Cardinal Health(CAH) - 2026 Q1 - Quarterly Results

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]