United States

International

Total Revenue

ff8394dfcc20b9afbc0de5288b4a78888808f19fcaf361816c2eb2c8aa04252f

Pharmaceutical and Specialty Solutions

- Nuclear and Precision Health Solutions

Global Medical Products and Distribution

- at-Home Solutions

Other

- OptiFreight® Logistics

Corporate

9e62d86643d962b33694acdf7dd4c76a8561955c87ee84a390ff34b3483584ee

The **Operating Cash Flow** dropped sharply in **Q3 2024** primarily due to significant changes in working capital components. Notably, there was a **large decrease in accounts payable of $2,170 million** compared to a much smaller decrease in the prior year, which strained cash flow. Additionally, a substantial **increase in inventories of $1,165 million** further consumed cash. The reduction in trade receivables and a decline in other accrued liabilities and operating items also contributed to the overall decrease in operating cash flow.  **[20240502CL02887:5]** 

Why did Operating Cash Flow drop so sharply in Q3 2024?

The heavy negative swing in Q1 2025 was driven mainly by changes in working capital. In detail, a **significant decrease in accounts payable of $1,394 million**—compared to an increase of $1,762 million in Q1 2024—had a major negative impact on cash flow. Additionally, there were notable changes in other operating assets and liabilities, including a larger reduction in trade receivables, a less severe increase in inventories, and changes in other accrued liabilities, all contributing to the negative operating cash flow result.  **[0000721371-24-000119_a25q1_x093024xex991xnewsre.htm:5]** 

What drove the heavy negative swing in Operating Cash Flow in Q1 2025?

Operating Cash Flow is substantially lower in Q2 2025 due to several factors. The net cash provided by/(used in) operating activities dropped to **$(400) million**, mainly because inventories increased significantly (negatively impacting cash flow), accounts payable saw a much smaller increase (**$924 million** compared to **$2,591 million** in Q2 2024), and other accrued liabilities and operating items, net, contributed a more negative amount (**$(133) million** vs. **$(83) million** in Q2 2024).  **[20250130CL07313:5]** **[0000721371-25-000009_a25q2_x123124xex991xnewsre.htm:5]** 

Why is Operating Cash Flow substantially lower in Q2 2025?

The marked increase in **operating cash flow** in FY 2024 was driven by several factors. **Higher net earnings**, which rose from **$331 million** in FY 2023 to **$853 million** in FY 2024, provided a strong boost to operating cash flow.  **[20240814CL82875:7]** **[0000721371-24-000056_cah-20240630.htm:83]**  Additionally, **changes in working capital** played a key role; a significant **decrease in inventories** contributed **$1,115 million** in FY 2024 compared to a negative impact of **$(412) million** in FY 2023, while an increase in **accounts payable** continued to support cash flow despite being lower than in FY 2023.  **[20240814CL82875:7]** **[0000721371-24-000056_cah-20240630.htm:83]**  Furthermore, reductions in **impairments and asset disposals**—with a lower non-cash adjustment of **$634 million** in FY 2024 versus **$1,246 million** in FY 2023—and a smaller cash outflow from **other operating items** helped drive the overall improvement.  **[20240814CL82875:7]** **[0000721371-24-000056_cah-20240630.htm:83]** 

What factors contributed to the marked increase in Operating Cash Flow in FY 2024?

The provided documents do not include any information explaining why the estimated **Free Cash Flow** turned negative in **Q3 2024** [N/A].

Why did the estimated Free Cash Flow turn negative in Q3 2024?

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Cardinal Health’s cash and equivalents were so low in Q1 2025 primarily because of a sharp decline driven by several factors. The company used **$1.6 billion** in net cash in operating activities, influenced by unwinding negative net working capital associated with the OptumRx contracts, the normal timing of vendor payments, and an **annual payment of $366 million** related to the National Opioid Settlement Agreement. Additionally, **$375 million** was deployed for share repurchases and **$90 million** was spent on capital expenditures, contributing to the reduction from **$5.1 billion** in Q4 2024 to **$2.9 billion** in Q1 2025.  **[0000721371-24-000121_cah-20240930.htm:10]** 

Why was Cash and equivalents so low in Q1 2025?

The surge in Cardinal Health’s total assets in Q2 2025 was primarily driven by strategic acquisitions and operational adjustments. Specifically, there was a **significant increase in inventories** (**+1,947 million USD**) and an **increase in goodwill and other intangibles** (**+986 million USD**) as the company expanded its portfolio through acquisitions, including a 73% stake in GI Alliance. Additionally, there was a **decrease in cash and equivalents** (**-1,323 million USD**), reflecting the cash used for these investments.  **[0000721371-25-000013_cah-20241231.htm:32]** **[0000721371-25-000009_a25q2_x123124xex991xnewsre.htm:0]** **[0000721371-25-000009_a25q2_x123124xex991xnewsre.htm:5]** 

What drove the surge in Total assets in Q2 2025?

The jump in **long-term obligations, less current portion**, from **$4,658 million** to **$7,062 million** was primarily driven by the issuance of additional debt in **November 2024**. Cardinal Health issued **$2.9 billion** in net proceeds from new notes—specifically **$500 million** at 4.7% (maturing in 2026), **$750 million** at 5.0% (maturing in 2029), **$1.0 billion** at 5.35% (maturing in 2034), and **$650 million** at 5.75% (maturing in 2054)—to help fund a portion of the acquisition considerations for **GIA and ADSG acquisitions** as well as for general corporate purposes.  **[0000721371-25-000013_cah-20241231.htm:32]** **[0000721371-25-000013_cah-20241231.htm:43]** 

Why did long-term obligations jump in Q2 2025?

1ecad439d4f2df9ed7a8a12b3904add530d5c36e4cf5227fd5a2b87ed42718ce

Revenue dipped in Q2 2025 mainly due to the **expiration of a large customer contract** that significantly impacted reported revenues. This contract loss contributed to a **4% decrease** in overall revenue (**$55.3 billion** vs. **$57.4 billion** in Q2 2024). Additionally, segment-specific challenges—particularly in the **Pharmaceutical and Specialty Solutions segment**, which saw a revenue decline of **4%**—and the absence of the **$9.8 billion of OptumRx revenue** compared to the prior year also played a crucial role in the revenue decline.  **[20250130CL07313:0]** **[0000721371-25-000009_a25q2_x123124xex991xnewsre.htm:0]** **[20250130CL07313:8]** 

Why did Revenue dip in Q2 2025?

The EPS jump in Q1 2025 was primarily driven by a combination of **improved operating earnings** (with operating earnings turning positive from a loss in the previous corresponding period), **favorable non-GAAP adjustments** that bolstered reported performance, a sharply **lower effective tax rate** (dropping from 75.1% to 23.0%), and **share repurchase activity** that reduced the weighted-average number of common shares outstanding, all of which contributed to the significant increase in earnings per share.  **[0000721371-24-000119_a25q1_x093024xex991xnewsre.htm:4]** **[20241101CL45470:0]** **[0000721371-24-000119_a25q1_x093024xex991xnewsre.htm:0]** 

What drove the EPS jump in Q1 2025?

Operating Earnings improved in **Q1 2025** because of several key factors. The **Pharmaceutical and Specialty Solutions segment profit** increased by **16%** to **$530 million** due to higher contributions from branded and specialty pharmaceuticals, including the positive impact of an earlier COVID-19 vaccine launch and improved performance in the generics program.  **[20241101CL45470:0]** **[0000721371-24-000121_cah-20240930.htm:7]**  Additionally, there was no **$585 million goodwill impairment charge** in Q1 2025—a charge that had significantly impacted the previous year, further boosting the earnings.  **[0000721371-24-000119_a25q1_x093024xex991xnewsre.htm:4]** **[0000721371-24-000121_cah-20240930.htm:3]**  Revenue growth, when excluding the impact of contract expirations, improved by **15%**, and cost management contributed with improvements in gross margin (a **9%** rise to **$1.9 billion**) despite an **8%** increase in SG&A expenses.  **[20241101CL45470:0]** **[0000721371-24-000121_cah-20240930.htm:3]** **[0000721371-24-000121_cah-20240930.htm:7]** 

Why did Operating Earnings improve in Q1 2025?

In Q1 2025, Cardinal Health experienced higher net earnings due to **improved operating earnings** driven by a strong performance in its Pharmaceutical and Specialty Solutions segment, the **absence of a significant $541 million impairment charge** that impacted Q1 2024, favorable **revenue adjustments** (including strong organic growth despite a 4% decrease in total revenue), a much lower **effective tax rate** (23.0% versus 75.1% in Q1 2024), and beneficial **litigation recoveries**.  **[0000721371-24-000119_a25q1_x093024xex991xnewsre.htm:4]** **[20241101CL45470:0]** **[0000721371-24-000119_a25q1_x093024xex991xnewsre.htm:0]** **[20241101CL45470:7]** 

What contributed to the higher net earnings in Q1 2025?

In FY 2024, Cardinal Health’s net earnings were significantly boosted by several factors. The company experienced **strong revenue growth** with total revenue rising by **11% to $226.8 billion**, largely driven by the **Pharmaceutical and Specialty Solutions** segment. **Improved operating earnings**, with GAAP operating earnings up by **65% to $1.243 billion** and non-GAAP operating earnings increasing by **16% to $2.414 billion**, also played a key role. Additionally, the firm benefited from **lower interest expense** (reduced to **$51 million** from **$84 million**), **reduced litigation charges** compared to the previous fiscal year's net recovery of **$304 million**, and **significantly lower goodwill impairment charges** (declining to **$634 million** from **$1.246 billion**). Lastly, the effective tax rate improved markedly from **50.0%** to **28.9%**, further enhancing net earnings.  **[20240814CL82875:0]** **[0000721371-24-000056_cah-20240630.htm:11]** **[0000721371-24-000054_a24q4_x063024xex991xnewsre.htm:5]** 

Why were net earnings so high in FY 2024?

99daab0bc5f239b60b7dfc87880a8835c3080a0b6ae9e245554945f9606a7971

Net earnings (USD, millions)

Depreciation and amortization (USD, millions)

Impairments and loss on sale of other investments (USD, millions)

Impairments and (gain)/loss on disposal of assets, net (USD, millions)

Share-based compensation (USD, millions)

Provision for bad debts (USD, millions)

Increase in trade receivables (USD, millions)

Increase in inventories (USD, millions)

Increase/(decrease) in accounts payable (USD, millions)

Other accrued liabilities and operating items, net (USD, millions)

Net cash provided by/(used in) operating activities (USD, millions)

Acquisition of subsidiaries, net of cash acquired (USD, millions)

Proceeds from divestitures, net of cash sold (USD, millions)

Additions to property and equipment (USD, millions)

Proceeds from disposal of property and equipment (USD, millions)

Purchases of investments (USD, millions)

Proceeds from investments (USD, millions)

Proceeds from net investment hedge terminations (USD, millions)

Proceeds from short-term investment in time deposit (USD, millions)

Net cash provided by/(used in) investing activities (USD, millions)

Proceeds from long-term obligations, net of issuance costs (USD, millions)

Reduction of long-term obligations (USD, millions)

Net tax proceeds/(withholding) from share-based compensation (USD, millions)

Dividends on common shares (USD, millions)

Purchase of treasury shares, net (USD, millions)

Net cash provided by/(used in) financing activities (USD, millions)

Effect of exchange rate changes on cash and equivalents (USD, millions)

Net increase/(decrease) in cash and equivalents (USD, millions)

Cash and equivalents at beginning of period (USD, millions)

Cash and equivalents at end of period (USD, millions)

95f403faada91310ad53325dd28d64636a7467531c108694b487cb0cf91b2a8e

Cash and equivalents (USD, millions)

Trade receivables, net (USD, millions)

Inventories, net (USD, millions)

Prepaid expenses and other (USD, millions)

Assets held for sale (USD, millions)

Total current assets (USD, millions)

Property and equipment, net (USD, millions)

Goodwill and other intangibles, net (USD, millions)

Other assets (USD, millions)

Total assets (USD, millions)

Accounts payable (USD, millions)

Current portion of long-term obligations and other short-term borrowings (USD, millions)

Other accrued liabilities (USD, millions)

Total current liabilities (USD, millions)

Long-term obligations, less current portion (USD, millions)

Deferred income taxes and other liabilities (USD, millions)

Total shareholders’ deficit (USD, millions)

Total liabilities and shareholders’ deficit (USD, millions)

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Revenue (USD, millions)

Cost of Products Sold (USD, millions)

Gross Margin (USD, millions)

Distribution, Selling, General and Administrative Expenses (USD, millions)

Restructuring and Employee Severance (USD, millions)

Amortization and Other Acquisition-Related Costs (USD, millions)

Impairments and (Gain)/Loss on Disposal of Assets, Net (USD, millions)

Litigation (Recoveries)/Charges, Net (USD, millions)

Operating Earnings (USD, millions)

Other (Income)/Expense, Net (USD, millions)

Interest Expense, Net (USD, millions)

Earnings Before Income Taxes (USD, millions)

Provision for Income Taxes (USD, millions)

Net Earnings (USD, millions)

Net Earnings Attributable to Noncontrolling Interests (USD, millions)

Net Earnings Attributable to Cardinal Health, Inc. (USD, millions)

Basic Earnings Per Common Share Attributable to Cardinal Health, Inc. (USD)

Diluted Earnings Per Common Share Attributable to Cardinal Health, Inc. (USD)

974595d21e73e30a3158b53fb387b22de45489acaba0fac182e660d3a10f9f7c

Adjustments for Non-Cash Items

Stock-Based Compensation

Changes in Working Capital

Capital Expenditures (CapEx)

Proceeds from / Repayments of Debt

Share Repurchases

Dividend Payments

Net Change in Cash

996b43605898b3f552cd17e8f9f01812f277d309caf7a95b57d2709bd95f64ff

da7a28d5063a009505ecce9161d61907121e307926e08c747d62cca0634ba706

d9df2bb8c3a5874bf029564dcb88281794377bffcbcc95888261484418f5ad52

130861014697bc953e90c26a7dd0721a5ee2983d2c9795404aa4af477c7a20ab

952cd429110fef41588ac64f66b50f580d47e4b2ecb68933c0d4295befa84c38

CARDINAL HEALTH (CAH)

Financials