Financial Data and Key Metrics Changes - The company reported a total revenue increase of 22% to $64 billion, driven by strong demand across all five operating segments [11][12] - Operating earnings grew by 37% and EPS increased by 36%, with Q1 EPS reported at $2.55 [9][12] - Gross profit rose by 22% to $2.3 billion, while SG&A expenses increased by 14% to $1.5 billion [11][12] - The effective tax rate for Q1 was 21.9%, about 100 basis points better than the previous year [12] Business Line Data and Key Metrics Changes - **Pharmaceutical and Specialty Solutions**: Revenue increased by 23% to $59 billion, with segment profit up 26% to $667 million, driven by brand and specialty pharmaceutical sales [12][13] - **GMPD**: Revenue grew by 2% to $3.2 billion, with profit increasing by $38 million to $46 million, supported by volume growth from existing customers [14] - **Other Businesses**: Revenue surged by 38% to $1.6 billion, with segment profit rising by 60% to $166 million, reflecting strong demand across all three businesses [15][16] Market Data and Key Metrics Changes - The company experienced strong demand trends across its pharmaceutical segment, particularly in brand and specialty products, with approximately 6 percentage points of revenue growth attributed to GLP-1 sales [12][13] - The GMPD segment saw over 6% revenue growth in the U.S. [14] - The integration of ADS into At Home Solutions is progressing well, with earlier realization of planned synergies [15][16] Company Strategy and Development Direction - The company is focused on expanding its Specialty Alliance platform and enhancing its capabilities through the acquisition of Solaris Health, which is expected to close shortly [6][11] - Investments are being made to modernize the national pharmaceutical distribution network and improve operational efficiency [25][26] - The company aims to leverage its MSO platforms to broaden its impact in key therapeutic areas such as autoimmune, urology, and oncology [26][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's momentum and raised full-year EPS guidance to a range of $9.65 to $9.85, reflecting 17% to 20% growth from the prior year [11][18] - The company anticipates continued strong demand in the pharmaceutical sector and expects to benefit from the integration of recent acquisitions [18][19] - Management highlighted the importance of maintaining service levels and operational performance to capitalize on market opportunities [58][100] Other Important Information - The company generated $1.3 billion in adjusted free cash flow during Q1 and ended the quarter with a cash position of $4.6 billion [17] - The company is increasing its adjusted free cash flow guidance to a new range of $3 billion to $3.5 billion for the full year [18] Q&A Session Summary Question: What is the broader momentum going forward and what has driven the upside in Q1? - Management noted strong demand across the board and highlighted that the Specialty business was trending above historical levels, contributing significantly to growth [36][43] Question: Does the guidance include Rite Aid from CVS? - Management indicated that while they do not support Rite Aid, they are likely picking up a greater share of that volume due to strong performance across various customers [49][51] Question: How do you view the growth outlook for the Pharmaceutical and Specialty Solutions segment? - Management emphasized that they are focused on what they can control, expecting strong utilization and continued demand, while also factoring in contributions from acquisitions [56][58] Question: What is the impact of recent policy changes in D.C.? - Management stated that they align with the administration's intent to ensure access to affordable healthcare, which could drive utilization positively [52][53] Question: Can you discuss the onboarding of distribution businesses from recent acquisitions? - Management confirmed that the onboarding of distribution for ION and GIA is going well and is included in the guidance, while Solaris Health's distribution will be addressed once the acquisition closes [94][96] Question: What opportunities arise from competitors divesting their businesses? - Management noted that they continue to focus on service levels and performance, which positions them favorably in the competitive landscape [99][100]

Core Insights - Cardinal Health reported quarterly earnings of $2.55 per share, exceeding the Zacks Consensus Estimate of $2.21 per share, and showing an increase from $1.88 per share a year ago, resulting in an earnings surprise of +15.38% [1] - The company achieved revenues of $64.01 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 8.39%, compared to $52.28 billion in the same quarter last year [2] - Cardinal shares have increased by approximately 39.1% since the beginning of the year, outperforming the S&P 500's gain of 17.2% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2.23, with expected revenues of $62.1 billion, and for the current fiscal year, the EPS estimate is $9.45 on revenues of $249 billion [7] - The estimate revisions trend for Cardinal was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Medical - Dental Supplies industry, to which Cardinal belongs, is currently ranked in the top 21% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - McKesson, another company in the same industry, is expected to report quarterly earnings of $8.92 per share, reflecting a year-over-year change of +26.2%, with revenues anticipated to be $104.66 billion, up 11.8% from the previous year [9][10]

Revenue and Earnings Growth - Revenue for the three months ended September 30, 2025, increased 22 percent to $64.0 billion from the prior-year quarter due to branded and specialty pharmaceutical sales growth[13] - GAAP operating earnings for the same period increased 18 percent to $668 million, primarily due to the acquisition of management services organization platforms and increased contribution from branded and specialty pharmaceutical products[15] - Non-GAAP operating earnings for the three months ended September 30, 2025, increased 37 percent to $857 million, driven by the impact of acquisitions and growth from existing customers within the GMPD segment[16] - GAAP diluted EPS increased 11 percent to $1.88, while non-GAAP diluted EPS increased 36 percent to $2.55 from the prior-year quarter[18] - Pharmaceutical and Specialty Solutions segment revenue increased 23 percent to $59.2 billion, primarily due to sales growth from existing and new customers[33] - The company reported a 12% increase in non-GAAP earnings for the same quarter last year, totaling $625 million[88] - Net earnings attributable to Cardinal Health, Inc. for Q1 Fiscal 2026 were $450 million, compared to $416 million in Q1 Fiscal 2025, representing an 8.2% increase[106] Acquisitions and Investments - The company announced the acquisition of Solaris Health for approximately $1.9 billion, which is expected to enhance its MSO capabilities[20] - The company announced the acquisition of Solaris Health for approximately $1.9 billion in cash, with additional common units issued to physicians and management valued at around $500 million[70] - The acquisition of Advanced Diabetes Supply Group was completed for approximately $1.0 billion in cash[131] - The company completed the acquisition of GI Alliance for approximately $2.8 billion in cash, with a 73% ownership interest acquired[132] - Total identifiable net assets acquired from Urology America, ADS, GIA, and ION were valued at $381 million, $1.049 billion, $2.785 billion, and $1.069 billion respectively[136] - The company plans to finance the Solaris Health acquisition with cash proceeds from recent debt financing and cash on hand[130] Financial Performance and Margins - Gross margin increased 22 percent to $2.3 billion, primarily due to the acquisition of MSO platforms and increased contributions from branded pharmaceutical products[38] - Total segment profit rose by 37% to $879 million, with Pharmaceutical and Specialty Solutions profit increasing by 26% to $667 million[42][43] - Global Medical Products and Distribution segment profit increased to $46 million, driven by growth from existing customers[44] - Other segment profit surged by 60% to $166 million, attributed to the performance of at-Home Solutions and the acquisition of ADS[45] - Cash flows from operating activities provided $973 million, a significant recovery from a cash outflow of $1,647 million in the prior year[113] Expenses and Liabilities - SG&A expenses increased by 14% to $1.5 billion from the prior-year quarter, primarily due to the acquisition of MSO platforms and ADS[40] - Interest expense increased to $80 million from $32 million in the prior-year quarter, primarily due to additional debt financing for recent acquisitions[53] - Total current liabilities increased to $40,268 million as of September 30, 2025, compared to $38,897 million at June 30, 2025[110] - Long-term obligations increased to $9.0 billion as of September 30, 2025, up from $8.5 billion at June 30, 2025[154] Tax and Legal Matters - The effective tax rate for the three months ended September 30, 2025, was 24.1%, compared to 23.0% in the prior year[54] - The company had $894 million of unrecognized tax benefits as of September 30, 2025, which could impact the effective tax rate if recognized[192] - The company is cooperating with a Department of Justice investigation regarding potential violations of the Anti-Kickback Statute and False Claims Act[184] Cash and Liquidity - Cash and equivalents balance was $4.6 billion at September 30, 2025, up from $3.9 billion at June 30, 2025[56] - The company deployed $500 million for debt repayment and $375 million for share repurchases during the three months ended September 30, 2025[57][69] - Cash and equivalents rose to $4,593 million as of September 30, 2025, compared to $3,874 million at June 30, 2025, reflecting improved liquidity[110] Share Repurchase and Dividends - The company has $2.4 billion remaining under its $3.5 billion share repurchase program approved on June 7, 2023, which is set to expire on December 31, 2027[103] - The company declared cash dividends of $0.5107 per common share, slightly up from $0.5056 per share in the previous year[106] Risk Factors - The company faces risks related to tariffs that may impact costs and supply chain dynamics, potentially affecting financial results[27] - The company accrued $4.3 billion for opioid-related matters as of September 30, 2025, with payments totaling $403 million and $798 million made during the three months and fiscal year 2025, respectively[173] Derivative Instruments and Hedging - The company utilizes derivative financial instruments primarily to manage interest rate risk and currency exchange risk, without engaging in trading or speculative purposes[197] - During the three months ended September 30, 2025, the company entered into pay-floating interest rate swaps with total notional amounts of $300 million, designated as fair value hedges[203] - In September 2025, the company entered into ¥18 billion ($120 million) cross-currency swaps maturing in September 2027 to hedge foreign currency risk associated with net investment positions[206]

Q1 FY26 Financial Performance - Revenue increased by 22% to $64,009 million[9] - Gross Margin increased by 22% to $2,319 million[9] - Operating Earnings increased by 18% to $668 million on a GAAP basis, and 37% to $857 million on a non-GAAP basis[9] - Net Earnings attributable to Cardinal Health, Inc increased by 8% to $450 million on a GAAP basis, and 33% to $611 million on a non-GAAP basis[9] - Diluted EPS attributable to Cardinal Health, Inc increased by 11% to $1.88 on a GAAP basis, and 36% to $2.55 on a non-GAAP basis[9] Segment Performance - Pharmaceutical and Specialty Solutions revenue increased by 23% to $59,205 million, with segment profit increasing by 26% to $667 million[11] - Global Medical Products and Distribution revenue increased by 2% to $3,184 million, with segment profit increasing significantly to $46 million[16] - Other (NPHS, at-Home Solutions, and OptiFreight) revenue increased by 38% to $1,641 million, with segment profit increasing by 60% to $166 million[21] FY26 Outlook - Non-GAAP EPS outlook revised upwards to $9.65 - $9.85 from the previous $9.30 to $9.50[29] - Non-GAAP adjusted free cash flow is expected to be $3.0 billion - $3.5 billion, revised upwards from the previous $2.75 billion - $3.25 billion[29] - The company anticipates ~$325 million in Interest and Other expenses[29]

Core Insights - Cardinal Health raised its annual adjusted profit forecast after exceeding first-quarter profit estimates, driven by strong demand for specialty medicines and branded drugs [1] Financial Performance - The company reported a strong first-quarter profit, which surpassed market expectations [1] - The increase in profit forecast indicates positive growth prospects for the company in the upcoming fiscal year [1] Market Demand - There is a notable increase in demand for costly specialty medicines, which has significantly contributed to the company's financial performance [1] - The performance in branded drugs also played a crucial role in the overall profit increase [1]

Financial Performance - Cardinal Health reported Q1 FY26 revenues of $64 billion, a 22% increase from $52.3 billion in Q1 FY25[2] - GAAP operating earnings rose 18% to $668 million, while GAAP diluted EPS increased 11% to $1.88[3] - Non-GAAP operating earnings increased 37% to $857 million, with non-GAAP diluted EPS rising 36% to $2.55[3] - Net earnings for the first quarter of 2026 were $454 million, compared to $417 million in the first quarter of 2025, reflecting a growth of 9%[26] - Revenue from Global Medical Products and Pharmaceutical and Specialty Solutions Distribution reached $59,205 million in the first quarter of 2026, a 23% increase from $47,990 million in the same period of 2025[28] - Segment profit for Global Medical Products and Pharmaceutical and Specialty Solutions Distribution rose to $667 million, a 26% increase from $530 million year-over-year[28] Guidance and Future Outlook - The company raised its fiscal year 2026 non-GAAP EPS guidance to a range of $9.65 to $9.85, reflecting a 17% to 20% growth[10] - Cardinal Health anticipates completing the acquisition of Solaris Health in early November 2025[3] Segment Performance - Revenue for the Pharmaceutical and Specialty Solutions segment increased 23% to $59.2 billion, with segment profit up 26% to $667 million[4] - The Global Medical Products and Distribution segment saw a 2% revenue increase to $3.2 billion, with segment profit rising to $46 million[6] - Other segment revenue grew 38% to $1.6 billion, with segment profit increasing 60% to $166 million[8] Cash Flow and Liquidity - Net cash provided by operating activities was $973 million in the first quarter of 2026, a significant recovery from a cash outflow of $1,647 million in the first quarter of 2025[34] - Non-GAAP adjusted free cash flow for the first quarter of 2026 was $1,269 million, compared to a negative $1,361 million in the first quarter of 2025[34] - Cash and equivalents at the end of the period increased to $4,593 million, up from $2,867 million at the end of the first quarter of 2025[26] Assets and Liabilities - Total assets increased to $55,228 million as of September 30, 2025, up from $53,122 million on June 30, 2025, representing a growth of 4%[24] - Accounts payable increased to $36,860 million as of September 30, 2025, up from $34,713 million on June 30, 2025, indicating a growth of 6%[24] - Total current liabilities rose to $40,268 million as of September 30, 2025, compared to $38,897 million on June 30, 2025, marking an increase of 4%[24] Shareholder Actions - The company initiated a $375 million accelerated share repurchase program in Q1 FY26[14] - Cardinal Health announced the opening of a new flagship Pharmaceutical and Specialty Solutions distribution center in Indianapolis, expected to be operational by Fall 2027[14] Non-GAAP Metrics and Adjustments - Non-GAAP adjusted free cash flow is provided as a supplemental metric to assess cash flow available for working capital needs, debt repayments, and strategic acquisitions[40] - Non-GAAP operating earnings exclude various costs such as LIFO charges, state opioid assessments, restructuring costs, and acquisition-related expenses[45] - Non-GAAP net earnings attributable to Cardinal Health, Inc. exclude significant non-recurring items, enhancing the clarity of ongoing business performance[48] - Non-GAAP gross margin excludes LIFO charges, providing a clearer view of operational efficiency[44] - Non-GAAP effective tax rate adjusts for various excluded items, offering a more accurate reflection of tax obligations[49] - The company emphasizes the importance of adjusted free cash flow as a measure for assessing financial health and strategic flexibility[51] Accounting and Reporting - The company did not recognize any LIFO charges or credits during the periods presented, facilitating comparison of current financial results to historical results[39] - The occurrence and timing of excluded items could significantly impact the company's fiscal 2026 GAAP results[42] - Over the past five fiscal years, excluded items have impacted the company's EPS from $1.79 to $8.44, including a $6.79 charge related to goodwill impairment in fiscal 2022[42] - The company does not provide GAAP outlook due to the unpredictability of excluded items, which are not part of routine operating activities[41]

Core Insights - Cardinal Health reported a strong first quarter for fiscal year 2026, with revenues of $64 billion, marking a 22% increase from the previous year [1][2] - The company raised its fiscal 2026 outlook based on this performance, anticipating non-GAAP diluted EPS in the range of $9.65 to $9.85, reflecting a growth of 17% to 20% [10][11] Financial Performance - First quarter fiscal year 2026 revenues reached $64 billion, up from $52.3 billion in the same quarter of fiscal year 2025, representing a 22% year-over-year increase [2][11] - GAAP operating earnings increased by 18% to $668 million, while non-GAAP operating earnings rose by 37% to $857 million [1][11] - GAAP diluted EPS increased by 11% to $1.88, and non-GAAP diluted EPS surged by 36% to $2.55 [1][11] Segment Performance - The Pharmaceutical and Specialty Solutions segment generated revenues of $59.2 billion, a 23% increase from $48 billion in the prior year, with segment profit rising 26% to $667 million [3][4] - The Global Medical Products and Distribution segment saw a modest revenue increase of 2% to $3.2 billion, with segment profit significantly improving from $8 million to $46 million [5][7] - The "Other" segment reported a 38% revenue increase to $1.6 billion, with segment profit growing 60% to $166 million, driven by various operating segments [8][9] Guidance and Outlook - Cardinal Health raised its guidance for non-GAAP diluted EPS to a range of $9.65 to $9.85, up from the previous range of $9.30 to $9.50, reflecting strong first quarter performance and expected contributions from the acquisition of Solaris Health [10][11] - The company also increased its adjusted free cash flow expectations to $3.0 billion to $3.5 billion, up from $2.75 billion to $3.25 billion [10][11] Recent Developments - Cardinal Health's Sonexus Access and Patient Support business onboarded over 30 new specialty therapies in Q1, supporting growth expectations of over 30% for the BioPharma Solutions business in fiscal year 2026 [19] - The company announced the opening of a new flagship Pharmaceutical and Specialty Solutions distribution center in Indianapolis, expected to be operational by Fall 2027 [19] - An accelerated share repurchase program of $375 million was initiated in the first quarter of fiscal year 2026 [19]

Core Viewpoint - Cardinal Health, Inc. (CAH) is expected to report strong first-quarter fiscal 2026 results, with adjusted earnings per share (EPS) anticipated to increase by 17.6% year-over-year, driven by robust pharmaceutical demand and new customer acquisitions [1][7]. Group 1: Performance Expectations - The company is projected to achieve revenues of $59.05 billion for the first quarter, reflecting a 13% increase from the previous year [7]. - The Pharmaceutical and Specialty Solutions unit is likely to be a key driver of revenue growth, benefiting from steady brand and generics volume growth, as well as contributions from biosimilars and GLP-1 therapies [3][9]. - The Other segment, which includes growth businesses like at-Home Solutions and Nuclear and Precision Health, is expected to show strong double-digit growth, with estimated sales of $1.49 billion [5]. Group 2: Segment Analysis - The Pharmaceutical and Specialty Solutions segment is estimated to generate $53.58 billion in sales, supported by increasing specialty penetration and new customer wins [3]. - The Global Medical Products and Distribution (GMPD) segment is projected to have sales of $3.19 billion, although margins may be pressured by tariff-related costs [4]. - U.S. and international sales are estimated at $57.82 billion and $437 million, respectively, with higher selling, general and administrative (SG&A) expenses potentially impacting operating leverage [6]. Group 3: Market Position and Valuation - Cardinal Health's shares have gained 1.2% over the past three months, underperforming the Medical - Dental Supplies sector and the S&P 500 [11]. - The company's forward 12-month price-to-earnings (P/E) ratio is 16.3X, which is below the industry average of 16.8X, indicating a potential valuation opportunity [15]. - The company is building a durable growth runway through its Pharmaceutical and Specialty Solutions business, supported by acquisitions and expansion into high-growth therapeutic areas [16][19]. Group 4: Growth Initiatives - The Biopharma Solutions segment is expected to grow at an annual rate of 20%, driven by technology-enabled services [17]. - The at-Home Solutions segment is capitalizing on the increasing demand for home healthcare, supported by recent acquisitions and distribution center expansions [18]. - Supply-chain modernization and growth in Cardinal-branded products in GMPD are expected to contribute to sustained earnings growth and margin expansion [19].

Core Insights - Cardinal Health's Relative Strength (RS) Rating has improved from 70 to 74, indicating enhanced market leadership and price performance [1][3]. Group 1: Stock Performance - Cardinal Health's stock has received an upgrade in its RS Rating, reflecting a positive trend in its price performance [1][3]. - The RS Rating for Cardinal Health has shown a significant increase, moving to 74, which suggests a strong upward momentum in its stock [3]. Group 2: Market Position - The improvement in Cardinal Health's RS Rating signifies that the stock is getting closer to key technical measures, indicating potential for further growth [3]. - Despite the upgrade, Cardinal Health's RS Rating is still shy of the benchmark, suggesting there is room for improvement [3].

Core Insights - Cardinal Health, Inc. (NYSE:CAH) is recognized as a must-buy dividend stock due to its diversified operations and strong financial position [2][4]. Group 1: Company Overview - Cardinal Health is a major distributor of branded and generic drugs, specialty medicines, over-the-counter healthcare products, and consumer goods, serving a wide range of customers including hospitals, pharmacies, and medical offices [2]. - The company also produces and markets its own line of medical and surgical supplies, including gloves and surgical wear, and operates a large network of radiopharmacies [3]. Group 2: Financial Performance - In FY25, Cardinal Health generated an adjusted free cash flow of $2.5 billion, with expectations for FY26 to be between $2.75 billion and $3.25 billion [4]. - The company has increased its dividend payouts for 39 consecutive years, currently offering a quarterly dividend of $0.5107 per share and a dividend yield of 1.30% as of October 9 [4].