• Strong sales growth in specialty products, particularly in oncology and ophthalmology, outpacing broader market growth and driving performance in physician practices and health systems. ,
• Increased U.S. operating income guidance towards the upper end of the previous range, reflecting solid utilization trends and broad-based good performance across many business units.
• Early positive signs in the specialty logistics business, with improving volume trends indicating potential for continued strong long-term growth in a historically well-performing segment.

• The company's gross profit margins are declining due to increased sales of lower-margin GLP-1 products and unfavorable sales mix.
• The International Healthcare Solutions segment is experiencing higher IT expenses, lower operating income from reduced shipments and lower weight per shipment, and softness in demand at PharmaLex.
• The company expects significant year-over-year declines in contributions from COVID therapies and vaccines, creating headwinds in upcoming quarters, especially as they lap prior year periods with higher COVID-related earnings.

1. Leadership Transition and Guidance Philosophy
   Q: Any changes in guidance or growth metrics under new leadership?
   A: Cencora's new CEO, Robert Mauch, affirmed there will be no changes in strategy or approach to guidance following the leadership transition. The existing strategy has been effective, and they will continue to execute it. James Cleary added they feel good about their long-term guidance, which includes operating income growth of 5% to 8% and EPS growth of 8% to 12%. Factors influencing fiscal 2025 include growth in specialty products, utilization trends, capital deployment timing, and comparisons to commercial COVID vaccine sales in fiscal 2024.

2. Health of the Market and Utilization Trends
   Q: How is the current health of the market affecting your outlook?
   A: The company continues to see very good utilization trends, with solid performance in the quarter. Growth in GLP-1 products is driving top-line revenue but minimally impacts the bottom line. Strong sales of specialty products to physicians and health systems are outpacing broader market growth, particularly in oncology and ophthalmology. Brand inflation aligns with expectations, and generic deflation has moderated. Overall, market trends remain consistent with recent commentary.

3. Walgreens Relationship
   Q: What's the status of your relationship with Walgreens amid their strategic changes?
   A: Walgreens remains an incredibly strategic partner for Cencora. The company works closely with Walgreens to support their strategy, including distribution relationships and joint generic purchasing. They are committed to maintaining and strengthening this long-term partnership and will approach any changes thoughtfully, aiming to create long-term value.

4. Gross Margin Decline
   Q: What's causing the decline in gross profit margin this quarter?
   A: The decline is due to an increase in sales of lower-margin GLP-1s in the U.S. On a consolidated basis, the mix effect also contributed, as the U.S. business, which has lower gross profit margins, grew faster than the international business. The higher-margin international business's slower growth impacted the overall gross margin.

5. PharmaLex Business Outlook
   Q: How is the PharmaLex business performing amid industry softness?
   A: There has been some softness in the consulting business, consistent with trends in the industry. However, there are early positive indicators in the market, though it's too early to call it a rebound. The team is focused on prioritizing revenue-generating actions. The company remains confident in the strategic decision to acquire PharmaLex, believing in the long-term innovation in pharma and the benefits to their higher growth, higher margin businesses.

6. Oncology Market Consolidation
   Q: Do recent sales of large oncology groups impact Cencora?
   A: The consolidation of oncology groups reflects the value of community oncology as a high-quality, lower-cost site of care. As groups aggregate, they gain efficiency and are better positioned for value-based care programs. This trend is seen as positive, and Cencora intends to continue leading in the oncology market, supporting these customers and benefiting from their growth.

7. Operating Income Guidance and COVID Impact
   Q: What's driving the expected sequential decline in Q4 operating income?
   A: While increasing U.S. operating income guidance toward the upper end of the range, the company expects total COVID contributions to decrease year-over-year in Q4. They anticipate very little contribution from therapies, compared to $0.08 per share from exclusive therapies in the prior year's Q4, creating a headwind. Commercial vaccine contributions are expected to be comparable year-over-year. Overall performance depends on business execution as the year ends.

8. International Business Performance
   Q: What factors affected your international business, excluding FX dynamics?
   A: International operating income was down 4.1% reported but up 1% on a constant currency basis. Higher IT expenses in European distribution and lower operating income in global specialty logistics, due to fewer and lighter international shipments, impacted results. The Canadian business performed well. Guidance for international operating income growth was modestly lowered by 1 percentage point, approximately $7 million, due to these factors and softness in the PharmaLex business.

9. Competitive Differentiation and Renewals
   Q: How do you differentiate during renewals, and have contract structures changed?
   A: Cencora differentiates by supporting customers with efficiency improvements and customized solutions, especially for large customers. They invest in long-term strategic partnerships, providing resources to align with customer strategies. Over the years, they've balanced contracts to avoid subsidizing one product category over another, making financial outcomes more predictable despite market mix changes. This approach is seen as healthy and positive for customer relationships.

10. Impact of NADAC on Independent Pharmacies
    Q: Have NADAC changes affected independent pharmacies you're working with?
    A: Independent pharmacies have been incredibly resilient. Cencora remains close to these customers, discussing how to support them. Regarding NADAC, a voluntary survey that has shown volatility, they haven't received specific requests from independents related to recent changes. Nonetheless, they stay attentive to market reimbursement trends to support their customers effectively.

Note: The numbers in square brackets [ ] correspond to the document index numbers from the provided documents.