Financial Analysis

"2. Acquisitions Solaris Health On November 3, 2025, we, through The Specialty Alliance, completed the acquisition of Solaris Health, a urology MSO, for a purchase price of approximately $1.9 billion in cash, subject to certain adjustments. In connection with the closing of this transaction, we issued common units in The Specialty Alliance to certain physicians and members of management which are estimated to have a grant date fair value of approximately $500 million, a portion of which will be recognized as post-combination expense within acquisition-related cash and share-based compensation costs. We have accounted for the acquisition of the ownership interest in Solaris as a business combination in accordance with ASC 805. Solaris Health includes more than 750 providers across more than 250 practice locations in 14 states. Solaris Health is part of The Specialty Alliance, our multi-specialty MSO platform, and their results are reported within our Pharma segment. With the closing of this transaction, we own approximately 76% of The Specialty Alliance. Transaction and integration costs associated with the Solaris acquisition were $4 million and $44 million during the three and nine months ended March 31, 2026, respectively. Advanced Diabetes Supply Group (""ADS"") On April 1, 2025, we completed the acquisition of ADS for a purchase price of approximately $1.0 billion in cash. Transaction and integration costs associated with the ADS acquisition were $6 million and $13 millio …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

"6. Commitments, Contingent Liabilities and Litigation Commitments Generic Sourcing Venture with CVS Health In July 2014, we established Red Oak Sourcing, LLC (""Red Oak Sourcing""), a U.S.-based generic pharmaceutical sourcing venture with CVS Health for an initial term of 10 years. Red Oak Sourcing negotiates generic pharmaceutical supply contracts on behalf of its participants. In August 2021, we amended our agreement to extend the term through June 2029. We are required to make quarterly payments to CVS Health for the term of the arrangement. Contingencies New York Opioid Stewardship Act In 2018, the State of New York adopted the Opioid Stewardship Act (the ""OSA""), which created an aggregate $100 million annual assessment on all manufacturers and distributors that was assessed based on each manufacturer or distributor's share of the total morphine milligram equivalents sold or distributed in New York, the applicability of which was ultimately limited to two years (2017 and 2018). Since fiscal 2021, we have made certain payments to New York State for our portion of the assessment. However, we, and other distributors, challenged the OSA as unconstitutional. In May 2024, the New York Appellate Division held that the 2017 assessment was unconstitutionally retroactive, directing a refund of assessments paid for calendar year 2017, but upheld the 2018 assessment. In fiscal 2025, both parties agreed to a final settlement and in December 2025, we received payment and recognized …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

5. Long-Term Obligations and Other Short-Term Borrowings The following table summarizes long-term obligations and other short-term borrowings at: (in millions) (1) March 31, 2026 June 30, 2025 3.75% Notes due 2025 $ $ 501 4.7% Notes due 2026 499 498 3.41% Notes due 2027 1,214 1,206 5.125% Notes due 2029 646 645 5.0% Notes due 2029 745 745 4.5% Notes due 2030 595 5.45% Notes due 2034 500 501 5.35% Notes due 2034 990 989 5.15% Notes due 2035 392 4.6% Notes due 2043 328 323 4.5% Notes due 2044 338 338 4.9% Notes due 2045 437 438 4.368% Notes due 2047 565 566 5.75% Notes due 2054 641 641 7.0% Debentures due 2026 124 124 Floating Rate Term Loan due 2028 699 799 Other Obligations 203 213 Total 8,916 8,527 Less: current portion of long-term obligations and other short-term borrowings 671 550 Long-term obligations, less current portion $ 8,245 $ 7,977 (1) Maturities are presented on a calendar year basis. Maturities of existing long-term obligations and other short-term borrowings for the remainder of fiscal 2026 through fiscal 2030 and thereafter are as follows: (in millions) Debt maturities 2026 $ 14 2027 1,888 2028 740 2029 676 2030 768 Thereafter 4,830 Total debt and finance lease obligations $ 8,916 Long-Term Debt We had total long-term obligations, including the current portion and other short-term borrowings, of $8.9 billion and $8.5 billion at March 31, 2026 and June 30, 2025, respectively. All the notes represent unsecured obligations of Cardinal Health, Inc. and rank equall …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following tables present revenue for the two reportable segments and disaggregated revenue within the remaining operating segments, included in Other, and Corporate: Three Months Ended March 31, (in millions) 2026 2025 Pharmaceutical and Specialty Solutions $ 56,111 $ 50,433 Global Medical Products and Distribution 3,148 3,160 Nuclear and Precision Health Solutions 478 403 at-Home Solutions 1,128 817 OptiFreight Logistics 100 84 Other 1,706 1,304 Total segment revenue 60,965 54,897 Corporate (1) (25) (19) Total revenue $ 60,940 $ 54,878 Nine Months Ended March 31, (in millions) 2026 2025 Pharmaceutical and Specialty Solutions $ 175,985 $ 149,272 Global Medical Products and Distribution 9,591 9,437 Nuclear and Precision Health Solutions 1,354 1,148 at-Home Solutions 3,428 2,391 OptiFreight Logistics 289 234 Other 5,071 3,773 Total segment revenue 190,647 162,482 Corporate (1) (71) (63) Total revenue $ 190,576 $ 162,419 (1) Corporate revenue consists of the elimination of inter-segment revenue and other revenue not allocated to the segments. …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

13. Share-Based Compensation We maintain Cardinal Health Inc. corporate stock incentive plans (collectively, the Plans) for the benefit of certain of our officers, directors, and employees. As of March 31, 2026, we have 16 million shares authorized for issuance under the Plans. Upon vesting these units convert to common shares without restrictions or future service requirements. The following tables provide total share-based compensation expense by type of award: Three Months Ended March 31, (in millions) 2026 2025 Restricted share unit expense $ 21 $ 18 Performance share unit expense 11 14 Total share-based compensation $ 32 $ 32 Nine Months Ended March 31, (in millions) 2026 2025 Restricted share unit expense $ 55 $ 54 Performance share unit expense 38 37 Total share-based compensation $ 93 $ 91 The total tax benefit related to share-based compensation was $4 million for both the three months ended March 31, 2026 and 2025, respectively, and $12 million and $11 million for the nine months ended March 31, 2026 and 2025, respectively. Share-based compensation expense is included in selling, general, and administrative expenses in the condensed consolidated statements of earnings. Our condensed consolidated statements of cash flows present our share-based compensation expense as a reconciling adjustment between net income and net cash provided by operating activities for all periods presented. Restricted Share Units Restricted share units granted under the Plans generally vest …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

4. Goodwill and Other Intangible Assets Goodwill The following table summarizes the changes in the carrying amount of goodwill by segment and in total: (in millions) Pharmaceutical and Specialty Solutions (1) Global Medical Products and Distribution Other (2) Total Balance at June 30, 2025 $ 7,943 $ $ 1,748 $ 9,691 Goodwill acquired, net of purchase price adjustments 1,909 (1) 1,908 Goodwill impairment (184) (184) Balance at March 31, 2026 $ 9,668 $ $ 1,747 $ 11,415 (1) At March 31, 2026, the Pharmaceutical segment accumulated goodwill impairment loss was $184 million. (2) Comprised of the remaining operating segments, Nuclear and Precision Health Solutions, at-Home Solutions and OptiFreight Logistics. Due to certain reductions in our long-term financial plan assumptions made during the three months ended March 31, 2026, we elected to bypass the qualitative assessment and perform quantitative goodwill impairment testing for the Navista & ION reporting unit. This quantitative testing resulted in the carrying amount of Navista & ION exceeding the fair value, resulting in a pre-tax goodwill impairment charge of $184 million. The impairment charge recognized during the three months ended March 31, 2026 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. Goodwill increased in the nine months ended March 31, 2026 primarily due to …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

"7. Income Taxes Fluctuations in our provision for income taxes as a percentage of pre-tax earnings (effective tax rate) are due to changes in international and U.S. state effective tax rates resulting from our business mix and discrete items. Effective Tax Rate During the three and nine months ended March 31, 2026, the effective tax rate was 3.1 percent and 19.4 percent, respectively. During the three and nine months ended March 31, 2025, the effective tax rate was 23.6 percent and 22.8 percent, respectively. The effective tax rate for the three and nine months ended March 31, 2026 was primarily impacted by discrete planning benefits. Tax Effects of Goodwill Impairment Charges During the three months ended March 31, 2026, we recognized a pre-tax goodwill impairment charge of $184 million related to the Navista & ION reporting unit within the Pharma segment. The net tax benefit related to this charge is $23 million for fiscal 2026. The tax effect of the goodwill impairment charge recorded during the three months ended March 31, 2026 was included in our estimated annual effective tax rate because it was not considered unusual or infrequent, given that we have recorded other goodwill impairments in prior fiscal years. The impact of the non-deductible goodwill did not materially impact the annual effective tax rate for 2026. Unrecognized Tax Benefits We had $906 million and $879 million of unrecognized tax benefits, at March 31, 2026 and June 30, 2025, respectively. The Marc …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

"Recently Issued Financial Accounting Standards and Disclosure Rules Not Yet Adopted We assess the adoption impacts of recently issued accounting standards by the Financial Accounting Standards Board (""FASB"") on our consolidated financial statements as well as material updates to previous assessments, if any, from the 2025 Form 10-K. Income Tax Disclosure In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This guidance also includes certain other amendments to improve the effectiveness of income tax disclosures. This guidance will be effective for us in fiscal 2026 Form 10-K and will be applied on a prospective basis. Adoption will require enhancements to our income tax disclosures but is not expected to have a significant impact on our financial reporting, or on our operational processes, controls and governance in support of the new guidance. Disaggregation of Income Statement Expenses In November 2024, the FASB issued ASU 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), which requires disaggregated disclosures of certain categories of expenses which are included in any relevant income statement expense caption on an annual and interim basis. Additionally, the guidance requires the disclosure of total selling expenses and, in annual …

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3. Restructuring and Employee Severance The following tables summarize restructuring and employee severance costs: Three Months Ended March 31, (in millions) 2026 2025 Employee-related $ 7 $ 22 Facility exit and other 18 6 Total restructuring and employee severance $ 25 $ 28 Nine Months Ended March 31, (in millions) 2026 2025 Employee-related $ 37 $ 41 Facility exit and other 29 20 Total restructuring and employee severance $ 66 $ 61 Employee-related costs primarily consist of termination benefits provided to employees who have been involuntarily terminated, duplicate payroll costs, and retention bonuses incurred during transition periods. Facility exit and other costs primarily consist of project consulting fees, accelerated depreciation, professional project management, and costs associated with vacant facilities. During the three and nine months ended March 31, 2026 and 2025, restructuring and employee severance costs were primarily related to the implementation of certain enterprise-wide cost-savings measures and certain initiatives to rationalize our manufacturing operations. The following table summarizes activity related to liabilities associated with restructuring and employee severance: (in millions) Employee- Related Costs Facility Exit and Other Costs Total Balance at June 30, 2025 $ 79 $ $ 79 Additions 25 25 Payments and other adjustments (31) (31) Balance at March 31, 2026 $ 73 $ $ 73 …

RestructuringAndRelatedActivitiesDisclosureTextBlock · excerpt; the full note is in the filing

"12. Segment Information We operate under two reportable segments: Pharmaceutical and Specialty Solutions (""Pharma"") and Global Medical Products and Distribution (""GMPD""). 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. The factors for determining the reportable segments include the manner in which management evaluates performance for purposes of allocating resources and assessing performance combined with the nature of the individual business activities. 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 physician offices. Our GMPD segment manufactures, sources and distributes Cardinal Health branded medical, surgical and laboratory products, which are sold in the United States, Canada, Europe, Asia and other markets. This segment also distributes a broa …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

10. Shareholders' Deficit We repurchased $1.0 billion and $750 million of our common shares, in the aggregate, through share repurchase programs during the nine months ended March 31, 2026 and 2025, respectively. We funded the repurchases with available cash. The common shares repurchased are held in treasury to be used for general corporate purposes. The following table presents the share repurchase programs executed during the nine months ended March 31, 2026 and 2025: Quarter Entered Date Concluded Aggregate Purchase Price (in millions) Initial Shares (in millions) Reference Price Final Shares (in millions) Weighted Average Price per Common Share Q3 FY26 4/20/2026 $250 0.9 $215.42 0.3 $209.55 Q2 FY26 12/15/2025 $375 1.6 $190.22 0.3 $200.00 Q1 FY26 10/31/2025 $375 2.0 $148.12 0.4 $151.88 Q3 FY25 3/11/2025 $375 2.4 $125.33 0.6 $125.87 Q1 FY25 10/30/2024 $375 2.7 $109.65 0.7 $110.10 During the nine months ended March 31, 2026 and 2025, we paid $8 million and $15 million for excise taxes, respectively, related to the completion of prior Accelerated Share Repurchase programs. During the three months ended December 31, 2024, we retired 56 million of common stock shares without par value. Accumulated Other Comprehensive Loss The following tables summarize the changes in the balance of accumulated other comprehensive loss by component and in total: (in millions) Foreign Currency Translation Adjustments Unrealized Gain/(Loss) on Derivatives, net of tax Accumulated Other Comprehensi …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing