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

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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.

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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.

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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>

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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

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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.

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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

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

Good morning, welcome to the CVS Health second quarter 2026 earnings call and webcast. I'm Larry McGrath, Executive Vice President of Capital Markets at CVS Health. 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 report 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 on 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, good morning, e veryone. I'm proud to share that this quarter, each of our operating segments grew earnings and delivered performance that exceeded our expectations. We generated adjusted operating income of $5.2 billion and adjusted earnings per share of $2.58. These results reflect a clear and deliberate enterprise-wide focus on building trust by executing against our commitments to consumers, colleagues, and shareholders. Building on this strong performance so far this year, we are raising our full year 2026 adjusted earnings per share guidance by $0.60 to a range of $7.90 to-$8.10. We are also updating our full year expectation for cash flow from operations to at least $11.5 billion, a meaningful increase of $2 billion from our prior guidance. These expectations reflect the core principles of our guidance philosophy: credible targets, disciplined execution, and clear opportunities for outperformance.

Brian will provide more details on our updated guidance, as well as some early high-level preliminary commentary for 2027 later in the call. Across CVS Health, our focus remains on helping people more easily access affordable care, navigate the healthcare system, and engage in their health. One clear example of how we're doing this is through our work supporting patients utilizing GLP-1s for weight loss. As demand for these therapies continue to grow, consumers are increasingly focused on three things: affordability, access, and convenience. CVS Health is a leader in all three. For employers looking to provide coverage for their workforce, Caremark continues to lead the industry by taking formulary actions that will increase availability of these drugs at a lower cost. However, despite these efforts, affordability challenges mean not all employers can cover GLP-1s for weight loss.

As more consumers seek access to these therapies outside of traditional benefit designs, CVS Health's comprehensive direct-to-consumer platform provides a trusted, convenient, and affordable pathway to care. MinuteClinic's 24/7 virtual weight management offering is the lowest cost option in the industry, connecting eligible patients with a licensed clinician for just $29. Through our manufacturer relationships and CVS Pharmacy's omni-channel fulfillment capabilities, eligible patients can access GLP-1 therapies for as little as $149 through cash pay options in the way that's most convenient to them. We're also simplifying navigation and making it easier for patients to find the most affordable option available to them. Later this year, through our new partnership with Eli Lilly, eligible Zepbound and Mounjaro patients will be able to access cash pay pricing for same-day pickup directly through CVS Health's app or in our stores.

This builds on our existing relationship with Novo to dispense oral and injectable Wegovy, making CVS Pharmacy a convenient, affordable destination for all FDA-approved GLP-1s. As more consumers begin these therapies, the role of our nearly 30,000 pharmacists is an important differentiator for us. They help patients manage common side effects, answer questions, and ensure they stay on therapy. These trusted pharmacist relationships and our omni-channel capabilities are especially important for seniors. With the launch of Medicare Bridge last month, CVS Pharmacy is helping seniors navigate the program and access these therapies more easily. At the same time, we're creating a new source of prescription volume as affordability barriers come down. Across CVS Health, we are best positioned to improve affordability, expand access, enhance the consumer experience, and capture the opportunities ahead regardless of how consumers choose to access GLP-1s.

Our work with GLP-1s is one example of how we can bring our assets together around a consumer need. More broadly, that same focus on simplicity, access, and engagement is driving our consumer technology strategy. Last month, we began the targeted launch of our Health 100 platform, including HIO, our new AI-powered assistant. HIO is designed to simplify the consumer experience and help people engage more effectively in their care journey. Early feedback has been encouraging, and we are excited to expand access later this year. Simplifying healthcare for consumers also requires making the system easier for the providers who care for them. That is why becoming the partner of choice for providers is such an important priority for us. We spend a great deal of time listening to providers and understanding where they experience the most friction in the healthcare system.

Consistently, we hear the same themes: reducing prior authorization burdens, streamlining claims, and improving access to real-time patient information. Our recent national provider survey reinforced those priorities and confirmed that we are making meaningful progress. Those insights are also helping reinforce the actions we're taking across our businesses to simplify interactions and improve experiences. We've recently launched a new AI-enabled Claims Assist Manager, which will reduce our processing time by over 20% and accelerate payment for providers on hundreds of millions of claims every year. We're also expanding the Aetna Clinical Collaboration Program that we announced last year. This program embeds our nurses directly into the facilities to work alongside hospital staff during critical care transitions. It also helps create a more connected experience for both providers and members through improved coordination and communication.

Together, these efforts are making us easier to work with and helping strengthen our position in the market. Those same principles, better connectivity, less friction, and faster access to information, are also guiding the work we're doing in our care delivery business. We've implemented technology infrastructure changes to modernize our platforms and accelerate data sharing, and connectivity with providers and payer partners. We continue to expand and refine our use of AI and analytics to reduce provider administration burden and support better, more connected care for patients. This includes appropriate use of AI to analyze over 1 billion pages of clinical records to enable more personalized and coordinated care. As we drive towards improved performance in this business, technology enhancements such as these are instrumental in positioning us for long-term success. Across these efforts, we're building capabilities that further differentiate CVS Health in the marketplace.

While we position ourselves for the future, we're not losing sight of the need to deliver best-in-class performance across each of our businesses. At Aetna, we put an industry-leading team in place, and the deliberate, coordinated actions we've discussed over the last two years continue to improve both our results and positioning. We're strengthening our clinical programs, improving the way we operate, and maintaining a disciplined approach to cost management and pricing. What you see now is the cumulative impact of these actions starting to come through clearly in our results. So far this year, we've delivered more than $2 billion of year-over-year improvement in adjusted operating income, reflecting both our commitment to restoring this business to its full potential and the consistency of execution behind it.

In our Caremark business, we've been leading the transition towards greater transparency for several years, especially at the pharmacy counter, where consumers can feel the impact of high-priced drugs. With recent legislation and regulatory developments, including our proposed settlement with the FTC, we expect the transition to net cost price models to accelerate while preserving the value PBMs deliver to clients, members, and the entire healthcare system. Our teams remain intensely focused on executing this transition. At the same time, we continue to build on the strength of CVS Specialty, the leading specialty pharmacy in this country. Success in this critically important, fast-growing category requires the ability to bring together clinical expertise, data and analytics, and personalized engagement to support complex patients across their full therapy journey. That's exactly what we do.

Building on that foundation, our focus on technology, automation, and embedding AI into our processes have made CVS Specialty the most tech-enabled specialty pharmacy in the industry. Our tools and processes are designed to identify patients earlier, initiate therapy faster, and support them continuously to help improve adherence and outcomes. While others in the industry are working towards achieving the standard of 80% adherence, CVS Specialty consistently operates above 90%. At CVS Pharmacy, we continue to build momentum, grow volumes, and deliver strong results. Our improving performance reflect both the impact of deliberate actions we've taken to position this business for long-term success and the discipline with which we are executing every day. Healthcare is local and best delivered by trusted, caring, and tech-enabled colleagues that are part of the communities they serve. This is why maintaining pharmacy access across the country is so important.

We, along with others, are challenging unconstitutional laws in states like Arkansas and Tennessee that will make care more expensive, less accessible, and more complicated for patients. Our teams are working hard to achieve the best possible outcome as this develops. At the same time, we are strengthening our omni-channel and engagement capabilities to meet consumers where they are, creating more seamless experience across our stores and digital platforms. This is how we help ensure that we continue to support the millions of Americans that depend on CVS Pharmacy and maintain our position as the best-run national pharmacy in the country. To summarize, we are doing what we said we would. We delivered strong results, exceeded our expectations, and raised our outlook for the year. More importantly, we're continuing to make meaningful progress towards becoming America's most trusted healthcare company.

Across each of our businesses, the deliberate actions we've taken are strengthening our position in the market and creating opportunities for distinction and long-term sustainable growth. We are seeing those efforts translate into better experiences for our consumers, providers, and clients, while delivering stronger performance across CVS Health. We are encouraged by the momentum we're seeing and confident in our ability to continue delivering on our commitments. With that, I'll turn it over to Brian to walk through the financial details.

Thank you, David, and good morning. I will cover four key topics in my remarks this morning. First, an update on our second quarter results. Second, I'll discuss cash flow and the balance sheet. Third, I'll provide an updated financial outlook for 2026. Finally, I will share some early high-level commentary on 2027. As David just highlighted, our strong second quarter results demonstrate the discipline with which we are managing the enterprise and exemplify our say-do philosophy as we continue to execute our strategic priorities and deliver on our commitments. Let me start by highlighting some of our enterprise results in the quarter. We generated over $106 billion of revenue and delivered approximately $5.2 billion of adjusted operating income, increases of over 7% and 35% respectively from the prior year quarter.

These increases were broad-based as we experienced growth across both the top and bottom line in all of our operating segments. We delivered adjusted EPS of $2.58, a significant increase of over 40% from the prior year quarter. Finally, we generated year-to-date cash flow from operations of approximately $10.6 billion. Turning now to each of our segments. In healthcare benefits, we generated over $37 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. Medical membership, as of quarter end of approximately 26 million members, remained consistent sequentially and declined approximately 700,000 members from the prior year quarter. The year-over-year decrease was primarily driven by our previously discussed exit from the individual exchange business, partially offset by growth in our commercial fee-based membership.

Adjusted operating income in the quarter was approximately $2.4 billion, our medical benefit ratio was 87.4%, both of which improved meaningfully from the prior year quarter as we continue to execute on our margin recovery. These results include the impact of changes in our individual exchange risk adjustment position associated with the 2025 plan year, as well as the impact of favorable prior year development. Together, these items contributed approximately $500 million or 140 basis points to our MBR in the quarter. Excluding these items, our core performance in the quarter still exceeded our expectations. This core outperformance was largely concentrated in our Medicare business, where we continue to experience pockets of favorability as a result of strong medical cost management and disciplined pricing. Our Medicaid and commercial businesses performed in line with our expectations during the quarter. We remain confident in the adequacy of our reserves.

Shifting now to our Health Services Segment. During the quarter, we generated revenues of nearly $52 billion, an increase of over 11% from the prior year quarter. 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 over $1.7 billion, an increase of 10% from the prior year quarter, primarily driven by improved purchasing economics, pharmacy drug mix, and modest improvement in our healthcare delivery business. These increases were partially offset by pharmacy client price improvements. At Caremark, we continue to make progress against our priorities. Within Caremark’s results in the quarter, there are a few items to call out. We experienced some pressure in our 340B business as the environment for this program remains dynamic.

We also experienced a pull forward of value previously expected to occur in the second half of the year. After adjusting for the pull forward, our underlying results were in line with our expectations as outperformance across the broader Caremark business, including higher specialty generic penetration rates, offset the pressure in 340B. We are encouraged by our continued progress in our healthcare delivery business, which performed in line with our expectations during the quarter. Total revenues grew nearly 23% compared to the same quarter last year, primarily driven by Oak Street Health. Our Pharmacy and Consumer Wellness Segment delivered an exceptional quarter and continues to build momentum. We generated revenues of nearly $34 billion, a slight increase from the prior year quarter, primarily driven by pharmacy drug mix, increased prescription volume, including contributions from the Rite Aid transaction we completed last year, brand inflation.

These increases were largely offset by regulatory-related price reductions on certain drugs, the impact of recent generic drug introductions, and pharmacy reimbursement pressure. On a same-store basis, total revenues increased modestly in the quarter, and same-store pharmacy sales grew approximately 3%. These increases were driven by the revenue drivers I previously mentioned, including a 7% increase in same-store prescription volumes. Same-store front-store sales increased 100 basis points versus the prior year quarter. We delivered adjusted operating income of nearly $1.5 billion, an increase of over 10% from the prior year, primarily driven by core pharmacy strength and contributions from the Rite Aid transaction, partially offset by continued business investments and the impact of consumer dynamics. Turning now to cash flow on the balance sheet. In the first half of the year, we generated cash flow from operations of approximately $10.6 billion.

This result reflects strong earnings year-to-date, as well as the impact of improvements in working capital. We returned over $1.7 billion to our shareholders through our shareholder dividend year-to-date. We ended the quarter with approximately $2.7 billion of cash at the parent and unrestricted subsidiaries. Our leverage ratio at the end of the quarter was approximately 3.5x, and we expect to drive further improvement as we continue to execute against our 2026 outlook. Shifting now to our guidance for 2026. As David mentioned, we are increasing our full year 2026 guidance for adjusted EPS to a range of $7.90-$8.10, an increase of $0.60 or 8% higher than our previous guidance. We now also expect our full year total revenues to be at least $414 billion.

In our Health Benefits segment, we now expect full-year adjusted operating income to be in a range of $5.03 billion-$5.37 billion, an increase of over $1 billion relative to our prior guidance. This increase reflects a portion of our strong underlying core performance in the first half of the year, as well as the approximately $500 million cumulative impact of our net risk adjustment update and the prior year development experienced in the second quarter. We now expect a full year MBR of 89.75%, ±25 basis points. This outlook continues to maintain a respectful and prudent view of medical cost trends in the second half of the year. In our Pharmacy and Consumer Wellness segment, we now expect full-year adjusted operating income of at least $6.4 billion, an increase of $220 million from our prior guidance.

This reflects our strong performance in the quarter and our updated expectations for the remainder of the year, which includes the continuation of strong pharmacy performance. We are also pleased to reiterate our full-year adjusted operating income outlook for our Health Services Segment. This outlook reflects continued strong performance across our pharmacy services businesses, offset by our updated view of 340B. In aggregate, we now expect full-year enterprise adjusted operating income to be in the range of $16.58 billion-$16.92 billion. We are also increasing our outlook for full-year cash flow from operations to at least $11.5 billion, reflecting our updated earnings outlook, as well as the impact of improvements in working capital. As a reminder, our current outlook does not assume any share repurchases this year. We will continue to evaluate capital deployment opportunities as our leverage position improves.

We expect second half EPS to be more weighted to the third quarter, reflecting typical seasonality. We now expect the increase between our first quarter and fourth quarter MBR in our healthcare benefits business to be slightly higher than 950 basis points after adjusting for the impact of prior year development in the first quarter. You can find additional details on the components of our updated 2026 guidance on our investor relations website. As you can see, we are making meaningful progress unlocking our embedded earnings power and continue to feel confident in the mid-teens adjusted EPS CAGR from 2025 through 2028 that we laid out at our recent investor day. Consistent with our historical approach, we intend to share 2027 headwinds and tailwinds on our third quarter call and detail full year guidance on our fourth quarter call.

As you know, David and I have emphasized the importance of being open and transparent with our shareholders. This year, in the spirit of this commitment, we are pulling forward our commentary on 2027 by a quarter as we wanted to discuss some dynamics in our businesses that we are aware of today. We are seeing significant momentum in Aetna's margin recovery, including the more than $2 billion of improvement in adjusted operating income that we've already delivered this year. The actions we have taken to strengthen our foundation and improve our performance are working, and we expect this momentum to continue on our pathway back to target margins over the next couple of years. In our pharmacy services business, we expect the previously discussed market dynamics in our 340B business to continue and result in a headwind in 2027.

Additionally, we believe we will see membership declines in Caremark next year. There are two main reasons. First, while we are working through the transition to a pricing model grounded in the lowest net cost over the next few years. We need to make sure our current agreements reflect underwriting to appropriate risk and contracting structures, and we have taken a deliberate approach to our client renewals and the selling season. As you are aware, we are already managing through industry dynamics that are having an impact on our legacy contracts. Second, product actions and market exits by some of our health plan customers will result in a membership impact. These headwinds will be partially offset by our industry-leading specialty pharmacy business, which continues to benefit from strong execution and secular trends in the market, including a robust generic portfolio in 2027.

Despite these near-term earnings pressures, we remain confident in the value our pharmacy services businesses deliver to clients and our ability to achieve fair margins consistent with historical levels in the industry over time. Elsewhere in health services, we remain on track, driving improved results in our healthcare delivery business. We are also building strong momentum in our PCW business. You can already see this in the second consecutive year of mid-single-digit growth reflected in our updated guidance. We continue to differentiate ourselves in the market through our deliberate actions and intentional investments and have established CVS Pharmacy as the best-run national pharmacy. These actions are what allowed us to change the trajectory of this business, and we are excited to carry that momentum into 2027.

Putting the pieces together across the enterprise, we remain confident in the mid-teens adjusted EPS CAGR from 2025 through 2028 that we outlined at our investor day. While we would not normally comment on 2027 consensus this early in the year, an outlook of at least $8.44 consistent with current consensus appears reasonable at this juncture. This represents EPS growth of about 13% off an adjusted baseline of $7.46. This baseline reflects the midpoint of our updated EPS guidance and, consistent with our guidance convention, excludes prior year development and prior year items in our individual exchange business, which we have exited. Importantly, these expectations continue to be grounded in our guidance philosophy of establishing credible targets, delivering with disciplined execution, and highlighting opportunities for outperformance. Before we open the call for questions, I want to reiterate how encouraged we are by our performance this quarter.

We delivered year-over-year revenue and adjusted operating income growth across all our operating segments. Our performance so far in 2026 is a testament to our intense focus and disciplined execution as we continue to do what we said we would do and highlights our ability to unlock the significant earnings opportunity of CVS Health. 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 bar at the bottom of your screen. When it is your turn, you'll receive a message on your screen, you'll hear your name called. Please accept, unmute your audio, and ask your question. If you're 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'll take our first question from Michael Cherny with Leerink Partners. Please unmute your line and ask your question.

Good morning. Thanks for taking the question. Really nice job on the quarter. If we could, I'd love to dive in a bit more to the headwinds and tailwinds you discussed on a preliminary basis for 2027, in particular, around HSS. As you think about the dynamics of managing to some level of growth trajectory, how do you feel about the opportunities, whether it's conversion on formulary, whether it's specialty dynamics that are within your control? How do you think about the pathway forward to offset and mitigate, in particular, the 340B headwinds, given that it does seem to be a moving target within D.C. right now? Thank you.

Thank you. Thank you, Michael, and appreciate the comments on the quarter. I'm going to do this in two parts. I'm going to have Brian give you the broader financial view of the HSS, and then I'm going to have Brian give some color commentary on some of the specifics that you asked. Brian?

Thanks, David, and Mike, thanks for the question. I'll take you back to Investor Day. We always saw multiple pathways to achieving our target of a mid-teens EPS CAGR. I think if you look at this year, Mike, based on the strength of our performance across the enterprise, we remain very confident in our commitment through 2028. At a high level, that 2025 to 2028 remains intact.

While I think it's too early in our planning process for specifics on 2027, given some of the dynamics that we're seeing early in the year, we just wanted to provide some commentary and pull forward the conversation by about a quarter. I would reiterate, confident in our ability to generate highly attractive earnings growth, at the enterprise level next year in 2027. I think a reasonable floor, Mike, for 2027, for adjusted EPS, could be 844, and that's obviously consistent with current consensus. It would imply an EPS growth rate for us of about 13% off of that adjusted baseline of 746. Just to remind you, the baseline reflects the midpoint of our updated EPS guide and then consistent with our guidance convention, it excludes prior year development, PYD, and any prior year items in our individual exchange business, which we've exited.

One thing I think, Mike, also worth emphasizing is the strong cash flow generation of the enterprise. It was demonstrated again this quarter. We continue to strengthen our balance sheet. As a reminder, we've only reflected the offset of dilution in our long-term expectations. The expectations continue to be grounded in a guidance philosophy of establishing credible targets, delivering with disciplined execution, and highlighting opportunities for outperformance. Prem, do you want to talk more about the dynamics within the business?

Yeah. Thanks, Michael, for the question, and thanks, Brian. Just a couple things, right? We highlighted two pressures that we're seeing right now. One is from 340B and one is from the selling season. On 340B, we're confident in our 2026 guide for our services due to the broader strength across the business. I'll talk about that in a second. We did experience some pressure from 340B in the quarter and now expect that to be a headwind as we go into next year. With respect to the selling season, recall last year, we had an incredible selling season where our pipeline was very active. We had over $6 billion in new sales from last year, or sorry, for this year, and that's meaningfully above our historical average.

As we went into 2027, we took a disciplined and prudent approach to the selling season to ensure that we had the right underwriting and contracts in place for the new business and renewals that we had. At this point in the year, we're trending to a retention rate that's slightly lower than our historical performance, but more consistent with industry norms. I'd say the second part of the selling season that's dynamic at this point is really around how our health plans are handling the selling season and as our clients continue to assess the markets in which they operate, and that could also have implications on our membership. Your question on how we plan on offsetting it, look, I think we have a tremendous specialty pharmacy business that continues to perform exceptionally well.

When you talk to our PBM customers, they're focused on the things they've been focused on for many decades, what they expect out of us, which is how do we help them lower the cost of goods for the memberships that they serve. Our specialty pharmacy business and specialty generic pipeline is areas in which we continue to have very high generic adherence as well as generic dispensing rates that's creating value for our customers. Secondly, we continue to create innovative solutions like Cordavis, where we launched a biosimilar, and that's generated over $1.8 billion of savings on just HUMIRA for our customers. We're continually focused on our clients' needs. Last I checked, the industry, the brand trends, and brand inflation continue to be really high.

We're focused on managing the trend for our clients, reducing the cost for our clients, and we think by doing that, we'll continue to deliver value for our customers. We really do believe the ability to maintain margins with historical levels is how we see this business. In this industry, it's been durable over the long term, and we continue to believe that's the way this will be as we go forward.

Thank you, Brian and Prem. Maybe just one additional comment. As Brian said, we pulled forward the headwinds and tailwinds, so I appreciate the other question, but I think the theme you're going to hear from us is going to continue to be around the tremendous momentum we have across CVS Health. I just want to reinforce a couple of thoughts here. One is we took the right steps at Aetna. You see the results as they're coming through. This is our second consecutive year of strong performance. We've talked about the strong performance in our retail business, so the deliberate and intentional investments that we've made, both in our colleagues and technology, and our pricing model has continued to make us the best national pharmacy in the country. The tailwinds on the PS business is our specialty.

As Prem said, we're running the best specialty pharmacy in the country. The tailwinds and the trajectory of that business, what we haven't talked about is the investments in technology and AI specifically, which is allowing us to focus on the things that are creating friction in the marketplace, and we're trying to improve the healthcare experience. A big push and a big investment in that area. The GLP-1s, we're really proud of the fact that we're able to serve that market in multiple ways, both whether it be in the pharmacy benefit and or at a business, managing the underlying cost and or serving the consumer in a cash or unfunded marketplace, the relationships that we're announcing with the manufacturers are allowing us to be a leader in that space.

As Brian mentioned, we have a strong balance sheet, continue to make progress in terms of strengthening and positioning ourselves in terms of creating a more disciplined capital deployment model. Overall, I would say we definitely wanted to pull forward the headwinds, tailwinds early. Again, talking about the fact that we have some pressure in our PBM at the moment, it's more than offset by the strength that we have across the enterprise. Again, thanks for the question. Next question, please.

Our next question comes from Lisa Gill with JPMorgan. You may now unmute your line and ask your question.

Thanks very much and good morning. Just really want to follow up on the health benefits side of your business. Obviously, very strong performance in the quarter. Just had a couple of questions here. One, can you maybe just talk about what you're seeing in the underlying trend? You mentioned that Medicare Advantage was better, but as we think about what Brian talked about for 2027, just your thoughts on the way that you bid for MA in 2027, thoughts on Medicare Part D in 2027 and how you see that playing out. Then David, just on your comments on GLP-1s, can this be a meaningful component to growth over time, or is this just taking all the elements of what CVS has to offer and bringing it to the market?

Thanks, Lisa, for the question. I'll have Steve talk specifically to the healthcare benefits business and Medicare and Part D, and then I'll come back on the GLP-1.

Morning. Thanks, Lisa, for the question. I'm going to start with just Aetna overall, just to give you a perspective. We have a great team executing at a high level. Really encouraged about the progress across all three businesses. Medicaid is in line, great advocacy execution. Our commercial business has been strong, remains strong, seeing growth in a highly disciplined pricing environment, and then our Medicare business, as you asked specifically about, is ahead of our expectations.

Really pleased with the performance across the entire Aetna and the progress that we're making over the last couple of years. Specifically on Medicare, before I comment on whatever I can on 2027, it's a little early to be specific, but let me give you a little context on the performance in 2026, because I think that'll help you understand some of my commentary around 2027. As we've laid down the foundation for this business over the last couple of years, we've made tremendous progress in the geographic footprint, our product mix, our ability to execute during AEP, and we've taken a lot of discipline into both previous bid cycles. That is playing out in 2026.

We've seen less contraction in our membership than we expected, favorable member mix. We have leading STARS scores. It's all really coming together. Our strong medical cost management approach has really been producing some really strong momentum in this business for 2026, and we expect that to continue. As I think about 2027, as we contemplated the bids, we're taking that same focus to return the business to target margins, and the same discipline. We assumed a continuation of the elevated trend as we put our bids in. We think this business, combined with our leading STARS scores, is going to be well positioned to make that continued progress towards the appropriate margins in 2027, but also delivering a great experience and good health outcomes for our members. Very encouraged about the individual Medicare Advantage business.

Before I comment on Part D, just highlight group Medicare Advantage too, because that has contributed meaningfully to the progress. With 2027 pricing in, we have renewed about 75% of our book, good progress there, and that's contributing to the return to target margin. On Part D specifically, that business is operating, performing in line with our expectations. We took deliberate actions over the past couple of years to, I'd say, de-risk that and simplify our product portfolio. We contemplated that same approach and took that same discipline into our 2027 bid. Overall, really encouraged by the progress. The momentum's going to continue. We will make continued progress in 2027 as well.

Yeah. Thanks Steve. Lisa, with the two-parter, it may be a little lengthy response here, but let me give you the context for GLP-1. I think we all know that GLP-1 served the diabetes market. It remains a funded benefit for most all, if all of our customers at the moment. The question that we're dealing with is where we think the obesity category is headed. That's why we continue to emphasize the fact that we can capture the GLP-1 volumes in our funded programs with Caremark and Aetna and help manage the underlying cost. At the same time, we see a lot of movement back into the cash or the unfunded marketplace, which is why we're emphasizing the ability to support in our direct consumer platform, the ability to serve both the Lilly and Novo products in that market.

Prem, maybe you want to just give a little bit of color on how we're thinking about GLP-1s and the impact it will have across some of your business.

Yeah, just to add to what David said, I'd say a few things. First off, on the Caremark side, GLP-1s continues to be a trend driver and a challenging category for our customers. As we announced in May, we're expanding our formulary options again for GLP-1s while continuing to drive savings in the category for our funded customers. When you think about the open market, as David alluded to, I would say, we may have been slightly slow to enter the cash paying market or direct-to-patient market, we've kind of repivoted that program over the course of this year, and we're really proud of where we landed. First off, from a MinuteClinic perspective, we launched a new weight management offering in Q2 at $49 for a visit.

We're announcing now that we're going to reduce the price of those weight management visits to $29 as we go forward. Those visits are available 24/7 across the country or in our hundreds of MinuteClinics that we have across the country. You can get access to that in either way. Secondly, we're excited about our partnership, as David mentioned, both with Lilly, with our new announcement to take care of more patients in the cash market as well as our Novo product offering that we have there. We continue to be able to serve all FDA-approved products. This is an opportunity that we see in PCW that generated some of the strength that you saw in the quarter and as well as you'll see in the back half of this year.

It's a tremendous opportunity for us to create solutions that consumers are asking for and really leverage our 9,000 community pharmacy destinations and create it in a manner in which consumers ask for. We're excited to bring this to market. We're excited about the opportunity it creates for our enterprise, but more importantly, the opportunity it creates to create access across the country.

Our next question comes from Justin Lake with Wolfe Research. Please unmute your line and ask your question.

Thanks. Good morning. First, a quick follow-up on 2027. Is there any share repo or other capital deployment assumed in that 844, or is that still outside the guide similar to the Investor Day framework? My question is around the retail business strength. We know you're benefiting at the moment from share gains from Rite Aid and others that might normalize over time. I'm curious on your thoughts of the sustainability of the strong PCW growth, the share gains might normalize going forward. Maybe you can give us an update on the cost-plus rollout, how you're seeing your ability to stabilize gross margins per script into 2027 and beyond, and any other dynamics we should consider? Thanks.

All right, perfect. Thank you, Justin. Brian, can you answer the share repo question and then turn it over to Prem for the color on the durability and strength of retail?

Sure, David. Thanks, Justin. Good morning. Similar to what we talked about in Investor Day, we're only assuming offsetting dilution in 2027, Justin. Nothing beyond that at this point. Obviously you heard cash is improving. Prem, you want to fill in the rest of the color?

CVS Health (CVS) Q2 2026 Earnings Call Transcript

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