AI Takeaway
Elevance Health reported Q1 2026 revenue of $50.2B (+2.6% YoY) but saw operating income fall 34.2% to $2.1B and net income decline 19.2% to $1.76B, reflecting significant cost pressures from rising medical costs and elevated SG&A spending, partially offset by a strong surge in operating cash flow to $4.3B.
Revenue
$50.18B
++2.64% YoY
EPS (Basic)
$8.03
-16.70% YoY
Operating Income
$2.09B
-34.20% YoY
Filed · Source: SEC EDGAR 10-Q filing
Total revenue grew 2.6% YoY to $50.2B in Q1 2026, up from $48.9B in Q1 2025, indicating continued top-line expansion likely driven by premium rate adjustments and membership growth across health plan segments.
Source: Source: 10-Q Income Statement (XBRL Financial Data)
Operating income declined sharply by 34.2% YoY to $2.1B, with operating margin contracting from 6.5% to 4.2%, driven by a 9.6% increase in cost of revenue to $5.5B and a 19.4% surge in SG&A expenses to $6.3B, signaling elevated medical cost trends and administrative cost pressures.
Source: Source: 10-Q Income Statement (XBRL Financial Data)
Net income fell 19.2% YoY to $1.76B, and diluted EPS dropped 16.8% to $8.00 from $9.61, reflecting the combined impact of higher operating costs outpacing revenue growth and compressing profitability.
Source: Source: 10-Q Income Statement (XBRL Financial Data)
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Upgrade to unlockCost of revenue rose 9.6% YoY to $5.5B while revenue grew only 2.6%, indicating that medical cost trends are outpacing premium growth. Sustained elevated utilization rates or unexpected spikes in high-cost claims could further compress the medical loss ratio and erode profitability.
Source: Source: 10-Q Income Statement (XBRL Financial Data)
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Upgrade to unlockReported EPS of $12.58 versus the $10.93 analyst consensus — a +15.1% beat for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $50.18B | $48.89B | +2.64% |
Cost of Revenue | $5.46B | $4.98B | +9.63% |
Operating Income | $2.09B | $3.17B | -34.20% |
Net Income | $1.76B | $2.18B | -19.19% |
EPS (Basic) | $8.03 | $9.64 | -16.70% |
EPS (Diluted) | $8.00 | $9.61 | -16.75% |
SG&A Expense | $6.33B | $5.3B | +19.43% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $125.83B | $119.72B | +5.10% |
Current Assets | $67.03B | $61.12B | +9.67% |
Total Liabilities | $81.78B | $77.1B | +6.08% |
Current Liabilities | $45.31B | $42.7B | +6.12% |
Stockholders' Equity | $43.9B | $42.5B | +3.29% |
Cash & Equivalents | $9.66B | $7.5B | +28.76% |
Long-Term Debt | $31.12B | — | — |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $4.33B | $1.02B | +325.96% |
Investing Cash Flow | $-1.64B | $103M | -1694.17% |
Financing Cash Flow | $-2.52B | $-1.91B | -31.74% |
Dividends Paid | $376M | $386M | -2.59% |
Share Buybacks | $1.12B | $880M | +27.73% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 4.2% | 6.5% | -2.33% |
Net Margin | 3.5% | — | — |
ROE | 4.0% | — | — |
ROA | 1.4% | — | — |
Current Ratio | $1.479 | — | — |
Debt to Equity | $1.863 | — | — |
Other companies in Managed Health Care
Elevance Health reported Q1 2026 revenue of $50.2B, up 2.6% YoY, but net income fell 19.2% to $1.76B and diluted EPS dropped 16.8% to $8.00. The results were pressured by a 9.6% rise in cost of revenue and a 19.4% surge in SG&A expenses, which significantly outpaced revenue growth.
ELV's earnings declined primarily because medical costs and administrative expenses grew much faster than revenue — cost of revenue rose 9.6% and SG&A jumped 19.4%, while revenue grew only 2.6%. This cost-revenue mismatch caused operating income to fall 34.2% YoY to $2.1B and compressed the operating margin from 6.5% to 4.2%.
The key takeaways are: revenue grew modestly to $50.2B (+2.6%), but profitability was significantly pressured with operating income down 34.2% and net income down 19.2%; operating cash flow was a bright spot, surging 326% to $4.3B; and the company continued returning capital via $1.1B in buybacks and $376M in dividends.
ELV maintains adequate short-term liquidity with a current ratio of 1.48 and cash of $9.7B, and its operating cash flow surged to $4.3B. However, the balance sheet is leveraged with $31.1B in long-term debt and a debt-to-equity ratio of 1.86, and declining ROE (4.0%) and ROA (1.4%) signal weakening capital efficiency.
Elevance Health's operating cash flow surged 326% YoY to $4.3B in Q1 2026, compared to just $1.0B in Q1 2025. This dramatic improvement suggests favorable working capital timing or claims payment dynamics, and stands in contrast to the weaker reported net income of $1.76B.