Cigna Sees Elevated Cost Trends To Continue Into Next Year

Cigna Group (NYSE:CI) reported second-quarter 2025 revenue of $67.13 billion on Thursday, beating analyst estimates of $62.46 billion.

Sales increased 11% year over year, primarily driven by Evernorth Health Services, and include growth of existing client relationships and strong specialty pharmacy growth.

The company reported adjusted earnings of $7.20 per share, beating analysts' estimates of $7.13.

Adjusted income from operations for the second quarter of 2025 increased 1% to $1.93 billion, reflecting strong growth in Evernorth Health Services and improvement in Corporate, partially offset by expected higher stop loss medical costs in Cigna Healthcare.

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Evernorth Health Services, including Pharmacy Benefit and Specialty and Care Services, reported second-quarter sales of $57.83 billion, up 17%.

Pharmacy Benefit Services sales reached $31.95 billion, an increase of 20% reflecting strong organic growth, including the growth of existing client relationships and new business.

Specialty and Care Services sales reached $25.87 billion, an increase of 13% reflecting strong specialty volume growth.

Cigna Healthcare segment sales decreased 18% to $10.75 billion, primarily reflecting the impact of the Health Care Services Corporation (HCSC) transaction.

Excluding the impact of the HCSC transaction, quarterly revenues would have increased 7%, primarily driven by premium rate increases to cover expected increases in medical costs.

The Cigna Healthcare (MCR) was 83.2% compared to 82.3% a year ago, primarily due to expected higher stop-loss medical costs.

Cigna ended the quarter with total medical customers reaching 18.05 million, down from 19.04 million. Total customer relationships stood at 182.2 million.

Total pharmacy customers as of June 30, 2025, increased 3% from Dec. 31, 2024, to 121.9 million due to new sales and the continued expansion of relationships.

During an investor earnings conference call, a Cigna executive said the company expects elevated cost trends to persist in 2026.

Outlook: Cigna reaffirms fiscal 2025 adjusted income per share guidance of at least $29.60, versus the consensus of $29.68.

The company expects Evernorth's adjusted income from operations (pre-tax) of at least $7.2 billion, with at least $4.125 billion for Cigna Healthcare.

Cigna Healthcare Medical Care Ratio is expected to be between 83.2% to 84.2%.

CI Price Action: Cigna stock is down 6.02% at $279.90 at publication on Thursday.

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