Summary of Cardinal Health's 2025 Investor Day Company Overview - **Company**: Cardinal Health (CAH) - **Event**: 2025 Investor Day held on June 12, 2025 Key Industry Insights - **Healthcare Industry Role**: Cardinal Health positions itself as a crucial link in the healthcare supply chain, connecting manufacturers to patients through a complex distribution network [7][31] - **Market Trends**: The aging population and ongoing healthcare innovations are driving demand in the healthcare sector, providing a "rising tide" of volume for the industry [32] Core Business Strategies - **Core Distribution Focus**: The company emphasizes strengthening its core distribution business, which is foundational for future growth and profitability [19][20] - **Specialty Solutions Growth**: Specialty solutions remain the highest growth priority, with a focus on organic and inorganic investments in this segment [21][50] - **Investment in Automation**: Cardinal Health is investing in automation to enhance distribution efficiency and capacity, which is critical for meeting customer needs [13][40] Financial Performance and Guidance - **Earnings Growth**: The company raised its fiscal 2025 EPS guidance and confirmed a long-term EPS growth target of 12-14% for fiscal years 2026-2028 [27][55] - **Capital Deployment**: Over the past two years, Cardinal Health has returned nearly $3 billion to shareholders while also increasing capital expenditures by over 50% compared to four to five years ago [25][24] Specialty Solutions and Partnerships - **Specialty Alliance Formation**: The formation of the Specialty Alliance aims to enhance capabilities in gastroenterology, urology, and oncology, leveraging existing infrastructure and expertise [41][90] - **Managed Service Organizations (MSOs)**: The company is expanding its MSO platforms to support independent physicians, providing back-office support and enhancing care delivery [92] Innovations and Technology - **New Distribution Centers**: Cardinal Health is launching a new flagship distribution center with advanced automation technology to improve service levels and efficiency [40][69] - **Technology Investments**: Significant investments in technology infrastructure, including a new ordering platform (Vantas HQ), are aimed at improving customer experience and operational efficiency [70] Market Position and Competitive Advantage - **Diverse Customer Base**: The company serves a wide range of customers, including independent pharmacies, health systems, and specialty practices, allowing it to adapt to various market needs [64][65] - **Strategic Sourcing**: Strong relationships with brand manufacturers and partnerships with CVS enhance product availability and cost efficiency, contributing to profitable growth [66] Future Outlook - **Growth Opportunities**: Cardinal Health anticipates significant growth in its specialty segment, with expectations of doubling the number of supported products in the next three years [98][106] - **Resilience in Cash Flow**: The company has demonstrated strong cash flow resilience, with a consistent upward trend over long periods, indicating robust operational performance [36][37] Conclusion - **Commitment to Innovation**: Cardinal Health is focused on continuous improvement and innovation to meet evolving customer and patient needs, positioning itself for sustained growth in the healthcare industry [34][55]

Financial Performance and Outlook - The company is targeting a 12% to 14% non-GAAP EPS CAGR [22, 72, 325, 369]. - The company expects to generate approximately $9 billion in adjusted free cash flow (FCF) [19]. - The company is raising FY25 EPS guidance to $8.15 - $8.20 [22, 311]. - The company provides FY26 EPS guidance for ~13% growth [22, 328]. - The company anticipates generating $10B+ in total adjusted free cash flow over the next 3 years [347]. Segment Performance and Strategy - Pharma segment profit growth is expected to be 8% CAGR [19]. - Other segment profit growth is expected to be 10% CAGR [19]. - Specialty is now over $40B in revenue, growing at a 14% CAGR over the last 3 years [104]. - GMPD delivered $92M of segment profit in FY24, a ~$240M increase over FY23 [278]. - The company is investing over $150M in NPHS over the next three years [53].

Core Insights - Cardinal Health is hosting an Investor Day to discuss growth strategies and long-term financial outlook [2][3] - The company emphasizes its strong foundation and significant future growth opportunities [3] Strategic Updates - Cardinal Health is focusing on expanding its Pharmaceutical and Specialty Solutions, particularly in Specialty and higher-margin businesses [4] - The Specialty Alliance platform will include the recently acquired GI Alliance and the new Urology Alliance [5] - The MSO platforms now support approximately 2,200 providers across 28 states [6] Biopharma Solutions - Continued investments in Biopharma Solutions are announced, with expansions into oncology and other therapeutic areas [7] - The Sonexus™ Access and Patient Support platform is expected to more than double its supported therapies by fiscal year 2028 [7] Pharmaceutical Distribution - The Consumer Health Logistics Center in Ohio is set to be fully operational by July 2025, aimed at increasing capacity and efficiency [8] - Plans for a new forward distribution center with advanced automation technology are underway [9] Financial Guidance - FY25 non-GAAP diluted EPS guidance is raised to $8.15 to $8.20, with preliminary FY26 guidance set at $9.10 to $9.30 [10][18] - Long-term targets for non-GAAP diluted EPS growth are set at 12% to 14% for FY26 to FY28 [20] Capital Deployment - The company plans to invest at least $600 million annually in capital expenditures and anticipates at least $750 million in share repurchases each year for the next three years [21]

Core Insights - 16 dividend growth companies announced increases in the second half of April, indicating a positive trend in dividend policies among these firms [1] - Predictions are made for an additional 7 companies expected to announce dividend increases in the first half of May, suggesting ongoing confidence in dividend growth [1] Group 1 - The article highlights the effectiveness of investing in dividend growth stocks and reinvesting dividends as a strategy for long-term wealth growth [1] - The author operates a blog, HarvestingDividends.com, which focuses on S&P Dividend Aristocrats and other dividend growth stocks, providing valuable insights for investors [1]

Group 1 - Cardinal Health Inc. reported third-quarter 2025 adjusted EPS of $2.35, a 13% increase year over year, surpassing the consensus estimate of $2.17 [1] - Sales remained flat at $54.9 billion, missing the consensus of $55.35 billion, while adjusted operating earnings increased by 21% to $807 million [1] - The Pharmaceutical and Specialty Solutions segment's sales were unchanged at $50.6 billion [1] Group 2 - Revenue for the Global Medical Products and Distribution (GMPD) segment rose by 2% to $3.2 billion, driven by volume growth from existing customers [2] - Segment profit increased by 14% to $662 million in the third quarter, supported by brand and specialty products, MSO platforms, and positive generics program performance [6] - The company raised its fiscal year 2025 adjusted EPS guidance from $7.85-$8.00 to $8.05-$8.15, compared to the consensus of $7.96 [3] Group 3 - Cardinal Health anticipates double-digit non-GAAP EPS growth in fiscal 2026 despite evolving macroeconomic conditions [4] - The outlook for the Pharmaceutical and Specialty Solutions segment profit was increased to 11.5% to 12.5% growth, up from a previous range of 10% to 12% [6] - The company expects GMPD segment profit to be consistent with fiscal 2025 segment profit amid macro uncertainty [6] Group 4 - CAH stock is trading 2.30% higher at $144.53 [5] - The company plans to discuss its fiscal 2026 and beyond expectations at its upcoming Investor Day on June 12 [6]

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 ...