Financial Data and Key Metrics Changes - CVS Health reported adjusted operating income of $3.8 billion and adjusted earnings per share (EPS) of $1.81 for Q2 2025, with an increase in full year 2025 adjusted EPS guidance to a range of $6.30 to $6.40, up from $6.00 to $6.20 [4][35] - Total revenues for Q2 2025 were nearly $99 billion, reflecting an approximate 8% increase year-over-year, driven by growth across all segments [22][35] - Year-to-date cash flow from operations reached approximately $6.5 billion, with $1.7 billion distributed in dividends [33][34] Business Line Data and Key Metrics Changes - In the health care benefits segment, revenue exceeded $36 billion, marking an over 11% increase year-over-year, with adjusted operating income rising nearly 40% to approximately $1.3 billion [23][24] - The health services segment generated revenues of over $46 billion, a year-over-year increase of over 10%, but adjusted operating income decreased approximately 18% due to pharmacy client price improvements [28][29] - The pharmacy and consumer wellness segment reported revenues of over $33 billion, a 12% increase compared to the prior year, with adjusted operating income increasing nearly 8% to over $1.3 billion [31][33] Market Data and Key Metrics Changes - Medical membership in the health care benefits segment was approximately 26.7 million, a decrease of about 350,000 members sequentially [23] - The medical benefit ratio for the quarter was 89.9%, reflecting a 30 basis point increase from the prior year, primarily due to a premium deficiency reserve in the group Medicare Advantage business [26] - Retail pharmacy script share grew to approximately 27.8%, an increase of about 60 basis points from the same period last year, with same-store pharmacy sales growing over 18% [32] Company Strategy and Development Direction - CVS Health aims to become America's most trusted health care company, focusing on affordability, access, and care coordination through holistic solutions [6][7] - The company is enhancing operations through technology investments and improving partnerships with payer clients to strengthen its Medicare Advantage strategy [10][12] - CVS Health is committed to transforming health care experiences by reducing friction and improving visibility for providers and patients, with a $20 billion commitment over the next decade [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed a cautious yet optimistic outlook for the remainder of the year, highlighting opportunities for outperformance despite pressures in health care delivery [5][9] - The company remains focused on executing its margin recovery plan, particularly in the Aetna business, while addressing challenges in the health care delivery segment [9][10] - Management noted that while medical cost trends remain elevated, they are generally in line with expectations, and they are maintaining a prudent view on these trends for the rest of the year [36] Other Important Information - CVS Health is transitioning its government business to cost-based pricing models for 2026, aiming to improve the pharmacy reimbursement model [16][38] - The company is actively working to streamline prior authorization processes to enhance patient care experiences [17][18] - CVS Health's strong cash flow generation is a critical strength, with plans to drive greater efficiency in working capital [34] Q&A Session Summary Question: Insights on Aetna's performance and visibility for the second half of the year - Management highlighted the focus on Aetna's multiyear recovery and innovation, expressing optimism about progress and performance in the second half of the year [43][44] Question: Group Medicare Advantage margins and renewal process - Management indicated that achieving target margins may take more than one cycle due to the nature of multiyear contracts, but they remain optimistic about the business [67][68] Question: Pharmacy segment outlook and reimbursement stabilization - Management noted strong performance in the pharmacy business, driven by script growth and market disruption, while maintaining a cautious stance on consumer dynamics and spending [73][76] Question: Reimbursement landscape for 2026 - Management discussed the transition to cost-based models and the expectation of a more stable reimbursement environment over time [82][84] Question: Medicare results reconciliation between Aetna and Oak Street - Management clarified that different member populations and acuity levels contribute to the performance differences, with ongoing efforts to strengthen the Oak Street business [90][92]

Financial Data and Key Metrics Changes - CVS Health reported adjusted operating income of $3.8 billion and adjusted earnings per share (EPS) of $1.81 for Q2 2025, with an increase in full year 2025 adjusted EPS guidance to a range of $6.30 to $6.40, up from $6.00 to $6.20 [3][21][33] - Total revenues for Q2 2025 were nearly $99 billion, reflecting an approximate 8% increase year-over-year, driven by growth across all segments [21][22] - Year-to-date cash flow from operations reached approximately $6.5 billion, with $1.7 billion distributed in dividends [30][31] Business Line Data and Key Metrics Changes - In the health care benefits segment, revenue exceeded $36 billion, an increase of over 11% year-over-year, with adjusted operating income rising nearly 40% to approximately $1.3 billion [22][24] - The health services segment generated revenues of over $46 billion, up over 10% year-over-year, but adjusted operating income decreased approximately 18% to around $1.6 billion due to pricing improvements and higher medical benefit ratios [26][27] - The pharmacy and consumer wellness segment reported revenues of over $33 billion, a 12% increase year-over-year, with adjusted operating income increasing nearly 8% to over $1.3 billion [29][30] Market Data and Key Metrics Changes - Medical membership in the health care benefits segment was approximately 26.7 million, a decrease of about 350,000 members sequentially [22] - Retail pharmacy script share grew to approximately 27.8%, an increase of about 60 basis points from the same period last year, with same-store pharmacy sales growing over 18% [29] Company Strategy and Development Direction - CVS Health aims to address major healthcare challenges such as affordability and access through holistic solutions, leveraging its diverse business model and national footprint [4][5] - The company is focused on margin recovery in its Aetna business while managing pressures in health care delivery, particularly at Oak Street [7][8] - CVS Health is committed to innovation in its pharmacy business, including the introduction of a weight management program that combines drug therapy with behavioral support [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed a cautious yet optimistic outlook for the remainder of the year, highlighting opportunities for outperformance despite ongoing challenges in the healthcare environment [4][18] - The company is focused on improving operations through technology investments and enhancing partnerships with payer clients to drive better outcomes [8][9] - Management remains vigilant regarding medical cost trends and is maintaining a prudent view on future expectations [34] Other Important Information - CVS Health announced a commitment of $20 billion over the next decade to transform healthcare, aiming to reduce friction and improve patient experiences [15][17] - The company is transitioning its government business to cost-based pricing models for 2026, which is expected to stabilize reimbursement [14][84] Q&A Session Summary Question: Insights on Aetna's performance and visibility for the second half of the year - Management highlighted the focus on Aetna's recovery and innovation, with strong performance in individual Medicare driving results, while maintaining a cautious outlook on Part D until more data is available [42][46][50] Question: Group Medicare Advantage margins and renewal process - Management indicated that achieving target margins for group Medicare Advantage may take more than one cycle due to the nature of multiyear contracts, but expressed optimism about the renewal process [63][66] Question: Pharmacy segment outlook and reimbursement stabilization - Management noted strong performance in the pharmacy segment, driven by script growth and market share gains, while remaining cautious about consumer spending dynamics and potential lower demand for vaccines [71][76] Question: Medicare results reconciliation between Aetna and Oak Street - Management clarified that the differences in performance are due to the distinct member populations, with Oak Street facing higher acuity and medical costs, while Aetna's broader base showed favorable trends [87][90]

CVS Health (CVS) came out with quarterly earnings of $1.81 per share, beating the Zacks Consensus Estimate of $1.47 per share. This compares to earnings of $1.83 per share a year ago. These figures are adjusted for non- recurring items. CVS Health shares have added about 38.8% since the beginning of the year versus the S&P 500's gain of 8.2%. What's Next for CVS Health? While CVS Health has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? O ...

Financial Performance & Guidance - CVS Health reported consolidated revenue growth of 8.4% in the second quarter of 2025[6] - Adjusted EPS for Q2 2025 was $1.81[6, 7, 11] - The company raised its 2025 adjusted EPS guidance to a range of $6.30 to $6.40[6, 14] - Full year 2025 consolidated revenue is projected to be at least $391.5 billion[7, 13] - Full year 2025 adjusted operating income is expected to be between $13.77 billion and $13.94 billion[7, 13] - Cash flow from operations for full year 2025 is projected to be at least $7.5 billion[7, 13] Segment Performance - Health Care Benefits total revenues for Q2 2025 were $36.3 billion[18] - Health Care Benefits adjusted operating income increased by nearly 40% year over year in Q2 2025[19] - Health Services total revenues for Q2 2025 were $46.5 billion[21] - Health Services adjusted operating income decreased ~18% year over year in Q2 2025[22] - Pharmacy & Consumer Wellness total revenues for Q2 2025 were $33.6 billion[24] - Pharmacy & Consumer Wellness adjusted operating income increased nearly 8% year over year in Q2 2025[25]

Revenue Performance - Total revenues increased by $7.7 billion, or 8.4%, in the three months ended June 30, 2025, compared to the prior year, driven by revenue growth across all operating segments [178]. - Total revenues increased by $13.8 billion, or 7.7%, in the six months ended June 30, 2025, driven by revenue growth across all operating segments [184]. - Total revenues for the Health Care Benefits segment reached $36,258 million for the three months ended June 30, 2025, compared to $32,475 million for the same period in 2024 [192]. - The Company recorded total revenues of $193,503 million for the six months ended June 30, 2025, compared to $179,671 million for the same period in 2024 [192]. - Total revenues increased by $3.8 billion, or 11.6%, in the three months ended June 30, 2025, primarily driven by increases in the Government business due to the Inflation Reduction Act's impact on the Medicare Part D program [198]. - Premium revenues for the Health Care Benefits segment reached $34.2 billion in Q2 2025, an increase of 11.5% compared to $30.7 billion in Q2 2024 [197]. - Total revenues increased by $6.4 billion, or 9.8%, in the six months ended June 30, 2025, primarily driven by the Government business [203]. - Total revenues for the three months ended June 30, 2025, increased by $4.3 billion, or 10.2%, compared to the prior year, primarily driven by pharmacy drug mix and brand inflation [217]. - Total revenues increased by $3.7 billion, or 12.5%, in the three months ended June 30, 2025, compared to the prior year, primarily driven by pharmacy drug mix and increased prescription and front store volume [230]. - Total revenues increased by $6.9 billion, or 11.8%, in the six months ended June 30, 2025, primarily driven by pharmacy drug mix and increased prescription volume [235]. Operating Income and Expenses - Operating expenses rose by $874 million, or 8.5%, in the three months ended June 30, 2025, primarily due to $833 million in litigation charges related to past business practices [178]. - Operating expenses increased by $1.6 billion, or 7.8%, in the six months ended June 30, 2025, primarily due to $1.2 billion in litigation charges and $288 million in pre-tax losses on Accountable Care assets [184]. - Operating income decreased by $664 million, or 21.8%, in the three months ended June 30, 2025, primarily due to declines in the Health Services and Pharmacy & Consumer Wellness segments [183]. - Adjusted operating income for the consolidated totals was $3,808 million for the three months ended June 30, 2025, up from $3,744 million in the same period of 2024 [194]. - Adjusted operating income increased by $1.6 billion, or 97.7%, in the six months ended June 30, 2025, driven by improved performance in the Government business [207]. - Adjusted operating income decreased by $100 million, or 3.1%, in the six months ended June 30, 2025, primarily driven by continued pharmacy client price improvements [224]. - Adjusted operating income decreased by $340 million, or 17.8%, in the three months ended June 30, 2025, primarily due to continued pharmacy client price improvements [226]. Net Income and Tax Rate - Net income attributable to CVS Health was $1,021 million for the three months ended June 30, 2025, a decrease of $749 million, or 42.3%, compared to the prior year [177]. - The effective income tax rate was 38.5% for the three months ended June 30, 2025, compared to 24.3% for the same period in 2024, primarily due to non-deductible litigation charges [180]. Membership and Utilization - As of June 30, 2025, medical membership decreased by 358,000 members compared to March 31, 2025, totaling 26.7 million members [213]. - The Company's medical membership in Medicare and individual exchange products is set to decline, with plans to exit certain states by January 2026 [187]. - Utilization levels remain elevated, which is expected to pressure the Health Care Benefits segment and health care delivery assets for the remainder of 2025 [187]. - The Medicaid business is facing medical cost pressures due to higher acuity following member redeterminations, with uncertainty on when these pressures will be offset by state rate updates [187]. Cash Flow and Financing - Net cash provided by operating activities decreased by $1.5 billion to $6.5 billion for the six months ended June 30, 2025, a decline of 19.3% compared to the prior year [242]. - Net cash used in investing activities decreased by $1.9 billion to $1.8 billion for the six months ended June 30, 2025, a reduction of 52.0% compared to the prior year [242]. - Net cash used in financing activities was $1.5 billion for the six months ended June 30, 2025, compared to net cash provided of $22 million in the prior year, marking a significant change of 7036.4% [246]. - The Company had $3.0 billion of commercial paper outstanding at a weighted average interest rate of 5.02% as of June 30, 2025 [244]. - The maximum borrowing capacity from the Federal Home Loan Bank of Boston was approximately $1.2 billion as of June 30, 2025, with no outstanding advances [245]. - The Company did not repurchase any shares during the six months ended June 30, 2025, while it repurchased 39.7 million shares for approximately $3.0 billion in the prior year [250]. - The Company has authorized share repurchase programs totaling $20 billion, with $10 billion remaining under the 2022 program as of June 30, 2025 [249]. - The Company was in compliance with all its debt covenants as of June 30, 2025 [247]. Segment Performance - The Health Services segment includes CVS Caremark operations and provides a full range of pharmacy benefit management solutions [172]. - The Pharmacy & Consumer Wellness segment is anticipated to benefit from increased volume due to disruptions in the retail pharmacy market, including acquisitions from Rite Aid [187]. - Operating expenses in the Health Services segment increased by $321 million, or 37.8%, in the three months ended June 30, 2025, mainly due to a $291 million litigation charge [219]. - Operating expenses in the Health Care Benefits segment remained consistent in the six months ended June 30, 2025, compared to the prior year [206]. - Pharmacy claims processed remained relatively consistent on a 30-day equivalent basis in the six months ended June 30, 2025, compared to the prior year [225]. - Pharmacy same store sales increased by 18.1% in the three months ended June 30, 2025, primarily due to pharmacy drug mix and a 6.4% increase in pharmacy same store prescription volume [230]. - Pharmacy same store sales increased by 17.9% in the six months ended June 30, 2025, driven by pharmacy drug mix and a 6.5% increase in pharmacy same store prescription volume [235]. - Front store same store sales increased by 1.5% in the six months ended June 30, 2025, compared to the prior year [235]. Future Outlook - The Company expects to achieve over $500 million in cost savings in 2025 from an enterprise-wide restructuring plan finalized in Q3 2024 [187]. - Future financial performance will be influenced by competitive demand, legislative and regulatory considerations, and inflation [187]. - Regulatory changes and consumer sentiment shifts regarding immunizations may negatively impact national demand and financial results [187]. - The Company intends to appeal the verdict related to legacy litigation charges amounting to $387 million recorded in Q1 2025 [196].

Core Viewpoint - CVS Health reported stronger-than-expected second-quarter earnings and revenue, leading to an increase in its adjusted profit outlook, driven by the retail pharmacy business and improvements in its insurance unit [1][2]. Financial Performance - The company expects fiscal 2025 adjusted earnings to be between $6.30 and $6.40 per share, an increase from the previous guidance of $6 to $6.20 per share [2]. - CVS reported net income of $1.02 billion, or 80 cents per share, for the first quarter, down from $1.77 billion, or $1.41 per share, in the same period last year [5]. - Adjusted earnings for the quarter were $1.81 per share, exceeding the expected $1.46 per share [8]. - Revenue for the first quarter was $98.92 billion, an 8.4% increase from the previous year, surpassing the expected $94.50 billion [6][8]. Business Segments - The retail pharmacy business is performing well, attributed to new technology and investments in labor, which have improved operations and efficiency [4]. - The insurance unit, Aetna, is undergoing a multi-year recovery effort to address higher medical costs, contributing to the positive outlook [3]. - However, the strength in the retail pharmacy and insurance segments was partially offset by a decline in the health services segment [4]. Strategic Initiatives - CVS is pursuing a broader turnaround plan that includes $2 billion in cost cuts over the next several years, with plans to close additional locations while expanding in underrepresented areas like the Pacific Northwest [7].

Exhibit 99.1 CVS HEALTH CORPORATION REPORTS SECOND QUARTER 2025 RESULTS AND UPDATES FULL-YEAR 2025 GUIDANCE Financial Highlights Operational Highlights 2025 Full-Year Guidance CEO Commentary "What people want most — a connected, simpler health care experience — is what CVS Health uniquely provides. For the 185 million people we serve, we deliver better access, greater affordability and aligned advocacy. Our strong performance demonstrates the continued focus we have on operational and financial improvement ...

Earnings Report - CVS Health is expected to report Q2 earnings of $1.46 per share, a decrease from $1.83 per share in the same period last year [1] - Projected quarterly revenue is $94.59 billion, up from $91.23 billion a year earlier [1] Recent Developments - CVS Health opened a new Workforce Innovation and Talent Center (WITC) in Columbus on July 23 [2] - CVS Health shares increased by 3.8%, closing at $62.30 on Wednesday [2] Analyst Ratings - UBS analyst Kevin Caliendo maintained a Neutral rating and reduced the price target from $71 to $67 [4] - Jefferies analyst Brian Tanquilut maintained a Buy rating and raised the price target from $74 to $80 [4] - Mizuho analyst Ann Hynes maintained an Outperform rating and increased the price target from $70 to $76 [4] - Leerink Partners analyst Michael Cherny upgraded the stock from Market Perform to Outperform and raised the price target from $55 to $75 [4]

The Medical group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Is CVS Health (CVS) one of those stocks right now? A quick glance at the company's year-to-date performance in comparison to the rest of the Medical sector should help us answer this question. CVS Health is one of 983 companies in the Medical group. The Medical group currently sits at #7 within the Zacks Sector Rank. The Zacks Sector Rank considers 16 different groups, measu ...

Core Insights - CVS Health's Health Care Delivery business has shown strong revenue growth, with a 27% increase in Q1 2025, driven by strategic acquisitions and a focus on value-based care [1][8] Group 1: Financial Performance - The Health Care Delivery segment's revenue growth of 27% in Q1 2025 excludes the impact of exiting certain programs and selling parts of the business [1] - Integration costs related to the acquisitions of Signify Health and Oak Street Health amounted to $45 million in Q1 2025 [2] - CVS Health's Signify unit completed over 3 million in-home health evaluations in 2024, while Oak Street reported a 37% increase in at-risk members [3][8] Group 2: Market Dynamics - The financial performance of the Health Care Delivery business is closely linked to Medicare Advantage medical cost trends, with early signs of pressure observed at Oak Street Health [4] - Humana's CenterWell segment reported a 37.5% revenue growth in Q1 2025, driven by primary care business expansion [5] - Agilon Health is transforming senior healthcare with its PalliUM program, which has seen increased patient participation [6] Group 3: Valuation and Estimates - CVS Health shares have increased by 6.2% over the past six months, contrasting with an 11.6% decline in the industry [7] - The stock is trading at a forward price-to-earnings ratio of 9.06, below the industry average of 14.37, and carries a Value Score of A [9] - Consensus estimates for CVS Health's 2025 earnings have shown an upward trend, with current estimates for Q1 2025 at $1.47 and for the full year at $6.12 [10][11]