CVS Health beats Q4 and Q1 estimates, raises full-year 2026 outlook as turnaround gains traction.
CVS Health Corporation released financial results for both the fourth quarter of fiscal 2025 and the first quarter of fiscal 2026, with both periods exceeding analyst consensus estimates. The company also raised its full-year 2026 earnings and revenue guidance, citing progress in its operational turnaround.
Q4 2025 Financial Results
For the quarter ended December 31, 2025, CVS reported net income of $2.92 billion ($2.30 per share), compared to $1.62 billion ($1.30 per share) in the same period a year prior. Total revenue reached $105.69 billion, an 8.2% increase year-over-year.
Adjusted earnings per share for the quarter were $1.09, above the consensus estimate of $0.99. Revenue exceeded the expected $103.59 billion.
Q1 2026 Financial Results
For the quarter ended March 31, 2026, CVS reported net income of $2.94 billion ($2.30 per share), compared to $1.78 billion ($1.41 per share) in the same quarter a year prior. Total revenue was $100.43 billion.
Adjusted earnings per share were $2.57, above the consensus estimate of $2.20. Revenue exceeded the expected $95.09 billion. The adjusted figures exclude restructuring charges and capital losses.
2026 Full-Year Guidance
Following the Q1 results, the company raised its full-year 2026 guidance:
- Earnings per share: Now $7.30 to $7.50, up from a prior range of $7.00 to $7.20.
- Revenue: Now at least $405 billion, up from a prior target of at least $400 billion.
The company reaffirmed its 2026 revenue guidance includes approximately $20 billion in anticipated headwinds. Roughly half of these headwinds are attributed to CVS's decision to exit the Affordable Care Act (ACA) individual exchange market this year. The other half reflects adjustments in the retail business due to lower drug prices following "most favored nation" agreements established by the Trump administration with various pharmaceutical companies.
Segment Performance
All three business segments (insurance, retail pharmacy, and health services) surpassed revenue expectations in both reported quarters.
- Aetna (Insurance): The insurance arm showed improvement, with CFO Brian Newman attributing $5 billion of the revenue increase to "tailwinds" from Aetna.
- Caremark (Health Services): The pharmacy benefit manager is expected to negotiate further cost reductions for clients based on lower drug prices.
- Oak Street Health (Primary Care): The primary-care provider reported improved profitability following the closure of 16 underperforming locations.
- Retail Pharmacy: Performance was supported by new technological investments and new locations acquired from Rite Aid.
Strategic Adjustments
CVS is executing a broader turnaround plan that includes $2 billion in cost cuts, store closures, leadership changes, and cost reductions in Medicare Advantage plans.
CVS pharmacies are now accepting discount cards from the Trump administration's direct-to-consumer platform, TrumpRx, for eligible patients. The company stated its alignment with the goal of reducing healthcare costs.
Market Response
Following the Q1 2026 earnings report, CVS shares rose more than 4% in premarket trading.