The Cigna Group

Ladies and gentlemen, thank you for standing by for the Cigna Group second quarter 2026 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 Giacobbe. Please go ahead.

Great, thank you. Good morning, everyone. Thanks for joining today's call. I'm Ralph Giacobbe, Senior Vice President of Investor Relations. With me on the line this morning are Brian Evanko, the Cigna Group's President and Chief Executive Officer, and Ann Dennison, Chief Financial Officer. In our remarks today, Brian and Ann will cover a number of topics, including our second quarter 2026 financial results and our financial outlook for 2026. Following their prepared remarks, 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 second quarter, we recorded after tax special item charges of $153 million or 58 cents 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 purchases and anticipated 2026 dividends. With that, I'll turn the call over to Brian.

Thanks, Ralph. Good morning, everyone, and thank you for joining our call. I'm pleased to share we delivered strong performance in the second quarter as we continue to execute at a high level, drive results, and accelerate momentum across our enterprise. Today I'll discuss our performance for the quarter and key strategic drivers of our growth and demonstrate how the strength and durable nature of our model is fueling our success. I'll also share some examples of how we are leveraging data, AI, and technology to deliver more personalized healthcare experiences for our customers and patients. Then Ann will review additional details about our results and outlook for the rest of the year. And we'll take your questions. So let's get started. As I've stepped into the CEO role, I'm energized by our strategic direction, our execution, and the impact we're having for those we serve, while leveraging the power of one of the most experienced leadership teams in the industry. Over the past few months, I've been spending even more time carefully listening to our partners across the healthcare system. including clients, customers, healthcare professionals, and brokers. Throughout these conversations, a few themes consistently emerge. First, an elevated focus on affordability as new expensive therapies continue to enter the market and demand for complex care grows. Second, growing expectations for more personalized experiences as people want healthcare to feel as easy as other areas of their lives. and third, the need for actionable insights and clinical programs to keep people healthy. These themes within healthcare are coupled with continued economic pressures, geopolitical uncertainty and a rapid pace of change fueled by AI advances. While the current environment is certainly dynamic, I see the landscape as ripe with opportunity to innovate, drive change and forge a new path in healthcare, all while continuing to execute on our commitments today. This orientation has fueled our strong second quarter performance, where I'm pleased to report that both Evernorth and Cigna Healthcare results were ahead of expectations. In the second quarter, the Cigna Group delivered total revenues of $71.7 billion and adjusted earnings per share of $7.78, all while we continue to reinvest in our business to fund growth, expansion, and innovation for our customers. I'm proud of our team around the world for continuing to focus on those we serve. Our strategy is aligned with what customers and patients need most. And our portfolio is purpose-built for where healthcare is headed, and its relevance has never been greater. Now, looking at our performance across our businesses, we continue to drive impact and growth across both Evernorth Health Services and Cigna Healthcare. Overall, Evernorth earnings were slightly ahead of expectations, with revenues increasing 6% year-over-year, reflecting the continued demand for our services while we invest in broadening our offerings and expanding our reach. Our specialty and care services businesses deliver pre-tax adjusted earnings growth of 22% year-over-year, fueled by secular tailwinds as well as the differentiated strengths in the credo, and our expanded suite of specialty pharmacy services that support hospitals and health systems. This quarter, we also saw faster than expected adoption of specialty generics and biosimilars, both of which improve affordability for patients and clients. Our growth in specialty continues to be fueled by our unique portfolio capabilities, which enables us to better serve patients with more complex, clinically intensive needs. We're seeing continued growth in the number of patients relying on specialty medications, and we are uniquely positioned to serve them with our market leading access to more than 330 limited distribution medicines. Our highly personalized capabilities, including our clinical care teams, tailored engagement, and deep understanding of complex health journeys, distinguish us in our ability to serve these patients. Turning to our Evernorth pharmacy benefit services business, we delivered pre-tax adjusted earnings of $609 million, reflecting the impacts of the previously discussed renewals and extensions of large client contracts, as well as investments to support the transition to our new rebate-free model, which we call Signature. The team is making strong progress in the build out of our signature pharmacy benefits model. We see significant early interest from health plans and employers as we prepare for our broader market launch in 2028. This will follow our important next step of introducing signature to Cigna Healthcare's fully insured plans next year. At the same time, we're adding value and winning business today, with 2027 representing one of our strongest selling seasons in recent years. We've been able to achieve this performance in pharmacy benefit services through our winning combination of superior unit costs, clinical programs designed to improve adherence to therapies, and market-leading innovations that help our clients anticipate what is around the corner in a rapidly changing environment, helping them build and tailor solutions to meet their needs today while planning for the future. Turning to Cigna Healthcare, we delivered results ahead of expectations with pre-tax adjusted earnings growth of 17%. While the needs of every client are unique, several factors contribute to why we continue to win in this segment. Our deep focus on the employer-sponsored healthcare market, where we have differentiated expertise, generating continued customer growth in our US employer business. Our disciplined pricing and execution, including in our stop-loss business, where we continue to make progress on margin recapture. Our strategic portfolio shaping to drive focus. Our ability to continuously find new ways to innovate by leveraging data and clinical programs that keep people healthy. And our integrated solutions that provide increased access and coordination across medical, pharmacy, and behavioral health services. For example, given the growing demand for mental health services, our most recent solutions demonstrate our continued industry leadership and make us the partner of choice. are provider matching capabilities for behavioral health patients by reducing costs by matching patients with high quality providers. And offerings like Headspace are expanding access to lower acuity behavioral health options, improving affordability, encouraging earlier intervention, and complementing demand for outpatient services. As you can see, a consistent reason why we win in both Evernorth and Cigna Healthcare is our ability to innovate to meet evolving customer and client demands. Now, I want to spend a few minutes sharing more about how we are applying data, technology, and AI to improve customer outcomes and transform business models. Our AI approach is built on a simple principle. Start with the customer and patient and identify where innovation can drive the most meaningful impact for them. We are leveraging technology and AI to drive better health outcomes, simplify and personalize customer experiences and lower costs, and then execute that at scale. This has enabled us to use AI to change the trajectory of the most complex clinical journeys to improve the lives of our customers and patients. One example is Pharmacy Forward, a recently announced AI-powered program designed to improve how patients access and incorporate specialty medications into their treatment plans. We are unlocking new ways to coordinate care for patients by shortening the time between when a patient receives a prescription and when they can begin treatment. while minimizing administrative friction along the way. With Pharmacy Forward, we're focused on personalizing support, streamlining processing, and helping patients start and stay on therapy with greater ease and confidence. Our targeted use of AI is expected to cut time to therapy in half on average. And for clinicians, it enables them to deliver more connected, informed support, reducing their documentation time by up to 50% free capacity to spend more time on patient care. We're applying that same philosophy within Cigna Healthcare. We know patients navigating complex conditions benefit from personalized clinical support to improve both outcomes and affordability. This month, we announced an expansion of our AI-enabled care coordination capabilities to help us identify customers with emerging, complex, or chronic health needs earlier, such as cancer, heart disease, and high-risk pregnancies. and connect them more quickly to the personalized clinical support they need. Through predictive models and AI-enabled insights, we would be able to expand support to 20% more customers with emerging complex health needs. This is not about replacing clinicians with technology, but helping clinicians spend more time where they can make the greatest difference. And the results speak for themselves. Customers who engage in these programs reduce medical costs by approximately $2,000 per year on average. Early engagement has already yielded a 42% reduction in avoidable inpatient stays amongst those customers. What makes these efforts unique is that they're not standalone technology initiatives. They are enabled by the combination of data, clinical expertise, and pharmacy capabilities that exist across our enterprise, all focused on better serving our customers. We believe this ability to connect insights with action and action with measurable outcomes is a significant competitive advantage for the Cigna Group. As we look ahead, we'll continue to focus our investments on meaningful applications of AI that improve affordability, enhance the customer experience, help clinicians work more effectively, and create long-term value. Now let me summarize our results. We have a proven track record of delivering differentiated value for those we serve by innovating new solutions like Signature, Clarity, Pharmacy Forward, and Personalized Care Coordination, as well as through our flexible model and meaningful partnerships. As a result, in the second quarter, we delivered on our financial commitments with adjusted EPS of $7.78 and are pleased to increase our guidance for full year adjusted earnings per share to at least $30.45. Further, our company has attractive, sustainable growth opportunities in the long term, building on our history and track record of results delivery. Overall, our strong performance and disciplined execution throughout the first half of the year reflects the intentional design of our company and the passion of our coworkers for serving our customers. With that, I'd like to turn it over to Ann.