CVS Health(CVS) - 2025 Q1 - Quarterly Report

Financial Performance - Total revenues increased by $6.2 billion, or 7.0$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$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$1.8 billion for the three months ended March 31, 2025[159]. - Total revenues increased by $2.6 billion, or 8.0$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$32.808 billion for the three months ended March 31, 2025[175]. - Medicare Advantage premium revenues increased by $3.186 billion, or 14.7$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$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$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$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$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$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$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$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$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 $1.1 billion, or 90.1$(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].