CorVel NASDAQ: CRVL reported modest growth in the December 2025 quarter, with management pointing to short-term operational factors rather than a shift in the company’s underlying business fundamentals. Executives also highlighted continued investment in artificial intelligence and automation, a technology-focused acquisition completed in late June, and several market trends they believe are creating opportunities in workers’ compensation and healthcare payment integrity.
Quarterly and year-to-date results
Chief Financial Officer Brian Nichols said revenue for the nine months ended December 31, 2025, was $710 million, up 7% from $664 million in the prior-year period. Year-to-date earnings per share were $1.53, an increase of 16% from $1.32 for the nine months ended December 31, 2024.
For the December 2025 quarter, CorVel posted revenue of $236 million, up 3% from $228 million in the December 2024 quarter. Earnings per share were $0.47, compared with $0.46 a year earlier.
Nichols noted that earnings-per-share comparisons were adjusted to account for a three-for-one stock split reported in December 2024. He also said that in comparing the December quarters, the allocation of general and administrative expenses declined to 9.6% from 9.7%, while margin improved to 23.3% from 23.2%. However, an increase in the company’s effective tax rate “did temper earnings results.”
Operations generated net income of $24.1 million for the December 2025 quarter, up from $23.8 million in the prior-year period, according to the CFO.
Management cites market trends in workers’ compensation
Nichols described several trends shaping the workers’ compensation environment, including lower injury volume, higher severity, rising medical costs, and labor market shifts.
He cited U.S. Department of Labor data showing a small decline in total work-related injuries from 2023 to 2024, consistent with a longer-term downward trend that accelerated during the pandemic. Nichols said fewer injuries translate into fewer claims, which CorVel “certainly recognizes.”
At the same time, Nichols said severity and medical costs per claim have been moving higher. He referenced the National Council on Compensation Insurance, saying average medical and lost-time claim severity increased by 6% in 2024 and marked five consecutive years of increases. He also cited the Workers Compensation Research Institute as noting rising medical costs in a range of 5% to 12% across multiple states, attributing the inflationary shift to higher provider bill charges and higher payments allowed by some states’ fee schedules.
He added that labor market dynamics matter as well, pointing to U.S. Bureau of Labor Statistics expectations for job openings in physically demanding occupations such as transportation, construction, maintenance, food service, childcare, recreation, hospitality, and healthcare—roles he said can be more susceptible to work-related injuries.
Overall, Nichols argued these factors support the case for continued opportunity in managed workers’ compensation for organizations equipped to address its challenges.
CEO points to retention, sales execution, and AI initiatives
Chief Executive Officer Michael Combs said December quarter results were “modest relative to expectations,” primarily due to short-term operational factors and what he described as a normalization of the effective tax rate after an extended period below average levels.
Looking at fiscal 2025 highlights, Combs said the company’s net revenue retention was 107%, its close rate on new business opportunities was 44%, and it saw “strong incremental growth with existing partners.”
Combs also emphasized increased traction with AI initiatives, describing the company’s focus as:
- Augmenting the development process
- Increasing operational efficiency
- Elevating team member work
- Enhancing outcomes for partners
Combs said CorVel closed a technology-centric acquisition at the end of June. While he described it as “relatively small,” he said the integration is driving meaningful efficiency and effectiveness improvements in health payment integrity services for the commercial health segment, with ROI consistent with management’s expectations.
Examples of AI and automation in operations
Combs said the company expects automation of lower-value activities to reduce service delivery costs while improving client outcomes. He acknowledged that pricing pressure could develop over time, but said he expects cost efficiencies to more than offset associated fee adjustments.
He provided several examples of how technology is being applied across the business:
- Commercial health: CorVel receives medical claim volumes that can exceed processing capacity. Combs said the company is using technology to prioritize claims where it can deliver the greatest impact and strongest return, since each selected claim carries a processing cost regardless of savings outcome.
- Claims management: Combs said adjuster transitions can create inefficiencies when new adjusters inherit large portfolios of open claims. He described deploying technology to help adjusters quickly understand claim risk and complexity and prioritize immediate tasks.
- Self-service for stakeholders: He said CorVel is leveraging technology to provide a more seamless interface that enables stakeholders to obtain real-time information for many inquiries.
- Case management: Combs said AI is being used to automate documentation, synthesize data, and handle routine workflows so clinicians can manage higher caseloads and focus on complex interventions. He said this supports margin expansion through productivity gains while maintaining an outcome-driven service model.
- Software development: Combs said “agentic AI” is accelerating the development process from ideation to deployment and that the company has a “compelling” software development roadmap for 2026.
CERIS payment integrity and regulatory backdrop
Combs discussed CorVel’s healthcare payment integrity business, CERIS, saying the market is evolving as medical costs rise while reimbursement rates remain flat, increasing pressure on payers. He said health plans are turning to technology—particularly AI and automation—to improve accuracy, identify errors earlier in the claims lifecycle, and strengthen financial performance. He also cited vendor consolidation as prompting payers to reevaluate partnerships, with preference shifting toward proven, scalable vendors.
Combs said CERIS uses clinical expertise and workflows to identify issues before claims are paid, and that CorVel continues to advance AI, machine learning, and predictive analytics to make solutions more accurate and scalable. He added that the acquisition referenced earlier helped accelerate the technology roadmap, and said integration is progressing ahead of plan with benefits already showing up in faster innovation and enhanced capabilities.
He also pointed to U.S. Department of Justice False Claims Act enforcement statistics, noting that settlements and judgments reached record levels in 2025 with recoveries exceeding $6.8 billion, including $5.7 billion in the healthcare sector. Combs said CERIS’ payment integrity and fraud, waste, and abuse services aim to prevent improper payments pre-pay and identify aberrant billing patterns early, while post-pay services can recoup dollars tied to similar issues.
On capital allocation and liquidity, Nichols said CorVel repurchased 185,559 shares during the quarter for $13.4 million. He added that since inception the company has repurchased 114.9 million shares for $868 million, representing 69% of total shares outstanding at an average price of $7.55 per share, funded by operating cash flow.
CorVel ended the quarter with $230 million in cash, and Nichols said fiscal year-to-date free cash flow was $90 million, with $36 million used for capital expenditures driven by increased spending on proprietary software development and software licenses. He emphasized that CorVel remains debt-free, which he said provides agility for service integration, innovation, and potential acquisitions.
During the Q&A, management reiterated that CorVel operates as a single segment and does not break out products separately, while also characterizing the quarter’s revenue-growth slowdown as not indicative of future results.
About CorVel NASDAQ: CRVL
CorVel Corporation NASDAQ: CRVL is a technology-driven provider of workers' compensation, liability, and specialty risk management solutions. The company develops and deploys software and data analytics tools to streamline claims administration, medical cost containment, prescription drug management, and provider network access. CorVel's integrated platform connects employers, insurers, healthcare providers, and injured workers, aiming to improve outcomes and control costs through process automation and real-time decision support.
The company's product suite includes claims lifecycle management, bill review and negotiation, virtual care and telehealth services, pharmacy benefit management, and independent medical examinations (IMEs).
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