。
She's getting on fine.
Literal
She [topic-は] cheerfully is-doing.
元気にやっている is the stock 'doing well, getting on fine' status report — used as a first-person reply to 元気? as much as a third-person update like this one. 元気 is a versatile word covering health, spirits, and energy all at once; the adverbial 元気に ('healthily, energetically') paired with the placeholder verb やる ('do, get on') gives a vague, friendly summary without committing to specifics. The polite ~ています fits the kind of context where this phrasing comes up most — a quick exchange about a mutual acquaintance, a return letter, a brief check-in.