Anthem — Income Statement, Cash Flows & Balance Sheet

Is Elevance Health profitable?

Revenue grew sharply, but benefit costs grew faster, compressing profit.

Revenue jumped meaningfully, driven by premium growth, but medical costs rose even faster — the benefit expense ratio (the share of premium dollars paid out in claims) climbed noticeably, squeezing operating profit across all segments.

Net income fell and the effective tax rate swung dramatically between years.

Pre-tax income fell meaningfully, but a sharply lower effective tax rate — driven by a one-time internal restructuring benefit and favorable resolution of uncertain tax positions — cushioned the blow, limiting the decline in reported net income to around 5%.

Where does Elevance Health's revenue come from?

Health Benefits remains the dominant segment, but Carelon Services is growing fast.

Health Benefits — the core insurance business — still generates the vast majority of unaffiliated revenue. Carelon Services, which delivers healthcare-related services, more than doubled its external revenue, partly reflecting recent acquisitions including CareBridge, a Medicaid home-care company acquired at the end of 2024.

Health Benefits profitability declined sharply; the Carelon units held up better.

Rising medical costs hit Health Benefits hardest, with operating profit down by a third. CarelonRx and Carelon Services both grew their contributions, partly offsetting the pressure.

Does Elevance Health generate cash?

Operating cash flow dropped sharply, largely due to higher claims payments and working capital.

Operating cash generation declined substantially. A large increase in receivables — reflecting the rapid premium growth — and swings in claims payable timing consumed cash that flowed through the income statement as profit.

Capital returns to shareholders remained substantial despite the cash flow dip.

Elevance Health continued to return meaningful capital through buybacks and a growing dividend, though the pace of repurchases moderated, consistent with a lower free cash flow year.

How strong is Elevance Health's balance sheet?

Long-term debt has grown to a significant level, though covenants remain comfortably met.

Debt is large in absolute terms — a common feature of large managed care companies that use leverage to fund acquisitions and buybacks — but Elevance Health is operating well within its debt covenant limit, and cash on hand improved year-over-year.

The balance sheet carries substantial goodwill and intangibles from past acquisitions.

Goodwill and intangibles together represent roughly a third of total assets — a reflection of years of acquisitions, including the Blue Cross and Blue Shield trademarks and state Medicaid licenses. No impairment was recorded in 2025, and annual testing found carrying values well below estimated fair values.