CVS Health Reports Strong Q3 Results, Raises Full-Year Guidance Amid Strategic Shifts

CVS Health Corporation, a leading healthcare company, reported robust third-quarter results for 2025, surpassing Wall Street expectations and prompting an increase in its full-year earnings forecast. The company's performance reflects significant improvements across its diversified business segments, despite facing challenges in its healthcare delivery unit.

Record Revenue and Earnings Growth

CVS Health achieved record-high revenue of $102.9 billion in the third quarter, representing a 7.8% increase year-over-year. This impressive growth was accompanied by an adjusted earnings per share (EPS) of $1.60, up from $1.09 in the prior year. The company's financial performance exceeded analysts' predictions, with the average estimate for EPS standing at $1.36.

David Joyner, CVS Health's President and CEO, attributed the strong results to the company's focus on delivering "a connected, simpler experience that improves health and simplifies care." He emphasized the progress made in stabilizing operations and concentrating on high-potential markets and businesses.

Segment Performance and Strategic Shifts

Healthcare Benefits Segment

The healthcare benefits segment, which includes Aetna, reported a 9.1% increase in revenue to nearly $36 billion. This growth was primarily driven by the government business, particularly due to the impact of the Inflation Reduction Act on the Medicare Part D program. The segment's adjusted operating income showed a significant improvement, rising to $314 million compared to a loss of $924 million in the previous year.

Notably, Aetna's medical benefit ratio decreased to 92.8% in Q3 2025, down from 95.2% in the prior year. The company also highlighted that over 81% of Aetna Medicare Advantage members are enrolled in plans rated 4 stars or higher for 2026.

Health Services Segment

The health services segment, encompassing Caremark and Oak Street Health clinics, saw an 11.6% revenue increase to $49 billion. However, adjusted operating income in this segment decreased by 7%. CVS Health acknowledged challenges in its healthcare delivery reporting unit, leading to strategic changes, including a reduction in the number of new primary care clinics planned for 2026 and beyond.

Pharmacy and Consumer Wellness Segment

This segment reported an 11.7% increase in total revenues to $26 billion, driven by pharmacy drug mix and increased prescription volume. The growth was partially offset by continued pharmacy reimbursement pressure, resulting in a 7.4% decrease in adjusted operating income for the quarter.

Financial Outlook and Challenges

Despite reporting strong overall results, CVS Health faced a significant setback with a $5.7 billion impairment charge related to its healthcare delivery reporting unit. This charge led to a net loss of $3.99 billion for the quarter. However, the company remains optimistic about its future performance.

CVS Health raised its full-year 2025 adjusted EPS guidance to a range of $6.55 to $6.65, up from the previous forecast of $6.30 to $6.40. The company also updated its cash flow from operations guidance to a range of $7.5 billion to $8 billion.

As CVS Health continues to navigate the complex healthcare landscape, its ability to adapt and innovate across its diverse business segments will be crucial for maintaining its position as a leading healthcare provider in the United States.