01—Abstract
Summary
Summary of the 10-Q filed February 5, 2026. Cited figures are marked; the original filing is the authoritative source.
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 billiona, 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 millionb, 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%c 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.
02—Key points
Key Highlights
- Total revenue for the quarter reached $65.6 billion, a 19% increase compared to the prior year, driven by strong Pharma segment performance.
- GAAP operating earnings increased by 29% to $707 million, and non-GAAP operating earnings grew by 38% to $877 million, indicating improved profitability.
- The 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.
- GAAP diluted EPS rose 19% to $1.97, and non-GAAP diluted EPS increased by 36% to $2.63, reflecting enhanced earnings per share.
- The company completed the significant acquisition of Solaris Health for approximately $1.9 billion, further expanding its MSO platform in the Pharma segment.
- Cash and equivalents decreased to $2.8 billion from $3.9 billion, primarily due to substantial investments in acquisitions and share repurchases.
- Cardinal Health reported compliance with its consolidated net leverage ratio covenant of no more than 3.75-to-1 as of December 31, 2025.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2026, Cardinal Health Inc kept $0.01.
- Revenue$65.63B100.0%
- Cost of revenue−$63.23B96.3%
- Gross profit$2.40B3.7%
- Operating costs−$1.69B2.6%
- Operating income$707.0M1.1%
- Interest, other & tax−$240.0M0.4%
- Net income$467.0M0.7%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed February 5, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $65.63B$55.26B | +18.8% |
| Cost of Revenue | $63.23B$53.32B | +18.6% |
| Gross Profit | $2.40B$1.94B | +23.5% |
| SG&A Expenses | $1.50B$1.31B | +15.2% |
| Operating Income | $707.00M$549.00M | +28.8% |
| Interest Expense | $88.00M$35.00M | +151.4% |
| Net Income | $467.00M$400.00M | +16.8% |
| Shares Outstanding (Basic) | 236.00M242.00M | −2.5% |
| Shares Outstanding (Diluted) | 237.00M243.00M | −2.5% |
05—Questions
Frequently Asked Questions
What are the primary drivers behind Cardinal Health's revenue growth in the second quarter of fiscal 2026?
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.
How did the Solaris Health acquisition impact the company's financial results?
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.
What is the company's stance on its liquidity and capital resources?
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.
How is Cardinal Health addressing the opioid litigation, and what is the financial impact?
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.
06—Continue