Cardinal Health, Inc. Q3 FY2026 earnings call

• Pharmaceutical and Specialty Solutions: Underlying operating strength led by pharma, with growth in specialty, including over 20% revenue growth in Q3. Progressing MSO platforms, integration of Solaris on track. Focus on core with investments in infrastructure, technology, and people. • GMPD: Continuing improvement plan, focusing on simplification and cost optimization, with Cardinal Health brand growth. • Other Growth Businesses: At Home Solutions seeing strong demand, integration of ADS progressing. Nuclear and Precision Health Solutions demonstrating leading position with expansion of Actinium 225 production capabilities. Optifreight Logistics continuing to deliver unique value proposition.

Pharmaceutical and Specialty Solutions: Segment revenue grew 11% to $56.1 billion, with segment profit growing 18% to $784 million. Growth driven by existing customer growth, strong pharmaceutical demand across categories. GMPD: Revenue was $3.1 billion, generally flat year-over-year, reflecting lower distribution volumes offset by Cardinal Health brand growth. Segment profits decreased to $25 million due to adverse net impact of tariffs. Other Growth Businesses: At Home Solutions, Nuclear and Precision Health Solutions, and Optifreight Logistics saw segment revenue grow 31% to $1.7 billion and segment profit grow 34% to $179 million, driven by robust demand and acquisition of ADS.

• Raised full-year fiscal 2026 non-GAAP EPS outlook to $10.70 - $10.80, representing 30% - 31% annual EPS growth. • Pharma segment: Expect fiscal 2026 revenue at lower end of 15% - 70% range, segment profit growth outlook raised and narrowed to 22% - 23%. • GMPD segment: Reiterating revenue outlook of 1% - 3% growth and holding profit guidance to $150 million. • Other growth businesses: Revenue guidance unchanged, projecting 26% - 28% growth, profit growth guidance increased to 36% - 38%. • Updated interest and other expense outlook to approximately $340 million, lowered non-GAAP effective tax rate for full year to ~19%, updated weighted average shares outstanding outlook, and raised and narrowed full year adjusted free cash flow guidance to $3.3 billion - $3.7 billion.

• Uncertainty in timing, scope, and administration of refunds related to tariffs imposed under the International Emergency Economic Powers Act. • Potential impacts of macroeconomic factors including fuel and commodity exposure on GMPD segment. • Dynamics in healthcare landscape and regulatory environment could impact business operations.

Q: Lisa Gill from J.P. Morgan had issues with audio.

Q: Michael Cherney of Learing Partners asked about quantifying SG&A investments and holes in specialty portfolio.

A: James Meeker said SG&A up 17% overall, 7% excluding M&A impact, and on specialty portfolio, pleased with strength, prioritizing autoimmune and urology, disciplined with inorganic opportunities.

Q: Elizabeth Anderson of Evercore ISI asked about other growth businesses' trend.

A: Aaron Ault said strong performance across others, driven by secular trends, strong demand, ADS integration, theranostic growth in nuclear, and Optifreight's performance.

Q: Aaron Wright of Morgan Stanley asked about sustained momentum into 2027.

A: James Meeker said confident in business resilience, strong core, positive demographic trends, and specialty expansion.

Q: Eric Percher of Nephron Research asked about NAVISTA and ION impairment.

A: Jason Holler said pivot in strategy towards equity arrangement, not changing broader strategy, underlying data supports accretive way.

Q: Alan Lutz of Bank of America asked about free cash flow raise.

A: Alan Lutz was told it was driven by all businesses focusing on customer service levels and inventory positions.

Q: Glenn Santangelo of Barclays asked about fee-for-service pricing power.

A: Jason Holler said confident in value provided, expecting to be paid same amount going forward.

Q: George Hill of Deutsche Bank asked about fee-for-service pricing power and BFSF risk.

A: Jason Holler said comfortable with value provided, expecting similar transition if required.

Q: Steven Baxter of Wells Fargo asked about below-the-line items and EPS growth.

A: James Meeker said confident in long-term targets, managing income statement year over year.

Q: Kevin Caliendo of UBS asked about GMPD volumes and tariff clawback.

A: Jason Holler said volumes had slight impact, tariffs refund uncertain, not recognized in P&L yet.

Q: Charles Roy of TD Cowan asked about IRA impact.

A: James Meeker said revenue impact from IRA and GLP-1s, profit line strong.

Q: Stephen Valliquette of Mizuho Securities asked about weather impact.

A: Jason Holler said weather had slight financial impact, not large enough to call out.

Q: Daniel of Citi asked about distribution volume ramp.

A: Jason Holler said Solaris distribution volume ramping up, impact to fiscal 2026 not material.

Q: Brian Conquiment of Jefferies asked about energy costs and input costs.

A: Jason Holler said oil shock different, more manageable, exam gloves cost increase manageable.

Q: Eric Coldwell of Bayard asked about Novista, ION changes and tax item.

A: Jason Holler said changes are cardinal specific, tax item was multi-year opportunity of ~35 cents.