Elevance Health Inc. (NYSE:ELV)

Reported shareholders’ net income demonstrates a generally stable, albeit slightly decreasing, trend over the five-year period. However, a significant divergence exists between reported and adjusted shareholders’ net income, particularly in 2022 and 2023, indicating substantial adjustments related to mark-to-market valuation of available-for-sale securities.

Reported Net Income Trend

Reported shareholders’ net income decreased from US$6,104 million in 2021 to US$5,987 million in 2023, representing a cumulative decline of approximately 2%. A slight decrease to US$5,980 million was observed in 2024, followed by a more pronounced decrease to US$5,662 million in 2025.

Adjusted Net Income Volatility

Adjusted shareholders’ net income exhibits considerably more volatility. A substantial decrease is evident from US$5,649 million in 2021 to US$3,762 million in 2022, a decline of approximately 33%. This suggests a significant negative impact from mark-to-market adjustments in 2022. A dramatic increase is then observed in 2023, with adjusted net income reaching US$7,104 million, indicating a reversal of the prior year’s negative impact. Adjusted net income then decreased to US$6,084 million in 2024 and increased slightly to US$6,294 million in 2025.

Impact of Mark-to-Market Adjustments

The difference between reported and adjusted net income highlights the sensitivity of earnings to changes in the fair value of available-for-sale securities. The largest discrepancy occurs in 2022, where the adjustment reduces net income by US$2,263 million. In 2023, the adjustment *increases* net income by US$1,117 million, demonstrating the potential for both positive and negative impacts from these valuations. The adjustments in 2024 and 2025 are comparatively smaller, at US$106 million and US$328 million respectively.

The fluctuations in adjusted net income suggest that investment performance, specifically related to available-for-sale securities, plays a crucial role in overall profitability. The company’s reported earnings provide a more stable view of core operations, while the adjusted figures reveal the impact of investment portfolio valuations, which can be subject to market conditions and potentially introduce significant earnings volatility.

The period under review demonstrates fluctuating performance in profitability and returns when considering adjustments to reported figures. Generally, reported metrics exhibit a declining trend, while adjusted metrics show more volatility, with instances of improvement followed by stabilization or slight decreases.

Net Profit Margin

Reported net profit margin decreased consistently from 4.46% in 2021 to 2.87% in 2025. The adjusted net profit margin experienced a more significant decline initially, falling from 4.13% in 2021 to 2.42% in 2022, before recovering to 4.17% in 2023, and subsequently decreasing to 3.19% in 2025. The divergence between reported and adjusted margins suggests the presence of items impacting net income that are excluded from the adjusted calculation, and their increasing impact over time.

Return on Equity (ROE)

Reported ROE followed a downward trajectory, decreasing from 16.93% in 2021 to 12.90% in 2025. Adjusted ROE showed greater fluctuation. It declined sharply from 15.67% in 2021 to 10.36% in 2022, then increased substantially to 18.07% in 2023, before moderating to 14.73% in 2024 and 14.34% in 2025. The substantial increase in adjusted ROE in 2023 indicates a significant positive impact from the adjustments made to equity in that year.

Return on Assets (ROA)

Reported ROA exhibited a consistent decline from 6.26% in 2021 to 4.66% in 2025. Adjusted ROA mirrored this trend initially, with a decrease to 3.66% in 2022. However, it then rose to 6.52% in 2023, followed by a slight decrease to 5.20% in 2024 and stabilization at 5.18% in 2025. Similar to ROE, the adjustments to assets in 2023 appear to have had a considerable positive effect on the calculated ROA.

The consistent decrease in reported profitability ratios suggests underlying pressures on core business operations. The adjustments made to these ratios highlight the impact of specific items on the overall financial picture, and their influence varies year to year. The significant improvements observed in adjusted ROE and ROA in 2023 warrant further investigation to understand the nature of those adjustments and their sustainability.

The period under review demonstrates fluctuating performance in both reported and adjusted shareholders’ net income, with corresponding variations in net profit margins. While reported net profit margin exhibits a consistent downward trend, the adjusted net profit margin shows more volatility.

Reported Shareholders’ Net Income & Margin

Reported shareholders’ net income experienced a slight decrease from US$6,104 million in 2021 to US$6,025 million in 2022, followed by a further decline to US$5,987 million in 2023. This trend stabilized with US$5,980 million in 2024 before decreasing to US$5,662 million in 2025. Consequently, the reported net profit margin decreased steadily from 4.46% in 2021 to 2.87% in 2025, indicating a diminishing profitability based on reported figures.

Adjusted Shareholders’ Net Income & Margin

Adjusted shareholders’ net income displayed significant variation. A substantial decrease occurred between 2021 (US$5,649 million) and 2022 (US$3,762 million). However, a considerable increase was observed in 2023, reaching US$7,104 million. This level was followed by a decrease to US$6,084 million in 2024 and a slight increase to US$6,294 million in 2025. The adjusted net profit margin mirrored this volatility, falling from 4.13% in 2021 to 2.42% in 2022, rising to 4.17% in 2023, and then decreasing to 3.47% in 2024 and 3.19% in 2025.

Comparison of Reported and Adjusted Margins

The adjusted net profit margin consistently remained below the reported net profit margin throughout the observed period. The difference between the two margins varied year to year, suggesting that adjustments made to net income have a notable impact on the overall profitability picture. The larger divergence in 2022 and 2023 indicates that significant adjustments were made in those years, substantially altering the reported profitability.

Overall Trend

While the reported net profit margin demonstrates a clear downward trend, the adjusted net profit margin exhibits a more complex pattern. The substantial fluctuations in adjusted net income suggest the presence of non-recurring items or accounting adjustments that significantly influence the reported financial performance. Further investigation into the nature of these adjustments would be necessary to fully understand the underlying drivers of profitability.

Analysis reveals fluctuations in both reported and adjusted shareholders’ net income, impacting corresponding return on equity (ROE) figures over the five-year period. While reported net income demonstrates a general downward trajectory, adjusted net income exhibits more volatility. This divergence significantly influences the observed ROE trends.

Reported Shareholders’ Net Income & ROE

Reported shareholders’ net income decreased from US$6,104 million in 2021 to US$5,662 million in 2025, representing a cumulative decline. Consequently, reported ROE followed a similar downward trend, decreasing from 16.93% in 2021 to 12.90% in 2025. This consistent decline suggests a diminishing ability to generate profit from shareholder equity when measured using reported figures.

Adjusted Shareholders’ Net Income & ROE

Adjusted shareholders’ net income experienced substantial variation. A significant decrease was observed from US$5,649 million in 2021 to US$3,762 million in 2022. However, it rebounded strongly to US$7,104 million in 2023 before moderating to US$6,084 million in 2024 and US$6,294 million in 2025. This volatility is mirrored in the adjusted ROE, which fell to 10.36% in 2022, peaked at 18.07% in 2023, and then decreased to 14.73% in 2024 and 14.34% in 2025. The 2023 peak indicates a period of particularly efficient equity utilization based on the adjusted metric.

ROE Discrepancy

A consistent difference exists between reported and adjusted ROE throughout the period. The adjusted ROE consistently falls below the reported ROE in 2021, 2022, and 2024, but exceeds it in 2023 and is nearly equivalent in 2025. This suggests that adjustments to net income have a material impact on the assessment of equity performance. The nature of these adjustments is not apparent from the information presented, but their effect is demonstrably significant.

In summary, while reported ROE demonstrates a clear downward trend, the adjusted ROE exhibits greater fluctuation, highlighting the importance of understanding the adjustments made to net income when evaluating the company’s profitability relative to shareholder equity.

Analysis of the presented financial information reveals distinct trends in both reported and adjusted shareholders’ net income, and consequently, in reported and adjusted return on assets (ROA). Reported shareholders’ net income demonstrates a slight, consistent decline over the five-year period, decreasing from US$6,104 million in 2021 to US$5,662 million in 2025. Adjusted shareholders’ net income exhibits more volatility, with a significant decrease in 2022, followed by substantial increases in 2023 and a stabilization in 2024 and 2025.

Reported Return on Assets (ROA)

Reported ROA consistently decreased from 6.26% in 2021 to 4.66% in 2025. This indicates a declining profitability relative to the company’s total assets when measured by reported net income. The decrease is gradual but persistent throughout the period.

Adjusted Return on Assets (ROA)

Adjusted ROA mirrors the volatility observed in adjusted shareholders’ net income. A substantial drop is evident in 2022, falling to 3.66% from 5.80% in 2021. However, adjusted ROA recovers significantly in 2023, reaching 6.52%, before stabilizing at approximately 5.20% in both 2024 and 2025. This suggests that adjustments to net income have a considerable impact on the ROA calculation, and that underlying operational performance, as reflected in the adjusted figures, experienced a temporary setback in 2022.

The divergence between reported and adjusted ROA highlights the importance of considering the impact of specific adjustments when evaluating the company’s profitability. While reported ROA shows a steady decline, the adjusted ROA demonstrates a more nuanced picture, indicating potential distortions in the reported figures. The stabilization of adjusted ROA in the latter two years suggests a potential leveling off of performance after the initial volatility.

Net Income Trends

The difference between reported and adjusted net income varies across the period. The largest discrepancy occurs in 2022, where adjusted net income is significantly lower than reported net income. This suggests substantial adjustments were made to arrive at the adjusted figure for that year. The narrowing gap in 2023, 2024, and 2025 indicates a lessening of these adjustments.