01—Abstract
Summary
Summary of the 10-Q filed November 6, 2025. Cited figures are marked; the original filing is the authoritative source.
McKesson Corporation reported robust financial performance for the second quarter and first half of fiscal year 2026.
Revenues saw a significant increase of 10% and 16% year-over-year for the respective periods, driven by strong growth in the North American Pharmaceutical and Oncology & Multispecialty segments. Diluted Earnings Per Share (EPS) surged to $8.92a in Q2 and $15.16 for the first half, up substantially from the prior year, reflecting improved profitability. The company completed two significant acquisitions during the period, PRISM Vision Holdings, LLC and Community Oncology Revitalization Enterprise Ventures, LLC, further expanding its healthcare services capabilities.
Despite increased investments in acquisitions and ongoing restructuring initiatives, McKesson demonstrated effective cost management, with total operating expenses decreasing by 20% and 9% for the quarter and half-year, respectively. The company also returned significant capital to shareholders through share repurchases ($1.4 billionb in the first half) and a dividend increase. While facing some operational challenges, such as a provision for bad debts related to Rite Aid's bankruptcy, McKesson's strategic acquisitions and solid operational execution position it for continued growth and value creation for its investors.
02—Key points
Key Highlights
- Revenues increased by 10% to $103.15 billion for the three months ended September 30, 2025, and by 16% to $200.98 billion for the six months ended September 30, 2025, year-over-year.
- Diluted EPS rose significantly to $8.92 for the quarter and $15.16 for the six months, reflecting strong profitability improvements.
- Two major acquisitions were completed: PRISM Vision Holdings, LLC for $871 million and Community Oncology Revitalization Enterprise Ventures, LLC for $2.5 billion, enhancing the Oncology & Multispecialty segment.
- Total operating expenses decreased by 20% for the quarter and 9% for the six months, indicating effective cost management and operational efficiencies.
- The company returned $1.6 billion to shareholders in the first half of fiscal 2026 through share repurchases ($1.4 billion) and dividend payments ($179 million).
- The quarterly dividend was increased to $0.82 per share from $0.71 per share.
- A provision for bad debts of $189 million was recorded for the six months ended September 30, 2025, related to the bankruptcy of customer Rite Aid.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2026, McKesson Corp kept $0.01.
- Revenue$103.15B100.0%
- Cost of revenue−$99.61B96.6%
- Gross profit$3.54B3.4%
- Operating costs−$2.13B2.1%
- Operating income$1.41B1.4%
- Interest, other & tax−$297.0M0.3%
- Net income$1.11B1.1%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed November 6, 2025Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $103.15B$93.65B | +10.1% |
| Cost of Revenue | $99.61B$90.40B | +10.2% |
| Gross Profit | $3.54B$3.25B | +9.1% |
| SG&A Expenses | $2.07B$2.50B | −17.1% |
| Operating Expenses | $2.13B$2.67B | −20.0% |
| Operating Income | $1.41B$578.00M | +143.4% |
| Net Income | $1.11B$241.00M | +360.6% |
| EPS (Basic) | $8.95$1.88 | +376.1% |
| EPS (Diluted) | $8.92$1.87 | +377.0% |
| Shares Outstanding (Basic) | 124.00M128.70M | −3.7% |
| Shares Outstanding (Diluted) | 124.40M129.30M | −3.8% |
05—Questions
Frequently Asked Questions
What drove the significant increase in revenue for McKesson?
The substantial revenue growth was primarily driven by market expansion in the North American Pharmaceutical segment, with higher volumes from retail national account customers, and growth in the Oncology & Multispecialty segment due to increased specialty pharmaceutical sales. The launch of new products and overall drug utilization also contributed positively.
How did McKesson manage its expenses despite significant acquisitions and initiatives?
McKesson demonstrated effective cost management by reducing total operating expenses by 20% for the quarter and 9% for the six months year-over-year. This was achieved through a decrease in Selling, Distribution, General, and Administrative (SDG&A) expenses, partly due to the divestiture of Canadian businesses, and lower restructuring and litigation charges compared to the prior year. Strategic restructuring initiatives are also underway to improve efficiency.
What is the impact of the recent acquisitions on McKesson's financial position?
The acquisitions of PRISM Vision Holdings, LLC and Community Oncology Revitalization Enterprise Ventures, LLC are significant strategic moves, particularly bolstering the Oncology & Multispecialty segment. While these acquisitions required substantial cash outlay ($871 million and $2.5 billion respectively), they are expected to contribute to future revenue growth and market positioning. The financial results of these acquired entities are now consolidated into McKesson's financial statements.
What are the key risks or uncertainties facing McKesson as highlighted in the filing?
McKesson operates in a highly regulated industry. Key risks include potential changes in government policies and regulations affecting healthcare, as well as ongoing litigation, particularly related to opioid distribution. The company has significant liabilities related to opioid settlements, with approximately $5.7 billion accrued as of September 30, 2025. An adverse outcome in ongoing legal proceedings could materially impact financial position and results of operations.
06—Continue