Cigna's Q2 2026 revenue rose 6.7% to $71.7B and GAAP EPS rose 10.2% to $6.29, as a 17% profit gain at Cigna Healthcare and 22% at specialty pharmacy offset a 27% drop in PBM profit; full-year adjusted EPS outlook raised to at least $30.45.
Revenue
$71.7B
+6.7% YoY
Net income
$1.7B
+8.4% YoY
Diluted EPS
$6.29
+10.2% YoY
Operating margin
3.7%
Overview: the insurer carried the quarter while the pharmacy-benefit arm absorbed its own price cuts
The Cigna Group has two very different businesses under one roof. Evernorth Health Services runs Express Scripts, a pharmacy benefit manager (PBM — the middleman that processes prescription claims and negotiates drug prices for employers and health plans), plus the Accredo specialty pharmacy and care services. Cigna Healthcare is the health insurer, mostly selling coverage and claims administration to employers.
In Q2 2026 (quarter ended June 30, 2026) total revenue rose 6.7% to $71.7 billion, and shareholders' net income rose 8.4% to $1.66 billion, or $6.29 per diluted share (up 10.2%). The filing attributes the profit increase "primarily" to higher adjusted income from operations in Cigna Healthcare. Inside Evernorth, the story split in two: profit in the core Pharmacy Benefit Services unit fell 27% as Cigna cut prices on large client renewals and invested in its move away from rebates, while the Specialty and Care Services unit grew profit 22%.
Key metrics
Metric
Q2 2026
Q2 2025
YoY Change
Total revenue
$71,668M
$67,178M
+6.7%
Operating margin (income from operations ÷ revenue)
3.7%
3.4%
+0.3 pts
Shareholders' net income
$1,660M
$1,532M
+8.4%
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A low operating margin is normal here: most of Evernorth's revenue is the cost of the drugs themselves passing through its books, so a 3.7% margin on $71.7 billion of revenue still produced $2.68 billion of income from operations (up from $2.31 billion).
Year to date (six months): revenue $140,162M vs. $132,680M (+5.6%); shareholders' net income $3,314M vs. $2,855M (+16.1%); diluted EPS $12.55 vs. $10.55 (+19.0%); adjusted EPS $15.58 vs. $13.94 (+11.8%). First-half revenue growth looks slower than the quarter's because the first half of 2025 still included about two and a half months of the Medicare Advantage business sold to Health Care Services Corporation (HCSC) on March 19, 2025; the filing puts that sale's drag on six-month premiums at 17 percentage points.
GAAP vs. adjusted earnings
Cigna's preferred profit measure, "adjusted income from operations," strips out investment gains and losses, amortization of past acquisitions, and items management considers one-off. It was $2,054M in Q2 ($7.78 per share), up 6.4% from $1,930M. GAAP shareholders' net income ($1,660M) sits below it mainly because of:
Amortization of acquired intangible assets: $296M after tax (an accounting charge tied to past deals such as Express Scripts, not a cash cost).
Special items of $153M after tax, including $53M for the strategic optimization program (a cost-cutting plan started in Q1 2025 and expected to run through 2028; $1,199M pre-tax spent to date, mostly severance), $60M of charges for litigation matters (not described further in the filing), and $26M of integration and transaction costs.
Offset by $55M of after-tax net investment gains.
The total after-tax gap between the two measures was almost the same in both years ($394M vs. $398M), so GAAP profit grew faster in percentage terms (+10.2% per share vs. +8.1% adjusted) mostly because it starts from a smaller base. Two lines below operating profit also mattered. The effective tax rate fell to 16.9% from 19.2%, which the filing attributes about equally to tax benefits on equity investments and the absence of last year's state tax audit charges. Working the other way, income belonging to outside co-owners of partly owned businesses (reported within Evernorth) more than doubled, from $100M to $215M after tax, so net income before that deduction grew 15% while the shareholders' share grew only 8%. The filing does not explain the increase.
Evernorth Health Services
Evernorth (adjusted, $M)
Q2 2026
Q2 2025
Change
Pharmacy Benefit Services revenue
34,496
31,954
+8.0%
Specialty and Care Services revenue
26,972
25,871
+4.3%
Segment revenue
61,468
57,825
+6.3%
Pharmacy Benefit Services pre-tax adjusted income
609
833
-26.9%
Specialty and Care Services pre-tax adjusted income
1,054
863
+22.1%
Segment pre-tax adjusted income
1,663
1,696
-1.9%
Pre-tax margin
2.7%
2.9%
-0.2 pts
Revenue rose even though volume fell. Adjusted pharmacy claims fell 2% to 537 million (90-day and home-delivery prescriptions count as three claims). Revenue still grew because of "claims composition," meaning the drugs being dispensed are more expensive branded and specialty drugs. The filing credits claims composition in Pharmacy Benefit Services with +7 points of segment revenue growth and Specialty volume growth with +1 point, against -2 points from lower PBM claim volume. The earnings release shows pharmacy customers down to 118.2 million from 121.9 million a year earlier, which it attributes to "expected client transitions and lower membership from health plan clients."
Why PBM profit fell 27%. The 10-Q breaks down the segment's profit bridge: "client- and customer-focused initiatives" in Pharmacy Benefit Services took 11 points off segment profit growth and lower claim volume another 2 points. Growth in Specialty and Care Services added 7 points and operating efficiencies in that unit another 4. The filing defines those initiatives as "proactive renewals or extensions of large client contracts, investments to support the recently announced rebate-free model, and multi-stakeholder recontracting efforts (including affordability-related contract changes and responses to government programs such as the Inflation Reduction Act)." It ties them to "changing legislative, regulatory, and client dynamics, including our business model plans announced in October 2025." In other words, part of this decline is Cigna choosing to give up margin: renewing big contracts on cheaper terms and building the systems for a pricing model that relies less on drug-maker rebates (payments drug makers send PBMs in exchange for favorable placement on drug lists). The Inflation Reduction Act's Medicare drug-pricing provisions also show up in cash: the filing cites an "unfavorable net cash flow impact related to the Inflation Reduction Act" in first-half operating cash flow.
Specialty and Care Services (Accredo, specialty distribution, care programs) grew pre-tax profit 22% to $1,054M. The earnings release (Exhibit 99.1 to the July 30, 2026 Form 8-K) attributes this to "strong organic growth in specialty businesses, including higher generic and biosimilar adoption," plus operating efficiencies. Biosimilars are lower-cost near-copies of expensive biologic drugs.
Cigna Healthcare
Cigna Healthcare
Q2 2026
Q2 2025
Change
Adjusted revenue
$11,728M
$10,754M
+9.1%
Pre-tax adjusted income
$1,276M
$1,094M
+16.6%
Pre-tax margin
10.9%
10.2%
+0.7 pts
Medical care ratio
84.5%
83.2%
+1.3 pts
SG&A expense ratio
19.6%
20.3%
-0.7 pts
Revenue rose $974M, driven by $664M of higher premiums, mostly employer insured (+$305M) and stop loss (+$259M; stop loss is insurance that self-funded employers buy to cap their exposure to very large claims), "primarily reflecting premium rate increases." Pre-tax adjusted income rose 17%, which the filing attributes to "an improved margin within our U.S. Employer business."
The medical care ratio (MCR) is the share of each premium dollar paid out on members' medical care. A higher MCR means less is left over to cover overhead and profit. It rose 1.3 points to 84.5%, but the filing ties this to a comparison effect, not worse claims this year: "higher prior year risk adjustment benefits within our Individual and Family Plans business recognized in second quarter 2025." Risk adjustment is a system under the Affordable Care Act that moves money between insurers depending on how sick their members are, and last year's Q2 got an unusually large payment. The segment still grew profit because overhead fell as a share of revenue (SG&A ratio -70 basis points, with operating efficiencies worth -110 bps) and premium growth exceeded cost growth. For the six months the MCR was 82.2% vs. 82.6%. Within that, a higher MCR in the U.S. Employer business (+100 bps, "primarily due to mix of business") was more than offset by the HCSC sale (-120 bps) and a lower Individual and Family Plans MCR (-60 bps).
The release also reports favorable prior-year reserve development of $268M gross pre-tax for the first half (vs. $297M a year earlier): claims from earlier periods cost less than Cigna had set aside, which helps current earnings.
Medical customers reached 18.41 million, up 2%. Growth in Middle Market (+3 pts) and Select (+1 pt) employer segments outweighed a decline in large National Accounts (-2 pts). Insured customers fell 3% to 3.70 million, while administrative-services-only customers (employers who pay their own claims and use Cigna to run the plan) rose 3% to 14.71 million.
Individual and Family Plans exit. In April 2026 Cigna announced it will leave the Individual and Family Plans (ACA exchange) medical business on January 1, 2027. The line brought in $860M of premiums in Q2, down from $941M.
Cash, buybacks and balance sheet
Buybacks slowed sharply: 0.9 million shares for about $250M in the first half, versus 8.2 million shares for about $2.6B in the first half of 2025. All of this quarter's program purchases (864,544 shares at about $289) came in May. About $6.48B of authorization remains.
Dividend: $1.56 per quarter, up from $1.51; the Q3 dividend was declared July 22, 2026.
Operating cash flow was $710M for the first half (vs. $34M). The filing credits receivables timing and factoring settlements (selling receivables to a bank for cash), largely offset by the IRA impact and lower insurance liabilities.
Leverage: debt-to-capitalization of 42.8% (vs. 43.0% at year-end), $1.0B of commercial paper outstanding, and $6.6B of cash and short-term investments, of which about $0.8B sits at the parent or non-regulated subsidiaries.
Takeaway: Cigna's quarter looks like steady 8-10% earnings growth, but the two halves are moving in opposite directions. Cigna Healthcare's pre-tax profit rose 17% on higher premium rates and lower overhead, and specialty pharmacy rose 22%, while the core PBM's profit fell 27% as Cigna reprices big contracts and moves away from rebates. How low PBM margins go under the new model is the main open question for the stock.
Outlook
Per the July 30, 2026 earnings release, management raised its full-year 2026 adjusted EPS outlook by $0.10 to at least $30.45, including planned buybacks and dividends. Segment outlooks: Evernorth pre-tax adjusted income of at least $6,900M (unchanged); Cigna Healthcare at least $4,550M (raised $25M); full-year MCR of 83.7%–84.7%.
The arithmetic points to a heavier second half for Evernorth and a lighter one for Cigna Healthcare. First-half adjusted EPS was $15.58, so the second half needs at least $14.87. Evernorth earned $3,129M in the first half and needs at least $3,771M in the second, roughly 20% more. Cigna Healthcare earned $2,790M and needs only $1,760M or more. With a first-half MCR of 82.2%, the full-year range implies clearly higher medical costs per premium dollar in the second half. The filing already points to stop-loss seasonality, which pushed unpaid claims to $5,228M at June 30 from $4,241M at year-end.
Our read: the insurance side has cushion against the guide, so the harder test is whether Evernorth's back-half step-up happens while the PBM unit keeps absorbing contract repricing and rebate-free investments. Watch Pharmacy Benefit Services profit, claim volume (down about 2% in both Q1 and Q2), and any quantified 2027 effect of the Individual and Family Plans exit in the Q3 report.
Source: The Cigna Group Form 10-Q for the quarter ended June 30, 2026 (filed July 30, 2026). Guidance, pharmacy-customer counts and reserve-development figures are from the earnings release filed as Exhibit 99.1 to the Form 8-K dated July 30, 2026.