Cigna Group
For the period ended Jun 30, 2025. Filed Jul 31, 2025.
View on SEC.govAbout this filing
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.
Jun 30, 2025 · Filed Jul 31, 2025
CI$293.59-2.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-02.
0001739940-25-000021
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-07-31.
0001739940-25-000028
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 162 previous paragraphs and 157 current paragraphs.
96 unchanged; 53 reworded; 8 added; 12 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 12 previous and 12 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 (8)
Current report
Adjusted income from operations. See discussion of segment results in the "Segment Reporting" section.
Current report
Premiums decreased 20% and 5%, primarily driven by the impact of the HCSC transaction (-26% and -10%, respectively), partially offset by higher premiums within our ongoing U.S. Healthcare businesses (+5% and +4%, respectively).
Current report
Selling, general and administrative ("SG&A") expenses decreased 7% for the three months ended and increased 3% for the six months ended. Both periods were primarily impacted by the HCSC transaction (-12% and -4%, respectively), the strategic optimization program (+2% and +4%, respectively), and supporting business growth (+2% and +3%, respectively).
Current report
Investment results for the three and six months ended increased, reflecting investment gains related to the change in fair value of certain equity securities in the second quarter of 2025 and the absence of the impairment of VillageMD equity securities that was recorded in the first quarter of 2024.
Current report
We repurchased 8.2 million shares for approximately $2.6 billion during the six months ended June 30, 2025, compared with 14.7 million shares for approximately $5.0 billion during the six months ended June 30, 2024.
Current report
•The composition of claims generally considers the types of drugs, including the mix of claims among branded and higher priced specialty drugs compared to generic or biosimilar alternatives. We manage pharmaceutical manufacturer increase in prices through programs designed to reduce drug spend, providing positive impacts on our clients, our customers and us. Changes to claims mix, including types of drugs, distribution methods, pharmaceutical manufacturer prices, and alternative uses of drugs within our formularies continue to be a significant driver of organic growth for our revenues and income from operations in the current environment.
Current report
Pre-tax adjusted income from operations increased for both periods, primarily driven by the decision to discontinue certain small non-strategic businesses.
Current report
Pre-tax adjusted loss from operations decreased for both periods, primarily due to lower interest expense.
Removed paragraphs (12)
Previous report
(1) For the three months ended March 31, 2024, due to the anti-dilutive effect resulting from the Shareholders' net loss for the period, the impact of potentially dilutive securities has been excluded from the calculation of weighted average shares for the calculation of diluted Shareholders’ net loss per share. Weighted average common shares outstanding used to calculate diluted Shareholders’ net loss per share for the three months ended March 31, 2024 were 286,465 thousand.
Previous report
(4) For the three months ended March 31, 2024, due to the adjusted income from operations, the number of weighted average shares used to calculate Adjusted income from operations per share reflects the dilution caused by outstanding stock options, unvested restricted stock grants and units, and strategic performance shares. Weighted average common shares outstanding used to calculate Adjusted income from operations per share for the three months ended March 31, 2024 were 289,717 thousand.
Previous report
Shareholders' net income (loss)increased $1,600 million, primarily reflecting the absence of net investment losses recorded in 2024 ($1,875 million, after tax) driven by the impairment of equity securities.
Previous report
Adjusted income from operations decreased 2%, primarily reflecting the absence of state tax benefits recorded in 2024 (-2%) and lower earnings in Cigna Healthcare (-3%), partially offset by higher earnings in Evernorth Health Services (+4%).
Previous report
Premiums increased 10%, primarily reflecting higher premium rates in our U.S. Healthcare operating segment.
Previous report
Selling, general and administrative ("SG&A") expenses increased 14%, primarily reflecting costs associated with the Strategic Optimization Program (+5%) and the HCSC transaction costs (+5%).
Previous report
We repurchased 5.0 million shares for approximately $1.5 billion during the three months ended March 31, 2025, compared to 10.1 million shares for approximately $3.4 billion during the three months ended March 31, 2024. From April 1, 2025 through May 1, 2025, we repurchased 3.2 million shares for approximately $1.1 billion. Share repurchase authority was $7.7 billion as of May 1, 2025.
Previous report
On balance sheet:
Previous report
•The mix of claims generally considers the type of drug and distribution channel method. In addition to the types of drugs, the mix of generic or biosimilar claims also impacts our results. Generally, a higher mix of generic and biosimilar drugs reduces revenues and increases income from operations, as generic and biosimilar drugs are typically priced lower than the branded drug counterparts, providing positive impacts on our clients, our customers and us.
Previous report
•Pharmaceutical manufacturer inflation also impacts our pricing because most of our contracts provide that we bill clients and pay pharmacies based on a generally recognized price index for pharmaceuticals. Therefore, the rate of inflation for prescription drugs and our efforts to manage this inflation for our clients continue to be significant drivers of our revenues and cost of revenues in the current environment.
Previous report
Pre-tax adjusted income from operations decreased, primarily driven by less favorable COLI claims experience and unfavorable margins in our non-strategic businesses.
Previous report
Pre-tax adjusted loss from operations was consistent with prior year.
Reworded paragraphs (53)
Previous wording
Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to provide information to assist you in better understanding and evaluating our financial condition as of March 31, 2025, compared with December 31, 2024 and our results of operations for the three months ended March 31, 2025, compared with the same period last year and is intended to help you understand the ongoing trends in our business. We encourage you to read this MD&A in conjunction with our Consolidated Financial Statements included in Part I, Item 1 in this Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2024 ("2024 Form 10-K"). In particular, we encourage you to refer to the "Risk Factors" contained in Part I, Item 1A of our 2024 Form 10-K.
Current wording
Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to provide information to assist you in better understanding and evaluating our financial condition as of June 30, 2025 compared with December 31, 2024 and our results of operations for the three and six months ended June 30, 2025 compared with the same periods last year, and is intended to help you understand the ongoing trends in our business. We encourage you to read this MD&A in conjunction with our Consolidated Financial Statements included in Part I, Item 1 in this Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2024 ("2024 Form 10-K"). In particular, we encourage you to refer to the "Risk Factors" contained in Part I, Item 1A of our 2024 Form 10-K.
Previous wording
Statements in this Form 10-Q for updates to those policies resulting from adopting new accounting guidance, if any. The preparation of interim consolidated financial statements necessarily relies heavily on estimates. This and certain other factors call for caution in estimating full-year results based on interim results of operations. In some of our financial tables in this MD&A, we present either percentage changes or "N/M" when those changes are so large as to become not meaningful. Changes in percentages are expressed in basis points ("bps").
Current wording
Unless otherwise indicated, financial information in this MD&A is presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). See Note 2 to the Consolidated Financial Statements in our 2024 Form 10-K for additional information regarding the Company's significant accounting policies and see Note 2 to the Consolidated Financial Statements in this Form 10-Q for updates to those policies resulting from adopting new accounting guidance, if any. The preparation of interim consolidated financial statements necessarily relies heavily on estimates. This and certain other factors call for caution in estimating full-year results based on interim results of operations. In some of our financial tables in this MD&A, we present either percentage changes or "N/M" when those changes are so large as to become not meaningful. Changes in percentages are expressed in basis points ("bps").
Previous wording
In this MD&A, our consolidated measures "adjusted income from operations," earnings per share on that same basis and "adjusted revenues" are not determined in accordance with GAAP and should not be viewed as substitutes for the most directly comparable GAAP measures of "shareholders' net income (loss)," "earnings per share" and "total revenues." We also use pre-tax adjusted income (loss) from operations and adjusted revenues to measure the results of our segments.
Current wording
In this MD&A, our consolidated measures "adjusted income from operations," earnings per share on that same basis and "adjusted revenues" are not determined in accordance with GAAP and should not be viewed as substitutes for the most directly comparable GAAP measures of "shareholders' net income," "earnings per share" and "total revenues." We also use pre-tax adjusted income (loss) from operations and adjusted revenues to measure the results of our segments.
Previous wording
The Company uses "pre-tax adjusted income (loss) from operations" and "adjusted revenues" as its principal financial measures of segment operating performance because management believes these metrics reflect the underlying results of business operations and facilitate analysis of trends in underlying revenue, expenses and profitability. We define adjusted income (loss) from operations as shareholders' net income (loss) (or income (loss) before income taxes less pre-tax income (loss) attributable to noncontrolling interests for the segment metric) excluding net investment gains/losses, amortization of acquired intangible assets and special items. The Cigna Group's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting are also excluded. Special items are matters that management believes are not representative of the underlying results of operations due to their nature or size. Adjusted income (loss) from operations is measured on an after-tax basis for consolidated results and on a pre-tax basis for segment results. Consolidated adjusted income (loss) from operations is not determined in accordance with GAAP and should not be viewed as a substitute for the most directly comparable GAAP measure, shareholders' net income (loss). See the below Financial Highlights section for a reconciliation of consolidated adjusted income from operations to shareholders' net income (loss).
Current wording
The Company uses "pre-tax adjusted income (loss) from operations" and "adjusted revenues" as its principal financial measures of segment operating performance because management believes these metrics reflect the underlying results of business operations and facilitate analysis of trends in underlying revenue, expenses and profitability. We define adjusted income (loss) from operations as shareholders' net income (or income (loss) before income taxes less pre-tax income (loss) attributable to noncontrolling interests for the segment metric) excluding net investment gains/losses, amortization of acquired intangible assets and special items. The Cigna Group's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting are also excluded. Special items are matters that management believes are not representative of the underlying results of operations due to their nature or size. Adjusted income (loss) from operations is measured on an after-tax basis for consolidated results and on a pre-tax basis for segment results. Consolidated adjusted income (loss) from operations is not determined in accordance with GAAP and should not be viewed as a substitute for the most directly comparable GAAP measure, shareholders' net income. See the below Financial Highlights section for a reconciliation of consolidated adjusted income from operations to shareholders' net income.
Previous wording
Commentary: Three Months Ended March 31, 2025 versus Three Months Ended March 31, 2024
Current wording
Commentary: Three and Six Months Ended June 30, 2025 versus Three and Six Months Ended June 30, 2024
Previous wording
The commentary presented below, and the segment commentaries that follow, compare results for the three months ended March 31, 2025 with results for the three months ended March 31, 2024. Commentary regarding percentage changes (or bps) and dollar variances represents the driver's impact on the overall category.
Current wording
The commentary presented below, and the segment commentaries that follow, compare results for the three and six months ended June 30, 2025 with results for the three and six months ended June 30, 2024. Commentary regarding percentage changes (or bps) and dollar variances represents the driver's impact on the overall category.
Previous wording
Investment results primarily reflect the absence of the impairment of VillageMD equity securities that was recorded in 2024.
Current wording
Shareholders' net incomefor the six months ended increased 125%, primarily reflecting the absence of the impairment of VillageMD equity securities that was recorded in the first quarter of 2024.
Previous wording
Medical customers decreased 6%, primarily reflecting the HCSC transaction (defined below).
Current wording
Medical customers decreased 5%, primarily reflecting the closing of the HCSC transaction (defined below) in the three months ended March 31, 2025.
Previous wording
Pharmacy revenues increased 16%, primarily reflecting higher utilization of prescription drugs from customer growth in Evernorth Health Services.
Current wording
Pharmacy revenues increased 19% and 17%, primarily reflecting higher utilization of prescription drugs from customer growth in Evernorth Health Services.
Previous wording
Fees and other revenues increased 17%, primarily reflecting growth in affordability services within our Pharmacy Benefit Services operating segment.
Current wording
Fees and other revenues increased 13% and 15%, primarily reflecting growth in affordability services (defined below) within our Pharmacy Benefit Services operating segment.
Previous wording
Net investment income decreased 18%, primarily due to lower average assets.
Current wording
Net investment income decreased 26% and 22%, primarily due to lower average assets, due in part to the impact of the HCSC transaction.
Previous wording
Pharmacy and other service costs increased 17%, primarily reflecting higher utilization of prescription drugs from customer growth in Evernorth Health Services.
Current wording
Pharmacy and other service costs increased 20% and 18%, primarily reflecting higher utilization of prescription drugs from customer growth in Evernorth Health Services.
Previous wording
Medical costs and other benefit expenses increased 11%, primarily reflecting higher medical costs in our U.S. Healthcare operating segment.
Current wording
Medical costs and other benefit expenses decreased 19% and 4%, primarily driven by the impact of the HCSC transaction (-27% and -11%, respectively), partially offset by higher medical costs in our ongoing U.S. Healthcare businesses (+9% and +8%, respectively).
Previous wording
Gain (loss) on sale of businesses primarily reflects the HCSC transaction. See the "Divestiture of Medicare Advantage and Related Businesses" section below and Note 5 to the Consolidated Financial Statements for further discussion of the HCSC transaction.
Current wording
Gain (loss) on sale of businesses primarily reflects the HCSC transaction for the six months ended. See the "Divestiture of Medicare Advantage and Related Businesses" section below and Note 5 to the Consolidated Financial Statements for further discussion of the HCSC transaction.
Previous wording
The effective tax rate decreased, primarily driven by the absence of a valuation allowance related to the impairment of equity securities recorded in 2024 (-540%), partially offset by the absence of state tax benefits recorded in 2024 (+88%) and the impact related to the HCSC transaction (+69%). See Note 15 to the Consolidated Financial Statements for further discussion of these matters.
Current wording
The effective tax rate increased for the three months ended, primarily driven by the absence of tax benefits recorded in 2024 related to favorable state audit resolutions (+2%), partially offset by the favorable impact of foreign operations (-1%). For the six months ended, the effective tax rate decreased, primarily driven by the absence of a valuation allowance related to the impairment of equity securities recorded in 2024 (-21%), partially offset by the absence of state tax benefits recorded in 2024 (+6%) and the impact related to the HCSC transaction (+1%). See Note 15 to the Consolidated Financial Statements for further discussion of these matters.
Previous wording
Parent Level. Cash requirements at the parent company level generally consist of debt service; payment of declared dividends to shareholders; lending to subsidiaries as needed; and pension plan funding.
Current wording
Parent Company Level. Cash requirements at the parent company level generally consist of debt service, payment of declared dividends to shareholders, lending to subsidiaries as needed and pension plan funding.
Previous wording
Cash flows for the three months ended March 31 were as follows:
Current wording
Cash flows for the six months ended June 30 were as follows:
Previous wording
The following discussion explains variances in the various categories of cash flows for the three months ended March 31, 2025 compared with the same period in 2024.
Current wording
The following discussion explains variances in the various categories of cash flows for the six months ended June 30, 2025 compared with the same period in 2024.
Previous wording
Operating Activities. Cash flows from operating activities consist principally of cash receipts and disbursements for pharmacy revenues and costs, premiums, fees, investment income, taxes, benefit costs, and other expenses.
Current wording
Operating Activities. Cash flows from operating activities consist principally of cash receipts and disbursements for pharmacy revenues and costs, premiums and medical costs, fees, investment income, taxes, and other expenses.
Previous wording
Operating cash flows decreased for the three months ended March 31, 2025 primarily driven by the timing of settlements related to the accounts receivable facility as well as the absence of favorable net cash flow impacts from onboarding significant new clients in 2024.
Current wording
Operating cash flows decreased for the six months ended June 30, 2025 primarily due to the absence of the favorable net cash flow impacts from onboarding significant new clients in 2024 as well as the unfavorable impact of pharmacy and services costs payments, due in part to timing.
Previous wording
Financing Activities. The increase in cash used in financing activities in 2025 is driven by the absence of debt issuances that occurred in 2024, partially offset by lower share repurchases and lower debt repayments.
Current wording
Financing Activities. The increase in cash used in financing activities in 2025 is driven by net debt repayments in 2025 compared with net debt issuances in 2024, offset by lower share repurchases.
Previous wording
Our capital resources consist primarily of cash, cash equivalents and investments maintained at regulated subsidiaries required to underwrite insurance risks, cash flows from operating activities, our commercial paper program, revolving credit facility, and the issuance of long-term debt and equity securities. Our businesses generate significant cash flows from operations, some of which is subject to regulatory restrictions relative to the amount and timing of dividend payments to the parent company. Dividends received from U.S.-regulated subsidiaries were $0.5 billion for the three months ended March 31, 2025 and $0.6 billion for the three months ended March 31, 2024. Non-regulated subsidiaries also generate significant cash flows from operating activities, which is typically available immediately to the parent company for general corporate purposes.
Current wording
Our capital resources consist primarily of cash, cash equivalents and investments maintained at regulated subsidiaries required to underwrite insurance risks, cash flows from operating activities, our commercial paper program, revolving credit facility, and the issuance of long-term debt and equity securities. Our businesses generate significant cash flows from operations, some of which is subject to regulatory restrictions relative to the amount and timing of dividend payments to the parent company. Dividends received from U.S.-regulated subsidiaries were $0.5 billion for the six months ended June 30, 2025 and $1.1 billion for the six months ended June 30, 2024. Non-regulated subsidiaries also generate significant cash flows from operating activities, which is typically available immediately to the parent company for general corporate purposes.
Previous wording
Commercial Paper Program. There was no commercial paper outstanding balance as of March 31, 2025.
Current wording
Commercial Paper Program. The commercial paper program had an approximately $1.2 billion outstanding balance as of June 30, 2025.
Previous wording
Revolving Credit Agreements. Our revolving credit agreements provide us with the ability to borrow amounts for general corporate purposes, including for the purpose of providing liquidity support if necessary under our commercial paper program discussed above. In April 2025, the Company replaced its previous revolving credit agreements and entered into a $6.5 billion, five-year revolving credit and letter of credit agreement that will mature in April 2030. See Note 7 to the Consolidated Financial Statements for further information on our credit agreements and commercial paper program.
Current wording
Revolving Credit Agreement. Our revolving credit agreement provides us with the ability to borrow amounts for general corporate purposes, including for the purpose of providing liquidity support if necessary under our commercial paper program discussed above. In April 2025, the Company replaced its previous revolving credit agreements and entered into a $6.5 billion, five-year revolving credit and letter of credit agreement that will mature in April 2030. See Note 7 to the Consolidated Financial Statements for further information on our credit agreement and commercial paper program.
Previous wording
As of March 31, 2025, we had $6.5 billion of undrawn committed capacity under our revolving credit agreements (these amounts are available for general corporate purposes, including providing liquidity support for our commercial paper program), $6.5 billion of remaining capacity under our commercial paper program, and $8.5 billion in cash and short-term investments, approximately $0.8 billion of which was held by the parent company or certain nonregulated subsidiaries.
Current wording
As of June 30, 2025, we had $6.5 billion of undrawn committed capacity under our revolving credit agreement (these amounts are available for general corporate purposes, including providing liquidity support for our commercial paper program), $5.3 billion of remaining capacity under our commercial paper program, and $4.6 billion in cash and short-term investments, approximately $1.0 billion of which was held by the parent company or certain nonregulated subsidiaries.
Previous wording
Our debt-to-capitalization ratio (calculated as Short-term debt and Long-term debt ("Total debt") as a percentage of Total shareholders' equity and Total debt ("Total capitalization")) was 43.1% and 43.8% at March 31, 2025 and December 31, 2024, respectively. We actively monitor our debt obligations and engage in issuance or redemption activities as needed in accordance with our capital management strategy.
Current wording
Our debt-to-capitalization ratio (calculated as Short-term debt and Long-term debt ("Total debt") as a percentage of Total shareholders' equity and Total debt ("Total capitalization")) was 43.3% and 43.1% as of June 30, 2025 and March 31, 2025, respectively. We actively monitor our debt obligations and engage in issuance or redemption activities as needed in accordance with our capital management strategy.
Previous wording
Subsidiary Borrowings. In addition to the sources of liquidity discussed above, the parent company can borrow an additional $3.6 billion from its subsidiaries without further approvals as of March 31, 2025.
Current wording
Subsidiary Borrowings. In addition to the sources of liquidity discussed above, the parent company can borrow an additional $1.1 billion from its subsidiaries without further approvals as of June 30, 2025.
Previous wording
Short-Term and Long-Term Debt. During the three months ended March 31, 2025, the Company redeemed at par its $700 million 5.685% senior notes that were due March 2026. In April 2025, $900 million of 3.250% senior notes due April 2025 were repaid at maturity.
Current wording
Short-Term and Long-Term Debt. During the three months ended March 31, 2025, the Company redeemed at par its $700 million 5.685% senior notes that were due March 2026. In April 2025, $900 million of 3.250% senior notes were repaid at maturity.
Previous wording
Capital Expenditures. Capital expenditures for property, equipment and computer software were $0.3 billion in the three months ended March 31, 2025 compared to $0.3 billion in the three months ended March 31, 2024.
Current wording
Capital Expenditures. Capital expenditures for property, equipment and computer software were $0.6 billion in the six months ended June 30, 2025 compared with $0.7 billion in the six months ended June 30, 2024.
Previous wording
Divestiture. As discussed in the "Developments" section above, the HCSC transaction was completed on March 19, 2025. We anticipate using the proceeds in alignment with our capital deployment priorities, with the majority allocated to share repurchases.
Current wording
Divestiture. As discussed in the "Developments" section above, the HCSC transaction was completed on March 19, 2025. We used the proceeds in alignment with our capital deployment priorities, with the majority allocated to share repurchases.
Previous wording
Due to the redemption of senior notes in the three months ended March 31, 2025, our long-term debt obligations as of March 31, 2025 have been updated compared to those previously provided in our 2024 Form 10-K. See Note 7 to the Consolidated Financial Statements for further discussion. Except for the item listed below, there have been no material changes to other information presented in our guarantees and contractual obligations set forth in our 2024 Form 10-K.
Current wording
Due to the redemption and maturity of senior notes in the six months ended June 30, 2025, our long-term debt obligations as of June 30, 2025 have been updated compared to those previously provided in our 2024 Form 10-K. See Note 7 to the Consolidated Financial Statements for further discussion. Except for the item listed below, there have been no material changes to other information presented in our guarantees and contractual obligations set forth in our 2024 Form 10-K.
Previous wording
Long-Term Debt. Total scheduled payments on long-term debt are $47.3 billion through February 2054 (of which $3.1 billion relate to the remainder of 2025), which include scheduled interest payments and maturities of long-term debt.
Current wording
Long-Term Debt. Total scheduled payments on long-term debt are $46.1 billion through February 2054 (of which $1.9 billion relate to the remainder of 2025), which include scheduled interest payments and maturities of long-term debt.
Previous wording
Evernorth Health Services includes a broad range of coordinated and point solution health services and capabilities within our Pharmacy Benefit Services and Specialty and Care Services operating segments. As described in the introduction to Segment Reporting, Evernorth Health Services' performance is measured using adjusted revenues and pre-tax adjusted income (loss) from operations.
Current wording
Evernorth Health Services includes a broad range of coordinated and point solution health services and capabilities within our Pharmacy Benefit Services and Specialty and Care Services operating segments. As described in the introduction to Segment Reporting, the performance of Evernorth Health Services is measured using adjusted revenues and pre-tax adjusted income (loss) from operations.
Previous wording
The key factors that impact the segment's revenues and income from operations are claims volume, mix of claims, price and contract affordability services. Specialty and Care Services revenues are also impacted by customer and client growth. These key factors are discussed further below. See Note 2 to the Consolidated Financial Statements included in our 2024 Form 10-K for additional information on revenue and cost recognition policies for this segment.
Current wording
The key factors that impact the segment's revenues and income from operations are claims utilization, claims composition and contract affordability services. Specialty and Care Services revenues are also impacted by customer and client growth. These key factors are discussed further below. See Note 2 to the Consolidated Financial Statements included in our 2024 Form 10-K for additional information on revenue and cost recognition policies for this segment.
Previous wording
Pharmacy claim volume (utilization) is impacted by new clients or organic customer growth through the expansion of existing clients or through the loss of customers and business.
Current wording
Pharmacy claim volume is impacted by new clients or organic customer growth through the expansion of existing clients or through the loss of customers and business.
Previous wording
•Our client contract pricing is impacted by our ongoing ability to negotiate favorable contracts for pharmacy network, pharmaceutical and wholesaler purchasing, and manufacturer rebates (also referred to as affordability improvements). Through these affordability services, we seek to improve the effectiveness of our combined and standalone solutions, for our clients, by continuously innovating, improving affordability and implementing drug purchasing contract initiatives. Our continued affordability improvements further reduce drug costs for our customers and clients, and we share in the value delivered, which generally results in a favorable impact on our income from operations.
Current wording
•Our client contract pricing is impacted by our ongoing ability to negotiate favorable contracts for pharmacy network, pharmaceutical and wholesaler purchasing, and manufacturer rebates (also referred to as "affordability improvements" or "affordability services"). Through these affordability improvements, we seek to improve the effectiveness of our combined and standalone solutions for our clients by continuously innovating, improving affordability and implementing drug purchasing contract initiatives. Our continued affordability improvements further reduce drug costs for our customers and clients, and we share in the value delivered, which generally results in a favorable impact on our income from operations.
Previous wording
Adjusted revenues increased 16%, primarily reflecting higher utilization of prescription drugs from customer growth in both Specialty and Care Services (+7%) and Pharmacy Benefit Services (+5%), an increase due to claims mix in Pharmacy Benefit Services (+2%), and inflation on branded drugs in both Pharmacy Benefit Services (+1%) and Specialty and Care Services (+1%).
Current wording
Adjusted revenues increased 17% and 16% for the three and six months ended, respectively, primarily reflecting higher utilization of prescription drugs from customer growth in Pharmacy Benefit Services (+7% and +7%, respectively) and Specialty and Care Services (+6% and +7%, respectively) and an increase due to claims composition in Pharmacy Benefit Services (+4% and +2%, respectively).
Previous wording
Pre-tax adjusted income from operations increased 5%, primarily reflecting specialty pharmacy growth in Specialty and Care Services (+7%) and continued affordability improvements in Pharmacy Benefit Services (+6%). These increases were partially offset by strategic investments and initiatives to support business growth (-4% in Specialty and Care Services and -2% in Pharmacy Benefit Services).
Current wording
Pre-tax adjusted income from operations increased 5% and 5% for the three and six months ended, respectively, primarily reflecting specialty pharmacy growth in Specialty and Care Services (+8% and +6%, respectively), and contract affordability improvements and customer growth in Pharmacy Benefit Services (+3% and +3%, respectively), partially offset by strategic investments and initiatives to support business growth in Specialty and Care Services (-3% and -2%, respectively) and Pharmacy Benefit Services (-1% and -2%, respectively).
Previous wording
The SG&A expense ratio decreased 20 bps, primarily reflecting higher adjusted revenues as discussed above.
Current wording
The SG&A expense ratio decreased 10 bps for both the three and six months ended, primarily reflecting higher adjusted revenues as discussed above.
Previous wording
Adjusted revenues increased 9%, or $1,205 million, primarily due to higher premiums within Medicare Part D (+$573 million), employer insured (+$295 million) and stop loss (+$200 million), reflecting premium rate increases to cover expected increases in underlying medical costs across those businesses.
Current wording
Adjusted revenues decreased 18%, or $2,389 million, and 4%, or $1,184 million, primarily due to the impact of the HCSC transaction (-$3,137 million and -$2,527 million, respectively), partially offset by higher premiums within employer insured (+$334 million and +$629 million, respectively) and stop loss (+$214 million and +$414 million, respectively), primarily reflecting premium rate increases to cover expected increases in underlying medical costs across those businesses.
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Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Unless otherwise indicated, financial information in this MD&A is presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). See Note 2 to the Consolidated Financial Statements in our 2024 Form 10-K for additional information regarding the Company's significant accounting policies and see Note 2 to the Consolidated Financial