Core Viewpoint - Cardinal Health, Inc. reported strong adjusted earnings per share (EPS) for the third quarter of fiscal 2025, beating estimates, while revenues remained flat and slightly missed expectations [1][12]. Financial Performance - Adjusted EPS for Q3 fiscal 2025 was $2.35, exceeding the Zacks Consensus Estimate of $2.15 by 9.3% and improving 12.4% year over year [1]. - GAAP EPS was $2.10, compared to $1.07 in the same quarter last year [1]. - Total revenue was $54.89 billion, flat year over year, but missed the Zacks Consensus Estimate by 0.2% [1]. Segmental Analysis - **Pharmaceutical and Specialty Solutions**: Revenues decreased 0.4% to $50.4 billion year over year, primarily due to the expiration of a customer contract with OptumRx, although sales grew 20% when excluding this impact [2]. - **Pharmaceutical Profit**: Totaled $662 million, up 14% from the previous year, driven by growth in brand and specialty products [3]. - **Global Medical Products and Distribution**: Revenues increased 2% to $3.2 billion, supported by growth from existing customers [3]. - **Other Segment**: Sales reached $1.3 billion, up 13% year over year, with profits of $134 million, a 22% increase from the prior year [4][5]. Margin Analysis - Gross profit rose 9.7% year over year to $2.12 billion, with a gross margin of 3.9%, expanding nearly 30 basis points [6]. - Operating income was $730 million, up 97.8% year over year, while adjusted operating income increased 21% to $807 million [6]. Financial Update - Cash and cash equivalents at the end of the quarter were $3.33 billion, down from $3.81 billion in the previous quarter [8]. - Net cash provided by operating activities was $2.91 billion, a significant increase from $27 million used in the same period last year [8]. 2025 Guidance Update - Cardinal Health updated its fiscal 2025 earnings guidance, now expecting adjusted EPS between $8.05 and $8.15, up from $7.85-$8.00 [9]. - Pharmaceutical segment revenues are anticipated to decline 4-6%, while segment profit is expected to increase 11.5-12.5% [9]. - Medical segment revenues are projected to grow 3-5%, with profits expected between $130-$140 million [10]. Future Outlook - The company expects double-digit EPS growth for fiscal 2026, driven by strong segment profit growth across various divisions [11]. - Continued strong demand for Pharmaceutical and Specialty Solutions is anticipated, with growth from existing customers offsetting contract expirations [12]. Market Performance - Despite mixed results, Cardinal Health's shares rose 0.5% in pre-market trading, with a year-to-date gain of 19.5% compared to the industry’s 0.9% growth [13].

Core Insights - Cardinal Health reported revenue of $54.88 billion for the quarter ended March 2025, a slight decrease of 0.1% year-over-year, with an EPS of $2.35, up from $2.08 in the same quarter last year [1] - The revenue fell short of the Zacks Consensus Estimate of $55.03 billion by 0.27%, while the EPS exceeded the consensus estimate of $2.15 by 9.30% [1] Financial Performance Metrics - Revenue from Pharmaceutical and Specialty Solutions was $50.43 billion, slightly above the average estimate of $50.33 billion, reflecting a year-over-year decline of 0.4% [4] - Revenue from Other segments was reported at $1.30 billion, slightly exceeding the estimated $1.29 billion [4] - Revenue from Medical Products and Distribution was $3.16 billion, below the average estimate of $3.21 billion, but showed a year-over-year increase of 1.5% [4] - Segment profit for Pharmaceutical and Specialty Solutions was $662 million, surpassing the estimated $635.77 million [4] - Segment profit for Other was $134 million, exceeding the average estimate of $119.24 million [4] - Segment profit for Global Medical Products and Distribution was $39 million, below the average estimate of $44.16 million [4] Stock Performance - Cardinal Health's shares have returned +1.9% over the past month, contrasting with a -0.7% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Group 1 - Cardinal Health reported quarterly earnings of $2.35 per share, exceeding the Zacks Consensus Estimate of $2.15 per share, and showing an increase from $2.08 per share a year ago, representing an earnings surprise of 9.30% [1] - The company posted revenues of $54.88 billion for the quarter ended March 2025, slightly missing the Zacks Consensus Estimate by 0.27%, and down from $54.91 billion year-over-year [2] - Cardinal has surpassed consensus EPS estimates in all four of the last quarters and has topped consensus revenue estimates three times during the same period [2] Group 2 - The stock has increased approximately 19.5% since the beginning of the year, contrasting with the S&P 500's decline of -5.3% [3] - The current consensus EPS estimate for the upcoming quarter is $2 on revenues of $60.06 billion, and for the current fiscal year, it is $7.94 on revenues of $222.62 billion [7] - The Zacks Industry Rank places Medical - Dental Supplies in the bottom 40% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Revenue and Earnings - Revenue for Q3 Fiscal 2025 was flat at $54.9 billion and decreased 3% to $162.4 billion for the nine months, primarily due to the expiration of OptumRx contracts[14]. - GAAP operating earnings increased to $730 million for Q3 and $1.8 billion for the nine months, while non-GAAP operating earnings rose 21% to $807 million and 14% to $2.1 billion, driven by branded pharmaceutical sales growth[16]. - GAAP diluted EPS for Q3 increased 96% to $2.10 and 118% to $5.44 for the nine months, primarily due to improved operating earnings and absence of prior goodwill impairment charges[20]. - Non-GAAP operating earnings for Q3 Fiscal 2025 were $807 million, representing a 21% growth rate compared to the prior year[119]. - Net earnings for the nine months ended March 31, 2025, were $1,326 million, compared to $620 million for the same period in 2024, representing a 113% increase[145]. Cash Flow and Liquidity - Cash and equivalents decreased to $3.3 billion at March 31, 2025, from $5.1 billion at June 30, 2024, with net cash provided by operating activities at $870 million[22]. - Cash flows from operating activities for the nine months ended March 31, 2025, were $870 million, down from $1,680 million in 2024, indicating a decrease of 48%[145]. - Total cash and equivalents at the end of the period was $3,326 million, down from $3,746 million at the end of the same period in 2024, marking a decrease of 11%[145]. - The company had $4.9 billion accrued related to opioid litigation settlements as of March 31, 2025, with payments totaling $797 million made during the nine months ended March 31, 2025[87]. Acquisitions and Investments - Cardinal Health deployed $1.1 billion for the Integrated Oncology Network acquisition and $2.8 billion for a 73% ownership interest in GI Alliance during the nine months ended March 31, 2025[23]. - The acquisition of GI Alliance is expected to positively impact segment revenue and profit while increasing amortization and acquisition-related costs[29]. - Cardinal Health completed the acquisition of Advanced Diabetes Supply Group for $1.1 billion, which will be reported in the at-Home Solutions segment[28]. - The acquisition of Integrated Oncology Network (ION) was completed for $1.1 billion in cash, supporting over 50 practice sites across 10 states[165]. - The acquisition of GI Alliance (GIA) was completed for approximately $2.8 billion in cash, with a 73% ownership interest[167]. Segment Performance - Pharma segment revenue for the three months ended March 31, 2025 was $50.4 billion, relatively flat compared to the prior year, while revenue for the nine months decreased 3% to $149.3 billion due to the expiration of OptumRx contracts[46]. - Global Medical Products and Distribution segment revenue increased 2% to $3.2 billion for the three months and $9.4 billion for the nine months ended March 31, 2025, primarily due to higher volumes from existing customers[47]. - Total segment profit for the three months ended March 31, 2025 increased 17% to $835 million, and for the nine months, it increased 13% to $2.1 billion, reflecting strong performance across segments[54]. Costs and Expenses - SG&A expenses for the three months ended March 31, 2025 increased 4% to $1.3 billion, and for the nine months, they increased 5% to $3.9 billion, primarily due to MSO platform acquisitions and higher costs to support sales growth[51]. - Interest expense for the three months ended March 31, 2025 increased to $74 million, and for the nine months, it increased to $141 million, primarily due to new debt financing[68]. - Restructuring and employee severance costs for Q3 Fiscal 2025 amounted to $28 million, while amortization and other acquisition-related costs were $152 million[119]. Tax and Goodwill - The effective tax rate for the three months ended March 31, 2025, was 23.6%, compared to 23.3% for the same period in 2024[69]. - During the nine months ended March 31, 2024, the company recognized pre-tax goodwill impairment charges of $675 million related to the GMPD segment, resulting in a net tax benefit of $56 million for fiscal 2024[70]. - Goodwill increased from $4.725 billion at June 30, 2024, to $8.906 billion at March 31, 2025, primarily due to the acquisitions of ION and GIA[187]. Shareholder Returns - The company approved a quarterly dividend of $0.5056 per share, amounting to an annualized rate of $2.02 per share, paid to shareholders on specified dates[89]. - The company has $2.7 billion authorized for share repurchases remaining under the program approved on June 7, 2023[135]. - The company’s share repurchase program activity resulted in a net cash outflow of $765 million for the nine months ended March 31, 2025, compared to $750 million in 2024, indicating ongoing commitment to returning capital to shareholders[145]. Risks and Uncertainties - Cardinal Health is facing potential additional costs and supply disruptions due to recent U.S. tariffs imposed on various countries[31]. - The company faces risks associated with entering new lines of business, including regulatory changes and competition from other healthcare organizations[128]. - The New York Opioid Stewardship Act created a $100 million annual assessment on manufacturers and distributors, with ongoing litigation regarding its constitutionality[204].

Financial Data and Key Metrics Changes - The company reported operating earnings growth of 21% and EPS growth of 13%, with EPS for the quarter at $2.35 [12][14] - Total company revenue was flat at nearly $55 billion, but adjusted for contract expiration, revenue increased by 19% year-over-year [13] - Total company gross profit dollars increased by 10%, while SG&A increased by only 4%, indicating strong cost control [13][14] Business Line Data and Key Metrics Changes - Pharmaceutical and Specialty Solutions revenue was relatively flat at $50.4 billion, but excluding customer contract expiration, revenue increased by 20% [15] - GNPD segment revenue increased by 2% to $3.2 billion, driven by volume growth from existing customers [17] - Other businesses reported a 13% revenue increase to $1.3 billion, with profit growth across all three operating segments [18] Market Data and Key Metrics Changes - The company generated over 99% of its enterprise revenue in the U.S., with 95% of segment profit from four of its five businesses largely unaffected by tariffs [9] - The company expects fiscal year 2025 revenue growth of 17% to 19% and segment profit growth of 16% to 18% in its Other segment [25] Company Strategy and Development Direction - The company has invested approximately $7 billion in the U.S. over the last two years, focusing on acquisitions, domestic manufacturing, and technology [9] - The company is committed to increasing patient access, affordability, and innovation in healthcare while navigating regulatory complexities [9][10] - The addition of Advanced Diabetes Supply Group is expected to be accretive to EPS and enhance the company's capabilities in diabetes care [11][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to generate sustainable long-term growth, raising fiscal year 2025 EPS guidance to a range of $8.5 to $8.15 [11][21] - The company anticipates continued strong demand and organic growth fueled by favorable market trends and competitive positioning [27] - Management is focused on mitigating tariff impacts through operational improvements and pricing strategies [36][66] Other Important Information - The company has completed customer onboardings that contribute approximately $10 billion of new customer revenue in fiscal year 2025 [23] - The effective tax rate for Q3 was 22.4%, a 2.5% increase from the prior year [14] Q&A Session Summary Question: Can you discuss the strong brand and specialty sales growth? - Management noted broad-based strength across various categories, with specialty distribution growth in the mid-teens and contributions from new customers [44][45] Question: Are there any headwinds from consumer weakness related to tariffs? - Management indicated no significant changes in demand, emphasizing the resilience of pharmaceutical demand even during macroeconomic challenges [53][54] Question: What is the AOI percentage for Cardinal Health brand revenue? - Approximately $4 billion of GNPD revenue comes from Cardinal Health brand, which has seen good volume growth [61] Question: How will the company offset tariff exposure? - Management stated that the majority of the anticipated $200 to $300 million in tariff costs will be addressed through pricing adjustments and operational actions [66][67] Question: What is the outlook for fiscal year 2026? - Management expects double-digit EPS growth, primarily driven by the Pharma segment, despite potential macro challenges [110]

Financial Data and Key Metrics Changes - The company reported operating earnings growth of 21% and EPS growth of 13%, with EPS for the quarter at $2.35 [11][12] - Total company revenue was flat at nearly $55 billion, but adjusted for contract expiration, revenue increased by 19% year-over-year [12][21] - Total company gross profit dollars increased by 10%, while SG&A increased by only 4%, indicating strong cost control [12][13] Business Line Data and Key Metrics Changes - Pharmaceutical and Specialty Solutions revenue was relatively flat at $50.4 billion, but excluding customer contract expiration, revenue increased by 20% [14][15] - GNPD segment revenue increased by 2% to $3.2 billion, driven by volume growth from existing customers [16] - Other businesses reported a 13% revenue increase to $1.3 billion, with At Home Solutions growing by 12%, Optifreight Logistics by 17%, and Nuclear by 14% [18] Market Data and Key Metrics Changes - The company generated over 99% of its enterprise revenue in the U.S., with 95% of segment profit from four of its five businesses largely unaffected by tariffs [6][7] - The company expects fiscal year 2025 revenue growth of 17% to 19% and segment profit growth of 16% to 18% in its Other segment [24] Company Strategy and Development Direction - The company has invested approximately $7 billion in the U.S. over the last two years, focusing on acquisitions, domestic manufacturing, and technology [7] - The company aims to enhance patient access, affordability, and innovation in healthcare while navigating regulatory complexities [6][7] - The addition of Advanced Diabetes Supply Group is expected to be accretive to EPS and enhance the company's capabilities in diabetes care [10][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to generate sustainable long-term growth and raised fiscal year 2025 EPS guidance to a range of $8.5 to $8.15 [10][21] - The company anticipates continued strong demand and organic growth driven by favorable market trends and competitive positioning [27][29] - Management acknowledged potential challenges from tariffs but emphasized proactive measures to mitigate impacts on customers and operations [35][36] Other Important Information - The company completed the acquisition of GI Alliance and Integrated Oncology Network, which are performing as expected [9][10] - The company has delivered adjusted free cash flow of $1.2 billion year-to-date and repurchased $750 million in shares [19][20] Q&A Session Summary Question: Strong brand and specialty sales growth - Management noted broad-based strength in brand and specialty sales, driven by multiple categories and new customer onboarding [44][46] Question: Consumer weakness related to tariffs - Management indicated no significant changes in consumer behavior or prescription demand despite macroeconomic concerns [53][54] Question: Cardinal Health brand revenue and USMCA coverage - Approximately $4 billion of GNPD revenue comes from Cardinal Health brand, which is higher margin relative to national brands [59][60] Question: Tariff impact on Cardinal Health brand - The majority of the anticipated $200 to $300 million in tariff costs will be addressed through pricing adjustments, particularly for Cardinal Health brand products [64][66] Question: Margin expansion in pharma - Management attributed margin expansion to growth in specialty and brand drug sales, acquisitions, and effective cost control measures [84][86] Question: Customer onboarding and new customer wins - The onboarding of new customers is progressing well, with a reaffirmation of $10 billion in incremental new customer revenue for the year [95][96]

Q3 FY25 Earnings Cardinal Health, Inc. May 1, 2025 © 2025 Cardinal Health. All Rights Reserved. 1 © 2025 Cardinal Health. All Rights Reserved. • Q3 FY25 Earnings Cautions Concerning Forward-Looking Statements Q3 Results © 2025 Cardinal Health. All Rights Reserved. 3 © 2025 Cardinal Health. All Rights Reserved. • Q3 FY25 Earnings This presentation contains forward-looking statements addressing expectations, prospects, estimates and other matters that are dependent upon future events or developments. These st ...

Cardinal Health Reports Third Quarter Fiscal Year 2025 Results and Raises Fiscal Year 2025 Outlook Exhibit 99.1 FOR IMMEDIATE RELEASE DUBLIN, Ohio, May 1, 2025 – Cardinal Health (NYSE: CAH) today reported third quarter fiscal year 2025 revenues of $54.9 billion, flat to the third quarter of fiscal year 2024. Third quarter revenue increased 19% excluding the impact of the previously communicated customer contract expiration. Third quarter GAAP operating earnings increased to $730 million and GAAP diluted ear ...

Core Viewpoint - Cardinal Health, Inc. is set to report its third-quarter fiscal 2025 results, with expectations of continued strong performance driven by recent acquisitions and robust pharmaceutical demand [1][10]. Group 1: Recent Acquisitions and Strategic Growth - The acquisition of Integrated Oncology Network (ION) in December 2024 is expected to enhance Cardinal Health's oncology services through integration into its Navista practice [2]. - In November, Cardinal Health announced plans to acquire a majority stake in GI Alliance and Advanced Diabetes Supply Group, with the acquisition of GI Alliance completed in January, supporting its multi-specialty growth strategy [3]. - These acquisitions are anticipated to positively impact the Pharmaceutical and Specialty Solutions segment, although the full effects may be realized by the end of the fiscal year [4]. Group 2: Financial Performance and Estimates - For the third quarter, the Zacks Consensus Estimate for revenues is $55.03 billion, reflecting a 0.2% increase year-over-year, while the EPS estimate is $2.15, indicating a 3.4% increase from the prior year [10]. - The Pharmaceutical and Specialty Solutions segment is projected to generate revenues of $49.41 billion, down 2.4% year-over-year, influenced by customer contract expirations [6][5]. Group 3: Product Launches and Innovations - The Nuclear and Precision Health Solutions business has begun weekly production of actinium-225 (Ac-225), enhancing the availability of investigational therapeutic drug products [7]. - The launch of the Kendall SCD SmartFlow Compression System is expected to boost sales in the Global Medical Products and Distribution segment [8]. Group 4: Market Performance and Valuation - Cardinal Health's shares have increased by 8.3% over the past three months, outperforming the Medical - Dental Supplies sector and other peers [13][17]. - The company's forward 12-month price-to-earnings (P/E) ratio is 15.7X, which is below the industry average of 16.7X, indicating potential for growth relative to its peers [18][19]. Group 5: Long-Term Growth Prospects - Cardinal Health is constructing a new at-Home Solutions distribution center in Fort Worth, TX, expected to be operational by summer 2025, which will enhance its distribution capabilities [20]. - The opening of a new distribution center in Boylston, MA, is anticipated to strengthen supply chain resiliency and improve service for New England customers [21].

Group 1 - The upcoming report from Cardinal Health (CAH) is expected to show quarterly earnings of $2.15 per share, reflecting a 3.4% increase year-over-year [1] - Analysts forecast revenues of $55.03 billion for the quarter, indicating a 0.2% increase compared to the previous year [1] - The consensus EPS estimate has been revised 0.1% lower over the last 30 days, indicating a reevaluation of initial estimates by analysts [1][2] Group 2 - Analysts estimate that 'Revenue- Pharmaceutical and Specialty Solutions' will reach $50.33 billion, representing a -0.6% change from the year-ago quarter [4] - The 'Revenue- Medical Products and Distribution' is projected to be $3.21 billion, indicating a year-over-year increase of 3.2% [4] - Segment profit for 'Pharmaceutical and Specialty Solutions' is forecasted to be $635.77 million, up from $580 million in the same quarter last year [5] Group 3 - The 'Segment profit- Global Medical Products and Distribution' is expected to reach $44.16 million, compared to $20 million in the previous year [5] - Over the past month, Cardinal shares have recorded returns of +0.8%, while the Zacks S&P 500 composite has seen a -4.3% change [5] - Cardinal Health holds a Zacks Rank 3 (Hold), suggesting its performance will likely align with the overall market in the upcoming period [5]