CVS HEALTH CORPORATION First quarter 2024
May 1, 2024
Earnings conference call
Karen S. Lynch
President and
Chief Executive Officer
Thomas F. Cowhey
Executive Vice President and Chief Financial Officer
Cautionary statement
concerning forward-looking statements
This presentation includes forward-lookingstatements. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of CVS Health Corporation ("CVS Health"). By their nature,
all forward-looking statements are not guarantees of future performance or results and are subject to risks and uncertainties that are difficult to predict and/or quantify. Actual results may also differ materially from those contemplated by the forward- looking statements due to the risks and uncertainties related to the recent acquisitions of Signify Health, Inc. and Oak Street Health, Inc. as well as the risks and uncertainties described in our Securities and Exchange Commission filings, including those set forth in the Risk Factors section and under the heading "Cautionary Statement Concerning Forward-Looking Statements" in our most recent Annual Report on Form 10-K, our most recent Quarterly Report on Form 10-Q, our recent Current Reports on Form 8-K, and this morning's earnings press release.
This presentation includes non-GAAP financial measures that we use to describe our company's performance. In accordance with SEC regulations, you can find the definitions of these non-GAAP measures, as well as reconciliations to the most directly comparable GAAP measures, on the Investor Relations portion of our website.
Link to our non-GAAP Reconciliations
2 ©2024 CVS Health and/or one of its affiliates. Confidential and proprietary.
Financial highlights
Delivered revenue growth of 3.7% and adjusted EPS of $1.31 in the first quarter of 2024.
Lowered 2024 adjusted EPS guidance to at least $7.00, primarily due to elevated Medicare utilization.
FIRST QUARTER
Financial Results
3.7%
revenue growth
$0.88
GAAP EPS
$1.31
adjusted EPS
$4.9B
cash flow from operations
GENERATING
Shareholder Value
$3.0B
accelerated share
repurchase transaction
completed
$840M
returned to
shareholders through
quarterly dividend
FULL-YEAR 2024
Company Guidance
at least $369.0B
total company revenue
at least $14.75B
total adjusted operating income
at least $7.00
total company adjusted EPS
at least $10.5B
total operating cash flow
3 ©2024 CVS Health and/or one of its affiliates. Confidential and proprietary.
OUR VISION
Building a
world of health around
every consumer
4 ©2024 CVS Health and/or one of its affiliates. Confidential and proprietary.
Our Strategic Imperatives
Grow | Build | Enable | Create | Empower |
our core business | diverse national care | consumers' health | seamless engagement | our people and |
delivery and value- | with care and | and personalized | culture | |
based care capabilities | coverage capabilities | experiences across | ||
across local points | all company channels | |||
of care |
5 ©2024 CVS Health and/or one of its affiliates. Confidential and proprietary.
Consolidated Results
in billions, | Q1 2024 |
except per share amounts | |
Total Revenues | $88.4 |
Adjusted Operating Income | $2.96 |
GAAP Earnings per Share | $0.88 |
Adjusted Earnings per Share | $1.31 |
Cash Flow from Operations | $4.9 |
Q1 2023
$85.3
$4.37
$1.65
$2.20
$7.4
Business highlights
Implemented our unique and meaningful formulary change related to Humira, driving greater adoption of biosimilars and increasing the affordability of critical specialty drugs.
In the first month since the formulary change, more biosimilar Humira
prescriptions have been dispensed than the entire U.S. market in 2023.
Completed a $3.0 billion accelerated share repurchase transaction in the first quarter, retiring ~40 million shares.
Returned $840 million to shareholders through quarterly
dividend.
6 ©2024 CVS Health and/or one of its affiliates. Confidential and proprietary.
2024 Consolidated Guidance
Full-year guidance
in billions, except per share amounts and tax rate
Total Revenues
Adjusted Operating Income
GAAP Earnings per Share
Adjusted Earnings per Share
Cash Flow from Operations
Interest Expense
Capital Expenditures
Adjusted Effective Tax Rate
Weighted Average Diluted Share
Count
Q1 2024
May 1, 2024
At least $369.0 At least $14.75 At least $5.64 At least $7.00 At least $10.5
~$2.9 ~$3.0 ~25.6% ~1.265
Q4 2023
February 7, 2024
At least $371.3
At least $16.90
At least $7.06
At least $8.30
At least $12.0
~$2.9
~$3.0
~25.4%
~1.263
Business highlights
Revised full-year 2024 adjusted EPS guidance to at least $7.00, primarily due to the impact of elevated Medicare utilization in our Health Care Benefits business.
Since unveiling CVS Caremark TrueCost™ and CVS CostVantage™, there has been a tremendous interest in these more simple and transparent pharmacy models.
Achieved several wins with large Commercial clients and received key RFP awards in Medicaid, including Virginia and Texas.
7 ©2024 CVS Health and/or one of its affiliates. Confidential and proprietary.
Superior assets. Superior care. Superior value.
8 ©2024 CVS Health and/or one of its affiliates. Confidential and proprietary.
Health care benefits
Quarter Results
Full-year guidance
in billions, except MBR and membership
Total Revenues
Adjusted Operating Income Total Medical Membership
(millions)
Commercial
Government
Medical Benefits Ratio (MBR)
Total Revenues
Adjusted Operating Income Total Medical Membership
(millions)
Medical Benefits Ratio (MBR)
Q1 2024
$32.2
$0.73
26.8
18.9
7.9
90.4%
Q1 2024
May 1, 2024
At least $129.1
At least $3.60
~27.0
~89.8%
Q1 2023
$25.9
$1.82
25.5
18.0
7.5
84.6%
Q4 2023
February 7, 2024
At least $125.1
At least $5.40
~26.9
~87.7%
Business highlights
Increase of 1.1 million members sequentially reflects broad based growth in our Medicare, Individual Exchange and Commercial products.
Medical costs were ~$900 million above expectations, primarily in Medicare Advantage, driven by ~$500 million of seasonal factors or items specific to the quarter. The remaining ~$400 million of pressure was driven by utilization trends we assume will persist for the remainder of 2024.
Lowered 2024 adjusted operating income guidance to at least $3.6 billion and increased 2024 medical benefit ratio guidance to ~89.8%.
9 ©2024 CVS Health and/or one of its affiliates. Confidential and proprietary.
Health services
Results | in billions, except pharmacy claims |
Total Revenues | |
Quarter | Adjusted Operating Income |
(millions) | |
Pharmacy Claims Processed1 |
guidance | Total Revenues |
-year | Adjusted Operating Income |
Pharmacy Claims Processed1 | |
Full | (billions) |
Q1 2024 $40.3 $1.36 462.9
Q1 2024
May 1, 2024
At least $167.0
At least $7.00
~1.91
Q1 2023 $44.6 $1.68 587.3
Q4 2023
February 7, 2024
At least $169.7
At least $7.40
~1.87
Business highlights
Health Services revenue of ~$40 billion was impacted by the previously announced loss of a large client and continued pharmacy client price improvements, partially offset by
pharmacy drug mix, growth in specialty pharmacy and the acquisitions of Oak Street Health and
Signify Health.
Oak Street Health ended the quarter with 205 centers, an increase of 33 centers year-over-year.
Lowered 2024 adjusted operating income guidance to at least $7.0 billion, reflecting impact of higher Medicare utilization in Health Care Delivery and mix trends in Pharmacy Services.
10 ©2024 CVS Health and/or one of its affiliates. Confidential and proprietary.
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CVS Health Corporation published this content on 01 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 May 2024 09:35:42 UTC.
