01—Abstract
Summary
Summary of the 10-Q filed October 30, 2025. Cited figures are marked; the original filing is the authoritative source.
Cardinal Health Inc. reported a strong first quarter of fiscal year 2026, with total revenue climbing 22% year-over-year to $64.0 billiona.
This growth was primarily driven by a significant increase in pharmaceutical and specialty solutions sales, fueled by both existing and new customers, alongside contributions from strategic acquisitions. Non-GAAP operating earnings saw a substantial 37% increase, reflecting improved profitability from recent MSO platform acquisitions and strong performance in branded and specialty pharmaceuticals. The company announced a significant move with the agreement to acquire Solaris Health for approximately $1.9 billionb, a strategic expansion into the urology MSO space.
While this acquisition will be financed through debt and cash, it underscores Cardinal Health's commitment to expanding its specialized healthcare services. Despite increased interest expenses related to new debt financing, the company's diluted EPS also showed healthy growth, with non-GAAP diluted EPS increasing by 36%c.
02—Key points
Key Highlights
- Total revenue increased by 22% to $64.0 billion for the first quarter of fiscal year 2026, driven by pharmaceutical and specialty pharmaceutical sales growth.
- Non-GAAP operating earnings surged by 37% to $857 million, demonstrating enhanced profitability from acquisitions and core business performance.
- Acquisition of Solaris Health for approximately $1.9 billion announced, strengthening the company's position in specialized healthcare services.
- GAAP operating earnings grew 18% to $668 million, benefiting from the acquisition of MSO platforms and Advanced Diabetes Supply Group (ADS).
- Non-GAAP diluted EPS rose by 36% to $2.55, reflecting strong underlying operational performance.
- The company is managing its liquidity effectively, with cash and equivalents increasing to $4.6 billion and no outstanding balances on its commercial paper or revolving credit facilities as of quarter-end.
- Capital deployment included $375 million for share repurchases and $129 million for dividends, indicating a commitment to shareholder returns.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, Cardinal Health Inc kept $0.01.
- Revenue$64.01B100.0%
- Cost of revenue−$61.69B96.4%
- Gross profit$2.32B3.6%
- Operating costs−$1.65B2.6%
- Operating income$668.0M1.0%
- Interest, other & tax−$218.0M0.3%
- Net income$450.0M0.7%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed October 30, 2025Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $64.01B$52.28B | +22.4% |
| Cost of Revenue | $61.69B$50.38B | +22.5% |
| Gross Profit | $2.32B$1.90B | +21.9% |
| SG&A Expenses | $1.46B$1.28B | +14.4% |
| Operating Income | $668.00M$568.00M | +17.6% |
| Interest Expense | $80.00M$32.00M | +150.0% |
| Net Income | $450.00M$416.00M | +8.2% |
| EPS (Basic) | $1.89$1.71 | +10.5% |
| EPS (Diluted) | $1.88$1.70 | +10.6% |
| Shares Outstanding (Basic) | 238.00M243.00M | −2.1% |
| Shares Outstanding (Diluted) | 239.00M245.00M | −2.4% |
05—Questions
Frequently Asked Questions
What drove the significant revenue growth in the first quarter of fiscal year 2026?
The 22% year-over-year revenue increase to $64.0 billion was primarily driven by strong sales growth in the Pharmaceutical and Specialty Solutions segment, attributed to both existing and new customers. The acquisition of MSO platforms and Advanced Diabetes Supply Group also contributed to this growth.
How is Cardinal Health financing the acquisition of Solaris Health?
Cardinal Health intends to finance the approximately $1.9 billion acquisition of Solaris Health through a combination of cash proceeds from recent debt financing and existing cash on hand.
What is the impact of recent acquisitions on the company's profitability?
Recent acquisitions, particularly of MSO platforms like GI Alliance (GIA), Urology America, and Integrated Oncology Network (ION), along with Advanced Diabetes Supply Group (ADS), have positively impacted profitability. Non-GAAP operating earnings increased by 37%, largely due to these acquisitions and increased contributions from branded and specialty pharmaceutical products.
How is Cardinal Health managing its debt and liquidity?
The company's liquidity remains strong, with cash and equivalents at $4.6 billion as of September 30, 2025. Cardinal Health has $3.0 billion in available liquidity through its commercial paper program backed by a revolving credit facility, and as of the reporting date, had no amounts outstanding under these facilities. Long-term debt increased to $9.0 billion, partly due to new debt issuance for acquisitions.
06—Continue