Cardinal Health (CAH) 1 Nov 242025 Q1 Earnings call transcript

Hello, and welcome to the First Quarter Fiscal Year 2025 Cardinal Health, Inc. Earnings Conference Call. My name is George, and I'll be a coordinator for today's event. Please note this conference is being recorded. I will now hand the call over to your host today, Mr. Investor begin President, conference. Vice Sims, Relations, today's to Matt Please sir. go ahead,

statements me could First from morning's you as statement refer of of 'XX With SEC Please let today, all supporting reconciliations Please forward-looking cause discussion results differ materially the our our GAAP. filings projected to you Health this GAAP be to non-GAAP or and to risks a matters we press Quarter to comments [indiscernible]. on for risks presentation addressed are and note to Since description relevant that in CEO the actual Cardinal a us. statements the forward-looking subject the can thank during the out Welcome our making be for and and today, slide Health be Fiscal schedules for found will that attached release. uncertainties. Cardinal Call, Earnings our joining those basis, implied. today remind in unless our me called are periods uncertainties that to non-GAAP specifically will Conference these

Q&A participant, and the turn that one you to limit can portion per over to I call ask the call, opportunity. of questions kindly For we try With an give that now everyone we that, so today's will Jason.

in the by start communicated Thanks, Matt, most led and Specialty team's preparations XX% profit transition. the ongoing 'XX segment and largest through advanced our fiscal delivering to previously and execution excellent terrific growth, strong Health everyone. of business significant with customer evident and was resiliency large and Overall, reflecting managing a good strength performance Pharma morning, Solutions. delivered operational financial Cardinal and The

environment our pharmaceutical a this underpinning quarter specialty, brand, We stable utilization broad-based saw and We across generics with continue trends to consumer demand particularly strong program. and operate positive in growth. health our industry

with immunization vaccines customers the of the address in facilitate pleased are processes COVID-XX our alluded to, customer commercial the the urgency of plan fall to implementations. season. preparation I We with and And the to executed distribution realigning growth business for again new support as transition operational ongoing team support our inefficiencies, customer

improvement to creation also be last OptiFreight, Nuclear, by continue to summary, we the continuing focus are enhance and first to pleased quarter. Across the GMPD, cover as businesses, trends. these encouraged from were some expand our below our continues detail, and chain to resiliency. our welfare plan, to next take while plans to confident Aaron health be GMPD accelerate the positive our industry near-term unanticipated expectations raise years and over financial value that demand businesses In which our We're due guidance the and we in unchanged underlying benefit quarter. and is while performance enterprise costs outlined the X In in performance actions fiscal strong in as the and for we're a against make to of our our position results to QX business seeing continue will supply the 'XX at-Home team GMPD we after progress other

look guidance updated confident results our in business more strong, to Aaron ahead. With as we're and to me review we Our over it and let is detail. turn that,

performance excellent Jason, other. included segment, Pharma start with Health's businesses by the in the GMPD and morning. delivered accompanied QX good an from outstanding XXXX from Thanks, operational results to fiscal and Cardinal solid

repurchase flow managed to the and to expectations us on operating business team we the program. and adeptly same execute enabling X% earnings QX As through transition. time, grew negative and invest EPS the an early on accelerated enterprise, an working capital by our in anticipated over continue an share customer recent unwind both XX% despite delivering At by cash the

delighted to and am cash With raising shortly. year, the our of outlook raising the to EPS More headline flow range to adjusted share solid that $X.X to billion. of fiscal EPS $X.XX that we our on for $X.XX an are the to range I a billion free guidance start to 'XX

results, revenue across decreased Slide company our with organic company X% we better total X. year, customer of revenue prior XX% for billion, Let's rest our revenue review the to Adjusting the the increased Total versus transition, starting than $XX business. strong expected. growth reflecting the

billion also segment. of the that increased X%, referenced both guidance trends to brands the generics positive new for in make pharma driven the over started of onboard the customers first we've in in incremental gross Total successfully by We our that up in and margin revenue year. Pharma company $XX the

tightly we plan million $XX costs. This onetime our a prior was by quarter Even of during rely, our million, year. prior by from third-party financials, SG&A than higher health control last this the discretionary mistake we the or and from $XXX employee utilization grew increase of health charge actuary us years. a catch-up driven on cost whom on per of of the employee in half spending higher and included that XX% While delivered impact, calculation we versus wealth of incremental both of notifying claim earnings Approximately well liabilities plan resulting year. claims welfare as with numbers our substantially as X% face and costs, operating

to primarily interest driven $XX million and income lower increased lower other anticipated Moving below due million interest cash line, to the the by $XX balances.

tax due positive effective nonrepetition finished discrete XX%, points the X quarter year. to prior rate of percentage first Our some the at in items up

year net a [indiscernible]. our $X.XX growth As share of of QX than for The shares QX EPS average was of outstanding million, $XXX repurchases, result result were a lower diluted X% ago.

Pharma on Specialty Now to and Solutions with Slide beginning segments, X. the turning

the $XX customer X% due to the First transition. of to impact quarter billion revenue decreased

percentage Excluding that, revenue from existing GLP-X of by increased sales revenue XX%, customers. pharmaceutical brand and points specialty sales. from X driven This included growth growth

the transition. In we broad-based expected, solutions. distribution customer across the pleased to on vaccines, year, as the commercial FDA's biopharma impact XX% impact original from to specialty This strong in quarter, With last seasonal we contributed $XXX favorable distribution of a and are than increased generics pharmaceutical and September profit brand, we and vaccine million performance earlier this categories, first launch COVID-XX largest by consumer profit from and the QX, performance first peaked on program more across products, in customers. recall, Specialty Notably, peak from specialty came quarter. with Specialty, saw and product generics year, approval and the This XX During including saw strong our demand integration. October. contribution Segment distribution distribution performance. offset specialty, our Networks COVID-XX the from the demand driven the positive higher a and brand progress health leading within for

modest This for While year. the vaccines tailwind trends the QX. year-over-year COVID-XX the that quarter second in by year saw for with predict, our demand to QX in prior full headwind tell lower for sales us continue COVID-XX is in more offset vaccine with the consistent to is overall should we expect a than the impact we difficult guidance

to growth Our market generics Red performance consistent from strong including program with continued dynamics, coupled volume see Oak.

the by following and need overall created also found plans improve We our opportunities optimize We to credit contract quickly and ahead significant transition. our structure team cost to for the incremental to a of customer flexibility operations transition. the executing give business as result our on our planning

growth So complex tremendous a large while Pharmaceutical profit business very change to quarter to team are XX% bring the and of overall, a we segment Specialty proud of pharma in navigating the Solutions.

obscured health GMPD was the operational in to in costs driven billion, quarter Slide volume by million made increase the existing resulted in X. welfare segment customers. previously GMPD and QX and $X profit Revenue million solid QX. to mentioned growth X% segment decreasing in $XX to year-over-year on Turning progress in $X.X the increased from by The a

including start-up manufacturing results increased to chain costs related manufacturing our expect impacted to our resiliency costs, also quarter, which last enhance some domestic to also previewed QX. As impact we supply by were expanding

inflationary net On the Slide in in during existing growth the businesses the positive, Finishing initiatives the growth quarter. also mostly other, mitigation year-over-year the we and as our X. customers brand again from an saw reported impacts, quarter. on Cardinal seen in including volumes improvement with decline offset And in

billion collectively underlying to of X X at-Home OptiFreight of growth XX% and increased and across businesses technology to and our revenue logistics Logistics. quarter X%, driven Nuclear another in by profit OptiFreight to Solutions, had grew health due segment performance Health First Solutions continues all Logistics. I'm the by for the $X.X OptiFreight with performance they of and care the demand services as quarter strong other Precision businesses: grow. quarter all pleased as

quarter expectations $X.X our previewed a million was of $XXX balance a billion Now contract balance call. position the the the $XXX earmarked maturity be the better November includes unwind free quarter time day-of-week an prepaid $X.X additional deposits turning QX the debt held billion, than cash reflected to and the We through our quarter, in paid sheet. Adjusted million flow which on for the sheet. timing to with ended other and as assets we with and and unfavorable use large the of guided cash on for

quarter, $XX drive CapEx shareholders approximately to During $XXX and returned invested million program. the to organic accelerated framework. the we into through in according million repurchase first to including dividends, We share capital continued deploy allocation We a our to disciplined the $XXX repo businesses capital back share growth. million

Jason to to that integrated billion, We will which is invest $X.X agreement network an specialty in deal a continue on closed. by yet oncology for shortly. reaching acquire not elaborate

the After guidance start on $X.XX, the reflecting beginning X, the of strong segment the are our 'XX our to $X.XX year, fiscal expectations. updated $X.XX of guidance our $X.XX, prior range raising to EPS for from $X.XX increase at fiscal midpoint improved primarily the profit enterprise. pharma our to Slide we with guidance to 'XX Now a

$X We a adjusted flow to to of guidance $X.X free cash are billion our billion. raising range

Slide individual guidance adjusting segments are seen We on for also our as our XX.

so increased we a X% Specialty decline for demand trends strong including outlook of revenue to X%, For Pharmaceutical broad-based and we've the sales. Solutions, far, reflecting improving seen to are GLP-X pharmaceutical expectations our

the unchanged. Our COVID-XX vaccine fiscal year XX% growth for revenue are expectations at 'XX transition, midpoint to customer Normalizing now would XX%. be between full

and $XX volume quarter 'XX. from Our we outlined fiscal customer what from billion revenue over of a generally customers for incremental expectations in is unchanged expansions new ago,

consistent profit, the despite year segment we following strength the our the I'll contract target full quarter, long-term to transition. notice Our Pharma to first are guidance our with of profit for raising growth, X% segment which X% the

we to COVID-XX quarters. continue the segment our Pharma expect expiration, with of segment third slightly to in QX given vaccine growth with profit resuming along earlier terms down and be contract profit year-over-year season, the In fourth cadence,

GMPD. Turning to

to We fiscal to We revenue do X% distribution of will of continue offset Cardinal lost growth notification some to distribution government volume our the new to the year. recent X% the onboarding in we via Health which X% segment growth for 'XX. brand outlook expect contracts are partially updating are X% GMP to reflect lower-margin revenue

to primarily the the health referenced. guidance segment profit impact 'XX reflect we updating Our costs are I our fiscal and welfare from

from range of our specific million fully our in as to a of impacts segment are impact the million fiscal identified to may I fiscal continue to on sight the the focus term emphasize it Those our GMPD $XXX the team impact results. Nevertheless, the and while tonal $XXX We want support the year we executing million. recover adjust a profit still to that health [indiscernible] to gap think $XXX our segment goal team efforts externalities initiatives 'XX. growth to support profit pressed strategy arising and for hit by business, QX GMPD and million incremental and the $XXX welfare the profit in profit GMPD outlook actions on other to 'XX. impacting timing be is the given to and near unanticipated for to

by weighted well GMPD's ongoing and seasonality. sequential operational improvements half back to segment the cadence, to each Regarding profit business in commercial continue the driven as profit with quarter, improvements we expect be quarterly as

One we to segment costs welfare XX% revenue by QX. In our with from continue and cadence. other, the in growth carryover expect profit guidance prior year, for We manufacturing we to utilization on full note QX higher growth. others be XX% approximately saw along to of some health higher are XX% reiterating impacted the plan

nuclear in the volume QX. We business shortage are [indiscernible] material raw industry-wide and of impact expecting an profitability to

for to moderate to to a segment expect As for digits profit low quarter. result, growth mid-single the other we QX the

are rescheduled. With However, expect procedures these on a second. delayed details volumes generally we return return the table, guidance subsequent for let's to in the those enterprise to quarters as

COVID-XX we have of combination which full in a our anticipated of to efficiencies to gets offset pharma the from the contribution guidance The year a at $X.XX combination guidance for of Those quarter. corporate are trends the offset positive us QX year. profit positive reflective side, GMPD. on range following year wider rest anticipated partially earlier is providing the our and our today raise On the by our are the to raise first we full midpoint in

deployment. of a on up, capital couple wrap comments I Before

disciplined of in investment-grade M&A to invest Of assess with fiscal continues expect return end targeted bottom provide we our Our the announced plans, rating, of of North capital capital at of business, Star, capital be end year credit additional and opportunities. X.Xx of protect even return 'XX. capital leverage note, strategy allocation the our the and baseline our investment to and by range of be return our

large guidance our As I long-term business. of I it business our performance opportunities in the 'XX our delivering Across announcements, remain strength excited With you in 'XX significant resilience of especially you over of back over look term. To and coming proof value is Pharma I'm the and that, through most the can hope and our turn change to strong. a our while us of tell eyes all will year to for creation shareholder forward Jason. started months. creation that fiscal in 'XX to fiscal further segment. value segment in fiscal close, from largest quite see this front on target long firmly updating I on pleased and we our focused am to the businesses, Raising QX managing

ags are with industry-leading quarter growth their core in a the upon simplification we've the and execution higher Aaron. The the serve to first They build we've specialty. testament and core we've service. products couple Pharma been the focused by to and strong of our solidify ruthlessly established customers results on Specialty and operational years foundation over Thanks, increase exposure in and higher-margin taken to our areas. to past and In execution prioritizing expanding core consistently in patients also our essential Solutions momentum

across operational quarter, on performance strong both further we distribution progress our made This fronts. We network. delivered

levels Red over we quarter, the customers their ability and A to continue program. positive we've which delivery reached in expect. level of generics part and productivity and effectively highs highest During multiyear managing supply, achieved in our our volume year. our cost our and dual service maximize both key service to supports performance a to Oak is that the mandate continues seen execute its available for growth

customer continued customer Ion We're announced and to push our On integrated upstream. in momentum, we've successful to the underserved commercial care improve have joint of couple have front, reached communities. thrilled and to onboardings strong Together, smoothly cancer to agreement of seen that customers businesses our a seen gone an both Health forward September. we've in acquire oncology continue renewals to networks extensions Specialty, and and due downstream we recent in focus. In continual key Cardinal will mission as team's

MSL other payer proven the management. focused in physicians independent Navista Networks outcomes ancillary services. combined combination to ION's community with and oncology footprint, offer care. across and to specialty to innovation We testing care revenue additional and community networks clinical XX-state economic operational and When value-based cycle will medical solutions who can its drive such oncologists deliver radiation in care relations than drive and management, oncologists analytics platform the suite and a It enhance supporting to brings platforms urology, scale practice PPS offer provide and formulary to offering, for offerings Navista's as seek diagnostic and to through adds immediate clinical we of a independent tech Oncology more remain of improve providers improve network on [indiscernible] and broad-reaching costs, solutions Specialty powerful of independent performance. Integrated needs our lower success XXX patient in-house

will and further we're additional opportunities new building, areas. Upstream and therapeutic we evaluate suite we the Solutions are inorganic growth organically Therapy strategies of pleased to the Solutions our our with invest to manufacturers, develop actively to services accelerate and While continue offerings. capabilities continue businesses with across Advanced specialty BioPharma

enables The care streamlined place provider For example, in patient Connect ending ensure Therapy the product products treatment X and quarter. seamless we ask efficient launched therapy to to availability. our ordering their centers contracted in portal solution Advanced cell provider

execute where plan our Turning we're GMPD improvement initiatives. to to continuing GMPD,

with offerings chain taking Cardinal supply significant macro is urgency, drive team positive priorities, to Health challenges actions line, Our operating strengthening and while the mitigating enhancing our operational across implementing wins our of resiliency. impact distribution progress key brand driving our

have maintaining remain patients striving Service constantly 'XX distribution loyalty with on our Health build During time. index to Demand the the continued lows, Canada the Overall look and to indicators onboarding Cardinal their to into leading forward levels of remain and quarter, trend with [indiscernible] we're right base. With track notable patient remained we wins back newest to across for [indiscernible] secured customer and fiscal positively, healthy. customer customers and expanding to distribution pump APAC new we're year. provide right growth with brand, launch orders in of and the our to in EMEA renewals seeing near U.S. We're this key regions. and fiscal industry-leading scores implement thousands patients remain continued access some the in has place multiyear consistent and at utilization our trends for during year products throughout [indiscernible] the globally U.S. QX. We stable,

vein to global leveraging our The diversity year. device for designed back our while next-generation of preparing embolisms platform macro We're the [indiscernible], to by also enhancing the Kendall adapting supply the half to operations circulation. is we next-generation thrombosis outcomes optimal fiscal blood and in prevent chain. compression deep our pulmonary of are launch environment,

our a port as with seen continuing we've our horizon. short, approach In opportunities Coast disruptions to the disruptions elevated We're in from we the in service. to for through such date, we've quarter, of quarter, GMPD During freight the decline significant the accelerate strike and hurricanes and cost And the we've at remain as challenges progress turnaround international exited to in structure external industry-wide the initiatives in tariffs. managing our levels. significantly we U.S.-based facilities minimal the take manufacturing an our with recently to to response We're costs X on confident of planned the evaluating impacts managing and plan aggressive support opportunities East to expanded achieved southeastern domestic and [indiscernible] goals.

has other and Nuclear with revenue the Health our the growth business its core in above-market double-digit to Solutions, categories businesses. Turning and Precision In continued growth Theranostics.

we're driving primary such an such Solutions, growth efficiency. distribution to an and customer for products. growth have In been investing metrics take energy service the investments low predominantly that doses The agents minimize experience. We've for increasing indicated, meet our record Outside beginning hold. we urology, closely adverse maximize early QX, our achieved to also many see PET, the operational six. benefits detection used possible. in on for leverage. on for as across with capacity to quality continued additional increase and leading XX% see which seen reach our double-digit increased automation and supports again core, available over continuing shortage [indiscernible] CGN as deliver we're on our will and revenue We've to levels strong QX, in are and operating [indiscernible] our In Felix oncology As demand ongoing significant second volumes highest have anticipating positive core suppliers the focus of which to products, in Theranostics key at of areas of demand are revenue such a most Aaron industry-wide much as Alzheimer's Home with as With quarter working disruptions products capacity impact categories as geographic GE and Healthcare's we've imaging diagnostic dementia. to for of grew and

forward OptiFreight our invest investing Logistics, to capabilities total as in decision-driving of tech and our We continuing to our customers. view such evolve the and continue growth platforms business. In insights in capability for and we're insights to unlock expect this value

We're of for our to product the it working shipments strengthen capital to recent capital attention our the actions liability financial optimizing and years, capabilities several product in significant to our with always we've has sheet enterprise on the the value over trends an needs customers the shipments. to customers. At prioritize relentless growth. past enhancements business, example, with our to launches makes along invest tracking spending to critical shipment and return choices flexibility. team's include coverage view incremental balance our add For working right to accelerate and shareholders satisfy continuing positioned our We're provides to on strategic and these our easier to limited taken us level, that long-term

continue to to an fit Nuclear growth specialty in as the in active activity our other priorities of primarily OptiFreight. of those pursue areas as are we'll areas well We with M&A that strategic environment, and inorganic investing at-Home, and

southeastern Before to I like hurricanes. by wrap those affected I'd the all up, destating acknowledge

take and delivering excited as Our team to our priority surprised upon challenges [indiscernible] at that, had trusted great has role efforts partner. of lobbing patients. will but are their continue momentum. our fiscal navigated the tireless proud 'XX team customers for fulfilling employees the our we close, building is for our and I'm our To Cardinal to questions. always many to health our we customers. their care's Thank a you how and your not With most continue

Instructions] [Operator Lisa be will Gill first calling JPMorgan. coming from Today's from question

focus results. to of on which want business, had just great drug distribution your the side I

Just few a questions.

something out revenue around secondly, that talk called we managed will can you better? the we've What And specialty. of is especially heard those increase we some in the changes out as volumes, that you about thank was companies driving XXXX. there improvement Jason think the incremental specialty for changes revenue as when Is potentially about And from drugs. the that the calling the around then IRA calendar when think materially care Or you about Aaron, margin I is component. vaccine, when about think improvement driving First, margin? quarter? else the

just to volumes thinking there. about how you're curious as I'm margins So there,

the margin? a And question about about be and we how secondly, that side. specialty think on my to do really what's to overall, the first would segment. X being how just then just happening think around single vaccine So contribution the questions and

first go components, I is very asked into think, couple buckets. it. overall I'll glad bit let referenced those, but quarter of Yes. a that's, hear this me commentary it Thanks, put me some and and segment. a lot Pharma question what little the the get We segment, you much color in X up let the quarter. highlight thing quarter me but I'm was what's I'll key of -- the into the of just a and of you're strong that It particular behind deeper key There just is from bucket a success the gave to And not to because for additional because there's driving script, X Lisa. in this and kind key about back any you drivers going talk that drove the were Pharma

of generics, did strong broad brands various about perspective. we're we various consumer and we the talking health with the and is, of biopharma was business utilization very or saw as solutions. I your of across specialty, see a out of call utilization across from products, all, distribution whether think it's essence and as services Really, very classes customers all pharma Again, First question or you demand the corners stricter trade. well strong specialty

we good strength. so that some really have across spectrum, And

stronger quarter was because yes, approval, year. this the COVID, month about with the a FDA Specifically than earlier of volume last was course,

this August year, middle September year. late XX to last So

last of COVID So -- we in this clearly in was QX in year. clearly of year. QX It the had volumes October was peak

difference. So a that is

for small tailwind the was slight However, that associated highlight a I segment a tailwind, to Pharma actual year-over-year contribution the with earnings would COVID.

year-over-year depth what COVID utilization that a not we and the thought for last One on strength see higher for QX as It So a we was of those was the timing first than of the driver. the quarter the QX. vaccines comment the bigger other results. of well significant and driver better breadth and but difference

a year, but quarter. the will be in -- being that the -- be second the all For year-over-year, anticipate we still will that headwind modest headwind full same

So that's the volume the point, primary point, first across board. strong the

we favorable the point mix. we see, did volume some did see that Second is

strength lot of with of more is which final types that's the enhancements. cost that I we trade utilization. the was stool the a service In would customers that a then of in transition of allowed to quarter we some even actually change, incredibly volume levels deliver we it, And having in of execute of to levels improved the it we But that actually well, able degree, we're customers, the that that. levels efficiently. quarter we upon performed deliver in So multiyear highlight that us did to to volume, had fact leg that a good that, levels, will And lot really favorable. broad right, underlying productivity back on meaning the service had fantastic have service that, strong

specialty. the overall when growth. we those there It's more vaccines, it's perhaps the look just than enterprise faster your at some So are our around overall and question just drivers. may dynamics than more did be IRA than Within there, we growth see specialty

large growth customer XX%. way, it specialty look little bit the a When same higher at in that you ex that. than pharma the transition was Our was

by I So that. there. wouldn't that component strength driven was we underlying a of that say some But see did this was growth. It

Cherny question Partners. Leerink will of The coming Michael from be next

Maybe GLP-X basis same pieces heard Lisa, to full it's year you you played and But Jason, the And on mean, within COVID a any that economics, just want -- to the the sense question guidance I'll but talk Is level not? a any modest I to I then a drivers the modest any were there, specifically of say bridge into you mentioned improvement? anything the being year. a improvements. about guidance in biggest tied one uptick headwind point there make led the can of similar what just us sure on year-over-year. you for gap whether the can couple role way of I that give pharma or way want approach I utilization try uptick the it. in XXX lot to

to guide Happy some pleased and updates we to leading with really course, perspective of actually X% QX Jason forward. the by to as new growth X% form. in really the our the the to we and to resiliency QX carry for target year. driven of provide we And performance, It's to off, our strength the where see starting to talk left continuing are long-term the business of on guidance the for profit raise that

this execution. part just Now is of

from good broad-based That transition. assists as guidance. You raise as were the of to that income working the going the impact more especially customers. right? we strong QX both than news heard Jason how that And focused anticipating from very we to there a It's the The perspective customer offset we managed had execute we managed that capital certainly our new walk -- statement into got part the contributed by on we simplification. also we anticipated, the significant the and very reference an in case in were done is, Networks that We are QX, well, was demand, team is perspective.

to as You started heard those onboard we've well. me say

so continue. as coming of through pieces as business how than the we are that carry offset the give the will And confidence together, us well, more to really helping forward year

continuing. in We guidance generics, market consistent assumes dynamics dynamics our saw those in market strength generics anticipate we and portfolio. our QX are Now in consistent

a that through just continues the brand notwithstanding about from guide we specialty a for repeat of year, what be guidance modest us it will start Our indeed, to at had for modest us increased did and contributions say category. guidance And products. tailwind was Jason the CO during that QX. headwind also continues won't the I it see our year. that to

grow strength so increase. that's our side we house, of than in existing and up and call the right? strength the Of course, GLP-Xs originally customers percentage did overall the are new part and to contribute guide On of X expected, the And about from from by we there. more had the and that's points continuing customers driven the revenue revenue

Now from your anticipating the perspective a next headwind the on be due down we cadence to to guide, slightly guiding perhaps from COVID-XX. question, are QX,

as course of long frequently inflation we over of the quarter that's the be And with just that have half, I profit to second given be brand The we well. X% to note highest X% final are to term. say, One dollar QX we the guide. guide see the consistent the for when expecting the as impact will

other close And Oncology the completion [ guidance close, to now guide ION are Integrated the to on pleased of anticipating that report of subject year. our The of I conditions, we period that that transaction some provide we're Our going closing will include by to customary we that. the of not calendar has we waiting acquisition, end am to the the ] deal update although expired. Network when HSR does that impact

Erin Our next Wright Morgan question of from Stanley. is

want but was here. Pharma do to Yes, on I medical strong, ask

utilization are that about progression this of underlying just of quarterly at So those your we but the remarks, year? the dynamics talking trends, thinking think excluding segment? demand medical you for how balance the And point then just were you that about in of across how medical some prepared do about kind underlying in

Appreciate the question.

million, year $XXX million, make guide GMPD plan context And Let hit and we our that is And to fiscal At million. I me improvement perspective year. a for quarter reflecting unanticipated our target and more XXXX the We wellness little guide forward. on that. enterprise notwithstanding primarily with million, for which health start original QX. unchanged, are $XXX million just to the $XXX the in absolutely carry the the in level, progress that $XXX pipe did bit year to update it of and the against the around continue to $XX some on we was results offer to be was some want costs. still is the case both the that that we headline the the our as

called rest increase About tied increase prior years. in was actuaries in X/X was to well number I QX performance. the the driving of out buyer overall as claim at an in error as of to a The level tied Noble notable $XX half million SG&A. in unusual claims increase what really that for of us. think That's was about per the I an cost the

continue additional quite to We help drive find against opportunities to showed tenacity and the are GMPD plan. otherwise pleased with progress the plan. the they The

chain QX, would against and planned gave I they to level the aren't accelerate team as breakdown be they we they challenges certainly, contributions would health given inflation knew seeing progress, increased well into we the of as carry just the the from QX. continues the we we've inflation improvement 'XX are experienced. anticipating fiscal 'XX. right? that the execution supply is growth Significant Now the same the the initiatives, in within you, for plan will we cost wellness And from GNPD already plan fiscal year-over-year of the mitigation mitigation they'll But mostly

team improvement guide forward. fiscal in the unchanged simplify anticipating we've perspective, we sequential brand ahead. ways There's X% a there. and indeed, the Health continues. to of back We business carry We've revenue from the continue revenue said cadence are half cadence to cost be the 'XX change but -- improvement our expecting the the optimize for we proven business our From the And Cardinal guidance. following described quarter-over-quarter always nachos and their the finding growth as GMPD will that what seasonality plan overall has no plan will as are we weighted additional remains push to growth from previously, prior

add an of same last consistent what would in said, strength certainly on I think, seen the you X. medical products. thing in with we've I your only year is recently, on The But that have Aaron, it's we that level fairly question, utilization or there's element of seen side than the see didn't historically more pharma the utilization,

macro seeing with you not and not disruptions seeing the positive So we're big course, is to about just the me hurricanes changes. all big factors when that saline of there, which partly and, think changes the we're given

that. smaller procedures. wide not industry But on we seen deferral Some some cancellation health throughout do aspects we've systems overall, the being or there see some of

job this managing we So well materially cautiously that customers a optimistic of point, at impacting disruptions are through don't our we utilization. some as as underlying fantastic that see doing

be will next coming question Nephron Our from of Eric Research. Percher

you pretty Question on inventory do good GLP-Xs commentary inventory that We And as some pharma I'd on in fluctuation. the DSA build manufacturers not expect to visibility. heard pharma. allow agreements from of

flow? relative factor And check a growth you cash all GLP-X have stabilizes? that assumption? to in we then inventory, can was So improving been as that able at And optimize to

Yes.

So some I I'm inventory. the Obviously, can't for on aware industry. GLP-X comments broader of speak

this closely. very we For us, manage specifically,

that volatility not meet does supply that demand can demand. in a of You lot that strong of there's imagine terms

detailed certainly, ultimately levels is several as levels So possible. we're patients our as at of that this managing hands and get low it our it inventory inventory, product levels level. of much quarters. Relatively our inventory, have customers fluctuated And but at quickly to of static all to priority manual have in practice, not relatively the very of very over low a we seen the last

financials. X% our no, So we whatsoever. on been And underlying XX% that have not growth. revenue in to of any as relates of changing inventory impact QX our levels It is it meaningful way our

case the strong significant not and of a inventory of certainly results our other cash driver not fluctuating, that also was now implies continues it we've driver driver as and impact. And a meaningful growth earnings, a of given be revenue this still flow. to it's for that But So and the GLP-X it financial quarter. our to always is line ex than significant not the is meaningful particular top that our said, is

The from America. coming be Allen next of question Bank Lutz will of

there really line, type losing you're on there margin, gross margin year-over-year. and that improvement a benefit The excluding customer. any some to Aaron. the nice the change? takes of way puts is getting Obviously, contract for low-margin gross from But One frame

after I Actually, lot to let of a it one that's I'm give Aaron, arrived. after him but going this I'll arrived to take on me, talk he and before I'm statements Aaron the that one made know you first.

-- not margin not margin gross manage we business did year-over-year, I manage were I We that's our on gross rates lower our business. how dollars. So always when highlighted

lose for so we rate I'm not going to improvements customer. a And when take credit margin gross low-margin, large

we And things fact love key change, margin I all keeps higher driven margins. took rate, revenues this to is and business model And probably those we're thing a growing customers, is. slim would to capital I gross higher-margin more across. equal, like have talking lower-margin not manage that that important by the dollars the the having on. a if SG&A celebrate than and quarter the being how another of and very metrics. What's higher overall it I between are increases, gross gross we this to fewer this benefits but want balance has the regardless customers, We'll working focused appreciate realized working our higher. largely in continue margin. the what And of manage our and is But great of direction especially just the our going mix which Aaron, to -- I margin that it's And this like example model So rates, points, we all are the to cost margin that's that's margin get SG&A the be that's and it add. your anything I increase, what rate way that's reductions negative

that I incredibly was thought well said, Jim.

to will move now of Kevin We Caliendo UBS.

subcu. for this the of no part economics suggested That's talk is wondering sure of you, reported know impact sort potentially in does forward X/XX that the full potentially driving you how that's pricing infusion -- would that change company that And week brand to of a to wondering part Does if of the any not in Can I all? I'm guidance that lowers you? there's a way, the work STELARA at I just want came. any impact in economics one when come any how of lower brand if price I'm at of going pricing, this companies infusion you way? just just through change GLP-X But and year. level, impact to going been secondarily, who two, in was biosimilars make all. necessarily sort So And get

that I I economics, GLP-X before. one the No, Yes. basically answered think

areas I else We key that It's the other even think part saw allow great benefits So didn't and be the industry. innovation. I specifically the mention those volume. I to it's there's love I to highlighted. great Again, of drivers the I strength, specifically broad add But the was us I It It's and that's not nature. about helps don't we we that think talking when of that a and for strength It like something things highlighted there. that -- we underlying key much GLP Again, all drove not change. even for that more efficient us. there.

definitely component, it's it's driver. a the not but So

us that through. our service. changes dramatic we with didn't in a for our peers, In us, The work And point We the on sense basis and model lot that that that when hear terms new a type comment, again our those concept to at price see makes not comes way reductions for tested price fixed and yet to saw fee was that not talking [indiscernible] is insulin us. of only flow the we operate you this basically that recently industry. it but of continues about in

to get for is manufacturer -- financial and compensation from dollar in products provide those we the we the side on get and prices service safely, by to these continue marketplace. far, price best believe exact same the expect alternative the unchanged. support exact stock for we same fee delivering that. change, are, the levels the to when securely So And that and efficiently the We to

future. those that we of continue how to happen cases, that expect we in about, today have how [indiscernible] the continue In model that have phases to products the hold to also each that to and with structured well, [indiscernible], continue all evolve given we'll continue would again, you whether we over model So to And you're -- talking or insulin expect evolve. will to it.

Baird. from be coming Our Coldwell will Eric next question of

talk want here. a Congrats to like, couple confirmation costs? would health incremental other in reasons. And the their And confirm we're possible is size of just tariff good raising seeing it China the out build you coming of also market the into you're wellness looks I have suppliers unexpected the costs just just GMPD. so to increase more on as I U.S.? guess might on -- syringe for across then the We're with be some hearing quick costs some not that. had doubled and costs international profit as U.S. I a to the and these performance on the And than in that limitations if it what the in about segment then products. other knock-ons for seeing manufacturing product capacity China some other

thing size us a is and multifold I such GMPD, but growth guess there helpful. question be if you would manufacturing ex and the increase could So is in costs wellness underlying what, anything a health ex around profit help

of couple responses. A questions. the quick Appreciate

impact the here out in into or cost, profit wellness correct First, getting And in and health doubt if impact wellness an of beginning quantification related across of a adjustment. rolling where broadly, business one would question coming manufacturing to from million referencing your go delivery to you're math to basis going at mid-XXs dollar of really out on the place QX. Yes. January and if it health for no then add part similar And then the the to $XX is and last operating headwind your the later. to $X was that forth you on your you million that the that China, ex the you're [indiscernible] will, products tariffs estimation, are the

short -- me make about to consistent is think a that statement we I broad how about it let in term. think with it the So

we and but well. half mentioned, diversified about we a out Mexico degree North come anything a of America, use use diversified, decent well. supply have We've given entirely brand it's don't Latin amount does U.S. highlighted less Cardinal as Health China, And some the quite But manufacture in like not our Mexico. We which from Asia, than of China, I coming as We America a XX% very of U.S. We bit out China. it's source base. it's use in include products Southeast

is very have type for a the flow of continue It some this There's know from of there's was -- us, in have something raise cost. COVID, of in will that well. margins, it, know has the served during it you when that only perhaps a optimal. that you mean we course, doubt raise one And add optimal diverse to that. Asia, and that. will to We fairly will through no had on that but tariffs will base will that we if supply too challenges, across-the-board throughout top we the us space XX% you migrate when way. But And much our location to that not industry. economically about So less costs that's take margins in tariff, that

keep from be We that will flowing through there we impacts that will but customers, be everything can to our to entirely some do will to have absorbed.

will that's sense representative and are think, impacted products, supply China, in some Asia these around it seeing commentary PPE points is Southeast through near alternative are anecdotally, out flow some of the occurring term, through the have here higher Those being that marketplace sourced the products pricing that. your we're for cost, namely are of I very data that low-cost seeing list So with changes that short coming you are and especially of largely the makes already a into is think to that and and that base. because and we syringes

Of should solutions course, we're be on I there But something it's increases. to working minimize price be will that expected impact. that think that

now Bank. George We'll Deutsche to go Hill of

Jason, a switches, joke, drug And forgive of an and I weren't to kind we've just able called we generic But that the both guys pharma you'll GLP-Xs was either lot morning [indiscernible] hope Aaron, versus margins. which we've to pharma attempting you in program being And drug I'm generics increase quarter. investors and versus question, other? seen wondering [indiscernible] vaccine where the questions an in the I of increase some which maybe from this on is have generic if but much as actually, one pricing, contribute seen attribute getting kind would generics the out you XX outperformance parts. in of focus guys I just the in

just just like pricing happening other love to market kind of of to it shortages. the commentary versus relates would as and your [indiscernible] So in again, drug on what's hear and vaccines outperformance kind

year-over-year together I and Within force our can Yes. can the a put both again, increase. the our kind products I drivers. within press presentation, I'll release of it that vaccines good slight were Again, you specialty and see into we that, are the rank. greatest mean, what comments [indiscernible] brand drivers. say were

that's simple of a and cost I can do tailwind. a More course, you this pretty that the well. the nice performance best year, of [indiscernible] quantified given than and last the as was had strong I of higher did it's was a strength was the is also I bit it in specialty, the board, It's profit as notable. answered that as that little can managed through quarter. revenue being percentage it about and of growth quarter, brand environment, with X the driver large well And that's was It we're $XX the not a even driver That seeing Generics well. I transition GLP-X. we ex it. think not and million operating was particular that utilization that, in before across very change. with though But it. highlights of lot We customer XX% good do we why math we points was but revenue -- but operational as again, of had

kind strong quite which still categories translates revenue So I referenced. growth, into core of all those

The volumes there that we happening did us that one out thing -- we really saw dynamics, as should generics do, good there's which sign take you usually drilled we we consistent we market the nothing I add the would had fact extraordinary the because on program buyer. is

manage those we sites X together. So

will Barclays. question calling be from coming Davis from Next Stephanie

on dovetails about kind in potential that have helpful. I Since the how Congrats broader election your for outcome. was GMPD puts hopefully of pharma, takes you asked. Eric the one there M&A could on to some of of potential hear kind the be would easing what quarter. there's you're I've thinking got thoughts and risk tariff risk

those access services about we better good topics, really helped is provide us the people patients. to ultimately, love Sure. And Well, I you've that the first those that any be needs, affordability. provider thing for care ultimately affordable right I to heard patients' these the which of is to love health products I to transparency, in those D.C. about. access me We even think believe I when would utilization think an We the talked that think news the because has solve about important. drives love is most talk

there what's I difference at see highest don't in patient. a the level, is So for that the best wanting

Of there. course, to there's get ways different

how always But included how be doing I ultimately, be under heard You've the a could of flow of or something that's North the positioned flow today the certainly creates there's to through patient we're and But about of best of Star, that what's known products would something think well that's Congress. and impact at how either about that. see already commentary being that about feel the the lot are would elements day, top already not some other just for we very to is in us. with medical through with end that something industry, pharma talking mind lot level the will prices a pressure for we President whether my that party work and reimbursement uncertainty customers of that either we're of and that tariffs our more and the

that that, term. lot foresee have a we we spot, momentum So the or long good or going and of near we're into don't a medium changing in and in

Elizabeth We'll Anderson now ISI. go of Evercore to

the in think for I the potential you year a change the help simplification the you evolving of time more. that line the be any by the in that contract on us parameters obviously and think see -- through sort of rest on has a of you some But for would obviously, of supply it been as line. think this of kind about then much about we efforts? nuclear one Can could And the mean, helpful. this Like the little driven you if maybe just sort are year time how that? Where rest that across that like bit guys. terms How follow-up of put I beyond, do talk quarter. was of we of trend longer-term help

Thanks. Yes.

cliche, it particular of our a This relates and a very a well. is absolutely us business. any core it not it's absolutely to broader strategy. has And much not part destination. bit It As is served but journey it's simplification, one a

we for I probably things. highlighted is fully the think sure within GMPD that quarter, than that some But for business I'm this size So there to pharma, do there's think, not I even of we pharma. opportunity relative more understood. can the

journey business. even in more and ways to aspects all our So efficient. going be an to additional enterprise, use to continue a challenge to find continue Throughout whole of automation our of there's here ongoing be to we ton ourselves don't

the we that, and from company learning parts of it different that in as testing We in other are we learn parts. introduced absolutely

So whether financial Within especially the I is with have an that's efficiencies. or there. one numbers, all think area and improved to talking manufacturing, up always about there's a lot always through of opportunity in opportunity automation, new manufacturing, anecdote through processes. this, the network little we're it shows our GMPD, distribution going And

talk we the this underlying quite business because that high making to all that We percentage quarter there efficiency that the an the in fantastic had of referenced more of driving well, learn safety we're to it where talked the about businesses to investments and best way are last a from out on throughout our from record as service, have right to also well, that we directly it's as quarter, in automation are really which home. team broadly. than have shows often this roll quality and process. working record we investments related the metrics about of all-time business, to we're processes to was we comments continue making but it's going than for other in improvements safety more have a historically, we're on better highlighting metric, the size our bit investments not incredibly to is important I that something we've don't financials, much much, it my some at just

value received have of So from lot we it. a

I think also But for still would we targets have. I expectation of come. to there's that that's more ongoing that the long-term part say continued

have that. that. reductions are baked these of in We types always of course, And to share into our cost customers wanting

The next be from we to of put the unfortunate timing On continue sight as Nuclear, in coming moly-XX is X back simultaneously some competitive, the so bit find some X also we'll to of derive we ways a reactors of line the so type try downtime. unplanned well. this news but plans, with typically of to to have that And that our product line or X. [ good do for up Europe reactors to of out down good as is of ] being some those week a pretty bottom

that volumes take come a scans. believe end usually course, quarter, of of will for will of of to have line of is of be to needs to indicate a weeks, a then So this process of pretty that up the types of impact sight will course for these Starting because, that cardiac is the the procedures. over resolved the more of for this about that's be patient significant X-month product next couple it us, this we This quarters. back within October. most month and type We more the low a seems pretty good this energy type come couple scanning of

full So will quarters. are reschedule this implications fiscal I couple in to a beyond understand doubt year, that. next to we the of patients but that of it's early bit it expect But go the still the these

on pin the other the not segments. for a year for have full guidance put we to our changed that, Just

of a As was cadence timing or this observation a result only.

Grosslight, Citi. Our from Daniel next from is calling question

you mentioned speaking, curious the was Just soon. in is public broadly competitors couple on I a in if the to increase an program. rumored VA of as the competitive intensity really, a of this seeing loss going you're your GMPD. And question more one be regions of specifically segment, within

Cardinal Yes. stable My about to That they've business commentary products was will environment. in VA attached low be past. low the the quite talking margin. you're a it. been brand as It's competitive relatively and same

same that much that something there's liked it's we kept to would have value have time, the not it, other customers. So but as as at associated with with

space, see anything rotation. just within this customer type that, don't than different I So of normal that's see we what

Charles TD from Rhyee question next The Cowen. of

since. and you Jason, health hurricanes of is you -- is a just of think, distribution that of hard are clarifications. And just made those everything and deferrals cancellations utilization up of forward? care comment, is about procedures. has costs, into related guide? maybe to Just kind saying level the couple hurricane-related back that to quick picked the some for maybe related of embedded assumptions kind a the I are utilization Are And also of kind your then going what already

Yes.

was it well. meaningful GMPD. So at that's what be I that for that would highlighting indicated when but that of Utilization to and talking anything quite the utilization was is say us that, customers is because I hurricane what our it has the pharma not which just I type as was I because that into normal GMPD is clear, seeing was is utilization are second been was And guiding wouldn't about -- as not I we're say I strong that your on all managing both question, we're a part side, environment. the which of stronger, pharma think leads for weak.

from normalize would much it -- X normalized and of Aaron, basically the in which consistent the of heard nature, would utilization. QX when long-term you our more what you level COVID timing more is earnings that type be things for So be growth, as normalized we're of with, to guiding effectively with guidance. consistent It's for what

Wells from today question last Stephen coming be Fargo. Baxter from Our will

kind one guidance. the last cleanup Just on pharma of one

going all broad the the the annualization should largely this strength quarter about on this largely based the into think appreciate seeing COVID. here. the that by driven in favorability about we just differences we the not QX it's to business? EBIT the the very continue I saw strength cadence guess the I seeing of keep first in So when that comments as is think you're of there's we in about balance Or Do to favorability underlying as and some raise that of year. the that line, $XX clear in the we think million

Yes.

depends about. it we're pieces which so talking And on

of in about terms talked that of driving growth elements what's the X the the business. I For the

of element some some part as was be underlying Qs also growth. quarter's favorability X first favorable quarters broad for I is to this would I'd of mix that growth. more I X highlighted highlight the And be positive, highlighted volume that levels negative. our normalized The would was

quarter, this more it's favorable. So neutral was particular it

course, reductions continue of So other. or And still relevant cost that in X this. but of of that's thing not type normally the the all the then, does smaller pieces, in direction our ongoing is the

performance. modest quite levels baked the track headwind into the all vaccines and very high peak It here now. for very, ex more will We've guidance of combination that expect level, confidence. But down in seen be certainly it's We a impact normalized But more we of this anticipates will pretty second that. a COVID come that's COVID tightly. normalized our quarter again, piece except So this. that, with

much. you Thank very

questions. the no As any call over further remarks. there turn Thank are back I'd Mr. you. to you to closing for additional Hollar, like

Yes.

Just Again, to raise more quarter to thank forward after first looking continuing the our and position start to great this We're year, our significant business, thanks you strength, pleased momentum be our that, and the again an only a especially for in a joining to us With morning. largest, resiliency the excellent . our year. broad and day. business. throughout to showing broad pharma updates have of most guidance give you,

a a and day. conclude very wish day, goodbye. conference. your today's attendance. will Thank you We for Have good That good