Executive Summary

Q2 2025 delivered strong topline and non‑GAAP earnings: total revenue $67.18B (+11% y/y) and adjusted EPS $7.20; GAAP EPS $5.71 . Consensus was lower, implying a beat on both revenue and adjusted EPS. Bold beats below.
Evernorth Health Services grew adjusted revenues 17% y/y to $57.83B; Specialty & Care Services momentum, GLP‑1 program innovations, and biosimilar adoption were key drivers .
Cigna Healthcare results were consistent with expectations amid elevated medical costs; MCR was 83.2% (vs. 82.3% last year), primarily due to higher stop‑loss costs, with pre‑tax margin at 10.2% .
2025 outlook reaffirmed: adjusted EPS ≥$29.60; Evernorth pre‑tax adjusted income ≥$7.2B; Cigna Healthcare pre‑tax adjusted income ≥$4.125B; MCR 83.2%–84.2% . Q1 raised EPS outlook by +$0.10; Q2 maintained prior levels .
Near‑term catalysts: continued specialty/biosimilar adoption (e.g., Stelara biosimilar), GLP‑1 affordability expansion ($200 cap program), and mid‑90%+ PBM retention for 2026 selling season .

What Went Well and What Went Wrong

What Went Well

Specialty and Care Services delivered strong growth; normalized pre‑tax adjusted earnings +12% y/y with increased specialty prescription volume and biosimilar adoption .
Pharmacy Benefit Services retention and contract wins; multi‑year extension with Prime Therapeutics, tracking mid‑90%+ 2026 retention .
Innovation in GLP‑1s: new benefit caps patient OOP at ≤$200/month via direct manufacturer negotiations, improving affordability and adoption while earning program fees; employer clients benefit from lower net costs .
Management reaffirmed full‑year adjusted EPS outlook (≥$29.60) and provided clear quarterly cadence (Q3 slightly above 25% of full‑year), underscoring confidence .
Quote: “We delivered $67.2 billion in total revenue and grew adjusted earnings per share to $7.20... disciplined execution and the strength of our business mix” — David Cordani .

What Went Wrong

Elevated medical cost trends sustained; Cigna Healthcare MCR rose to 83.2% (vs. 82.3% y/y), driven by expected higher stop‑loss medical costs and ACA individual exchange utilization pressure .
PBM margins impacted by client mix (large clients growing faster with lower margin profiles) and drug mix (higher‑priced drugs inflate revenue more than margins) .
Working capital timing within Evernorth constrained operating cash flow in Q2; reversal expected in H2 .
Individual exchange book running below target margins in 2025; portfolio repositioned (customers down from ~1M in 2023 to <400k) with price increases ~2× industry average in 2024–2025 to prioritize margin over growth .

Financial Results

Consolidated Metrics vs Prior Periods

Metric	Q2 2024	Q1 2025	Q2 2025
Revenue ($USD Billions)	$60.52	$65.50	$67.18
GAAP Diluted EPS ($)	$5.45	$4.85	$5.71
Adjusted EPS ($)	$6.72	$6.74	$7.20
Cigna Healthcare MCR (%)	82.3%	82.2%	83.2%
SG&A ratio (GAAP)	6.1%	6.4%	5.1%
SG&A ratio (Adjusted)	6.0%	5.8%	4.9%

Segment Breakdown

Segment Metric	Q2 2024	Q1 2025	Q2 2025
Evernorth PBS Adjusted Revenues ($B)	$26.63	$29.74	$31.95
Evernorth Specialty & Care Adjusted Revenues ($B)	$22.92	$23.94	$25.87
Evernorth Total Adjusted Revenues ($B)	$49.55	$53.68	$57.83
Evernorth Pre‑Tax Adjusted Income ($B)	$1.62	$1.43	$1.70
Evernorth Pre‑Tax Margin (%)	3.3%	2.7%	2.9%
Cigna Healthcare Adjusted Revenues ($B)	$13.14	$14.48	$10.75
Cigna Healthcare Pre‑Tax Adjusted Income ($B)	$1.20	$1.29	$1.09
Cigna Healthcare Pre‑Tax Margin (%)	9.2%	8.9%	10.2%

KPIs

KPI	Q2 2024	Q1 2025	Q2 2025
Net Medical Costs Payable ($B)	$5.04	$4.37	$4.49
Weighted Avg Shares (thousands)	284,052	272,953	268,154

Actual vs Wall Street Consensus (S&P Global)

Metric	Q2 2025 Consensus	Q2 2025 Actual
Revenue ($USD Billions)	$62.51*	$67.18
Adjusted EPS ($)	$7.15*	$7.20

Values retrieved from S&P Global.
Note: Revenue and Adjusted EPS consensus imply bold beats vs actual.

Revenue beat: $4.67B, +7.5% vs consensus (Bold) .
Adjusted EPS beat: $0.05 (Bold) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EPS (per share)	FY 2025	At least $29.50 (implied; +$0.10 vs prior)	At least $29.60	Raised in Q1; Maintained in Q2
Evernorth Pre‑Tax Adjusted Income ($B)	FY 2025	≥$7.20	≥$7.20	Maintained
Cigna Healthcare Pre‑Tax Adjusted Income ($B)	FY 2025	≥$4.10 (+$0.025B)	≥$4.125	Raised in Q1; Maintained in Q2
Cigna Healthcare MCR (%)	FY 2025	83.2%–84.2%	83.2%–84.2%	Maintained
Dividend (Quarterly)	Q3 2025 Payable Sep 18	—	$1.51 per share	Declared

Additional cadence commentary: Q3 adjusted EPS slightly above 25% of full‑year outlook; Evernorth Q3 slightly above 25% and Cigna Healthcare Q3 slightly below 25%; Q3 MCR toward upper end of full‑year range due to seasonality .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q2 2025)	Trend
AI/Digital	Q1: preview of personalized digital tools; commitment to improve experience	Launch of AI‑powered virtual assistant; positive early adoption	Advancing adoption
GLP‑1 Strategy	Q1: EnCircleRx, Enreach, ENGUIDE rollout; prioritizing affordability and safety	New ≤$200/month OOP program via Lilly/Novo deals; contributions in line with expectations	Expanding programs, stable economics
Specialty/Biosimilars	Q1: $0 OOP Humira biosimilar, Stelara launch	Specialty volumes up; CuraScript growth; early Stelara biosimilar adoption	Sustained tailwind
Regulatory/Legal	Q1: opposition to Arkansas PBM law, emphasis on transparency/choice	Courts put TRO in place; management reiterates affordability/choice concerns	Active regulatory engagement
Commercial Cost Trends	Q1: elevated stop‑loss trend; recovery plan through 2026; MCR 82.2%	MCR 83.2%; stop‑loss premiums +13% y/y; pricing environment firm	Elevated but managed
Selling Season/Retention	Q1: PBM retention mid‑90s expected	PBM retention tracking mid‑90%+; national accounts flat/shrinking; select segment net share gains	Stable retention; selective growth

Management Commentary

“Our performance in the second quarter reflects our disciplined execution and the strength of our business mix” — David Cordani .
“Specialty and Care Services demonstrated strong growth... normalized pre‑tax adjusted earnings increased 12% year over year” — Ann Dennison .
“We recently finalized a multi‑year contract extension with Prime Therapeutics” — Brian Evanko .
“We introduced a new program... maximum out‑of‑pocket cost of no more than $200 per month... win‑win dynamics” — Brian Evanko .

Q&A Highlights

GLP‑1 economics and adoption: Client adoption rates broadly flat y/y; new $200 cap program targets employers not covering weight management; program fees contribute within Evernorth .
Arkansas PBM law: Management supports transparency and choice; TRO underscores issues of access, continuity, and affordability; continued engagement at state/federal levels .
Stop‑loss: Premiums up 13% y/y; margin recovery plan in motion across 2025–2026 with typical retention preserved .
PBM margins: Client and drug mix dynamics (larger clients, higher‑priced drugs) pressure margins; growth still robust .
Individual exchanges: Portfolio resized (<400k lives) with pricing ~2× industry average to prioritize margin; modest positive risk adjustment offset Q2 ACA utilization pressure .

Estimates Context

Q2 2025 consensus (S&P Global): Revenue $62.51B*, Adjusted EPS $7.15*; actual revenue $67.18B and adjusted EPS $7.20 — both beats .
Coverage: 15 revenue estimates, 22 EPS estimates for Q2 2025*.

Values retrieved from S&P Global.

Key Takeaways for Investors

Evernorth remains the growth engine; specialty and PBM retention underpin earnings with secular tailwinds in biosimilars and specialty distribution (CuraScript ~$25B, double‑digit growth) .
GLP‑1 innovation continues to differentiate CI’s offering and should support net cost reductions and client adoption without materially diluting economics; watch employer uptake at renewals .
Cigna Healthcare’s MCR is elevated but within guided range; pricing environment firm for 2026 with expected price increases above 2025 levels, supporting margin recovery in stop‑loss .
Cash flow timing in Evernorth impacted Q2; reversal expected in H2 — reduces near‑term risk to capital deployment; dividend declared ($1.51) adds income support .
Guidance intact post‑Q2: adjusted EPS ≥$29.60; any upside hinges on specialty outperformance and ACA utilization normalization; Q3 EPS cadence slightly >25% of full‑year .
Trading angle: Bold revenue and EPS beats plus reaffirmed FY guide are supportive; monitor regulatory developments (Arkansas/TRO) and GLP‑1 program adoption as next narrative drivers .
Medium‑term thesis: Durable services‑based model with diversified growth platforms (Evernorth + Cigna Healthcare) and continued innovation should sustain 10%–14% adjusted EPS CAGR target over strategic horizon .

Cigna Group (CI)·Q2 2025 Earnings Summary