Elevance Health Inc.

Elevance Health reported second quarter adjusted diluted EPS of $7.45, above its outlook. Operating revenue was $49.8 billion, up 0.8% year over year. Medical membership ended at 44.9 million. Days in claims payable were 45.4 days, up 2.9 days year over year. The company recorded a net below-the-line benefit of $0.80 per share, mainly from valuation adjustments within net investment income, and said it will use that for one-time investments in the second half. For 2026, management raised adjusted EPS guidance to at least $27, kept the Medicaid operating margin outlook at approximately -1.75%, said Medicare Advantage remains on track for at least a 2% operating margin, expects at least 1 million individual ACA members at year-end, and raised operating cash flow guidance to at least $6 billion. It also said third-quarter adjusted EPS should be about 17% of the revised full-year guidance and that the adjusted operating expense ratio should be in the upper half of the full-year range.

Gail Boudreaux said the quarter came in ahead of outlook because of favorable benefit expense, disciplined execution, and actions to manage healthcare costs more effectively. She emphasized that the confidence in the raised outlook is broad-based across the portfolio, not tied to one business or one quarter, and highlighted progress in Medicare Advantage, Commercial, ACA, Carelon, and AI-enabled capabilities. Her tone was constructive but careful: she repeatedly framed the outlook as prudent, especially in Medicaid, while stressing that targeted investments now are meant to strengthen the enterprise over time.

Mark Kaye said Q2 adjusted EPS of $7.45 beat expectations, helped by Medicare Advantage and ACA benefit expense, expense discipline, and care management actions. He noted the $0.80 per share below-the-line benefit and said it will be redeployed into one-time second-half investments; he also said there was about $0.75 of EPS tied to targeted investment spending already included in the first-half outlook. Financially, he cited $49.8 billion of revenue, 44.9 million members, 45.4 days in claims payable, and $1.9 billion of operating cash flow. He raised full-year operating cash flow guidance to at least $6 billion, kept Medicaid margin outlook at about -1.75%, said MA remains on track for at least 2% margin, and said the company now views at least $26 as the EPS baseline for modeling toward 2027.

Most analyst questions focused on Medicaid: rate updates, acuity, second-half margin shape, and why the company is still considering market exits even as rates improved. Management said second-half Medicaid margin should improve from Q2, but the company is not assuming a major trend improvement and remains prudent because elevated utilization persists in identifiable categories like behavioral health, specialty pharmacy, outpatient surgery, and ED use. On exits, Gail, Felicia, and Aimée said decisions are based on long-term sustainability and strategic fit, not just near-term results. Other questions covered ACA risk adjustment, where management said it is reestablishing most of the favorable 2025 risk adjustment in 2026 reserves, and Medicare Advantage, where management said the portfolio repositioning is working and Stars remains a multi-year effort.