CVS Health Second Quarter 2025 Earnings Conference Call

    CVS Health Second Quarter 2025 Earnings Conference Call

    F2 weeks ago 12

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    1 ©2025 CVS Health and/or one of its affiliates. Confidential and proprietary.
Second Quarter 2025 July 31, 2025
J. David Joyner
President and
Chief Executive Officer
Brian O. Newman
Executive Vice President and
Chief Financial Officer
Earnings
Conference Call
    1/12

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    2 ©2025 CVS Health and/or one of its affiliates. Confidential and proprietary.
Cautionary Statement
concerning forward-looking statements
This presentation includes forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a 
safe harbor for forward-looking statements made by or on behalf of CVS Health Corporation (“CVS Health”). By their nature, 
all forward-looking statements are not guarantees of future performance or results and are subject to risks and 
uncertainties that are difficult to predict and/or quantify. Actual results may also differ materially from those contemplated 
by the forward-looking statements due to the risks and uncertainties described in our Securities and Exchange Commission 
filings, including those set forth in the Risk Factors section and under the heading “Cautionary Statement Concerning 
Forward-Looking Statements” in our most recent Annual Report on Form 10-K, our most recent Quarterly Report on Form 
10-Q, our recent Current Reports on Form 8-K, and this morning’s earnings press release.
This presentation includes non-GAAP financial measures that we use to describe our company’s performance. In 
accordance with SEC regulations, you can find the definitions of these non-GAAP measures, as well as reconciliations to 
the most directly comparable GAAP measures, in our press release we issued in connection with the release of our results 
for the second quarter of 2025 and our non-GAAP reconciliation document, which are both available on the Investor 
Relations portion of our website.
    2/12

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    3 ©2025 CVS Health and/or one of its affiliates. Confidential and proprietary.
Delivered consolidated revenue growth of 8.4% and adjusted EPS of $1.81 in the second quarter of 2025.
Raised 2025 adjusted EPS guidance to a range of $6.30 to $6.40.
8.4%
consolidated revenue growth
$1.81
adjusted EPS
$0.80
GAAP EPS
$6.30 – $6.40
adjusted EPS
At least $391.5B
consolidated revenue
$13.77 – $13.94B
consolidated adjusted operating income
At least $7.5B
cash flow from operations
Build Trust
Delivering better experiences that
Financial Results
Second Quarter
Company Guidance
Full Year 2025
$6.5B
year-to-date cash flow
from operations
Our integrated model uniquely 
positions us to take on the largest 
challenges in health care 
In collaboration with CMS, 
leading the industry forward to 
streamline, simplify and reduce 
complexities in health care
Committing $20B to support our 
transformation of health care 
through investments in 
technology
Enterprise Highlights
    3/12

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    4 ©2025 CVS Health and/or one of its affiliates. Confidential and proprietary.
Becoming America’s 
most trusted health 
care company
OUR FOCUS
    4/12

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    5 ©2025 CVS Health and/or one of its affiliates. Confidential and proprietary.
Strategic Imperatives
Drive sustainable growth in our core businesses
Deliver enterprise value across our assets
Engage patients and consumers through 
personalized experiences
Transform business operations with technologyenabled capabilities
Invest in our colleagues and strengthen our culture
    5/12

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    6 ©2025 CVS Health and/or one of its affiliates. Confidential and proprietary.
Business highlights
Reported a second consecutive 
quarter of solid results driven by the 
strength of our execution. We are 
continuing to build positive momentum 
across CVS Health as we work to 
become America’s most trusted 
health care company.
We continue to make meaningful 
progress driving improvements 
within our Aetna business. This 
remains our top priority.
Returned $866 million to 
stockholders through our quarterly 
dividend.
Consolidated Results
2Q 2025 2Q 2024
Total Revenues $98.9 $91.2
Adjusted Operating Income $3.81 $3.74
GAAP Earnings per Share $0.80 $1.41
Adjusted Earnings per Share $1.81 $1.83
Cash Flow from Operations $1.9 $3.1
In billions, except per share amounts
Quarter Results
    6/12

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    7 ©2025 CVS Health and/or one of its affiliates. Confidential and proprietary.
Consolidated Guidance
Business highlights
Raised 2025 adjusted EPS guidance to 
a range of $6.30 to $6.40. 
We are encouraged by our 
Enterprise performance and revised 
outlook in a dynamic environment. 
Our updated expectations reflect 
increases in our Health Care Benefits 
and Pharmacy and Consumer 
Wellness segments, while 
recognizing the impact of a higher 
medical benefit ratio in our Health Care 
Delivery business. The outlook for our 
Pharmacy Services business is 
unchanged.
Updated 2025 guidance continues to 
reflect our focus on building trust by 
setting expectations that are 
appropriate and achievable with 
opportunities for outperformance.
Full Year 2025
as of July 31, 2025
Full Year 2025
as of May 1, 2025
Total Revenues At least $391.5 At least $382.6
Adjusted Operating Income $13.77 to $13.94 $13.31 to $13.65
GAAP Earnings per Share $3.84 to $3.94 $4.23 to $4.43
Adjusted Earnings per Share $6.30 to $6.40 $6.00 to $6.20
Cash Flow from Operations At least $7.5 ~$7.0
Interest Expense ~$3.11 ~$3.15
Capital Expenditures $2.9 to $3.1 $2.8 to $3.0
Adjusted Effective Tax Rate ~25.7% ~25.9%
Weighted Average
Diluted Share Count ~1.270 ~1.270
In billions, except per share amounts and tax rate
Full Year Guidance
    7/12

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    8 ©2025 CVS Health and/or one of its affiliates. Confidential and proprietary.
Superior assets. Superior care.Superior value.
    8/12

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    9 ©2025 CVS Health and/or one of its affiliates. Confidential and proprietary.
Full Year 2025
as of July 31, 2025
Full Year 2025
as of May 1, 2025
Total Revenues At least $139.9 At least $138.0
Adjusted Operating Income $2.42 to $2.59 $1.91 to $2.25
Total Medical Membership (millions) ~26.4 ~26.4
Medical Benefits Ratio (MBR) ~91.0%
(at the low-end)
91.3%
(at the low-end)
2Q 2025 2Q 2024
Total Revenues $36.3 $32.5
Adjusted Operating Income $1.31 $0.94
Total Medical Membership (millions) 26.7 27.0
Commercial 18.8 18.8
Government 7.9 8.2
Medical Benefits Ratio (MBR) 89.9% 89.6%
In billions, except MBR and membership
Quarter Results
Business highlights
Second quarter adjusted operating 
income increased by nearly 40% year 
over year, driven by the favorable impact 
of changes to our Individual Exchange 
risk adjustment estimates, improved 
underlying performance in our 
Government business and higher 
favorable prior period development.
During the second quarter, we established 
a ~$470 million premium deficiency 
reserve recorded in the Group 
Medicare Advantage product line 
related to anticipated losses for the 
remainder of the 2025 coverage year.
Raised 2025 adjusted operating income 
guidance of $2.42 billion, at the low end, 
reflects a prudent view of medical cost 
trends through the remainder of the year. 
The biggest source of potential 
outperformance in our guidance will be 
medical cost trends.
Health Care Benefits
In billions, except MBR and membership
Full Year Guidance
    9/12

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    10 ©2025 CVS Health and/or one of its affiliates. Confidential and proprietary.
Full Year 2025
as of July 31, 2025
Full Year 2025
as of May 1, 2025
Total Revenues At least $183.5 At least $181.0
Adjusted Operating Income At least $7.34 At least $7.54
Pharmacy Claims Processed1 At least 1.91 At least 1.93
2Q 2025 2Q 2024
Total Revenues $46.5 $42.2
Adjusted Operating Income $1.58 $1.92
Pharmacy Claims Processed1
(millions) 469.0 471.2
In billions, except pharmacy claims
Quarter Results
Business highlights
Second quarter adjusted operating 
income decreased ~18% year over year, 
driven by continued pharmacy client 
price improvements and the impact of a
higher medical benefit ratio within our 
health care delivery business, partially 
offset by improved purchasing economics 
and pharmacy drug mix. 
Health Care Delivery experienced 
continued strong patient growth at Oak 
Street and increased in-home health 
evaluation volumes at Signify.
Updated 2025 adjusted operating income 
guidance to at least $7.34 billion, 
reflecting a ~$200 million decrease in our 
Health Care Delivery business driven by a
higher medical benefit ratio at Oak 
Street. The outlook for our Pharmacy 
Services business is unchanged.
Health Services
In billions
Full Year Guidance
    10/12

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    11 ©2025 CVS Health and/or one of its affiliates. Confidential and proprietary.
Full Year 2025
as of July 31, 2025
Full Year 2025
as of May 1, 2025
Total Revenues At least $137.5 At least $133.0
Adjusted Operating Income At least $5.68 At least $5.48
Prescriptions Filled1 At least 1.80 At least 1.77
2Q 2025 2Q 2024
Total Revenues $33.6 $29.8
Adjusted Operating Income $1.34 $1.24
Prescriptions Filled1
(millions) 438.1 420.4
In billions, except prescriptions filled
Quarter Results
Business highlights
Second quarter adjusted operating 
income increased nearly 8% year over 
year, primarily driven by increased 
prescription and front store volume,
partially offset by continued pharmacy 
reimbursement pressure.
Same store pharmacy sales and same 
store prescription volumes increased by 
~18%2 and ~6%2, respectively, over the 
prior year quarter.
Continued growth in retail pharmacy 
script share, reaching ~27.8% in the 
second quarter.
Raised 2025 adjusted operating income 
guidance to at least $5.68 billion, 
reflecting a ~$200 million increase, driven 
by our strong first half performance, while 
continuing to maintain a prudent outlook 
for the remainder of the year.
Pharmacy & Consumer Wellness
In billions
Full Year Guidance
    11/12

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    12 ©2025 CVS Health and/or one of its affiliates. Confidential and proprietary.
Footnotes
Second Quarter 2025
1. Includes an adjustment to convert 90-day prescriptions to the equivalent of three 30-day prescriptions.
2. Same store sales and prescription volume represent the change in revenues and prescriptions filled in the 
Company’s retail pharmacy stores that have been operating for greater than one year and digital sales initiated 
online or through mobile applications and fulfilled through the Company’s distribution centers, expressed as a 
percentage that indicates the increase or decrease relative to the comparable prior period. Same store metrics 
exclude revenues and prescriptions from LTC and infusion services operations. Management uses these metrics 
to evaluate the performance of existing stores on a comparable basis and to inform future decisions regarding 
existing stores and new locations. Same-store metrics provide management and investors with information 
useful in understanding the portion of current revenues and prescriptions resulting from organic growth in 
existing locations versus the portion resulting from opening new stores.
    12/12

    CVS Health Second Quarter 2025 Earnings Conference Call

    • 1. 1 ©2025 CVS Health and/or one of its affiliates. Confidential and proprietary. Second Quarter 2025 July 31, 2025 J. David Joyner President and Chief Executive Officer Brian O. Newman Executive Vice President and Chief Financial Officer Earnings Conference Call
    • 2. 2 ©2025 CVS Health and/or one of its affiliates. Confidential and proprietary. Cautionary Statement concerning forward-looking statements This presentation includes forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of CVS Health Corporation (“CVS Health”). By their nature, all forward-looking statements are not guarantees of future performance or results and are subject to risks and uncertainties that are difficult to predict and/or quantify. Actual results may also differ materially from those contemplated by the forward-looking statements due to the risks and uncertainties described in our Securities and Exchange Commission filings, including those set forth in the Risk Factors section and under the heading “Cautionary Statement Concerning Forward-Looking Statements” in our most recent Annual Report on Form 10-K, our most recent Quarterly Report on Form 10-Q, our recent Current Reports on Form 8-K, and this morning’s earnings press release. This presentation includes non-GAAP financial measures that we use to describe our company’s performance. In accordance with SEC regulations, you can find the definitions of these non-GAAP measures, as well as reconciliations to the most directly comparable GAAP measures, in our press release we issued in connection with the release of our results for the second quarter of 2025 and our non-GAAP reconciliation document, which are both available on the Investor Relations portion of our website.
    • 3. 3 ©2025 CVS Health and/or one of its affiliates. Confidential and proprietary. Delivered consolidated revenue growth of 8.4% and adjusted EPS of $1.81 in the second quarter of 2025. Raised 2025 adjusted EPS guidance to a range of $6.30 to $6.40. 8.4% consolidated revenue growth $1.81 adjusted EPS $0.80 GAAP EPS $6.30 – $6.40 adjusted EPS At least $391.5B consolidated revenue $13.77 – $13.94B consolidated adjusted operating income At least $7.5B cash flow from operations Build Trust Delivering better experiences that Financial Results Second Quarter Company Guidance Full Year 2025 $6.5B year-to-date cash flow from operations Our integrated model uniquely positions us to take on the largest challenges in health care In collaboration with CMS, leading the industry forward to streamline, simplify and reduce complexities in health care Committing $20B to support our transformation of health care through investments in technology Enterprise Highlights
    • 4. 4 ©2025 CVS Health and/or one of its affiliates. Confidential and proprietary. Becoming America’s most trusted health care company OUR FOCUS
    • 5. 5 ©2025 CVS Health and/or one of its affiliates. Confidential and proprietary. Strategic Imperatives Drive sustainable growth in our core businesses Deliver enterprise value across our assets Engage patients and consumers through personalized experiences Transform business operations with technologyenabled capabilities Invest in our colleagues and strengthen our culture
    • 6. 6 ©2025 CVS Health and/or one of its affiliates. Confidential and proprietary. Business highlights Reported a second consecutive quarter of solid results driven by the strength of our execution. We are continuing to build positive momentum across CVS Health as we work to become America’s most trusted health care company. We continue to make meaningful progress driving improvements within our Aetna business. This remains our top priority. Returned $866 million to stockholders through our quarterly dividend. Consolidated Results 2Q 2025 2Q 2024 Total Revenues $98.9 $91.2 Adjusted Operating Income $3.81 $3.74 GAAP Earnings per Share $0.80 $1.41 Adjusted Earnings per Share $1.81 $1.83 Cash Flow from Operations $1.9 $3.1 In billions, except per share amounts Quarter Results
    • 7. 7 ©2025 CVS Health and/or one of its affiliates. Confidential and proprietary. Consolidated Guidance Business highlights Raised 2025 adjusted EPS guidance to a range of $6.30 to $6.40. We are encouraged by our Enterprise performance and revised outlook in a dynamic environment. Our updated expectations reflect increases in our Health Care Benefits and Pharmacy and Consumer Wellness segments, while recognizing the impact of a higher medical benefit ratio in our Health Care Delivery business. The outlook for our Pharmacy Services business is unchanged. Updated 2025 guidance continues to reflect our focus on building trust by setting expectations that are appropriate and achievable with opportunities for outperformance. Full Year 2025 as of July 31, 2025 Full Year 2025 as of May 1, 2025 Total Revenues At least $391.5 At least $382.6 Adjusted Operating Income $13.77 to $13.94 $13.31 to $13.65 GAAP Earnings per Share $3.84 to $3.94 $4.23 to $4.43 Adjusted Earnings per Share $6.30 to $6.40 $6.00 to $6.20 Cash Flow from Operations At least $7.5 ~$7.0 Interest Expense ~$3.11 ~$3.15 Capital Expenditures $2.9 to $3.1 $2.8 to $3.0 Adjusted Effective Tax Rate ~25.7% ~25.9% Weighted Average Diluted Share Count ~1.270 ~1.270 In billions, except per share amounts and tax rate Full Year Guidance
    • 8. 8 ©2025 CVS Health and/or one of its affiliates. Confidential and proprietary. Superior assets. Superior care.Superior value.
    • 9. 9 ©2025 CVS Health and/or one of its affiliates. Confidential and proprietary. Full Year 2025 as of July 31, 2025 Full Year 2025 as of May 1, 2025 Total Revenues At least $139.9 At least $138.0 Adjusted Operating Income $2.42 to $2.59 $1.91 to $2.25 Total Medical Membership (millions) ~26.4 ~26.4 Medical Benefits Ratio (MBR) ~91.0% (at the low-end) 91.3% (at the low-end) 2Q 2025 2Q 2024 Total Revenues $36.3 $32.5 Adjusted Operating Income $1.31 $0.94 Total Medical Membership (millions) 26.7 27.0 Commercial 18.8 18.8 Government 7.9 8.2 Medical Benefits Ratio (MBR) 89.9% 89.6% In billions, except MBR and membership Quarter Results Business highlights Second quarter adjusted operating income increased by nearly 40% year over year, driven by the favorable impact of changes to our Individual Exchange risk adjustment estimates, improved underlying performance in our Government business and higher favorable prior period development. During the second quarter, we established a ~$470 million premium deficiency reserve recorded in the Group Medicare Advantage product line related to anticipated losses for the remainder of the 2025 coverage year. Raised 2025 adjusted operating income guidance of $2.42 billion, at the low end, reflects a prudent view of medical cost trends through the remainder of the year. The biggest source of potential outperformance in our guidance will be medical cost trends. Health Care Benefits In billions, except MBR and membership Full Year Guidance
    • 10. 10 ©2025 CVS Health and/or one of its affiliates. Confidential and proprietary. Full Year 2025 as of July 31, 2025 Full Year 2025 as of May 1, 2025 Total Revenues At least $183.5 At least $181.0 Adjusted Operating Income At least $7.34 At least $7.54 Pharmacy Claims Processed1 At least 1.91 At least 1.93 2Q 2025 2Q 2024 Total Revenues $46.5 $42.2 Adjusted Operating Income $1.58 $1.92 Pharmacy Claims Processed1 (millions) 469.0 471.2 In billions, except pharmacy claims Quarter Results Business highlights Second quarter adjusted operating income decreased ~18% year over year, driven by continued pharmacy client price improvements and the impact of a higher medical benefit ratio within our health care delivery business, partially offset by improved purchasing economics and pharmacy drug mix. Health Care Delivery experienced continued strong patient growth at Oak Street and increased in-home health evaluation volumes at Signify. Updated 2025 adjusted operating income guidance to at least $7.34 billion, reflecting a ~$200 million decrease in our Health Care Delivery business driven by a higher medical benefit ratio at Oak Street. The outlook for our Pharmacy Services business is unchanged. Health Services In billions Full Year Guidance
    • 11. 11 ©2025 CVS Health and/or one of its affiliates. Confidential and proprietary. Full Year 2025 as of July 31, 2025 Full Year 2025 as of May 1, 2025 Total Revenues At least $137.5 At least $133.0 Adjusted Operating Income At least $5.68 At least $5.48 Prescriptions Filled1 At least 1.80 At least 1.77 2Q 2025 2Q 2024 Total Revenues $33.6 $29.8 Adjusted Operating Income $1.34 $1.24 Prescriptions Filled1 (millions) 438.1 420.4 In billions, except prescriptions filled Quarter Results Business highlights Second quarter adjusted operating income increased nearly 8% year over year, primarily driven by increased prescription and front store volume, partially offset by continued pharmacy reimbursement pressure. Same store pharmacy sales and same store prescription volumes increased by ~18%2 and ~6%2, respectively, over the prior year quarter. Continued growth in retail pharmacy script share, reaching ~27.8% in the second quarter. Raised 2025 adjusted operating income guidance to at least $5.68 billion, reflecting a ~$200 million increase, driven by our strong first half performance, while continuing to maintain a prudent outlook for the remainder of the year. Pharmacy & Consumer Wellness In billions Full Year Guidance
    • 12. 12 ©2025 CVS Health and/or one of its affiliates. Confidential and proprietary. Footnotes Second Quarter 2025 1. Includes an adjustment to convert 90-day prescriptions to the equivalent of three 30-day prescriptions. 2. Same store sales and prescription volume represent the change in revenues and prescriptions filled in the Company’s retail pharmacy stores that have been operating for greater than one year and digital sales initiated online or through mobile applications and fulfilled through the Company’s distribution centers, expressed as a percentage that indicates the increase or decrease relative to the comparable prior period. Same store metrics exclude revenues and prescriptions from LTC and infusion services operations. Management uses these metrics to evaluate the performance of existing stores on a comparable basis and to inform future decisions regarding existing stores and new locations. Same-store metrics provide management and investors with information useful in understanding the portion of current revenues and prescriptions resulting from organic growth in existing locations versus the portion resulting from opening new stores.


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