CORVEL CORP

CorVel Corporation is an independent nationwide provider of medical cost containment and managed care services designed to address the escalating medical costs of workers' compensation benefits, automobile insurance claims, and group health insurance. The company applies certain technology, including artificial intelligence, machine learning, and natural language processing, to enhance the management of episodes of care and related health-care costs. In January 2026, the Bureau of Labor Statistics reported that the occupational injury count for 2024 was 2.34 million compared to 2.37 million in 2023, 2.34 million in 2022, 2.24 million in 2021, 2.11 million in 2020, and 2.69 million in 2019. While the injury count has steadily increased since 2019, it has not returned to pre-pandemic levels. Despite fewer claims to administrate from 2020 to 2024 as compared to 2019, the Company has been able to offset the decrease in claims with an increase in market share. Cost drivers in workers' compensation include implementing effective return-to-work and transitional duty programs, coordinating medical care, managing medical costs, recognizing fraud and abuse, and improving communications with injured workers.

CorVel's primary competitors in the workers' compensation market include TPAs, MCOs, large insurance carriers and numerous independent companies. Many of the Company's competitors are significantly larger and have greater financial and marketing resources than the Company. Moreover, the Company's customers may establish the in-house capability of performing the kinds of services offered by the Company. The Company believes that the strength of its national PPO network, combined with local PPO developers' commitment and community involvement, enables CorVel to grow its PPO network's size, quality, depth of discount, and commitment to service. No single customer accounted for 10% or more of revenue for fiscal years 2026, 2025 or 2024. Two customers accounted for 10% or more of accounts receivable as of March 31, 2026 and 2025.

CorVel generates revenue through two primary service categories: network solutions services and patient management services. The Company delivers its solutions three ways — as a fully integrated claims-management program, as discrete standalone services, or as targeted add-ons that enhance an existing client workflow. Integrated, end-to-end bundled programs are designed primarily for customers that are self-insured employers who want a single, turnkey partner. Conversely, individual modules and à-la-carte add-ons tend to fit larger scale relationships, where insurance carriers or TPAs plug specific CorVel capabilities into a broader service stack. The Company serves a diverse group of customers, which include insurers, TPAs, self-administered employers, government agencies, municipalities, state funds, and numerous other stakeholders in the health care industry.

Network solutions services include bill review, PPO management, CERIS, professional review, provider reimbursement, Symbeo technologies, pharmacy services, directed care services, Medicare solutions, and clearinghouse services. CorVel's proprietary bill review and claims management technology provides customers with cost savings by decreasing the turnaround time for bill review results through automated, customized algorithms. CorVel's artificial intelligence engine includes over 100 million individual rules, which offers a comprehensive, paperless solution that surpasses the capabilities of traditional, manual bill review processes. As of March 31, 2026, the Company's PPO network was comprised of over 1.2 million providers nationwide, which are searchable based on quality, types of services, and location by the public through the Company's applications. CERIS, CorVel's enhanced review program, is a national provider of cost management solutions to employers, TPAs, insurance companies and government agencies. Symbeo technologies include scanning, optical character recognition, and document management services. Pharmacy services include formulary management, discounted prescriptions, drug interaction monitoring, utilization management and eligibility confirmation. Directed care services provide access to specialty medical services including medical imaging, physical therapy, diagnostics and ancillary service networks. Medicare solutions include Medicare set asides and agent reporting services to help employers comply with new CMS reporting legislation.

Patient management services include claims management, case management, a 24/7 virtual care platform with nurse triage, utilization management, vocational rehabilitation and disability management, liability claims management, and auto claims management. Claims management serves customers in the self-insured and commercially-insured markets. Case management services address all aspects of disability management and recovery, including utilization review (pre-certification, concurrent review and discharge planning), early intervention, telephonic, field and catastrophic case management, as well as vocational rehabilitation. The virtual care platform allows injured workers to contact a 24/7 nurse triage hotline to speak with a registered nurse who specializes in occupational injuries. Utilization management programs review proposed care to determine appropriateness, frequency, duration and setting. Vocational rehabilitation services include ergonomic assessments, rehabilitation plans, transferable skills analysis, labor market services, marketability, résumé development, job analysis and development, job placement, career counseling and expert testimony. Disability management programs offer a continuum of services for short and long-term disability coverages. Liability claims management services include claims management, adjusting services, litigation management, claims subrogation, and investigations regarding auto liability, general liability, product liability, personal injury, professional liability, property damage, accidents and weather-related damage. Auto claims services include national preferred provider organizations, medical bill review, first or third party bill review, first notice of loss, demand packet reviews and reporting and analytics.

During the fiscal year ended March 31, 2026, the Company spent $56.2 million ¹ to repurchase 782,744 ² shares of its common stock under a program approved by the Company's Board of Directors. Since the commencement of this program in fiscal 1997 through fiscal year 2026, the Company has repurchased 115,259,435 ³ shares of its common stock, at a cost of approximately $888 million ⁴, and had 1,740,565 ⁵ shares of common stock authorized for repurchase remaining under its share repurchase program as of March 31, 2026. These repurchases were funded primarily from the Company's operating cash flows. During fiscal year 2026, Mr. Brian S. Nichols was appointed Chief Financial Officer of the Company, effective September 10, 2025. In November 2022, the Board of Directors increased the number of shares of common stock authorized to be repurchased over the life of the program by 3,000,000 ⁶ shares to 117,000,000 ⁷ shares.

For the fiscal year ended March 31, 2026, total revenues were $713.163 billion ⁸, compared to $680.985 billion ⁹ in fiscal 2025 and $649.626 billion ¹⁰ in fiscal 2024. Net income was $22.270 billion ¹¹ for fiscal 2026, compared to $22.270 billion ¹² for fiscal 2025 and $22.270 billion ¹³ for fiscal 2024. Diluted earnings per share was $2.73 ¹⁴ for fiscal 2026, compared to $2.41 ¹⁵ for fiscal 2025 and $2.41 ¹⁶ for fiscal 2024. The Company's operating cash flows funded share repurchases and capital expenditures.

The Company's growth strategy is to continue internal growth and, as strategic opportunities arise in the workers' compensation managed care industry, to consider acquisitions of, or relationships with, other companies in related lines of business. The Company's business strategy and future success depend in part on its ability to capture market share with its cost containment services as national and regional insurance carriers and large, self-funded employers look for ways to achieve cost savings. The Company continues to develop its claims system capabilities, which reflects the Company's preference for owning and maintaining its own software assets. Ongoing integration projects are underway to present more of this claims-centric information available through the CareMC online portal. The Company's goal is to continue to modernize user interfaces, give more rapid feedback and put real-time information in the hands of our customers.

The Company's strategy is to continue internal growth and, as strategic opportunities arise in the workers' compensation managed care industry, to consider acquisitions of, or relationships with, other companies in related lines of business. The Company remains focused on executing its strategy to offer industry-leading claims management and cost containment solutions to the market. The Company continues to leverage the latest technological innovation to connect all parties involved in the workers' compensation, risk management, and insurance processes. The Company believes that the location of its headquarters puts it in the best position for future growth across its business in these areas of service.The Company utilizes a tier III-rated data center as its primary processing site along with leveraging a leading enterprise-grade cloud computing platform. Within the data center, redundancy is provided at many levels in power, cooling, and computing resources, with the goal of ensuring maximum uptime and system availability for the Company's production systems. The Company has embraced server virtualization and consolidation techniques to push the fault-tolerance of systems even further. The Company's national data center is located near Portland, Oregon. The redundancy center, which is located in Lone Mountain, Nevada, is the Company's backup processing site in the event that the Portland data center suffers catastrophic loss. Currently, the Company's data is continually replicated to Lone Mountain in near-real time. As of March 31, 2026, CorVel had 5,239 ¹⁷ employees, including nurses, claims adjusters, and other employees. Currently, 93% ¹⁸ of our employees are working either permanently from home or in a hybrid arrangement.

The filing does not specify R&D spending levels, capital expenditure plans, or dividend policy with exact figures for the upcoming period. The Company has never paid any cash dividends on its common stock and has no current plans to do so in the foreseeable future. The Company intends to retain future earnings, if any, for use in the Company's business and for purchases of stock under its stock repurchase program. As of March 31, 2026, the Company had 1,740,565 ¹⁹ shares of common stock authorized for repurchase remaining under its share repurchase program.

The sequential revenue growth may not increase and may decline in the future as a result of a variety of factors, many of which are outside of the Company's control. Fluctuations or declines in sequential revenue growth may be due to a number of factors, including the decline in manufacturing employment, the decline in workers' compensation claims, the decline in healthcare expenditures, the considerable price competition in a flat-to-declining workers' compensation market, litigation, the increase in competition, and the changes and the potential changes in state workers' compensation and automobile-managed care laws which can reduce demand for the Company's services. These factors create an environment where revenue and margin growth is more difficult to attain and where revenue growth is less certain than historically experienced.

The Company faces competition for staffing, which may increase labor costs and reduce profitability. In some markets, the scarcity of nurses and other medical support personnel has become a significant operating issue to healthcare providers. This shortage may require the Company to enhance wages to recruit and retain qualified nurses and other healthcare professionals. The Company is subject to inflation risks which could increase wages, benefits, and other costs which may result in decreased profitability. Wage and benefit inflation, whether driven by competition for talent or ordinary course pay increases and other inflationary pressure, may increase the Company's cost of providing services and reduce profitability.

The sequential revenue growth may not increase and may decline due to factors including the decline in manufacturing employment, the decline in workers' compensation claims, the decline in healthcare expenditures, considerable price competition in a flat-to-declining workers' compensation market, litigation, increased competition, and changes in state workers' compensation and automobile-managed care laws which can reduce demand for services. The Company faces competition from national managed care providers, preferred provider networks, smaller independent providers, and insurance companies, many of which are significantly larger and have greater financial and marketing resources. Healthcare providers are becoming increasingly resistant to certain cost containment techniques and are engaging in litigation to avoid application of certain cost containment practices, which may result in a decrease in revenue from the Company's cost containment business. The Company is subject to inflation risks which could increase wages, benefits, and other costs, potentially reducing profitability. The Company's failure to compete successfully could make it difficult to add and retain customers and could reduce or impede the growth of the business.

Management's message emphasizes that CorVel is an independent nationwide provider of medical cost containment and managed care services designed to address the escalating medical costs of workers' compensation benefits, automobile insurance claims, and group health insurance. The Company applies certain technology, including artificial intelligence, machine learning, and natural language processing, to enhance the management of episodes of care and the related health-care costs. Management highlights that despite fewer claims to administrate from 2020 to 2024 as compared to 2019, the Company has been able to offset the decrease in claims with an increase in market share. The Company remains focused on executing its strategy to offer industry-leading claims management and cost containment solutions to the market. Management's strategic priorities include continuing internal growth, considering strategic acquisitions or relationships in the workers' compensation managed care industry, and leveraging the latest technological innovation to connect all parties involved in the workers' compensation, risk management, and insurance processes. The Company's goal is to continue to modernize user interfaces, give more rapid feedback and put real-time information in the hands of customers.