Inquired about shorter-term and longer-term opportunities for driving adjusted operating income growth from the MSO platform, given RCA's one-year anniversary and OneOncology's recent closing.

Bob Mauch explained that MSOs extend relationships with specialty providers and biopharma. With two platform MSOs, Cencora can leverage capabilities like RCA's clinical trial excellence across the platform, strengthen revenue cycle management, and develop new services over time to support physicians. “the clinical trial excellence that exists within RCA is something that we believe we can quickly leverage across the entire platform. Revenue cycle management is a very strong capability within the MSOs that can become even stronger.”

Asked about opportunities and future potential in strategic partnerships with health systems, and for Jim to provide color on the cadence of earnings for the next several quarters.

Bob Mauch highlighted significant growth in relationships with health systems, focusing on understanding their strategy and bringing Cencora's capabilities to help them grow, particularly in specialty. Jim Cleary noted the oncology customer loss as a headwind in Q2 and Q3, which will dissipate in Q4, and reiterated that Q2 interest expense would be approximately double Q1 due to OneOncology financing. “the oncology customer that was acquired by a competitor, that will be a headwind like it was the last 2 quarters, that will be a headwind in the second and third fiscal quarter, and then we'll no longer have that headwind in the fourth quarter.”

Asked for clarification on the $30 million below-the-line income from OneOncology, its ongoing nature, Cencora's ownership stake in OneOncology, and why share repurchases are paused despite low leverage.

Jim Cleary confirmed the $30 million income and noncontrolling loss add-back are ongoing, related to OneOncology's UUG subsidiaries. Cencora now owns 92% of OneOncology, with practices and management owning the remaining 8%. He stated share repurchases are paused to prioritize debt paydown, but long-term capital deployment priorities (investing, M&A, buybacks, dividends) remain unchanged. “we increased our ownership stake when we made the announcement today from 35% to 92%, and we're really pleased to say that the practices and management will own the remaining 8%.”

COR

Cencora (COR) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Dec 2025 (Q1 FY26)· Health Care· Feb 4, 2026

Source: earnings call transcript

Executive summary

Cencora Q1 FY26 — Strong Specialty Performance and OneOncology Acquisition Drive Raised Guidance

Cencora delivered a strong first quarter, driven by robust performance in its U.S. Healthcare Solutions segment and the strategic acquisition of OneOncology. The company raised its full-year operating income guidance, reflecting confidence in its specialty-focused strategy and the value creation opportunities from its MSO platform. Management emphasized leveraging MSO capabilities to enhance physician support and patient access, while also prioritizing debt reduction.

Highlights

Adjusted operating income grew 12% to $1.1 billion in Q1 FY26.
Adjusted diluted EPS grew 9% to $4.08 in Q1 FY26.
Consolidated revenue increased 5.5% to $85.9 billion.
U.S. Healthcare Solutions operating income increased 21% to $831 million.
Full-year consolidated operating income growth guidance raised to 11.5%-13.5% from 8%-10%.

Concerns

Net interest expense increased $44 million to $72 million due to debt for the RCA acquisition.
Negative adjusted free cash flow of $2.4 billion in Q1 FY26 due to seasonal working capital needs.
International Healthcare Solutions operating income declined 14% (17% constant currency) due to timing of manufacturer price adjustments in a developing market.
Share repurchases are paused to prioritize debt paydown following the OneOncology acquisition.

Guidance & targets

Category	Target	Timeline	Confidence
Fiscal 2026 Adjusted Operating Income Growth	11.5% to 13.5% high materiality	FY26 · 2026	High
Fiscal 2026 Adjusted Diluted EPS	$17.45 to $17.75 high materiality	FY26 · 2026	High
Fiscal 2026 Consolidated Revenue Growth	7% to 9% high materiality	FY26 · 2026	High
Fiscal 2026 U.S. Healthcare Solutions Revenue Growth	7% to 9% medium materiality	FY26 · 2026	High
Fiscal 2026 International Healthcare Solutions Revenue Growth (as-reported)	7% to 9% medium materiality	FY26 · 2026	High
Fiscal 2026 International Healthcare Solutions Revenue Growth (constant currency)	6% to 8% medium materiality	FY26 · 2026	High
Fiscal 2026 Other Revenue Growth	1% to 5% medium materiality	FY26 · 2026	High
Fiscal 2026 U.S. Healthcare Solutions Operating Income Growth	14% to 16% high materiality	FY26 · 2026	High
Fiscal 2026 International Healthcare Solutions Operating Income Growth	5% to 8% medium materiality	FY26 · 2026	High
Fiscal 2026 Other Operating Income	flat low materiality	FY26 · 2026	High
Fiscal 2026 Effective Income Tax Rate	approximately 20% low materiality	FY26 · 2026	High
Fiscal 2026 Diluted Share Count	approximately 195.5 million shares low materiality	FY26 · 2026	Medium
Fiscal 2026 Net Interest Expense	$480 million to $500 million medium materiality	FY26 · 2026	High
Fiscal 2026 Adjusted Free Cash Flow	approximately $3 billion high materiality	FY26 · 2026	High
OneOncology EPS Accretion	neutral net of financing costs medium materiality	first 12 months post-acquisition	High
OneOncology Nonoperating Income Contribution	approximately $30 million low materiality	FY26 · 2026	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
U.S. Healthcare Solutions Driven by RCA acquisition and continued specialty growth in health systems and physician practices, offsetting oncology customer loss. Saw good volumes and revenue growth, including GLP-1s. Operating income growth: 21%	$76.2 billion	5%	—	$831 million
International Healthcare Solutions Decline due to timing of manufacturer price adjustments in a developing market country, partially offset by operating income growth in Global Specialty Logistics business, which saw volume growth. Revenue growth constant currency: 6%Operating income decline as-reported: 14%Operating income decline constant currency: 17%	$7.6 billion	10% as-reported	—	$142 million
Other Primarily due to growth at MWI Animal Health and Profarma, offset by revenue decline in legacy U.S. hub consulting services. Operating income decline due to U.S. Hub Consulting Services, partially offset by MWI Animal Health. Operating income decline: 6%	$2.1 billion	6%	—	$91 million

Deals & partnerships

OneOncology acquisition increased ownership from 35% to 92%

Cencora completed the acquisition of the majority of the remaining equity interest in OneOncology, increasing its stake from 35% to 92%. The remaining 8% is owned by practices and management. This acquisition is a natural extension of Cencora's leadership in specialty pharmaceuticals.

Retina Consultants of America acquisition

Cencora celebrated the 1-year anniversary of RCA joining Cencora in January. RCA has performed better than expected, with strong volume, research trends, and new physicians joining the platform.

Risks & headwinds

Oncology Customer Loss Impacted Q1 FY26, expected to be a headwind in Q2 and Q3 FY26, dissipating in Q4 FY26.

Not explicitly quantified in dollars, but cited as a headwind to revenue and operating income.

Mitigation:Offset by strong execution and continued specialty growth in U.S. Healthcare Solutions.

Seasonal Working Capital Needs Q1 FY26, expected to unwind over the balance of FY26.

Negative $2.4 billion in Q1 FY26.

Mitigation:Expect full-year adjusted free cash flow of approximately $3 billion as dynamics unwind.

International Manufacturer Price Adjustment Timing Q1 FY26, expected to be a timing difference that picks up in the balance of FY26.

14% decline (17% constant currency) in International Healthcare Solutions operating income.

Mitigation:No change to full-year International operating income guidance (5%-8% growth).

Share Repurchase Pause Indefinite pause, prioritizing debt paydown.

Not quantified, but impacts diluted share count guidance.

Mitigation:Prioritizing debt paydown following OneOncology acquisition; long-term capital deployment priorities remain.

Q&A highlights

Asked about the deceleration in U.S. segment operating income growth from Q4 FY25 to Q1 FY26 and whether to expect continued deceleration due to difficult comps, inquiring about headwinds/tailwinds.

Jim Cleary clarified that Q1 U.S. operating income growth was 21%. Excluding RCA, performance was at the higher end of the 7%-10% long-term guidance, even with an oncology customer loss headwind. He attributed strong performance to utilization trends, specialty sales, and health systems. For the balance of the year, excluding RCA and OneOncology, the core business is expected to remain within the 7%-10% range despite the oncology customer loss.

“If you back out RCA, our performance in the U.S. was still towards the higher end of our long-term guidance range. And that's even with the headwind from the oncology customer that we lost.”

asked by Glen Santangelo · answered by James Cleary

2 min read 6 chapters

Detailed narrative

MSO Expansion and Strategic Priorities

Cencora's MSO expansion, including the recent acquisition of OneOncology and the one-year anniversary of RCA, is central to its strategy. These investments strengthen leadership in specialty pharmaceuticals, support market leaders, and enhance patient access. The MSO platform leverages capabilities like clinical research, revenue cycle management, and data-driven clinical insights to support physicians and advance care, creating a significant footprint for deployment.

RCA Performance and Innovation

Retina Consultants of America (RCA) has performed well, contributing to over one-third of all retina clinical trial research in the U.S. RCA physicians have adopted advanced technologies, such as imaging devices, and were leaders in the early adoption of a key retina biosimilar product, driving patient access to high-quality, lower-cost treatments.

This demonstrates the value of supporting healthcare leaders at the forefront of innovation and has exceeded initial expectations.

OneOncology's Role in Cancer Care

OneOncology partner practices are active contributors at leading oncology conferences, presenting research on emerging treatments like cellular therapies and CAR-T. Their physicians play a crucial role in advancing cancer care and expanding access to complex treatments in local communities, aligning with Cencora's goal of enhancing patient access to pharmaceuticals. The platform is well-positioned and high-performing, expected to be a meaningful contributor to Cencora's operating income.

Impact of IRA Price Negotiations

Cencora successfully navigated the initial IRA price negotiations by leveraging its strategic global sourcing team and contractual terms. The company maintained its economics and gross profit dollars despite list price reductions, demonstrating its ability to protect profitability through discussions with manufacturers. Price increases for other brands were in line with expectations, indicating effective preparation and execution.

International Segment Dynamics

The International Healthcare Solutions segment maintained its full-year operating income guidance despite a Q1 decline. This decline was attributed to a timing difference in manufacturer price adjustments in a developing market country, which is expected to normalize. The Global Specialty Logistics business showed encouraging trends with volume growth and operating income growth, contributing to the segment's overall resilience and positioning for success as the market rebounds.

Portfolio Optimization and Strategic Focus

Cencora is prioritizing growth-oriented investments and assessing its business portfolio for strategic alignment. The full impairment of depreciable assets in the U.S. consulting business, which eliminated future depreciation expense, reflects progress in focusing the portfolio. This move, while small in enterprise context, aims to create management and strategic focus, potentially benefiting the long-term growth rate.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.