The Cigna Group’s Solid Financial Performance in Q1 2025

The Cigna Group, a leading global health services company, has reported its financial results for the first quarter of 2025. The company’s performance showcases its ability to navigate the evolving healthcare landscape and deliver value to its customers and shareholders.

Overview of Financial Performance

The Cigna Group’s total revenues for the first quarter of 2025 increased by 14% to $65.5 billion, compared to the same period in 2024. This growth was driven by strong performance across the company’s business segments.

The company’s shareholders’ net income for the quarter was $1.3 billion, a significant improvement from the net loss of $277 million reported in the first quarter of 2024. This turnaround was primarily due to the absence of net investment losses that were recorded in the previous year.

Adjusted income from operations, a key metric that excludes the impact of certain items, decreased slightly by 2% to $1.84 billion. This decline was mainly attributable to the absence of state tax benefits recorded in 2024 and lower earnings in the Cigna Healthcare segment, partially offset by higher earnings in the Evernorth Health Services segment.

Segment Performance

The Cigna Group’s performance is analyzed across three main segments: Evernorth Health Services, Cigna Healthcare, and Other Operations.

Evernorth Health Services Segment

The Evernorth Health Services segment, which includes the company’s Pharmacy Benefit Services and Specialty and Care Services operations, delivered strong results. Adjusted revenues for this segment increased by 16% to $53.7 billion, driven by higher utilization of prescription drugs and an increase in claims mix.

Pre-tax adjusted income from operations for Evernorth Health Services grew by 5% to $1.4 billion. This improvement was primarily due to specialty pharmacy growth and continued affordability improvements in the Pharmacy Benefit Services business, partially offset by strategic investments and initiatives to support business growth.

The segment’s pre-tax margin decreased slightly from 2.9% in the first quarter of 2024 to 2.7% in the current quarter, while the SG&A expense ratio improved from 2.1% to 1.9%, reflecting the segment’s ability to leverage its scale and operational efficiency.

Cigna Healthcare Segment

The Cigna Healthcare segment, which includes the company’s U.S. Healthcare and International Health businesses, also contributed to the overall performance. Adjusted revenues for this segment increased by 9% to $14.5 billion, primarily due to higher premiums within Medicare Part D, employer-insured, and stop-loss businesses.

However, pre-tax adjusted income from operations for the Cigna Healthcare segment decreased by 4% to $1.3 billion. This decline was mainly driven by a higher medical care ratio (MCR), which increased from 79.9% to 82.2%, reflecting higher medical costs, particularly in the stop-loss business. The segment’s SG&A expense ratio improved from 20.5% to 19.4%, reflecting the company’s ability to manage its expenses effectively.

Other Operations Segment

The Other Operations segment, which includes the company’s corporate-owned life insurance (COLI), run-off operations, and other non-strategic businesses, reported adjusted revenues of $175 million, a 5% increase compared to the first quarter of 2024. Pre-tax adjusted income from operations for this segment decreased to $0 million, primarily due to less favorable COLI claims experience and unfavorable margins in the non-strategic businesses.

Liquidity and Capital Resources

The Cigna Group maintains a strong financial position, with ample liquidity and capital resources to support its operations and strategic initiatives.

As of March 31, 2025, the company had $8.5 billion in cash and short-term investments, with approximately $0.8 billion held by the parent company or certain non-regulated subsidiaries. The company also had $6.5 billion of undrawn committed capacity under its revolving credit agreements and $6.5 billion of remaining capacity under its commercial paper program, providing additional financial flexibility.

The company’s debt-to-capitalization ratio was 43.1% as of March 31, 2025, slightly lower than the 43.8% reported at the end of 2024. The company actively manages its debt obligations and engages in issuance or redemption activities as needed to maintain a balanced capital structure.

During the first quarter of 2025, the company redeemed its $700 million 5.685% senior notes that were due in March 2026. Additionally, in April 2025, the company repaid $900 million of 3.250% senior notes that were due.

The company’s capital expenditures for property, equipment, and computer software were $0.3 billion in the first quarter of 2025, consistent with the same period in the prior year.

Developments and Outlook

The Cigna Group’s performance was also shaped by a significant development during the quarter – the completion of the sale of its Medicare Advantage, Medicare Individual Stand-Alone Prescription Drug Plans, Medicare and Other Supplemental Benefits, and CareAllies businesses within the U.S. Healthcare operating segment to Health Care Service Corporation (HCSC).

The sale, which was finalized on March 19, 2025, resulted in the company receiving $4.2 billion in cash proceeds at closing, with an additional $0.6 billion expected in the fourth quarter of 2025 upon HCSC’s collection of amounts due from the Centers for Medicare and Medicaid Services. The company anticipates using the proceeds in alignment with its capital deployment priorities, with the majority allocated to share repurchases.

Looking ahead, the Cigna Group remains focused on executing its strategic initiatives and leveraging its diverse portfolio of healthcare solutions to drive growth and enhance value for its customers and shareholders. The company’s strong liquidity position and disciplined capital management approach position it well to navigate the evolving healthcare landscape and capitalize on future opportunities.

Conclusion

The Cigna Group’s first-quarter 2025 financial results demonstrate the company’s ability to deliver solid performance across its business segments. The company’s focus on operational efficiency, affordability initiatives, and strategic investments has enabled it to navigate the challenges of the healthcare industry and position itself for continued success. With a strong financial foundation and a commitment to innovation, the Cigna Group is well-equipped to meet the evolving needs of its customers and drive long-term value for its shareholders.