Cigna reports strong Q1, completes Medicare divestiture

The Cigna Group reported a strong start to the year, with first-quarter 2025 revenues rising 14% to $65.5 billion, driven by growth in its Evernorth Health Services and Cigna Healthcare segments.

Shareholders' net income was $1.3 billion, or $4.85 per share, compared with a loss in the same quarter last year. Adjusted income from operations came in at $1.8 billion, or $6.74 per share.

Cigna also raised its full-year adjusted earnings outlook to at least $29.60 per share.
The Cigna Group completed the sale of its Medicare businesses to Health Care Service Corporation (HCSC) on March 19.

The move reduced medical customer counts by 6% from year-end, though underlying membership remained stable, excluding the divestiture.

Evernorth’s Specialty and Care Services posted a 19% revenue increase, while Pharmacy Benefit Services grew 14%. Combined, the segments generated $53.7 billion in adjusted revenue and $1.43 billion in pre-tax operating income, reflecting strong demand for cost-effective health solutions.

Quarterly Snapshot:

- Total revenues rose 14% year-over-year to $65.5 billion.
- Adjusted income from operations: $1.8 billion, or $6.74 per share.
- Shareholders’ net income: $1.3 billion, or $4.85 per share.
- Selling, General &Administrative expense ratio improved to 6.4%, with adjusted SG&A at 5.8%.
- Evernorth Health Services adjusted revenue: $53.7 billion (up 16%).
- Cigna Healthcare adjusted revenue: $14.5 billion (up 9%).
- Evernorth pre-tax income: $1.43 billion; Cigna Healthcare: $1.29 billion.
- Repurchased 8.2 million shares YTD for $2.6 billion.

Management Perspective:

CEO David Cordani said the company is committed to building a more sustainable and transparent health care model. He credited the strength of Cigna’s diversified platforms and execution discipline for the company’s performance and outlook revision.

“We’ve delivered this performance in a dynamic environment, with forces of change going beyond technology,” Cordani said.  “Tariffs and trade significantly increased. Geopolitical, our market-leading capabilities and flexible model have fueled our consistent track record of delivering differentiated value, innovating, and smartly expanding our addressable markets, driving sustained long-term growth, even in the most disrupted environments.”

Brian Evanko, Cigna’s president and chief operating officer, noted that the U.S. market in GLP-1 medications, used to treat diabetes and weight loss management, will reach $100 billion by 2030.

“One in 10 Americans is expected to be on a GLP-1 medication,” he said. “But the challenge of affordability, success, and clinical coordination for GLP-1s in the U.S. remains. Scientists are looking for ways to manage the high cost of these medications while ensuring appropriate use. And patients want to access these medications at an affordable price point, a positive experience with the clinical support they need.”

To that end, Evanko said Cigna’s EncircleRx provides a clinical program wrap around the medication, supporting sustainable and positive lifestyle changes for patients, as well as improving affordability and access for clients.

“We’re building on that success with the launch of additional innovations around GLP-1 access and affordability, including our new and high-touch, short clinical model enabled by pharmacies committed to clinical care for dispensing GLP-1 medicines.”

In addition, he said Cigna will offer a new, specialized GLP-1 pharmacy.

“The combination of our pharmacies strengthens our position in solving pharmacy and patient challenges,” he said

Looking ahead, Cigna reaffirmed its full-year outlook for the medical care ratio at 83.2% - 84.2% but raised the guidance for adjusted income from operations by $0.10 per share to at least $29.60, in line with Wall Street consensus estimates.

“We expect the second quarter Cigna Healthcare adjusted earnings to be slightly above 25% of the full-year outlook,” said Ann Dennison, executive vice president and chief financial officer. “We continue to expect the full-year medical care ratio within the range of 83.2% to 84.2%. Additionally, we expect our second quarter medical care ratio to be towards the low end of the full-year range.”

By The Numbers:

- Total Revenue: $65.5 billion
- Net Income: $1.3 billion
- Adjusted EPS: $6.74
- Medical Care Ratio: 82.2% (vs. 79.9% in Q1 2024)
- Evernorth Segment Margin: 2.7%
- Cigna Healthcare Segment Margin: 8.9%
- Pharmacy Customers: 122.3 million
- Total Customer Relationships: 182.2 million
- Stock: Up 20% year-to-date; down 1% in mid-day trading Friday, to $331.33 per share.

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Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].