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Jun 30, 2025
Elevance Health Q2 2025 Earnings Report
Elevance Health reported solid revenue growth in Q2 2025 but faced margin pressure due to higher medical costs.
Key Takeaways
Elevance Health delivered strong revenue growth in Q2 2025, driven by acquisitions and Medicare Advantage membership gains, but elevated medical cost trends in ACA and Medicaid weighed on margins and net income.
Revenue rose 14.3% YoY to $49.4B, boosted by acquisitions and higher premium yields.
Net income declined 24% YoY to $1.74B due to elevated medical cost trends.
Adjusted EPS was $8.84, with GAAP EPS at $7.72.
Carelon segments posted strong growth, particularly in home health and pharmacy services.
Revenue by Segment
Forward Guidance
Elevance Health revised its FY 2025 guidance due to elevated ACA and Medicaid medical cost trends, expecting GAAP EPS of ~$24.10 and adjusted EPS of ~$30.00.
Positive Outlook
- Reaffirmed long-term goal of at least 12% average annual adjusted EPS growth.
- Strong revenue momentum from acquisitions and Medicare Advantage growth.
- CarelonRx and Carelon Services continue to scale successfully.
- Operating expense ratio improved by 160 basis points YoY.
- Maintained significant share repurchase authorization (~$8B remaining).
Challenges Ahead
- Elevated medical cost trends in ACA and Medicaid impacting margins.
- Medicaid membership attrition weighing on revenue growth.
- Benefit expense ratio rose 260 basis points YoY to 88.9%.
- Slower rate alignment in Medicaid expected to persist.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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