $1.1 billion, citing lower health plan membership and continued investment in Carelon Services risk-based capabilities. Source
• Specialty pharmacy and behavioral improved: Profitability in the specialty pharmacy and behavioral health businesses improved. This partly offset the lower membership and Carelon Services investment effects. Source
• Corporate & Other carried the CMS accrual: Corporate & Other operating loss was $1,123 million. It included the $935 million CMS accrual along with transaction, integration and litigation costs. Source

“We are raising our full-year adjusted EPS guidance, supported by greater visibility into the balance of the year.”

Gail K. Boudreaux President and Chief Executive Officer

Membership and products

• Medical membership up 186 thousand: Medical membership was about 45.4 million at March 31, 2026, up 186 thousand from year-end 2025. Commercial fee-based growth more than offset declines in Medicare Advantage and Employer Group risk membership. Source
• Medicare Advantage membership fell 15.8 percent: Medicare Advantage membership was 1,899 thousand, down 15.8 percent year over year, after repositioning actions in that business. Source
• CarelonRx scripts declined 4.3 percent: CarelonRx quarterly adjusted scripts were 80.3 million, down from 83.9 million a year earlier. CarelonRx segment revenue rose 4.8 percent to $10.6 billion. Source
• Carelon Services consumers fell 6.6 percent: Carelon Services consumers served were 92.9 million, down 6.6 percent year over year. Source

Medical costs and claims

• Days in claims payable rose: Days in claims payable were 46.6 at March 31, 2026, up 5.3 days from December 31, 2025 and up 3.8 days year over year. Source
• Prior-year claims settled below estimates: Prior-year redundancies were $1,124 million, against $1,025 million in the prior year quarter. The company explained that these reflect claims settled below original estimates. Source
• Current-year claims paid ratio fell: Current-year medical claims paid were 64.5 percent of current-year net incurred medical claims, compared with 66.2 percent a year earlier. Source

“Our actions are driving more consistent performance and position Elevance Health for continued improvement over time.”

Gail K. Boudreaux President and Chief Executive Officer

Operating expense and charges

• Expense ratio up on CMS accrual: The operating expense ratio was 12.8 percent, including the CMS accrual and business optimization charges. The adjusted operating expense ratio was 10.5 percent, down 20 basis points. Source
• Operating expense rose 19.4 percent: Operating expense was $6,330 million, up from $5,300 million. Adjustments removed the CMS accrual, business optimization charges, transaction costs and litigation expenses. Source
• Adjusted operating expense roughly flat: Adjusted operating expense was $5,212 million, down 0.1 percent year over year. Source

CMS notice and accrual

• CMS notice drives $935 million accrual: The company recorded a $935 million accrual, its current best estimate of potential exposure on historical Medicare Advantage risk adjustment data under a CMS notice. Source
• Accrual sits within operating expense: The accrual is recorded in operating expense, which produced the 12.8 percent operating expense ratio. Adjusted results exclude the accrual. Source
• Accrual is a current best estimate: Management characterized the $935 million as a current best estimate of the identified potential exposure, not a determined amount. Source

Capital, cash and shareholder returns

• Operating cash flow up $3.3 billion: Operating cash flow was $4.3 billion in the quarter, up $3.3 billion year over year. The company cited underlying business strength and favorable working capital. Source
• $1.5 billion returned to shareholders: Capital returned to shareholders totaled $1.5 billion in the first quarter, covering share repurchases and dividends. Source
• Buybacks and dividend detail: The company repurchased 3.7 million shares for $1.1 billion at a weighted average price of $304.68. The quarterly dividend was $1.72 per share, totaling $376 million. Source
• Repurchase authorization down to $5.6 billion: Remaining Board-approved repurchase authorization was about $5.6 billion at March 31, 2026, down from $6.7 billion at December 31, 2025. Source
• Parent company cash about $2.2 billion: Cash and investments at the parent company were about $2.2 billion at March 31, 2026, down from about $2.6 billion at December 31, 2025. Source

Strategy and cost actions

• Targeted investments prioritized: Management is prioritizing targeted investments across clinical, operational and administrative workflows, aimed at long-term growth of the enterprise. Source
• Actions to reduce medical costs cited: Management attributed the raised adjusted EPS guidance to underlying business strength, actions to reduce medical costs, and greater visibility into the year. Source
• Business optimization charge recorded: The company recorded $129 million of business optimization charges as it simplifies and enhances its organizational structure. Source

Coming up, as management said on 22 April 2026

• Second quarter dividend payable June 25: The second quarter 2026 dividend of $1.72 per share is payable June 25, 2026, to shareholders of record at the close of business on June 10, 2026. Source

Figures management reported

Risks management discussed

• Operational: Medicaid medical cost trend is expected to remain elevated, which raised the benefit expense ratio in the quarter. Source
• Operational: Days in claims payable rose by 5.3 days in the quarter, which the company listed among its results. Source
• Regulatory: The CMS notice creates an identified potential exposure on historical Medicare Advantage risk adjustment data, with an estimate recorded. Source
• Financial: Full-year operating cash flow guidance includes potential cash payments tied to the CMS matter. Source
• Demand: Risk membership is expected to decline in Medicare Advantage, Medicaid and Employer Group businesses. Source
• Operational: Investment in Carelon Services risk-based capabilities reduced Carelon operating gain in the quarter. Source

Earlier plans management reported on

• Ahead: The company reported first quarter 2026 results ahead of its expectations. Source
• Not stated: The company reaffirmed its FY 2026 operating cash flow guidance of at least $5.5 billion. Source
• Met: The prior release said fourth quarter 2025 results were in line with the company's earlier plan.
• Not stated: The prior release said management remained confident in returning to at least 12% adjusted EPS growth in 2027.

Other quarters

• Q2 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.