Cencora Reports Fiscal 2025 Second Quarter Results

Revenue of $75.5 billion for the Second Quarter, a 10.3 percent Increase Year-Over-Year

Second Quarter GAAP Diluted EPS of $3.68 and Adjusted Diluted EPS of $4.42

Adjusted Diluted EPS Guidance Range Raised to $15.70 to $15.95 for Fiscal 2025

CONSHOHOCKEN, Pa.–(BUSINESS WIRE)–Cencora, Inc. (NYSE: COR) reported that in its fiscal year 2025 second quarter ended March 31, 2025, revenue increased 10.3 percent year-over-year to $75.5 billion. On the basis of U.S. generally accepted accounting principles (GAAP), diluted earnings per share (EPS) was $3.68 for the second quarter of fiscal 2025 compared to $2.09 in the prior year second quarter. Adjusted diluted EPS, which is a non-GAAP financial measure that excludes items described below, increased 16.3 percent to $4.42 in the fiscal second quarter from $3.80 in the prior year second quarter.

Cencora is updating its outlook for fiscal year 2025. The Company does not provide forward-looking guidance on a GAAP basis as discussed below in Fiscal Year 2025 Expectations. Adjusted diluted EPS guidance has been raised from the previous range of $15.30 to $15.60 to a range of $15.70 to $15.95.

“Cencora’s second quarter results reflect the strength of our value proposition as a healthcare services provider and the important role we play in the supply chain, driven by our pharmaceutical distribution footprint and complementary end-to-end services and solutions,” said Robert P. Mauch, President and Chief Executive Officer of Cencora. “We continue to advance our core business and enhance our capabilities, with a focus on elevating our solutions in the markets we serve.”

“Cencora strives to enhance its leadership position in healthcare through our pharmaceutical centric strategy, best-in-class team members, and customer-focused approach.” Mauch continued. “We believe this leadership, coupled with our operational excellence and emphasis on productivity, drives our resilient financial performance now and will continue to drive it in the future.”

Second Quarter Fiscal Year 2025 Summary Results

Below, Cencora presents descriptive summaries of the Company’s GAAP and adjusted (non-GAAP) quarterly results. In the tables that follow, GAAP results and GAAP to non-GAAP reconciliations are presented. For more information related to non-GAAP financial measures, including adjustments made in the periods presented, please refer to the “Supplemental Information Regarding Non-GAAP Financial Measures” following the tables.

Second Quarter GAAP Results

• Revenue: In the second quarter of fiscal 2025, revenue was $75.5 billion, up 10.3 percent compared to the same quarter in the previous fiscal year, primarily due to an 11.4 percent increase in revenue within the U.S. Healthcare Solutions segment.

• Gross Profit: Gross profit in the second quarter of fiscal 2025 was $3.1 billion, a 20.6 percent increase compared to the same period in the previous fiscal year, primarily due to the increase in gross profit in the U.S. Healthcare Solutions segment and larger gains from antitrust litigation settlements, offset in part by LIFO expense in the current year period in comparison to a LIFO credit in the prior year period and a decrease in gross profit in the International Healthcare Solutions segment. Gross profit as a percentage of revenue was 4.06 percent, an increase of 35 basis points from the prior year quarter due to the increase in U.S. Healthcare Solutions gross profit margin, primarily as a result of the January 2025 acquisition of Retina Consultants of America (RCA).

• Operating Expenses: In the second quarter of fiscal 2025, operating expenses were $2.0 billion, a 2.0 percent increase compared to the same quarter in the previous fiscal year, primarily due to an increase in distribution, selling, and administrative expenses as a result of the acquisition of RCA and to support our revenue growth, offset in part by lower litigation and opioid-related expenses compared to the prior year period, which included a $214.0 million litigation accrual related to the distribution of prescription opioid medications.

• Operating Income: In the second quarter of fiscal 2025, operating income was $1.0 billion, an increase of 87.3 percent compared to the same period in the previous fiscal year due to the increase in gross profit, offset in part by the increase in operating expenses. Operating income as a percentage of revenue was 1.37 percent in the second quarter of fiscal 2025 compared to 0.81 percent in the prior year quarter.

• Interest Expense, Net: In the second quarter of fiscal 2025, net interest expense was $104.0 million, an increase of 62.2 percent from the prior year quarter primarily due to an increase in interest expense as a result of our issuance of $1.8 billion of senior notes in December 2024 and the $1.5 billion variable-rate term loan, which we borrowed in January 2025, to finance a portion of the RCA acquisition, and increased revolving credit facility borrowings to cover seasonal short-term working capital needs.

• Effective Tax Rate: The effective tax rate was 22.7 percent for the second quarter of fiscal 2025 compared to 9.8 percent in the prior year quarter, which included discrete tax benefits associated with foreign valuation allowance adjustments.

• Diluted Earnings Per Share: Diluted earnings per share was $3.68 in the second quarter of fiscal 2025, a 76.1 percent increase compared to $2.09 in the previous fiscal year’s second quarter.

• Diluted Shares Outstanding: Diluted weighted average shares outstanding for the second quarter of fiscal 2025 were 195.1 million, a decrease of 3.0 percent versus the prior year second quarter primarily due to share repurchases.

Second Quarter Adjusted (non-GAAP) Results

• Revenue: No adjustments were made to the GAAP presentation of revenue. In the second quarter of fiscal 2025, revenue was $75.5 billion, up 10.3 percent compared to the same quarter in the previous fiscal year, primarily due to an 11.4 percent increase in revenue within the U.S. Healthcare Solutions segment.

• Adjusted Gross Profit: Adjusted gross profit in the second quarter of fiscal 2025 was $2.9 billion, a 15.2 percent increase compared to the same period in the previous fiscal year due to the increase in gross profit in the U.S. Healthcare Solutions segment, offset in part by the decrease in gross profit in the International Healthcare Solutions segment. Adjusted gross profit as a percentage of revenue was 3.86 percent in the fiscal 2025 second quarter, an increase of 16 basis points from the prior year quarter due to the increase in U.S. Healthcare Solutions gross profit margin, primarily as a result of the January 2025 acquisition of RCA.

• Adjusted Operating Expenses: In the second quarter of fiscal 2025, adjusted operating expenses were $1.7 billion, a 15.2 percent increase compared to the same period in the previous fiscal year, primarily driven by an increase in distribution, selling, and administrative expenses as a result of the January 2025 acquisition of RCA and to support our revenue growth.

• Adjusted Operating Income: In the second quarter of fiscal 2025, adjusted operating income was $1.2 billion, a 15.3 percent increase compared to the same period in the prior fiscal year, driven by an increase in the U.S. Healthcare Solutions segment, partially offset by a decrease in the International Healthcare Solutions segment. Adjusted operating income as a percentage of revenue was 1.58 percent in the fiscal 2025 second quarter, an increase of 7 basis points when compared to the prior year quarter.

• Interest Expense, Net: No adjustments were made to the GAAP presentation of net interest expense. In the second quarter of fiscal 2025, net interest expense was $104.0 million, an increase of 62.2 percent from the prior year quarter primarily due to an increase in interest expense as a result of our issuance of $1.8 billion of senior notes in December 2024 and the $1.5 billion variable-rate term loan, which we borrowed in January 2025, to finance a portion of the RCA acquisition, and increased revolving credit facility borrowings to cover seasonal short-term working capital needs.

• Adjusted Effective Tax Rate: The adjusted effective tax rate was 20.8 percent for the second quarter of fiscal 2025 compared to 20.9 percent in the prior year quarter.

• Adjusted Diluted Earnings Per Share: Adjusted diluted earnings per share was $4.42 in the second quarter of fiscal 2025, a 16.3 percent increase compared to $3.80 in the previous fiscal year’s second quarter.

• Diluted Shares Outstanding: No adjustments were made to the GAAP presentation of diluted shares outstanding. Diluted weighted average shares outstanding for the second quarter of fiscal 2025 were 195.1 million, a decrease of 3.0 percent versus the prior year second quarter primarily due to share repurchases.

Segment Discussion

The Company is organized geographically based upon the products and services it provides to its customers under two reportable segments: U.S. Healthcare Solutions and International Healthcare Solutions.

U.S. Healthcare Solutions

U.S. Healthcare Solutions revenue was $68.3 billion in the second quarter of fiscal 2025, an increase of 11.4 percent compared to the same quarter in the previous fiscal year due to overall market growth primarily driven by unit volume growth, including increased sales of products labeled for diabetes and/or weight loss in the GLP-1 class and specialty products to physician practices and health systems. There was no significant increase in U.S. Healthcare Solutions revenue resulting from the acquisition of RCA as inventory sales from our specialty distribution business to RCA are now being eliminated in consolidation. Segment operating income of $1.0 billion in the second quarter of fiscal 2025 was up 22.8 percent compared to the same period in the previous fiscal year primarily due to the increase in gross profit, as a result of increased product sales and the January 2025 acquisition of RCA, offset in part by the increase in operating expenses.

International Healthcare Solutions

International Healthcare Solutions revenue was $7.2 billion in the second quarter of fiscal 2025, an increase of 0.7 percent compared to the previous fiscal year’s second quarter. Segment operating income in the second quarter of fiscal 2025 was $159.3 million, a decrease of 17.3 percent, primarily due to lower operating income at our global specialty logistics business and our European distribution business. On a constant currency basis, International Healthcare Solutions revenue increased by 5.7 percent while segment operating income decreased by 13.9 percent.

Recent Company Highlights & Milestones

• Cencora released its 2024 Corporate Responsibility Report and microsite, outlining the integration with business objectives and a focus on business resiliency and sustainable operations. For the seventh consecutive year, selected information within the 2024 report was assured by ERM Certification and Verification Services.

Fiscal Year 2025 Expectations

The Company does not provide forward-looking guidance on a GAAP basis as to certain financial information, where the probable significance of the information cannot be determined, is not available or cannot be reasonably estimated. Please refer to the Supplemental Information Regarding Non-GAAP Financial Measures following the tables for additional information.

Fiscal Year 2025 Expectations on an Adjusted (non-GAAP) Basis

Cencora is now updating its fiscal year 2025 financial guidance to reflect stronger earnings growth in the U.S. Healthcare Solutions segment and a lower contribution from the International Healthcare Solutions segment.

There is no reduction to updated EPS guidance for a noncontrolling interest in RCA because the 15% equity interest retained by certain RCA physicians and members of management is accounted for by the Company as a contingent liability as opposed to a noncontrolling interest in equity.

The Company now expects:

• Adjusted diluted EPS to be in the range of $15.70 to $15.95, up from the previous range of $15.30 to $15.60.

Additional expectations now include:

• International Healthcare Solutions segment revenue growth to be in the range of 3 to 4 percent, down from the previous range of 4 to 5 percent;

• On a constant currency basis, International Healthcare Solutions segment revenue growth to be in the range of 6 to 8 percent, down from the previous range of 7 to 9 percent;

• Adjusted consolidated operating income growth to be in the range of 13.5 to 15.5 percent, up from the previous range of 11.5 to 13.5 percent;

• U.S. Healthcare Solutions segment operating income growth to be in the range of 17.5 to 19.5 percent, up from the previous range of 14.5 to 16.5 percent;

• International Healthcare Solutions segment as reported operating income decline of 1 to 4 percent, down from the previous guidance of no growth;

• On a constant currency basis, International Healthcare Solutions segment operating income growth to be down 3 percent to flat, from the previous guidance of an increase of approximately 5 percent;

• Weighted average diluted shares outstanding is expected to be in the range of 195.0 to 195.5 million, revised from the previous expectation of under 196 million.

Dividend Declaration

The Company’s Board of Directors declared a quarterly cash dividend of $0.55 per common share, payable June 2, 2025, to stockholders of record at the close of business on May 16, 2025.

Conference Call & Slide Presentation

The Company will host a conference call to discuss its operating results at 8:30 a.m. ET on May 7, 2025. A slide presentation for investors has also been posted on the Company’s website at investor.cencora.com. Participating in the conference call will be:

• Robert P. Mauch, President & Chief Executive Officer
• James F. Cleary, Executive Vice President & Chief Financial Officer

The dial-in number for the live call will be (833) 470-1428. From outside the United States and Canada, dial +1 (404) 975-4839. The access code for the call will be 962235. The live call will also be webcast via the Company’s website at investor.cencora.com. Users are encouraged to log on to the webcast approximately 10 minutes in advance of the scheduled start time of the call.

Replays of the call will be made available via telephone and webcast. A replay of the webcast will be posted on investor.cencora.com approximately one hour after the completion of the call and will remain available for one year. The telephone replay will also be available approximately one hour after the completion of the call and will remain available for seven days. To access the telephone replay from within the U.S. and Canada, dial (866) 813-9403. From outside the United States, dial 0(204) 525-0658. The access code for the replay is 839530.

Upcoming Investor Events

Cencora management will be attending the following investor event in the coming months:

• Bank of America Global Healthcare Conference, May 13, 2025.

Please check the website for updates regarding the timing of the live presentation webcasts, if any, and for replay information.

About Cencora

Cencora is a leading global pharmaceutical solutions organization centered on improving the lives of people and animals around the world. We partner with pharmaceutical innovators across the value chain to facilitate and optimize market access to therapies. Care providers depend on us for the secure, reliable delivery of pharmaceuticals, healthcare products, and solutions. Our 51,000+ worldwide team members contribute to positive health outcomes through the power of our purpose: We are united in our responsibility to create healthier futures. Cencora is ranked #10 on the Fortune 500 and #18 on the Global Fortune 500 with more than $290 billion in annual revenue. Learn more at investor.cencora.com

Cencora’s Cautionary Note Regarding Forward-Looking Statements

Certain of the statements contained in this press release are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Securities Exchange Act”). Words such as «aim,» «anticipate,» «believe,» «can,» «continue,» «could,» «estimate,» «expect,» «intend,» «may,» «might,» «on track,» «opportunity,» «plan,» «possible,» «potential,» «predict,» «project,” «seek,» «should,» «strive,» «sustain,» «synergy,» «target,» «will,» «would» and similar expressions are intended to identify such forward-looking statements, but the absence of these words does not mean the statement is not forward-looking. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances and speak only as of the date hereof. These statements are not guarantees of future performance and are based on assumptions and estimates that could prove incorrect or could cause actual results to vary materially from those indicated. A more detailed discussion of the risks and uncertainties that could cause our actual results to differ materially from those indicated is included (i) in the «Risk Factors» and «Management’s Discussion and Analysis» sections in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2024 and elsewhere in that report and (ii) in other reports filed by the Company pursuant to the Securities Exchange Act. The Company undertakes no obligation to publicly update or revise any forward-looking statements, except as required by the federal securities laws.

Contacts

Bennett S. Murphy
Senior Vice President, Head of Investor Relations and Treasury
[email protected]

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