While Cardinal Health (NYSE: CAH) reported “relatively flat” fourth-quarter fiscal year 2025 revenue, CEO Jason Hollar lauded the company’s overall achievements during an Aug. 12 earnings call.
“We closed fiscal 2025 with momentum, delivering excellent fourth-quarter results in what was a transformative year for Cardinal Health,” Hollar told investors and other stakeholders. “Our consistent performance with all five operating segments delivering double-digit profit growth for both the year and Q4 reflects the significant progress we’ve made against our strategic priorities. As we outlined at Investor Day, our strategy is clear, and we continue to deliver on our commitments, reflecting disciplined execution across each of our operating segments.”
Hollar praised the “strong growth” of Cardinal Health’s at-Home Solutions business, “now including the acquisition of ADS [Advanced Diabetes Supply Group], nuclear and precision health solutions, and OptiFreight Logistics. As we close out fiscal 2025 and look ahead, we have great optimism in what we will achieve in fiscal 2026.”
Chief Financial Officer Aaron Alt said Cardinal Health had a “significant” year: “At the enterprise level, we grew operating earnings 19% in the quarter and 15% on the year.”
Alt described total company revenue for the fourth quarter as “relatively flat at $60.2 billion on a reported basis. Adjusting for the contract expiration, revenue at the enterprise level increased 21% versus the prior year, led by strong demand across pharma and the growth businesses in other.
“We closed the ADS acquisition at the start of the fourth quarter and are very pleased with the integration and synergy capture efforts,” Alt continued. “The at-Home Solutions management team has a synergy realization plan which is specific and achievable with opportunities for over-performance over time.”
The at-Home business “saw strong organic growth,” Alt added, noting that at-Home, nuclear and precision health solutions, and OptiFreight Logistics business units “continue to benefit from their leading value propositions, efficient operations and alignment with favorable long-term secular trends.”
Looking forward to 2026, Alt said at-Home Solutions “will benefit from our ongoing distribution capacity expansions and automation efficiencies, double-digit revenue growth, and the integration of ADS’s distribution volumes. With the ADS acquisition having closed at the start of our Q4, our growth rates will be strongest in the first three quarters until we begin lapping the acquisition in Q4.”
Hollar added that investments in at-Home Solutions’ distribution capacity and automation “are yielding tangible results. Q4 revenue grew nearly 50%, and double digits on an organic basis, significantly outpacing the increase in our freight and warehousing costs. This includes strong growth in urology products, which grew revenue over 20% on the year.”
And Cardinal Health at-Home is looking forward to the full integration of ADS, whose acquisition was completed in April.
“We anticipate continued growth, fueled by the secular tailwinds in home health care and synergies from the full integration with ADS,” Hollar said. “This integration positions us well to build on this year’s momentum and manage through potential changes in the reimbursement environment.
“ADS excels in multi-channel patient acquisition and user experience, leading to exceptional patient retention and customer satisfaction. Our strong operational foundation will support ADS and enable us to achieve greater growth and operating leverage. We’ve already begun transitioning the ADS volume into our DC network, and we expect full conversion by the end of Q1.”
Competitive bidding and CGMs
During the Q&A session following Hollar’s and Alt’s remarks, an attendee asked what percentage of at-Home revenue would be subject to Medicare’s competitive bidding program, and what the company thinks about the potential addition of continuous glucose monitors (CGMs) and insulin pumps to the program.
“First of all, we feel very good about our overall product portfolio and our payer portfolio,” Hollar said. “When you think about the payer mix, it’s quite diverse. We had relatively little Medicaid-type of reimbursement within the prior portfolio. It is higher with the government payers within the recent acquisition.
“As it relates to where we think the administration is going, we are uniquely positioned to help support that in terms of our capabilities, and you think about we’re the only scaled distributor and provider together. So we provide that unique capability.”
The CEO said a priority for Cardinal Health as well as for the Trump administration “is ensuring that access for patients to those products that are clearly creating a lot of value for them. So that overall is a nice setup, and we feel like we will be indispensable in any solution or changes going forward.”
As for including CGMs to the program, “Overall, I think the setup for the CGMs is one where, while there was likely to be this competitive bidding process as a category that is already seeing fairly low rates relative to commercial rates. And we see it as a fairly concentrated, just-two-manufacturers type of environment. So, the setup feels a little bit different than some of the other historical precedents.”
CGMs across the at-Home Solutions portfolio represent “for Medicare less than 15% of our total revenue for at-Home Solutions,” Hollar said.
“And when you think about what they’re really trying to accomplish, it’s taking out the fraud, waste and abuse,” he said of the competitive bidding program. “We run a pretty tight ship, and we are very focused on compliance and running strong processes. And so, the more pressure there may be, I think the more opportunities we may have to pick up an even greater leadership role within this important category.”
As the company begins a new fiscal year, Hollar said, “I am pleased with the progress and execution across all five of our operating segments. Our strong results speak to the strength of our foundation, the talent of our teams, and the consistent demand for value we bring to the market. We’ve accelerated our momentum and are well positioned to carry it forward.”
