CVS Health (CVS) Q2 2024 earnings summary

Executive summary

• Q2 2024 total revenues rose 2.6% year-over-year to $91.2 billion, driven by Health Care Benefits and Pharmacy & Consumer Wellness growth, partially offset by Health Services decline.

• Adjusted EPS for Q2 2024 was $1.83, with GAAP EPS at $1.41, reflecting Health Care Benefits segment pressures.

• Operating cash flow for the first half reached $8.0 billion, down from last year due to Medicare payment timing and utilization.

• Leadership changes were made in the Health Care Benefits segment, with the CEO assuming direct oversight and a new COO appointed.

• Over 186 million people served, 57 million+ using multiple offerings, and ~$400 million in biosimilar savings generated.

Financial highlights

• Q2 2024 total revenue: $91.2B (up 2.6% YoY); adjusted operating income: $3.74B (down from $4.48B YoY); operating income: $3.05B (down 5.8% YoY).

• Net income for Q2 2024 was $1.77B, down 6.9% year-over-year; diluted EPS was $1.41 (down from $1.48).

• Year-to-date cash flow from operations was $8.0B, down from $13.3B YoY.

• Pharmacy and consumer wellness revenue grew 3.7% to $29.8B; health services revenue was $42.2B, down 8.8%-9% due to a large client loss.

• Dividend per share for Q2 2024 was $0.665, up from $0.605 in Q2 2023.

Outlook and guidance

• 2024 adjusted EPS guidance lowered to $6.40–$6.65 (from at least $7.00); GAAP diluted EPS guidance revised to $4.95–$5.20.

• 2024 revenue guidance: $369.0B–$372.0B; adjusted operating income: $13.75B–$14.15B.

• Operating cash flow guidance for 2024 lowered to ~$9.0B.

• Health Care Benefits 2024 adjusted operating income guidance lowered by $1.05B–$1.35B; MBR guidance increased to 90.6%–90.8%.

• For 2025, Medicare Advantage margins projected to improve by 100–200 basis points, with a multi-year path to 4%–5% target margins.