Analysis of Reportable Segments
CVS Health Corp. operates in 4 segments: Health Care Benefits; Health Services; Pharmacy & Consumer Wellness; and Corporate/Other.
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- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- Return on Equity (ROE) since 2005
- Return on Assets (ROA) since 2005
- Price to Earnings (P/E) since 2005
- Analysis of Revenues
- Analysis of Debt
- Aggregate Accruals
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Segment Profit Margin
CVS Health Corp., profit margin by reportable segment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Health Care Benefits | |||||
| Health Services | |||||
| Pharmacy & Consumer Wellness | |||||
| Corporate/Other |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Health Care Benefits Segment Profit Margin
-
The profit margin exhibited a rising trend between December 31, 2021, and December 31, 2022, increasing from 6.27% to 6.97%. However, this positive momentum reversed in the subsequent years, showing a consistent decline to 5.32% in 2023 and sharply dropping to 0.24% by the end of 2024. This pattern suggests a significant reduction in profitability in the latest period after a temporary improvement.
- Health Services Segment Profit Margin
-
This segment's profit margin showed a relatively stable trend over the observed years. It started at 4.22% in 2021, slightly decreased to 4.00% in 2022, followed by a marginal decline to 3.91% in 2023. A modest recovery was observed in 2024, with the margin increasing back to 4.18%. Overall, the margins remained within a narrow range, indicating steady performance with minor fluctuations.
- Pharmacy & Consumer Wellness Segment Profit Margin
-
Profitability in this segment experienced a steady downturn throughout the reporting periods. Initially, the margin was relatively high at 7.15% in 2021, but it decreased notably to 6.01% in 2022 and continued to decline to 5.11% in 2023, followed by a further decrease to 4.64% in 2024. This trend reflects a consistent and gradual erosion of profit margins over time.
- Corporate/Other Segment Profit Margin
-
The Corporate/Other category displayed significantly negative profit margins throughout all observed years, indicating substantial losses. The figures show a slight improvement from -1308% in 2021 to -1300.81% in 2022. However, this was followed by a marked worsening in 2023 and 2024, with losses deepening to -2312.28% and -2407.14%, respectively. This increasing negative trend highlights growing challenges or escalating expenses within this segment.
- Overall Observations
-
The data reflects mixed performance across the reportable segments. Both the Health Care Benefits and Pharmacy & Consumer Wellness segments demonstrate weakening profitability in the later periods, with the former experiencing a sharp downturn by the end of 2024. The Health Services segment shows relative stability in margins, while the Corporate/Other segment remains deeply unprofitable with deteriorating losses over the years. These divergent trends suggest varying operational and market factors affecting each business area.
Segment Profit Margin: Health Care Benefits
CVS Health Corp.; Health Care Benefits; segment profit margin calculation
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Adjusted operating income (loss) | |||||
| Revenues | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Segment profit margin = 100 × Adjusted operating income (loss) ÷ Revenues
= 100 × ÷ =
- Revenues
- The revenues for the Health Care Benefits segment have shown a consistent upward trend from 2021 to 2024. Starting at $81,533 million in 2021, revenues increased steadily to $90,874 million in 2022, $104,881 million in 2023, and reached $129,192 million in 2024. This indicates a strong growth trajectory in the segment's top-line performance over the observed period.
- Adjusted Operating Income (Loss)
- Adjusted operating income experienced fluctuations throughout the years. In 2021, the adjusted operating income was $5,110 million and increased to $6,338 million in 2022. However, in 2023, there was a decline to $5,577 million, followed by a significant drop to $307 million in 2024. This sharp decrease in 2024 suggests that profitability was severely impacted despite the increasing revenues.
- Segment Profit Margin
- The segment profit margin also reflects the changes in profitability. It rose from 6.27% in 2021 to 6.97% in 2022, indicating improved efficiency or favorable conditions that year. However, the margin declined to 5.32% in 2023 and drastically fell to 0.24% in 2024. The substantial decrease in profit margin in 2024 aligns with the decline in adjusted operating income, signalling potential challenges in cost management or increased expenses.
- Overall Analysis
- Despite a consistent increase in revenues over the years, the Health Care Benefits segment showed declining profitability starting in 2023, with a particularly sharp downturn in 2024. The stark reduction in both adjusted operating income and profit margin in 2024 suggests that the revenue growth did not translate into sustainable profit growth, possibly due to rising costs, operational inefficiencies, or other adverse factors impacting the segment's financial performance.
Segment Profit Margin: Health Services
CVS Health Corp.; Health Services; segment profit margin calculation
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Adjusted operating income (loss) | |||||
| Revenues | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Segment profit margin = 100 × Adjusted operating income (loss) ÷ Revenues
= 100 × ÷ =
- Adjusted Operating Income (Loss)
- The adjusted operating income for the Health Services segment demonstrated a generally positive trend from 2021 through 2023. It increased from 6,492 million USD in 2021 to 7,312 million USD in 2023, representing steady growth. However, a slight decline was observed in 2024 where the figure decreased to 7,243 million USD. This suggests a possible challenge or increased costs impacting profitability in the most recent year, despite overall growth over the period.
- Revenues
- The revenue trend exhibited a consistent upward movement from 2021 through 2023, rising from 153,892 million USD to 186,844 million USD. This indicates healthy growth in the segment’s sales or service delivery. Nonetheless, in 2024, revenues decreased to 173,320 million USD, indicating a pullback after several years of expansion. The reduction may reflect market pressures, decreased demand, or other external factors affecting sales.
- Segment Profit Margin
- The segment profit margin showed slight fluctuations during the period analyzed. Starting at 4.22% in 2021, it declined gradually to 4.00% in 2022 and further to 3.91% in 2023, marking a continuous erosion in profit margin percentage despite increasing revenues and adjusted operating income. In 2024, the profit margin improved slightly to 4.18%, indicating an effort to regain profitability efficiency or cost control during a year of declining revenue.
- Overall Insights
- The Health Services segment saw growth in adjusted operating income and revenues from 2021 through 2023, followed by declines in 2024. The profit margin's initial decline followed by partial recovery in 2024 suggests dynamic operational efficiency changes amid volatile economic factors. The simultaneous decrease in both revenue and operating income in 2024, paired with improved profit margin, points to possible cost management strategies enacted to sustain profitability during revenue contraction.
Segment Profit Margin: Pharmacy & Consumer Wellness
CVS Health Corp.; Pharmacy & Consumer Wellness; segment profit margin calculation
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Adjusted operating income (loss) | |||||
| Revenues | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Segment profit margin = 100 × Adjusted operating income (loss) ÷ Revenues
= 100 × ÷ =
The financial data for the "Pharmacy & Consumer Wellness" segment demonstrates several notable trends over the five-year period from 2020 to 2024.
- Revenues
- Revenues have shown a consistent upward trajectory, increasing steadily each year. Starting from approximately $101.6 billion in 2021, revenues increased to $108.6 billion in 2022, then $116.8 billion in 2023, and reached $124.5 billion by 2024. This reflects a strong growth trend in sales or service delivery within the segment.
- Adjusted Operating Income (Loss)
- Adjusted operating income, available from 2021 onwards, exhibits a declining pattern despite the revenue growth. The segment recorded $7.26 billion in 2021, which decreased to $6.53 billion in 2022, then to $5.96 billion in 2023, and further down to $5.77 billion in 2024. This suggests increasing operational costs or decreasing operational efficiency impacting profitability.
- Segment Profit Margin
- The segment profit margin, which expresses the adjusted operating income as a percentage of revenues, has steadily declined throughout the period. From 7.15% in 2021, margins fell to 6.01% in 2022, then to 5.11% in 2023, and finally to 4.64% in 2024. This consistent decrease, alongside rising revenues, indicates that although the segment is growing its top line, profitability as a share of revenue is diminishing.
Overall, the segment exhibits growth in revenue but a decline in both absolute operating income and relative profitability margins. This pattern may imply increased cost pressures, competitive pricing challenges, or investment in growth initiatives that have yet to translate into improved operating margins.
Segment Profit Margin: Corporate/Other
CVS Health Corp.; Corporate/Other; segment profit margin calculation
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Adjusted operating income (loss) | |||||
| Revenues | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Segment profit margin = 100 × Adjusted operating income (loss) ÷ Revenues
= 100 × ÷ =
- Adjusted Operating Income (Loss)
- The adjusted operating income (loss) shows a consistent negative trend throughout the available periods from December 31, 2021, to December 31, 2024. The losses were significant, starting at -1,635 million US dollars in 2021 and slightly improving to -1,613 million US dollars in 2022. However, the losses decreased further to -1,318 million US dollars in 2023 but slightly increased again to -1,348 million US dollars in 2024. Overall, the segment remained unprofitable across all reported years, though there was a modest improvement in losses from 2021 to 2023, followed by a slight deterioration in 2024.
- Revenues
- Revenues for the segment were relatively low and displayed a declining trend over the reported years. Revenues were 125 million US dollars in 2021 and remained almost stable at 124 million US dollars in 2022. However, there was a sharp decrease to 57 million US dollars in 2023, with a marginal further decline to 56 million US dollars in 2024. This decline in revenues over time indicates weakening sales or business activity within the segment.
- Segment Profit Margin
- The segment profit margin, expressed as a percentage, was deeply negative throughout the years. It was reported at -1,308% in 2021 and slightly improved to approximately -1,300.81% in 2022. However, it drastically worsened in 2023 to -2,312.28% and further deteriorated to -2,407.14% in 2024. The negative margins indicate that losses greatly exceeded revenues, and the extent of these losses intensified significantly in the last two years, signaling serious profitability challenges in the segment.
Revenues
CVS Health Corp., revenues by reportable segment
US$ in millions
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Health Care Benefits | |||||
| Health Services | |||||
| Pharmacy & Consumer Wellness | |||||
| Corporate/Other | |||||
| Intersegment eliminations | |||||
| Consolidated total |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The segment revenues exhibit distinct trends over the observed period from December 31, 2020, to December 31, 2024. Overall, the consolidated total revenue demonstrates steady growth, increasing from approximately US$ 290.9 billion in 2021 to US$ 370.7 billion in 2024.
- Health Care Benefits
- This segment shows consistent and strong growth throughout the period. Starting from US$ 81.5 billion in 2021, revenue increased yearly to reach US$ 129.2 billion by 2024. This reflects a compound upward trajectory, indicative of expanding business or increased demand in the health care benefits sector.
- Health Services
- Revenue in Health Services rose from US$ 153.9 billion in 2021 to a peak of US$ 186.8 billion in 2023, representing substantial growth over three years. However, there is a noticeable decline in 2024, dropping to US$ 173.3 billion. This downturn suggests possible market challenges, competitive pressures, or changes in service demand during the final year.
- Pharmacy & Consumer Wellness
- This segment also experienced steady revenue growth over the observed years. Revenues increased from US$ 101.6 billion in 2021 to US$ 124.5 billion in 2024. The growth appears more gradual and stable compared to the other segments, suggesting consistent performance within this line of business.
- Corporate/Other
- Revenues in this segment remained relatively flat and minimal throughout the period, fluctuating slightly around the US$ 56 million to US$ 125 million range. The limited scale and lack of clear growth suggest that this segment contributes marginally to total revenues.
- Intersegment Eliminations
- The negative values for Intersegment Eliminations increase slightly in magnitude yearly, from -US$ 46.2 billion in 2021 to -US$ 56.4 billion in 2024. These eliminations represent internal adjustments likely reflecting intercompany transactions and appear to grow as overall segment revenues expand.
- Consolidated Total
- The consolidated total revenues consistently increase each year, rising from US$ 290.9 billion in 2021 to US$ 370.7 billion in 2024. The upward trend is supported primarily by substantial growth in Health Care Benefits and Pharmacy & Consumer Wellness segments, despite the decline noted in Health Services in the final year.
Adjusted operating income (loss)
CVS Health Corp., adjusted operating income (loss) by reportable segment
US$ in millions
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Health Care Benefits | |||||
| Health Services | |||||
| Pharmacy & Consumer Wellness | |||||
| Corporate/Other | |||||
| Consolidated total |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Health Care Benefits Segment
- The adjusted operating income for the Health Care Benefits segment exhibited an increase from 5,110 million US dollars in 2021 to 6,338 million in 2022. However, this was followed by a decline to 5,577 million in 2023 and a sharp decrease to 307 million in 2024, indicating significant downward pressure on profitability in the most recent year.
- Health Services Segment
- The Health Services segment showed consistent growth from 6,492 million US dollars in 2021 to 6,781 million in 2022, then increasing further to 7,312 million in 2023. In 2024, the figure slightly declined to 7,243 million, suggesting relative stability with a minor recent dip after sustained growth.
- Pharmacy & Consumer Wellness Segment
- This segment's adjusted operating income declined steadily over the period. Starting at 7,260 million US dollars in 2021, it decreased to 6,531 million in 2022, then to 5,963 million in 2023, and further to 5,774 million in 2024. The consistent downward trend indicates diminishing profitability in this business area over the four years.
- Corporate/Other
- The Corporate/Other segment consistently reported negative adjusted operating income, reflecting expenses or losses. The values were -1,635 million in 2021, slightly improving to -1,613 million in 2022, followed by a more considerable improvement to -1,318 million in 2023. In 2024, a slight decline to -1,348 million was recorded. Overall, this segment continues to exert a drag on consolidated results, though some reduction in losses was observed before a minor setback in the last year.
- Consolidated Total
- The consolidated total adjusted operating income rose from 17,227 million US dollars in 2021 to a peak of 18,037 million in 2022, then decreased to 17,534 million in 2023, and declined more sharply to 11,976 million in 2024. The overall trend shows initial growth followed by a notable contraction in profitability, especially pronounced in the latest period analyzed.