CVS HEALTH CORPORATION REPORTS STRONG SECOND QUARTER 2026 RESULTS AND RAISES FULL-YEAR 2026 GUIDANCE

• Second quarter total revenues increased to $106.1 billion, up 7.3% year-over-year

• Second quarter GAAP diluted EPS of $2.31 and Adjusted EPS of $2.58

• Generated year-to-date cash flow from operations of $10.6 billion

• Raising full-year 2026 guidance: GAAP diluted EPS guidance range to $6.84 to $7.04 from $6.24 to $6.44 Adjusted EPS guidance range to $7.90 to $8.10 from $7.30 to $7.50 Cash flow from operations guidance to at least $11.5 billion from at least $9.5 billion

• GAAP diluted EPS guidance range to $6.84 to $7.04 from $6.24 to $6.44

• Adjusted EPS guidance range to $7.90 to $8.10 from $7.30 to $7.50

• Cash flow from operations guidance to at least $11.5 billion from at least $9.5 billion

WOONSOCKET, R.I., Aug. 5, 2026 /PRNewswire/ -- CVS Health Corporation (NYSE: CVS) today announced operating results for the three months ended June 30, 2026.

"Our CVS Health colleagues build trust every day in communities across our country by making healthcare easier for millions of customers, patients and members. As our businesses work together to deliver a technology-powered care engagement experience, we continue to deliver strong performance. We uniquely enable what our customers want the most: simple, connected and convenient access to affordable, quality healthcare, where, when, and how they want it."

"Our CVS Health colleagues build trust every day in communities across our country by making healthcare easier for millions of customers, patients and members. As our businesses work together to deliver a technology-powered care engagement experience, we continue to deliver strong performance. We uniquely enable what our customers want the most: simple, connected and convenient access to affordable, quality healthcare, where, when, and how they want it."

- David Joyner, CVS Health Chairman and CEO

Total revenues

$106.1

$98.9

At least $414.0

Diluted earnings per share

$2.31

$0.80

$6.84-$7.04

Adjusted EPS (2)

$2.58

$1.81

$7.90-$8.10

Second quarter GAAP diluted EPS of $2.31 increased from $0.80 in the prior year. Adjusted EPS of $2.58 increased from $1.81 in the prior year, primarily due to improved adjusted operating income in the Health Care Benefits segment, reflecting continued execution on the Health Care Benefits segment margin recovery plan.

The Company is increasing its full-year 2026 GAAP diluted EPS, Adjusted EPS and cash flow from operations guidance to reflect increases in the Health Care Benefits and Pharmacy & Consumer Wellness segments, while maintaining a cautious view for the remainder of the year in light of continued elevated cost trends and the potential for macro headwinds.

Total revenues

$106,096

$98,915

$7,181

$206,522

$193,503

$13,019

Operating income

4,703

2,381

2,322

9,383

5,755

3,628

Adjusted operating income (1)

5,157

3,808

1,349

10,307

8,387

1,920

Net income

2,995

1,013

1,982

5,952

2,795

3,157

Diluted earnings per share

$2.31

$0.80

$1.51

$4.61

$2.21

$2.40

Adjusted EPS (2)

$2.58

$1.81

$0.77

$5.16

$4.06

$1.10

For the three months ended June 30, 2026 compared to the prior year:

• Total revenues increased 7.3% driven by revenue growth across all operating segments.

• Operating income increased 97.5% primarily due to the increase in adjusted operating income described below and the absence of $833 million in legacy litigation charges recorded in the prior year.

• Adjusted operating income increased 35.4% driven by increases across all operating segments. See pages 3 through 5 for additional discussion of the adjusted operating income performance of the Company's segments.

• CVS Health launched a comprehensive approach to GLP-1 support across its CVS Pharmacy ® and MinuteClinic ® locations. New offerings include expanded pharmacy support designed to help patients access these treatments and stay on them, and a new $29 MinuteClinic virtual visit that connects eligible adults with licensed clinicians who can evaluate and, where clinically appropriate, prescribe GLP-1 therapy. In addition, CVS Pharmacy participates in the Centers for Medicare & Medicaid Services Medicare GLP-1 Bridge program, which runs through December 31, 2027. Eligible Medicare beneficiaries can access certain GLP-1 medications for $50 per month, offering more predictable and affordable pricing for patients who qualify.

• CVS Caremark updated its most common commercial formularies, expanding GLP-1 options for members, building on its industry-leading efforts to help patients get FDA-approved weight management medications at an affordable cost.

• CVS Health is deploying agentic AI to simplify and streamline call center interactions for members and providers engaging with Aetna ® and CVS Caremark ® businesses on a secure call center platform.

• Aetna launched its second generation Aetna Claims Assist Manager ("CAM"), an AI-powered agentic claims advisor platform designed to streamline claims processing and improve payment accuracy. CAM reduces processing time by over 20% for complex claims that require manual review, helping providers get paid faster and more consistently.

The Health Care Benefits segment offers a full range of insured and self-insured ("ASC") medical, pharmacy, dental and behavioral health products and services. The segment results for the three and six months ended June 30, 2026 and 2025 were as follows:

Total revenues

$37,538

$36,258

$1,280

$73,509

$71,068

$2,441

Adjusted operating income (1)

2,426

1,308

1,118

5,467

3,301

2,166

Medical benefit ratio ("MBR") (3)

87.4%

89.9%

(2.5)%

86.0%

88.6%

(2.6)%

Medical membership (4)

26.0

26.7

(0.7)

• Total revenues increased 3.5% for the three months ended June 30, 2026 compared to the prior year primarily driven by an increase in the Government business, partially offset by a decline as a result of the Company's exit of the individual exchange business in 2026.

• Adjusted operating income increased 85.5% for the three months ended June 30, 2026 compared to the prior year primarily driven by improved underlying performance in the Government business and the absence of a $471 million premium deficiency reserve recorded within the Group Medicare Advantage product line in the prior year.

• The MBR decreased to 87.4% in the three months ended June 30, 2026 compared to 89.9% in the prior year primarily driven by improved underlying performance in the Government business and the absence of the premium deficiency reserve recorded in the prior year.

• Medical membership as of June 30, 2026 of 26.0 million remained consistent compared with March 31, 2026.

• Prior years' health care costs payable estimates developed favorably by $1.2 billion during the six months ended June 30, 2026.

• Days claims payable were 41.7 days as of June 30, 2026, a decrease of 1.2 days compared to March 31, 2026.

The Health Services segment provides a full range of pharmacy benefit management solutions, delivers health care services in its medical clinics, virtually, and in the home, and offers provider enablement solutions. The segment results for the three and six months ended June 30, 2026 and 2025 were as follows:

Total revenues

$51,795

$46,453

$5,342

$100,032

$89,915

$10,117

Adjusted operating income (1)

1,733

1,575

158

3,222

3,178

44

Pharmacy claims processed (5) (6)

473.0

469.0

4.0

937.7

933.2

4.5

• Total revenues increased 11.5% for the three months ended June 30, 2026 compared to the prior year primarily driven by pharmacy drug mix and brand inflation, partially offset by continued pharmacy client price improvements.

• Adjusted operating income increased 10.0% for the three months ended June 30, 2026 compared to the prior year primarily driven by improved purchasing economics, pharmacy drug mix and modest improvement in the Company's health care delivery business. These increases were partially offset by continued pharmacy client price improvements.

• Pharmacy claims processed remained consistent on a 30-day equivalent basis for the three months ended June 30, 2026 compared to the prior year.

The Pharmacy & Consumer Wellness segment dispenses prescriptions in its retail pharmacies and through its infusion operations, provides ancillary pharmacy services including pharmacy patient care programs 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. The segment results for the three and six months ended June 30, 2026 and 2025 were as follows:

Total revenues

$33,816

$33,581

$235

$65,805

$65,493

$312

Adjusted operating income (1)

1,475

1,338

137

2,672

2,651

21

Prescriptions filled (5) (6)

457.0

438.1

18.9

908.2

873.6

34.6

• Total revenues increased slightly for the three months ended June 30, 2026 compared to the prior year primarily driven by pharmacy drug mix, increased prescription volume, including contributions from the Company's Rite Aid asset acquisitions which were completed during the third quarter of 2025, and brand inflation. These increases were largely offset by regulatory-related price reductions on certain drugs, the impact of recent generic drug introductions and pharmacy reimbursement pressure.

• Adjusted operating income increased 10.2% for the three months ended June 30, 2026 compared to the prior year primarily driven by core pharmacy strength and contributions from the Company's Rite Aid asset acquisitions. These increases were partially offset by continued business investments and the impact of consumer dynamics.

• Prescriptions filled increased 4.3% on a 30-day equivalent basis for the three months ended June 30, 2026 compared to the prior year primarily driven by incremental volume resulting from the Company's Rite Aid prescription file acquisitions and increased utilization, partially offset by the absence of long-term care pharmacy prescription volume following the deconsolidation of Omnicare, LLC in September 2025.

CVS Health is a leading health solutions company simplifying health care one person, one family and one community at a time. As of June 30, 2026, the Company had approximately 9,000 retail pharmacy locations, more than 1,000 walk-in and primary care medical clinics and a leading pharmacy benefits manager with approximately 87 million plan members. The Company also serves an estimated 37 million people through a broad range of health insurance products and related services. The Company's integrated model uses personalized, technology driven services to connect people to simply better health, increasing access to quality care, delivering better outcomes, and lowering overall costs.

The Company will be holding a conference call today for investors at 8:00 a.m. (Eastern Time) to discuss its second quarter results. An audio webcast of the call will be broadcast simultaneously for all interested parties through the Investor Relations section of the CVS Health website at http://investors.cvshealth.com. This webcast will be archived and available on the website for a one-year period following the conference call.

The Company presents both GAAP and non-GAAP financial measures in this press release to assist in the comparison of the Company's past financial performance with its current financial performance. See "Non-GAAP Financial Information" beginning on page 10 and endnotes beginning on page 20 for explanations of non-GAAP financial measures presented in this press release. See pages 12 through 14 and page 19 for reconciliations of each non-GAAP financial measure used in this release to the most directly comparable GAAP financial measure.

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of CVS Health Corporation. Statements in this press release that are forward-looking include, but are not limited to, the full-year 2026 guidance information, Mr. Joyner's quotation and the information included in the reconciliations and endnotes. By their nature, all forward-looking statements are not guarantees of future performance or results and are subject to risks and uncertainties that are difficult to predict and/or quantify. Actual results may differ materially from those contemplated by the forward-looking statements due to the risks and uncertainties described in our Securities and Exchange Commission ("SEC") filings, including those set forth in the Risk Factors section and under the heading "Cautionary Statement Concerning Forward-Looking Statements" in our most recently filed Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2026 and June 30, 2026 and our Current Reports on Form 8-K.

You are cautioned not to place undue reliance on CVS Health's forward-looking statements. CVS Health's forward-looking statements are and will be based upon management's then-current views and assumptions regarding future events and operating performance, and are applicable only as of the dates of such statements. CVS Health does not assume any duty to update or revise forward-looking statements, whether as a result of new information, future events, uncertainties or otherwise.

- Tables Follow -

Revenues:

Products

$66,219

$60,607

$128,445

$118,276

Premiums

35,117

34,195

68,908

67,015

Services

4,119

3,626

7,954

7,205

Net investment income

641

487

1,215

1,007

Total revenues

106,096

98,915

206,522

193,503

Operating costs:

Cost of products sold

58,862

54,005

114,306

105,062

Health care costs

31,485

31,317

60,843

60,452

Operating expenses

11,046

11,212

21,990

22,234

Total operating costs

101,393

96,534

197,139

187,748

Operating income

4,703

2,381

9,383

5,755

Interest expense

(757)

(763)

(1,531)

(1,548)

Other income

31

29

63

57

Income before income tax provision

3,977

1,647

7,915

4,264

Income tax provision

982

634

1,963

1,469

Net income

2,995

1,013

5,952

2,795

Net (income) loss attributable to noncontrolling interests

(16)

8

(30)

5

Net income attributable to CVS Health

$2,979

$1,021

$5,922

$2,800

Net income per share attributable to CVS Health:

Basic

$2.33

$0.81

$4.64

$2.22

Diluted

$2.31

$0.80

$4.61

$2.21

Weighted average shares outstanding:

Basic

1,279

1,266

1,276

1,264

Diluted

1,287

1,270

1,283

1,267

Assets:

Cash and cash equivalents

$11,329

$8,453

Investments

2,629

2,145

Accounts receivable, net

40,309

39,779

Inventories

17,622

19,246

Other current assets

3,457

5,091

Total current assets

75,346

74,714

Long-term investments

33,247

32,669

Property and equipment, net

13,168

13,083

Operating lease right-of-use assets

14,451

14,973

Goodwill

85,478

85,478

Intangible assets, net

24,644

25,508

Other assets

7,434

7,113

Total assets

$253,768

$253,538

Liabilities:

Accounts payable

$17,167

$17,641

Pharmacy claims and discounts payable

26,203

26,344

Health care costs payable

16,313

15,399

Accrued expenses and other current liabilities

22,477

22,387

Other insurance liabilities

1,009

1,116

Current portion of operating lease liabilities

1,914

1,737

Current portion of long-term debt

1,958

4,068

Total current liabilities

87,041

88,692

Long-term operating lease liabilities

12,982

13,643

Long-term debt

59,452

60,502

Deferred income taxes

3,766

3,832

Other long-term insurance liabilities

4,516

4,716

Other long-term liabilities

6,112

6,771

Total liabilities

173,869

178,156

Shareholders' equity:

Preferred stock

—

—

Common stock and capital surplus

50,968

50,402

Treasury stock

(36,852)

(36,790)

Retained earnings

65,398

61,196

Accumulated other comprehensive income

188

406

Total CVS Health shareholders' equity

79,702

75,214

Noncontrolling interests

197

168

Total shareholders' equity

79,899

75,382

Total liabilities and shareholders' equity

$253,768

$253,538

Cash flows from operating activities:

Reconciliation of net income to net cash provided by operating activities:

Net income

$5,952

$2,795

Adjustments required to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

2,241

2,325

Stock-based compensation

442

262

Loss on sale of subsidiary

—

236

Deferred income taxes and other items

(241)

(283)

Change in operating assets and liabilities

2,200

1,118

Net cash provided by operating activities

10,594

6,453

Cash flows from investing activities:

Proceeds from sales and maturities of investments

7,483

6,866

Purchases of investments

(8,704)

(7,186)

Purchases of property and equipment

(1,540)

(1,350)

Acquisitions

(9)

(139)

Other

12

23

Net cash used in investing activities

(2,758)

(1,786)

Cash flows from financing activities:

Commercial paper borrowings (repayments), net

—

921

Repayments of long-term debt

(3,287)

(762)

Dividends paid

(1,725)

(1,706)

Proceeds from exercise of stock options

217

191

Payments for taxes related to net share settlement of equity awards

(154)

(125)

Other

(62)

(45)

Net cash used in financing activities

(5,011)

(1,526)

Net increase in cash, cash equivalents and restricted cash

2,825

3,141

Cash, cash equivalents and restricted cash at the beginning of the period

8,712

8,884

Cash, cash equivalents and restricted cash at the end of the period

$11,537

$12,025

The Company uses non-GAAP financial measures to analyze underlying business performance and trends. The Company believes that providing these non-GAAP financial measures enhances the Company's and investors' ability to compare the Company's past financial performance with its current and expected future performance. These non-GAAP financial measures, which are included in this press release and which may be referred to on the conference call discussing the Company's second quarter financial results, are provided as supplemental information to the financial measures presented in this press release and discussed on the conference call that are calculated and presented in accordance with GAAP. Non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures determined or calculated in accordance with GAAP. The Company's definitions of its non-GAAP financial measures may not be comparable to similarly titled measures reported by other companies.

Non-GAAP financial measures such as consolidated adjusted operating income, adjusted earnings per share ("EPS") and adjusted income attributable to CVS Health exclude from the relevant GAAP metrics, as applicable: 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.

For the periods covered in this press release, the following items are excluded from the non-GAAP financial measures described above, as applicable, because the Company believes they neither relate to the ordinary course of the Company's business nor reflect the Company's underlying business performance:

• The Company's acquisition activities have resulted in the recognition of intangible assets as required under the acquisition method of accounting which consist primarily of trademarks, customer contracts/relationships, covenants not to compete, technology, provider networks and value of business acquired. Definite-lived intangible assets are amortized over their estimated useful lives and are tested for impairment when events indicate that the carrying value may not be recoverable. The amortization of intangible assets is reflected in operating expenses within each segment. Although intangible assets contribute to the Company's revenue generation, the amortization of intangible assets does not directly relate to the underwriting of the Company's insurance products, the services performed for the Company's customers or the sale of the Company's products or services. Additionally, intangible asset amortization expense typically fluctuates based on the size and timing of the Company's acquisition activity. Accordingly, the Company believes excluding the amortization of intangible assets enhances the Company's and investors' ability to compare the Company's past financial performance with its current performance and to analyze underlying business performance and trends. Intangible asset amortization excluded from the related non-GAAP financial measure represents the entire amount recorded within the Company's GAAP financial statements, and the revenue generated by the associated intangible assets has not been excluded from the related non-GAAP financial measure. Intangible asset amortization is excluded from the related non-GAAP financial measure because the amortization, unlike the related revenue, is not affected by operations of any particular period unless an intangible asset becomes impaired or the estimated useful life of an intangible asset is revised.

• The Company's net realized capital gains and losses arise from various types of transactions, primarily in the course of managing a portfolio of assets that support the payment of insurance liabilities. Net realized capital gains and losses are reflected in net investment income (loss) within each segment. These capital gains and losses are the result of investment decisions, market conditions and other economic developments that are unrelated to the performance of the Company's business, and the amount and timing of these capital gains and losses do not directly relate to the underwriting of the Company's insurance products, the services performed for the Company's customers or the sale of the Company's products or services. Accordingly, the Company believes excluding net realized capital gains and losses enhances the Company's and investors' ability to compare the Company's past financial performance with its current performance and to analyze underlying business performance and trends.

• During the three and six months ended June 30, 2026 and 2025, the acquisition-related integration costs relate to the acquisitions of Signify Health, Inc. and Oak Street Health, Inc. The acquisition-related integration costs are reflected in operating expenses within the Corporate/Other segment.

• 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. The legacy litigation charges were reflected in operating expenses within the Pharmacy & Consumer Wellness and Health Services segments.

• 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, as well as costs incurred in connection with the wind down of the Company's ACO REACH operations. The loss on Accountable Care assets was reflected in operating expenses within the Health Services segment.

• 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. The office real estate optimization charges were reflected in operating expenses within each segment.

• The corresponding tax benefit or expense related to the items excluded from adjusted income attributable to CVS Health and Adjusted EPS above. The nature of each non-GAAP adjustment is evaluated to determine whether a discrete adjustment should be made to the adjusted income tax provision.

See endnotes (1) and (2) on page 20 for definitions of non-GAAP financial measures. Reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure are presented on pages 12 through 14 and page 19.

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):

Operating income (loss) (GAAP measure)

$2,191

$1,603

$1,411

$ (502)

$4,703

Amortization of intangible assets

237

130

64

—

431

Net realized capital (gains) losses

(2)

—

—

15

13

Acquisition-related integration costs

—

—

—

10

10

Adjusted operating income (loss) (1)

$2,426

$1,733

$1,475

$ (477)

$5,157

Operating income (loss) (GAAP measure)

$1,002

$1,102

$736

$ (459)

$2,381

Amortization of intangible assets

293

141

60

—

494

Net realized capital losses

13

—

—

14

27

Acquisition-related integration costs

—

—

—

28

28

Legacy litigation charges

—

291

542

—

833

Loss on Accountable Care assets

—

41

—

—

41

Office real estate optimization charges

—

—

—

4

4

Adjusted operating income (loss) (1)

$1,308

$1,575

$1,338

$ (413)

$3,808

Operating income (loss) (GAAP measure)

$4,997

$2,950

$2,545

$ (1,109)

$9,383

Amortization of intangible assets

473

272

127

1

873

Net realized capital (gains) losses

(3)

—

—

32

29

Acquisition-related integration costs

—

—

—

22

22

Adjusted operating income (loss) (1)

$5,467

$3,222

$2,672

$ (1,054)

$10,307

Operating income (loss) (GAAP measure)

$2,676

$2,329

$1,600

$ (850)

$5,755

Amortization of intangible assets

587

285

120

1

993

Net realized capital (gains) losses

34

(15)

—

29

48

Acquisition-related integration costs

—

—

—

73

73

Legacy litigation charges

—

291

929

—

1,220

Loss on Accountable Care assets

—

288

—

—

288

Office real estate optimization charges

4

—

2

4

10

Adjusted operating income (loss) (1)

$3,301

$3,178

$2,651

$ (743)

$8,387

The following are reconciliations of net income attributable to CVS Health to adjusted income attributable to CVS Health and calculations of GAAP diluted EPS and Adjusted EPS:

Net income attributable to CVS Health (GAAP measure)

$2,979

$2.31

$1,021

$0.80

Amortization of intangible assets

431

0.33

494

0.39

Net realized capital losses

13

0.01

27

0.02

Acquisition-related integration costs

10

0.01

28

0.02

Legacy litigation charges

—

—

833

0.66

Loss on Accountable Care assets

—

—

41

0.03

Office real estate optimization charges

—

—

4

—

Tax impact of non-GAAP adjustments

(109)

(0.08)

(144)

(0.11)

Adjusted income attributable to CVS Health (2)

$3,324

$2.58

$2,304

$1.81

Weighted average diluted shares outstanding

1,287

1,270

Net income attributable to CVS Health (GAAP measure)

$5,922

$4.61

$2,800

$2.21

Amortization of intangible assets

873

0.68

993

0.78

Net realized capital losses

29

0.02

48

0.04

Acquisition-related integration costs

22

0.02

73

0.06

Legacy litigation charges

—

—

1,220

0.96

Loss on Accountable Care assets

—

—

288

0.23

Office real estate optimization charges

—

—

10

0.01

Tax impact of non-GAAP adjustments

(230)

(0.17)

(284)

(0.23)

Adjusted income attributable to CVS Health (2)

$6,616

$5.16

$5,148

$4.06

Weighted average diluted shares outstanding

1,283

1,267

The following are reconciliations of financial measures of the Company's segments to the consolidated totals:

Total revenues

$37,538

$51,795

$33,816

$147

$ (17,200)

$106,096

Adjusted operating income (loss) (1)

2,426

1,733

1,475

(477)

—

5,157

Total revenues

$36,258

$46,453

$33,581

$96

$ (17,473)

$98,915

Adjusted operating income (loss) (1)

1,308

1,575

1,338

(413)

—

3,808

Total revenues

$73,509

$100,032

$65,805

$273

$ (33,097)

$206,522

Adjusted operating income (loss) (1)

5,467

3,222

2,672

(1,054)

—

10,307

Total revenues

$71,068

$89,915

$65,493

$229

$ (33,202)

$193,503

Adjusted operating income (loss) (1)

3,301

3,178

2,651

(743)

—

8,387

(a)

Intersegment revenue eliminations relate to intersegment revenue generating activities that occur between the Health Care Benefits segment, the Health Services segment, and/or the Pharmacy & Consumer Wellness segment.

The following table summarizes the Health Care Benefits segment's performance for the respective periods:

Revenues:

Premiums

$35,119

$34,184

$68,911

$66,992

$935

2.7%

$1,919

2.9%

Services

1,911

1,667

3,628

3,282

244

14.6%

346

10.5%

Net investment income

508

407

970

794

101

24.8%

176

22.2%

Total revenues

37,538

36,258

73,509

71,068

1,280

3.5%

2,441

3.4%

Health care costs

30,692

30,740

59,271

59,377

(48)

(0.2)%

(106)

(0.2)%

MBR (Health care costs as a% of premium revenues) (3)

87.4%

89.9%

86.0%

88.6%

(250)

bps

(260)

bps

Operating expenses

$4,655

$4,516

$9,241

$9,015

$139

3.1%

$226

2.5%

Operating expenses as a% of total revenues

12.4%

12.5%

12.6%

12.7%

Operating income

$2,191

$1,002

$4,997

$2,676

$1,189

118.7%

$2,321

86.7%

Operating income as a% of total revenues

5.8%

2.8%

6.8%

3.8%

Adjusted operating income (1)

$2,426

$1,308

$5,467

$3,301

$1,118

85.5%

$2,166

65.6%

Adjusted operating income as a% of total revenues

6.5%

3.6%

7.4%

4.6%

Premium revenues (by business):

Government

$28,494

$25,930

$56,277

$50,832

$2,564

9.9%

$5,445

10.7%

Commercial

6,625

8,254

12,634

16,160

(1,629)

(19.7)%

(3,526)

(21.8)%

The following table summarizes the Health Care Benefits segment's medical membership for the respective periods:

Medical membership: (4)

Commercial

2,487

15,833

18,320

2,462

15,872

18,334

3,447

15,350

18,797

3,608

15,251

18,859

Medicare Advantage

4,202

—

4,202

4,175

—

4,175

4,267

—

4,267

4,240

—

4,240

Medicare Supplement

1,176

—

1,176

1,192

—

1,192

1,202

—

1,202

1,236

—

1,236

Medicaid

1,964

361

2,325

1,938

366

2,304

1,952

373

2,325

1,985

401

2,386

Total medical membership

9,829

16,194

26,023

9,767

16,238

26,005

10,868

15,723

26,591

11,069

15,652

26,721

Medicare Prescription Drug Plan (stand-alone)

3,870

3,889

4,041

4,065

The following table summarizes the Health Care Benefits segment's days claims payable for the respective periods:

Days Claims Payable (7)

41.7

42.9

38.9

40.9

Revenues:

Products

$49,216

$44,223

$94,942

$85,358

$4,993

11.3%

$9,584

11.2%

Services

2,580

2,233

5,091

4,546

347

15.5%

545

12.0%

Net investment income (loss)

(1)

(3)

(1)

11

2

66.7%

(12)

(109.1)%

Total revenues

51,795

46,453

100,032

89,915

5,342

11.5%

10,117

11.3%

Cost of products sold

47,908

43,080

92,627

83,195

4,828

11.2%

9,432

11.3%

Health care costs

1,350

1,101

2,652

2,148

249

22.6%

504

23.5%

Gross profit (8)

2,537

2,272

4,753

4,572

265

11.7%

181

4.0%

Gross margin (Gross profit as a% of total revenues) (8)

4.9%

4.9%

4.8%

5.1%

Operating expenses

$934

$1,170

$1,803

$2,243

$ (236)

(20.2)%

$ (440)

(19.6)%

Operating expenses as a% of total revenues

1.8%

2.5%

1.8%

2.5%

Operating income

$1,603

$1,102

$2,950

$2,329

$501

45.5%

$621

26.7%

Operating income as a% of total revenues

3.1%

2.4%

2.9%

2.6%

Adjusted operating income (1)

$1,733

$1,575

$3,222

$3,178

$158

10.0%

$44

1.4%

Adjusted operating income as a% of total revenues

3.3%

3.4%

3.2%

3.5%

Pharmacy claims processed (5) (6)

473.0

469.0

937.7

933.2

4.0

0.9%

4.5

0.5%

Pharmacy & Consumer Wellness segment The following table summarizes the Pharmacy & Consumer Wellness segment's performance for the respective periods:

Revenues:

Products

$33,152

$32,942

$64,491

$64,227

$210

0.6%

$264

0.4%

Services

664

639

1,314

1,266

25

3.9%

48

3.8%

Total revenues

33,816

33,581

65,805

65,493

235

0.7%

312

0.5%

Cost of products sold

27,282

27,554

53,072

53,358

(272)

(1.0)%

(286)

(0.5)%

Gross profit (8)

6,534

6,027

12,733

12,135

507

8.4%

598

4.9%

Gross margin (Gross profit as a% of total revenues) (8)

19.3%

17.9%

19.3%

18.5%

Operating expenses

$5,123

$5,291

$10,188

$10,535

$ (168)

(3.2)%

$ (347)

(3.3)%

Operating expenses as a% of total revenues

15.1%

15.8%

15.5%

16.1%

Operating income

$1,411

$736

$2,545

$1,600

$675

91.7%

$945

59.1%

Operating income as a% of total revenues

4.2%

2.2%

3.9%

2.4%

Adjusted operating income (1)

$1,475

$1,338

$2,672

$2,651

$137

10.2%

$21

0.8%

Adjusted operating income as a% of total revenues

4.4%

4.0%

4.1%

4.0%

Revenues (by major goods/service lines):

Pharmacy

$27,781

$27,631

$53,904

$53,707

$150

0.5%

$197

0.4%

Front Store

5,407

5,368

10,666

10,611

39

0.7%

55

0.5%

Other

628

582

1,235

1,175

46

7.9%

60

5.1%

Prescriptions filled (5) (6)

457.0

438.1

908.2

873.6

18.9

4.3%

34.6

4.0%

Same store sales increase: (9)

Total

2.6%

15.4%

2.7%

14.8%

Pharmacy

2.9%

18.1%

3.0%

17.9%

Front Store

1.0%

3.4%

1.1%

1.5%

Prescription volume (6)

7.0%

6.4%

6.9%

6.5%

The following reconciliations of projected net income attributable to CVS Health to projected adjusted income attributable to CVS Health and calculations of projected GAAP diluted EPS and projected Adjusted EPS contain forward-looking information. All forward-looking information involves risks and uncertainties. Actual results may differ materially from those contemplated by the forward-looking information for a number of reasons as described in our SEC filings, including those set forth in the Risk Factors section and under the heading "Cautionary Statement Concerning Forward-Looking Statements" in our most recently filed Annual Report on Form 10-K and our most recently filed Quarterly Report on Form 10-Q. See "Non-GAAP Financial Information" earlier in this press release and endnote (2) later in this press release for more information on how we calculate Adjusted EPS.

Net income attributable to CVS Health (GAAP measure)

$8,810

$6.84

$9,065

$7.04

Non-GAAP adjustments:

Amortization of intangible assets

1,730

1.34

1,730

1.34

Net realized capital losses

29

0.02

29

0.02

Acquisition-related integration costs

80

0.06

80

0.06

Tax impact of non-GAAP adjustments

(463)

(0.36)

(463)

(0.36)

Adjusted income attributable to CVS Health (2)

$10,186

$7.90

$10,441

$8.10

Weighted average diluted shares outstanding

1,289

1,289

(1) The Company defines adjusted operating income as operating income (GAAP measure) 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, such as acquisition-related integration costs, certain legacy litigation charges, losses on Accountable Care assets and office real estate optimization charges. The chief operating decision maker (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. The consolidated measure is not determined in accordance with GAAP and should not be considered a substitute for, or superior to, the most directly comparable GAAP measure, consolidated operating income. See "Non-GAAP Financial Information" earlier in this press release for additional information regarding the items excluded from consolidated operating income in determining consolidated adjusted operating income.

(2) GAAP diluted earnings per share and Adjusted EPS, respectively, are calculated by dividing net income attributable to CVS Health and adjusted income attributable to CVS Health by the Company's weighted average diluted shares outstanding. The Company defines adjusted income attributable to CVS Health as net income attributable to CVS Health (GAAP measure) 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, such as acquisition-related integration costs, certain legacy litigation charges, losses on Accountable Care assets, office real estate optimization charges, as well as the corresponding income tax benefit or expense related to the items excluded from adjusted income attributable to CVS Health. See "Non-GAAP Financial Information" earlier in this press release for additional information regarding the items excluded from net income attributable to CVS Health in determining adjusted income attributable to CVS Health.

(3) Medical benefit ratio is calculated by dividing the Health Care Benefits segment's health care costs by premium revenues and represents the percentage of premium revenues spent on medical benefits for the segment's insured members. Management uses MBR to assess the underlying business performance and underwriting of its insurance products, understand variances between actual results and expected results and identify trends in period-over-period results. MBR provides management and investors with information useful in assessing the operating results of the Health Care Benefits segment's insured products.

(4) Medical membership represents the number of members covered by the Health Care Benefits segment's insured and ASC medical products and related services at a specified point in time. Management uses this metric to understand variances between actual medical membership and expected amounts as well as trends in period-over-period results. This metric provides management and investors with information useful in understanding the impact of medical membership on the Health Care Benefits segment's total revenues and operating results.

(5) Pharmacy claims processed represents the number of prescription claims processed through the Company's pharmacy benefits manager and dispensed by either its retail network pharmacies or the Company's mail and specialty pharmacies. Prescriptions filled represents the number of prescriptions dispensed through the Pharmacy & Consumer Wellness segment's retail pharmacies and infusion services operations, as well as through the Omnicare long-term care pharmacies prior to their deconsolidation in September 2025. Management uses these metrics to understand variances between actual claims processed and prescriptions dispensed, respectively, and expected amounts as well as trends in period-over-period results. These metrics provide management and investors with information useful in understanding the impact of pharmacy claim volume and prescription volume, respectively, on segment total revenues and operating results.

(6) Includes an adjustment to convert 90-day prescriptions to the equivalent of three 30-day prescriptions. This adjustment reflects the fact that these prescriptions include approximately three times the amount of product days supplied compared to a normal prescription.

(7) Days claims payable is calculated by dividing the Health Care Benefits segment's health care costs payable at the end of each quarter by its average health care costs per day during such quarter. Management and investors use this metric as one of the indicators of the adequacy of the health care costs payable liability at the end of each quarter.

(8) Gross profit is calculated as the segment's total revenues less its cost of products sold, and, for the Health Services segment, health care costs. Gross margin is calculated by dividing the segment's gross profit by its total revenues and represents the percentage of total revenues that remains after incurring direct costs associated with the segment's products sold and services provided. Gross margin provides investors with information that may be useful in assessing the operating results of the Company's Health Services and Pharmacy & Consumer Wellness segments.

(9) 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.