The Cigna Group Earnings - Q4 2025 Analysis & Highlights
The Cigna Group delivered strong 2025 results with double-digit revenue growth and sustained earnings expansion, while navigating significant regulatory developments including an FTC settlement and federal PBM reform legislation. The company is executing a transformative shift toward a rebate-free pharmacy benefits model, expanding specialty care capabilities, and introducing innovative digital health solutions to drive affordability and customer-centricity across its diversified portfolio.
Key Financial Results
Full year 2025 adjusted revenues of $275 billion, representing 11% growth
Full year 2025 adjusted earnings per share of $29.84, a 9% increase, building on a multiyear track record of sustained earnings growth
Full year 2025 adjusted after-tax earnings of $8 billion
Fourth quarter after-tax special item charges of $483 million, or $1.82 per share
Customer Net Promoter Score increased year over year in each of the largest businesses
Business Segment Results
Evernorth fourth quarter revenues of $63.1 billion with pre-tax adjusted earnings of $2.2 billion, in line with expectations
Specialty and Care Services business generated $26.7 billion in revenue, an increase of 14% year over year, with $1 billion in adjusted earnings
Specialty scripts grew 13% year over year in 2025
Pharmacy Benefit Services business delivered $36.3 billion in revenue and $1.2 billion in adjusted earnings
Pharmacy Benefit Services retention rate exceeded 97% for 2026
Cigna Healthcare fourth quarter adjusted revenues of $11.2 billion and pre-tax adjusted earnings of $734 million
Cigna Healthcare delivered financial results slightly ahead of expectations
Cigna Healthcare grew customers in select segment by 7%
Specialty and Care Services business has grown from around 25% of the company three years ago to around 35% this year
Capital Allocation
Returned over $5 billion to shareholders through dividends and share repurchase in 2025
Repurchased 11.9 million shares of common stock for approximately $3.6 billion in 2025
Returned $1.6 billion to shareholders via dividends in 2025
Delivered $9.6 billion of cash flow from operations in 2025
Improved debt to capitalization ratio to 43% during 2025, including an improvement of 190 basis points in the fourth quarter
Expected to deploy approximately $1.3 billion to capital expenditures in 2026
Expected to deploy approximately $1.6 billion to shareholder dividends in 2026, reflecting increased quarterly dividend of $1.56 per share
Industry Trends and Dynamics
Chronic disease and mental health conditions account for roughly 90% of total healthcare spending
Since 2000, the cost of a hospital stay has increased more than 220%
Median price of a new drug launch was over $370,000 in 2024, compared to only $2,000 just 20 years ago
Approximately 90% of all prescriptions filled in the United States are generic and make up only 10% of total pharmacy spend
More than $100 billion of savings expected for the US in the biosimilar space alone in coming years
Specialty and Care Services business operates in a $400 billion-plus addressable market, growing at a high single digit secular growth rate
Competitive Landscape
Company is leveraging competition and encouraging use of most cost-effective solutions through generics and biosimilar medications
Humira biosimilar penetration in 2025 represented the vast majority of eligible scripts
Company offers $0 out-of-pocket offerings for patients on Humira and Stelara biosimilars, saving them thousands of dollars each year
Company is collaborating with Progyny and Carrot to offer new coverage options for fertility support
Company announced industry-first collaboration with Headspace to support mental health of millions of Cigna Healthcare customers
Company is partnering with the administration on improving prior authorization processes
Macroeconomic Environment
Population is aging and chronic conditions are increasing
Demand for healthcare in the United States is growing rapidly
Cost trend environment is assumed to remain elevated in 2026
Company has not seen anything out of the ordinary in group enrollment trends and current outlook reflects current view of what the economy will do
Regulatory and Settlement Developments
Global settlement with Federal Trade Commission announced regarding Pharmacy Benefits business, including industry-wide insulin lawsuit and ongoing investigations
Settlement includes $7 billion in out-of-pocket costs relief over the next 10 years for 100 million customers and patients served
Settlement will increase transparency for customers and clients and strengthen relationships with community pharmacists
Federal PBM reform legislation passed earlier in the week, providing additional clarity on regulatory direction
Company will move Ascent GPO capabilities from Switzerland to the United States
Potential maximum impact to effective tax rate of up to 1% over time from GPO relocation, if unmitigated
Growth Opportunities and Strategies
Transformative rebate-free Pharmacy Benefits model announced in third quarter 2025 to improve affordability and transparency
New Clearity solution in Cigna Healthcare launched in November, putting customers in control with cost transparency and saving clients up to 10% in medical costs
Clearity has simple copay-only structure and single digital front door for all Cigna Healthcare customers
Expanded suite of AI-powered digital tools to improve and personalize customer experiences, including provider matching tool and real-time cost tracking tool
EnReachRx launched as new patient support model designed for pharmacies dispensing GLP-1 drugs
Patient Assurance program expanded to include GLP-1 medicines with caps on member out-of-pocket costs
Strategic investment in Shields Health Solutions announced in late 2025 to expand specialty capabilities serving hospitals and health systems
Partnership with TrumpRx site where Evernorth is pharmacy partner to dispense EMD Serono treatment for fertility
Reduced number of prior authorizations by 15% over the past year
Company is collaborating rather than owning physician practices or pursuing capital intensive care delivery infrastructure
Significant increase in digital registrations for US employer businesses and decreased call volumes
Pharmacy Benefits Model Transformation
Entire Cigna Healthcare fully insured book will adopt new rebate-free model in 2027
At least 50% of Evernorth business expected to adopt new model by year end 2028
New model includes core admin fee per member or per script, delinked from price of drug and growing with inflation
Second category of compensation for clinical programs and other innovations with risk taken on this portion
Expected to achieve comparable level of profitability between legacy model and new model, although sources of profit will evolve
Price Assure technology in new model guarantees patients lowest possible price on drug when filled
Early feedback from clients, brokers and other external stakeholders has been positive
Investment spending to build infrastructure for transformative rebate-free model expected to commence in 2026, with spend more back half weighted
Financial Guidance and Outlook
Full year 2026 consolidated adjusted revenues of approximately $280 billion
Full year 2026 consolidated adjusted income from operations of at least $30.25 per share
First quarter 2026 EPS expected to be slightly above 25% of full year guidance
Evernorth expected full year 2026 adjusted earnings of at least $6.9 billion
Evernorth first half earnings expected to be higher than historical pattern, with first quarter representing over 20% of full year earnings
Cigna Healthcare expected full year 2026 adjusted earnings of at least $4.5 billion
Cigna Healthcare first quarter expected to represent over 30% of full year adjusted earnings
Medicare ratio in Cigna Healthcare expected in range of 83.7% to 84.7% for 2026
First quarter 2026 medical care ratio expected to be below 81%, reflecting typical seasonality
Approximately 18.1 million total medical customers expected at year end 2026, including growth in middle, select and international markets, offset by lower membership in national accounts and individual exchange business
Adjusted SG&A ratio projected at approximately 5% for 2026, consistent with 2025 level
Consolidated adjusted tax rate expected to be approximately 19%
Expected to deliver approximately $9 billion of cash flow from operations in 2026
Majority of operating cash flow expected to be realized in second half of 2026
Weighted average shares outstanding expected in range of 261 million to 265 million shares for 2026
Expected to continue progressing towards long-term debt-to-capitalization ratio of approximately 40%
Specialty and Care Services business expected to grow earnings towards high end of long-term 8% to 12% growth rate target
FTC agreement will not impact 2027 financial outlook
Long-term growth algorithm for Pharmacy Benefit Services business expected to remain intact
Long-term earnings growth algorithm of 10% to 14% expected to be maintained
