Q2 2024 McKesson Corp Earnings Call
Yeah.
Please standby.
Speaker 1: Welcome to the testant's second quarter fiscal 2024 earnings confidence.
Welcome to Mckesson's second quarter fiscal 2024 earnings conference call. Please be advised that today's conference is being recorded at this time I would like to turn the call over to Rachel Rodriguez VP of Investor Relations. Please go ahead.
Speaker 1: Please be advised that today's conference is being recorded. At this time, I would like to turn the call over to Rachel Wagriget, VP of Invest relations. Please go ahead.
Speaker 2: Thank you, operator. Good afternoon and welcome everyone to the CAST-1's second quarter fiscal 2024 earnings call. Today, I'm joined by Brian Tyler, our chief executive officer, and Britt Vittelon, our chief financial officer.
Thank you operator, good afternoon, and welcome everyone to Mckesson's second quarter fiscal 2024 earnings call today, I'm joined by Brian Tyler, Our Chief Executive Officer, and Brittany alone, our Chief Financial Officer.
Speaker 2: Brian will lead off, follow the hybrid, and then we will move to a question and answer.
Brian will lead off followed by Britt and then we will move to a question and answer session.
Speaker 2: Today's discussion will include forward-looking statements such as forecasts about McKesson's operations and future results.
Today's discussion will include forward looking statements such as forecasts about mckesson's operations and future Regal.
Speaker 2: Thank you for the cost and your statements and today's earnings release and presentation slides available on our website at investor dot McEsten dot com.
Please refer to the cautionary statements in today's earnings release and presentation slides available on our website at Investor Mckesson Dotcom and.
Speaker 2: and to the risk factor section of our most recent annual and periodic FEC fire links for additional information concerning risk factors that could cause our actual result to materially differ from those in our forward looking.
And to the risk factors section of our most recent annual and periodic SEC filings for additional information concerning risk factors that could cause our actual results to materially differ from those in our forward looking statements.
Speaker 2: Information about non- GAAP financial measures that we will discuss during this webcast, including reconciliation of those measures to gap results, can be found in today's earnings release and presentation slide.
Information about non-GAAP financial measures, we will discuss during this webcast, including reconciliation of those measures to GAAP results can be found in today's earnings release and presentation slides.
Speaker 2: The presentation slides also include a summary of our results for the quarter and updated guidance. With that, let me turn it over to Brian .
The presentation slides also include a summary of our results for the quarter and updated guidance with that let me turn it over to Brian.
Speaker 3: Thank you Rachel and good afternoon everybody. We appreciate you joining us on our call today. We're very pleased to report another solid quarter in fiscal 2024 with adjusted results above expectations.
Thank you Rachel and good afternoon, everybody. We appreciate you joining us on our call today.
We're very pleased to report another solid quarter in fiscal 2024 with adjusted results above expectations.
Speaker 3: demonstrating our ability to consistently execute against company priorities and create sustained value for our shareholders.
Constraining, our ability to consistently execute against company priorities and create sustained value for our shareholders.
Speaker 3: In the second quarter, revenues increased 10% to $77.2 billion. Adjusted earnings per diluted share was $6.23. When excluding certain items, adjusted earnings per diluted share increased 14% from the prior year.
In the second quarter revenues increased 10% to 77 $2 billion adjusted earnings per diluted share was $6 23.
When excluding certain items adjusted earnings per diluted share increased 14% from the prior year.
Operator: Please stand by. Welcome to McKesson's second quarter fiscal 2024 earnings conference call. Please be advised that today's conference is being recorded.
Speaker 3: Our performance through the first half of the fiscal year combined with the continued momentum in advancing our company strategies gives us the confidence to raise our guidance for fiscal 2024 adjusted earnings per diluted share. Our previous guidance range of $26.55 to $27.35 has been updated to a range of $26.80 to $27.40.
Our performance through the first half of the fiscal year combined with the continued momentum in advancing our company's strategies gives us the confidence to raise our guidance for fiscal 2024 adjusted earnings per diluted share our previous guidance range of $26 55 to $27 35.
Rachel Rodriguez: At this time, I would like to turn the call over to Rachel Rodriguez, VP of investor relations. Please go ahead. Thank you, operator.
Rachel Rodriguez: Good afternoon, and welcome everyone to the customs, second quarter fiscal 2024 earnings call. Today, I'm joined by Brian Tyler, our chief executive officer. And Britt Vitalone, our chief financial officer. Brian will lead off followed by Britt and then we will move to a question and answer session. Today's discussion will include forward looking statement, such as forecasts about McKesson's operations and future results. Thank you for to the cautionary statements in today's earnings release and presentation slides available on our website at investor dot McKesson dot com.
It has been updated to a range of $26 80.
The $27 and 40.
Speaker 3: Team McKesson continues to deliver on our mission of improving care and every setting. As a diversified healthcare services company, we're making important progress in strengthening our portfolio of differentiated assets and bringing more value to our customers and their patients.
Mckesson continues to deliver on our mission of improving care in every setting as a diversified healthcare services company, we're making important progress in strengthening our portfolio of differentiated assets and bringing more value to our customers and their patients.
Speaker 3: Before I turn my attention to our company priorities and the second quarter results, I wanna briefly discuss right age recent bankruptcy proceeding.
Before I turn my attention to our company priorities in the second quarter results I want to briefly discuss Rite Aid's recent bankruptcy proceedings, we have been supplying rite aid with the majority of their pharmaceutical products for more than 20 years as they navigate through their reorganization process. We are working closely with them to provide continued delivery of products.
Rachel Rodriguez: And to the risk factor section of our most recent annual and periodic FEP fire links for additional information concerning risk factors that could cause our actual result to materially differ from those in our forward looking statement. Information about non-gap financial measures that we will discuss during this webcast, including reconciliation of those measures to gap results can be found in today's earnings release and presentation slides.
Speaker 3: We have been supplying right aid with the majority of their pharmaceutical products for more than 20 years. As they navigate through their reorganization process, we're working closely with them to provide continued delivery of products. We're closely monitoring developments, but as Britt will describe in his remarks, we anticipate that right aid's bankruptcy filing will not materially impact fiscal 2024 adjusted earnings per diluted share.
We're closely monitoring developments, but as Brent will describe in his remarks, we anticipate that rite aid's bankruptcy filing will not materially impact fiscal 2024 adjusted earnings per diluted share.
The presentation slides also include a summary of our results for the quarter and updated guidance.
Speaker 3: Now, let me move on to our company priorities. And I want to start by recognizing our
Now, let me move on to our company priorities and I want to start by recognizing our people, including the diverse dedicated and talented team. We built here at Mckesson investing in people and culture, it's foundational to our strategy and we offer many engagement programs and initiatives to empower our employees and allow them to express new ideas.
Brian Tyler: With that, let me turn it over to Brian. Thank you, Rachel, and good afternoon, everybody. We appreciate you joining us on our call today.
Speaker 3: including the diverse dedicated and talented team we've built here at McHatham.
Brian Tyler: We're very pleased to report another solid quarter in fiscal 2024 with adjusted results above expectations, demonstrating our ability to consistently execute against company priorities and create sustained value for our shareholders. In the second quarter, revenues increased 10% to $77.2 billion. Adjusted earnings per diluted share was $6.23. When excluding certain items, adjusted earnings per diluted share increased 14% from the prior year.
Speaker 3: investing in people and culture is foundational to our strategy. And we offer many engagement programs and initiatives to empower our employees and allow them to express new ideas, to contribute their unique perspectives, and to care for each other.
To contribute their unique perspectives and to care for each other we.
Speaker 3: firmly believe that we achieve our full potential when our culture is diverse, inclusive, and focused on best talent. Our efforts fostering a culture of belonging are well-reck...
We firmly believe that we achieve our full potential what our culture is diverse inclusive and focused on best talent.
Our efforts fostering a culture of belonging our well recognized recently we were honored we were honored to be named by Forbes as one of America's best employers for women and for the eighth consecutive year, we renamed as one of the best places to work for disability inclusion, earning a top ranking score of 100.
Speaker 3: Recently, we were honored to be named by Forbes as one of America's best employers for women. For the eighth consecutive year, we were named as one of the best places to work for disability inclusion, earning a top ranking score of 100.
Brian Tyler: Our performance through the first half of fiscal year combined with the continued momentum in advancing our company strategies gives us the confidence to raise our guidance for fiscal 2024 adjusted earnings per diluted share. Our previous guidance range of $26.55 to $27.35 has been updated to a range of $26.80 to $27.40.
Speaker 3: We appreciate all the hard work and dedication from Team McKesson, and we recognize the importance of helping, respecting, and caring for each other. On October 27th, we celebrated our annual wellness day called Your Day Your Way.
We appreciate all the hard work and dedication from team Mckesson and we recognize the importance of helping respecting and caring for each other.
October 27th we celebrated our annual wellness day called your day. Your way. This is the third year that we've celebrated this tradition and shown appreciation for our employees by providing them with additional day off work to prioritize their personal health and wellbeing.
Speaker 3: The third year that we've celebrated this tradition and shown appreciation for our employees by providing them with additional day off work to prioritize their personal health and wellbeing.
Team McKesson continues to deliver on our mission of improving care and every setting. As a diversified healthcare services company, we're making important progress in strengthening our portfolio of differentiated assets and bringing more value to our customers and their patients.
Speaker 3: Let's take a minute to review the performance of the distribution business, and the progress we've made driving the stable core growth.
Let's take a minute to review the performance of the distribution business and the progress we've made driving sustainable core growth.
Brian Tyler: Before I turn my attention to our company priorities and the second quarter results, I want to briefly discuss right AIDS recent bankruptcy proceedings. We have been supplying right aid with the majority of their pharmaceutical products for more than 20 years. As they navigate through their reorganization process, we're working closely with them to provide continued delivery of products. We're closely monitoring developments, but as Britt will describe in his remarks, we anticipate that right AIDS bankruptcy filing will not materially impact fiscal 2024 adjusted earnings per diluted share.
Speaker 3: In the second quarter, we saw strong performance in the US pharmaceutical segment.
In the second quarter, we saw strong performance in the U S pharmaceutical segment.
Speaker 3: Over the past 10 quarters, the segment has consistently delivered double digit revenue increases, demonstrating our ability to serve and grow with our...
Over the past 10 quarters. This segment has consistently delivered double digit revenue increases demonstrating our ability to serve and grow with our customers and.
Speaker 3: In the second quarter, we continued to observe solid prescription volume trends, particularly in the category of GLP1 medications, which contributed to revenue...
In the second quarter, we continued to observe solid prescription volume trends, particularly in the category of <unk> medications with contributed to revenue growth in the quarter.
Speaker 3: And over the past three years, we were honored to support the US government as the centralized distributor of COVID-19 vaccine.
And over the past three years, we were honored to support the U S government as the centralized distributor of COVID-19 vaccines, our team demonstrated incredible agility and dedication and standing up a fit for purpose operation distribute the vaccines across the country.
Brian Tyler: Now let me move on to our company priorities and I want to start by recognizing our People, including the diverse dedicated and talented team we've built here at McKesson. Investing in people and culture is foundational to our strategy. And we offer many engagement programs and initiatives to empower our employees and allow them to express new ideas to contribute their unique perspectives and to care for each other. We firmly believe that we achieve our full potential when our culture is diverse, inclusive, and focused on best talent.
Speaker 3: Our team demonstrated incredible agility and dedication in standing up a fit-for-purpose operation distributed vaccines across the country.
Speaker 3: This past September , we started transitioning the COVID-19 vaccine distribution to commercial channels, where working closely with the manufacturers to bring vaccines to patients in an efficient and timely manner.
This past September we started transitioning in the COVID-19 vaccine distribution to commercial channels. We are working closely with the manufacturers to bring vaccines to patients in an efficient and timely manner.
Speaker 3: As one of the largest distributors of flu vaccines in the country, we have scaled channel reach and deep expertise in working with vaccine products. And I'm pleased to say that through October 20th, we have distributed nearly 8 million COVID-19 vaccines through our commercial channel.
As one of the largest distributors of flu vaccines in the country, we have scaled channel reach and deep expertise in working with vaccine products and I am pleased to say that through October 20th we've distributed nearly $8 million COVID-19 vaccines through our commercial channels.
Brian Tyler: Our efforts fostering a culture of belonging are well-recorded. Recently, we were honored to be named by Forbes as one of America's best employers for women. And for the eighth consecutive year, we were named as one of the best places to work for disability inclusion, earning a top-ranking score of 100. We appreciate all the hard work and dedication from Team McKesson, and we recognize the importance of helping, respecting, and caring for each other.
Speaker 3: In the medical, physical segment, we continue to support our customers evolving needs with a diversified portfolio of products.
And the medical surgical segment, we continued to support our customers' evolving needs with a diversified portfolio of products and broad experience in medical surgical and related supplies.
Speaker 3: broad experience in medical surgical and related supplies.
Speaker 3: As a reminder, while we serve many alternate site providers, the biggest channel within the segment is primary care, including positional...
As a reminder, while we serve many alternate site providers the biggest channel within the segment as primary care, including physician offices, we closely track market data and during the second quarter, we observed general market moderation in primary care foot traffic. We also saw a year over year decline in instances of respiratory illness in flu.
Speaker 3: We closely tracked market data, and during the second quarter, we observed general market moderations in primary care foot traffic. We also saw a year-over-year decline in instances of respiratory illness and flu, which contributed to lower illness testing and patient visits in the primary care business.
On October 27, we celebrated our annual wellness day called Your Day Your Way. This is the third year that we've celebrated this tradition and shown appreciation for our employees by providing them with additional day off work to prioritize their personal health and well-being.
Which contributed to lower illness testing and patient visits and the primary care business.
Speaker 3: These dynamics impacted the segment results in the second quarter and our full year fiscal 2024 outlook. However, we remain confident in the fundamentals of the business and the strength of our scaled assets within the medical surgical segment.
These dynamics impacted the segment results in the second quarter and our full year fiscal 2024 outlook. However, we remain confident in the fundamentals of the business and the strength of our scaled assets within the medical surgical segment.
Brian Tyler: Let's take a minute to review the performance of the distribution business and the progress we've made driving sustainable core growth. In the second quarter, we saw strong performance in the US pharmaceutical segment. Over the past 10 quarters, the segment has consistently delivered double-digit revenue increases, demonstrating our ability to serve and grow with our customers. In the second quarter, we continued to observe solid prescription volume trends, particularly in the category of GLP1 medications, but contributed to revenue growth in the quarter.
Speaker 3: Moving on to the next company priority of expanding our oncology and biopharma plat
Moving on to the next company priority of expanding our oncology and Biopharma platforms.
Speaker 3: Since the beginning of this calendar year, we've added four new practices and welcome hundreds of new providers to the US on college.
Since the beginning of this calendar year, we've added four new practices and welcome hundreds of new providers to the U S oncology network.
Speaker 3: The team is working hard to ensure that the new practices are leveraging the resources of the network, including best practices, coordinated resources, technology, and infrastructure.
The team is working hard to ensure that the new practices or leveraging the resources of the network, including best practices coordinated resources technology and infrastructure.
Brian Tyler: And over the past three years, we were honored to support the US government as the centralized distributor of COVID-19 vaccines. Our team demonstrated incredible agility and dedication in standing up a fit-for-purpose operation distributive vaccines across the country. This past September, we started transitioning the COVID-19 vaccine distribution to commercial channels, where working closely with the manufacturers to bring vaccines to patients in an efficient and timely manner. As one of the largest distributors of flu vaccines in the country, we have scaled channel reach and deep expertise in working with vaccine products.
Speaker 3: As an important element of the integration, all of the new practices will be operating on the same electronic health record or EHR system.
As an important element of the integration all of the new practices will be operating on the same electronic health records or EHR system.
We call Idaho met.
Speaker 3: Designed in close collaboration with oncologist I know Med serves as an important link between the US oncology network and on Tata, our data and insights.
Designed in close collaboration with Oncologists INO Med serves as an important link between the U S oncology network and on <unk>, our data and insights business.
Speaker 3: powered by the innovative technology from Antata, I know MedCRETE's powerful insights and provides comprehensive point of care treatment decision support to providers.
<unk> by the innovative technologies for Montana, Idaho Med creates powerful insights and provides comprehensive point of care treatment decision support to providers.
Speaker 3: More than 2600 providers across the country use INOMED as their EHR, and we are pleased to see INOMED being honored as a top-ranked medical oncology EHR in the 2023 Best-in-Class Report.
More than 2600 providers across the country use <unk> as their EHR and we're pleased to see item Ed being honored as a top ranked medical oncology EHR in the 2023 best in Klas report.
Brian Tyler: And I'm pleased to say that through October 20, we have distributed nearly 8 million COVID-19 vaccines through our commercial channels. In the medical surgical segment, we continued to support our customers evolving needs with a diversified portfolio of products and broad experience in medical surgical and related supplies. As a reminder, while we served many alternate site providers, the biggest channel within the segment is primary care, including physician offices. We closely tracked market data, and during the second quarter, we observed general market moderations in primary care foot traffic.
Speaker 3: In addition to technology solutions like I know med, on Tata continues to advance its mission of transforming the fight against cancer. Recently, the US Food and Drug Administration awarded on Tata a contract to advance the use of real world data in the US Community Oncology setting, which is a good opportunity to identify insights that will inform care and clinical research. Moving on to the bottom.
In addition to technology solutions like <unk> <unk> continues to advance its mission of transforming the fight against cancer recently, the U S food and drug administration awarded on Tata contract to advance the use of real world data in the U S community oncology, setting, which is a good opportunity to identify insight.
That will inform care and clinical research.
Brian Tyler: We also saw a year-over-year decline in instances of respiratory illness and flu, which contributed to lower illness testing and patient visits in the primary care business. These dynamics impacted the segment results in the second quarter and our full year fiscal 2024 outlook. However, we remain confident in the fundamentals of the business and the strength of our scaled assets within the medical surgical segment.
Moving on to the Biopharma services platform through.
Speaker 3: Through strategic acquisitions and investments, we've built a set of highly differentiated assets within the prescription technology solution segment.
Through strategic acquisitions and investments we've built a set of highly differentiated assets within the prescription technology solutions segment.
Speaker 3: The combination of these assets creates a powerful and scaled network that includes multiple touch points throughout the patient treatment journey.
Combination of these assets creates a powerful and scaled network that includes multiple touch points throughout the patient treatment journey.
Speaker 3: We're connected to approximately 900,000 providers enabling solutions that help move barriers to access prescription medicine.
We are connected to approximately 900000 providers, enabling solutions that help remove barriers to access prescription medications. We're also connected to over 50000 pharmacies, helping patients afford their prescriptions through solutions like cash copay and digital coupons right at the pharmacy counter.
Brian Tyler: Coming on to the next company priority of expanding our oncology and biopharma platforms. Since the beginning of this calendar year, we've added four new practices and welcome hundreds of new providers to the US oncology network. The team is working hard to ensure that the new practices are leveraging the resources of the network, including best practices, coordinated resources, technology and infrastructure.
Speaker 3: We're also connected to over 50,000 pharmacies, helping patients afford their prescriptions through solutions like cash co-pay and digital coupons right at the pharmacy counter.
Speaker 3: In the second quarter, we were pleased with the strong performance in the segment with double digit growth in both revenue and adjusted operating process.
In the second quarter, we were pleased with the strong performance in this segment with double digit growth in both revenue and adjusted operating profit driven.
As an important element of the integration, all of the new practices will be operating on the same electronic health record, or EHR system, we call INOMed. Designed in close collaboration with oncologists, INOMed serves as an important link between the US oncology network and on TADA, our data and insights business. Powered by the innovative technology from TADA, INOMed creates powerful insights and provides comprehensive point of care treatment, decision support to providers. More than 2600 providers across the country use INOMed as their EHR, and we are pleased to see INOMed being honored as a top rank medical oncology EHR in the 2023 Best in Class Report.
Speaker 3: Driven by growth and access solutions, including increased volumes in prior authorizations for GLP1 medicine.
Driven by growth in access solutions, including increased volumes and prior authorizations for <unk> medications.
Speaker 3: The year-over-year comparison was also partially impacted by lower prior year results, which as we called out in Q2 of our fiscal 2023 included higher operating expenses resulting from the timing of increased headcount to support customer annual verification X.
Year over year comparison was also partially impacted by lower prior year results, which as we called out in Q2 of our fiscal 2023 included higher operating expenses, resulting from the timing of increased head count to support customer annual verification activities.
Speaker 3: One of the areas where we saw significant growth in the past two quarters is our access solutions, including prior authorizations for brands like GLP-1 medication.
One of the areas, where we saw significant growth in the past two quarters as our access solutions, including prior authorizations for brands like <unk> medications.
Speaker 3: For selected prescription drugs, patients are required to obtain approval from their health plan, which sometimes can be very man...
Selected prescription drugs patients are required to obtain approval from their health plan, which sometimes can be very manual and cumbersome.
Brian Tyler: In addition to technology solutions like INOMed, TADA continues to advance its mission of transforming the fight against cancer. Recently, the US Food and Drug Administration awarded TADA a contract to advance the use of real world data in the US community oncology setting, which is a good opportunity to identify insights that will inform care and clinical research.
Speaker 3: What we offer is an automated technology solution that is embedded within the provider's workflow. Our technology solution introduces efficiency to the process. More than 40% of our prior authorizations are approved instantly, and approximately 65% are approved within one hour.
What we offer is an automated technology solution that is embedded within the provider's workflow our technology solution introduces efficiency to the process more than 40% of our prior authorizations are approved instantly and approximately 65% are approved within one hour we.
Speaker 3: We continue to add new features and functionalities to improve the user experience. The latest feature introduced allows providers to share prior authorization outcomes directly with their patients when a health plan makes the determination. Through improvements like this, we help remove barriers and provide greater patient visibility to the prior authorization process.
We continue to add new features and functionalities to improve the user experience.
Brian Tyler: Moving on to the biopharma services platform. Through strategic acquisitions and investments, we've built a set of highly differentiated assets within the prescription technology solution segment. The combination of these assets creates a powerful and scaled network that includes multiple touch points throughout the patient treatment journey. We're connected to approximately 900,000 providers, enabling solutions that help move barriers to access prescription medications. We're also connected to over 50,000 pharmacies, helping patients afford their prescriptions through solutions like cash co-pay and digital coupons right at the pharmacy counter.
Latest feature introduced allows providers to share prior authorization outcomes directly with their patients when a health plan makes a determination through improvements like this we help remove barriers and provide greater patient visibility to the prior authorization process.
Speaker 3: Solutions like prior authorizations are great examples of the success of our business strategy. It's also a reflection of our efforts to improve medication access, and ultimately advanced health outcomes for all.
Solutions like prior authorizations are great. Examples of the success of our business strategy. It's also a reflection of our efforts to improve medication access and ultimately advanced health outcomes for all.
Speaker 3: As an impact-driven organization, we're deeply committed to advancing our strategy and contributing to positive changes in the communities where we live and work.
As an impact driven organization, we are deeply committed to advancing our strategy and contributing to positive changes in the communities, where we live and work.
Speaker 3: This past quarter, we celebrated our community impact.
This past quarter, we celebrated our community impact days, which as mckesson's largest annual company wide employee volunteer event.
Brian Tyler: In the second quarter, we were pleased with the strong performance in the segment with double-digit growth in both revenue and adjusted operating profit, driven by growth and access solutions, including increased volumes in prior authorizations for GLP1 medications. The year-over-year comparison was also partially impacted by lower prior-year results, which, as we called out in Q2 of our fiscal 2023, included higher operating expenses resulting from the timing of increased headcount to support customer annual verification activities.
Speaker 3: which is McKesson's largest annual company wide employee volunteer of
Speaker 3: Thousands of McKesson employees participated in various community impact projects that align with this year's theme.
<unk> of Mckesson employees participated in various community impact projects that align with this year's theme cancer awareness prevention and support this.
Speaker 3: cancer awareness, prevention and support. This year marked the 25th anniversary of the event and we will continue honoring this tradition and we'll work to find more ways to enhance the health of those who live in our communities. So.
This year marked the 25th anniversary of the event and we will continue honoring this tradition and we will work to find more ways to enhance the health of those who live in our communities.
So let me pull everything together.
Speaker 3: McKesson delivered a solid second quarter. Thanks to the contribution and dedication of over 50,000 McKesson employees, we continue to execute against our company priorities with focus and expertise.
Mckesson delivered a solid second quarter, thanks to the contribution and dedication of over 50000 Mckesson employees, we continue to execute against our company priorities with focus and excellence.
Brian Tyler: One of the areas where we saw significant growth in the past two quarters is our access solutions, including prior authorizations for brands like GLP1 medications. For selected prescription drugs, patients are required to obtain approval from their health plan, which sometimes can be very manual and cumbersome. What we offer is an automated technology solution that is embedded within the provider's workflow. Our technology solution introduces efficiency to the process. More than 40% of our prior authorizations are approved instantly and approximately 65% are approved within one hour.
Speaker 3: Leveraging our differentiated services and solutions were well positioned to continue to improve care.
Leveraging our differentiated services and solutions, we are well positioned to continue to improve care in every setting.
Speaker 3: Looking ahead, we're confident in our ability to drive continued growth in strategic advancement in fiscal 2024 and beyond. And with that, I'll turn it over to Britt for additional comments.
Looking ahead, we're confident in our ability to drive continued growth and strategic advancement in fiscal 2024, and beyond and with that I'll turn it over to Brett for additional comments.
Thank you Brian.
Speaker 4: And please, with our second quarter results, which reflect another quarter of solid performance during my operation of execution and meaningful growth in our U.S. foreign and suitable and prescription technology solutions. Thank you.
We're pleased with our second quarter results, which reflect another quarter of solid performance driven by operational execution and meaningful growth in our U S pharmaceutical and prescription technology solutions segments.
Brian Tyler: We continue to add new features and functionalities to improve the user experience. The latest feature introduced allows providers to share prior authorization outcomes directly with their patients when a health plan makes the determination. Through improvements like this, we help remove barriers and provide greater patient visibility to the prior authorization process. Solutions like prior authorizations are great examples of the success of our business strategy. It's also a reflection of our efforts to improve medication access and ultimately advance health outcomes for all.
Speaker 4: Before I turn to our Consolidated Results and want to highlight one item that impacted our second quarter gap on leaders.
Before I turn to our consolidated results I want to highlight one item that impacted our second quarter GAAP only results.
Speaker 4: We recorded a pre-tax gap provision for bad debts of $210 million or $155 million after tax. Within the U.S. pharmaceutical segment, for uncollected trade accounts receivable related to Rite Aid's bankruptcy.
We recorded a pre tax GAAP provision for bad debts of $210 million or $155 million after tax within the U S. Pharmaceutical segment for uncollected trade accounts receivable related to <unk> bankruptcy.
Speaker 4: We anticipate recording and additional provisions for bad debts of $511 million in the third quarter of this year 2024. Retreated Council seemed more that McCastin recognized the sales to right aid in October 2023 prior to its bankruptcy petition.
We anticipate recording an additional provision for bad debts was $511 million in the third quarter.
Two four.
Brian Tyler: As an impact-driven organization, we're deeply committed to advancing our strategy and contributing to positive changes in the communities where we live and work. This past quarter, we celebrated our community impact days, which is McKesson's largest annual company-wide employee volunteer event. Thousands of McKesson employees participated in various community impact projects that align with this year's theme, cancer awareness prevention and support. This year marked the 25th anniversary of the event and we will continue honoring this tradition and we'll work to find more ways to enhance the health of those who live in our communities.
Trade accounts receivable that Mckesson recognize some sales to rite aid in October 2023 prior to its bankruptcy petition.
Speaker 4: We continue to provide distribution of services to write aid posts or bankruptcy filing, providing same efficiency and operational excellence as we have for over 20 years.
We continue to provide distribution services already posted a bankruptcy filings provide the same efficiency and operational excellence as we have for over 20 years.
Speaker 4: for suing to an interim agreement for distribution services, which is pending final court approval, includes reduced credit terms of seven days than certain other items, as right aid continues to re-organize.
We're operating pursuant to an interim agreement for distribution services, which is pending final court approval includes reduced credit terms of seven days and certain other items as rite aid continues to reorganize.
Speaker 4: We are closely monitoring developments and we anticipate this customer event will not have a material impact for fiscal 2024, adjusted earnings for diluted share results, or liquidity division, and ongoing business operations.
We are closely monitoring developments and we anticipate this customer that would not have a material impact fiscal 2024.
Brian Tyler: So let me pull everything together. McKesson delivered a solid second quarter. Thanks to the contribution and dedication of over 50,000 McKesson employees, we continue to execute against our company priorities with focus and excellence. Leveraging our differentiated services and solutions were well-positioned to continue to improve care in every setting. Looking ahead, we're confident in our ability to drive continued growth and strategic advancement in fiscal 2024 and beyond.
And earnings per diluted share results, our liquidity position and ongoing business operations.
Speaker 4: The remainder of my comments refer to our fiscal 2024 adjusted results, unless I state otherwise, let me start with review of our 2nd quarter results.
The remainder of my comments refer to our fiscal 2024 adjusted results unless I state otherwise, let me start with a review of our second quarter results.
Speaker 4: The testing delivered solid growth in the second quarter, led by strong performance in U.S. pharmaceutical and prescription technology solutions.
Mckesson delivered solid growth in the second quarter led by strong performance in the U S pharmaceutical and prescription technology solutions segments.
Speaker 4: Our focus and execution against our company priorities position us to generate consistent, solid financial results will continue to evolve and grow our diversified portfolio through focused strategic investments in oncology and biopharma services.
Our focus and execution against our company priorities position us to generate consistent solid financial results, while continuing to evolve and grow our diversified portfolio through focus and strategic investments in oncology and Biopharma services.
Britt Vitalone: And with that, I'll turn it over to additional comments. Thank you, Brian. We're pleased with our second quarter results, which reflect another quarter of solid performance during my operational execution and meaningful growth in our U.S. Farmers suitable and prescription technology solution segments. Before I turn to our consolidating results, I want to highlight one item that impacted our second quarter gap only results. We recorded a pre-tax gap provision for bad debts of $210,000 or $155,000,000 after tax within the U.S.
Speaker 4: As a result of our operating performance and outwith for the remainder of the fiscal year, we are increasing and narrowing our full year outlook for fiscal 2024 adjusted earnings for deluded share to a range of $26.80 to $27.40.
As a result of our operating performance and outlook for the remainder of the fiscal year, we are increasing and narrowing our full year outlook for fiscal 2024 adjusted earnings per diluted share to a range of $26 80 to $27 40.
Speaker 4: Moving to our consolidated results, revenues increased 10% to $77.2 billion led by growth in the U.S. pharmaceutical segment, resulting from increased prescription volumes, including higher volumes from retail national account customers, specialty products, and GLP-1 medications, partially offset by lower revenues in the international segment, resulting from fiscal 2023 divestitures of certain testing European businesses.
Moving to our consolidated results revenues increased 10% to $77 2 billion.
Britt Vitalone: Farmers suitable segment for uncollected trade accounts we see in both related earnings, bankruptcy. We anticipate recording and additional provisions for bad debts of $511,000,000 in the third quarter fiscal 2024. For trade accounts, we see more that McKesson recognized themselves to write aid in October 2023 prior to its bankruptcy petition. We continue to provide distribution services to write aid posts or bankruptcy filing, providing the same efficiency and operational excellence as we have for over 20 years.
Led by growth in the U S pharmaceutical segment <unk>.
Resulting from increased prescription volumes, including higher volumes from the retail national account customers specialty products.
One medication.
We offset by lower revenues in the international segment, resulting from fiscal 2023 divestitures of certain test and European businesses.
Speaker 4: excluding the impact of our European business operations and completed divestitures, revenue increased 15 percent.
Excluding the impact of our European business operations and completed divestitures revenue increased 15%.
Speaker 4: Gross profit was $3 billion for the quarter, a decrease of 1%. And when excluding the impact of our European business operations and completed the vestitures, second quarter gross profit increased 8%. Primarily a result of growth in the US farm as soon as goal in prescription technology solutions segment.
Gross profit was $3 billion for the quarter, a decrease of 1% and.
Britt Vitalone: We're operating for student to an interim agreement for distribution services, which is pending final quarter approval, and includes reduced credit terms of seven days and spend certain other items as right aid continues to reorganize. We are closely monitoring developments and we anticipate this customer event will not have a material impact for existing 2024 adjusted earnings for diluted share results, or liquidity division, and ongoing business operations.
When excluding the impact of our European business operations and completed divestitures second quarter gross profit increased 8%, primarily a result of growth in U S pharmaceutical prescription technology solutions segments.
Speaker 4: operating expenses decreased 2% in the quarter, and when excluding the impact of our European business operations, including completed divestitures, operating expenses increased 90% year-over-year, which included approximately 2% from costs related to the second half fiscal 2023 acquisitions of RX Savings Solutions and the joint venture with Sarah Cannon Research Institute.
Operating expenses decreased 2% in the quarter when excluding the impact of our European business operations, including completed divestitures operating expenses increased 9% year over year, which included approximately 2% from costs related to the second half of fiscal 2023 acquisitions of Rx savings solution.
Britt Vitalone: The remainder of my comments were referred to our fiscal 2024 adjusted results once I state otherwise. Let me start with the review of our second quarter results. The casting delivered solid growth in the second quarter, led by strong performance in the US pharmaceutical and prescription technology solution segments. Our focus and execution against our company priorities, position us to generate consistent solid financial results, will continue to evolve and grow our diversified portfolio through focused strategic investments in oncology and biopharmus services.
And the joint venture with Syracuse Research Institute.
Speaker 4: Second quarter operating profit increased 1% to $1.2 billion. Again, primarily driven by growth in our U.S. pharmaceutical and prescription technology solutions segment.
Second quarter operating profit increased 1% to $1 2 billion.
Again, primarily driven by growth in our U S pharmaceutical and prescription technology solutions segments.
Speaker 4: This was partially offset by slower growth in our medical surgical solution segment, including lower-illemous season testing and the complete at divestitures of our European and business operations within the international segment.
This was partially offset by slower growth in our medical surgical solutions segment, including lower illness season testing and the completed divestitures of our European business operations within the international segment.
Britt Vitalone: As results of our operating performance and outlook for the remainder of the fiscal year, we are increasing and narrowing our full year outlook for fiscal 2024, adjusted earnings per deluded share to a range of $26.80 to $27.40. Moving to our consolidated results. Revenues increased 10% to $77.2 billion, but by growth in the US pharmaceutical site. Resolving from increased prescription volumes, including higher volumes from retail national account customers, specialty products, and GLP1 medication.
Speaker 4: which included the impact of COVID-19-related items in fiscal 2023 and losses associated with McKesson Ventures' equity investments in fiscal 2023 and 2024, operating profit increased 12% in the quarter.
When excluding the impact of COVID-19 related items fiscal 2023 and losses associated with Mckesson ventures equity investments in fiscal 2023% in 2020 or operating.
<unk> profit increased 12% in the quarter.
Speaker 4: Moving below the line, the effective tax rate was 23.5%, which included the recognition of a net discreet tax expense of $12 million.
Moving below the line the effective tax rate was 23, 5%, which included the recognition of a net discrete tax expense of $12 million.
Speaker 4: Second quarter diluted weighted average shares outstanding was $134.8 million, a decrease of 6% year-over-year.
Second quarter diluted weighted average shares outstanding was $134 8 million a decrease of 6% year over year.
Britt Vitalone: Partially offset by lower revenues in the international segment. Resolving through fiscal 2023 divestitures of certain testing European businesses. Excluding the impact of our European business operations in completed divestitures, revenue increased 15%. Gross profit was $3 billion for the quarter, a decrease of 1%. And when excluding the impact of our European business operations in completed divestitures, second quarter gross profit increased 8%. Primarily result in growth in the US pharmaceutical and prescription technology solution segments.
Speaker 4: Consolidated second quarter earnings for the limited share was $6.23, which represents an increase of 3% over the prior year.
Speaker 4: excluding COVID-19 related items during the second quarter of fiscal 2023 losses within the protest event for the year with fiscal 2023 and 2024. Second quarter earnings for the losing share was up 14% over the prior year.
Speaker 4: Turning to our second quarter segment results, which can be found in slides 70 through 11 and starting in U.S. Pharmaceutical.
Speaker 4: The U.S. pharmaceutical segment delivered continued momentum and strong operating profit growth. Our ability to drive sustainable growth in this segment reflects a few factors.
Britt Vitalone: Operating expenses decreased 2% in the quarter, and we excluded the impact of our European business operations, including completed divestitures. Operating expenses increased 9% year over year, which included approximately 2% from cost related to the second half fiscal 2023 acquisitions of our savings solution and the joint venture with Saracan Research Institute. Second quarter operating profit increased 1% to $1.2 billion. Again, primarily driven by growth in our US pharmaceutical and prescription technology solutions segments.
Speaker 4: The efficiency of our scale distribution operations. The investments that were made into unlike these capabilities that will further expand and strengthen our value propositions for our customers and partners.
Speaker 4: a balanced approach to managing a broad portfolio pharmaceutical products. Inclusive of a Claris 1 generic sourcing operations, bolstering our competitive position, and enabling an in-bill approach to customer demands, new product launches, and market movement.
Nimble approach to customer demand new product launches in market movements.
Britt Vitalone: This was partially offset by slower growth in our medical surgical solution segment, including lower illness season testing, and the completed divestitures of our European business operations within the international segment. We're excluding the impact of COVID-19 related items of fiscal 2023, and losses associated with McKesson Ventures equity investments in fiscal 2023 and 2024, operating profit increased 12% in the quarter. Moving below the line, the effective tax rate was 23.5%, which included the recognition of a net discrete tax expense of $12 million.
Speaker 4: In continued investment and expansion in our broad oncology platform, we are pleased with the growth momentum across our oncology assets from provider solutions in the US oncology network data and insights through on Tata and expanded clinical trial capabilities through our research institute joint venture.
And continued investment and expansion in our broad oncology platform. We are pleased with the growth momentum across her oncology assets and provider solutions in the us oncology network.
Data and insights through an tartar and expanded clinical trial capability Sorcerer Cane Research Institute joint venture.
Speaker 4: These assets contributed to revenue and operating profit results in the quarter, which exceeded our expectations.
Assets contributed to revenue in operating profit results in the quarter was exceeded our expectations.
Speaker 4: Checking for revenue were $69.8 billion in increase of 16% year over year.
Second quarter revenues were $69.8 billion, an increase of 16% year over year.
Speaker 4: Revenue growth reflects an increased prescription bond, including higher bond and retail national account customers, specialty products, and GLP-1 medications. These increases were partially offset by branded to generic conversion.
Revenue growth reflect the increased prescription volumes, including higher volume from retail national account customers specialty products and G. L. P. One medications.
Britt Vitalone: Second quarter diluted weighted average shares outstanding was 134.8 million, a decrease of 6% year over year. Consolidated second quarter earnings for losing share was $6.23, which represents an increase of 3% over the prior year. Excluding COVID-19-related items during the second quarter of fiscal 2023, and losses within our protest inventions portfolio of fiscal 2023 and 2024, second quarter earnings per diluted share was up 14% over the prior year.
Increases were partially offset branded to generic conversions.
Speaker 4: The growth of GLP-1 medications provided a revenue tail in the core. As a reminder, we generally recognize lower market rates for the distribution of GLP-1 medications in the US pharmaceutical site.
The growth of G. L. P. One medications provided a revenue detail within the corps.
As a reminder, we generally recognized lower margin rates for the distribution of DLP, one medications in the U S pharmaceutical segment.
Speaker 4: In our prescription technology solution setting, you could grow up to GLQ-1 medication, like other new brand launches, has led to increased demand for our access solutions such as prior authorization service.
And our prescription technology solutions that the growth of G. L. P. One medications like other new brand launches has led to increased demand for our access solutions such as prior authorization services.
Britt Vitalone: Turning to our second quarter segment results, which can be found in slides 7 through 11 and starting the U.S. Pharmaceutical. The U.S. Pharmaceutical Operating and Property Growth, our ability to drive sustainable growth in this segment reflects a few factors. The efficiency of our scale distribution operations, the investments that we're making to unlock these capabilities that will further expand and strengthen our value proposition for our customers and partners. A balanced approach to managing a broad portfolio pharmaceutical products, inclusive of a reclerus one generic sourcing operation, bolstering our competitive position in enabling the nimble approach to customer demands, new product launches, and market movements.
Speaker 4: Second order, US Armed Forces will have green profit increased 8% to 815 million dollars. During that growth in the distribution of specialty products, increased contributions from our generic program.
Second order to us pharmaceutical operating profit increased 8% 815 million driven by growth in the distribution of specialty products and increased contributions from our generic programs.
Speaker 4: When it's seen the impact of COVID-19 vaccine distribution in the second quarter of this will 2023, the US pharmaceutical side will deliver operating profit growth of 15 percent year over year.
When excluding the impact of COVID-19 vaccine distribution in the second quarter of fiscal 2023.
The U S pharmaceutical segment delivered operating profit growth of 15% year over year.
Moving your prescription technology solutions.
Speaker 4: The strong results in the 2nd quarter demonstrate the success of our product portfolio and the partnerships with biopharma manufacturers that we've developed over the years. The strength of our differentiated capabilities and partnerships. Positioning testing to capture demand driven by strong prescription utilization trends. Including the growth of GLP 1 medication.
Strong results in the second quarter demonstrate the success of our product portfolio and the partnerships with Biopharma manufacturers that we've developed over the years.
Strength of R differentiated capabilities and partnerships physician and casting capturing demand driven by strong prescription utilization trends, including the growth of G. L. P. One medications.
Britt Vitalone: And continue to investment in expansion in our broad oncology platform. We are pleased with the growth momentum across our oncology assets, from provider solutions in the U.S, oncology network, data and insights through ontata, and expanded clinical trial capabilities through our Sarah Kane research institute joint venture. These assets contributed to revenue and operating profit resulting in order to succeed in our expectations. Second quarter revenues were $69.8 billion in increase of 16% year over year.
Speaker 4: For the second quarter revenues increase 12% year over year, $1.1 billion. An operating profit increased 48% to $209.
For the second quarter revenues increased 12% year over year $1.1 billion in operating profit increased 48% to $209 million <unk>.
Speaker 4: Second quarter results reflect increased prescription transaction volumes, which drove higher demand for our access solutions, primarily related to prior authorization services and growth in our third party logistics business.
Second quarter results reflect the increased subscription transaction volumes, which drove higher demand for our access solutions, primarily related prior authorization services and growth in our third party logistics business.
Speaker 4: The year-over-year growth also included higher operating expenses in the second quarter of fiscal 2023, which resulted from the timing of decreased headcount to support customer annual verification activities.
A year over year growth also included higher operating expenses in the second quarter of fiscal 2023, which.
Britt Vitalone: Revenue growth reflected increased prescription bonds, including higher bonds and retail national account customers, specialty products, and GLP-1 medications. These increases were partially offset by branded to generic conversions. The growth of GLP-1 medications provided a revenue tail in the quarter. As a reminder, we generally recognize lower margin rates for the distribution of GLP-1 medications in the U.S, pharmaceutical segment. In our prescription technology solution setting, the growth of GLP-1 medications, like other new brand launches, has led to increased demand for our access solutions such as prior authorization services.
Which resulted from the timing of decreased head count to support customer annual verification activities.
Speaker 4: Medical surgical solutions, revenues for $2.8 million in the quarter, which was flat to the prior year, resulting from anticipated lower sales of COVID-19 tests, and lower contribution from kidding storage and distribution of antifers supplies for the U.S. government's COVID-19 vaccine program.
Medical surgical solutions revenues for $2 $8 million in the quarter, which was flat prior year, resulting from anticipated lower sales of COVID-19 test and lower contribution from hitting storage and distribution of ancillary supplies for the U S. Government's COVID-19 vaccine program.
Speaker 4: The anticipated lower COVID-19-related revenues were partially offset by growth in the extended care business and increased distribution of pharmaceuticals in the primary care.
The anticipated lower COVID-19 related revenues were partially offset by growth in the extended care business and increased distribution of pharmaceuticals, and the primary care business.
Speaker 4: Operating profit was $254 million, a decrease of 17%, driven by anticipated lower contributions from cave storage and distribution of ancillary supplies for the U.S. government's COVID-19 vaccine program, and lower sales of COVID-19 tests.
Trading profit was $254 million a decrease the 17% driven by anticipated lower contributions from K storage and distribution of ancillary supplies for the U S. Government's COVID-19 vaccine program.
Britt Vitalone: Second quarter of the U.S, pharmaceutical operating profit increased 8% to $815 million, driven by growth in the distribution of specialty products and increased contributions from our generic programs. When excluding the impact of COVID-19 vaccine distribution in the second quarter of fiscal 2023, the U.S, pharmaceutical segment delivered operating profit growth of 15% year over year.
And lower sales of COVID-19 test.
Speaker 4: When excluding the impact of COVID-19 related items in the second quarter of this year 2023, the second delivered operating profit growth was 5%. Driven by increased fines and nutritional supplements can be extended care visits.
When excluding the impact of COVID-19 related items in the second quarter of fiscal 2023.
Segment delivered operating profit growth, 5% driven by increased volumes of nutritional supplements may extend the care business.
Britt Vitalone: We'll leave a prescription technology solution. The strong results in the second quarter demonstrate the success of our product portfolio and the partnerships with biopharmal manufacturers that we've developed over the years. The strength of our differentiating capabilities in partnerships, positioning testing, caption, and demand during my strong prescription utilization trends, including the growth of GLP-1 medications. For the second quarter of revenues increased 12% year over year, $1.1 billion. An operating profit increased 48% to $209 million.
Speaker 4: Based on Iqbia, another market indication, the second quarter exhibited moderating primary care market buying.
Based on <unk> and other marketing indications the second quarter exhibited moderating primary care market volumes.
Speaker 4: Medical searchable solutions that can put growth rate reflects these market indications, which was partially related to a slower start to the illness season, including illness season testings, compared to the prior year.
The medical surgical solutions second quarter growth rate reflects these marketing indications, which was partially related to a slower start to the illness season, including illness season testing when compared to the prior year.
Speaker 4: Next, let me address our international results. Revenue is in the second quarter with $3.5 billion, a decrease of 44% of your over year. An operating plough that was $89 a decrease of $35.
Next let me address or international results revenues in the second quarter to $3.5 billion, a decrease of 44% year over year.
Britt Vitalone: Second quarter results reflect increased prescription transaction volumes, which drove higher demand for our access solutions, primarily related to prior authorization services and growth in our third-party logistics business. The year-over-year growth also included the higher operating expenses in the second quarter of fiscal 2023, which resulted from the timing of decreased headcount to support customer annual verification activities. In medical surgical solutions, revenues for $2.8 million in the quarter, which was flat to the prior year, resulting from anticipated lower sales of COVID-19 tests, and lower contributions from kidding storage and distribution of answers supplies, for the U.S, government's COVID-19 vaccine program.
An operating profit was $89 million a decrease of 35%.
Speaker 4: Second quarter results reflect the year-over-year effects of the completed divestitures within our European district.
Second quarter results reflect the year over year effects in the completed divestitures within our European business.
Speaker 4: We're wrapping up our second review. Corporate expenses were $159 million in the quarter, an increase of 10% year over year.
Wrapping up our segment review.
Corporate expenses were $159 million and a quarter, an increase of 10% year over year.
Speaker 4: During the quarter, we had lost the $10 million or six cents for share related to equity investments within the McKesson Ventures portfolio compared to losses of approximately $3 million in the second quarter of fiscal 2023.
During the quarter, we had losses of $10 million or six per share related to equity investments within the Mckesson ventures portfolio compared to losses of approximately $3 million in the second quarter of fiscal 2023.
Speaker 4: As a reminder, the casting venue's portfolio holds equity investments in several growth stage, digital health and services companies. With plays for the insights and results that we are obtaining to this portfolio.
As a reminder of the cast and venues portfolio hold equity investments in several growth stage digital health and services companies were pleased with the insights from the results that were obtained introduce port.
Britt Vitalone: The anticipated lower COVID-19-related revenues were partially offset by growth in the extended care business and increased distribution of pharmaceuticals in the primary care business. Operating profit was $254 million, a decrease of 17%, driven by anticipated lower contributions from kidding storage and distribution of answers supplies for the U.S, government's COVID-19 vaccine program. And lower sales of COVID-19 tests. When excluding the impact of COVID-19-related items in the second quarter of fiscal 2023, segment delivered operating profit growth was 5%, driven by increased volumes of nutritional supplements in the extended care business.
Speaker 4: The impacts on consolidated financial can be influenced by the performance of each individual investment in the quarter to quarter. And as a result, the testing of investment may result in gains or losses, the timing and magnitude of which can vary for each investment.
The impacts on consolidated financials convinced can be influenced by the performance of each individual investment quarter to quarter and as a result of curses investments may result in gains or losses.
The magnitude of which can vary for each investment.
Speaker 4: Turning out a cash flows and capital deployment was true in Falman's, by 12. We ended the quarter with $2.5 billion in cash and cash equivalents. We delivered free cash flow of $825 million in the second quarter. And $4.3 billion for the trailing 12 months.
Turning now to cash flows and capital deployment, which can be found on slide 12.
Did the quarter with $2.5 billion in cash and cash equivalents, we delivered free cash flow of $825 million in the second quarter and $4 $3 billion for the trailing 12 months.
Speaker 4: Our cash balance and free cash flow in the second quarter included payments totaling 529 million dollars associated with settlement agreements for opioid related claims.
Our cash balance in free cash flow in the second quarter included payments totally $529 million associated with settlement agreements for opioid related claims.
Britt Vitalone: Based on IQVIA and other market indications, the second quarter exhibited moderated primary care market bind. The medical surgical solution second quarter growth rate reflects these market indications, which was partially related to a slower start to the illness season, including illness season testing, compared to the prior year.
Speaker 4: As a reminder, our cast position working capital metrics in resulting cash flows can each be impacted by time, which includes the day of the week that a quarter ends on and therefore it can vary from quarter to quarter.
As a reminder, our cash position working capital metrics and results in cash flows can each be impacted by time.
Which includes the day of the week for the quarter Enzon, and therefore can vary from quarter to quarter.
Speaker 4: During the first six months of the fiscal year, we made $264 million of capital expenditures, which included investments in new and existing distribution centers, as well as investments in technology, data and analytics to support our growth fireworks.
During the first six months of the fiscal year.
$264 million of capital expenditures, which include investments in new and existing distribution centers as well as investments in technology data and analytics to support our gross priorities.
Britt Vitalone: Next, let me address our international results. Revenue is in the second quarter with $3.5 billion, a decrease of 44% at year-over-year, an operating profit was $89 a decrease of 35%. Second quarter results reflect the year-over-year effects of the completed divestitures within our European business.
Speaker 4: Near-to-date, you're returned $1.7 billion of cash to shareholders, which included $1.5 billion of shared purchases, and $149 billion in dividend payments.
Here to date, we returned $1.7 billion of cash to shareholders, which included $1.5 billion in share repurchases.
<unk> $49 million and dividend payments.
Britt Vitalone: We're wrapping up our second review. Corporate expenses were $159 million in the quarter, an increase of 10% year-over-year. During the quarter, we had losses of $10 million or $6 cents per share, related to equity investments within the McKesson Ventures portfolio, compared to losses of approximately $3 million in the second quarter of fiscal 2023. As a reminder, the McKesson Ventures portfolio holds equity investments in several growth stage, digital health and services companies, with plays for the insights and results that we are obtaining through this portfolio.
Speaker 4: Now, let me discuss our updated outlook. As a reminder, we do not provide forward looking guidance on a gap basis. The following metrics are provided on an adjusted non-gap basis.
Now, let me discuss our updated outlook.
Minder, we do not provide forward looking guidance on a gap basis.
Britt Vitalone: The impacts on consolidated financials can be influenced by the performance of each individual investment, quarter to quarter, and as a result, the McKesson investment may result in gains or losses, the timing and magnitude of which can vary for each investment.
Following metrics are provided on and adjusted non-GAAP basis.
Speaker 4: The guidance on providing today relates to fiscal 2024. And the focus of our countries can be found in flyers 13 through 17 and are supplemental slide presentation.
Providing today relates to fiscal 2024.
What were some of our assumptions can be found in slash 13 through 17, and our supplemental slide presentation.
Let me start with the outlook for our segments for.
Speaker 4: For the full year, we now anticipate US pharmaceutical revenues to increase 13 to 15 percent and operating profit to increase 6 to 8 percent year over year.
For the full year now anticipate U S pharmaceutical revenues to increase 13% to 15%.
Operating profits increased 6% to 8% year over year.
Speaker 4: excluding the impact of COVID-19 vaccine distribution in fiscal 2023, we anticipate operating profit to increase 11 to 14 percent.
Excluding the impact of COVID-19 vaccine distribution in fiscal 2023.
We anticipate operating profit to increase 11% to 14%.
Speaker 4: This updated segment outlook incorporates the strong second quarter performance, as well as further growth in our generic sourcing programs and specialty distribution, including our differentiated plasma and biologics business.
This updated segment outlook incorporates the strong second quarter performance as well as further growth in our generic sourcing programs and specialty distributions include.
Britt Vitalone: Turning how to cash flows and capital deployment, which we found on slide 12, we ended the quarter with $2.5 billion in cash and cash equivalents. We delivered free cash flow of $825 million in the second quarter, and $4.3 billion for the trail in 12 months. Our cash balance and free cash flow in the second quarter included payments to early $529 million associated with settlement agreements for opioid-related claims. As a reminder, our cash position working capital metrics and resulting cash flows can each be impacted by time, which includes the day of the week that the quarter ends on and therefore can vary from quarter to quarter.
Including are differentiated plasma and biologics business.
Speaker 4: Our full year outlook assumes that violence related to GFK1 medications will remain elevated compared to the prior year and may vary according to court.
Our full year outlook assumed that volumes related to G. L. P. One medications will remain elevated compared to the prior year and may vary quarter to quarter.
Speaker 4: We anticipate the consolidated GLP-1 medication revenue and operating profit growth compared to prior year will slow in our fiscal fourth quarter, reflecting the inflection in volumes for these medications in the fourth quarter of fiscal 2023.
We anticipate the consolidated G. L. P. One medication revenue in operating profit growth compared to prior year will slow and our fiscal fourth quarter, reflecting the inflection volumes certifications in the fourth quarter of fiscal 2023.
Speaker 4: We anticipate GLP-1 medications will continue to be a revenue tailwind for U.S. pharmaceuticals.
We anticipate G. L. P. One medications will continue to be the revenue tailwind for U S. Pharmaceutical however.
Britt Vitalone: During the first six months of the fiscal year, we made $264 million of capital expenditures, which included investments in the new and existing distribution centers, as well as investments in technology, data and analytics to support our growth priorities. Near-to-date, we returned $1.7 billion of cash to shareholders, which included $1.5 billion of charity purchases, and $149 billion in dividend payments.
Speaker 4: However, distribution of these medications has a lower distribution margin rate profile and represents a headwind of prior year results.
However distribution of these medications as a lower distribution margin right profile and represents a headwind the prior year results.
Speaker 4: In the prescription technology solution segment, we anticipate revenue growth of 7 to 13%. We have increased our operating process growth outlook to 18 to 22%. It's like an stronger minimum or access solutions and strong, fair, safe, or more.
And the prescription technology solutions segment, we anticipate revenue growth of 7% to 13%.
We have increased our operating profit growth outlook to 18% to 22%.
Strong momentum and our access solutions and strong first half performance.
Speaker 4: We make sure we just support a very ability in this site during bi-prescription and transaction volumes. The timing pace and trajectory to new product launches. The timing inside investments to support and expand our product portfolio. And the annual verification programs that we provide for our customers that occur in our fiscal core.
We may continue to see quarter to quarter variability in this segment.
Britt Vitalone: Now, let me discuss our updated outlook. As a reminder, we do not provide forward-looking guidance on a gap basis. The following metrics are provided on an adjusted non-gap basis.
By a prescription and transaction volumes.
Timing pace and trajectory of new product drug launches, the timing and size of investments to support and expand our product portfolio.
Britt Vitalone: The guidance on providing today relates to fiscal 2024, and the focus of our assumptions can be found in slides 13 through 17 and our supplemental slide presentation. Let me start with the outlook for our segments. For the full year, we now anticipate US pharmaceutical revenues to increase 13 to 15 percent in operating profit to increase 6 to 8 percent year over year, excluding the impact of COVID-19 vaccine distribution in fiscal 2023, we anticipate operating profit to increase 11 to 14 percent.
And the annual verification programs that we provide for our customers that occur in our fiscal fourth quarter.
Our medical surgical solutions segment remains well positioned across all ultimate channels with unmatched scale product assortment and capabilities.
Speaker 4: Our medical surgical solution segment remains well positioned across all alternate site channels with unmatched scale, product assortment and capability.
Speaker 4: In a medical surgical solution segment, we anticipate revenue to be approximately a 2% decline to 2% growth in operating profit to P-Grease 12 to 16%.
And the medical surgical solutions segment, we anticipate revenues to be approximately a 2% decline to 2% growth.
An operating profit decreased 12% to 16%.
Speaker 4: So the full year we anticipate volumes of COVID-19 tests to continue to decline compared to fiscal 2023. And the impact in COVID-19 related items will remain immaterial to fiscal 2024 results.
For the full year, we anticipate volumes of COVID-19 test to continue to decline compared to fiscal 2023.
Britt Vitalone: This updated segment outlook incorporates the strong second quarter performance, as well as further growth in our generics, sourcing programs, and specialty distribution, including our differentiated plasma and biologic business. Our full year outlook assumes that funds related to GLK1 medications will remain elevated compared to the prior year and may vary quarter to quarter. We anticipate the consolidated GLK1 medication revenue and operating profit growth compared to prior year will slow in our fiscal fourth quarter, reflecting the inflection and volumes for these medications in the fourth quarter of fiscal 2023.
And the impact of COVID-19 related items will remain immaterial to fiscal 2024 results.
Speaker 4: Excluding the impact of COVID-19-related items from fiscal 2023 results. We anticipate offering a profit to increase 5 to 7 percent year over year.
Excluding the impact of COVID-19 related items from fiscal 2023 results, we anticipate operating profit to increased 5% to 7% year over year.
Our outlook incorporates the second quarter results, which I discussed earlier, we anticipate the general market Moderations in primary care foot traffic in part driven by a modest illness season may persist you the remainder of fiscal 2024 <unk>.
Speaker 4: Our outlook incorporates the second quarter results, which I discussed earlier. We anticipate the general market moderations and primary care foot traffic. In part, driven by a modest illness season may persist through the remainder of fiscal 2024. Additionally, 1st, half fiscal 2023 results benefited from an extended illness season. Which did not repeat in fiscal 2024.
Additionally, first half fiscal 2023 results benefited from an extended illness season, which did not repeat in fiscal 2024.
Britt Vitalone: We anticipate GLK1 medications will continue to be a revenue tailwind for US pharmaceutical. However, distribution of these medications has a lower distribution margin rate profile and represent the headwind of prior year results. In the prescription technology solution segment, we anticipate revenue growth of 7 to 13 percent. We have increased our operating profit growth outlook to 18 to 22 percent, reflecting strong minimum or access solutions and strong first half performance. We may continue to see quarter to quarter variability in this segment, during bi-prescription and transaction volumes, the timing pace and trajectory to new product launches, the timing and size of investments to support and expand our product portfolio, and the annual verification programs that we provide for our customers that occur in our fiscal fourth quarter.
Speaker 4: Our outlook includes continued investments in our scale distribution network and in state ER automation regulatory capabilities to serve the breadth of our customer base. In distribution network investments support the breadth of our non-acute customer and broader pull chain distribution, for example, COVID vaccines for positional.
Our outlook includes continued investments in our scale distribution network Adams state of the art automation regulatory capabilities to serve the breath of our customer base.
Distribution network investments to support the rest of our non acute customers and broader culture and distribution for example, COVID-19 vaccines for physician offices.
Speaker 4: We also anticipate further investments in data and analytics to expand the channel reach for medical supplies, pharmaceuticals, and private brand products for quality.
We also anticipate further investments and data and analytics to expand the channel reach for medical supplies pharmaceuticals, and private brand product portfolio.
Speaker 4: Finally in the international segment, we anticipate revenues to decline by 30 to 34 percent. We have an operating profit to decline by 20 to 29 percent.
Finally in the International segment, we anticipate revenues to decline by 30% to 34% and operating profits have declined by 23, 2090%.
Speaker 4: This year-over-year decrease includes a loss of operating profit contribution from European businesses and transactions that we closed during fiscal 2023.
<unk> over near decrease includes the loss of operating profit contribution from European businesses and transactions that we closed during fiscal 2023.
Britt Vitalone: Our medical surgical solution segment remains well positioned across all alternate site channels with unmatched scale product disorder and capabilities. In the medical surgical solution segment, we anticipate revenue to be approximately at 2 percent decline to 2 percent growth and operating profit to decrease 12 to 16 percent. For the full year, we anticipate volumes of COVID-19 tests to continue to decline compared to fiscal 2023, and the impact in COVID-19 related items will remain immaterial to fiscal 2024 results.
Speaker 4: In the corporate segment, we anticipate expenses to be in the range of $600 to $660 million, which is due to losses associated with the Cesson Ventures equity investments recorded in the first half of the year, and elevated technology spend to support the growth of our business.
And the corporate segment, we anticipate expenses to be in the range of $600 million to $660 million, which includes losses associated with Mckesson venture's equity investments recorded in the first half of the year and elevated technology spend to support the growth of our businesses.
Speaker 4: Moving below the line, we anticipate the full year effective tax rate to be approximately 18 to 19 percent.
Moving below the line, we anticipate the full year effective tax rate to be approximately 18 and 19%.
Speaker 4: The timing of discrete tax ratings is difficult to predict, and therefore, we typically do not provide quarterly effective tax rate guidance.
The timing of discrete tax items is difficult to predict and therefore, we typically do not provide quarterly effective tax rate guidance.
Britt Vitalone: Lutz, excluding the impact of COVID-19-related items from fiscal 2023 results, we anticipate operating profit to increase 5% to 7% year-over-year. Our outlook and corporates for second quarter results, which I discussed earlier, we anticipate the general market moderations and primary care foot traffic being part driven by a modest illness season, may persist through the remainder of fiscal 2024. Additionally, first half, fiscal 2023 results benefited from an extended illness season, which did not repeat in fiscal 2024.
Speaker 4: However, our outlook includes recognition of a discrete tax benefit in our fiscal quarter. As a result, we anticipate the third quarter tax rate to be lower as compared to the fourth quarter.
However, our outlook includes recognition with discrete tax benefit in our fiscal third quarter.
As a result.
Dissipate the third quarter tax rates will be lower as compared to the fourth quarter.
Speaker 4: And finally, we now anticipate income attributable to non-controlling interests can be in the range of $155 to $175 million, reflecting CLAIRS 1 generic sourcing success.
And finally, we know anticipate income attributable to non controlling interest to be in the.
Range of $155 million to $175 million, reflecting players one generic sourcing success.
Speaker 4: Turning the cash flow and capital deployment. We anticipate free cash flow of approximately $3.7 to $4.1 billion. Our Outlooking for a great plan to repurchase approximately $3.5 billion of shares.
Turning to cash flow and capital deployment.
Free cash flow of approximately three seven to $4 $1 billion.
Our outlook incorporates plan to repurchase approximately $3.5 billion of shares.
Britt Vitalone: Our outlook includes continued investments in our scale distribution network, adding state-of-the-art automation regulatory capabilities to serve in the breadth of our customer base. In distribution network investments support the breadth of our non-acute customers, and broader coal chain distribution, for example, COVID vaccines for physician offices. We also anticipate further investments in data and analytics to expand the channel reach for our medical supplies, pharmaceuticals, and private brand products for COLEO. Finally, in the international segment, we anticipate revenues to decline by 30 to 34% in operating profits to decline by 23 to 29%.
Speaker 4: As a result of the shared purchase activity, we estimate weighted average blue chairs upstanding and you can be in range more approximately 134 million.
As a result of the share repurchase activity, we estimate weighted average diluted shares outstanding needs to be in the range of approximately $134 million.
In summary.
Speaker 4: In summary, as a result of solid performance in the second quarter of fiscal 2024, combined with our outlook for the remainder of the fiscal year, we are increasing and narrowing our earnings for the limited share outlook for fiscal 2024 through a new range of 26 dollars and 80 cents to $27.40.
As a result of solid performance in the second quarter of fiscal 2024, combined with our outlook for the remainder of the fiscal year, we are increasing and narrowing our earnings per diluted share outlook for fiscal 2024 to a new range of $26.80 to $27.40.
Speaker 4: We anticipate operating profit will be flat to 4% decline compared to the prior year. When excluding certain items, we anticipate operating profit increased by 6 to 10% year over year.
We anticipate operating profit will be flat to 4% decline compared to the prior year.
Excluding certain items, we anticipate operating profit increased by 6% to 10% year over year.
Britt Vitalone: This year-over-year decrease includes the loss of operating profit contribution from European businesses and transactions that we closed during fiscal 2023. In the corporate segment, we anticipate expenses to be in the range of $600 to $660 million, which is due to losses associated with the Kesson Ventures equity investments recorded in the first half of the year, and elevated technology spend to support the growth of our businesses. Moving below the line, we anticipate the full-year effect of tax rates to be approximate in 18 to 97%.
Speaker 4: As a reminder, certain items include the following. Neck gains and losses associated with the CES and Ventures equity investment in fiscal 2023 and 2024.
As a reminder, certain items include the following.
Net gains and losses associated with Mckesson venture's equity investments in fiscal 2023 and 2024.
Speaker 4: A 65 cent benefit related to the early termination of the tax receivable agreement would change health care fiscal 2023.
Ah 65 cent benefit related to the early termination attacks receivable agreement would change healthcare fiscal 2023.
Speaker 4: $1.90 related to COVID-19 related items in our U.S. pharmaceutical and medical surgical segments in fiscal 2023. We anticipate the impact of COVID-19 related items will be in the journal fiscal 2024 when compared to fiscal 2023.
And $1.90 related to COVID-19 related items in our U S pharmaceutical and medical surgical segments in fiscal 2023.
We anticipate the impact of COVID-19 related items will be immaterial the fiscal 2024, when comparing fiscal 2023.
Britt Vitalone: The timing of the street tax savings is difficult to the day, and therefore, in typically do not provide quarterly effective tax rate diets. However, our outlook includes recognition of a discrete tax benefit in our fiscal quarter. As a result, we anticipate the third quarter tax rate to be lower as compared to the fourth quarter. To finally be now anticipating to come attributable to non-controlling interests, can be in the range of $155 to $175 million. We're selecting Clare's one generic sourcing success.
Speaker 4: We increased our outlook for adjusted earnings for deluded share, indicates earnings for deluded shared growth of 14 to 17% when excluding certain items. When further sleeting the contribution from the runoff of our European operations, earnings for deluded shared growth is indicated that 18 to 20% for the full year.
The increase through our outlook for adjusted earnings per diluted share indicates earnings per diluted share growth of 14% to 17% would exclude any certain items. When further excluding the contribution from the runoff of our European operations.
Per diluted share growth has indicated at 18% to 20% for the full year.
Speaker 4: We also anticipate the fiscal third quarter will be stronger than the fiscal fourth quarter. Based on the development of prescription transactions, patient visits, internal investments, and the recognition of the discrete tax benefit in the third quarter.
We also anticipate the fiscal third quarter inch stronger than the fiscal fourth quarter based on the development of prescription transactions patient visits internal investments and the recognition of the discrete tax benefit in the third quarter.
Turning the cash flow and capital deployment. We anticipate three cash flow of approximately $3.7 to $4.1 billion. Our outlooking for a great plan is to re-purchase approximately $3.5 billion of shares. As a result of the shared purchase activity, we estimate weighted average limited shares upstanding need to be in the range of approximately $134 million.
Speaker 4: In closing, we are pleased with our strong first half performance, the momentum across the business, including growth in our oncology and biopharma services platforms, positions us to deliver for our customers and our partners, and to create sustainable shareholder value. And with that, let's move to the Q&A.
In closing we are pleased with our strong first half performance the momentum across the business, including growth in oncology and Biopharma services platforms physicians us to deliver for our customers and our partners and you create sustainable shareholder value.
Britt Vitalone: In summary, as a result of solid performance in the second quarter of fiscal 2024, combined with our outlook for the remainder of the fiscal year, we are increasing and narrowing our earnings for the limited share outlook for fiscal 2024 through a new range of $26.80 to $27.40. We anticipate operating profit will be flat to 4% decline compared to the prior year. When excluding certain items, we anticipate operating profit increased by 6 to 10% of the year.
That was making the Q&A.
Speaker 1: Thank you. If you would like to signal with questions, please press star 1 on your touchtone telephone. If you are joining us today using a speakerphone, please make sure the mute function is turned off to allow your signal to reach our equipment. Again, that is star 1 if you'd like to ask questions.
Thank you.
If you would like to signal, which question. Please press star one on your touch tone telephone Joy.
Joining us today using a speakerphone. Please make sure the main function is turned off.
Can reach our equipment again that is star one if you'd like to ask questions.
Speaker 1: And our first question will come from Eric Purcher with Neffron Research. Please go ahead.
And our first question will come from Eric Parcher with <unk> Research. Please go ahead.
Britt Vitalone: As a reminder, certain items include the following, neck gains and losses associated with recast and ventures equity investments in fiscal 2023 and 2024, a 65 cent benefit related to the early termination of the tax receivable agreement with change health care fiscal 2023, and $1.90 related to COVID-19 related items in our U.S. Pharmaceutical and Medical surgical segments in fiscal 2023. We anticipate the impact of COVID-19 related items will be in the journal with fiscal 2024 when compared to fiscal 2023.
Speaker 5: And I'd like to focus on RxTS and specifically, Britt, you mentioned that the guidance reflects a strong Q2, but it sounded like there's a range of outcomes for the second half. Can you provide some context on
Thank you I would like to focus on our X T S and.
And specifically Brittany mentioned that the guidance reflects strong Q2, but it sounded like there's a.
Range of outcomes for the second half can you provide some context on.
Speaker 5: Whether revenue upside that you've seen this year on delivering on prior authorization for GLP once has been tied to.
Whether revenue upside that you've seen this year.
Delivering on prior authorization for G. L. P. One has been tied to.
Speaker 5: manufacturer programs versus the volume of scripts being written. And we'd be wrong to assume somewhat conservative or some conservatism here on how second half develops. And last I'll ask, are there particular indicators such as denial rates or new starts that you look for as you're modeling this?
Manufacturer programs versus the volume of scripts being read in and would be would be wrong to assume somewhat conservative or some conservatism here on how that can have developed and last I'll ask are there particular indicators such as denial rates are new star.
Britt Vitalone: We increased our outlook for adjusted earnings for deluded share indicates earnings for deluded shared gross of 14 to 17 percent from excluding certain items. When further excluding the contribution from the runoff of our European operations, firms for deluded shared gross is indicated at 18 to 20 percent for the full year. We also anticipate the fiscal third quarter will be stronger than the fiscal fourth quarter based on the development of prescription transactions, patient visits, internal investments, and the recognition of the discrete tax benefit in the third quarter.
That you're looking for as your modeling this business.
Speaker 4: Yeah, Eric, thanks for that question. I'll start and then certainly I'll let Brian add on to that. You really touched on a lot of the factors that we that we look at when we think about this, this segment, you know, as I mentioned, we've seen stable and strong utilization trend.
Yeah, Eric Thanks for that question I'll start and then certainly I'll, let Brian add onto that you really touched on a lot of factors that we that.
That we look at when we think about this this segment.
As I mentioned, we've seen.
Britt Vitalone: In closing, we are pleased with our strong first half performance, the momentum across the business, including growth in our oncology and biopharmist services platforms, positions us to deliver for our customers and our partners and to create sustainable shareholder value.
Stable and strong utilization trends.
Speaker 4: That certainly drives transactions, which our services benefit from. Secondly, we've seen continued growth in GLP-1 medications, as an example. And our services, primarily prior authorization, support those programs. So we've seen growth from that aspect.
That certainly drive transactions, which are services benefit from your second where you may have seen the continued growth in G. O P. One medications as an example.
Operator: With that, let's move to the Q&A. Thank you. If you would like to signal with questions, please press star one on your touch tone telephone. If you are joining us today using a speaker phone, please make sure the mute function is turned off to allow your signal to reach our equipment. Again, that is star one.
Services, primarily prior authorization support those programs. So we've seen a growth from that aspect.
Speaker 4: As I mentioned in my remarks, there are a number of things that can create some variability, certainly can drive.
I mentioned in my remarks, there are a number of things that can create some variability certainly can and drive.
Speaker 4: from a revenue and an operating profit perspective and you touched on a few of those. As I mentioned,
Or the <unk> from a revenue in an operating profit perspective of new touched on a few of those as I mentioned.
Speaker 4: You know, prescription utilization is one of those, certainly the timing and pace.
Your prescription utilization is one of those certainly the timing and pace and the trajectory of drug launches G. L. P. One category B, a one of those drug launched categories.
Speaker 4: In the trajectory of drug launches, GLP1 category being one of those drug launch categories.
Eric Percher: If you'd like to ask questions, and our first question will come from Eric Purcher with nephron research. Please go ahead. Thank you.
Speaker 4: And certainly the timing of certain other programs, like the annual verification programs that we do for our customers in the fourth quarter.
And certainly the timing of certain other programs like the annual verification.
Britt Vitalone: I'd like to focus on RXTS. And specifically, great, you mentioned that the guidance reflects a strong Q2, but it sounded like there's a range of outcomes for the second half. Can you provide some context on whether revenue outside that you've seen this year on delivering on prioritization for GLP-1 has been tied to manufacturer programs versus the volume of scripts being written? And we'd be wrong to assume somewhat conservative or some conservatism here on how the second half develops.
Programs that we do for our customers in the fourth quarter. So we've seen good stable utilization trends, we've seen new drug launches like categories like G. L. P. One medications that utilize the successful prior authorization programs that rehab.
Speaker 4: So we've seen good stable utilization trends. We've seen new drug launches, like categories like GLP-1 medications that utilize the successful prior authorization programs that we have. And we've certainly seen revenue and operating profit trend in a similar manner to that.
We've certainly seen revenue in operating profit trend.
In a similar manner to that.
Echo Nancy.
Speaker 1: Thank you and next will be Lisa Gill with J.P. Morgan. Please go ahead.
Thank you and next will be Lisa Gal with J P. Morgan. Please go ahead.
Speaker 6: Thanks very much, Britt. I've got to stick on this area. Just really want to understand if I take the numbers that you talked about in the updated guidance for the second half of the year, it looks like the margin.
Thanks, very much spread I've got a stake in this area just really wanted to understand if I take the numbers that you talked about and that updated guidance for the second half of the here it looks like the Martin.
And last, I'll ask, are there particular indicators such as denial rates or new starts that you look for as you're modeling this business? Yeah, Eric, thanks for that question. I'll start. And then certainly, I'll let Brian add on to that. You really touched on a lot of factors that we look at when we think about this segment. As I've mentioned, we've seen two teams stable and strong utilization trends. That certainly drives transactions, which are services benefit from.
Speaker 6: in prescription technology solutions will come down pretty dramatically versus what we saw in the first half of the year. Growth rate will come down. So is this conservatism? Is there incremental programs and expenses that you have? Is it any changes in the program? Just trying to understand how to think about this business on kind of a normalized basis and, again, how do we think about first half versus second half.
And prescription technology solutions will come down pretty dramatically versus what we saw in the first half of the year growth rate will come down to is this.
Conservatism is they're incremental programs and expenses that you have is it and any changes in the program just trying to understand how to think about this business on kind of a normalized basis and you know.
Again, how do we think about first have first the second half.
The second way we've seen continued growth in GLP-1 medications as an example in our services for merely prior authorization support those programs that we've seen growth from that aspect. As I mentioned in my remarks, there are a number of things that can create some variability, certainly can drive the segment from a revenue and an operating profit perspective, and you touched on a few of those. As I mentioned, prescription utilization is one of those, certainly the timing and pace and the trajectory of drug launches, a GLT1 category being one of those drug launch categories.
Yeah, a couple of things.
Speaker 4: Yeah, a couple things. This is a business that is one that I think you need to look at on a whole year basis or items such as our annual verification programs as an example. It's a very different set of programs that we provide.
Business that is one that I think you need to look at all year basis for items, such as our annual verification programs. As an example, it's a very different set of programs that we provide.
Speaker 4: has different revenue in bargain profile. If I can piece to that is, we've talked about in the past, our 3PL business, which has a different margin profile from the rest of the business and that business.
Has different revenue in margin profile reflective piece to that is we've talked about it in the past and our <unk> business, which has a different margin profile from the rest of the business and that business.
And certainly the timing of certain other programs like the annual verification programs that we do for our customers in the fourth quarter. So we've seen good stable utilization trends, we've seen new drug launches, like categories like GLT1 medications that utilize the successful prior authorization programs that we have, and we've certainly seen a revenue and operating profit trend in a similar manner to that.
Speaker 4: tends to have some variability from quarter to quarter. It's good revenue profile and certainly come to the lower margin than we've talked about in the past.
Tends to have some variability from quarter to quarter has been revenue profile.
Really comes at a lower margin of and we've talked about that we've talked about in the past. The other thing that I can talk about it as I mentioned earlier in my remarks is that G. L. T ones are flattening out euro per year as we get to the fourth quarter cassettes, what we anticipate we saw significant inflection <unk> medication volumes.
Speaker 5: The other thing that I would talk about is, I mentioned earlier in my remarks, is that GLP-1s are flattening out year over year as we get to the fourth quarter because that's what we anticipate.
Next, please.
Speaker 4: So a significant inflection in GLP1 medication volumes in the fourth quarter of last year. And you know, certainly we've seen elevated levels of GLP1 medication.
In the fourth quarter of last year, and certainly we've seen elevated levels of G. L. P. One medication.
Speaker 4: a volume through this year, but you kind of get to a year over year, begin to lap that fourth quarter impression point.
<unk> this year, because you kind of get to a year over year begin to laugh at fourth quarter inflection point.
Speaker 4: You know, that's that's certainly going to be another factor for the, you know, the year over year and the second half component. So I think there's a lot of things going on here, but if you look at the business on an annual basis, I think you'll see very, very consistent, you'll revenue and operating profit growth.
That's that's certainly going to be another factor for the.
The year over year and in the second half component. So I think there's a lot of things going on here, but if you look at the business.
Britt Vitalone: Thank you, and next will be Lisa Gill with JP Morgan, please go ahead. Thanks very much, Britt. I've got to stick on this area. I just really want to understand if I take the numbers that you talked about in the updated guidance for the second half of the year, it looks like the margin in prescription technology solutions will come down pretty dramatically versus what we saw. In the first half of the year, growth rate will come down. So is this conservatism? Is there incremental programs and expenses that you have? Is it, you know, any changes in the program?
Annual basis, I think you'll see very very consistent revenue in operating profit growth yeah. The only thing I would add to that is that you look at the growth and the <unk>.
Speaker 3: The only thing I would add to that, is that if you look at the growth in the trajectory of the segment has had historically, now we continue to also reinvest.
Projector. This segment has had historically we continue to also reinvest and product extensions you know new product enhancements new products overall.
Speaker 3: product extensions, you know, new product enhancements, new product overall. We're excited about this segment. We're excited about the assets that we have. We want to make sure we continue to invest into this segment to protect future growth as well. And all those investments are reflected in our FY24 outlook.
We're excited about this segment, we're excited about the assets that we have and we wanted to make sure we continue.
To invest into this segment to protect future growth as well and all those investments are reflected in our FY 24 outlook.
Just trying to understand how to think about this business on kind of a normalized basis, and, you know, again, how do we think about first half versus second half? Yeah, a couple of things. This is a business that is one that I think you need to look at on a whole year basis for items such as our annual verification programs as an example. It's a very different set of programs that we buy as different revenue and margin profile.
Next question please.
Speaker 1: And next will be Charles Reed with TD Cowan. Please go ahead.
And next will be Charles three with television Cowan. Please go ahead.
Speaker 7: Yeah, thanks for taking the question. I'd like to ask about the Rite Aid on the reserves. I know you kind of reached a settlement with Rite Aid for ongoing supply of pharmaceuticals for Rite Aid as they reorganize. The reserves that you've taken, you know, can you talk a little bit about how are you going to approach collections on that and how should we think about that in terms of the way you reserve for it and the way?
Yeah. Thanks for taking my question like to ask about the the Rite aid on the on the reserves I know you've reached a settlement with rite aid for ongoing supply of pharmaceuticals for for right as a reorganized the.
The second piece to that is we've talked about in the past or 3PL business, which has a different margin profile from the rest of the business and that business tends to have some variability from quarter to quarter. It's been revenue profile. It certainly comes at a lower margin than we've talked about that we've talked about in the past. The other thing that I've talked about is, I mentioned earlier in my remarks, is that GLP1s are flattening out year over year to get to the fourth quarter because that's what we anticipate.
The reserves that you've taken.
A little bit about.
Hi, how are you going to approach collections on that and how how should we think about that in terms of the way you reserved for it and the way we should think about the the cash flows.
Speaker 4: Sure, appreciate the question. Let me just go back to some of my earlier comments because I think that these are...
Sure I appreciate the question really just go back to some of my earlier comments, because I think that these are.
Speaker 4: First of all, we continue to provide distribution services to RiteA. That's what we have for over 20 years. And we're proud to be a distributor for RiteA and their customers. We did report a provision in the third quarter for those sales that we consider the uncollected trade and counter-electionable as of September 30th. That's the $210 million that I referenced.
Question.
First of all we.
We continue to provide distribution services to write as as we have for over 20 years and we're proud to be a.
We saw significant inflection in GLP1 medication volumes in the fourth quarter of last year, and you know, certainly we've seen elevated levels of GLP1 medication volumes through this year, but as you kind of get to a year over year, begin to lap that fourth quarter inflection point, you know, that's certainly going to be another factor for the year over year and the second half component. I think there's a lot of things going on here, but if you look at the business on an annual basis, I think you'll see very, very consistent revenue and operating profit growth.
Distributor for Rite aid in their customers and we did record a provision.
Third quarter for those sales that we considered uncollected trade accounts receivable as of September 30th $210 million that I referenced.
Speaker 4: We anticipate an additional provision that will be recorded in our third quarter for those sales up until they're back to their bankruptcy filing and that's the 511 million dollars.
Anticipate an additional provision.
Recorded in our third quarter to those sales up until they're back to their bankruptcy.
<unk> and that's the $511 million.
Speaker 4: We have an interim agreement in place that is still pending final court approval and that interim agreement has different credit terms. They have shorter credit terms of seven days.
Have an interim agreement in place that is still pending a final quarter approval.
Yeah, the only thing I would add to that, Brad, is that you look at the growth in the trajectory the segment has had historically. Now, we continue to also reinvest, and Product Extensions, New Product Enhancements, New Product Overall. We're excited about this segment. We're excited about the assets that we have. We want to make sure we continue to invest into this segment to protect future growth as well. And all those investments are reflected in our FY24 outlook.
The agreement has different credit terms they have shorter credit terms of 70 days there are other aspects to the interim agreement with the key thing.
Speaker 8: There are other aspects to the interim agreement, but the key thing for this call, and for this group is that those credit terms are on 70 terms, which are different than what we had in the previous agreement. Next question, please.
For this call for this group is that those credit terms are on 17 terms, which are.
Different than what we had disagreement.
Next question please.
And next will be.
Britt Vitalone: Next question, please. And next will be Charles Reed with TD Cowan. Please go ahead. Yeah, thanks for taking the question. I'd like to ask about the the right aid on the on the reserves. I know you kind of reached the settlement with right aid for ongoing supply of pharmaceuticals for for right as a reorganized the the reserves that you've taken, you know, can you talk a little bit about.
Brian can correct with Jeffrey Please go ahead.
Speaker 3: Hey, good afternoon guys. Great, just a quick question for me as I think about your operating expense line, pretty good level of improvement there, especially in the margin side. How should we be thinking about the sustainability of operating expenses and potential gains going forward? Thanks.
A good a good afternoon, you guys <unk>.
Just a quick question for me is I think about your operating expense line pretty good level of improvement there, especially in the margin side.
Should we be thinking about the sustainability of.
Operating expenses and potential gains.
Pardon.
Speaker 4: Thanks for the question, but I'm not sure what you're referring to in the work game. But we think about our operating experience.
Thank you for the question, but I'm not sure what you're referring to.
The word games as we think about our operating expenses.
How are you going to approach collections on that and how should we think about that in terms of the way you reserve for it and the way we should think about the cash flow. Sure, I appreciate the question. Let me just go back to some of my earlier comments because I think that these are. Question, you know, first of all, we continue to provide distribution services to right aid as we have for over 20 years and we're proud to be a distributor for right aid and their customers.
Speaker 4: You know, we have great operating expense discipline and the efficiency of our operations allows us to drive operating margin leverage. We've been able to do that for a long period of time.
We have great operating expense discipline and the efficiency of our operations allows us to drive operating margin leverage been able to do that for a long period of time.
Speaker 4: The success that we've seen in many of our segments really has allowed us to continue to reinvest back into the business. Brian just mentioned what we've been doing at RxSavings Solutions, or I should say RxTS, where we've been reinvesting to drive additional programs and capabilities for our customers.
The success that we've seen in many of our segments.
Really is allowed us to continue to reinvest back into the business. Brian you just mentioned what we've been doing your savings solution or I should say <unk>, where we've been reinvest theme to drive additional programs and capabilities for our customers, but as I mentioned in my comments, we've also been investing in.
Speaker 4: But as I mentioned in my comments, we've also been investing in distribution capabilities, additional automation.
We did record a provision in the third quarter for those sales that we consider the uncollected trade comfortable as of September 30th, that's $210 million for that reference. We anticipate an additional provision that will be recorded in our third quarter for those sales up until they're back to their bankruptcy of filing and that's the $511 million. We have an interim agreement in place that is still pending filing for approval and that interim agreement has different credit terms they have shorter credit terms of seven days.
Distribution networks capabilities additional automation.
Speaker 4: Regulatory capabilities that are going to benefit not only our operations, but our customers. We're also investing in data and analytics. We think that's going to be important to drive the efficiency of our operations, the capabilities for our, for our customers.
Regulatory capabilities, if we're going to benefit not only our operations, but our customers were also invested in data and analytics, we think that's going to be important to drive the efficiency of our operations.
The capabilities for our for our customers so.
Speaker 4: You should expect to see us continue to deliver operating margin leverage, but to continue to invest against our programs our capabilities on behalf of those officials and our customers.
You should expect to see us continue to deliver operating margins leveraged but to continue to invest against our programs are capabilities.
There are other aspects to the interim agreement, but the key thing for this call for this group is that those credit terms are on 70 terms, which are different than what we had in the previous agreement.
On behalf of those efficiencies and our customers.
Next question please.
Speaker 1: And next will be Eric Caldwell with Baird. Please go ahead.
And next will be Eric Caldwell with third please go ahead.
Hi. This is Eric was that me I had a deep here.
Britt Vitalone: Next question, please. And next will be Brian Tancullet with Jeffries, please go ahead. Hey, good afternoon guys. Just a quick question for me as I think about your operating expense line, pretty good level of improvement there, especially in the margin side. How should we be thinking about the sustainability of operating expenses and potential gains going forward next? Thank you for the question. I'm not sure what you're referring to in the word gain, but as we think about our operating expenses, we will read out great operating expense discipline and the efficiency of our operations allows us to drive operating margin leverage.
Speaker 9: Thank you. Thank you. You're all good. Okay, thanks, hi guys. I wanted to hit on the Med Surge segment, specifically primary care. I think your comments on slow start, low ramp in the illness season is, I think well understood. We've seen that elsewhere. I'm curious what else you might have seen in the quarter that could...
Barrett.
Good Okay. Thanks, Hi, guys I wanted to hit on the Med surge segment, specifically primary care I think you're under your comments on slow start low ramp and the yield illness season is I think well understood. We've seen that elsewhere I'm curious what else you might have seen in the quarter that could.
Speaker 9: Uh, Lynn, some color on the, uh, the lower, uh, primary care volumes, you know, I've heard heavy travel season from some companies. I've heard, uh, others talk about vacation schedules, uh, just the timing of the calendar if you will. But I'm, I'm curious if you have any more.
Lynn some color on the the lower primary care volumes.
Heavy travel season from some companies I've heard others talk about vacation schedules just the timing of the calendar. If you will but I'm curious if you have any more.
Speaker 9: details or thoughts you could add on the primary care trend and if you could, could you quantify the rate of growth change that you saw?
Details or thoughts you could add on the primary care trend and if you could could you quantify the rate of growth changed that you saw during the September quarter. Thank you.
Britt Vitalone: We've been able to do that for a long period of time. The success that we've seen in many of our segments really has allowed us to continue to reinvest back into the business. Brian just mentioned what we've been doing at our savings solution, or as to say RxTS, where we've been reinvesting to drive additional programs and capabilities for our customers. But as I mentioned in my comments, we've also been investing in distribution that capabilities, additional automation and regulatory capabilities that are going to benefit not only our operations but our customers.
Speaker 3: Yeah, thank you Eric and we've heard all many of those same themes and trends. I mean clearly.
Yep. Thank you, Eric and we've heard all many of those same themes and trends I mean, clearly a big one is your last year and this call. We would have been talking about the so-called triple demick and the RSV and flew in Covid kind of all hitting at the same time and I I think so we're.
Speaker 3: A big one is last year in this call, we would have been talking about the so-called triple-demick and the RSV and flu and COVID kind of all.
Speaker 3: hitting at the same time and I think so we're clearly laughing and abnormally high year.
Clearly lapping an abnormally high year, and then I think you fast forward to the trends, we're seeing this year and they're probably lower than what we would have expected at the beginning of the outside.
Speaker 3: And I think you fast forward to the trends we're seeing this year, they're probably lower than what we would have expected at the beginning of the outset, beginning of the outset, the data that we've looked, you know, looked at, you know, the data you could, you can reference does show.
Britt Vitalone: We're also investing in data analytics. That's going to be important to drive the efficiency of our operations, the capabilities for our customers. So you should expect to see us continue to deliver operating margin leverage, but continue to invest against our programs, our capabilities on behalf of those officials in our customers.
Beginning at the outset, the data that we've looked.
Looked at you know they accuse me of data you could you can reference it does show that foot traffic is down. It does also show telemedicine visits her down we sort of don't think structurally the need to consume health care services. In this country has gone down and so that's why I asked for it provided the context he did for our guidance through the remainder of the year.
Speaker 3: foot traffic is down. It does also show telemedicine visits are down. We sort of don't think structurally the need to consume health care services in this country has gone down.
Speaker 3: So that's why I provided the context he did for our guidance through the remainder of the year.
Next question please. And next will be Eric Coldwell with Baird. Please go ahead. Hi, this is Eric. Was that me? I had a beep here. Thank you. Yeah, good. Okay. Thanks.
Speaker 4: And Eric, I would just also point out that we are extremely well positioned across all ultra sites of care and the competence that we have in that position to service our customers. We're continuing to make investments. And I talked about some of the investments. That we are making not only in distribution capabilities in the network.
And Eric averages also pointed out that we are extremely well positioned across all three sites of care and the confidence that we have in that position to serve our customers. We are continuing to make investments and I talked about some of the investments that we are making not only and distribution capabilities in the network, but also.
Brian Tyler: Hi, guys. I wanted to hit on the med surge segment, specifically primary care. I think you're under your comments on slow start, low ramp in the illness season is I think well understood. We've seen that elsewhere. I'm curious what else you might have seen in the quarter that could lend some color on the lower primary care volumes. You know, I've heard heavy travel season from some companies. I've heard others talk about vacation schedules, just the timing of the calendar, if you will, but I'm curious if you have any more details or thoughts you could add on the primary care trend.
Brian Tyler: And if you could, could you quantify the rate of growth change that you saw during the September quarter? Thank you. Yeah, thank you, Eric. And we've heard all many of those same themes and trends. I mean, clearly a big one is, you know, last year in this call, we would have been talking about the so called triple Demick and the RSV and flu and COVID kind of all hitting at the same time.
Speaker 4: But also in data analytics to help support our customers in the product portfolio that we provide for them. So we have a lot of confidence in the position and the capabilities that we have and the investments that we're making are.
And data and analytics to help support our customers in the product portfolio that we provide to them. So we have a lot of confidence in the position of the capabilities that we have in the investments that we're making a reflection of that.
Speaker 3: And we do think macro trends support the migrant continued migration of care into these alternate sites or use more community based settings. So we're well positioned.
Hey, wait do think macro.
Macro trends support the micro continued migration of care into these alternate site or it can more community based settings. So we're well positioned.
Okay.
Next question please.
And next will be Kevin Kelly endow with you B S. Please.
Please go ahead.
Speaker 10: Hi, thanks for taking my question. The pharma segment growth continues to be really impressive and I'm guessing it's more than just the typical fundamentals of pharma distribution with generic pricing or generic mix and the like. Can you talk?
Hi, Thanks for taking my question.
The farmers segment growth continues to be really impressive and I'm guessing it's more than just the typical fundamentals of Parma distribution with generic pricing or generic mix and the like can you talk.
Brian Tyler: And I think so we're clearly laughing and abnormally high year. And I think you fast forward to the trends we're seeing this year and they're probably lower than what we would have expected at the beginning of the outside, beginning of the outset. The data that we've looked, you know, looked at, you know, the acuvia data you could, you can reference does show the foot traffic is down. It does also show telemedicine visits are down.
Speaker 10: about how the mix is evolving. Maybe is it some of your oncology businesses, some of the clinics you've purchased recently that are contributing? How is that mix changing currently to drive this sort of outsize even growth that you're seeing?
About how the mixes evolving maybe.
Some of your oncology businesses. Some of the clinic you purchased recently that are contributing how does that mix changing currently to drive this sort of outsize EBIT growth that you're seeing.
Speaker 4: Thanks for the question. I, you know, certainly we have a broad portfolio and it's much broader than it was a few years ago and the investments that we've made in oncology are certainly adding to that. But the efficiency that we have and the scale that we have with retail national accounts and our ability to provide and service specialty, they're really driving a lot of this. In particular, as you think about stable utilization rates.
Thanks for the question.
Certainly we have a broad portfolio and it's much broader than it was a few years ago and investments that we've made in oncology.
Certainly adding to that but the efficiency that we have in the scale that we have with retail national talents and our ability to provide a service specialty they're really driving a lot of this in particular do you think about stable utilization rates I also talked about the success that were seeing it claris, one and with our Jeanette.
Brian Tyler: We sort of don't think structurally the need to consume healthcare services in this country has gone down. And so that's why it provided the context he did for our guidance through the remainder of the year. Eric, I would just also point out that we are extremely well positioned across all open sites of care and the confidence that we have in that position to serve our customers. We're continuing to make investments and I talked about some of the investments that we are making not only in distribution capabilities in the network, but also in data analytics to help support our customers.
Speaker 4: I also talked about the success that we're seeing at Claris One and with our generic programs and we saw good contribution from generics during the quarter.
Brian Tyler: And the product portfolio that we provide so we have a lot of confidence in the position of the capabilities that we have and the investments that we're making are reflection of that. And we do think macro trends support the migrant continued migration to care into these alternate sites or you can more community based settings. So we're well positioned.
Programs and we saw good contribution from generics during the quarter.
Speaker 4: You know, our ecology business continues to grow. We've added four practices and seven geographies and over 200 providers in the last 12 months. And that's certainly going to be added as to the overall ecology platform. But what we're seeing is just the stable utilization of growth in prescription volume, our ability to be efficient for our customers to continue to provide good generic programs. That's driving the majority of the growth that we're seeing at this point.
College of business continues to grow leaves added for practices and seven geographies and over 200 providers in the last 12 months and that's certainly going to be.
He added to the overall oncology platform, but what we're seeing is just a stable utilization of growth in prescription volume our ability to be efficient for for our customers to continue to provide good generic programs.
Driving the majority of the growth that we're seeing at this point.
Next question please.
And next will be Daniel gross like with city. Please go ahead.
Speaker 1: and next will be Daniel Grosslight with City. Please go ahead.
Next question please. And next will be Kevin Caliendo with UBS please go ahead. Hi, thanks for taking my question. The far most segment growth continues to be really impressive and I'm guessing it's more than just the typical fundamentals of farm a distribution with generic pricing or generic mix.
Speaker 11: Hi, thanks for taking the question. I want to go back to the medical segment and the key ends for the remainder of the year. If I just look at guidance, it implies around a 4% increase in both revenue and AOI from the first half to the second half. So slot margins. You mentioned a less severe flu season and some investments you're making in distribution and data analytics.
Hi, Thanks for taking my question I want to go back to the medical segment and the <unk> for the remainder of the year cause I just look at guidance that implies around a 4% increase in both revenue and ally from the first after the second half so.
<unk>, you mentioned, a less severe flu season, and some investments, you're making and distribution data analytics.
Speaker 11: How should we be thinking about the key in the AOI for the next two quarters, particularly as we think about some of those larger investments you're making?
How should we be thinking about the cadence of a way for the next two quarters, particularly as they they think that some of those larger investments you're making.
Britt Vitalone: And the like you talk about how the mix is evolving maybe is it some of your oncology businesses some of the clinics you purchased recently that are contributing how is that mix changing currently to drive this sort of outsize even growth that you're seeing. Thank you for the question. You know, certainly we have a broad portfolio and it's much broader than it was a few years ago and the investments that we've made in oncology are certainly adding to that, but the efficiency that we have and the scale that we have with retail national accounts and our ability to provide and service specialty.
Speaker 4: Yes, a great question, Dan. I think for modeling purposes, I would guide you to model something very similar in terms of growth rates to the second quarter.
Yeah, that's a great question, Dan and I I think for modeling purposes.
A guide you to model something very similar in terms of growth rates to the second quarter.
Okay next question please.
Speaker 1: And next will be Alan Lutz with Bank of America. Please go ahead.
And next will be Allen, let's with Bank of America. Please go ahead.
Speaker 11: Good afternoon, and thanks for taking the questions. One for Brian , you mentioned the strength of Claris One. Given the recent customer bankruptcy you mentioned, are you assuming any volume lost for Claris One over time? And then one for Britt, within the RXTF segment, you guys did a large restructuring in March. Have those OPEX savings completely flown through the model at this point, or should we expect more over time? Thanks.
Good afternoon, and thanks for taking the questions one for Brian you mentioned the strength of Claris one given the recent customer bankruptcy. You mentioned are you assuming any volume lost for Claris one of our time and then one for Brett within the Rx TX segment, you guys did a large restructuring in March had those opex savings.
Britt Vitalone: It's really driving a lot of this in particular, as you think about stable utilization rates. I also talked about the success that we're seeing at Clarice One and with our generic programs and we saw good contribution from generic during the quarter. You know, our ecology business continues to grow. We've added four practices and 70 geographies over 200 providers in the last 12 months, and that's certainly going to be added to the overall ecology platform.
Britt Vitalone: But what we're seeing is just the stable utilization of growth in prescription volume, our ability to be efficient for our customers to continue to provide good generic programs. That's driving the majority of the growth that we're seeing at this point.
Completely flowing through the bottle at this point or should we expect more overtime. Thanks.
Next question, please. And next will be Daniel Grosslight with City. Please go ahead.
Speaker 3: So, let me start with your question on Claris one. We obviously have a scaled sourcing engine and partnership with with Walmart. We believe we've, we've got, you know.
Oh, let me start with with your question on Claris one.
<unk> have a scaled sourcing engine in partnership with with Wal Mart.
We believe we we've got you know.
Speaker 3: leading scale and volume and a very mature team that has been through multiple sourcing cycles, and so we're very confident in our position there. And as the pharma business in general grows, the volumes that flow through the Claris sourcing engine also grow, so we continue to have a lot of confidence in Claris One and their ability to perform for the business.
Bleeding scale and volume and a very mature team that entered multiple sourcing cycles and so we're very confident in our position there and as the pharma business in general grows the volumes that flow through the claris sourcing engine also grow. So we continue to have a lot of confidence in claris one.
And their ability to perform for the business.
You want to take the second.
Britt Vitalone: Hi, thanks for taking the question. I want to go back to the medical segment and the cadence for the remainder of the year. If I just look at guidance, it implies around a 4% increase in both revenue and AOI from the first half to the second half, so slot margins. You mentioned a less severe flu season and some investments you're making in distribution data analytics. How should we be thinking about the cadence of AOI for the next two quarters, particularly as we think about some of those larger investments you're making? That's a great question, Dan. I think for modeling purposes, I would guide you to model something very similar in terms of growth rates to the second quarter.
Speaker 4: Yeah, I'll take the 2nd, 1, Brian , as it relates to your question on the restructuring, you did incur certain charges in the 4th quarter of our fiscal 2023. we also incur additional restructuring charges in the 1st, half. Of fiscal 2024 and so we're still in the process of finalizing the program.
Yeah, I'll take the second one Brian as it relates to your question on the restructuring did occur.
Next question, please.
Charges in the fourth quarter of our fiscal 2023, we also incur additional restructuring charges in the first half.
Of.
Fiscal 2024, and so we're still.
In the process of finalizing the programs and the savings that we have are contemplated within our guidance.
Speaker 4: savings that we have are contemplated within our guidance. So the fact that we started this program in fiscal fourth quarter of 23, continued the program, really taking charges and organizing and integrating through the first half of 2024, we certainly haven't seen all of the benefits from those programs to this point in time.
So the fact that we started this program in fiscal fourth quarter of 23 continue the program really taking charges and organizing an integrated into the first half of 2024, when we certainly haven't seen all of the benefits from those programs to this point in time.
Next question really.
Speaker 1: And next will be Aaron Wright with Morgan Stanley . Please go ahead. Great. Thanks for.
Brian Tyler: And next will be Alan Lutz with Bank of America. Please go ahead. Good afternoon, and thanks for taking the questions. One for Brian, you mentioned the strength of Claris one given the recent customer bankruptcy you mentioned. Are you assuming any volume lost for Claris one over time and then one for Brit within the RXT segment, you guys did a large restructuring in March. Have those object savings completely flown through the model at this point or should we expect more over time?
And next will be Aaron White like Morgan Stanley. Please go ahead.
Alright, Thanks for taking my question is.
Speaker 12: Two questions here. I guess, are you seeing the generic or easing generic deflation environment? Has that been a material driver for you, just to follow up on the generic side? And then on M&A, and you outlined the share repurchases, but how are you thinking about the acquisition pipeline from here? Where's the focus? What does the M&A pipeline look like? Thanks.
Two two questions here I guess are you seen that at Jenny generic aren't even generic deflation environment has that been material driver for you just to follow up on the generic side and then.
<unk>.
[noise] and your outline to share repurchases, but how are you thinking about the acquisition pipeline from here, where he says okay sweat disseminate pipeline with like thanks.
Brian Tyler: Thanks. So let me start with your question on Claris one. We obviously have a scaled sourcing engine and partnership with Walmart. We believe we've got leading scale and volume and a very mature team that has been through multiple sourcing cycles and so we're very confident in our position there. And as the pharma business in general grows, the volumes that flow through the Claris sourcing engine also grow, so we continue to have a lot of confidence in Claris one and their ability to perform for the business.
Do you want to take the first part sure Brian Thanks for the question Aaron.
Speaker 4: Sure, Brian . Thanks for the question, Aaron. As a relates to generics, our focus continues to be on a strong...
As it relates to generics our focus continues to be on a strong.
Speaker 4: sourcing program combined with discipline on the South Side. We've been operating in a competitive but stable environment now for a number of years, really. And we're really not seeing anything different in the second quarter from what we've seen in the previous several quarters before that.
Sourcing program combined with discipline on the sell side, we've been operating.
A competitive with stable environment now for a number of years really.
Really don't seem any different in the second quarter from what we've seen in the previous.
Several quarters before that.
Speaker 4: we're able to procure generics very competitively on behalf of our customers and we focus on stability of supply at the same time. So, from a generics perspective, our programs are running very well. We feel very well positioned to continue to procure at a low cost and stable supply for our customers and the environment is conducive to us being able to do that.
We're able to.
Procurer generics very competitively on behalf of our customers and we focus on stability supply at the same time. So from a generic perspective are programs are running very well, we feel very well positioned to continue.
Brian Tyler: Greg, you want to take it with that? Yeah, I'll take the second one, Brian, as it relates to your question on the restructuring. You did incur certain charges in the fourth quarter of our fiscal 2023. We also incur additional restructuring charges in the first half of fiscal 2024. And so we're still in the process of finalizing the programs and the savings that we have are contemplated within our guidance. So the fact that we started this program and in the first half of 2024, we certainly haven't seen all of the benefits from those programs to this point in time.
To procure at a low cost and stable supply for our customers and the environment is conducive to us being able to do that.
Speaker 3: I think the second part of the question was on M&A.
I think the second part of the question was on M&A.
Speaker 3: You know, clearly one of our top priorities for capital deployment is to support the growth.
Clearly one of our top priorities for capital deployment is to support the growth.
Speaker 3: and the differentiated capabilities we have in our segments to continue to extend that growth. And so we are and continue to be active on the M&A front. Now, we have a very structured and disciplined way we approach that. First is it's gotta be aligned to our stated strategy and particularly our growth pillars. And so if you look at recent activities like RX Saving Solutions or Sarah Cannon Joint Venture, obviously both very, very tied to our stated growth.
And the differentiated capabilities, we have in our segments to continue to extend that growth and so we are are and continue to be active on the M&A front now we have a very structured and disciplined way. We approach that first is it's gotta be aligned to our stated strategy and particularly our growth pillars and so if you.
Look at recent activities like Rx saving solutions are Sarah can and joint venture obviously both.
Britt Vitalone: Next question, please. And next will be Erin Wright with Morgan Stanley. Please go ahead. Thanks for taking the questions. Two questions here. I guess are you seeing the generic or easy and generic deflation environment? Has that been a material driver for you just to follow up on the generic side? And then on, on MNA and you outlined the Sherry purchases, but how are you thinking about the acquisition pipeline from here? Where's the focus? What does MNA pipeline look like? Thanks.
Very very tied to our stated growth priorities.
Speaker 3: And then the second step of that process is to lay over a lens of financial discipline. We have many uses for capital, some internal investment and efficiency and technology and tools.
And then.
Step in that process is to layer over our lands of financial discipline. We have many uses for capital some internal investment and efficiencies and technologies and tools.
Speaker 3: Obviously we have shared repurchase hurdles that we can meet. So we bring a lot of financial discipline to the acquisition process to ensure that we're getting good returns for shareholders as we deploy that capital. So it's on strategy and has appropriate financial return. We're very interested and we continue to develop our business development funnels.
Obviously, we had share repurchase.
Hurdles that we that we can meet so we bring a lot of financial discipline to the acquisition process to ensure that we're getting good returns for shareholders as we deploy that capital. So it's on strategy and has appropriate financial return. We're very interested in we continue to develop our business development of tunnels.
Great. Do you want to take the first part? Sure, Brian. Thanks for the question, Erin. You know, as it relates to generics, our focus continues to be on a strong sourcing program, combined with discipline on self. We've been operating in a competitive, stable environment now for a number of years, really. And we're really seeing any different in the second quarter from what we've seen in the previous, you know, several quarters before that we're able to procure generics very competitively on behalf of our customers and we focus on stability supply at the same time.
Next question please.
And next will be Elizabeth Anderson with Evercore ISI. Please go ahead.
Speaker 1: and next will be Elizabeth Anderson with Evercore ISI. Please go ahead.
Speaker 13: Hi guys, thanks so much for the question. I had two questions. One, on the RTS business, are you seeing any sort of spillover benefit from GLP ones? I'm thinking like either, you know, an organization that doesn't use you, that does use you because they've heard about this with the GLP ones or sort of a cross-selling across your group of services within this segment. And then secondarily, on the medical side, one of your competitors
Hi, guys. Thanks, so much for that question and I answered your question one on the ice tea S.
Business are you seeing any sort of spillover benefit from TRP ones I'm thinking like either.
Organization that doesn't use use <unk> because they've heard about this but <unk> across sailing across here group of services within the segment and then secondarily on the medical side one of your competitors.
So from a generics perspective, our programs are running very well. We feel very low position to continue to procure at a low cost and stable supply for our customers in the environment is conducive to us being able to do that.
Speaker 13: on the outpatient side has seen some ordering impact because of a sort of website and sort of cyber attack. Is that provided any kind of material change and customer ordering within that segment in the last couple of weeks? Thank you very much.
On the outpatient side has seen some ordering impact because of <unk>.
Britt Vitalone: I think the second part of the question was on MNA. You know, clearly, one of our top priorities for capital deployment is to support the growth and the differentiated capabilities we have in our segments to continue to extend that growth. And so we are and continue to be active on the MNA front. Now, we have a very structured and disciplined way we approach that. First is it's got to be aligned to our seed strategy and particularly our growth pillars.
Britt Vitalone: And so if you look at recent activities like our saving solutions or Sarah can and joint venture, obviously both, you know, very, very tied to our stated growth priorities. And then the second step of that process is to lay our over a lens of financial discipline. We have many uses for capital, some internal investment and efficiencies and technologies and tools. Obviously we have shared repurchase hurdles that we can meet. So we bring a lot of financial discipline to the acquisition process to ensure that we're getting good returns for shareholders as we deploy that capital. So it's on strategy and has appropriate financial return. We're very interested and we continue to develop our business development funnel.
Website Internet cyber attack Ah is that provided any kind of material change in customer ordering within that segment.
The last couple of weeks, thank you very much.
Speaker 3: So, the 1st, I think your 1st question was as relates to and and this opening new avenues, I would just remind you are connected to 900,000 providers today and 50,000 plus pharmacies today. So we've had a long established relationship with them.
So the first I think the first question was as it relates to our X T. S. N and this opening new avenues that would just remind you are X T. S is connected to 900000 providers today and 50000 plus pharmacies today. So we've had a long established relationship with them and I think we've been well known for.
Speaker 3: We've been well known for quite a long time in that arena. So I don't think you'd see anything material there. And then your second question was as relates to a competitor ordering challenges. I'm not really not going to get into the issues a competitor might have. I don't think we've, you know, we've spent a little bit of time talking about the trends that we saw in the medical surgical business and reviewed those trends. And I think those stand for themselves. And we have time.
For quite a long time in that arena. So I don't think there'll be see anything material. There and then your second question was as it relates to a competitor ordering challenges I'm not really not gonna get into issues a competitor might have I don't think we've we've.
We spent a little bit of time talking about the trends that we saw in the medical surgical business and reviewed those trends and I think those stand for themselves.
And we have time for one more question. Please.
Speaker 1: Certainly. That question will come from George Hill with Deutsche Bank. Please go ahead.
Certainly that question will come from Georgetown like Deutsche Bank. Please go ahead.
Speaker 8: Hey, guys, I appreciate you sneaking me in. I'll say Brian and Britt, the oncology business has really been a standout over the last several years. I was wondering if there's a chance that you guys might give us any kind of sense of the scope or scale of the business inside of the U.S. drug segment with any type of number around it. And Britt is a quick follow up. I guess, given the ongoing agreement with Rady, can you tell.
Hey, guys I appreciate you sneaking me and I'll say, Bryan and Brent the oncology business has really been a stand out.
Over the last several years I was wondering if there is a chance that you guys might give us any kind of sense of the scope of scale of the business decided to use drugs segment.
Britt Vitalone: Next question, please. And next will be Elizabeth Anderson with Evercore ISI. Please go ahead. Hi guys, thanks so much for the question. I had two questions. One, on the RFTS business, are you seeing any sort of spillover benefit from GLP ones? I'm thinking like either, you know, an organization that doesn't use you, that does use you because they've heard about this with the GLP ones or sort of a cross-selling across. You're a group of services within this segment.
Any type of number around it and British a quick fault I guess given the ongoing agreement with <unk> can you tell me.
Right now it looks like you dropped off.
Mr. <unk>. Please proceed.
Speaker 1: I think we lost you. Can you guys hear me? Yeah, go ahead. Can you hear me now?
I think we lost can you guys hear me okay.
Yeah go ahead, and you hear me now.
Speaker 5: Oh, I'm sorry, Brian , I don't know what happened there. Just the growth of the oncology business has been pretty impressive over the last couple of years. I was just wondering if you would kind of provide any call to kind of give us some sense of the scope of the scale of that business inside the US distributions.
I'm, sorry, Brian I don't know what happened there just the greater the oncology business has been pretty impressive over the last couple of years I was just wondering if you would kindly.
Britt Vitalone: And then secondarily, on the medical side, one of your competitors on the outpatient side has seen some ordering impact because of a sort of website and sort of cyber attack. Is that provided any kind of material change and customer ordering within that segment in the last couple of weeks? Thank you very much.
Provide any color to kind of give us some sense of the scope of the scale of that business inside the U S distributions segment.
And your call will be helpful.
Speaker 3: You know, when we talk about our oncology business, we talk about it as an ecosystem, everything from distribution to GPO services, to Heino-Medium, or the community, to Antana, to the SCRI.
When we talk about our oncology business, we talk about it as an ecosystem everything from distribution to G. P O services to high Nomad earmark the community to an Tartar SPRI joint venture. So there's a lot a lot of components that go into that I think about what we have provided in terms of sense of scale and scope is 24.
So the first, I think your first question was as relates to RFTS and this opening new avenues, I would just remind you RFTS is connected to 900,000 providers today and 50,000 plus pharmacies today. So we've had a long established relationship with them. And I think we've been well known for quite a long time in that arena. So I don't think you'd be seeing anything material there. And then your second question was as relates to a competitor ordering challenges. I'm not really not going to get into the issues a competitor might have.
Speaker 3: So there's a lot of components that go into that. I think what we have provided in terms of census scale and scope is 2,400 plus.
400, plus providers are operating in 27 states seeing roughly 15 plus percent of all cancer patients and the community setting. So I hope that helps you get an order of magnitude.
Speaker 3: providers operating in 27 states seeing roughly
Speaker 3: 15 plus percent of all cancer patients in the community setting. So I hope that helps you get an order of magnitude.
Okay that our last question.
Speaker 3: Great, well, thank you everybody for for the questions for your interest in McKesson and certainly for joining joining our call today. Thank you operator for helping facilitate the call. I want to conclude by just reiterating McKesson delivered solid second quarter results. We saw continued momentum across the business.
Great well. Thank you everybody for for the questions for your interest in Mckesson and certainly for joining joining our call today.
I don't think we've, you know, we've spent a little bit of time talking about the trends that we saw in the medical surgical business and reviewed those trends and I think those stand for themselves.
Operator for helping facilitate the call I want to conclude by just reiterating Mckesson delivered solid second quarter results. We saw continued momentum across the business.
Brian Tyler: And we have time for one more question, please. Certainly. That question will come from George Hill with Deutsche Bank. Please go ahead. Hey, guys, I appreciate you sneaking me in. I'll say Brian and Brittany, the oncology business has really been a standout over the last several years. I was wondering if there's a chance that you guys might give us any kind of center, the scope or scale of the business inside of the US drug segment.
Speaker 3: We're confident in our ability to deliver sustained long-term growth.
Confident in our ability to deliver sustained long term growth as a diversified health care services company, we've made significant progress advancing our company priorities and lastly, and importantly, I Wanna make sure that I think the Mckesson team for all their contributions it's it's incredibly humbling and proud to be able to leave the talented and.
Speaker 3: As a diversified health care services company, we've made significant progress advancing our company priorities. And lastly, and importantly, I want to make sure that I thank the McKesson team for all their contributions. It's, it's incredibly humbling and proud to be able to lead this talented and dedicated team. Thanks again, everybody. I hope you all have
Brian Tyler: Let me type of number around it and bring it to a quick follow up. I guess given me ongoing agreement with ready. Can you tell me? Mr. Hill, please proceed. I think we lost. Can you guys hear me? Yeah, go ahead and hear me now. I'm sorry. I don't know what happened there. Just the growth of the oncology business has been pretty impressive over the last couple of years. I was just wondering if you would kind of provide any call to kind of give us some sense of the scope of the scale of that business inside the US distribution segment.
Dedicated team.
Thanks, again, everybody I hope you all have a terrific evening.
Speaker 1: Thank you for joining today's conference call. You may now disconnect and have a great day.
Thank you for joining today's conference call you may now disconnect and have a great day.
Speaker 14: You
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Brian Tyler: And we call it the helpful. You know, when we talk about our oncology business, we talk about it as an ecosystem, everything from distribution to GPO services, to high nomadium, our community to antenna to the SCRI joint venture. So there's a lot, a lot of components that go into that. You know, I think what we have provided in terms of sense of scale and scope is 2400 plus providers operating in 27 states seeing roughly 15 plus percent of all cancer patients in the community setting. I think so. I hope that helps you get an order of mag. Thank you.
Okay, is that our last question? Great. Well, thank you, everybody, for the questions, for your interest in McKesson, and certainly for joining our call today. Thank you, operator, for helping facilitate the call. I want to conclude by just reiterating McKesson delivered solid second quarter results. We saw continued momentum across the business, and were confident in our ability to deliver sustained long-term growth. As a diversified healthcare services company, we've made significant progress advancing our company priorities.
And lastly, and importantly, I want to make sure that I thank the McKesson team for all their contributions. It's incredibly humbling and proud to be able to leave this college and dedicated team. Thanks again, everybody. I hope you all have a terrific evening. Thank you for joining today's conference call. You may now disconnect and have a great day.