Cigna(US:CI)2025-10-30 16:20Revenue Performance - Pharmacy revenues for Q3 2025 reached $56,054 million, a 16% increase from $48,284 million in Q3 2024[142] - Total revenues for the nine months ended September 30, 2025, were $202,428 million, up 12% from $181,472 million in the same period last year[142] - Adjusted revenues for Evernorth Health Services rose by 15% to $60,391 million for the three months ended September 30, 2025, and by 16% to $171,897 million for the nine months[145] - Total adjusted revenues increased by 15% to $60,391 million for the three months ended September 30, 2025, and by 16% to $171,897 million for the nine months ended[199] - Pharmacy Benefit Services revenue rose by 18% to $34,091 million for the three months ended, and by 17% to $95,787 million for the nine months ended[199] Net Income and Earnings - Net income for Q3 2025 was $1,973 million, a 139% increase compared to $825 million in Q3 2024[142] - Shareholders' net income for the nine months ended September 30, 2025, was $4,723 million, reflecting a 135% increase from $2,010 million in the same period last year[142] - Shareholders' net income increased by 153% for the three months ended September 30, 2025, and 135% for the nine months, primarily due to the absence of impairment losses recorded in 2024[147] - Pre-tax adjusted income from operations for the nine months ended September 30, 2025, was $5.0 billion, a 4% increase from $4.9 billion in the same period of 2024[196] - Pre-tax adjusted income from operations increased by 1% to $1,903 million for the three months ended, and by 4% to $5,033 million for the nine months ended[201] Tax and Expenses - The consolidated effective tax rate decreased to 14.0% in Q3 2025 from 30.8% in Q3 2024, a reduction of 1,680 basis points[142] - The effective tax rate decreased for the three and nine months ended September 30, 2025, primarily due to the absence of a valuation allowance related to equity securities impairment recorded in 2024[154] - Pharmacy and other service costs increased by 17% to $55,530 million in Q3 2025 from $47,565 million in Q3 2024[142] - Medical costs and other benefit expenses decreased by 18% and 8% for the three and nine months ended September 30, 2025, respectively, primarily due to the HCSC transaction[151] Customer Metrics - Medical customers decreased by 5% to 18,059 thousand in Q3 2025 from 19,048 thousand in Q3 2024[142] - Total medical customers decreased by 5% to 18,059 thousand as of September 30, 2025, primarily due to the HCSC transaction[212] Investment Income - The company reported a net investment income of $233 million in Q3 2025, a significant increase from $85 million in Q3 2024[142] - Net investment income increased by 174% for the three months ended September 30, 2025, primarily due to the absence of a $182 million impairment recorded in 2024[150] Debt and Capital Management - As of September 30, 2025, the debt-to-capitalization ratio was 44.9%, up from 43.3% as of June 30, 2025, indicating an increase of 1.6 percentage points[171] - Total scheduled payments on long-term debt amount to $53.0 billion through January 2056, including $1.5 billion due in the remainder of 2025[183] - The company entered into a $6.5 billion revolving credit agreement in April 2025, which will mature in April 2030, providing liquidity support for corporate purposes[169] - The company issued $4.5 billion of new senior notes in September 2025, with proceeds used to repay $2.0 billion of loans under the Term Loan Facility[172] Shareholder Returns - The company repurchased 8.2 million shares for approximately $2.6 billion during the nine months ended September 30, 2025, compared to 14.7 million shares for approximately $5.0 billion during the same period in 2024, representing a decrease of 44.4% in shares repurchased[178] - Dividends received from U.S.-regulated subsidiaries were $0.6 billion for the nine months ended September 30, 2025, compared to $1.7 billion for the same period in 2024, indicating a decrease of 64.7%[166] Investment Portfolio - The carrying value of the debt securities portfolio decreased from $9.4 billion to $8.4 billion as of September 30, 2025, primarily reflecting the HCSC transaction[222] - As of September 30, 2025, 87% of the debt securities in the investment portfolio were investment grade, totaling $7.3 billion[223] - As of September 30, 2025, the commercial mortgage loan portfolio totaled $1.3 billion, consisting of approximately 40 fixed-rate loans, with a borrower cash investment generally ranging between 30% and 40%[225] - Other long-term investments amounted to $4.9 billion, diversified across securities limited partnerships, real estate limited partnerships, and direct investments in real estate joint ventures[228] - The unconsolidated subsidiary investments portfolio supporting the insurance joint venture in China was approximately $17.4 billion, with 70% in debt securities, 20% in equities, and 10% in long-term deposits and policy loans[230] Market Risk Management - The primary market risk exposure for the company is interest rate risk, which is continuously monitored[231] - There was no material change in risk exposure as reported in the 2024 Form 10-K, indicating stability in market risk management[232] - The company expects continued volatility in private equity and real estate fund performance as fair market valuations adjust[229] - Less than 4% of other long-term investments are exposed to real estate in the office sector, indicating a cautious approach to this market segment[229] - The commercial mortgage loan portfolio has less than 25% exposure to office properties, mitigating potential risks from weak tenant demand[227] - No single partnership investment exceeded 3% of the securities and real estate limited partnership portfolio, demonstrating a diversified investment strategy[228] - The company remains confident that the majority of borrowers in the commercial mortgage loan portfolio will continue to perform as expected under their contract terms[225]