Cigna's 27% Revenue Increase in 2024 and the Outlook on 2025

The Cigna Group reported today its total revenue of $247.1 billion for 2024, marking a 27% increase compared with $195.3 billion in 2023.

This growth highlights the company’s strong financial results, supported by the success of Evernorth Health Services, new client acquisitions and growth in the specialty drug space.

According to a release shared this morning, a key driver to Cigna's growth was the strong performance of Evernorth within the pharmacy benefit and specialty and care services divisions.

Pharmacy benefit services reached an adjusted revenue of $111.8 billion in 2024, a 46% jump from $76.8 billion in 2023. Specialty and care services recorded $90.3 billion in adjusted revenue, marking an 18% increase from $76.7 billion in 2023.

These gains helped balance out some of the challenges Cigna faced, including higher stop-loss medical costs.

David M. Cordani, chairman and CEO of The Cigna Group, said on a conference call reviewing 2024’s results, “Evernorth continues to drive strong results in line with our expectations, primarily driven by our specialty and care services segment.”

Cordani also highlighted the company’s efforts to offer their interchangeable Humira (adalimumab) biosimilar at no cost to patients, a factor that contributed to this strong performance.

He added that the biosimilar use for eligible Humira prescriptions reached nearly 50% by the end of 2024, and the company plans to offer the same benefit for the Stelara (ustekinumab) biosimilar.

However, the rise in stop-loss medical costs negatively impacted Cigna’s fourth-quarter earnings and overall annual results.

To address these challenges, Cordani stressed Cigna’s efforts to building a sustainable healthcare model focused on improving transparency, support and value for patients and clients.

The company’s medical care ratio, which increased from 81.3% to 83.2%, primarily due to the rise in stop-loss medical costs.

It was also found that shareholders’ net income for 2024 stood at $3.4 billion, or $12.12 per share, reflecting a decrease from $5.2 billion, or $17.39 per share, in 2023.

The decline was mainly due to a non-cash after-tax investment loss of $2.7 billion related to the impairment of VillageMD equity securities.

Either way, adjusted income from operations for 2024 rose by 4% to $7.7 billion, or $27.33 per share, compared to $7.4 billion, or $25.09 per share, in 2023.

Cigna also made improvements in operational efficiency in 2024.

The adjusted SG&A expense ratio dropped to 5.9% for the year from 7.3% in 2023, due to business mix shifts, strong revenue growth and ongoing operational improvements.

The company returned value to shareholders by repurchasing 20.9 million shares of common stock for approximately $7. billion in 2024.

Additionally, the board of directors approved a $6 billion increase in the share repurchase authorization, bringing the total authorization to $10.3 billion as of December 31, 2024.

Looking ahead to 2025, Cigna is projecting adjusted income from operations to be at least $7.9 billion, or $29.50 per share, with total adjusted revenue expected to reach at least $252 billion.

Evernorth is expected to deliver adjusted income from operations of at least $7.2 billion, while Cigna is projected to contribute at least $4.1 billion, with a medical care ratio ranging from 83.2% to 84.2%.

The company also predicts a total medical customer base of 18.1 million.

Lastly, the acquisition of Cigna’s Medicare businesses by Health Care Service Corporation (HCSC) is expected to close in the first quarter of 2025.