Why was reported Q4 revenue flat if the business grew so strongly?

A previously communicated customer contract expiration removed roughly $10.3 billion of quarterly revenue that was included in the prior-year period (OptumRx). Excluding that impact, Q4 revenue grew 21%, and Pharmaceutical and Specialty Solutions revenue grew 22%.

How much of the FY26 EPS guidance increase is operational versus accounting-driven?

The $0.20 raise is attributed partly to classifying shares held by Specialty Alliance physicians and management as liabilities rather than noncontrolling interests, which adds to non-GAAP EPS, and partly to stronger PSS and Other growth. The filing does not quantify the split, so investors should check the earnings call for that breakdown.

How will Cardinal pay for the Solaris Health acquisition, and what does it mean for leverage?

Cardinal will fund the roughly $1.9 billion purchase with cash on hand and new debt, and plans a focused debt paydown over 18 to 24 months. It expects to remain within its targeted leverage range by the end of fiscal 2026 and says share repurchases are not expected to change.

What are the main risks investors should monitor?

Key risks include execution on acquisitions and integration, regulatory and physician approvals for the Solaris deal, the impact of the Most Favored Nation pricing executive order and the One Big Beautiful Bill Act, customer contract renewals, generics deflation, a Department of Justice investigation under the Anti-Kickback Statute and False Claims Act, and tariffs affecting GMPD.

Was FY25 GAAP earnings growth of 87% in EPS meaningful for investors?

Largely no. FY24 GAAP results included $634 million of impairments, mostly goodwill impairment in GMPD, which depressed the base. Non-GAAP diluted EPS, which excludes these items, grew a more modest 9% to $8.24.

CAH 8-K: Earnings & Results & Regulation FD

01—Abstract

Summary

Summary of the 8-K filed August 12, 2025. Cited figures are marked; the original filing is the authoritative source.

Cardinal Health (CAH) reported fiscal 2025 fourth-quarter and full-year results on August 12, 2025, and raised its fiscal 2026 non-GAAP EPS guidance to $9.30^a–$9.50, up $0.20 from the preliminary range given at its June 2025 Investor Day.

Q4 consolidated revenue was roughly flat at $60.2 billion^b, but that comparison is distorted by a previously communicated customer contract expiration (OptumRx); excluding that impact, revenue grew 21%. Q4 GAAP operating earnings were $428 million (+7%) and GAAP diluted EPS was $1.00, while non-GAAP operating earnings rose 19% to $719 million and non-GAAP diluted EPS rose 13% to $2.08. For the full year, GAAP diluted EPS was $6.45 versus $3.45 in FY24 (which included large goodwill impairments), and non-GAAP EPS grew 9% to $8.24.

Note that the raised FY26 guidance partly reflects a non-operating accounting benefit from reclassifying shares held by physicians and management of The Specialty Alliance as liabilities rather than noncontrolling interests. The company also announced that The Specialty Alliance, its multi-specialty MSO, has signed a definitive agreement to acquire Solaris Health, a urology MSO with over 750 providers in 14 states. Cardinal will provide approximately $1.9 billion^c in cash and will own about 75% of The Specialty Alliance after closing, which is expected by the end of calendar 2025 and is expected to be slightly accretive to non-GAAP EPS in the first 12 months.

Financing will combine cash on hand and new debt, and the company plans to focus on debt paydown over 18 to 24 months while maintaining its share repurchase plans and expecting to reach its target leverage range by the end of fiscal 2026. Balance-sheet leverage is clearly rising: long-term obligations grew to $8.0 billion^d from $4.7 billion, and cash fell to $3.9 billion from $5.1 billion, primarily due to acquisition spending of $5.25 billion for the year. Investors should weigh the strong earnings momentum against the higher debt load and the risk of execution on acquisitions and on pending government drug-pricing and litigation matters, including a DOJ investigation.

02—Key points

Key Highlights

Q4 FY25 revenue was flat at $60.2B reported, but up 21% excluding the previously communicated customer contract expiration.
Q4 non-GAAP operating earnings rose 19% to $719M; non-GAAP diluted EPS rose 13% to $2.08, helped by a lower share count and offset by higher interest expense and a higher non-GAAP tax rate.
FY26 non-GAAP EPS guidance raised to $9.30–$9.50 (+13% to +15%) from $9.10–$9.30; part of the increase reflects an accounting reclassification of shares held by Specialty Alliance physicians and management.
Agreement to acquire Solaris Health, a 750+ provider urology MSO, for approximately $1.9B in cash, with closing expected by end of calendar 2025 and slightly accretive to non-GAAP EPS in the first 12 months.
Balance sheet leverage increased: long-term obligations rose to $8.0B from $4.7B, and cash fell to $3.9B from $5.1B after $5.25B of FY25 acquisition spending.
FY25 adjusted free cash flow was $2.5B, down from $3.9B in FY24, and operating cash flow fell to $2.4B from $3.8B, driven by working capital and acquisition-related items.
FY26 outlook calls for PSS revenue growth of 11–13%, Other revenue growth of 26–28%, and adjusted free cash flow of $2.75–$3.25B, with roughly $750M of share repurchases planned.

03—Questions

Frequently Asked Questions

Why was reported Q4 revenue flat if the business grew so strongly?
A previously communicated customer contract expiration removed roughly $10.3 billion of quarterly revenue that was included in the prior-year period (OptumRx). Excluding that impact, Q4 revenue grew 21%, and Pharmaceutical and Specialty Solutions revenue grew 22%.
How much of the FY26 EPS guidance increase is operational versus accounting-driven?
The $0.20 raise is attributed partly to classifying shares held by Specialty Alliance physicians and management as liabilities rather than noncontrolling interests, which adds to non-GAAP EPS, and partly to stronger PSS and Other growth. The filing does not quantify the split, so investors should check the earnings call for that breakdown.
How will Cardinal pay for the Solaris Health acquisition, and what does it mean for leverage?
Cardinal will fund the roughly $1.9 billion purchase with cash on hand and new debt, and plans a focused debt paydown over 18 to 24 months. It expects to remain within its targeted leverage range by the end of fiscal 2026 and says share repurchases are not expected to change.
What are the main risks investors should monitor?
Key risks include execution on acquisitions and integration, regulatory and physician approvals for the Solaris deal, the impact of the Most Favored Nation pricing executive order and the One Big Beautiful Bill Act, customer contract renewals, generics deflation, a Department of Justice investigation under the Anti-Kickback Statute and False Claims Act, and tariffs affecting GMPD.
Was FY25 GAAP earnings growth of 87% in EPS meaningful for investors?
Largely no. FY24 GAAP results included $634 million of impairments, mostly goodwill impairment in GMPD, which depressed the base. Non-GAAP diluted EPS, which excludes these items, grew a more modest 9% to $8.24.

04—Continue

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