The Cigna Group

Ladies and gentlemen, thank you for standing by for the Cigna Group's second quarter 2025 results review. At this time, all callers are in a listen-only mode. We will conduct a question and answer session later during the conference and review procedures on how to enter queue to ask questions at that time. If you should require assistance during the call, please press star zero on your touchtone phone. As a reminder, ladies and gentlemen, this conference, including the Q&A session, is being recorded. We'll begin by turning the conference over to Ralph Jacoby. Please go ahead.

Thanks. Good morning, everyone. Thanks for joining today's call. I'm Ralph Jacoby, Senior Vice President of Investor Relations. With me on the line this morning are David Cordani, the Cigna Group's Chairman and Chief Executive Officer, Brian Evenko, President and Chief Operating Officer, and Anne Dennison, Chief Financial Officer. In our remarks today, David, Brian, and Anne will cover a number of topics, including our second quarter 2025 financial results and our financial outlook for 2025. Following their prepared remarks, David, Brian, and Ann will be available for Q&A. As noted in our earnings release, when describing our financial results, we use certain financial measures, including adjusted income from operations and adjusted revenues, which are not determined in accordance with accounting principles generally accepted in the United States, otherwise known as GAAP. A reconciliation of these measures to the most directly comparable gap measures, shareholders' net income, and total revenues, respectively, is contained in today's earnings release, which is posted in the investor relations section of the CignaGroup.com. We use the term labeled adjusted income from operations and adjusted earnings per share on the same basis as our principal measures of financial performance. In our remarks today, we will be making some forward-looking statements, including statements regarding our outlook for 2025 and future performance. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our current expectations. A description of these risks and uncertainties is contained in the cautionary note to today's earnings release and in our most recent reports filed with the SEC. Regarding our results in the second quarter, we recorded net after-tax special item charges of $171 million, or 64 cents per share. Additional details of the special items are included in our quarterly financial supplement. Additionally, please note that when we make prospective comments regarding financial performance, including our full-year 2025 outlook, we will do so on a basis that includes the potential impact of future share purchases and anticipated 2025 dividends. And with that, I'll turn the call over to David.

Thanks, Ralph. Good morning, everyone. And thank you for joining our call. We entered the second quarter with momentum, and I'm pleased to report that the Cigna Group delivered another quarter of differentiated financial results. And recognizing the meaningful disruption in the industry, we're also pleased to reaffirm our guidance for full year 2025. At the Cigna Group, we continue to meet our financial commitments by delivering innovative new solutions to improve access and affordability for customers and patients, and working to build a better, more sustainable healthcare model. At the same time, we also remain laser-focused on delivering every day for the benefit of those we serve. Today for our discussion, briefly I'll discuss how the strength and durable nature of our model enabled us to continue to grow. Then Brian will discuss the performance of our growth platforms and how we continue to expand our total addressable market. After that, Ann will provide details on our financial performance in the quarter and we'll take your questions. So let's get started. In the second quarter, we delivered $67.2 billion in total revenue and grew adjusted earnings per share to $7.20. This builds on our long track record of sustained attractive results, where over the average of each of the last three, five, and ten years, we've achieved our growth algorithm of 10% to 14% compounded adjusted EPS growth. Our results are a direct reflection of our clear and deliberate strategy to position the Cigna Group with differentiated services and integrated benefit capabilities, coupled with strong execution and led by the most tenured and capable leadership team in the industry. At a macro level, we continue to operate with the assumption that the environment will remain dynamic. We see eroding health status, affordability, and access challenges as key forces of change in the healthcare system in the U.S. and around the globe. In addition, we have operated in and will continue to operate in this space with elevated regulatory and legislative activity, as well as significant technological, clinical, and pharmacological advances. We have a number of differentiators which enable us to lead through these dynamic markets. The first is our orientation toward anticipating and, in some instances, creating constructive disruption, which better positions us to identify opportunities. This is a foundational part of our strategy. For us, it means listening to our customers, patients, and clients and leveraging their feedback to continue to evolve, innovate, and deliver even more value. For example, as we stepped into 2025, the forces of change in healthcare further accelerated our efforts to help shape a more sustainable healthcare system and, in part, fueled our customer-focused commitments and actions we announced earlier this year. These commitments, which we refer to as our commitment to better, call on us to deliver easier access to care, better support to help customers and patients navigate the healthcare system, increased value, greater accountability, and greater transparency. This quarter, we took another step forward with Cigna Healthcare introducing a new AI-powered virtual assistant to improve our customers' experience during common interactions, such as checking benefits, estimating costs, and finding care. As it relates to regulatory and legislative activity, we continue to proactively lean in with a partnership orientation. We continue to believe in and embrace public-private partnerships, which are essential for the healthcare system to continue to be responsive to all stakeholder needs. And we are proactively working to bring forward new solutions with the current administration, Congress, and within states. The recent industry announcement to further streamline and simplify prior authorizations for the benefit of patients and physicians is a good example of this, and we partnered closely with HHS on this advancement. Each of these actions represent a commitment from the Cigna Group to build a better future, and I'm pleased that we continue to make good progress. Our second differentiator is our diverse portfolio of businesses, which provides us with the strategic flexibility pursue multiple avenues for delivering and capturing value. This is made possible by our service-based model, which provides us with significant amount of agility and nimbleness. We've deliberately shaped our services-based model over years, and today they are configured in three strong platforms that together provide us with a diversified position and multiple pathways for growth, serving employers, health plans, governmental agencies, and healthcare delivery systems. In Evernote, that includes specialty and care services and our pharmacy benefits services business. And in our significant healthcare portfolio, our integrated benefits offerings, both in the United States and globally. Our proven approach leverages the combined strength and capabilities of these platforms to create even more value for the benefit of those we serve. Over the long term, the way we've architected our company, coupled with our strategic choices, including a capital-like model, has given us both the resilient model and the ability to pivot and evolve as the marketplace changes. Now, a third key differentiator for us is our relentless execution fueled by our tenured and talented team. Ultimately, our results are made possible by our coworkers, including the most experienced enterprise leadership team in the industry. And along with the great depth and continuity of our leadership, We also continue to strategically infuse talent into our company in areas such as technology and clinical. The strength of our team continues to be a key differentiator in our ability to consistently execute on our strategy and deliver on our core fundamentals. Our team's deep expertise in the healthcare industry and strong understanding of the competitive landscape enables us to adapt quickly. This strategic agility helps us navigate challenging environments as well as to identify and seize new opportunities for growth. We have drawn upon each of these differentiators time and time again to continue to grow in times of uncertainty, from the launch of the ACA to leading through the global pandemic. And during each of these events, we have sought to innovate through and deliver sustainable value for our customers, patients, clients, and shareholders. As a result, we've delivered 13% compounded adjusted EPS CAGR over the last decade. Now to wrap up my comments. Against the backdrop of a dynamic environment, we continue to deliver and are well positioned for the remainder of 2025. Our second quarter results underscore the strength of our diverse portfolio of businesses and our disciplined focus on innovation and partnership. We are confident in our ability to sustainably deliver 10% to 14% compounded adjusted EPS growth over the strategic horizon, along with an attractive dividend. And with that, I'll turn the call over to Brian.