CVS Health Q1 2025 Earnings Report

Introduction to CVS Health’s Q1 Earnings

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. Shares of CVS closed 4% higher Thursday.

Earnings and Revenue

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 week found Omnicare liable for dispensing drugs without valid prescriptions to elderly and disabled individuals in assisted living and long-term care facilities. CVS plans to appeal.

Performance and Guidance

The company did not provide a revenue forecast for the year. CVS said it is "maintaining a cautious view for the remainder of the year" in light of continued higher medical costs and "the potential for macro headwinds." "We got smarter about the markets that we wanted and the lives that we wanted to compete for, and so we actually have planned and budgeted for the elevated trends," CVS CEO David Joyner said in an interview. "So I think why you’re not seeing a surprise on our part is because we actually plan for elevated trends going into this year," he added.

Impact of Tariffs

Joyner said the company is watching for the potential impact from President Donald Trump’s planned tariffs on pharmaceuticals imported into the U.S. "On the pharmacy side, I think it is highly dependent on what happens in the next week or two when they announce the implications of tariffs on the manufacturers," he told CNBC. Joyner added that the vast majority of the company’s retail products at the front of stores are sourced in the U.S., "which should be a benefit for us."

Q1 Results

Here’s what CVS reported for the first quarter compared with what Wall Street was expecting:

• Earnings per share: $2.25 per share adjusted vs. $1.70 per share expected
• Revenue: $94.59 billion vs. $93.64 billion expected

Insurance Business

The company’s insurer, Aetna, and its rivals have been dogged by higher-than-expected medical costs over the last year as more Medicare Advantage patients return to hospitals for procedures they delayed during the pandemic. But for the first time in several quarters, CVS’ insurance business appeared to show some signs of improvement. The unit’s medical benefit ratio — a measure of total medical expenses paid relative to premiums collected — decreased to 87.3% from 90.4% a year earlier.

Business Segments

CVS’ insurance business booked $34.81 billion in revenue during the quarter, up 8% from the first quarter of 2024. The unit also recorded adjusted operating income of $1.99 billion for the first quarter, compared with $732 million for the year-earlier period. Also on Thursday, CVS said Aetna will stop offering health insurance plans on the Affordable Care Act marketplaces — also known as individual exchanges — starting in the 2026 plan year.

Pharmacy and Consumer Wellness

CVS’ pharmacy and consumer wellness division booked $31.91 billion in sales for the first quarter, up more than 11% from the same period a year earlier. But that was far under the $35.27 billion that analysts were expecting for the quarter. That unit dispenses prescriptions in CVS’ more than 9,000 retail pharmacies and provides other pharmacy services, such as vaccinations and diagnostic testing.

Health Services

CVS’ health services segment generated $43.46 billion in revenue for the quarter, up nearly 8% compared with the same quarter in 2024. Analysts expected the unit to post $43.64 billion in sales for the period. That unit includes Caremark, one of the nation’s largest pharmacy benefit managers.

Conclusion

In conclusion, CVS Health’s Q1 earnings and revenue topped estimates, with its insurance business showing signs of improvement. The company revised its guidance and is maintaining a cautious view for the remainder of the year due to higher medical costs and potential macro headwinds.

FAQs

Q: What were CVS Health’s Q1 earnings and revenue?
A: CVS Health reported adjusted earnings of $2.25 per share and revenue of $94.59 billion for the first quarter.
Q: What is the outlook for CVS Health’s insurance business?
A: CVS Health’s insurance business showed signs of improvement in Q1, with a decrease in medical benefit ratio to 87.3% from 90.4% a year earlier.
Q: What is the impact of tariffs on CVS Health’s business?
A: CVS Health is watching for the potential impact from President Donald Trump’s planned tariffs on pharmaceuticals imported into the U.S., but the vast majority of its retail products are sourced in the U.S.
Q: What are the key drivers of CVS Health’s revenue growth?
A: CVS Health’s revenue growth is driven by its insurance business, pharmacy and consumer wellness division, and health services segment.