McKesson — Fiscal 2027 Second Quarter Earnings Summary

Financial Performance:

• Consolidated revenues for the second quarter ended September 30, 2026, were $111.0 billion, an 8% increase year-over-year; year-to-date revenues were $216.3 billion, also an 8% increase.
• Net income attributable to McKesson Corporation was $1,218 million for the quarter (up 10% year-over-year) and $1,832 million for the first six months (down 3% year-over-year).
• Adjusted earnings were $1,363 million for the quarter (up 11% year-over-year) and $2,546 million for the first six months (up 12% year-over-year).
• Earnings per diluted common share were $10.44 for the quarter (up 17% year-over-year) and $15.53 for the first six months (up 2% year-over-year).
• Adjusted earnings per diluted share were $11.68 for the quarter (up 18% year-over-year) and $21.59 for the first six months (up 19% year-over-year).
• Cash flow from operations was $3.1 billion for the quarter and $2.9 billion for the first six months.
• Free cash flow was $2.9 billion for the quarter and $2.6 billion for the first six months.
• Total assets were $92.3 billion as of September 30, 2026, compared to $82.3 billion as of March 31, 2026.
• Long-term debt increased to $8.4 billion as of September 30, 2026, from $5.3 billion as of March 31, 2026.
• Cash and cash equivalents were $6.5 billion as of September 30, 2026, compared to $4.0 billion as of March 31, 2026.

Guidance and Future Outlook:

• McKesson raised its fiscal 2027 Adjusted Earnings per Diluted Share guidance range to $45.60 to $46.40, from the previous range of $44.20 to $45.00.
• The new guidance range indicates 17% to 19% growth compared to the prior year.
• The company does not provide forward-looking guidance on a GAAP basis due to the inability to reasonably forecast LIFO inventory-related adjustments, litigation contingencies, transaction-related expenses, and other adjustments without unreasonable effort.

Business Segments and Product Lines:

• North American Pharmaceutical: Revenues were $91.4 billion (up 6%); Adjusted Segment Operating Profit was $1.0 billion (up 22%), driven by growth in specialty product distribution to health systems and strategic accounts.
• Oncology & Multispecialty: Revenues were $15.0 billion (up 24%); Adjusted Segment Operating Profit was $427 million (up 8%), driven by growth in provider solutions and specialty distribution.
• Prescription Technology Solutions: Revenues were $1.5 billion (up 10%); Adjusted Segment Operating Profit was $307 million (up 18%), driven by higher demand for access solutions.
• Medical-Surgical Solutions: Revenues were $3.1 billion (up 5%); Adjusted Segment Operating Profit was $225 million (down 10%), driven by lower contributions from the ambulatory care channel due to product mix, partially offset by growth in the extended care channel.

Market and Competitive Landscape:

• Growth in the North American Pharmaceutical and Oncology & Multispecialty segments was driven by increased prescription volumes and distribution of specialty products.
• Lower contributions from branded pharmaceuticals partially offset revenue growth in the North American Pharmaceutical segment.
• The company noted strategic investments to expand capabilities in key growth areas, including complex specialty therapies and biopharma commercialization.

Risks and Challenges:

• Forward-looking statements include risks such as the potential failure to complete the planned separation of the Medical-Surgical Solutions segment or the investment in Option Care Health, Inc.
• Risks include costly legal disputes and settlements related to the distribution of controlled substances and opioids.
• Potential impacts from changing healthcare laws, policies, and reimbursement models, as well as competition and industry consolidation.
• Cybersecurity incidents, information system problems, and risks associated with the adoption of artificial intelligence.
• Risks related to customer purchase reductions, contract non-renewals, payment defaults, bankruptcies, and supplier relationship changes.
• Potential adverse impacts from changes in tax legislation, capital and credit markets, and geopolitical factors.

Management Commentary and Tone:

• Brian Tyler, Chair and CEO, stated the company delivered "another quarter of strong results" reflecting operational strength and disciplined execution, expressing confidence in leveraging differentiated solutions to create value.
• Kenny Cheung, Executive Vice President and CFO, attributed the guidance raise to the strength of the business and confidence in consistent execution, emphasizing a commitment to disciplined capital deployment and strategic investments.

Other Key Points:

• McKesson signed an agreement to extend its pharmaceutical distribution partnership with CVS Health through June 2032.
• On October 5, 2026, McKesson signed a definitive agreement to invest approximately $1.4 billion for a minority interest of approximately 49% in Option Care Health, Inc., subject to closing conditions.
• On November 2, 2026, McKesson completed the acquisition of Precision Medicine Group, LLC, a global provider of clinical research and biopharma commercialization services.
• On November 2, 2026, PRISM Vision Group expanded its network with the addition of Spectrum Vision Partners, adding more than 150 providers.
• During the first six months of fiscal 2027, the company returned $3.6 billion to shareholders, including $3.4 billion in common stock repurchases and $198 million in dividend payments.
• Dividends declared per common share were $0.94 for the quarter (up 15% year-over-year) and $1.76 for the first six months (up 15% year-over-year).
• Diluted weighted-average common shares outstanding decreased by 6% year-over-year for both the quarter and the first six months.