Cigna Q2 Earnings Beat Estimates on Higher Specialty Volumes

Core Viewpoint - Cigna Group reported strong second-quarter 2025 results with adjusted EPS of $7.20, exceeding estimates and showing a year-over-year increase of 7.1% alongside adjusted revenues of $67.1 billion, which rose 11% year over year [1][10]. Financial Performance - Adjusted revenues of $67.1 billion surpassed the consensus estimate by 7.1% [1] - Total benefits and expenses increased 12% year over year to $64.9 billion, driven by higher pharmacy and service costs [4] - Adjusted income from operations was $1.9 billion, a 1% increase year over year [4] Segment Performance - Evernorth Health Services segment achieved adjusted revenues of $57.8 billion, up 17% year over year, benefiting from new business and improved specialty volumes [5] - Cigna Healthcare segment's adjusted revenues fell 18% year over year to $10.8 billion, impacted by divestitures, but still slightly beat estimates [7] - Medical customer base decreased by 5.2% year over year to 18 million, although it exceeded the consensus estimate [3][10] Expense and Margin Analysis - Adjusted SG&A expense ratio improved by 110 basis points year over year to 4.9% due to a favorable business mix [4] - Adjusted pre-tax operating income for Evernorth rose 5% year over year to $1.7 billion, while the adjusted pre-tax margin declined by 40 basis points to 2.9% [6] Financial Position - Cash and cash equivalents decreased by 42.7% from the end of 2024 to $4.3 billion [11] - Total assets fell 2.7% to $151.7 billion, while long-term debt decreased by 8.5% to $26.5 billion [11] Capital Deployment - Cigna repurchased shares worth approximately $2.6 billion in the first half of 2025 [13] 2025 Outlook - Adjusted EPS is projected to be a minimum of $29.60, indicating at least 8.3% growth from 2024 [14] - Adjusted revenues are expected to reach a minimum of $252 billion, reflecting at least a 2% increase from 2024 [15]