CARDINAL HEALTH INC
For the period ended Sep 30, 2025. Filed Oct 30, 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.
Sep 30, 2025 · Filed Oct 30, 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 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 MeasuresCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-10-30.
0000721371-25-000130
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 181 previous paragraphs and 134 current paragraphs.
70 unchanged; 47 reworded; 17 added; 57 removed; 7 previous and 0 current paragraphs rearranged.
Tables are not compared: 38 previous and 34 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 (17)
Current report
GAAP operating earnings for the three months ended September 30, 2025 increased 18 percent to $668 million from the prior-year quarter primarily due to the impact of the acquisition of management services organization ("MSO") platforms and the acquisition of Advanced Diabetes Supply Group ("ADS") and increased contribution from branded and specialty pharmaceutical products, partially offset by acquisition-related cash and share-based compensation costs.
Current report
Non-GAAP operating earnings for the three months ended September 30, 2025 increased 37 percent to $857 million from the prior-year quarter primarily due to the impact of the acquisition of MSO platforms and the acquisition of ADS, increased contribution from branded and specialty pharmaceutical products, and growth from existing customers within the GMPD segment.
Current report
(2) The reconciling items are presented within this table net of tax. See quantification of tax effect of each reconciling item in our GAAP to Non-GAAP Reconciliations in the "Explanation and Reconciliation of Non-GAAP Financial Measures."
Current report
Solaris Health Acquisition
Current report
On August 12, 2025, we announced that we, through the Specialty Alliance, have entered into a definitive agreement to acquire Solaris Health for a purchase price of approximately $1.9 billion in cash, subject to certain adjustments. Solaris Health is the country's leading urology MSO and supports more than 750 providers across more than 250 practice locations in 14 states. In connection with the closing of this transaction, we will issue common units in the Specialty Alliance to certain physicians and management which are estimated to have a grant date fair value of approximately $500 million, a portion of which will be recognized as post-combination expense within acquisition-related cash and share-based compensation costs. We consolidate the results of the Specialty Alliance in our consolidated financial statements and report those consolidated results within our Pharma segment.
Current report
Gross margin increased 22 percent to $2.3 billion from the prior-year quarter primarily due to the acquisition of MSO platforms and the acquisition of ADS and the increased contribution from branded pharmaceutical and specialty pharmaceutical products.
Current report
Gross margin rate was relatively flat compared to the prior-year quarter with impact of the unfavorable changes in product mix for the Pharma segment mostly offset by the beneficial gross margin rates due to the acquisition of MSO platforms. The changes in product mix were primarily driven by increased pharmaceutical distribution branded sales, which have a dilutive impact on our overall gross margin rate.
Current report
SG&A expenses increased 14 percent to $1.5 billion from the prior-year quarter primarily due to the inclusion of the acquisition of MSO platforms and the acquisition of ADS.
Current report
GMPD segment profit increased to $46 million from the prior-year quarter primarily due to growth from existing customers.
Current report
Interest expense, net, increased to $80 million from the prior-year quarter primarily due to the additional debt financing for our recent acquisitions.
Current report
During the three months ended September 30, 2025 and 2024, the effective tax rate was 24.1 percent and 23.0 percent, respectively. See Note 7 of the “Notes to Condensed Consolidated Financial Statements” for additional information.
Current report
In September 2025, we renewed our committed receivables sales facility program through Cardinal Health Funding, LLC (“CHF”) through September 28, 2028.
Current report
In October 2025, we renewed the 364-Day revolving credit facility, under which we have access to $1.0 billion of committed liquidity through October 2026.
Current report
Opioid Litigation Settlements
Current report
Solaris Health Acquisition
Current report
On August 12, 2025, we announced that we, through the Specialty Alliance, have entered into a definitive agreement to acquire Solaris Health, a urology MSO, for a purchase price of approximately $1.9 billion in cash, subject to certain adjustments. In connection with the closing of this transaction, we will issue common units in the Specialty Alliance to certain physicians and management which are estimated to have a grant date fair value of approximately $500 million, a portion of which will be recognized as post-combination expense. See Note 2 of the "Notes to Condensed Consolidated Financial Statements" for additional information.
Current report
GAAP to Non-GAAP Reconciliations
Removed paragraphs (57)
Previous 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.
Previous report
(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 report
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 report
See Note 2 and Note 6 of the "Notes to Condensed Consolidated Financial Statements" for additional information on these acquisitions and the debt issuance, respectively.
Previous report
Acquisitions
Previous report
GI Alliance ("GIA")
Previous report
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 report
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 report
Advanced Diabetes Supply Group ("ADSG")
Previous report
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 report
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 report
See Note 2 of the "Notes to Condensed Consolidated Financial Statements" for additional information on these acquisitions.
Previous report
OptumRx Contracts
Previous report
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 report
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.
Previous report
BioPharma Solutions
Previous report
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 report
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 report
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 report
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 report
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 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.
Previous report
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 report
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 report
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 report
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 report
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 report
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 report
Tax Effects of Goodwill Impairment Charges
Previous report
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 report
Unless an item is considered discrete because it is unusual or infrequent, the tax impact of the item is included in our estimated annual effective tax rate. When items are recognized through our estimated annual effective tax rate, we apply our estimated annual effective tax rate to the earnings before income taxes for the year-to-date period to compute our impact from income taxes for the current quarter and year-to-date period. The tax impacts of discrete items are recognized in their entirety in the period in which they occur.
Previous report
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 report
Cash and Equivalents
Previous report
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 report
During the nine months ended March 31, 2025, we deployed $1.1 billion for the ION acquisition and $2.8 billion to acquire a 73 percent ownership interest in 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
Previous report
repurchases, $400 million for debt repayment, $374 million for cash dividends, and $315 million for capital expenditures.
Previous report
On December 5, 2024, we entered into a term loan credit agreement that, among other things, provides commitments for a term loan facility in an aggregate amount of up to $1.0 billion. No amounts were borrowed from this agreement as of March 31, 2025. However, on April 1, 2025, we closed on our acquisition of ADSG and borrowed $800 million under this term loan facility. The loan provided under this term loan credit agreement will mature three years from the date of borrowing and allows for prepayment, which may be accelerated pursuant to certain conditions specified in the credit agreement. Interest rates on borrowings will be based on prevailing interest rates, benchmarked based on Term SOFR and subject to our credit ratings.
Previous report
as prepaid expenses and other in our condensed consolidated balance sheets at June 30, 2024. As of March 31, 2025, all short-term time deposits related to the debt issuance in fiscal 2024 have matured.
Previous report
Opioid Litigation Settlement Agreement
Previous report
During the nine months ended March 31, 2025, we paid $15 million for excise taxes related to the completion of prior ASR programs.
Showing the first 40 of 57 passages. Open the source sections for the rest.
Reworded paragraphs (47)
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 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.
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 September 30, 2025 and June 30, 2025, and in our condensed consolidated statements of earnings and our condensed consolidated statements of cash flows for the three months ended September 30, 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 2025 Form 10-K.
Previous 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.
Current wording
Revenue for the three months ended September 30, 2025 increased 22 percent to $64.0 billion from the prior-year quarter due to branded and specialty pharmaceutical sales growth from existing and new customers.
Previous wording
(1)Diluted earnings per share attributable to Cardinal Health, Inc. ("diluted EPS").
Current wording
(1) Diluted earnings per share attributable to Cardinal Health, Inc. ("diluted EPS").
Previous 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.
Current wording
For the three months ended September 30, 2025, GAAP and non-GAAP diluted EPS increased 11 percent to $1.88 and 36 percent to $2.55, respectively, from the prior-year quarter due to the factors impacting operating earnings in the preceding section, partially offset by increased interest expense.
Previous 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".
Current wording
We intend to finance the acquisition with a combination of cash proceeds from the recent debt financing and cash on hand. See Note 5 of the "Notes to Condensed Consolidated Financial Statements" for additional information on the debt financing.
Previous wording
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 wording
The performance of our MSO platforms, which consists of the Specialty Alliance and Navista, positively impacted the year-over-year comparison of Pharma segment profit during the three months ended September 30, 2025, primarily due to the impact of the acquisitions of GI Alliance ("GIA"), Urology America, and Integrated Oncology Network ("ION"). The Specialty Alliance is our multi-specialty MSO platform, which is primarily comprised of GIA, Urology America, and other gastroenterology- and urology-focused practices. Navista is our oncology MSO platform, which is primarily comprised of ION and other oncology-focused practices. Our ability to successfully provide physician practice support and management services, and to receive the value we expect to receive from our recent acquisitions 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; ensuring the alignment of interests between Cardinal Health and the physicians; the ability to successfully support negotiations with vendors, suppliers, and payors; the reimbursement and regulatory environment; and competition from other healthcare organizations.
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, 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.
Current wording
During the three months ended September 30, 2025, we saw increased demand for GLP-1 pharmaceuticals and our sales increased significantly. These increased sales positively impacted our Pharma segment and consolidated revenue for the three months ended September 30, 2025; however, increased GLP-1 sales did not meaningfully contribute to segment profit. Future demand for these medications is unpredictable and our ability to meet demand may be impacted by supply constraints. Additionally, the recently issued Executive Order titled “Delivering Most-Favored Nation Prescription Drug Pricing to American Patients” may impact sales or profitability of branded pharmaceutical products, including GLP-1 products; however, the extent of the impact is uncertain and may vary depending on the timeline for implementation and the extent of any price reductions. It is also possible that the adoption of the One Big Beautiful Bill Act ("OBBBA") could reduce participation in Medicare and Medicaid programs, resulting in a change in utilization of the healthcare system. This may adversely affect demand for our products and services; however, the extent of any reduction is unpredictable.
Previous 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.
Current wording
The performance of our Pharma segment generics program positively impacted the year-over-year comparison of Pharma segment profit during the three months ended September 30, 2025. 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.
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. These risks and uncertainties may impact Pharma segment profit and consolidated operating earnings during the remainder of fiscal 2026 and beyond.
Previous 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.
Current wording
We experienced Cardinal Health brand medical products sales growth during the three months ended September 30, 2025 and expect further growth during the remainder of fiscal 2026 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.
Previous wording
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 wording
Recent U.S. tariffs imposed or threatened to be imposed on goods, materials, and products imported into the United States from countries where we do business and any retaliatory or responsive actions taken by such countries have resulted in us incurring substantial additional costs to source products and materials, directly and indirectly, from affected countries, and are requiring 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.
Previous wording
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 wording
We have taken action to reduce the potential impact of tariffs on our costs; however, at this time, the countries that will be subject to tariffs and the tariff rate that may be imposed on each country is uncertain and dynamic 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. Additionally, if tariffs are modified in the future, or our preliminary information is incorrect regarding their impact, we may not be able to respond to such changes adequately or in a timely manner and our financial results could be negatively impacted. Furthermore, 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.
Previous 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.
Current wording
Pharma segment revenue increased 23 percent to $59.2 billion from the prior-year quarter primarily due to branded and specialty pharmaceutical sales growth from existing and new customers.
Previous 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.
Current wording
GMPD segment revenue increased 2 percent to $3.2 billion from the prior-year quarter primarily due to volume growth from existing customers.
Previous 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.
Current wording
Other segment revenue increased 38 percent to $1.6 billion from the prior-year quarter due to growth across at-Home Solutions (including the acquisition of ADS), Nuclear and Precision Health Solutions, and OptiFreight® Logistics.
Previous 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.
Current wording
Cost of products sold increased 22 percent to $61.7 billion from the prior-year quarter due to the factors affecting the changes in revenue and gross margin.
Previous wording
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 wording
Pharma segment profit increased 26 percent to $667 million from the prior-year quarter primarily due to increased contribution from branded and specialty pharmaceutical products, the acquisition of MSO platforms, and the performance of our generics program.
Previous 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.
Current wording
Other segment profit increased 60 percent to $166 million from the prior-year quarter primarily due to the performance of all of at-Home Solutions (including the acquisition of ADS), OptiFreight® Logistics, and Nuclear and Precision Health Solutions.
Previous 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.
Current wording
The changes in Corporate during the three months ended September 30, 2025 are 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 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 wording
During the three months ended September 30, 2025 and 2024, restructuring and employee severance costs were primarily related to the implementation of certain enterprise-wide cost-savings measures and certain initiatives to rationalize our manufacturing operations.
Previous 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.
Current wording
Amortization of acquisition-related intangible assets was $87 million and $68 million for the three months ended September 30, 2025 and 2024, respectively.
Previous 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.
Current wording
Transaction and integration costs associated with acquisitions were $17 million for the three months ended September 30, 2025.
Previous wording
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 wording
Acquisition-related cash and share-based compensation costs were $64 million for the three months ended September 30, 2025, primarily resulting from the acquisition of GIA.
Previous 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.
Current wording
During the three months ended September 30, 2024, we recognized income of $43 million for net recoveries in class action antitrust lawsuits in which we were a class member or plaintiff.
Previous wording
In addition to the items discussed above, earnings before income taxes were impacted by the following:
Current wording
In addition to the items discussed above, earnings before income taxes was impacted by the following:
Previous wording
Our cash and equivalents balance was $3.3 billion at March 31, 2025 compared to $5.1 billion at June 30, 2024.
Current wording
Our cash and equivalents balance was $4.6 billion at September 30, 2025 compared to $3.9 billion at June 30, 2025.
Previous 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.
Current wording
During the three months ended September 30, 2025, net cash provided by operating activities was $1.0 billion, which includes the impact of payments totaling $403 million related to the opioid litigation.
Previous 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.
Current wording
During the three months ended September 30, 2025, we deployed $500 million for debt repayment, $375 million for share repurchases, $129 million for dividends, and $108 million for capital expenditures. In addition, we issued new long-term debt and received net proceeds of approximately $1.0 billion to fund a portion of the consideration payable in connection with the Solaris Health acquisition and for general purposes.
Previous wording
The cash and equivalents balance at March 31, 2025 includes $602 million of cash held by subsidiaries outside of the United States.
Current wording
The cash and equivalents balance at September 30, 2025 included $596 million of cash held by subsidiaries outside of the United States.
Previous wording
In addition to cash and equivalents and operating cash flow, other sources of liquidity at March 31, 2025 include a $3.0 billion commercial paper program, backed by a $2.0 billion revolving credit facility and a $1.0 billion 364-Day revolving credit facility that expires in October 2025. We also have a $1.0 billion committed receivables sales facility through September 2025. At March 31, 2025, we had no amounts outstanding under our commercial paper program, revolving credit facilities, or our committed receivables sales facility.
Current wording
In addition to cash and equivalents and operating cash flow, other sources of liquidity at September 30, 2025 include a $3.0 billion commercial paper program, backed by a $2.0 billion revolving credit facility that expires in February 2028 and a $1.0 billion 364-Day revolving credit facility that expired in October 2025. We also have a $1.0 billion committed receivables sales facility through September 2028. At September 30, 2025, we had no amounts outstanding under our commercial paper program, revolving credit facility, or our committed receivables sales facility.
Previous wording
net leverage ratio of no more than 3.75-to-1. As of March 31, 2025, we were in compliance with this financial covenant.
Current wording
Our revolving credit and committed receivables sales facilities require us to maintain a consolidated net leverage ratio of no more than 3.75-to-1. As of September 30, 2025, we were in compliance with this financial covenant.
Previous wording
We had total long-term obligations, including the current portion and other short-term borrowings, of $7.7 billion and $5.1 billion at March 31, 2025 and June 30, 2024, respectively.
Current wording
We had total long-term obligations, including the current portion and other short-term borrowings, of $9.0 billion and $8.5 billion at September 30, 2025 and June 30, 2025, respectively.
Previous wording
In November 2024, we issued additional debt with the aggregate principal amount of $2.9 billion to fund a portion of the consideration payable in connection with the GIA and ADSG acquisitions, and for general purposes. The notes issued are $500 million aggregate principal amount of 4.7% Notes that mature on November 15, 2026, $750 million aggregate principal amount of 5.0% Notes that mature on November 15, 2029, $1.0 billion aggregate principal amount of 5.35% Notes that mature on November 15, 2034, and$650 million aggregate principal amount of 5.75% Notes that mature on November 15, 2054. The proceeds of the notes issued, net of discounts, premiums, and debt issuance costs were $2.9 billion. We also obtained a commitment letter on November 11, 2024 from a financial institution for a $2.9 billion unsecured bridge term loan facility that could have been used to complete the acquisition of GIA. We incurred fees related to the facility, which are included in interest expense, net. The unsecured bridge term loan facility was never entered into and we terminated the commitment letter on November 22, 2024.
Current wording
In August 2025, we issued additional debt, with the aggregate principal amount of $1.0 billion, to fund a portion of the consideration payable in connection with the Solaris Health acquisition and for general purposes. The notes issued are $600 million aggregate principal amount of 4.5% Notes that mature on September 15, 2030 and $400 million aggregate principal amount of 5.15% Notes that mature on September 15, 2035. The proceeds of the notes issued, net of discounts, premiums, and debt issuance costs, were approximately $1.0 billion.
Previous wording
During the nine months ended March 31, 2025, we repaid the full principal of $400 million of the 3.5% Notes due 2024 at maturity with proceeds from the debt issuance in fiscal 2024, $200 million of which were invested in short-term time deposits and classified
Current wording
During the three months ended September 30, 2025, we repaid the full principal of $500 million of the 3.75% Notes due 2025 at maturity with available cash.
Previous wording
We had $4.9 billion accrued at March 31, 2025 related to certain national opioid litigation settlements, as further described within Note 7 of the "Notes to Condensed Consolidated Financial Statements." We expect the majority of the remaining payment amounts to occur through 2038. During the nine months ended March 31, 2025, we made payments totaling $797 million, which included our fourth annual payment under the agreement to settle the vast majority of the opioid lawsuits filed by states and local governmental entities (the "National Opioid Settlement Agreement") and payments related to the settlement agreements with the City of Baltimore and a national class of private acute care hospitals. The amounts of future annual payments under the National Opioid Settlement Agreement may differ from the payments that we have already made.
Current wording
We had $4.3 billion accrued at September 30, 2025 related to certain national opioid litigation settlements, as further described within Note 6 of the "Notes to Condensed Consolidated Financial Statements." We expect the majority of the remaining payment amounts to occur through 2038. During the three months ended September 30, 2025, we made our fifth annual payment of $366 million under National Opioid Settlement Agreement ("the NOSA") and other payments of $37 million related to the opioid litigation. The amounts of future annual payments under the NOSA may differ from the payments that we have already made.
Previous wording
Capital expenditures during the nine months ended March 31, 2025 and 2024 were $315 million and $318 million, respectively.
Current wording
Capital expenditures during the three months ended September 30, 2025 and 2024 were $108 million and $90 million, respectively.
Previous wording
On each of May 7, 2024, August 15, 2024, November 5, 2024 and February 3, 2025, our Board of Directors approved a quarterly dividend of $0.5056 per share, or $2.02 per share on an annualized basis, which were paid on July 15, 2024, October 15, 2024, January 15, 2025, and April 15, 2025 to shareholders of record on July 1, 2024, October 1, 2024, January 2, 2025, and April 1, 2025, respectively.
Current wording
On each of May 5, 2025 and August 15, 2025, our Board of Directors approved a quarterly dividend of $0.5107 per share, or $2.04 per share on an annualized basis, which were paid on July 15, 2025 and October 15, 2025 to shareholders of record on July 1, 2025 and October 1, 2025, respectively.
Previous wording
During the nine months ended March 31, 2025, we deployed $750 million for repurchases of our common shares under accelerated share repurchase ("ASR") programs. We funded the repurchases with available cash. See Note 11 of the "Notes to Condensed Consolidated Financial Statements" for additional information.
Current wording
During the three months ended September 30, 2025, we deployed $375 million for repurchases of our common shares under an accelerated share repurchase ("ASR") program. We funded the repurchases with available cash. The ASR program will conclude by October 31, 2025 and reduce the amount remaining under our existing share repurchase authorization to less than $2.4 billion. See Note 10 of the "Notes to Condensed Consolidated Financial Statements" for additional information.
Previous wording
The MD&A in the 2024 Form 10-K addresses our contractual obligations and cash requirements, as of and for the fiscal year ended June 30, 2024. Other than the considerations noted above in connection with acquisitions and our debt issuance, there have been no subsequent material changes outside of the ordinary course of business to those items. See Note 2 and Note 6 of the "Notes to Condensed Consolidated Financial Statements" for additional information.
Current wording
The MD&A in the 2025 Form 10-K addresses our contractual obligations and cash requirements, as of and for the fiscal year ended June 30, 2025. Other than the considerations noted above in connection with the planned acquisition and our debt issuance, there have been no subsequent material changes outside of the ordinary course of business to those items. See Note 2 and Note 5 of the "Notes to Condensed Consolidated Financial Statements" for additional information.
Previous wording
Critical accounting policies are those accounting policies that (i) can have a significant impact on our financial condition and results of operations and (ii) require the use of complex and subjective estimates based upon past experience and management’s judgment. Other people applying reasonable judgment to the same facts and circumstances could develop different estimates. Because estimates are inherently uncertain, actual results may differ, including due to the risks discussed in "Risk Factors" and other risks discussed in our 2024 Form 10-K and our other filings with the SEC since June 30, 2024.
Current wording
Critical accounting policies are those accounting policies that (i) can have a significant impact on our financial condition and results of operations and (ii) require the use of complex and subjective estimates based upon past experience and management’s judgment. Other people applying reasonable judgment to the same facts and circumstances could develop different estimates. Estimates are inherently uncertain, therefore actual results may differ, including due to the risks discussed in "Risk Factors" and other risks discussed in the 2025 Form 10-K and our other filings with the SEC since June 30, 2025. There have been no material changes to our critical accounting estimates since the filing of our 2025 Form 10-K.
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Previous report — wording carried elsewhere
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.
Previous report — wording carried elsewhere
The frequency, timing, magnitude, and profit impact of customer demand, new product launches, and our ongoing investments 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.
Previous report — wording carried elsewhere
Impairments and (Gain)/Loss on Disposal of Assets, Net
Previous report — wording carried elsewhere
Our term loan credit agreement, revolving credit, and committed receivables sales facilities require us to maintain a consolidated
Previous report — wording carried elsewhere
As of March 31, 2025, we had $2.7 billion remaining under our existing share repurchase authorization.
Previous report — wording carried elsewhere
In November 2024, we issued additional debt with the aggregate principal amount of $2.9 billion to fund a portion of the consideration payable in connection with the GIA and ADSG acquisitions and for general purposes. See Note 2 and Note 6 of the "Notes to Condensed Consolidated Financial Statements" for additional information.
Previous report — wording carried elsewhere
not meet the criteria to be recognized on the acquired entity’s initial balance sheet as part of the purchase price allocation. These costs are also significantly impacted by the timing, complexity and size of acquisitions.