Q124 ELV earnings

earnings summary

Earnings Results: • Adjusted earnings per share (EPS) of $10.64, up 12.5% year-over-year • GAAP earnings per share of $9.59 • Solid performance and growth in operating gains for both Health Benefits and Carelon segments of $138 million and $72 million, respectively • Operating revenue of $42.3 billion, in line with expectations • Consolidated benefit expense ratio of 85.6% improved 20 basis points year-over-year

Future Guidance: • Increased full year adjusted EPS guidance by $0.10 to be greater than $37.20 • Expect operating cash flow of at least $8.1 billion for the full year • Remain committed to achieving long-term adjusted EPS compound annual growth rate of 12% to 15% through 2027

Elevance Health reported strong first quarter results, with adjusted EPS growing 12.5% to $10.64 and GAAP EPS of $9.59, driven by operating revenue of $42.3 billion. The company’s consolidated benefit expense ratio improved by 20 basis points to 85.6%, and solid performance in both the Health Benefits and Carelon segments led to growth in consolidated adjusted operating gains of over 7%. Elevance Health increased its full year adjusted EPS guidance by $0.10 to be greater than $37.20 and expects operating cash flow of at least $8.1 billion, demonstrating confidence in its long-term adjusted EPS compound annual growth rate target of 12% to 15% through 2027.

The company is making significant progress on its enterprise strategy, including accelerating growth in Carelon and optimizing its Health Benefits business. A strategic partnership with Clayton, Dubilier & Rice to form a payer-agnostic health services company serving nearly 1 million consumers across commercial, Medicare, and Medicaid plans highlights Elevance Health’s commitment to delivering innovative care enablement solutions.

Despite challenges posed by the dynamic market environment, such as the ongoing Medicaid redetermination process and potential Medicare Advantage rate cuts for 2024, Elevance Health remains confident in its ability to navigate these headwinds through its diversified business mix, disciplined execution, and focus on delivering value to its members and partners.

Notable quotes: • “We’re excited to collaborate with CD&R and a broad range of care provider partners to accelerate innovation, enhance health care experiences and improve health outcomes for consumers.” - Gail Boudreaux, CEO • “Solid performance and growth in operating gains for both our Health Benefits and Carelon segments of $138 million and $72 million, respectively, led to growth in consolidated adjusted operating gains of over 7%.” - Mark Kaye, CFO • “We estimate that nearly 90% of our members have had their eligibility redetermined.” - Felicia Norwood, President of Government Business