01—Abstract
Summary
Summary of the 10-Q filed May 6, 2026. Cited figures are marked; the original filing is the authoritative source.
CVS Health Corporation reported a strong first quarter for 2026, demonstrating significant revenue and net income growth compared to the prior year.
Total revenues increased by 6.2% to $100.4 billiona, driven by robust performance across all operating segments, particularly in Health Services and Pharmacy & Consumer Wellness, with notable contributions from pharmacy drug mix and brand inflation. Net income saw a substantial increase of 65.9% to $2.96 billion. This growth was significantly aided by the absence of large one-time charges incurred in the prior year, such as the legacy litigation charge and the loss on Accountable Care assets.
The effective income tax rate also improved due to these factors. The company maintained a solid liquidity position with $9.5 billionb in cash and cash equivalents, and continues to return value to shareholders through consistent dividend payments.
02—Key points
Key Highlights
- Total revenues grew 6.2% year-over-year to $100.4 billion, driven by broad segment performance.
- Net income surged 65.9% to $2.96 billion, benefiting from the absence of prior-year charges.
- Operating income increased by a significant 38.7% to $4.68 billion, reflecting improved segment performance and lower one-time expenses.
- The Health Care Benefits segment saw strong growth in its Government business and improved Medical Benefit Ratio (MBR) to 84.6%.
- Health Services segment revenue increased 11.0% driven by pharmacy drug mix and brand inflation.
- Pharmacy & Consumer Wellness segment revenues remained stable, with positive same-store sales growth in both pharmacy and front store.
- The company maintained a strong liquidity position with $9.5 billion in cash and cash equivalents as of March 31, 2026.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, CVS Health Corp kept $0.03.
- Revenue$100.43B100.0%
- Cost of revenue−$55.44B55.2%
- Gross profit$44.98B44.8%
- Operating costs−$40.30B40.1%
- Operating income$4.68B4.7%
- Interest, other & tax−$1.74B1.7%
- Net income$2.94B2.9%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed May 6, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $100.43B$94.59B | +6.2% |
| Cost of Revenue | $55.44B$51.06B | +8.6% |
| Gross Profit | $44.98B$43.53B | +3.3% |
| Operating Expenses | $95.75B$91.21B | +5.0% |
| Operating Income | $4.68B$3.37B | +38.7% |
| Net Income | $2.94B$1.78B | +65.4% |
| EPS (Basic) | $2.31$1.41 | +63.8% |
| EPS (Diluted) | $2.30$1.41 | +63.1% |
| Shares Outstanding (Basic) | 1.27B1.26B | +1.0% |
| Shares Outstanding (Diluted) | 1.28B1.26B | +1.2% |
05—Questions
Frequently Asked Questions
What were the main drivers of CVS Health's revenue growth in Q1 2026?
CVS Health's total revenues increased by 6.2% to $100.4 billion, primarily driven by revenue growth across all operating segments. This was supported by pharmacy drug mix, brand inflation, and contributions from acquisitions, alongside increased volume in the Health Services segment.
How did the company's profitability change compared to the previous year?
Net income increased significantly by 65.9% to $2.96 billion. This substantial growth was largely due to the absence of significant one-time charges incurred in the prior year, such as a $387 million legacy litigation charge and a $247 million pre-tax loss on the wind down and sale of Accountable Care assets. Operating income also saw a strong increase of 38.7%.
What is the current status of the company's legal and regulatory matters?
CVS Health is involved in numerous ongoing legal and regulatory proceedings, including those related to PBM practices, controlled substances (opioids), prescription processing, and government program compliance. While the company has reached significant settlements for opioid claims, some litigation remains. The company accrues for probable losses that can be reasonably estimated, but the ultimate outcomes of many of these matters are uncertain and could materially affect financial results.
How is the company managing its liquidity and capital resources?
CVS Health maintained a strong liquidity position with $9.5 billion in cash and cash equivalents as of March 31, 2026. Net cash provided by operating activities was $4.25 billion. The company did not have any commercial paper outstanding and had access to significant revolving credit facilities. Dividends were maintained at $0.665 per share, and the company did not repurchase shares during the quarter.
06—Continue