The 300 companies on this year’s list brought in over $12.5 trillion in revenue for the latest 12 months, with the median revenue figure at $24 billion.

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The corporations on our annual list of the world's 500 largest companies combined to generate $41.7 trillion in revenue over the past year.

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Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Fortune 500

The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

The corporations on our annual list posted aggregate revenues of $41 trillion for the second year in a row.

Industries included in the sector are insurance and managed care, medical products and facilities, pharmacy services, and pharmaceutical companies.

Fortune Sector Leaders: Health Care

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The 200 companies on this list are transforming industries from the inside out.

The corporations on our annual list of the world’s largest companies delivered a record $41 trillion in aggregate revenues.

G500-2023-Cardinal Health

This U.S. wholesale health-supply distributor is one of three such companies in the top 40 of the Global 500. Its revenue rose 11.6% last year, to $181 billion. 
<ul> 
 	<li>Ongoing litigation issues over the alleged role of Cardinal and other pharmaceutical distributors in the opioid crisis bled into the company’s 2022 financials; the company registered a $933 million loss in the fiscal year ended June 2022. But the company’s stock soared in calendar 2022, reflecting investors’ relief after Cardinal reached settlements in several opioid-related lawsuits. (The company did not admit wrongdoing in those settlements.)</li> 
 	<li>The pharmaceutical arm of the company performed well, with a 5% increase in profit year over year.</li> 
 	<li>CEO Mike Kaufmann was succeeded by former CFO Jason Hollar in September 2022.</li> 
</ul>

The 300 companies on this list are transforming industries from the inside out.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

F500 2023-Cardinal Health

This wholesale health-supply distributor is one of three such companies in the top 20 of the Fortune 500. Its revenue rose 11.6% last year, to $181 billion. 
<ul> 
 	<li>Ongoing litigation issues over the alleged role of Cardinal and other pharmaceutical distributors in the opioid crisis bled into the company’s 2022 financials; the company registered a $933 million loss in the fiscal year ended June 2022. But the company’s stock soared in calendar 2022, reflecting investors’ relief after Cardinal reached settlements in several opioid-related lawsuits. (The company did not admit wrongdoing in those settlements.)</li> 
 	<li>The pharmaceutical arm of the company performed well, with a 5% increase in profit year over year.</li> 
 	<li>CEO Mike Kaufmann was succeeded by former CFO Jason Hollar in September 2022.</li> 
</ul>

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World's Most Admired Companies

Aggregate sales hit $37.8 trillion last year—an increase of 19%, the highest annual growth rate in the list’s history.

Despite bringing in over $160 billion in revenue in 2021, Cardinal Health reported net income of just $611 million for the year. Litigation costs were one factor: One of several companies entangled in lawsuits over their alleged role in the opioid crisis, Cardinal in July 2021 agreed to pay $6.4 billion in settlements to help fund health care and drug-treatment programs. The company also agreed to settle a case with the Equal Employment Opportunity Commission involving racial harassment claims made by Black employees at one of its distribution centers, offering $1.45 million in settlements and agreeing to implement a range of policy changes. On the business-building front, Cardinal partnered with logistics startup Zipline to deliver products to pharmacies using autonomous aircraft.

This year’s Fortune 500 marks the 68th running of the list.

F500 2022 Cardinal Health

Despite bringing in over $160 billion in revenue in 2021, Cardinal Health reported net income of just $611 million for the year. Litigation costs were one factor: One of several companies entangled in lawsuits over their alleged role in the opioid crisis, Cardinal in July 2021 agreed to pay $6.4 billion in settlements to help pay for health care and drug-treatment programs. The company also agreed to settle a case with the Equal Employment Opportunity Commission involving racial harassment claims made by Black employees at one of its distribution centers, offering $1.45 million in settlements and agreeing to implement a range of policy changes. On the business-building front, Cardinal recently partnered with logistics startup Zipline to deliver products to pharmacies using autonomous aircraft.

After a year in which humanity leaned more heavily than ever on tech giants, see which companies topped Fortune's ranking of corporate reputation.

Total revenue for the world’s biggest companies fell 4.8% to $31.7 trillion this year—the first decline in half a decade.

G500-2021-030-Cardinal Health

The drug and medical supply company saw 5.1% sales growth last year (its fiscal year ended in June 2020) owing to the strength of its pharmaceutical distribution business. That was particularly true during the first half of 2020, as customers stocked up on medications at the onset of the pandemic. A manufacturer and distributor of the personal protective equipment that has been much in demand, Cardinal has seen both sales of these products and the cost of making and sourcing them increase in the past year. As with other drug wholesalers, Cardinal faces legal challenges over its alleged role in America’s opioid epidemic.

This year’s Fortune 500 marks the 67th running of the list.

F500-201-14-Cardinal Health

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

This year's Fortune Global 500 generated $33.3 trillion in revenues and $2.1 trillion in profits.

G500-2020-037-Cardinal-Health

The Ohio-based drug wholesaler, which counts CVS Health and Kroger as customers, saw revenues rise 6.4% in its 2019 fiscal year due to growth in its drug and specialty pharmaceutical distribution business—and despite the 2018 divestiture of part of its business in China. While depressed prices of generic medications and the cost of opioid-related litigation weighed on Cardinal’s bottom line, the company’s profits rebounded from 2018, when the company took a $1.4 billion impairment charge. Like its two large competitors, Cardinal faces thousands of lawsuits over its alleged role in the nation’s opioid epidemic. In February, states rejected a proposed $18 billion settlement with the nation’s three largest drug distributors.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-016-Cardinal-Health

The Ohio-based drug wholesaler, which counts CVS Health and Kroger as customers, saw revenues rise 6.4% in its 2019 fiscal year due to growth in its drug and specialty pharmaceutical distribution business—and despite the 2018 divestiture of the business in China. While depressed prices of generic medications and the cost of opioid-related litigation weighed on Cardinal’s bottom line, the company’s profits rebounded from 2018, when the company took a $1.4 billion impairment charge. Like its two large competitors, Cardinal faces thousands of lawsuits over its alleged role in the nation’s opioid epidemic. In February, states rejected a proposed $18 billion settlement with the nation’s three largest drug distributors.

Here are the World's Most Admired Companies for 2019 as ranked in their industries. See who made the list.

This year's Fortune Global 500 generated $27.7 trillion in revenues and $1.5 trillion in profits.

This year's Fortune 500 marks the 65th running of the list.

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This year's Fortune 500 marks the 64th running of the list.

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This year's Fortune 500 marks the 63rd running of the list.

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This year's Fortune 500 marks the 62nd running of the list.

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The world's 500 largest companies generated $31.2 trillion in revenues and $1.7 trillion in profits in 2014. Together, this year's Fortune Global 500 employ 65 million people worldwide and are represented by 36 countries.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Global business is back. After limping through a worldwide financial crisis and economic slowdown, the 500 largest companies ranked by revenues shattered all sorts of performance records in 2013: They racked up combined revenues of $31.1 trillion, up 2.5% from 2012, and profits soared 27% to nearly $2 trillion. China’s 95 companies (up from 89 last year) posted $5.8 trillion in revenues. The U.S. has four fewer companies on the list than last year but remains (for now) the country leader, with 128 corporations on the list—including No. 1 Wal-Mart Stores—reporting $8.6 trillion in revenues. 

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Cardinal Health is a U.S. health care services and products company operating across over 30 countries as of 2025. The business provides customized solutions for hospitals, health care systems, pharmacies, surgery centers, clinical laboratories, and patients at home. The medical giant distributes generic and specialty pharmaceuticals, as well as medical, surgical, and laboratory products. Cardinal Health’s history dates back to 1971, in its founding as Cardinal Foods; in 1979, the company switched industries from food to health care, changing its name to Cardinal Distribution.

Q3 2026

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Q4 2025

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Q2 2025

Cardinal Health (CAH): Company Profile, Stock Price, News, Rankings

legacy

Cardinal Health

cardinal health

Hello, and welcome to the third quarter fiscal year 2026 Cardinal Health, Inc. earnings conference call. My name is George, and I'll be your coordinator for today's event. Please note, this conference is being recorded, and for the duration of the call, your lines will be in the listen-only mode. However, you have the opportunity to ask questions towards the end of the presentation, and this can be done by pressing star 1 on your telephone keypad to register your question. Also, can you please limit yourselves to one question each to allow the maximum attendees to ask a question. If you require assistance at any point, please press star 0 and you will be connected to an operator. I'd like to hand the call over to your host, Mr. Matt Sims, Vice President, Investor Relations, to begin today's conference. Please go ahead, sir.

Good morning, and welcome to Cardinal Health third quarter fiscal 2026 earnings conference call. Thank you for joining us. With me today are Cardinal Health CEO, Jason Hollar, and our CFO, Aaron Alt. You can find this morning's earnings press release and investor presentation on the investor relations section of our website at ir.cardinalhealth.com. Since we will be making forward-looking statements today, let me remind you that the matters addressed in these statements are subject to risks and uncertainties that could cause our actual results to differ materially from those projected or implied. Please refer to our SEC filings and the forward-looking statement slide at the beginning of our presentation for a description of these risks and uncertainties. Please note that during our discussion today, the comments will be on a non-GAAP basis, unless specifically called out as GAAP.

GAAP to non-GAAP reconciliations for all relevant periods can be found in the supporting schedules attached to our press release. For the Q&A portion of today's call, we kindly ask that you limit questions to one per participant so that we can try and give everyone an opportunity. With that, I will now turn the call over to Jason.

Thanks, Matt. Good morning, everyone. We are pleased to report another strong quarter for Cardinal Health, building on the momentum we displayed over the past few years. This quarter's performance highlights the durability and resilience of our business and the team's disciplined execution. Results reinforce our conviction in the company's growth trajectory and ability to deliver long-term value creation. Our underlying operating strength continues to be led by our largest and most significant business, Pharmaceutical and Specialty Solutions, and is amplified by contributions from our higher margin growth businesses. Within Pharma, we delivered strong growth, highlighting the strength of our core. We continue to see benefits from our strategic focus on expanding our capabilities across specialty, both downstream with providers and upstream with manufacturers.

We are progressing the expansion of our MSO platforms, in particular with the Specialty Alliance's multi-specialty offerings, delivering differentiated value to a growing network of physicians and enhancing patient care and access. The integration of Solaris into the Specialty Alliance remains on track, we are taking actions to realize synergistic benefits across our portfolio. In GMPD, we continue to execute against our improvement plan. Our focus on simplification and cost optimization initiatives is producing tangible results, and we continue to see notable strength in our portfolio of Cardinal Health brand products. Our deliberate actions to simplify operations, enhance supply chain resiliency, and drive commercial excellence remain strategic priorities as the business navigates the dynamic tariff environment. Our other growth businesses, At-Home Solutions, Nuclear and Precision Health Solutions, and OptiFreight Logistics, continue to deliver robust results.

Their sustained performance is a direct outcome of our continued strategic long-term investments in these areas, which are aligned with a favorable demand environment and positive secular trends in faster-growing areas of healthcare. The collective strength and sustained momentum across the enterprise, including our financial position, gives us the confidence to again raise our full-year outlook for fiscal 2026 and highlight our expectations for continued momentum in fiscal 2027. With that, I'll turn over to Aaron to review our financials and outlook.

Thank you, Jason. Good morning. Our team delivered strong financial results in the third quarter, reflecting positive and broad-based demand, operational execution, and loyalty to our disciplined capital allocation framework. Our strong operational performance was supplemented by positive discrete tax planning benefits below the operating line and continued share repurchase activity. Given our confidence in the remainder of the fiscal year, we are pleased to be raising our full-year fiscal 2026 non-GAAP EPS and adjusted pre-cash flow guidance. Let's begin with a review of our consolidated third quarter results. Total company revenue increased 11% to $61 billion. This growth was driven by strong demand in our Pharmaceutical and Specialty Solutions segment and in other. Gross profit grew 18% to $2.5 billion due to benefits from our acquisitions and segment performance.

While we maintained our focus on cost management, we also invested in the business, with SG&A, inclusive of the impact of our M&A, increasing 17% on a headline basis. When you adjust for the impact of the M&A, our SG&A growth was 7%, reflecting increased volumes and purposeful investments in teams and technology across our business. The combination of these results led to an 18% increase in enterprise operating earnings to $956 million. Moving below the line, we recorded net interest and other expense of $117 million for the quarter, driven primarily by the increased financing costs associated with prior acquisitions. Our non-GAAP effective tax rate for the third quarter was 10.2% due to the benefit of discrete tax planning items in the quarter.

Included in our Q3 ETR was a multi-year benefit that contributed approximately $0.35 to the quarter. Average diluted shares outstanding were 236 million shares. This reflects the positive impact of the completion of our second quarter ASR program in January, as well as the launch of an additional $250 million share repurchase program in the quarter, which was completed in April. This brings our fiscal year 2026 total share repurchases to $1 billion, exceeding our fiscal year baseline target by $250 million year to date. The net result of these factors was third quarter non-GAAP EPS of $3.17, representing 35% growth. Diving deeper into the businesses, the pharma segment delivered a strong quarter. Segment revenue grew 11% to $56.1 billion.

This was primarily driven by existing customer growth across the portfolio. We continue to see strong overall pharmaceutical demand across product categories, including specialty, generics, and consumer health. Within brand, volume growth also remains quite healthy, though we did observe some fluctuations in mix that impacted the overall revenue line between GLP-1s, IRA changes, and generics. Of note, during Q3, GLP-1s added 6 percentage points to our revenue growth. GLP-1 revenue growth remained robust at over 30% but moderated from the prior quarter. The growth from GLP-1s was generally offset in the quarter by a 6 percentage point impact to revenue from Inflation Reduction Act WAC pricing adjustments. Segment profit growth outpaced revenue growth significantly, increasing 18% to $784 million. This strong result was primarily driven by contributions from brand and specialty products.

As previously shared, we maintained our economics on distribution contracts notwithstanding the impact of WAC changes. We also saw positive performance of our generics program, we're pleased to again see consistent market dynamics. I want to highlight how our teams have deftly managed through the increased operational complexity resulting from heightened winter storm activity during the third quarter, a testament to the agility of our workforce and fundamental durability of our business model. As a matter of financial transparency, I will note that on a GAAP basis, earnings were impacted by a $184 million pre-tax goodwill impairment charge related to our Navista business. The non-cash impairment charge was primarily due to changes in the risk profile of the business plans resulting in an increase in the discount rate. These changes reflect business model updates and base operational performance. The impairment does not affect our non-GAAP results.

Our strong positive outlook for our specialty business is unchanged. We are pleased with the above-market growth we are seeing in specialty, including over 20% revenue growth in the third quarter, and we continue to expect our specialty revenue to exceed $50 billion in fiscal 2026. In our GMPD segment, revenue was $3.1 billion. This was generally flat to prior year, reflecting lower distribution volumes offset by Cardinal Health brand growth. We were again pleased with Cardinal Health brand performance, which grew over 5% in the U.S., including timing shifts into Q2 that we called out last quarter. GMPD segment profits saw a decrease to $25 million due to the adverse net impact of tariffs.

That said, our segment results reflect solid underlying operational performance, and the team remains focused on executing our improvement plan, driving cost efficiencies, and managing supply chain resilience to serve our customers effectively. As you are aware, our tariff exposure is concentrated in the GDPMD segment. In February of 2026, the Supreme Court ruled tariffs imposed under the International Emergency Economic Powers Act unlawful, and work is underway to establish a refund process. Uncertainty remains in the timing, scope, and administration of refunds, and we have not recognized any financial impact in the quarter, nor reflected potential impacts in our updated guidance. To date, we have paid approximately $200 million in IEEPA tariffs and previously noted sharing in these impacts with our customers.

As a result, if circumstances change and become more certain, we would anticipate the potential future net benefit to Cardinal to be about half of that two hundred million dollars, primarily driven by the repayment of the IEEPA pricing that we've taken to our customers. Turning to our other growth businesses, At-Home Solutions, Nuclear and Precision Health Solutions, and OptiFreight Logistics, we saw strong results. These businesses represent a key element of our long-term growth expectations. Segment revenue grew 31% to $1.7 billion, and segment profit grew 34% to $179 million. This performance was driven by robust demand across all three businesses and the acquisition of ADS.

The integration of ADS into our At-Home Solutions business is progressing well. This combination has created a powerful platform for patients with chronic conditions that supports and can be supported by other parts of our business. Our Nuclear & Precision Health Solutions business is executing like clockwork. NPHS again saw over 30% revenue growth from Theranostics, a key area of innovation and investment. OptiFreight Logistics continues to deliver its unique value proposition, helping healthcare providers manage logistics with greater efficiency and cost effectiveness, growing revenue nearly 20% in the quarter. Now turning to the balance sheet. Our capital deployment priorities remain consistent: investing organically in the business for long-term profit growth, maintaining our investment-grade credit rating, returning capital to shareholders, and opportunistically pursuing value creation through strategic M&A.

We ended the quarter with a cash position of nearly $4 billion after generating $1.7 billion of adjusted free cash flow in the quarter and taking several actions that align with our discipline framework. We continue to invest heavily into the business with CapEx of $385 million so far this year across all of our businesses. We prepaid $100 million on our outstanding term loan, further reducing our Moody's adjusted leverage ratio to 3 times. This places us comfortably within our target leverage range of 2.75 times to 3.25 times and demonstrates our commitment to our Baa2 rating at Moody's. As I noted, we also returned capital to shareholders through an additional $250 million accelerated share repurchase. Let's talk about the rest of fiscal 2026.

Our strong performance through the third quarter and our confidence in the fundamentals of our business leads us to raise our non-GAAP EPS outlook for the full year to a range of $10.70-$10.80. That is a $0.50 increase at the midpoint, made up of approximately $0.13 from operational strength at Pharma and in our other growth businesses and the remainder below the line. This new range represents annual EPS growth of 30%-31%. In Pharma, we expect our fiscal 2026 revenue to come in at the lower end of our 15%-70% range, reflecting the continued strong overall volume growth and the mix dynamics within brand that I referenced earlier.

For segment profit, we are pleased to raise and narrow our profit growth outlook to 22%-23%, an increase from our prior range of 20%-22%. This change reflects our performance through the third quarter and is indicative of our confidence in the segment's continued operational execution with anticipated high teens profit growth in the fourth quarter at the midpoint. As you model the remainder of the year, please keep in mind that we have now fully lapped our large pharma wins from FY 2025 and the GIA acquisition. Consequently, Solaris will be the primary inorganic driver to account for in your year-over-year comparisons. Additionally, I will note we are onboarding distribution volumes for GI Alliance and Solaris during Q4, which are reflected in our guidance.

For the GMPD segment, we are reiterating our revenue outlook of 1%-3% growth and holding our profit guidance to $150 million. We remain pleased with the progress against the GMPD improvement plan and are encouraged by both the consistency of our Cardinal Health brand growth and tangible impact of our simplification strategy. With our other growth businesses, revenue guidance is unchanged, projecting the full year between 26%-28% growth. However, we are increasing our profit growth guidance to a range of 36%-38%, up from 33%-35%. This positive revision is driven by strong performance across all three growth businesses to date. As you model the remainder of the year, please continue to remember that we have lapped the acquisition of ADS in April, which will result in more normalized Q4 growth.

Focusing below the line, we are updating our outlook for interest and other to approximately $340 million, up from our previous estimate of $325 million. This is due to some Q3 adjustments within the other income and expense line, the majority of which was offset in tax and net neutral to the enterprise. Additionally, as a result of the discrete planning benefits in Q3, we are lowering our expected non-GAAP effective tax rate for the full year to approximately 19%, down from our prior range of 21%-23%. Reflecting the impact of our share repurchase activity, we are updating our outlook for weighted average shares outstanding to approximately 237 million shares from our previous guidance of 237 million-238 million shares.

Finally, we are raising and narrowing our full year adjusted free cash flow guidance to a range of $3.3 billion-$3.7 billion from our previous guidance of $3 billion-$3.5 billion, which reinforces the robust and resilient cash generating capabilities of our business model. In summary, our third quarter results demonstrate the broad-based strength of our business and the progress we are making against our strategic objectives. Before I close, I'd like to share some initial thoughts on fiscal 2027. The headline is that we remain confident in our long-term targets and will continue to assess the various puts and takes for next year as we progress further through our annual planning process.

We look forward to sharing detail of our fiscal 2027 outlook during our fourth quarter earnings call. Before then, a few items of perspective. While the healthcare landscape and regulatory environment remain dynamic, we have consistently demonstrated an ability to navigate change, reinforcing the durability and deep resilience of our model and our enduring value proposition. In our Pharmaceutical and Specialty Solutions segment, we anticipate positive demand and demographic trends to persist, supported by strong ongoing operating performance. There are several positive items informing our views. The scale and efficiency of our pharmaceutical distribution operations and our growing position in specialty, including specialty distribution, our MSO strategy, and Biopharma Solutions. We will see benefits from the annualization of the Solaris acquisition in the beginning of the fiscal year and anticipate benefits of continued synergy realization.

The three businesses and other are exceptionally well positioned to benefit from secular trends and to win in high growth innovation areas like theranostics. We plan to continue to strategically invest and position ourselves to capitalize on those trends. In our GDPMD segment, the successful execution of our multi-year improvement plan is on track and gives us confidence in our continued potential to unlock value in this business. We continue to monitor the dynamic tariff environment and broader macroeconomic factors, including fuel and commodity exposure, with improved ability to navigate change as a result of our multi-year focus on simplification and efficiency. All of this is supported by the fact that we are completing our third year of long-term, sustained investment in our businesses to ensure that the foundations of future growth are built before we need them.

Below the line, we'll have the comparison to the discrete tax benefits this year while continuing to pursue opportunities to drive durable improvements in our tax position. We expect another year of robust cash flow generation, and we'll be sticking to our knitting with respect to our disciplined capital framework. Which creates opportunity for accretion through our baseline share repurchases. In closing, we are confident in our ability to achieve our updated higher guidance for fiscal 2026. Our priorities are unchanged, and we are executing against them. Our team is committed to our vision and will remain focused on its achievement while investing for long-term growth and value creation. With that, I'll now turn the call back over to Jason.

Thanks, Aaron Alt. Our pharma segment once again led our performance, providing proof points of our strategy to strengthen the core and expand in Specialty. Our continued focus on the core with investments in infrastructure, technology, and our people are delivering measurable improvements across the network. As an example, we continue to invest in our existing distribution centers through automation and productivity initiatives, which both improves our costs and expands our capacity. We are achieving record high service levels, which is a testament to our employees and the investments we've made focusing on the core. We continue to see consistent dynamics in generics with our Red Oak partnership and continue to have best-in-class performance in the strength of our generics program. Specialty continues to be an increasingly important driver of our strategy and results.

Upstream, our Biopharma Solutions business is advancing its momentum, providing critical services to our pharmaceutical partners, evidenced by 3 new pharmaceutical therapies that our Synexus patient support business onboarded this quarter, with another 10 scheduled to be completed over the next 2 quarters. This growing pipeline underscores the trust and value we provide to manufacturers bringing life-changing therapies to market. We continue to see opportunity from our multi-specialty MSO strategy within the Specialty Alliance, which is proving to be a key differentiator in the marketplace, generating value for community-based physicians and their patients. Since last quarter, we closed 3 tuck-in acquisitions within the Specialty Alliance, adding physicians to our network and further extending our geographic reach into our 33rd state. Our model continues to unlock value through the synergies we create across our businesses.

For instance, Specialty Networks and The Specialty Alliance are now partnering to support a pharmaceutical company on a multi-year study focused on understanding real-world outcomes for patients receiving care at community gastroenterology clinics across the country. Specialty Networks will perform the analysis, showcasing how we connect our vast network of partners, physicians, and patients to create long-term differentiated value. Turning to GDPMD, we continue to demonstrate disciplined execution and make progress on our ongoing improvement plan. The team remained focused on growing Cardinal Health brand and relentlessly simplifying operations, and we made tangible progress on both fronts during the quarter. With the execution of our five-point plan, Cardinal Health brand has now grown at least mid-single digits for five consecutive quarters, outpacing the broader market. Our other growth businesses, which remain an increasingly critical component of our long-term strategy, were again a significant driver of our performance this quarter.

In At-Home Solutions, we continue to see a strong demand environment fueled by the ongoing shift of care into the home. To support the growing demand, we are investing to expand the capacity of our network, the breadth of our offering, and in new technology to drive efficiencies and customer experience. We are pleased with the integration progress of ADS, which now marks 1 year as part of Cardinal Health. We have successfully migrated ADS volume into our distribution centers, as well as onboarded nearly 1,000 new employees and nearly 500,000 new patients. This marks a significant operational achievement that positions us for enhanced efficiency and long-term growth.

We are well positioned to capture ongoing growth, as evidenced by the key synergies between Pharma and at-Home, where we are seeing strong growth of our Continued Care Pathway program, which we announced early this year, with the team now serving 165,000 patients and growing up nearly 20% since January. This progress is supported by our ongoing investments in technology and our core distribution footprint. To that end, we have signed a lease and are progressing with our new Sacramento Distribution Center, which will help us serve even more customers on the West Coast. Nuclear and Precision Health Solutions continues to demonstrate its leading position, thanks to our differentiated offerings and specialized expertise.

This quarter, we announced a significant expansion of our Actinium-225 production capabilities at our Center for Theranostics Advancement, which will substantially increase our capacity to support the rapidly growing demand for novel, targeted cancer therapies and strengthen our ability to meet customer needs today and into the future. To date, Nuclear's Actinium-225 has supported more than 15 clinical trials worldwide, reflecting broad engagement with pharmaceutical innovators, a clear indicator of our ability to execute and scale in this complex and highly differentiated field. We continue to unlock opportunities for greater connectivity between our nuclear business and our specialty businesses, exemplified by a recent supply agreement with the Specialty Alliance, which makes them our nuclear business's largest user of Illuccix for prostate cancer imaging. Our OptiFreight Logistics business also continues to perform well and expand its offerings, consistently demonstrating its leading value proposition for healthcare providers.

Launched last quarter, the pharmacy solution from OptiFreight Logistics, inclusive of tech-forward products, Shipment Navigator, and Tracking Beacon, provides meaningful shipping process efficiencies and improved tracking visibility via an all-in-one platform to drive confidence, security, and clarity for outbound pharmacy shipments. In closing, our results this quarter again demonstrate the clear progress we're making across the business. The relentless focus and dedication of our colleagues around the world underscores the vital role we play in ensuring critical products reach the right place at the right time for our customers, evidenced by the increased complexity our teams managed through to achieve record high service levels for the quarter.

Our resilient business model and our foundational role as the backbone of the healthcare system give us great confidence in our ability to capitalize on opportunities ahead and to deliver sustained long-term value. With that, we'll take your questions.

Thank you very much, sir. Ladies and gentlemen, as a reminder, if you have any questions, please press star one on your phone keypad. Once again, can you please also limit yourselves to one question each to allow the maximum attendees to ask a question. All right, the first question today is coming from Lisa Gill, Taldum, JPMorgan. Please go ahead, Lisa. Your line is open. Lisa, your line is open. Okay, Lisa, I'm not able to hear you at this time. I'm just going to put you back in the queue. If you check your phone, and we're just going to move to our next question. It's coming from Michael Cherny of Leerink Partners. Please go ahead, Michael. Your line is open.

Perfect. Thanks. Just one quick housekeeping and then 1 broader question. First, on the housekeeping side, is there any way to quantify the accelerated SG&A investments that you mentioned in the quarter relative to positioning for future growth? Broadly speaking, great to hear all the progress on specialty. As you look at the portfolio now, where do you think if there are any kind of holes or shortfalls that you continue to see the opportunity to build out either organically or inorganically from here? Thank you.

Great. Good morning. Thanks for the questions. Happy to address them. You know, we did call out in the prepared remarks that while SG&A was up 17% across the enterprise overall, if you exclude the impact of the M&A, it was up, you know, 7%. I can assure you we are being quite purposeful and disciplined in thinking through our SG&A structure to ensure that where we are investing, particularly in technology and team, as I called out, it's focused on setting us up for success, you know, going forward. With respect to the specialty portfolio, I guess I'll start and just observe that we are really pleased with the continued strength we're seeing in our specialty business, indeed across the pharmaceutical demand, you know, overall.

As we think about the specialty portfolio, that was a key contributor to the excellent results that, you know, Pharma had. GIA, Solaris, you know, Ion, all of the businesses that we've acquired have certainly partnered well with the existing specialty capabilities, Specialty Networks, et cetera, and are performing as we expected when we brought them into the portfolio. As far as where to next, if your question is really about the inorganic opportunities, what I, what I would observe is while we will continue to be focused on specialty, we have prioritized, you know, autoimmune and urology, and we'll remain focused there. We are going to be quite disciplined as well. The right assets at the right timing at the right price, we will continue to lean in to support our growing specialty platforms.

Yeah, I'd just add that we're very pleased, Aaron just used the words platform. I think that's an important distinction of the investments we've made to date. We're clearly much more focused on the bolt-ons. We believe we have the capability, the business, and perhaps most importantly, the teams in place to execute this strategy. We see that there's a lot of opportunity, not just within each of these platforms, but how these platforms work together. You even heard in this call already some of the examples of the areas that we're working not just between the MSOs, but the MSOs and the rest of the specialty business, between MSOs and what we're doing with Nuclear or our At-Home Solutions business. We have a lot of interconnectivity there.

And it's all a component to our broader strategy to drive overall specialty growth, which we reinforce again today, is growing at over 20%. Still expect to exceed $50 billion of revenue this year. The only other thing to add outside, especially clearly our highest priority, we've been very clear on that point. The other acquisition that we've done in the last year that we just anniversaried here April 1st, of course, is the At-Home Solutions business. The other businesses are the other areas of potential opportunity for us. Secular growth trends that are part of the market that's growing very quickly. We are very well-positioned in each of those three spaces. And if the right opportunity presents itself, I would use similar words as to Aaron just said.

We will be very disciplined as to how we approach those opportunities. We think the market's growing and we're well-positioned. Next question, please.

Yes, sir. The next question is coming from Elizabeth Anderson of Evercore ISI. Please go ahead.

Hi, guys. Thank you so much for the question. I wanted to dive into other. You know, obviously that continues to grow very nicely and you just raised the guidance for the fourth quarter. Are you seeing any sort of changes in trend there that give you the confidence to do that? Or how should we think about that as we sort of think about the back half of the year and then into 2027? Thank you.

Morning. Thanks for the question. We saw strong performance across all three of the growth businesses affectionately known as Other. Revenue was up 31%, profit was up 34%. If you really unpack that, you know, Jason referenced the strong secular trends, the positioning, the competitive positioning we have, that's contributing to good results within the business and indeed, lots of positive perspective on where those businesses are going to take us, you know, as we carry forward. Strong demand has also been a key part of why those businesses have succeeded the way they have. I would highlight a couple things. The core business within at-Home is doing well, and it has been reinforced by the ADS acquisition. The integration that Jason referenced earlier, it's going very well.

We had highlighted in an earlier earnings call that we had a plan with opportunities to overperform, and we continue to see the goodness coming from the at-Home business supported by the ADS acquisition. We pivoted from the integration of the supply chain, the distribution, to now being focused on the systems, the back office, and ensuring that we're providing the best in class, you know, customer experience that we aspire to for the patients being served by our at-Home business. You know, within Nuclear, boy, that theranostic growth just keeps coming. The investments that we're making in supporting, you know, the 70 different therapeutics that are coming our way, really have created a pipeline of success for the business, some of which we're now starting to see, particularly within urology and in oncology. We're excited about that.

OptiFreight continues to perform, providing the excellent services to its customers with another good quarter as well. We were pleased to deliver a good quarter, and this business will of course contribute to our race to our guidance in achieving our long-term targets. Next question, please.

Thank you, sir. Next question will be coming from Erin Wright of Morgan Stanley.

Some of the commentary on 2027 and the moving pieces was helpful. When we dig into that core Pharmaceutical and Specialty Solutions segment and the AOI growth assumptions that we should be considering remain strong, but how do we think about the sustained momentum into 2027? What would make you deviate from the long-term growth algo in that segment? And how do we kind of reconcile with underlying utilization trends that you're seeing or you're expecting into 2027 and then also those continuing specialty drivers? Thanks.

A couple of thoughts there. First, we remain confident that our business is quite resilient and has demonstrated durability notwithstanding a fair amount of change in the industry. I think it's important to keep that in mind that as we talk about, you know, fiscal 2027 as well. That's part of why we're able to express the confidence in the long-term targets that we have really across the enterprise, but particularly within, you know, the pharma business. We have a strong core to our business, right? We have seen consistent positive demand, right? We saw it again, you know, this quarter, and the business is supported by, you know, positive demographic trends that aren't going away as we get one more quarter into our business.

We think those are all things that are going to support the trajectory of that business. We will also continue to benefit from the specialty expansion that Jason and I have just commented upon, right? One thing we're particularly excited about as well is how the pieces are all now starting to fit together. Specialty Alliance working with Nuclear. Biopharma really working with the broader portfolio. There's a lot of goodness there within the pharma business that we think is supportive of the long-term target, and of course, we'll provide more perspective as we get through our planning cycle at the Q4 earnings call. Next question, please.

Thank you, sir. Next question will be coming from Eric Percher of Nephron Research. Please go ahead, Eric.

Thank you. I want to stick with pharma and specialty, and I'd like to get a little bit more on Navista and Ion, and the impairment. I know you called out changes to the risk profile relative to a business plan. Can you give us a feel for whether that was, you know, near term versus long-term changes? Does it alter at all the oncology MSO strategy or, you know, economics of the platform?

Sure. Thanks, Eric. I'll go ahead and start and then turn over to Aaron to walk through a few of the mechanics. First of all, I'll just reinforce what Aaron already said. The broader strategy, we're very pleased with the execution not just this quarter, but this year, but also the last several years. Exceeding this $50 billion this year, continuing to see over 20% growth in specialty highlights our strategies working within the collective assets that we have put in place. I'll remind you that that 20% growth is pretty consistent to what we said over the last two quarters. Each quarter this year, which was an acceleration from the mid-teens growth that we saw in the prior several years.

We've seen our specialty growth be strong, and then it's accelerated this year into, you know, very strong competitive positioning. Within oncology, it was even stronger this quarter, continuing on those trends as well, over 30% growth in oncology. As a reminder, you know, specialty has a lot of components to it. Within specialty, MSO is just one component within, you know, within the MSOs, it's oncology is just one component, and then we have, of course, Navista within that. Navista is a component of that, and it was a combination of an acquisition, but also organic business. We had a couple of different strategies in place. We had the equity strategy, working with physicians to create this long-term cooperation, collaborations agreements with an equity component.

Then we had the non-equity, where it was more transactional, more, you know, contractual. What we've seen is that while physicians like to have choices and like to have a different alternative, ultimately we're seeing the market voting for the equity arrangement. That's where the market has moved and why we're prioritizing our strategy to that component. It does not change the broader strategy of either on the MSO strategy or the broader specialty strategy, and I think the underlying data certainly supports that. It's all coming together in a very accretive way.

With this pivot in strategy, it did have some knock-on effects that Aaron can walk through. You know, I won't belabor the point, just to observe that this is one piece of specialty and one piece of oncology, and we're keeping score, right? On ourselves. As we've always committed, we would tell you what we're gonna do it and report back. In this case, we have increased the discount rate applied to a small part of the oncology business. We remain pleased with the contribution that the specialty M&A is adding to our portfolio overall, you know, the 8 percentage points or so, within fiscal 2026, consistent with the prior guidance that we've given. Next question please.

Yes, sir. The next question is coming from Allen Lutz of Bank of America. Please go ahead.

Good morning, thanks for taking the questions. Aaron, you know, big free cash flow raise with a quarter to go. You mentioned or called out that revenue was maybe a little bit lower than your expectations. I think you called out IRA and maybe a little bit from GLP-1s. We know that IRA is maybe more of a headwind on the revenue side, but you were able to raise the free cash flow guidance. Can you talk about what gave you the confidence for what you're seeing? Was it better than expected? Was there a mix shift, with a movement, I guess, more toward those IRA drugs that was actually a positive contributor to free cash flow? Was it more generics?

Just trying to understand what mix shift, if at all, impacted the free cash flow guide that was maybe a little bit better than you expected. Thanks.

Allen, good morning. Thanks for the question. What I would observe is that it's amazing how what gets measured gets done. I can't point to just one factor across the enterprise as being the single source of success for our ability to generate the adjusted free cash flow we did or indeed drive the increase to the guidance. It was driven really across all of our businesses with the management teams focused on the intersection between our customer service levels and our inventory positions, ensuring that we're collecting that which is due to us from a, you know, AR perspective and focusing on, you know, the appropriate levels of AP with our suppliers.

There were a series of initiatives that have been underway now for, you know, several quarters that are really generating the success, you know, that we are able to call out. I do want to seize on your question to maybe answer a question I haven't gotten yet or maybe put an emphasis on a point in the broader, you know, pharma results, which is you called out the revenue. I think this is probably a good point for me to observe that the revenue growth within the pharma business was 11%, which I understand some were maybe expecting a little bit more than that. It's important to understand that we're in the first quarter of a couple of things going on.

Firstly, of course, we have, you know, the IRA WAC changes, which was a, that was a negative, relative to, the overall growth rate. Similarly-

Sorry. Revenue. Thank you. Similarly, GLP-1s is also in a period of change. While GLP-1s are growing extensively, still over 30%, they're growing less than they were before. We saw a 6 percentage points uplift from growth within GLP-1s, offset by a similar level of downdraft from IRA WAC. When you toss in some other brand dynamics like the LOE to generics, which is a positive for profit, right? That's really what's going on within the revenue line, even though the demand line was very strong. The profit line is very strong. I just wanted to take this opportunity to reference what was going on there.

Thank you, sir. We'll now move to Glen Santangelo of Barclays. Please go ahead.

Oh, yeah. Thanks for taking my question. you know, Jason, I just wanna follow up on some of those comments you were just making because I think there is obviously a lot of focus on these IRA impacts on pricing and the revenue line.

I guess what the concern that some may have is as these prices come down, it seems like on the fee for service side, you're clearly maybe being made whole, but maybe some are concerned about, you know, the buy margin on the 2% discount, and then ultimately downstream, when you look at practice profits, if the price of these drugs are coming down, if these practices inherently become less profitable, can you get squeezed in any way at the distributor level from these IRA price reductions beyond just the fee for service or agreements? I think that's, you know, what we're all trying to sort of figure out is the different components of the profitability there and if there's any vulnerability. Thanks.

Thanks, thanks for the follow-on question on that. Let's break it into the two components. I think you're right to talk about this in two different pieces. Aaron's comments were very much focused on the distribution side. That's by far the biggest component of our business, and it's relevant to start there. We remain incredibly confident in our underlying business model. When you think about the fees that we receive today for the services we provide, that should not change. The services are certainly not changing, and we remain the lowest paid component of the supply chain than anyone in the supply chain. We feel very good about continuing to receive the fees that we currently receive for that work.

As a reminder, we announced the completion of the renegotiation of these contracts at the very beginning of the quarter at an analyst conference there. This was all done prior to the quarter. It executed exactly consistent with that announcement because those agreements were already in place.

Very similar to what happened with the insulin repricing the year before that. There's a lot of precedents, and frankly it just makes sense, and it is consistent with we have the right to renegotiate the vast majority of our contracts for situations like this. I continue to feel very, very confident with that. Now, when you talk about other components of our of our business, MSOs in particular, as a reminder, the drug spend for our $4.5 billion of revenue in MSOs is pretty diversified. We have only about 1/3 of that being drug spend, and within that we have a very diverse payer mix.

We feel very confident that the implications to our MSOs are gonna be very manageable, if any at all, because ultimately what we're all looking for is exactly what is the administration's intent for providers as it relates to these go forward initiatives. We don't think the intent is to harm community providers that provide the excellent service to their patients, excellent care at the lowest cost already today. It all makes sense for them not to be harmed, but we recognize actions need to be taken. Even if they don't, we believe this is very manageable for Cardinal Health. Next question please.

Yes sir. The next question will be coming from George Hill from Deutsche Bank. Please go ahead, George.

Good morning guys. To take the questions, I'm gonna dovetail right off of what Glen just asked. I guess I would Jason and Aaron, how would you guys characterize your fee for service pricing power as it relates to distribution agreements, especially in the face of some falling drug prices? Then I would ask as a follow-up, like how have you guys analyzed that in the face of BRFSS risk, as that's supposed to roll out and kind of get recalculated in the back half of this year? Thank you.

As it relates to Bona fide service fees, I think it's just too early to talk about exactly what the implications are gonna be for the whole industry. I mean, this is far from just a distributor type of process change, if at all. Again, it goes all back to we feel very comfortable with the value we're providing. Just like in the initial shift to fee for service in the first place, which maintained those economics, we would expect there to be a similar type of transition if there is a transition that's required. In terms of just the pricing power, it's quite simple.

you know, we have 1% margins, and I think we've been, I've been very clear that branded products are at the low end of that 1%, right? I mean, this is a blended margin of 1%. These products are at the low end. We have the right to renegotiate these rates. We get paid a certain dollar fee today for the service we provide. It's clearly the best value for all those in the supply chain, or they wouldn't be using the distributors in the first place. There's nothing that changes in terms of the value we're providing tomorrow, so we fully expect, we fully demand to be paid the same amount going into the future. Next question, please.

Our next question will be coming from Stephen Baxter, call from Wells Fargo. Please go ahead.

Hi, thanks. Appreciate the early comments on next year at this stage. I'm trying to boil down some of the business commentary and the below the line commentary. I guess I'm trying to understand, you know, whether you're suggesting that the benefits from, you know, lapping deals and ramping synergies you think could potentially offset the below the line items that we're gonna be comping against as we move into next year, and therefore leave the kind of typical EPS long-term growth rate intact, or you think people need to be modeling maybe something more conservative at this stage? Just wanna make sure I understood that right. Thanks.

It's a great question. Our job is to manage the entire income statement, year-over-year. What I want you to take my comments as being is providing initial perspective that we believe there are good reasons to believe in our long-term targets overall, the 12%-14% non-GAAP, you know, EPS growth. We've talked about some of the operating reasons, the demand, the demographics, industry positioning, et cetera, all in supportive of the overall position. As we do in every year and every quarter, we will continue to go looking for ways to optimize our below the line items, whether it's finding further durable ways to ensure we have the appropriate tax rate, or also looking at, you know, our server purchase plans.

We have a lot of planning yet to do in our cycle, but we are confident in our long-term targets. Next question please.

Yes sir. Next question is coming from Kevin Caliendo of UBS. Please go ahead. Your line is open, sir.

Hey guys, thanks for taking my question. I want to talk a little bit about GDPMD and understanding exactly what you meant by lower volumes. Is that just a macro thing? Is that a market share thing? Is there anything you can talk about that's happening? Have the volumes improved in April if it was a macro thing? Secondly, you talked about the potential clawback on the tariffs. How do you account for that? You mentioned it's potentially upwards of $100 million versus the, maybe the $200 million impact. How does that get accounted for? Does that drop through to the P&L? Is it something that you're reserving for on the balance sheet now?

I just wanted to sort of understand from an economic perspective, from a modeling perspective, from an accounting perspective how that all works. Thanks.

Sure. Yeah. This is Jason. I'll go ahead and start and I'm sure Aaron will clean up then after that. In terms of volumes, I think the underlying industry volumes for the med surg side of our business seem to be fairly resilient and consistent, likely in the low single-digit type of range. The one area that I know I've seen public data on as well, is we saw a little bit of softness in lab respiratory. It's not a huge component of our GDPMD business, but it is one that had a little bit earlier flu season, certainly weaker in the third quarter.

Not one that's materially driving our numbers, but it is one that does have a little bit of an impact on the top line as well. We had called out in the past a large government customer, the VA, that we did lose earlier in the year, and so that is a fairly low Cardinal branded product customer. We also had a large customer that went through a significant merger. We had part of the business, competitor had other part, and so we did not carry over that piece of the business. Also, a relatively low Cardinal branded mix customer, which is why you're seeing over 5% Cardinal brand growth in the quarter, even though the top line was a little bit weaker.

We feel pretty good about the underlying industry strength, the underlying positioning we have, and we're seeing continued strength on the most valuable parts of our business, which is that Cardinal brand product. We're at the best service levels we've ever been at. We're in a really good position. Certainly some supply chain complexities, but underlying a really good, strong position to continue to support our customers and grow that part of our business. As it relates to the tariffs, I think the message is trying to be simple and clear that we have the potential for a $200 million refund based upon the tariffs that we paid up to the IEEPA announcement.

None of that has been put into our P&L at this point in time. What Aaron commented that we want to be really clear with is that we have directly received price increases from our customers over the last year as a result of these tariffs. About half that $200 million, we ultimately, if we receive it, we would expect to share in that about half range with our customers, implying that someday we may have a $100 million earnings gain as a result of that change. It is still too uncertain for us to put through any of that into the P&L, we have not recognized any of that today.

Yeah, I'm just gonna emphasize that last point. We haven't recognized the financial impact in Q3. We've also not provided an update to our guidance reflective of that. The amount of any recovery, the means by which the recovery occurs, the timing of the recovery, those are all uncertain at this point. I'm not going to get ahead of ourselves and provide you with a specific accounting and treatment till we have more clarity on how this plays out.

Yeah. You know, while we're on the topic of tariffs, it wasn't exactly the question that was asked here, but we had a couple of questions so far in the 27 puts and takes. Just one thing to kinda double back on to what Aaron had referenced earlier. You know, unrelated to the tariff refund, but the ongoing tariffs that are still in place and certainly may change further with the Section 232 study that's ongoing. We would anticipate that from a year-over-year perspective, there is some opportunity as it relates to tariffs for the GDPMD business. We also all know that fuel prices are higher at this moment in time, and that also flows through to some of the commodity prices within our products.

These are fairly modest in their nature. They're nowhere near the impact that we saw several years ago with the hyperinflation that was in place. We have a tailwind associated with tariffs that we think at this moment will be likely from an operational standpoint. We also expect that it's likely that there's gonna be this ongoing commodity impacts. Both are in, I'll say a reasonable similar ballpark. We'll get a lot more specific with this when we provide our 2027 guidance. You have a put and take there that is to some degree offsetting. It will be dependent upon where things stand in three months, and we'll provide those at that time.

Overall, we think that's not only manageable for the GMPD business, it's even more manageable for the overall enterprise. We have some impacts for fuel, but it's certainly the GMPD business is where we are most closely focused at this point. Next question, please.

Yes, sir. The next question will be coming from Charles Rhyee of TD Cowen. Please go ahead, Charles. Your line is open, sir.

Hi, this is Ethan on. Thanks for taking our questions. I just wanna go back to the IRA topic real quickly. Given that you said you expect to be at the lower end of your rev guide for pharma, is it a fair extrapolation to say that the IRA impact so far this year has maybe been a bit larger than your expectations? Thank you.

No, I think what I observe is there are a series of things going on within the revenue line or the revenue guide that we had provided, and we're trying to be transparent that as we are modeling, as you are modeling, the revenue impact to be thinking about on the one hand, you know, the strong demand we're seeing certainly as a positive, but also understanding the impact of, you know, GLP-1 growth, given that they are relatively empty calorie dollars for us. They impact revenue, don't provide a lot of profit for us. Similarly, when a branded product converts to generic, and we are seeing some notable LOE examples this year.

You know, that is a, that is a downdraft on revenue, but a positive for us from a profit perspective as well. We're just trying to provide some of the puts and takes that are going on within that revenue line. Question, please.

Yes, sir. Next question will be coming from Steven Valiquette of Mizuho Securities. Please go ahead.

Yeah, thanks. Good morning. Hopefully I didn't miss this, but I think in some of the segment discussions with, you know, the talk about the soft distribution volumes, et cetera. You know, it seems like some of the investors believe that, you know, that's been tied to weather impact. That was obviously pretty prevalent in some of the public hospital patient volumes. It seems like you're not really calling out weather as a volume headwind in either GDPMD or pharma unless I missed it. Even though, you know, this whole weather discussion is obviously irrelevant going forward, just want to get your thoughts on that dynamic just within the just reported quarter really for any of the segments. Thanks.

Cardinal Health (CAH) Q3 2026 Earnings Call Transcript

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