Sign in

You're signed outSign in or to get full access.

CH

CARDINAL HEALTH INC (CAH)·Q1 2026 Earnings Summary

Executive Summary

  • Strong quarter: revenue $64.0B (+22% y/y), non-GAAP EPS $2.55 (+36% y/y); GAAP EPS $1.88 (+11% y/y) . Versus prior quarter (Q4 FY25), revenue rose from $60.2B and non-GAAP EPS from $2.08 .
  • Material beats vs consensus: EPS $2.55 vs $2.17*; revenue $64.0B vs $59.27B*; EBITDA ~$1.00B vs $0.84B*; breadth of strength across all five segments drove upside .
  • FY26 guidance raised: non-GAAP EPS to $9.65–$9.85 (from $9.30–$9.50), adjusted FCF to $3.0–$3.5B; Pharma segment profit growth to 16%–19% (from 11%–13%); Other segment profit to 29%–31% (from 25%–27%) .
  • Strategic catalysts: completion of Solaris Health acquisition (Nov 3) adds scale to urology MSO; Board approved $0.5107 quarterly dividend payable Jan 15, 2026 .
  • Watch items: CFO flagged tariff cost step-up in Q2 within GMPD; interest/other outlook raised to ~$325M from ~$275M to reflect Solaris financing, partly offset by Pharma segment accretion .

What Went Well and What Went Wrong

What Went Well

  • Broad-based performance: “strong double-digit profit growth across each of our five operating segments,” driving non-GAAP operating earnings +37% to $857M and non-GAAP EPS +36% to $2.55 .
  • Pharma and Specialty strength: segment profit +26% to $667M, including contributions from brand/specialty, MSO platforms, and positive generics program; GLP-1 sales added ~6 pts to pharma revenue growth .
  • Growth businesses: Other revenue +38% to $1.6B and segment profit +60% to $166M; theranostics revenue grew >30% within Nuclear & Precision; OptiFreight® revenue grew >20% .

What Went Wrong

  • Tariffs: GMPD faced a “slight net headwind” in Q1 with a larger step-up expected in Q2; despite segment profit improving to $46M, margins remain thin .
  • Higher interest/other: outlook raised by ~$50M to ~$325M due to Solaris financing, partially offset by segment accretion; quarterly interest expense rose to $80M (from $32M y/y) .
  • GMPD quarterly cadence: management does not expect y/y profit growth in Q2 due to realization of tariff costs, with profit skew to Q4; underscores near-term margin sensitivity despite structural progress .

Financial Results

Consolidated Results vs Prior Periods

MetricQ3 FY25Q4 FY25Q1 FY26
Revenue ($USD Billions)$54.9 $60.2 $64.0
Operating Earnings ($USD Millions)$730 $428 $668
Non-GAAP Operating Earnings ($USD Millions)$807 $719 $857
Net Earnings Attributable to CAH ($USD Millions)$506 $239 $450
Non-GAAP Net Earnings Attributable ($USD Millions)$568 $501 $611
GAAP Diluted EPS ($USD)$2.10 $1.00 $1.88
Non-GAAP Diluted EPS ($USD)$2.35 $2.08 $2.55
Effective Tax Rate (%)23.6% 36.9% 24.1%
Non-GAAP Effective Tax Rate (%)22.4% 26.3% 21.9%

Actual vs Consensus (Q1 FY26)

MetricActualConsensus
Revenue ($USD Billions)$64.0 $59.27*
Primary EPS ($USD)$2.55 $2.17*
EBITDA ($USD Millions)~$1,004 [functions.GetEstimates]~$844*
EPS - # of Estimates—14*
Revenue - # of Estimates—13*

Values retrieved from S&P Global.

Segment Breakdown

SegmentQ3 FY25Q4 FY25Q1 FY26
Pharmaceutical & Specialty Solutions Revenue ($USD Billions)$50.4 $55.4 $59.2
Pharmaceutical & Specialty Solutions Segment Profit ($USD Millions)$662 $535 $667
Pharmaceutical & Specialty Solutions Segment Profit Margin (%)1.31% 0.97% 1.13%
GMPD Revenue ($USD Billions)$3.16 $3.20 $3.18
GMPD Segment Profit ($USD Millions)$39 $70 $46
GMPD Segment Profit Margin (%)1.23% 2.19% 1.44%
Other Revenue ($USD Billions)$1.30 $1.61 $1.64
Other Segment Profit ($USD Millions)$134 $160 $166
Other Segment Profit Margin (%)10.28% 9.94% 10.12%

KPIs

KPIQ1 FY25Q1 FY26
Cash from Operations ($USD Millions)$(1,647) $973
Non-GAAP Adjusted Free Cash Flow ($USD Millions)$(1,361) $1,269
Cash & Equivalents (Period-End, $USD Millions)$2,867 $4,593
Interest Expense, Net ($USD Millions)$32 $80
Diluted Weighted Avg Shares (Millions)245 239

Non-GAAP Adjustments Impact (Q1 FY26)

ItemEPS Impact ($USD)
Amortization & other acquisition-related costs$0.31
Acquisition-related cash & share-based compensation costs$0.26
Restructuring & employee severance$0.06
Litigation (recoveries)/charges, net$0.03

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Non-GAAP EPSFY26$9.30–$9.50 $9.65–$9.85 Raised
Adjusted Free Cash FlowFY26$2.75–$3.25B $3.0–$3.5B Raised
Pharma Segment Profit GrowthFY2611%–13% 16%–19% Raised
Other Segment Profit GrowthFY2625%–27% 29%–31% Raised
Interest & OtherFY26~$275M ~$325M Raised (cost)
Diluted Weighted Avg SharesFY26238–240M ~238M Lowered
Capital ExpendituresFY26~$600M $600–$650M Raised
DividendJan 15, 2026—$0.5107 per share Announced

Earnings Call Themes & Trends

TopicQ3 FY25 (Prior-2)Q4 FY25 (Prior-1)Q1 FY26 (Current)Trend
Specialty/MSO expansionGI Alliance expanding; ADS acquired Announced definitive Solaris acquisition; FY26 EPS guide raised Solaris closing expected, then completed Nov 3; MSO platforms a key growth driver Accelerating
Generics programPositive generics performance; volume strength Solid program; breadth of demand “Consistent market dynamics” with strong same-store unit growth; buy/sell spread managed Stable to improving
GLP-1 contributionNot highlightedNot highlighted~6 pts contribution to pharma revenue growth Positive tailwind
Tariffs (GMPD)Benefit from cost optimization initiatives Ongoing GMPD improvement plan; guidance conservative Slight net headwind in Q1; bigger Q2 step-up expected; maintain FY profit target Near-term headwind
Supply chain/resilienceExecution focus across segments Network investments; customer wins Award for resilience; logistics and robotics investments; new centers opened Strengthening
Capital allocationASR $375M completed FY26 share repurchases ~$750M, Solaris financing ASR $375M initiated in Q1; interest raised for Solaris; cash $4.6B Active
Regulatory/policyMonitoring macro; guidance cautious Various risks noted Policy changes broadly neutral-to-positive for utilization; biosimilar push watched Neutral-to-positive

Management Commentary

  • CEO: “We are pleased to report a strong start to fiscal 2026… As a result, we are raising our fiscal 2026 outlook.”
  • CFO on beat drivers: “We grew operating earnings by 37% and EPS by 36%… raising our full year EPS guidance to $9.65 to $9.85.”
  • CFO on Pharma cadence: “We continue to expect strong profit growth in the first half… $7 billion of new customer revenue primarily in the first half.”
  • CEO on GMPD: “Improvement plan initiatives are yielding results… clinically differentiated products delivered another quarter of strong volume growth in the U.S.”
  • CFO on tariffs: “We expect a step up in tariff costs in the second quarter… holding to our annual guidance.”

Q&A Highlights

  • Sustainability and mix of outperformance: Management emphasized both strong market utilization and controllable execution (capacity, service levels), with caution not to over-assume outsized demand; cadence stronger in H1 .
  • M&A contributions and Solaris: M&A adds ~8 pts to Pharma profit growth for FY26; Solaris ~3 pts; Solaris distribution spend not included in guidance yet .
  • Generics: Strength driven by volume, LOE pipeline, and consistent market dynamics; spreads managed prudently .
  • GMPD competitive landscape & tariffs: Tariff headwinds elevate in Q2; focus on service to be supplier of choice; competitor actions seen as opportunity .
  • Policy/regulatory: Broad alignment with affordability goals; potential biosimilar tailwinds monitored; too early to quantify .

Estimates Context

MetricQ1 FY26 ActualQ1 FY26 ConsensusSurprise
Revenue ($USD Billions)$64.0 $59.27*+$4.73B; +8.0%
Primary EPS ($USD)$2.55 $2.17*+$0.38; +17.5%
EBITDA ($USD Millions)~$1,004 [functions.GetEstimates]~$844*+$160; +19%

Forward look (Q2 FY26): EPS $2.30*, revenue $64.90B*, EBITDA ~$909M* [functions.GetEstimates].

Values retrieved from S&P Global.

Where estimates may adjust: Upward revisions likely in Pharma and Other segments given raised FY26 segment profit ranges and GLP-1 tailwinds, with some offset from higher interest/other; GMPD Q2 tariff step-up could temper near-term margin forecasts .

Key Takeaways for Investors

  • Quarter delivered broad beats on EPS and revenue with momentum across all segments; non-GAAP EPS up 36% and Pharma segment profit up 26% .
  • FY26 guidance raised materially (EPS +$0.35; FCF +$0.25B mid-point), anchored by specialty/MSO scale and strong pharma demand; watch interest and tariff headwinds .
  • Solaris completion adds scale in urology and supports MSO strategy; distribution revenue from Solaris drug spend is incremental upside not yet in guidance .
  • Near-term setup: H1 stronger than H2 on customer wins and M&A timing; GMPD profit dip expected in Q2 before recovery into Q4 seasonality .
  • Generics and GLP-1 demand remain tailwinds; continued execution on logistics capacity, automation, and branded product mix supports margin resilience .
  • Cash generation improved sharply y/y in Q1 (CFO $973M; adjusted FCF $1.27B); capital return ongoing via dividend and ASR .
  • Trading implication: Positive estimate revision and guidance raise are catalysts; monitor Q2 call for tariff impact sizing and Solaris integration updates .