Cardinal Health (NYSE: CAH) 2025 Conference Summary Company Overview - **Company**: Cardinal Health - **Date**: November 11, 2025 - **Key Speakers**: Aaron Alt (CFO), Matt Sims (Head of IR) Key Points Financial Performance - Cardinal Health reported strong Q1 results with all five operating segments achieving double-digit profit growth, particularly in the pharma business, which saw a profit increase of 26% [2][3][4] - The company raised its adjusted EPS guidance to $9.65-$9.85, reflecting a year-over-year growth of 17%-20% [4][5] Business Segments - **Pharma Business**: Strong demand and execution, particularly in specialty distribution, contributed significantly to profit growth [2][3] - **Other Business**: The aggregation of smaller businesses (Nuclear Precision Health, At Home, OptiFreight Logistics) saw a profit growth of 60%, partly due to the acquisition of ADSG [3][4] - **Global Medical Products and Distribution (GMPD)**: Experienced revenue growth with the Cardinal Health brand business growing at 6% for two consecutive quarters [4][5][56] Customer Onboarding and Growth Strategy - Cardinal Health onboarded $10 billion in new business in the latter half of the previous year and is on track to onboard an additional $7 billion in the first half of the current year [5][12] - The company is focusing on investing in new customers and enhancing its MSO platforms to drive future growth [5][6] Market Dynamics and Demand - Demand across all segments exceeded expectations, with notable growth in generics and specialty products [9][10] - The company noted a consistent market dynamic, indicating no dislocation between buying and selling, which contributed to strong quarterly results [10][11] Specialty Business Focus - Cardinal Health emphasizes its strength in "otherologies" (rheumatology, urology, gastroenterology) rather than oncology, which is a key differentiator in its specialty business strategy [19][20] - The company aims to leverage its distribution capabilities and technology to enhance partnerships with healthcare providers in these specialty areas [25][26] Competitive Landscape - The medical products business is undergoing competitive changes, with Cardinal Health focusing on improving its GMPD segment to maintain market share against competitors like Medline and McKesson [56][59] - The company is actively seeking opportunities arising from industry transitions, such as acquisitions and partnerships, to enhance its competitive position [60] Operational Efficiency - Cardinal Health is investing in automation and optimizing its distribution network to improve operational efficiency and reduce costs [36][37] - The company is committed to maintaining high service levels while managing costs effectively [37][39] Future Outlook - The company anticipates continued growth in its nuclear precision health business, projecting a long-term profit growth of 10% [74][75] - Cardinal Health remains confident in its long-term guidance, citing its essential role in the American healthcare system and the ongoing demand for its services [49][50] COVID-19 Impact - COVID-19 was noted as a slight headwind in Q1, but overall demand growth offset this impact [78][79] - The company expects COVID-related profits to continue declining, with a focus on broader market dynamics moving forward [79][80] Conclusion Cardinal Health's strong financial performance, strategic focus on specialty and otherologies, and commitment to operational efficiency position the company well for future growth in a competitive healthcare landscape. The ongoing investments in customer onboarding and technology enhancements are expected to drive continued success.

Summary of McKesson's 2025 Conference Call Company Overview - **Company**: McKesson Corporation (NYSE: MCK) - **Event**: UBS Healthcare Conference - **Date**: November 10, 2025 Key Points Industry Insights - **North American Pharmaceutical Business**: McKesson has resegmented its business to provide clarity on strategies, separating specialty oncology from the North American Pharmaceutical segment, which includes the US Pharma and Canadian distribution businesses [3][5][6] - **Market Trends**: The company has observed consistent growth in utilization, driven by demographic trends and innovations in drug development and distribution [7][9] - **Specialty Drugs**: There is a notable shift towards specialty drugs, which are becoming a larger part of the business mix, contributing to improved margins [9][10] Financial Performance - **Operating Expense Leverage**: Over the past five years, McKesson has improved its operating expense leverage by over 1,000 basis points, attributed to investments in automation and technology [17][18] - **Revenue Growth**: The adjusted EPS guidance for the year is between $38.35 and $38.85, representing a growth of 16%-18%, or 18%-20% when excluding prior year gains [63] Strategic Initiatives - **Automation and AI**: McKesson is investing in automation and AI to enhance operational efficiency, with a new distribution center in Ohio being 90% automated [16][18] - **Oncology and Specialty Services**: The company is focused on expanding its oncology services and exploring opportunities in other specialties, particularly in high drug spend areas like retina and ophthalmology [35][44] Pricing and Market Dynamics - **Generic Pricing**: The pricing environment for generics has been stable, with month-to-month variations not significantly impacting long-term strategies [21][22] - **Impact of Legislation**: McKesson does not foresee direct impacts from recent legislative changes regarding drug pricing, as they continue to negotiate fair value for their services [24][25] Future Opportunities - **Clinical Trials and Research**: McKesson sees potential in expanding clinical trial access and management through its Sarah Cannon Research Institute joint venture, which could enhance its oncology platform [33][34] - **New Therapeutic Areas**: The company is exploring opportunities in other therapeutic areas with high innovation and drug spend, beyond oncology and ophthalmology [44][45] Operational Considerations - **Working Capital Management**: McKesson is focused on efficient working capital management, ensuring that fixed fees for services remain unaffected by fluctuations in drug prices [28][29] - **GPO and MSO Dynamics**: The Group Purchasing Organization (GPO) services a wide range of providers, and the company is looking to grow beyond drug distribution into additional service offerings [49] Conclusion - McKesson is strategically positioned to leverage its capabilities in the North American pharmaceutical market, focusing on specialty drugs, operational efficiency through automation, and expanding its oncology services while navigating the evolving regulatory landscape. The company anticipates continued growth and opportunities in high drug spend areas, supported by its investments in technology and clinical services.

Core Insights - McKesson Corporation reported strong adjusted earnings per share (EPS) of $9.86 for Q2 fiscal 2026, exceeding estimates by 10.5% and showing a year-over-year increase of 39.5% driven by operational growth and acquisitions [1] - Total revenues reached $103.15 billion, a 10.1% increase year-over-year, but fell short of estimates by 1.4% [3] - The company raised its fiscal 2026 EPS guidance to $38.35-$38.85, reflecting confidence in demand and growth across its segments [15] Revenue and Earnings Performance - Adjusted EPS of $9.86 beat the Zacks Consensus Estimate of $8.92, with GAAP EPS reported at $8.92 compared to $1.87 in the prior year [1][2] - Revenues of $103.15 billion increased by 10.1% year-over-year, driven by higher prescription volumes and growth in oncology and specialty products [3] - The North American Pharmaceutical segment generated $86.48 billion in revenue, up 8.1% year-over-year, attributed to increased prescription volumes [7] Segment Analysis - The Oncology & Multispecialty segment reported revenues of $12.04 billion, a significant increase of 31.5% year-over-year, with adjusted operating profit rising 71.1% to $397 million [9] - The Prescription Technology Solutions segment saw revenues of $1.38 billion, up 8.8% year-over-year, with adjusted operating profit increasing 19.7% to $261 million [10] - The Medical-Surgical Solutions segment's revenues remained flat at $2.95 billion, with adjusted operating profit up 2.5% to $249 million [11] Financial Metrics - Adjusted gross profit was $3.53 billion, an increase of 8.9% year-over-year, representing 3.4% of net revenues [12] - Adjusted operating income rose 24.9% to $1.57 billion, with an operating margin of 1.5%, expanding nearly 18 basis points year-over-year [13] - Cash and cash equivalents increased to $4 billion from $2.42 billion in the previous quarter, with cumulative net cash from operating activities at $1.5 billion [14] Strategic Initiatives - McKesson is modernizing its distribution through automation and compliance with DSCSA, enhancing its operational capabilities [18] - The company is advancing its portfolio transformation, including plans to spin off the Medical-Surgical Solutions business by the second half of calendar 2027 [18] - New capabilities in high-complexity therapies and rising demand for automated access tools are expected to drive future growth [17]

Cencora is set to invest $1bn by 2030 for expanding its US pharmaceutical distribution network, adding resilience and capacity to support customer needs across the country. This includes opening a second national distribution centre in Harrison, Ohio and expanding facilities in California and Alabama. The centre will span 530,000ft² and become operational by spring 2027. It aims to boost both throughput and storage capacity, incorporating advanced automation technologies, including autonomous mobile rob ...

Financial Data and Key Metrics Changes - Consolidated revenues increased 10% year over year to $103 billion, with adjusted earnings per diluted share rising 39% to $9.86 [5][20][41] - Operating profit reached a record $1.6 billion, up 26% year over year, driven by growth across all operating segments [23][41] - Gross profit increased 9% to $3.5 billion, primarily due to strong specialty distribution and provider growth [22] Business Line Data and Key Metrics Changes - North American pharmaceuticals segment revenues were $86.5 billion, an increase of 8%, with operating profit rising 13% to $851 million [25][41] - Oncology and multi-specialty segment revenues increased 32% to $12 billion, with operating profit up 71% to $397 million, driven by strong provider and specialty distribution growth [27][41] - Prescription technology solutions segment revenues rose 9% to $1.4 billion, with operating profit increasing 20% to $261 million [28][41] - Medical-surgical solutions segment revenues were flat at $2.9 billion, with operating profit increasing 2% to $249 million [29][41] Market Data and Key Metrics Changes - Revenues from GLP-1 medications were $13.2 billion, a 24% increase year over year [26] - The oncology business continues to see good traffic and volumes, benefiting from new partners and complicated oncology-type patients [65] Company Strategy and Development Direction - The company introduced a new reporting structure to enhance transparency and sharpen visibility into growth platforms, focusing on oncology and multi-specialty, and biopharma services [21][34] - The strategy includes significant investments in automation and technology to improve operational efficiency and customer experience [14][15][41] - The company is targeting to exit the medical-surgical solutions business through an initial public offering by the second half of calendar 2027 [17][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business outlook, raising guidance for adjusted earnings per diluted share to a range of $38.35-$38.85, reflecting strong second-quarter performance [5][34] - The company anticipates revenue growth of 11%-15% and operating profit growth of 12%-16% for fiscal 2026 [35][41] - Management highlighted the importance of maintaining discipline in reviewing the portfolio and market decisions [66][67] Other Important Information - The company ended the quarter with $4 billion in cash and cash equivalents, indicating strong liquidity [30] - Free cash flow for the second quarter was $2.2 billion, reflecting disciplined working capital management [30] Q&A Session Summary Question: Understanding revenue growth versus operating profit expansion - Management noted that operating margin expansion was seen across all segments, driven by new products and enhanced programs [44][45] Question: Oncology and multi-specialty segment guidance - Management indicated that strong growth was driven by acquisitions, with organic growth at about 13% year over year [53] Question: Health system business performance - Management expressed satisfaction with the health system business, noting strong volumes and market-leading share [57] Question: Tax rate guidance for the year - Management clarified that the tax rate could vary, with an anticipated range of 18%-19% for the full year [60][61] Question: Impact of cash pay channel on prior authorization business - Management stated that the impact of cash pay channels is expected to be minimal, as the eligible population remains small [76][78] Question: SG&A and gross profit trends - Management attributed the trends to a favorable mix of businesses and continued focus on efficiency [83][84]

Financial Data and Key Metrics Changes - Consolidated revenues increased 10% year-over-year to $103 billion, with adjusted earnings per diluted share rising 39% to $9.86 [5][21][39] - Gross profit increased 9% to $3.5 billion, while operating profit reached a record of $1.6 billion, up 26% year-over-year [22][23] - Interest expense declined 6% to $68 million, and the effective tax rate was 17.5%, down from 21% in the prior year [24][39] Business Line Data and Key Metrics Changes - North American Pharmaceuticals segment revenues were $86.5 billion, an increase of 8%, with operating profit up 13% to $851 million [25][26] - Oncology and Multispecialty segment revenues increased 32% to $12 billion, with operating profit rising 71% to $397 million [26][27] - Prescription Technology Solutions segment revenues increased 9% to $1.4 billion, with operating profit up 20% to $261 million [27] Market Data and Key Metrics Changes - Revenues from GLP-1 medications were $13.2 billion, a 24% increase year-over-year [26] - The company reported strong performance in health systems, benefiting from increased traffic and market-leading share [55] Company Strategy and Development Direction - The company introduced a new reporting structure to enhance transparency and focus on growth areas, specifically in Oncology and Multispecialty segments [6][21] - The strategy includes significant investments in automation and technology to improve operational efficiency and customer experience [14][15][39] - The company is targeting to separate the Medical-Surgical Solutions business through an IPO, expected to be completed by the second half of calendar 2027 [17][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business outlook, raising guidance for adjusted earnings per diluted share to $38.35-$38.85, reflecting strong first-half performance [5][33] - The company anticipates revenue growth of 11%-15% and operating profit growth of 12%-16% for fiscal 2026 [34][39] Other Important Information - The company reported a free cash flow of $2.2 billion for the quarter, with $4 billion in cash and cash equivalents [29][39] - Corporate expenses were flat year-over-year at $151 million, reflecting operational efficiencies [28][39] Q&A Session Summary Question: Understanding revenue growth versus operating profit expansion - Management noted that operating margin expansion was driven by a mix of new products and enhanced programs, particularly in Prescription Technology Solutions [41][42][43] Question: Oncology and Multispecialty guidance maintenance - Management indicated that strong growth was anticipated, with half driven by acquisitions and organic growth at about 13% year-over-year [49][50][51] Question: Health system strength - Management highlighted strong performance in the health system segment, attributing it to market-leading share and increased volumes [54][55] Question: Tax rate guidance - Management clarified that the tax rate for the second half is expected to be slightly higher, with specific guidance for the third quarter at 23%-25% [58][59] Question: Specialty trend continuation - Management confirmed continued good traffic and volumes in oncology, with a focus on treating more complicated patients [62][63] Question: Cash pay channel impact - Management expressed that the impact of cash pay channels on the prior authorization business is expected to be minimal, emphasizing their commitment to work with policymakers [72][75][76]

Financial Data and Key Metrics Changes - Consolidated revenues increased 10% year over year to $103 billion, with adjusted earnings per diluted share rising 39% to $9.86 [4][18][23] - Operating profit reached a record $1.6 billion, up 26% year-over-year, driven by growth across all operating segments [21][38] - Interest expense declined 6% to $68 million, and the effective tax rate was 17.5%, down from 21% in the prior year [22][23] Business Line Data and Key Metrics Changes - North American pharmaceuticals segment revenues were $86.5 billion, an increase of 8%, with operating profit increasing 13% to $851 million [23][24] - Oncology and multi-specialty segment revenues rose 32% to $12 billion, with operating profit increasing 71% to $397 million [24][25] - Prescription technology solutions segment revenues increased 9% to $1.4 billion, with operating profit rising 20% to $261 million [25] Market Data and Key Metrics Changes - Revenues from GLP-1 medications were $13.2 billion, a 24% increase year-over-year [24] - The oncology and multi-specialty segment's growth was supported by expanded distribution and contributions from recent acquisitions [19][24] Company Strategy and Development Direction - The company introduced a new reporting structure to enhance transparency and sharpen strategic alignment, focusing on oncology and multi-specialty segments [5][18] - The strategy includes significant investments in automation and technology to improve operational efficiency and customer experience [13][14][38] - The company is targeting to separate the medical-surgical solutions business through an initial public offering, expected to be completed by the second half of calendar 2027 [15][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business outlook, raising the guidance for adjusted earnings per diluted share to $38.35-$38.85, reflecting strong second-quarter performance [4][31] - The company anticipates revenue growth of 11%-15% and operating profit growth of 12%-16% for fiscal 2026 [32][38] - Management highlighted the importance of maintaining operational discipline and strategic focus to drive long-term value creation [18][29] Other Important Information - The company ended the quarter with $4 billion in cash and cash equivalents, indicating strong liquidity [28] - Free cash flow for the second quarter was $2.2 billion, with $907 million returned to shareholders through share repurchases and dividends [28][38] Q&A Session Summary Question: Understanding revenue growth versus operating profit expansion - Management noted that operating margin expansion was seen across all segments, driven by a mix of new products and access programs [40][41] Question: Oncology and multi-specialty segment guidance - Management indicated that strong growth was anticipated, with half driven by acquisitions and organic growth at about 13% year-over-year [44][45] Question: Health system business performance - Management expressed satisfaction with the health system business, noting strong volume growth and market-leading share [46] Question: Tax rate guidance for the year - Management clarified that the tax rate for the second half is expected to be slightly higher, with specific guidance for the third quarter at 23%-25% [48] Question: Specialty trend expectations - Management confirmed continued good traffic and volumes in oncology, supported by new partners and complex therapies [49][50] Question: Impact of cash pay channel on prior authorization business - Management stated that the cash pay channel's impact is expected to be minimal, as the eligible population remains small [53][55] Question: SG&A and gross profit trends - Management highlighted the favorable mix of businesses and continued focus on efficiency as key drivers of the observed trends [56][58] Question: Market decisions and gains - Management clarified that the gains from market decisions were non-recurring and included in the reported figures [59][62] Question: Drug Supply Chain Security Act impact - Management noted that the implementation was smooth and added value to services, but it is not expected to be a material driver of growth [63]

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 ...

Core Insights - The National Association of Free & Charitable Clinics (NAFC) announced nine Equity Rx grantees to enhance access to prescription medications for the uninsured and underinsured [1] - The Cardinal Health Foundation has committed $5 million to the Equity Rx program, with the latest funding round distributing $1.6 million to various clinics and pharmacies [2] - The Equity Rx program aims to dispense 1 million prescriptions by 2030, addressing barriers to medication access [6] Funding and Support - The Cardinal Health Foundation's support has expanded the Equity Rx program nationally, with initial grants of $45,000 awarded to establish programs in 10 clinics across multiple states [3] - The program has successfully reached over 11,100 patients and delivered more than 145,000 prescription medications in its first year [4] - The NAFC and Cardinal Health Foundation are aligned in their missions to promote equitable healthcare access [5] Program Objectives and Impact - The Equity Rx program focuses on community-driven, data-informed strategies to improve health outcomes and strengthen the charitable care network [7] - Key objectives include providing sustainable funding to high-performing grantees and revamping a national Charitable Pharmacy Playbook to share best practices [9] - The program addresses significant barriers to medication access, with 29% of people unable to fill prescriptions due to drug costs [5]

Core Insights - Cencora, Inc. reported a revenue increase of 5.9% to $83.7 billion for the fourth quarter of fiscal year 2025, ending September 30, 2025 [1] - For the entire fiscal year 2025, revenue rose by 9.3% to $321.3 billion [1] - The diluted earnings per share (EPS) for the September quarter of fiscal 2025 was $(1.75), a decline from $0.02 in the same quarter of the previous year [1]