d9df2bb8c3a5874bf029564dcb88281794377bffcbcc95888261484418f5ad52

| Metric [Unit: USD Billion] | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 |
|----------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Pharmaceutical Segment    | **47.99**  **[0000721371-24-000121_cah-20240930.htm:7]**  | **55.6**  **[0000721371-24-000054_a24q4_x063024xex991xnewsre.htm:8]** **[0000721371-24-000054_a24q4_x063024xex991xnewsre.htm:1]**  | **50.7**  **[CAH_3382095_2]** **[0000721371-24-000036_a24q3_x033124xex991xnewsre.htm:6]** **[0000721371-24-000036_a24q3_x033124xex991xnewsre.htm:0]**  | **53.5**  **[0001628280-24-002805_a24q2_x123123xex991xnewsre.htm:0]**  | **51.0**  **[0000721371-23-000083_a24q1_x093023xex991xnewsre.htm:1]** **[0000721371-23-000083_a24q1_x093023xex991xnewsre.htm:0]**  | **49.7**  **[CAH_3309854_1]** **[0000721371-23-000058_a23q4_x063023xex991xnewsre.htm:1]**  | **46.8**  **[0001193125-23-135011_d358353dex991.htm:0]** **[0001628280-23-015775_cah-20230331.htm:52]** **[0001628280-23-015775_cah-20230331.htm:9]** **[0001628280-23-015775_cah-20230331.htm:52]** **[0001628280-23-015775_cah-20230331.htm:9]**  | **47.7**  **[0000721371-23-000005_a23q2_x123122xex991xnewsre.htm:0]** **[CAH_3226498_4]**  |
| Medical Segment           | **3.123**  **[0000721371-24-000121_cah-20240930.htm:7]**  | **3.1**  **[0000721371-24-000054_a24q4_x063024xex991xnewsre.htm:8]** **[0000721371-24-000054_a24q4_x063024xex991xnewsre.htm:1]**  | **3.1**  **[0000721371-24-000036_a24q3_x033124xex991xnewsre.htm:6]** **[0000721371-24-000036_a24q3_x033124xex991xnewsre.htm:0]** **[CAH_3382095_3]**  | **3.9**  **[0001628280-24-002805_a24q2_x123123xex991xnewsre.htm:1]**  | **3.8**  **[0000721371-23-000083_a24q1_x093023xex991xnewsre.htm:1]** **[0000721371-23-000084_cah-20230930.htm:7]**  | **3.8**  **[CAH_3309854_1]** **[0000721371-23-000058_a23q4_x063023xex991xnewsre.htm:1]**  | **3.7**  **[0001193125-23-135011_d358353dex991.htm:0]** **[0001628280-23-015775_cah-20230331.htm:52]** **[0001628280-23-015775_cah-20230331.htm:9]** **[0001628280-23-015775_cah-20230331.htm:52]** **[0001628280-23-015775_cah-20230331.htm:9]**  | **3.8**  **[0000721371-23-000005_a23q2_x123122xex991xnewsre.htm:0]**  |
| Other                     | **1.186**  **[0000721371-24-000121_cah-20240930.htm:7]**  | **1.2**  **[0000721371-24-000054_a24q4_x063024xex991xnewsre.htm:8]** **[0000721371-24-000054_a24q4_x063024xex991xnewsre.htm:1]**  | **1.2**  **[0000721371-24-000036_a24q3_x033124xex991xnewsre.htm:6]** **[0000721371-24-000036_a24q3_x033124xex991xnewsre.htm:0]** **[CAH_3382095_3]**  | N/A | N/A | N/A | N/A | N/A |
| Total Revenue             | **52.277**  **[0000721371-24-000121_cah-20240930.htm:7]**  | **59.9**  **[0000721371-24-000054_a24q4_x063024xex991xnewsre.htm:0]**  | **54.9**  **[0000721371-24-000036_a24q3_x033124xex991xnewsre.htm:0]** **[0000721371-24-000038_cah-20240331.htm:9]**  | **57.4**  **[0001628280-24-002805_a24q2_x123123xex991xnewsre.htm:0]**  | **54.8**  **[0000721371-23-000083_a24q1_x093023xex991xnewsre.htm:0]** **[0000721371-23-000084_cah-20230930.htm:7]**  | **53.5**  **[0000721371-23-000058_a23q4_x063023xex991xnewsre.htm:0]**  | **50.5**  **[0001193125-23-135011_d358353dex991.htm:0]** **[0001628280-23-015775_cah-20230331.htm:9]**  | **51.5**  **[0000721371-23-000005_a23q2_x123122xex991xnewsre.htm:0]**  |

2722b11de036887a9fda9358f01fe2e65b73b8bc10b1e66957d138e4186dd9ea

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

| Metric [Unit: $ million] | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 |
|--------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| United States            | **50,333**  **[0000721371-23-000007_cah-20221231.htm:51]**  | **49,326**  **[0001628280-23-015775_cah-20230331.htm:53]**  | N/A     | **53,557**  **[0000721371-23-000084_cah-20230930.htm:43]**  | **56,241**  **[0001628280-24-002813_cah-20231231.htm:52]**  | **53,715**  **[0000721371-24-000038_cah-20240331.htm:56]**  | **225,231**  **[0000721371-24-000056_cah-20240630.htm:126]**  | **51,891**  **[0000721371-24-000121_cah-20240930.htm:44]**  |
| International            | **1,137**  **[0000721371-23-000007_cah-20221231.htm:51]**   | **1,167**  **[0001628280-23-015775_cah-20230331.htm:53]**   | N/A     | **1,209**  **[0000721371-23-000084_cah-20230930.htm:43]**   | **1,207**  **[0001628280-24-002813_cah-20231231.htm:52]**   | **1,216**  **[0000721371-24-000038_cah-20240331.htm:56]**   | **1,681**  **[0000721371-24-000056_cah-20240630.htm:126]**   | **408**  **[0000721371-24-000121_cah-20240930.htm:44]**    |
| Total Revenue            | **51,470**  **[0000721371-23-000007_cah-20221231.htm:51]**  | **50,487**  **[0001628280-23-015775_cah-20230331.htm:53]**  | N/A     | **54,766**  **[0000721371-23-000084_cah-20230930.htm:43]**  | **57,445**  **[0001628280-24-002813_cah-20231231.htm:52]**  | **54,931**  **[0000721371-24-000038_cah-20240331.htm:56]**  | **226,912**  **[0000721371-24-000056_cah-20240630.htm:126]**  | **52,299**  **[0000721371-24-000121_cah-20240930.htm:44]**  |

176e3373cc02105ae711f0092e21c03bcebfba37b4e339acaeca712ffd42e6d7

Cardinal Health, Inc. is a global healthcare services and products company that operates primarily through two main segments: Pharmaceutical and Specialty Solutions, and Global Medical Products and Distribution (GMPD). The company distributes branded and generic pharmaceuticals, specialty pharmaceuticals, and over-the-counter healthcare products in the United States, and provides services to pharmaceutical manufacturers and healthcare providers **[0000721371-24-000042_exhibit101-x2023conflictmi.htm:1]** **[0000721371-24-000121_cah-20240930.htm:44]** **[0000721371-24-000056_cah-20240630.htm:125]**. Cardinal Health also manufactures, sources, and distributes medical, surgical, and laboratory products, and offers inventory management technology **[0000721371-24-000042_exhibit101-x2023conflictmi.htm:1]** **[0000721371-24-000121_cah-20240930.htm:44]** **[0000721371-24-000056_cah-20240630.htm:125]**. The company has undergone a reorganization to focus on core operations and growth areas, prioritizing long-term growth and investment in its key segments **[0000721371-24-000005_exhibit991-january92024pre.htm:2]** **[CAH_3369911_2]**.

1. **Pharmaceutical and Specialty Solutions** - Distributes branded and generic pharmaceuticals, specialty pharmaceuticals, and over-the-counter healthcare products in the United States, and provides services to pharmaceutical manufacturers and healthcare providers.
2. **Global Medical Products and Distribution (GMPD)** - Manufactures, sources, and distributes Cardinal Health branded medical, surgical, and laboratory products, as well as national brand products, to healthcare providers in the United States and Canada. Includes the Wavemark division, which provides inventory management technology.
3. **Nuclear and Precision Health Solutions** - Offers specialized healthcare solutions, although not significant enough individually to require separate reportable segment disclosures.
4. **at-Home Solutions** - Provides healthcare products and services designed for home use, contributing to the company's growth strategy.
5. **OptiFreight® Logistics** - Delivers logistics and transportation services, supporting the company's focus on efficient supply chain management.

63b4bd709e5ac2feebcec1e9e69344a81aba3d253bd0f7188f8f2b86d6ef87aa

1. Regarding the GMPD segment, despite the expected annualization of inflation mitigation benefits, can you provide more detail on how you plan to achieve the significant jump to $300 million in segment profit by fiscal year '26, especially considering recent input cost increases and challenges in passing these costs on to customers?  **[CAH_3398782_5]** **[CAH_3398782_8]** 

2. In the Pharma segment, you anticipate a 4% to 6% revenue decline due to the nearly $40 billion headwind from the large customer contract expiration. Can you elaborate on the specific strategies and customer wins that will offset this loss, and how confident are you in the timing and ramp-up of these new volumes?  **[CAH_3398782_5]** **[CAH_3398782_2]** 

3. You've highlighted the Averon joint venture with CVS to source biosimilars. Given that the joint venture extends beyond the distribution contract ending in 2027 and the Red Oak agreement ending in 2029, what are the financial implications and risks associated with this venture, especially if the underlying agreements with CVS are not renewed?  **[CAH_3398782_22]** **[CAH_3398782_2]** 

4. In light of the restatement of GMPD financials due to revenue recognition issues in your at-Home business, can you explain the controls you have put in place to prevent such issues in the future, and reassure investors about the reliability of your current financial reporting?  **[CAH_3398782_20]** 

5. Could you provide more clarity on the expected growth and investment returns from your 'Other' segment businesses, particularly Nuclear and Precision Health Solutions, OptiFreight, and at-Home Solutions, and how these investments will contribute to overall profitability, considering the heavy investment periods and the timing of returns?  **[CAH_3398782_9]** **[CAH_3398782_21]** 

5fc81347a40fd8ad772ca91de3f6f3f6d8bdd03b04c78f3f1685faeabcd128de

3ce717c4acac7c3702dcf7f40bf24ede99bccca23c3d3f4e6a7522ee9680960d

b1d3fdc8d2e1d635c6dd6771aebad530a611475d23c8d38584984ddd60510302

Pharmaceutical and Specialty Solutions

- Nuclear and Precision Health Solutions

Global Medical Products and Distribution

- at-Home Solutions

Other

- OptiFreight® Logistics

Corporate

Total Revenue

130861014697bc953e90c26a7dd0721a5ee2983d2c9795404aa4af477c7a20ab

### Q1 2025 Earnings Call
- **Issued Period**: Q1 2025
- **Guided Period**: FY 2025
- **Guidance**:
  1. **EPS Guidance**: $7.55 to $7.70
  2. **Pharma Segment Revenue**: Decline 4% to 6%
  3. **Pharma Segment Profit Growth**: 1% to 3%
  4. **GMPD Segment Revenue Growth**: 3% to 5%
  5. **GMPD Segment Profit**: $175 million
  6. **Cardinal Brand Sales Growth**: 3% to 5%
  7. **Other Segment Revenue Growth**: 10% to 12%
  8. **Other Segment Profit Growth**: 10%
  9. **Interest and Other Expenses**: $140 million to $170 million
  10. **Effective Tax Rate**: 23% to 24%
  11. **Share Repurchase Expectations**: $750 million
  12. **Share Count Guidance**: 245 million shares
  13. **Adjusted Free Cash Flow**: $1 billion  **[CAH_3398782_5]** **[CAH_3398782_6]** .

### Q4 2024 Earnings Call
- **Issued Period**: Q4 2024
- **Guided Period**: FY 2025
- **Guidance**:
  1. **EPS Guidance**: $7.55 to $7.70
  2. **Pharma Segment Revenue**: Decline 4% to 6%
  3. **Pharma Segment Profit Growth**: 1% to 3%
  4. **GMPD Segment Revenue Growth**: 3% to 5%
  5. **GMPD Segment Profit**: $175 million
  6. **Other Segment Revenue Growth**: 10% to 12%
  7. **Other Segment Profit Growth**: 10%
  8. **Interest and Other Expenses**: $140 million to $170 million
  9. **Effective Tax Rate**: 23% to 24%
  10. **Share Repurchases**: $750 million
  11. **Adjusted Free Cash Flow**: $1 billion  **[CAH_3398782_5]** **[CAH_3398782_1]** .

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: FY 2024 and preliminary FY 2025
- **Guidance**:
  - **FY 2024**:
    1. **Non-GAAP EPS**: $7.30 to $7.40
    2. **Effective Tax Rate**: 22% to 23%
    3. **Adjusted Free Cash Flow**: $2.5 billion
    4. **Capital Expenditures**: $500 million
    5. **Diluted Shares**: 247 million
    6. **Share Repurchases**: $750 million
    7. **Pharmaceutical and Specialty Solutions Profit Growth**: 9%
    8. **GMPD Segment Profit**: $65 million
    9. **Other Businesses Profit Growth**: 6% to 8%
  - **Preliminary FY 2025**:
    1. **Pharmaceutical and Specialty Solutions Profit Growth**: At least 1%
    2. **GMPD Segment Profit**: $175 million
    3. **Other Businesses Profit Growth**: Approximately 10%
    4. **Non-GAAP EPS**: At least $7.50  **[CAH_3382095_2]** **[CAH_3382095_4]** **[CAH_3382095_5]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **EPS Guidance**: $7.20 to $7.35
  2. **Pharmaceutical and Specialty Solutions Revenue Growth**: 10% to 12%
  3. **Pharmaceutical and Specialty Solutions Profit Growth**: 7% to 9%
  4. **GMPD Segment Profit**: $65 million
  5. **Other Segments Profit Growth**: 6% to 8%
  6. **Interest and Other Expenses**: $50 million to $65 million
  7. **Effective Tax Rate**: 23% to 24%
  8. **Shares Outlook**: 247 million
  9. **Medical Segment Profit**: $380 million  **[CAH_3371536_3]** .

1a1a818a47ac0508878291623f7454122d235e5167bc543a790640b9aad7bf74

United States

International

952cd429110fef41588ac64f66b50f580d47e4b2ecb68933c0d4295befa84c38

| Name               | Position                                                                 | Start Date       | Short Bio                                                                                                                                                                                                 |
|--------------------|--------------------------------------------------------------------------|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Jason M. Hollar    | Chief Executive Officer                                                  | September 1, 2022 | Jason M. Hollar has been serving as the Chief Executive Officer of Cardinal Health, Inc. since September 1, 2022. Previously, he was the Chief Financial Officer of Cardinal Health from May 2020 to August 2022  **[0000721371-24-000056_cah-20240630.htm:133]** **[0001308179-23-001007_lcah2023_def14a.htm:16]** **[0000721371-24-000103_cah-20240913.htm:16]** .                     |
| Aaron E. Alt       | Chief Financial Officer                                                  | February 10, 2023 | Aaron E. Alt has served as the Chief Financial Officer of Cardinal Health, Inc. since February 10, 2023. Before joining Cardinal Health, he was the Executive Vice President and Chief Financial Officer of Sysco Corporation  **[0000721371-24-000056_cah-20240630.htm:133]** **[0000721371-23-000060_cah-20230630.htm:116]** **[0001308179-23-001007_lcah2023_def14a.htm:59]** .        |
| Deborah L. Weitzman| Chief Executive Officer, Pharmaceutical and Specialty Solutions segment  | September 2022    | Deborah L. Weitzman has served as the Chief Executive Officer of the Pharmaceutical and Specialty Solutions segment at Cardinal Health since September 2022. Previously, she was the President of the Pharmaceutical Distribution division  **[0000721371-24-000056_cah-20240630.htm:133]** **[0000721371-23-000060_cah-20230630.htm:116]** . |
| Stephen M. Mason   | Chief Executive Officer, GMPD segment                                    | August 2019       | Stephen M. Mason has served as the Chief Executive Officer of the Global Medical Products and Distribution (GMPD) segment at Cardinal Health since August 2019. Previously, he was the President of Cardinal Health at-Home Solutions  **[0000721371-24-000056_cah-20240630.htm:133]** **[0000721371-23-000060_cah-20230630.htm:116]** .   |
| Ola M. Snow        | Chief Human Resources Officer                                            | October 2018      | Ola M. Snow has served as the Chief Human Resources Officer at Cardinal Health since October 2018. Prior to this role, she was the Senior Vice President of Human Resources, Total Rewards, Talent Acquisition, and Corporate Business Partner  **[0000721371-24-000056_cah-20240630.htm:133]** **[0000721371-23-000060_cah-20230630.htm:116]** . |
| Jessica L. Mayer   | Chief Legal and Compliance Officer                                       | March 2019        | Jessica L. Mayer has served as the Chief Legal and Compliance Officer at Cardinal Health since March 2019. Previously, she was the Executive Vice President, Deputy General Counsel, and Secretary  **[0000721371-24-000056_cah-20240630.htm:133]** **[0000721371-23-000060_cah-20230630.htm:116]** .                                      |
| Michelle D. Greene | Executive Vice President, Chief Information Officer and Customer Support Services | August 2022      | Michelle D. Greene has served as the Executive Vice President, Chief Information Officer and Customer Support Services at Cardinal Health since August 2022. Previously, she was the Senior Vice President of the Pharmaceutical segment IT  **[0000721371-24-000056_cah-20240630.htm:133]** **[0000721371-23-000060_cah-20230630.htm:116]** . |

e9c34d2b6de8c28b1530c8f1f350fa96736da85f883c5064b9c2a28aeeb51780

| Program Details          | Program 1                  | Program 2                  |
|--------------------------|----------------------------|----------------------------|
| Approval Date            | June 7, 2023  **[0000721371-24-000121_cah-20240930.htm:23]**            | August 21, 2024  **[0000721371-24-000121_cah-20240930.htm:11]**         |
| End Date/Duration        | December 31, 2027  **[0000721371-24-000121_cah-20240930.htm:23]**       | October 30, 2024  **[0000721371-24-000121_cah-20240930.htm:11]**        |
| Total additional amount  | $3.5 billion  **[0000721371-24-000121_cah-20240930.htm:23]**            | $375 million  **[0000721371-24-000121_cah-20240930.htm:11]**            |
| Remaining authorization  | $2.825 billion  **[0000721371-24-000121_cah-20240930.htm:23]** **[0000721371-24-000121_cah-20240930.htm:11]** **[0000721371-24-000121_cah-20240930.htm:43]**    | $275 million  **[0000721371-24-000121_cah-20240930.htm:11]** **[0000721371-24-000121_cah-20240930.htm:43]**         |
| Details                  | General buyback program  **[0000721371-24-000121_cah-20240930.htm:23]** | Accelerated Share Repurchase (ASR)  **[0000721371-24-000121_cah-20240930.htm:11]**  |

9faf87d4465960bfe2479f9dad8c06c02e036819e50ae5ea8fe4bbf9bc40cc2c

**Annual guidance for FY 2025:**
- **EPS Guidance**: $7.55 to $7.70  **[CAH_3398782_6]** (no change from $7.55 to $7.70  **[CAH_3398782_5]** )  
- **Pharma Segment Revenue**: Decline 4% to 6%  **[CAH_3398782_6]** (no change from Decline 4% to 6%  **[CAH_3398782_5]** )  
- **Pharma Segment Profit Growth**: 1% to 3%  **[CAH_3398782_6]** (no change from 1% to 3%  **[CAH_3398782_5]** )  
- **GMPD Segment Revenue Growth**: 3% to 5%  **[CAH_3398782_6]** (no change from 3% to 5%  **[CAH_3398782_5]** )  
- **GMPD Segment Profit**: $175 million  **[CAH_3398782_6]** (no change from $175 million  **[CAH_3398782_5]** )  
- **Other Segment Revenue Growth**: 10% to 12%  **[CAH_3398782_6]** (no change from 10% to 12%  **[CAH_3398782_5]** )  
- **Other Segment Profit Growth**: 10%  **[CAH_3398782_6]** (no change from 10%  **[CAH_3398782_5]** )  
- **Interest and Other Expenses**: $140 million to $170 million  **[CAH_3398782_6]** (no change from $140 million to $170 million  **[CAH_3398782_5]** )  
- **Effective Tax Rate**: 23% to 24%  **[CAH_3398782_6]** (no change from 23% to 24%  **[CAH_3398782_5]** )  
- **Share Repurchase Expectations**: $750 million  **[CAH_3398782_6]** (no change from $750 million  **[CAH_3398782_5]** )  
- **Adjusted Free Cash Flow**: $1 billion  **[CAH_3398782_6]** (no change from $1 billion  **[CAH_3398782_5]** )  

- **Cardinal Brand Sales Growth**: 3% to 5%  **[CAH_3398782_6]** (no prior guidance)  
- **Share Count Guidance**: 245 million shares  **[CAH_3398782_6]** (no prior guidance)  

 **[CAH_3398782_5]**  = Guidance issued in Q4 2024  
 **[CAH_3398782_6]**  = Guidance issued in Q1 2025  

d1391e62ee5005bc36251bc35c7c849b310ddb411908fef71a7544b0c6ff7170

da7a28d5063a009505ecce9161d61907121e307926e08c747d62cca0634ba706

| Name               | Start Date | End Date | Reason for Change |
|--------------------|------------|----------|-------------------|
| Ernst & Young LLP | 2002  **[0000721371-24-000056_cah-20240630.htm:80]**  | Present  | Current auditor   |

a37329653958af5d3239eb9a924ffae378d04645093dea41e492ca28df7ae312

95372febc18e644a704d559fbacc47350d509f31c891f26482d3d7cf84a4e2eb

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

- Total Revenue: $52,277 million (−4.5% YoY)  **[0000721371-24-000121_cah-20240930.htm:7]** **[0000721371-24-000121_cah-20240930.htm:44]**   
- Pharmaceutical & Specialty Solutions: $47,990 million (**−5% YoY**)  **[0000721371-24-000121_cah-20240930.htm:7]** **[0000721371-24-000121_cah-20240930.htm:44]**   
- Nuclear & Precision Health Solutions: $373 million (+15% YoY)  **[0000721371-24-000121_cah-20240930.htm:7]** **[0000721371-24-000121_cah-20240930.htm:44]**   
- At-Home Solutions: $739 million (+8% YoY)  **[0000721371-24-000121_cah-20240930.htm:7]** **[0000721371-24-000121_cah-20240930.htm:44]**   
- International: $408 million (**−66% YoY**)  **[0000721371-24-000121_cah-20240930.htm:44]**   
- Net Income: $416 million (up from $5 million in Q1 2024)  **[0000721371-23-000084_cah-20230930.htm:27]** **[0000721371-24-000121_cah-20240930.htm:28]**   
- Diluted EPS: $1.70 (up from $0.02 in Q1 2024)  **[0000721371-23-000084_cah-20230930.htm:27]** **[0000721371-24-000121_cah-20240930.htm:28]**   

ee60785a56724aed971cd9a9f8619584546b8957e4d36e4f4eb510d1a4debffd

- **Strong growth in the Specialty segment driven by strategic investments and acquisitions.** Cardinal Health's Specialty segment is experiencing robust growth, with revenue increasing more than 14% over previous years. This growth is fueled by the successful integration of acquisitions like Ion and GI Alliance, enhancing their specialty strategy centered on community providers and specialty physicians. This positions the company for continued expansion in high-margin areas.  **[CAH_3413708_10]**
- **Raised fiscal '25 EPS guidance and strong underlying performance in the Pharmaceutical segment.** The company increased its fiscal '25 EPS guidance to **$7.85 to $8**, reflecting confidence in its financial outlook. Even excluding contributions from recent acquisitions, the Pharmaceutical segment expects high single-digit operating profit growth, driven by strong utilization, significant new customer wins, and expansions. This indicates strong underlying performance and potential for future growth.  **[CAH_3413708_9]**
- **Significant growth and investment in the At-Home Solutions business.** The At-Home Solutions segment reported a **13% increase in revenue**, propelled by strong performance in Continuous Glucose Monitoring (CGM), diabetes, and urology-related categories. Cardinal Health continues to make substantial investments in this business, focusing on automation and efficiency, which are expected to drive future profitability and capitalize on the expanding home healthcare market.  **[CAH_3413708_14]**

22f8b406e1b3d59fecacb93b8eb7f68ea5513d82ee6d5ab57d433613cc67b389

- The **GMPD segment** reduced its profit guidance to a range of **$130 million to $150 million**, down from the original guidance of **$175 million**, due to unexpected healthcare costs and a **$15 million charge** in the WaveMark business. Additionally, potential tariffs and softness in volumes may continue to impact profitability, and the company is not providing an update on its long-term guidance for GMPD. \[9\]
- The company has taken on additional debt to finance recent acquisitions, which may put pressure on cash flows and necessitate prioritizing debt repayment over share repurchases or other returns to shareholders. This may limit capital allocation flexibility in the near term. \[10\]
- **Uncertainty in trade policies** and potential tariffs, combined with difficulties in quickly onshoring production, could lead to increased costs that may need to be passed on to customers. This could impact demand and put pressure on margins in the GMPD segment. \[9\]\[15\]

c633825173e80232f5ac73c049707bedac777d4b0ac0f9ea19b447d458141796

1. **Operating Income Guidance**  
   **Q:** Explain the expected operating income growth?  
   **A:** Management raised full-year operating income guidance to **10%–12% growth**  **[CAH_3413708_9]** , including the impact of the Ion and GI Alliance deals. Without these deals, operating income would be in the **high single digits**.  **[CAH_3413708_9]**  The M&A is adding about **300 basis points** to the pharma raise  **[CAH_3413708_9]** , and there's an additional **$15 million** positive progress in other income due to equity treatment on minority ASCs.  **[CAH_3413708_9]**  They expect utilization to normalize in the back half of fiscal 2025.  **[CAH_3413708_9]** 

2. **Impact of Tariffs on Costs**  
   **Q:** How will tariffs affect costs and pricing?  
   **A:** Potential widespread tariffs in Mexico and the U.S. require evaluation.  **[CAH_3413708_12]**  About **50%** of Cardinal-branded products are sourced from North America, split between the U.S. and Mexico.  **[CAH_3413708_16]**  They have capabilities to manufacture **50%** of Cardinal brand in the U.S..  **[CAH_3413708_16]**  If tariffs occur, they anticipate corresponding price increases but are well-positioned competitively to pass on these increases.  **[CAH_3413708_12]** **[CAH_3413708_16]**  They continue to minimize the impact by diversifying their supply chain.  **[CAH_3413708_12]** **[CAH_3413708_16]** 

3. **Specialty Growth Strategy**  
   **Q:** What's driving specialty growth and strategy?  
   **A:** Specialty was a key driver, with revenue growth of **16%** this quarter.  **[CAH_3413708_13]**  They've seen mid-teens growth over several years, with specialty growing **14%** in previous periods.  **[CAH_3413708_10]**  The integration of Ion and GI Alliance is progressing well.  **[CAH_3413708_10]** **[CAH_3413708_13]**  They're focused on supporting specialty physicians with services beyond distribution, including data management and administrative support.  **[CAH_3413708_10]**  They are going to market with two distinct platforms: one in oncology and one for other specialties like GI.  **[CAH_3413708_10]** 

4. **Capital Allocation and Leverage**  
   **Q:** What's the plan for capital allocation and debt?  
   **A:** They have a disciplined capital allocation strategy  **[CAH_3413708_19]** : investing over **$500 million** in CapEx  **[CAH_3413708_19]** , protecting their investment-grade rating with leverage adjusted to **2.75x–3.25x**  **[CAH_3413708_19]** , and confirming **$750 million** in share repurchases.  **[CAH_3413708_19]**  They'll manage the leverage ratio over time but won't reach the target within fiscal 2025.  **[CAH_3413708_19]**  They plan to discuss more at Investor Day on June 12.  **[CAH_3413708_19]** 

5. **Utilization Trends**  
   **Q:** Are utilization trends changing?  
   **A:** They experienced strong utilization in the first half  **[CAH_3413708_9]**  but expect a more normalized environment in the back half.  **[CAH_3413708_9]** **[CAH_3413708_15]**  Adjusting for a large customer nonrenewal and GLP-1s, they saw **10%–11%** adjusted growth.  **[CAH_3413708_15]**  Growth was across all categories, with specialty and retail independent contributing more margin.  **[CAH_3413708_15]** 

6. **Generic Drug Pricing**  
   **Q:** Will generic deflation persist?  
   **A:** Market dynamics remained consistent this quarter.  **[CAH_3413708_18]**  They manage both sides of the equation to maintain a consistent average margin per unit.  **[CAH_3413708_18]** 

7. **Impact of Macroeconomic Weakness**  
   **Q:** How is macro weakness affecting business segments?  
   **A:** Overall, they saw slight growth in all products, including Cardinal Health brand products.  **[CAH_3413708_14]**  Weakness was noted in respiratory and lab products within the GMPD business.  **[CAH_3413708_14]**  The at-Home business showed strong revenue growth of **13%** in the quarter  **[CAH_3413708_14]** , driven by CGM, diabetes, and urology categories.  **[CAH_3413708_14]** 

8. **COVID Vaccine Volumes**  
   **Q:** How did COVID vaccine volumes impact results?  
   **A:** COVID vaccine volumes were a modest headwind but came in exactly as expected.  **[CAH_3413708_11]**  They were pleased to overcome this due to strong pharma results.  **[CAH_3413708_11]** 

9. **Illness Season Dynamics**  
   **Q:** What's the impact of illness season dynamics?  
   **A:** They observed weaker utilization in respiratory and lab products due to a soft cough, cold, and flu season in the December quarter.  **[CAH_3413708_17]**  Anecdotally, January may be stronger, but it's too early to confirm.  **[CAH_3413708_17]** 

10. **At-Home Business Performance**  
    **Q:** How is the at-Home business performing?  
    **A:** The at-Home business grew revenue by **13%** in the quarter  **[CAH_3413708_14]** , with strong performance in CGM, diabetes, and urology categories.  **[CAH_3413708_14]**  They continue to invest in automation and efficiency, expecting profit contributions as these investments pay off.  **[CAH_3413708_14]** 

48e25bb8d739936ac7aa4e7cb9a72904de80908802004ece06ea476dcaa80720

Cardinal Health raises FY25 EPS guidance to $7.85–$8, propelled by Specialty’s 14% revenue jump and high-single-digit Pharma profit growth. Meanwhile, At-Home Solutions climbed 13%. Despite GMPD’s lowered outlook, overall momentum remains strong.

bf0416b9d012c26a2561c783cfcdaf046ddcaccd347a875ef9c89dc27c331ca4

**Annual guidance for FY 2025:**  
- **EPS**: $7.85 to $8.00  **[CAH_3413708_2]** **[CAH_3413708_3]**  (raised from $7.75 to $7.90  **[CAH_3405431_4]** **[CAH_3405431_2]** )  
- **Pharma (Pharmaceutical) revenue**: decline of 1% to 3%  **[CAH_3413708_3]**  (raised from decline of 2% to 4%  **[CAH_3405431_4]** )  
- **Pharma (Pharmaceutical) operating income**: 10% to 12%  **[CAH_3413708_4]** **[CAH_3413708_9]**  (raised from 4% to 6%  **[CAH_3405431_4]** **[CAH_3405431_10]** )  
- **GMPD revenue**: 2% to 4%  **[CAH_3413708_4]**  (no change from prior guidance  **[CAH_3405431_4]** )  
- **GMPD segment profit**: $130 million to $150 million  **[CAH_3413708_4]** **[CAH_3413708_9]**  (lowered from $140 million to $175 million  **[CAH_3405431_4]** **[CAH_3405431_11]** )  
- **Adjusted free cash flow**: reconfirmed  **[CAH_3413708_19]**  (no change from $1.0B to $1.5B  **[CAH_3405431_4]** **[CAH_3405431_2]** )  
- **Interest and other expenses**: $200 million to $230 million  **[CAH_3413708_3]**  (no prior guidance)  
- **CapEx**: > $500 million  **[CAH_3413708_19]**  (no prior guidance)  
- **Share repurchases**: $750 million  **[CAH_3413708_19]**  (no prior guidance)  

c97e159c3458e871782d3b9e0438e6c38a833d726ab9e407b62ff22b6f53c635

- Total Revenue: $55,264 million (‑4% YoY)  **[0000721371-25-000009_a25q2_x123124xex991xnewsre.htm:4]** **[0001628280-24-002813_cah-20231231.htm:31]** **[0001628280-24-002813_cah-20231231.htm:34]**   
- Pharmaceutical & Specialty Solutions: $50,849 million (‑5% YoY)  **[0000721371-25-000013_cah-20241231.htm:55]** **[0001628280-24-002813_cah-20231231.htm:52]**   
- Nuclear & Precision Health Solutions: **$372 million (+13% YoY)**  **[0000721371-25-000013_cah-20241231.htm:55]** **[0001628280-24-002813_cah-20231231.htm:52]**   
- at‑Home Solutions: $835 million (+10% YoY)  **[0000721371-25-000013_cah-20241231.htm:55]** **[0001628280-24-002813_cah-20231231.htm:52]**   
- Operating Income (EBIT): $549 million (+14% YoY)  **[0000721371-25-000009_a25q2_x123124xex991xnewsre.htm:4]** **[0001628280-24-002813_cah-20231231.htm:31]** **[0001628280-24-002813_cah-20231231.htm:34]**   
- Net Income: **$4 million (‑99% YoY)**  **[0000721371-25-000009_a25q2_x123124xex991xnewsre.htm:4]** **[0001628280-24-002813_cah-20231231.htm:31]** **[0001628280-24-002813_cah-20231231.htm:34]**   
- EPS (Diluted): $1.65 (+16% YoY)  **[0000721371-25-000009_a25q2_x123124xex991xnewsre.htm:4]** **[0001628280-24-002813_cah-20231231.htm:31]** **[0001628280-24-002813_cah-20231231.htm:34]**   

4febe373ba8983258fa1d7dd8f78ba337befe3f1ee5f34b4507b0bd3d71446ab

2fc69cd6a40268875cbbbdc82cb4e59747ac9ed43c8d07aad3e536dad5923278

| Year | Amount Due (in millions) | Debt Type | Interest Rate (%) | % of Total Debt |
|----------|------------------------------|----------------|-----------------------|---------------------|
| 2026     | $500 **[0000721371-25-000013_cah-20241231.htm:43]**                 | 4.7% Notes **[0000721371-25-000013_cah-20241231.htm:43]** | 4.7 **[0000721371-25-000013_cah-20241231.htm:43]**           | 6.6% = (500 / 7600) * 100 **[0000721371-25-000013_cah-20241231.htm:43]** **[0000721371-25-000013_cah-20241231.htm:12]** |
| 2029     | $750 **[0000721371-25-000013_cah-20241231.htm:43]**                 | 5.0% Notes **[0000721371-25-000013_cah-20241231.htm:43]** | 5.0 **[0000721371-25-000013_cah-20241231.htm:43]**           | 9.9% = (750 / 7600) * 100 **[0000721371-25-000013_cah-20241231.htm:43]** **[0000721371-25-000013_cah-20241231.htm:12]** |
| 2034     | $1,000 **[0000721371-25-000013_cah-20241231.htm:43]**               | 5.35% Notes **[0000721371-25-000013_cah-20241231.htm:43]** | 5.35 **[0000721371-25-000013_cah-20241231.htm:43]**          | 13.2% = (1000 / 7600) * 100 **[0000721371-25-000013_cah-20241231.htm:43]** **[0000721371-25-000013_cah-20241231.htm:12]** |
| 2054     | $650 **[0000721371-25-000013_cah-20241231.htm:43]**                 | 5.75% Notes **[0000721371-25-000013_cah-20241231.htm:43]** | 5.75 **[0000721371-25-000013_cah-20241231.htm:43]**          | 8.6% = (650 / 7600) * 100 **[0000721371-25-000013_cah-20241231.htm:43]** **[0000721371-25-000013_cah-20241231.htm:12]** |

893a7b481dd9ec911b86644785f16fb48e6f8c0b827799db96ddb1986857544e

721f75845fa991cfc34aebb9c90c14d26177f3acd355160b4900b8e7a08d9c11

1. **Pharma Segment Guidance Raise**  
   **Q:** What drove the 300 bps pharma guidance increase?  
   **A:** The strong Q1 performance led us to raise our pharma guidance to our long-term target of **4% to 6% profit growth**.  **[CAH_3405431_10]**  This was driven by broad-based demand, effective management of customer transitions, and increased contributions from brand and specialty products.  **[CAH_3405431_10]**  **GLP-1s added about 4 percentage points to revenue growth** but were not a significant driver of earnings.  **[CAH_3405431_10]** 

2. **Medical Segment Unexpected Costs**  
   **Q:** How will health and wellness costs affect Medical's outlook?  
   **A:** We updated our Medical guidance to **$140 million to $175 million**, reflecting **$45 million** in unanticipated health and wellness costs in Q1.  **[CAH_3405431_11]**  These costs were due to actuarial errors and unusually high claims.  **[CAH_3405431_11]**  We continue to execute our improvement plan and expect sequential quarterly improvements.  **[CAH_3405431_11]** 

3. **GLP-1 Impact on Financials**  
   **Q:** Did GLP-1s contribute to guidance uptick?  
   **A:** **GLP-1s contributed 5% to our 16% Q1 revenue growth** but are not a meaningful driver of earnings  **[CAH_3405431_10]** **[CAH_3405431_12]** . Our economics on GLP-1s remain stable, and inventory levels have not fluctuated significantly.  **[CAH_3405431_12]** 

4. **Impact of Drug Price Reductions**  
   **Q:** How will price cuts (e.g., STELARA) affect you?  
   **A:** Our model operates on a fixed fee basis.  **[CAH_3405431_14]**  When brand companies lower prices, our dollar fee remains unchanged.  **[CAH_3405431_14]**  We don't expect significant impact from drug price reductions, as seen with insulin price cuts.  **[CAH_3405431_14]** 

5. **Supply Chain and Tariff Risks**  
   **Q:** Are tariffs impacting your costs?  
   **A:** Tariffs will raise costs, especially on products sourced from China.  **[CAH_3405431_15]**  Less than **10% of our products** come from China.  **[CAH_3405431_15]**  We anticipate some price increases due to tariffs but are working on solutions to minimize the impact.  **[CAH_3405431_15]** 

6. **Simplification Efforts and Cost Savings**  
   **Q:** Can you discuss your simplification initiatives?  
   **A:** Simplification is core to our strategy across all businesses.  **[CAH_3405431_18]**  We are continuously finding ways to be more efficient, such as automation investments leading to record metrics in quality, service, and safety.  **[CAH_3405431_18]** 

7. **Nuclear Supply Disruption**  
   **Q:** What's the timeline for nuclear supply issues?  
   **A:** Three of six reactors in Europe are down, affecting **moly-99** supply.  **[CAH_3405431_18]**  We expect the reactors to resume operations within the next couple of weeks, resolving the issue this quarter.  **[CAH_3405431_18]**  We have not changed our full-year guidance due to this.  **[CAH_3405431_18]** 

8. **Competitive Intensity in Medical Segment**  
   **Q:** Is competition increasing in Medical?  
   **A:** The market remains competitive but stable.  **[CAH_3405431_19]**  The loss of regions in the VA program was of relatively low margin and is part of normal customer rotation.  **[CAH_3405431_19]** 

9. **Gross Margin Improvements**  
   **Q:** How did gross margins improve this quarter?  
   **A:** While gross margin rate improved due to losing a low-margin customer, we focus on gross margin dollars over rate.  **[CAH_3405431_13]**  We manage the balance between SG&A and gross margin to drive profitability.  **[CAH_3405431_13]** 

10. **Generics Market Dynamics**  
    **Q:** What's happening in the generic drug market?  
    **A:** We saw good volumes in generics with consistent market dynamics.  **[CAH_3405431_16]**  There was strength in utilization but nothing extraordinary in pricing.  **[CAH_3405431_16]** 

11. **Hurricane Impact and Utilization Trends**  
    **Q:** Are hurricanes affecting procedure volumes?  
    **A:** We haven't seen meaningful impacts from hurricanes.  **[CAH_3405431_20]**  Utilization remains consistent, though not as strong as in pharma.  **[CAH_3405431_20]**  We are guiding for a normal utilization environment.  **[CAH_3405431_20]** 

12. **Election Outcome Impacts**  
    **Q:** How might the election outcome affect you?  
    **A:** We believe in affordable access to healthcare and see this as a priority across parties.  **[CAH_3405431_17]**  Tariffs could impact prices, but we feel well-positioned to work with any administration.  **[CAH_3405431_17]** 

13. **Pharma Guidance Details**  
    **Q:** Should we annualize Q1 favorability in guidance?  
    **A:** Our guidance anticipates a more normalized level of growth in Q2–Q4.  **[CAH_3405431_21]**  Part of Q1's favorability was due to favorable mix and strong volume, which may not continue at the same level.  **[CAH_3405431_21]** 

30e1103c71eef8a4bef47e9a4bafa1d077bbc6a00b3163635f44efb51645c2b5

- **Cardinal Health's Other segment, including OptiFreight, Nuclear, and at-Home Solutions businesses, presents significant growth opportunities, with investments in new distribution centers, automation, and expansion of the PET network and Theranostics opportunities.**  **[CAH_3398782_21]**
- **The Pharmaceutical segment is expected to achieve adjusted revenue growth of 15% to 18% in fiscal '25, driven by strong overall pharmaceutical demand and $10 billion of new revenue from new customer wins and expansions, including the Publix contract win, despite a $40 billion revenue headwind from the non-renewal of a low-margin contract.**  **[CAH_3398782_10]**
- **Effective management of supply chain and input cost increases, with freight cost increases being manageable and the supply chain functioning more efficiently, allowing the company to navigate cost pressures without widespread price adjustments.**  **[CAH_3398782_11]**

12fb7c5872028b64391ce9822caa49473c33ac8f7ff0a92250c7d264e0bd90e6

- **Continued strong performance in the Pharmaceutical segment, driven by consistent market dynamics in the generics space matched with strong volume, leading to increased profit guidance to 7%-9%**.  **[CAH_3371536_13]**
- **Strong cash flow generation and increased financial flexibility, with $4.6 billion cash on hand, enabling opportunistic capital deployment and investments in growth areas**.  **[CAH_3371536_11]**
- **Positive progress in the Medical segment improvement plan, with underlying performance tracking as expected, cost structure improvements, and inflation mitigation efforts on track, giving confidence in achieving fiscal year-end targets**.  **[CAH_3371536_12]** **[CAH_3371536_19]** **[CAH_3371536_10]**

fddf1c1e73954d69aa9626c7023a0b30e5f2c80be00a37af624cd07728dc8c19

1. **Margin Improvement in Pharma**  
   **Q:** What's driving the margin improvement in fiscal '25?  
   **A:** We're pleased to raise our guidance for the pharma business in fiscal '25, reflecting confidence in our team and the resiliency of the business despite some challenges. We've increased profitability guidance to **1%-3%** growth, supported by consistent market dynamics, **low single-digit growth** in core generic volumes, **high single-digit growth** in specialty, and strong overall prescription demand. We've added **$10 billion** in new revenue from new customers and expanded services with existing customers, offsetting the **$40 million** headwind from a low-margin contract nonrenewal. We also announced the Publix win, which won't hurt us as we carry forward.  **[CAH_3398782_10]** 

2. **Specialty Pharma Growth**  
   **Q:** How will specialty impact pharma growth amid contract loss?  
   **A:** Specialty is key to our continued growth next year. In fiscal '24, we saw another year of **14% growth** in specialty, consistent with our prior **14%** CAGR. Growth drivers include our Advanced Therapy Solutions, the new venture with CVS for Averon focused on biosimilars, and the acquisition of Specialty Networks. Despite the revenue reduction from the contract nonrenewal, we expect our specialty business to **grow in fiscal '25**, aligning with our long-term expectation of low single-digit profit growth in core pharma distribution and double-digit growth in specialty.  **[CAH_3398782_12]** 

3. **Earnings Cadence and Customer Unwind**  
   **Q:** How will the Optum unwind affect earnings cadence?  
   **A:** The nonrenewal of the Optum contract will impact our **Q1**, as they were a large low-margin customer. New customers are mostly back-half loaded, so we'll see a timing difference in revenue and profitability over the year. We're implementing cost optimizations and benefiting from contributions of Specialty Networks and new customer wins.  **[CAH_3398782_13]** **[CAH_3398782_17]** 

4. **Cost Cutting and Structural Changes**  
   **Q:** What's the long-term benefit of cost cuts?  
   **A:** Operating in a **1% operating margin** business, we're always mindful of our cost structure while ensuring customer service. Actions identified in Q4 help offset the near-term impact of customer loss and create a more efficient operational structure. Changes are broad-ranging and many have already been implemented, leading to long-term benefits as we support existing and new customers.  **[CAH_3398782_19]** 

5. **Competitive Landscape in Drug Distribution**  
   **Q:** Has the competitive environment changed?  
   **A:** The drug distribution industry remains competitive but stable—it's a **1% industry**. The vast majority of contracts don't change hands period-to-period. We feel good about our competitive positioning, focusing on customer experience, service levels, value propositions, and tools like Interlogix and Atrix platforms. We're not just competing on price but offering value, which has helped us offset challenges.  **[CAH_3398782_17]** 

6. **Freight Costs and Input Inflation**  
   **Q:** Are rising freight costs affecting you materially?  
   **A:** While freight costs have increased, they're still much lower than during the peak a couple of years ago. The supply chain is functioning more efficiently now. We monitor and manage these increases tightly and haven't needed widespread price adjustments yet. Overall, we're managing better than before, with puts and takes being manageable.  **[CAH_3398782_11]** 

7. **Supply Chain and Domestic Investments**  
   **Q:** Are you investing in domestic manufacturing due to tariffs?  
   **A:** We're investing in a diversified, competitive geographic footprint, not limited to domestic. We have low exposure to China, sourcing less than **10%** of our branded products from there. By enhancing supply chain resiliency across various regions, including nearshore and domestic, we're ensuring customers get the products they need. Investments are driven by volume opportunities and customer needs rather than just cost considerations.  **[CAH_3398782_15]** 

8. **Growth in Other Segments**  
   **Q:** What are growth expectations for OptiFreight, Nuclear, at-Home?  
   **A:** All three businesses are expected to contribute to **double-digit 10% growth** in fiscal '25. We're investing in each: At-Home has opened two new distribution points and is automating; OptiFreight is investing in digital platforms; Nuclear is expanding the PET network and exploring Theranostics, with about **$100 million** invested from fiscal '24 to '26. We believe in their ability to grow and benefit from secular trends.  **[CAH_3398782_21]** 

9. **Averon and CVS Partnership**  
   **Q:** Will Averon only serve CVS?  
   **A:** No, Averon won't just serve CVS. Similar to our Red Oak Sourcing model, we both have different needs and customers but can jointly benefit patients by combining capabilities. The structure is different, without the same payment schedules as Red Oak. Our distribution contract with CVS goes through **2027**, and Red Oak agreement through **2029**; Averon is outside of these agreements and exemplifies partnerships we seek with customers.  **[CAH_3398782_22]** 

10. **Impact of Insulin and Biosimilars**  
    **Q:** How do insulin pricing and HUMIRA shifts affect gross profit?  
    **A:** We've seen offsets due to insulin pricing changes from WACC adjustments at the beginning of the calendar year, impacting us until Q2 of fiscal '25. HUMIRA biosimilar penetration is starting but remains low industry-wide. Actions by companies like CVS are moving things along. We're focused on biosimilars and our joint venture with Averon to increase patient access to affordable therapies.  **[CAH_3398782_14]** 

11. **AI and Efficiency Improvements**  
    **Q:** What's your AI strategy for efficiency and savings?  
    **A:** AI is integrated into our operations broadly. Examples include Specialty Networks' PPS analytics, which synthesizes electronic medical records for actionable insights, and automation in our at-Home Solutions network, now at over **25%** of sites. Platforms like Interlogix and Atrix, in partnership with companies like Palantir, enhance value. We focus on meaningful applications beyond buzzwords to drive our business forward.  **[CAH_3398782_18]** 

12. **Restatement Impact on GMPD**  
    **Q:** Does the restatement affect GMPD targets?  
    **A:** There's no comparability issue; the **$175 million** target is unimpacted by the revisions. Adjustments over the three-year period involved shifting income or expenses into prior periods. We've addressed a revenue recognition issue in our at-Home business, which is less than **0.5%** of our revenue. Now, we have clean financials entering fiscal '25 to discuss our progress moving forward.  **[CAH_3398782_20]** 

13. **Medicaid Disenrollment Effects**  
    **Q:** Has Medicaid disenrollment impacted your business?  
    **A:** We haven't seen meaningful impacts from Medicaid disenrollment. Our broad customer base and payers make it hard to pinpoint reimbursement sources. Same-store sales show consistent utilization without significant fluctuations. Currently, these trends aren't driving our business materially.  **[CAH_3398782_16]** 

6f6e3583c0682c13fc54e37e0087f7825c410dbe4a0d9318465461e3759d4fc1

1. **Impact of Optum Contract Loss**  
   **Q:** How will the loss of the Optum contract affect fiscal '25 earnings, and what's being done to mitigate it?  
   **A:** The loss of the Optum contract will result in an estimated **$80 million net impact** on fiscal '25 segment EBIT, accounting for approximately **4 percentage points** difference from their usual 4–6% profit growth target.  **[CAH_3382095_9]**  Management plans to mitigate this impact through new customer wins, growth in specialty networks, cost reductions, and streamlining processes.  **[CAH_3382095_9]**  They expect at least **1% profit growth** in the segment for fiscal '25 despite the Optum loss.  **[CAH_3382095_9]** 

2. **Fiscal '25 Earnings Guidance and Growth Drivers**  
   **Q:** What are the main factors influencing the fiscal '25 earnings outlook and growth guidance?  
   **A:** Fiscal '25 will see a significant volume drop at the start due to the Optum contract loss, but new customer business and the Specialty Networks acquisition will contribute to revenue, especially in the second half.  **[CAH_3382095_11]**  Cost actions and process simplifications will help offset the impact over the year.  **[CAH_3382095_11]**  Management confirms long-term profit growth guidance of **4–6%**, with fiscal '25 expected to grow at least **1%**, returning to normalized growth rates in fiscal '26.  **[CAH_3382095_14]** 

3. **Red Oak Sourcing Impact**  
   **Q:** Does the loss of the Optum contract and a large payer contract by your partner affect Red Oak Sourcing?  
   **A:** Despite these losses, Red Oak Sourcing remains strong due to significant combined volume with their partner, CVS.  **[CAH_3382095_13]**  The percentage of volume related to the lost customers is quite small relative to their total, so their scale, competitiveness, and ability to drive value and supply remain unaffected.  **[CAH_3382095_13]** 

4. **Progress in Medical Segment (GMPD)**  
   **Q:** How is the medical segment progressing towards fiscal '25 operating income targets?  
   **A:** The medical segment (GMPD) is executing on its plan, having swung from a **negative $165 million** in fiscal '23 to a **positive $65 million** in fiscal '24, marking a **$230 million improvement**.  **[CAH_3382095_13]**  For fiscal '25, they expect approximately **$175 million** in operating income, driven by full inflation mitigation, continued revenue growth, especially in the Cardinal Health Brand, and ongoing cost simplification.  **[CAH_3382095_13]** 

5. **Cardinal Health Brand Growth**  
   **Q:** Where does the company stand on realizing the $50 million growth target for Cardinal Health Brand by fiscal '26?  
   **A:** The company has seen **4% revenue growth** in the Cardinal Health Brand this quarter, indicating positive momentum.  **[CAH_3382095_19]**  They've expanded product offerings and are on track with their plan, with Cardinal Health Brand volume growth being a key component of profit improvement from fiscal '25 to '26.  **[CAH_3382095_19]** 

6. **Competitive Environment in Specialty**  
   **Q:** How is the competitive environment in specialty changing, and how prepared is the company?  
   **A:** While the overall market remains rational, recent contract switches are exceptions.  **[CAH_3382095_10]**  The company feels confident with its broad suite of services and is building out capabilities upstream and downstream to add value for customers.  **[CAH_3382095_10]**  The acquisition of Specialty Networks aids in getting closer to practitioners and offering incremental services demanded by the industry.  **[CAH_3382095_10]** 

7. **Generic Pricing and Margins**  
   **Q:** What trends are you seeing in generic pricing and gross profit dollars?  
   **A:** The company observes consistent market dynamics with stability on both the buy and sell sides of generics.  **[CAH_3382095_12]**  They continue to see strength in the generics portfolio and view the current stability as a strength.  **[CAH_3382095_12]** 

8. **Navista and Specialty Networks Integration**  
   **Q:** Can you provide an update on Navista and the integration with Specialty Networks?  
   **A:** Progress on Navista is on track, with a focus on building tools and capabilities guided by customer needs.  **[CAH_3382095_20]**  The integration of Specialty Networks enhances technology and capabilities but is customer-driven in terms of which services are utilized.  **[CAH_3382095_20]**  The leadership and expertise from Specialty Networks are positively impacting the broader business.  **[CAH_3382095_20]** 

9. **Other Segment Revenue and Profit Growth**  
   **Q:** When will the strong revenue growth in the Other segment translate into profit growth?  
   **A:** The Other segment is expected to achieve **8–10% profit growth** for fiscal '24, confirming the high end of that range for fiscal '25.  **[CAH_3382095_18]**  The strong industry sectors and leadership positions within the segment's businesses support this growth outlook.  **[CAH_3382095_18]** 

10. **GMPD Competitive Environment and Utilization Demand**  
    **Q:** Are you seeing improvements in the competitive environment and underlying utilization demand in GMPD?  
    **A:** The company's performance has improved significantly, with customer loyalty scores increasing and product availability stabilizing.  **[CAH_3382095_17]**  The market utilization is more normalized, supporting consistent growth aligned with the market.  **[CAH_3382095_17]** 

02a2520fc38a38d5a35baad815b613eeef005283bcef6d7474080757657486a2

1. **Medical Segment Turnaround**  
   **Q:** Are you still committed to the core Medical business, and is the turnaround on track?  
   **A:** Management affirmed their commitment to the Medical business, emphasizing that their #1 priority is turning it around following their 5-point plan to drive Cardinal Health brand volumes, mitigate inflation, and reduce costs. The core operational performance is as laid out, with no changes to their fiscal year '26 aggregate targets or long-term profitability plans.  **[CAH_3371536_10]** 

2. **Medical Segment Profitability and One-Time Items**  
   **Q:** What were the one-time items in Medical, and how does that affect profitability trajectory?  
   **A:** The underlying performance of the Medical business was encouraging, consistent with expectations despite adjustments taken in the quarter. The nonrecurring adjustments, primarily impacting the at-Home and WaveMark businesses, reduced guidance from approximately **$400 million to $380 million**, but core operational plans remain on track. They anticipate a step-up in the second half driven by inflation mitigation and Cardinal Health brand volume growth.  **[CAH_3371536_12]** 

3. **Optum Contract Renewal**  
   **Q:** Any updates on the United (Optum) contract renewal timing?  
   **A:** There are no updates on the Optum contract, which runs through this fiscal year. Optum is a significant customer, generating over **$30 billion** in revenue last year, primarily through low-margin mail order volume. Management emphasized their strong relationship and desire to continue working with Optum.  **[CAH_3371536_15]** 

4. **SG&A Growth and Investments**  
   **Q:** What drove SG&A growth in the quarter, and how should we think about it going forward?  
   **A:** SG&A growth was tied to variable costs from higher volumes and purposeful investments in strategic areas like Navista. While gross profit grew faster than SG&A, management is focused on optimizing the cost structure and balancing short-term needs with long-term strategic investments.  **[CAH_3371536_14]** 

5. **COVID Vaccine Distribution Impact**  
   **Q:** What was the contribution from COVID vaccine distribution, and expectations for the balance of the year?  
   **A:** The COVID vaccine distribution peaked in October, with higher contributions in Q2 versus Q1. Volume tailed off in November and December, and minimal impact is expected in Q3. The performance was consistent with expectations, and costs associated with the rollout were incurred due to ramping up for two months of high volume.  **[CAH_3371536_17]** 

6. **Interest Expense and Capital Structure**  
   **Q:** Why did interest expense decrease, and what are the ongoing thoughts on capital structure?  
   **A:** The company ended the quarter with **$4.6 billion** in cash, driven by strong cash generation and optimization efforts. Higher cash balances in a higher interest rate environment led to greater returns, reducing net interest expense. Upcoming debt maturities in June and November are being assessed, and cash balances will fluctuate seasonally.  **[CAH_3371536_11]** 

7. **Generics Market Dynamics**  
   **Q:** Are you still seeing easing deflationary dynamics in generics, and how material is it?  
   **A:** Consistent market dynamics in the generic space, combined with strong volume, contributed to a strong quarter. The balance in generics is a core component of guidance for the Pharma segment, which saw profit guidance raised to growth of **7% to 9%** last quarter.  **[CAH_3371536_13]** 

8. **Impact of Shipping Rates on Medical Segment**  
   **Q:** How will recent spikes in shipping rates affect the Medical improvement plan?  
   **A:** While shipping rates have spiked, the magnitude is substantially less than previous levels, and management does not believe current rates will be permanent. Increased flexibility in contracts and improved capabilities mitigate the impact, and it is not seen as a material issue for the Medical improvement plan.  **[CAH_3371536_19]** 

9. **Restatement of 'Other' Segment Growth**  
   **Q:** Which subsegments are showing softness relative to long-term expectations in the 'Other' segment?  
   **A:** The 'Other' segment, including at-Home, Nuclear and Precision Health, and OptiFreight businesses, is expected to grow at a long-term CAGR of **8% to 10%**. The near-term growth of **6% to 8%** in fiscal '24 is due to nonrecurring adjustments impacting the at-Home business in Q2. Each business is expected to contribute to revenue and profit growth moving forward.  **[CAH_3371536_16]** 

10. **Specialty Networks Acquisition**  
    **Q:** Can you provide more details on Specialty Networks' capabilities and future deals?  
    **A:** The acquisition of Specialty Networks brings valuable analytics and technology, notably PPS Analytics, which can be expanded across therapeutic areas. The company values the technology and leadership team, seeing it as a profitable business today. They plan to invest early on to expand its scope, aligning with their strategy in the specialty space.  **[CAH_3371536_9]** 

769a8115d999809dcb7f6b9df9ada9d591d2fb9840cf1b16cc947486cead4bba

- **Cardinal Health identified a long-standing accounting error in revenue recognition** within its at-Home Solutions business related to third-party payers, which raises concerns about financial reporting reliability.  **[CAH_3398782_3]**
- The company faces a **$40 billion revenue headwind in fiscal year '25** due to the expiration of a **large customer contract**, potentially impacting overall revenue and profitability.  **[CAH_3398782_5]**
- **Supply chain inflation and increased freight costs** continue to challenge the company's margins, particularly in the **GMPD business**, requiring ongoing mitigation efforts.  **[CAH_3398782_8]** ,  **[CAH_3398782_11]**

6923f618daa4c3c707750c6c0cf97771f2f923d56b8642c3ae283118725bfa6d

- **The Medical segment faced nonrecurring adjustments in Q2 that negatively impacted profitability, raising concerns about achieving the expected improvement in the second half of the fiscal year.**  **[CAH_3371536_12]** ,  **[CAH_3371536_19]** ,  **[CAH_3371536_10]**
- **Spiking shipping rates in January could increase costs and potentially impact the Medical segment's improvement plan into fiscal '25.**  **[CAH_3371536_19]**
- **Growth in the 'Other' segment, including the at-Home business, is lower in fiscal '24 compared to long-term targets due to nonrecurring adjustments, indicating potential softness in these areas.**  **[CAH_3371536_16]**

a6164786e8c2e03c22f6cda4495630025f88ff708d82ec6843b5568424c0424a

- **Loss of a major customer expected to cause significant volume drop**: The company anticipates a "cliff event customer transition" on July 1, leading to volume dropping off "fairly precipitously" in Q1 fiscal 2025 due to the nonrenewal of a large, growing customer contract.  **[CAH_3382095_11]** **[CAH_3382095_18]**
- **Adjusted free cash flow expected to be significantly lower in fiscal 2025**: The "large contract unwind" from the customer loss will "significantly influence our cash flow in Q1 of next year," leading to a lower adjusted free cash flow in fiscal 2025 compared to the average.  **[CAH_3382095_4]**
- **Growth in the largest segment expected to slow**: For the Pharmaceutical and Specialty Solutions segment, they "notably expect to deliver at least 1% segment profit growth in fiscal year '25" before returning to normalized growth in fiscal '26, indicating near-term challenges.  **[CAH_3382095_4]** **[CAH_3382095_18]**

0e5672c2694a914ba08608712d8fc6beb6af1e8c5d560fb5e0d2fcbe05521406

- The **sustainability of Pharma segment profit growth** is uncertain due to anticipated decreases in COVID-19 vaccine contributions and expectations that **brand inflation will not repeat at fiscal '23 levels**, which may pressure margins in the second half of the year.  **[CAH_3364177_10]** **[CAH_3364177_15]**
- The **Medical segment** relies on **significant back-half weighted performance** to meet its **$400 million profit target**, and despite slight overperformance in Q1, there is **no change in guidance**, indicating potential challenges in achieving the profit target.  **[CAH_3364177_6]** **[CAH_3364177_9]**
- There is concern about **margin dilution** from increased sales of **GLP-1 medications**, which have high revenue but may be **less profitable**, potentially impacting overall profitability in the Pharma segment.  **[CAH_3364177_12]** **[CAH_3364177_11]**

4257176f3266e949b478821564cb678ea1f0cf4b72454aad9b7f547cb45818de

- **Cardinal Health raised its Pharma segment profit guidance to 7% to 9% growth for the year**, up from the previous 4% to 6%, reflecting a strong start to the year and ongoing business strength.  **[CAH_3364177_10]**
- The company's generics business continues to perform well, with **Red Oak Sourcing effectively managing cost and supply**, contributing to consistent market dynamics and strong customer service.  **[CAH_3364177_12]** **[CAH_3364177_11]**
- **Operational efficiency is driving margin improvement**, as evidenced by increased gross margins and flat SG&A expenses, demonstrating efficient execution and cost control leading to improved profitability.  **[CAH_3364177_13]**

8b8e113c8c4b7f8381656a4255d16bebcce16f7bb630bebcf0195c54fe2a90ec

Cardinal Health Inc (CAH)

Financials