Executive Summary

Strong start to FY25: revenue $81.5B (+12.8% YoY), adjusted EPS $3.73 (+13.7% YoY); GAAP EPS fell to $2.50 on higher OpEx and one-time items .
Guidance raised: adjusted EPS to $15.25–$15.55; consolidated revenue growth to 8–10%; consolidated adjusted operating income growth to 11.5–13.5% .
U.S. Healthcare Solutions outperformed (revenue $74.0B, +13.6% YoY; adj OI +9.9%), aided by strong utilization and GLP‑1 volumes; International modestly up in revenue (+5.5%) with softer logistics OI .
Catalysts: guidance raise and strategic RCA MSO acquisition closed Jan 2 (85% interest; ~$4.4B cash outlay; expected ~$0.35 EPS accretion in first 12 months) .

What Went Well and What Went Wrong

What Went Well

U.S. segment strength: “adjusted diluted EPS increased 14% to $3.73… U.S. Healthcare Solutions segment outperformed expectations due to strong prescription utilization trends” .
Specialty momentum: “strong demand for specialty products from physician practices and health systems” with U.S. adj OI +10% to $767M .
Strategic expansion: closed RCA acquisition to advance specialty leadership and clinical research capabilities; management “excited” about combined opportunity .

What Went Wrong

Margin mix headwinds: gross margin declined 20–28 bps YoY on lower‑margin GLP‑1 mix, lower COVID vaccine sales, and lack of exclusive COVID therapies .
International logistics softness: World Courier faced subdued clinical trial activity; segment OI down 3% as reported in Q1 (up 3% cc) .
Higher financing needs: net interest expense guidance materially increased to $290–$310M due to RCA financing; Q2 expected to be lowest growth quarter on stepped‑up interest and COVID headwinds .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Billions)	$74.241	$79.050	$81.487
GAAP Diluted EPS ($)	$2.42	$0.02	$2.50
Adjusted Diluted EPS ($)	$3.34	$3.34	$3.73
Gross Profit Margin % (GAAP)	3.25%	3.15%	3.14%
Gross Margin % (Adjusted)	3.19%	3.10%	3.11%
Operating Income ($USD Millions, GAAP)	$672.5	$126.6	$706.3
Operating Income ($USD Millions, Adjusted)	$877.7	$851.1	$949.3
Operating Margin % (GAAP)	0.91%	0.16%	0.87%
Operating Margin % (Adjusted)	1.18%	1.08%	1.16%

Segment breakdown

Segment Metric	Q3 2024	Q4 2024	Q1 2025
U.S. Healthcare Solutions Revenue ($B)	$67.192	$71.671	$74.033
International Healthcare Solutions Revenue ($B)	$7.052	$7.382	$7.457
U.S. Healthcare Solutions Operating Income ($M)	$698.3	$697.4	$767.3
International Healthcare Solutions Operating Income ($M)	$179.4	$153.7	$182.1

KPIs (Q1 FY25 unless noted)

KPI	Q3 2024	Q4 2024	Q1 2025
GLP‑1 sales YoY increase ($B)	+$2.1	+$3.1	+$3.2
COVID vaccines contribution vs PY	—	Comparable YoY (qualitative)	~half of PY contribution (qualitative)
Exclusive COVID therapy contribution	$0.08 in PY Q4 (context)	$0.08 in PY Q4 (context)	$0.06 headwind YoY
Net interest expense ($M)	$31.3	$21.0	$27.9
Effective tax rate (Adjusted %)	21.0%	20.3%	20.0%
Diluted shares (M)	200.0	198.1	195.2
Gains from antitrust settlements ($M)	$51.6	$62.3	$22.9
LIFO (credit)/expense ($M)	$6.8 expense	$12.3 expense	$7.3 credit
Turkey FX remeasurement ($M)	$3.6	$10.2	$7.2

Notes: COVID metrics are as discussed in management commentary; where qualitative, figures reflect directional contribution rather than exact dollars as disclosed.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted Diluted EPS ($)	FY2025	$15.15–$15.45 (Jan 2 update); initial $14.80–$15.10 (Nov 6)	$15.25–$15.55	Raised
Consolidated Revenue Growth (%)	FY2025	7–9%	8–10%	Raised
U.S. Healthcare Solutions Revenue Growth (%)	FY2025	7–9%	9–11%	Raised
International Healthcare Solutions Revenue Growth (%)	FY2025	7–9%	4–5% (as reported); 7–9% (constant currency unchanged)	Lowered (as reported); Maintained (cc)
Adjusted Consolidated Operating Income Growth (%)	FY2025	5–6.5%	11.5–13.5%	Raised
U.S. Segment Operating Income Growth (%)	FY2025	5–6.5%	14.5–16.5%	Raised
International Segment Operating Income Growth (%)	FY2025	5–6.5%	Flat (≈5% cc)	Lowered (as reported)
Net Interest Expense ($M)	FY2025	$150–$170	$290–$310	Raised (financing RCA)
Weighted Avg Diluted Shares (M)	FY2025	≈196	Under 196	Lowered
Dividend per share ($)	Next payment	—	$0.55; payable Mar 3, 2025; record Feb 14, 2025	Declared

Quarterly cadence: management expects Q2 FY25 to be the lowest growth quarter (mid‑single‑digit adjusted EPS growth) given higher interest expense and COVID headwinds .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 & Q4 FY24)	Current Period (Q1 FY25)	Trend
GLP‑1 impact	Q3: GLP‑1 up $2.1B YoY; margin pressure from mix . Q4: GLP‑1 up $3.1B YoY; sequential +14% .	Q1: GLP‑1 up $3.2B YoY; management assumes slower growth vs Q1 in rest of FY (revenue, minimal OI impact) .	Continued top‑line lift; margin pressure persists; growth normalizing.
Specialty distribution	Specialty strength in oncology/ophthalmology; providers outpacing market .	Strong demand to physician practices and health systems; U.S. adj OI +10% .	Durable driver.
World Courier / clinical trials	Early positive signs but lower weight/shipments; segment lumpy .	Subdued clinical trial activity; expecting improvement later FY25 .	Near‑term soft; improving later.
RCA MSO strategy	Announced agreement to acquire RCA, MSO strategy emphasized .	Closed Jan 2; 85% interest; integration and accretion ramp through FY25 .	Strategic expansion executing.
Walgreens / large customers	Close collaboration; stable competitive environment; contract rebalancing approach .	Active discussions; guidance reflects assumptions; win‑win value focus .	Ongoing strategic engagement.
COVID products	PY exclusive therapies contribution; vaccines comparable in Q4 .	Q1 vaccines ~half PY; no significant Q2 vaccine contribution; $0.06 headwind from exclusive therapies YoY .	Headwind fading into H2.
FX / constant currency	Int’l growth/FX impacts disclosed .	Int’l revenue/adj OI cc: +8.5%/+3.3% in Q1; FY Int’l cc guidance ~5% OI growth .	FX pressure continues; cc performance steadier.

Management Commentary

“Cencora delivered a strong start to our fiscal year… we are raising guidance for the fiscal year.” — Robert P. Mauch, CEO .
“Our consolidated revenue was $81.5 billion, up 13%… driven primarily by strong revenue growth in the U.S. Healthcare Solutions segment… GLP‑1 products.” — James Cleary, CFO .
“We are excited to have closed on our acquisition of Retina Consultants of America on January 2nd… drives forward our leadership in Specialty.” — Robert P. Mauch .
“We expect consolidated operating income growth to be in the range of 11.5% to 13.5%… U.S. segment 14.5% to 16.5%.” — James Cleary .

Q&A Highlights

RCA/MSO strategy: Management emphasized physician‑led MSO value creation (clinical trials, analytics) and confidence attracting practices; RCA expected ~$0.35 accretion in first 12 months, ramping through FY25 .
GLP‑1 cadence and revenue/EPS sensitivity: Guidance assumes higher GLP‑1 growth in Q1 than balance of year; impacts revenue more than operating income (minimal profitability) .
COVID headwinds: Q1 vaccines ~half of PY; Q2 expected no significant vaccine contribution; exclusive therapy headwind quantified ($0.06) .
World Courier outlook: Near‑term softness from subdued trials; expecting improvement later FY25 as pipeline converts; competitive market but premium service positioning .
Large customer dynamics: Walgreens relationship remains strategic; guidance incorporates assumptions; management focused on co‑innovation and efficiency .

Estimates Context

S&P Global consensus for Q1 FY25 and FY25 was unavailable at time of request due to provider rate limit. As a result, we cannot quantify beat/miss vs Wall Street estimates in this recap (S&P Global data unavailable).
Management raised FY25 adjusted EPS guidance and consolidated revenue/OI growth, indicating internal outperformance in U.S. segment despite COVID and interest headwinds .

Key Takeaways for Investors

Revenue growth remains robust, driven by strong U.S. utilization and GLP‑1 volumes, but margin mix pressures persist due to lower‑margin GLP‑1 and reduced COVID contributions .
Guidance lift is broad‑based (EPS, revenue, operating income), with U.S. segment a notable driver; International as‑reported tempered by FX while cc expectations remain stable .
RCA acquisition extends specialty leadership into retina MSO with clinical research; accretion ramps through FY25, with deleveraging a near‑term capital priority .
Expect Q2 FY25 to be the softest EPS growth quarter (mid‑single digits) on seasonally higher interest expense and continued COVID vaccine headwinds; plan positioning accordingly .
Structural contract rebalancing and specialty focus support resilience amid macro and policy shifts; management maintains close engagement with major customers like Walgreens .
Cash flow remains strong over the year despite Q1 seasonal outflows; dividend $0.55 declared (Mar 3 payment) underscores capital return commitment .
International logistics weakness appears cyclical (trials softness) with improving pipeline; watch signs of demand recovery and FX trends for segment OI inflection later in FY25 .

Cencora, Inc. (COR)·Q1 2025 Earnings Summary