CVS Reports Q1 Revenue Increase Amid Operational Changes

Company saw growth across all business segments

5/2/2023

Effective in Q1, CVS Health realigned its business segments to correspond with changes made to its operating model.

As it buttons up two significant acquisitions, CVS Health has released its financial results for the first quarter ended March 31. The company saw total revenues increase 11% year over year to $85.3 billion thanks to gains across each business segment, while adjusted operating income decreased 5.1% due to declines in the pharmacy and consumer wellness segment.

In Q1, CVS Health saw a generated cash flow from operations of $7.4 billion, GAAP diluted EPS of $1.65 and a relatively consistent interest expense of $589 million. Its acquisition of Signify Health for approximately $7.8 billion was completed on March 29, which will advance the company’s health care services strategy through added capabilities for in-home services and a platform to accelerate growth in value-based care.

CVS Health completed the acquisition of Oak Street Health for approximately $10.6 billion on May 2, adding a multi-payor, value-based primary care company with approximately 600 providers and more than 170 medical centers across 21 states.

"We delivered another strong quarter while executing on the strategy we outlined in December 2021, leading to the close of the Signify Health acquisition followed quickly by Oak Street Health,” said CVS Health President and CEO Karen S. Lynch. “These additions are core to our strategy and will help unlock future growth as we push further into value-based care, which prioritizes keeping people healthy."

Also during Q1, the company realigned its segments to correspond with changes made to its operating model, to include the formation of a new health services segment and a new pharmacy and consumer wellness segment. The former segment includes pharmacy benefit management operations, health care services and provider enablement solutions, while the latter consists of enterprise pharmacy fulfillment and retail front store operations.

Looking forward, full-year guidance includes a revised GAAP diluted EPS guidance range to $6.90 to $7.12 from $7.73 to $7.93; revised adjusted EPS guidance range to $8.50 to $8.70 from $8.70 to $8.90; and a confirmed cash flow from operations guidance range of $12.5 billion to $13.5 billion.

With its CVS Pharmacy subsidiary operating almost 10,000 locations nationwide, Woonsocket, R.I.-based CVS Health has over 300,000 colleagues – including more than 40,000 physicians, pharmacists, nurses and nurse practitioners. The company is No. 7 on The PG 100, Progressive Grocer’s 2022 list of the top food and consumables retailers in North America.