CVS Health reported record revenue for 2025 and reaffirmed its earnings outlook for the coming year, but continuing cost pressures at its Aetna insurance business weighed on quarterly profitability and underscored the challenges faced by the company’s health benefits segment.
The Woonsocket, Rhode Island-based health care giant said Tuesday that fourth-quarter revenue rose 8.2% to $105.7 billion, driven by growth across its pharmacy, insurance and health services businesses. Adjusted earnings were $1.09 per share, down from a year earlier but above Wall Street expectations.
For the full year, CVS posted revenue of $402.1 billion, also up 7.8%, a company record.
It reaffirmed its 2026 adjusted earnings guidance of $7 to $7.20 per share, but cut its outlook for operating cash flow to at least $9 billion, citing timing-related factors.
Hartford-based Aetna Inc., which operates within CVS’ Health Care Benefits segment, continued to struggle. The segment reported a fourth-quarter adjusted operating loss of $676 million, wider than a year earlier, as medical costs continued to consume a high share of premium revenue, according to CVS.
The segment’s medical benefit ratio — a key measure of insurance profitability — was 94.8% in the quarter, meaning nearly 95 cents of every premium dollar went toward medical care.
CVS said the results were affected by changes to Medicare Part D under the Inflation Reduction Act, which altered the seasonal pattern of prescription drug costs and pressured quarterly earnings.
For the full year, however, Aetna’s performance improved, with adjusted operating income rising to $2.9 billion from $307 million in 2024, helped by favorable development of prior-year medical claims.
Still, membership trends were mixed. Total medical membership fell to 26.6 million at year’s end, down about 504,000 from a year earlier, reflecting declines in individual exchange and government plans. CVS said those declines were partially offset by growth in commercial self-insured plans.
As it seeks to address cost pressures, CVS announced Thursday it plans to lay off more than 300 additional Aetna remote workers, including 17 in Connecticut, by the end of July, raising the total number of layoffs from the insurer in the past two years to more than 1,000 workers.
Outside insurance, CVS’s pharmacy and health services businesses continued to provide stability. Retail prescription volumes climbed more than 6% in the fourth quarter, aided by prescription files acquired from closed Rite Aid locations. The company also said it completed its transition to cost-based pharmacy reimbursement across major lines of business.
CEO David Joyner, who took over that role in October 2024, said the company is making progress in reshaping its business and remains focused on improving healthcare access and affordability as it navigates ongoing pressures in the insurance market.
