Results Center

For the three months ended March 31, 2025 compared to the prior year:

Total revenues increased 7.0% driven by revenue growth across all segments.

Operating income increased 48.6% primarily due to the increase in adjusted operating income described below and the absence of a $100 million opioid litigation charge recorded in the prior year. These increases were partially offset by a $387 million litigation charge related to a jury verdict against Omnicare and a $247 million pre-tax loss on the wind down and sale of Accountable Care assets, both recorded during the three months ended March 31, 31 2025.

Adjusted operating income increased 54.9% driven by increases across all operating segments.

Interest expense increased $69 million, or 9.6%, due to higher debt in the three months ended March 31, 2025, primarily as a result of long-term debt issued in May and December of 2024.

The effective income tax rate increased to 31.9% compared to 28.9% primarily due to the impact of a litigation charge recorded in the three months ended March 31, 2025.

The Health Services segment provides a full range of pharmacy benefit management solutions, delivers health care services in its medical clinics, virtually, and in the home, and offers provider enablement solutions.

The segment results for the three months ended March 31, 2025 and 2024 were as follows:

Total revenues increased 7.9% for the three months ended March 31, 2025 compared to the prior year primarily driven by pharmacy drug mix, growth in specialty pharmacy and brand inflation. These increases were partially offset by continued pharmacy client price improvements.

Adjusted operating income increased 17.6% for the three months ended March 31, 2025 compared to the prior year primarily driven by improved purchasing economics and pharmacy drug mix. These increases were partially offset by continued pharmacy client price improvements.

Pharmacy claims processed remained relatively consistent on a 30-day equivalent basis for the three months ended March 31, 2025 compared to the prior year primarily driven by increased utilization, largely offset by the impact of an additional day in 2024 due to the leap year.

CVS Caremark is partnering with Novo Nordisk to significantly increase access to Wegovy, a GLP-1 drug, for its members at a more affordable price. The Company is taking a formulary action on July 1, 2025 to prefer Wegovy for its members. The Company will enhance the value of these new medications by combining them with additional lifestyle clinical support as part of the CVS Weight Management program offered to clients through CVS Caremark.

The Pharmacy & Consumer Wellness segment dispenses prescriptions in its retail pharmacies and through its infusion operations, provides ancillary pharmacy services including pharmacy patient care programs, diagnostic testing and vaccination administration, and sells a wide assortment of health and wellness products and general merchandise. The segment also provides pharmacy services to long-term care facilities and pharmacy fulfillment services to support the Health Services segment’s specialty and mail order pharmacy offerings.

The segment results for the three months ended March 31, 2025 and 2024 were as follows:

Total revenues increased 11.1% for the three months ended March 31, 2025 compared to the prior year primarily driven by pharmacy drug mix and increased prescription volume. These increases were partially offset by continued pharmacy reimbursement pressure.

Adjusted operating income increased 11.6% for the three months ended March 31, 2025 compared to the prior year primarily driven by increased prescription volume and improved drug purchasing. These increases were partially offset by continued pharmacy reimbursement pressure and the impact of softening consumer demand in the front store in the three months ended March 31, 2025.

Prescriptions filled increased 4.3% on a 30-day equivalent basis for the three months ended March 31, 2025 compared to the prior year primarily driven by increased utilization, partially offset by the impact of an additional day in 2024 due to the leap year.

Same store prescription volume increased 6.7% on a 30-day equivalent basis for the three months ended March 31, 2025 compared to the prior year.

The Health Care Benefits segment offers a full range of insured and self-insured (“ASC”) medical, pharmacy, dental and behavioral health products and services.

The segment results for the three months ended March 31, 2025 and 2024 were as follows:

Total revenues increased 8.0% for the three months ended March 31, 2025 compared to the prior year primarily driven by increases in the Medicare product line, including the impact of improved Medicare Advantage star ratings for the 2025 payment year.

Adjusted operating income increased $1.3 billion for the three months ended March 31, 2025 compared to the prior year primarily driven by the favorable year-over-year impact of prior-year development, as well as improved underlying performance in Medicare, including the impact of improved Medicare Advantage star ratings for the 2025 payment year. These increases were partially offset by the premium deficiency reserve described below.

During the first quarter of 2025, the Company recorded a premium deficiency reserve of $448 million within its individual exchange product line related to anticipated losses for the 2025 coverage year. The $448 million premium deficiency recorded was comprised of $17 million of operating expenses related to the write-off of unamortized acquisition costs and $431 million of health care costs.

The MBR decreased to 87.3% in the three months ended March 31, 2025 compared to 90.4% in the prior year driven by the favorable year-over-year impact of prior-year development, as well as improved underlying performance in Medicare, including the impact of improved Medicare Advantage star ratings for the 2025 payment year. These decreases were partially offset by the $431 million (130 basis points) premium deficiency reserve recorded as health care costs described above.

Medical membership as of March 31, 2025 of 27.1 million remained relatively consistent compared with December 31, 2024, reflecting membership declines in the individual exchange and Medicare product lines, which were largely offset by an increase in Commercial ASC membership.

Prior years’ health care costs payable estimates developed favorably by $1.6 billion during the three months ended March 31, 2025. This development is reported on a basis consistent with the prior years’ development reported in the health care costs payable table in the Company’s annual audited financial statements and does not directly correspond to an increase in 2025 operating results.

Days claims payable were 43.2 days as of March 31, 2025, a decrease of 0.8 days compared to December 31, 2024. The decrease was primarily driven by pharmacy costs, partially offset by the impact of the premium deficiency reserve recorded as health care costs in the first quarter of 2025 described above.

The Company decided to exit the individual exchange business for 2026. This decision is consistent with others taken this year to focus the Company’s portfolio. The Company is best able to serve members through its other health benefit solutions, which offer access to quality care, affordable health benefits and exceptional service. The Company will continue delivering superior service and support to its individual exchange members through 2025 and residual activities in 2026.

Aetna has introduced an approach to bundling approvals for prior authorizations for certain cancer-related scans and tests, making it one upfront approval instead of multiple approvals over a period of months. In addition, a new Aetna Clinical Collaboration program partners with hospitals to support members as they change care settings, reducing readmissions and improving outcomes.

The Company revised its full-year 2025 GAAP diluted EPS guidance range to $4.23 to $4.43 from $4.58 to $4.83 and raised its 2025 Adjusted EPS guidance range to $6.00 to $6.20 from $5.75 to $6.00. The Company also raised its full-year 2025 cash flow from operations guidance to approximately $7.0 billion from approximately $6.5 billion.

The adjustments between full-year 2025 GAAP diluted EPS and Adjusted EPS include amortization of intangible assets, net realized capital losses, acquisition-related integration costs, the loss on the wind down and sale of Accountable Care assets, the Omnicare litigation charge, office real estate optimization charges and the corresponding income tax benefit or expense related to the items excluded from adjusted income attributable to CVS Health.