The companies on the Global 500 employ 70.2 million people, and their revenue represents more than one-third of the world’s GDP.

Fortune Global 500

With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

AI is a major force shaping this year’s list—but it’s far from the only story.

World's Most Admired Companies

The corporations on our annual list of the world's 500 largest companies combined to generate $41.7 trillion in revenue over the past year.

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

America's Most Innovative Companies

The corporations on our annual list posted aggregate revenues of $41 trillion for the second year in a row.

Industries included in the sector are insurance and managed care, medical products and facilities, pharmacy services, and pharmaceutical companies.

Fortune Sector Leaders: Health Care

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The 26th edition of the list shows how much esteem Big Tech giants command among other business leaders.

WMA 2024-CVS

The 25th Fortune World’s Most Admired Companies list suggests that tech giants’ peers respect them as much as ever.

WMA-2023-CVS

The corporations on our annual list of the world’s largest companies delivered a record $41 trillion in aggregate revenues.

G500-2023-CVS Health

The health retail, pharmacy, and insurance conglomerate is the largest company ever to be led by a female CEO; Karen Lynch has been chief executive since Feb. 2021. 
<ul> 
 	<li>CVS exceeded Wall Street’s revenue expectations in 2022 with $322 billion, but profits fell nearly 50% compared to 2021.</li> 
 	<li>The company made progress in expanding into the primary care space with two big acquisitions: primary care network Oak Street Health, purchased for approximately $10.6 billion; and health services company Signify Health, for approximately $8 billion. The deals were completed earlier than anticipated, prompting the company to lower its earnings expectations for 2023.</li> 
 	<li>CVS joined other health care companies in settling lawsuits that claimed they should have known they were filling too many opioid prescriptions. Under a settlement announced in December, CVS will pay state and local governments up to $4.9 billion over 10 years. (The company did not admit wrongdoing.)</li> 
</ul>

The 300 companies on this list are transforming industries from the inside out.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

F500 2023-CVS Health

The health retail, pharmacy, and insurance conglomerate led by Karen Lynch is one of the nation’s two biggest health care companies. It’s also the biggest company ever to be led by a female CEO. 
<ul> 
 	<li>CVS exceeded Wall Street’s revenue expectations in 2022 with $322 billion, but profits fell nearly 50% compared to 2021.</li> 
 	<li>The company made progress in expanding into the primary care space with two big acquisitions: primary care network Oak Street Health, purchased for approximately $10.6 billion; and health services company Signify Health, for approximately $8 billion. The deals were completed earlier than expected, prompting the company to pull back on earnings expectations for 2023.</li> 
 	<li>CVS joined other health care companies in settling lawsuits that claimed they should have known they were filling too many opioid prescriptions. Under a settlement announced in December, CVS will pay state and local governments up to $4.9 billion over 10 years. (The company did not admit wrongdoing.)</li> 
</ul>

Just as it dominates our economy, Big Tech now dominates Fortune’s annual ranking of corporate reputation.

WMAC-2022-27-CVS

Aggregate sales hit $37.8 trillion last year—an increase of 19%, the highest annual growth rate in the list’s history.

G500 2022-10-CVS Health

CVS outpaced analyst expectations for 2021 under the leadership of Karen Lynch, who came aboard as CEO in February. The company reported $292 billion in revenue for the fiscal year ended December 2021—an 8.7% increase year over year. In a quest to revolutionize America’s access to health care, Lynch initiated a plan to transform hundreds of CVS stores into super-clinics that provide primary care—creating what will become the nation’s biggest network of urgent care and primary care outlets. CVS also played a major role in fighting COVID-19, administering over 50 million vaccines and 29 million tests through December 2021. In the fight to retain talent, CVS announced a minimum wage increase to $15 an hour, effective July 2022.

Fortune collaborated with the Diligent Institute to rank the most innovative boards of directors among S&P 500.

Modern Board 2022-CVS Health

CVS, the retail and pharmacy giant that ranks fourth on the <a href="https://fortune.com/fortune500/">Fortune</a> 500, scored high on gender equality, board independence, and ESG. Karen Lynch was named CEO in February 2021 and <a href="https://fortune.com/2021/10/04/cvs-ceo-karen-lynch-stores-health-care-super-clinics/">has said the company</a> is “pivoting to become more central to America’s health care.” The company recently made the decision to <a href="https://fortune.com/2021/08/04/cvs-minimum-wage-t15-an-hour/">raise its minimum wage</a> to $15. 
 
CVS counts the former CEOs of Chiquita Brands; AT&amp;T; Becton, Dickinson; Johnson &amp; Johnson; PCS Health Systems; and Applied Biosystems among its directors. The board also has two members with high-level government experience: Nancy-Ann DeParle is the former deputy chief of staff and director of the White House Office of Health Reform, and Mary Schapiro is a former chairman of the Securities and Exchange Commission. 
 
Editor's note: An earlier version of this post misspelled the name of Nancy-Ann DeParle.

Fortune Modern Board 25

Fortune's annual list dedicated to the idea that business is uniquely suited to address society’s biggest challenges.

CTW.1122. CVS Aetna

CVS-owned Aetna last year launched an effort to reduce suicide attempts. Its clinicians began asking mental health screening questions of most members, rather than querying only those who showed risk of self-harm; it also reached out to high-risk youth. Aetna has seen an 18% decrease in suicide attempts since 2019 among its 16.3 million adult members with behavioral health coverage—a promising start.

Change the World

This year’s Fortune 500 marks the 68th running of the list.

F500 2022 CVS Health

CVS outpaced analyst expectations for 2021 under the leadership of Karen Lynch, who came aboard as CEO in February. The company reported $292 billion in revenue for the fiscal year that ended in December 2021—an 8.7% increase year over year. In a quest to revolutionize America’s access to health care, Lynch initiated a plan to transform hundreds of CVS stores into super-clinics that provide primary care—creating what will become the nation’s biggest network of urgent care and primary care outlets. CVS also played a major role in fighting COVID-19, administering over 50 million vaccines and 29 million tests through December 2021. In the fight to retain talent, CVS has announced a minimum wage increase to $15 an hour, effective July 2022.

After a year in which humanity leaned more heavily than ever on tech giants, see which companies topped Fortune's ranking of corporate reputation.

Total revenue for the world’s biggest companies fell 4.8% to $31.7 trillion this year—the first decline in half a decade.

G500-2021-007-CVS

CVS embedded itself on the front lines of the COVID pandemic as one of the central hubs for distributing vaccines to local communities. In the first quarter of 2021 alone, the company, now fully integrated with health insurer Aetna following a mammoth $69 billion acquisition, produced more than $69 billion in revenues. In 2020, revenue grew $12 billion compared to the previous year. Karen Lynch, who became CEO in February 2021, believes that “millions of new customers will engage with CVS Health for the first time through testing and vaccine administration.” The company’s upbeat guidance for 2021, meanwhile, relies on pharmacy sales, rather than retail, to carry the revenue growth.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-04-CVS Health

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

This year's Fortune Global 500 generated $33.3 trillion in revenues and $2.1 trillion in profits.

G500-2020-013-CVS-Health

The drug store chain-slash-health care juggernaut got a $62 billion revenue boost—due to its $69 billion acquisition of Aetna, the insurance giant, in 2018. Though investors haven’t entirely sweetened on the deal, CEO Larry Merlo pronounced the integration of the two companies “successful” in February. Former Aetna CEO Mark Bertolini, meanwhile, resigned from the CVS board and said the integration was “far from over.” As a pharmacy retailer on the pandemic’s frontlines, CVS’s sales were brisk in the first quarter, but Merlo has warned about the “uncertainties” that surround the long-term performance of the company’s multifaceted business in a time of COVID-19.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-005-CVS-Health

The drug store chain-slash-health care juggernaut leapt three spots on this year's Fortune 500—and got a $62 billion revenue boost—due to its $69 billion acquisition of Aetna, the insurance giant, in 2018. Though investors haven’t entirely sweetened on the deal, CEO Larry Merlo pronounced the integration of the two companies “successful” in February; former Aetna CEO Mark Bertolini, meanwhile, resigned from the CVS board and said the integration was “far from over.” As a pharmacy retailer on the pandemic’s frontlines, CVS’s sales were brisk in the first quarter, but Merlo has warned about the “uncertainties” that surround the long-term performance of the company’s multifaceted business in a time of COVID-19.

Here are the World's Most Admired Companies for 2019 as ranked in their industries. See who made the list.

This year's Fortune Global 500 generated $27.7 trillion in revenues and $1.5 trillion in profits.

This year's Fortune 500 marks the 65th running of the list.

Here are the World's Most Admired Companies for 2018 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 64th running of the list.

Here are the World's Most Admired Companies for 2017 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 63rd running of the list.

Here are the World's Most Admired Companies for 2016 as ranked in their industries. See who made the list.

This year's Fortune Global 500 generated $27.6 trillion in revenues and $1.5 trillion in profits.

This year's Fortune 500 marks the 62nd running of the list.

Here’s our look at 50 companies that do well by doing good.

Business insiders have spoken: Asked which companies they most admire, more than 4,100 executives, directors, and analysts chose these top 50 All-Stars.

The world's 500 largest companies generated $31.2 trillion in revenues and $1.7 trillion in profits in 2014. Together, this year's Fortune Global 500 employ 65 million people worldwide and are represented by 36 countries.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Nike, Cisco, MasterCard, SABMiller, Vodafone, Google—and 45 other companies that are doing well by doing good.

Global business is back. After limping through a worldwide financial crisis and economic slowdown, the 500 largest companies ranked by revenues shattered all sorts of performance records in 2013: They racked up combined revenues of $31.1 trillion, up 2.5% from 2012, and profits soared 27% to nearly $2 trillion. China’s 95 companies (up from 89 last year) posted $5.8 trillion in revenues. The U.S. has four fewer companies on the list than last year but remains (for now) the country leader, with 128 corporations on the list—including No. 1 Wal-Mart Stores—reporting $8.6 trillion in revenues. 

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

Change The World

Impact Segment

Sector

Culture rank

Process rank

Product rank

Years on list

Previous rank

Industry

Current All-Star Rank

Previous All-Star Rank

Industry Rank

Previous Industry Rank

Overall Score

Innovation

People Management

Use of Corporate Assets

Social Responsibility

Quality of Management

Financial Soundness

Long-Term Investment Value

Quality of Products/Services

Global Competitiveness

Key Financials (last Fiscal Year)

Revenues ($M)

Profits ($M)

Assets ($M)

Total Stockholder Equity ($M)

Profit Ratios

Profit as % of Revenues

Profits as % of Assets

Profits as % of Stockholder Equity

Earnings Per Share (last Fiscal Year)

Earnings Per Share ($)

EPS % Change (from prior fiscal year)

EPS % Change (5 year annual rate)

EPS % Change (10 year annual rate)

Total Return

Total Return to Investors (last year)

Total Return to Investors (5 year, annualized)

Total Return to Investors (10 year, annualized)

Headquartered in Woonsocket, R.I., CVS Health owns the country’s largest pharmacy chain with more than 9,000 physical locations found mostly in the Northeastern U.S. The publicly traded corporation is comprised of more than 300,000 employees and offers pharmacy services, health and beauty products, convenience foods, and other services like photo printing. CVS Health didn’t start adding pharmacies to new stores until 1967, but since then has acquired large companies in the health space such as Aetna, Signify Health, and Oak Street Health to boost its primary care offerings and develop its own insurance arm. Other subsidiaries of CVS Health include benefit services manager CVS Caremark and MinuteClinic, a walk-in health clinic for vaccinations, health screenings, and other quick appointments.

Q2 2026

Q1 2026

Q4 2025

Q3 2025

Q2 2025

Q1 2025

Q4 2024

David Joyner

President and Chief Executive Officer, CVS Health®

Sree Chaguturu, MD

Executive Vice President and Chief Medical Officer, CVS Health®

Thomas F. Cowhey

Executive Vice President and Chief Financial Officer of CVS Health®

Sam Khichi

Executive Vice President, Chief Policy Officer and General Counsel, CVS Health®

Tilak Mandadi

Executive Vice President, Ventures and Chief Digital, Data, Analytics and Technology Officer, CVS Health®

Larry McGrath

Executive Vice President, Chief Strategy Officer and Chief Strategic Advisor to the CEO of CVS Health®

Michelle Peluso

Executive Vice President and Chief Customer and Experience Officer, CVS Health®

Mike Pykosz

Executive Vice President and President of Health Care Delivery, CVS Health®

Prem Shah

Executive Vice President, Chief Pharmacy Officer, and President of Pharmacy and Consumer Wellness, CVS Health®

CVS Health (CVS): Company Profile, Stock Price, News, Rankings

legacy

CVS Health

cvs health

Hello and welcome to CVS Health first quarter 2026 earnings call. We ask that you please hold all questions until the end of the prepared remarks. At which time you will be given instructions for the question-and-answer session. As as reminder these conference is being recorded today. If you have any objection please disconnect at this time. I would now like to pass the call to Larry McGrath. Larry, please proceed.

Good morning, and welcome to the CVS Health first quarter 2026 earnings call and webcast. I'm Larry McGrath, Executive Vice President of Capital Markets at CVS Health, and I'm joined this morning by David Joyner, Chair and Chief Executive Officer, and Brian Newman, Chief Financial Officer. Following our prepared remarks, we'll host a question and answer session that will include additional members of the leadership team. Our press release and slide presentation have been posted to our website, along with our Form 10-Q filed this morning with the SEC. Today's call is also being broadcast on our website. During this call, we'll make certain forward-looking statements. Our forward-looking statements are subject to significant risks and uncertainties that could cause actual results to differ materially from currently projected results. We strongly encourage you to review the reports we file with the SEC regarding these risks and uncertainties.

In particular, those that are described in the cautionary statement concerning forward-looking statements and risk factors in our most recent annual report on Form 10-K, our quarterly reports on Form 10-Q filed this morning, and our recent filings on Form 8-K, including this morning's earnings press release. During this call, we'll use certain non-GAAP measures when talking about the company's financial performance and financial condition, and you can find a reconciliation of these non-GAAP measures in this morning's press release and in the reconciliation document posted to the investor relations portion of our website. With that, I'd like to turn the call over to David. David?

Thank you, Larry, and good morning, everyone. Let me start off with some highlights across the business. We entered 2026 with strong momentum, and our intentional execution and deliberate actions across CVS Health have led to another quarter of excellent performance. We are driving improved results at Aetna while removing friction for members and providers. We remain laser-focused on delivering meaningful savings and the lowest net cost to our clients and members at Caremark. We are executing against our operational plans in healthcare delivery to improve healthcare access across the country. Through the dedication and hard work of our colleagues in the communities across the country, we continue to build momentum and expand our position as the best-run national pharmacy. Turning to our results this quarter, we delivered adjusted operating income of $5.2 billion and adjusted earnings per share of $2.57.

Our strong first quarter performance gave us the confidence to increase our full year 2026 adjusted earnings per share guidance to a range of $7.30-$7.50, up from the previous range of $7.00-$7.20. Our revised outlook continues to reflect the core principles of our guidance philosophy: credible targets, disciplined execution, and clear opportunities for outperformance. Across CVS Health, our teams remain focused on what matters most: improving affordability, reducing friction, and delivering a more connected and seamless healthcare experience. However, to realize our ambition of becoming America's most trusted healthcare company, we need to drive change across the entire healthcare ecosystem. We've been focused on strengthening our relationships with all stakeholders to address our key priorities and improve healthcare for Americans.

We share CMS's goal of ensuring the long-term sustainability of the Medicare Advantage program, which remains the best example of a public-private partnership. The final rate notice that came out in April represented a step in the right direction towards greater sustainability, but it remains insufficient to offset underlying medical cost trends. These trends remain above historical levels, and for the past several years have pressured the entire industry. This includes our own Medicare business, which improved significantly in 2025, but like most of the industry, still generated an adjusted operating loss. As we look ahead, we remain committed to taking the necessary actions to progress towards our target margins. We're encouraged to see the recognition of the importance of value-based care providers and the detrimental impact of the proposed risk model changes, as well as the critical role of clinician-led documentation in the chart review process.

This is a clear example of how we're working to engage with CMS, regulators, and legislators, discussing what's not working, developing constructive solutions, and being disciplined in the actions we control. That same approach of collaboration with a focus on consumer outcomes is also shaping how we are working with the Federal Trade Commission to reach a settlement. We saw where the market needed to go more than two years ago, and we have been leading that transition. Recent regulatory actions are helping clarify that direction and reinforcing our focus on simpler pricing, greater transparency, and lower out-of-pocket costs for patients at the pharmacy counter. A clear example of this commitment is our work to ensure that every American has access to certain insulin products for $25 per month across our network of more than 60,000 pharmacies, including our own 9,000 CVS pharmacies.

At the same time, we continue to introduce innovations that simplify the pharmacy experience, accelerate biosimilar adoption, and improve cost predictability. We recently announced that of July 1st, 2026, we will exclude brand STELARA from our commercial template formularies to be replaced with the low-cost effective biosimilars. We'll use the same proven playbook that allowed us to be the only ones to meaningfully move share with HUMIRA, converting over 90% of eligible patients. By delivering the same frictionless experience for providers and patients, we expect to achieve similar conversion rates and for the majority of our customers to pay zero dollars out of pocket for this therapy. This is not theoretical policy. It is real, repeatable savings delivered at scale. Another important priority we're focused on is reducing unnecessary friction for providers and patients, particularly in the prior authorization process. Our leadership here is clear.

Aetna has the fewest medical services subject to prior authorization in the industry. Our focus on embedding technology within each of our businesses has enabled us to approve more than 95% of the eligible prior authorizations within 24 hours, with over 80% being approved in real time. We've integrated medical and pharmacy decisions, we've introduced bundling solutions for certain conditions that replace multiple approvals with just one. Now we're leading the way forward by standardizing prior authorization submissions. Over the past several months, we rallied and worked with key industry peers through AHIP to commit to standardize the services for the most common prior authorizations, which represent over 50% of the PA volume by the end of this year. Importantly, Aetna is well ahead of the industry standard with 88% of procedures standardized today.

This is a meaningful step towards faster decisions, less administrative burden, and a better experience for clinicians and patients alike. As we look ahead, the next critical step is ensuring other stakeholders within the healthcare system open up their own systems so these standards can be fully adopted and the benefits of this work can be realized at scale. While we drive towards reducing cost and friction in the system, our work to reimagine the healthcare experience is also directly aligned with our priorities around access and interoperability. At our Investor Day in December, we outlined our vision for an open consumer engagement platform with the consumer at the center. Later this year, we will be launching Health 100, an AI native state-of-the-art technology and service platform that allows for any payer, PBM, pharmacy, or provider to seamlessly connect.

The Health 100 app is designed to be the consumer's front door to a fully integrated healthcare experience, regardless of the banner on their pharmacy or brand of their benefit card. This is where CVS Health scale, consumer trust, and position the system truly differentiate us. Few companies have the reach, data, and engagement points with the consumer that are necessary to bring a platform like this to market, and to do so in a way that benefits consumers, clients, and the broader healthcare system. We are focused on developing tech forward solutions like Health 100 because we believe the future of best in class healthcare companies will be powered by technology and AI. We see an immense opportunity for technology to drive systemic change across the entire healthcare industry.

That is why we've been embedding it in everything that we do and using it to ensure that we are best in class in each of our businesses. AI has been deployed across CVS Health for years to improve our operations and to drive efficiencies. What we are most excited about and believe will have the biggest impact is AI's ability to improve consumer experiences, engagement, and outcomes. It is already making it easier for our members to find the right providers and better navigate the system. We're enabling more personalized and exceptional care by empowering our pharmacists and clinicians with constantly improving insights. We're accelerating our go-to-market strategies by using cutting-edge technology to develop deep consumer insights rapidly and at scale. Technology is truly the enabler of our strategy and growth, and we are continuously driving innovation across the enterprise to distinguish ourselves in the marketplace.

In closing, I want to emphasize how encouraged we are by our first quarter performance, our revised outlook for the rest of the year, and the incredible progress we are making on our initiatives to improve affordability for our clients, patients, and members. We are executing against our commitments and continuing to build momentum on our path to becoming the most trusted healthcare company in America. As we look ahead, our priorities remain clear. Disciplined execution, thoughtful partnership with stakeholders across the healthcare system, and a continued focus on innovating to improve affordability, access, and provide a simple healthcare experience, one person, one family, one community at a time. With that, I'll turn it over to Brian to walk through the financial details.

Thank you, David, and good morning. I'll cover three key topics in my remarks this morning. First, an update on our first quarter results. I'll discuss cash flow and the balance sheet. Finally, I'll wrap up with an update on our revised financial outlook for the remainder of 2026. I want to start by reinforcing the theme David just outlined. Our first quarter results and our updated expectations for 2026 are a clear reflection of our say-do philosophy in action. This guidance philosophy is predicated on committing to thoughtful and credible targets while simultaneously striving to identify and execute on opportunities to deliver outperformance. The strength of our results in the first quarter demonstrates the discipline with which we are managing the enterprise. Let me highlight some of our enterprise results in the first quarter.

We generated over $100 billion of revenue, an increase of over 6% over the prior-year quarter, driven by growth across all operating segments. Adjusted operating income of approximately $5.2 billion increased over 12% from the prior-year quarter, primarily driven by an improvement in our Health Care Benefits segment. We delivered adjusted EPS of $2.57, a meaningful increase of over 14% from the prior-year quarter. Finally, during the quarter, we generated cash flow from operations of approximately $4.2 billion. Turning now to each of our segments. In Health Care Benefits, we generated nearly $36 billion of revenue in the quarter, an increase of over 3% from the prior-year. This increase was primarily driven by our government business, partially offset by our exit from the individual exchange business in 2026.

We ended the quarter with approximately 26 million medical members, which declined sequentially by approximately 600,000 members. This decrease was primarily driven by our exit from the individual exchange business in 2026, partially offset by growth in our commercial fee-based membership. Adjusted operating income in the quarter was approximately $3 billion, and our medical benefit ratio was 84.6%. Our performance reflects a substantial improvement from the prior year quarter as we continue to execute on our margin recovery plans at Aetna. The MBR was also better than our expectations in the quarter, driven by favorable prior year development, as well as some pockets of core outperformance resulting from strong medical cost management. We remain confident in the adequacy of our reserves. Shifting now to our Health Services segment.

During the quarter, we generated revenues of over $48 billion, an increase of 11% year-over-year. This increase was primarily driven by pharmacy drug mix and brand inflation, partially offset by continued pharmacy client price improvements. We delivered adjusted operating income of approximately $1.5 billion in the quarter, a decrease of approximately 7% from the prior year quarter, primarily driven by continued pharmacy client price improvements, partially offset by improved purchasing economics and pharmacy drug mix. Our results this quarter also reflect the early recognition of value that we previously expected to occur in the second quarter. When excluding the impact of this pull forward, our Health Services segment still modestly exceeded our previous expectations. We are encouraged by progress in our healthcare delivery business during the quarter, which delivered results that were broadly in line with our expectations.

Total revenues grew over 15% compared to the same quarter last year, primarily driven by Oak Street Health. Our Pharmacy & Consumer Wellness segment delivered another strong quarter. We generated revenues of nearly $32 billion, which remained relatively consistent with the prior year quarter. In the quarter, we saw increases primarily driven by pharmacy drug mix, increased prescription volumes, and brand inflation. These increases were largely offset by the impact of regulatory-related price reductions on select drugs, as well as the impact of recent generic drug introductions and pharmacy reimbursement pressure. On a same-store basis, total revenues increased approximately 3% in the quarter. Same-store pharmacy sales grew over 3% compared to the prior year quarter, driven by the revenue drivers I previously mentioned, including a nearly 7% increase in same-store prescription volumes.

Same-store front-store sales increased 120 basis points versus the prior year quarter. Our retail pharmacy script share of over 29% continues to represent meaningful growth compared to the same quarter last year. Adjusted operating income decreased approximately 9% from the prior year to approximately $1.2 billion. Although results in PCW this quarter were impacted by milder seasonal illness and greater weather disruption compared to last year, our strong underlying business performance exceeded our expectations. This provided us with the flexibility to make incremental investments in our business. Turning now to cash flow and the balance sheet. In the first quarter, we generated cash flows from operations of approximately $4.2 billion and returned nearly $850 million to our shareholders through our quarterly dividend.

We ended the quarter with approximately $2.2 billion of cash at the parent and unrestricted subsidiaries. Our leverage ratio at the end of the first quarter improved to 3.84x. We expect to drive further improvement this year as we execute against our 2026 guidance. Shifting now to our outlook for 2026. As David mentioned, we are increasing our full year 2026 guidance for adjusted EPS to a range of $7.30-$7.50, an increase of $0.30, or more than 4% higher than our previous guidance. We now expect our full year total revenues to be at least $405 billion.

We are also updating our outlook for full year cash flow from operations to at least $9.5 billion, reflecting improved underlying performance primarily related to working capital. In our Health Care Benefits segment, we now expect full year adjusted operating income to be in a range of approximately $4 billion-$4.34 billion, an increase of $420 million relative to our prior guidance, reflecting the favorable prior year development that we experienced in the first quarter. We continue to expect a full year MBR within our previous guidance range of 90.5% ± 50 basis points. This outlook continues to maintain the same respectful and prudent view on medical cost trends until we have greater visibility into how those trends are developing.

In our Pharmacy & Consumer Wellness segment, we now expect full year adjusted operating income of at least $6.18 billion, an increase of approximately $90 million from our prior guidance. This increase reflects our strong underlying business performance in the first quarter and our revised expectations for the remainder of the year. We are also pleased to reiterate our full year guidance for our Health Services segment. In aggregate, we now expect full year enterprise adjusted operating income to be in the range of $15.53 billion-$15.87 billion. We now expect a roughly 60%-40% split of earnings between the first half and second half. You can find additional details on the components of our updated 2026 guidance on our investor relations website.

Before we open the call for questions, I just want to reiterate how incredibly encouraged we are by our performance in the first quarter. We drove over $1 billion of year-over-year AOI improvement at Aetna. Our updated CVS Pharmacy guidance now already reflects an over 2% increase in earnings for 2026. We are driving improvement at Healthcare Delivery, and our team is executing well against our rebate guarantee commitments in our Caremark business. We remain confident that 2026 will be another year of meaningful progress as we continue to deliver on the tremendous amount of earnings opportunity ahead of us. With that, we will now open the call to your questions. Operator.

Thank you. At this time if you would like to ask a question, please click on the raise hand button which can be found on the black part at the bottom of your screen.  When it is your turn, you will receive a message on your screen and then you will hear your name called. Please accept, unmute your audio and ask your question. If your calling in today star nine will activate the raise hand feature and star six can be used to mute and unmute your line. We ask that you please limit yourself to one question this morning. We will wait one moment to allow the queue to form. Our first question comes from Justin Lake with Wolfe. If you would like to unmute yourself and ask your question.

Thanks. Good morning. Wanted to ask first about the Medicare Advantage rates coming out for 2027, your thoughts on those, and then how that you think that fits within the previously discussed trajectory of MA margins getting to the 3% ballpark by 2028.

All right. Thanks, thanks, Justin. Good morning. Before I turn it over to Steve, I think it's important to reflect on at least the last couple of years. As you know, the rates have not been supportive of the elevated medical trends, and I think our team has proven, at least now in two consecutive years, that we've been able to manage, prioritizing margin over growth. I couldn't be more proud of the team in terms of their focus on making sure that they're restoring the performance of this business.

I also just wanna reinforce the commitment to Medicare Advantage, and I think the team has done a great job working closely with the administration on giving feedback and having constructive dialogue in terms of making, you know, continued improvement in the, in the program offerings. With that, Steve, you wanna give some guidance on the rates?

Sure. Thanks, David. Good morning, Justin. Yeah, I just wanna add my personal acknowledgment of the strong partnership we've had with CMS. Appreciate the progress we made from advanced notice to final notice. They definitely listened and notwithstanding the shortfall relative to trend, appreciate the partnership there. Look, we're off to a strong start in our Medicare Advantage business. You can see that the year-over-year improvement is really encouraging. As David said, you know, we've been laying down the foundation for this business over the past two years.

We took a very disciplined strategy into our 2026 planning. Strong execution during AEP, which resulted in improved geographic mix, product mix, membership landed in line with our expectations. We have leading Star Ratings. We're gonna carry those into 2027 as well. Look, we're gonna take the same disciplined approach going into 2027, and feel confident that we can continue the momentum and again, make meaningful progress towards target margins in 2027. Yeah, I'll just reaffirm our confidence in hitting target margins in 2028.

Justin, maybe I'll just reassert what Steve was getting at. We've got tremendous earning power at Aetna, and we see a pathway back to target margins, as you mentioned, by 2028. Our goal remains to get back to target margins as quickly possible. I think the start of this year reinforces our trajectory.

Our next question comes from Michael Cherny with Leerink Partners. If you would like to unmute yourself and ask your question.

Good morning. Thanks for taking the question. Maybe if I can just dive in a bit on HSS. Obviously a big focus point heading into the year as you work through the rebate guarantees. It's great to see the outperformance even adjusting for the timing. Is it possible to go a little bit more into some of the timing dynamics? Then as you think about the build for the year and what's embedded in guidance, have you seen any changes either from a competitive perspective, from a manufacturer perspective that would influence the views one way or the other, especially given what's obviously been a number of headlines out of D.C. and other places relative to the future value and the importance of the PBM? Thanks so much.

Maybe I'll start, Prem, and then hand it over to you. As I mentioned in my prepared remarks, AOI in the quarter reflected some timing benefit in Q1. However, I think importantly, when you adjust for the pull forward, HSS actually modestly exceeded our expectations. It was really driven by the underlying execution. With the rebate guarantee pressure was tracking broadly in line with our expectations. As it's still early in the year, but I think maintaining our full year guide is the prudent approach at this stage. Prem, you wanna fill in some color?

Yeah. Thanks for the question, Mike. As you know, in 2025, as Brian said, we assumed the trends would persist and create some incremental pressure in 2026, and that was reflected in our 2026 expectations. The team is really focused on resolving this with our clients, and they're executing really well against our 2026 rebate guarantee commitments. It's really kind of driven by what I would say is focus and making sure we have disciplined execution around this area in our book. As we look at the back half of this year, we're pleased with the rebate guarantee performance to date, you know, our expectations is that this is reflected in our 2026 outlook with no surprises.

On your second question on what I would say is the dynamics around the industry. Look, our clients' biggest challenge still today is that the trends of pharmacy drugs are still too high, and they're pressured with this. Over 90% of our clients' costs are coming from 10% of the branded drugs. The PBMs continue to play a really important role in driving competition and creating value. From our perspective and our active dialogue, we just had our client forum, you know, their biggest ask of us is how do we continue to make sure that we create that competition and we create affordability in the PBM for their clients and their members. Secondly, you know, what we're hearing and what we've been focused on over time is really around continuing to create transparency.

As you know, we launched TrueCost over two years ago, which is our PBM offering, where we continue to provide that transparency to our customers. The last thing I'll say is, you know, the model's evolving with some of the changes with the regulations, with the CAA and other things. We're going from rebate guarantees to, you know, drug specific drug level rebates, pricing guarantees, where we're focused on, you know, ensuring that our clients get the value and their members get that. You know, we've said this before, but just as you recall, our Aetna fully insured business over the last eight years have had point of sale rebates where we're passing that transparency to consumers. We remain on our front foot to drive the evolution and the change in the space.

We remain hyper-focused on creating affordability and driving down cost inside of the PBM.

Thank you. Our next question comes from Stephen Baxter with Wells Fargo. If you would like to open your line and ask your question.

Hi. Thank you very much. I just wanted to ask a little bit about the approach to the HCB guidance at this stage. It looks like most of the guidance range, at least to us, feels like it could be potentially attributed by the net favorable PYD you saw in the quarter, which is obviously good to see. It implies you've taken a pretty conservative approach to the current year cost trend. I guess first, you know, maybe we'd love to hear a little bit more about the pockets of outperformance you've actually seen so far that you discuss in the slides, and then whether to think those are kind of across the board or more notable in certain businesses. At this stage, have you actually made any changes to how you're booking current year cost trend into the P&L? Thank you.

Thanks very much for the question. Maybe I'll start on the guidance question and then Steve, turn it over to you for some color. I would say very pleased with our performance across Aetna, and obviously encouraged by the Q1 early results. We did benefit, as I mentioned previously, from some favorable prior year development that was primarily in the government business. We saw some pockets of core outperformance, and that was driven by strong medical cost management, which has not been reflected in our updated guidance. Really that's because it's only the first quarter, it's early in the year. We did also see some outperformance on non-medical cost items such as net investment income, NII, and fees.

While encouraging, I think given where we are in the year, early in the year, Q1, our full year outlook maintains that same respectful and prudent view that we talked about most of last year. Overall, pleased with where we're at at this point, confident in our ability to deliver the full year. Maybe Steve, you can provide some more color on the business.

Sure. Thanks Brian. Good morning, Steven. Look, we, you know, as David and Brian have said, a really strong start to the year and great year-over-year performance and improvement in across Aetna, you know, driven by government business, which is encouraging. We saw, you know, really strong performance across all the lines of business at Aetna. Our commercial business has been strong. We've been investing in that, and we saw really nice growth in a very disciplined pricing environment. Really pleased with that. That was, that growth was across all parts of our commercial business and came from, you know, better retention in force and also some nice new wins. Our Medicare business that we talked about, strong performance there, great start.

Medicaid also, we've been executing really well on rate advocacy, and we're starting to see those rates line up with acuity, strong partnership with the states and encouraged by the start and feel good about the outlook there as we think about the rest of the year. We've been very focused, as David and Brian have talked about, on returning the business to target margin in the second year of that multi-year journey. You know, like where we are, but we've also been focused on returning Aetna to leading capabilities. We've been moving from a transaction kind of orientation to a consumer solutions orientation, so we've been investing in technology, AI, and been driving some really nice results there. David highlighted what we've done in prior auth, the industry-leading statistics really.

Then as you think about the opportunities to really go after affordability, we think that in addition to the strong medical cost management fundamentals that we have, we're really leaning into navigation and partnerships with providers in a distinctive way. We think a better informed, more engaged, empowered member is a better healthcare consumer. We think when we combine all that together, that's actually gonna reduce total cost of care. We're excited about that, and it's not just us saying it, we're getting some really nice, you know, external validation that we're on the right track from our clients and members, but also, awards such as Press Ganey named us their inaugural Health Plan of the Year.

Just really encouraged by kind of the overall positioning of Aetna, in addition to returning the business to target margin. We have incredible team, a culture of execution and accountability, and strong start, and we have confidence, you know, in the rest of the year and even beyond.

Our next question comes from Andrew Mok with Barclays. If you would like to unmute your line and ask your question.

Hi, good morning. Question on capital deployment. With respect to AI, you're still reinvesting meaningfully across the enterprise, but you talked about the immense opportunity to drive systemic change. One, can you help us understand the level and pace of AI investments you're making this year, and how we should think about the inflection point when AI shifts from net investment to net benefit on the P&L?Relatedly, it looks like net leverage in the quarter finished in the low threes, which I believe is better than the BBB leverage target. If so, when do you expect to turn share repurchase back on? Thanks.

Maybe I'll take the second question first, and then we can rotate in. As we think about share repo, we started down this path a couple of years ago and are making a lot of good progress towards our objectives. Candidly, I'm really proud of the team, the performance they've delivered. We remain focused, however, on strengthening our balance sheet, and that's by reducing leverage. A lot of good progress, but we'll continue to evaluate the impact of the improving financial performance and leverage throughout 2026, as well as what you're hinting at, the potential implications of capital deployment opportunities later this year. Right now that's not baked into the 2026 guide, but we'll evaluate as we go through. David, you wanna pick up?

Yeah, Andrew, I think it's a great question in terms of the investments or the reinvestments we're making into our business, in particular around technology. We see this really as an inflection point in our business, and I've talked with our own team about the fact that we're moving from a consumer-based healthcare company to a consumer-based healthcare technology company. We think we're really at the center of being able to leverage technology to engage the consumer. Steve mentioned it in terms of how we're looking at it at Aetna.

We're doing the same thing across our pharmacy assets. I think this is really an important time for us to stand above the rest of the industry in terms of our investment in technology, how we're investing in the consumer experience, and trying to connect all the various stakeholders across the system. Maybe I'll let Steve and Prem talk specifically about how it's impacting their businesses. Steve, you wanna start first?

Sure. Thanks, David. Good morning, Andrew. Yeah, you know, for Aetna, we think about it in three buckets. One is in terms of investment in AI and broader technology. One is, you know, really going deliberately at cost structure and improving efficiency.

This is, think about this as investing in just the fundamentals of the business: accuracy, reducing rework, better forecasting, better analytics, pricing discipline. I mean, it all comes from advanced analytics and capabilities there. That's one bucket. Second bucket, which is really important, is it's improving the way we do our work, so our colleagues can spend more time on things that matter, and that's really important to our colleagues. You know, we just, we need to equip our colleagues and our workforce, you know, and make sure that they're ready for this and they can really leverage it. They took all our leaders through an AI academy.

We're launching an AI academy in a couple weeks with all of our colleagues across Aetna, and we're gonna be doing that across the enterprise. That's kind of the second bucket. The third bucket, which I'm also really excited about, I mentioned earlier, is investing in the capabilities and better experience, more empowerment, better insights, you know, better navigation for our members. Things like informed choice, our Smart Compare products, our care pathways, they all help our members be better consumers of healthcare, and that's because of the leading technology we've developed in AI and our digital tools. Again, really excited actually about the progress we've made very quickly and what that's what that means to our members, our clients, and honestly, not just total cost of care, but actually better health outcomes.

Thanks, Steve, and thanks, David. Just a couple other things, Andrew. I think first and foremost, technology and AI are at the core of a lot of our businesses. If you think about the assets that we have, we have to be industry leading, and we have to leverage technology to operate in these businesses. If you think about the progress we've made in PCW or the work that we're doing in HSS, they are all founded in our what I'd say is industry-leading capabilities and ways to technology and AI. Secondly, as we mentioned at Investor Day, we are launching Health 100, that is really powered in the premise of our ability to engage consumers in a very different way.

We're excited about how AI is going to help us accelerate and create unique solutions for members. We know that if we can get engaged members into the healthcare ecosystem, we will be able to drive better results, and better results drives better outcomes and lower costs for our clients. We are focused there. We're happy about the progress we're making as it relates to Health 100. I'd say more to come as it relates to this. This is a core founding principle in the way we operate this company in all of our businesses, in how we do work for our colleagues, and really enable our colleagues to serve our customers.

Yeah. Andrew, maybe just one final note. Prem mentioned the client forum that we had a couple of weeks ago on the CVS Caremark side. I think it's a good scorecard for us to figure out if are we heading in the right direction. We had 500 of our largest customers attending, and we showcased the technology and investments that we're making in the business, in particular around Health 100. Their answer was somewhat surprising. They said, "What took you so long." Because there's such frustration with the fragmentation of how healthcare is delivered and how it actually impacts the engagement for the members, employees, and/or the consumer.

The fact that we're standing up and actually connecting the various stakeholders, and actually making it easier for the consumer to engage is something that our customers actually are looking for. I think it's something that our consumers have been asking for, and I think we're uniquely positioned to be able to execute on that strategy.

Thank you. Our next question comes from Lisa Gill, JPMorgan, if you'd like to unmute yourself and ask your question.

Thanks very much. Good morning. I wonder if we could just spend a couple of minutes talking about the current regulatory environment. We've obviously have PBM legislation that's passed on a national level, but I'm thinking about states like Tennessee that look to do something similar to what we saw in Arkansas. Really two questions here. One, how are you navigating that? Two, kind of dovetailing into an earlier question and David, what you just talked about with your client forum, will we see meaningful changes due to some of these potential changes that could happen in trying to separate the different components of pharmacy, whether we think about specialty or the retail versus the PBM?

CVS Health (CVS) Q1 2026 Earnings Call Transcript

Company Participants