CVS Health — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenues for the three months ended September 30, 2026, increased 5.4% year-over-year to $108.4 billion ($108,399 million) from $102.9 billion ($102,871 million).
• GAAP diluted earnings per share (EPS) for the quarter were $1.68, compared to a loss of $3.13 per share in the prior year period.
• Adjusted EPS for the quarter was $2.09, an increase from $1.60 in the prior year period.
• Operating income for the quarter was $3.6 billion, compared to an operating loss of $3.2 billion in the prior year.
• Adjusted operating income for the quarter increased 21.2% to $4.2 billion ($4,194 million) from $3.5 billion ($3,459 million).
• Net income for the nine months ended September 30, 2026, was $8.1 billion ($8,123 million), compared to a net loss of $1.2 billion ($1,195 million) in the prior year.
• Year-to-date cash flow from operations for the nine months ended September 30, 2026, was $15.3 billion ($15,318 million).
• Medical benefit ratio (MBR) for the Health Care Benefits segment decreased to 91.3% in the third quarter of 2026 from 92.8% in the prior year.
• Days claims payable for the Health Care Benefits segment were 41.9 days as of September 30, 2026.

Guidance and Future Outlook:

• Full-year 2026 GAAP diluted EPS guidance was raised to at least $6.98, up from a previous range of $6.84 to $7.04.
• Full-year 2026 Adjusted EPS guidance was raised to at least $8.20, up from a previous range of $7.90 to $8.10.
• Full-year 2026 cash flow from operations guidance was raised to at least $15.5 billion, up from at least $11.5 billion.
• Full-year 2026 total revenue guidance is set at at least $420.0 billion.
• Management maintains a cautious view for the remainder of the year due to continued elevated cost trends and potential macro headwinds.

Business Segments and Product Lines:

• Health Care Benefits: Total revenues increased 2.4% to $36.9 billion ($36,855 million). Adjusted operating income increased significantly to $912 million from $314 million, driven by improved performance in the Government business. Medical membership was 26.1 million as of September 30, 2026.
• Health Services: Total revenues increased 9.5% to $54.0 billion ($53,964 million). Adjusted operating income increased 2.7% to $2.1 billion ($2,106 million). Pharmacy claims processed increased 1.3% to 481.7 million.
• Pharmacy & Consumer Wellness: Total revenues decreased 2.0% to $35.5 billion ($35,498 million), driven by regulatory-related price reductions and generic drug introductions, partially offset by prescription volume growth. Adjusted operating income increased 10.6% to $1.6 billion ($1,635 million). Prescriptions filled increased 1.9% to 470.0 million.
• Operational Updates: More than 69% of Aetna Medicare Advantage members are in 2027 plans rated 4 stars or higher. CVS Health offers all FDA-approved GLP-1 medications with integrated digital and in-person support. Health100 earned the CARIN Code of Conduct for Consumer-Facing Applications Accreditation.
• Acquisitions: The Company completed Rite Aid asset acquisitions during the third quarter of 2025, contributing to prescription volume growth.

Market and Competitive Landscape:

• Aetna is positioned second among large, publicly traded Medicare Advantage organizations in the Star Ratings program.
• The Company continues to lead the industry in direct-to-consumer weight management offerings.
• The Health Care Benefits segment saw growth in Government business, partially offset by the exit from the individual exchange business in 2026.

Risks and Challenges:

• Elevated cost trends and potential macro headwinds remain concerns for the remainder of the year.
• The Omnicare guarantee, an estimated contingent guarantee liability related to litigation and bankruptcy resolutions, was recorded in the third quarter of 2026.
• The prior year included a $5.7 billion goodwill impairment charge related to the Health Care Delivery reporting unit, which is absent in the current year results.

Management Commentary and Tone:

• David Joyner, Chairman and CEO, stated that colleagues build trust through delivering quality health care and that each business delivered another quarter of strong results.
• Management highlighted the advancement of their strategy to improve consumer experience, lower health care costs, and connect care.
• The tone reflects confidence in the margin recovery plan and execution of the strategy, while acknowledging caution regarding future cost trends.

Other Key Points:

• Prior years' health care costs payable estimates developed favorably by $1.3 billion during the nine months ended September 30, 2026.
• The Company has approximately 9,000 retail pharmacy locations, more than 1,000 walk-in and primary care medical clinics, and a pharmacy benefits manager with approximately 87 million plan members.
• The Company serves an estimated 37 million people through health insurance products and related services.
• Dividends paid for the nine months ended September 30, 2026, were $2.6 billion ($2,578 million).
• Net cash used in investing activities for the nine months ended September 30, 2026, was $5.5 billion ($5,545 million).
• Net cash used in financing activities for the nine months ended September 30, 2026, was $6.5 billion ($6,537 million).