Elevance Health, Inc.
ELV · NYSE
Next quarter
Expected to report Jan 27, 2027 — estimated from last year’s reporting date.
Consensus is $2.33 EPS for Dec 2026 across 9 estimates, ranging $1.92 to $3.02.
ELV Sep 2026
- 50.00%
- $4.66
- $6.99
- —
- $51.43B
Reported results
- $51.43B
- 89.03%
- $1.27B
- 2.47%
- $1.36B
- $6.27
Highlights
- Adjusted EPS beat: Adjusted diluted EPS was $6.99, 50% above the supplied $4.66 consensus; GAAP diluted EPS was $6.27, including a net non-operating benefit of $1.85 per share.
- Guidance raised: 2026 guidance is now at least $22.00 GAAP EPS and $29.00 adjusted EPS, with operating cash flow of at least $6.5 billion; management reiterated at least 12% adjusted EPS growth in 2027 from a $26.75 baseline.
- Revenue grew modestly: Total revenue of $51.43 billion rose 1.4% year over year and about 1.9% from Q2; operating revenue was $50.44 billion, up 0.7% year over year.
- Core operating gain slipped: Reportable-segment operating gain was $1.27 billion, down 2.0% year over year, while adjusted operating margin held at 2.7%.
- Medical costs improved year over year: The benefit expense ratio fell 70 basis points to 90.6%, but the adjusted operating expense ratio rose 90 basis points to 11.3% as the company funded targeted investments.
- Carelon offset Health Benefits pressure: Carelon operating gain increased 17% to $908 million; Health Benefits operating gain fell 27.5% to $436 million.
- Membership continued to contract: Medical membership declined 487,000, or 1.1%, year over year to 44.9 million, with decreases in Medicaid and Medicare Advantage among the largest drags.
- Cash generation strengthened: Nine-month operating cash flow was $7.51 billion versus $4.21 billion a year earlier; the company repurchased $330 million of shares and paid $373 million in dividends during the quarter.
Analysis
Elevance reported Q3 total revenue of $51.43 billion, up 1.4% from a year ago and about 1.9% from Q2’s $50.47 billion. GAAP diluted EPS of $6.27 was 17.9% above Q3 2025’s $5.32 but below Q2’s $6.71. Adjusted EPS was $6.99, 50% above the supplied $4.66 consensus and 15.9% above the year-ago $6.03; the release attributed $1.85 per share to a net non-operating benefit. The distinction matters: segment operating gain declined 2.0% year over year to $1.27 billion, and the operating margin eased 10 basis points to 2.5%.
The operating picture mixed improved medical costs with expense pressure and uneven segments. The benefit expense ratio improved 70 basis points to 90.6%, while the adjusted operating expense ratio increased 90 basis points to 11.3% amid targeted investments. Carelon’s operating gain rose 17% to $908 million, but Health Benefits’ fell 27.5% to $436 million. Membership was down 1.1% year over year. Elevance raised its 2026 outlook to at least $22.00 GAAP EPS, $29.00 adjusted EPS and $6.5 billion of operating cash flow. It also reiterated a target of at least 12% adjusted EPS growth in 2027 from a $26.75 baseline.
Earnings and guidance
The headline beat was stronger on adjusted than on GAAP earnings. Adjusted diluted EPS of $6.99 exceeded the supplied $4.66 consensus by 50% and increased 15.9% from $6.03 a year earlier. GAAP diluted EPS was $6.27, up from $5.32 a year ago but down from $6.71 in Q2. The release said results included a net non-operating benefit of $1.85 per share. Net investment income rose 65.9% year over year to $1.04 billion, while net losses on financial instruments were $48 million versus $1 million a year ago.
- 2026 outlook: The company raised its minimum guidance to $22.00 GAAP diluted EPS and $29.00 adjusted diluted EPS, and to at least $6.5 billion in operating cash flow.
- 2027 target: Management reiterated at least 12% adjusted EPS growth from a 2026 adjusted earnings baseline of at least $26.75; the baseline excludes non-recurring net investment income and other non-operating items, as well as targeted one-time investments.
Operating performance
Total revenue was $51.43 billion, 1.4% above Q3 2025’s $50.71 billion; the sequential comparison was about 1.9% above Q2’s $50.47 billion. Operating revenue, which excludes investment income and financial-instrument results, was $50.44 billion, up 0.7% year over year. Higher premium yields, CarelonRx product revenue and service fees supported growth, partly offset by lower Medicare Advantage, Medicaid and employer risk-based membership. Reportable-segment operating gain was $1.27 billion, down 2.0% year over year, and operating margin was 2.5% versus 2.6%.
- Medical costs: The benefit expense ratio improved to 90.6% from 91.3%, reflecting better Medicare Advantage and Individual ACA performance.
- Operating expenses: The adjusted operating expense ratio increased to 11.3% from 10.4%. Elevance cited targeted one-time capability investments, growth and quality initiatives, technology adoption, premium taxes and regulatory-related spending.
- Claims timing: Days in claims payable reached 44.9, up 3.5 days year over year.
Segment performance
- Health Benefits: Revenue rose 2.6% to $43.36 billion, but operating gain declined 27.5% to $436 million and margin narrowed to 1.0% from 1.4%. Higher premium yields and an improved benefit expense ratio were outweighed by higher medical costs and targeted investments.
- CarelonRx: Revenue increased 5.5% to $11.60 billion and operating gain grew 10.8% to $616 million. Higher average revenue per prescription and better specialty pharmacy profitability helped, while adjusted scripts fell 2.8% year over year to 82.6 million.
- Carelon Services: Revenue grew 5.2% to $7.71 billion and operating gain rose 33.3% to $292 million. Specialty and home-based care performance contributed, partly offset by less favorable behavioral health contracts; consumers served declined 6.8% to 91.0 million.
Membership trends
Medical membership was 44.9 million at quarter-end, down 487,000, or 1.1%, from a year earlier and 67,000 from Q2. Medicaid membership fell 425,000 year over year to 8.22 million, while Medicare Advantage declined 347,000 to 1.90 million. Employer Group risk-based membership was down 250,000 to 3.37 million. Growth in commercial fee-based membership, up 603,000 to 27.61 million, partly offset those declines. The company attributed the broader reduction to Medicaid eligibility redeterminations and deliberate repositioning in Medicare Advantage, among other membership decreases.
- Membership mix: Commercial fee-based membership grew 2.2% year over year, while Medicaid and Medicare Advantage membership declined 4.9% and 15.5%, respectively.
Cash and capital
- Cash flow: Quarterly operating cash flow was $1.3 billion, up $0.1 billion year over year, primarily on favorable working-capital dynamics. For the first nine months, operating cash flow was $7.51 billion versus $4.21 billion.
- Shareholder returns: Elevance repurchased 0.8 million shares for $330 million in Q3 and paid $373 million in dividends. About $5.0 billion of repurchase authorization remained at September 30.
- Liquidity: Parent-company cash and investments were approximately $2.4 billion at quarter-end.
CMS and regulatory matters
CMS told Elevance in July that it had completed the required steps relating to the agency’s February notice on historical Medicare Advantage risk-adjustment data, that sanctions would not be imposed and that the enforcement process was closed. The separate financial exposure remains unresolved: after a $342 million payment in May against the original $935 million accrual, $593 million remained accrued at September 30. Management said the eventual liability could be about $320 million below or above the original accrual. The original accrual is excluded from adjusted earnings and accounts for $4.28 per share in the company’s 2026 GAAP-to-adjusted EPS guidance reconciliation.
