CVS HEALTH Corp
For the period ended Sep 30, 2025. Filed Oct 29, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Oct 29, 2025
CVS$83.85+3.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-07-31.
0000064803-25-000024
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-10-29.
0000064803-25-000037
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 188 previous paragraphs and 213 current paragraphs.
111 unchanged; 59 reworded; 41 added; 17 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 14 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (41)
Current report
•Operating expenses increased $731 million, or 6.9%, in the three months ended September 30, 2025 compared to the prior year. The increase in operating expenses was primarily due to a $320 million opioid litigation charge related to a change in the Company’s accrual for ongoing opioid litigation matters recorded during the three months ended September 30, 2025, as well as increased investments in colleagues and capabilities.
Current report
Operating income (loss)
Current report
•During the three months ended September 30, 2025, the Company incurred an operating loss of $3.2 billion compared to operating income of $832 million in the prior year. The difference was primarily driven by a $5.7 billion goodwill impairment charge related to the Health Care Delivery reporting unit, partially offset by improved operating performance in the Health Care Benefits segment and the absence of approximately $1.2 billion of restructuring charges recorded in the prior year.
Current report
Gain on deconsolidation of subsidiary
Current report
•During the three months ended September 30, 2025, the gain on deconsolidation of subsidiary relates to Omnicare, LLC (“Omnicare”), a wholly-owned indirect subsidiary of CVS Health Corporation, and certain of its subsidiary entities (collectively, the “Omnicare Entities”). See Note 1 ‘‘Significant Accounting Policies’’ to the unaudited condensed consolidated financial statements for further information on the deconsolidation of the Omnicare Entities.
Current report
•Operating income decreased $3.6 billion, or 58.6%, in the nine months ended September 30, 2025 compared to the prior year primarily due to the $5.7 billion goodwill impairment charge related to the Health Care Delivery reporting unit, the $1.2 billion of legacy litigation charges, the $320 million opioid litigation charge, as well as the pre-tax losses on Accountable Care assets, all recorded during the nine months ended September 30, 2025. These decreases were partially offset by improved operating performance in the Health Care Benefits segment and the absence of approximately $1.2 billion of restructuring charges recorded in the prior year.
Current report
Gain on deconsolidation of subsidiary
Current report
•During the nine months ended September 30, 2025, the gain on deconsolidation of subsidiary relates to Omnicare and certain of its subsidiary entities.
Current report
(4)During the three and nine months ended September 30, 2025, the goodwill impairment charge relates to the Health Care Delivery reporting unit within the Health Services segment.
Current report
(5)During the three and nine months ended September 30, 2025, the Health Care Delivery clinic closure charge primarily relates to the write down of long-lived assets in connection with the planned closure of certain existing Oak Street Health clinics in 2026, as well as associated severance and employee-related costs expected to be incurred. The Health Care Delivery clinic closure charge is reflected in operating expenses within the Health Services segment.
Current report
(10)During the three and nine months ended September 30, 2024, the restructuring charges are primarily comprised of a store impairment charge, corporate workforce optimization costs, including severance and employee-related costs, and other asset impairment and related charges associated with the discontinuation of certain non-core assets. During the third quarter of 2024, the Company finalized an enterprise-wide restructuring plan intended to streamline and simplify the organization, improve efficiency and reduce costs. In connection with this restructuring plan, the Company completed a strategic review of its retail business and determined that it planned to close additional retail stores in 2025, and, accordingly, it recorded a store impairment charge to write down the associated lease right-of-use assets and property and equipment. In addition, during the third quarter of 2024, the Company also conducted a review of its various strategic assets and determined that it would discontinue the use of certain non-core assets, at which time impairment losses were recorded to write down the carrying value of these assets to the Company’s best estimate of their fair value. The restructuring charges associated with the store impairments are reflected within the Pharmacy & Consumer Wellness segment, other asset impairments and related charges are reflected within the Corporate/Other and Pharmacy & Consumer Wellness segments and corporate workforce optimization costs are reflected within the Corporate/Other segment.
Current report
•During the three months ended September 30, 2025, the favorable impact of premium deficiency reserves included the absence of approximately $1.1 billion of premium deficiency reserves recorded during the third quarter of 2024, as well as the utilization of $174 million of premium deficiency reserves recorded during the first half of 2025.
Current report
•Operating expenses decreased $161 million in the three months ended September 30, 2025 compared to the prior year primarily driven by the absence of the accelerated recognition of unamortized costs in connection with the premium deficiency reserves recorded in the third quarter of 2024.
Current report
Adjusted operating income (loss)
Current report
•During the three months ended September 30, 2025, the Health Care Benefits segment had adjusted operating income of $314 million compared to an adjusted operating loss of $924 million in the prior year. The change was primarily driven by the favorable year-over-year impact of premium deficiency reserves, higher favorable prior period development and improved underlying performance in the Government business. These increases were partially offset by changes in the seasonality of the Medicare Part D program due to the impact of the IRA and the impact of higher acuity in the individual exchange product line.
Current report
•The MBR decreased to 90.0% in the nine months ended September 30, 2025 compared to 91.7% in the prior year driven by improved underlying performance in the Government business and higher favorable prior period development.
Current report
•Adjusted operating income increased $2.9 billion, or 384.6%, in the nine months ended September 30, 2025 compared to the prior year primarily driven by improved underlying performance in the Government business, higher favorable prior period development, as well as lower premium deficiency reserves recorded in the nine months ended September 30, 2025 compared to the prior year.
Current report
The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (collectively, the “ACA”) ties a portion of each Medicare Advantage plan’s reimbursement to the plan’s “star ratings.” Plans must have a star rating of four or higher (out of five) to qualify for bonus payments. CMS released the Company’s 2026 star ratings in October 2025. The Company’s 2026 star ratings will be used to determine which of the Company’s Medicare Advantage plans have ratings of four stars or higher and qualify for bonus payments in 2027. Based on the Company’s membership as of September 2025, more than 81% of the Company’s Medicare Advantage members were in plans with 2026 star ratings of at least 4.0 stars, compared to 88% of the Company’s Medicare Advantage members being in plans with 2025 star ratings of at least 4.0 stars based on the Company’s membership as of September 2024.
Current report
•Operating expenses increased $162 million, or 21.4%, in the three months ended September 30, 2025 compared to the prior year. The increase was primarily driven by an $83 million Health Care Delivery clinic closure charge recorded in the three months ended September 30, 2025, primarily related to the write down of long-lived assets in connection with the planned closure of certain existing Oak Street Health clinics in 2026, as well as associated severance and employee-related costs expected to be incurred.
Current report
Goodwill impairment
Current report
•During the three months ended September 30, 2025, the Company recorded a $5.7 billion goodwill impairment charge related to the Health Care Delivery reporting unit within the Health Services segment. See Note 4 ‘‘Goodwill & Other Intangibles’’ to the unaudited condensed consolidated financial statements for further information.
Current report
•Pharmacy claims processed decreased 1.8% on a 30-day equivalent basis in the three months ended September 30, 2025 compared to the prior year.
Current report
Goodwill impairment
Current report
•During the nine months ended September 30, 2025, the Company recorded a $5.7 billion goodwill impairment charge related to the Health Care Delivery reporting unit within the Health Services segment.
Current report
•The Company’s pharmacy claims processed decreased 0.7% on a 30-day equivalent basis in the nine months ended September 30, 2025 compared to the prior year.
Current report
•Operating expenses increased $293 million, or 6.0%, in the three months ended September 30, 2025 primarily due to increased investments in the segment’s colleagues and capabilities compared to the prior year.
Current report
Restructuring charges
Current report
•During the three months ended September 30, 2024, the Company recorded $747 million of restructuring charges related to the write-down of lease right-of-use assets and property and equipment in connection with the Company’s restructuring program.
Current report
•Adjusted operating income decreased $118 million, or 7.4%, in the three months ended September 30, 2025 compared to the prior year primarily driven by continued pharmacy reimbursement pressure and increased investments in the segment’s colleagues and capabilities, partially offset by increased prescription volume.
Current report
Restructuring charges
Current report
•During the nine months ended September 30, 2024, the Company recorded $747 million of restructuring charges related to the write-down of lease right-of-use assets and property and equipment in connection with the Company’s restructuring program.
Current report
Long-term Borrowings
Current report
2025 Notes
Current report
On August 15, 2025, the Company issued $750 million aggregate principal amount of 5.0% senior notes due September 2032, $1.5 billion aggregate principal amount of 5.45% senior notes due September 2035, $1.25 billion aggregate principal amount of 6.2% senior notes due September 2055 and $500 million aggregate principal amount of 6.25% senior notes due September 2065 for total proceeds of approximately $4.0 billion, net of discounts and underwriting fees. The net proceeds of these offerings were used to repay existing indebtedness, including borrowings under the Company’s commercial paper program, as well as for general corporate purposes.
Current report
Recoverability of Goodwill
Current report
During the fourth quarter of 2024, the Company performed its required annual impairment test of goodwill. The results of the impairment tests indicated that there was no impairment of goodwill as of the 2024 testing date. The fair values of the reporting units with goodwill exceeded their carrying values by significant margins, with the exception of the Government reporting unit and the Health Care Delivery reporting unit which exceeded their carrying values by approximately 4% and 8%, respectively.
Current report
During 2025, the Health Care Delivery reporting unit continued to experience challenges, including the impact of persistent elevated utilization levels. In order to best respond to these challenges, the Company made a number of changes to its Health Care Delivery management team during 2025. During the third quarter of 2025, this new management team finalized certain strategic changes, including the determination that it would reduce the number of new primary care clinics it would open in 2026 and annually thereafter. The Company also determined that it would close certain existing Oak Street Health clinics in 2026. The strategy changes were presented to CVS Health Corporation’s Board of Directors in September 2025.
Current report
These changes are expected to impact management’s ability to grow the business at the rate that was originally estimated when the Company acquired the associated care delivery assets in 2023 and when the prior year annual goodwill impairment test was performed. Accordingly, the Health Care Delivery management team updated its financial projections to reflect these changes for 2026 and beyond. Based on these updated projections, management determined that there were indicators that the Health Care Delivery reporting unit’s goodwill may be impaired and, accordingly, an interim goodwill impairment test was performed during the third quarter of 2025.
Current report
The results of the impairment test showed that the fair value of the Health Care Delivery reporting unit was lower than its carrying value, resulting in a $5.7 billion goodwill impairment charge. The fair value of the Health Care Delivery reporting unit was determined using a combination of a discounted cash flow method and a market multiple method. In addition to the lower financial projections, lower market multiples of the peer group companies contributed to the amount of the goodwill impairment charge. As of September 30, 2025, the remaining goodwill balance in the Health Care Delivery reporting unit after recording the goodwill impairment was approximately $4.2 billion.
Current report
The fair value of the Company’s reporting units is estimated using a combination of a discounted cash flow method and a market multiple method. The determination of the fair value of the reporting units requires the Company to make significant assumptions and estimates. These assumptions and estimates primarily include the selection of appropriate peer group companies; control premiums and valuation multiples appropriate for acquisitions in the industries in which the Company competes; discount rates; terminal growth rates; and forecasts of revenue, operating income, depreciation and amortization, income taxes, capital expenditures and future working capital requirements. When determining these assumptions and preparing these estimates, the Company considers each reporting unit’s historical results and current operating trends; consolidated revenues, profitability and cash flow results and forecasts; and industry trends. The Company’s estimates can be affected by a number of factors, including general economic and regulatory conditions; the risk-free interest rate environment; the Company’s market capitalization; efforts of customers and payers to reduce costs, including their prescription drug costs, and/or increase member co-payments; the continued efforts of competitors to gain market share, consumer spending patterns and the Company’s ability to achieve its revenue growth projections and execute on its cost reduction initiatives.
Showing the first 40 of 41 passages. Open the source sections for the rest.
Removed paragraphs (17)
Previous report
•Operating expenses increased $874 million, or 8.5%, in the three months ended June 30, 2025 compared to the prior year. The increase in operating expenses was primarily due to $833 million in litigation charges recorded during the three months ended June 30, 2025 related to two court decisions associated with the Company’s past business practices.
Previous report
•Operating income decreased $664 million, or 21.8%, in the three months ended June 30, 2025 compared to the prior year primarily due to declines in the Health Services and Pharmacy & Consumer Wellness segments, including $833 million in litigation charges described above, partially offset by improved operating performance in the Health Care Benefits segment and a decrease in acquisition-related integration costs compared to the prior year.
Previous report
Operating income
Previous report
•Operating income increased $439 million, or 8.3%, in the six months ended June 30, 2025 compared to the prior year primarily due to an increase in operating income in the Health Care Benefits segment as well as the absence of the $100 million opioid litigation charge recorded in the prior year. These increases were partially offset by declines in the Pharmacy & Consumer Wellness and Health Services segments, which were primarily driven by the $1.2 billion of litigation charges and $288 million of pre-tax losses on Accountable Care assets described above.
Previous report
•The MBR increased to 89.9% in the three months ended June 30, 2025 compared to 89.6% in the prior year driven by the $471 million (140 basis points) premium deficiency reserve described below, largely offset by the favorable year-over-year impact of changes to the Company’s individual exchange business risk adjustment estimates.
Previous report
Premium Deficiency Reserve
Previous report
•During the second quarter of 2025, in light of continued utilization pressure, the Company recorded a premium deficiency reserve of $471 million to health care costs in its Group Medicare Advantage product line related to anticipated losses for the remainder of the 2025 coverage year.
Previous report
•Adjusted operating income increased $370 million, or 39.4%, for the three months ended June 30, 2025 compared to the prior year primarily driven by the favorable year-over-year impact of changes to the Company’s individual exchange business risk adjustment estimates, improved underlying performance in the Government business and higher favorable prior period development. These increases were partially offset by the premium deficiency reserve described above.
Previous report
•During the six months ended June 30, 2025, the Company recorded a Group Medicare Advantage premium deficiency reserve of $471 million to the health care costs related to anticipated losses for the remainder of the 2025 coverage year, as well as an individual exchange premium deficiency reserve of $448 million related to anticipated losses for the remainder of the 2025 coverage year. The individual exchange premium deficiency reserve was comprised of $17 million of operating expenses related to the write-off of unamortized acquisition costs and $431 million of health care costs.
Previous report
•Adjusted operating income increased $1.6 billion, or 97.7%, in the six months ended June 30, 2025 compared to the prior year primarily driven by the favorable year-over-year impact of prior period development, as well as improved underlying performance in the Government business. These increases were partially offset by the premium deficiency reserves recorded during the six months ended June 30, 2025 described above.
Previous report
•Operating expenses increased $321 million, or 37.8% in the three months ended June 30, 2025 compared to the prior year. The increase was primarily due to a $291 million litigation charge recorded during the three months ended June 30, 2025. See Note 9 ‘‘Commitments and Contingencies’’ to the unaudited condensed consolidated financial statements for further information on this litigation charge.
Previous report
•Pharmacy claims processed remained relatively consistent on a 30-day equivalent basis in the three months ended June 30, 2025 compared to the prior year.
Previous report
•The Company’s pharmacy claims processed remained relatively consistent on a 30-day equivalent basis in the six months ended June 30, 2025 compared to the prior year.
Previous report
•Front store same store sales increased 3.4% in the three months ended June 30, 2025 compared to the prior year. The increase was primarily due to increased volume, including the impact related to the shift of sales associated with the Easter holiday from the first quarter of 2024 to the second quarter of 2025.
Previous report
•Operating expenses increased $467 million, or 9.7%, in the three months ended June 30, 2025 compared to the prior year. The increase in operating expenses was primarily due to a $542 million litigation charge recorded during the three months ended June 30, 2025 related to the Omnicare long-term care business. See Note 9 ‘‘Commitments and Contingencies’’ to the unaudited condensed consolidated financial statements for further information on this litigation matter.
Previous report
•Adjusted operating income increased $95 million, or 7.6%, in the three months ended June 30, 2025 compared to the prior year primarily driven by increased prescription and front store volume, partially offset by continued pharmacy reimbursement pressure.
Previous report
•Total revenues decreased $15 million, or 13.5%, in the three months ended June 30, 2025 compared to the prior year primarily driven by lower net investment income, largely due to lower private equity income and lower average fixed income yields during the three months ended June 30, 2025.
Reworded paragraphs (59)
Previous wording
CVS Health Corporation, together with its subsidiaries (collectively, “CVS Health,” the “Company,” “we,” “our” or “us”), is a leading health solutions company building a world of health around every consumer it serves and connecting care so that it works for people wherever they are. As of June 30, 2025, the Company had approximately 9,000 retail locations, more than 1,000 walk-in and primary care medical clinics, a leading pharmacy benefits manager with approximately 87 million plan members and expanding specialty pharmacy solutions, and a dedicated senior pharmacy care business serving more than 800,000 patients per year. The Company also serves an estimated more than 37 million people through traditional, voluntary and consumer-directed health insurance products and related services, including expanding Medicare Advantage offerings and a leading standalone Medicare Part D prescription drug plan (“PDP”). The Company is creating new sources of value through its integrated model allowing it to expand into personalized, technology driven care delivery and health services, increasing access to quality care, delivering better health outcomes and lowering overall health care costs.
Current wording
CVS Health Corporation, together with its subsidiaries (collectively, “CVS Health,” the “Company,” “we,” “our” or “us”), is a leading health solutions company building a world of health around every consumer it serves and connecting care so that it works for people wherever they are. As of September 30, 2025, the Company had approximately 9,000 retail locations, more than 1,000 walk-in and primary care medical clinics and a leading pharmacy benefits manager with approximately 87 million plan members and expanding specialty pharmacy solutions. The Company also serves an estimated more than 37 million people through traditional, voluntary and consumer-directed health insurance products and related services, including expanding Medicare Advantage offerings and a leading standalone Medicare Part D prescription drug plan (“PDP”). The Company is creating new sources of value through its integrated model allowing it to expand into personalized, technology driven care delivery and health services, increasing access to quality care, delivering better health outcomes and lowering overall health care costs.
Previous wording
The Pharmacy & Consumer Wellness segment dispenses prescriptions in its CVS Pharmacy® retail locations and through its infusion operations, provides ancillary pharmacy services including pharmacy patient care programs, diagnostic testing and vaccination administration, and sells a wide assortment of health and wellness products and general merchandise. The segment also conducts long-term care pharmacy (“LTC”) operations, which distribute prescription drugs and provide related pharmacy consulting and ancillary services to long-term care facilities and other care settings, and provides pharmacy fulfillment services to support the Health Services segment’s specialty and mail order pharmacy offerings. As of June 30, 2025, the Pharmacy & Consumer Wellness segment operated approximately 9,000 retail locations, as well as online retail pharmacy websites, LTC pharmacies and on-site pharmacies, retail specialty pharmacy stores, compounding pharmacies and branches for infusion and enteral nutrition services.
Current wording
The Pharmacy & Consumer Wellness segment dispenses prescriptions in its CVS Pharmacy® retail locations and through its infusion operations, provides ancillary pharmacy services including pharmacy patient care programs, diagnostic testing and vaccination administration, and sells a wide assortment of health and wellness products and general merchandise. The segment also provides pharmacy fulfillment services to support the Health Services segment’s specialty and mail order pharmacy offerings. As of September 30, 2025, the Pharmacy & Consumer Wellness segment operated approximately 9,000 retail locations, as well as online retail pharmacy websites, retail specialty pharmacy stores, compounding pharmacies and branches for infusion and enteral nutrition services.
Previous wording
The following discussion explains the material changes in the Company’s operating results for the three and six months ended June 30, 2025 and 2024, and the significant developments affecting the Company’s financial condition since December 31, 2024. We strongly recommend that you read our audited consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”).
Current wording
The following discussion explains the material changes in the Company’s operating results for the three and nine months ended September 30, 2025 and 2024, and the significant developments affecting the Company’s financial condition since December 31, 2024. We strongly recommend that you read our audited consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”).
Previous wording
•Total revenues increased $7.7 billion, or 8.4%, in the three months ended June 30, 2025 compared to the prior year driven by revenue growth across all operating segments.
Current wording
•Total revenues increased $7.4 billion, or 7.8%, in the three months ended September 30, 2025 compared to the prior year driven by revenue growth across all operating segments.
Previous wording
•Interest expense increased $31 million, or 4.2%, due to higher debt in the three months ended June 30, 2025, primarily as a result of long-term debt issued in December of 2024.
Current wording
•Interest expense increased $32 million, or 4.3%, due to higher debt in the three months ended September 30, 2025, primarily as a result of long-term debt issued in December of 2024 and August of 2025.
Previous wording
•The effective income tax rate was 38.5% for the three months ended June 30, 2025 compared to 24.3% for the three months ended June 30, 2024. The increase in the effective income tax rate was primarily due to the impact of non-deductible litigation charges recorded in the three months ended June 30, 2025.
Current wording
•The effective income tax rate was (14.6)% for the three months ended September 30, 2025 compared to 32.4% for the three months ended September 30, 2024. The change in the effective income tax rate was primarily due to the $5.7 billion goodwill impairment charge recorded in the three months ended September 30, 2025, which was not deductible for income tax purposes.
Previous wording
•Total revenues increased $13.8 billion, or 7.7%, in the six months ended June 30, 2025 compared to the prior year driven by revenue growth across all operating segments.
Current wording
•Total revenues increased $21.3 billion, or 7.7%, in the nine months ended September 30, 2025 compared to the prior year driven by revenue growth across all operating segments.
Previous wording
•Operating expenses increased $1.6 billion, or 7.8%, in the six months ended June 30, 2025 compared to the prior year. The increase in operating expenses was primarily due to $1.2 billion in litigation charges recorded during the six months ended June 30, 2025 related to two court decisions associated with the Company’s past business practices, as well as $288 million in pre-tax losses on Accountable Care assets recorded during the six months ended June 30, 2025. These increases were partially offset by the absence of a $100 million opioid litigation charge recorded in the prior year.
Current wording
•Operating expenses increased $2.3 billion, or 7.5%, in the nine months ended September 30, 2025 compared to the prior year. The increase in operating expenses was primarily due to $1.2 billion in legacy litigation charges related to two court decisions associated with the Company’s past business practices, the $320 million opioid litigation charge described above, as well as $288 million of pre-tax losses on Accountable Care assets, all recorded during the nine months ended September 30, 2025.
Previous wording
•Interest expense increased $100 million, or 6.9%, due to higher debt in the six months ended June 30, 2025, primarily as a result of long-term debt issued in May and December of 2024.
Current wording
•Interest expense increased $132 million, or 6.0%, due to higher debt in the nine months ended September 30, 2025, primarily as a result of long-term debt issued in August of 2025 and May and December of 2024.
Previous wording
•The effective income tax rate was 34.5% for the six months ended June 30, 2025 compared to 26.2% for the six months ended June 30, 2024. The increase in the effective income tax rate was primarily due to the impact of non-deductible litigation charges recorded in the six months ended June 30, 2025.
Current wording
•The effective income tax rate was 252.8% for the nine months ended September 30, 2025 compared to 26.3% for the nine months ended September 30, 2024. The increase in the effective income tax rate was primarily due to the impact of the goodwill impairment charge and the legacy litigation charges recorded in the nine months ended September 30, 2025 described above, both of which were not deductible for income tax purposes.
Previous wording
•Utilization persisted at elevated levels through the second quarter of 2025. Although the level of utilization is difficult to accurately predict, at this time, the Company expects that utilization will pressure its Health Care Benefits segment and its health care delivery assets in its Health Services segment for the remainder of the year. Further utilization pressure beyond current expectations could result in the future impairment of goodwill.
Current wording
•Utilization persisted at elevated levels through the third quarter of 2025. Although the level of utilization is difficult to accurately predict, at this time, the Company expects that utilization will pressure its Health Care Benefits segment and its health care delivery assets in its Health Services segment for the remainder of the year. Further utilization pressure beyond current expectations could result in the future impairment of goodwill.
Previous wording
•Increases in utilization beyond the Company’s projections may result in the Company having to record additional premium deficiency reserves within the Health Care Benefits segment during the remainder of 2025.
Current wording
•Increases in utilization beyond the Company’s projections may result in the Company having to record additional premium deficiency reserves within the Health Care Benefits segment.
Previous wording
•The Company continues to share with clients a larger portion of rebates, fees and/or discounts received from pharmaceutical manufacturers. In addition, marketplace dynamics and regulatory changes have limited the Company’s ability to offer plan sponsors pricing that includes retail network “differential” or “spread.” The Company expects these trends to continue.
Current wording
•The Company continues to share with clients a larger portion of rebates, fees and/or discounts received from pharmaceutical manufacturers, and typically offers clients minimum pricing guarantees that cannot always be achieved. In addition, marketplace dynamics and regulatory changes have limited the Company’s ability to offer plan sponsors pricing that includes retail network “differential” or “spread.” The Company expects these trends to continue.
Previous wording
•The Company’s Pharmacy & Consumer Wellness segment is likely to benefit from incremental volume due to disruption across the retail pharmacy market, including the Company’s agreement to acquire the prescription files of certain Rite Aid pharmacies and acquire and operate certain Rite Aid stores.
Current wording
•The Company’s Pharmacy & Consumer Wellness segment is likely to benefit from incremental volume due to disruption across the retail pharmacy market, including the Company’s acquisition of the prescription files of certain Rite Aid pharmacies and certain Rite Aid stores.
Previous wording
The Company has four reportable segments: Health Care Benefits, Health Services, Pharmacy & Consumer Wellness and Corporate/Other. The Company’s segments maintain separate financial information, and the Chief Operating Decision Maker (the “CODM”) evaluates the segments’ operating results on a regular basis in deciding how to allocate resources among the segments and in assessing segment performance. The Company’s CODM is the Chief Executive Officer. The CODM evaluates the performance of the Company’s segments based on adjusted operating income (loss). Adjusted operating income is defined as operating income as measured by accounting principles generally accepted in the United States of America (“GAAP”) excluding the impact of amortization of intangible assets, net realized capital gains or losses and other items, if any, that neither relate to the ordinary course of the Company’s business nor reflect the Company’s underlying business performance. See the reconciliations of operating income (loss) (GAAP measure) to adjusted operating income (loss) below for further context regarding the items excluded from operating income in determining adjusted operating income. The CODM uses adjusted operating income as its principal measure of segment performance as it enhances the CODM’s ability to compare past financial performance with current performance and analyze underlying business performance and trends. Non-GAAP financial measures the Company discloses, such as consolidated adjusted operating income, should not be considered a substitute for, or superior to, financial measures determined or calculated in accordance with GAAP.
Current wording
The Company has four reportable segments: Health Care Benefits, Health Services, Pharmacy & Consumer Wellness and Corporate/Other. The Company’s segments maintain separate financial information, and the Chief Operating Decision Maker (the “CODM”) evaluates the segments’ operating results on a regular basis in deciding how to allocate resources among the segments and in assessing segment performance. The Company’s CODM is the Chief Executive Officer. The CODM evaluates the performance of the Company’s segments based on adjusted operating income (loss). Adjusted operating income is defined as operating income (loss) as measured by accounting principles generally accepted in the United States of America (“GAAP”) excluding the impact of amortization of intangible assets, net realized capital gains or losses and other items, if any, that neither relate to the ordinary course of the Company’s business nor reflect the Company’s underlying business performance. See the reconciliations of operating income (loss) (GAAP measure) to adjusted operating income (loss) below for further context regarding the items excluded from operating income (loss) in determining adjusted operating income. The CODM uses adjusted operating income as its principal measure of segment performance as it enhances the CODM’s ability to compare past financial performance with current performance and analyze underlying business performance and trends. Non-GAAP financial measures the Company discloses, such as consolidated adjusted operating income, should not be considered a substitute for, or superior to, financial measures determined or calculated in accordance with GAAP.
Previous wording
(1)Total revenues of the Health Services segment include approximately $2.7 billion and $2.8 billion of retail co-payments for the three months ended June 30, 2025 and 2024, respectively, and $6.4 billion and $6.2 billion of retail co-payments for the six months ended June 30, 2025 and 2024, respectively.
Current wording
(1)Total revenues of the Health Services segment include approximately $2.4 billion and $2.7 billion of retail co-payments for the three months ended September 30, 2025 and 2024, respectively, and $8.8 billion and $8.9 billion of retail co-payments for the nine months ended September 30, 2025 and 2024, respectively.
Previous wording
The following are reconciliations of consolidated operating income (GAAP measure) to consolidated adjusted operating income, as well as reconciliations of segment GAAP operating income (loss) to segment adjusted operating income (loss):
Current wording
The following are reconciliations of consolidated operating income (loss) (GAAP measure) to consolidated adjusted operating income, as well as reconciliations of segment GAAP operating income (loss) to segment adjusted operating income (loss):
Previous wording
(3)During the three and six months ended June 30, 2025 and 2024, the acquisition-related integration costs relate to the acquisitions of Signify Health and Oak Street Health. The acquisition-related integration costs are reflected in operating expenses within the Corporate/Other segment.
Current wording
(3)During the three and nine months ended September 30, 2025 and 2024, the acquisition-related integration costs relate to the acquisitions of Signify Health and Oak Street Health. The acquisition-related integration costs are reflected in operating expenses within the Corporate/Other segment.
Previous wording
(7)During the six months ended June 30, 2024, the opioid litigation charge relates to a change in the Company’s accrual related to ongoing opioid litigation matters.
Current wording
(6)During the three and nine months ended September 30, 2025 and the nine months ended September 30, 2024, the opioid litigation charges relate to changes in the Company’s accrual related to ongoing opioid litigation matters.
Previous wording
(4)During the three and six months ended June 30, 2025, the office real estate optimization charges primarily relate to the abandonment of leased real estate and the related right-of-use assets and property and equipment in connection with the Company’s evaluation of corporate office real estate space in response to its ongoing flexible work arrangement. The office real estate optimization charges are reflected in operating expenses within each segment.
Current wording
(7)During the nine months ended September 30, 2025 and the three and nine months ended September 30, 2024, the office real estate optimization charges primarily relate to the abandonment of leased real estate and the related right-of-use assets and property and equipment in connection with the Company’s evaluation of corporate office real estate space in response to its ongoing flexible work arrangement. The office real estate optimization charges are reflected in operating expenses within each segment.
Previous wording
(5)During the three and six months ended June 30, 2025, the Company recorded legacy litigation charges related to two court decisions associated with its past business practices.
Current wording
(8)During the nine months ended September 30, 2025, the Company recorded legacy litigation charges related to two court decisions associated with its past business practices.
Previous wording
In April 2025, a jury found Omnicare, L.L.C. (f/k/a Omnicare, Inc., “Omnicare”) and CVS Health Corporation liable in connection with alleged violations of the federal False Claims Act related to dispensing practices by Omnicare from 2010, prior to its acquisition by the Company in 2015, through 2018. Damages were found only with respect to Omnicare. Accordingly, the Company recorded a litigation charge of $387 million during the first quarter of 2025. During the three months ended June 30, 2025, the Company recorded a charge of $542 million, reflecting penalties assessed under the False Claims Act. These litigation charges are reflected in operating expenses within the Pharmacy & Consumer Wellness segment. The Company intends to appeal the verdict once the judgment is entered.
Current wording
In April 2025, a jury found Omnicare and CVS Health Corporation liable in connection with alleged violations of the federal False Claims Act related to dispensing practices by Omnicare from 2010, prior to its acquisition by the Company in 2015, through 2018. Damages were found only with respect to Omnicare. Accordingly, the Company recorded a litigation charge of $387 million during the first quarter of 2025. During the second quarter of 2025, the Company recorded a charge of $542 million, reflecting penalties assessed under the False Claims Act. These litigation charges are reflected in operating expenses within the Pharmacy & Consumer Wellness segment.
Previous wording
In June 2025, a court found certain subsidiaries of CVS Health Corporation liable for damages in connection with a complaint filed in February 2014, in which the government declined to intervene, related to PBM direct and indirect remuneration reporting practices for two clients from 2010 through 2016, which the Company has since modified. In connection with this court decision, the Company recorded a litigation charge of $291 million during the three months ended June 30, 2025. This litigation charge is reflected in operating expenses within the Health Services segment. The judgment will not be final until the Court enters penalties at a later date. The Company intends to appeal the decision once the judgment is entered.
Current wording
In June 2025, a court found certain subsidiaries of CVS Health Corporation liable for damages in connection with a complaint filed in February 2014, in which the government declined to intervene, related to PBM direct and indirect remuneration reporting practices for two clients from 2010 through 2016, which the Company has since modified. In connection with this court decision, the Company recorded a litigation charge of $291 million during the second quarter of 2025. This litigation charge is reflected in operating expenses within the Health Services segment.
Previous wording
(6)During the three and six months ended June 30, 2025, the loss on the wind down and sale of Accountable Care assets represents the pre-tax loss on the divestiture of the Company’s Medicare Shared Savings Program (“MSSP”) operations, which the Company sold in March 2025, as well as costs incurred in connection with the process of winding down the Company’s Accountable Care Organization Realizing Equity, Access and Community Health (“ACO REACH”) operations. The loss on Accountable Care assets is reflected in operating expenses within the Health Services segment.
Current wording
(9)During the nine months ended September 30, 2025, the loss on the wind down and sale of Accountable Care assets represents the pre-tax loss on the divestiture of the Company’s Medicare Shared Savings Program (“MSSP”) operations, which the Company sold in March 2025, as well as costs incurred in connection with the process of winding down the Company’s Accountable Care Organization Realizing Equity, Access and Community Health (“ACO REACH”) operations. The loss on Accountable Care assets is reflected in operating expenses within the Health Services segment.
Previous wording
•Total revenues increased $3.8 billion, or 11.6%, in the three months ended June 30, 2025 compared to the prior year primarily driven by increases in the Government business, largely due to the impact of the Inflation Reduction Act on the Medicare Part D program.
Current wording
•Total revenues increased $3.0 billion, or 9.1%, in the three months ended September 30, 2025 compared to the prior year primarily driven by increases in the Government business, largely due to the impact of the Inflation Reduction Act (“IRA”) on the Medicare Part D program.
Previous wording
•The MBR decreased to 88.6% in the six months ended June 30, 2025 compared to 90.0% in the prior year driven by the favorable year-over-year impact of prior period development, as well as improved underlying performance in the Government business. These decreases were partially offset by the $902 million of premium deficiency reserves recorded as health care costs in the six months ended June 30, 2025 described below.
Current wording
•The MBR decreased to 92.8% in the three months ended September 30, 2025 compared to 95.2% in the prior year driven by the favorable year-over-year impact of premium deficiency reserves recorded as health care costs, higher favorable prior period development and improved underlying performance in the Government business. These decreases were partially offset by changes in the seasonality of the Medicare Part D program due to the impact of the IRA and the impact of higher acuity in the individual exchange product line.
Previous wording
•Total revenues increased $6.4 billion, or 9.8%, in the six months ended June 30, 2025 compared to the prior year primarily driven by increases in the Government business, largely due to the impact of the Inflation Reduction Act on the Medicare Part D program.
Current wording
•Total revenues increased $9.4 billion, or 9.6%, in the nine months ended September 30, 2025 compared to the prior year primarily driven by increases in the Government business, largely due to the impact of the Inflation Reduction Act on the Medicare Part D program.
Previous wording
•Operating expenses remained relatively consistent in the three months ended June 30, 2025 compared to the prior year.
Current wording
•Operating expenses remained relatively consistent in the nine months ended September 30, 2025 compared to the prior year.
Previous wording
•Medical membership as of June 30, 2025 of 26.7 million decreased 358,000 members compared with March 31, 2025, reflecting previously announced membership declines in the individual exchange product line.
Current wording
•Medical membership as of September 30, 2025 of 26.7 million remained consistent compared with June 30, 2025.
Previous wording
•Medical membership as of June 30, 2025 of 26.7 million decreased 249,000 members compared with June 30, 2024, reflecting declines in the individual exchange product line, partially offset by an increase in Commercial ASC membership.
Current wording
•Medical membership as of September 30, 2025 of 26.7 million decreased 445,000 members compared with September 30, 2024, reflecting declines in the individual exchange product line, partially offset by an increase in Commercial ASC membership.
Previous wording
(1)See “Segment Analysis” above in this report for a reconciliation of Health Services segment operating income (GAAP measure) to adjusted operating income, which represents the Company’s principal measure of segment performance.
Current wording
(1)See “Segment Analysis” above in this report for a reconciliation of Health Services segment operating income (loss) (GAAP measure) to adjusted operating income, which represents the Company’s principal measure of segment performance.
Previous wording
(2)Pharmacy network revenues relate to claims filled at retail and specialty retail pharmacies, including the Company’s retail pharmacies and LTC pharmacies, as well as activity associated with Maintenance Choice, which permits eligible client plan members to fill their maintenance prescriptions through mail order delivery or at a CVS pharmacy retail store for the same price as mail order.
Current wording
(2)Pharmacy network revenues relate to claims filled at retail and specialty retail pharmacies, including pharmacies owned by the Company, as well as activity associated with Maintenance Choice, which permits eligible client plan members to fill their maintenance prescriptions through mail order delivery or at a CVS pharmacy retail store for the same price as mail order.
Previous wording
•Total revenues increased $4.3 billion, or 10.2%, in the three months ended June 30, 2025 compared to the prior year primarily driven by pharmacy drug mix and brand inflation, partially offset by continued pharmacy client price improvements.
Current wording
•Total revenues increased $5.1 billion, or 11.6%, in the three months ended September 30, 2025 compared to the prior year primarily driven by pharmacy drug mix and brand inflation, partially offset by continued pharmacy client price improvements.
Previous wording
•Adjusted operating income decreased $100 million, or 3.1% in the six months ended June 30, 2025 compared to the prior year primarily driven by continued pharmacy client price improvements, partially offset by improved purchasing economics and pharmacy drug mix.
Current wording
•Adjusted operating income decreased $154 million, or 7.0%, in the three months ended September 30, 2025 compared to the prior year primarily driven by continued pharmacy client price improvements, partially offset by improved purchasing economics.
Previous wording
•Total revenues increased $7.5 billion, or 9.0%, in the six months ended June 30, 2025 compared to the prior year primarily driven by pharmacy drug mix and brand inflation, partially offset by continued pharmacy client price improvements.
Current wording
•Total revenues increased $12.6 billion, or 10.0%, in the nine months ended September 30, 2025 compared to the prior year primarily driven by pharmacy drug mix and brand inflation, partially offset by continued pharmacy client price improvements.
Previous wording
•Operating expenses increased $555 million, or 32.9%, in the six months ended June 30, 2025 compared to the prior year. The increase was primarily due to the $291 million litigation charge described above and $288 million in pre-tax losses on Accountable Care assets, both recorded during the six months ended June 30, 2025. See Note 1 ‘‘Significant Accounting Policies’’ to the unaudited condensed consolidated financial statements for further information on the Company’s Accountable Care exit.
Current wording
•Operating expenses increased $717 million, or 29.3%, in the nine months ended September 30, 2025 compared to the prior year. The increase was primarily due to a $291 million litigation charge, $288 million in pre-tax losses on Accountable Care assets and the $83 million Health Care Delivery clinic closure charge described above, all recorded during the nine months ended September 30, 2025.
Previous wording
•Adjusted operating income decreased $340 million, or 17.8%, in the three months ended June 30, 2025 compared to the prior year primarily driven by continued pharmacy client price improvements and the impact of a higher medical benefit ratio in the Company’s health care delivery business, partially offset by improved purchasing economics and pharmacy drug mix.
Current wording
•Adjusted operating income decreased $254 million, or 4.6%, in the nine months ended September 30, 2025 compared to the prior year primarily driven by continued pharmacy client price improvements and the impact of a higher medical benefit ratio in the Company’s health care delivery business, partially offset by improved purchasing economics and pharmacy drug mix.
Previous wording
(3)Same store sales and prescription volume represent the change in revenues and prescriptions filled in the Company’s retail pharmacy stores that have been operating for greater than one year and digital sales initiated online or through mobile applications and fulfilled through the Company’s distribution centers, expressed as a percentage that indicates the increase or decrease relative to the comparable prior period. Same store metrics exclude revenues and prescriptions from LTC and infusion services operations. Management uses these metrics to evaluate the performance of existing stores on a comparable basis and to inform future decisions regarding existing stores and new locations. Same-store metrics provide management and investors with information useful in understanding the portion of current revenues and prescriptions resulting from organic growth in existing locations versus the portion resulting from opening new stores.
Current wording
(3)Same store sales and prescription volume represent the change in revenues and prescriptions filled in the Company’s retail pharmacy stores that have been operating for greater than one year and digital sales initiated online or through mobile applications and fulfilled through the Company’s distribution centers, expressed as a percentage that indicates the increase or decrease relative to the comparable prior period. Same store metrics exclude revenues and prescriptions from infusion services operations and long-term care pharmacies. Management uses these metrics to evaluate the performance of existing stores on a comparable basis and to inform future decisions regarding existing stores and new locations. Same-store metrics provide management and investors with information useful in understanding the portion of current revenues and prescriptions resulting from organic growth in existing locations versus the portion resulting from opening new stores.
Previous wording
•Total revenues increased $3.7 billion, or 12.5%, in the three months ended June 30, 2025 compared to the prior year primarily driven by pharmacy drug mix and increased prescription and front store volume, partially offset by continued pharmacy reimbursement pressure.
Current wording
•Total revenues increased $3.8 billion, or 11.7%, in the three months ended September 30, 2025 compared to the prior year primarily driven by pharmacy drug mix and increased prescription volume, including incremental volume resulting from the Company’s Rite Aid prescription file acquisitions, partially offset by continued pharmacy reimbursement pressure.
Previous wording
•Pharmacy same store sales increased 18.1% in the three months ended June 30, 2025 compared to the prior year. The increase was primarily driven by pharmacy drug mix, including branded GLP-1 drugs, and the 6.4% increase in pharmacy same store prescription volume on a 30-day equivalent basis. These increases were partially offset by continued pharmacy reimbursement pressure.
Current wording
•Pharmacy same store sales increased 16.8% in the three months ended September 30, 2025 compared to the prior year. The increase was primarily driven by pharmacy drug mix, including branded GLP-1 drugs, and the 8.9% increase in pharmacy same store prescription volume on a 30-day equivalent basis. These increases were partially offset by continued pharmacy reimbursement pressure.
Showing the first 40 of 59 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
•Front store same store sales increased 1.5% in the nine months ended September 30, 2025 compared to the prior year.
Current report — wording carried from elsewhere
•Total revenues remained relatively consistent in the nine months ended September 30, 2025 compared to the prior year.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
•Operating expenses remained relatively consistent in the six months ended June 30, 2025 compared to the prior year.