10-QPeriod: Q2 FY2026

CARDINAL HEALTH INC Quarterly Report for Q2 Ended Dec 31, 2025

Filed February 5, 2026For Securities:CAH

Summary

Cardinal Health Inc. reported strong performance for the second quarter of fiscal year 2026, driven by significant revenue growth and improved operating earnings. Total revenue increased by 19% year-over-year to $65.6 billion, fueled by robust sales in the Pharmaceutical and Specialty Solutions (Pharma) segment, primarily from branded and specialty pharmaceutical products and new customer acquisitions. The company also saw substantial growth in its Other segment, largely due to the acquisition of Advanced Diabetes Supply Group (ADS) and performance in OptiFreight® Logistics. Profitability also showed a marked improvement. GAAP operating earnings rose 29% to $707 million, while non-GAAP operating earnings saw a stronger 38% increase to $877 million. This growth was attributed to strategic acquisitions, including Solaris Health, and increased contributions from specialty pharmaceuticals and existing customers in the GMPD segment. Diluted EPS also followed this positive trend, with GAAP diluted EPS up 19% and non-GAAP diluted EPS up 36%. The company maintained adequate liquidity, although cash and equivalents decreased due to significant capital deployments for acquisitions and share repurchases.

Financial Highlights

47 data points
Beta

Revenue

$65.63B

3.7% Gross Margin

Net Income

$467.00M

0.7% Net Margin

Total Assets

$58.08B

Cash & Equivalents

$2.78B

Free Cash Flow

$555.00M

Financial Statements
Beta
Revenue$65.63B
Cost of Revenue$63.23B
Gross Profit$2.40B
SG&A Expenses$1.50B
Operating Income$707.00M
Interest Expense$88.00M
Net Income$467.00M
Shares Outstanding (Basic)236.00M
Shares Outstanding (Diluted)237.00M

Key Highlights

  • 1Total revenue for the quarter reached $65.6 billion, a 19% increase compared to the prior year, driven by strong Pharma segment performance.
  • 2GAAP operating earnings increased by 29% to $707 million, and non-GAAP operating earnings grew by 38% to $877 million, indicating improved profitability.
  • 3The Pharma segment's profit increased by 29% year-over-year, bolstered by acquisitions of MSO platforms like Solaris Health and increased branded and specialty pharmaceutical contributions.
  • 4GAAP diluted EPS rose 19% to $1.97, and non-GAAP diluted EPS increased by 36% to $2.63, reflecting enhanced earnings per share.
  • 5The company completed the significant acquisition of Solaris Health for approximately $1.9 billion, further expanding its MSO platform in the Pharma segment.
  • 6Cash and equivalents decreased to $2.8 billion from $3.9 billion, primarily due to substantial investments in acquisitions and share repurchases.
  • 7Cardinal Health reported compliance with its consolidated net leverage ratio covenant of no more than 3.75-to-1 as of December 31, 2025.

Frequently Asked Questions

Revenue growth was primarily driven by a 19% increase in the Pharmaceutical and Specialty Solutions (Pharma) segment, fueled by higher sales of branded and specialty pharmaceuticals to both existing and new customers. The Other segment also contributed significantly with a 34% revenue increase, largely due to the acquisition of Advanced Diabetes Supply Group (ADS) and growth in OptiFreight® Logistics.

The acquisition of Solaris Health, a urology MSO, for approximately $1.9 billion closed on November 3, 2025, and is reported within the Pharma segment. This acquisition significantly contributed to the growth in revenue and segment profit, as well as acquisition-related costs and goodwill. It is a key factor in the company's strategy to expand its physician practice support services.

Cardinal Health believes it has adequate capital resources to fund operations and future needs. However, the company's cash and equivalents decreased to $2.8 billion from $3.9 billion due to significant capital deployments, including $1.9 billion for the Solaris Health acquisition, $758 million for share repurchases, and $251 million for dividends. The company also issued $1.0 billion in new long-term debt to fund acquisitions and for general purposes.

As of December 31, 2025, the company has $4.3 billion accrued for opioid-related matters, with payments expected through 2038. During the first six months of fiscal 2026, payments totaling $403 million were made. While significant progress has been made in settling claims with states and political subdivisions, some lawsuits from private plaintiffs and specific governmental entities remain. The company continues to defend itself vigorously and recognizes income from insurance recoveries related to these matters.