Cigna Group (NYSE:CI) reported first-quarter financial results on Thursday. The transcript from the company’s first-quarter earnings call has been provided below.
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Summary
Cigna Group reported strong first quarter 2026 results with total revenues of $68.5 billion and an adjusted earnings per share (EPS) of $7.79.
The company raised its full-year 2026 adjusted EPS outlook to at least $30.35 due to strong performance and market momentum.
Strategic portfolio updates include exiting the individual exchange business and exploring strategic alternatives for Evercore to focus on core growth platforms.
Management highlighted the launch of a new rebate-free pharmacy benefits model, Signature, aimed at providing the lowest out-of-pocket costs for consumers.
CEO David Cordani announced his transition to Executive Chair, with Brian Ivanko succeeding him as CEO in July 2026.
Full Transcript
OPERATOR
Ladies and Gentlemen, thank you for standing by for the Cigna Group’s first quarter 2026 results review. At this time, all callers are in a listen only mode. We will conduct a question and answer session later during the conference and review procedures on how to enter queue to ask questions at that time. If you should require assistance during the call, please press Star zero on your touch tone phone. As a reminder, ladies and gentlemen, this conference, including the Q and A session is being recorded. We’ll begin by turning the conference over to Ralph Jacoby. Please go ahead.
Ralph Jacoby (Senior Vice President of Investor Relationship)
Great, thanks. Good morning everyone. Thanks for joining today’s call. I’m Ralph Jacoby, Senior Vice President of Investor Relations. With me on the line this morning are David Cordani, the Cigna Group’s Chairman and Chief Executive Officer Brian Ivanko, President and Chief Operating Officer and Ann Denison, Chief Financial Officer. In our remarks today, David, Brian and Anne will cover a number of Topics, including our first quarter 2026 financial results and our financial outlook for 2026. Following their prepared remarks, David, Brian and Anne will be available for Q and A. As noted in our earnings release, when describing our financial results, we use certain financial measures, including adjusted income from operations and adjusted revenues, which are not determined in accordance with accounting principles generally accepted in the United States, otherwise known as GAAP. A reconciliation of these measures to the most directly comparable GAAP measures, shareholders net income and total revenues respectively, is contained in today’s earnings release which is posted in the Investor relations section of thecignagroup.com we use the term labeled adjusted income from operations and adjusted earnings per share on the same basis as our principal measures of financial performance. In our remarks today, we will be making some forward looking statements, including statements regarding our outlook for 2026 and future performance. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our current expectations. A description of these risks and uncertainties is contained in the cautionary note to today’s earnings release and in our most recent reports filed with the SEC regarding our results. In the first quarter, we recorded after tax special items charges of $322 million or $1.22 per share. Details of the special items are included in our quarterly financial supplement. Additionally, please note that when we make prospective comments regarding financial performance, including our full year 2026 outlook, we will do so on a basis that includes the potential impact of future share repurchases and anticipated 2026 dividends. With that, I’ll turn the call over to David.
David Cordani (Chairman and Chief Executive Officer)
Thanks, Ralph. Good morning everyone. And thank you for joining us today. This call is somewhat bittersweet for me as it is my last quarterly earnings call after many years at Cigna Group as CEO, I participated in close to 70 of these calls with you, and I’m pleased to be able to share strong results again on this call today, I’ll focus my remarks on our strong first quarter performance and how we continue to deliver in a dynamic operating environment, and then I’ll take a moment to address our leadership transition on July 1, when Brian Ivanko will step into the CEO role to drive our company’s next chapter of growth and I’ll transition to the role of Executive Chair. Following my remarks, Brian will provide a more detailed update on our business platforms and performance and then Ann will review additional details about our financial results and outlook and then we’ll move to your questions. So let’s get started. I’m pleased to report that the Cigna Group delivered strong performance in the first quarter, including total revenues of $68.5 billion and adjusted earnings per share of $7.79 all while we continue our disciplined track record of reinvesting back in our businesses to fund growth, addressable market expansion and innovation. With our performance, we are raising our full year 2026 adjusted EPS outlook to at least $30.35, reflecting our disciplined approach and steady execution in an operating environment that continues to be shaped by many forces. Two of these forces are clearly rising to the top for customers and employers. First, affordability and second, the need for health care that is more personalized and as a result, easier to navigate. We are addressing these expectations in an environment where healthcare demand continues to rise and the cost of new services like pharmaceuticals continue to grow at a rate greater than inflation. Against this backdrop, over the course of my tenure, there are three key attributes that our company has demonstrated time and again to fuel a successful track record of performance rooted in purpose and innovation. First, and perhaps most importantly, we’ve been steadfast in our commitment to put the customer at the center to make the healthcare journey more affordable, personalized and overall easier to navigate. This commitment is what spurred us to improve our prior authorization process as outlined in our first Customer Transparency Report, which was released last month. Our goal is to make the process faster and more seamless while ensuring that care is delivered at the right time and right place appropriately and safely. To that end, we have removed hundreds of tests and procedures and services from prior authorization process in the United States, decreasing the volume of medical prior authorizations by about 15%. Our commitment to the customer also drove us to take an active role within the industry, which last week announced further progress towards standardization of the prior authorization process. This is enabling greater automation and more seamless, efficient access to care while maintaining appropriate safeguards. This announcement reflects continued progress on the voluntary commitments our industry made in June of 2025 in coordination with HHS and CMS. Second, our company is taking a strategic and disciplined approach to the way we shape our business portfolio, which Brian will address more in a moment. Through our approach, we remain sharply focused on where we can deliver differentiated value and we feed those businesses with additional capabilities and resources and where we cannot, we make the decision to exit. This process has honed our focus on the addressable markets where we have a right to win for the benefit of our customers, patients and clients, which has been a critical driver in our success for many years. Finally, we have a proven ability to innovate and perform even in the most challenging environments, whether that has been periods of accelerated medical costs or during the COVID 19 pandemic, just to name two. In moments like these, when customers, needs and behaviors change quickly, we remain relentlessly focused on market centricity, customer centricity and micro segmentation. The introduction of our transformative rebate free pharmacy service model is the most recent example. This multi year investment in innovation will deliver the lowest price to the consumers for their brand drugs, which will be 30% lower with full transparency each and every time and this model further deepens partnerships with independent pharmacists, including those critical ones in rural communities. We call this offering Signature, a name that reflects a new era in pharmacy services. Now, before concluding my remarks, I also want to speak briefly to our upcoming leadership transition. After my nearly 17 years as CEO of the Cigna Group, we are on track for our carefully planned transition on July 1st when Brian will succeed me as CEO and I will take on the role of Executive Chairman. Brian has a strong history of prioritizing customer and client needs and decision making, grounded in our clarion mission and enduring sense of purpose. Looking ahead, he is committed to further the use of data and AI to drive affordability and personalization, which in turn drives value and sustained growth with a strong foundation and clear focus. I’m excited for Brian to take the helm to guide the Cigna Group to its next chapters of growth and I look forward to working closely with Brian in my role as Executive Chair. Now let me wrap up and summarize the quarter and our results. We delivered strong performance, giving us the confidence to raise our full year guidance for 2026. We delivered total revenues of $68.5 billion and earnings per share of $7.79. Looking ahead, our increased adjusted EPS outlook of at least $30.35 reinforces the sustained growth, durability and strength of our company. We are delivering in a highly dynamic environment and we continue to invest with purpose through a customer first orientation, driving, disciplined portfolio shaping and innovating to personalize and modernize health care for the benefit of our customers and clients. We have a clear strategy and the right leadership team in place to capitalize on those opportunities ahead. And with that, I’ll turn the call over to Brian to discuss our results in more detail.
Brian Ivanko (President and Chief Operating Officer)
Thanks, David. Good morning everyone. First, I want to take a moment to thank David and acknowledge his strong leadership both within our company and throughout the industry. Through his 35 years of service with the company, he has left an enduring legacy defined by an unwavering focus on meeting customer needs, a relentless partnership orientation toward others, and a deep commitment to the communities that we serve. It’s been a privilege to work with him for so many years. Looking to the future there’s no question that the status quo in health care is unsustainable. Costs continue to rise as does demand for healthcare services, an untenable equation in this environment. The experience that I have gained over my nearly three decades with the company have sharpened my understanding of the needs of those we serve and strengthened my commitment to continue to deliver on our mission. I’m humbled and honored to take on the role of CEO in July with a focus on the Cigna Group becoming the clear leader in consumer focused and AI enabled health services with an emphasis on clinically complex patients making care more affordable and more personalized for those we serve. In my remarks today, I will cover several topics. First, I will share a few ways we are shaping our portfolio for the future aligned to our strategy. Then I will review our first quarter business performance across our growth platforms and I will go a bit deeper on ways that we are harnessing data, advanced analytics and AI to deliver more affordable and more personalized healthcare services. Turning to our portfolio, we have a disciplined and consistent approach to ensure that our businesses are aligned to and support our strategic direction and can deliver differentiated value in the market. Over the years, this approach has guided our decisions to either add to or subtract from our portfolio, which in turn has positioned our core healthcare businesses for sustainable growth. For example, last year we added key capabilities in the highly attractive specialty pharmacy market. Our acquisition of carepath Rx provides us with further depth in infusion related services and our investment in Shields Health Solutions provides us the opportunity to partner more closely with hospitals and health systems who serve patients with complex care needs and rely on specialty medications. On the other end of the spectrum are the businesses we have divested where the assets no longer support our strategic direction or have reduced management focus from our core growth platforms. Our divestiture of our group life and disability business, which also meaningfully reduced the company’s exposure to economic downturns, is a prime example, as is the more recent sale of our Medicare businesses. Divesting each of these assets enabled greater focus and investment in the remaining businesses within our portfolio, supporting our forward looking growth path. In keeping with this portfolio shaping discipline, today we are announcing two additional actions. First, we are planning to exit our individual exchange business at the end of this year. We did not make this decision lightly and appreciate the importance of ensuring patients have continuity through the transition. There are no changes to coverage or networks related to this announcement and we will support members who are through their open enrollment transitions into 2027. Second, as our industry continues to make strong progress on standardizing and automating prior authorization services, we have decided to initiate a strategic review of alternatives for evicor. Evicor is a part of enabling how care is evaluated and delivered across the industry, including working with numerous health plans to perform reviews and prior authorizations on their behalf. As David mentioned, prior authorization plays an important role in health care and we will explore options to continue delivering the highest level of service for health plans and the industry at large while maximizing long term value. We see the potential for different approaches to standardized prior authorization across the improving transparency for customers and clients, reducing the administrative burden for providers and creating efficiencies for the industry. Both of these actions reflect a deliberate strategy to sharpen our focus on our core platforms where we have the capabilities, positioning and expertise to deliver differentiated value for the benefit of those we serve. Turning to our performance in the first quarter, we started the year with strong results across both evernorth Health Services and Cigna Healthcare. Overall, Evernorth earnings were slightly ahead of expectations. This was driven by the strength of our specialty and care services businesses which delivered adjusted earnings growth of 20% in the quarter, reflecting continued attractive volume growth as the specialty pharmacy marketplace continues to grow. We are well positioned across our suite of solutions, our strong supply chain and our expertise in inventory management and complex drug distribution. Our ability to deliver a strong clinical support model continues to have a positive impact for patients and clients alike. We see this through higher adoption and adherence rates once patients begin taking biosimilars in specialty generics, leading to better overall outcomes. Turning to Evernorthth’s pharmacy benefit services business, our results were in line with expectations. Our first quarter results reflect previously discussed impacts of large client renewals and investments as we progress toward our transformative new rebate free model, aptly named Signature. This week we met with hundreds of leaders from our largest pharmacy benefit services clients and there are a few consistent themes we’re hearing from clients and prospects alike about the direction of our business. First, our forward thinking innovation is resonating or its focus on the consumer offering the lowest out of pocket cost at the pharmacy counter and helping clients navigate through a very complex and fluid external environment. As clients continue to face budget uncertainty driven by new drug launches and mid year market disruptions, our new simplified model will give clients clear visibility into economic value and greater predictability. Second, they appreciate that we are proactively leading through regulatory and legislative changes. We continue to hear from clients and prospects that they are seeking clarity, predictability and value for consumers. Our Signature model directly addresses these priorities and supports plan sponsors as they address their obligations today and in the future. Finally, our clients value our partnership in meeting their needs today while anticipating future needs. This feedback is reflected in a strong start to our 2027 pharmacy benefits services selling season. Finally, turning to Cigna Healthcare, our earnings exceeded expectations in the quarter and grew 18% year over year powered by solid persistency, continued disciplined execution and MCR favorability. Our strong earnings performance is further enabled by our innovative offerings and focus on consumer experience improvements. Recently, Cigna Healthcare was ranked number one by JD Power and Digital Experience Satisfaction among commercial health plan members. For the second consecutive year, we are also seeing Clarity. Our new co Pay only medical plan launched late last year generates strong market interest. In addition to its simplified product design, Clarity features externally derived clinical quality measures and a single digital front door that gives customers integrated access to care and their historical claims Data through our MyCigna app. Taken altogether, we’re pleased with our strong first quarter performance across both Evernorthth and Cigna Healthcare. The positive first quarter results and market momentum are further powered by our embrace of data and modern technology. By leveraging the combined power of data, advanced analytics and AI, we’re able to drive greater customer and client satisfaction through improved affordability of care and greater personalization of services. Let me offer a few examples. Starting in our specialty and care services businesses today we are using AgentIQ AI together with our clinical expertise to improve customer and patient experiences. This is enabling us to transform how prescriptions are processed efficiently, schedule prescription orders and proactively identify patients who may need additional service. We do not use AI for clinical decision making, but rather AI capabilities increase the speed and strength in the decision quality of our highly experienced clinical teams. In pharmacy benefits services, we are utilizing AI to enable better care and service to our customers. This includes leveraging AI in our signature model to improve member communication and notifications and help patients make decisions on their care journey and enhancing our capabilities to deliver the lowest out of pocket cost for consumers including with GLP1s where we continue to evolve as new oral solutions enter the market and prices decrease. In Insignia Healthcare, we are using AI enabled capabilities to improve outcomes through risk prediction models, identifying complex patients earlier and connecting them with our clinical teams. Our predictive high cost claimants model identifies members with increasing care needs earlier in their clinical journey. This then enables targeted clinical engagements that improve affordability, reduce acute utilization and drive measurable cost savings. To date for those customers engaged in this model, we see an average of $2,000 per member per year in savings resulting in the elimination of unnecessary provider and ER visits. This improved high cost claimant prediction capability has benefits across Cigna Healthcare, for example in the stop loss business more broadly, we are proactively helping our customers in highly personalized ways. The combination of our AI tools and contact centers and improved customer digital experiences led to a 20% drop in total inbound calls for digitally eligible customer in our Cigna Healthcare US employer business and a 25% reduction for pharmacy benefit services members when compared to just two years ago. Ultimately, these capabilities allow us to go beyond administrative …
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