Management's Discussion and Analysis of Financial Condition and Results of Operations [About Cardinal Health](index=6&type=section&id=About%20Cardinal%20Health) Cardinal Health is a global healthcare company operating through its Pharmaceutical (Pharma) and Medical Products (GMPD) segments, with a third "Other" category for smaller units - The company reports its financial results in two main segments: **Pharmaceutical and Specialty Solutions ("Pharma")** and **Global Medical Products and Distribution ("GMPD")**[19](index=19&type=chunk) - The Pharma segment distributes branded, generic, and specialty pharmaceuticals in the United States and provides related services to manufacturers and healthcare providers[19](index=19&type=chunk) - The GMPD segment manufactures, sources, and distributes Cardinal Health brand and national brand medical, surgical, and laboratory products across the U.S., Canada, Europe, and Asia[20](index=20&type=chunk) - The "Other" category comprises operating segments not large enough for separate disclosure, including Nuclear and Precision Health Solutions, at-Home Solutions, and OptiFreight Logistics[19](index=19&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) [Consolidated Results](index=7&type=section&id=Consolidated%20Results) Fiscal 2025 revenue decreased 2% to $222.6 billion, while GAAP operating earnings surged 83% and non-GAAP operating earnings grew 15% - Revenue for fiscal 2025 decreased by **2% to $222.6 billion**, mainly due to the expiration of the OptumRx contracts, though this was partially offset by growth in branded and specialty pharmaceutical sales[23](index=23&type=chunk) Fiscal 2025 vs. 2024 Operating Earnings (GAAP and Non-GAAP) | (in millions) | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | **GAAP operating earnings** | **$2,275** | **$1,243** | **83%** | | **Non-GAAP operating earnings** | **$2,786** | **$2,414** | **15%** | - The increase in GAAP operating earnings was significantly driven by a favorable comparison to the prior year, which included **$675 million in goodwill impairment charges**, and by recognizing **$171 million in net litigation recoveries** in fiscal 2025[25](index=25&type=chunk) Fiscal 2025 vs. 2024 Diluted EPS (GAAP and Non-GAAP) | ($ per share) | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | **GAAP diluted EPS** | **$6.45** | **$3.45** | **87%** | | **Non-GAAP diluted EPS** | **$8.24** | **$7.53** | **9%** | - Cash and equivalents decreased from **$5.1 billion** at June 30, 2024, to **$3.9 billion** at June 30, 2025, with net cash from operations of **$2.4 billion** impacted by the OptumRx contract unwind and **$798 million** in opioid litigation payments[30](index=30&type=chunk) [Significant Developments in Fiscal 2025 and Trends](index=10&type=section&id=Significant%20Developments%20in%20Fiscal%202025%20and%20Trends) Fiscal 2025 was marked by strategic acquisitions totaling $5.3 billion, strong GLP-1 demand, and the adverse impact of the OptumRx contract expiration Key Acquisitions in Fiscal 2025 | Company | Closing Date | Purchase Price (in billions) | Business Description | | :--- | :--- | :--- | :--- | | **Advanced Diabetes Supply (ADS)** | Apr 1, 2025 | $1.1 | Diabetic medical supplies provider | | **GI Alliance (GIA)** | Jan 30, 2025 | $2.8 | Gastroenterology management services organization (MSO) | | **Urology America** | May 30, 2025 | $0.36 | Urology MSO (acquired through GIA) | | **Integrated Oncology Network (ION)** | Dec 2, 2024 | $1.1 | Independent community oncology network (MSO) | - The expiration of the OptumRx contracts, which accounted for **17% of consolidated revenue in fiscal 2024**, adversely impacted results of operations, financial condition, and cash flows in fiscal 2025[42](index=42&type=chunk) - Sales of **GLP-1 pharmaceuticals increased significantly**, positively impacting revenue but not meaningfully contributing to segment profit[43](index=43&type=chunk) - The company faces risks from potential U.S. tariffs on goods from countries where it operates, which could lead to substantial additional costs, price increases, and supply disruptions[40](index=40&type=chunk)[41](index=41&type=chunk) [Results of Operations](index=14&type=section&id=Results%20of%20Operations) Total revenue decreased 2% to $222.6 billion, while gross margin grew 10% and total segment profit increased 15% to $2.9 billion [Revenue](index=14&type=section&id=Revenue) Total revenue decreased 2% to $222.6 billion, driven by a 3% decline in the Pharma segment due to the OptumRx contract loss Revenue by Segment (in millions) | Segment | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Pharmaceutical and Specialty Solutions | $204,644 | $210,019 | (3)% | | Global Medical Products and Distribution | $12,636 | $12,381 | 2% | | Other | $5,382 | $4,512 | 19% | | **Total Segment Revenue** | **$222,662** | **$226,912** | **(2)%** | [Gross Margin](index=15&type=section&id=Gross%20Margin) Gross margin increased 10% to $8.2 billion, driven by acquisitions and a favorable product mix Gross Margin (in millions) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Gross Margin | $8,168 | $7,414 | 10% | - The increase in gross margin was primarily due to acquisitions (MSO platforms, ADS), increased contribution from branded and specialty pharmaceuticals, and BioPharma Solutions, partially offset by the OptumRx contract expiration[57](index=57&type=chunk) [Distribution, Selling, General, and Administrative ("SG&A") Expenses](index=15&type=section&id=Distribution%2C%20Selling%2C%20General%2C%20and%20Administrative%20%28%22SG%26A%22%29%20Expenses) SG&A expenses increased 8% to $5.4 billion, primarily due to the integration of recent acquisitions and higher operational costs SG&A Expenses (in millions) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | SG&A Expenses | $5,382 | $5,000 | 8% | [Segment Profit](index=16&type=section&id=Segment%20Profit) Total segment profit grew 15% to $2.9 billion, with strong performance across all segments Segment Profit (in millions) | Segment | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Pharmaceutical and Specialty Solutions | $2,258 | $2,015 | 12% | | Global Medical Products and Distribution | $135 | $92 | 47% | | Other | $516 | $423 | 22% | | **Total Segment Profit** | **$2,909** | **$2,530** | **15%** | [Provision for Income Taxes](index=18&type=section&id=Provision%20for%20Income%20Taxes) The effective income tax rate decreased to 25.3% from 28.9%, mainly due to the absence of a prior-year goodwill impairment charge Effective Income Tax Rate Reconciliation | | 2025 | 2024 | | :--- | :--- | :--- | | Provision at Federal statutory rate | 21.0% | 21.0% | | Goodwill Impairment | — | 8.7% | | Specialty Alliance Share-based Compensation | 1.4% | — | | Other items, net | 2.9% | (1.8)% | | **Effective income tax rate** | **25.3%** | **28.9%** | [Liquidity and Capital Resources](index=19&type=section&id=Liquidity%20and%20Capital%20Resources) Cash decreased to $3.9 billion as the company deployed $5.3 billion for acquisitions and returned capital to shareholders, funded partly by new debt - Cash and equivalents decreased to **$3.9 billion** at June 30, 2025, from **$5.1 billion** at June 30, 2024[80](index=80&type=chunk) - Net cash provided by operating activities was **$2.4 billion** in fiscal 2025, which includes the impact of unwinding the OptumRx contracts and **$798 million** in opioid litigation payments[81](index=81&type=chunk) - Major uses of cash in fiscal 2025 included **$5.3 billion for acquisitions**, **$765 million for share repurchases**, **$547 million for capital expenditures**, and **$494 million for dividends**[82](index=82&type=chunk) - The company issued new long-term debt with net proceeds of **$2.9 billion** and borrowed **$800 million** from a term loan to fund acquisitions and for general purposes[82](index=82&type=chunk)[89](index=89&type=chunk) Contractual Obligations and Cash Requirements as of June 30, 2025 (in millions) | Obligation | Total | | :--- | :--- | | Long-term debt and short-term borrowings | $8,314 | | Interest on long term debt | $4,032 | | Lease obligations (Finance & Operating) | $1,157 | | Purchase obligations and other payments | $1,510 | | Opioid litigation settlement agreements | $4,829 | | **Total** | **$19,842** | [Critical Accounting Policies and Sensitive Accounting Estimates](index=24&type=section&id=Critical%20Accounting%20Policies%20and%20Sensitive%20Accounting%20Estimates) This section details key accounting policies requiring significant management judgment, including goodwill impairment, litigation contingencies, and inventory valuation Allowance for Doubtful Accounts Activity (in millions) | | 2025 | 2024 | 2023 | | :--- | :--- | :--- | :--- | | Beginning Balance | $233 | $240 | $207 | | Charged to costs and expenses | $89 | $108 | $165 | | Reductions/Write-offs | ($109) | ($115) | ($132) | | **Ending Balance** | **$213** | **$233** | **$240** | - **52% of inventories** at June 30, 2025, are valued using the last-in, first-out (LIFO) method, primarily for merchandise at core pharmaceutical distribution facilities[113](index=113&type=chunk) - In fiscal 2024, the company recognized a **$675 million goodwill impairment charge** related to the GMPD segment; no impairments were recorded for other reporting units in fiscal 2025[123](index=123&type=chunk)[124](index=124&type=chunk) - The company has accrued **$56 million** for losses and legal defense costs related to IVC filter product liability lawsuits as of June 30, 2025[132](index=132&type=chunk) - A new tax law, the One Big Beautiful Bill Act (OBBBA), was signed in July 2025, and the company is currently evaluating its impact on the consolidated financial statements[145](index=145&type=chunk) Explanation and Reconciliation of Non-GAAP Financial Measures [GAAP to Non-GAAP Reconciliations](index=35&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliations) This section reconciles GAAP to non-GAAP financial measures, adjusting for items like restructuring, amortization, and litigation to reflect underlying business performance - Management uses non-GAAP financial measures internally to evaluate performance, for financial planning, and to determine incentive compensation, believing they better reflect the performance of the underlying, ongoing business[148](index=148&type=chunk) - Key exclusions from non-GAAP measures include LIFO charges/credits, restructuring and severance costs, amortization and other acquisition-related costs, impairments, and litigation charges/recoveries[149](index=149&type=chunk)[158](index=158&type=chunk) Fiscal Year 2025 GAAP to Non-GAAP Reconciliation Summary (in millions, except EPS) | Metric | GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | **Operating Earnings** | $2,275 | $511 | $2,786 | | **Net Earnings** | $1,561 | $434 | $1,995 | | **Diluted EPS** | $6.45 | $1.79 | $8.24 | Quantitative and Qualitative Disclosures about Market Risk [Market Risk Disclosures](index=36&type=section&id=Market%20Risk%20Disclosures) The company is exposed to market risks from foreign exchange, interest rates, and commodity prices, which it manages through a hedging program - The company's primary market risks are related to foreign exchange, interest rates, and commodity prices, which are managed through a hedging program[162](index=162&type=chunk) - Using a Value-At-Risk (VAR) model, the potential maximum loss in earnings from transactional foreign exchange exposure is estimated at **$13 million** for the upcoming fiscal year[165](index=165&type=chunk) - A hypothetical **50 basis point** increase/decrease in interest rates would result in a **$12 million** increase/decrease in interest expense and a **$14 million** increase/decrease in interest income, respectively[168](index=168&type=chunk)[169](index=169&type=chunk) - The company has a forecasted direct commodity exposure of **$491 million** for the upcoming fiscal year; a hypothetical **10%** fluctuation in commodity prices could result in a potential gain/loss of **$49 million**[172](index=172&type=chunk) Business [Business Overview](index=38&type=section&id=Business%20Overview) Cardinal Health is a global healthcare company distributing pharmaceuticals and medical products, recently expanding its specialty and at-home offerings through acquisitions - The Pharmaceutical and Specialty Solutions segment distributes a wide range of pharmaceutical products to retailers and hospitals, provides specialty pharma services, and operates MSO platforms[181](index=181&type=chunk) - The GMPD segment manufactures and sources Cardinal Health branded medical products and distributes a broad range of national brand medical, surgical, and laboratory products[182](index=182&type=chunk)[184](index=184&type=chunk) - The company operates Red Oak Sourcing, a generic pharmaceutical sourcing venture with CVS Health, with a term extending through June 2029[182](index=182&type=chunk)[183](index=183&type=chunk) Recent Major Acquisitions | Date | Company | Business | Acquisition Price (in billions) | | :--- | :--- | :--- | :--- | | 05/30/25 | Urology America | Urology MSO | $0.4 | | 04/01/25 | ADS | Diabetic medical supplies | $1.1 | | 01/30/25 | GI Alliance (GIA) | Gastroenterology MSO | $2.8 | | 12/02/24 | ION | Oncology MSO | $1.1 | | 03/18/24 | Specialty Networks | Multi-specialty GPO | $1.2 | [Customers, Suppliers, and Competition](index=43&type=section&id=Customers%2C%20Suppliers%2C%20and%20Competition) The company has significant customer and supplier concentration and operates in a highly competitive market against national and regional distributors - Customer concentration is high: **CVS Health accounted for 30% of fiscal 2025 revenue**, and the top five customers accounted for 43%[194](index=194&type=chunk) - The five largest suppliers accounted for **37% of revenue** in fiscal 2025, with the single largest supplier representing 9%[195](index=195&type=chunk) - Key competitors in the Pharma segment include **McKesson Corporation** and **Cencora, Inc**; in the GMPD segment, competitors include **Medline Industries, Inc** and **Owens & Minor, Inc**[197](index=197&type=chunk)[198](index=198&type=chunk) [Human Capital Management](index=43&type=section&id=Human%20Capital%20Management) As of June 30, 2025, the company employed approximately 57,700 people globally, with a strategy focused on culture, talent, and safety - The company had approximately **57,700 employees** globally as of June 30, 2025[201](index=201&type=chunk) - **35,000 employees** work in distribution centers, manufacturing facilities, or pharmacies, while **21,000** work in other functions like finance, IT, and sales[202](index=202&type=chunk) - The Human Resources and Compensation Committee of the Board oversees human capital management strategies, including talent attraction, development, retention, and succession planning[204](index=204&type=chunk) [Regulatory Matters](index=46&type=section&id=Regulatory%20Matters) The business is highly regulated by numerous U.S. and foreign agencies, covering areas from controlled substances and medical devices to data privacy - The business is subject to extensive regulation by agencies such as the **FDA, DEA, NRC, and FTC** in the U.S., as well as comparable agencies abroad[215](index=215&type=chunk)[224](index=224&type=chunk) - Distribution of controlled substances is governed by the Controlled Substances Act (CSA), and the **National Opioid Settlement Agreement (NOSA)** imposes specific injunctive relief terms on anti-diversion programs until 2027[216](index=216&type=chunk)[217](index=217&type=chunk) - Manufacturing and marketing of medical devices require clearance or approval, such as the **510(k) or PMA process** in the U.S. and **CE Mark Certification** under the new Medical Device Regulation (MDR) in the EU[219](index=219&type=chunk)[221](index=221&type=chunk)[222](index=222&type=chunk) - The company is subject to evolving privacy laws, including **HIPAA** in the U.S. and **GDPR** in the EU, due to its handling of patient-identifiable health information[223](index=223&type=chunk)[226](index=226&type=chunk) - The **Drug Supply Chain Security Act (DSCSA)** requires a national system for tracing prescription drugs, with compliance deadlines extended into 2025[228](index=228&type=chunk) Risk Factors [Legal, Regulatory, & Compliance Risks](index=54&type=section&id=Legal%2C%20Regulatory%2C%20%26%20Compliance%20Risks) The company faces significant risks from complex regulations, potential litigation, changes in tax laws, and ongoing opioid-related compliance obligations - The business is subject to rigorous regulatory and licensing requirements; failure to comply could result in suspension of operations, recalls, or sanctions[242](index=242&type=chunk) - The Department of Justice is investigating potential violations of the **Anti-Kickback Statute** and **False Claims Act** related to a 2022 GPO acquisition[244](index=244&type=chunk) - The company faces risks from potential adverse changes in tax laws and challenges by the IRS to its tax positions, including the deductibility of opioid litigation accruals and a self-insurance loss carryback under the CARES Act[254](index=254&type=chunk)[256](index=256&type=chunk)[258](index=258&type=chunk) - Opioid-related legal proceedings, including compliance with the **National Opioid Settlement Agreement (NOSA)** and lawsuits from private plaintiffs, could have additional negative effects on operations and financial results[265](index=265&type=chunk)[266](index=266&type=chunk)[267](index=267&type=chunk) [Industry & Economic Risks](index=62&type=section&id=Industry%20%26%20Economic%20Risks) The company is exposed to risks from international trade policies, generic drug market volatility, supply chain disruptions, and intense competitive pressure - Changes in U.S. or international trade policies, including **tariffs**, could disrupt global operations and negatively impact financial results by increasing costs and causing supply shortages[275](index=275&type=chunk)[277](index=277&type=chunk) - The Pharma segment's profit margin is subject to volatility from **generic pharmaceutical pricing**, launches, and customer purchasing volumes, which may not be offset by sourcing ventures like Red Oak[279](index=279&type=chunk) - The company is subject to fluctuations in the cost and availability of raw materials (e.g., oil-based resins, cotton) and has experienced higher supply chain costs that negatively impacted **GMPD segment profit**[284](index=284&type=chunk) - **Consolidation in the U.S. healthcare industry** among distributors, manufacturers, and providers could create larger enterprises with greater negotiating power, potentially harming the company's results[292](index=292&type=chunk) [Business & Operational Risks](index=68&type=section&id=Business%20%26%20Operational%20Risks) Key operational risks include dependency on information systems, cybersecurity threats, significant customer concentration, and challenges in integrating large acquisitions - Operations depend on the proper functioning of information systems and distribution networks, which are vulnerable to physical disruptions and **cybersecurity incidents**[295](index=295&type=chunk) - A material **cyber-attack** poses a significant risk, as unauthorized parties continuously attempt to gain access to systems, and the sophistication of these threats is increasing[297](index=297&type=chunk)[298](index=298&type=chunk) - The company has significant customer concentration, with **CVS Health accounting for 30% of fiscal 2025 revenue** and 26% of gross trade receivables at year-end[305](index=305&type=chunk) - Integrating recent large acquisitions (ION, GIA, ADS) and entering new business lines like physician practice management present numerous risks, including regulatory challenges, unforeseen liabilities, and difficulties in retaining key personnel and customers[306](index=306&type=chunk)[308](index=308&type=chunk)[310](index=310&type=chunk) - The company recorded goodwill impairment charges of **$675 million** and **$1.2 billion** in fiscal 2024 and 2023, respectively, related to the GMPD segment; future impairments of goodwill or other long-lived assets remain a risk[321](index=321&type=chunk) Cybersecurity [Cybersecurity Risk Management, Strategy, and Governance](index=75&type=section&id=Cybersecurity%20Risk%20Management%2C%20Strategy%2C%20and%20Governance) The company integrates cybersecurity into its enterprise risk management, using the NIST framework and providing Board-level oversight through the Audit Committee - The company's cybersecurity risk management strategy is benchmarked to industry standards like the **NIST framework** and includes measures such as penetration testing and tabletop exercises[322](index=322&type=chunk) - The **Chief Information Security Officer (CISO)**, reporting to the CIO, leads the assessment and management of cybersecurity risks[324](index=324&type=chunk) - The Board's **Audit Committee** has primary responsibility for overseeing cybersecurity risks, receiving at least quarterly updates from the CISO and CIO[326](index=326&type=chunk) - To date, the company is not aware of any cybersecurity incidents that have **materially affected** or are reasonably likely to materially affect its business[324](index=324&type=chunk) Financial Statements and Supplementary Data [Consolidated Financial Statements](index=84&type=section&id=Consolidated%20Financial%20Statements) For fiscal 2025, the company reported revenue of $222.6 billion, net earnings of $1.56 billion, and total assets of $53.1 billion Consolidated Statement of Earnings Highlights (in millions) | Metric | 2025 | 2024 | 2023 | | :--- | :--- | :--- | :--- | | Revenue | $222,578 | $226,827 | $204,979 | | Gross Margin | $8,168 | $7,414 | $6,874 | | Operating Earnings | $2,275 | $1,243 | $752 | | Net Earnings Attributable to Cardinal Health, Inc. | $1,561 | $852 | $330 | Consolidated Balance Sheet Highlights (in millions) | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Cash and equivalents | $3,874 | $5,133 | | Total Current Assets | $36,373 | $34,884 | | Total Assets | $53,122 | $45,121 | | Total Current Liabilities | $38,897 | $35,640 | | Total Liabilities | $55,756 | $48,333 | | Total Shareholders' Deficit | ($2,634) | ($3,212) | Consolidated Statement of Cash Flows Highlights (in millions) | Metric | 2025 | 2024 | 2023 | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $2,397 | $3,762 | $2,844 | | Net cash used in investing activities | ($5,593) | ($1,849) | ($454) | | Net cash provided by/(used in) financing activities | $1,940 | ($847) | ($3,051) | [Notes to Consolidated Financial Statements](index=89&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies and provide further information on acquisitions, goodwill, debt, litigation, and subsequent events - **Note 2 (Acquisitions):** Details the acquisitions of ADS ($1.1B), GIA (73% for $2.8B), and ION ($1.1B) in fiscal 2025, which significantly increased goodwill and intangible assets[476](index=476&type=chunk)[478](index=478&type=chunk)[481](index=481&type=chunk) - **Note 5 (Goodwill):** Goodwill increased from **$4.7 billion to $9.7 billion**, primarily due to the GIA and ION acquisitions in the Pharma segment and the ADS acquisition in the Other segment[503](index=503&type=chunk)[504](index=504&type=chunk) - **Note 7 (Debt):** Total long-term obligations and other short-term borrowings increased to **$8.5 billion from $5.1 billion**, mainly from issuing **$2.9 billion** in new notes and borrowing **$800 million** under a term loan to fund acquisitions[513](index=513&type=chunk)[516](index=516&type=chunk)[522](index=522&type=chunk) - **Note 8 (Litigation):** As of June 30, 2025, the company has accrued **$4.9 billion** for opioid-related matters; during fiscal 2025, it made payments totaling **$798 million** related to these settlements[540](index=540&type=chunk) - **Note 16 (Subsequent Events):** On August 12, 2025, the company announced a definitive agreement to acquire Solaris Health, a urology MSO, for approximately **$1.9 billion** in cash[640](index=640&type=chunk)

Acquisition Details - Cardinal Health agreed to acquire Solaris Health for $1.9 billion [1] - The acquisition expands Cardinal Health's multispecialty strategy [1] Industry Focus - The deal represents Cardinal Health's latest acquisition in the urology category [1]

Financial Performance - Q4 FY25 - Revenue remained flat at $60.159 billion[9] - Gross margin increased by 17% to $2.202 billion[9] - Operating earnings increased by 7% to $428 million on a GAAP basis and 19% to $719 million on a non-GAAP basis[9] - Net earnings increased by 2% to $239 million on a GAAP basis and 11% to $501 million on a non-GAAP basis[9] - Diluted EPS increased by 4% to $1.00 on a GAAP basis and 13% to $2.08 on a non-GAAP basis[9] Segment Performance - Q4 FY25 - Pharmaceutical and Specialty Solutions revenue decreased by 0% to $55.372 billion, while segment profit increased by 11% to $535 million[11] - Global Medical Products and Distribution revenue increased by 3% to $3.199 billion, and segment profit increased significantly by 49% to $70 million[15] - Other (NPHS, at-Home Solutions, and OptiFreight) revenue increased by 37% to $1.609 billion, with segment profit increasing by 44% to $160 million[20] Financial Performance - FY25 - Revenue decreased by 2% to $222.578 billion[28] - Gross margin increased by 10% to $8.168 billion[28] - Operating earnings increased significantly by 83% to $2.275 billion on a GAAP basis and 15% to $2.786 billion on a non-GAAP basis[28] - Net earnings increased significantly by 83% to $1.561 billion on a GAAP basis and 7% to $1.995 billion on a non-GAAP basis[28] - Diluted EPS increased significantly by 87% to $6.45 on a GAAP basis and 9% to $8.24 on a non-GAAP basis[28] Segment Performance - FY25 - Pharmaceutical and Specialty Solutions revenue decreased by 3% to $204.644 billion, but segment profit increased by 12% to $2.258 billion[30] - Global Medical Products and Distribution revenue increased by 2% to $12.636 billion, with segment profit increasing significantly by 47% to $135 million[35] - Other (NPHS, at-Home Solutions, and OptiFreight) revenue increased by 19% to $5.382 billion, and segment profit increased by 22% to $516 million[40] FY26 Outlook - Non-GAAP EPS is expected to be in the range of $9.30 - $9.50, revised from the previous outlook of $9.10 to $9.30[48] - Interest and Other expenses are projected to be approximately $275 million[48] - Non-GAAP adjusted free cash flow is expected to be between $2.75 billion and $3.25 billion[48]

FOR IMMEDIATE RELEASE Exhibit 99.1 Cardinal Health Reports Fourth Quarter and Fiscal Year 2025 Results and Raises Fiscal Year 2026 Guidance DUBLIN, Ohio, August 12, 2025 – Cardinal Health (NYSE: CAH) today reported fourth quarter fiscal year 2025 revenues of $60.2 billion, relatively flat to the fourth quarter of fiscal year 2024. Fourth quarter revenue increased 21% excluding the impact of a previously communicated customer contract expiration. GAAP operating earnings were $428 million and GAAP diluted ear ...

Core Insights - Cardinal Health reported fourth quarter fiscal year 2025 revenues of $60.2 billion, which is relatively flat compared to the same period in fiscal year 2024. Excluding the impact of a customer contract expiration, revenue increased by 21% [1][12] - The company achieved GAAP operating earnings of $428 million and GAAP diluted earnings per share (EPS) of $1.00 for the fourth quarter. Non-GAAP operating earnings rose by 19% to $719 million, with non-GAAP diluted EPS increasing by 13% to $2.08 [1][12] - For the full fiscal year 2025, revenues totaled $222.6 billion, a 2% decrease from fiscal year 2024. However, revenue increased by 18% when excluding the impact of the customer contract expiration [2][12] - Cardinal Health's CEO highlighted the operational strength across all five operating segments, which experienced double-digit profit growth, indicating effective execution of the company's growth strategy [3][12] Financial Performance - Fourth quarter fiscal year 2025 summary: - Revenue: $60.2 billion (Q4 FY24: $59.9 billion) - GAAP operating earnings: $428 million (Q4 FY24: $401 million, 7% increase) - Non-GAAP operating earnings: $719 million (Q4 FY24: $605 million, 19% increase) - Non-GAAP diluted EPS: $2.08 (Q4 FY24: $1.84, 13% increase) [4][12] - Full year fiscal year 2025 summary: - Revenue: $222.6 billion (FY24: $226.8 billion, 2% decrease) - GAAP operating earnings: $2.3 billion (FY24: $1.2 billion, 83% increase) - Non-GAAP operating earnings: $2.8 billion (FY24: $2.4 billion, 15% increase) - Non-GAAP diluted EPS: $8.24 (FY24: $7.53, 9% increase) [2][4] Segment Performance - Pharmaceutical and Specialty Solutions segment: - Q4 FY25 revenue: $55.4 billion (Q4 FY24: $55.6 billion) - Segment profit increased by 11% to $535 million in Q4 FY25 [5][6] - Global Medical Products and Distribution segment: - Q4 FY25 revenue: $3.2 billion (Q4 FY24: $3.1 billion, 3% increase) - Segment profit increased by 49% to $70 million in Q4 FY25 [7][8] - Other segment: - Q4 FY25 revenue: $1.6 billion (Q4 FY24: $1.2 billion, 37% increase) - Segment profit increased by 44% to $160 million in Q4 FY25 [9][10] Future Outlook - Cardinal Health raised its fiscal year 2026 outlook for non-GAAP diluted EPS to a range of $9.30 to $9.50, reflecting a growth of 13% to 15% [10][12] - The company anticipates revenue growth of 11% to 13% in the Pharmaceutical and Specialty Solutions segment and 2% to 4% in the Global Medical Products and Distribution segment for fiscal year 2026 [11][12]

Core Viewpoint - Cardinal Health has announced the acquisition of Solaris Health, a leading urology management services organization, to enhance its multi-specialty growth strategy and expand its Urology Alliance [1][2][5]. Company Overview - Cardinal Health will provide approximately $1.9 billion in cash for the acquisition and will own about 75% of The Specialty Alliance post-acquisition [3]. - Solaris Health supports over 750 providers across more than 250 practice locations in 14 states, enhancing Cardinal Health's reach in local communities [4][11]. - The acquisition is expected to be slightly accretive to Cardinal Health's non-GAAP earnings per share in the first 12 months following the close [6]. Strategic Importance - The acquisition aligns with Cardinal Health's focus on accelerating specialty growth, particularly in urology, which is viewed as an attractive specialty [5][7]. - The combined capabilities of The Specialty Alliance and Solaris Health will empower physicians to focus on patient care, improving outcomes through integrated and coordinated care [5][6]. Financial Aspects - Cardinal Health plans to finance the acquisition through a combination of cash on hand and new debt financing, while maintaining a disciplined capital allocation framework [7][8]. - The company expects to remain within its targeted leverage range by the end of fiscal 2026 despite the acquisition [8]. Leadership Transition - Following the acquisition, Dr. Gary Kirsh, CEO of Solaris Health, will retire from his role and serve as a Senior Advisor to Cardinal Health [5][6].

Group 1 - Cardinal Health (CAH.US) experienced a pre-market increase of 2.44% ahead of its earnings report scheduled for August 12 [1] - Analysts expect Cardinal Health to achieve revenue of $60.921 billion for Q4 2025, representing a year-over-year increase of 1.76% [1] - The anticipated earnings per share (EPS) for Cardinal Health is $1.76, which indicates a significant year-over-year increase of 83.13% [1] Group 2 - As of August 11, Cardinal Health's closing price was $157.66, with a pre-market price of $161.51 [1] - The company's market capitalization stands at $37.63 billion, with a total share count of 239 million [1] - The stock has a price-to-earnings (P/E) ratio of 45.70 and a dividend yield of 1.280% [1]

Group 1 - Cardinal Health, Inc. (NYSE: CAH) is a distributor of pharmaceuticals and medical/laboratory products [1] - The company is investing in its distribution capabilities for fast-growing segments including autoimmune, urology, and oncology [1] - There has been a turnaround in its Global Medical Products segment [1]

Industry Overview - The Zacks Medical - Dental Supplies industry is experiencing weakness due to rising U.S. tariffs on trading partners, particularly China, which are expected to impact sales through 2025 [1] - Demand for elective procedures in the U.S. is declining, affecting sales across various product lines, including CAD/CAM and imaging products [2] - The global dental industry is projected to reach $610.4 billion with a CAGR of 4.5% from 2023 to 2032, indicating long-term growth potential despite current challenges [2] Major Trends - The aging population in the U.S. is a significant driver for the dental equipment market, with 55.8 million people aged 65 and above reported in 2020 [5] - Technological innovations such as CAD/CAM systems and AI diagnostics are enhancing treatment efficacy and expanding product use [6] - There is a growing emphasis on preventive care, leading to increased consumption of preventive dental products [6] - Trends towards minimally invasive and cosmetic dentistry are expanding market segments for specialized dental consumables [7] - Emerging markets, particularly in Asia-Pacific, are experiencing faster growth rates due to rising healthcare expenditure and improved access to care [8] Economic Impact - U.S. tariffs have significantly increased costs on essential imported dental items, with tariffs ranging from 10% to over 50%, leading to higher operational costs for manufacturers and distributors [10] - The industry is gradually shifting supply chains towards domestic production to mitigate tariff exposure, while dental associations are advocating for tariff exemptions [10] Industry Performance - The Zacks Medical Dental Supplies industry has underperformed compared to the broader sector and the S&P 500, with a collective decline of 0.4% over the past year [13] - The industry is currently trading at a forward P/E of 16.05X, lower than the S&P 500's 22.7X and the sector's 18.4X [16] Company Insights - West Pharmaceutical is expected to sustain growth momentum through 2025, with projected revenues between $3.04 billion and $3.06 billion, reflecting an organic growth of 3-3.75% [22] - McKesson is experiencing strong operational momentum, with a projected revenue gain of 13.3% for fiscal 2025 [31] - Cardinal Health anticipates adjusted EPS in the range of $8.05-$8.15 for fiscal 2025, despite facing pricing pressures and inflationary impacts [37] - Cooper Companies expects revenue growth of approximately 5.7% for 2025, supported by strong demand in both CooperVision and CooperSurgical segments [43]

Core Viewpoint - Cardinal Health, Inc. is expected to report strong fourth-quarter fiscal 2025 results, driven by growth in the Pharmaceutical segment and recovery in the Medical segment, with adjusted EPS projected to increase by 10.3% year-over-year [1][2][8] Financial Performance - The company’s adjusted EPS for the last reported quarter was $2.35, exceeding the Zacks Consensus Estimate by 9.3%, with an average surprise of 10.3% over the last four quarters [1][2] - For the upcoming fourth quarter, the Zacks Consensus Estimate for revenues is $60.67 billion, reflecting a 1.3% increase from the prior year [7][8] Segment Analysis - The Pharmaceutical segment is anticipated to show robust performance, supported by strong volume trends in branded drugs and specialty physician practices, along with the expansion of the Outcomes platform [3][4] - The Medical segment is expected to continue its recovery, aided by improved global supply chain execution and stability in manufacturing, with modest sequential revenue growth anticipated [4][5] Cost Management - Operating discipline and cost-saving initiatives under the Medical Improvement Plan are expected to support margin stability, despite some offset from performance-based compensation and IT investments [5][6] Shareholder Value - Adjusted EPS is projected to benefit from segment-level profit growth, lower interest expenses, and share repurchases, with full-year adjusted EPS guidance maintained at $7.20-$7.35 [6][8] Market Performance - Cardinal Health's shares have gained 29.7% year-to-date, outperforming the Medical - Dental Supplies sector and the broader market [11][12] Valuation Metrics - The forward 12-month price-to-earnings (P/E) ratio for Cardinal Health is 16.5X, which is a premium compared to the industry average of 15.9X and its peers [16] Long-Term Initiatives - The company is investing in new distribution centers, including a facility in Fort Worth, TX, expected to enhance its distribution chain with advanced robotics and automation technologies [17][18]