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CI

Cencora, Inc. (COR)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 2025 delivered solid non-GAAP performance: adjusted EPS $3.84 and revenue $83.7B, with adjusted operating income up 20% YoY and margin expanding to 1.22%, driven by U.S. Healthcare Solutions and contribution from RCA; GAAP EPS of $(1.75) reflected a $724M PharmaLex goodwill impairment and higher interest expense tied to RCA financing .
  • Versus S&P Global consensus, Cencora modestly beat on EPS (+$0.05) and revenue (+$0.33B) and exceeded EBITDA as reported by S&P Global’s actuals; GLP-1s contributed ~40 bps to consolidated revenue growth in Q4, less than recent quarters, as mix normalized .
  • Management raised long-term guidance: adjusted operating income growth to 6–9% and adjusted EPS growth to 9–13%, and announced ~$1B distribution-network investments through 2030; FY26 guidance targets adjusted EPS of $17.45–$17.75, revenue growth 5–7%, AOI growth 8–10% and adjusted FCF ≈$3.0B .
  • Strategic re-segmentation from FY26 (U.S. Healthcare Solutions, International Healthcare Solutions, and “Other”) and active review of “Other” (MWI Animal Health, Profarma/ProPharma, legacy U.S. Consulting Services, and parts of PharmaLex) sharpen focus on specialty/MSO platforms as a medium-term stock catalyst .

What Went Well and What Went Wrong

What Went Well

  • Adjusted EPS and operating income outperformed: $3.84 (+15% YoY) and $1.023B (+20%) with margin expansion to 1.22%, led by U.S. Healthcare Solutions and RCA contribution .
  • U.S. Healthcare Solutions strength: segment revenue $75.8B (+5.7% YoY) and operating income $872.4M (+25.1% YoY), underpinned by specialty volumes across health systems and physician practices and GLP-1 demand .
  • Strategic investments/dividend: ~$1B U.S. distribution capacity program through 2030 and dividend raised 9% to $0.60, aligning payout growth with LT EPS growth range low end .

What Went Wrong

  • GAAP earnings impacted by impairments and financing costs: GAAP EPS $(1.75) due to $723.9M PharmaLex goodwill impairment and higher net interest expense (+$56.9M YoY) from RCA-related debt .
  • International Healthcare Solutions mixed: revenue +7.6% YoY but operating income down 2% (as-reported) on consulting pressure; constant-currency OI down 6% .
  • Loss of an oncology customer (late June) and COVID headwind reduced the U.S. segment ex-RCA growth, with management flagging a headwind for the first three quarters of FY26 before lapping in Q4 .

Financial Results

Consolidated performance (comparative quarters and vs estimates)

MetricQ2 2025Q3 2025Q4 2025S&P Global Consensus (Q4 2025)
Revenue ($USD Billions)$75.5 $80.7 $83.7 $83.394*
GAAP Diluted EPS ($)$3.68 $3.52 $(1.75) n/a
Adjusted Diluted EPS ($)$4.42 $4.00 $3.84 $3.785*
Adjusted Operating Income ($USD Billions)$1.192 $1.058 $1.023 n/a
Adjusted Operating Income Margin (%)1.58% 1.31% 1.22% n/a
Gross Profit Margin (%) (GAAP)4.06% 3.60% 3.53% n/a
Net Interest Expense ($USD Millions)$104.0 $81.8 $77.8 n/a

Values marked with * retrieved from S&P Global.

Actual vs S&P Global consensus (Q4 2025)

  • EPS: Actual $3.84 vs consensus $3.785 → Beat by ~$0.05 .
  • Revenue: Actual $83.7B vs consensus $83.394B → Beat by ~$$0.33B .
  • EBITDA: Actual $1.208B vs consensus $1.141B → Beat by ~$$0.07B (S&P Global actual/estimate).
    Values retrieved from S&P Global.

Segment breakdown

SegmentQ2 2025 Revenue ($B)Q2 2025 Op Inc ($M)Q3 2025 Revenue ($B)Q3 2025 Op Inc ($M)Q4 2025 Revenue ($B)Q4 2025 Op Inc ($M)
U.S. Healthcare Solutions$68.28 $1,033.2 $72.88 $901.8 $75.79 $872.4
International Healthcare Solutions$7.17 $159.3 $7.79 $156.2 $7.94 $150.7

KPIs and mix

KPIQ2 2025Q3 2025Q4 2025
GLP-1 Contribution to Consolidated Revenue Growth (bps)—~40 bps ~40 bps, “less meaningful than recent quarters”
Diluted Weighted Avg Shares (Adj) (Millions)195.1 195.2 195.3
Adjusted Effective Tax Rate (%)20.8% 20.7% 20.6%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted Diluted EPSFY 2026—$17.45–$17.75 New (baseline set)
Revenue GrowthFY 2026—5%–7% New
Adjusted Operating Income GrowthFY 2026—8%–10% New
U.S. HCS AOI GrowthFY 2026—9%–11% New
International HCS AOI GrowthFY 2026—5%–8% (as-reported & CC) New
Other AOI GrowthFY 2026—(1)%–(4)% New
Net Interest ExpenseFY 2026—$315–$335M New
Adjusted Effective Tax RateFY 2026—20%–21% New
Diluted Avg SharesFY 2026—~194M New
Adjusted Free Cash FlowFY 2026—≈$3.0B New
Capital ExpendituresFY 2026—≈$900M New
Long-term Adjusted Operating Income GrowthLong-term5%–8% (management reference) 6%–9% Raised
Long-term Adjusted EPS GrowthLong-termManagement indicated increase (prior numeric not disclosed in 8-K) 9%–13% Raised
Quarterly DividendOngoing$0.55 $0.60 (Dec 1, record Nov 14) Raised (+9%)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3 2025)Current Period (Q4 2025)Trend
Specialty/MSO strategy (RCA, One Oncology)Q2: RCA acquisition closing, specialty-led margin expansion ; Q3: RCA contribution, strong specialty volumes CEO/CFO doubled down on MSO platform, clinical trials synergy across retina/oncology, pathway to full ownership of One Oncology Strengthening focus; integration synergies highlighted
GLP-1 demandQ2: GLP-1 drove U.S. revenue growth ; Q3: ~40 bps to consolidated growth Q4: GLP-1 contribution ~40 bps; “less meaningful” than recent quarters Normalization of GLP-1 mix contribution
International performanceQ2: revenue +0.7%, OI down (consulting, logistics) ; Q3: revenue +10.5%, OI down 12.9% Q4: revenue +7.6%, OI down 2%; World Courier rebound; Pharmalex pressure and portfolio simplification Improving ex-consulting; tailoring portfolio
Portfolio review / “Other” segment—Segmentation change for FY26; exploring strategic alternatives (MWI, Profarma/ProPharma, legacy U.S. Consulting, parts of PharmaLex) Active pruning to focus on core specialty
Capital deployment (CapEx, buybacks, dividend)Q2/Q3: disciplined buybacks, dividend maintained/raised ~$900M FY26 CapEx and ~$1B share repurchases; dividend +9% Elevated investment + returns to shareholders
Legal/litigationQ2: opioid accrual in prior year, lower litigation expense in 2Q25 ; Q3: lower litigation and opioid-related expenses Q4: litigation expense lower YoY; GAAP impacted by goodwill impairment Legal headwind subsiding; impairment dominated GAAP

Management Commentary

  • “Cencora furthered key initiatives in fiscal 2025... enhancing our position in specialty through our acquisition of RCA as well as the decision to strategically refocus our existing business portfolio.” — Bob Mauch, CEO .
  • “We are catalyzing growth and innovation... Our increased long-term guidance reflects our confidence that Cencora's foundation in pharmaceutical distribution and leading capabilities... will continue driving growth well into the future.” — Bob Mauch, CEO .
  • “Adjusted diluted EPS of $3.84, an increase of 15%, driven by strong performance in our U.S. healthcare solution segment... GLP-1s were a less meaningful contributor… ~40 bps to consolidated revenue growth.” — Jim Cleary, CFO .
  • “We were proud to announce significant investments totaling $1 billion through 2030 to amplify our distribution network... increasing cold chain storage capacity to support the growth of specialty pharmaceuticals.” — Bob Mauch, CEO .
  • “We are raising our long-term adjusted operating income growth guidance to 6–9%... We feel we are strongly positioned to grow EPS over the long term in the range of 9–13%.” — Jim Cleary, CFO .

Q&A Highlights

  • MSO platform integration: Management highlighted cross-platform synergies in clinical trials and revenue-cycle management between RCA and One Oncology; full ownership pathway expected to enhance strategic control .
  • U.S. AOI durability: Q4 adjusted AOI growth +25% (U.S. segment); ex-RCA growth +13% despite COVID and customer loss; FY26 U.S. AOI guide 9–11%, 10–12% excluding headwind .
  • International recovery: Confidence in 5–8% long-term OI growth driven by World Courier rebound and 3PL strength in Europe, with easier comps and portfolio tailoring (PharmaLex) .
  • “Other” segment economics: MWI and ProPharma profitable with FY26 profit growth expected; divestitures could be short-term dilutive but long-term accretive through focus on higher-growth core .
  • Margin trajectory: Specialty wraparound services (e.g., GPO) and MSO expansion seen as accretive to margins; ROIC emphasized even in lower-margin distribution .

Estimates Context

  • Q4 2025 vs S&P Global consensus: EPS beat ($3.84 vs $3.785*), revenue beat ($83.7B vs $83.394B*), EBITDA beat (~$1.208B vs $1.141B*). Street had reflected a moderation in U.S. segment revenue growth; Cencora exceeded on profitability metrics with specialty-led margin expansion .
    Values retrieved from S&P Global.

Key Takeaways for Investors

  • Specialty/MSO execution remains the core growth engine; RCA/One Oncology synergy and investments should sustain AOI growth above revenue growth over the medium term .
  • Near-term headwinds (lost oncology customer, incremental quarter of higher interest expense) temper FY26 cadence, with growth expected to pick up in Q4 FY26 as comps ease; model accordingly .
  • International improvement hinges on World Courier and European 3PL; PharmaLex restructuring lowers volatility and focuses on pharmacovigilance/market access/regulatory affairs .
  • Strong cash generation and capital deployment: FY26 adjusted FCF ≈$3.0B and $900M CapEx fund infrastructure and digital investments; dividend up 9% and buybacks ($1B) support EPS growth .
  • Re-segmentation and strategic alternatives for “Other” could unlock value and enhance visibility of core specialty economics; monitor potential asset sales and accretion/dilution dynamics .
  • Non-GAAP adjustments materially impacted GAAP results (impairment, LIFO, legal, FX); investors should prioritize adjusted trends and margin evolution for valuation frameworks .
  • Long-term guidance raised (AOI 6–9%, EPS 9–13%) underpins medium-term thesis of specialty-led growth, supported by demographic and innovation trends; watch execution on MSO integration and infrastructure buildout .

Additional Primary Source References

  • Q4 2025 8-K press release incl. dividend and FY26 guidance .
  • Q3 2025 8-K press release and segment detail .
  • Q2 2025 8-K press release and segment detail .
  • Q4 2025 earnings call transcript (prepared remarks and Q&A) .