Elevance Health, Inc.: Q3 FY2026 earnings call

What management said about Q3 FY2026, from the documents filed with the SEC on 21 October 2026: press release. Guidance figures: 4 raised, 1 new, 1 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Operating revenue up 0.7 percent: Operating revenue reached $50.4 billion, up $0.4 billion, on higher premium yields, CarelonRx product revenue and service fees, partly offset by lower risk membership in several businesses. Source
• Quarterly EPS rose with non-operating benefit: Diluted EPS was $6.27 against $5.32 a year earlier, and adjusted diluted EPS was $6.99 against $6.03. Management attributes results to operating performance and a $1.85 per-share net non-operating benefit. Source
• Health Benefits gain fell: Health Benefits operating gain fell to $0.4 billion, with margin at 1.0 percent against 1.4 percent. Management ties the decline to targeted investments in its long-term operating model. Source
• Benefit expense ratio improved: Benefit expense was 90.6 percent of premiums, 70 basis points better than a year earlier, which management attributes to Medicare Advantage and Individual ACA performance. Source
• CMS risk-adjustment exposure accrued: Nine-month operating gain includes $935 million, which management describes as its current best estimate of potential exposure on historical Medicare Advantage risk adjustment data. The amount sits in Corporate & Other. Source
• Operating expense ratio up 90 basis points: Operating expense was 11.4 percent of operating revenue against 10.5 percent, and adjusted it was 11.3 percent against 10.4 percent. Management attributes the rise to targeted one-time investments and growth and quality spending. Source
• Full-year guidance raised: Management raised 2026 guidance: diluted EPS to at least $22.00, adjusted diluted EPS to at least $29.00, and operating cash flow to at least $6.5 billion. Source
• 2027 adjusted EPS growth reaffirmed: Management remains confident in at least 12 percent adjusted EPS growth in 2027, from a 2026 baseline of at least $26.75 that excludes non-recurring net investment income and targeted one-time investments. Source

“Elevance Health's third quarter results reflect stronger execution across our diversified portfolio and underscore the earnings power of the business.”

Gail K. Boudreaux President and Chief Executive Officer

Guidance

What changed from last quarter

• Guidance raised: Full-year 2026 diluted EPS guidance raised to at least $22.00 from at least $20.10. Source
• Guidance raised: Full-year 2026 adjusted diluted EPS guidance raised to at least $29.00 from at least $27.00. Source
• Guidance raised: Full-year 2026 operating cash flow guidance raised to at least $6.5 billion from at least $6.0 billion. Source
• New: A 2026 earnings baseline of at least $26.75 is stated, excluding non-recurring net investment income, other non-operating items and targeted one-time investments. Source
• Guidance kept: The 2027 target of at least 12 percent adjusted EPS growth is restated; the prior release also expressed confidence in it. Source

Results and growth drivers

• Operating revenue up 0.7 percent: Operating revenue reached $50.4 billion, up $0.4 billion, on higher premium yields, CarelonRx product revenue and service fees, partly offset by lower risk membership in several businesses. Source
• Quarterly EPS rose with non-operating benefit: Diluted EPS was $6.27 against $5.32 a year earlier, and adjusted diluted EPS was $6.99 against $6.03. Management attributes results to operating performance and a $1.85 per-share net non-operating benefit. Source
• Nine-month adjusted EPS nearly flat: Nine-month diluted EPS was $21.01 against $22.67. Nine-month adjusted diluted EPS was $27.06 against $26.88, up 0.7 percent. Source
• Operating margin slightly lower: Total operating margin was 2.5 percent against 2.6 percent for the quarter and 3.4 percent against 4.6 percent for nine months. Adjusted operating margin for the quarter was 2.7 percent, unchanged. Source

Segment results

• Health Benefits gain fell: Health Benefits operating gain fell to $0.4 billion, with margin at 1.0 percent against 1.4 percent. Management ties the decline to targeted investments in its long-term operating model. Source
• Health Benefits revenue rose on yields: Health Benefits revenue grew on higher premium yields and service fees, partly offset by lower Medicare Advantage, Medicaid and Employer Group risk membership. Source
• Carelon revenue and gain both rose: Carelon operating revenue was $19.3 billion, up 5 percent, and its operating gain was $0.9 billion, up 17 percent, with margin at 4.7 percent against 4.2 percent. Source
• Carelon Services gain up one-third: Carelon Services operating gain was $292 million against $219 million, and its margin was 3.8 percent against 3.0 percent. Source

“By bringing together the capabilities of our Health Benefits business and Carelon, we are improving the healthcare experience, strengthening our competitive advantage, and creating long-term value for our shareholders.”

Gail K. Boudreaux President and Chief Executive Officer

Membership and product mix

• Medical membership down 1.1 percent: Medical membership was 44.9 million, down 487 thousand from a year earlier. Management attributes the decline to lower enrollment in Medicaid, Medicare Advantage and Employer Group risk-based businesses. Source
• Medicare Advantage membership fell 15.5 percent: Medicare Advantage membership was 1.898 million against 2.245 million a year earlier, and up 0.1 percent from June 30. Source
• Commercial fee-based membership grew: Commercial fee-based membership reached 27.6 million, up 2.2 percent, and BlueCard membership rose 3.2 percent to 6.6 million. Source
• Scripts and service consumers declined: CarelonRx quarterly adjusted scripts were 82.6 million, down 2.8 percent, and Carelon Services consumers served were 91.0 million, down 6.8 percent from a year earlier. Source

Medical costs and claims

• Benefit expense ratio improved: Benefit expense was 90.6 percent of premiums, 70 basis points better than a year earlier, which management attributes to Medicare Advantage and Individual ACA performance. Source
• Days in claims payable lengthened: Days in claims payable were 44.9 at September 30, up 3.5 days year over year, against 45.4 days at June 30. Source
• Benefit expense dollars declined: Quarterly benefit expense was $37.8 billion against $38.1 billion, down 0.9 percent, while nine-month benefit expense rose 0.2 percent to $110.4 billion. Source

Medicare Advantage risk accrual

• CMS risk-adjustment exposure accrued: Nine-month operating gain includes $935 million, which management describes as its current best estimate of potential exposure on historical Medicare Advantage risk adjustment data. The amount sits in Corporate & Other. Source
• Accrual amount unchanged since June: The second-quarter release already included the same $935 million accrual for the six months ended June 30, 2026, so the amount has not changed in the third quarter.

Operating expense and investment

• Operating expense ratio up 90 basis points: Operating expense was 11.4 percent of operating revenue against 10.5 percent, and adjusted it was 11.3 percent against 10.4 percent. Management attributes the rise to targeted one-time investments and growth and quality spending. Source
• Adjusted operating expense rose 8.8 percent: Adjusted operating expense was $5.68 billion, up 8.8 percent. For nine months it was $16.39 billion, up 6.6 percent. Source
• Transaction and integration costs excluded: This quarter's operating gain excludes $42 million of transaction and integration costs and $18 million of business optimization charges. Source

Cash flow and shareholder returns

• Quarterly operating cash flow $1.3 billion: Operating cash flow was $1.3 billion, up $0.1 billion, mainly from favorable working capital. Nine-month operating cash flow was $7.5 billion against $4.2 billion. Source
• Quarter buybacks and dividends: The company repurchased 0.8 million shares for $330 million at a weighted average of $398.75 per share, and paid dividends of $1.72 per share totaling $373 million. Source
• Repurchase authorization reduced: About $5.0 billion of Board-approved repurchase authorization remained at September 30, down from about $5.3 billion at June 30. Source
• Shareholders' equity rose: Total shareholders' equity was $44,681 million at September 30, against $43,882 million at December 31, 2025. Source

Guidance and 2027 earnings path

• Full-year guidance raised: Management raised 2026 guidance: diluted EPS to at least $22.00, adjusted diluted EPS to at least $29.00, and operating cash flow to at least $6.5 billion. Source
• Targeted investments continue: Management says it is investing in capabilities that improve the member experience, strengthen its competitive advantage and support long-term growth. Source
• 2027 adjusted EPS growth reaffirmed: Management remains confident in at least 12 percent adjusted EPS growth in 2027, from a 2026 baseline of at least $26.75 that excludes non-recurring net investment income and targeted one-time investments. Source
• Net investment income rose: Net investment income was $1.04 billion against $625 million, up 65.9 percent, and $2.5 billion for nine months, up 47.3 percent. Source

Coming up, as management said on 21 October 2026

• Fourth quarter dividend payable: A fourth quarter dividend of $1.72 per share is payable December 18, 2026, to holders of record on December 4, 2026. Source

Figures management reported

Risks management discussed

• Regulatory: Management describes the Medicare Advantage risk-adjustment accrual as its current best estimate of potential exposure tied to a February 27, 2026 CMS notice. Source
• Demand: Enrollment fell in Medicaid, Medicare Advantage and Employer Group risk-based businesses, which management cites as the main reason for lower medical membership. Source
• Operational: Days in claims payable rose year over year, which management reports alongside its claims processing metrics. Source
• Financial: Operating expense rose on targeted one-time investments, which management excludes from adjusted results in part. Source

Earlier plans management reported on

• Ahead: The company reported third quarter 2026 results ahead of expectations, as stated in the release headline. Source
• Not stated: Management states it remains confident in delivering at least 12 percent adjusted EPS growth in 2027, restating the prior commitment. Source

Other quarters

• Q2 FY2026 earnings call
• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 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.