10-QPeriod: Q3 FY2025

CVS HEALTH Corp Quarterly Report for Q3 Ended Sep 30, 2025

Filed October 29, 2025For Securities:CVS

Summary

CVS Health Corporation reported a net loss of $3.98 billion for the third quarter of 2025, a significant downturn from the prior year's net income of $87 million. This substantial decline was primarily driven by a goodwill impairment charge of $5.7 billion related to its Health Care Delivery reporting unit, compounded by ongoing litigation expenses, including opioid-related charges. Despite the reported net loss, total revenues saw a healthy increase of 7.8% to $102.9 billion for the quarter, driven by growth across all segments, particularly in 'Products' and 'Premiums'. The company's Health Services segment experienced robust revenue growth, though its adjusted operating income saw a slight decrease. The Pharmacy & Consumer Wellness segment also reported revenue growth, with strong same-store sales, but faced pressure on adjusted operating income due to reimbursement challenges and increased investments. The Health Care Benefits segment showed significant improvement in its adjusted operating income, benefiting from favorable premium deficiency reserve adjustments and strong performance in its government business.

Financial Highlights

54 data points
Beta

Revenue

$102.87B

44.5% Gross Margin

Net Income

-$3.98B

-3.9% Net Margin

EPS (Diluted)

$-3.13

Total Assets

$255.33B

Cash & Equivalents

$9.10B

Free Cash Flow

$98.00M

Financial Statements
Beta
Revenue$102.87B
Cost of Revenue$57.05B
Gross Profit$45.83B
Operating Expenses$106.08B
Operating Income-$3.21B
Net Income-$3.98B
EPS (Basic)$-3.13
EPS (Diluted)$-3.13
Shares Outstanding (Basic)1.27B
Shares Outstanding (Diluted)1.27B

Key Highlights

  • 1Net loss of $3.98 billion for the third quarter of 2025, compared to a net income of $87 million in the prior year.
  • 2Significant goodwill impairment charge of $5.7 billion recognized for the Health Care Delivery reporting unit.
  • 3Total revenues increased by 7.8% to $102.9 billion for the quarter, indicating top-line growth across segments.
  • 4Health Care Benefits segment's adjusted operating income improved substantially, turning from a loss to a profit, driven by favorable reserve adjustments and government business performance.
  • 5Health Services segment revenue grew by 11.6%, but adjusted operating income decreased by 7.0% due to client price improvements and increased investment.
  • 6Pharmacy & Consumer Wellness segment revenue increased by 11.7%, with strong same-store sales, but adjusted operating income declined by 7.4% due to reimbursement pressure and investments.
  • 7Company continues to manage substantial litigation risks, with ongoing opioid litigation and other legal proceedings impacting financial results.

Frequently Asked Questions

The primary driver for the substantial net loss of $3.98 billion in the third quarter of 2025 was a goodwill impairment charge of $5.7 billion recognized for the Health Care Delivery reporting unit. This was further impacted by ongoing litigation expenses, including opioid-related charges.

Total revenues grew by 7.8% to $102.9 billion, with all segments contributing positively. The Health Care Benefits segment showed a significant improvement in adjusted operating income, moving from a loss to a profit. The Health Services segment's revenue increased, but adjusted operating income declined. The Pharmacy & Consumer Wellness segment also saw revenue growth and strong same-store sales, but its adjusted operating income decreased due to reimbursement pressures and increased investments.

The company experienced a decline in medical membership for its Medicare and individual exchange products and plans to exit individual exchange plans in most states by January 2026. Utilization levels remained elevated through the third quarter of 2025, which is expected to continue pressuring the Health Care Benefits segment and health care delivery assets in the Health Services segment. Further utilization increases could lead to future goodwill impairment.

CVS Health is facing significant litigation risks, including substantial opioid-related litigation, PBM investigations and lawsuits concerning drug pricing and rebate arrangements, usual and customary pricing litigation, and other matters related to prescription processing and controlled substances. The company has recorded reserves for some of these matters, but the ultimate outcomes remain uncertain and could materially impact financial results.