Cardinal Health reported strong fourth-quarter fiscal year 2026 results, thanks to “consistent execution and broad-based performance across our enterprise,” according to CEO Jason Hollar.
In an Aug. 11 earnings call, Hollar lauded all of Cardinal Health’s business units, while Chief Financial Officer Aaron Alt noted that the integration of Advanced Diabetes Supply, whose acquisition was completed in 2025, “is progressing well and is ahead of schedule on the integration synergies.”
Growing the at-Home Solutions business
Cardinal Health’s at-Home Solutions business, which includes its diabetes segment, made headlines in late July when it announced the acquisitions of AdaptHealth’s diabetes unit and independent urology supplier Strive Medical on the same day.
Alt said in his remarks to investors that the “partial year impact of the announced tuck-in acquisitions of the diabetes health segment of AdaptHealth and the recently completed tuck-in acquisition of Strive Medical” are now expected “to add two percentage points of profit growth to the [upcoming] year” to Cardinal Health’s “Other” business segment.
Q4 performance “was once again led by Pharmaceutical and Specialty Solutions, where a resilient demand environment and continued strength across our specialty business, both upstream and downstream, drove strong results and extended the momentum we have built throughout fiscal 2026,” Hollar said. “The Global Medical Products and Distribution segment demonstrated continued progress against our improvement plan initiatives, and we benefited from a non-recurring tailwind in the quarter. In Cardinal Health brand, we again saw above-market growth when normalizing for the impact of the tariff refund.”
Hollar said Cardinal Health was “pleased with the performance of our other growth businesses, who again collectively delivered double-digit profit growth this quarter.”
Those results, Hollar added, demonstrate “the value of these specialized assets and their meaningful impact on enterprise results.
“We continue to experience a favorable demand environment and supportive secular healthcare trends across these businesses. Coupled with our strategic long-term investments, we see significant opportunities ahead.”
Increase in total company revenue
Alt reported total company revenue for the fourth quarter as $63.7 billion, a 6% increase “driven by strong demand in our Pharmaceutical and Specialty Solutions segment, with contributions from our three growth businesses that make up Other.”
Gross profit for Q4 grew 16% to $2.6 billion thanks to “broad-based contributions from all five of our operating segments.” Cardinal Health’s enterprise operating income was $935 million, up 30% compared to last year, Alt said. “We reported a one-time $100 million net operating earnings benefit from IEEPA [International Emergency Economic Powers Act] tariff refunds in our GMPD [Global Medical Products and Distribution] segment. This reflects increased clarity and confidence in receiving approximately $200 million in IEEPA tariff refunds, offset primarily by payables to customers for the increased prices they paid related to the IEEPA tariffs.”
“Our other growth businesses also had a successful quarter,” Alt added “This group delivered $1.7 billion in revenue, or 7% growth, and $183 million in segment profit, for a 14% growth.”
He described “good demand” for Cardinal Health’s at-Home Solutions business: “We lapped the Advanced Diabetes Supply acquisition in the quarter, while at the same time purposely curating our customer base and category management opportunities through the ROI [return on investment] lens.”
Cardinal Health reported fourth-quarter diluted earnings per share of $2.91, up 40% from the prior year.
Growth and future plans
“When we started this journey as a management team,” Hollar said, “Cardinal had just delivered $5.07 in EPS [earnings per share] and $2.3 billion in adjusted free cash flow in fiscal 2022. Our company’s performance was not meeting its potential as we battled business and organizational complexity that was impacting both our strategy and our operations. Four years later, we are in a very different place.”
In describing the process, Hollar noted that Cardinal Health has “simplified our strategy, our structure and how we operate. We have invested heavily in our infrastructure to drive economies of scale, new customer service capabilities, and efficiency through automation and technology. Indeed, in each of the last four years, we have invested more than we ever have before. We executed six strategic acquisitions, and we have gotten to know our supplier partners and our customers better than ever before, which have presented us with opportunities to win with the winners.”
As for moving forward, “We have retained key customers across all classes of trade and have benefited from the new, more strategic customers we have added over the last 18 months, creating stability as we enter fiscal 2027,” Hollar noted. “In at-Home Solutions, we saw a strong operating performance and the impact of our strategic investments in fiscal 2025 and 2026. We continue to lean in on our smart growth strategy and expect to benefit from the efficiencies arising from our ongoing distribution capacity and automation expansion.”
And Hollar said the company looks forward to more at-Home Solutions growth.
“Our core operations demonstrate exceptional reliability,” he said. “Total fill rate reached nearly 99%, and we recorded our best quarter in history for on-time departures. These metrics are the result of continued inventory control driven by the increased capacity throughout our at-Home Solutions network, enabled by our investments in technology and automation.
“We see opportunity to continue this momentum in fiscal 2027, both organically and inorganically, as with the recently completed acquisition of Strive Medical and the announced acquisition of the diabetes health business of AdaptHealth. These additions build on the synergies created by our recent investments in home care and enhance the framework established by our ADS acquisition, where we are seeing greater-than-anticipated synergies.”
Hollar concluded his remarks by adding that the company’s board of directors authorized “a $5 billion increase to our share repurchase authority. This takes our total share repurchase authorization to $6.4 billion.
“The company has excellent assets led by a talented team and the financial flexibility necessary to enable great choices on how best to create shareholder value. We spent today telling you what we have done and what we are going to do. Now we are just going to go do it.”
