CARDINAL HEALTH INC
For the period ended Mar 31, 2025. Filed May 1, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 1, 2025
CAH$271.72+1.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-12-31; filed 2025-01-30.
0000721371-25-000013
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsExplanation and Reconciliation of Non-GAAP Financial MeasuresCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-01.
0000721371-25-000038
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsExplanation and Reconciliation of Non-GAAP Financial MeasuresThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 172 previous paragraphs and 181 current paragraphs.
100 unchanged; 63 reworded; 14 added; 9 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 38 previous and 38 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
For the three and nine months ended March 31, 2025, GAAP operating earnings increased to $730 million and $1.8 billion, respectively, and non-GAAP operating earnings increased 21 percent to $807 million and 14 percent to $2.1 billion, respectively, from the comparative prior-year periods. The increases in both GAAP and non-GAAP operating earnings were driven by the increased contribution from branded pharmaceutical and specialty pharmaceutical products, the beneficial impact of enterprise-wide cost savings measures, and MSO platforms acquisitions, partially offset by the expiration of the OptumRx contracts. The increases to GAAP operating earnings were also driven by the absence of the pre-tax non-cash goodwill impairment charges related to the GMPD segment recorded during the three and nine months ended March 31, 2024 of $90 million and $675 million, respectively. The increases to GAAP operating earnings were favorably impacted by net recoveries in class action antitrust litigation in which we were a class member or plaintiff, for which we recognized $106 million and $165 million during the three and nine months ended March 31, 2025, respectively, as compared to $6 million and $77 million during the three and nine months ended March 31, 2024, respectively.
Current report
Tariffs
Current report
Recent U.S. tariffs imposed or threatened to be imposed on China, Mexico, Canada and other countries and any retaliatory actions taken by such countries could result in us incurring substantial additional costs to source materials, directly and indirectly, from affected countries, and may require us to raise prices on certain products and seek alternative sources of supply. It is also possible that we could experience supply disruptions or shortages as a result of tariffs or other protective measures.
Current report
We have taken action to reduce the potential impact of tariffs on our costs; however, at this time, the countries which will be subject to tariffs and the tariff rate that may be imposed on each country is uncertain and we do not expect to be able to establish alternative sources of supply or otherwise mitigate the potential impact of tariffs on all of the products that we source, manufacture or distribute. If we are not able to offset the impact of tariffs through price increases or otherwise mitigate the impacts, our financial results could be negatively impacted.
Current report
Additionally, if our competitors do not increase prices, or increase prices to a lesser extent than we do, or are able to offset the impact of tariffs through other actions, our competitive and financial position may be adversely affected.
Current report
Management Service Organization Platforms
Current report
The performance of our MSO platforms positively impacted the year-over-year comparison of Pharma segment profit during the three months ended March 31, 2025 due to the acquisitions of ION and GIA. Our ability to successfully provide physician practice support and management services and to receive the value we expect to receive from our recent acquisition of MSO platforms, depends upon a number of factors, including: the ability to develop or acquire and integrate appropriate practice management and support expertise; the ability to support recruitment, integration, and retention of sufficient numbers of local providers and staff; the ability to successfully support negotiations with vendors, suppliers, and payors; the reimbursement environment; and competition from other healthcare organizations with greater depth of experience or market knowledge.
Current report
Pharma segment profit for the three months ended March 31, 2025 increased 14 percent to $662 million from the comparative prior-year quarter, primarily due to the increased contribution from branded pharmaceutical and specialty pharmaceutical products, MSO platforms acquisitions, BioPharma Solutions, and the performance of our generics program, partially offset by the expiration of the OptumRx contracts.
Current report
Pharma segment profit for the nine months ended March 31, 2025 increased 12 percent to $1.7 billion from the comparative prior-year period, primarily due to the increased contribution from branded pharmaceutical and specialty pharmaceutical products, BioPharma Solutions, and the performance of our generics program, partially offset by the expiration of the OptumRx contracts.
Current report
Acquisition-related Cash and Share-based Compensation Costs
Current report
Acquisition-related cash and share-based compensation costs were $20 million for both the three and nine months ended March 31, 2025, primarily resulting from the acquisition of GIA.
Current report
During the nine months ended March 31, 2025, we paid $15 million for excise taxes related to the completion of prior ASR programs.
Current report
•Acquisition-related cash and share-based compensation costs are incurred in connection with contingent cash payments or the issuance of share-based payment awards, which include service requirements, as a part of certain physician practice acquisitions. These costs are excluded because they are unrelated to the underlying operating results of our business and to facilitate comparison of our current financial results to our historical financial results and to our peer group companies’ financial results. In addition, the magnitude of these expenses is significantly impacted by the timing and size of the acquisitions of physician practices.
Current report
Non-GAAP net earnings attributable to non-controlling interests: net earnings attributable to non-controlling interests excluding (1) LIFO charges/(credits), (2) state opioid assessment related to prior fiscal years, (3) shareholder cooperation agreement costs, (4) restructuring and employee severance, (5) amortization and other acquisition-related costs, (6) acquisition-related cash and share-based compensation costs, (7) impairments and (gain)/loss on disposal of assets, net, (8) litigation (recoveries)/charges, net and (9) loss on early extinguishment of debt, each net of tax.
Removed paragraphs (9)
Previous report
GAAP operating earnings for the three months ended December 31, 2024 increased 9 percent to $549 million from the comparative prior-year quarter, primarily due to the beneficial impact of enterprise-wide cost savings measures and growth from BioPharma Solutions, including contributions from Specialty Networks, partially offset by transaction and integration costs associated with acquisitions. GAAP operating earnings for the six months ended December 31, 2024 increased to $1.1 billion from the comparative prior-year period, primarily due to the pre-tax non-cash goodwill impairment charges related to the GMPD segment of $585 million recognized during the six months ended December 31, 2023. See "Critical Accounting Policies and Sensitive Accounting Estimates" section of this MD&A and Note 5 of the "Notes to Condensed Consolidated Financial Statements" for additional information.
Previous report
Non-GAAP operating earnings increased 9 percent to $635 million for the three months ended December 31, 2024 from the comparative prior-year quarter, primarily due to the beneficial impact of enterprise-wide cost savings measures and growth from BioPharma Solutions, including contributions from Specialty Networks, partially offset by the expiration of the OptumRx contracts. Non-GAAP operating earnings increased 10 percent to $1.3 billion for the six months ended December 31, 2024 from the comparative prior-year period, primarily due to increased contribution from branded pharmaceutical and specialty pharmaceutical products and the beneficial impact of enterprise-wide cost savings measures, partially offset by the expiration of the OptumRx contracts.
Previous report
Integrated Oncology Network
Previous report
On December 2, 2024, we completed the acquisition of ION, a physician-led independent community oncology network, for a purchase price of $1.1 billion in cash, subject to certain adjustments. ION is a management services organization that supports more than 50 practice sites in 10 states representing more than 100 providers. ION supports a continuum of care across its member sites including medical oncology, radiation oncology, urology diagnostic testing, and other ancillary services. As part of the transaction, ION practices will be integrated into Navista, our managed services organization intended to enhance efficiency for providers and patients, enable additional capabilities, and increase practice profitability of independent community oncologists. We report ION results within our Pharma segment. We funded the acquisition with available cash on hand.
Previous report
During fiscal 2024, we began distributing commercially available COVID-19 vaccines following the U.S. Food and Drug Administration (“FDA”) approval. Distribution of these vaccines had a greater than anticipated benefit to our Pharma segment profit in fiscal 2024, especially in the second quarter. In August 2024, the FDA approved the 2024-2025 commercial COVID-19 vaccines, and our Pharma
Previous report
segment profit was positively impacted by distribution of these vaccines in the first and second quarter of fiscal 2025, but to a lesser extent than in fiscal 2024. Due to the earlier seasonal launch of the COVID-19 vaccine distribution in fiscal 2025, there was a lower contribution from the vaccine distribution in the second quarter of fiscal 2025 compared to the prior-year quarter.
Previous report
Gross margin for the three months ended December 31, 2024 increased 5 percent to $1.9 billion from the comparative prior-year quarter, primarily due to growth from BioPharma Solutions, including contributions from Specialty Networks, increased contribution from branded pharmaceutical and specialty pharmaceutical products, and due to the ION acquisition, partially offset by the expiration of the OptumRx contracts.
Previous report
Pharma segment profit for the three and six months ended December 31, 2024 increased 7 percent to $531 million and 12 percent to $1.1 billion, respectively, from the comparative prior-year periods, primarily due to increased contribution from branded pharmaceutical and specialty pharmaceutical products and growth from BioPharma Solutions, including contributions from Specialty Networks, partially offset by the expiration of the OptumRx contracts.
Previous report
Other segment profit for the six months ended December 31, 2024 increased 10 percent to $222 million from the comparative prior-year period, primarily due to the performance of OptiFreight® Logistics.
Reworded paragraphs (63)
Previous wording
The discussion and analysis presented below is concerned with material changes in financial condition and results of operations, including amounts and certainty of cash flows from operations and from outside sources, between the periods specified in our condensed consolidated balance sheets at December 31, 2024 and June 30, 2024, and in our condensed consolidated statements of earnings and our condensed consolidated statements of cash flows for the three and six months ended December 31, 2024 and 2023. All comparisons presented are with respect to the prior-year period, unless stated otherwise. Our previously reported segment results have been recast to conform to our new reporting structure and reflect changes in the elimination of inter-segment revenue and allocated corporate technology and shared function expenses, which are driven by the reporting structure change. All of the revisions are reflected throughout this Form 10-Q. See Note 1 of the "Notes to Condensed Consolidated Financial Statements" for additional information. The discussion and analysis in this Form 10-Q should be read in conjunction with the MD&A included in our 2024 Form 10-K.
Current wording
The discussion and analysis presented below is concerned with material changes in financial condition and results of operations, including amounts and certainty of cash flows from operations and from outside sources, between the periods specified in our condensed consolidated balance sheets at March 31, 2025 and June 30, 2024, and in our condensed consolidated statements of earnings and our condensed consolidated statements of cash flows for the three and nine months ended March 31, 2025 and 2024. All comparisons presented are with respect to the prior-year period, unless stated otherwise. The discussion and analysis in this Form 10-Q should be read in conjunction with the MD&A included in our 2024 Form 10-K.
Previous wording
Revenue for the three and six months ended December 31, 2024 decreased 4 percent to $55.3 billion and $107.5 billion, respectively, from the comparative prior-year periods, primarily due to the expiration of the OptumRx contracts, partially offset by branded and specialty pharmaceutical sales growth from existing and new customers.
Current wording
Revenue for the three and nine months ended March 31, 2025 was flat at $54.9 billion and decreased 3 percent to $162.4 billion, respectively, from the comparative prior-year periods, primarily due to the expiration of the Pharma segment OptumRx contracts, partially offset by branded and specialty pharmaceutical sales growth from existing and new customers.
Previous wording
(2)For the six months ended December 31, 2023, impairments and (gain)/loss on disposal of assets, net included a pre-tax goodwill impairment charge of $585 million related to the GMPD segment. This had an adverse impact of $1.91 per share to GAAP diluted EPS for the six months ended December 31, 2023.
Current wording
(2)For the three and nine months ended March 31, 2024, impairments and (gain)/loss on disposal of assets, net includes pre-tax goodwill impairment charges of $90 million and $675 million, respectively, related to the GMPD segment. This had an adverse impact of $0.44 and $2.36 per share to GAAP diluted EPS for the three and nine months ended March 31, 2024, respectively.
Previous wording
GAAP diluted EPS for the three and six months ended December 31, 2024 increased to $1.65 and $3.35, respectively, from the comparative prior-year periods, primarily due to the factors impacting GAAP operating earnings discussed in the preceding section.
Current wording
GAAP diluted EPS for the three and nine months ended March 31, 2025 increased to $2.10 and $5.44, respectively, from the comparative prior-year periods, primarily due to the factors impacting GAAP operating earnings discussed in the preceding section, partially offset by increased interest expense.
Previous wording
Non-GAAP diluted EPS for the three and six months ended December 31, 2024 increased 2 percent to $1.93 and 6 percent to $3.81, respectively, from the comparative prior-year periods, primarily due to the factors impacting non-GAAP operating earnings discussed in the preceding section, offset by increased interest expense.
Current wording
Non-GAAP diluted EPS for the three and nine months ended March 31, 2025 increased 13 percent to $2.35 and 8 percent to $6.16, respectively, from the comparative prior-year periods, primarily due to the factors impacting non-GAAP operating earnings discussed in the preceding section, partially offset by increased interest expense.
Previous wording
Our cash and equivalents balance was $3.8 billion at December 31, 2024 compared to $5.1 billion at June 30, 2024. During the six months ended December 31, 2024, net cash used in operating activities was $2.0 billion, which was primarily impacted by the unwinding of the negative net working capital associated with the OptumRx contracts and the normal timing of payments to vendors. Cash used in operating activities also includes the impact of payments totaling $692 million related to the opioid litigation.
Current wording
Our cash and equivalents balance was $3.3 billion at March 31, 2025 compared to $5.1 billion at June 30, 2024. During the nine months ended March 31, 2025, net cash provided by operating activities was $870 million, which includes the impact of unwinding the negative net working capital associated with the OptumRx contracts and the normal timing of payments to vendors, partially offset by the benefit of onboarding new customers. Cash provided by operating activities also includes the impact of payments totaling $797 million related to the opioid litigation.
Previous wording
In addition, on December 2, 2024, we completed the acquisition of ION for a purchase price of $1.1 billion of cash, subject to certain adjustments. During the six months ended December 31, 2024, we issued additional long-term debt and received net proceeds of $2.9 billion to fund a portion of the consideration to be paid in connection with our proposed acquisitions and for general purposes, and deployed cash of $400 million for debt repayment, $390 million for share repurchases, $250 million for cash dividends, and $189 million for capital expenditures.
Current wording
During the nine months ended March 31, 2025, we deployed $1.1 billion for the Integrated Oncology Network ("ION") acquisition and $2.8 billion to acquire a 73 percent ownership interest in GI Alliance ("GIA"). In addition, during the nine months ended March 31, 2025, we issued additional long-term debt and received net proceeds of $2.9 billion to fund a portion of the consideration paid in connection with our acquisitions and for general purposes, and deployed cash of $765 million for share repurchases, $400 million for debt repayment, $374 million for cash dividends, and $315 million for capital expenditures.
Previous wording
On January 30, 2025, we completed the acquisition of 73 percent ownership interest in GIA, a gastroenterology management services organization, for a purchase price of approximately $2.8 billion in cash, subject to certain adjustments. Beginning on the third anniversary of GIA's closing, we have the ability to exercise a call right to purchase up to 100 percent of the remaining outstanding equity. GIA's management services organization platform includes over 900 physicians across 345 practice locations in 20 states and has the ability to further expand both geographically and in other key therapeutic areas. We will consolidate the results of GIA in our condensed consolidated financial statements and report those consolidated results within our Pharma segment.
Current wording
On January 30, 2025, we completed the acquisition of a 73 percent ownership interest in GIA, a management services organization ("MSO") primarily serving gastroenterologists and urologists, for a purchase price of approximately $2.8 billion in cash, subject to certain adjustments. Beginning on the third anniversary of the closing, we have the ability to exercise a call right to purchase up to 100 percent of the remaining outstanding equity. GIA's MSO provides services to over 900 physicians across 345 practice locations in 20 states. We consolidate the results of GIA in our condensed consolidated financial statements and report those consolidated results within our Pharma segment. The portion of GIA net earnings attributable to noncontrolling interest holders is reported as a reduction to net earnings in the condensed consolidated statements of earnings.
Previous wording
On November 11, 2024, we also announced that we have entered into a definitive agreement to acquire ADSG, a diabetic medical supplies provider, for a purchase price of approximately $1.1 billion in cash, subject to certain adjustments. This transaction is subject to the satisfaction of customary closing conditions, including receipt of required regulatory approvals.
Current wording
Additionally, on April 14, 2025, we announced that we entered into a definitive agreement to acquire Urology America. This transaction is subject to the satisfaction of customary closing conditions, including receipt of required regulatory approvals.
Previous wording
On November 11, 2024, we announced that we have entered into a definitive agreement to acquire the Advanced Diabetes Supply Group ("ADSG"), a diabetic medical supplies provider, for a purchase price of approximately $1.1 billion in cash, subject to certain adjustments. ADSG serves approximately 500,000 patients annually by providing the latest innovations in diabetes therapies from leading manufacturers. ADSG will become part of our at-Home Solutions operating segment and we will report ADSG results in Other. This transaction is subject to the satisfaction of customary closing conditions, including receipt of required regulatory approvals.
Current wording
On April 1, 2025, we completed the acquisition of ADSG, a diabetic medical supplies provider, for a purchase price of $1.1 billion in cash, subject to certain adjustments. ADSG serves approximately 500,000 patients annually providing innovative diabetes therapies from leading manufacturers. ADSG will become part of our at-Home Solutions operating segment and we will report ADSG results in Other.
Previous wording
We intend to finance the acquisitions of GIA and ADSG with a combination of cash on hand and cash proceeds from the new debt financing as described in Note 6 of the "Notes to Condensed Consolidated Financial Statements".
Current wording
We financed the acquisitions of GIA and ADSG with a combination of cash on hand and cash proceeds from the new debt financing as described in Note 6 of the "Notes to Condensed Consolidated Financial Statements".
Previous wording
We expect the acquisition of ION and GIA and proposed acquisitions of ADSG to positively impact respective segment revenue and segment profit while increasing amortization and acquisition-related costs during the remainder of fiscal 2025, fiscal 2026, and beyond.
Current wording
We expect the acquisitions of GIA and ADSG to positively impact respective segment revenue and segment profit while increasing amortization and acquisition-related costs and acquisition-related cash and share-based compensation costs during the remainder of fiscal 2025, fiscal 2026, and beyond.
Previous wording
On April 22, 2024, we announced that our pharmaceutical distribution contracts with OptumRx would expire at the end of June 2024. Sales to OptumRx generated 17 percent of our consolidated revenue in fiscal 2024; however, due to the class of trade, sales to OptumRx generated a meaningfully lower operating margin than the overall Pharma segment. The expiration of the OptumRx contracts and unwinding of the negative net working capital associated with the contracts adversely impacted our results of operations, including segment profit, financial condition, and cash flows during the six months ended December 31, 2024. While we anticipate offsetting the impact through a combination of onboarding new customers, growth from existing customers, and cost savings, we expect some adverse impacts to continue throughout the remainder of fiscal 2025.
Current wording
In April 2024, we announced that our pharmaceutical distribution contracts with OptumRx would expire at the end of June 2024. Sales to OptumRx generated 17 percent of our consolidated revenue in fiscal 2024; however, due to the class of trade, sales to OptumRx generated a meaningfully lower operating margin than the overall Pharma segment. The expiration of the OptumRx contracts and unwinding of the negative net working capital associated with the contracts adversely impacted our results of operations, including segment profit, financial condition, and cash flows during the nine months ended March 31, 2025. While we have offset the impact through
Previous wording
During fiscal 2024, we saw increased demand for GLP-1 pharmaceuticals and our sales increased significantly, despite periodic supply shortages. These increased sales positively impacted our Pharma segment and consolidated revenue for the fiscal 2024; however, GLP-1 sales did not meaningfully contribute to segment profit. Future demand and reimbursement for these medications is unpredictable and our ability to meet demand may be impacted by supply constraints.
Current wording
During fiscal 2024, we saw increased demand for GLP-1 pharmaceuticals and our sales increased significantly, despite periodic supply shortages. These increased sales positively impacted our Pharma segment and consolidated revenue for the fiscal 2024; however, increased GLP-1 sales did not meaningfully contribute to segment profit. Future demand and reimbursement for these medications is unpredictable and our ability to meet demand may be impacted by supply constraints.
Previous wording
The performance of our Pharma segment generics program positively impacted the year-over-year comparison of Pharma segment profit, excluding the impact of the OptumRx contracts expiration, during the three and six months ended December 31, 2024. The Pharma segment generics program includes, among other things, the impact of generic pharmaceutical product launches, customer volumes, pricing changes, the Red Oak Sourcing, LLC venture ("Red Oak Sourcing") with CVS Health Corporation ("CVS Health"), and generic pharmaceutical contract manufacturing and sourcing costs.
Current wording
During the three and nine months ended March 31, 2025, the performance of our Pharma segment generics program positively impacted the year-over-year comparison of Pharma segment profit, excluding the impact of the OptumRx contracts expiration. The Pharma segment generics program includes, among other things, the impact of generic pharmaceutical product launches, customer volumes, pricing changes, the Red Oak Sourcing, LLC venture ("Red Oak Sourcing") with CVS Health Corporation ("CVS Health"), and generic pharmaceutical contract manufacturing and sourcing costs.
Previous wording
The frequency, timing, magnitude, and profit impact of generic pharmaceutical customer volumes, pricing changes, customer contract renewals, generic pharmaceutical manufacturer pricing changes, and generic pharmaceutical contract manufacturing and sourcing costs all impact Pharma segment profit and are subject to risks and uncertainties. These risks and uncertainties may impact Pharma segment profit and consolidated operating earnings during the remainder of fiscal 2025 and beyond.
Current wording
The frequency, timing, magnitude, and profit impact of generic pharmaceutical customer volumes, pricing changes, customer contract renewals, generic pharmaceutical manufacturer pricing changes, and generic pharmaceutical contract manufacturing and sourcing costs all impact Pharma segment profit and are subject to risks and uncertainties.
Previous wording
The performance of BioPharma Solutions positively impacted the year-over-year comparison of Pharma segment profit during the three and six months ended December 31, 2024. BioPharma Solutions consists of services to biopharmaceutical manufacturers and healthcare providers including, among other things, Specialty Networks, third-party logistics ("3PL"), group purchasing organizations ("GPOs"), patient access and support programs, regulatory and clinical consulting, and real world data and evidence.
Current wording
The performance of BioPharma Solutions positively impacted the year-over-year comparison of Pharma segment profit during the three and nine months ended March 31, 2025. BioPharma Solutions consists of services to biopharmaceutical manufacturers and healthcare providers including, among other things, Specialty Networks, third-party logistics ("3PL"), group purchasing organizations ("GPOs"), patient access and support programs, regulatory and clinical consulting, and real world data and evidence.
Previous wording
We experienced Cardinal Health brand medical products sales growth during fiscal 2024 and in the first half of fiscal 2025, and we expect further growth for the remainder of fiscal 2025 and beyond. The timing, magnitude, and profit impact of this anticipated sales growth is subject to risks and uncertainties, which may impact GMPD segment profit.
Current wording
Cardinal Health brand medical products sales grew during fiscal 2024 and during the three and nine months ended March 31, 2025, and we expect further growth for the remainder of fiscal 2025 and beyond. The timing, magnitude, and profit impact of this anticipated sales growth is subject to risks and uncertainties and it is possible that sales volume may differ from our expectations and impact GMPD segment profit to a greater or lesser extent than we currently expect.
Previous wording
Pharma segment revenue for the three and six months ended December 31, 2024 decreased 4 percent to $50.8 billion and 5 percent to $98.8 billion, respectively, from the comparative prior-year periods, primarily due to the expiration of the OptumRx contracts, partially offset by branded and specialty pharmaceutical sales growth from existing and new customers.
Current wording
Pharma segment revenue for the three and nine months ended March 31, 2025 was relatively flat at $50.4 billion and decreased 3 percent to $149.3 billion, respectively, from the comparative prior-year periods, primarily due to the expiration of the OptumRx contracts, partially offset by branded and specialty pharmaceutical sales growth from existing and new customers.
Previous wording
GMPD segment revenue for the three and six months ended December 31, 2024 increased 1 percent to $3.2 billion and 2 percent to $6.3 billion, respectively, from the comparative prior-year periods, primarily due to higher volumes from existing customers.
Current wording
GMPD segment revenue for the three and nine months ended March 31, 2025 increased 2 percent to $3.2 billion and $9.4 billion, respectively, from the comparative prior-year periods, primarily due to higher volumes from existing customers.
Previous wording
Other revenue for the three and six months ended December 31, 2024 increased 13 percent to $1.3 billion and $2.5 billion, respectively, from the comparative prior-year periods, due to growth across the three operating segments: at-Home Solutions, Nuclear and Precision Health Solutions, and OptiFreight® Logistics.
Current wording
Other revenue for the three and nine months ended March 31, 2025 increased 13 percent to $1.3 billion and $3.8 billion, respectively, from the comparative prior-year periods, due to growth across the three operating segments: at-Home Solutions, Nuclear and Precision Health Solutions, and OptiFreight® Logistics.
Previous wording
Cost of products sold for the three and six months ended December 31, 2024 decreased 4 percent to $53.3 billion and $103.7 billion, respectively, from the comparative prior-year periods, primarily due to the factors affecting the changes in revenue and gross margin.
Current wording
Cost of products sold for the three and nine months ended March 31, 2025 was relatively flat at $52.8 billion and decreased 3 percent to $156.5 billion, respectively, from the comparative prior-year periods, primarily due to the factors affecting the changes in revenue and gross margin.
Previous wording
Gross margin for the six months ended December 31, 2024 increased 7 percent to $3.8 billion from the comparative prior-year period, primarily due to the increased contribution from branded pharmaceutical and specialty pharmaceutical products and growth from BioPharma Solutions, including contributions from Specialty Networks, partially offset by the expiration of the OptumRx contracts.
Current wording
Gross margin for the three and nine months ended March 31, 2025 increased 10 percent to $2.1 billion and 8 percent to $6.0 billion, respectively, from the comparative prior-year periods, primarily due to increased contribution from branded pharmaceutical and specialty pharmaceutical products, MSO platforms acquisitions, and BioPharma Solutions, partially offset by the expiration of the OptumRx contracts.
Previous wording
Gross margin rates for the three and six months ended December 31, 2024 grew 28 basis points to 3.51 percent and 36 basis points to 3.57 percent, respectively, from the comparative prior-year periods, primarily due to favorable changes in the overall product mix for the Pharma segment and the increased contribution from branded pharmaceutical and specialty pharmaceutical products, largely driven by the expiration of the OptumRx contracts.
Current wording
Gross margin rates for the three and nine months ended March 31, 2025 grew 34 basis points to 3.87 percent and 36 basis points to 3.67 percent, respectively, from the comparative prior-year periods, primarily due to favorable changes in the overall product mix for the Pharma segment, MSO platforms acquisitions, and increased contribution from branded pharmaceutical and specialty pharmaceutical products, partially driven by the expiration of the OptumRx contracts.
Previous wording
SG&A expenses for the three months ended December 31, 2024 increased 3 percent to $1.3 billion from the comparative prior-year quarter, primarily due to the ION acquisition and higher costs to support sales growth for existing customers, partially offset by the beneficial impact of enterprise-wide cost savings measures.
Current wording
SG&A expenses for the three months ended March 31, 2025 increased 4 percent to $1.3 billion from the comparative prior-year quarter, primarily due to MSO platforms acquisitions and higher costs to support sales growth for existing customers, partially offset by the beneficial impact of enterprise-wide cost savings measures.
Previous wording
SG&A expenses for the six months ended December 31, 2024 increased 5 percent to $2.6 billion from the comparative prior-year period, primarily due to higher health and welfare costs and higher costs to support sales growth for existing customers, partially offset by the beneficial impact of enterprise-wide cost savings measures.
Current wording
SG&A expenses for the nine months ended March 31, 2025 increased 5 percent to $3.9 billion from the comparative prior-year period, primarily due to MSO platforms acquisitions, higher health and welfare costs, and higher costs to support sales growth for existing customers, partially offset by the beneficial impact of enterprise-wide cost savings measures.
Previous wording
GMPD segment profit for the three months ended December 31, 2024 increased to $18 million from the comparative prior-year quarter, primarily due to the beneficial impact of cost optimization initiatives, partially offset by the write-off of uncollectible receivables in the Wavemark business.
Current wording
GMPD segment profit for the three months ended March 31, 2025 increased 77 percent to $39 million from the comparative prior-year quarter, primarily due to the beneficial impact of cost optimization initiatives, partially offset by higher manufacturing costs.
Previous wording
GMPD segment profit for the six months ended December 31, 2024 increased to $26 million from the comparative prior-year period, primarily due to growth from existing customers and the beneficial impact of cost optimization initiatives, partially offset by higher manufacturing and health and welfare costs.
Current wording
GMPD segment profit for the nine months ended March 31, 2025 increased 44 percent to $65 million from the comparative prior-year period, primarily due to the beneficial impact of cost optimization initiatives and growth from existing customers, partially offset by higher manufacturing costs.
Previous wording
Other segment profit for the three months ended December 31, 2024 increased 11 percent to $118 million from the comparative prior-year quarter, primarily due to the performance of OptiFreight® Logistics and Nuclear and Precision Health Solutions.
Current wording
Other segment profit for the three and nine months ended March 31, 2025 increased 22 percent to $134 million and 14 percent to $356 million, respectively, from the comparative prior-year periods, primarily due to the performance of OptiFreight® Logistics and at-Home Solutions.
Previous wording
The changes in Corporate for the three and six months ended December 31, 2024 were due to the factors discussed in the "Other Components of Consolidated Operating Earnings" section that follows.
Current wording
The changes in Corporate for the three and nine months ended March 31, 2025 were due to the factors discussed in the "Other Components of Consolidated Operating Earnings" section that follows.
Previous wording
Restructuring and employee severance costs during the three and six months ended December 31, 2024 were primarily related to the implementation of certain enterprise-wide cost-savings measures and certain initiatives to rationalize our manufacturing operations. During the three and six months ended December 31, 2023, costs were primarily related to certain projects resulting from reviews of our strategy, portfolio, capital-allocation framework, and operations and the implementation of certain enterprise-wide cost-savings measures.
Current wording
Restructuring and employee severance costs during the three and nine months ended March 31, 2024 were primarily due to certain projects resulting from the review of our strategy portfolio, capital-allocation framework, and operations, and certain initiatives to rationalize our manufacturing operations.
Previous wording
Amortization of acquisition-related intangible assets was $69 million and $63 million for the three months ended December 31, 2024 and 2023, respectively, and $137 million and $127 million for the six months ended December 31, 2024 and 2023, respectively.
Current wording
Amortization of acquisition-related intangible assets was $77 million and $64 million for the three months ended March 31, 2025 and 2024, respectively, and $214 million and $191 million for the nine months ended March 31, 2025 and 2024, respectively.
Previous wording
Transaction and integration costs associated with acquisitions were $36 million and $42 million for the three and six months ended December 31, 2024, respectively.
Current wording
Transaction and integration costs associated with acquisitions were $75 million and $117 million for the three and nine months ended March 31, 2025, respectively.
Previous wording
During the six months ended December 31, 2023, we recognized a $585 million pre-tax non-cash goodwill impairment charge related to the GMPD segment and recognized a pre-tax gain of $53 million related to the divestiture of the Outcomes™ business.
Current wording
We recognized pre-tax non-cash goodwill impairment charges of $90 million and $675 million related to the GMPD segment during the three and nine months ended March 31, 2024, respectively.
Previous wording
We recognized income for net recoveries in class action antitrust litigation in which we were a class member or plaintiff of $16 million and $59 million during the three and six months ended December 31, 2024, respectively, and $31 million and $71 million during the three and six months ended December 31, 2023, respectively. We recognized $15 million in opioid-related insurance recoveries during both the three and six months ended December 31, 2024. During the three and six months ended December 31, 2023, we recognized a $22 million charge related to an agreement in principle with the Alabama Attorney General.
Current wording
We recognized income for net recoveries in class action antitrust litigation in which we were a class member or plaintiff of $106 million and $165 million during the three and nine months ended March 31, 2025, respectively, and $6 million and $77 million during the three and nine months ended March 31, 2024, respectively. We recognized $13 million in opioid-related insurance recoveries during the nine months ended March 31, 2025. We recognized expense of $88 million and $110 million in connection with opioid-related matters during the three and nine months ended March 31, 2024, respectively.
Previous wording
Interest expense for the three and six months ended December 31, 2024 increased to $35 million and $67 million, respectively, from the comparative prior-year periods, primarily due to the new debt financing and decreased interest income from cash and equivalents. See Note 6 of the "Notes to Condensed Consolidated Financial Statements" for additional information on the new debt financing.
Current wording
Interest expense for the three months ended March 31, 2025 increased to $74 million from the comparative prior-year quarter, primarily due to the new debt financing. Interest expense for the nine months ended March 31, 2025 increased to $141 million from the comparative prior-year period, primarily due the new debt financing and decreased interest income from cash and equivalents. See Note 6 of the "Notes to Condensed Consolidated Financial Statements" for additional information on the new debt financing.
Previous wording
The effective tax rate was 21.4 percent and 27.9 percent for the three months ended December 31, 2024 and 2023, respectively, and 22.2 percent and 23.4 percent for the six months ended December 31, 2024 and 2023, respectively. The prior-year tax rates reflect the impact of the tax effects of goodwill impairment charges as well as certain other discrete items. See Note 8 of the "Notes to Condensed Consolidated Financial Statements" for additional information.
Current wording
The effective tax rate was 23.6 percent and 23.3 percent for the three months ended March 31, 2025 and 2024, respectively, and 22.8 percent and 23.4 percent for the nine months ended March 31, 2025 and 2024, respectively. The prior-year tax rates reflect the impact of the tax effects of goodwill impairment charges as well as certain other discrete items. See Note 8 of the "Notes to Condensed Consolidated Financial Statements" for additional information.
Previous wording
During the six months ended December 31, 2023, we recognized a pre-tax goodwill impairment charge of $585 million related to the GMPD segment. The net tax benefit related to this charge was $45 million for fiscal 2024.
Current wording
During the nine months ended March 31, 2024, we recognized pre-tax goodwill impairment charges of $675 million related to the GMPD segment. The net tax benefit related to these charges was $56 million for fiscal 2024.
Previous wording
The tax effect of the goodwill impairment charge recorded during the six months ended December 31, 2023 was included in our estimated annual effective tax rate because it was not considered unusual or infrequent, given that we recorded goodwill impairments in prior fiscal years. The impact of the non-deductible goodwill impairment increased the estimated annual effective tax rate for fiscal 2024. Applying the higher tax rate to the pre-tax income for the six months ended December 31, 2023 resulted in recognizing an incremental interim tax benefit of approximately $66 million, which impacted the provision for income taxes in the condensed consolidated statements of earnings during the six months ended December 31, 2023. The incremental interim tax benefit reversed in the remainder of fiscal 2024.
Current wording
The tax effect of the goodwill impairment charges recorded during the nine months ended March 31, 2024 was included in our estimated annual effective tax rate because it was not considered unusual or infrequent, given that we recorded goodwill impairments in prior fiscal years. The impact of the non-deductible goodwill impairment increased the estimated annual effective tax rate for fiscal 2024. Applying the higher tax rate to the pre-tax income for the nine months ended March 31, 2024 resulted in recognizing an incremental interim tax benefit of approximately $36 million, which impacted the provision for income taxes in the condensed consolidated statements of earnings during the nine months ended March 31, 2024. The incremental interim tax benefit reversed in the fourth quarter of fiscal 2024.
Previous wording
Our cash and equivalents balance was $3.8 billion at December 31, 2024 compared to $5.1 billion at June 30, 2024.
Current wording
Our cash and equivalents balance was $3.3 billion at March 31, 2025 compared to $5.1 billion at June 30, 2024.
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Current report — wording carried from elsewhere
a combination of onboarding new customers, growth from existing customers, and cost savings, we expect some adverse impacts to continue throughout the remainder of fiscal 2025.
Current report — wording carried from elsewhere
Restructuring and employee severance costs during the three and nine months ended March 31, 2025 were primarily related to certain initiatives to rationalize our manufacturing operations and the implementation of certain enterprise-wide cost-savings measures.
Current report — wording carried from elsewhere
Our term loan credit agreement, revolving credit, and committed receivables sales facilities require us to maintain a consolidated
Current report — wording carried from elsewhere
On April 1, 2025, we completed the acquisition of ADSG, a diabetic medical supplies provider serving approximately 500,000 patients annually by providing the latest innovations in diabetes therapies from leading manufacturers, for a purchase price of approximately $1.1 billion in cash, subject to certain adjustments.