📰 What This Document Is

This document is an 8-K filing, which is a mandatory disclosure to the SEC informing investors about important recent corporate events. Specifically, it is an Earnings Release detailing the financial results for the first quarter (Q1) of 2026.

This release is highly significant because it provides a comprehensive look at Elevance Health's current financial health, outlines the major costs and gains they incurred, and—most importantly—provides raised financial guidance for the entire year of 2026.

👉 The headline takeaway is that Elevance is reporting better-than-expected results in Q1 and is committing to higher profitability targets for the full year, signaling confidence in its underlying business strength.

🏥 What The Company Does

In simple terms, Elevance Health is a large, comprehensive health partner that manages and delivers healthcare services across a vast array of patient needs. They act like a massive network connecting people to necessary medical and support care.

The company supports approximately 105 million consumers and operates through diverse solutions, including medical services, pharmacy care, behavioral health, and complex care solutions. Their business is built around managing risk and providing payment for services across various programs, such as Medicare, Medicaid, and employer-sponsored groups.

👉 Elevance isn't just a single doctor's office; it is a complex system that manages large pools of money and risks associated with people's healthcare needs.

📈 First Quarter Financial Performance

The Q1 2026 results show strong underlying revenue growth and performance, although some expense adjustments temporarily impacted headline profits. The company reported Operating Revenue of $49.5 billion in Q1 2026, which represents an increase of $0.7 billion, or 1.5% compared to the prior year quarter (Q1 2025).

Overall, the company's operating margin was 4.2%, while the adjusted operating margin stood at 6.5%. These "adjusted" figures are key because they remove one-time events—like large legal settlements or corporate restructuring costs—to show the true health of the core business.

👉 While reported earnings per diluted share (GAAP) were $8.00, the adjusted diluted EPS was $12.58, which management highlights as a better indicator of their consistent, underlying operational performance.

🔮 Full-Year 2026 Guidance Update

A critical part of this filing is the raised financial guidance, which management uses to predict future performance. This raises investor confidence by showing they have greater visibility into the year ahead.

Management raised the full-year adjusted diluted EPS guidance to at least $26.75. This raise is explicitly supported by the company's ability to reduce medical costs, increase overall operational visibility, and maintain underlying business strength.

They also reaffirmed the full-year operating cash flow guidance of at least $5.5 billion, which provides assurance regarding their ability to generate cash from operations.

👉 Raising guidance shows management believes its internal strategies—like improving efficiency and controlling medical costs—will allow it to hit profitability targets that are higher than what was previously expected.

💰 Cash Flow and Shareholder Actions

The cash flow section reveals how much money the company is generating and how it plans to use that cash. Operating cash flow was $4.3 billion in the quarter, a massive increase of $3.3 billion year over year. This significant cash increase highlights strong business operations.

In terms of returning capital to shareholders, the company spent substantial cash in Q1 2026:

• Stock Repurchase: They repurchased 3.7 million shares of common stock for $1.1 billion.
• Dividend: They paid a quarterly dividend of $1.72 per share, totaling $376 million in distributions.

As of March 31, 2026, they still have a substantial $5.6 billion in remaining share repurchase authorization, indicating management has room to buy back more stock if needed.

🌿 Health Benefits Segment Performance

This segment is the largest and most diverse part of the business, covering everything from Medicare to employer groups. Its Q1 2026 operating revenue was $42.5 billion, up $1.1 billion (or 2.6%) from the prior year quarter.

However, the operating gain for the Health Benefits segment declined by 2.7% year over year, despite the revenue growth. This decline was mainly due to anticipated higher medical costs, especially within the Medicaid business.

The segment reported that medical membership of approximately 45.4 million as of March 31, 2026, increased slightly, driven by growth in commercial fee-based membership.

🧪 Carelon Segment Performance

The Carelon segment is a critical, specialized part of the business focused on different product lines and services. Its operating revenue reached $18.0 billion in Q1 2026, representing a strong increase of $1.3 billion, or 7.9% compared to Q1 2025.

This growth was fueled by the expansion of Carelon Services risk-based solutions and CarelonRx product revenue. However, the operating gain for Carelon totaled $1.1 billion, which was a 3.8% decline year over year. This decline was attributed to lower health plan membership and continued necessary investments in expanding risk-based capabilities.

🧹 Expense Adjustments and the CMS Matter

The filing details several large, non-recurring expenses in Q1 2026, which are vital to understand when comparing GAAP (Generally Accepted Accounting Principles) results to Adjusted results.

1. CMS Notice Accrual: The company recorded a $935 million accrual related to an identified potential exposure from a CMS notice concerning historical Medicare Advantage risk adjustment data. This is a major, one-time cost.
2. Business Optimization: They also recorded a charge of $129 million for business optimization, which is standard when a large company simplifies its organizational structure.

These non-recurring charges significantly impacted the stated (GAAP) operating gain but were excluded from the adjusted measures, which is why the adjusted operating gain was significantly higher.

👉 The reconciliation section explicitly shows that adding back these $935 million and $129 million charges dramatically improves the reported adjusted net income, showing the core operational profitability.

📚 Key Membership Details

The report provides granular details on member numbers, which are crucial indicators of the market strength and stability of the business.

The total medical membership reached 45,418 (in thousands) as of March 31, 2026, compared to 45,833 in the previous year. The company saw significant variations across different risk groups, such as:

• Individual: Increased from 1,307 to 1,424 thousand.
• Medicare Advantage: Declined from 2,230 to 1,899 thousand.
• Medicaid: Declined from 8,500 to 8,456 thousand.

👉 Monitoring these membership changes (especially the drops in Medicare Advantage and Medicaid) helps analysts gauge where the biggest risks and growth opportunities lie for the company.

💹 Financial Position and Cash Flow Breakdown

The balance sheet remains strong, indicating significant liquidity. As of March 31, 2026, total current assets stood at $67,032 million, up from $63,001 million. The cash and investments at the parent company totaled approximately $2.2 billion.

From a cash flow perspective, Net cash provided by operating activities was $4,332 million, compared to $1,017 million in the prior year. This enormous increase shows the business model is generating vastly more operational cash than before.

📅 Upcoming Dates and Contacts

The company provided important details for investors looking to follow up on this report.

• Conference Call: Management hosted a conference call and webcast on April 22, 2026, at 8:30 a.m. Eastern Daylight Time (EDT).
• Access Numbers: Domestic dial-in was 888-947-9963, and the access code was 3972058.
• Investor Relations Contacts: For media inquiries, the company lists Nathan Rich and Leslie Porras, reachable at [email protected] and [email protected].

🧠 The Analogy

Think of Elevance Health as a massive utility company (like electricity or water). When a utility company reports its earnings, you have to look past the obvious—like a one-time fee for upgrading the entire power grid or paying off a major lawsuit—to understand how much electricity the core generators are actually producing. The $935 million CMS accrual and the $129 million optimization charges are those "one-time fees." Analysts ignore them to look at the "Adjusted" numbers, which tell the true story of the company's sustainable power output and profitability.

🧩 Final Takeaway

Elevance Health is successfully navigating high-cost regulatory environments by executing a strategy of expense discipline and reinvestment in profitable services (like Carelon). The combination of rising cash flow, high-confidence guidance raises, and a strong share repurchase program positions the company for continued, profitable improvement.