• Total Revenue: $65.5 billion for the first quarter.
• Adjusted Earnings Per Share (EPS): $6.74 for the first quarter.
• Full-Year EPS Guidance: Raised to at least $29.60.
• Evernorth Revenue: $53.7 billion for the first quarter.
• Evernorth Pretax Adjusted Earnings: $1.4 billion, a 5% increase.
• Specialty and Care Services Revenue: Up 19% to $239 billion.
• Pharmacy Benefit Services Revenue Growth: 14% increase.
• Cigna Healthcare Revenue: $14.5 billion for the first quarter.
• Cigna Healthcare Pretax Adjusted Earnings: $1.3 billion.
• Medical Care Ratio (MCR): 82.2% for the first quarter.
• Debt-to-Capitalization Ratio: 43.1% as of March 31.
• Share Repurchases: 8.2 million shares for approximately $2.6 billion as of May 1.

• Warning! GuruFocus has detected 4 Warning Signs with RMAX.

Release Date: May 02, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• The Cigna Group (NYSE:CI) reported strong first-quarter 2025 results with total revenue of $65.5 billion and adjusted earnings per share of $6.74.
• The company raised its full-year EPS guidance estimate to at least $29.60, reflecting confidence in its business performance.
• Evernorth, The Cigna Group's Health Services portfolio, showed double-digit revenue growth, driven by strong pharmacy benefit services and specialty pharmacy capabilities.
• Cigna Healthcare achieved strong revenue performance across its US employer and international health businesses, with a 9% growth in its Select segment customers.
• The company is actively addressing societal challenges in healthcare, such as access, affordability, and clinical safety, through innovative solutions like EnCircleRx, EnReachRx, and EnGuide.

Negative Points

• The Cigna Group (NYSE:CI) recorded net after-tax special item charges of $229 million in the first quarter, impacting earnings per share by $0.84.
• The divestiture of the Medicare businesses to HCSC closed later than planned, which modestly benefited first-quarter earnings but increased the medical care ratio by approximately 100 basis points.
• The company anticipates elevated medical cost trends in 2025, with continued pressure in specialty and behavioral categories.
• The Stop Loss business is expected to have an elevated medical care ratio for the full year, consistent with previous guidance.
• The Arkansas bill poses challenges to The Cigna Group's business model, potentially decreasing access, reducing choice, and increasing costs for citizens.

Q & A Highlights

Q: Can you discuss the opportunity to negotiate better pricing with GLP-1 manufacturers and the general coverage from an employer perspective? Also, what are your thoughts on the Arkansas legislation? A: David Cordani, CEO, explained that Cigna is proud of its comprehensive approach to the GLP-1 market, focusing on access, affordability, clinical safety, and lifestyle changes. Brian Evanko, COO, noted that over 50% of Evernorth's employers provide coverage for weight management, while Cigna Healthcare's coverage is lower. Regarding Arkansas legislation, Cordani stated that Cigna opposes the bill as it limits choice and increases costs, although Arkansas is a smaller market for Cigna.

Q: How is the current economic environment affecting your discussions with clients, particularly in the PBM selling season and benefit design? A: Brian Evanko, COO, mentioned that affordability remains a key focus for employers, driven by drug innovation and mental health spending. Cigna's improved unit cost position helps compete effectively, especially in the under 500 Select segment. The company expects mid-90s or better retention in the Express Scripts business and aims to maintain its share in the national accounts market.

Q: Can you provide more detail on the Stop Loss business and its cost trends? A: Brian Evanko, COO, stated that Cigna is on track with its Stop Loss margin improvement plan, incorporating revised cost structures in 2025 client renewals while maintaining retention levels. Ann Dennison, CFO, added that the first-quarter Stop Loss MCR reflects expectations for the full year, with trends remaining elevated in most categories.

Q: What is Cigna's response to the Arkansas bill, and how does it address potential conflicts of interest in PBMs and pharmacies? A: David Cordani, CEO, emphasized that Cigna opposes the Arkansas bill, which limits choice and increases costs. He highlighted the value of integrated capabilities in delivering savings and innovations like biosimilars. Cigna supports transparency and innovation while opposing legislation that constricts choice.

Q: What are the key components of Cigna's GLP-1 strategy, and how does it differ from past strategies for drug cost management? A: Brian Evanko, COO, explained that Cigna's GLP-1 strategy includes EnCircleRx, EnReachRx, and EnGuide, addressing access, affordability, clinical safety, and lifestyle changes. The strategy focuses on providing budget certainty for employers and enhanced clinical support for patients, differing from past strategies by addressing broader societal challenges.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.