Key financial results

  • Total company revenue grew 5% to $67.5 billion for the first quarter.Total company revenue grew 5% to $67.5 billion.
  • Consolidated gross profit increased 12% to $2.6 billion.Consolidated gross profit increased 12% to $2.6 billion.
  • Operating income grew 17% to $1 billion, marking the first time the company achieved this milestone in a quarter.operating income grew 17% to $1 billion, achieving that milestone in a quarter for the first time
  • Diluted earnings per share grew 28% to $3.26.first quarter diluted earnings per share growth of 28% or $3.26.
  • The effective tax rate for the quarter was 18.5%.

Business segment results

  • Pharma: Pharma segment revenue increased 6% to $62.6 billion, driven by brand and Specialty sales.Segment revenue increased 6% to $62.6 billion driven by growing brand and Specialty sales from existing customers.
  • Pharma: Pharma segment profit increased 17% to $783 million, reflecting contributions from brand, Specialty, and the generics program.Segment profit in pharma increased 17% to $783 million.
  • Pharma: Specialty sales grew 18% during the quarter.Specialty grew an 18% clip during the quarter.
  • Pharma: GLP-1 medications contributed 500 basis points of revenue growth, while IRA WAC reductions created a 400 basis point headwind.GLP-1 medications, which continued to grow on pace, drove approximately 500 basis points of revenue growth in the quarter.
  • GMPD: Global Medical Products and Distribution revenue was flat at $3.2 billion.Segment revenue was roughly flat to prior year at $3.2 billion.
  • GMPD: GMPD segment profit was $33 million, driven by operational improvements.Segment profit for GMPD was higher than expected at $33 million for the quarter.
  • Other: Other segment revenue grew 7% to $1.8 billion.Revenue for other grew 7% to $1.8 billion
  • Other: Other segment profit increased 16% to $193 million.profit increased 16% to $193 million.

Capital allocation

  • The company ended the quarter with $5.3 billion in cash.We ended the first quarter with $5.3 billion of cash
  • Adjusted free cash flow for the quarter was $1.6 billion.generating $1.6 billion of adjusted free cash flow.
  • The company invested $157 million in capital expenditures.investing $157 million of capital into our business
  • The company completed a $500 million accelerated share repurchase program.After completing a $500 million accelerated share repurchase program during the quarter
  • Approximately $125 million was returned to shareholders through dividends.returning approximately $125 million to shareholders through dividends.
  • Management noted that policy changes following the election will take time and are expected to be manageable.Any policy changes will take time, and we would expect to be manageable
  • The company continues to see secular growth trends in home-based care and complex medical innovation.These businesses operate in markets aligned with powerful secular trends, including the aging population.
  • Management is monitoring reimbursement changes related to 340B and OPPS, noting that volume may shift to community providers.if there are instances where they find that less affordable to serve those patients, then we do believe those patients will go elsewhere.

Competitive landscape

  • The company renewed its contract with CVS Health through June 2032.Recently, we announced the renewal of our largest customer, CVS Health through June 2032.
  • The Red Oak Sourcing partnership continues to provide value and service levels.our strategic sourcing initiatives, notably our Red Oak Sourcing partnership continue to drive significant value.
  • Management noted that the urology market remains fragmented, providing opportunities for consolidation.It is a space that continues to be quite fragmented.

Macroeconomic environment

  • High petroleum costs driven by the conflict in Iran are impacting GMPD segment profit.sustained high petroleum costs driven by the ongoing Iran conflict are pushing GMPD segment profit toward the low end of our guidance range

Growth opportunities and strategies

  • The company is focused on its Specialty strategy, including the integration of Solaris and MSO capabilities.The integration of Solaris and our MSO strategy continued to progress during the quarter
  • In the at-Home business, the company completed the migration of Strive Medical and is preparing for the Adapt transaction.We have successfully migrated all employees and volume from our recent acquisition of Strive Medical
  • The company is investing in technology, including AI-enabled automation and route optimization tools.We are actively investing in supply chain modernization, automation, technology and AI infrastructure to drive future productivity.
  • The nuclear business is expanding capacity for radiopharmaceutical therapies.We remain well positioned to serve the growing pipeline, complex radiopharmaceutical therapies coming to market

Financial guidance and outlook

  • Fiscal 2027 EPS guidance was raised to $12.80 to $13.we are pleased to raise our fiscal 2027 EPS guidance to $12.80 to $13
  • Pharma segment profit growth guidance was increased to 10% to 12%.we have increased our segment profit growth guidance to a range of 10% to 12% from the prior guidance of 8% to 11%.
  • GMPD segment profit is expected to be at the low end of the $200 million to $220 million range.pushing GMPD segment profit toward the low end of our guidance range of $200 million to $220 million.
  • Other segment revenue growth guidance was raised to 12% to 14%, and profit growth to 17% to 20%.
  • The effective tax rate guidance was lowered to 18.5% to 19.5%.We expect our effective tax rate to be in the range of 18.5% to 19.5%
  • Adjusted free cash flow guidance remains $3.5 billion to $4 billion.we continue to expect adjusted free cash flow to be between $3.5 billion and $4 billion.

M&A and Integration Strategy

  • Management emphasized that future M&A will focus on the existing three legs of the business rather than adding a fourth.we're not looking for a fourth leg of the stool, but there's still a lot of additional opportunities within the other three legs
  • The company is prioritizing successful integration of acquired assets to ensure physician experience.

Q1 FY2027 results

MetricResultChange
Total Revenue$67.5 billion5% growth
Operating Income$1 billion17% growth
Pharma Segment Revenue$62.6 billion6% growth
Pharma Segment Profit$783 million17% growth
GMPD Segment Revenue$3.2 billionflat
Diluted EPS$3.2628% growth

How management sounded

Positive (+45 on our -100 to +100 scale). Management raised full-year EPS guidance and highlighted broad-based growth across all segments, though they noted some moderation in earnings growth for the second and third quarters. Management sounded more upbeat than on 62% of the 302 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.

Read the analyst Q&A summary and guidance and outlook for this call.

What to watch before the next call

  • The impact of high petroleum costs on the Global Medical Products and Distribution segment profit.
  • The integration progress of the Solaris acquisition and other MSO assets.
  • The potential impact of future regulatory changes on 340B and provider reimbursement.

Earlier calls

  • Q4 FY2026 (Aug 11, 2026), tone Positive: Cardinal Health reported strong fourth-quarter results with 30% operating earnings growth and provided fiscal 2027 guidance of $12.40 to $12.60 per share. The company also announced a $5 billion increase to its share repurchase authorization.