McKesson Corporation Second Quarter Fiscal 2026 Earnings Call November 5, 2025 1 © 2021 McKesson Corporation. All rights reserved. Cautionary Statements Cautionary Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward- looking statements may be identified by their use of terminology such as "believes," "expects," "anticipates," "may," "will," "should," "seeks," "approxim ...

Financial Performance - McKesson reported record revenue of $103.2 billion for the second quarter, a 10% increase compared to the prior year[2]. - Adjusted Earnings per Diluted Share increased by 39% to $9.86, up from $7.07 in the previous year[8]. - The company raised its fiscal 2026 Adjusted Earnings per Diluted Share guidance by $0.30 to a range of $38.35 to $38.85, indicating 16% to 18% growth compared to the prior year[5][15]. - Net income attributable to McKesson Corporation for the second quarter was $1.11 billion, a significant increase from $241 million in the prior year[4]. - Revenues for the three months ended September 30, 2025, were $103,150 million, a 10% increase from $93,651 million in the same period of 2024[28]. - Net income attributable to McKesson Corporation for the three months ended September 30, 2025, was $1,110 million, representing a 361% increase compared to $241 million in the prior year[30]. - Diluted earnings per share for the three months ended September 30, 2025, reached $8.92, a 377% increase from $1.87 in the same quarter of 2024[30]. - Adjusted earnings (Non-GAAP) for the three months ended September 30, 2025, were $1,227 million, a 34% increase from $915 million in the same period of 2024[30]. - Total revenues for the six months ended September 30, 2025, were $200,977 million, a 16% increase from $172,934 million in the same period of 2024[37]. - Net income for the six months ended September 30, 2025, was $1,994 million, a 60% increase from $1,247 million in the same period of 2024[42]. Cash Flow and Investments - Cash flow from operations for the quarter was $2.4 billion, resulting in Free Cash Flow of $2.2 billion after capital expenditures of $196 million[9]. - Net cash provided by operating activities increased by 109% to $2,420 million for the three months ended September 30, 2025, compared to $720 million for the same period in 2024[44]. - Free Cash Flow (Non-GAAP) for the six months ended September 30, 2025, was $2,224 million, representing a 233% increase from $335 million in the same period of 2024[44]. - Net cash used in investing activities was $3,588 million for the six months ended September 30, 2025, compared to $373 million in the same period of 2024, indicating a significant increase in investment activity[44]. - The company reported a net decrease in cash, cash equivalents, and restricted cash of $1,847 million for the six months ended September 30, 2025, compared to a decrease of $2,074 million in the same period of 2024[44]. - Cash and cash equivalents at the end of the period were $4,004 million for the six months ended September 30, 2025, up from $2,509 million in the same period of 2024[42]. Segment Performance - The North American Pharmaceutical segment revenues reached $86.5 billion, an 8% increase driven by higher prescription transaction volumes[13]. - The Oncology & Multispecialty segment revenues grew by 32% to $12.0 billion, supported by increased provider and specialty distribution growth[13]. - North American Pharmaceutical segment revenues increased by 8% to $86,481 million from $80,018 million year-over-year[35]. - Operating profit for the North American Pharmaceutical segment rose by 146% to $852 million compared to $347 million in the prior year[35]. - The company reported an operating profit margin of 0.99% for the North American Pharmaceutical segment, up from 0.43%[35]. Shareholder Returns - The company returned $1.6 billion to shareholders in the first six months, including $1.4 billion in stock repurchases[10]. - The company declared dividends of $0.82 per common share, a 15% increase from $0.71 in the same quarter of 2024[28]. Strategic Initiatives - McKesson's strategic focus on oncology and multispecialty services continues to drive sustainable long-term growth[3]. - The company announced a definitive agreement to sell its retail and distribution businesses in Norway, subject to customary closing conditions[13]. Financial Adjustments and Non-GAAP Measures - Free Cash Flow (Non-GAAP) is defined as net cash from operating activities minus payments for property, plant, and equipment, with reconciliations provided in financial statements[59]. - The company believes Non-GAAP measures provide useful supplemental information for assessing operating performance and comparing financial results with industry peers[61]. - Management uses both GAAP and Non-GAAP measures for financial planning, resource allocation, and assessing business performance[62]. - Non-GAAP adjusted results should not be viewed as a substitute for GAAP financial results[62]. Liabilities and Restructuring - Total liabilities related to litigation increased by $657 million for the six months ended September 30, 2025, compared to $386 million in the same period of 2024[42]. - The company incurred pre-tax restructuring, impairment, and related charges of $110 million for the six months ended September 30, 2025, compared to $244 million in the same period of 2024[48]. - The company incurs restructuring charges related to operational changes, including employee severance and facility closure costs, which are not part of its underlying business[56].

Core Insights - McKesson Corporation (MCK) is set to report its second-quarter fiscal 2026 results on November 5, with expectations of a solid performance following a strong start to the year, where revenues increased by 23% year over year to $97.8 billion and adjusted earnings per share (EPS) rose by 5% to $8.26 [2][3] Financial Performance - The upcoming quarterly results are anticipated to show a more normalized pace of growth compared to the first quarter, which was boosted by acquisitions and specialty drug volumes [3] - The Zacks Consensus Estimate for earnings is $8.92 per share, reflecting a 26.2% year-over-year improvement, while revenue estimates are pegged at $104.66 billion, indicating an 11.8% year-over-year increase [6][10] Segment Performance - The U.S. Pharmaceutical segment, McKesson's largest business, is expected to remain the primary growth driver, with revenues in the first quarter surging by 25.4% to $90 billion, supported by prescription volume growth and strong GLP-1 medication sales [7][8] - The Prescription Technology Solutions (RxTS) segment is projected to continue its growth trajectory, with revenues expected to increase by 7.4% to $1.36 billion, driven by high prior authorization volumes and expanding business [11][12] - The Medical-Surgical Solutions segment is likely to maintain modest growth of 2-6%, while international operations are expected to see limited growth due to divestitures impacting sales [13][14] Operational Efficiency - McKesson's broad-based strength is attributed to expanding specialty pharmaceutical demand, effective execution in oncology and multi-specialty services, and digital access solutions that enhance medication affordability [4] - Automation initiatives and disciplined cost management are expected to support margins, despite potential headwinds from higher operating costs related to recent acquisitions [5][10] Earnings Outlook - The model predicts an earnings beat for McKesson this earnings season, supported by a positive Earnings ESP of +1.16% and a Zacks Rank of 1 (Strong Buy) [15][16]

Core Viewpoint - McKesson (MCK) has received an upgrade to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Rising earnings estimates for McKesson suggest an improvement in the company's underlying business, likely leading to an increase in stock price [5][10]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7][9]. - Only the top 5% of Zacks-covered stocks receive a "Strong Buy" rating, indicating superior earnings estimate revisions [9][10]. Recent Performance of McKesson - McKesson is expected to earn $38.05 per share for the fiscal year ending March 2026, with no year-over-year change, but the Zacks Consensus Estimate has increased by 2.3% over the past three months [8].

Core Insights - Concerns are rising about the potential for a bubble in AI stocks, reminiscent of the dot-com era, despite significant profits being reported by these companies [1][2] Group 1: Market Performance and Valuations - AI stocks have seen substantial increases in value, leading to debates about whether they are overpriced [1] - The Vanguard High Dividend Yield ETF outperformed the S&P 500 during the 2022 market crash, declining only 3% compared to the S&P 500's 19% drop [8] - The Vanguard U.S. Minimum Volatility ETF also performed better than the S&P 500, with a decline of nearly 8% during the same period [11] Group 2: Investment Options - The Vanguard High Dividend Yield ETF focuses on high-yielding stocks, providing diversification with a portfolio of 566 stocks, including blue-chip companies like Procter & Gamble and Walmart [5][6] - This ETF offers a dividend yield of around 2.5%, significantly higher than the S&P 500's average of 1.2%, with a low expense ratio of 0.06% [8] - The Vanguard U.S. Minimum Volatility ETF invests in low-volatility stocks, with 188 holdings and no single stock accounting for more than 2% of the portfolio, featuring companies like Coca-Cola and Cisco Systems [10][12]

Core Insights - McKesson Corporation is shifting its business model towards tech-enabled healthcare services to enhance its position in high-margin specialty and digital solutions [1] - Jefferies has set a new price target of $900 for McKesson, indicating a potential increase of 16.96% from its current trading price of $769.49, supported by strategic acquisitions [2][6] - The company's Q1 FY26 results demonstrate strong revenue growth and robust cash flow guidance, leading to raised long-term EPS targets [3][6] Financial Performance - McKesson's current stock price is $769.49, reflecting a 0.78% increase, with a trading range between $752.47 and $775.70 [4] - Over the past year, the stock has fluctuated between a high of $776.14 and a low of $492.39, with a market capitalization of approximately $95.71 billion [4] - Today's trading volume is 513,819 shares, indicating strong investor interest in the company's transformation [5] Strategic Initiatives - Recent acquisitions of PRISM Vision and Core Ventures are aimed at strengthening McKesson's presence in oncology, multispecialty, and technology-enabled segments [2][6] - The ongoing focus on tech-enabled healthcare services is expected to drive further growth and align with Jefferies' optimistic price target [5]

Core Insights - Gamu Dave Innocent Pasi is a seasoned financial professional with extensive experience in financial analysis and investment research [1] - He has a strong background in analyzing financial statements, capital markets, and the macro-economy, providing actionable trading ideas and investment recommendations [1] - Gamu is recognized for his quantitative and qualitative analytical skills, simplifying complex financial concepts for broader audiences [1] Professional Background - Gamu holds a Postgraduate Executive Certificate in Investments and Portfolio Management and a Bachelor of Business Studies Honors degree in Banking and Finance [1] - His insights have been featured in reputable publications such as The Axis business magazine and Investment Quarterly (IQ) Magazine [1] - He is focused on building a new international investment portfolio and sharing insights with the global investing community [1] Investment Philosophy - Gamu is passionate about promoting financial inclusion, sustainability, and generating measurable social impact [1] - He advocates for Responsible Investment and actively fosters Environmental, Social, and Governance (ESG) principles in investment decision-making [1]

Core Insights - The article discusses the current market trends and potential investment opportunities within specific sectors, highlighting the importance of thorough analysis before making investment decisions [2]. Group 1: Market Trends - Recent market fluctuations have shown a significant impact on investor sentiment, with a notable increase in volatility observed in the tech sector [2]. - Analysts are focusing on the performance of companies that have demonstrated resilience during economic downturns, particularly those with strong balance sheets and cash flow [2]. Group 2: Investment Opportunities - There is a growing interest in renewable energy companies, driven by government incentives and a shift towards sustainable practices [2]. - The healthcare sector is also highlighted as a potential area for investment, especially companies involved in innovative treatments and technologies [2]. Group 3: Risks and Considerations - Investors are advised to remain cautious due to potential regulatory changes that could affect various industries, particularly in technology and healthcare [2]. - The importance of diversification in investment portfolios is emphasized to mitigate risks associated with market volatility [2].

TABLE OF CONTENTS As filed with the Securities and Exchange Commission on October 9, 2025. TURN THERAPEUTICS INC. (Exact Name of Registrant as Specified in Its Charter) Delaware (State or Other Jurisdiction of Incorporation or Organization) 2834 (Primary Standard Industrial Classification Code Number) 32-0456090 (I.R.S. Employer 250 N. Westlake Blvd. Westlake Village, CA 91362 (818) 564-4011 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices) ...

Core Insights - McKesson is redefining its role in the healthcare ecosystem by shifting focus from pharmaceutical distribution to higher-margin services in oncology, multispecialty care, and biopharma solutions [1] - The company aims for sustainable long-term growth through technology, automation, and specialized care while planning to separate its Medical-Surgical business to sharpen focus [1] Short-Term Growth Drivers - McKesson is experiencing strong momentum in pharmaceutical distribution and specialty therapy demand, with the U.S. pharmaceutical market projected to grow at a 7% CAGR from 2019 to 2029, and oncology spending expected to increase by 60% from 2025 to 2029 [2] - Management has guided for fiscal 2026 adjusted operating profit of $6.2-$6.4 billion, adjusted EPS of $38.05-$38.55, and free cash flow of $4.4-$4.8 billion, reflecting robust operating leverage supported by investments in distribution center automation [3] Long-Term Growth Drivers - McKesson's U.S. Oncology Network includes over 3,300 providers and supports 1.4 million patients annually, which is central to its strategy of integrating clinical care and biopharma services [6] - The company is leveraging technology platforms like Ontada and iKnowMed to enhance its specialty care value chain [7] - Emerging therapeutic modalities, particularly in cell and gene therapies, represent a significant growth opportunity, supported by investments in cold-chain infrastructure and automation [8] Medical-Surgical Separation - McKesson plans to separate its Medical-Surgical business, which generated $11.4 billion in fiscal 2025 revenues and $1.1 billion in adjusted EBITDA, starting with an IPO of a minority stake and a full separation by the second half of calendar 2027 [11][12] Challenges - McKesson faces regulatory and legal risks, particularly related to historical opioid litigation, and operational challenges in integrating recent acquisitions like PRISM Vision [15] - The competitive landscape in specialty distribution and oncology services is intensifying, with risks associated with large-scale technology deployments and the pace of regulatory approvals for cell and gene therapies [16] Peer Comparison - McKesson is diversifying to improve margins and streamline operations, similar to peers Cardinal Health and Cencora, who are also focusing on higher-margin oncology and specialty care [17][21] - Cardinal Health is building a multi-platform healthcare solutions portfolio, while Cencora is extending its business model to include high-growth specialty services [18][22] Conclusion - McKesson is at an inflection point, targeting higher-margin growth avenues while shedding non-core assets, with strong near-term earnings momentum and long-term strategic initiatives [26][27] - The planned separation of Medical-Surgical highlights management's intent to sharpen focus, presenting a balanced opportunity for investors as the company evolves into a specialty-driven healthcare solutions leader [28]