The CIGNA Corporation

07/31/2025 | Press release | Distributed by Public on 07/31/2025 04:16

The Cigna Group Reports Strong Second Quarter 2025 Results, Reaffirms 2025 Adjusted EPS Outlook (Form 8-K)

The Cigna Group Reports Strong Second Quarter 2025 Results, Reaffirms 2025 Adjusted EPS Outlook

•
Total revenues for the second quarter 2025 increased 11% to $67.2 billion
•
Shareholders' net income for the second quarter 2025 was $1.5 billion, or $5.71 per share
•
Adjusted income from operations1 for the second quarter 2025 was $1.9 billion, or $7.20 per share
•
Reaffirms 2025 outlook for adjusted income from operations1,2 of at least $29.60 per share2

BLOOMFIELD, CT, July 31, 2025 - Global health company The Cigna Group (NYSE: CI) today reported strong second quarter 2025 results, reflecting continued growth and solid performance across its diverse portfolio of businesses.

"Listening, adapting, and innovating to meet the evolving needs of our patients, customers, and clients enables us to deliver meaningful value," said David M. Cordani, chairman and CEO of The Cigna Group. "Our performance in the second quarter reflects our disciplined execution and the strength of our business mix."

Shareholders' net income for second quarter 2025 was $1.5 billion, or $5.71 per share, and compares with $1.5 billion, or $5.45 per share, for second quarter 2024.

The Cigna Group's adjusted income from operations1 for second quarter 2025 was $1.9 billion, or $7.20 per share, compared with $1.9 billion, or $6.72 per share, for second quarter 2024.

A reconciliation of shareholders' net income to adjusted income from operations1 is provided on the following page and on Exhibit 1 of this earnings release.

2
CONSOLIDATED HIGHLIGHTS

The following table includes highlights of results and reconciliations of total revenues to adjusted revenues3 and shareholders' net income to adjusted income from operations1:

Consolidated Financial Results (dollars in millions):
Three Months Ended
Six Months
Ended
June 30,
March 31,
June 30,
2025
2024
2025
2025
Total Revenues
$
67,178
$
60,523
$
65,502
$
132,680
Net Investment Results from Equity Method Investments3
(44
)
(53
)
(50
)
(94
)
Adjusted Revenues3
$
67,134
$
60,470
$
65,452
$
132,586
Consolidated Earnings, net of taxes
Shareholders' Net Income
$
1,532
$
1,548
$
1,323
$
2,855
Net Investment (Gains)1
(103
)
(20
)
(48
)
(151
)
Amortization of Acquired Intangible Assets1
330
317
336
666
Special Items1
171
64
229
400
Adjusted Income from Operations1
$
1,930
$
1,909
$
1,840
$
3,770
Shareholders' Net Income, per share
$
5.71
$
5.45
$
4.85
$
10.55
Adjusted Income from Operations1, per share
$
7.20
$
6.72
$
6.74
$
13.94

•
Total revenues for second quarter 2025 increased 11% relative to second quarter 2024, primarily driven by Evernorth Health Services and includes growth of existing client relationships and strong specialty pharmacy growth.

•
Adjusted income from operations1 for second quarter 2025 increased 1% relative to second quarter 2024, reflecting strong growth in Evernorth Health Services and improvement in Corporate, partially offset by expected higher stop loss medical costs in Cigna Healthcare.

•
The SG&A expense ratio4 and adjusted SG&A expense ratio4 were 5.1% and 4.9%, respectively, for second quarter 2025, compared to 6.1% and 6.0%, respectively, in second quarter 2024, reflecting business mix shift and strong revenue growth.

3
CUSTOMER RELATIONSHIPS

The following table summarizes The Cigna Group's medical customers and overall customer relationships:

Customer Relationships (in thousands):
As of the Periods Ended

June 30,
March 31,
December 31,
2025
2024
2025
2024
Total Pharmacy Customers5
121,892
122,470
122,283
118,304
U.S. Healthcare
16,355
17,404
16,364
17,502
International Health
1,691
1,639
1,679
1,645
Total Medical Customers5
18,046
19,043
18,043
19,147
Behavioral Care
23,852
23,816
23,416
23,932
Dental
18,446
18,339
18,466
18,258
Medicare Part D
-
2,564
-
2,571
Total Customer Relationships5
182,236
186,232
182,208
182,212

•
Total customer relationships5 at June 30, 2025 were 182.2 million. Excluding the impact of the HCSC transaction6, total customer relationships5 increased 2% from December 31, 2024.

•
Total pharmacy customers5 at June 30, 2025 increased 3% from December 31, 2024 to 121.9 million due to new sales and the continued expansion of relationships.

•
Total medical customers5 at June 30, 2025 decreased 6% from December 31, 2024 to 18.0 million, primarily reflecting the impact of the HCSC transaction6. Excluding the impact of the HCSC transaction6, total medical customers5 as of June 30, 2025 were consistent relative to December 31, 2024.

4
HIGHLIGHTS OF SEGMENT RESULTS

See Exhibit 1 for a reconciliation of adjusted income from operations1 to shareholders' net income.

Evernorth Health Services

This segment includes the Pharmacy Benefit Services and Specialty and Care Services operating segments, which provide independent and coordinated health solutions and capabilities to enable the health care system to work better and help people live healthier lives.

Pharmacy Benefit Services drives high-quality, cost-effective pharmacy care through various services such as drug claim adjudication, retail pharmacy network administration, benefit design consultation, drug utilization review, drug formulary management and access to our home delivery pharmacy. Specialty and Care Services provides specialty drugs for the treatment of complex and rare diseases, specialty distribution of pharmaceuticals and medical supplies, as well as clinical programs to help our clients drive better whole-person health outcomes through care services.

Financial Results (dollars in millions):
Three Months Ended
Six Months
Ended
June 30,
March 31,
June 30,
2025
2024
2025
2025
Total Adjusted Revenues
Pharmacy Benefit Services
$
31,954
$
26,630
$
29,742
$
61,696
Specialty and Care Services
$
25,871
$
22,918
$
23,939
$
49,810
Adjusted Revenues3
$
57,825
$
49,548
$
53,681
$
111,506
Adjusted Income from Operations, Pre-Tax
Pharmacy Benefit Services
$
833
$
816
$
544
$
1,377
Specialty and Care Services
$
863
$
803
$
890
$
1,753
Adjusted Income from Operations, Pre-Tax1
$
1,696
$
1,619
$
1,434
$
3,130
Margin, Pre-Tax7
2.9
%
3.3
%
2.7
%
2.8
%

•
Evernorth Health Services second quarter 2025 adjusted revenues3 and adjusted income from operations, pre-tax1, increased 17% and 5%, respectively, relative to second quarter 2024.

•
For Pharmacy Benefit Services second quarter 2025 relative to second quarter 2024:

◦
Adjusted revenues3 increased 20% reflecting strong organic growth, including the growth of existing client relationships, and new business.


◦
Adjusted income from operations, pre-tax1, increased 2% reflecting continued affordability improvements, partially offset by initiatives to support business growth.

•
For Specialty and Care Services second quarter 2025 relative to second quarter 2024:

◦
Adjusted revenues3 increased 13% reflecting strong specialty volume growth.


◦
Adjusted income from operations, pre-tax1, increased 7% reflecting strong organic growth in specialty businesses, including increased biosimilar adoption. Year-over-year growth was also impacted by lower net investment income in second quarter 2025 compared to second quarter 2024.

5
Cigna Healthcare

This segment includes the U.S. Healthcare and International Health operating segments, which provide comprehensive medical and coordinated solutions to clients and customers. U.S. Healthcare provides medical plans and other benefits and solutions for insured and self-insured clients as well as individual health plans. International Health provides health care solutions in our international markets, as well as health solutions for globally mobile individuals and employees of multinational organizations. U.S. Healthcare included the Medicare and related businesses until the divestiture of such businesses to Health Care Services Corporation ("HCSC")6 on March 19, 2025.

Financial Results (dollars in millions):
Three Months Ended
Six Months
Ended
June 30,
March 31,
June 30,
2025
2024
2025
2025
Adjusted Revenues3,8
$
10,754
$
13,143
$
14,482
$
25,236
Adjusted Income from Operations, Pre-Tax1
$
1,094
$
1,204
$
1,287
$
2,381
Margin, Pre-Tax7
10.2
%
9.2
%
8.9
%
9.4
%

•
Second quarter 2025 adjusted revenues3,8 decreased 18% relative to second quarter 2024, primarily reflecting the impact of the HCSC transaction6,8. Excluding the impact of the HCSC transaction6,8, second quarter 2025 adjusted revenues3,8 would have increased 7% relative to second quarter 2024, primarily driven by premium rate increases to cover expected increases in medical costs.

•
Second quarter 2025 adjusted income from operations, pre-tax1, decreased 9% relative to second quarter 2024, primarily driven by a higher MCR4.

•
The Cigna Healthcare MCR4 was 83.2% for second quarter 2025 compared to 82.3% for second quarter 2024, primarily due to expected higher stop loss medical costs.

•
Cigna Healthcare net medical costs payable9 was $4.49 billion at June 30, 2025 which increased relative to $4.37 billion at March 31, 2025, and decreased relative to $5.04 billion at June 30, 2024. Cigna Healthcare net medical costs payable9 at June 30, 2024 included $895 million from businesses included in the HCSC transaction6. Favorable prior year reserve development on a gross pre-tax basis was $297 million and $284 million for the six months ended June 30, 2025 and 2024, respectively.

Corporate and Other Operations

Corporate reflects interest expense, amounts not allocated to operating segments and includes intersegment eliminations. Other Operations is comprised of Corporate Owned Life Insurance ("COLI"), the Company's run-off operations and other non-strategic businesses.

Financial Results (dollars in millions):
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
2025
2024
2025
2025

Adjusted (Loss) from Operations, Pre-Tax1
$
(357
) $
(451
) $
(411
) $
(768
)

6
2025 OUTLOOK2

The Cigna Group's outlook2 for full year 2025 consolidated adjusted income from operations1,2 is at least $29.60 per share2. Additionally, this outlook includes the impact of expected future share repurchases and anticipated 2025 dividends.

(dollars in millions, except where noted and per share amounts)
2025 Consolidated Metrics
Projection for Full Year Ending
December 31, 2025
Change from
Prior Projection
Adjusted Income from Operations, per share1,2
at least $29.60
Evernorth Adjusted Income from Operations, Pre-Tax1,2
at least $7,200
Cigna Healthcare Adjusted Income from Operations, Pre-Tax1,2
at least $4,125
Cigna Healthcare Medical Care Ratio2,4
83.2% to 84.2%

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The foregoing statements represent the Company's current estimates of The Cigna Group's 2025 consolidated and segment adjusted income from operations1,2 and other key metrics as of the date of this release. Actual results may differ materially depending on a number of factors. Investors are urged to read the Cautionary Note Regarding Forward-Looking Statements included in this release. Management does not assume any obligation to update these estimates.

This quarterly earnings release and the Quarterly Financial Supplement are available on The Cigna Group's website in the Investor Relations section (https://investors.thecignagroup.com/overview/default.aspx). Management will be hosting a conference call to review second quarter 2025 results and discuss full year 2025 outlook beginning today at 8:30 a.m. ET. A link to the conference call is available in the Investor Relations section of The Cigna Group's website located at https://investors.thecignagroup.com/events-and-presentations/default.aspx.

The call-in numbers for the conference call are as follows:
Live Call
(888) 566-1889 (Domestic)
(773) 799-3989 (International)
Passcode: 07312025

Replay
(800) 835-8067 (Domestic)
(203) 369-3354 (International)

It is strongly suggested you dial in to the conference call by 8:15 a.m. ET.

About The Cigna Group
The Cigna Group (NYSE: CI) is a global health company committed to creating a better future built on the vitality of every individual and every community. We relentlessly challenge ourselves to partner and innovate solutions for better health. The Cigna Group includes products and services marketed under Evernorth Health Services, Cigna Healthcare, or its subsidiaries. The Cigna Group maintains sales capabilities in more than 30 markets and jurisdictions, and has more than 180 million customer relationships around the world. Learn more at thecignagroup.com.

Notes:


1.
Adjusted income (loss) from operations is a principal financial measure of profitability used by The Cigna Group's management because it presents the underlying results of operations of the Company's businesses and facilitates analysis of trends in underlying revenue, expenses and shareholders' net income. Adjusted income (loss) from operations is defined as shareholders' net income (or income before income taxes less pre-tax income (loss) attributable to noncontrolling interests for the segment metric) excluding net investment gains/losses, amortization of acquired intangible assets and special items. The Cigna Group's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting are also excluded. Special items are matters that management believes are not representative of the underlying results of operations due to their nature or size. Adjusted income (loss) from operations is measured on an after-tax basis for consolidated results and on a pre-tax basis for segment results. Consolidated adjusted income (loss) from operations is not determined in accordance with GAAP and should not be viewed as a substitute for the most directly comparable GAAP measure, shareholders' net income. See Exhibit 1 for a reconciliation of consolidated adjusted income from operations to shareholders' net income.

8

2.
Management is not able to provide a reconciliation of adjusted income from operations to shareholders' net income, on a forward-looking basis because it is unable to predict, without unreasonable effort, certain components thereof including (i) future net investment results and (ii) future special items. These items are inherently uncertain and depend on various factors, many of which are beyond The Cigna Group's control. As such, any associated estimate and its impact on shareholders' net income and total revenues could vary materially.

The Company's outlook excludes the potential effects of any other business combinations that may occur after the date of this earnings release. The Company's outlook includes the potential effects of expected future share repurchases and anticipated 2025 dividends.

The timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions, and alternate uses of capital. The share repurchase program may be effected through open market purchases in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended, including through Rule 10b5-1 trading plans, or privately negotiated transactions. The program may be suspended or discontinued at any time.


3.
Adjusted revenues is used by The Cigna Group's management because it facilitates analysis of trends in underlying revenue. The Company defines adjusted revenues as total revenues excluding the following adjustments: special items and The Cigna Group's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting. Special items are matters that management believes are not representative of the underlying results of operations due to their nature or size. We exclude these items from this measure because management believes they are not indicative of past or future underlying performance of the business. Adjusted revenues is not determined in accordance with GAAP and should not be viewed as a substitute for the most directly comparable GAAP measure, total revenues. See Exhibit 1 for a reconciliation of consolidated adjusted revenues to total revenues.


4.
Operating ratios are defined as follows:

•
The Cigna Healthcare medical care ratio ("MCR") represents medical costs as a percentage of premiums for all Cigna Healthcare risk products provided through guaranteed cost or experience-rated funding arrangements. Changes in percentages may be expressed in basis points ("bps").

•
SG&A expense ratio on a GAAP basis for the second quarter 2025 represents enterprise selling, general and administrative expenses of $3,433 million as a percentage of total revenue of $67.2 billion at a consolidated level. SG&A expense ratio on a GAAP basis for the second quarter 2024 represents enterprise selling, general and administrative expenses of $3,684 million as a percentage of total revenue of $60.5 billion at a consolidated level.

•
Adjusted SG&A expense ratio for the second quarter 2025 represents enterprise selling, general and administrative expenses of $3,271 million excluding special items of $162 million as a percentage of adjusted revenue at a consolidated level. Adjusted SG&A expense ratio for the second quarter 2024 represents enterprise selling, general and administrative expenses of $3,621 million excluding special items of $63 million as a percentage of adjusted revenue at a consolidated level.

9

5.
Customer relationships are defined as follows:

•
Total medical customers includes individuals who meet any one of the following criteria: (i) are covered under a medical insurance policy, managed care arrangement, or administrative services agreement issued by Cigna Healthcare; (ii) have access to Cigna Healthcare's provider network for covered services under their medical plan; or (iii) have medical claims that are administered by Cigna Healthcare.

•
Total customer relationships and total medical customers as of December 31, 2024, excluding the impact of the HCSC transaction3, were 179,712 thousand and 18,055 thousand, respectively.


6.
On March 19, 2025, the company completed the sale (the "HCSC transaction") of its Medicare Advantage, Medicare Individual Stand-Alone Prescription Drug Plans, Medicare and Other Supplemental Benefits, and CareAllies businesses to Health Care Services Corporation ("HCSC").

7.
Margin, pre-tax, is calculated by dividing adjusted income (loss) from operations, pre-tax by adjusted revenues for each segment.


8.
The Cigna Group owns noncontrolling interests in certain operating joint ventures. As such, the adjusted revenues for the Cigna Healthcare segment only include the Company's share of the joint ventures' earnings reported in Fees and Other Revenues using the equity method of accounting under GAAP.

Set forth below is a table that presents the impact of the HCSC transaction on Cigna Healthcare Adjusted Revenues for the periods presented. Management believes that the presentation of this measure is useful to investors because it permits a comparison of the Company's go-forward business across periods.

Financial Results (dollars in millions):

Three Months Ended
Six Months
Ended
June 30,
March 31,
June 30,
2025
2024
2025
2025
Cigna Healthcare Adjusted Revenues3
$
10,754
$
13,143
$
14,482
$
25,236
Less: U.S. Healthcare - divested businesses revenues
-
3,137
3,850
3,850
Cigna Healthcare Adjusted Revenues3 excluding U.S. Healthcare - divested businesses revenues
$
10,754
$
10,006
$
10,632
$
21,386


9.
Medical costs payable within the Cigna Healthcare segment are presented net of reinsurance and other recoverables. The gross medical costs payable balance was $4.64 billion as of June 30, 2025, $4.51 billion as of March 31, 2025, and $5.20 billion as of June 30, 2024.

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