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MCKESSON CORP (MCK)·Q2 2026 Earnings Summary

Executive Summary

  • Record revenue and a significant EPS beat: Q2 FY26 revenue was $103.15B (+10% YoY) and adjusted EPS was $9.86 (+39% YoY), with GAAP diluted EPS $8.92; adjusted EPS exceeded S&P Global consensus by approximately $0.81, while revenue was modestly below consensus . Consensus: EPS $9.05*, Revenue $104.12B*.
  • Guidance raised: FY26 adjusted EPS range increased by $0.30 to $38.35–$38.85 (16%–18% YoY growth), building on an $0.80 increase at September Investor Day .
  • Segment strength: Oncology & Multispecialty revenue +32% and adjusted segment operating profit +71% YoY; North American Pharmaceutical revenue +8% and adjusted segment operating profit +13%; Prescription Technology Solutions operating profit +20% .
  • Cash generation and capital return: Q2 free cash flow $2.224B; quarter-end cash $4.004B; $907M returned to shareholders (repurchases $818M; dividends $89M) .
  • Narrative catalysts: Strong momentum in oncology/multispecialty, GLP-1 tailwinds ($13.2B revenue in quarter), and raised FY26 EPS guidance provide near-term support; softer illness-season demand in Medical-Surgical is a watch item .

What Went Well and What Went Wrong

What Went Well

  • “We delivered record revenue in the quarter of $103 billion, increasing 10% and Adjusted Earnings per Diluted Share accelerating 39%” — CEO underscoring breadth of growth drivers in oncology, multispecialty, and biopharma services .
  • Oncology & Multispecialty outperformance: Adjusted segment operating profit +71% YoY to $397M, aided by provider growth, acquisitions (PRISM, Core Ventures), and net gains from portfolio decisions; organic operating profit +13% excluding acquisitions and non-recurring gains .
  • PTS scaling: Operating profit +20% to $261M on strong demand for access solutions (e.g., prior auth for GLP-1s); RxDS up ~20% per commentary, reflecting mix shift toward tech services and margin expansion .

What Went Wrong

  • Medical-Surgical softness: Revenue flat at $2.947B; ~4% headwind from lower seasonal vaccines/testing volumes; adjusted segment operating profit +2%, reflecting efficiency gains but demand-related pressure .
  • Revenue modestly below Street: Actual $103.15B vs consensus* $104.12B; mix and timing (illness-season products, testing) contributed; sequential GLP-1 revenue growth (+6%) helped but didn’t fully offset .
  • Tax rate trajectory higher in 2H: FY26 ETR guided to 18%–19% vs prior 17%–19%; Q3 quarterly tax rate expected 23%–25%, implying less tailwind from discretes in back half .

Financial Results

Consolidated Performance (GAAP and Non-GAAP)

MetricQ2 FY2025Q1 FY2026Q2 FY2026
Revenue ($USD Billions)$93.651 $97.827 $103.150
Diluted EPS (GAAP) ($)$1.87 $6.25 $8.92
Adjusted Diluted EPS (Non-GAAP) ($)$7.07 $8.26 $9.86

Profitability Detail (GAAP)

MetricQ2 FY2025Q1 FY2026Q2 FY2026
Gross Profit ($USD Billions)$3.248 $3.279 $3.542
Operating Income ($USD Billions)$0.578 $1.036 $1.407
Net Income Attributable to MCK ($USD Millions)$241 $784 $1,110

Estimates vs Actuals (S&P Global)

MetricConsensus*ActualSurprise
Primary EPS ($)$9.05*$9.86 +$0.81 (+9%)
Revenue ($USD Billions)$104.120*$103.150 -$0.970 (-0.9%)

Values marked with * retrieved from S&P Global.

Segment Revenue

Segment Revenue ($USD Billions)Q2 FY2025Q1 FY2026Q2 FY2026
North American Pharmaceutical$80.018 $82.729 $86.481
Oncology & Multispecialty$9.157 $10.658 $12.044
Prescription Technology Solutions$1.265 $1.434 $1.376
Medical-Surgical Solutions$2.946 $2.701 $2.947
Other$0.265 $0.305 $0.302
Total$93.651 $97.827 $103.150

Adjusted Segment Operating Profit

Adjusted Segment Operating Profit ($USD Millions)Q2 FY2025Q1 FY2026Q2 FY2026
North American Pharmaceutical$754 $749 $851
Oncology & Multispecialty$232 $287 $397
Prescription Technology Solutions$218 $269 $261
Medical-Surgical Solutions$243 $244 $249
Other$14 $13 $25
Corporate (Adjusted)$(170) $(138) $(151)
Income Before Interest & Taxes (Adjusted)$1,291 $1,424 $1,632

KPIs

KPIQ2 FY2026
GLP-1 Revenue ($USD Billions)$13.2; +24% YoY; +6% sequential
Free Cash Flow ($USD Billions)$2.224
Cash from Operations ($USD Billions)$2.420
Capital Expenditures ($USD Millions)$196
Cash and Equivalents ($USD Billions)$4.004
Diluted Weighted-Average Shares (Millions)124.4
Share Repurchases ($USD Millions)$818 (quarter)
Dividends Declared per Share ($)$0.82 (declared Oct 30, payable Jan 2, 2026)
Effective Tax Rate (%)17.5% (Q2)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EPSFY2026$38.05–$38.55 $38.35–$38.85 Raised by $0.30
Revenue GrowthFY2026N/A11%–15% Set
Operating Profit GrowthFY2026N/A12%–16% Set
N. American Pharmaceutical – RevenueFY2026N/A+10%–14% Set
N. American Pharmaceutical – Operating ProfitFY2026Prior not specified+5%–9% (increased) Raised
Oncology & Multispecialty – RevenueFY2026N/A+27%–31% Set
Oncology & Multispecialty – Operating ProfitFY2026N/A+49%–53% Set
Prescription Tech Solutions – RevenueFY2026N/A+9%–13% Set
Prescription Tech Solutions – Operating ProfitFY2026Prior not specified+13%–17% (increased) Raised
Medical-Surgical Solutions – Rev & Op ProfitFY2026N/ALow end of +2%–+6% Tilted lower end
Corporate ExpensesFY2026N/A$600M–$650M Set
Interest ExpenseFY2026Higher range at Investor Day (unspecified)$210M–$240M (reduced vs prior) Lowered
Non-controlling InterestFY2026N/A$215M–$235M Set
Effective Tax RateFY202617%–19% 18%–19% Raised low end
Q3 Tax RateQ3 FY26N/A23%–25% Set
Free Cash FlowFY2026N/A~$4.4B–$4.8B Set
Share RepurchasesFY2026N/A~$2.5B Set
Weighted Avg Diluted SharesFY2026N/A~124M Set
Norway Held-for-Sale AccretionFY2026~$0.20 ~$0.13 Lowered

Notes: “Previous Guidance” is based on disclosures at Investor Day where specified within Q2 call; for items marked N/A, prior ranges were not disclosed in documents reviewed.

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 FY25 / Q1 FY26)Current Period (Q2 FY26)Trend
AI/automation & operating leverageEfficiency focus; RxDS growth and cost optimization (Q1: PTS rev +16%, adj op profit +21%) Tech-first, AI modernization; operating expenses as % of gross profit declined 570 bps; automation in distribution (“8 touches to 2”) Strengthening margin via automation
Supply chain & DSCSA complianceOperational discipline noted; no DSCSA milestone prior Active exchange of serialized transaction data; smooth implementation, minimal disruption Compliance achieved; moat-enhancing capability
GLP-1 dynamicsDriver of utilization in Q1 $13.2B GLP-1 revenue (+24% YoY; +6% seq); prior auth services demand boost in PTS Structural tailwind continues
Oncology/multispecialty strategyAcquisitions: PRISM (80%), Core Ventures (70%); US Oncology provider count expanded Segment revenue +32%, adj op profit +71%; non-recurring $51M gains; organic op profit +13%; Prism expansion to Spokane Eye Clinic Accelerating scale and mix shift
Medical-Surgical macro/illness seasonQ1 growth +2% rev; adj op profit +22% Flat revenue; ~4% headwind from vaccines/testing; guidance low end of +2%–+6% Softer in 2H; illness variability risk
Tax rateQ1 higher tax rate impacted adjusted EPS growth FY ETR 18%–19%; Q3 23%–25%; discrete benefits $96M in Q2 Headwind vs prior low-end guided

Management Commentary

  • CEO: “We delivered record revenue in the quarter of $103 billion, increasing 10% and Adjusted Earnings per Diluted Share accelerating 39%… advancing growth in oncology and multispecialty and biopharma services.”
  • CFO: “Second quarter earnings per diluted share increased 39% to $9.86… approximately $0.30 or 4% from net gains related to the sale of an equity investment and market decisions within the US Oncology Network… and a lower effective tax rate.”
  • CFO on GLP-1: “Revenues from GLP-1 medications were $13.2 billion… +24% YoY; +6% sequential.”
  • CEO on DSCSA: “We are now actively exchanging serialized transaction data… exceptional service-level accuracy with almost no disruption.”

Q&A Highlights

  • PTS margin drivers: Mix shift toward technology services (prior auth), new products/programs; strong H2 despite higher investment cadence .
  • Oncology & Multispecialty gains: $51M non-recurring gains (equity investment + market exits); acquisitions contributing ~half of segment op profit growth; organic op profit +13% .
  • Tax rate cadence: FY ETR raised to 18%–19%; Q3 quarterly rate 23%–25%, with lower Q4 expected due to discretes/mix .
  • NAP implied 2H moderation: First-half growth benefited from onboarding a strategic customer and Canada-related held-for-sale accounting in prior year; explains lower implied 2H growth .
  • Cash-pay channel (TrumpRx): Management views eligible population as small; limited impact expected on prior auth; McKesson prepared to engage with policymakers and leverage affordability tools .

Estimates Context

  • EPS beat: Adjusted EPS $9.86 vs consensus* $9.05 — driven by core operational strength, acquisitions (PRISM, Core Ventures), ~$0.30 non-recurring gains, and lower effective tax rate . Consensus: EPS $9.05*.
  • Revenue slight miss: $103.15B actual vs consensus* $104.12B — illness-season product/testing softness in Medical-Surgical and timing mix offset GLP-1 tailwinds .
  • Implications: Street EPS likely moves higher on raised FY26 guidance; revenue expectations may be tempered for Medical-Surgical near term while NAP and PTS ranges were increased .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Strong quarter quality: Broad-based margin expansion and operating leverage, especially in Oncology & Multispecialty and PTS, should support multiple maintenance despite a small revenue miss .
  • Guidance trajectory positive: FY26 adjusted EPS raised to $38.35–$38.85; segments’ growth ranges increased for NAP and PTS; watch higher FY tax rate and Q3 spike .
  • GLP-1 remains a core tailwind: $13.2B quarterly revenue and PTS prior-auth momentum underpin continued growth, though quarterly variability is expected .
  • Medical-Surgical is a swing factor: Illness-season variability drove flat revenue; FY guidance biased to low end; monitor separation timeline and IPO execution in 2027 .
  • Cash returns intact: Strong FCF ($2.224B Q2), ~$2.5B FY repurchases planned, dividend increased to $0.82; ample liquidity with $4.0B cash .
  • Portfolio evolution: New segmentation enhances transparency; PRISM expansion (Spokane Eye Clinic) and Core Ventures integration bolster multispecialty scale .
  • Near-term trading: EPS beat and guidance raise are supportive; watch Q3 tax-rate-induced EPS cadence, Medical-Surgical illness trends, and any GLP-1 utilization shifts .

Additional Relevant Press Releases (Q2 FY26 Window)

  • Dividend declared: $0.82 per share, payable Jan 2, 2026 (record Dec 1, 2025) .
  • PRISM Vision Group expansion: Affiliation with Spokane Eye Clinic, extending footprint beyond Mid-Atlantic .
  • Ontada research: Framework for external control arms to accelerate Phase 2 oncology trials (ISPOR Europe 2025) .

Non-GAAP adjustments: Adjusted results exclude items including amortization of acquisition-related intangibles, transaction-related expenses/adjustments, LIFO adjustments, gains from antitrust settlements, restructuring/impairment, claims/litigation charges, and other adjustments; reconciliations provided in Q2 release Schedules 2–3 .