Skip to content
    MCK
    Earnings call· Dec 2025(Q3 FY26)

    MCKESSON Q3 FY26 earnings call MCK

    Feb 4, 2026 Source

    Executive summary

    McKesson Q3 FY26 — Double-Digit Growth and Raised Full-Year EPS Guidance

    McKesson delivered a strong third quarter, driven by robust performance in oncology, biopharma services, and North American distribution. The company raised its full-year EPS guidance, reflecting confidence in its strategic priorities and operational execution, including significant investments in technology and automation to enhance efficiency and customer experience. Portfolio optimization continues with the planned Medical-Surgical separation and the completed European exit.

    Highlights

    5

    • Consolidated revenues increased 11% to $106.2 billion.

    • Adjusted EPS increased 16% to $9.34.

    • Full-year EPS guidance raised to $38.80-$39.20, representing 17%-19% year-over-year growth.

    • Oncology and Multispecialty segment revenue increased 37% to $13 billion, with operating profit up 57%.

    • Operating expenses as a percentage of gross profit improved by 138 basis points.

    Concerns

    1

    • Medical-Surgical Solutions operating profit decreased 10% to $265 million, reflecting lower volumes across physician office settings and lower incidence of seasonal illness.

    Guidance & targets

    23
    CategoryTargetConfidence
    Full-year FY26 Adjusted EPS
    $38.80 to $39.20
    high materiality
    High
    Full-year FY26 Revenue Growth
    12% to 16%
    high materiality
    High
    Full-year FY26 Operating Profit Growth
    13% to 17%
    high materiality
    High
    Full-year FY26 North American Pharmaceutical Revenue Growth
    10% to 14%
    medium materiality
    High
    Full-year FY26 North American Pharmaceutical Operating Profit Growth
    8% to 12%
    medium materiality
    High
    Full-year FY26 Oncology and Multispecialty Revenue Growth
    29% to 33%
    medium materiality
    High
    Full-year FY26 Oncology and Multispecialty Operating Profit Growth
    51% to 55%
    medium materiality
    High
    Full-year FY26 Prescription Technology Solutions Revenue Growth
    9% to 13%
    medium materiality
    High
    Full-year FY26 Prescription Technology Solutions Operating Profit Growth
    14% to 18%
    medium materiality
    High
    Full-year FY26 Medical-Surgical Solutions Revenue Growth
    Lower end of 2% to 6%
    medium materiality
    Medium
    Full-year FY26 Medical-Surgical Solutions Operating Profit Growth
    Lower end of 2% to 6%
    medium materiality
    Medium
    Full-year FY26 Corporate Expenses
    $620 million to $650 million
    low materiality
    High
    Full-year FY26 Interest Expense
    $215 million to $235 million
    low materiality
    High
    Full-year FY26 Income Attributable to Noncontrolling Interest
    $230 million to $250 million
    low materiality
    High
    Full-year FY26 Effective Tax Rate
    Approximately 19%
    low materiality
    High
    Full-year FY26 Free Cash Flow
    Approximately $4.4 billion to $4.8 billion
    high materiality
    High
    Full-year FY26 Share Repurchases
    Approximately $2.5 billion
    high materiality
    High
    Full-year FY26 Weighted-Average Diluted Shares Outstanding
    Approximately 124 million
    low materiality
    High
    Medical-Surgical Business IPO Timeline
    Second half of calendar 2027
    high materiality
    Medium
    Norway Operations FY26 Revenue Contribution
    Approximately $1 billion
    low materiality
    High
    Norway Operations FY26 Adjusted Operating Profit Contribution
    Approximately $70 million
    low materiality
    High
    Norway Operations FY26 Adjusted EPS Accretion
    Approximately $0.10
    low materiality
    High
    Q4 FY26 Prescription Technology Solutions Incremental Technology Investments Cost
    Approximate $0.05
    low materiality
    High

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    North American Pharmaceutical
    Driven by higher prescription volumes, including higher volumes across retail national account customers and continued specialty product distribution strength. Operating profit increased 6%, benefiting from growth in specialty products distribution, including to health systems. Prior year included a $19 million benefit from held-for-sale accounting related to Canada-based Rexall and Well.ca businesses.
    		$88.3 billion9%—$872 million
    Oncology and Multispecialty
    Driven by strong provider growth, expanded specialty distribution, and contributions from acquisitions (PRISM and Core Ventures) completed this fiscal year. Operating profit increased 57%, led by growth in provider solutions and specialty distribution, including contributions from acquisitions.
    Acquisitions contribution to revenue growth: 13%Organic operating profit growth (excluding acquisitions): 15%
    		$13 billion37%—$366 million
    Prescription Technology Solutions
    Supported by higher prescription volumes across third-party logistics and technology services businesses. Operating profit rose 18%, driven by continued demand for access solutions, including prior authorization services.
    		$1.5 billion9%—$277 million
    Medical-Surgical Solutions
    Revenue growth driven by higher specialty pharmaceutical volumes. Operating profit decreased 10%, reflecting lower volumes across physician office settings and lower incidence of seasonal illness.
    		$3 billion1%—$265 million
    Other (Norway operations)
    Contributed $0.05 of adjusted earnings per diluted share due to held-for-sale accounting in Q3. Divestiture completed on January 30, marking the final step in the exit from Europe.
    Adjusted earnings per diluted share accretion from held-for-sale accounting: $0.05
    		————

    Operational metrics

    21
    GLP-1 distribution revenues
    $14 millionup $3 million or 26% YoY
    Q3 FY26

    Transcription error: 'up $3 billion' was corrected to 'up $3 million' based on context of $14 million revenue. This is a specific call-out for GLP-1 related sales.

    Operating expenses as percentage of gross profit
    138 basis point improvementYoY
    Q3 FY26

    Reflects strong operational execution and enhanced efficiency.

    Interest expense
    $59 milliondecreased 5% YoY
    Q3 FY26

    Driven by effective cash and portfolio management.

    Effective tax rate
    23%vs 23.9% prior year
    Q3 FY26

    For the quarter.

    Diluted weighted average shares outstanding
    123.7 milliondecreased 2%
    Q3 FY26

    Reflecting ongoing share repurchase activity.

    Capital expenditures
    $175 million
    Q3 FY26

    Included in free cash flow calculation.

    Cash and cash equivalents balance
    $3 billion
    Q3 FY26 end

    Balance at the end of the quarter.

    Share repurchases
    $680 million
    Q3 FY26

    Part of cash returned to shareholders.

    Dividend payments
    $101 million
    Q3 FY26

    Part of cash returned to shareholders.

    Return on Invested Capital (ROIC)
    Exceeding 30%increased by more than 1,900 basis points since FY20
    Q3 FY26

    Reflects focus on accelerating growth and disciplined portfolio management.

    Acquisitions contribution to Oncology & Multispecialty Q3 revenue growth
    13%
    Q3 FY26

    From PRISM and Core Ventures.

    Oncology & Multispecialty organic operating profit growth
    15%
    Q3 FY26

    Excluding the impact from acquisitions.

    Employee resource group membership
    More than 30%
    Current

    Participation in these groups results in increased employee engagement, improved retention and better business outcomes.

    U.S. oncology network providers
    Approximately 3,400
    Current

    Part of the oncology and multispecialty business.

    PRISM Vision providers
    Over 200
    Current

    In retina and ophthalmology.

    New programs added to biopharma services platform
    50
    Q3 FY26

    Highlighting strong demand for access and affordability solutions.

    Refrigeration capacity expansion
    More than 50%
    Future

    Strengthens ability to support temperature-sensitive products.

    DSCSA inquiries prevented from escalation by AI chat tool
    75%
    Since November launch

    Materially improved first contact resolution for customer inquiries related to the Drug Supply Chain Security Act.

    Annual verification productivity increase
    120 more patientsYoY
    Current year

    Each full-time employee successfully supporting more patients due to technology, automation, and enhanced training.

    GAAP-only pretax credit (Rite Aid bankruptcy)
    $160 million
    Q3 FY26

    Recorded within the North American Pharmaceutical segment.

    Corporate expenses equity investments pretax gains
    $11 millionvs $6 million prior year
    Q3 FY26

    As compared to $0.04 per share in the prior year quarter.

    Industry KPIs

    6
    MetricValueDetails
    Utilization trendsStable
    Client retention new wins50 new programsprograms
    Pharmacy scripts specialtyHigher prescription volumes and continued strength
    Segment revenue operating income—
    Adjusted EPS EBITDA leverage guidanceAdjusted EPS $9.34USD
    Prior authorization operational metricsContinued demand

    Deals & partnerships

    3
    Norway operationsDivestiture

    Completed the divestiture of retail and distribution businesses in Norway on January 30. This marks the final step in McKesson's planned exit of Europe.

    Medical-Surgical businessDivestiture (IPO)

    Progressing in the separation of the Medical-Surgical business. Transition service agreements are now in place across the enterprise. The company is tracking towards an IPO by the second half of calendar 2027, subject to market conditions and customary regulatory approvals.

    PRISM Vision and Core VenturesAcquisition

    Acquisitions completed in the first quarter of fiscal 2026. These acquisitions are contributing meaningfully to the strong performance of the Oncology and Multispecialty segment and are performing well, maybe slightly ahead of the acquisition case.

    Risks & headwinds

    4
    Medical-Surgical segment performance variabilityQ3 FY26

    Operating profit decreased 10% to $265 million

    Mitigation: Closely tracking the development of the current illness season and executing the separation of the Medical-Surgical segment with discipline and focus.

    GLP-1 distribution revenue variabilityOngoing

    Growth may vary from quarter-to-quarter

    Medical-Surgical IPO market conditions and regulatory approvalsSecond half of calendar 2027

    IPO by the second half of calendar 2027, subject to market conditions and customary regulatory approvals

    Prescription Technology Solutions revenue and operating profit trend variabilityQuarter-to-quarter

    Not linear, can vary due to utilization trends, timing and trajectory of new product drug launches, program support requirements, product delays, supply chain dynamics, payer utilization and formulary requirements, annual verification programs, and investment timing.

    Q&A highlights

    10

    Can you elaborate on specific technology investments driving productivity in annual verification season and the long-term margin opportunity for the Prescription Technology Solutions segment?

    Management highlighted investments in AI and automation to streamline workflows, such as automating emails and building digitally native tools for new regulatory requirements like DSCSA, which autonomously resolves 75% of inquiries. They noted that half of RxTS revenue comes from technology services supporting biopharma, and positioning the portfolio to automate these services will continue to improve margin trajectory, which has already seen 130 bps growth YoY.

    “we look to position the portfolio to continue to automate capabilities and automated services and products on behalf of our biopharma partners. And I think we like the trajectory that we're seeing in the business. If you look at the segment, we've seen operating margins grow over 130 basis points year-over-year.”

    asked by Allen Lutz · answered by Britt Vitalone

    2 min read5 chapters

    Detailed Narrative

    01

    Strategic Growth Pillars Momentum

    McKesson is seeing continued momentum in its oncology and multispecialty business, supporting a network of approximately 3,400 U.S. oncology providers and over 200 PRISM Vision providers. The integration of Florida Cancer Specialists and PRISM Vision is progressing well, contributing significantly to segment performance. The company emphasizes its role in advancing community-based cancer care and leveraging its platform for biopharma partnerships, as highlighted by the recent 'advancing Community Oncology report' and the inaugural McKesson Accelerate conference with over 1,500 industry leaders.

    02

    Biopharma Services Expansion

    The Prescription Technology Solutions segment added over 50 new programs across 43 unique brands, demonstrating strong demand for its access and affordability solutions. Investments are focused on modernizing services, including simplifying electronic patient enrollment for specialty medications, reducing processing time from days or weeks to minutes, and improving accuracy. This evolving suite of solutions aims to accelerate patient authorization workflows, speed up medication access, and improve affordability through automated financial assistance searches.

    03

    North American Pharmaceutical Strength

    The North American Pharmaceutical segment shows strong broad-based momentum, supported by stable utilization trends, specialty product strength, and operational excellence. The company is investing in refrigerated capacity expansion across its network, aiming for over 50% increase at many forward distribution centers, and leveraging AI and automation for efficiency. An AI chat tool for DSCSA inquiries prevented 75% of escalations, materially improving first contact resolution and customer experience.

    04

    Portfolio Optimization and Shareholder Value

    McKesson is progressing with the separation of its Medical-Surgical business, with transition service agreements now in place, targeting an IPO by the second half of calendar 2027. The company also completed the divestiture of its Norwegian business, marking its full exit from Europe. These portfolio actions have streamlined the company, sharpened its strategy, and contributed to a significant increase in return on invested capital, now exceeding 30%.

    05

    Technology and Efficiency Gains

    McKesson is making targeted investments in technology, automation, and AI-driven capabilities across the enterprise to drive efficiencies and enhance customer experience. In the annual verification season, full-time employees are successfully supporting 120 more patients than last year due to these investments. The company also highlighted the modernization of contacts and digital operations in Canada, including agent assist and enhanced live chat, demonstrating strong results with near 100% service accuracy.

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