Earnings call transcript: CorVel Corp Q4 2025 shows revenue growth, stock dips

CorVel Corp reported its financial results for Q4 2025, revealing a 12% increase in revenue to $232 million and a 38% rise in earnings per share (EPS) to $0.51. Despite these strong figures, the company’s stock experienced a decline, dropping 3.67% to $110.38, as investors reacted to the earnings announcement. The stock movement reflects a broader sentiment in the market, possibly influenced by concerns over future growth and competitive pressures. InvestingPro data shows the stock trades with relatively low volatility and has delivered a solid 24.7% return over the past year. Discover 8 more exclusive ProTips and comprehensive valuation metrics with an InvestingPro subscription.

Key Takeaways

• CorVel’s Q4 2025 revenue grew by 12%, reaching $232 million.
• EPS increased by 38% year-over-year, reaching $0.51.
• Stock price declined by 3.67% following the earnings release.
• Strong performance in network solutions, with a 24% revenue increase.
• Continued focus on AI integration and operational efficiency.

Company Performance

CorVel Corp demonstrated robust performance in Q4 2025, with significant growth in both revenue and earnings. The company’s strategic focus on AI integration and operational efficiency contributed to this positive outcome. However, the decline in stock price suggests that investors may have anticipated even stronger results or have concerns about future growth prospects.

Financial Highlights

• Revenue: $232 million, up 12% year-over-year.
• Earnings per share: $0.51, a 38% increase from the previous year.
• Fiscal Year 2025 Revenues: $896 million, marking a 13% increase.
• Fiscal Year EPS: $1.83, a 24% rise from the prior year.
• Patient Management Revenue: $149 million, a 6% increase.
• Network Solutions Revenue: $83 million, a 24% increase.

Market Reaction

CorVel’s stock fell by 3.67% to $110.38 after the earnings announcement. This decline contrasts with the company’s positive financial results, suggesting investor concerns over potential challenges or unmet expectations. The stock remains within its 52-week range, having previously reached a high of $128.61 and a low of $76.53.

Outlook & Guidance

Looking forward, CorVel plans to continue investing in AI technologies and enhancing its service offerings. With an excellent InvestingPro Financial Health Score of 3.29 (rated as "GREAT") and minimal debt levels (Debt-to-Equity ratio of 0.06), the company is well-positioned to fund its growth initiatives. The company anticipates potential complexities in workers’ compensation claims and emphasizes the importance of technological innovation, cost containment, and operational efficiency in its strategic plans. Access the complete CorVel Research Report, along with 1,400+ other detailed company analyses, exclusively on InvestingPro.

Executive Commentary

CEO Michael Combs highlighted the company’s commitment to its long-standing principles, stating, "We remain committed to the principles that have guided us for the past thirty-eight years." CFO Brandon O’Brien emphasized the strength of CorVel’s financial position, noting, "Our strong and debt-free balance sheet generates improved earnings."

Risks and Challenges

• Potential increase in workers’ compensation claims complexity.
• Competitive pressures in the healthcare sector.
• Regulatory scrutiny affecting operational practices.
• Market demand for administrative cost reduction.
• Sustaining growth in a rapidly evolving industry.

CorVel Corp’s Q4 2025 earnings report showcases impressive financial growth, yet the stock’s decline indicates investor caution regarding future challenges and growth sustainability. The company’s emphasis on AI and operational efficiency positions it well for future developments, despite the current market reaction.

Full transcript - CorVel Corp (CRVL) Q4 2025:

Webcast Operator, CorVel Corporation: Thank you for standing by. Welcome to the CorVel Corporation Quarterly Earnings Release Webcast. During the course of this webcast, CorVel Corporation may make projections or other forward looking statements regarding future events or the future financial performances of the company. CorVel wishes to caution you that these statements are only predictions and that actual events or results may differ materially. CorVel refers you to the documents that the company files from time to time with the Securities and Exchange Commission, specifically the company’s last Form 10 ks and 10 Q files for the most recent fiscal year and quarter.

These documents contain and identify important factors that could cause the actual results to differ materially from those contained in our projections or forward looking statements. I would now like to turn it over to Michael Combs, President and Chief Executive Officer.

Michael Combs, President and Chief Executive Officer, CorVel Corporation: Good morning. Thank you for joining us to review CorVel’s March quarter and fiscal year results. Brandon O’Brien, CorVel’s Chief Financial Officer, is on the call with me today. Today, I will review business performance, the current environment and market trends and progress on new product and service offerings. Brandon will then provide an overview of the March and fiscal year financial results.

The March revenues were $232,000,000 12 percent over the $2.00 $7,000,000 in revenue for the March. The earnings per share for the quarter ended 03/31/2025 were zero five one dollars an increase of 38% over the same quarter of the prior year’s EPS of $0.37 Revenues for the fiscal year twenty twenty five were $896,000,000 up 13% from the $795,000,000 for the prior fiscal year. Earnings per share were 1.83 an increase of 24% compared to the $1.47 for the fiscal year ended 03/31/2024. As a reminder to our listeners, the earnings per share figures for the quarter and annual comparisons have been adjusted to account for the three for one stock split we previously reported in December of twenty twenty four. Current macroeconomic policies are uncertain, but recent developments have had minimal direct impact on the markets in which we operate.

However, ongoing shifts in trade dynamics could present longer term opportunities, specifically a broader reshoring of manufacturing and supply chain operations could create jobs and increase domestic production capacity, enhancing the risk management market and workers’ compensation and healthcare. But rather than focusing on speculation, we remain committed to the principles that have guided us for the past thirty eight years, specifically fiscal conservatism, investment in technology and our team and deliver meaningfully differentiating results to our partners. With CorVel’s strong balance sheet, we will navigate any economic uncertainty and seize opportunities as they arise. One strategic opportunity and area of continued investment is increased deployment of AI tools throughout the organization. Currently, we are focusing on enhancing and expanding our communication platform within our systems.

This functionality incorporates AI, interactive voice response or IVR, and chatbot tools to analyze, route, and manage calls in a personalized manner. By integrating these tools with proprietary and partnered solutions, we leverage new technology to combine text and email communication data, resulting in a unique and robust solution. In addition to streamlining workflows and increasing efficiencies, having all related communication data in an integrated platform fuels AI powered analysis and the identification of actionable insights. We are noticing an increase in AI adoption amongst medical providers, particularly in billing platforms to enhance revenue opportunities that are not necessarily aligned with standard industry accepted billing methodologies. To adapt to these changes in traditional billing practices, we are enhancing and adapting our bill review capabilities.

These enhancements allow us to identify new patterns of billing inaccuracies, discrepancies and inappropriate charges. As a result, we can achieve savings beyond standard fee schedule applications further supporting our cost containment efforts. We’ve implemented an additional cost containment enhancement in our bill review platform, specifically enhanced SaaS document viewer and management functionality. This upgrade increases the efficiency of CorVel’s payer partners review process. The new viewer allows users to access medical records in a clear and organized format, enhancing visibility and accelerating decision making.

Additionally, it separates the clinical review from the billing workflow, leading to a more focused and accurate evaluation of clinical updates and cost considerations. It ultimately supports faster, more informed medical management and claim handling. AI is also bringing additional value in fraud, waste and abuse in medical management. For over a decade, we’ve leveraged tools such as utilization review and professional bill review to identify and mitigate overutilization, up coding and duplicative services. More recently, heightened scrutiny has been directed towards emerging patterns of concern like questionable pharmacy practices, inappropriate use of durable medical equipment, and inconsistent provider treatment patterns and behaviors.

Through CorVel’s integrated medical management solutions, we have comprehensive visibility into clinical behavior and treatment trends, which allows us to deploy advanced AI and predictive analytics, uncovering actionable insights and identifying adverse patterns early. As a result, we provide our partners with greater transparency, earlier intervention opportunities and measurable reductions in inappropriate care utilization. CorVel solution, which leverages historical data and integrates the Network Solutions products, has decreased DMA cost per referral by 18% from fiscal year ’twenty four to fiscal year ’twenty five. In recent years, workforce participation has grown significantly among Americans aged 75 and older. In 2022, over eight percent of individuals in this age group were either employed or actively looking for work, double the rate a few decades earlier.

Projections for the coming years suggest this upward trend will continue, with estimates indicating that by 02/1930, nearly 12% of those 75 and older will be part of the labor force. This increase is influenced by longer life expectancy, financial needs and a growing interest among older adults to stay active and engage professionally. Based on this trend, we anticipate the potential for increased claims severity in workers’ compensation programs. During our Intake Advocacy 20 fourseven program, triage nurses capture holistic demographic information, which allows our proprietary system workflows to identify and escalate claims that could require greater attention from claims professionals. We also leverage the intake information through an advanced data insight and predictive modeling platform.

Combined with our highly trained professionals, these real time metrics influence treatment plans, including age appropriate recommendations. They reduce the duration of care, speed medical recovery, and ultimately improve clinical outcomes for injured workers. This data driven approach ensures that care pathways are both efficient and outcome focused. In the health care sector, we are witnessing a growing demand from payers for solutions that reduce administrative costs and enhanced medical loss ratios. Additionally, various market forces such as the shift towards value based care, increased regulatory scrutiny on payment practices and increased reliance on the results achieved with AI driven solutions have intensified the need for advanced payment integrity services.

Cerus, through targeted investments and strategic partnerships, is well positioned to take advantage of this increased demand. During the quarter, Ceris successfully launched its first customer through a strategic partnership platform and signed a second agreement to expand its partner network. These initiatives align with our long term strategy of combining organic product development with external partnerships. These efforts, growing transaction volumes from existing partners and workflow optimization provided positive quarter results and enhanced the value proposition to payers. Bren will now provide additional texture on the financial results for the March and the fiscal year.

Brandon O’Brien, Chief Financial Officer, CorVel Corporation: Thank you, Michael, and good day, everyone. As Michael indicated at the top of the call, revenues for the March were $232,000,000 a 12% increase over the $2.00 $7,000,000 revenue in the March. Earnings per share for the quarter were $0.51 increasing 38% from the $0.37 per share in the same quarter of the prior year. Revenues for the fiscal year ended 03/31/2025, were $896,000,000 up 13%. Earnings per share for the fiscal year ended March were 1.83 up 24% from the prior year’s EPS result of $1.47 The revenue for patient management, including third party administration, TPA services and traditional case management, was $149,000,000 in the March, an increase of 6%.

Gross profit increased by 5% from the March quarter of twenty twenty four. Patient management revenue for the fiscal year ended 03/31/2025, was $581,000,000 an annual increase of 10%. Fiscal year gross profit increased 11%. Patient Management Services, led by our TPA business, experienced growth primarily driven by successful onboarding of new clients. The Enterprise Comp platform continues to gain momentum in the marketplace, expanding its reach across a diverse range of sectors, including health care, higher education, foodservice distribution, automotive parts manufacturing and many others.

Throughout the fiscal year and during the quarter, the company made purposeful investments in our patient management business, including developing and integrating proprietary AI technologies and automated workflow solutions while ensuring optimal team capacity. These innovations and investments empower our expert teams to deliver uniquely effective and measurable results for our partners, reinforcing CorVel’s value proposition and market leadership. Coinciding with the New Year, we also expanded the breadth of our employer focused enterprise comp offering to include a new reporting service. This elevated capability streamlines how clients managed incident tracking, documentation and submissions, delivering a turnkey solution with greater accuracy and efficiency in meeting their regulatory obligations. The revenue for the network solutions sold in the wholesale market for the March was $83,000,000 up 24% from the same quarter of the prior year.

Gross profit in the wholesale business was up 71% from the March quarter of twenty twenty four. Network Solutions revenue for the fiscal year ended 03/31/2025, was $314,000,000 an annual increase of 19%. Fiscal year gross profit increased 32%. Network Solutions, including Cerus, continues to make deliberate progress in expanding and positioning these service offerings to emphasize flexibility, highlighting customizable, client specific solutions that can be activated individually or integrated. The successful onboarding of several high impact clients, including an expanded carrier relationship and the addition of a new prominent national employer, drove substantial volume growth while simultaneously advancing operational efficiency.

Select service lines experienced significant volume increases while being managed mainly within existing staffing levels. These outcomes reflect the strategic development of generative AI capabilities, the scaling of advanced process automation and continued optimization of core workflows. This approach has further elevated operational performance and deepened partnerships across the board. I would now like to review a few additional financial items. During the quarter, the company repurchased 80,661 shares at a total cost of $9,000,000 From inception to date, the company has repurchased 114,500,000.0 shares for a total cost of $832,000,000 Throughout this program, the company has repurchased 69% of the total shares outstanding.

The repurchasing of the shares continues to be funded via the company’s strong operating cash flow. The DSO, as in days sale outstanding of receivables, was 41 days, down two days from a year ago. The quarter ending cash balance was 171,000,000 CorVel’s strong and debt free balance sheet generates improved earnings in contrast to many others in the segment facing debt loads and associated interest rate cost headwinds. That concludes our remarks for today. Thank you for joining us.

I’ll now return the call to the operator.

Webcast Operator, CorVel Corporation: This concludes today’s webcast. You may disconnect.

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