CVS Health(US:CVS)2025-10-29 10:32Financial Performance - Total revenues for Q3 2025 reached a record high of $102.9 billion, an increase of 7.8% compared to Q3 2024[6] - Total revenues for the three months ended September 30, 2025, were $102,871 million, an increase from $95,428 million in the prior year, representing a growth of approximately 7.6%[26] - For the nine months ended September 30, 2025, total revenues were $296,374 million, up from $275,099 million for the same period in 2024[51] Earnings and Losses - The company reported a GAAP diluted loss per share of $3.13, which includes a $5.7 billion goodwill impairment charge related to the Health Care Delivery reporting unit[6] - Net income (loss) for the three months ended September 30, 2025, was $(3,975) million, compared to a net income of $87 million in the prior year[26] - Operating income (loss) for the three months ended September 30, 2025, was $(3,207) million, a decrease from an operating income of $832 million in the prior year[26] Adjusted Earnings - Adjusted EPS for Q3 2025 was $1.60, up from $1.09 in the prior year, primarily due to improved adjusted operating income in the Health Care Benefits segment[4] - Adjusted income attributable to CVS Health for the three months ended September 30, 2025, was $2,037 million, or $1.60 per share, compared to $1,369 million, or $1.09 per share, for the same period in 2024[48] - Adjusted earnings per share guidance for 2025 is projected between $6.55 and $6.65, with a net loss attributable to CVS Health estimated at $(432) million[67] Revenue Segments - The Health Care Benefits segment saw total revenues of $35.993 billion, a 9.1% increase driven by the Government business and the impact of the Inflation Reduction Act[12] - The Health Services segment reported total revenues of $49.266 billion, an increase of 11.6% compared to the prior year, primarily due to pharmacy drug mix and brand inflation[15] - The Pharmacy & Consumer Wellness segment's total revenues increased by 11.7% to $36.214 billion, driven by increased prescription volume and pharmacy drug mix[16] Operating Income - The Company reported a consolidated adjusted operating income of $3,459 million for the three months ended September 30, 2025, compared to an adjusted operating income of $2,547 million for the same period in 2024, reflecting a year-over-year increase of approximately 36%[44] - For the nine months ended September 30, 2025, the adjusted operating income reached $11,846 million, up from $9,248 million in the same period of 2024, indicating a growth of about 28%[46] - Adjusted operating income for the Health Care Benefits segment improved to $314 million from a loss of $924 million in the prior year[12] Goodwill and Impairments - Goodwill impairment for the three months ended September 30, 2025, was $5,725 million, with no impairment recorded in the prior year[26] - A goodwill impairment charge of $5,725 million was recognized during the three months ended September 30, 2025, primarily related to the Health Care Delivery reporting unit within the Health Services segment[44] Cash Flow and Guidance - Year-to-date cash flow from operations was $7.2 billion, with updated guidance for full-year cash flow from operations now ranging from $7.5 billion to $8.0 billion[6] - The company updated its GAAP diluted earnings per share guidance range to $(0.34) to $(0.24) from $3.84 to $3.94[6] Membership and Utilization - The company serves approximately 87 million plan members through its pharmacy benefits manager[21] - Total medical membership in the Health Care Benefits segment was 26,703 thousand as of September 30, 2025, slightly up from 26,721 thousand in June 2025[54] - Prescriptions filled increased by 6.9% on a 30-day equivalent basis for the three months ended September 30, 2025, compared to the prior year, driven by increased utilization and incremental volume from Rite Aid prescription file acquisitions[18] Legal and Litigation Charges - The Company recorded a litigation charge of $387 million in Q1 2025 and an additional charge of $542 million in Q2 2025 related to violations of the federal False Claims Act, impacting the Pharmacy & Consumer Wellness segment[37] - The Company recorded opioid litigation charges of $320 million during the three months ended September 30, 2025, reflecting ongoing legal matters related to opioid distribution[44] Health Care Costs - Health care costs as a percentage of premium revenues improved by 240 basis points to 92.8% for the three months ended September 30, 2025, compared to 95.2% in 2024[54] - Total incurred health care costs for the nine months ended September 30, 2025, were $91,570 million, up from $84,696 million in 2024[64] - Health care costs payable at the end of the period increased to $16,098 million in 2025 from $15,237 million in 2024[64] Operational Metrics - Days claims payable decreased to 42.5 days as of September 30, 2025, compared to 44.6 days in September 2024[54] - Same store prescription volume increased by 8.9% on a 30-day equivalent basis for the three months ended September 30, 2025, compared to the prior year[18]