Detailed narrative
Pharma-led quarter with profit outpacing revenue
Total revenue rose 11% to $61B and non-GAAP EPS grew 35% to $3.17, aided by a low 10.2% tax rate (including a ~$0.35 multiyear discrete benefit📎) and continued buybacks. The Pharmaceutical and Specialty Solutions segment grew revenue 11% to $56.1B on existing-customer growth across specialty, generics, and consumer health, while segment profit grew 18% to $784M on brand and specialty contributions and consistent generics dynamics via the Red Oak partnership.
Management noted revenue optics were muddied by a 6-point GLP-1 uplift offset by a 6-point IRA WAC repricing drag.
Specialty platform expansion and the Navista impairment
Specialty grew over 20% (oncology over 30%) and is expected to exceed $50B in revenue this fiscal year, with acquired assets GIA, Solaris, and ION performing to plan and contributing ~8 points of FY26 Pharma growth. The company closed three tuck-in acquisitions in the Specialty Alliance (now in its 33rd state) and prioritizes autoimmune and urology for future bolt-ons.
A $184M pretax GAAP goodwill impairment on Navista reflects a pivot to prioritize the equity MSO model over non-equity arrangements, raising the discount rate on a small part of the oncology business; management stressed the broader oncology/MSO strategy and economics are unchanged.
GMPD improvement plan amid tariff pressure
GMPD revenue was flat at $3.1B and segment profit fell to $25M on the adverse net impact of tariffs, though Cardinal Health brand grew over 5% in the U.S. and has grown at least mid-single digits for five consecutive quarters under the 5-Point Plan.
Cardinal has paid ~$200M in IEPA tariffs; following a February 2026 Supreme Court ruling that IEEPA tariffs are unlawful, a refund process is underway and a potential future net benefit of ~$100M (about half of $200M, net of customer price passthrough) could arise, though none is recognized in results or guidance given timing uncertainty.
Other growth businesses accelerating
at-Home Solutions, Nuclear and Precision Health Solutions, and OptiFreight Logistics grew combined revenue 31% to $1.7B and profit 34% to $179M. ADS integration is one year in with ~1,000 new employees and ~500,000 new patients onboarded and volume migrated into Cardinal's distribution centers; the continued care pathway program now serves 165,000 patients, up ~20% since January.
Nuclear's Theranostics grew over 30% with an announced Actinium-225 capacity expansion, and OptiFreight grew nearly 20%.
Capital allocation and balance sheet discipline
Cardinal ended the quarter with nearly $4B in cash after generating $1.7B adjusted FCF, prepaid $100M on its term loan to bring Moody's-adjusted leverage to 3.0x (within the 2.75x-3.25x target, supporting its Baa2 rating), and executed an additional $250M ASR, bringing FY26 buybacks to $1B ($250M above baseline).
CapEx of $385M year-to-date spans all businesses, including a signed lease for a new Sacramento distribution center. Below-the-line optimization of tax and buybacks is framed as a lever for FY27 accretion.
FY27 early framing
Management reaffirmed confidence in long-term targets (12%-14% non-GAAP EPS growth) while flagging puts and takes for FY27: Solaris annualization and synergy realization as tailwinds, ongoing tariff dynamics (with a potential GMPD year-over-year opportunity) roughly offset by higher fuel/commodity costs, and a tough comparison to this year's discrete tax benefits📎. Full FY27 guidance will be provided at the Q4 earnings call.