The Cigna Group (CI) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by for The Cigna Group's Second Quarter 2026 Results Review. [Operator Instructions] As a reminder, ladies and gentlemen, this conference, including the Q&A session, is being recorded. We'll begin by turning the conference over to Ralph Giacobbe. Please go ahead.

Great. Thank you. Good morning, everyone. Thanks for joining today's call. I'm Ralph Giacobbe, Senior Vice President of Investor Relations. With me on the line this morning are Brian Evanko, The Cigna Group's President and Chief Executive Officer; and Ann Dennison, Chief Financial Officer. In our remarks today, Brian and Ann will cover a number of topics, including our second quarter 2026 financial results and our financial outlook for 2026. Following their prepared remarks, Brian and Ann will be available for Q&A. As noted in our earnings release, when describing our financial results, we use certain financial measures, including adjusted income from operations and adjusted revenues, which are not determined in accordance with accounting principles generally accepted in the United States, otherwise known as GAAP. A reconciliation of these measures to the most directly comparable GAAP measures, shareholders net income and total revenues, respectively, is contained in today's earnings release, which is posted in the Investor Relations section of thecignagroup.com. We use the term labeled adjusted income from operations and adjusted earnings per share on the same basis as our principal measures of financial performance. In our remarks today, we will be making some forward-looking statements, including statements regarding our outlook for 2026 and future performance. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our current expectations. A description of these risks and uncertainties is contained in the cautionary note to today's earnings release and in our most recent reports filed with the SEC. Regarding our results in the second quarter, we recorded after-tax special item charges of $153 million or $0.58 per share. Details of the special items are included in our quarterly financial supplement. Additionally, please note that when we make prospective comments regarding financial performance, including our full year 2026 outlook we will do so on a basis that includes the potential impact of future share repurchases and anticipated 2026 dividends. With that, I'll turn the call over to Brian.

Thanks, Ralph. Good morning, everyone, and thank you for joining our call. I'm pleased to share we delivered strong performance in the second quarter as we continue to execute at a high level, drive results and accelerate momentum across our enterprise. Today, I'll discuss our performance for the quarter and key strategic drivers of our growth and demonstrate how the strength and durable nature of our model is fueling our success. I'll also share some examples of how we are leveraging data, AI and technology to deliver more personalized health care experiences for our customers and patients. Then Ann will review additional details about our results and outlook for the rest of the year. And we'll take your questions. So let's get started. As I've stepped into the CEO role, I'm energized by our strategic direction, our execution and the impact we're having for those we serve, while leveraging the power of one of the most experienced leadership teams in the industry. Over the past few months, I've been spending even more time carefully listening to our partners across the health care system, including clients, customers, health care professionals and brokers. Throughout these conversations, a few themes consistently emerge. First, an elevated focus on affordability as new expensive therapies continue to enter the market and demand for complex care growth. Second, growing expectations from our personalized experiences as people want health care to feel as easy as other areas of their lives. And third, the need for actionable insights and clinical programs to keep people healthy. These themes within health care are coupled with continued economic pressures, geopolitical uncertainty and a rapid pace of change fueled by AI advances. While the current environment is certainly dynamic, I see the landscape as ripe with opportunity to innovate, drive change and forge a new path in health care all while continuing to execute on our commitments today. This orientation has fueled our strong second quarter performance, where I'm pleased to report that both Evernorth and Cigna Healthcare results were ahead of expectations. In the second quarter, The Cigna Group delivered total revenues of $71.7 billion and adjusted earnings per share of $7.78, all while we continue to reinvest in our business to fund growth, expansion and innovation for our customers. I'm proud of our team around the world for continuing to focus on those we serve. Our strategy is aligned with what customers and patients need most. And our portfolio is purpose-built for where health care is headed and its relevance has never been greater. Now looking at our performance across our businesses, we continue to drive impact and growth across both Evernorth Health Services and Cigna Healthcare. Overall, Evernorth's earnings were slightly ahead of expectations, with revenues increasing 6% year-over-year, reflecting the continued demand for our services while we invest in broadening our offerings and expanding our reach. Our Specialty and Care Services businesses delivered pretax adjusted earnings growth of 22% year-over-year, fueled by secular tailwinds as well as the differentiated strengths in accretive and our expanded suite of Specialty Pharmacy Services that support hospitals and health systems. This quarter, we also saw faster-than-expected adoption of specialty generics and biosimilars both of which improve affordability for patients and clients. Our growth in Specialty continues to be fueled by our unique portfolio capabilities, which enables us to better serve patients with more complex clinically intensive needs. We're seeing continued growth in the number of patients relying on Specialty medications, and we are uniquely positioned to serve them with our market-leading access to more than 330 limited distribution medicines. Our highly personalized capabilities, including our clinical care teams, tailored engagement and deep understanding of complex health journeys distinguish us in our ability to serve these patients. Turning to our Evernorth Pharmacy Benefit Services business. We delivered pretax adjusted earnings of $609 million, reflecting the impacts of the previously discussed renewals and extensions of large client contracts as well as investments to support the transition to our new rebate-free model, which we call Signature. The team is making strong progress in the build-out of our Signature Pharmacy benefits model. We see significant early interest from health plans and employers as we prepare for our broader market launch in 2028. This will follow our important next step of introducing Signature to Cigna Healthcare's fully insured plans next year. At the same time, we're adding value and winning business today with 2027 representing one of our strongest selling seasons in recent years. We've been able to achieve this performance in pharmacy benefit services through our winning combination of superior unit costs, clinical programs designed to improve adherence to therapies and market-leading innovations that help our clients anticipate what is around the corner in a rapidly changing environment, helping them build and tailor solutions to meet their needs today while planning for the future. Turning to Cigna Healthcare. We delivered results ahead of expectations with pretax adjusted earnings growth of 17%. While the needs of every client are unique, several factors contribute to why we continue to win in this segment. Our deep focus on the employer-sponsored health care market, where we have differentiated expertise, generating continued customer growth in our U.S. employer business. Our disciplined pricing and execution, including in our stop loss business where we continue to make progress on margin recapture, our strategic portfolio shaping to drive focus, our ability to continuously find new ways to innovate by leveraging data and clinical programs that keep people healthy and our integrated solutions that provide improved access and coordination across medical, pharmacy and behavioral health services. For example, given the growing demand for mental health services, our most recent solutions demonstrate our continued industry leadership and make us the partner of choice. Our provider matching capabilities for behavioral health patients are reducing costs by matching patients with high-quality providers. And offerings like Headspace are expanding access to lower acuity behavioral health options, improving affordability, encouraging earlier intervention and complementing demand for outpatient services. As you can see, a consistent reason why we win in both Evernorth and Cigna Healthcare is our ability to innovate to meet evolving customer and client demands. Now I want to spend a few minutes sharing more about how we are applying data, technology and AI to improve customer outcomes and transform business models. Our AI approach is built on a simple principle, start with the customer and patient and identify where innovation can drive the most meaningful impact for them. We are leveraging technology and AI to drive better health outcomes, simplify and personalize customer experiences and lower costs and then execute that at scale. This has enabled us to use AI to change the trajectory of the most complex clinical journeys to improve the lives of our customers and patients. One example is Pharmacy Forward, our recently announced AI-powered program designed to improve how patients access and incorporate specialty medications into their treatment plans. We are unlocking new ways to coordinate care for patients by shortening the time between when a patient received their prescription and when they can begin treatment, while minimizing administrative friction along the way. With Pharmacy Forward, we're focused on personalizing support, streamlining processing and helping patients start and stay on therapy with greater ease and confidence. Our targeted use of AI is expected to cut time to therapy in half on average. And for clinicians, it enables them to deliver more connected, informed support, reducing their documentation time by up to 50%, free capacity to spend more time on patient care. We'll find the same philosophy within Cigna Healthcare. We know patients navigating complex conditions benefit from personalized clinical support to improve both outcomes and affordability. This month, we announced an expansion of our AI-enabled care coordination capabilities to help us identify customers with emerging complex or chronic health needs earlier such as cancer, heart disease and high-risk pregnancies and connect them more quickly to the personalized clinical support they need. Through predictive models and AI-enabled insights, we would be able to expand support to 20% more customers with emerging complex health needs. This is not about replacing clinicians with technology, but helping clinicians spend more time where they can make the greatest difference. And the results speak for themselves. Customers who engage in these programs reduce medical costs by approximately $2,000 per year on average. Early engagement has already yielded a 42% reduction in avoidable inpatient space amongst those customers. What makes these efforts unique is that they're not stand-alone technology initiatives. They are enabled by the combination of data, clinical expertise and pharmacy capabilities that exist across our enterprise, all focused on better serving our customers. We believe this ability to connect insights with action and action with measurable outcomes is a significant competitive advantage for The Cigna Group. As we look ahead, we'll continue to focus our investments on meaningful applications of AI that improve affordability, enhance the customer experience, help clinicians work more effectively and create long-term value. Now let me summarize our results. We have a proven track record of delivering differentiated value for those we serve by innovating new solutions like Signature, Clarity, Pharmacy Forward, and Personalized Care Coordination as well as through our flexible model and meaningful partnerships. As a result, in the second quarter, we delivered on our financial commitments with adjusted EPS of $7.78 and are pleased to increase our guidance for full year adjusted earnings per share to at least $30.45. Further, our company has attractive sustainable growth opportunities in the long term. building on our history and track record of results delivery. Overall, our strong performance and disciplined execution throughout the first half of the year reflects the intentional design of our company and the passion of our coworkers for serving our customers. With that, I'd like to turn it over to Ann.

Thanks, Brian. Good morning, everyone. As Brian mentioned, our second quarter results reflect another quarter of strong execution for the enterprise with both Evernorth and Cigna Healthcare delivering pretax adjusted earnings above expectations. During the second quarter, we delivered total revenues of $71.7 billion, adjusted after-tax earnings of $2.1 billion and adjusted earnings per share of $7.78. With our strong second quarter performance, we are raising our full year 2026 adjusted earnings per share outlook to at least $30.45. This outlook reflects the strong first half performance while maintaining a prudent view of the current environment. Now turning to our segment results. I'll start with Evernorth. Second quarter 2026 revenues grew 6% year-over-year to $61.5 billion and pretax adjusted earnings were $1.7 billion. Specialty & Care Services delivered strong performance with pretax adjusted earnings growing 22% year-over-year to $1.1 billion, ahead of expectations. The year-over-year growth reflects the strength of our Specialty businesses supported by continued specialty utilization growth and increased biosimilar adoption. Additionally, we were successful in improving the penetration of Specialty Generics, including generic Revlimid. The highest penetration of biosimilars and Specialty Generics drives affordability and value to patients and clients and contributed favorably to earnings in the quarter. Year-over-year earnings growth was further augmented by operating efficiencies and the income from our investment in Shields Health Solutions which expands our reach into hospitals and health systems. The sustained growth in our Specialty & Care Services business reinforces our confidence in the long-term growth opportunity within Specialty and reflects the deliberate steps we've taken to position our company at the forefront of this attractive market. Within Pharmacy Benefit Services, pretax adjusted earnings were $609 million, down from the prior year, broadly as expected. Our performance reflects the previously discussed renewals and extensions of large client contracts and investments associated with the transition to our Signature rebate-free model. As we previously mentioned, we saw higher biosimilar and specialty generic adoption during the quarter, which benefited Evernorth's results, driving increased contribution in Specialty & Care Services while reducing contributions in Pharmacy Benefit Services. Additionally, in the second quarter, we observed moderating GLP-1 growth as coverage level slightly declined and utilization growth flowed from elevated levels experienced in prior periods. We expect this trend to continue throughout the remainder of the year, and it is contemplated in our full year outlook. Overall, Evernorth's second quarter results reflect the continued strength of our Specialty & Care Services business alongside progress in the evolution of our Pharmacy Benefit Services business. Turning to Cigna Healthcare. Second quarter 2026 revenues grew 10% year-over-year to $11.8 billion, and pretax adjusted earnings were $1.3 billion. The medical care ratio for the second quarter was 84.5%, slightly ahead of expectations. Cigna Healthcare delivered results ahead of expectations, driven by strong performance within the U.S. employer business. Broadly, overall cost trends remain elevated but stable. Against that backdrop, medical cost trends were slightly favorable to expectations during the quarter, reflecting lower outpatient trends, including lower surgical spend. Additionally, we continue to see good traction in the employer market with medical membership growing year-to-date, reflecting the strength of our client relationships and the value of our offerings. Overall, we are pleased with Cigna Healthcare's performance, which reflects our disciplined pricing, effective care coordination and focused execution. Now turning to our outlook for the full year 2026. The strength of our second quarter performance gives us the confidence to increase our full year adjusted earnings per share outlook to at least $30.45 while maintaining a disciplined and prudent approach to the full year. Regarding the earnings cadence, we expect second half adjusted earnings per share to be split roughly evenly between the third and fourth quarter. Within Evernorth, we continue to expect full year pretax adjusted earnings of at least $6.9 billion and for the third quarter earnings seasonality to be consistent with prior years. Within Cigna Healthcare, we are raising our full year pretax adjusted earnings outlook to at least $4.55 billion and we expect the third quarter pretax adjusted earnings to be over 60% of the second half earnings. For the medical care ratio, our full year MCR guidance remains unchanged and we expect the third quarter MCR to be slightly above second quarter, consistent with historical seasonality. Turning to our 2026 capital management position. Second quarter operating cash flow was in line with expectations and consistent with historical patterns, which is influenced by calendarization impacts that shifts a portion of receivables into early July. We continue to expect our cash flow to be back half weighted, consistent with prior years. Our debt to capitalization ratio was 42.8% as of June 30, and we expect to end the year closer to our target of 40%. In the second quarter, we repurchased approximately 900,000 shares of common stock for approximately $250 million. We continue to view share repurchases as an attractive use of capital while maintaining a focus on debt paydown and disciplined capital management. Now to recap. Our second quarter results reflect focused execution with both Evernorth and Cigna Healthcare, delivering pretax adjusted earnings above expectations while we continue to make progress on initiatives to support our long-term growth strategy. We are pleased with our performance in the first half of the year and are confident in our increased full year 2026 adjusted earnings per share outlook of at least $30.45. We look forward to our upcoming Investor Day in September, where we'll go deeper on our long-term strategy, growth opportunities and the outlook for Evernorth and Sigma Healthcare. And with that, I'll turn you over to the operator for the Q&A portion of the call.

[Operator Instructions] Our first question comes from Stephen Baxter with Wells Fargo.

I was wondering if you could maybe speak a little bit about how you'd expect the earnings growth progression within Evernorth to develop both for specialty and care and pharmacy benefits and how the pace of investments is impacting that.

Thanks, Steve. So we are really pleased with Specialty & Care's second quarter results, which exceeded our expectations. Now performance during the quarter was driven by continued strength in specialty utilization, faster-than-expected adoption of biosimilars and specialty generics, which improves operating efficiency. We saw improved operating efficiency and contributions from Shields. Notably, Specialty generic penetration exceeded 80% for newer products during the quarter. These therapies improve affordability for patients. and sport clients and contributed favorably to earnings performance. So overall, we expect it to continue to perform well as we look through the back half of the year. We expect Specialty generics and biosimilars to be a meaningful tailwind, and we expect strong -- we expected strong penetration throughout the year and built that into our original full year guide. We experienced it earlier than expected. So the magnitude of the benefit we saw in the second quarter is not expected to repeat at the same level in the third and fourth quarters, but we still expect strong results as we look to the back half of the year for Specialty & Care.

Our next question comes from Lisa Gill with JPMorgan.

Brian, you made a comment that the PBM selling season was very strong. Can you maybe just do 2 things. One, can you talk about renewals and where your renewals are at? And two, can you size new business wins? And then thirdly, as we think about how important, how big your Specialty business is, can you talk about are there incremental opportunities within specialty? What did you see in this year's selling season specific to specialty? Are you seeing carve-outs? Or your winning more business? Is it just incremental business through the PBM contracting. Just want to better understand how you're thinking about the selling season.

Lisa, I appreciate the multifaceted nature of that question. So maybe I'll talk about the '27 selling season just more generally across the company and get to some of the specifics of your question on our Pharmacy Benefit Services and Specialty Businesses throughout that. As it relates to just common themes in the selling season, affordability continues to be the most pronounced problem across the health care space, and that's exacerbated certainly in the prescription drug space by the high unit prices for brand drugs. And then, of course, on the medical side, by the upward march of hospital prices, which has continued. And so those affordability pressures have led employers to consider alternate plan designs as well as financing solutions. Fortunately, we're well positioned to support employers and other buyers in those alternatives. A second common theme we're seeing is the focus on customer experience, what we call personalization with employer and health plan clients increasingly looking for partners who will engage individuals with the right information at the right time in their preferred modality. And these themes are squarely where we're focused as an organization. So as it relates to the specifics on the growth platforms. Within our Evernorth Pharmacy Benefit Services business, we closed 2026 with over 97% retention. And the preliminary indicators for 2027 also suggest mid-90s or higher retention. So both of those 2026 and 2027 years are very consistent with historical norms. And to your point, as I shared earlier, our 2027 new business performance is quite strong. Total new business already secured is above the prior 2 selling seasons combined. So a very strong '27 new business performance. And looking forward, our new rebate-free signature model is generating considerable interest from both existing clients and prospects as we look to scale it in 2028 and beyond. So this is good evidence that our clients see us as a multiyear thought partner as they prepare for future changes in their Pharmacy Benefit Programs. In the Specialty & Care services platform, we continue to benefit there from secular tailwinds, as Ann was just referencing, which leads to more patients utilizing specialty drugs along with our Accredo Specialty Pharmacy being included as a network option and even more unaffiliated EVM offerings. We also continue to see strong growth in the hospital and health system space where our fee-based offerings from Verity from Care Path and some of the synergy we've been able to accomplish from our Shields Health Solutions investments are starting to pay off. So putting all those pieces together, our solutions continue to adapt to market needs. We're confident in the long-term durability of the Cigna group and pleased with the performance so far in the '27 season.

Our next question comes from A.J. Rice with UBS.

I might pivot over to the benefit side. I appreciate the prepared remarks comment about the surgery volumes. I was wondering, is the overall cost trend you're seeing in the commercial business consistent with what you thought high single digits, I think, is where it was pegged or is it what you're seeing in surgical enough to move the needle? And then, I guess, your comment on GLP-1 mainly on the Evernorth side. Is that helping you on the commercial cost trend. And you're also referencing a risk adjustment benefit. I wondered if you could size how meaningful that was for you in the quarter.

A.J., I'll start on the first couple of components and maybe you can pick up on a risk adjustment and anything I missed from the first 2 pieces of A.J.'s question. So as it relates to Cigna Healthcare, obviously, we're pleased with the strong performance in the second quarter despite a challenging and dynamic operating environment, and the strong performance was driven by slightly favorable medical cost experience in the quarter, which resulted in the MCR being slightly favorable to expectations. Now to your point of absolute level, we continue to see high single-digit type cost trends. So persistently elevated cost trend levels, not a significant deceleration and no acceleration fortunately as well. So that's how I would encourage you to think about what's happening with the cost trend environment. And to Ann's point, we're seeing -- we saw a little bit of favorability in the outpatient side, but again not enough to call it a break in cost trends at this juncture. And our forward-looking assumptions continue to assume an elevated cost trend environment through 2026 and 2027. On the GLP-1 side, as we were talking about in respect to Evernorth, we saw some deceleration in the growth rate of GLP-1 prescriptions in the second quarter, which puts some very modest downward pressure on the PBS financial picture in the second quarter. That was more than offset by the strength in our Specialty business, which led to overall Evernorth results being above expectations. To your point, on the Cigna Healthcare portfolio, the very modest benefit from the standpoint of GLP-1 prescriptions being a little bit lighter. But keep in mind, in the Cigna Health care portfolio, we serve many smaller employers who did not cover GLP-1s for weight management. So we can say you only see 15% to 20% of the book covering that for weight management. So the overall financial impact there was fairly immaterial as you think about the pull-through in the Cigna Health care portfolio. Ann, can you address the risk adjustment question that A.J. asked.

Yes, sure. So A.J., the release of the 2025 final risk adjustment data and also the June weekly update for 2026 confirmed our risk adjustment position, so results were consistent with our expectations, and it wasn't a driver for the quarter.

Our next question comes from Charles Rhyee with TD Cowen.

Ann, I think you mentioned in pharmacy benefits or about biosimilars that it kind of benefits specialty and it was -- it sounds like there was a little bit of a headwind for pharmacy benefits. Is that a function of -- maybe you can talk about sort of the mechanics is that you get better margins as on the SP side, but maybe the impacts in terms of rebate dollars and GPOs on the pharmacy benefit side. And then just real quickly, if you could comment on in Cigna Health care I know there's been a lot of concerns about IDR and maybe sort of talk about your exposure related to that and stop loss.

Charles, let me just provide a few opening thoughts here and Ann can get some of the details on both of those important questions that you raised. So first off, on the specialty generics and biosimilars. We're really pleased with the strong second quarter performance as we saw more rapid adoption of both biosimilars and specialty generics in the quarter. And Importantly, we're seeing this building momentum across America of biosimilars and specialty generics, powered forward particularly in the past couple of years as HUMIRA biosimilars become more mainstream. And really, we're still in the starting point of a multiyear wave with respect to more biosimilars, especially generics coming to market. And importantly, these cost-effective prescription drug alternatives are all examples of putting our patients first in our strategy because they result in lower out-of-pocket costs as well as a better net price for the employer, the health plan or the government entity that's funding the drug underneath. So we're really pleased to see that. On the Cigna Healthcare side, as I mentioned earlier, in A.J.'s question, we're pleased with the favorability we saw in the second quarter in aggregate for Cigna Healthcare relative to the IDR aspect of your question, we do support the overall strategic intent of consumer protection from surprise billing. However, we're seeing some clear abuses of the IDR vehicle in practice. So we're seeing right now the IDR mechanism has seen unsustainable volume levels, much of which is concentrated amongst a small number of providers. The vast majority of the settlements are favoring providers both in terms of the frequency of wins and losses as well as the result in payment amounts. And all of this just further exacerbates the affordability challenges for employers and health plans who are ultimately required to pay these outsized settlement amounts. In fact, 2025 alone, the research that was published showed $15 billion health care spending across the industry was processed through the IDR mechanism. And we view much of that spending as wasteful or abusive. Now for us, specifically, the impact has been manageable within our Cigna Health care planning and pricing assumptions. So a little bit of color on each of those parts of your question. And maybe you can talk a little bit about the P&L geography, if you will, on the generics and biosimilars is there anything further you want to add on the Cigna Healthcare side?

Sure. So on the Specialty Generics and the adoption of that and how it sort of lands geography-wise, within the P&L as we see stronger adoption of biosimilars and specialty generics is the benefit for us overall in Evernorth from a margin perspective. It benefits the patients and our clients as well. But the economic shift from pharmacy benefit services to the Specialty & Care line. And there's also -- because drug costs are lower, you'll see a sort of not a proportional increase in the revenue line. So overall, I'd say, overall net benefit to Evernorth as a whole, lower results in Pharmacy Benefit Services and higher results in Specialty & Care and sort of how it all comes together. I think your last -- so I was just shifting over to the stop loss. I think your last question was there on solo you say that we're tracking in line with expectations. So it was not a variance driver in the second quarter. We've done a lot of work to enhance our analytics and clinical data to monitor early performance, and these indicators are tracking well. I'll just give one example. We've seen stable frequency trends and high-cost payments across multiple attachment point levels. So these trends have developed consistent with both our expectations and in line with the levels that we observed last year. So all in all, we -- all of these indicators support our confidence in the stop loss book and our expectations for the full year.

Our next question comes from Justin Lake with Wolfe Research.

Just want to follow up on something you just talked about here. Your Specialty growth has been phenomenal in the first half of the year. Your guidance is intact for Evernorth overall. So it does feel like the PBM services side is maybe a little weaker. And -- so that was kind of the core of my question. It sounded like in your last answer, you were talking about the fact that there might be some geography or earnings shift because of biosimilars. So I was hoping maybe you can double-click on that a little bit. Is there any way to give us some proportionality or put some numbers around how that -- how much specialty earnings are being benefited by that and how much PBM earnings are being kind of offset?

Sure. Thanks for the question, Justin. Maybe I'll just start just by saying we're really pleased with overall Evernorth's second quarter performance, which came in slightly ahead of expectations. So there were pockets of outperformance in the quarter. We saw a faster penetration, like you said, for specialty generics and biosimilars and Specialty & Care and also some modestly lower-than-expected GLP-1 volume growth. So when you couple those together, it supports maintaining our current guidance rather than raising at the time. As we look ahead at the back half of the year, we continue to expect specialty generics and biosimilars to be a meaningful tailwind. However, we came into the year, we expected strong penetration throughout the year, and we've built that into our original full year guide. So we experienced it earlier than expected. So the magnitude of the benefit that we saw in the second quarter is sort of not expected to repeat at the same level in the third and fourth quarters. And so -- at the same time, within Pharmacy Benefit Services, we saw the moderation of GLP-1 growth rates that had a slight impact on the actual quarter, but we expect that dynamic to continue through the balance of the year. So when we look across Evernorth, we've got a couple of offsetting dynamics. PBS tracking modestly below our earlier assumptions due to the shift in economics. And the faster adoption of specialty generics and slightly lower GLP-1 volume growth, both Specialty & Care is performing above our expectations, driven by the continued strength in the specialty generics and biosimilars. So when we put that all together, we remain confident in the overall strength of the Evernorth business and in our prudent full year outlook.