CVS Health Reports $372.8 Billion Revenue for Fiscal Year 2024, Net Income Declines 44.7%

CVS Health Corporation reported total revenues of $372.8 billion for the fiscal year ended December 31, 2024, a 4.2% increase compared to $357.8 billion in 2023. This increase was driven by growth in the Health Care Benefits and Pharmacy & Consumer Wellness segments, partially offset by a decline in the Health Services segment. Operating income decreased by $5.2 billion (38%) to $8.5 billion, primarily due to higher Medicare utilization and increased restructuring charges, partially offset by higher net realized capital gains and lower acquisition-related costs. Net income attributable to CVS Health was $4.6 billion, a 44.7% decrease from $8.3 billion in 2023.

Significant changes compared to the previous fiscal year included a 23.9% increase in Health Care Benefits premiums to $122.9 billion, driven by growth in Medicare and individual exchange product lines, but offset by a rise in the medical benefit ratio from 86.2% to 92.5% due to increased utilization and lower Medicare Advantage star ratings. The Health Services segment experienced a 7.1% revenue decline to $173.6 billion, primarily due to the loss of a large client and price improvements for pharmacy clients. The Pharmacy & Consumer Wellness segment saw a 6.6% revenue increase to $124.5 billion, driven by increased prescription volume and drug mix, but partially offset by lower front store volume and reduced COVID-19 test kit sales.

During 2023, CVS Health completed the acquisitions of Signify Health and Oak Street Health, expanding its presence in health risk assessments, value-based care, and primary care services. The company also launched Cordavis, a subsidiary focused on biosimilar products. In 2024, the company finalized an enterprise-wide restructuring plan aiming to streamline operations and generate cost savings exceeding $500 million in 2025, resulting in the closure of 299 retail locations and plans to close an additional 271 in 2025. As of December 31, 2024, CVS Health employed over 300,000 colleagues, approximately 73% of whom were full-time.

Key operational developments included the processing of 1.9 billion prescriptions (Health Services) and dispensing of approximately 27.2% of total retail pharmacy prescriptions in the U.S. (Pharmacy & Consumer Wellness). The company's Medicare Advantage membership increased to 4.4 million, while its Medicare Part D standalone membership decreased to 4.9 million. The company performed over 3 million in-home health evaluations. The company's retail pharmacy same-store sales increased by 12.3%, while front store same-store sales decreased by 2.1%.

CVS Health's 2025 outlook anticipates medical membership declines in Medicare and individual exchange products, continued elevated utilization pressure impacting profitability, and challenges related to Medicaid medical cost pressures and risk adjustment programs. The company expects benefits from cost-saving initiatives and anticipates continued pressure from pharmacy client price improvements and the sharing of rebates with clients. The company also notes uncertainties related to GLP-1 supply disruptions, immunization demand, potential tariff impacts, and consumer spending patterns. The company expects to maintain its quarterly dividend of $0.665 per share throughout 2025.