The Cigna Group

Ladies and gentlemen, thank you for standing by for the Cigna Group's fourth 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 Cardani, the Cigna Group's Chairman and Chief Executive Officer, Brian Avenko, President and Chief Operating Officer, and Ann Dennison, Chief Financial Officer. In our remarks today, David, Brian, and Ann will cover a number of topics, including our fourth quarter and full year 2025 financial results and our financial outlook for 2026. 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 GAAP measures, shareholders net income and total revenues, respectively, is contained in today's earnings release, which is posted in the investor relations section of thecignagroup.com. We use the term labeled adjusted income from operations and adjusted earnings per share on the same basis as our principle measures of financial performance. In our remarks today, we will be making some forward-looking statements, including statements regarding our outlook for 2026 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 fourth quarter, we recorded after tax special item charges of $483 million, or $1.82 per share. Details of the special items are included in our quarterly financial supplement. Additionally, please note that when we make perspective comments regarding financial performance, including our full year 2026 outlook, we will do so on a basis that includes the potential impact of future share of purchases and anticipated 2026 dividends. With that, I'll turn the call over to David.

Thanks, Ralph. Good morning, everyone, and thanks for joining our call. 2025 was a pivotal year for our company as we delivered new innovations for the benefit of our customers, strengthened meaningful partnerships, and extended strategic client relationships. Today, I'll briefly focus my comments on delivering our financial commitments for 2025 and how we are leading through a dynamic environment by evolving and advancing our business for the benefit of our customers, clients, and partners. Then Brian will provide an update on our performance and our growth platforms and perspective on the year ahead. Then Ann will review additional details on our results and our 26 outlook, and we'll take your questions. So let's get started. In 2025, I'm pleased to report that the Cigna Group delivered full-year adjusted revenue of $275 billion, or 11% growth. Full-year adjusted earnings per share of $29.84, a 9% increase, building on our multi-year track record of sustained earnings growth. We also took steps forward in improving our customer experience, as evidenced by the increase in our customer net promoter score year over year in each of our largest businesses. At the Cigna Group, we also continue to shape our portfolio in 2025, emphasizing businesses where we see clear opportunities to generate attractive, sustainable growth. For example, we further expanded our specialty capabilities to serve hospitals and health systems, in part with our new investment in Shields Health Solutions. And we completed the sale of Cigna Healthcare's Medicare business earlier last year. We are well positioned to continue leading and growing in a rapidly changing environment. To that end, I want to briefly comment on our global settlement with the Federal Trade Commission announced yesterday. The settlement is a comprehensive resolution of all matters brought by the FTC regarding pharmacy benefits business. It includes the industry-wide insulin lawsuit and ongoing investigations. To be clear here, the beneficiary of the settlement are our customers and patients. The settlement noted $7 billion in out-of-pocket cost relief over the next 10 years for the 100 million customers and patients we serve. The savings will be delivered through lower insulin prices and reduced costs for brand-name medications for consumers at the pharmacy counter. The settlement will also increase transparency for our customers and clients and strengthen our relationship further with community pharmacists. We were well-positioned to execute on the terms of this settlement because of the new pharmacy benefit model that we began developing in the beginning of 2025 and announced in the third quarter of 2025. Our new model clearly positions us to achieve this comprehensive settlement. It enhances the value we provide to customers and clients, all while we continue to strengthen our position and deliver on our long-term shareholder commitments. With the FTC matter now resolved, and the additional clarity from the federal PBM reform legislation that passed earlier this week, we are squarely focused on driving affordability improvements and value for those we serve. We know healthcare affordability affects everyone, from individuals and families to employers and governmental organizations. At the Cigna Group, we are steadfast in our focus on leaning in to lower healthcare costs and expanding access to quality care and medications. but doing so requires confronting the underlying cost drivers, including both the demand and the supply side. Demand for healthcare in the United States is growing rapidly. Our population is aging and chronic conditions are increasing. Today, chronic disease and mental health conditions account for roughly 90% of total healthcare spending. Together, these forces drive heightened demand for healthcare services and, as such, increase costs. Now, relative to supply, In most industries, when additional supply comes online, costs go down. However, in healthcare, costs are rising even as additional supply becomes available. Consider that since 2000, the cost of a hospital stay has increased more than 220%. And according to 2024 data, the median price of a new drug launch was over $370,000 compared to only $2,000 just 20 years ago. The organizations and professionals that supply and deliver costs, be they hospitals, doctors, pharmaceutical manufacturers, and medical device companies, are advancing significant innovations, but they are coming at an elevated cost. At the Cigna Group, we're moving forward with purpose and conviction to counter these forces. Let me share a few ways of how we're doing that. First, our approach to investing in and shaping our portfolio guides us to collaborate rather than own physician practices or pursuing capital-intensive care delivery infrastructure. This gives us more agility to offer new solutions and services that expand access, lower cost, and focus on prevention and treatment adherence. Our transformative rebate-free pharmacy benefits model is one of those improved innovations for prescription drugs. Another example is our new clarity solution in Cigna Healthcare that Brian will talk about in a few moments. A second way we are addressing affordability is by informing decisions more clearly on the location where care is provided, as locations can significantly impact patient affordability, whether in a hospital, freestanding facility, or a physician's office. A third way is through meaningful partnerships and collaboration. For example, when the new TrumpRx site launches, Evernorth is the pharmacy partner to the site and will dispense EMD Serrano treatment for fertility. This will make treatments more accessible for all Americans struggling to start or expand their families at the lowest available cash price. And we're helping providers focus on care by minimizing their administrative burden, for example, in prior authorization processes. Over the past year alone, we further reduced the number of prior authorizations by 15%. And going forward, we are partnering with the administration to further streamline the prior authorization process. And a fourth way we are driving affordability is by leveraging competition and encouraging the use of the most cost-effective solutions. Generics and biosimilar medications are important opportunities here. Today, for example, in the United States, approximately 90% of all prescriptions filled are generic, and they make up only 10% of the total pharmacy spend. As a result, the U.S. has some of the lowest generic prices in the world and highest uptake level. reflecting what happens when robust competition is harnessed. We see similar promise with biosimilars, and our company is already saving Americans money on the widely used brand-name medications such as Humira and Stelara, where we offer access to $0 out-of-pocket offerings for our patients, saving them thousands of dollars each year. Looking ahead in the coming years, there will be more than $100 billion of savings for the U.S. in the biosimilar space alone. At the Cigna Group, we will continue to make advancements in each of these areas in addition to the work we do day in, day out to support our customers, patients, and our clients every day. Now to summarize, time and again at the Cigna Group, we have demonstrated the ability to evolve to meet the needs of our stakeholders, something we've done over years and decades. Against the backdrop of a disrupted operating landscape, in 2025, we delivered full-year adjusted earnings per share of $29.84, and we returned over $5 billion to shareholders through dividends and share repurchase. Looking ahead to 2026, our adjusted EPS outlook of at least $30.25 reinforced the sustained growth and strength of our company. We will also continue to make strategic investments in strengthening our capabilities and broadening our total addressable market profile. While we remain focused on harnessing the breadth of our capabilities across our organization for the evolving needs of those we serve. With that, I'll turn the call over to Brian.