Cardinal Health (NYSE:CAH) FY Conference Transcript

Cardinal Health FY Conference Summary Company Overview - Company: Cardinal Health (NYSE: CAH) - Date of Conference: December 02, 2025 - Key Speakers: Aaron Alt (CFO), Matt Sims (VP of IR) Key Points Financial Performance - Strong Q1 Results: Cardinal Health reported double-digit growth across all five operating segments, driven by strong demand and execution [4][5] - Revenue Growth: The specialty part of the pharma business performed well, contributing to overall revenue growth [4][5] - New Customer Volume: Approximately $7 billion of new customer volume was added in the pharma business during the first half of the fiscal year [5][14] - Full Year Guidance Raised: The company raised its full-year guidance to $9.65-$9.85 [6] Business Segments - Pharma Business: The upcoming generic product pipeline from 2025 to 2029 is stronger than the previous five years, with generics being a significant revenue driver [8][9] - At-Home and Nuclear Precision Health: Both segments are experiencing double-digit organic growth, supported by investments in supply chain efficiency and capacity [22][23] - OptiFreight: This logistics technology provider is also seeing growth through better capabilities and customer penetration [23] Strategic Partnerships and Acquisitions - Partnership with CVS: The ongoing strategic partnership with CVS has been beneficial, especially after CVS's acquisition of Rite Aid, which brought new volume [12] - Recent Acquisitions: The integration of ADSG into the at-home business is progressing well, enhancing patient acquisition and care [6][24] Market Dynamics - Competitive Landscape: The medical products distribution market is undergoing changes with competitors exploring strategic alternatives, but Cardinal Health remains focused on its execution plan [27][28] - Tariff Impact: The company expects the net tariff impact to be at the top end of the previously disclosed range, but is managing pricing initiatives effectively [31] Regulatory Environment - CMS Policies: The administration's objectives for access, affordability, and innovation are aligned with Cardinal Health's goals, and the company is actively participating in policy discussions [33] - Drug Price Negotiations: The company has already factored potential impacts from drug price negotiations into its guidance [35] Future Outlook - Investment in AI: Cardinal Health is exploring AI opportunities across customer service, finance, and operations to enhance efficiency and effectiveness [48] - DTC Models: The rise of direct-to-consumer models is not seen as a threat, as many are supported by existing distributors [49] - Long-term Growth Strategy: The management is focused on long-term investments to ensure continued revenue and profit growth over the coming quarters [56][57] Capital Allocation - Cash Flow Management: The company raised its adjusted free cash flow guidance and plans to invest $600-$650 million in capital projects this fiscal year [44][46] - Share Repurchase Program: Cardinal Health is committed to a baseline share repurchase of at least $750 million [46] Innovation and Product Development - GLP-1 Market: The company anticipates that the introduction of oral solids will positively impact the GLP-1 market, potentially improving profitability [51] - DME Regulatory Changes: Cardinal Health believes it is well-positioned to thrive under new regulations due to its scale in the diabetes category [54] Conclusion - Cardinal Health is experiencing strong growth across its segments, driven by strategic partnerships, acquisitions, and a focus on innovation. The company is well-prepared to navigate market changes and regulatory challenges while maintaining a long-term growth strategy.