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Introduction & Market Context
CVS Health Corporation (NYSE:CVS) presented its first quarter 2025 earnings results on May 1, 2025, revealing strong performance across all business segments and prompting management to raise its full-year guidance. The healthcare giant, which connects with millions of Americans through its pharmacy, benefits, and healthcare services, reported consolidated revenue growth of 7.0% year-over-year.
The positive results follow a strong finish to 2024, when the company also exceeded expectations. Investors responded favorably to the latest results, with CVS shares rising 8.68% in premarket trading to $72.50, approaching its 52-week high of $71.45.
As shown in the following consolidated results slide, CVS Health achieved significant improvements across key financial metrics:
Quarterly Performance Highlights
CVS Health reported total revenues of $94.6 billion for Q1 2025, up from $88.4 billion in the same period last year. The company’s adjusted operating income surged by 54.7% to $4.58 billion, while adjusted earnings per share increased by 72% to $2.25, compared to $1.31 in Q1 2024.
GAAP earnings per share also showed substantial improvement, reaching $1.41 compared to $0.88 in the prior-year quarter. Cash flow from operations was $4.6 billion, slightly below the $4.9 billion generated in Q1 2024.
The company returned $840 million to stockholders via quarterly dividends during the quarter, while continuing to grow its retail pharmacy script share to approximately 27.6%.
The enterprise highlights slide summarizes these achievements and key initiatives:
Segment Performance Analysis
All three of CVS Health’s business segments delivered strong results in the first quarter of 2025.
The Health Care Benefits segment, which includes Aetna, reported total revenues of $34.8 billion, up from $32.2 billion in Q1 2024. Adjusted operating income more than doubled to $1.99 billion, compared to $0.73 billion in the prior-year period. Total (EPA:TTEF) medical membership increased to 27.1 million, while the Medical (TASE:BLWV) Benefits Ratio (MBR) improved significantly to 87.3% from 90.4% a year earlier.
As shown in the Health Care Benefits segment results:
The Health Services segment, which includes the pharmacy benefits manager Caremark and healthcare providers Oak Street Health and Signify Health, generated $43.5 billion in revenue, up from $40.3 billion in Q1 2024. Adjusted operating income increased to $1.60 billion from $1.36 billion. The segment processed 464.2 million pharmacy claims, slightly up from 462.9 million in the prior-year quarter.
Key highlights for this segment include partnerships with pharmaceutical companies like Novo Nordisk (NYSE:NVO) and strong patient growth at Oak Street and Signify Health:
The Pharmacy & Consumer Wellness segment, which includes CVS retail pharmacies, reported revenues of $31.9 billion, up from $28.7 billion in Q1 2024. Adjusted operating income rose to $1.31 billion from $1.18 billion. Prescriptions filled increased to 435.5 million from 417.6 million in the same period last year.
The segment’s performance is detailed in the following slide:
Strategic Initiatives
CVS Health continues to focus on its mission of becoming "America’s most trusted health care company" through several strategic imperatives. These include growing its core business, building diverse national care delivery capabilities, enabling consumers’ health with care and coverage capabilities, creating seamless engagement across channels, and empowering its people and culture.
The company’s strategic framework is illustrated in this slide:
During the quarter, CVS Health introduced a new bundled prior authorization approach to help alleviate friction in the healthcare system. The company is also working on increasing access to innovative drugs at more affordable costs and improving health outcomes through better medication adherence.
The implementation of CVS CostVantage, a new pharmacy pricing model announced in late 2024, is tracking in line with expectations according to management.
Updated 2025 Guidance
Based on the strong first-quarter performance, CVS Health raised its full-year 2025 adjusted EPS guidance to a range of $6.00 to $6.20, up from the previous range of $5.75 to $6.00. The company also increased its cash flow from operations projection to approximately $7.0 billion, up from approximately $6.5 billion.
However, CVS Health revised its total revenue guidance downward to at least $382.6 billion, a reduction of approximately $3.3 billion from its previous guidance. This adjustment primarily reflects the company’s strategic decisions to exit the ACO REACH program and sell its MSSP business.
The Health Care Benefits segment’s adjusted operating income guidance was increased by approximately $400 million, reflecting the strong performance in the first quarter.
The updated guidance is detailed in the following slide:
CVS Health’s first quarter results demonstrate the company’s ability to execute on its strategic priorities while delivering strong financial performance. With raised guidance for the full year and ongoing initiatives to improve healthcare access and affordability, the company appears well-positioned to continue its positive momentum throughout 2025.
Full presentation:
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