McKesson (MCK) 1 Feb 232023 Q3 Earnings call transcript

Welcome to McKesson's Third Quarter Fiscal 2023 Earnings Conference Call. Please be advised that today's conference is being recorded.

At this time, I would like to turn the call over to Rachel Rodriguez, VP of Investor Relations. Please go ahead.

Thank you, operator. everyone, Third welcome, Earnings Fiscal and Call. afternoon, to Quarter McKesson's XXXX Good by Chief Tyler, Britt I'm Brian Today, joined our Chief Officer. Vitalone, Financial Executive our and Officer; will by Brian off, Britt, move to and will a followed then lead session. question-and-answer we

such and forward-looking concerning and Please on SEC to website factors the presentation section the slides will to filings about in statements forward-looking results. forecasts our at statements Risk available cause discussion for actual that McKesson's risk periodic as Today's today's our refer cautionary differ include operations future information earnings release and could investor.mckesson.com from materially of additional statements. Factors to our in results our those

measures non-GAAP will also be that we can results financial release webcast, found updated discuss in about quarter today's including summary assumptions. presentation a measures for slides GAAP of presentation to the slides. The and earnings results this Information our those of and include during a reconciliation guidance

me to let it that, over Brian. turn With

Thank terms Today, we businesses. company everyone, you, progress to our afternoon. another quarter the XXXX fiscal operating our growth, call third It quarter the in American overall underscoring make North for on strength results, our signals and continue profit Rachel, company continued significant joining solid reported of this adjusted us our we and with priorities. in thanks, also stability of

for adjusted quarter of third XXXX $XX.XX our raising business range range an to outlook, guidance and from updated $XX.XX. of $XX.XX performance result a As per fiscal to diluted $XX.XX are our to earnings share we

on financial Then strategic quarter. third provide made going performance across During to in progress four the the our details Britt ask I'm we've today's call, additional I'll priorities. to highlight our

crafted years we As ago, strategy with priorities our you and know, our stakeholders. a enterprise few our shared we

capabilities, capabilities. increasing are add And growth through on of our central to our have both the differentiated areas not long-term with are aligned have have our businesses we We're deep we to and our acquisitions that our We are to and strategy. where divested we that portfolio invested and evolving organically strategy. focus expertise

to grow against priorities is advance expand progress of and and people a efforts evolve our date sustainable ecosystem Our our by important differentiated towards the to our and growth. portfolio and biopharma these core culture, focus to and our capabilities, services oncology company underpinned intentional on commitment execution platform

a to business. the our businesses and show to of cash solid strength free The generate and continued us growth core invest strong the into sheet ability distribution flow, which externally and internally balance provides

focus organization. is community Embedded giving that. and, for engaging with first is recognize operations McKesson impactful on our important culture. associates, Team McKesson provide an I'll we to our do advancing to daily continue people We in purpose, to start and and priority, importantly, to ways back that outcomes our our our for impact-driven most is all. health the exactly

third XX,XXX facing America the we where food had Community to Team another volunteered successful quarter, hunger. support that Day, to In North across members provide nonprofits people of McKesson Impact nearly

in million Tuesday, charities. global McKesson national McKesson's McKesson of matched the generosity local, a that also to ultimately where distributed will by annual and $X.X which in donations, employee held Team Giving be its with X,XXX resulted portion Foundation,

community donated outcomes to outreach one workforce diversity more addition for increase improve McKesson help which progress education pharmacy from our and range the five the million duration, years support in health various grants, In by pharmacy These to vulnerable employees, programs. to to populations. made Foundation $X school schools and will than overall

lead health business transform we our dedication, their to vulnerable in hard student team of outreach innovative their and our pharmacy to believe our patient-pharmacist which our as I'm equity for impact partnerships proud talented support, our McKesson customers innovation respective school areas. outcomes populations work is these Foundation positively communities. and enables patient the will partners, development The improved funding that help professional community through will interactions, and and

evolve Our next grow portfolio. to priority is the and

tightly We where with exit businesses have our have our continued opportunities. we led European handful best several the the of last as to evolve growth to This and as is capital capabilities, us ensuring grow the aligned a well decision our that to over region smaller deployment years.

business XX our XX the have We not to strategic European which yet remain have exit for committed in in. country on the progressing and We're the to is only we alternatives of operated plans region countries successfully our exploring we divested. Norway, exited

provided invest our that It's next expand actions These our support or areas oncology us company aligns to allow our look resources on long-term flexibility which with to and to our priority. biopharma our internally us strategy. well additional ecosystems, focus to externally

meaningful communities new We two Nexus by footprint New are as care comprehensive healing have Mexico. our part practices The journey. the oncology oncology Care need more the in that exemplified ensure helps receive addition care January expanding XXXX. their wide Oncology can and US year-to-date. X, announced biopharma and of treatment to specialties, and ecosystems The California they offer with Network conveniently U.S.'s progress now enabling investments patients Health These their in geographic strategic a during made the organization, expand practices, Both has McKesson in made US of its continued of management Network, largest range entire local the as that Epic Oncology practice recently of

in to of Sarah Research acquisition by we're well ecosystem. that and joint the substantial as with ecosystem. Cannon the as oncology new bring development the I'm Institute Genospace we've pleased And with excited our overall oncology opportunities of expansion venture our our made the progress

we the our the Pharmaceutical further of growth strategies. as supports progress solid segment long-term U.S. performance This

and and to evaluate opportunities to invest, business. internal evolve grow continue to will external We to this

platform growth. another In our addition capabilities, to of and our oncology assets biopharma services area priority remains

stand-alone than that several last each on valuable we've separate solutions. -- assets the systematically complement and of as an acquired and other ecosystem more Over each years, are that built complement together

expertise improves patient real of ultimately which impacts reach, leverage and and assets outcomes our to clinical these affordability better lives. Together, technology medications, and access network enable

pharmacies. started deserve. building been we We've more acquisition be this processes help in of value-added with give to right over can that their We integrate seamless experience gave the the they need to able the the so and business which into and XX,XXX us RelayHealth, workflow XXXX customer services connectivity

We providers, integration then some for friction acquired the of the XXXX. solution a long-term with the partner alleviates network CoverMyMeds, CoverMyMeds' McKesson our patient. overall XXX,XXX connectivity in The providing automation of access of by out workflow improving expanded providers. This over of

our In that technology so brought a proposition enabled get as end-to-end these suite providing and clinical more therapeutic our from of can we prescription solutions more they scale migrate recall, individual help businesses This to business to RxCrossroads enhance solutions. us find and support brought program, patients we to and expertise a XXXX, patient and on we value already quickly. together a expanded started appropriate offerings many in comprehensive new areas. services therapy the hub had, across

plans drug and its insight really Most analytics acquired by savings drive Rx employers more advanced capabilities. outcomes recently, actionable just utilizing we than price It's Savings reduce that can helps for members improve patients. gives health health guidance prescription It Solutions, and costs which and transparency.

biopharma prescription and integrated together, Relay, are CoverMyMeds, patient Solutions, affordability next-generation adherence technology provider businesses manufacturers and and access, these RxCrossroads, providers, into workflows. for McKesson bringing automated payers by solutions our really Savings solutions connect pharmacies, So, Rx that

medication and transactions pharmacy on approximately annually of access behalf to processes now patients XX affordability. CoverMyMeds billion support

to innovative allow provide to continue customers. and We to McKesson invest unique and build capabilities in that our insights products

these in And in our our the XXXX fiscal reflected in as well investment outlook. dollars as are results segment year-to-date

growth. growing invest our organically to continued we us new this the and and quarter, investments solutions network The products connectivity, of to our position third the sustainable the long-term as customers. for expand meet in and During enabled we demands have segment develop services

the grow most investments opportunities invest products patients. to to and to also and the continue resources evolve we're the focused assessing our portfolio that we bring the are and to platform, value While streamline ensure always on

This in momentum continued and profit segment to years. this prescription to adjusted trends pandemic coming of fiscal COVID-XX more strong manufacturers to These brands in factors our bring growth business utilization improve. our to saw recent platform as continued operating substantial biopharma led out

The We remain the to accelerate to over in into And this profit will and overall of reinvest XX% this financial growth. trajectory confident this fourth company business our biopharma the been in have ecosystems largely segment business growth due target in in the which possible we businesses, made investments our continue long-standing to and are term. distribution priority. our oncology our long sustainable core

region, been As the businesses. able we we've our American North to on exit efforts European our focus

our with help more a operations. core speed to to us Our leveraging these or platform, more it the act resources optimal succeed. that's continuously Whether talent evaluating are have ensuring we and efficiencies and drive teams allows agility in to businesses how modernized

McKesson long-term Team combined for North prescription to patient reinforces businesses. has our work Solutions utilization of segment process Medical-Surgical fundamentals The and U.S. growth and The with strong. distribution that remains confidence and American our streamline Pharmaceutical positive in our volume trends, our efficiencies, done

In finalized. been business, distribution contract excited the our Health our has with that U.S. pharmaceutical to to XXXX partnership Pharmaceutical extend June announce through of I'm CVS

exemplifies partnership our capabilities. long-standing further with CVS distribution Our of value the scaled

underpinned the to leading believe North American become our operations flow core business our of to significant innovate distribution priorities by generation services performance The in and business, strategic oncology We to sustainable distribution businesses. enables our our we've evolve against diversified culture, growth in and in McKesson people and company. invest focus care a services biopharma continue grow health allowed our on that's the strong strides ecosystem core to the cash to made and

also address Targets In change greenhouse a Based Let contribute received gears to its emissions. me bit. reducing just that shift gas McKesson to for its progress January, environmental the recently McKesson near-term sustainability. climate approval Science by targets initiative made has

change. of helping climate to response our serves purpose business fulfill We while forward target company these for technologies as outcomes in of example that related also advancing to will SBTi climate sustainability enhancing another all. and advancements and address to commitment our look health our environmental the leveraging our challenges to Our

updates initiatives provide We targets will, our as to on on ESG-related calls. continue ongoing future our of these as to progress on well course, stakeholders

also in one Newsweek be of committed We're employer. and honored XXXX. more inclusion. ongoing equity Newsweek to for recognized diversity, advancing efforts America's we're diverse recently organization, an inclusive was that McKesson's and a quite recognizes diversity As workplaces to by greatest McKesson as

up. wrap right, me All let things

a care services solid in reflect with quarter performance, strategy as highlights We the a of also businesses a third dynamic environment. our third company. operating delivered our employees demonstrate portfolio McKesson's diversified of continue resiliency as together we our health pleased our It and in exceptional the on talented dedication and growth are execution solutions. our to their results and as quarter team results and

I'm financial results. the additional on your it to over With comments all you for to going toss Britt, Thank for that, time. you

Brian, afternoon, Well, thank good you, and everyone.

the In delivered Our quarter financial North third continued strong across solid reflect quarter, led U.S. Pharmaceutical growth results performance and priorities. we momentum, fiscal segment, Solutions our segments. and the advancing American by company fiscal execution strong third in our Medical-Surgical solid

grow investments we diversified continue focused our through and oncology And in biopharma portfolio and evolve strategic services. and to

As adjusted for fiscal are outlook a narrowing share in solid confidence the a $XX.XX. result our performance financial and per of our increasing $XX.XX underlying and range business, year we full to of XXXX earnings diluted to

Before out I point to XXXX that third on fiscal GAAP-only want our adjusted details quarter our more non-GAAP in impacted two the provide quarter. items results results, I

rate in the recognized of proceeds of included pretax quarter. First, of we from share our settlement. third a second, This gain in And antitrust income interest We sales cost termination third related we $XX gain the other of to within under fixed the million class gain of $XXX is received quarter. million recognized action swaps. an the

resulting in completed Let's a our Pharmaceutical $XX.X billion of segment including quarter Consolidated third now product national customers, account resulted year-over-year basis. increased driven U.S. non-GAAP by increased on growth the results the lower European International in specialty divestitures segment, McKesson's the review X%, by partially revenues of businesses. offset of to move revenues volumes, retail a from adjusted from

of XX%. Excluding divestitures, the our European increased operations, impact revenues including completed business

billion Gross for XX%. quarter, a profit was the $X decrease of

the in operations largely primarily International divestitures, of U.S. Excluding Pharmaceutical divestitures a decreased in Operating driven profit increased and completed gross X%, the result of growth in the business our quarter segment. impact European XX%, by completed segment. European expenses the

impact the completed the our operations, expenses Excluding divestitures, increased European X%. operating of business including

the driven TRA, agreement, tax by to American Change benefit Operating growth to businesses profit segment. was of a or due across the X%, U.S. pretax $X.X strong $XXX million early of increase billion, led in of the a Healthcare with by receivable Pharmaceutical termination and North related performance an

portion generally to TRA of by McKesson McKesson net of Change a required the As as part the entered Under from pay a to joint formation joint Change the resulting reminder, was was the a a TRA, amortization venture of tax terms party of Healthcare. venture. the with savings

income XXXX, prior recognizing agreement terminate similar million. Change results right with its the benefit in both our other items, of is the our exercised Consistent paid and this to operating $XXX adjusted and quarter. reflected in October McKesson In practice in GAAP

the below to rate rates interest line, our Moving higher to the the for in tax quarter. we impacts increased And was million the $XX in due region. derivative portfolio interest expense XX.X% as effective and primarily quarter, exit the unfavorable European

As effective reminder, our rate of the quarter-to-quarter, our a driven vary tax timing items. of and can mix tax income discrete by

For the rate to in of expect to range full continue tax XX% year, an effective we the XX%. adjusted

consolidated Wrapping our up results.

increase Overall, XX% COVID-XX-related decrease quarter the resulting per outstanding agreement Change, the XXX impacts adjusted million, quarter shares third prior adjusted increased share share X%. compared $X.XX, share of of diluted to diluted the an approximately Third diluted the termination from a weighted early per excluding was tax of repurchase average earnings and items X%, receivable from activity. from earnings year. the benefit When with was

our including and conversions. Moving offset partially from which quarter billion, increased profit specialty branded of to found resulting included retail higher of visits, an year-over-year, branded Slides generic volume customers, Operating on volumes U.S. were increased in now X% to XX which increases from third and with oncology, revenues X price national increase starting account segment where $XX.X can to products, pharmaceutical increased million. Pharmaceutical, through be XX% $XXX patient by strength results,

profit programs, per $X.XX and in in delivered the volumes excluding products impact of in quarter COVID-XX compared prescription and in to distribution, U.S. specialty visits. by quarter a improvements vaccine X%, of fiscal generics the distribution U.S. and providers government with $X.XX third growth our Pharmaceutical segment When to benefit approximately operating per systems, contract COVID-XX growth share distribution contributions of share vaccine provided Our the XXXX. of for health driven oncology pharmaceutical from of

segment, technology service increase year-over-year, faster Operating Technology volumes, Solutions logistics In were increased revenues driven an $X.X billion, third-party higher the our prescription in Prescription by and of X% growth revenues. business sustainable profit increased we services and organic in by partially X% our growth continued and offset to for $XXX long-term products position by affordability solutions, million, growth. investments access driven as adherence

of U.S. the the offset to Medical-Surgical program X%. were supplies ancillary tests on COVID-XX business. and for Revenues $X vaccine of moving a Care Next, Solutions. and COVID-XX volumes billion, the Lower of decrease kitting government's storage in Primary partially distribution growth

storage fiscal a million. The contribution in Operating COVID-XX $X.XX supplies contract from distribution profit U.S. quarter to compared $XXX the benefit of of $X.XX and government increased provided share our the per X% XXXX. as the tests to of with and for quarter total per approximately the ancillary third share kitting in

from tests partially ancillary supplies Care growth COVID-XX segment Excluding favorable COVID-XX storage Solutions distribution XX%, the impact of program. of the of Primary growth contribution activities, and lower COVID-related delivered operating Medical-Surgical and by driven items, profit kitting U.S. of in the vaccine business the and from lower which volumes government's sourcing offset

and decrease and $X.X profit a were revenues was basis, million, me an of our let XX%. operating were $XXX revenues XX%, decrease results. Next, million, adjusted operating On of XX%. a billion, decrease International $XXX of profit billion, $X.X FX a was address

Third reflect year-over-year the divestiture from European quarter the results effect businesses. of the

with agreement year-over-year, Moving termination expenses early Corporate million, next of a lower opioid-related driven tax a and corporate. Change were decrease XX% expenses. of by receivable litigation the to $XX Healthcare

termination expenses receivable agreement, from benefit early tax the Excluding the X%. of decreased corporate the

litigation approximately expenses the incurred XXXX expenses that million. we $XX will quarter, we third Additionally, fiscal $X million litigation opioid-related of be and anticipate in opioid-related

XX. which can Turning found now on position, to Slide be our cash

and in equivalents. by cash and can flows working the each position, ended We As cash impacted cash resulting $X.X from quarter-to-quarter. and timing capital with be quarter cash a our billion vary metrics reminder,

including investments During made biopharma growth capacity, the first enhancements and investments our priorities, million the our support and $XXX and distribution we to regulatory nine of months data of in includes capital oncology year, fiscal which automation center analytics services expenditures, and ecosystems. in technology,

months XXXX respectively. billion first fiscal billion, cash free nine and and we the of flow of XXXX, $X.X For $X.X had

the M&A activities, venture Cannon Rx $XXX joint the Research acquisition we of Savings with towards a including and Institute Solutions. the allocated During quarter, million Sarah

returned including included billion returned repurchases. cash At had the of shareholders, billion which our Year-to-date, also shareholders, remaining $X.X and end of in repurchases $X $X.X we We payments. fiscal to $X.X we share of repurchase to dividend billion our of quarter, authorization. $XXX billion share $X.X billion share million third on

can with begin XXXX our our XX on to presentation. fiscal of me Slides assumptions outlook. I'll And full found list through supplemental our Let in turn A XX our consolidated be slide outlook.

X% to to fiscal X% growth assumes growth operating compared revenue as X% Our X% to and XXXX. revised guidance profit

$X.XX Solutions four kitting segment; the $X.XX related to of contribution termination $X.XX and Medical-Surgical distribution includes items: to approximately losses tax to $X.XX U.S. associated with Ventures of $X.XX benefit a the our McKesson COVID-XX to our segment; storage net and ancillary Pharmaceutical $X.XX government's to $X.XX $X.XX U.S. investments; supplies related tests in vaccine following related guidance to agreement in the receivable attributable and Our early equity Healthcare. related the with to the Change distribution to year-to-date

and and our of a supplies government U.S. As extends for with distribution reminder, July the of kitting through COVID-XX of contracts XXXX. vaccines distribution the ancillary storage the

associated with corporate million, with We million the year, of fiscal the the which of the the in quarters tax which agreement receivable recognized early includes range first third Change $XXX to the three Ventures' in the expenses and we of McKesson investments, termination which from in net anticipate $XXX was quarter. benefit Healthcare, equity losses recorded

guidance. As portfolio practice to in been include not will our has continue and a our estimates reminder, Ventures McKesson

Healthcare, Ventures receivable X% to increase gains of termination the growth Change to net XX%, anticipate items, operating the benefit profit and from we and the agreement losses equity profit COVID-XX-related from with impacts above early investments previous operating tax the target. McKesson excluding the with When associated

be The the the compared rate to below million. interest prior to anticipate expense environment. $XXX range Moving guidance line, increase higher the the we million in interest to $XXX of reflects

Our outlook our Based $XX.XX per for the previous quarter to anticipated from $XX.XX. XX%, unchanged. full year third earnings $XX.XX range fiscal we're rate on effective range our to to $XX.XX share increasing adjusted of remains our XX% approximately the guidance for results of and narrowing year, tax and

the fiscal from agreement guidance earnings indicates receivable tax Change When the net gains and diluted both losses fiscal over excluding the the results termination XXXX the and with growth impacts COVID-XX-related early equity and XX% our guidance investments to XXXX Ventures of of for Healthcare, benefit items, McKesson XXXX share from per fiscal approximately year. XX% prior adjusted

Moving for fiscal to anticipate we outlook profit segment, to Pharmaceutical now increase U.S. XX% reported to the increase XX% In revenue to X% to XXXX. operating segment the and X%.

As vaccine to distribution earlier, to includes approximately related U.S. $X.XX for our outlined the outlook $X.XX COVID-XX government. I

to X% excluding the distribution we for the profit growth. government, When of COVID-XX anticipate operating X% impact U.S. vaccine

with We are the the pleased momentum segment. of

stable Our through Pharmaceutical continues deliver to business and execution growth focused Distribution operational excellence.

few a strong highlight the performance. the factors to me of segment that leading Let are

utilization momentum stable which and we've our prescription observed retail offerings. the First, system in growth, health underpins

outlook our we oncology margin a which maintain higher for platform, Second, growth favorable delivering we and contributions. see higher

We oncology strategy. our against and continue execute invest to

we As Brian to US to and scale we providers practices our growing oncology network, capture touched and volumes. increased and continue add to on earlier, well positioned are Oncology

observed And XXXX, fiscal Third, delivering of was expectations. the for products have January, stability modestly efficient that scaled above patients. a supply pharmaceutical low-cost branded pricing and specific sourcing an customers through of we our to and we our generic operation, month

branded second, on this than modest to pricing from While first, pharmaceutical benefit would of anticipate years. benefit we two following this our contracts the a fixed arrangement; future as modest I repeat from more less fiscal make are fee-for-service and comments: XX% not in now remains higher historically, would material the now manufactured XXXX impact than results increase,

strong Our to U.S. exhibited well increased positioned is growth Pharmaceutical performance, outlook. segment fiscal the has and leading XXXX

segment provided, including the earnings of now that Investor growth I result X% Day. our that As grow above will the noted, anticipate we previously factors XXXX target a we that at just rate this execution our and

access and products Solutions Technology segment the adherence The differentiated affordability and products. within delivered services Prescription

both and differentiated margin. Biopharma We're an area Services will pleased strategic remain and remain and revenue growth faster are growth confident confident with this quarter. exhibit in profit growth higher We assets We our operating the in for and McKesson. capabilities. this solid important investment segment

provider transactions, connectivity across scale product breadth. and unmatched have We retail and

segment have this made. to commitment investments evidenced we Our is the by that

accelerate $XXX three approximately average, past the services. years, to invested a capabilities recent of and continue build into out. of products the year on existing and And acquisition Statement Arc organically we've new Over will the we breadth million Solutions

as also launches, of serve, the and third-party the mix organic anticipate The in as timing M&A. logistics pattern, and life further capabilities quarter-to-quarter. investment the resulted investments of we more the in of new We well internal technology products including cycle in products services variability performance have

grow to continue could further the to be and portfolios and business, invest we As supporting integrate product anticipate there charges we that infrastructure.

operating that of delivering above to of XX% our call revenue growth guidance in and provided to growth anticipate to XXXX. earnings at our profit in XX% XX% growth line We XX% and event Day profit initial May target the of XX% which the we with Investor communicated XXXX operating is XX% on XX%,

targets are well committed growth, for to we've We the growth and that operating strong communicated. previously we're positioned

X% X% to decrease operating the reported decrease to Solutions profit and anticipate we to segment, X%. In X% Medical-Surgical revenues to

includes to previously $X.XX and the and approximately of related our supplies government. for ancillary kitting the U.S. outlook $X.XX As storage distribution COVID-XX mentioned, to tests

Excluding profit XX% anticipate operating the items, increase of impact to we Medical-Surgical COVID-XX-related to XX%.

to we to revenues in XX% XX% XX% This to the and we to operating includes and contribution loss anticipate have transactions segment, operating profit from Finally, decrease that of by decline year-over-year businesses closed by date. XX%. decline the to International profit

$X.XX For per the months operations operating of approximately share, year. fiscal first fiscal anticipate XXXX, diluted the of to nine European we in will primarily contribute profit our $X.XX

Norway contributions for the operations our with Group. for PHOENIX includes held-for-sale This sales, the prior operations transaction completed and accounting resulting from in year-to-date contribution to

deployment. our conclude me review Let with and outlook a flow cash capital of

have and cash property other XXXX, which been capitalized In and is activities fiscal impacted of billion free $X.X anticipate cash of billion, to also acquisitions European software flows transactions. divestiture flow our to net continue $X.X by We expenses. approximately

flow $XXX As operations discussed impacts includes last our of quarter, from assets. negative free cash divested approximately million and guidance European our

remain committed good be of to capital We our shareholders. for stewards

We have categories. to capital take three and disciplined continue allocation think about a in allocation. We to capital strategically will broad approach

prioritize we growth investing through First, and by internally M&A.

our services. and We platforms growth These have capabilities. pillars biopharma strategic network oncology growth of differentiated scale are accelerating on asset and focused

Next, of we the will continue shareholders and of an repurchases. a dividend to And balance through a adequate of combination to third return our our strong is sheet and growing capital framework the share piece rating. by credit maintenance liquidity investment-grade underpinned

shares, Our to continues plans largely incorporate of to has third repurchase by completed approximately end outlook of billion quarter. $X.X our which been the fiscal

outstanding As we average repurchase the estimate million. to weighted be share shares of a activity, diluted $XXX approximately result

me consistently shared strategy take targets. reflect and growth growth fiscal reflect across with Day on and communicated to you our drive Investor the executed targets segment then, segments. a of we operating business and our XXXX on we At or above and delivered outlook commitment Since our consolidated profit level. a Let on a set momentum growth moment event, XXXX we've continued at that that metrics a on the our the

Some unpredictability execution strategy growth, including growth mobility, dynamics shareholder focuses contributed and growth we previously to materialized to patient disciplined have outlined tailwinds through return. successful and and prescription business as of macroeconomic maximizing that our the deployment volume recent capital on grow a and ability in that on

demonstration shareholder framework. creation further is of performance solid value the our importantly, More

deployment We and continue capital. on profitable growth efficient to of focused be

our focus shareholder on value on illustrates invested Our capital XX% return creation.

of we closing, with quarter. In third results pleased our are fiscal the

results We continued solid focused through to execution deliver investment. and strategic operating

confident in our Looking to growth. long-term ahead, ability sustainable we're deliver

will give Our we targets. profit on operating the disciplined framework growth growth strategy confidence and our us financial deliver

the And your for now turn questions. call you. that, the Thank with to operator over I'll

[Operator our first with Cherny Instructions] And of from Michael Bank comes question America.

organic Thanks I terms continued for that in a Technology it continues put the evolve bit, the everyone. of to you investment know you've Diving Prescription in assets make. into business Solutions place,

you of in level sustained the growth sales, last call smooth are will As not terms long-term the how of the you terms And ensuring think some I'd in evolve a that I your ability to of growth sustain we've visibility in rate. of own that business, successful to on much Street, working convert the, business your front the of to targets, the continue seen just quarter-by-quarter dynamics about on guess, pathway it, within can this how to quarters organic of the ability basis, continue on visibility on long-term couple investment that successful lumpiness and itself your of that into but out.

find two years new capabilities Great to let I'd AOP kick we for sometimes is we've this you And it projects. for And into opportunities off what me with continue particularly this pleased have find new strong this the business, been business. first. as be you X% of add ideas, reinvention, this invention, growth of reprioritization of continue revenue of question. got to growth I'll performance X% the business. year. year-over-year, we say Last

Day, a in see and we confident growth billion-plus market affordability pretty in segment. a at relatively long our But target access we think adherence. feel Investor is opportunity we we $XX runway shared this XX% this for and And

things that make in it. naturally there Now happen are may this business that

Maybe lumpy. was It our word that your your word. became think word. I was

underlying underachieve The Things projects some the of we pace the volumes. of of or like with prescription recovery expectations, success as partner exclusivity commercial loss overachieve events. of they their

be see mean, to that's significant completely business the this made years. over opportunity We of always smooth. mean, variable. the continued last those investments to opportunities Our I is nature that I do going investments, three not in we've and

this got and are sight, term. growth of that good disciplined to expectations is the process financial sustain long segment prudent sure we've make that those and investments line Our to in to make

of the we a a variability inherent do maybe bit and for seen that customer is And business would happens I of is Mike, this little our process quarter. customers, in things we in verification what annual just about talked usually one that we this fourth add have is that while the of quarter-to-quarter, lot and the

XX% What really of the I would XX%. we're the to in year that to you the with, that we to finish guidance balance are that you say, go May, we back is that what if the beginning gave you pleased at within guidance giving though, the The of now is year guidance.

develop It's really guidance we we're in said, that this the been, a rates year. variable with that we both that bit at seeing this business, of long-term while organically through and quarter-to-quarter, you line the we're we've gave gave target really but been that in as I Investor And pleased M&A, the little business beginning it's of investing the Day. at above

more you have the which little manage historically, seen term, it really rates when how bit over this you So with on gave look a at we while and above little seen basis of initial line variability beginning seeing long long-term we -- at target gave the year look annual at may that an than a we've it this and year. the the business, guidance the of we're the is we we quarter-to-quarter in

with be Gill And will Lisa JPMorgan. next

everyone. afternoon in I safe is hope everyone Texas. Good

comments you Just wanted to made CBS around couple that of distribution. go XXXX. to drug back would a with renewal the through U.S. be One

going growth Brian Just it within that new And that and made we as to know distribution, drug U.S. think was you margin Britt, nuance don't oncology want higher higher or or relationship? there's there. secondly, to comment anything that understand you're if to then see if the about I

that, to part to think any around of us business that At that point the enough you as seeing margin? improvement a basis margin guardrails the what big become continues could does grow. that that in kind about is drives today? how on Just what that actually give go-forward we're Or of

partnering work, a we obviously We've shared that had to were affiliated I proud has changed. providing -- the be We're time. been Lisa. incredibly work would not they we finalized support services CVS just Look, say a materially and last I we do them. with binding Sure. LOI quarter, that with for with we're CVS. long contract think that We've the

And so, to opportunity we're to XXXX. to thrilled extend the have that

each all In we we of call terms mean, think reinforces ecosystem it of because I oncology, other. an sort it

supports data, gives supports do us that the So, GPO us purchasing as and practices which like oncology. it more more we into to things network, bring power gives business. our It access

out and other each opportunity, oncology in think have $XX large reinforce oncology dimensions. well piece the quite here. the long ability and piece. And billion, of is in continue that assets really to the with so, that we've to very But scale in those our term us been position excess each progression succeed And of to a help the we market pleased we does the to in business

And and what Lisa, the last would the the value Ontada, through moving the Research what of chain. Institute two or add, up maybe Genospace, Sarah we're Cannon over partnerships through I we've with development done year

scale that's we earlier. The just years. coming that, we're US Network, about. very that adding And the scale Brian so, with to And going talked as more add chain Brian the distribution in up the by optimistic over scale, we're practices We're the have referenced to more the GPO scale, leveraging that margin Oncology moving value

Percher Eric be will Research. with next And Nephron

What may the drive the factors we appreciate you be Thank model commentary items 'XX. guidance or out have formal guidance and all that time, the at provided you. keeping I might year on I a bit mind this year? not commentary worth 'XX on relative you last you been fiscal long-term forward relative as that year long-term advance, helping year to 'XX of in in may guidance little next above/below to those call fiscal believe targets. would

Thanks tried for my it address a capture but here. little that to I question, can comments I of in the Eric. maybe

of prescription that growth the third seen be our to we've in We X% stabilization of what really stable. to mobility patient impactful seems could we think quarter, we that in handful items -- with a and we about utilization volume seems quite I be prescription think about there's Clearly, of forward. so talked about last go transactions quarters. as few and line be saw the in roughly

just acceleration. more Certainly, biosimilars to We're We've coming market. got to two see biosimilar the that are over market coming. are today and more going dozen on

that could that very the certainly back of announcements be we say integration, and recent and the our Some the growth think that impactful we make a size way. in acquisitions really of of the we timing timing positive I'd investments made, up. some

COVID, And go the going trajectory pipeline then that's are in we there XXXX. The think a that, to I other handful think of items. into here of commercial

go and goes of that to XXXX. doesn't It mean those are contract away. products July going Our through services

And have of will be pace that the strong certainly and we balance very sheet. So, impactful. a trajectory

balance way, or, the here us on deploy right sheet returning capital-accretive to to as recently, well. clearly, that had to as to acquisitions more strategy. seen in you've opportunity we do expect very organically We continue shareholders a whether that towards that's are And invest

example. terms items. of there's But things against So, trajectory go going positioned on. There a the we we're feel an really of are other things like well that as all lot of way could really COVID of are positive in those some that

We've open, any Yes. not China 'XX dynamic, I and way, thoughtful Did inflation, 'XX that We've impact guidance. a we workforce I and as dealt played it's be backdrop got right? remains into we've macro obviously, mean, those with. as our I think, assume material out go closed, really China think FY contemplated in dynamics well. that we'll successfully, the bit about

be Cowen. is open. Charles with line your Charles will next And Rhyee

earlier, product what's touch I if to strong out just the Is to any obviously, higher very wins. little deeper about Medical back well. business. new segment. dig to is that. out But there And its Hi, COVID, don't think of can customer little wanted per mentioned growth would and a changes -- or but you the that full than know as a their how you we because the I Or se, Primary here. think the thanks in is wanted Eric's driving that, for I customers about taking kind to question question. this is my understand a -- about And growth Obviously, there think you thinking about 'XX into bit be a because helpful. call mix? go And should maybe volume we I on can deep Care probably your growth that little XX year. Anything it? maybe just

ahead, to want it? you Go take Britt,

we and in of drove what our would really the that's say for had programs, this a growing sourcing that programs And we little Day, last Investor long-term several year. quarter, the contributor our some some At are the now. really in Certainly, I years been certainly a we faster really bit that the volumes in identified obviously, above strength Yes. seeing were that have sourcing rate the trend that the been talked target around than We of strong. XX%. a quarter. about good we've

as would But going to you really think I guidance for for forward, around that seen about the long-term I the three think you clearly, rates anchor growth we've given now last we've 'XX. the business. growth within that Primary And good think going years. of are They rate forward. rates. we supportive business Care is that good growth Those margins four to the this going are really be XX%

Deutsche of from question the Bank. line the And next Hill with will George be

the check I Thanks talk guess, of into if I for going about is XXX kind the quarter. I'm taking sustainability you're core? at I of the strength to assume your -- X% to the double for preliminary business? to think you're in COVID, year, ex you. the if something question. which pockets than the growing seeing this, faster segment Thank the of can what's basically the or at going Pharma I about you of that annualize, points my for expectations like guidance going on And have full ask you could it my balance year basis we you that Britt, versus greater math driving is least look for which at look

Yes. Thanks, George.

items, to raise the year to segment. of with the X%, the full So, we're we the COVID-related and very X% pleased for performance guidance did excluding

of I number there's got utilization. talked here. As We've a really stable my comments, prescription in factors about

As seeing strength in I quarter. our -- third X% we're saw based data about oncology the we on seeing We're in platform. certainly mentioned, IQVIA

value talked certainly chain adding of we're perspective. from moving that about that. factors just the we practices think that and some driving I are We're up the

growth, systems. we're health And in as providers in well stable as specialty growth really seeing

things so, all previous Day that that expecting growth you now reaffirmed of talked also about target well. we've going that's Investor that And faster quarters. that rate performing to at are why gave we're we're grow And those quite long-term I and in than we

would So, positive you I previously. of the that's long-term target faster we're seeing are expect, growth we why really think gave than rate than contributors. And things all faster we growth those that X%

Valiquette with Steven will be Barclays. next And

taking Pharma Good upside in around color afternoon. I thanks the in just Thank from flu Medical the the separate how a for much or you key the earnings of COVID my are to have in comment the segment factor may quarter, And the able been helpful question. streams, on guess, profit segment? all you. either

kits that illness does year. started that flu -- extension been the this not previously, season there talked a We're also It's really about some illness As our in in certainly first drive seeing first seen stronger we've about that the It was to season It not fiscal but talked only material visits. from an driver combo flu is quarter. vaccines our We quarter a of enterprise. has the season last and is driving more test which kits, our we've started historically. XXXX. test which

to a to more is in have, certainly does other that and it's traffic It driver not in only certainly So, enterprise. that but material Medical beneficial the not drive products we foot and Pharma. services

from Jefferies. Brian Tanquilut question next with be will And

comments looking question roll-up of up the Lisa's I like side. Thank sounds there. you, more consolidation with It you guys get to seems it like guess guys. follow on and on just and Networks, Britt's aggressive are to Oncology oncology there's the

So, in thinking opportunity as we in into years? catalysts how moves should about or do I I opportunity should see you Or Sarah partnership think thinking space, you. maybe could that be that? with network bring mean, the chunk of that big of be the about and we coming like a an Thank doctors new big the -- as Cannon

we've business for a Ontada the priorities the years. innovation of an anchor, are And you growth the oncology key Well, Genospace within management identified addition around and one saw we've most various lot last company and the Sarah clearly and important venture. oncology the talked capabilities as anchor, is joint the GPO done distribution about over and practice clearly ecosystem, there Cannon of our as an on recent our

happy a been to a really of So, of area. the the these it We've we and provider in We growth be this of differentiation, of to to very think a do to add continuing sort US as our add add McKesson Network. in partner the way. Oncology things to all disciplined service attractiveness

within works the our future. to model acquired quarter we continue a be opportunities part that that, to model. that able and practices we into clearly model last that But operate to And and of have we actions can us we and expect that that's have expand. it's grow to for need continue think We consistent any this indicate, our

And we question, more for have time one please.

Suisse. Credit That the come from question with A.J. of Rice line will

Maybe number more just look biosimilars. out on bit and guess Thanks to for development get is business I I today receives significant on everyone. it have benefit a know you'll if derive. but to possible, if patient expand, you we it the depends your next administered over as years, in few how -- around converting. of that how how the little your and drug comments it's specialty you the to a much

that is time? to And the about to competitive a little that and there this hear and then But expecting way you that landscape another bit number see specialty of point over positioning? us maybe how a talk of progressing Can a aspect of sense from you your is players grow. resources at of they're put how give a you more behind assess we

a We do Well, date, we guess, I opportunity HUMIRA. years. a think exists past to really XX today's on holds of us. promise. of XX I maybe long-term to front saying It the lot continues from been mean increasing start because count strengthen, be I would by there's the think contributions if in could biosimilars, the you news this has approved that biosimilars XX pipeline and launched, over

to are things like the impact of adoption, the going on interchangeability. rates those dependent the of be And really

But us. still support continue the to will majority biosimilars, this the experience the more rates have will services matter. channel be would in get we accelerate. and Part to we with more of at as being that ahead adoption market is Part is impactful. look would do we those I continue we biosimilars Part offer and provide clearly, B us, opportunity can B, think think of to people more young, be think hopeful to I less For D I

comes But with. pricing market it to and on like the strategies things that adopts the biosimilar depends innovator

think we our playing will in So, in good we're they biosimilars for But dynamics the I believe do very forward. of market. always like days, and business be lot young there's a are a going early model that out still

Carrie, Okay. Well, call. for evening. this want you, to facilitating this always, call thank operator, our joining for everyone, Appreciate, I our as the thank questions. thoughtful

momentum Let McKesson in third quarter it's And me just wrap continued business. really up driven results. by our saying really by delivered the good underlying

and I'm diversified small confident our everyone, our Team execute I'm leader so care health Thanks as evening. and I and the in dedication, joining without on a for growth member our proud to a services Team great all have is and their actions for you long-term they customers, for be this every partners again, ability take priorities help possible to everyone patients. McKesson, like of the drive our sustainable call. consistently to a company. McKesson. of company thank I'd our None big our of day hope to

call. Thank you for joining today's conference

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