Elevance Health, Inc.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 15 July 2026: press release. Guidance figures: 4 raised, 1 new. The quarter’s numbers.

Key takeaways

Diluted EPS fell year over year: Diluted EPS was $6.71, against $7.72 a year earlier; adjusted diluted EPS was $7.45, against $8.84. The company cited favorable benefit expense performance and about $0.80 per share of net below-the-line benefit. Source
Health Benefits gain fell 42.6 percent: Health Benefits operating gain was $0.9 billion, against $1.6 billion. Operating margin was 2.1 percent against 3.8 percent, reflecting higher benefit expense and workforce and enterprise investments, partly offset by revenue growth. Source
Benefit expense ratio rose 80 basis points: Benefit expense ratio was 89.7 percent, up 80 basis points from 88.9 percent, driven by expected elevated medical cost trend in Government businesses, partly offset by Individual ACA. Source
CMS accrual of $935 million: The six-month results include $935 million, the company's current best estimate of identified potential exposure for historical Medicare Advantage risk adjustment data under a February 27, 2026 CMS notice. Source
Adjusted expense ratio rose 100 basis points: Adjusted operating expense ratio was 11.0 percent, up 100 basis points, driven mainly by targeted investments in workforce and in capabilities supporting the long-term operating model. Source
Investment priorities named by CEO: The chief executive named five areas for accelerated investment: medical cost management, member experience, provider connectivity, operating efficiency and Carelon's value-based solutions. Source
Second-quarter operating cash flow of $1.9 billion: Operating cash flow was $1.9 billion in the quarter, reflecting timing of a state Medicaid pass-through payment along with underlying business strength. Source

“We are raising our 2026 adjusted EPS guidance to at least $27.00 and accelerating targeted investments in the capabilities that matter most: medical cost management, member experience, provider connectivity, operating efficiency, and Carelon’s value-based solutions.”
Gail K. Boudreaux, President and Chief Executive Officer

Guidance

Area	Period	Figure	Against last quarter
Diluted EPS Source	FY 2026	at least $20.10	Raised from at least $19.85
Adjusted diluted EPS Source	FY 2026	at least $27.00	Raised from at least $26.75
Operating cash flow Source	FY 2026	at least $6.0 billion	Raised from at least $5.5 billion
Adjusted EPS growth Source	2027, off the 2026 earnings baseline	at least 12%	New
EPS adjustment for CMS accrual Source	FY 2026	$4.27	Raised from $4.24

What changed from last quarter

Guidance raised: Full-year diluted EPS guidance rose from at least $19.85 to at least $20.10, and adjusted diluted EPS guidance rose from at least $26.75 to at least $27.00. Source
Guidance raised: Full-year operating cash flow guidance rose from at least $5.5 billion, which was reaffirmed in the first quarter release, to at least $6.0 billion. Source
New guidance: Management stated a target of at least 12% adjusted EPS growth in 2027, off its 2026 earnings baseline. Source
New: Targeted investments are being accelerated in cost management, member and provider experience, operating efficiency and Carelon's integrated solutions. Source

Results and profit drivers

Diluted EPS fell year over year: Diluted EPS was $6.71, against $7.72 a year earlier; adjusted diluted EPS was $7.45, against $8.84. The company cited favorable benefit expense performance and about $0.80 per share of net below-the-line benefit. Source
Operating revenue rose 0.8 percent: Operating revenue was $49.8 billion, up $0.4 billion, driven by higher premium yields in Health Benefits and CarelonRx product revenue growth, partly offset by lower risk membership in Medicare Advantage, Medicaid and Employer Group. Source
Net investment income rose 44.9 percent: Net investment income was $704 million in the quarter, up from $486 million, and $1,469 million for the six months, up 36.5 percent. Source

Segments and businesses

Health Benefits revenue rose 3 percent: Health Benefits operating revenue was $42.7 billion, driven mainly by higher premium yields, partly offset by expected declines in Medicare Advantage, Medicaid and Employer Group risk membership. Source
Health Benefits gain fell 42.6 percent: Health Benefits operating gain was $0.9 billion, against $1.6 billion. Operating margin was 2.1 percent against 3.8 percent, reflecting higher benefit expense and workforce and enterprise investments, partly offset by revenue growth. Source
Carelon revenue rose 6 percent: Carelon operating revenue was $19.2 billion, growing from scaling of Carelon Services risk-based solutions and CarelonRx product revenue. Source
CarelonRx gain rose 8.6 percent: CarelonRx operating gain was $582 million, against $536 million, at a 5.2 percent margin. Carelon Services operating gain was $366 million, down 8.5 percent, at a 4.6 percent margin. Source

“These actions will strengthen how we operate, improve consistency over time, and reinforce our confidence in returning to at least 12% adjusted EPS growth in 2027 off our 2026 earnings baseline.”
Gail K. Boudreaux, President and Chief Executive Officer

Membership and product mix

Medical membership fell 469 thousand sequentially: Medical membership was about 44.9 million at June 30, down 469 thousand from March 31, due to a known commercial fee-based customer transition and expected attrition in Individual ACA and Medicaid. Source
Medicare Advantage membership fell 15.9 percent: Medicare Advantage membership was 1,897 thousand, down 15.9 percent year over year and flat sequentially. Medicare operating revenue fell 4.2 percent. Source
Commercial revenue rose 8.9 percent: Commercial operating revenue was $13.6 billion, up 8.9 percent. Individual, which is reported within commercial, rose 16.8 percent to $2.7 billion. Source
CarelonRx scripts fell 2.9 percent: CarelonRx quarterly adjusted scripts were 80.9 million, down from 83.3 million. Carelon Services consumers served were 92.4 million, down 5.0 percent year over year. Source

Medical costs, claims and CMS matter

Benefit expense ratio rose 80 basis points: Benefit expense ratio was 89.7 percent, up 80 basis points from 88.9 percent, driven by expected elevated medical cost trend in Government businesses, partly offset by Individual ACA. Source
Days in claims payable at 45.4: Days in claims payable were 45.4 at June 30, down 1.2 days from March 31 but up 2.9 days year over year. Source
Prior-year redundancies of $1,195 million: Prior-year redundancies in the six-month claims reconciliation were $1,195 million, compared with $1,065 million a year earlier. Source
CMS accrual of $935 million: The six-month results include $935 million, the company's current best estimate of identified potential exposure for historical Medicare Advantage risk adjustment data under a February 27, 2026 CMS notice. Source
Accrual excluded from adjusted results: The $935 million accrual and $129 million business optimization charge are excluded from adjusted results. The second-quarter columns show no such items. Source

Operating expense and investments

Adjusted expense ratio rose 100 basis points: Adjusted operating expense ratio was 11.0 percent, up 100 basis points, driven mainly by targeted investments in workforce and in capabilities supporting the long-term operating model. Source
Adjusted operating expense rose 11.3 percent: Adjusted operating expense was $5,492 million for the quarter, up 11.3 percent from $4,934 million. Six-month adjusted operating expense rose 5.5 percent. Source
Investment priorities named by CEO: The chief executive named five areas for accelerated investment: medical cost management, member experience, provider connectivity, operating efficiency and Carelon's value-based solutions. Source

Cash flow and balance sheet

Second-quarter operating cash flow of $1.9 billion: Operating cash flow was $1.9 billion in the quarter, reflecting timing of a state Medicaid pass-through payment along with underlying business strength. Source
Six-month operating cash flow rose: Net cash provided by operating activities was $6,245 million for six months, against $3,071 million; changes in operating assets and liabilities contributed $2,700 million. Source
Parent cash of about $2.1 billion: Cash and investments at the parent company totaled approximately $2.1 billion at June 30, 2026. Source

Share repurchases and dividends

Share repurchases of $234 million: The company repurchased 0.7 million shares for $234 million during the second quarter, at a weighted average price of $344.62. Source
Quarterly dividend of $1.72 per share: A quarterly dividend of $1.72 per share was paid, a cash distribution of $373 million in the quarter. Source
Board authorization of about $5.3 billion: Board-approved repurchase authorization remaining was about $5.3 billion at June 30, 2026, compared with about $5.6 billion at March 31, 2026. Source

Coming up, as management said on 15 July 2026

Third-quarter dividend payable September 25: The Board declared a $1.72 per share third-quarter dividend on July 14, 2026, payable September 25, 2026 to holders of record on September 10. Source

Figures management reported

Figure	Reported
Investment income Source	$704 million in the quarter; $1,469 million for six months
Prior-year reserve development Source	$1,195 million of prior years redundancies, six months 2026

Risks management discussed

Operational: Management cited expected elevated medical cost trend in Government businesses as a driver of higher benefit expense this quarter. Source
Regulatory: The company treats the $935 million as its current best estimate of potential exposure from a CMS notice on historical Medicare Advantage risk adjustment data. Source
Demand: Membership declined partly because of anticipated attrition in Individual ACA and Medicaid, alongside a known commercial fee-based customer transition. Source
Financial: Operating cash flow in the quarter was affected by the timing of a state Medicaid pass-through payment. Source

Earlier plans management reported on

Ahead: Management reported second quarter 2026 results as ahead of expectations. Source
Not stated: Management reinforced its confidence in returning to at least 12% adjusted EPS growth in 2027, off its 2026 earnings baseline; progress against this is not stated. Source

Other quarters

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.

As filed with the SEC

Open the filing on EDGAR

E A R N I N G S R E L E A S E

ELEVANCE HEALTH REPORTS SECOND QUARTER 2026 RESULTS;

RAISES FULL-YEAR GUIDANCE

2Q 2026 operating revenue of $49.8 billion, up 0.8% from 2Q 2025
2Q 2026 diluted EPS of $6.71 and adjusted diluted EPS of $7.45; results were supported by favorable benefit expense performance and an approximately $0.80 per share net below-the-line benefit
FY 2026 diluted EPS guidance raised to at least $20.10; adjusted diluted EPS guidance raised to at least $27.00, reflecting strong second quarter operating results
Accelerating targeted investments in capabilities that lower healthcare costs, simplify the member and provider experience, and strengthen Carelon's integrated solutions
FY 2026 operating cash flow guidance raised to at least $6.0 billion

Indianapolis, IN - July 15, 2026 - Elevance Health, Inc. (NYSE: ELV) reported second quarter 2026 results ahead of expectations.

"Our second quarter results exceeded our outlook, supported by disciplined execution and improved operating performance across our diversified portfolio. We are raising our 2026 adjusted EPS guidance to at least $27.00 and accelerating targeted investments in the capabilities that matter most: medical cost management, member experience, provider connectivity, operating efficiency, and Carelon’s value-based solutions. These actions will strengthen how we operate, improve consistency over time, and reinforce our confidence in returning to at least 12% adjusted EPS growth in 2027 off our 2026 earnings baseline.”

Gail K. Boudreaux

President and Chief Executive Officer

1.Earnings per diluted share ("EPS").

2.Refer to GAAP reconciliation tables on pages 13 and 14 herein for reconciliation of GAAP to adjusted measures.

Elevance Health
Consolidated Enterprise Highlights
(Unaudited)
(In billions)	Three Months Ended
	June 30, 2026	June 30, 2025
Operating Revenue	$49.8	$49.4
Operating Gain	$1.8	$2.4
Adjusted Operating Gain	$1.8	$2.5
Operating Margin	3.5%	4.9%
Adjusted Operating Margin	3.6%	5.0%

2.Operating Gain for the three months ended June 30, 2026, and June 30, 2025, include items that are excluded from adjusted shareholders' net income. See "GAAP Reconciliation" on pages 13 and 14 herein.

3.Adjusted Operating Gain for the three months ended June 30, 2026, and June 30, 2025, exclude items that are excluded from adjusted shareholders' net income. See "GAAP Reconciliation" on pages 13 and 14 herein.

Operating revenue was $49.8 billion in the second quarter of 2026, an increase of $0.4 billion compared to the prior year quarter. This was driven by higher premium yields in our Health Benefits segment and growth in CarelonRx product revenue, partially offset by anticipated declines in our Medicare Advantage, Medicaid, and Employer Group risk membership.

The benefit expense ratio of 89.7 percent increased 80 basis points year over year, driven by expected elevated medical cost trend in our Government businesses, partially offset by improved performance in Individual ACA compared to the prior year.

Days in Claims Payable stood at 45.4 days as of June 30, 2026, a decrease of 1.2 days from March 31, 2026 and an increase of 2.9 days year over year.

The operating expense ratio was 11.1 percent. The adjusted operating expense ratio was 11.0 percent, an increase of 100 basis points, driven primarily by targeted investments in our workforce and in capabilities that support our long-term operating model. We continue to manage expenses thoughtfully while investing in the priorities that strengthen enterprise performance over time.

Cash Flow & Balance Sheet

Operating cash flow of $1.9 billion in the quarter reflects timing of a state Medicaid pass-through payment and underlying business strength. As of June 30, 2026, cash and investments at the parent company totaled approximately $2.1 billion.

During the second quarter of 2026, the Company repurchased 0.7 million shares of its common stock for $234 million, at a weighted average price of $344.62, and paid a quarterly dividend of $1.72 per share, representing a distribution of cash totaling $373 million. As of June 30, 2026, the Company had approximately $5.3 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
	June 30, 2026	June 30, 2025
Operating Revenue	$42.7	$41.6
Operating Gain	$0.9	$1.6
Operating Margin	2.1%	3.8%

Health Benefits segment operating revenue was $42.7 billion in the second quarter of 2026, an increase of $1.1 billion, or 3 percent compared to the prior year quarter, driven primarily by higher premium yields, partially offset by expected declines in our Medicare Advantage, Medicaid, and Employer Group risk membership.

Operating gain was $0.9 billion, a decrease year over year, reflecting higher benefit expense and targeted investments to support our workforce and strengthen enterprise performance, partially offset by operating revenue growth.

Medical membership of approximately 44.9 million as of June 30, 2026 decreased by 469 thousand sequentially, driven by a known commercial fee-based customer transition and anticipated attrition in our Individual ACA and Medicaid membership.

Carelon is comprised of CarelonRx and Carelon Services.

Carelon
Reportable Segment Highlights
(Unaudited)
(In billions)	Three Months Ended
	June 30, 2026	June 30, 2025
Operating Revenue	$19.2	$18.1
Operating Gain	$0.9	$0.9
Operating Margin	4.9%	5.2%

Operating revenue for Carelon was $19.2 billion in the second quarter of 2026, an increase of $1.1 billion, or 6 percent compared to the prior year quarter. Growth was driven by the scaling of Carelon Services risk-based solutions and CarelonRx product revenue.

Operating gain for Carelon totaled $0.9 billion, an increase of 1 percent year over year, reflecting improved profitability in our specialty pharmacy.

Quarterly Dividend

On July 14, 2026, the Audit Committee of the Company's Board of Directors declared a third quarter 2026 dividend to shareholders of $1.72 per share. The third quarter dividend is payable on September 25, 2026, to shareholders of record at the close of business on September 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 Daylight Time (“EDT”) to discuss the company’s second quarter results and outlook. The conference call should be accessed at least 15 minutes prior to the start of the call with the following numbers:

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. EDT today, until the end of the day on August 14, 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 pages 13 and 14 for 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-to-Date Ended June 30, 2026

Membership and Other Metrics
Quarterly & Year-to-Date Consolidated Statements of Income
Condensed Consolidated Balance Sheet
Condensed Consolidated Statement of Cash Flows
Supplemental Financial Information - Reportable Segments & Health Benefits Revenue Details
Supplemental Financial Information - Reconciliation of Medical Claims Payable
Reconciliation of Non-GAAP Financial Measures

				Change from
Elevance Health
Membership and Other Metrics
(Unaudited)
Medical Membership (in thousands)	June 30, 2026	June 30, 2025	March 31, 2026	June 30, 2025	March 31, 2026
Individual	1,317	1,348	1,424	(2.3)%	(7.5)%
Employer Group Risk-Based	3,417	3,615	3,439	(5.5)%	(0.6)%
Commercial Risk-Based	4,734	4,963	4,863	(4.6)%	(2.7)%
BlueCard®	6,582	6,570	6,579	0.2%	- %
Employer Group Fee-Based	20,931	20,584	21,170	1.7%	(1.1)%
Commercial Fee-Based	27,513	27,154	27,749	1.3%	(0.9)%
Medicare Advantage	1,897	2,255	1,899	(15.9)%	(0.1)%
Medicare Supplement	893	874	888	2.2%	0.6%
Total Medicare	2,790	3,129	2,787	(10.8)%	0.1%
Medicaid	8,358	8,733	8,456	(4.3)%	(1.2)%
Federal Employee Program	1,554	1,642	1,563	(5.4)%	(0.6)%
Total Medical Membership	44,949	45,621	45,418	(1.5)%	(1.0)%
Other Metrics (in millions)
CarelonRx Quarterly Adjusted Scripts	80.9	83.3	80.3	(2.9)%	0.7%
Carelon Services Consumers Served	92.4	97.3	92.9	(5.0)%	(0.5)%

Elevance Health
Consolidated Statements of Income
(Unaudited)
(In millions, except per share data)	Three Months Ended June 30						Six Months Ended June 30
		2026		2025	Change			2026		2025	Change
Revenues
Premiums		$41,279		$41,271	- %			$82,303		$82,158		0.2%
Product revenue		6,264		6,042		3.7%		12,489		11,851		5.4%
Service fees		2,283		2,108		8.3%		4,528		4,177		8.4%
Total operating revenue		49,826		49,421		0.8%		99,320		98,186		1.2%
Net investment income		704		486		44.9%		1,469		1,076		36.5%
Net losses on financial instruments		(56)		(131)		NM		(134)		(595)		NM
Total revenues		50,474		49,776		1.4%		100,655		98,667		2.0%
Expenses
Benefit expense		37,024		36,706		0.9%		72,639		72,018		0.9%
Cost of products sold		5,492		5,293		3.8%		10,955		10,276		6.6%
Operating expense		5,547		4,997		11.0%		11,877		10,297		15.3%
Interest expense		364		341		6.7%		721		685		5.3%
Amortization of other intangible assets		110		147		(25.2)%		222		302		(26.5)%
Total expenses		48,537		47,484		2.2%		96,414		93,578		3.0%
Income before income tax expense		1,937		2,292		(15.5)%		4,241		5,089		(16.7)%
Income tax expense		483		548		(11.9)%		1,027		1,161		(11.5)%
Net income		1,454		1,744		(16.6)%		3,214		3,928		(18.2)%
Net loss (gain) attributable to noncontrolling interests		9		(1)		NM		13		(2)		NM
Shareholders' net income		$1,463		$1,743		(16.1)%		$3,227		$3,926		(17.8)%
Shareholders' earnings per diluted share		$6.71		$7.72		(13.1)%		$14.73		$17.33		(15.0)%
Diluted shares		217.9		225.8		(3.5)%		219.1		226.5		(3.3)%
Benefit expense as a percentage of premiums	89.7%		88.9%		80bp		88.3%		87.7%		60bp
Operating expense as a percentage of total operating revenue	11.1%		10.1%		100bp		12.0%		10.5%		150bp
Income before income tax expense as a percentage of total revenue	3.8%		4.6%		(80)bp		4.2%		5.2%		(100)bp

"NM" = calculation not meaningful

Elevance Health
Condensed Consolidated Balance Sheet
(In millions)	June 30, 2026		December 31, 2025
Assets	(Unaudited)
Current assets:
Cash and cash equivalents		$10,232		$9,491
Fixed maturity and equity securities	27,282		26,624
Premium and other receivables	23,392		21,542
Other current assets	6,278		5,344
Total current assets	67,184		63,001
Long-term investments	12,389		11,960
Property and equipment, net	4,645		4,679
Goodwill and other intangible assets	39,322		39,544
Other noncurrent assets	2,898		2,310
Total assets		$126,438		$121,494
Liabilities and equity
Liabilities
Current liabilities:
Medical claims payable		$18,463		$17,084
Short-term borrowings	-		150
Current portion of long-term debt	375		1,099
Other current liabilities	25,416		22,702
Total current liabilities	44,254		41,035
Long-term debt, less current portion	30,669		30,797
Other noncurrent liabilities	6,493		5,636
Total liabilities	81,416		77,468
Total shareholders’ equity	44,883		43,882
Noncontrolling interests	139		144
Total equity	45,022		44,026
Total liabilities and equity		$126,438		$121,494

Elevance Health
Condensed Consolidated Statement of Cash Flows
(Unaudited)
(In millions)	Six Months Ended June 30
		2026		2025
Operating activities
Net income		$3,214		$3,928
Depreciation and amortization	720		753
Share-based compensation	130		162
Changes in operating assets and liabilities	2,700		(2,003)
Other non-cash items	(519)		231
Net cash provided by operating activities	6,245		3,071
Investing activities
Sales and maturities of investments, net of purchases (purchases of investments, net of sales and maturities)	(813)		329
Purchases of subsidiaries, net of cash acquired	5		54
Purchases of property and equipment	(522)		(463)
Other, net	(153)		(504)
Net cash used in investing activities	(1,483)		(584)
Financing activities
Net change in short-term and long-term borrowings	(900)		(1,255)
Repurchase and retirement of common stock	(1,358)		(1,258)
Cash dividends	(749)		(771)
Other, net	(1,002)		1,067
Net cash used in financing activities	(4,009)		(2,217)
Effect of foreign exchange rates on cash and cash equivalents	(12)		2
Change in cash and cash equivalents	741		272
Cash and cash equivalents at beginning of period	9,491		8,288
Cash and cash equivalents at end of period		$10,232		$8,560

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 June 30			Six Months Ended June 30
	2026	2025	Change	2026	2025	Change
Operating Revenue
Health Benefits	$42,720	$41,582	2.7%	$85,210	$83,013	2.6%
CarelonRx	11,250	10,643	5.7%	21,850	20,759	5.3%
Carelon Services	7,975	7,441	7.2%	15,340	13,977	9.8%
Corporate & Other	6	232	(97.4)%	10	397	(97.5)%
Eliminations	(12,125)	(10,477)	NM	(23,090)	(19,960)	NM
Total Operating Revenue	$49,826	$49,421	0.8%	$99,320	$98,186	1.2%
Operating Gain (Loss)
Health Benefits	$896	$1,560	(42.6)%	$3,053	$3,777	(19.2)%
CarelonRx	582	536	8.6%	1,164	1,138	2.3%
Carelon Services	366	400	(8.5)%	836	891	(6.2)%
Corporate & Other	(81)	(71)	NM	(1,204)	(211)	NM
Total Operating Gain	$1,763	$2,425	(27.3)%	$3,849	$5,595	(31.2)%
Operating Margin
Health Benefits	2.1%	3.8%	(170) bp	3.6%	4.5%	(90) bp
CarelonRx	5.2%	5.0%	20 bp	5.3%	5.5%	(20) bp
Carelon Services	4.6%	5.4%	(80) bp	5.4%	6.4%	(100) bp
Total Operating Margin	3.5%	4.9%	(140) bp	3.9%	5.7%	(180) bp
Health Benefits Revenue Details
(In millions)	Three Months Ended June 30			Six Months Ended June 30
	2026	2025	Change	2026	2025	Change
Health Benefits Operating Revenue
Commercial	$13,561	$12,453	8.9%	$26,799	$24,805	8.0%
Individual	2,720	2,328	16.8%	5,260	4,689	12.2%
Medicare	10,962	11,446	(4.2)%	21,953	22,852	(3.9)%
Medicaid	14,444	13,911	3.8%	28,724	27,954	2.8%
Federal Employee Program	3,753	3,772	(0.5)%	7,734	7,402	4.5%
Total Health Benefits Operating Revenue	$42,720	$41,582	2.7%	$85,210	$83,013	2.6%

2.Operating Gain for the three and six months ended June 30, 2026 included $44 and $91 million, respectively, of transaction and integration related costs, and $11 and $18 million, respectively, of litigation and settlement expenses. Operating Gain for the six months ended June 30, 2026 also included $935 million for the Company's current best estimate of the identified potential exposure for certain historical Medicare Advantage risk adjustment data related to the CMS notice to the Company dated February 27, 2026, and $129 million of business optimization program charges. All adjustments for the three and six month periods reside in the Corporate & Other reportable segment.

3.Operating Gain for the three and six months ended June 30, 2025, included $53 and $133 million, respectively, of transaction and integration related costs and $10 and $15 million, respectively, of litigation and settlement expenses, which reside in the Corporate & Other reportable segment.

4.Operating Gain for the three and six months ended June 30, 2026, and June 30, 2025, include items excluded from adjusted shareholders' net income. See "GAAP Reconciliation" on pages 13 and 14 herein.

5.The Individual business, including ACA products, is reported as part of Commercial Operating Revenue.

6."NM" = calculation not meaningful.

	Six Months Ended June 30		Years Ended December 31
	2026	2025	2025	2024	2023
Elevance Health
Reconciliation of Medical Claims Payable
(In millions)	(Unaudited)	(Unaudited)
Gross medical claims payable, beginning of period	$16,829	$15,580	$15,580	$15,865	$15,348
Ceded medical claims payable, beginning of period	(48)	(13)	(13)	(7)	(6)
Net medical claims payable, beginning of period	16,781	15,567	15,567	15,858	15,342
Business combinations and purchase adjustments	-	182	344	143	-
Net incurred medical claims:
Current year	71,743	71,090	145,566	125,370	121,798
Prior years redundancies	(1,195)	(1,065)	(1,290)	(1,731)	(1,571)
Total net incurred medical claims	70,548	70,025	144,276	123,639	120,227
Net payments attributable to:
Current year medical claims	56,610	57,117	130,265	110,930	107,146
Prior years medical claims	12,619	11,802	13,141	13,143	12,565
Total net payments	69,229	68,919	143,406	124,073	119,711
Net medical claims payable, end of period	18,100	16,855	16,781	15,567	15,858
Ceded medical claims payable, end of period	44	16	48	13	7
Gross medical claims payable, end of period	$18,144	$16,871	$16,829	$15,580	$15,865
Current year medical claims paid as a percentage of current year net incurred medical claims	78.9%	80.3%	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	7.7%	7.3%	9.0%	12.3%	11.4%
Prior year redundancies in the current year as a percentage of prior year net incurred medical claims	0.8%	0.9%	1.0%	1.4%	1.4%

1.Negative amounts reported for net incurred medical claims related to prior years result from claims being settled for amounts less than originally estimated.

2.Excludes insurance lines other than short duration.

Elevance Health

GAAP Reconciliation

(Unaudited)

This document references non-GAAP measures, including “Adjusted Diluted EPS,” “Adjusted Operating Expense Ratio,” “Adjusted Operating Gain,” “Adjusted Operating Margin,” “Adjusted Shareholders’ Net Income,” and “Adjusted Operating Expense”. 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,” “Operating Gain/Loss,” and “Operating Margin”. 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 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.

	Three Months Ended June 30					Six Months Ended June 30
(In millions, except per share data)		2026		2025	Change		2026		2025	Change
Shareholders' net income	$1,463		$1,743		(16.1)%	$3,227		$3,926		(17.8)%
Add / (Subtract):
Amortization of other intangible assets	110		147			222		302
Net losses on financial instruments	56		131			134		595
Transaction and integration related costs	44		53			91		133
Litigation and settlement expenses	11		10			18		15
Accrual related to CMS notice	-		-			935		-
Business optimization program charges	-		-			129		-
Tax impact of non-GAAP adjustments	(60)		(87)			(360)		(255)
Net adjustment items	161		254			1,169		790
Adjusted shareholders' net income	$1,624		$1,997		(18.7)%	$4,396		$4,716		(6.8)%
Shareholders' earnings per diluted share	$6.71		$7.72		(13.1)%	$14.73		$17.33		(15.0)%
Add / (Subtract):
Amortization of other intangible assets	0.50		0.65			1.01		1.33
Net losses on financial instruments	0.26		0.58			0.61		2.63
Transaction and integration related costs	0.20		0.23			0.42		0.59
Litigation and settlement expenses	0.05		0.04			0.08		0.07
Accrual related to CMS notice	-		-			4.27		-
Business optimization program charges	-		-			0.59		-
Tax impact of non-GAAP adjustments	(0.28)		(0.39)			(1.64)		(1.13)
Net adjustment items	0.74		1.12			5.33		3.49
Adjusted shareholders' earnings per diluted share	$7.45		$8.84		(15.7)%	$20.06		$20.82		(3.7)%
	Three Months Ended June 30					Six Months Ended June 30
(In millions)		2026		2025	Change		2026		2025	Change
Income before income tax expense	$1,937		$2,292		(15.5)%	$4,241		$5,089		(16.7)%
Net investment income	(704)		(486)			(1,469)		(1,076)
Interest expense	364		341			721		685
Amortization of other intangible assets	110		147			222		302
Net losses on financial instruments	56		131			134		595
Reportable segments operating gain	$1,763		$2,425		(27.3)%	$3,849		$5,595		(31.2)%

1.Adjustment item resides in the Corporate & Other reportable segment.

2.Adjustment item represents the Company's current best estimate of the identified potential exposure for certain historical Medicare Advantage risk adjustment data related to the CMS notice to the Company dated February 27, 2026.

Elevance Health

GAAP Reconciliation

(Unaudited)

	Three Months Ended June 30						Six Months Ended June 30
(In millions)		2026		2025	Change			2026		2025	Change
Reportable segments operating gain	$1,763		$2,425		(27.3)%		$3,849		$5,595		(31.2)%
Add / (Subtract):
Transaction and integration related costs	44		53				91		133
Litigation and settlement expenses	11		10				18		15
Accrual related to CMS notice	-		-				935		-
Business optimization program charges	-		-				129		-
Net adjustment items	55		63				1,173		148
Reportable segments adjusted operating gain	$1,818		$2,488		(26.9)%		$5,022		$5,743		(12.6)%
Operating revenue		$49,826		$49,421	0.8%			$99,320		$98,186	1.2%
Operating margin	3.5%		4.9%			(140) bp	3.9%		5.7%			(180) bp
Adjusted operating margin	3.6%		5.0%			(140) bp	5.1%		5.8%			(70) bp
	Three Months Ended June 30						Six Months Ended June 30
(In millions)		2026		2025	Change			2026		2025	Change
Operating expense	$5,547		$4,997		11.0%		$11,877		$10,297		15.3%
Add / (Subtract):
Transaction and integration related costs	(44)		(53)				(91)		(133)
Litigation and settlement expenses	(11)		(10)				(18)		(15)
Accrual related to CMS notice	-		-				(935)		-
Business optimization program charges	-		-				(129)		-
Net adjustment items	(55)		(63)				(1,173)		(148)
Adjusted operating expense	$5,492		$4,934		11.3%		$10,704		$10,149		5.5%
Operating revenue		$49,826		$49,421	0.8%			$99,320		$98,186	1.2%
Operating expense ratio	11.1%		10.1%			100 bp	12.0%		10.5%			150 bp
Adjusted operating expense ratio	11.0%		10.0%			100 bp	10.8%		10.3%			50 bp
	Full Year 2026 Outlook
Shareholders' earnings per diluted share	At least $20.10
Add / (Subtract):
Accrual related to CMS notice			$4.27
Amortization of other intangible assets			$2.00
Net losses on financial instruments			$1.15
Transaction and integration related costs			$0.90
Business optimization program charges			$0.59
Litigation and settlement expenses			$0.10
Tax impact of non-GAAP adjustments	Approximately ($2.11)
Net adjustment items			$6.90
Adjusted shareholders' earnings per diluted share	At least $27.00

1.Adjustment item resides in the Corporate & Other reportable segment.

3.Adjustment item represents the midpoint of a projected range and serves as the estimated full year adjustment amount.

Forward-Looking Statements

Forward-looking statements notice

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, or 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.

Contacts
888-947-9963 (Domestic) · 312-470-0178 (International)
800-391-9853 (Domestic Replay) · 203-369-3269 (International Replay)
Elevance Health Contacts: Investor Relations · Nathan Rich · Investor.Relations@elevancehealth.com
Media · Leslie Porras · Leslie.Porras@elevancehealth.com