Cardinal Health grew FY2026 revenue 14% to $254.2B and segment profit 29% on specialty drugs, generics and acquired physician practices, but GAAP EPS rose only 12% to $7.23 after impairments, deal costs and higher interest.
Revenue
$254.2B
+14.2% YoY
Net income
$1.7B
+9.8% YoY
Diluted EPS
$7.23
+12.1% YoY
Operating margin
1.0%
Overview
Cardinal Health's fiscal 2026 (the 12 months ended June 30, 2026) was a year in which profit grew about twice as fast as sales. Revenue rose 14% to $254.2 billion, while total segment profit — what the three business units earn before head-office costs and one-off charges — rose 29% to $3.75 billion. The 10-K attributes the gain to more branded and specialty drug sales, a stronger generics program, and a full year of the physician-practice businesses it bought (GI Alliance, and Solaris Health from November 2025).
The GAAP bottom line grew more slowly. Net earnings attributable to Cardinal Health rose 9.8% to $1,714 million, and diluted EPS rose 12% to $7.23. GAAP means the official accounting rules. Four things absorbed most of the operating gain: bigger acquisition-related pay costs, two impairment charges, higher interest on the debt used for the acquisitions, and a large legal recovery that boosted last year's figure and did not repeat.
Key metrics
Metric
FY2026
FY2025
YoY Change
Revenue
$254,248M
$222,578M
+14.2%
Gross margin (revenue minus cost of products sold)
$9,774M
$8,168M
+19.7%
Gross margin rate
3.84%
3.67%
+0.17 pts
Operating earnings (GAAP)
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Source: FY2026 Form 10-K, Consolidated Statements of Earnings and MD&A. Operating margin = operating earnings ÷ revenue. Non-GAAP EPS is the company's adjusted measure. It excludes items such as acquisition amortization, impairments and litigation. It is shown for context, and our headline figures stay on GAAP.
Why a $254 billion company keeps about 1 cent per dollar
The margins in the table are unusually thin because of what a drug wholesaler does. Cardinal buys medicines from manufacturers and delivers them to pharmacies, hospitals and clinics. The full price of every drug it passes through counts as Cardinal's revenue, but it keeps only a small handling fee. That is why cost of products sold was $244.5 billion against $254.2 billion of revenue, and why operating margin — the share of revenue left after running the business, before interest and tax — was about 1.0% in both years.
This matters most for GLP-1 weight-loss and diabetes drugs (the Ozempic/Wegovy/Mounjaro class). The 10-K says GLP-1 demand rose in fiscal 2026 and "positively impacted our Pharma segment revenue and consolidated revenue; however, increased GLP-1 sales did not meaningfully contribute to segment profit." These are expensive branded drugs that inflate revenue while earning little margin. Management adds that GLP-1 demand growth "began to moderate" during the year and it expects that to continue. The same mix effect shows up in the gross margin rate. It rose 17 basis points (0.17 of a percentage point) because the newly acquired physician practices earn higher margins. Growth in low-margin branded drug sales held part of that gain back.
Segment performance
Segment
FY2026 revenue
YoY
FY2026 segment profit
YoY
Profit as % of revenue
Pharmaceutical and Specialty Solutions (Pharma)
$234,833M
+15%
$2,783M
+23%
1.19%
Global Medical Products and Distribution (GMPD)
$12,719M
+1%
$258M
+91%
2.03%
Other (Nuclear, at-Home, OptiFreight)
$6,792M
+26%
$707M
+37%
10.4%
Corporate / eliminations
($96M)
($1,135M)
Total
$254,248M
+14%
$2,613M operating earnings
+15%
Pharma is 92% of revenue. Revenue grew 15% on "branded and specialty pharmaceutical sales growth from existing and new customers." Specialty drugs are high-cost medicines, often infused or injected, used in areas such as cancer, gastroenterology and urology. Segment profit grew faster, at 23%, for three reasons the 10-K lists: more contribution from branded and specialty products, a better generics program, and the acquired MSO platforms. An MSO (management services organization) runs the business side of physician practices. Profit rose from 1.10% to 1.19% of revenue, a small change on a very large base. In Q4 alone, Pharma revenue rose 6% to $58.8 billion and segment profit rose 21% to $645 million (8-K earnings release, Exhibit 99.1).
GMPD, Cardinal's own-brand medical products (gloves, syringes, wound care and similar) plus medical-supply distribution, was flat on revenue at $12.7 billion. Cardinal-brand growth was offset by lower distribution volumes and by the expected repayment of tariff refunds to customers. Segment profit almost doubled from $135 million to $258 million, but read that figure carefully:
The 10-K credits the full-year gain mainly to "growth from existing customers." It says the net effect of tariffs for the year "was not significant," because tariff costs were largely offset by an expected refund.
In February 2026 the U.S. Supreme Court ruled the IEEPA tariffs unlawful (IEEPA is the emergency-powers law they were imposed under). Cardinal has paid about $200 million of these tariffs since February 2025. In Q4 it booked a $200 million receivable for the expected refund and a matching expense for the share it plans to pass back to customers. The net result was a **$100 million one-time boost to Q4 operating earnings**. Of GMPD's $150 million Q4 segment profit, the earnings release says the increase was "primarily driven by IEEPA tariff refunds."
Management's FY2027 guidance of $200–220 million of GMPD segment profit is below FY2026's $258 million. That fits with the refund being a one-off. GMPD still earns only about 2 cents per dollar of sales, and the 10-K warns that price increases "have not fully offset" tariff costs imposed under other laws.
Other grew revenue 26% and profit 37%, to $707 million. It is the highest-margin part of the company at about 10% of revenue. The drivers were at-Home Solutions (including the acquired Advanced Diabetes Supply Group, ADS), the OptiFreight Logistics shipping business, and Nuclear and Precision Health Solutions (radiopharmaceuticals).
Acquisitions: bigger profits, but costs below the segment line
Solaris Health (urology MSO, 750+ providers, 250+ locations in 14 states) closed November 3, 2025, for about $1.9 billion in cash, through The Specialty Alliance. Cardinal also issued Specialty Alliance units to physicians and managers worth about $500 million at grant. After the deal, Cardinal owns about 76% of The Specialty Alliance.
GI Alliance (73% stake, ~$2.8 billion, January 2025) and Urology America ($381 million, May 2025) were fiscal-2025 deals. FY2026 is the first full year they are included. The 10-K names GI Alliance and Solaris Health as the main reasons The Specialty Alliance lifted Pharma segment profit.
Several acquisition-related costs are booked at Corporate, which is why Corporate costs rose from $634 million to $1,135 million:
Acquisition-related cash and share-based compensation costs rose from $126 million to $287 million. This is pay tied to the physician equity in the acquired practices.
Amortization and other acquisition costs were $469 million, versus $464 million.
A $184 million goodwill impairment on Navista & ION, the oncology practice platform. Goodwill is the premium paid for an acquisition above the value of its assets, and an impairment writes part of it off. The 10-K ties the charge to "changes in the risk profile of the business plans, resulting in an increase in the discount rate," after cuts to long-term plan assumptions in the March quarter. After the charge, $909 million of goodwill remains on that unit. Management says a 0.5-point higher discount rate would have cut its fair value by about $70 million more.
Below operating earnings, Cardinal also booked a $122 million impairment on its 16% stake in Outcomes.
Interest expense rose 62% to $348 million because of the debt raised for these deals. The deals include $1.0 billion of notes issued in August 2025 to help fund Solaris Health.
Opioid litigation and one-offs in the comparison
There was no new opioid settlement charge in fiscal 2026. The litigation line was a net $10 million recovery. By contrast, fiscal 2025 included $171 million of income from class-action antitrust recoveries, which made last year's GAAP figure look better and holds down this year's growth rate. Cardinal still has $4.3 billion accrued for national opioid settlements, and it expects most of that to be paid through 2038. It paid $417 million in FY2026, including the fifth annual $366 million payment under the National Opioid Settlement Agreement, and a sixth payment of $374 million in July 2026. Those are cash payments against an old accrual, so they reduce cash flow but not current earnings. That is partly why operating cash flow rebounded to $5.2 billion from $2.4 billion. FY2025 also carried $798 million of opioid payments and the cash drag from unwinding the OptumRx contracts.
Customers
CVS Health accounted for 28% of revenue. The five largest customers together accounted for 43%. The OptumRx distribution contracts expired at the end of June 2024. That is why FY2025 revenue ($222.6 billion) fell below FY2024 ($226.8 billion). FY2026 is the first year-over-year comparison without that loss in either year, so the 14% growth is a clean comparison. The earnings release also announced a long-term renewal of the Kroger distribution contract. Members of the Vizient and Premier purchasing groups made up 29% of revenue, up from 27%.
Capital returns
Cardinal spent $1.4 billion on share buybacks in FY2026, up from $765 million. Diluted share count fell to 237 million from 242 million, which is why EPS grew faster than net income (12% versus 9.8%). It also paid $491 million in dividends. The board approved another $5.0 billion of repurchase authority, bringing the total to $6.4 billion.
Takeaway: Cardinal's core businesses earned much more this year: segment profit rose 29% on 14% revenue growth. The GLP-1 boom did little for that profit. The gain came from higher-margin areas: specialty drugs, generics, the acquired physician practices and the at-Home/OptiFreight/Nuclear group. GAAP earnings grew only about 10%, because the acquisition strategy is paid for below the segment line through physician compensation, a $184 million oncology goodwill write-down, a $122 million Outcomes write-down and 62% higher interest. Whether those costs shrink as the deals mature, or keep repeating, will decide how much of the segment gain reaches shareholders.
Outlook
Management's fiscal 2027 guidance is on an adjusted (non-GAAP) basis only. It is taken from the August 11, 2026 earnings release (8-K Exhibit 99.1), not the 10-K:
Non-GAAP diluted EPS of $12.40–$12.60, growth of 13–15%. The growth rate is measured against FY2026 results excluding the one-time IEEPA refund benefit. On that basis FY2026 adjusted EPS was $10.95, not $11.26.
Pharma: revenue +3% to +5%, segment profit +8% to +11%.
GMPD: revenue +2% to +4%, segment profit $200–220 million.
Other: revenue +11% to +13%, segment profit +15% to +18%.
About $1 billion of buybacks, about 233 million diluted shares, capex of about $700 million, and adjusted free cash flow of $3.5–4.0 billion (FY2026: $5.0 billion).
Pharma revenue growth is expected to slow sharply, from 15% to 3–5%. That matches the 10-K's comment that GLP-1 demand growth is moderating, and the new pharmaceutical tariffs and drug-pricing policies could add pressure. Guidance still calls for Pharma profit to grow roughly twice as fast as its revenue, so the shift toward higher-margin specialty, generics and practice-management income is expected to continue. The main risks the 10-K names are the size of the Navista goodwill cushion, tariffs on medical products (and generic-drug tariffs proposed from 2028), and the concentration in CVS. GAAP results will again trail the adjusted figures by the acquisition costs described above.