Elevance Health, Inc. Quarterly Report on Form 10-Q For the Period Ended September 30, 2025
Elevance Health, Inc. Quarterly Report on Form 10-Q For the Period Ended September 30, 2025
Elevance Health, Inc. reported its quarterly financial results for the period ended September 30, 2025. The company’s revenue increased by 12.1% to $34.4 billion, driven by growth in its health insurance and pharmacy benefit management segments. Net income rose to $1.4 billion, or $6.34 per diluted share, compared to $1.1 billion, or $5.23 per diluted share, in the same period last year. The company’s operating cash flow was $2.5 billion, and its free cash flow was $1.8 billion. Elevance Health’s balance sheet remained strong, with cash and investments of $4.3 billion and debt of $14.5 billion. The company’s financial performance was driven by its ability to manage costs, improve operational efficiency, and invest in growth initiatives.
Overview
Elevance Health is one of the largest health insurers in the United States, serving approximately 45.4 million medical members through its affiliated health plans as of September 30, 2025. The company operates under various brands, including Anthem Blue Cross/Anthem Blue Cross and Blue Shield, Wellpoint, and Carelon, and reports its results in four segments: Health Benefits, CarelonRx, Carelon Services, and Corporate & Other.
Financial Performance
For the three months ended September 30, 2025, Elevance Health reported:
- Total operating revenue of $50,087 million, an increase of 12.0% from the prior year period
- Net income of $1,187 million, an increase of 17.8% from the prior year period
- Diluted earnings per share of $5.32, an increase of 22.0% from the prior year period
For the nine months ended September 30, 2025, Elevance Health reported:
- Total operating revenue of $148,273 million, an increase of 13.9% from the prior year period
- Net income of $5,115 million, a decrease of 8.0% from the prior year period
- Diluted earnings per share of $22.67, a decrease of 4.8% from the prior year period
The increases in revenue were primarily driven by premium rate increases, recent acquisitions, and growth in the Medicare Advantage business, partially offset by Medicaid membership attrition. The decrease in net income and earnings per share for the nine-month period was due to higher medical cost trends and increased investments, partially offset by improved performance in the CarelonRx and Carelon Services segments.
Segment Performance
| Segment | Q3 2025 Operating Gain | Q3 2024 Operating Gain | Change |
|---|---|---|---|
| Health Benefits | $601 million | $1,604 million | (62.5)% |
| CarelonRx | $556 million | $619 million | (10.2)% |
| Carelon Services | $219 million | $184 million | 19.0% |
| Corporate & Other | $(81) million | $(999) million | (91.9)% |
The decrease in Health Benefits operating gain was primarily due to higher medical cost trends and increased investments. CarelonRx saw a decline in operating gain due to expenses associated with expanding dispensing and specialty services. Carelon Services reported improved performance, driven by the acquisition of CareBridge and growth in risk-based capabilities. Corporate & Other benefited from lower business optimization charges.
Strengths and Weaknesses
Strengths:
- Diversified business model with strong market positions across commercial, Medicare, and Medicaid segments
- Expanding capabilities in pharmacy services and healthcare services through CarelonRx and Carelon Services
- Solid financial position with strong liquidity and access to capital
Weaknesses:
- Elevated medical cost trends, particularly in Medicaid and Affordable Care Act plans
- Challenges in managing the transition of Medicaid members to the Individual ACA business
- Ongoing litigation related to the Blue Cross Blue Shield Antitrust Litigation
Outlook
Elevance Health faces several regulatory and market uncertainties, including changes to Medicaid eligibility and enrollment, the potential expiration of enhanced Affordable Care Act premium subsidies, and increased scrutiny of Medicare Advantage risk adjustment practices. The company is focused on improving medical cost management, expanding its healthcare services capabilities, and navigating the evolving regulatory landscape. While near-term profitability may be pressured, Elevance Health’s diversified business model and strong market positions position it well for long-term growth.