First Quarter 2025 May 1, 2025 Earnings Conference Call J. David Joyner President and Chief Executive Officer Thomas F. Cowhey Executive Vice President and Chief Financial Officer 1 ©2025 CVS Health and/or one of its affiliates. Confidential and proprietary. Cautionary Statement concerning forward-looking statements This presentation includes forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of CVS Heal ...

Financial Performance - Total revenues increased by $6.2 billion, or 7.0%, to $94.6 billion for the three months ended March 31, 2025, compared to the prior year[159]. - Operating income rose by $1.1 billion, or 48.6%, to $3.4 billion, primarily due to increased income in the Health Care Benefits segment and the absence of a prior year opioid litigation charge[160]. - Net income attributable to CVS Health increased by $666 million, or 59.8%, reaching $1.8 billion for the three months ended March 31, 2025[159]. - Total revenues increased by $2.6 billion, or 8.0%, to $94.588 billion for the three months ended March 31, 2025, compared to $88.437 billion in the prior year[176]. - Adjusted operating income rose by $1.3 billion, or 172.3%, to $4.579 billion for the three months ended March 31, 2025, compared to $2.957 billion in the prior year[182]. Health Care Benefits Segment - The Health Care Benefits segment offers a broad range of health insurance products, serving approximately 88 million plan members[151]. - The Health Care Benefits segment's premiums increased by $2.429 billion, or 8.0%, to $32.808 billion for the three months ended March 31, 2025[175]. - Medicare Advantage premium revenues increased by $3.186 billion, or 14.7%, to $24.902 billion for the three months ended March 31, 2025[175]. - The Medical Benefit Ratio (MBR) improved to 87.3% for the three months ended March 31, 2025, down from 90.4% in the prior year, reflecting better performance in Medicare[180]. - Operating income for the Health Care Benefits segment surged by $1.246 billion, or 291.1%, to $1.674 billion for the three months ended March 31, 2025[175]. Pharmacy & Consumer Wellness Segment - The Pharmacy & Consumer Wellness segment operated over 9,000 retail locations as of March 31, 2025, providing a wide assortment of health and wellness products[156]. - Total revenues for the Pharmacy & Consumer Wellness segment increased by $3.2 billion, or 11.1%, to $31.912 billion for the three months ended March 31, 2025, driven by pharmacy drug mix and increased prescription volume[194][198]. - Pharmacy same store sales increased by 17.7% for the three months ended March 31, 2025, with a 6.7% increase in pharmacy same store prescription volume on a 30-day equivalent basis[198]. - Operating income for the Pharmacy & Consumer Wellness segment decreased by $249 million, or 22.4%, to $864 million for the three months ended March 31, 2025[194]. Health Services Segment - Total revenues for the Health Services segment increased by $3.2 billion, or 7.9%, to $43.462 billion for the three months ended March 31, 2025, driven by pharmacy drug mix and growth in specialty pharmacy[186][189]. - Adjusted operating income for the Health Services segment rose by $240 million, or 17.6%, to $1.603 billion for the three months ended March 31, 2025, primarily due to improved purchasing economics[190]. - Operating income for the Health Services segment was $1.227 billion, with an operating income margin of 2.8% for the three months ended March 31, 2025[186]. - The cost of products sold in the Health Services segment increased by $2.583 billion, or 6.9%, to $40.115 billion for the three months ended March 31, 2025[186]. Litigation and Charges - The Company recorded a $387 million litigation charge related to a jury verdict against Omnicare during the three months ended March 31, 2025[161]. - Operating expenses in the Pharmacy & Consumer Wellness segment increased by $392 million, or 8.1%, primarily due to a $387 million litigation charge recorded during the three months ended March 31, 2025[201]. Cash Flow and Debt - Net cash provided by operating activities decreased by $347 million, or 7.1%, to $4,556 million for the three months ended March 31, 2025, compared to $4,903 million in the prior year[206]. - Net cash used in investing activities decreased by $1.3 billion, or 63.6%, to $(762) million for the three months ended March 31, 2025, compared to $(2,094) million in the prior year[206]. - Net cash used in financing activities increased by $1.1 billion, or 90.1%, to $(2,332) million for the three months ended March 31, 2025, compared to $(1,227) million in the prior year[206]. - As of March 31, 2025, the company had approximately $10.1 billion in cash and cash equivalents, with approximately $1.5 billion held by the parent company or nonrestricted subsidiaries[205]. - The company had $1.3 billion of commercial paper outstanding at a weighted average interest rate of 5.00% as of March 31, 2025[208]. - The company's long-term debt was rated "BBB" by Fitch and S&P, with a "Negative" outlook from both agencies as of March 31, 2025[212]. Membership and Market Trends - Medical membership in Medicare and individual exchange products has declined, leading to potential volatility in financial results[167]. - Total medical membership reached 27.079 million as of March 31, 2025, compared to 27.095 million as of December 31, 2024[182]. - As of March 31, 2025, medical membership was 27.1 million, an increase of 309,000 members compared to March 31, 2024, primarily due to growth in Commercial ASC membership[185].

Operational Highlights 2025 Full-Year Guidance CEO Commentary "As we aim to be the most trusted health care company in America, we are driving greater care, value, and service from our integrated, industry-leading businesses. Thanks to a resolute focus on customers, our colleagues across CVS Health delivered positive results across our Health Care Benefits, Health Services and Pharmacy & Consumer Wellness segments, as we continue to build a world of better health around the 185 million consumers we are priv ...

The "Wegovy" brand slimming syringe is sold in the Achat pharmacy in Mitte. The "Wegovy" slimming syringe has been available in Germany for a year.CVS Health on Thursday said it will significantly expand access to the blockbuster weight loss drug Wegovy for patients covered by its pharmacy benefit manager, Caremark. Starting July 1, Caremark will prioritize Wegovy on its formularies — or lists of covered drugs — making it the preferred GLP-1 drug for obesity. The move is part of a new partnership between Ca ...

CVS Health on Thursday reported first-quarter earnings and revenue that topped estimates and hiked its guidance, as its troubled insurance business showed some improvement during the period. The company now expects full-year adjusted earnings of $6 to $6.20 per share, up from a previous guidance of $5.75 to $6 per share.But the company revised its GAAP diluted EPS guidance to be lower, which includes charges related to a legal battle involving its pharmacy services provider subsidiary, Omnicare. A jury this ...

Core Insights - The medical sector, particularly health insurance carriers, faced significant challenges in 2024 due to rising utilization costs associated with Medicare Advantage (MA) plans, which negatively impacted profits [1][2] - Despite the difficulties in 2024, health insurers are expected to perform well in 2025, benefiting from tariff-free status and recession resistance [2][3] Humana Inc. - Humana, the second-largest Medicare Advantage plan provider, experienced a stock decline of 46% in 2024, closing at $253.70 on December 31, 2024, but has seen an 11.3% increase year-to-date as of April 14, 2025 [2][3] - The company reported an EPS loss of $2.16 in Q4 2024, although revenues rose 10.4% year-over-year to $29.21 billion, surpassing consensus estimates [7] - Humana's adjusted benefits ratio increased by 120 basis points year-over-year to 91.9%, indicating rising costs [7][8] - The Centers for Medicare and Medicaid Services (CMS) raised MA reimbursement rates by 5.06% for 2026, resulting in an additional $26 billion for MA plan providers, with Humana set to benefit significantly [5][6] - However, Humana faces potential penalties of up to $2 billion due to a drop in Star Ratings, which could reduce net MA revenues to $3.4 billion [6][8] CVS Health - CVS Health has shown a turnaround, with stock prices increasing by 54% year-to-date as of April 14, 2025, and operates a more diversified business model compared to Humana [10][12] - The company reported an EPS of $1.19 in Q4 2024, beating consensus estimates, with revenues rising 4.2% year-over-year to $97.71 billion [13] - CVS Health's MA membership is expected to decline by high-single digits in unprofitable regions, but the 5.06% reimbursement rate increase could lead to an estimated $3 billion increase in 2026 reimbursements [12][17] - The Health Care Benefits segment reported an adjusted operating loss of $439 million, primarily due to higher MA utilization and lowered Star Ratings [13][14] - CVS Health's management aims to restore target margins of 3% to 5% in 2026, supported by the recent reimbursement increase [17]

Group 1: Market Overview - Major stock market indexes are down significantly this year, with many valuable companies leading the decline [1] - Some companies, such as Medical Properties Trust and CVS Health, are performing well, with CVS Health up by 50% and Medical Properties Trust's shares rising 26% [1] Group 2: Medical Properties Trust (MPT) - MPT faced significant challenges when its largest tenant, Steward Healthcare, defaulted on rent and filed for bankruptcy, leading to a decline in revenue and earnings [3] - The company has signed deals to place new tenants in facilities previously occupied by Steward Healthcare, although not all facilities are filled yet [4] - MPT's portfolio is now more diversified, with average lease lengths of 18 years for new tenants, and it has improved its financial health by selling facilities and issuing secured notes [5] - MPT is required to distribute 90% of its earnings as dividends, currently offering a forward yield of 6.1%, making it attractive for long-term income-seeking investors [8] Group 3: CVS Health - CVS Health has faced uncertainty due to lost revenue from coronavirus-related products and rising costs in its Medicare Advantage business, leading to lower-than-expected earnings [10] - The company appointed a new CEO, David Joyner, and delivered better-than-anticipated results in the fourth quarter, raising questions about future improvements [11] - CVS is a diversified healthcare brand with strengths in health insurance and primary care, but it has yet to take tangible steps to address its challenges [12][13]

While double-digit percentage movements in both directions seem to be the norm right now and while it is not really newsworthy when a single stock declined 10% or more, CVS Health Corporation (NYSE:My analysis is focused on high-quality companies, that can outperform the market over the long-run due to a competitive advantage (economic moat) and high levels of defensibility. Focused on European and North American companies, but without constraints regarding market capitalization (from large cap to small cap ...

Group 1 - CVS Health shares increased by 5.9% to close at $67.63, with notable trading volume compared to typical sessions, following a 2.1% loss over the past four weeks [1] - The price increase is driven by optimism regarding market recovery after a sell-off due to tariff concerns and a positive corporate update, including the announcement of Brian Newman as the new CFO effective April 21, 2025 [2] - CVS Health is expected to report quarterly earnings of $1.62 per share, reflecting a year-over-year increase of 23.7%, with revenues projected at $92.82 billion, up 5% from the previous year [3] Group 2 - The consensus EPS estimate for CVS Health has been revised 1.4% lower in the last 30 days, indicating a negative trend in earnings estimate revisions, which typically does not lead to price appreciation [4] - CVS Health holds a Zacks Rank of 3 (Hold), indicating a neutral outlook [4] - The company operates within the Zacks Medical Services industry, which includes other stocks like Concentra Group, which recently closed 1.9% lower [4]

Group 1 - CVS Health's shares increased by 8.2% amid a market rebound and a corporate update [1] - Brian Newman will become the new CFO effective April 21, 2025, and Amy Compton-Phillips has been appointed as the new chief medical officer [2] - The most significant news from CVS Health's update is the expectation that financial results will meet or exceed previously issued guidance for full year 2025, indicating a strong start to the year [4] Group 2 - CVS Health's stock has risen over 50% year to date, with a forward dividend yield of 3.85%, making it attractive for income investors [5] - The stock is trading below 11 times forward earnings, appealing to value investors [5]