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
Extracted filing text, with the paragraph anchors used by the comparison.
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Item 1. Financial Statements
Financial Statements
Condensed Consolidated Statements of Earnings
| Three Months Ended September 30, | ||
|---|---|---|
| (in millions, except per common share amounts) | 2025 | 2024 |
| Revenue | $64,009 | $52,277 |
| Cost of products sold | 61,690 | 50,375 |
| Gross margin | 2,319 | 1,902 |
| Operating expenses: | ||
| Distribution, selling, general and administrative expenses | 1,461 | 1,277 |
| Restructuring and employee severance | 20 | 24 |
| Amortization and other acquisition-related costs | 104 | 74 |
| Acquisition-related cash and share-based compensation costs | 64 | — |
| Impairments and (gain)/loss on disposal of assets, net | 2 | (1) |
| Litigation (recoveries)/charges, net | — | (40) |
| Operating earnings | 668 | 568 |
| Other (income)/expense, net | (10) | (5) |
| Interest expense, net | 80 | 32 |
| Earnings before income taxes | 598 | 541 |
| Provision for income taxes | 144 | 124 |
| Net earnings | 454 | 417 |
| Less: Net earnings attributable to noncontrolling interests | (4) | (1) |
| Net earnings attributable to Cardinal Health, Inc. | $450 | $416 |
| Earnings per common share attributable to Cardinal Health, Inc.: | ||
| Basic | $1.89 | $1.71 |
| Diluted | 1.88 | 1.70 |
| Weighted-average number of common shares outstanding: | ||
| Basic | 238 | 243 |
| Diluted | 239 | 245 |
| Cash dividends declared per common share | $0.5107 | $0.5056 |
| Cardinal Health | Q1 Fiscal 2026 Form 10-Q | 19 |
Financial Statements
Condensed Consolidated Statements of Comprehensive Income
| Three Months Ended September 30, | ||
|---|---|---|
| (in millions) | 2025 | 2024 |
| Net earnings | $454 | $417 |
| Other comprehensive income/(loss): | ||
| Foreign currency translation adjustments and other | (4) | 5 |
| Net unrealized gain/(loss) on derivative instruments, net of tax | — | 7 |
| Total other comprehensive income/(loss), net of tax | (4) | 12 |
| Total comprehensive income | 450 | 429 |
| Less: comprehensive income attributable to noncontrolling interests | (4) | (1) |
| Total comprehensive income attributable to Cardinal Health, Inc. | $446 | $428 |
| 20 | Cardinal Health | Q1 Fiscal 2026 Form 10-Q |
Financial Statements
Condensed Consolidated Balance Sheets
| (in millions) | September 30, 2025 | June 30, 2025 |
|---|---|---|
| Assets · (Unaudited) | ||
| Current assets: | ||
| Cash and equivalents | $4,593 | $3,874 |
| Trade receivables, net | 13,770 | 13,242 |
| Inventories, net | 17,559 | 16,831 |
| Prepaid expenses and other | 2,602 | 2,414 |
| Assets held for sale | 13 | 12 |
| Total current assets | 38,537 | 36,373 |
| Property and equipment, net | 2,831 | 2,858 |
| Goodwill and other intangibles, net | 12,110 | 12,177 |
| Other assets | 1,750 | 1,714 |
| Total assets | $55,228 | $53,122 |
| Liabilities and Shareholders’ Deficit | ||
| Current liabilities: | ||
| Accounts payable | $36,860 | $34,713 |
| Current portion of long-term obligations and other short-term borrowings | 52 | 550 |
| Other accrued liabilities | 3,356 | 3,634 |
| Total current liabilities | 40,268 | 38,897 |
| Long-term obligations, less current portion | 8,980 | 7,977 |
| Deferred income taxes and other liabilities | 8,711 | 8,882 |
| Shareholders’ deficit: | ||
| Preferred shares, without par value: | ||
| Authorized—500 thousand shares, Issued—none | — | — |
| Common shares, without par value: | ||
| Authorized—755 million shares, Issued—271 million shares at September 30, 2025 and June 30,2025 | 2,746 | 2,956 |
| Retained earnings | 1,116 | 783 |
| Common shares in treasury, at cost: 33 million shares and 32 million shares at September 30, 2025 and June 30, 2025, respectively | (6,582) | (6,365) |
| Accumulated other comprehensive loss | (159) | (155) |
| Total Cardinal Health, Inc. shareholders' deficit | (2,879) | (2,781) |
| Noncontrolling interests | 148 | 147 |
| Total shareholders’ deficit | (2,731) | (2,634) |
| Total liabilities and shareholders’ deficit | $55,228 | $53,122 |
| Cardinal Health | Q1 Fiscal 2026 Form 10-Q | 21 |
Financial Statements
Condensed Consolidated Statements of Shareholders' Deficit
| Common Shares · Treasury Shares · Accumulated OtherComprehensiveLoss · Noncontrolling Interests · TotalShareholders’Deficit | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in millions) · Shares Issued · Amount · Retained Earnings/(Accumulated Deficit) · Shares · Amount | |||||||||||||||||
| Three Months Ended September 30, 2025 | |||||||||||||||||
| Balance at June 30, 2025 | 271 | $2,956 | $783 | (32) | $(6,365) | $(155) | $147 | $(2,634) | |||||||||
| Net earnings | 450 | 4 | 454 | ||||||||||||||
| Other comprehensive loss, net of tax | (4) | (4) | |||||||||||||||
| Acquisitions | (1) | (1) | |||||||||||||||
| Employee stock plans activity, net of shares withheld for employee taxes | — | (135) | 1 | 86 | (49) | ||||||||||||
| Share repurchase program activity | (75) | (2) | (303) | (378) | |||||||||||||
| Dividends declared | (117) | (117) | |||||||||||||||
| Payments to noncontrolling interests | (3) | (3) | |||||||||||||||
| Other | 1 | 1 | |||||||||||||||
| Balance at September 30, 2025 | 271 | $2,746 | $1,116 | (33) | $(6,582) | $(159) | $148 | $(2,731) | |||||||||
| Three Months Ended September 30, 2024 | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Balance at June 30, 2024 | 327 | $2,917 | $(286) | (83) | $(5,677) | $(167) | $1 | $(3,212) | ||||||||
| Net earnings | 416 | 1 | 417 | |||||||||||||
| Other comprehensive income, net of tax | 12 | 12 | ||||||||||||||
| Employee stock plans activity, net of shares withheld for employee taxes | — | (15) | 1 | 17 | 2 | |||||||||||
| Share repurchase program activity | (75) | (3) | (303) | (378) | ||||||||||||
| Dividends declared | (119) | (119) | ||||||||||||||
| Other | 3 | (1) | 2 | |||||||||||||
| Balance at September 30, 2024 | 327 | $2,827 | $14 | (85) | $(5,963) | $(155) | $1 | $(3,276) | ||||||||
| 22 | Cardinal Health | Q1 Fiscal 2026 Form 10-Q |
Financial Statements
Condensed Consolidated Statements of Cash Flows
| Three Months Ended September 30, | ||
|---|---|---|
| (in millions) | 2025 | 2024 |
| Cash flows from operating activities: | ||
| Net earnings | $454 | $417 |
| Adjustments to reconcile net earnings to net cash provided by/(used in) operating activities: | ||
| Depreciation and amortization | 233 | 182 |
| Impairments and loss on sale of other investments | 5 | 1 |
| Impairments and (gain)/loss on disposal of assets, net | 2 | (1) |
| Share-based compensation | 93 | 30 |
| Provision for bad debts | 13 | 16 |
| Change in operating assets and liabilities, net of effects from acquisitions and divestitures: | ||
| (Increase)/decrease in trade receivables | (539) | 288 |
| Increase in inventories | (736) | (678) |
| Increase/(decrease) in accounts payable | 2,147 | (1,394) |
| Other accrued liabilities and operating items, net | (699) | (508) |
| Net cash provided by/(used in) operating activities | 973 | (1,647) |
| Cash flows from investing activities: | ||
| Acquisition of subsidiaries, net of cash acquired | (41) | — |
| Additions to property and equipment | (108) | (90) |
| Other investing items, net | 7 | 2 |
| Net cash used in investing activities | (142) | (88) |
| Cash flows from financing activities: | ||
| Proceeds from long-term obligations, net of issuance costs | 989 | — |
| Reduction of long-term obligations | (512) | (9) |
| Purchases/(payments) of noncontrolling interests, net | (3) | — |
| Net tax withholding from share-based compensation | (80) | (28) |
| Dividends on common shares | (129) | (128) |
| Purchase of treasury shares | (375) | (375) |
| Net cash used in financing activities | (110) | (540) |
| Effect of exchange rates changes on cash and equivalents | (2) | 9 |
| Net increase/(decrease) in cash and equivalents | 719 | (2,266) |
| Cash and equivalents at beginning of period | 3,874 | 5,133 |
| Cash and equivalents at end of period | $4,593 | $2,867 |
| Cardinal Health | Q1 Fiscal 2026 Form 10-Q | 23 |
Notes to Financial Statements
Notes to Condensed Consolidated Financial Statements
- Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation
Our condensed consolidated financial statements include the accounts of all majority-owned or consolidated subsidiaries, and all significant intercompany transactions and amounts have been eliminated. The results of businesses acquired or disposed of are included in the condensed consolidated financial statements from the date of the acquisition or up to the date of disposal, respectively.
References to "we," "our," and similar pronouns in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 (this "Form 10-Q") are to Cardinal Health, Inc. and its majority-owned or consolidated subsidiaries unless the context requires otherwise.
Our fiscal year ends on June 30. References to fiscal 2026 and 2025 in these condensed consolidated financial statements are to the fiscal years ending or ended June 30, 2026 and June 30, 2025, respectively.
Our condensed consolidated financial statements have been prepared in accordance with the U.S. Securities and Exchange Commission ("SEC") instructions to Quarterly Reports on Form 10-Q and include the information and disclosures required by accounting principles generally accepted in the United States ("GAAP") for interim financial reporting. The preparation of financial statements in conformity with GAAP requires us to make estimates, judgments, and assumptions that affect amounts reported in the condensed consolidated financial statements and accompanying notes. Actual amounts may differ from these estimated amounts.
In our opinion, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included, all such adjustments are of a normal and recurring nature. In addition, financial results presented for this fiscal 2026 interim period are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2026. These condensed consolidated financial statements are unaudited and, accordingly, should be read in conjunction with the audited consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025 (the "2025 Form 10-K").
Variable Interest Entities
We evaluate our ownership, contractual, and other interests in entities to determine if they are a variable interest entity (“VIE”), if we have a variable interest in those entities, and the nature and extent of those interests. These evaluations may involve management judgment and the use of estimates and assumptions
based on available historical information, among other factors. Based on our evaluations, if we determine we are the primary beneficiary of such VIEs, we consolidate such entities into our financial statements.
Consolidated Variable Interest Entities
We consolidate a VIE when we have the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits that could be significant to the VIE and, as a result, are considered the primary beneficiary of the VIE.
In relation to the acquisition of GI Alliance ("GIA"), we concluded that the GIA management services organization ("MSO") is the primary beneficiary of certain physician practices and therefore are consolidated as VIEs. The GIA VIEs do not have a material impact on our consolidated statements of earnings or consolidated statements of cash flows. Total assets and liabilities included in the consolidated balance sheets for the GIA VIEs were $760 million and $620 million, respectively, as of September 30, 2025.
Noncontrolling Interests
Noncontrolling interests represent the portion of net earnings, comprehensive income, and net assets that is not attributable to Cardinal Health, Inc. Noncontrolling interests as of September 30, 2025 primarily represents third-party equity interests in Integrated Oncology Network ("ION"). See Note 2 for additional information on the acquisition of ION.
Recently Issued Financial Accounting Standards And Disclosure Rules Not Yet Adopted
We assess the adoption impacts of recently issued accounting standards by the FASB on our consolidated financial statements as well as material updates to previous assessments, if any, from the 2025 Form 10-K.
Income Tax Disclosure
In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This guidance also includes certain other amendments to improve the effectiveness of income tax disclosures. This guidance will be effective for us in the 2026 Form 10-K and should be applied on a prospective basis, with retrospective application permitted. We are currently evaluating the impact of adoption of this guidance on our disclosures.
Disaggregation of Income Statement Expenses
In November 2024, the FASB issued ASU 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), which requires disaggregated disclosures of certain categories of expenses which
| 24 | Cardinal Health | Q1 Fiscal 2026 Form 10-Q |
Notes to Financial Statements
are included in any relevant income statement expense caption on an annual and interim basis. Additionally, the guidance requires the disclosure of total selling expenses and, in annual reporting periods, an entity's definition of selling expenses. This guidance will be effective for us in our fiscal 2028 Form 10-K and should be applied on a prospective basis, with retrospective application permitted. We are currently evaluating the impact of adoption of this guidance on our disclosures.
Recently Adopted Financial Accounting Standards
There were no new material accounting standards adopted in the three months ended September 30, 2025.
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