10-Q · May 6, 2026
CVS Health reported Q1 2026 revenues of $100.4 billion and an EPS of $2.30, both above consensus estimates of $94.9 billion in revenue and $2.21 in EPS. The company raised its full-year GAAP EPS guidance from a range of…
Earnings analysis · 10-Q
CVS earnings analysis
Filed August 5, 2026 · Our reading of the company's report
The latest report
CVS delivered a strong Q2 turnaround: revenue reached $106.096B, GAAP operating income rose 97.5% to $4.703B, and GAAP diluted EPS was $2.31. The primary driver was a sharp Health Care Benefits recovery, with a 250-bp…
Read full summary
CVS delivered a strong Q2 turnaround: revenue reached $106.096B, GAAP operating income rose 97.5% to $4.703B, and GAAP diluted EPS was $2.31. The primary driver was a sharp Health Care Benefits recovery, with a 250-bp improvement in MBR and $1.118B of adjusted operating-income growth, supplemented by Health Services growth and retail prescription-volume gains. Offsetting considerations are the 19.7% decline in commercial premium revenue, lower membership following the exchange exit, continuing PBM pricing pressure, and elevated medical utilization.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $2.31
What stood out
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Revenue and EPS accelerated
Q2 revenue rose $7.181B, or 7.3% YoY, to $106.096B and increased $6.246B from Q1 2026 revenue of $99.850B. GAAP diluted EPS was $2.31, up from $0.80 in Q2 2025 and $2.30 in Q1 2026.
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Material margin recovery
Operating income nearly doubled to $4.703B, up $2.322B or 97.5% YoY; operating margin expanded to 4.43% from 2.41% a year ago and 4.1% in Q1 2026. Gross margin was 14.84%, above 13.3% in Q2 2025, though below 15.1% in Q1 2026.
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Insurance profitability improved
Health Care Benefits adjusted operating income increased $1.118B, or 85.5%, to $2.426B as its medical benefit ratio improved 250 bps to 87.4%. Segment revenue grew $1.280B, or 3.5%, to $37.538B.
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Health Services delivered double-digit growth
Health Services revenue increased $5.342B, or 11.5%, to $51.795B, led by $2.966B of mail and specialty revenue growth. Adjusted operating income rose $158M, or 10.0%, to $1.733B.
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Retail pharmacy volume remained strong
Retail prescription volume rose 4.3% to 457.0M prescriptions, while Pharmacy & Consumer Wellness adjusted operating income rose $137M, or 10.2%, to $1.475B. Pharmacy same-store sales increased 2.9%.
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Operating cash flow and liquidity strengthened
Six-month operating cash flow rose $4.141B, or 64.2%, to $10.594B. CVS ended June 30 with approximately $11.3B of cash and cash equivalents, including approximately $2.7B held by the parent or nonrestricted subsidiaries.
What to watch
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Commercial revenue and membership contracted
Commercial premium revenue declined $1.629B, or 19.7%, to $6.625B, partly reflecting the 2026 exit from the individual exchange business. Total medical membership fell about 698,000 year over year to 26.023M.
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PBM pricing pressure constrains margins
Health Services adjusted operating margin declined 10 bps to 3.3% despite revenue growth of 11.5%; management cited continuing pharmacy-client price improvements as a partial offset to improved purchasing economics.
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Corporate investment spending increased losses
Corporate/Other adjusted operating loss widened $64M, or 15.5%, to $477M in Q2, driven by increased business investments. For the first half, the adjusted loss expanded $311M to $1.054B.
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Elevated utilization could reverse MBR gains
Management states utilization remained elevated in Q2 2026, following a 250-bp MBR improvement to 87.4%; utilization beyond current levels could pressure Health Care Benefits and health-care-delivery results in 2026.
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No risk-factor update; capital deployment remains cautious
No material risk-factor changes were reported versus the 2025 Form 10-K. Nevertheless, CVS had $11.500B of remaining repurchase authorization but repurchased $0 during Q2, preserving capital amid debt and operating priorities.
Management's outlook
The 10-Q does not provide quantitative full-year guidance; quantitative outlook was provided separately in the earnings release/call.
Earlier filings 4
10-K · February 10, 2026
CVS Health Corporation's 10-K filing for 2025 reveals a comprehensive review of their operational and financial health, highlighting a strategic pivot to enhance integrated health services and address challenges…
10-Q · October 29, 2025
CVS Health Corporation reported a total revenue of $102.87 billion for Q3 2025, marking a 7.8% increase from Q3 2024. However, the company posted a net loss of $3.98 billion, primarily due to a significant $5.7 billion…
10-Q · July 31, 2025
CVS Health's Q2 2025 results showed a substantial increase in revenue, surpassing prior estimates and last year's figures, though net income fell sharply due to litigation costs. The Health Care Benefits segment…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.