CorVel Q3 2026 Earnings Report

CorVel EPS Results

• Actual EPS: $0.47
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

CorVel Revenue Results

• Actual Revenue: $235.63 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

CorVel Announcement Details

• Quarter: Q3 2026
• Date: 2/3/2026
• Time: Before Market Opens
• Conference Call Date: Tuesday, February 3, 2026
• Conference Call Time: 11:30AM ET

CorVel (NASDAQ:CRVL) Corporation is a provider of workers’ compensation and liability claims management services. The company supports employers, insurance carriers, government entities and other organizations with technology-enabled solutions designed to manage claims, control costs and coordinate medical care.

Its services include third-party claims administration, medical bill review, utilization review, case management, pharmacy benefit management, provider-network services and claims-related analytics. CorVel combines software platforms with clinical and claims professionals to support the administration of workers’ compensation, auto and general liability claims.

Founded in 1987, CorVel serves customers across the United States through a network of offices, service teams and affiliated providers. The company is headquartered in Irvine, California, and is led by President and Chief Executive Officer Michael G. Combs.

CorVel Q3 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: CorVel reported nine-month revenue of $710 million (up 7% YoY) and YTD EPS of $1.53 (up 16%); the December quarter delivered $236 million in revenue (+3%) and EPS of $0.47 (+2%), with margin improvement partially offset by a higher effective tax rate.
• Positive Sentiment: Management emphasized expanded use of AI and a June technology acquisition to prioritize high‑value claims, automate documentation and workflows, and augment adjusters and clinicians—initiatives expected to drive productivity gains and margin expansion.
• Positive Sentiment: The CERIS healthcare payment‑integrity business is gaining momentum as payers face rising medical costs and stronger regulatory enforcement (notably record DOJ False Claims recoveries), with integration progressing ahead of plan and increased interest from large customers.
• Positive Sentiment: Shareholder returns and balance‑sheet strength remain notable—the company repurchased 185,559 shares this quarter for $13.4 million (114.9 million shares repurchased to date, ~69% of outstanding), holds $230 million cash, is debt‑free, and generated $90 million FYTD free cash flow.
• Neutral Sentiment: Industry dynamics include a long‑running decline in work‑injury volumes but rising claim severity and medical inflation (5–12% in some states), which could reduce claim counts while increasing per‑claim medical spend and demand for managed services.

Presentation

[Operator]

Thank you for standing by. Welcome to CorVel Corporation Quarterly Earnings Release Webcast. During the course of this webcast, CorVel Corporation will make projections or other forward-looking statements regarding future events or 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 in the company's files from time to time with the Securities and Exchange Commission, specifically the company's last Form 10-K and 10-Q filed for the most recent fiscal year and quarter. These documents contain and identify important factors that could cause actual results to differ materially from those contained in our projections and forward-looking statements. I would now like to turn the call over to Michael Combs, President and Chief Executive Officer. Mike, you may proceed.

[Michael Combs, President and CEO at CorVel Corporation]

Thank you. Good morning, and thank you for joining us to review CorVel's, CorVel's December quarter results. I'm very pleased to have Brian Nichols, CorVel's Chief Financial Officer, on the call today.

[Brian Nichols, CFO at CorVel Corporation]

Thank you, Michael, and good morning, everyone. It's a pleasure to join the call this morning.

[Michael Combs, President and CEO at CorVel Corporation]

Today, we're going to review operational performance, including 2025 highlights, a deeper dive into the value AI is bringing to our business model, key growth drivers, and the market trends that are shaping our business. Brian, let's start with an overview of the quarter's financial results.

[Brian Nichols, CFO at CorVel Corporation]

Absolutely, Michael. CorVel's revenue for the nine months ending December 31, 2025, were $710 million, a 7% increase from $664 million at the same period of the previous fiscal year. Fiscal year to date, earnings per share were $1.53, up 16% compared to $1.32 during the nine months ending December 31, 2024. The December 2025 quarter ended with revenues at $236 million, 3% above the $228 million achieved in the December 2024 quarter. Earnings per share for the December 2025 quarter were $0.47, an increase of 2% over the same quarter of the prior year's EPS at $0.46.

[Brian Nichols, CFO at CorVel Corporation]

I would like to remind our listeners that the earnings per share results from the quarter and annual comparisons have been adjusted to account for the three-for-one stock split reported in December of 2024. In comparing the 2024 and 2025 December quarters, the allocation of general and administrative expenses decreased from 9.7% to 9.6%, and margin had a commensurate improvement of 23.2% to 23.3%. However, an increase to the effective tax rate did temper earnings results. Overall, CorVel's operations netted an income of $24.1 million in the December 2025 quarter, which was an increase from $23.8 million in December of 2024.

[Brian Nichols, CFO at CorVel Corporation]

Throughout the fiscal year, products highlighting the growth among Network Solutions and Patient Management services were Independent Medical Evaluations, CERIS, Ancillary Care Solutions, Medical Bill Re-review, and Claims Management. In addition to financial results, I would also like to discuss noteworthy trends in the workers' compensation market. These trends include lower volume of work-related injuries, increasing injury severity, rising medical costs, and shifts within the labor market. The U.S. Department of Labor recently reported a small decline in total work-related injuries from 2023 to 2024. While this report result reflects results from more than a year ago, the trend is consistent with what has been occurring over the past decade and was magnified at the onset of the global pandemic in 2020. It is no secret that a reduction in work-related injuries equates to a lower volume of workers' compensation claims. CorVel certainly recognizes this trend.

[Brian Nichols, CFO at CorVel Corporation]

However, we also recognize that past declining volume of work-related injuries alone may not gauge the viability and value of the managed workers' compensation market, and other changes throughout the industry may be pointing toward growth opportunities. While work-related injuries have been moving in a decreasing pattern, the inverse response is occurring for injury severity and medical costs per claim. According to the National Council on Compensation Insurance, average medical and lost time claim severity increased by 6% in 2024, resulting in elevated medical costs and extended duration to injury claims. Further, the report indicated five consecutive years with an increase. The cost of medical compensation claims are also being impacted by medical inflation. The Workers Compensation Research Institute noted rising medical costs within a range of 5%-12% among multiple states.

[Brian Nichols, CFO at CorVel Corporation]

The inflationary change can be attributed to increased bill charges for medical providers and allowance of higher payments among multiple states' medical fee schedules. Labor market shifts, such as increasing job openings among occupations requiring moderate to heavy levels of physical demand, can also be important to consider when valuing the managed workers' compensation industry. According to the U.S. Bureau of Labor Statistics, new job openings are expected to maintain or exceed current growth averages among several physically demanding occupations, including transportation, construction, maintenance, food service, childcare, recreation, hospitality, and healthcare. These occupations are likely to be more susceptible to work-related injuries than those with sedentary or less physically demanding job functions. Collectively, the trends I've shared support the argument that the workers' compensation market is a growing industry for organizations equipped to address its challenges.

[Brian Nichols, CFO at CorVel Corporation]

CorVel's focus on product innovation, savings through clinical outcomes, and effective management allow us to not only adapt to these industry shifts, but also leverage them for continued market share gains. With that overview of our financial performance, I'll now turn the call over to our CEO, Michael Combs, to discuss operational progress and strategic priorities.

[Michael Combs, President and CEO at CorVel Corporation]

Thank you, Brian. The December quarter results were modest relative to expectations, primarily reflecting short-term operational factors rather than a change in fundamentals, including, as Brian mentioned, the normalization of our effective tax rate after an extended period of lower than average levels. I want to transition to highlights from 2025. The net revenue retention for our business was 107%. We had a 44% close rate on new business opportunities, and we experienced strong incremental growth with existing partners. On the AI front, increased traction with our AI initiatives and following are thematically the areas of focus: augmenting the development process, increasing operational efficiency, elevating the work of our team members, and enhancing outcomes achieved for our partners. In addition, there was a technology-centric acquisition that we closed at the end of June.

[Michael Combs, President and CEO at CorVel Corporation]

While relatively small, we're realizing meaningful increases in efficiency and effectiveness in the health payment integrity services for the commercial health segment through the integration of related logic and functionality through the acquisition. The realized ROI and impact are consistent with optimistic expectations. Continuing on AI and how we're harnessing AI and automation opportunities across our business. This is a little more detail in specific projects. As lower-value activities are increasingly automated, we expect meaningful reductions in service delivery costs while simultaneously improving client outcomes. Although pricing pressure is likely over time, we expect cost efficiencies to more than offset any associated fee adjustments. The nearer-term implications of AI on our business are becoming clearer in focus. They are broad, spanning our products, services, and software development processes, and following are a few specific examples.

[Michael Combs, President and CEO at CorVel Corporation]

In the commercial health business, we routinely receive medical claim volumes that surpass processing capacity. While some claims present limited savings potential, others offer significant higher value for our partners. Because each claim we select incurs a cost to process regardless of its ultimate savings, disciplined selection is critical. We are increasingly leveraging technology to prioritize those claims where we can deliver the greatest impact while also generating the strongest return on investment for CorVel. In claims management, transitions in adjuster assignments often create inefficiencies as new adjusters take on large portfolios of open claims. With roughly 125 active cases, achieving timely visibility into risk, complexity, and required actions for assigned claims can be challenging. We are deploying technology to augment adjuster decision-making, providing rapid understanding of claim nuances and clear prioritization of those tasks requiring immediate attention.

[Michael Combs, President and CEO at CorVel Corporation]

Also, in claims management, there are many stakeholders, partners, healthcare providers, clinical team members, all requiring information. We're leveraging technology to provide a seamless interface which allows stakeholders to self-service, obtaining real-time information for many, even complex inquiries. In case management, AI is enhancing the efficiency and scalability of our team's operations. We're using AI to automate documentation, data synthesis, and routine workflows, which will allow clinicians to manage higher caseloads and focus on complex, high-impact interventions. Financially, this supports margin expansion through productivity gains while maintaining an outcome-driven service model. Strategically, AI strengthens our platform by embedding decision support into workflows that are difficult to replicate without CorVel's data, clinical expertise, and regulatory experience. And finally, Agentic AI is transforming the software development process from ideation to deployment, enabling us to accomplish more, more quickly. We have a very compelling software development roadmap for 2026.

[Michael Combs, President and CEO at CorVel Corporation]

This is certainly not a comprehensive list, but a few representative examples of areas of focus. In the property and casualty business, by intentionally applying technology across our claims and case management systems, introducing intelligence earlier in the process, reducing administrative friction, modernizing data exchange, and leveraging automation and AI, we deliver a fundamentally simpler, more efficient, and more accurate experience. As buyers prioritize efficiency, transparency, outcomes, and cost, CorVel is well-positioned to generate differentiated results while scaling in 2026 and beyond. On the healthcare payment integrity front, this is our CERIS division. The market continues to evolve as medical costs rise while reimbursement rates remain flat, intensifying pressure on payers to control costs. In response, health plans are increasingly turning to technology, particularly AI and automation, to improve accuracy, identifying errors earlier in the claims lifecycle, and strengthening financial performance.

[Michael Combs, President and CEO at CorVel Corporation]

At the same time, ongoing vendor consolidation is prompting payers to reevaluate their partnerships. With a growing preference for proven, scalable vendors, it can consistently deliver measurable results, operational stability, and long-term value. CERIS combines deeper clinical expertise and efficient, proven workflows to identify issues before claims are paid. We continue to advance the use of AI, machine learning, and predictive analytics to deliver solutions that are more accurate, scalable, and impactful, driving increased business and value for our partners.... This momentum is reflected in the operating results. We have strengthened our market position, created opportunities to expand across additional products and lines of business, and seen heightened interest in CERIS from large industry players seeking differentiated, data-driven capabilities. We also accelerated our technology roadmap through the strategic acquisition mentioned earlier on the call.

[Michael Combs, President and CEO at CorVel Corporation]

Integration is progressing ahead of plan, and we are already seeing the benefits from faster innovation and enhanced capabilities. Of note, the U.S. Department of Justice recently released its False Claims Act enforcement statistics, which reported that settlements and judgments reached record levels in 2025, with recoveries exceeding $6.8 billion. Of that, $5.7 billion in total recoveries were in the healthcare sector. CERIS' payment integrity and fraud, waste, and abuse services help partners address this risk by utilizing prepaid services to prevent improper payments before they occur and identifying aberrant billing patterns early, while post-pay services can recoup dollars due to the same issues. These capabilities reduce exposure to false claims and deliver measurable financial impact through avoided or reclaimed overpayments and lower medical cost trends. Taken together, these dynamics underscore the growing importance of proactive, technology-enabled payment integrity solutions.

[Michael Combs, President and CEO at CorVel Corporation]

CERIS is well positioned to meet this need by combining advanced analytics, clinical rigor, with scalable operations to help partners reduce risk, improve compliance, and meaningful impact to medical costs. As regulatory scrutiny intensifies and financial pressure on payers continue, our ability to prevent improper payments before they occur while efficiently recovering dollars post-payment, creates sustained value for our partners. With strong operational momentum, an accelerated technology roadmap, and increasing interest from larger industry participants, CERIS remains focused on expanding its role as a trusted, differentiated partner in an increasingly complex healthcare landscape. Brian, would you provide the additional financial metrics for the quarter?

[Brian Nichols, CFO at CorVel Corporation]

During the quarter, CorVel repurchased 185,559 shares at a cost of $13.4 million. From inception to date, the company has repurchased 114.9 million shares for an aggregate total of $868 million. Through this program, the company has now repurchased 69% of the total shares outstanding at an average price of $7.55 per share. The repurchasing of shares continues to be funded from the company's strong operating cash flow. CorVel's Days Sales Outstanding was 39 days in the December 2025 quarter, which is an improvement of three days compared to the same period a year ago. The quarter-ending cash balance was $230 million.

[Brian Nichols, CFO at CorVel Corporation]

Fiscal year to date, free cash flow is $90 million, with $36 million having been used for capital expenditures. In the same period of the previous fiscal year, capital expenditures were $24 million-$27 million. This change in CapEx is a result of increased spending on our proprietary software development and software licenses. CorVel's financial strategy will remain committed to responsible management of financial risk. Conversely, many competing organizations throughout the market spaces in which we operate are faced with the costs and challenges of considerable debt obligations and consequently may lack the financial agility needed for service integration and innovation. We believe that our strong and debt-free balance sheet uniquely positions CorVel for continued strategic product expansion, technological advancement, and acquisition opportunities. Thank you for your time this morning. I will now invite the operator to open this session for questions.

[Operator]

Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. To enter questions via the web, please type your question in the chat box on the web platform and click Enter to submit. We will pause for a brief moment to see if any questions come in.

[Operator]

We do have a web question from Adam: Can you provide more detail on the deceleration of year-over-year revenue growth for each segment? There's been a long track record of quarter-over-quarter revenue growth that ended this quarter. What drove that?

[Michael Combs, President and CEO at CorVel Corporation]

We're live, yes? Yeah, I would say we look at the principles and fundamentals on which the organization was structured, and revenue growth over our history, certainly, if you look at the last 10 years, it isn't a straight line necessarily. So we believe that the focus we have with the investment in technology, our reputation in the business, and the trajectory, the momentum we have, indicates that the historical pattern will continue. So we're not looking at a small cycle change, if you will, as an indication of future results.

[Operator]

I have an online from Jesse: Can you please provide more context around segment quarter three?

[Brian Nichols, CFO at CorVel Corporation]

CorVel operates within a single segment. The services that we provide within that segment are Patient Management, network, and Network Solutions. As a policy, we do not break up the various products and report those separately. Rather, our entire company and all of our products operate through one single segment.

[Operator]

There are no further questions at this time. I would like to hand the conference back over to management for closing remarks.

[Michael Combs, President and CEO at CorVel Corporation]

Thank you for joining the call today.

[Operator]

Thank you.

[Michael Combs, President and CEO at CorVel Corporation]

Well, thank you.

[Operator]

This will conclude today's conference. You may disconnect at this time, and thank you for your participation.

Participants

Executives

• Brian Nichols, CFO

Analysts

• Michael Combs, President and CEO at CorVel Corporation