Cigna’s second quarter results were met with a significant negative market reaction, reflecting investor concerns despite revenue and adjusted earnings per share both coming in ahead of Wall Street expectations. Management attributed the quarter’s results to continued momentum in its Evernorth services platform and the resilience of its U.S. employer business. However, persistent elevated medical costs, especially in the commercial and individual exchange segments, remained a notable challenge. CEO David Cordani described the company’s performance as “differentiated,” but acknowledged industry disruption and the necessity of ongoing portfolio adjustments. Management also highlighted product innovation, such as new GLP-1 benefit options and AI-powered virtual assistance, as key contributors to maintaining customer engagement and operational execution.
Is now the time to buy CI? Find out in our full research report (it’s free).
Cigna (CI) Q2 CY2025 Highlights:
- Revenue: $67.18 billion vs analyst estimates of $62.21 billion (11.1% year-on-year growth, 8% beat)
- Adjusted EPS: $7.20 vs analyst estimates of $7.15 (0.6% beat)
- Adjusted EBITDA: $2.89 billion vs analyst estimates of $3.06 billion (4.3% margin, 5.7% miss)
- Operating Margin: 3.4%, in line with the same quarter last year
- Customers: 16.36 million, down from 16.36 million in the previous quarter
- Market Capitalization: $74.87 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Cigna’s Q2 Earnings Call
- A.J. Rice (UBS) asked how Evernorth’s pharmacy and specialty capabilities provide a competitive edge in managing commercial cost trends. CEO David Cordani emphasized their integrated approach and ability to track patient journeys across benefits, while Brian Evanko highlighted that specialty pharmacy now accounts for over 25% of employer medical costs.
- Lisa Gill (JPMorgan) inquired about the 2026 renewal cycle for pharmacy benefit contracts and the impact of recent legislative developments. President Brian Evanko reported strong client retention and described the market as focused on affordability and personalized solutions, while Cordani discussed the importance of collaboration with regulators.
- Josh Raskin (Nephron Research) questioned risk adjustment in the individual exchange business and future pricing strategies. Evanko outlined the decision to reduce exposure and prioritize margin, noting the company will continue to raise prices and limit growth in that segment for 2026.
- Justin Lake (Wolfe Research) probed the impact of sophisticated hospital billing and AI on stop-loss insurance and employer pricing. Cordani acknowledged increased provider billing complexity, but noted this is opening opportunities for precision network solutions, while Evanko described stop-loss demand as strong and pricing actions underway.
- Andrew Mok (Barclays) sought an update on GLP-1 product economics and client adoption. Evanko explained the new benefit design and capped out-of-pocket costs, stating the financial contribution is “in line with expectations,” though broader client adoption will depend on renewal cycles.
Catalysts in Upcoming Quarters
Looking forward, the StockStory team will closely monitor (1) the pace of client adoption and renewal of new GLP-1 benefit designs, (2) progress in expanding specialty pharmacy and distribution with health systems and biosimilars, and (3) evolving regulatory actions that may impact pharmacy benefit management and pricing strategies. Execution on digital health initiatives and margin stabilization within the individual exchange segment will also be important indicators of Cigna’s operational effectiveness.
Cigna currently trades at $280.99, down from $298.05 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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