01—Abstract
Summary
Summary of the 10-K filed May 9, 2025. Cited figures are marked; the original filing is the authoritative source.
McKesson Corporation's fiscal year 2025 performance demonstrated robust revenue growth, up 16%a year-over-year, driven primarily by its U.S. Pharmaceutical segment, which saw increased volumes from retail national accounts and growth in specialty pharmaceuticals.
The company also reported a significant increase in diluted earnings per share from continuing operations to $25.72b, up from $22.39 in the prior year. Key financial events impacting the year included a $667 million charge related to the sale of its Canadian retail businesses and $298 million in restructuring charges for enterprise-wide efficiency initiatives. McKesson returned $3.5 billion to shareholders through share repurchases and dividends, underscoring its commitment to capital return.
The company is actively managing significant legal and regulatory challenges, particularly those related to opioid litigation, for which it has accrued $6.4 billionc in liabilities. While these are ongoing, the company's core pharmaceutical distribution and technology solutions segments appear to be performing well, evidenced by the revenue and EPS growth. Strategic investments in technology and ongoing efforts to drive operational efficiencies are key focus areas for future performance.
02—Key points
Key Highlights
- Revenue increased by 16% year-over-year to $359.05 billion, primarily driven by the U.S. Pharmaceutical segment's strong performance.
- Diluted earnings per share from continuing operations increased to $25.72, a 15% rise from the previous fiscal year.
- The company returned $3.5 billion to shareholders in fiscal year 2025 through $3.1 billion in stock repurchases and $345 million in dividends.
- A significant charge of $667 million was recorded related to the fair value remeasurement of the Canadian retail disposal group upon its sale.
- Restructuring charges of $298 million were incurred for enterprise-wide initiatives aimed at improving operational efficiency and streamlining the organization.
- McKesson received $444 million related to its share of antitrust legal settlements, recognized as a gain within Cost of Sales.
- The company reported an accrued liability of $6.4 billion for opioid-related claims as of March 31, 2025.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2025, McKesson Corp kept $0.01.
- Revenue$359.05B100.0%
- Cost of revenue−$345.73B96.3%
- Gross profit$13.32B3.7%
- Operating costs−$8.90B2.5%
- Operating income$4.42B1.2%
- Interest, other & tax−$1.13B0.3%
- Net income$3.29B0.9%
Where FY2025 revenue went
$359.05B- Cost of revenue: $345.73B, 96% of revenue
- Net income: $3.29B, 0.9% of revenue
- SG&A: $8.51B, 2.4% of revenue
Kept 0.9% as net incomeNet income $3.29B · 0.9%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2025filed May 9, 2025Financial Statements
FY2025 against FY2024
| Line item | FY2025FY2024 | Change |
|---|---|---|
| Revenue | $359.05B$308.95B | +16.2% |
| Cost of Revenue | $345.73B$296.12B | +16.8% |
| Gross Profit | $13.32B$12.83B | +3.9% |
| SG&A Expenses | $8.51B$8.66B | −1.7% |
| Operating Expenses | $8.90B$8.92B | −0.2% |
| Operating Income | $4.42B$3.91B | +13.1% |
| Net Income | $3.29B$3.00B | +9.8% |
| EPS (Basic) | $25.86$22.54 | +14.7% |
| EPS (Diluted) | $25.72$22.39 | +14.9% |
| Shares Outstanding (Basic) | 127.40M133.20M | −4.4% |
| Shares Outstanding (Diluted) | 128.10M134.10M | −4.5% |
05—Questions
Frequently Asked Questions
What drove McKesson's revenue growth in fiscal year 2025?
McKesson's revenue increased by 16% to $359.05 billion, primarily fueled by market growth in its U.S. Pharmaceutical segment. This growth was driven by higher volumes from retail national account customers and an expansion in specialty pharmaceuticals, supported by increasing drug utilization and new product launches. The International segment also contributed favorably with increased pharmaceutical distribution volumes.
How is McKesson addressing its opioid litigation liabilities?
McKesson is actively managing significant liabilities related to opioid litigation. As of March 31, 2025, the company has accrued $6.4 billion for these opioid-related claims, which includes settlements with governmental entities, Native American tribes, and certain third-party payors and acute care hospitals. While these are ongoing matters, the company believes it has valid legal defenses for claims not covered by settlements.
What is the company's strategy regarding its business segments, and are there any notable divestitures or strategic changes?
McKesson operates across four reportable segments: U.S. Pharmaceutical, Prescription Technology Solutions (RxTS), Medical-Surgical Solutions, and International. Notably, the company completed the sale of its Canadian retail businesses in fiscal year 2025 and announced its intention to separate its Medical-Surgical Solutions segment into an independent company in May 2025. These strategic moves indicate a focus on streamlining operations and potentially divesting non-core assets.
How is McKesson returning capital to shareholders?
McKesson demonstrated a strong commitment to returning capital to shareholders in fiscal year 2025. The company repurchased approximately $3.1 billion of its common stock and paid $345 million in dividends. The Board of Directors also approved a $4.0 billion increase to the share repurchase authorization and raised the quarterly dividend to $0.71 per share, signaling confidence in future cash flow generation.
06—Continue