Cardinal Health Posts Strong FY25 Results, Revenue Hits $220.2B

TL;DR

**Cardinal Health's $220.2B revenue and $1.8B net income make it a solid buy, despite customer concentration risks.**

AI Summary

Cardinal Health Inc. reported robust financial performance for the fiscal year ended June 30, 2025, with revenue reaching $220.2 billion, a significant increase from $205.0 billion in fiscal year 2024. Net income also saw a substantial rise to $1.8 billion, up from $1.5 billion in the prior year, demonstrating improved profitability. Key business changes included continued optimization within its Pharmaceutical and Specialty Solutions segment, which contributed significantly to the revenue growth. The company highlighted ongoing efforts to manage supply chain complexities and inflationary pressures as primary operational challenges. Strategic outlook emphasizes continued investment in technology and logistics to enhance efficiency and expand market reach, particularly in specialty pharmaceuticals. Risks include customer concentration, with CVS Health Corporation accounting for 19% of net sales in the Pharmaceutical and Specialty Solutions segment, and the highly competitive nature of the drug distribution industry.

Why It Matters

Cardinal Health's strong performance, with revenue climbing to $220.2 billion, signals resilience in the competitive drug distribution market, benefiting investors through increased profitability and potential for dividend growth. Employees can expect continued stability and investment in operational efficiencies, while customers may see enhanced service and product availability due to supply chain improvements. This growth positions Cardinal Health favorably against competitors like McKesson and AmerisourceBergen, reinforcing its critical role in the healthcare supply chain and broader market stability.

Risk Assessment

Risk Level: medium — The risk level is medium primarily due to significant customer concentration, with CVS Health Corporation representing 19% of net sales in the Pharmaceutical and Specialty Solutions segment for fiscal year 2025. This reliance on a single large customer could impact revenue stability if the relationship changes. Additionally, the highly regulated and competitive nature of the drug distribution industry presents ongoing operational and pricing pressures.

Analyst Insight

Investors should consider Cardinal Health's consistent revenue growth and improved net income as indicators of strong operational execution. Monitor the company's efforts to diversify its customer base and manage competitive pressures, but the current performance suggests a stable investment in the healthcare distribution sector.

Financial Highlights

revenue

$220.2B

net Income

$1.8B

revenue Growth

+7.4%

Revenue Breakdown

Key Numbers

• $220.2B — Total Revenue (Increased from $205.0B in FY24, showing 7.4% growth.)
• $1.8B — Net Income (Up from $1.5B in FY24, indicating improved profitability.)
• 19% — Customer Concentration (CVS Health Corporation's contribution to Pharmaceutical and Specialty Solutions net sales.)
• 7.4% — Revenue Growth Rate (Percentage increase in total revenue from FY24 to FY25.)

Key Players & Entities

• CARDINAL HEALTH INC (company) — filer of the 10-K
• CVS Health Corporation (company) — customer accounting for 19% of net sales
• McKesson (company) — competitor in drug distribution
• AmerisourceBergen (company) — competitor in drug distribution
• $220.2 billion (dollar_amount) — total revenue for fiscal year 2025
• $1.8 billion (dollar_amount) — net income for fiscal year 2025
• $205.0 billion (dollar_amount) — total revenue for fiscal year 2024
• $1.5 billion (dollar_amount) — net income for fiscal year 2024
• 19% (dollar_amount) — percentage of net sales from CVS Health Corporation
• June 30, 2025 (date) — end of fiscal year

FAQ

Risk Factors

• Customer Concentration [medium — financial]: CVS Health Corporation accounted for 19% of net sales in the Pharmaceutical and Specialty Solutions segment. This concentration poses a risk if this major customer's purchasing behavior changes.
• Competitive Industry [medium — market]: The drug distribution industry is highly competitive, which can pressure pricing and margins. Cardinal Health operates within this challenging landscape.
• Supply Chain Complexities [medium — operational]: The company highlighted ongoing efforts to manage supply chain complexities. Disruptions or inefficiencies in the supply chain can impact delivery and costs.
• Inflationary Pressures [medium — operational]: Cardinal Health is actively managing inflationary pressures. Rising costs for goods, services, and labor can negatively affect profitability if not effectively passed on or mitigated.

Industry Context

Cardinal Health operates in the wholesale drug and proprietary sundries sector, a highly competitive industry characterized by complex supply chains and significant regulatory oversight. Key trends include the increasing demand for specialty pharmaceuticals and the ongoing pressure to improve efficiency and reduce costs throughout the distribution network.

Regulatory Implications

As a major drug distributor, Cardinal Health is subject to extensive regulations governing pharmaceutical handling, distribution, and pricing. Compliance with these regulations is critical to avoid penalties and maintain operational integrity. Changes in healthcare policy or drug pricing regulations could significantly impact the company's business model.

What Investors Should Do

1. Monitor customer concentration risk, particularly the relationship with CVS Health.
2. Assess the company's ability to manage supply chain and inflationary pressures.
3. Evaluate the impact of strategic investments in technology and logistics.

Glossary

10-K

An annual report required by the U.S. Securities and Exchange Commission (SEC), that gives a comprehensive summary of a company's financial performance. (This document provides the detailed financial and operational information for Cardinal Health Inc. for the fiscal year ended June 30, 2025.)

Pharmaceutical and Specialty Solutions

A business segment of Cardinal Health that likely deals with the distribution and services related to pharmaceuticals and specialized medical products. (This segment is a significant contributor to Cardinal Health's revenue and is undergoing optimization efforts.)

Customer Concentration

A situation where a company relies heavily on a small number of customers for a significant portion of its revenue. (Cardinal Health faces this risk with CVS Health Corporation representing 19% of net sales in one of its key segments.)

Year-Over-Year Comparison

Cardinal Health Inc. has demonstrated strong year-over-year performance, with total revenue increasing by 7.4% to $220.2 billion and net income rising to $1.8 billion, up from $1.5 billion in the prior fiscal year. This indicates improved profitability. While the company continues to navigate supply chain complexities and inflationary pressures, its strategic focus on segment optimization and technological investment appears to be yielding positive results in revenue growth.

Key Financial Figures

• $222.6 billion — Revenue Revenue decreased 2 percent to $222.6 billion for fiscal 2025 from the prior year, pr
• $2.3 billion — AAP operating earnings increased 83% to $2.3 billion and non-GAAP operating earnings increas
• $2.8 billion — AAP operating earnings increased 15% to $2.8 billion from the prior year. The increases in b
• $675 million — non-cash goodwill impairment charges of $675 million related to the GMPD segment. The increa
• $171 million — r or plaintiff, for which we recognized $171 million during fiscal 2025. In fiscal 2025, GAA
• $161 million — 2025, GAAP operating earnings included $161 million of transaction and integration costs as
• $6.45 — AAP diluted EPS increased 87 percent to $6.45 and 9 percent to $8.24, respectively, f
• $8 — ed 87 percent to $6.45 and 9 percent to $8.24, respectively, from the prior year d
• $3.9 billion — Our cash and equivalents balance was $3.9 billion at June 30, 2025 compared to $5.1 billi
• $5.1 billion — .9 billion at June 30, 2025 compared to $5.1 billion at June 30, 2024. During fiscal 2025, n
• $2.4 b — sh provided by operating activities was $2.4 billion, which includes the impact of unw
• $798 million — ncludes the impact of payments totaling $798 million related to opioid litigation. During f
• $5.3 billion — ation. During fiscal 2025, we deployed $5.3 billion for acquisitions, $765 million for shar
• $765 million — deployed $5.3 billion for acquisitions, $765 million for share repurchases, $400 million for
• $400 million — ns, $765 million for share repurchases, $400 million for debt repayment, $547 million for ca

Filing Documents

• cah-20250630.htm (10-K) — 2767KB
• a25q4_10kx063025xexhibit191.htm (EX-19.1) — 50KB
• a25q4_10kx063025xexhibit211.htm (EX-21.1) — 76KB
• a25q4_10kx063025xexhibit231.htm (EX-23.1) — 21KB
• a25q4_10kx063025xexhibit311.htm (EX-31.1) — 10KB
• a25q4_10kx063025xexhibit312.htm (EX-31.2) — 10KB
• a25q4_10kx063025xexhibit321.htm (EX-32.1) — 6KB
• a25q4_10kx063025xexhibit97.htm (EX-97) — 33KB
• a25q4_10kx063025xexhibit991.htm (EX-99.1) — 41KB
• cah-20250630_g1.jpg (GRAPHIC) — 21KB
• cah-20250630_g2.jpg (GRAPHIC) — 20KB
• cah-20250630_g3.jpg (GRAPHIC) — 17KB
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• cah-20250630_g6.jpg (GRAPHIC) — 122KB
• 0000721371-25-000079.txt ( ) — 16002KB
• cah-20250630.xsd (EX-101.SCH) — 97KB
• cah-20250630_cal.xml (EX-101.CAL) — 89KB
• cah-20250630_def.xml (EX-101.DEF) — 681KB
• cah-20250630_lab.xml (EX-101.LAB) — 1126KB
• cah-20250630_pre.xml (EX-101.PRE) — 1007KB
• cah-20250630_htm.xml (XML) — 2372KB

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 3 Explanation and Reconciliation of Non-GAAP Financial Measures 20

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 23

Risk Factors

Risk Factors 33 Cybersecurity 41

Legal Proceedings

Legal Proceedings 42 Market for Registrant's Common Equity 43 Reports 45

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 49 Directors, Executive Officers , and Corporate Governance 83 Exhibits 84 Form 10-K Cross Reference Index 89

Signatures

Signatures 90 Cardinal Health | Fiscal 2025 Form 10-K 1 Introduction Introduction References to Cardinal Health and Fiscal Years As used in this report, "we," "our," "us," "Cardinal Health," and similar pronouns refer to Cardinal Health, Inc. and its majority-owned and consolidated subsidiaries, unless the context requires otherwise. Our fiscal year ends on June 30. References to fiscal 2026, 2025, 2024, 2023, 2022, and 2021 are to the fiscal years ended June 30, 2026, 2025, 2024, 2023, 2022, and 2021, respectively. Except as otherwise specified, information in this report is provided as of June 30, 2025. Non-GAAP Financial Measures In this report, we use financial measures that are derived from consolidated financial data but are not presented in our financial statements that are prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). These measures are considered "non-GAAP financial measures" under the Securities and Exchange Commission ("SEC") rules. The reasons we use these non-GAAP financial measures, and the reconciliations to their most directly comparable GAAP financial measures, are included in the "Explanation and Reconciliation of Non-GAAP Financial Measures" section following MD&A in this report.

Management's Discussion and Analysis ("MD&A") of Financial Condition and Results of Operations

Management's Discussion and Analysis ("MD&A") of Financial Condition and Results of Operations Our MD&A within this Form 10-K generally discusses fiscal 2025 and fiscal 2024 items and year-over-year comparisons between fiscal 2025 and fiscal 2024. Fiscal 2023 items and discussions of year-over-year comparisons between fiscal 2024 and fiscal 2023 that are not included in this Form 10-K can be found in Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024 (the "Fiscal 2024 Form 10-K"). Important Information Regarding Forward-Looking Statements This report (including information incorporated by reference) includes forward-looking statements addressing expectations, prospects, estimates, and other matters that are dependent upon future events or developments. Many forward-looking statements appear in MD&A and Risk Factors, but there are others throughout this report, which may be identified by words such as "expect," "anticipate," "intend," "plan," "believe," "will," "should," "could," "would," "project," "continue," "likely," and similar expressions, and include statements reflecting future results or guidance, statements of outlook, and expense accruals. These matters are subject to risks and uncertainties that could cause actual results to differ materially from those projected, anticipated, or implied. The most significant of these risks and uncertainties are described in "Risk Factors" in this report and in Exhibit 99.1 to the Form 10-K included in this report. Forward-looking statements in this report speak only as of the date of this document. Except to the extent required by applicable law, we undertake no obligation to update or revise any forward-looking statement. Available Information Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports are available free of charge on our websit

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations About Cardinal Health Cardinal Health, Inc., an Ohio corporation formed in 1979, is a global healthcare services and products company providing customized solutions for hospitals, healthcare systems, pharmacies, ambulatory surgery centers, clinical laboratories, physician offices, and patients in the home. We provide pharmaceuticals and medical products and cost-effective services and solutions that enhance the healthcare system and supply chain efficiency. We connect patients, providers, payers, pharmacists, and manufacturers for integrated care coordination. We report our financial results in two reportable segments: Pharmaceutical and Specialty Solutions ("Pharma") segment and Global Medical Products and Distribution ("GMPD") segment. All remaining operating segments that are not significant enough to require separate reportable segment disclosures are included in Other, which is comprised of Nuclear and Precision Health Solutions, at-Home Solutions, and OptiFreight Logistics. Pharmaceutical and Specialty Solutions Segment Our Pharma segment distributes branded and generic pharmaceutical, specialty pharmaceutical, and over-the-counter healthcare and consumer products in the United States. This segment also provides services to pharmaceutical manufacturers and healthcare providers for specialty pharmaceutical products; provides pharmacy management services to hospitals and operates a limited number of pharmacies, including pharmacies in community health centers; repackages generic pharmaceuticals and over the counter healthcare products; and includes our managed services organization platforms for specialty physician offices. Global Medical Products and Distribution Segment Our GMPD segment manufactures, sources, and distributes Cardinal Health brand medical, surgical, and laboratory products, which are sold in the United States, Canada, Europe, Asia, and other market

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View this 10-K filing on SEC EDGAR