Cencora, Inc.

Previous wording

•Revenue increased by $7.0 billion, or 10.3%, and $16.3 billion, or 11.6%, from the prior year quarter and six-month period, respectively, primarily due to growth in the U.S. Healthcare Solutions segment. The U.S. Healthcare Solutions segment grew its revenue by $7.0 billion, or 11.4%, and $15.8 billion, or 12.5%, from the prior year quarter and six-month period, respectively, primarily due to overall market growth largely driven by unit volume growth, including increased sales of products labeled for diabetes and/or weight loss in the GLP-1 class of $2.2 billion, or 36.1%, and $5.4 billion, or 44.5%, from the prior year quarter and six-month period, respectively, and increased sales of specialty products to physician practices and health systems. International Healthcare Solutions' revenue increased by $0.1 billion, or 0.7%, and $0.4 billion, or 3.1%, from the prior year quarter and six-month period, respectively.

Current wording

•Revenue increased by $6.4 billion, or 8.7%, and $22.7 billion, or 10.6%, from the prior year quarter and nine-month period, respectively, due to growth in both reportable segments. The U.S. Healthcare Solutions segment grew its revenue by $5.7 billion, or 8.5%, and $21.5 billion, or 11.1%, from the prior year quarter and nine-month period, respectively, primarily due to overall market growth largely driven by unit volume growth, including increased sales of products labeled for diabetes and/or weight loss in the GLP-1 class of $1.4 billion, or 18.6%, and $6.8 billion, or 34.4%, from the prior year quarter and nine-month period, respectively, and increased sales of specialty products to physician practices and health systems. International Healthcare Solutions' revenue increased by $0.7 billion, or 10.5%, and $1.2 billion, or 5.5%, from the prior year quarter and nine-month period, respectively.

Previous wording

•Gross profit increased by $521.8 million, or 20.6%, and $611.0 million, or 12.2%, from the prior year quarter and six-month period, respectively, primarily due to the increases in gross profit in the U.S. Healthcare Solutions segment and larger gains from antitrust litigation settlements, offset in part by last-in, first-out ("LIFO") expense in the current year periods in comparison to LIFO credits in the prior year periods and decreases in gross profit in the International Healthcare Solutions segment. U.S. Healthcare Solutions' gross profit increased by $441.7 million, or 26.3%, and $555.5 million, or 17.1%, from the prior year quarter and six-month period, respectively. Gross profit in International Healthcare Solutions decreased by $55.1 million, or 6.5%, and $22.1 million, or 1.3%, from the prior year quarter and six-month period, respectively.

Current wording

•Gross profit increased by $496.3 million, or 20.6%, and $1,107.4 million, or 14.9%, from the prior year quarter and nine-month period, respectively. The increase in gross profit from the prior year quarter is primarily due to the increase in gross profit in both reportable segments and a last-in, first-out ("LIFO") credit in the current year quarter in comparison to LIFO expense in the prior year quarter, offset in part by lower gains from antitrust litigation settlements. The increase in gross profit from the prior year nine-month period is primarily due to the increase in gross profit in the U.S. Healthcare Solutions reportable segment and larger gains from antitrust litigation settlements, offset in part by a lower LIFO credit in the current year period and a decrease in gross profit in the International Healthcare Solutions reportable segment. U.S. Healthcare Solutions' gross profit increased by $483.9 million, or 31.3%, and $1,039.4 million, or 21.7%, from the prior year quarter and nine-month period, respectively, driven by increased sales and the January 2025 acquisition of RCA. International Healthcare Solutions' gross profit increased by $6.6 million, or 0.8%, from the prior year quarter and decreased $15.5 million, or 0.6%, from the prior year nine-month period.

Previous wording

•Total operating expenses increased by $38.9 million, or 2.0%, and $244.7 million, or 6.7%, from the prior year quarter and six-month period, respectively, primarily due to the January 2025 acquisition of RCA and the increase in acquisition-related deal and integration expenses, offset in part by a large decrease in litigation and opioid-related expenses in the current year quarter.

Current wording

•Total operating expenses increased by $301.2 million, or 17.3%, and $545.9 million, or 10.2%, from the prior year quarter and nine-month period, respectively, primarily due to the January 2025 acquisition of RCA and the increase in acquisition-related deal and integration expenses, offset in part by a large decrease in litigation and opioid-related expenses in the current year nine-month period.

Previous wording

•Total segment operating income increased by $158.5 million, or 15.3%, and $222.1 million, or 11.6%, from the prior year quarter and six-month period, respectively. U.S. Healthcare Solutions' operating income increased by $192.1 million, or 22.8%, and $261.3 million, or 17.0%, from the prior year quarter and six-month period, respectively. International Healthcare Solutions' operating income decreased by $33.4 million, or 17.3%, and $38.9 million, or 10.2%, from the prior year quarter and six-month period, respectively.

Current wording

•Total segment operating income increased by $180.6 million, or 20.6%, and $402.7 million, or 14.4%, from the prior year quarter and nine-month period, respectively. U.S. Healthcare Solutions' operating income increased by $203.5 million, or 29.1%, and $464.8 million, or 20.8%, from the prior year quarter and nine-month period, respectively, in part due to the January 2025 acquisition of RCA. International Healthcare Solutions' operating income decreased by $23.2 million, or 12.9%, and $62.1 million, or 11.1%, from the prior year quarter and nine-month period, respectively.

Previous wording

Revenue increased by $7.0 billion, or 10.3%, and $16.3 billion, or 11.6%, from the prior year quarter and six-month period, respectively, primarily due to growth in the U.S. Healthcare Solutions segment.

Current wording

Revenue increased by $6.4 billion, or 8.7%, and $22.7 billion, or 10.6%, from the prior year quarter and nine-month period, respectively, due to growth in both reportable segments.

Previous wording

The U.S. Healthcare Solutions segment grew its revenue by $7.0 billion, or 11.4%, and $15.8 billion, or 12.5%, from the prior year quarter and six-month period, respectively, primarily due to overall market growth largely driven by unit volume growth, including increased sales of products labeled for diabetes and/or weight loss in the GLP-1 class of $2.2 billion, or 36.1%, and $5.4 billion, or 44.5%, from the prior year quarter and six-month period, respectively, and increased sales of specialty products to physician practices and health systems. Sales, including GLP-1 products, to our two largest customers increased by $0.8 billion and $4.2 billion from the prior year quarter and six-month period, respectively.

Current wording

The U.S. Healthcare Solutions segment grew its revenue by $5.7 billion, or 8.5%, and $21.5 billion, or 11.1%, from the prior year quarter and nine-month period, respectively, primarily due to overall market growth largely driven by unit volume growth, including increased sales of products labeled for diabetes and/or weight loss in the GLP-1 class of $1.4 billion, or 18.6%, and $6.8 billion, or 34.4%, from the prior year quarter and nine-month period, respectively, and increased sales of specialty products to physician practices and health systems. Sales, including GLP-1 products, to our two largest customers increased by $1.4 billion and $5.6 billion from the prior year quarter and nine-month period, respectively.

Previous wording

International Healthcare Solutions' revenue increased by $0.1 billion, or 0.7%, and $0.4 billion, or 3.1%, from the prior year quarter and six-month period, respectively. The revenue increase in the six months ended March 31, 2025 was primarily due to increased sales of $0.3 billion at our European distribution business and increased sales of $0.1 billion at our Canadian business.

Current wording

International Healthcare Solutions' revenue increased by $0.7 billion, or 10.5%, and $1.2 billion, or 5.5%, from the prior year quarter and nine-month period, respectively, primarily due to increased sales at our European distribution business of $0.6 billion and $0.9 billion from the prior year quarter and nine-month period, respectively.

Previous wording

A number of our contracts with customers, including group purchasing organizations, are typically subject to expiration each year. We may lose a key customer if an existing contract with such customer expires without being extended, renewed, or replaced. During the six months ended March 31, 2025, no key contracts expired. Additionally, from time to time, key contracts may be terminated in accordance with their terms or extended, renewed, or replaced prior to their expiration dates. If those contracts are extended, renewed, or replaced at less favorable terms, they may also negatively impact our revenue, results of operations, and cash flows. As previously disclosed, we anticipate the June 2025 loss of an oncology customer in connection with its pending acquisition, and, during the three months ended March 31, 2025, we received a notice of non-renewal.

Current wording

A number of our contracts with customers, including group purchasing organizations, are typically subject to expiration each year. We may lose a key customer if an existing contract with such customer expires without being extended, renewed, or replaced. As previously disclosed, we received a notice of non-renewal from an oncology customer, and in June 2025, our sales contract with that customer was terminated. Over the next twelve months, there are no key contracts scheduled to expire. Additionally, from time to time, key contracts may be terminated in accordance with their terms or extended, renewed, or replaced prior to their expiration dates. If those contracts are extended, renewed, or replaced at less favorable terms, they may also negatively impact our revenue, results of operations, and cash flows.

Previous wording

Gross profit increased by $521.8 million, or 20.6%, and $611.0 million, or 12.2%, from the prior year quarter and six-month period, respectively, primarily due to the increases in gross profit in the U.S. Healthcare Solutions segment and larger gains from antitrust litigation settlements, offset in part by LIFO expense in the current year periods in comparison to LIFO credits in the prior year periods and decreases in gross profit in the International Healthcare Solutions segment.

Current wording

Gross profit increased by $496.3 million, or 20.6%, and $1,107.4 million, or 14.9%, from the prior year quarter and nine-month period, respectively. The increase in gross profit from the prior year quarter is primarily due to the increase in gross profit in both reportable segments and a LIFO credit in the current year quarter in comparison to LIFO expense in the prior year quarter, offset in part by lower gains from antitrust litigation settlements. The increase in gross profit from the prior year nine-month period is primarily due to the increase in gross profit in the U.S. Healthcare Solutions reportable segment and larger gains from antitrust litigation settlements, offset in part by a lower LIFO credit and a decrease in gross profit in the International Healthcare Solutions reportable segment.

Previous wording

U.S. Healthcare Solutions' gross profit increased by $441.7 million, or 26.3%, and $555.5 million, or 17.1%, from the prior year quarter and six-month period, respectively, primarily due to increased sales and the January 2025 acquisition of RCA. As a percentage of revenue, U.S. Healthcare Solutions' gross profit margins were 3.11% and 2.67% in the current year quarter and six-month period, respectively, and represent increases of 37 basis points and 10 basis points from the prior year quarter and six-month period, respectively. The current year quarter increase of 37 basis points was primarily due to the January 2025 acquisition of RCA. The six-month period increase of 10 basis points was primarily due to the January 2025 acquisition of RCA, offset in part by higher sales of GLP-1 products, which have lower gross profit margins, and lower sales of COVID vaccines, which have higher gross profit margins.

Current wording

U.S. Healthcare Solutions' gross profit increased by $483.9 million, or 31.3%, and $1,039.4 million, or 21.7%, from the prior year quarter and nine-month period, respectively, primarily due to increased sales and the January 2025 acquisition of RCA. As a percentage of revenue, U.S. Healthcare Solutions' gross profit margins were 2.79% and 2.71% in the current year quarter and nine-month period, respectively, and represent increases of 49 basis points and 23 basis points from the prior year quarter and nine-month period, respectively. The current year quarter increase of 49 basis points was primarily due to the January 2025 acquisition of RCA. The current year nine-month period increase of 23 basis points was primarily due to the January 2025 acquisition of RCA, offset in part by higher sales of GLP-1 products, which have lower gross profit margins, and lower sales of COVID vaccines, which have higher gross profit margins.

Previous wording

Gross profit in International Healthcare Solutions decreased by $55.1 million, or 6.5%, and $22.1 million, or 1.3%, from the prior year quarter and six-month period, respectively. The decrease in the current year quarter is primarily due to declines in gross profit at our European distribution business and our global specialty logistics business. The decrease in the current year six-month period is primarily due to a decline in gross profit at our global specialty logistics business, offset in part by an increase in gross profit at our European distribution business.

Current wording

International Healthcare Solutions' gross profit increased by $6.6 million, or 0.8%, from the prior year quarter and decreased $15.5 million, or 0.6%, from the prior year nine-month period. The increase in the current year quarter is primarily due to the increase in gross profit at our European distribution business, offset in part by a decrease in gross profit at our global specialty logistics business. The decrease in the current year nine-month period is primarily due to a decline in gross profit at our global specialty logistics business, offset in part by an increase in gross profit at our European distribution business.

Previous wording

We recognized gains from antitrust litigation settlements with pharmaceutical manufacturers of $198.6 million and $8.7 million in the three months ended March 31, 2025 and 2024, respectively, and $221.5 million and $57.0 million in the six months ended March 31, 2025 and 2024, respectively. The gains were recorded as reductions to Cost of Goods Sold (see Note 10 of the Notes to Consolidated Financial Statements).

Current wording

We recognized gains from antitrust litigation settlements with pharmaceutical manufacturers of $9.5 million and $51.6 million in the three months ended June 30, 2025 and 2024, respectively, and $231.0 million and $108.6 million in the nine months ended June 30, 2025 and 2024, respectively. The gains were recorded as reductions to Cost of Goods Sold (see Note 10 of the Notes to Consolidated Financial Statements).

Previous wording

Our cost of goods sold for interim periods includes a LIFO provision that is recorded ratably on a quarterly basis and is based on our estimated annual LIFO provision. The annual LIFO provision, which we estimate on a quarterly basis, is affected by manufacturer pricing practices, which may be impacted by market and other external influences, expected changes in inventory quantities, and product mix, many of which are difficult to predict. Changes to any of the above factors may have a material impact on our annual LIFO provision. Based on estimates in our current fiscal year LIFO provision, the LIFO expense in the current year periods, in comparison to LIFO credits in the prior year periods, is primarily due to higher brand pharmaceutical inflation.

Current wording

Our cost of goods sold for interim periods includes a LIFO provision that is recorded ratably on a quarterly basis and is based on our estimated annual LIFO provision. The annual LIFO provision, which we estimate on a quarterly basis, is affected by manufacturer pricing practices, which may be impacted by market and other external influences, expected changes in inventory quantities, and product mix, many of which are difficult to predict. Changes to any of the above factors may have a material impact on our annual LIFO provision. Based on estimates in our current fiscal year LIFO provision, the LIFO credit in the current year nine-month period is lower than the LIFO credit in the prior year nine-month period primarily due to slightly higher brand pharmaceutical inflation, offset in part by higher generic pharmaceutical deflation.

Previous wording

We recognized expense in Cost of Goods Sold of $14.5 million and $23.1 million in the three months ended March 31, 2025 and 2024, respectively, and $21.6 million and $40.3 million in the six months ended March 31, 2025 and 2024, respectively, related to the impact of Turkey highly inflationary accounting driven by the continued weakening of the Turkish Lira.

Current wording

We recognized expense in Cost of Goods Sold of $14.8 million and $3.6 million in the three months ended June 30, 2025 and 2024, respectively, and $36.4 million and $43.9 million in the nine months ended June 30, 2025 and 2024, respectively, related to the impact of Turkey highly inflationary accounting driven by the continued weakening of the Turkish Lira.

Previous wording

Distribution, selling, and administrative expenses increased by $211.2 million, or 15.2%, and $284.5 million, or 10.2%, compared to the prior year quarter and six-month period, respectively, primarily due to the January 2025 acquisition of RCA and to support our revenue growth. As a percentage of revenue, distribution, selling, and administrative expenses were 2.12% and 1.96% in the current year quarter and six-month period, respectively, and represent an increase of 9 basis points compared to the prior year quarter and a decline of 2 basis points compared to the prior year six-month period. The increase from the prior year quarter was primarily due to the January 2025 acquisition of RCA, offset in part by our improved operating leverage from our 10.3% revenue growth. The decline from the prior year six-month period was primarily due to our improved operating leverage from our 11.6% revenue growth, offset in part by the January 2025 acquisition of RCA.

Current wording

Distribution, selling, and administrative expenses increased by $289.7 million, or 20.9%, and $574.2 million, or 13.8%, compared to the prior year quarter and nine-month period, respectively, primarily due to the January 2025 acquisition of RCA and to support our revenue growth. As a percentage of revenue, distribution, selling, and administrative expenses were 2.07% and 2.00% in the current year quarter and nine-month period, respectively, and represent increases of 21 basis points and 6 basis points compared to the prior year quarter and nine-month period, respectively, primarily due to the January 2025 acquisition of RCA, offset in part by our improved operating leverage from our 8.7% and 10.6% revenue growth from the prior year quarter and nine-month period, respectively.

Previous wording

Depreciation expense increased 14.7% and 11.5% from the prior year quarter and six-month period, respectively, and amortization expense decreased 16.6% and 8.5% from the prior year quarter and six month period, respectively. The decline in amortization expense is due to certain tradenames becoming fully amortized in connection with our company name change to Cencora and the gradual transition away from other tradenames used, which were acquired through prior acquisitions.

Current wording

Depreciation expense increased 18.7% and 13.9% from the prior year quarter and nine-month period, respectively, and amortization expense decreased 23.6% and 13.5% from the prior year quarter and nine-month period, respectively. The decline in amortization expense is due to certain tradenames becoming fully amortized in connection with our company name change to Cencora and the gradual transition away from other tradenames used, which were acquired through prior acquisitions.

Previous wording

Litigation and opioid-related expenses, net in the three and six months ended March 31, 2025 included legal fees in connection with opioid lawsuits and investigations. Litigation and opioid-related expenses, net in the three months ended March 31, 2024 included a $214.0 million litigation accrual for ongoing litigation related to the distribution of prescription opioid medications and $12.0 million of legal fees in connection with opioid lawsuits and investigations. Litigation and opioid-related expenses, net in the six months ended March 31, 2024 included a $214.0 million litigation accrual for ongoing litigation related to the distribution of prescription opioid medications and $25.2 million of legal fees in connection with opioid lawsuits and investigations, offset in part by a net $92.2 million opioid litigation settlement accrual reduction primarily as a result of our prepayment of the net present value of a future obligation as permitted under our opioid settlement agreements.

Current wording

Litigation and opioid-related expenses, net in the three months ended June 30, 2025 and 2024 and in the nine months ended June 30, 2025 included legal fees in connection with opioid lawsuits and investigations. Litigation and opioid-related expenses, net in the nine months ended June 30, 2024 included a $214.0 million litigation accrual for ongoing litigation related to the distribution of prescription opioid medications and $39.7 million of legal fees in connection with opioid lawsuits and investigations, offset in part by a net $92.2 million opioid litigation settlement accrual reduction primarily as a result of our prepayment of the net present value of a future obligation as permitted under our opioid settlement agreements.

Previous wording

Acquisition-related deal and integration expenses in the three and six months ended March 31, 2025 primarily included costs related to the acquisition of RCA, including a $37.5 million expense related to equity units retained by RCA physicians and members of management (see Note 2 of the Notes to Consolidated Financial Statements), and the continued integration of PharmaLex. Acquisition-related deal and integration expenses in the three and six months ended March 31, 2024 primarily related to the integration of Alliance Healthcare and PharmaLex.

Current wording

Acquisition-related deal and integration expenses in the three and nine months ended June 30, 2025 primarily included costs related to the acquisition of RCA, including expenses related to equity units retained by RCA physicians and members of management of $37.5 million and $74.9 million in the three and nine months ended June 30, 2025, respectively (see Note 2 of the Notes to Consolidated Financial Statements), and the continued integration of PharmaLex. Acquisition-related deal and integration expenses in the three and nine months ended June 30, 2024 primarily related to the integration of Alliance Healthcare and PharmaLex.

Previous wording

Restructuring and employee severance costs in the three and six months ended March 31, 2025 primarily included workforce reductions in both of our reportable segments. Restructuring and employee severance costs in the three and six months ended March 31, 2024 primarily included expenses incurred related to facility closures in connection with our office optimization plan and workforce reductions in both of our reportable segments.

Current wording

Restructuring and employee severance costs in the three and nine months ended June 30, 2025 primarily included workforce reductions in both of our reportable segments. Restructuring and employee severance costs in the three and nine months ended June 30, 2024 primarily included expenses incurred related to facility closures in connection with our office optimization plan and workforce reductions in both of our reportable segments.

Previous wording

Business transformation efforts in the three and six months ended March 31, 2025 and 2024 included rebranding costs associated with our name change to Cencora and non-recurring expenses related to significant strategic initiatives to improve operational efficiency, including certain technology initiatives. The majority of these costs are related to services provided by third-party consultants.

Current wording

Business transformation efforts in the three and nine months ended June 30, 2025 and 2024 included rebranding costs associated with our name change to Cencora and non-recurring expenses related to significant strategic initiatives to improve operational efficiency, including certain technology initiatives. The majority of these costs are related to services provided by third-party consultants.

Previous wording

In February 2024, we experienced a cybersecurity event where data from our information systems was exfiltrated. In connection with this event, we incurred costs that were recorded in Other, net in the above table. The majority of the costs included in Other, net in the three and six months ended March 31, 2024 related to this cybersecurity event.

Current wording

In February 2024, we experienced a cybersecurity event where data from our information systems was exfiltrated. In connection with this event, we incurred costs that were recorded in Other, net in the above table. The majority of the costs included in Other, net in the nine months ended June 30, 2024 related to this cybersecurity event.

Previous wording

U.S. Healthcare Solutions' operating income increased by $192.1 million, or 22.8%, and $261.3 million, or 17.0%, from the prior year quarter and six month-period, respectively, primarily due to the increases in gross profit, as noted above, and were offset in part by the increases in operating expenses. As a percentage of revenue, U.S. Healthcare Solutions' operating income margins were 1.51% and 1.27% in the current year quarter and six-month period, respectively, and represent increases of 14 basis points and 5 basis points from the prior year quarter and six-month period, respectively, due to the increases gross profit margin, as described above in the Gross Profit section, offset in part by increases in the operating expense margin.

Current wording

U.S. Healthcare Solutions' operating income increased by $203.5 million, or 29.1%, and $464.8 million, or 20.8%, from the prior year quarter and nine month-period, respectively, primarily due to the increases in gross profit, as noted above, and were offset in part by the increases in operating expenses. As a percentage of revenue, U.S. Healthcare Solutions' operating income margins were 1.24% and 1.26% in the current year quarter and nine-month period, respectively, and represent increases of 20 basis points and 10 basis points from the prior year quarter and nine-month period, respectively, due to the increases gross profit margin, as described above in the Gross Profit section, offset in part by increases in the operating expense margin.

Previous wording

International Healthcare Solutions' operating income decreased by $33.4 million, or 17.3%, and $38.9 million, or 10.2%, from the prior year quarter and six-month period, respectively. The decrease in the current year quarter was primarily due to lower operating income at our global specialty logistics business and our European distribution business. The decrease in the current year six-month period was primarily due to lower operating income at our global specialty logistics business.

Current wording

International Healthcare Solutions' operating income decreased by $23.2 million, or 12.9%, and $62.1 million, or 11.1%, from the prior year quarter and nine-month period, respectively. These decreases were primarily due to lower operating income at our global specialty logistics business and our specialized consulting services business.

Previous wording

Other loss, net of $61.4 million in the six months ended March 31, 2025 includes a $35.5 million loss on the divestiture of non-core businesses.

Current wording

Other (income) loss, net in the nine months ended June 30, 2025 includes $39.7 million for our portion of an equity method investment’s gain on the sale of a business, a $30.6 million gain on the remeasurement of an equity investment, a $15.7 million currency remeasurement gain on the deferred tax assets relating to 2020 Swiss tax reform, and a $35.5 million loss on the divestiture of non-core businesses. Other (income) loss, net in the nine months ended June 30, 2024 includes a $24.8 million loss on the remeasurement of an equity investment.

Previous wording

Interest expense, net increased by $39.9 million, or 62.2%, from the prior year quarter due to the increase in interest expense, offset in part by an increase in interest income. The increase in interest expense was primarily due to the issuance of our $1.8 billion of senior notes in December 2024 and the $1.5 billion variable-rate term loan, which we borrowed in January 2025 to finance a portion of the RCA acquisition, and increased revolving credit facility borrowings to cover seasonal short-term working capital needs. The increase in interest income was driven by higher average investment cash balances and higher investment interest rates outside the United States in the current year quarter in comparison to the prior year quarter.

Current wording

Interest expense, net increased by $50.5 million, or 161.1%, from the prior year quarter due to the increase in interest expense, offset in part by an increase in interest income. The increase in interest expense was primarily due to the issuance of our $1.8 billion of senior notes in December 2024 and the $1.5 billion variable-rate term loan, which we borrowed in January 2025 to finance a portion of the RCA acquisition, and increased revolving credit facility borrowings to cover short-term working capital needs. The increase in interest income was driven by higher average investment cash balances in the current year quarter in comparison to the prior year quarter.

Previous wording

Interest expense, net and the respective weighted average interest rates for the six months ended March 31, 2025 and 2024 are as follows:

Current wording

Interest expense, net and the respective weighted average interest rates for the nine months ended June 30, 2025 and 2024 are as follows:

Previous wording

Interest expense, net increased by $27.2 million, or 26.0%, from the prior year six-month period due to the increase in interest expense, offset in part by an increase in interest income. The increase in interest expense was primarily due to the issuance of our $1.8 billion of senior notes in December 2024 and the $1.5 billion variable-rate term loan, which we borrowed in January 2025 to finance a portion of the RCA acquisition, and increased revolving credit facility borrowings to cover seasonal short-term working capital needs, offset in part by lower foreign subsidiary interest expense. The increase in interest income was driven by higher average investment cash balances and higher investment interest rates outside the United States in the current year six-month period in comparison to the prior year period.

Current wording

Interest expense, net increased by $77.7 million, or 57.1%, from the prior year nine-month period due to the increase in interest expense, offset in part by an increase in interest income. The increase in interest expense was primarily due to the issuance of our $1.8 billion of senior notes in December 2024 and the $1.5 billion variable-rate term loan, which we borrowed in January 2025 to finance a portion of the RCA acquisition, and increased revolving credit facility borrowings to cover short-term working capital needs. The increase in interest income was driven by higher average investment cash balances and higher investment interest rates outside the United States in the current year nine-month period in comparison to the prior year period.

Previous wording

•Our effective tax rates were 22.7% and 21.8% for the three and six months ended March 31, 2025, respectively. Our effective tax rates were 9.8% and 18.1% for the three and six months ended March 31, 2024, respectively. The effective tax rates for the three and six months ended March 31, 2025 were higher than the U.S. statutory rate primarily due to U.S. state income taxes, offset in part by the benefit of non-U.S. income taxed at rates lower than the U.S. statutory rate and benefits associated with equity compensation. The effective tax rates for the three and six months ended March 31, 2024 were lower than the U.S. statutory rate primarily due to discrete tax benefits associated with foreign valuation allowance adjustments, non-U.S. income taxed at rates lower than the U.S. statutory rate, and tax benefits associated with equity compensation, offset in part by U.S. state income taxes.

Current wording

Our effective tax rates were 23.0% and 22.3% for the three and nine months ended June 30, 2025, respectively. Our effective tax rates were 22.4% and 19.5% for the three and nine months ended June 30, 2024, respectively. The effective tax rates for the three and nine months ended June 30, 2025 were higher than the U.S. statutory rate primarily due to U.S. state income taxes, offset in part by the benefit of income taxed at rates lower than the U.S. statutory rate and benefits associated with equity compensation. The effective tax rate for the three months ended June 30, 2024 was higher than the U.S. statutory rate primarily due to U.S. state income taxes, offset in part by the benefit of income taxed at rates lower than the U.S. statutory rate. The effective tax rate for the nine months ended June 30, 2024 was lower than the U.S. statutory rate primarily due to discrete tax benefits associated with foreign valuation allowance adjustments, the benefits of income taxed at rates lower than the U.S. statutory rate, and tax benefits associated with equity compensation, offset in part by U.S. state income taxes.

Previous wording

As of March 31, 2025 and September 30, 2024, our cash and cash equivalents held by foreign subsidiaries were $837.2 million and $851.3 million, respectively. We have the ability to repatriate the majority of our cash and cash equivalents held by our foreign subsidiaries without incurring significant additional taxes upon repatriation.

Current wording

As of June 30, 2025 and September 30, 2024, our cash and cash equivalents held by foreign subsidiaries were $1.0 billion and $851.3 million, respectively. We have the ability to repatriate the majority of our cash and cash equivalents held by our foreign subsidiaries without incurring significant additional taxes upon repatriation.

Previous wording

We have increased seasonal needs related to our inventory build during the December and March quarters that, depending on our cash balance, may require the use of our credit facilities to fund short-term capital needs. Our cash balances in the six months ended March 31, 2025 and 2024 were supplemented by intra-period credit facility borrowings to cover short-term working capital needs. The largest amount of intra-period borrowings under our revolving and securitization credit facilities that was outstanding at any one time during the six months ended March 31, 2025 and 2024 was $5.1 billion and $3.2 billion, respectively. We had $42.9 billion and $47.9 billion of cumulative intra-period borrowings that were repaid under our credit facilities during the six months ended March 31, 2025 and 2024, respectively.

Current wording

Our cash balances in the nine months ended June 30, 2025 and 2024 were supplemented by intra-period credit facility borrowings to cover short-term working capital needs. The largest amount of intra-period borrowings under our revolving and securitization credit facilities that was outstanding at any one time during the nine months ended June 30, 2025 and 2024 was $5.1 billion and $3.2 billion, respectively. We had $86.1 billion and $56.7 billion of cumulative intra-period borrowings that were repaid under our credit facilities during the nine months ended June 30, 2025 and 2024, respectively.

Previous wording

We generated $632.5 million of cash from operations during the six months ended March 31, 2025 compared to $6.7 million of cash from operations during the six months ended March 31, 2024, an increase of $625.7 million. The increase in the current year six-month period was in part driven by our growth, which resulted in an increase in net income plus non-cash items of $367.1 million. The timing of cash receipts and disbursements can significantly impact our working capital. The change in working capital accounts provided a year-over-year increase in cash of $450.2 million, in part due to delayed collections of approximately $600 million from certain customers in the six months ended March 31, 2024 as a result of the February 2024 Change Healthcare cyberattack, as well as the timing of cash receipts from customers and the timing of disbursements to suppliers.

Current wording

We generated $741.7 million of cash from operations during the nine months ended June 30, 2025 compared to $2.5 billion of cash from operations during the nine months ended June 30, 2024, a decrease of $1.7 billion. The decrease in the current year nine-month period was primarily driven by changes in our working capital accounts. The timing of cash receipts and disbursements can significantly impact our working capital. The change in working capital accounts, primarily accounts receivable and accounts payable, resulted in a year-over-year use of cash of $2.2 billion primarily due to the timing of cash receipts from customers and the timing of disbursements to suppliers, offset in part by our growth, which resulted in an increase in net income, plus non-cash items of $528.2 million.

Previous wording

During the six months ended March 31, 2025, our operating activities provided cash of $632.5 million and was principally the result of the following:

Current wording

During the nine months ended June 30, 2025, our operating activities provided cash of $741.7 million and was principally the result of the following:

Previous wording

•Positive non-cash items of $635.3 million, which is primarily comprised of amortization expense of $335.5 million and depreciation expense of $222.7 million; and

Current wording

•Positive non-cash items of $1.0 billion, which is primarily comprised of amortization expense of $436.8 million and depreciation expense of $367.6 million.

Previous wording

•An increase in accounts receivable of $218.0 million primarily due to an increase in sales and the timing of scheduled payments from our customers.

Current wording

•An increase in accounts receivable of $977.6 million primarily due to an increase in sales and the timing of scheduled payments from our customers;

Previous wording

•A decrease in accrued expenses of $489.5 million primarily due to the payment of accrual liabilities that were on our Consolidated Balance Sheet as of September 30, 2024, including $226.0 million of opioid litigation settlement payments; and

Current wording

•A decrease in accrued expenses of $316.7 million primarily due to the payment of accrual liabilities that were on our Consolidated Balance Sheet as of September 30, 2024, including $226.0 million of opioid litigation settlement payments.

Previous wording

During the six months ended March 31, 2024, our operating activities provided cash of $6.7 million and was principally the result of the following:

Current wording

During the nine months ended June 30, 2024, our operating activities provided cash of $2.5 billion and was principally the result of the following:

Previous wording

•An increase in accounts payable of $497.7 million primarily due to the increase in our inventory balances and the timing of scheduled payments to our suppliers.

Current wording

•An increase in accounts payable of $4.1 billion primarily due to the increase in our inventory balances and the timing of scheduled payments to our suppliers;

Previous wording

•Positive non-cash items of $815.5 million, which is primarily comprised of amortization expense of $308.2 million and depreciation expense of $237.2 million.

Current wording

•Positive non-cash items of $897.3 million, which is primarily comprised of amortization expense of $502.1 million and depreciation expense of $337.0 million.

Previous wording

•An increase in accounts receivable of $1,682.1 million primarily due to an increase in sales and the timing of scheduled payments from our customers, including delayed collections of approximately $600 million from certain customers as a result of the February 2024 Change Healthcare cyberattack; and

Current wording

•An increase in accounts receivable of $3.1 billion primarily due to an increase in sales and the timing of scheduled payments from our customers; and

Previous wording

Operating cash flows during the six months ended March 31, 2025 included $153.7 million of interest payments and $294.9 million of income tax payments, net of refunds. Operating cash flows during the six months ended March 31, 2024 included $129.1 million of interest payments and $291.7 million of income tax payments, net of refunds.

Current wording

Operating cash flows during the nine months ended June 30, 2025 included $263.1 million of interest payments and $421.4 million of income tax payments, net of refunds. Operating cash flows during the nine months ended June 30, 2024 included $197.7 million of interest payments and $408.9 million of income tax payments, net of refunds.