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    CAH
    Earnings call· Jun 2026(Q4 FY26)

    CARDINAL HEALTH Q4 FY26 earnings call CAH

    Aug 11, 2026 Source

    Executive summary

    Cardinal Health Q4 FY26 — Strong Performance Across Segments, Reaffirms Long-Term EPS Growth

    Cardinal Health concluded FY26 with strong Q4 results, driven by robust performance in Pharmaceutical and Specialty Solutions and continued progress in Global Medical Products and Distribution. The company delivered significant profit and free cash flow growth, reaffirming its long-term EPS growth rate while strategically investing in key growth areas. Management remains focused on operational execution and disciplined capital allocation, including a new $5 billion share repurchase authorization.

    Highlights

    5

    • Enterprise operating earnings grew 30% in Q4 FY26 and 30% for the full FY26.

    • Diluted EPS grew 40% in Q4 FY26 and 37% for the full FY26.

    • The company generated $5 billion in adjusted free cash flow for FY26.

    • Pharma segment profit grew 21% in Q4 FY26.

    • Other growth businesses delivered 14% profit growth in Q4 FY26.

    Concerns

    3

    • GMPD revenue declined 2% in Q4 FY26, impacted by revenue reduction from expected payables to customers associated with anticipated tariff refund and lower distribution volumes.

    • IRA WAC changes created an approximate 500 basis points headwind to Pharma revenue growth in Q4 FY26.

    • Protracted conflicts in Iran could move GMPD profit to the lower end of its FY27 guidance range.

    Guidance & targets

    14
    CategoryTargetConfidence
    Long-term EPS growth rate
    12% to 14% per year
    high materiality
    High
    FY27 Adjusted EPS
    $12.40 to $12.60
    high materiality
    High
    Pharma segment revenue growth
    3% to 5%
    medium materiality
    High
    Pharma segment profit growth
    8% to 11%
    medium materiality
    High
    GMPD segment revenue growth
    2% to 4%
    medium materiality
    High
    GMPD segment profit
    $200 million to $220 million
    medium materiality
    High
    Other growth businesses revenue growth
    11% to 13%
    medium materiality
    High
    Other growth businesses segment profit growth
    15% to 18%
    medium materiality
    High
    Interest and other expense
    $240 million to $290 million
    low materiality
    High
    Effective tax rate
    19% to 20%
    low materiality
    High
    Adjusted free cash flow
    $3.5 billion and $4 billion
    high materiality
    High
    Capital expenditures
    $700 million
    medium materiality
    High
    Share repurchases
    at least $1 billion
    high materiality
    High
    Diluted weighted average shares outstanding
    approximately 233 million
    low materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Pharmaceutical and Specialty Solutions
    Observed robust brand sales and continued strength across specialty business. Core distribution business remains highly durable, demonstrating ability to be compensated for value provided during regulatory change.
    Profit growth: 21%GLP-1 growth: approx. 500 basis points tailwind to revenueIRA WAC changes: approx. 500 basis points headwind to revenueGenerics program: positive performance, consistent market dynamics
    		$58.8 billion6%—$645 million
    Global Medical Products and Distribution (GMPD)
    Revenue decline impacted by payables to customers for tariff refunds and lower distribution volumes. Profit reflects solid underlying operational performance and the one-time IEEPA tariff refund benefit. Team remains focused on executing improvement plan, driving cost efficiencies and managing supply chain resilience.
    Cardinal Health brand (US) reported growth: -2%Cardinal Health brand (US) ex-tariff impact growth: mid-single-digitNet operating earnings benefit from IEEPA tariff refunds: $100 million
    		$3.1 billion-2%—$150 million
    Other Growth Businesses
    Experienced good demand in At-Home Solutions, while lapping the ADS acquisition and purposely curating customer base. Nuclear and Precision Health Solutions continues to benefit from rapid expansion of Theranostics. OptiFreight Logistics demonstrates strong economic value and core volume growth.
    Profit growth: 14%Nuclear and Precision Health Solutions PET growth: over 20%Nuclear and Precision Health Solutions Theranostics growth: nearly 30% (Q4), over 30% (FY26)At-Home Solutions fill rate: nearly 99%At-Home Solutions on-time departures: best quarter in history
    		$1.7 billion7%—$183 million

    Operational metrics

    28
    Total Company Revenue
    $63.7 billion6% increase
    Q4 FY26

    Driven by strong demand in Pharmaceutical and Specialty Solutions segment with contributions from other growth businesses.

    Total Company Revenue
    $254 billion14% increase
    FY26

    Driven by branded specialty sales.

    Gross Profit
    $2.6 billion16% increase
    Q4 FY26

    Driven by broad-based contributions from all five operating segments.

    Gross Profit
    $9.8 billion20% increase
    FY26

    Benefited directly from segment performance and accretive acquisitions.

    SG&A Growth
    9.5%
    Q4 FY26

    Inclusion of acquisitions contributed to year-over-year growth.

    Enterprise Operating Income
    $935 million30% increase
    Q4 FY26

    Result of operational and financial metrics.

    Enterprise Operating Income
    $3.6 billion30% increase
    FY26

    Total operating earnings for the full year.

    IEEPA Tariff Refund Net Operating Earnings Benefit
    $100 millionone-time
    Q4 FY26

    Reflects increased clarity and confidence in receiving approximately $200 million in IEEPA tariff refunds, offset primarily by payables to customers. Viewed as nonrecurring.

    Interest and Other Expense
    $53 millionyear-over-year increase
    Q4 FY26

    Primarily driven by the impact of acquisition-related financing.

    Effective Tax Rate
    22.5%
    Q4 FY26

    Part of the full year tax rate of 19%.

    Effective Tax Rate
    19%
    FY26

    Full year tax rate.

    Diluted EPS (Adjusted)
    $2.9140% increase
    Q4 FY26

    $0.31 of EPS due to IEEPA tariff refund, representing approximately 15 percentage points of the total 40% growth.

    Diluted EPS (Adjusted)
    $11.26more than doubled since FY22
    FY26

    Non-GAAP EPS for the full year.

    Diluted EPS (Adjusted, Baseline ex-IEEPA)
    $10.95
    FY26

    Baseline adjusted non-GAAP EPS for comparability, excluding $0.31 IEEPA tariff refund impact from Q4 FY26.

    Cash on Hand
    $4.9 billion
    FY26 end

    Ended the year with strong cash position.

    Capital Expenditures
    $264 million
    Q4 FY26

    Deployed to enable profitable growth, including automation, supply chain technology, customer solutions, and platform capabilities.

    Capital Expenditures
    $649 million
    FY26

    Deployed to enable profitable growth, including automation, supply chain technology, customer solutions, and platform capabilities.

    Share Repurchase Program
    $350 millionincremental
    Q4 FY26

    Completed during the quarter.

    Share Repurchases
    $1.35 billion$600 million more than previous commitment
    FY26

    Total share repurchases for the full year.

    Share Repurchase Authorization
    $5 billion increase
    current

    Authorized by the Board of Directors, signaling confidence in durable cash generation.

    Capital Returned to Shareholders
    $7 billion
    4-year period

    Total capital returned over the last four years.

    Biopharma Solutions Growth
    20%+
    expected

    On track to reach $1 billion by FY28.

    Cell and Gene Market Share (serviced exclusively)
    nearly 1/2
    current

    Positioned to support innovative therapies with two additional gene therapy commercialization agreements.

    PET Growth
    over 20%
    Q4 FY26

    Reflects rapid expansion in the portfolio.

    Theranostics Growth
    nearly 30%
    Q4 FY26

    Reflects rapid expansion in the portfolio.

    Theranostics Growth
    over 30%
    FY26

    Reflects rapid expansion in the portfolio.

    At-Home Solutions Fill Rate
    nearly 99%
    Q4 FY26

    Demonstrates exceptional reliability, a result of continued inventory control and increased capacity.

    At-Home Solutions On-Time Departures
    best quarter in history
    Q4 FY26

    Result of continued inventory control and increased capacity throughout the network.

    Industry KPIs

    5
    MetricValueDetails
    Utilization trendsFavorable
    Client retention new winslong-term extension
    Pharmacy scripts specialtydouble-digit growth%
    Segment revenue operating income3% to 5%%
    Adjusted EPS EBITDA leverage guidance$12.40 to $12.60USD

    Product announcements

    2
    ProductTypeDetails
    Innovative Care Pharmacylaunch
    Shipment Navigator and Tracking Beaconupdate

    Deals & partnerships

    5
    KrogerLong-term extension for core pharma distribution.long-term

    Part of successful customer renewal efforts, creating stability for FY27.

    Largest GMPD customerLong-term renewal of distribution agreement.long-term

    Most recently with the long-term renewal of our largest customer in the GMPD segment.

    AdaptHealthAcquisition of the Diabetes Health segment.

    Builds on synergies created by recent investments in home care and enhances the framework established by the ADS acquisition.

    Strive MedicalTuck-in acquisition.

    Recently completed, building on synergies created by recent investments in home care.

    SolarisAcquisition.

    Lapped in Q2 of fiscal '27.

    Risks & headwinds

    4
    IRA WAC changesQ4 FY26, continuing into FY27

    approx. 500 basis points headwind to Pharma revenue growth

    Mitigation: Management adapts to consequences of changes, working with customers and manufacturers to understand intent and logistics. Assumes no adverse profit impact in FY27.

    Rising fuel and commodity costsFY27

    modest tailwind from tariffs expected to offset headwinds

    Mitigation: Guidance assumes offset by tariff tailwind. If costs stay elevated for the full year, GMPD profit would be at the lower end of guidance. More flexible commercial environment and surcharges for diesel fuel provide some protection.

    Protracted conflicts in IranFY27

    could move GMPD profit to the lower end of guide

    Mitigation: Management is monitoring the geopolitical landscape and its potential impact on commodity costs.

    Medicaid redetermination effectsongoing

    discussed, not quantified

    Mitigation: Management tracks closely, noting potential impact on hospital customers' ability to serve certain patients or procedures, which could go against access in healthcare.

    What to watch in Q1 FY27

    5

    GMPD segment profit trajectory

    next quarter
    CurrentFY27 guidance of $200M-$220M (ex-IEEPA FY26 results)
    TargetTracking towards the lower end of guidance if fuel/commodity costs remain elevated or Iran conflicts protracted

    Why it matters

    This indicates the effectiveness of mitigation strategies against rising input costs and geopolitical risks, impacting the segment's profitability.

    However, we continue to monitor both tariffs as well as the length and severity of the conflicts in Iran. Should the conflicts in Iran be protracted, we would expect that to move us to the lower end of our profit guide for GMPD.

    Q&A highlights

    7

    Can you elaborate on the drivers of strong Pharma and Specialty Solutions AOI growth in Q4 and how that momentum translates into the 8-11% FY27 guidance?

    Management attributed Q4 strength to strong demand across key product categories, largest customers, strong specialty growth at higher margins, and positive generics program performance. For FY27, they expect these trends to continue, but without the 'outsized' demand experienced periodically in FY26. M&A concluded in FY26 will contribute 2-3 percentage points to FY27 profit growth.

    “From a guidance perspective, we expect all of those to continue into our fiscal year '27. Now you heard us call out the broader context from a guidance for the year. I do want to point out that, ofcourse, we are not assuming outsized demand, which, as you know, we did experience a couple of times over the course of fiscal year '26.”

    asked by Erin Wilson Wright · answered by Aaron Alt

    3 min read7 chapters

    Detailed Narrative

    01

    Strategic Investments & Operational Excellence

    Cardinal Health has significantly invested in infrastructure, technology, and automation over the past four years, deploying more capital than ever before. These investments aim to drive economies of scale, enhance customer service capabilities, and improve efficiency across the distribution network. The Consumer Health Logistics Center, now in its first full year of operations, has elevated over-the-counter product service levels to record highs and improved customer access to health and diagnostic products.

    02

    Specialty Business Expansion & Innovation

    Expanding the Specialty business remains a fundamental priority, with Biopharma Solutions gaining traction and expected to achieve over 20% growth. The company secured two additional gene therapy commercialization agreements, positioning it to support innovative therapies entering the market in FY28. The new Innovative Care Pharmacy, located in La Vergne, Tennessee, is specifically designed to meet the rigorous standards of high-cost and complex cell and gene therapies, leveraging existing infrastructure to provide end-to-end market solutions.

    03

    GMPD Improvement Plan Progress

    The Global Medical Products and Distribution (GMPD) segment continues to execute its improvement plan, showing the impact of simplification efforts in its results. Steady growth in Cardinal Health brand products was observed in Q4 FY26, continuing a fiscal year trend. Operational efficiency is being enhanced through automation deployment in the distribution network, driving improvements in efficiency, employee safety, and order accuracy. The segment also secured a long-term renewal with its largest customer.

    04

    At-Home Solutions Growth & Acquisitions

    At-Home Solutions demonstrated strong operating performance, benefiting from strategic investments made in FY25 and FY26. The business is focused on smart growth, expecting efficiencies from ongoing distribution capacity and automation expansion. Recent acquisitions of Strive Medical and the Diabetes Health business of AdaptHealth are building on synergies from prior investments in home care, enhancing the framework established by the Advanced Diabetes Supply (ADS) acquisition, which is exceeding synergy expectations.

    05

    Nuclear and Precision Health Solutions Leadership

    Nuclear and Precision Health Solutions maintains a leading position, evidenced by above-market growth in its core business and rapid expansion in Theranostics (nearly 30% growth in Q4) and PET (over 20% growth in Q4). The business is uniquely positioned to capitalize on growth in urology, oncology, and neurology. Integration of Sonexus, the specialty access and patient support business, into the Nuclear web ordering platform has created a seamless digital workflow for high-cost radiopharmaceuticals.

    06

    OptiFreight Logistics Value Proposition

    OptiFreight Logistics continues to demonstrate a strong value proposition for healthcare providers, expecting continued strong core volume growth. The expansion of its offerings, including tech-forward products like Shipment Navigator and Tracking Beacon, supports customers with outbound pharmacy shipments. These solutions are designed to drive insights, cost savings, and efficiencies, creating value for customers.

    07

    Capital Allocation & Shareholder Returns

    The Board of Directors authorized a $5 billion increase to the share repurchase authority, bringing the total authorization to $6.4 billion. This signals confidence in durable cash generation and commitment to disciplined capital allocation. For FY27, the company expects at least $1 billion in share repurchases, marking the third consecutive year of additional repurchases above its original baseline commitment.

    AI-generated summary of the company’s earnings call. Not investment advice.