Q1 2025 McKesson Corp Earnings Call

Please stand by.

Unknown Executive: Anderson's first quarter fiscal 2025 earnings conference call. Please be advised that today's conference is being recorded.

Rachel Rodriguez: Welcome to McKesson's first quarter fiscal 2025 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.

Rachel Rodriguez: At this time, I would like to turn the call over to Rachel Rodriguez, VP of Investor Relations. Please go ahead.

Rachel Rodriguez: Thank you, operator. Good afternoon and welcome everyone to McKesson's first quarter fiscal 2025 earnings call. Today, I'm joined by Brian Tyler, our Chief Executive Officer and Britt Vitalone, our Chief Financial Officer.

Rachel Rodriguez: Thank you, Operator. Good afternoon and welcome everyone to McKesson's first quarter fiscal 2025 earnings call. Today, I'm joined by Brian Tyler, our Chief Executive Officer, and Britt Vitalone, our Chief Financial Officer.

Rachel Rodriguez: Brian will lead off, followed by Britt, and then we will move into a question-and-answer session. Today's discussions will include forward-looking statements, such as forecasts about McKesson's operations and future results.

Rachel Rodriguez: Brian will lead off, followed by Britt, and then we will move into a question and answer session. With that, I will turn it over to Brian.

Speaker Change: Brian will lead off, followed by Britt, and then we will move into a question and answer session.

Speaker Change: Today's discussions will include forward-looking statements, such as forecasts about McKesson's operations and future results.

Rachel Rodriguez: Please refer to the cautionary statements and today's earnings release and presentation slides available on our website at investor.McKesson.com and to the risk factor section of our most recent annual report and other 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 Change: Please refer to the cautionary statements in today's earnings release and presentation slides available on our website at investor.mckesson.com.

Speaker Change: and to the risk factors section of our most recent annual report and other SEC filings for additional information concerning risk factors that could cause our actual results to materially differ from those in our forward-looking statements.

Rachel Rodriguez: Information about non-GAAP financial measures that we will discuss during this webcast, including a reconciliation of those measures to GAAP results, can be found in today's earnings release and presentation slides. The presentation slides also include a summary of our results for the quarter and updated guidance.

Speaker Change: Information about non-GAAP financial measures that we will discuss during this webcast, including a reconciliation of those measures to GAAP results, can be found in today's earnings release and presentation slides.

Speaker Change: The presentation slides also include a summary of our results for the quarter and updated guidance.

Brian Tyler: With that, let me turn it over to Brian. Thank you, Rachel, and I'll extend my good afternoon to everyone as well. Thank you for joining our call today. Earlier today, we reported first quarter company revenues of $79.3 billion, reflecting 6% growth year over year. Adjusted earnings per diluted share increased 8% to $7.88, above our original expectations. As a result of our performance in the first quarter, we're raising our guidance for full year adjusted earnings per diluted share from $31.25 to $32.05 to a new range of $31.75 to $32.55. The continued business growth and strong cash flow generation allow it to deliver on our commitment to our shareholders.

Brian Tyler: Thank you, Rachel, and I'll extend my good afternoon to everyone as well. Thank you for joining our call today. Earlier today, we reported first quarter company revenues of $79.3 billion, reflecting 6% growth year over year. Adjusted earnings per diluted share increased 8% to $7.88, above our original expectation.

Speaker Change: With that, let me turn it over to Brian . Thank you, Rachel. And I'll extend my good afternoon to everyone as well. Thank you for joining our call today. Earlier today, we reported first quarter company revenues of $79.3 billion, reflecting 6% growth year over year.

Operator: Anderson's first quarter fiscal 2025 earnings conference call. Please be advised that today's conference is being recorded.

Brian: Adjusted earnings per diluted share increased 8% to $7.88, above our original expectations.

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.

Speaker Change: As a result of our performance in the first quarter, we are raising our guidance for full-year adjusted earnings per diluted share from $31.25 to $32.05 to a new range of $31.75 to $32.55.

Rachel Rodriguez: Good afternoon and welcome everyone to McKesson's first quarter fiscal 2025 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 into a question and answer session. Today's discussions will include forward-looking statements, such as forecasts about McKesson's operations and future results. Please refer to the cautionary statements and today's earnings release and presentation slides available on our website at investor.

Brian Tyler: The continued business growth and strong cash flow generation allow us to deliver on our commitment to our shareholders. We're also pleased to announce that our Board of Directors approved a 15% increase in our quarterly dividend and an additional share repurchase authorization of up to $4 billion. This brings the total share repurchase authorization to approximately $10 billion as of July 2024.

Speaker Change: The continued business growth and strong cash flow generation allow us to deliver on our commitment to our shareholders.

Brian Tyler: We're also pleased to announce that our board of directors approved a 15% increase to our quarterly dividend. An additional share repurchased authorization of the $4 billion. This brings the total share repurchased authorization to approximately $10 billion as of July of 2024. Underpinning the financial performance is our continued execution on our company priorities.

Speaker Change: We're also pleased to announce that our Board of Directors approved a 15% increase to our quarterly dividend and additional share repurchase authorization up to $4 billion. This brings the total share repurchase authorization to approximately $10 billion as of July of 2024.

Rachel Rodriguez: McCesson.com and to the risk factor section of our most recent annual report and other SEC filing for additional information concerning risk factors that could cause our actual results to materially differ from those in our forward-looking statements. Information about non-gap financial measures that we will discuss during this webcast, including a reconciliation of those measures to gap results can be found in today's earnings release and presentation slides.

Brian Tyler: Underpinning the financial performance is our continued execution on our company priorities. Of course, transformation and execution are a lot of hard work. It takes the efforts of the full team, and the path to sustainable growth is not always perfectly linear. During the first quarter, we saw solid operating performance led by our pharmaceutical distribution business in the U.S. and Canada. Meanwhile, we experienced some headwinds in other parts of the business. We are investing in the business, especially where we can leverage technology to enhance product offerings and improve operational efficiency. Let me start, though, with our focus on people and culture.

Speaker Change: Underpinning the financial performance is our continued execution on our company priorities.

Brian Tyler: It was nearly five years ago when we centered our strategy around four company priorities that embarked on the journey of transforming into a diversified healthcare services company. We've been consistently executing against these strategies, driving enhanced value to our customers and delivering sustained financial growth across our operating segments. Of course, transformation and execution is a lot of hard work; it takes the efforts of the full team, and the past sustainable growth is not always perfectly linear. During the first quarter, we saw solid operating performance led by our pharmaceutical distribution business in the US and Canada. Meanwhile, we experienced some headwinds and other parts of the business.

Speaker Change: It was nearly five years ago when we centered our strategy around four company priorities and embarked on the journey of transforming into a diversified healthcare services company.

Speaker Change: We've been consistently executing against these strategies, driving enhanced value to our customers and delivering sustained financial growth across our operating segments.

Rachel Rodriguez: The presentation slides also include a summary of our results for the quarter and updated guidance.

Speaker Change: Source Transformation and Execution is...

Brian Tyler: With that, let me turn it over to Brian. Thank you, Rachel, and I'll extend my good afternoon to everyone as well. Thank you for joining our call today. Earlier today, we reported first quarter company revenues of $79.3 billion, reflecting 6% growth year over year. Adjusted earnings per diluted share increased 8% to $7.88 above our original expectations. As a result of our performance in the first quarter, we're raising our guidance for full year adjusted earnings per diluted share from $31.25 to $32.05 to a new range of $31.75 to $32.55.

Speaker Change: A lot of hard work takes the efforts of the full team, and the path to sustainable growth is not always perfectly linear. During the first quarter, we saw solid operating performance led by our pharmaceutical distribution business in the U.S. and Canada. Meanwhile, we experienced some headwinds in other parts of the business.

Brian Tyler: In medical surgical growth in the primary care channels was really slower than we anticipated, resulting in a year-over-year decline for the first quarter. In prescription technology solutions, adjusted operating profit was unchanged from the prior year, driven by growth and affordability solutions, offset by lower contributions due to the mix of the services within our access programs and higher expenses to support future growth. We remain committed to our long-term growth targets. We have strong conviction in our strategy and confidence in the strength of our differentiated capabilities across the enterprise. Looking ahead to the remainder of fiscal 2025, our focus remains on our company priorities and advancing our role as a diversified healthcare services company.

Speaker Change: In medical-surgical, growth in the primary care channels was really slower than we anticipated, resulting in a year-over-year decline for the first quarter.

Speaker Change: In prescription technology solutions, adjusted operating profit was unchanged from the prior year, driven by growth in affordability solutions offset by lower contributions due to the mix of the services within our access programs and higher expenses to support future growth.

Brian Tyler: The continued business growth and strong cash flow generation allow it to deliver on our commitment to our shareholders. We're also pleased to announce that our board of directors approved a 15% increase to our quarterly dividend. An additional share repurchased authorization of the $4 billion. This brings the total share repurchased authorization to approximately $10 billion as of July of 2024. Underpinning the financial performance is our continued execution on our company priorities.

Speaker Change: We remain committed to our long-term growth targets. We have strong conviction in our strategy and confidence in the strength of our differentiated capabilities across the enterprise.

Speaker Change: Looking ahead to the remainder of fiscal 2025, our focus remains on our company priorities and advancing our role as a diversified healthcare services company.

Brian Tyler: We are investing in the business, especially where we can leverage technology to enhance product offerings and improve operational efficiencies. We've made great strides in these areas.

Speaker Change: We are investing in the business, especially where we can leverage technology to enhance product offerings and improve operational efficiencies.

Brian Tyler: I'll plan to share a few examples before I hand it over to Britt. Let me start, though, with our focus on people and culture. We firmly believe that people are the foundation for everything we do here at McKesson, as we strive to become the best place to work in healthcare. Recently, we were named one of America's best employers for diversity by Forbes, recognizing our dedicated efforts to fostering inclusion, caring, and belonging in the workplace. We also take a very thoughtful and strategic approach to attracting and retaining talent across the company, and this, of course, includes our Board of Directors.

Britt: We've made great strides in these areas and I'll plan to share a few examples before I hand it over to Britt.

Brian Tyler: It was nearly five years ago when we centered our strategy around four company priorities that embarked on the journey of transforming into a diversified healthcare services company. We've been consistently executing against these strategies, driving enhanced value to our customers and delivering sustained financial growth across our operating segments. Of course, transformation and execution is a lot of hard work takes the efforts of the full team and the past sustainable growth is not always perfectly linear.

Brian Tyler: I firmly believe that people are the foundation for everything we do here at McKesson, recognizing our dedicated efforts to foster inclusion, caring, and belonging in the workplace. We also take a very thoughtful and strategic approach to attracting and retaining talent across the company. And this, of course, includes our Board of Directors. In June, our Board of Directors welcomed Dr. Deborah Dunsire as a new independent director, serving on the Compensation and Talent Committee as well as the Finance Committee.

Britt: Let me start, though, with our focus on people and culture.

Britt: We firmly believe that people are the foundation for everything we do here at McKesson.

Speaker Change: as we strive to become the best place to work in healthcare. Recently, we were named one of America's best employers for diversity by Forbes, recognizing our dedicated efforts to fostering inclusion, caring, and belonging in the workplace.

Speaker Change: We also take a very thoughtful and strategic approach to attracting and retaining talent across the company, and this of course includes our Board of Directors.

Brian Tyler: During the first quarter, we saw solid operating performance led by our pharmaceutical distribution business in the US and Canada. Meanwhile, we experienced some headwinds and other parts of the business. In medical surgical growth in the primary care channels was really slower than we anticipated resulting in a year over year decline for the first quarter. In prescription technology solutions, adjusted operating profit was unchanged from the prior year driven by growth and affordability solutions offset by lower contributions due to the mix of the services within our access programs and higher expenses to support future growth.

Brian Tyler: In June, our Board of Directors welcomed Dr. Deborah Dunsire as a new independent director, serving on the Compensation and Talent Committee, as well as the Finance Committee. She brings decades of experience in biopharmaceuticals and in oncology, specifically. She's a highly respected healthcare industry leader as the former CEO of multiple biopharmaceutical companies. We're grateful for the unique experience that Dr. Dunsire brings to our Board as she joins us on this exciting journey of growth and innovation.

Speaker Change: In June , our Board of Directors welcomed Dr. Deborah Dunsire as a new independent director, serving on the Compensation and Talent Committee as well as the Finance Committee.

Speaker Change: She brings decades of experience in biopharmaceuticals and in oncology specifically. She's a highly respected healthcare industry leader as the former CEO of multiple biopharmaceutical companies.

Brian Tyler: We're grateful for the unique experience that Dr. Dunsire brings to our board as she joins us on this exciting journey of growth and innovation. Moving on to our next priority of driving sustainable core growth in our distribution business. During the first quarter, we saw solid growth in the U.S. pharmaceutical segment. Adjusted operating profit grew 6 percent, driven by growth in specialty pharmaceuticals and strong results in our oncology platform, which includes U.S. Oncology Network, Ontata, Provider Solutions, and the Sarah Cannon Research Institute Joint Venture, which we often refer to as SCRI.

Speaker Change: We're grateful for the unique experience that Dr. Dunthayer brings to our board as she joins us on this exciting journey of growth and innovation

Brian Tyler: Moving on to our next priority of driving sustainable core growth in our distribution business. During the first quarter, we saw solid growth in U.S. pharmaceuticals' segment, adjusted operating profit grew 6% driven by growth in specialty pharmaceuticals and strong results in our oncology platform, which includes U.S. oncology network on Tata, Provider Solutions, and the Sarah Cannon Research Institute joint venture, which we often refer to as SCRI. The results demonstrated the diversity and breadth of our oncology assets. Also in the pharmaceuticals' segment, one of the achievements I really want to highlight is the successful onboarding of a large distribution customer this past July.

Brian Tyler: We remain committed to our long-term growth targets. We have strong conviction in our strategy and confidence in the strength of our differentiated capabilities across the enterprise. Looking ahead to the remainder of fiscal 2025, our focus remains on our company priorities and advancing our role as a diversified healthcare services company. We are investing in the business, especially where we can leverage technology to enhance product offerings and improve operational efficiencies. We've made great strides in these areas.

Speaker Change: Moving on to our next priority of driving sustainable core growth in our distribution business.

Speaker Change: During the first quarter, we saw solid growth in U.S. pharmaceutical segments.

Speaker Change: Adjusted operating profit grew 6%.

Speaker Change: Driven by growth in specialty pharmaceuticals.

Speaker Change: and strong results in our oncology platform.

Speaker Change: which includes U.S. Oncology Network.

Speaker Change: Montada, Provider Solutions, and the Sarah Cannon Research Institute Joint Venture, which we often refer to as SCRI.

Brian Tyler: The results demonstrated the diversity and breadth of our oncology efforts. Also, in the pharmaceutical segment, one of the achievements I really want to highlight is the successful onboarding of a large distribution customer this past July. This is a significant endeavor that requires close coordination across many, many parts of the organization. I'm deeply grateful for the dedication and the commitment of the teams at McKesson. They worked hard to ensure an efficient and smooth transition for our customer and, most importantly, for their patients. This is an example of the terrific execution McKesson is known for.

Brian Tyler: I'll plan to share a few examples before I hand it over to Britt. Let me start, though, with our focus on people and culture. We firmly believe that people are the foundation for everything we do here at McKesson, as we strive to become the best place to work in healthcare. Recently, we were named one of America's best employers for diversity by Forbes, recognizing our dedicated efforts to fostering inclusion, caring, and belonging in the workplace.

Speaker Change: The results demonstrated the diversity and breadth of our oncology assets.

Speaker Change: Also in the pharmaceutical segment, one of the achievements I really want to highlight is the successful onboarding of a large distribution customer this past July.

Brian Tyler: This is a significant endeavor that requires close coordination across much, many, many parts of the organization. I'm deeply grateful for the dedication and the commitment of the teams at McKesson. They worked hard to ensure an efficient and smooth transition for our customer and, most importantly, for their patients. This is an example of the terrific execution McKesson is known for. Moving on to the international segment, we saw growth in the quarter above expectations, primarily driven by the performance of our Canadian business, which includes pharmaceutical distribution, retail pharmacies, and technology-enabled capabilities. We're pleased to see organic growth in the business, supported by the stable trends in pharmaceutical volumes.

Speaker Change: This is a significant endeavor that requires close coordination across many, many parts of the organization.

Speaker Change: I'm deeply grateful for the dedication and the commitment of the teams at McKesson. They worked hard to ensure an efficient and smooth transition for our customer and most importantly for their patients. This is an example of the terrific execution McKesson is known for.

Brian Tyler: We also take a very thoughtful and strategic approach to attracting and retaining talent across the company, and this, of course, includes our Board of Directors. In June, our Board of Directors welcomed Dr. Deborah Dunsire as a new independent director, serving on the compensation and talent committee, as well as the finance committee. She brings decades of experience in biopharmaceuticals and in oncology specifically. She's a highly respected healthcare industry leader as the former CEO of multiple biopharmaceutical companies. We're grateful for the unique experience that Dr. Dunsire brings to our Board as she joins us on this exciting journey of growth and innovation.

Brian Tyler: Moving on to the international segment, we saw growth in the quarter above expectations, primarily driven by the performance of our Canadian business, which includes pharmaceutical distribution, retail pharmacies, and technology-enabled capabilities. We're pleased to see organic growth in the business supported by the stable trends in pharmaceutical volume. As market conditions continue to normalize, we've seen some general market weakness in the primary care channel, which impacted our first quarter.

Speaker Change: Moving on to the international segment, we saw growth in the quarter above expectations, primarily driven by the performance of our Canadian business, which includes pharmaceutical distribution, retail pharmacies, and technology-enabled capabilities.

Speaker Change: We're pleased to see organic growth in the business, supported by the stable trends in pharmaceutical volumes.

Brian Tyler: Throughout the quarter, the team also identified opportunities to apply technology and artificial intelligence in areas like inventory control and supply chain management. We're still at the early stages of application, but the opportunities ahead of us are exciting.

Speaker Change: Throughout the quarter, the team also identified opportunities to apply technology and artificial intelligence in areas like inventory control and supply chain management. We're still at the early stages of application, but the opportunities ahead of us are exciting.

Brian Tyler: Moving on to our next priority of driving sustainable core growth in our distribution business. During the first quarter, we saw solid growth in U.S, pharmaceuticals' segment, adjusted operating profit grew 6% driven by growth in specialty pharmaceuticals and strong results in our oncology platform, which includes U.S, oncology network on Tata, provider solutions, and the Sarah Cannon Research Institute Joint Venture, which we often refer to as SCRI. The results demonstrated the diversity and breadth of our oncology assets.

Brian Tyler: Let's turn to the medical surgical segment. Market environment over the last several years, which obviously included the COVID-19 era, has been pretty dynamic and introduced volatility, but generally it was very favorable for our medical business. As market conditions continue to normalize, we've seen some general market weakness in the primary care channel, which impacted our first quarter. We're taking actions to drive operational efficiencies and increased cost optimization efforts. These efforts will enhance our core distribution capabilities while continuing to invest in efficiencies to better serve our customers, partners, and patients.

Speaker Change: Let's turn to the medical-surgical segment.

Speaker Change: Market environment over the last several years, which obviously included the COVID-19 era, has been pretty dynamic and introduced volatility, but generally it was very favorable for our medical business.

Speaker Change: As market conditions continue to normalize, we've seen some general market weakness in the primary care channel, which impacted our first quarter.

Brian Tyler: We're taking actions to drive operational efficiencies and increase cost optimization. Despite a weaker-than-expected start to the year, we remain confident in our assets and unique positions in the alternative site markets and our ability to drive long-term growth. Building upon the foundational distribution services, we have built extensive capabilities spanning a patient's journey in cancer treatment, demonstrating our differentiated value propositions and unique positions in this space to further align our oncology platform. In the last fiscal year, we welcomed four practices to the U.S. Oncology Network, expanding our geographic footprint and increasing access to lower-cost oncology care.

Speaker Change: We're taking actions to drive operational efficiencies and increase cost optimization efforts.

Brian Tyler: Also in the pharmaceuticals' segment, one of the achievements I really want to highlight is the successful onboarding of a large distribution customer this past July. This is a significant endeavor that requires close coordination across much, many, many parts of the organization. I'm deeply grateful for the dedication and the commitment of the teams at McKesson. They worked hard to ensure an efficient and smooth transition for our customer and most importantly for their patients.

Speaker Change: These efforts will enhance our core distribution capabilities while continuing to invest in efficiencies to better serve our customers, partners, and patients.

Brian Tyler: Despite the weaker than expected start to the year, we remain confident in our assets and unique positions in the alternate site markets and our ability to drive long-term growth, moving on to our two strategic pillars of oncology and biopharma services. We are steadily executing our strategy to grow our oncology platform and improve patients' cancer care experiences. Building upon the foundational distribution services, we have built extensive capabilities spanning a patient's journey and cancer treatment. We're driving strong momentum across the oncology platform, demonstrating our differentiated value propositions and unique positions in this space. During the first quarter, we aligned all the oncology-related assets and teams, including the U.S.

Speaker Change: Despite a weaker-than-expected start to the year, we remain confident in our assets and unique positions in the alternate site markets and our ability to drive long-term growth.

Speaker Change: Moving on to our two strategic pillars of oncology and biopharma services.

Speaker Change: We are steadily executing our strategy to grow our oncology platform and improve patients' cancer care experiences.

Brian Tyler: This is an example of the terrific execution McKesson is known for. Moving on to the international segment, we saw growth in the quarter above expectations primarily driven by the performance of our Canadian business, which includes pharmaceutical distribution, retail pharmacies, and technology enabled capabilities. We're pleased to see organic growth in the business supported by the stable trends in pharmaceutical volumes. Throughout the quarter, the team also identified opportunities to apply technology and artificial intelligence in areas like inventory control and supply chain management. We're still at the early stages of application, but the opportunities ahead of us are exciting.

Speaker Change: Building upon the foundational distribution services, we have built extensive capabilities spanning a patient's journey in cancer treatment. We're driving strong momentum across the oncology platform, demonstrating our differentiated value propositions and unique positions in this space.

Speaker Change: During the first quarter, we aligned all the oncology-related assets and teams, including the U.S. Oncology Network, Ontara, Provider Solutions, and SCRI, into one organization to further align our oncology platform.

Brian Tyler: and College of Technology Network, Untada, Provider Solutions, and SCRI, into one organization to further align our oncology platform. We view this as a natural step as we accelerate our go-to-market strategies across our oncology capabilities. It will also allow us to better execute on our oncology strategy and deliver a connected and seamless customer experience across this diversified portfolio. One of the foundational assets in the oncology platform is the U.S. oncology network. In the past year, the network saw significant growth as reflected in the addition of new practices, the growth in physician numbers, and steady increases in patient visits, as both patients and providers continue to recognize the value of the network.

Speaker Change: We view this as a natural step as we accelerate our go-to-market strategies across our oncology capabilities. It'll also allow us to better execute on our oncology strategy and deliver a connected and seamless customer experience across this diversified portfolio.

Brian Tyler: Let's turn to the medical surgical segment. Market Environment over the last several years, which obviously included the COVID-19 era, has been pretty dynamic and introduced volatility, but generally it was very favorable for our medical business. As market conditions continue to normalize, we've seen some general market weakness in the primary care channel, which impacted our first quarter. We're taking actions to drive operational efficiencies and increased cost optimization efforts. These efforts will enhance our core distribution capabilities while continuing to invest in efficiencies to better serve our customers, partners, and patients.

Speaker Change: One of the foundational assets in the oncology platform is the U.S. Oncology Network.

Speaker Change: In the past year, the network saw significant growth as reflected in the addition of new practices, the growth in physician numbers, and steady increases in patient visits, as both patients and providers continue to recognize the value of the network.

Brian Tyler: In the last fiscal year, we welcomed four practices to the U.S. oncology network, expanding our geographic footprint and increasing access to lower cost oncology care. And we're pleased to see the momentum continuing. We announced earlier today, we welcomed the Tennessee Cancer Specialist to the network, bringing the total number of providers in the network to now exceed 2,600. In addition to practice management, we also support the community practices through the Sarah Cannon Research Institute Joint Venture, a fully integrated oncology research organization aimed at expanding clinical research and increasing access to clinical trials. SCRI's research network brings together more than 1,300 physicians who are actively enrolling patients into clinical trials at more than 250 locations in 24 states across the United States.

Speaker Change: in the last fiscal year we welcome four practices to the u s oncology network expanding our geographic footprint and increasing access to lower cost oncology care and we're pleased to see the momentum continuing

Brian Tyler: Despite the weaker than expected start to the year, we remain confident in our assets and unique positions in the alternate site markets and our ability to drive long-term growth, moving on to our two strategic pillars of oncology and biopharma services. We are steadily executing our strategy to grow our oncology platform and improve patients' cancer care experiences. Building upon the foundational distribution services, we have built extensive capabilities spanning a patient's journey and cancer treatment.

Brian Tyler: And we're pleased to see the momentum continuing. Leveraging our differentiated physician, pharmacy, and patient networks and our transaction scale, we believe we are strategically well-positioned to continue to deliver value to biopharmaceuticals. Our provider network is able to reach more than 50% of the specialists in each of these growing therapeutic areas. To improve the efficiency of our solutions and enhance customer experiences, we continue to explore more use cases for technology and AI. One of the more recent examples includes the implementation of a chatbot, which leverages AI to answer common user questions about prior authorization status.

Speaker Change: We announced earlier today, we welcome the Tennessee Cancer Specialists to the network, bringing the total number of providers in the network to now exceed 2,600.

Speaker Change: In addition to practice management, we also support the community practices through the Sarah Cannon Research Institute joint venture.

Speaker Change: A fully integrated oncology research organization aimed at expanding clinical research and increasing access to clinical trials. SCRI's research network brings together more than 1,300 physicians who are actively enrolling patients into clinical trials at more than 250 locations across the United States.

Brian Tyler: We're driving strong momentum across the oncology platform, demonstrating our differentiated value propositions and unique positions in this space. During the first quarter, we aligned all the oncology-related assets and teams, including the U.S, and College of Technology Network, Untada, Provider Solutions, and SCRI, into one organization to further align our oncology platform. We view this as a natural step as we accelerate our go-to-market strategies across our oncology capabilities. It will also allow us to better execute on our oncology strategy and deliver a connected and seamless customer experience across this diversified portfolio.

Brian Tyler: In the past year, practices in the U.S. Oncology network participated in over 200 clinical trials through SCRI. And earlier this year, SCRI announced a collaboration with AstraZeneca that will introduce modern solutions to accelerate clinical trial delivery timelines, reduce site burdens, and enhance patient enrollment.

Speaker Change: in 24 states across the United States.

Speaker Change: In the past year, practices in the U.S. Oncology Network participated in over 200 clinical trials through SCRI.

Speaker Change: And earlier this year, SCRI announced a collaboration with AstraZeneca that will introduce modern solutions to accelerate clinical trial delivery timelines, reduce site burdens, and enhance patient enrollment.

Brian Tyler: Let's move now to biopharmus services, our second strategic growth pillar, which focuses on improving medication access, affordability, and adherence through a scaled and connected network. During the quarter, adjusted operating profit in the prescription technology solution segment was unchanged year over year. Growth in our technology services products, particularly within the affordability solution. was offset by lower contributions due to the mix of services within our access program and higher expenses to support future growth. Leveraging our differentiated physician pharmacy and patient networks and our transaction scale, we believe we are strategically well positioned to continue to deliver value to biopharma.

Speaker Change: Let's move now to Biopharma Services, our second strategic growth pillar, which focuses on improving medication access, affordability, and adherence through a scaled and connected network.

Brian Tyler: One of the foundational assets in the oncology platform is the U.S, oncology network. In the past year, the network saw significant growth as reflected in the addition of new practices, the growth in physician numbers, and steady increases in patient visits, as both patients and providers continue to recognize the value of the network. In the last fiscal year, we welcomed four practices to the U.S, oncology network, expanding our geographic footprint and increasing access to lower cost oncology care.

Speaker Change: During the quarter, adjusted operating profit in the prescription technology solution segment was unchanged year over year.

Speaker Change: Growth in our technology services products, particularly within the affordability solutions, was offset by lower contributions due to the mix of services within our access programs and higher expenses to support future growth.

Speaker Change: Leveraging our differentiated physician, pharmacy, and patient networks and our transaction scale, we believe we are strategically well-positioned to continue to deliver value to Biopharma.

Brian Tyler: And we're pleased to see the momentum continuing. We announced earlier today, we welcomed the Tennessee Cancer Specialist to the network, bringing the total number of providers in the network to now exceed 2600. In addition to practice management, we also support the community practices through the Sarah Cannon Research Institute Joint Venture, a fully integrated oncology research organization aimed at expanding clinical research and increasing access to clinical trials. SCRI's research network brings together more than 1300 physicians who are actively enrolling patients into clinical trials at more than 250 locations in 24 states across the United States. In the past year, practices in the U.S, oncology network participated in over 200 clinical trials through SCRI.

Brian Tyler: In the first quarter, our affordability programs have saved patients nearly $2.2 billion in out-of-pocket costs. In addition, we continue to offer a variety of services and capabilities that help patients get the medicine they need to live healthier lives. Many of our products achieve this by integrating automation and technology into the existing processes. We support more than 650 biopharma brands and have a strong footprint in key therapeutic areas including oncology, neurology, gastroenterology, endocrinology, and cardiology. Our provider network is able to reach more than 50% of the specialists in each of these growing therapeutic areas. To improve the efficiency of our solutions and enhance customer experiences, we continue to explore more use cases for technology and AI.

Speaker Change: In the first quarter, our affordability programs have saved patients nearly $2.2 billion in out-of-pocket costs.

Speaker Change: In addition, we continue to offer a variety of services and capabilities that help patients get the medicine they need to live healthier lives. Many of our products achieve this by integrating automation and technology into the existing processes.

Speaker Change: We support more than 650 biopharma brands and have a strong footprint in key therapeutic areas including oncology, neurology, gastroenterology, endocrinology, and cardiology.

Speaker Change: Our provider network is able to reach more than 50% of the specialists in each of these growing therapeutic areas.

Brian Tyler: And earlier this year, SCRI announced a collaboration with AstraZeneca that will introduce modern solutions to accelerate clinical trial delivery timelines, reduce site burdens and enhance patient enrollment.

Speaker Change: To improve the efficiency of our solutions and enhance customer experiences, we continue to explore more use cases for technology and AI. One of the more recent examples includes the implementation of a chatbot, which leverages AI to answer common user questions about the prior authorization status.

Brian Tyler: One of the more recent examples includes the implementation of a chatbot which leverages AI to answer common user questions about the prior authorization status. We are also leveraging AI to improve internal forecasting of customer demand, allowing us to better plan for operations and staffing needs. We really think that pairing AI with humans further differentiates our capabilities and will best position our business for the future.

Brian Tyler: Let's move now to biopharmus services, our second strategic growth pillar, which focuses on improving medication access, affordability and adherence through a scaled and connected network. During the quarter, adjusted operating profit in the prescription technology solution segment was unchanged year over year. Growth in our technology services products, particularly within the affordability solution, was offset by lower contributions due to the mix of services within our access program and higher expenses to support future growth.

Brian Tyler: We're also leveraging AI to improve internal forecasting of customer demand, allowing us to better plan for operations and staffing. Now, let's pull everything together. We're pleased with the continued progress in advancing our company priority. Despite the somewhat mixed segment results in the quarter, we are confident that we have a clear and robust plan to deliver on our financial commitments. We have a strong business foundation, a well-defined strategy, and a track record of execution with dedication and excellence. With that, I'll hand it over to Britt.

Speaker Change: We're also leveraging AI to improve internal forecasting of customer demand, allowing us to better plan for operations and staffing needs.

Speaker Change: We really think that pairing AI with humans further differentiates our capabilities and will best position our business for the future.

Brian Tyler: Now let's pull everything together. We are pleased with the continued progress in advancing our company priorities. Despite the somewhat mixed segment results in the quarter, we are confident that we have a clear and robust plan to deliver on our financial commitments. We have a strong business foundation and a well-defined strategy, and a track record of execution with dedication and excellence. Our differentiated offerings will continue to drive better health outcomes for our customers and their patients.

Speaker Change: Now let's pull everything together. We're pleased with the continued progress in advancing our company priorities.

Speaker Change: Despite the somewhat mixed segment results in the quarter, we are confident that we have a clear and robust plan to deliver on our financial commitments.

Brian Tyler: Leveraging our differentiated physician pharmacy and patient networks and our transaction scale, we believe we are strategically well positioned to continue to deliver value to Biopharma. In the first quarter, our affordability programs have saved patients nearly $2.2 billion in out-of-pocket costs. In addition, we continue to offer a variety of services and capabilities that help patients get the medicine they need to live healthier lives. Many of our products achieve this by integrating automation and technology into the existing processes.

Speaker Change: We have a strong business foundation and a well-defined strategy and a track record of execution with dedication and excellence. Our differentiated offerings will continue to drive better health outcomes for our customers and their patients.

Britt Vitalone: With that, I'll hand it over to Britt. Thank you, Brian, and good afternoon. As Brian mentioned, McKesson had another solid quarter with earnings per share results that exceeded our expectations, resulting in an increase to our full-year guidance. These results reflect the continued growth in our U.S. pharmaceutical segment, including our leading oncology and specialty capabilities and our Canadian pharmaceutical distribution operations within the international segment.

Speaker Change: With that, I'll hand it over to Britt.

Britt: Thank you, Brian , and good afternoon.

Britt: As Brian mentioned, McKesson had another solid quarter with earnings per share results that exceeded our expectations, resulting in an increase to our full year guidance.

Britt Vitalone: These results reflect the continued growth in our U.S. pharmaceutical segment, including our leading oncology and specialty capabilities and our Canadian pharmaceutical distribution operations within the international segment, and higher distribution volumes in our Canadian business. These were partially offset by lower contributions from the primary care channel in the medical-surgical solution segment, principally to support growth in the U.S. pharmaceutical segment. Year-over-year results benefited from continued growth in the U.S. pharmaceutical segment, partially offset by lower volumes across the primary care channel in the medical-surgical solution segment. The effective tax rate for the quarter was 13 percent, driven by the recognition of net discrete tax benefits of $125 million in the quarter.

Britt: These results reflect the continued growth in our U.S. pharmaceutical segment, including our leading oncology and specialty capabilities and our Canadian pharmaceutical distribution operations within the international segment.

Brian Tyler: We support more than 650 Biopharma brands and have a strong footprint in key therapeutic areas including oncology, neurology, gastroenterology, endocrinology and cardiology. Our provider network is able to reach more than 50% of the specialists in each of these growing therapeutic areas. To improve the efficiency of our solutions and enhance customer experiences, we continue to explore more use cases for technology and AI. One of the more recent examples includes the implementation of a chatbot which leverages AI to answer common user questions about the prior authorization status.

Britt Vitalone: I'm also pleased that our Board of Directors approved two actions in July. First, the 15% increase to the quarterly dividend to 71 cents per share, marking the eighth consecutive year of dividend increases. And second, in the additional $4 billion of share repurchase authorization, bringing the total share repurchase authorization to approximately $10 billion as of July of 2024. These actions demonstrate the confidence that the board and management have in the execution of our strategic priorities as we continue to focus on capital deployment to drive value for our shareholders.

Speaker Change: I'm also pleased that our Board of Directors approved two actions in July . First, a 15% increase to the quarterly dividend to $0.71 per share, marking the eighth consecutive year of dividend increases.

Speaker Change: And second, an additional $4 billion of share repurchase authorization, bringing the total share repurchase authorization to approximately $10 billion as of July of 2024.

Brian Tyler: We are also leveraging AI to improve internal forecasting of customer demand allowing us to better plan for operations and staffing needs. We really think that pairing AI with humans further differentiates our capabilities and will best position our business for the future.

Speaker Change: These actions demonstrate the confidence that the board and management have in the execution of our strategic priorities as we continue to focus on capital deployment to drive value for our shareholders.

Britt Vitalone: My comments today refer to our adjusted results unless I state otherwise.

Speaker Change: My comments today refer to our adjusted results, unless I state otherwise. I'll start with a consolidated result, followed by a review at the segment level, and conclude with an update on our outlook.

Britt Vitalone: I'll start with a consolidated results, followed by a review at the segment level, and conclude with an update on our outlook. Consolidated revenues were $79.3 billion, an increase of 6%. Led by growth in the U.S. pharmaceutical segment, resulting from increased prescription volumes, including higher volumes from specialty products, retail national account customers in GLP-1 medication. Gross' profit was $3.1 billion, an increase of 4%, primarily a result of specialty distribution growth within the U.S. pharmaceutical segment, including our provider solutions business, and higher distribution volumes in our Canadian business, included in the international segment. These were partially offset by lower contributions from the primary care channel in the medical surgical solution segment.

Brian Tyler: Now let's pull everything together. We are pleased with the continued progress in advancing our company priorities. Despite the somewhat mixed segment results in the quarter, we are confident that we have a clear and robust plan to deliver on our financial commitments. We have a strong business foundation and a well-defined strategy and a track record of execution with dedication and excellence. Our differentiated offerings will continue to drive better health outcomes for our customers and their patients.

Speaker Change: Consolidated revenues were $79.3 billion, an increase of 6%, led by growth in the U.S. pharmaceutical segment, resulting from increased prescription volumes, including higher volumes from specialty products, retail national account customers, and GLP-1 medications.

Speaker Change: Gross profit was $3.1 billion, an increase of 4%.

Britt Vitalone: With that, I'll hand it over to Britt. Thank you, Brian, and good afternoon. As Brian mentioned, McKesson had another solid quarter with earnings per share results that exceeded our expectations resulting in an increase to our full-year guidance. These results reflect the continued growth in our U.S, pharmaceutical segment, including our leading oncology and specialty capabilities and our Canadian pharmaceutical distribution operations within the international segment. I'm also pleased that our Board of Directors approved two actions in July.

Speaker Change: primarily a result of specialty distribution growth within the U.S. pharmaceutical segment including our provider solutions business.

Speaker Change: and Higher Distribution Volumes in our Canadian business.

Speaker Change: Included in the international segment.

Speaker Change: These were partially offset by lower contributions from the primary care channel in the medical-surgical solution segment.

Britt Vitalone: Operating expenses increased 7% to $1.9 billion, principally to support growth in the U.S. pharmaceutical segment. Year-over-year results were also impacted by increased technology investment across the enterprise, and the lapping of prior year integration costs resulted related to the SCRI joint venture and our savings solutions. Operating profit was $1.3 billion, an increase of 12%, driven by $110 million of pre-tax gains associated with McKesson Ventures equity investments included in corporate expenses, compared to pre-tax losses of $70 million in the first quarter of fiscal 2024. Year-over-year results benefited from continued growth in the U.S. pharmaceutical segment, partially offset by lower volumes across the primary care channel in the medical surgical solutions segment.

Speaker Change: Operating expenses increased 7% to $1.9 billion, principally to support growth in the U.S. pharmaceutical segment.

Britt Vitalone: First, the 15% increase to the quarterly dividend to 71 cents per share, marking the eighth consecutive year of dividend increases. And second, in the additional $4 billion of share repurchase authorization, bringing the total share repurchase authorization to approximately $10 billion as of July of 2024. These actions demonstrate the confidence that the Board and management have in the execution of our strategic priorities as we continue to focus on capital deployment to drive value for our shareholders.

Speaker Change: Year-over-year results were also impacted by increased technology investment across the enterprise and the lapping of prior year integration costs.

Speaker Change: Results related to the SCRI Joint Venture and AHRQ Savings Solutions.

Speaker Change: Operating profit was $1.3 billion, an increase of 12%.

Speaker Change: Driven by $110 million of pre-tax gains associated with McKesson Ventures' equity investments included in corporate expenses, compared to pre-tax losses of $7 million in the first quarter of fiscal 2024.

Speaker Change: Year-over-year results benefited from continued growth in the U.S. pharmaceutical segment, partially offset by lower volumes across the primary care channel in the medical-surgical solution segment.

Britt Vitalone: My comments today refer to our adjusted results unless I state otherwise. I'll start with a consolidated results followed by a review at the segment level and conclude with an update on our outlook. Consolidated revenues were $79.3 billion, an increase of 6%. Led by growth in the U.S, pharmaceutical segment, resulting from increased prescription volumes, including higher volumes from specialty products, retail national account customers in GLP1 medication. Gross' profit was $3.1 billion, an increase of 4%, primarily a result of specialty distribution growth within the U.S, pharmaceutical segment, including our provider solutions business, and higher distribution volumes in our Canadian business, included in the international segment.

Britt Vitalone: Interest expense was $70 million in increase over the prior year, resulting from higher average balances of our loan portfolio throughout the quarter, and a prior year gain on debt extinguishment of $9 million. The effect of tax rate for the quarter was 13%, driven by the recognition of net discrete tax benefits of $125 million in the quarter. As a reminder, we had a net discrete tax benefit of $147 million in the first quarter of the prior year.

Speaker Change: Interest expense was $70 million, an increase over the prior year, resulting from higher average balances of our loan portfolio throughout the quarter and a prior year gain on debt extinguishment of $9 million.

Speaker Change: The effective tax rate for the quarter was 13 percent, driven by the recognition of net discrete tax benefits of $125 million in the quarter.

Speaker Change: As a reminder, we had a net discrete tax benefit of $147 million in the first quarter of the prior year.

Britt Vitalone: As we've discussed previously, we provide annual effective tax rate guidance, as the timing and amount of discrete tax items are difficult to predict. First quarter diluted weighted average shares outstanding was $130.7 million, a decrease of 4%. Rapping up our consolidated results, earnings per diluted share increased 8% to $7.88, ahead of our expectation, driven by pre-tax gains associated with test and ventures equity investments, a lower share count, and operating profit growth in the U.S. pharmaceutical segment.

Britt Vitalone: As we've discussed previously, we provide annual effective tax rate guidance as the timing and amount of discrete tax items are difficult to predict. Wrapping up our consolidated results, earnings per diluted share increased 8% to $7.88, ahead of our expectations, driven by pre-tax gains associated with Kesson Ventures' equity investments, a lower share count, and operating profit growth in the U.S. pharmaceutical side. Revenue growth reflects positive utilization trends, leading to increased prescription volumes, including higher volumes from specialty products, retail national account customers, and GLP-1 medication.

Speaker Change: As we've discussed previously, we provide annual effective tax rate guidance as the timing and amount of discrete tax items are difficult to predict.

Britt Vitalone: These were partially offset by lower contributions from the primary care channel in the medical surgical solution segment. Operating expenses increased 7% to $1.9 billion, principally to support growth in the U.S, pharmaceutical segment. Year over year results were also impacted by increased technology investment across the enterprise, and the lapping of prior year integration costs resulted related to the SCRI joint venture and our savings solutions. Operating profit was $1.3 billion, an increase of 12%, driven by $110 million of pre-tax gains associated with McKesson Ventures equity investments included in corporate expenses, compared to pre-tax losses of $70 million in the first quarter of fiscal 2024.

Speaker Change: First quarter diluted weighted average shares outstanding was $130.7 million, a decrease of 4%.

Speaker Change: Wrapping up our consolidated results, earnings per diluted share increased 8% to $7.88, ahead of our expectations, driven by pre-tax gains associated with Kesson Ventures' equity investments, a lower share count, and operating profit growth in the U.S. pharmaceutical segment.

Britt Vitalone: During the first quarter segment results, it can be found on slide 7-11 starting with the U.S. Pharmaceutical. U.S. pharmaceutical segment delivered solid revenue and operating profit growth. Once again, first quarter results demonstrate the continued momentum across all customer segments and our ability to drive sustainable long-term growth. Revenues were $71.7 billion, an increase of 7%. Revenue growth reflects positive utilization trend, leading to increased prescription volumes, including higher volumes from specialty products, retail national account customers, and GLP-1 medications. In the quarter, revenues for GLP-1 medications were $8.8 billion, an increase of approximately $1.8 billion, or 26%, when compared to the prior year.

Speaker Change: According to first quarter segment results, it can be found on slides 7 through 11, starting with U.S. Pharmaceutical.

Speaker Change: U.S. Pharmaceutical segment delivered solid revenue and operating profit growth. Once again, first quarter results demonstrate the continued momentum across all customer segments and our ability to drive sustainable long-term growth.

Britt Vitalone: Year over year results benefited from continued growth in the U.S, pharmaceutical segment, partially offset by lower volumes across the primary care channel in the medical surgical solution segment. Interest expense was $70 million in increase over the prior year, resulting from higher average balances of our loan portfolio throughout the quarter, and a prior year gain on debt extinguishment of $9 million. The effect of tax rate for the quarter was 13%, driven by the recognition of net discrete tax benefits of $125 million in the quarter.

Speaker Change: Revenues were $71.7 billion, an increase of 7%.

Speaker Change: Revenue growth reflects positive utilization trends, leading to increased prescription volumes, including higher volumes from specialty products, retail national account customers, and GLP-1 medications.

Speaker Change: In the quarter, revenues for GLP-1 medications were $8.8 billion, an increase of approximately $1.8 billion, or 26% when compared to the prior year.

Britt Vitalone: On a sequential basis, revenues for GLP-1 medications increased $1.3 billion, or $17. As supply constraints moderated in the quarter. We anticipate continued GLP-1 medication growth year over year; however, with variability from quarter to quarter. For the quarter, operating profit increased 6% to $815 million, driven by growth in the distribution of specialty products to providers in health systems. Within the US pharmaceutical segment, our comprehensive platform of leading oncology assets continues to grow in deliver value for customers and patients. Our ongoing investments in the oncology platform further differentiate our capabilities. More than 2600 providers in the US oncology network continued to experience solid growth, with same-site visits increasing 6% in the quarter.

Speaker Change: On a sequential basis, revenues for GLP-1 medications increased $1.3 billion, or 17%.

Britt Vitalone: As a reminder, we had a net discrete tax benefit of $147 million in the first quarter of the prior year. As we've discussed previously, we provide annual effective tax rate guidance as the timing and amount of discrete tax items are difficult to predict. First quarter diluted weighted average shares outstanding was $130.7 million, a decrease of 4%. Rapping up our consolidated results earnings per diluted share increased 8% to $7.88 ahead of our expectation, driven by pre-tax gains associated with test and ventures equity investments, a lower share count, and operating profit growth in the U.S, pharmaceutical segment.

Speaker Change: as supply constraints moderated in the quarter.

Speaker Change: We anticipate continued GLP-1 medication growth year-over-year, however, with variability from quarter-to-quarter.

Britt Vitalone: For the quarter, operating profit increased 6% to $815 million, driven by growth in the distribution of specialty products to providers and health systems within the U.S. pharmaceutical segment. The comprehensive platform of leading oncology assets continues to grow and deliver value for customers and patients. Our ongoing investments in the oncology platform further differentiate our capabilities. We remain excited about our leading and differentiated oncology offerings and intend to continue our ongoing investment. We must sustain the growth and progress we're seeing against our strategic priorities.

Speaker Change: For the quarter, operating profit increased 6% to $815 million, driven by growth in the distribution of specialty products to providers and health systems.

Speaker Change: Within the U.S. pharmaceutical segment,

Speaker Change: Our comprehensive platform of leading oncology assets continues to grow and deliver value for customers and patients.

Speaker Change: Our ongoing investments in the Oncology platform further differentiate our capabilities.

Speaker Change: More than 2,600 providers in the U.S. Oncology Network continue to experience solid growth, with same-site visits increasing 6% in the quarter.

Britt Vitalone: During the first quarter segment results, it can be found on slide 7-11 starting with the U.S, pharmaceutical. U.S, pharmaceutical segment delivered solid revenue and operating profit growth. Once again, first quarter results demonstrate the continued momentum across all customer segments and our ability to drive sustainable long-term growth. Revenues were $71.7 billion in increase of 7%. Revenue growth reflects positive utilization trend, leading to increased prescription volumes, including higher volumes from specialty products, retail national account customers, and GLP-1 medications.

Britt Vitalone: US Oncology Network is further strengthened by a set of broad capabilities, including provider solutions, GPO services, data and insight through Ontata, and clinical trial capabilities to our Saracanand Research Institute Joint Venture, which concludes clinical trial matching and accelerated clinical trial setup.

Speaker Change: U.S. Oncology Network is further strengthened by a set of broad capabilities.

Speaker Change: including provider solutions, GPO services, data and insight through UNTADA, and clinical trial capabilities through our Sarah Cannon Research Institute joint venture, which includes clinical trial matching and accelerated clinical trial setup.

Britt Vitalone: We remain excited about our leading and differentiated oncology offerings and intend ongoing investment to sustain the growth and progress we're seeing against our strategic priorities.

Speaker Change: We remain excited about our leading and differentiated oncology offerings and intend ongoing investment.

Speaker Change: to sustain the growth and progress we're seeing against our strategic priorities.

Britt Vitalone: Moving to prescription technology solution, prescription technology solution segment delivered revenues of $1.2 billion in operating profit of $223 million, both flat to the prior year. First quarter results reflect growth across our technology services products, including increased demand for our affordability solutions, including growth and evoucher and You prescribe. Revenue included 18% sequential growth and third party logistics. However, these results were lower than anticipated due to drug product launch delays, which had an approximately 7% impact on segment revenue growth in the quarter. Operating profit was impacted by lower contributions from our access solutions due to the mix of transactions and services we provide across our access program, and higher expenses to support future growth across the business.

Britt Vitalone: In the quarter, revenues for GLP-1 medications were $8.8 billion, an increase of approximately $1.8 billion or 26% when compared to the prior year. On a sequential basis, revenues for GLP-1 medications increased $1.3 billion or $17, as supply constraints moderated in the quarter. We anticipate continued GLP-1 medication growth year over year, however with variability from quarter to quarter. For the quarter operating profit increased 6% to $815 million, driven by growth in the distribution of specialty products to providers in health systems.

Britt Vitalone: The Prescription Technology Solutions Segment delivered revenues of $1.2 billion and an operating profit of $223 million, both flat to the prior year. Revenue included 18% sequential growth in third-party logistics. However, these results were lower than anticipated due to drug product launch delays, which had an approximately 7% impact on segment revenue growth in the quarter. Turning to Medical Surgical Solutions, Let me turn to cash and capital deployment, which can be found in slide 12. For the first quarter, we had a negative pre-cash flow of $1.5 billion, which included $167 million in capital expenditure.

Speaker Change: Moving to Prescription Technology Solutions.

Speaker Change: Description Technology Solutions Segment delivered revenues of $1.2 billion and operating profit of $223 million, both flat to the prior year.

Speaker Change: First quarter results reflect growth across our technology services products, including increased demand for our affordability solutions, including growth in eVoucher and ePrescribe.

Speaker Change: Revenue included 18% sequential growth in third-party logistics.

Britt Vitalone: Within the US pharmaceutical segment, our comprehensive platform of leading oncology assets continues to grow in deliver value for customers and patients. Our ongoing investments in the oncology platform further differentiate our capabilities. More than 2600 providers in the US oncology network continued to experience solid growth with same but site visits increasing 6% in the quarter. US oncology network is further strengthened by a set of broad capabilities, including provider solutions, GPO services, data and insight through ontata, and clinical trial capabilities to our Saracanand Research Institute Joint Venture, which concludes clinical trial matching and accelerated clinical trial setup. We remain excited about our leading and differentiated oncology offerings and intend ongoing investment to sustain the growth and progress we're seeing against our strategic priorities.

Speaker Change: However, these results were lower than anticipated due to drug product launch delays, which had an approximately 7% impact on segment revenue growth in the quarter.

Speaker Change: Operating profit was impacted by lower contributions from our access solutions due to the mix of transactions and services we provide across our access program.

Speaker Change: and higher expenses to support future growth across the business

Britt Vitalone: We remain confident that the segment operating profit will grow at or above the long-term growth target rate on an annual basis.

Speaker Change: We remain confident that the segment operating profit will grow at or above the long-term growth target rate on an annual basis.

Britt Vitalone: Turning to medical surgical solutions, first quarter results in the segment were below our expectations. Revenues were $2.6 billion, an increase of 1%. Operating profit was $200 million, a decrease of 15%. These results were driven by higher volumes of specialty pharmaceuticals, offset by lower volumes across the primary care channel, including customer mix and product demand shifts. And the laughing of prior year nutritional products strength in the extended care channel.

Speaker Change: Turning to Medical Surgical Solutions.

Speaker Change: First quarter results in this segment were below our expectations.

Speaker Change: Revenues were $2.6 billion, an increase of 1%.

Speaker Change: An operating profit was $200 million, a decrease of 15%.

Speaker Change: These results were driven by higher volumes of specialty pharmaceuticals, offset by lower volumes across the primary care channel, including customer mix and product demand shifts, and the lapping of prior year nutritional product strength in the extended care channel.

Britt Vitalone: Next, let me address our international results. Revenues were $3.7 billion, an increase of 6%. Operating profit was $102 million, an increase of 13%, driven by higher pharmaceutical distribution volumes in the Canadian business compared to the prior year.

Britt Vitalone: Moving to prescription technology solution, prescription technology solution segment delivered revenues of $1.2 billion in operating profit of $223 million, both flat to the prior year. First quarter results reflect growth across our technology services products, including increased demand for our affordability solutions, including growth and evoucher and you prescribe. Revenue included 18% sequential growth and third party logistics. However, these results were lower than anticipated due to drug product launch delays, which had an approximately 7% impact on segment revenue growth in the quarter.

Speaker Change: Next, let me address our international results.

Speaker Change: Revenues were $3.7 billion, an increase of 6%. And operating profit was $102 million, an increase of 13%, driven by higher pharmaceutical distribution volumes in the Canadian business compared to the prior year.

Britt Vitalone: In wrapping up our segment review, corporate expenses were $35 million in the quarter, which included pre-tax gains of $110 million, or $62 cents per share, related to equity investments within the test and ventures portfolio, compared to pre-tax losses of $7 million, or $4 cents per share, in the first quarter of fiscal 2024. As we've previously discussed, McKesson Ventures' impact on consolidated financials can be influenced by the performance of each individual investment quarter to quarter, which may result in gains and losses, the timing and magnitude, which can vary for each investment.

Speaker Change: Wrapping up our segment review.

Speaker Change: Corporate expenses were $35 million in the quarter, which included pre-tax gains of $110 million or $0.62 per share.

Speaker Change: related to equity investments within the McKesson Ventures portfolio compared to pre-tax losses of $7 million or $0.04 per share in the first quarter of fiscal 2024.

Britt Vitalone: Operating profit was impacted by lower contributions from our access solutions due to the mix of transactions and services we provide across our access program and higher expenses to support future growth across the business. We remain confident that the segment operating profit will grow at or above the long term growth target rate on an annual basis.

Speaker Change: As we've previously discussed, McKesson Ventures' impact on consolidated financials can be influenced by the performance of each individual investment, quarter-to-quarter, which may result in gains and losses,

Britt Vitalone: Let me turn to cash and capital deployment, which can be found in Slide 12. We ended the quarter with $2.3 billion in cash and cash equivalents. For the first quarter, we had negative free cash flow of $1.5 billion, which included $167 million in capital expenditures. In the quarter, free cash flow was impacted by the timing of tax payments and working capital investments to support the onboarding of new customers in the US pharmaceutical segment.

Speaker Change: The timing and magnitude which can vary for each investment.

Speaker Change: Let me turn to cash and capital deployment, which can be found in slide 12.

Speaker Change: We ended the quarter with $2.3 billion in cash and cash equivalents.

Britt Vitalone: Turning to medical surgical solutions, first quarter results in the segment were below our expectations revenues were $2.6 billion in increase of 1% in operating profit was $200 million a decrease of 15%. These results were driven by higher volumes of specialty pharmaceuticals offset by lower volumes across the primary care channel, including customer mix and product demand shifts. And the laughing of prior year nutritional products strength in the extended care channel.

Speaker Change: For the first quarter, we had negative free cash flow of $1.5 billion, which included $167 million in capital expenditures.

Speaker Change: In the quarter, free cash flow was impacted by the timing of tax payments and working capital investments to support the onboarding of new customers in the U.S. pharmaceutical segment.

Britt Vitalone: We returned $609 million of cash to shareholders, which included $527 million of share repurchases and $82 million in dividend payments.

Speaker Change: We returned $609 million of cash to shareholders, which included $527 million of share repurchases and $82 million in dividend payments.

Britt Vitalone: As a reminder, our cash position, working capital metrics, and the resulting cash flows can each be impacted by timing, which includes the day of the week that a quarter ends on and therefore can vary from quarter to quarter.

Britt Vitalone: Next let me address our international results revenues were $3.7 billion an increase of 6% in operating profit was $102 million an increase of 13% driven by higher pharmaceutical distribution volumes in the Canadian business compared to the prior year. In wrapping up our segment review corporate expenses were $35 million in the quarter, which included pre-tax gains of $110 million or $62 cents per share related to equity investments within the test and ventures portfolio compared to pre-tax losses of $7 million or $4 cents per share in the first quarter of fiscal 2024.

Speaker Change: As a reminder, our cash position, working capital metrics, and the resulting cash flows can each be impacted by timing, which includes the day of the week that a quarter ends on, and therefore can vary from quarter to quarter.

Britt Vitalone: Now let me discuss our fiscal 2025 outlook. We continue to make progress against our strategic priorities, leveraging our broad capabilities across the enterprise. As a result of our first quarter performance and confidence in the outlook over the balance of the year, we are raising our guidance range for fiscal 2025 adjusted earnings per diluted share to $31.75 to $32.55. Looking ahead to the remainder of fiscal 2025, we remain confident in our differentiated oncology and bio-farmist services assets and our strategy to advance McKesson as a diversified healthcare services company.

Britt Vitalone: Now, let me discuss our fiscal 2025 outlook. We continue to make progress against our strategic priorities, leveraging our broad capabilities across the enterprise. In the first quarter, we experienced strong momentum across our U.S. pharmaceutical segment, including our broad oncology business. The breadth of our capabilities and leading portfolio of assets across oncology have led to value creation for our customers, partners, and shareholders over the last five years. Our outlook also contemplates the impact of the distribution contract with Optum that went into effect in July of 2024. As we previously outlined, startup costs associated with this contract implementation were not material to first quarter results.

Speaker Change: Now, let me discuss our fiscal 2025 outlook. We continue to make progress against our strategic priorities, leveraging our broad capabilities across the enterprise.

Speaker Change: As a result of our first quarter performance and confidence in the outlook over the balance of the year, we are raising our guidance range for fiscal 2025 adjusted earnings per diluted share to $31.75 to $32.55.

Britt Vitalone: As we've previously discussed, McKesson ventures impact on consolidated financials can be influenced by the performance of each individual investment quarter to quarter, which may result in gains and losses, the timing and magnitude, which can vary for each investment.

Speaker Change: Looking ahead to the remainder of fiscal 2025, we remain confident in our differentiated oncology and biopharma services assets and our strategy to advance McKesson as a diversified healthcare services company.

Britt Vitalone: Let me start with our segments. In the first quarter, we experienced strong momentum across our US pharmaceutical segment, including our broad oncology offering. The breadth of our capabilities and leading portfolio of assets across oncology have led to value creation for our customers, partners, and shareholders over the last five years. Our fiscal 2025 outlook for the US pharmaceutical segment is a continuation of this momentum. Our outlook also contemplates the impact of the distribution contract with Optimum that went into effect in July of 2024. Thanks to dedicated effort from our employees, we delivered a seamless onboarding experience in July.

Britt Vitalone: Let me turn to cash and capital deployment, which can be found in slide 12. We ended the quarter with $2.3 billion in cash and cash equivalents. For the first quarter, we had negative free cash flow of $1.5 billion, which included $167 million in capital expenditures.

Speaker Change: Let me start with our segments.

Speaker Change: In the first quarter, we experienced strong momentum across our U.S. pharmaceutical segment, including our broad oncology offering.

Speaker Change: The breadth of our capabilities and leading portfolio of assets across oncology have led to value creation for our customers, partners, and shareholders over the last five years. Our fiscal 2025 outlook for the U.S. pharmaceutical segment is a continuation of this momentum.

Britt Vitalone: In the quarter, free cash flow was impacted by the timing of tax payments and working capital investments to support the onboarding of new customers in the US pharmaceutical segment. We returned $609 million of cash to shareholders, which included $527 million of share repurchases and $82 million in dividend payments.

Speaker Change: Our outlook also contemplates the impact of the distribution contract with Optum that went into effect in July of 2024.

Speaker Change: Thanks to dedicated effort from our employees, we delivered a seamless onboarding experience in July .

Britt Vitalone: As we previously outlined, startup costs associated with this contract implementation were not material to first quarter results. However, we made investments in working capital during the quarter in advance of the contract start date. We are pleased to expand our pharmaceutical distribution relationship with Optimum, and this is a testament to our leading distribution and sourcing capabilities, including our strong customer value proposition. We now anticipate US pharmaceutical revenues will increase 13 to 16%. When compared to prior guidance, we anticipate lower contribution from branded pharmaceuticals, which includes lower volumes for Himmera. And we anticipate offering profit to increase 8 to 10%.

Britt Vitalone: As a reminder, our cash position, working capital metrics, and the resulting cash flows can each be impacted by timing, which includes the day of the week that a quarter ends on and therefore can vary from quarter to quarter.

Speaker Change: As we previously outlined, startup costs associated with this contract implementation were not material to first quarter results.

Britt Vitalone: However, we made investments in working capital during the quarter in advance of the contract start date. We are pleased to expand our pharmaceutical distribution relationship with Optum, and this is a testament to our leading distribution and sourcing capabilities, including our strong customer value proposition. And we anticipate operating profit to increase 8 to 10 percent. In the prescription technology solution segment, we anticipate revenues to increase 14 to 18 percent and operating profit to increase 11 to 15 percent, a modest decline from the prior guidance and volatility driven in part by product delays and shortages.

Speaker Change: However, we made investments in working capital during the quarter in advance of the contract start date.

Britt Vitalone: Now let me discuss our fiscal 2025 outlook. We continue to make progress against our strategic priorities, leveraging our broad capabilities across the enterprise. As a result of our first quarter performance and confidence in the outlook over the balance of the year, we are raising our guidance range for fiscal 2025 adjusted earnings per diluted share to $31.75 to $32.55. Looking ahead to the remainder of fiscal 2025, we remain confident in our differentiated oncology and bio-farmist services assets and our strategy to advance McKesson as a diversified healthcare services company.

Speaker Change: We are pleased to expand our pharmaceutical distribution relationship with Optum and this is a testament to our leading distribution and sourcing capabilities, including our strong customer value proposition.

Speaker Change: We now anticipate U.S. pharmaceutical revenues will increase 13 to 16 percent. When compared to prior guidance, we anticipate lower contribution from branded pharmaceuticals, which includes lower volumes for Humira.

Speaker Change: and we anticipate operating profit to increase 8 to 10 percent.

Britt Vitalone: In the prescription technology solution segment, we anticipate revenues to increase 14 to 18% in operating profit to increase 11 to 15%, a modest decline from the prior guidance. The updated outlook for the segment reflects the lower than anticipated first quarter results and the impact of product launch delays. During the first quarter, demand for our access solutions, including prior authorization volumes related to GLP-1 medications, demonstrated a slower rate of growth compared to the prior year, including the mix of transactions and services across our various access programs and volatility driven in part by product delays and shortages.

Speaker Change: In the Prescription Technology Solutions segment, we anticipate revenues to increase 14-18% and operating profit to increase 11-15%, a modest decline from the prior guidance.

Britt Vitalone: Let me start with our segments. In the first quarter, we experienced strong momentum across our US pharmaceutical segment, including our broad oncology offering. The breadth of our capabilities and leading portfolio of assets across oncology have led to value creation for our customers, partners, and shareholders over the last five years. Our fiscal 2025 outlook for the US pharmaceutical segment is a continuation of this momentum. Our outlook also contemplates the impact of the distribution contract with optimum that went into effect in July of 2024.

Speaker Change: The updated outlook for the segment reflects the lower than anticipated first quarter results and the impact of product launch delays.

Speaker Change: During the first quarter, demand for our access solutions, including prior authorization volumes related to GLP-1 medications, demonstrated a slower rate of growth compared to the prior year, including the mix of transactions and services across our various access programs.

Britt Vitalone: These results were lower than our expectations in the first quarter. As we have previously communicated, we remain confident in the long-term growth rate targets on an annual basis. However, we anticipate the growth trajectory in this segment will vary from quarter to quarter, driven by several factors that include utilization trends, the timing and trajectory of new product drug launches, the evolution of a product's program support requirements as it matures, which could result in the shift to other services or a program termination, product delays and supply shortages, the annual verification programs that we provide for our customers that occur in our fiscal fourth quarter, and the size and timing of investments to support and expand our product portfolio.

Speaker Change: and volatility driven in part by product delays and shortages.

Speaker Change: These results were lower than our expectations in the first quarter.

Britt Vitalone: Thanks to dedicated effort from our employees, we delivered a seamless onboarding experience in July. As we previously outlined, startup costs associated with this contract implementation were not material to first quarter results. However, we made investments in working capital during the quarter in advance of the contract start date. We are pleased to expand our pharmaceutical distribution relationship with optimum, and this is a testament to our leading distribution and sourcing capabilities, including our strong customer value proposition.

Speaker Change: As we've previously communicated, we remain confident in the long-term growth rate targets on an annual basis.

Britt Vitalone: However, we anticipate the growth trajectory in this segment will vary from quarter to quarter, driven by several factors that include utilization trends, the timing and trajectory of new product launches, the evolution of a product's program support requirements as it matures, which could result in the shift to other services or a program termination, product delays and supply shortages, the annual verification programs that we provide for our customers that occur in our fiscal fourth quarter, and the size and timing of investments to support We remain confident that our market-leading assets, Moving to Medical Surgical Solutions. As market conditions have normalized, we've noted instances of general market weakness in the primary care channel. This led to lower sales and operating profit contributions in the first quarter.

Speaker Change: However, we anticipate the growth trajectory in this segment will vary from quarter to quarter, driven by several factors that include utilization trends,

Speaker Change: The timing and trajectory of new product drug launches, the evolution of a product's program support requirements as it matures, which could result in the shift to other services or a program termination.

Speaker Change: Product delays and supply shortages, the annual verification programs that we provide for our customers that occur in our fiscal fourth quarter, and the size and timing of investments to support and expand our product portfolio.

Britt Vitalone: We now anticipate US pharmaceutical revenues will increase 13 to 16%. When compared to prior guidance, we anticipate lower contribution from branded pharmaceuticals, which includes lower volumes for Himmera. And we anticipate offering profit to increase 8 to 10%. In the prescription technology solution segment, we anticipate revenues to increase 14 to 18% in operating profit to increase 11 to 15%, a modest decline from the prior guidance. The updated outlook for the segment reflects the lower than anticipated first quarter results and the impact of product launch delays.

Britt Vitalone: We see solid market demand for our differentiated suite of solutions and services that help improve patients' access, affordability, and adherence to medication, as well as help to support biopharma manufacturers throughout the life cycle of their products. We continue to build differentiated technology-enabled solutions that can seamlessly be used in the workflow of payers, providers, and pharmacies. We remain confident that our market-leading assets, depth of services and capabilities, and continued investment in innovation position us for growth in line or modestly above our long-range targets.

Speaker Change: We see solid market demand for our differentiated suite of solutions and services that help improve patients' access, affordability, and adherence to medication.

Speaker Change: as well as help to support biopharma manufacturers throughout the life cycle of their products.

Speaker Change: We continue to build differentiated, technology-enabled solutions that can seamlessly be used in the workflow of payers, providers, and pharmacies.

Speaker Change: We remain confident that our market-leading assets, depth of services and capabilities, and continued investment in innovation position us for growth in line or modestly above our long-range targets.

Britt Vitalone: During the first quarter, demand for our access solutions, including prior authorization volumes related to GLP-1 medications demonstrated a slower rate of growth compared to the prior year, including the mix of transactions and services across our various access program and volatility driven in part by product delays and shortages. These results were lower than our expectations in the first quarter. As we have previously communicated, we remain confident in the long-term growth rate targets on an annual basis.

Britt Vitalone: Moving to medical surgical solutions, we anticipate revenues to increase three to seven percent in operating profit to be at the low end of the initial guidance range of six to eight percent. Over the last few years, including the period covering COVID, the medical surgical environment has been dynamic and experienced volatility across the customers and products within the primary care channel and sites of care. The customer's unparalleled breadth of services and capabilities led to strong performance. As market conditions ignore normalize, we've noted instances of general market weakness in the primary care channel. This led to lower sales and operating profit contributions in the first quarter.

Speaker Change: Moving to medical-surgical solutions, we anticipate revenues to increase 3-7% and operating profit to be at the low end of the initial guidance range of 6-8%.

Speaker Change: Over the last few years, including the period covering COVID, the medical-surgical environment has been dynamic and experienced volatility across the customers and products within the primary care channel and sites of care.

Britt Vitalone: However, we anticipate the growth trajectory in this segment will vary from quarter to quarter, driven by several factors that include utilization trends, the timing and trajectory of new product drug launches, the evolution of a product's program support requirements as it matures, which could result in the shift to other services or a program termination, product delays and supply shortages, the annual verification programs that we provide for our customers that occur in our fiscal fourth quarter, and the size and timing of investments to support and expand our product portfolio. We see solid market demand for our differentiated suite of solutions and services that help improve patients access, affordability and adherence to medication, as well as help to support biopharma manufacturers throughout the life cycle of their products.

Speaker Change: McKesson's unparalleled breadth of services and capabilities led to strong performance.

Speaker Change: As market conditions have normalized, we've noted instances of general market weakness in the primary care channel. This led to lower sales and operating profit contributions in the first quarter.

Britt Vitalone: Our updated foliar outlook reflects the results from the first quarter and the trends we are seeing in the market. We anticipate that these trends will continue through the second quarter.

Speaker Change: Our updated full-year outlook reflects the results from the first quarter and the trends we are seeing in the market. We anticipate that these trends will continue through the second quarter.

Britt Vitalone: As Brian noted in his remarks, in response to the market conditions, today we are announcing a series of initiatives within the medical surgical solution segment to drive operational efficiencies and increase cost optimization efforts. In addition to delivering improved operating performance, these actions will result in greater alignment across the organization while continuing to invest to better serve our customers, partners, and patients. We estimate total charges between $150 million, consisting primarily of employee severance and other employee-related costs, facility and other exit-related costs, as well as long-lived asset impairment. This restructuring program is anticipated to be substantially complete by the end of the first half of fiscal 2026.

Britt Vitalone: As Brian noted in his remarks, in response to market conditions, today we are announcing a series of initiatives within the medical surgical solutions segment to drive operational efficiencies and increase cost optimization efforts. This restructuring program is anticipated to be substantially complete by the end of the first half of fiscal 2026. Streamlined Infrastructure and Operating Leverage. Finally, in the international segment, we anticipate revenues to increase 4% to 8% and operating profit to increase 8% to 12%.

Speaker Change: As Brian noted in his remarks, in response to the market conditions, today we are announcing a series of initiatives within the medical surgical solutions segment to drive operational efficiencies and increase cost optimization efforts.

Speaker Change: In addition to delivering improved operating performance, these actions will result in greater alignment across the organization while continuing to invest to better serve our customers, partners, and patients.

Britt Vitalone: We continue to build differentiated technology-enabled solutions that can seamlessly be used in the workflow of payers, providers, and pharmacies. We remain confident that our market-leading assets, depth of services and capabilities, and continued investment in innovation, position us for growth in line or modestly above our long-range targets.

Speaker Change: We estimate total charges between $100 and $150 million, consisting primarily of employee severance and other employee-related costs.

Speaker Change: Facility and other exit-related costs, as well as long-lived asset impairments.

Speaker Change: This restructuring program is anticipated to be substantially complete by the end of the first half of fiscal 2026.

Britt Vitalone: Moving to medical surgical solutions, we anticipate revenues to increase three to seven percent in operating profit to be at the low end of the initial guidance range of six to eight percent. Over the last few years, including the period covering COVID, the medical surgical environment has been dynamic and experienced volatility across the customers and products within the primary care channel and sites of care. The customer's unparalleled breadth of services and capabilities led to strong performance.

Britt Vitalone: These initiatives will lead to improved margin, a streamlined infrastructure, and operating leverage. We anticipate the benefits from this program will begin in the second half of this fiscal year.

Speaker Change: These initiatives will lead to improved margins.

Speaker Change: Streamlined Infrastructure and Operating Leverage. We anticipate the benefits from this program will begin in the second half of this fiscal year.

Britt Vitalone: We are well positioned with leading assets and capabilities across all the alternate sites of care, and we remain confident in our ability to continue delivering long-term growth. Finally, in the international segment, we anticipate revenues to increase 4 to 8 percent and operating profit to increase 8 to 12 percent. We are pleased with the first quarter performance in our Canadian business and anticipate continued growth in fiscal 2025.

Speaker Change: We are well positioned with leading assets and capabilities across all the alternate sites of care, and we remain confident in our ability to continue delivering long-term growth.

Speaker Change: Finally, in the international segment, we anticipate revenues to increase 4-8% and operating profit to increase 8-12%.

Britt Vitalone: As market conditions ignore normalize, we've noted instances of general market weakness in the primary care channel. This led to lower sales and operating profit contributions in the first quarter. Our updated foliar outlook reflects the results from the first quarter and the trends we are seeing in the market. We anticipate that these trends will continue through the second quarter.

Speaker Change: We are pleased with the first quarter performance in our Canadian business and anticipate continued growth in fiscal 2025.

Britt Vitalone: We also remain committed to exit Norway as part of the completion of our European exit. As a reminder, Norway remains the only operating country in Europe that we have not yet entered into an agreement to sell. Contributions related to operations in Norway are included in the fiscal 2025 outlook for the segment.

Speaker Change: We also remain committed to Exit Norway as part of the completion of our European exit.

Britt Vitalone: As Brian noted in his remarks, in response to the market conditions, today we are announcing a series of initiatives within the medical surgical solution segment to drive operational efficiencies and increase cost optimization efforts. In addition to delivering improved operating performance, these actions will result in greater alignment across the organization while continuing to invest to better serve our customers, partners and patients. We estimate total charges between $150 million, consisting primarily of employee severance and other employee related costs, facility and other exit related costs, as well as long lived asset impairment.

Britt Vitalone: Contributions related to operations in Norway are included in the fiscal 2025 outlook for the second. In the corporate segment, we anticipate expenses to be in the range of $495 to $555 million, which incorporates the impact of $110 million of pre-tax gains related to equity investments within the McKesson Ventures portfolio in the first quarter. Our investments in AI will continue to focus on improving the customer experience. We continue to evaluate the enterprise technology operating model approach to effectively support the development of our strategy and needs of the organization, our customers, and partners.

Britt Vitalone: In the corporate segment, we anticipate expenses to be in the range of $495 to $555, which incorporates the impact of $110 million of pre-tax gains related equity investments within the McKesson Ventures portfolio in the first quarter, as well as increased technology spending. We are pleased with the development and contributions from our enterprise technology organization, including the pace of our technology investment focused on supporting growth, innovation, and efficiency. Our investments in AI will continue to focus on improving the customer experience. We continue to evaluate the enterprise technology operating model approach to effectively support the development of our strategy and needs of the organization, our customers, and partners.

Britt Vitalone: This restructuring program is anticipated to be substantially complete by the end of the first half of fiscal 2026. These initiatives will lead to improved margin, a streamlined infrastructure and operating leverage. We anticipate the benefits from this program will begin in the second half of this fiscal year. We are well positioned with leading assets and capabilities across all the alternate sites of care and we remain confident in our ability to continue delivering long-term growth.

Speaker Change: We continue to evaluate the enterprise technology operating model approach to effectively support the development of our strategy and needs of the organization our customers and partners. We anticipate an increased level of investment in the technology operating model to accelerate the organization and improve business continuity compliance and all.

Britt Vitalone: We anticipate an increased level of investment in the technology operating model to accelerate the organization and improve business continuity, compliance, and operating efficiency.

Speaker Change: Operating efficiency.

Britt Vitalone: Rapping up our outlook. We anticipate interest expense to be approximately $245 to $265 million, reflecting the impact from increased average balances of the company's loan portfolio and higher interest rates throughout the first quarter and our outlook for the remainder of fiscal 2025. We anticipate income attributable to non-controlling interest to be in the range of $175 to $185 million, reflecting the success of Claris-1's generic sourcing operations. We anticipate the full-year effective tax rate will be in the range of approximately 17 to 19 percent, reflecting the positive discrete tax items recognized in the first quarter.

Speaker Change: Wrapping up our outlook.

Speaker Change: <unk> interest expense to be approximately $245 million to $265 million, reflecting the impact from increased average balances of the companys loan portfolio and higher interest rates throughout the first quarter and our outlook for the remainder of fiscal 2025.

Britt Vitalone: Finally, in the international segment, we anticipate revenues to increase 4 to 8 percent and operating profit to increase 8 to 12 percent. We are pleased with the first quarter performance in our Canadian business and anticipate continued growth in fiscal 2025. We also remain committed to exit Norway as part of the completion of our European exit. As a reminder, Norway remains the only operating country in Europe that we have not yet entered into an agreement to sell. Contributions related to operations in Norway are included in the fiscal 2025 outlook for the segment.

Speaker Change: We anticipate income attributable to noncontrolling interest to be in the range of $175 million to $185 million, reflecting the success of claris, one generic sourcing operations.

Speaker Change: And we anticipate the full year effective tax rate will be in the range of approximately 17% to 19%, reflecting the positive discrete tax items recognized in the first quarter.

Britt Vitalone: In the corporate segment, we anticipate expenses to be in the range of $495 to $555 which incorporates the impact of $110 million of pre-tax gains related equity investments within the McKesson Ventures portfolio in the first quarter, as well as increased technology spending. We are pleased with the development and contributions from our enterprise technology organization, including the pace of our technology investment focused on supporting growth, innovation and efficiency. Our investments in AI will continue to focus on improving the customer experience.

Britt Vitalone: As a reminder, the timing and amount of discrete tax items are difficult to predict, and therefore we do not provide quarterly effective tax rate guidance.

Speaker Change: As a reminder, the timing and amount of discrete tax items are difficult to predict.

Speaker Change: Therefore, we do not provide quarterly effective tax rate guidance.

Britt Vitalone: Turning to cash flow and capital deployment, we anticipate free cash flow of approximately $4.8 to $5.2 billion. Harris, our working capital metrics and resulting free cash flow will vary from quarter to quarter, impacted by timing, including the day of the week that marks the close of the quarter. Our guidance reflects plans to repurchase approximately $2.8 billion of shares in fiscal 2025. As a result of this share repurchase activity, we estimate weighted average diluted shares outstanding to be in the range of approximately 128 to 130 million. We will continue to execute our discipline capital allocation strategy, creating value for our shareholders.

Speaker Change: Turning to cash flow and capital deployment.

Speaker Change: <unk> free cash flow of approximately four 8% to $5 2 billion.

Speaker Change: Our working capital metrics, and resulting free cash flow will vary from quarter to quarter impacted by timing, including the day of the week that marks the close of the quarter.

Speaker Change: Our guidance reflects plans to repurchase approximately $2 8 billion of shares in fiscal 2025.

Britt Vitalone: As a result of this share repurchase activity, we estimate weighted average diluted shares outstanding to be in the range of approximately $128 to $130 million. We anticipate revenue growth of 13 to 15%. In fiscal 2025, we anticipate earnings per diluted share of $31.75 to $32.55, which represents growth of 16 to 19 percent compared to fiscal 2024. In closing, we remain positioned to deliver for our customers and our partners. With that, we can move to the Q&A.

Britt Vitalone: We continue to evaluate the enterprise technology operating model approach to effectively support the development of our strategy and needs of the organization, our customers and partners. We anticipate an increased level of investment in the technology operating model to accelerate the organization and improve business continuity, compliance and operating efficiency.

Speaker Change: As a result of this share repurchase activity, we estimate weighted average diluted shares outstanding to be in the range of approximately $128 million to $130 million.

Speaker Change: We will continue to execute our disciplined capital allocation strategy, creating value for our shareholders. This discipline has led to a return on invested capital approaching 28%.

Britt Vitalone: This discipline has led to a return on invested capital approaching 28%.

Britt Vitalone: Rapping of fiscal 2025 guidance, we anticipate revenue growth of 13 to 15% and operating profit growth of 10 to 15% as compared to the prior year. Fiscal 2025, we anticipate earnings per diluted share of $31.75 to $32.55, which represents growth of 16 to 19% as compared to fiscal 2024. Our guidance assumes that the first half of the fiscal year will deliver less contribution than previously anticipated, with the second half delivering approximately 53% of the full year earnings.

Speaker Change: Wrapping a fiscal 2025 guidance, we anticipate revenue growth of 13% to 15% and operating profit growth of 10% to 15% as compared to the prior year.

Britt Vitalone: Rapping up our outlook. We anticipate interest expense to be approximately $245 to $265 million, reflecting the impact from increased average balances of the company's loan portfolio and higher interest rates throughout the first quarter and our outlook for the remainder of fiscal 2025. We anticipate income attributable to non-controlling interest to be in the range of $175 to $185 million, reflecting the success of Claris-1's generic sourcing operations. We anticipate the full year effective tax rate will be in the range of approximately 17 to 19 percent, reflecting the positive discrete tax items recognized in the first quarter. As a reminder, the timing and amount of discrete tax items are difficult to predict and therefore we do not provide quarterly effective tax rate guidance.

Speaker Change: Fiscal 2025, we anticipate earnings per diluted share of $31 75 to $32 55.

Speaker Change: Which represents growth of 16% to 19% as compared to fiscal 2024.

Speaker Change: Our guidance assumes that the first half of the fiscal year will deliver less contribution than previously anticipated.

Speaker Change: Second half delivering approximately 53% of the full year earnings.

Britt Vitalone: In closing, our fiscal 2025 outlook incorporates continued momentum across the business. We remain confident in our leading positions in growth pillars across oncology and biopharma services platforms. We are confident the actions we are taking now will sustain the growth we have delivered over the past several years.

Speaker Change: In closing our fiscal 2025 outlook incorporates continued momentum across the business, we remain confident in our leading positions in growth pillars across oncology and Biopharma services platforms.

Britt Vitalone: Turning to cash flow and capital deployment, we anticipate free cash flow of approximately $4.8 to $5.2 billion. Harris, our working capital metrics and resulting free cash flow will vary from quarter to quarter, impacted by timing, including the day of the week that marks the close of quarter. Our guidance reflects plans to repurchase approximately $2.8 billion of shares in fiscal 2025. As a result of this share repurchase activity, we estimate weighted average diluted shares outstanding to be in the range of approximately 128 to 130 million. We will continue to execute our discipline capital allocation strategy, creating value for our shareholders. This discipline has led to a return on invested capital approaching 28%.

Speaker Change: We are confident the actions, we're taking now will sustain the growth we have delivered over the past several years, we have strong and stable financial foundation, which positions us to execute on our capital allocation strategy.

Britt Vitalone: We have a strong and stable financial foundation, which positions us to execute on our capital allocation strategy. We remain positioned to deliver for our customers and our partners and to create sustainable shareholder value.

Speaker Change: And we remain positioned to deliver for our customers and our partners and to create sustainable shareholder value.

Unknown Executive: With that, we can move to 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 if you would like to ask questions.

Speaker Change: That we can move to the Q&A.

Speaker Change: Thank you.

Speaker Change: If you would like to signal with questions. Please press star one on your Touchtone telephone.

Speaker Change: If you are joining us today using a speaker phone. Please make sure to mute function is turned off to allow your signal to reach our equipment.

Speaker Change: That is star one if you'd like to ask questions.

Eric Percher: And our first question will come from Eric Percher with Neffron Research. Please go ahead. Thank you. I would like to jump right into RxPS and Brian, can I help you?

Speaker Change: And our first question will come from Eric Percher with Nephron Research. Please go ahead.

Britt Vitalone: Rapping of fiscal 2025 guidance, we anticipate revenue growth of 13 to 15% and operating profit growth of 10 to 15% as compared to the prior year. Fiscal 2025, we anticipate earnings per diluted share of $31.75 to $32.55, which represents growth of 16 to 19% as compared to fiscal 2024. Our guidance assumes that the first half of the fiscal year will deliver less contribution than previously anticipated with the second half delivering approximately 53% of the full year earnings.

Eric Percher: Thank you I'd like to jump right into Rx TFS.

Unknown Executive: I'd like to jump right into RXTS, and Brian, can I help you, can I ask you to help us understand the mix of services within Access? I think we've talked about the mix between Access and 3PL, but it sounds like there was a mix of services within Access that is different. And then Britt, relative to the GLP-1 mix, is this in part the value of new scripts versus annual re-ups?

Eric Percher: Ryan can I help you can I ask you to help us understand the mix of services within access I think we've talked about mix between access and <unk>. It sounds like there was a mix of services and the access that is different and then britt relative to that <unk> mix is this in part the value of new scripts versus.

Eric Percher: Can I ask you to help us understand the mix of services within Access? I think we've talked about mix between access and through PL, but it sounds like there was a mix of services and access. That is different. And then grit relative to the GLP1 mix. Is this in part the value of new scripts versus annual re-ups? Or are you seeing any manufacturer push back on prices, volume expands, or any impact from the advent of these direct manufacturer programs? Have those been factors? Thanks, Eric. Thanks for the question. So I think the first part of your question was relative to mix within the access portfolio.

Speaker Change: <unk> annual re ups.

Speaker Change: Or are you seeing any manufacturer pushback on price and volume expands or any impact from the advent of these direct manufacturer programs have those been factors.

Britt Vitalone: In closing, our fiscal 2025 outlook incorporates continued momentum across the business. We remain confident in our leading positions in growth pillars across oncology and biopharma services platforms. We are confident the actions we are taking now will sustain the growth we have delivered over the past several years. We have strong and stable financial foundation, which positions us to execute on our capital allocation strategy. We remain positioned to deliver for our customers and our partners and to create sustainable shareholder value.

Speaker Change: Thanks, Eric Thanks for the question so.

Speaker Change: I think the first part of your question was relative to mix within the access portfolio.

Brian Tyler: And here I would just say, you know, this isn't a single program offering. Each program can have nuance to it. It can be based off different sorts of transactions and interactions with the patients. We can get paid differently. It's really a manufacturer program, so they have a hand in how they want to design and what metrics they want to track. And then that translates to the transactions that we can build for.

Speaker Change: And here I would just say these programs. This isn't a single program offering each program can have nuance to it can be based off different sorts of transactions and interactions with the patients. We can get paid differently. It's really it's really a manufacturer programs that they have.

Operator: With that, we can move to 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 if you would like to ask questions.

Speaker Change: And then how they want it designed and what metrics they want to track and then that translates to the transactions that we can bill for this quarter the mix of those services shifted honest an NOL.

Brian Tyler: In this quarter, the mix of those services shifted on us in a way that was unanticipated at the beginning of the year. As it relates to GLP1's, Eric, I don't think we're seeing anything that we haven't seen over the past few quarters. I think maybe I just go back and talk about maybe re-emphasize some of the things that go on in this particular segment. And I think specifically, as you think about our access and affordability programs, clearly utilization is the foundation building block, and utilization has been stable and growing over the last several quarters. But a couple of things that I would point out, clearly the timing and trajectory of new product drug launches is an impact.

Speaker Change: Hey that was unanticipated at the beginning of the year.

Speaker Change: As it relates to GOP ones, Eric I don't think we're seeing anything that.

Eric Percher: We haven't seen over the past few quarters I think maybe I'll just go back and talk about just maybe reemphasize some of the things that go on in this particular segment and I think.

Eric Percher: And our first question will come from Eric Percher with Neffron Research. Please go ahead. Thank you. I would like to jump right into RxPS and Brian, can I help you? Can I ask you to help us understand the mix of services within access? I think we've talked about mix between access and through PL, but it sounds like there was a mix of services and access. That is different. And then grit relative to the GLP1 mix.

Speaker Change: Specifically as you think about our access and affordability programs.

Eric Percher: Is this in part the value of new scripts versus annual re-ups? Or are you seeing any manufacturer push back on prices, volume expands, or any impact from the advent of these direct manufacturer programs? Have those been factors? Thanks, Eric. Thanks for the question. So I think the first part of your question was relative to mix within the access portfolio. And here I would just say, you know, this isn't a single program offering.

Eric Percher: Nearly utilization as the foundation building block and utilization has been stable and growing over the last several quarters, but a couple of things that I would point out clearly the timing and trajectory of new product drug launches has an impact and I referenced in my opening comments that we had product delays in our <unk> business. We also have product delay.

Brian Tyler: And I referenced in my opening comments that we had product delays in our 3PL business. We also have product delays that relate to our access programs. Ike Deck is a good example of a product that we have a program in place for. And that program has been delayed, and that has an impact on our prior authorization programs throughout the rest of the year. And if you think about product evolution, so there's also the maturity of products over time. You know, prior authorization programs, depending on the particular drug and the needs of the biopharm manufacturer, they will vary in terms of the length of that particular product.

Eric Percher: As that relate to our access programs <unk> is a good example of a product that we have a program in place for and that program has been delayed and that has an impact.

Eric Percher: On our prior.

Speaker Change: Prior authorization programs throughout the rest of the year.

Speaker Change: Do you think about product evolution. So there is also the maturity of products over time prior authorization programs, depending on the particular drug and the needs in the Biopharma manufacturer. They will vary in terms of the length of that particular product we had a drug true licit EBIT with a prior authorization program for nine years.

Unknown Executive: We had a drug Trillicity that went up with a prior authorization program for nine years. And the manufacturer determined to shift the funds for that particular program to other programs within RXTS. Nine years is a long time for a prior authorization service. So it's not unusual that we will see either a funding shift to other programs or, in some cases, just terminate. So you have that kind of variability that goes through the segment. It's not necessarily transaction or pricing variations that are driving that variability, but it's, you know, certainly the launch timing and trajectory as well as, you know, the types of services and programs and the drugs within those particular buckets.

Eric Percher: Each program can have nuance to it. It can be based off different sorts of transactions and interactions with the patients. We can get paid differently. It's really a manufacturer program, so they have a hand in how they want to design and what metrics they want to track. And then that translates to the transactions that we can build for.

Speaker Change: And the manufacturer determined to shift the funds for that particular program to other programs within our XTS nine years is a long time for prior authorization service. So it's not unusual that we will see either.

Brian Tyler: In this quarter, the mix of those services shifted on us in a way that was unanticipated at the beginning of the year. As it relates to GLP1's, Eric, I don't think we're seeing anything that we haven't seen over the past few quarters. I think maybe I just go back and talk about maybe re-emphasize some of the things that go on in this particular segment. And I think specifically, as you think about our access and affordability programs, clearly utilization is the foundation building block and utilization has been stable and growing over the last several quarters.

Unknown Executive: Funding shifts to other programs, or in some cases, just terminates. So you have that kind of variability that goes through the segment. It's not necessarily transaction or pricing variations that are driving that variability, but it's certainly the launch timing and trajectory as well as the types of services and programs and the drugs within those particular buckets.

Speaker Change: Funding shift to other programs. We are in some cases, just terminate so you have that kind of variability that goes through.

Speaker Change: Segment, it's not necessarily true.

Speaker Change: Transaction or pricing variations that are driving that variability, but it's certainly the launch timing and trajectory as well as the types of services and programs and the drugs within those particular buckets.

Stephen Baxter: Next question, please. And next, we'll be Steven Baxter with Wells Fargo. Please go ahead. Yeah. Hi. Thank you. I just wanted to ask two quick ones on the U.S. farm assignment. The profit growth there at 6%.

Speaker Change: Next question please.

Speaker Change: And next will be Stephen Baxter with Wells Fargo. Please go ahead.

Brian Tyler: But a couple things that I would point out, clearly the timing and trajectory of new product drug launches is an impact. And I referenced in my opening comments that we had product delays in our 3PL business. We also have product delays that relate to our access programs. Ike Deck is a good example of a product that we have a program in place for. And that program has been delayed and that has an impact on our prior authorization programs throughout the rest of the year.

Stephen Baxter: Yes, hi, Thank you I just wanted to ask two quick ones on the U S. Pharma segment profit growth there at 6% and was hoping you could talk a little about the factors that are going to drive it up into the 8% to 10% guidance range for the year and a bit greater detail and then if we were to look at the revenue revision I guess, if you were to exclude <unk> and Humira is there.

Stephen Baxter: Just hoping you could talk a little about the factors that are going to drive it up into the 8% to 10% guidance range for the year and in this greater detail.

Stephen Baxter: And then if you were to look at the revenue revision, I guess if you were to exclude GLP1s in Humira, is there any sense that you give us the whether the decline in your revenue out would be the same or different or maybe they wouldn't be the client all? Thank you. Well, I'll maybe I'll take those in reverse order, you know, in the case of the lower contribution from branded pharmaceuticals, specifically Humira. You know, that impact is the difference between our current guidance, the guidance that we had previously. There's no really other change to the revenue profile within the segment.

Speaker Change: Any sense you can give us.

Speaker Change: Whether the decline in your revenue outlook will be the same or different or maybe there wouldn't be a decline at all thank you.

Speaker Change: Well, maybe I'll take those in reverse order in the case of the lower contribution from branded pharmaceuticals, specifically humira.

Unknown Executive: Well, maybe I'll take those in reverse order, you know, in the case of the lower contribution from branded pharmaceuticals.

Brian Tyler: And if you think about product evolution, so there's also the maturity of products over time, you know, it, prior authorization programs, depending on the particular drug and the needs of the biopharm manufacturer, they will vary in terms of the length of that particular product. We had a drug trillicity that went up with a prior authorization program for nine years. And the manufacturer determined to shift the funds for that particular program to other programs within RXTS.

Speaker Change: That impact is the difference between our our current guidance the guidance that we had previously there is no really other change to the revenue profile within the segment as it relates to the first quarter. The performance that we had in the first quarter was in line with our expectations I would remind you that that's also in line with our long term growth.

Stephen Baxter: As it relates to the first quarter, the performance that we had in the first quarter was in line with our expectations. I would remind you that that's also in line with the long-term growth rate guidance that we've provided previously. Again, that's being driven by a lot of the same factors that we've seen or the last quarter's growth, specialty, growth within our oncology business. And as we think about the rest of the year, we anticipate that we'll have continued growth in those areas, continued strength in our generics program, and the 8% to 10% guide for the full year, again, is unchanged from our prior guidance.

Brian Tyler: Nine years is a long time for a prior authorization service. So it's not unusual that we will see either a funding shift to other programs or in some cases just terminate. So you have that kind of variability that goes through the segment. It's not necessarily transaction or pricing variations that are driving that variability, but it's, you know, certainly the launch timing and trajectory as well as, you know, the types of services and programs and the drugs within those particular buckets.

Speaker Change: The guidance that we've provided previously again, it's being driven by a lot of the same factors that we've seen over the last several quarters growth in specialty.

Unknown Executive: Next question, please.

Speaker Change: Growth within our oncology business.

Speaker Change: As we think about the rest of the year and we anticipate that we'll have continued growth in those areas continued strength in our generics program and the 8% 10% guide for the full year again is unchanged from our prior guidance. So we feel good about the position that we have the customer set that we're serving as well as the continued growth in our key strategic.

Stephen Baxter: So we feel good about the position that we have, the customer set that we're serving, as well as a continued growth in a key strategic area for us, which is our oncology plan.

Jerry: Jerry for Us, which is our oncology platform.

Stephen Baxter: And next, we'll be Steven Baxter with Wells Fargo. Please go ahead. Yeah. Hi. Thank you. I just wanted to ask two quick ones on the U.S, farm assignment. The profit growth there at 6%.

Lisa Gill: Next question, please. And next will be Lisa Gill with JP Morgan. Please go ahead. Thanks very much. But just as a follow-up to that, when you talk about the brand of Humera, is it that the price is coming down because of the biosimilar, or is it just circumventing your channel altogether? That's just really not a question, just to follow up.

Jerry: Next question please.

Speaker Change: And next will be Lisa Gill with Jpmorgan. Please go ahead.

Lisa Gill: Alright, thanks very much.

Lisa Gill: Great just as a follow up to that when you talk about the Brandon Humira is it that the prices coming down because of the biosimilar or circumventing Youre channel altogether.

Unknown Executive: Just hoping you could talk a little about the factors that are going to drive it up into the 8% to 10% guidance range for the year and in this greater detail.

Unknown Executive: And then if you were to look at the revenue revision, I guess if you were to exclude GLP1s in Humira, is there any sense that you give us the whether the decline in your revenue out would be the same or different or maybe they wouldn't be the client all? Thank you. Well, I'll maybe I'll take those in reverse order, you know, in the case of the lower contribution from branded pharmaceuticals, specifically Humira.

Lisa Gill: Just really not a question just a follow up and then my real question is just if you can help you or Brian can help us to understand what's happening in the med search business, you talked about product demand mix in primary care and shifts there.

Lisa Gill: And then my real question is just if you can help, you or Brian can help us to understand what's happening in the med service business. You talk about product demand mix and primary care and shifts there. You talk about the fact that you're putting a new cost cutting, etc. around that. But what's really shifting and changing in that market? Thanks. Thank you, Lisa, for the question. Let me start with your first question. This is simply a formulary change that a customer made shift from brand to the biosimilar. And so that's the impact that's happening to the revenues is that formulary change to the biosimilar.

Lisa Gill: Can you talk about the fact that you're putting a new cost cutting et cetera around that but what's really shifting and changing in that market. Thanks.

Unknown Executive: You know, that impact is the difference between our current guidance, the guidance that we had previously. There's no really other change to the revenue profile within the segment. As it relates to the first quarter, the performance that we had in the first quarter was in line with our expectations. I would remind you that that's also in line with the long term growth rate guidance that we've provided previously. Again, that's being driven by a lot of the same factors that we've seen or the last quarter's growth specialty, growth within our oncology business.

Speaker Change: Thank you Lisa for the question, let me start with your first question. This is simply a formulary change that a customer made shift from brand to to the Biosimilar and so that's the impact that's happening to the revenues is that formulary change to the Biosimilar I'll start on medical and as we talked about.

Lisa Gill: I'll start on medical. And as we talked about, you know, we're coming off of a pretty dynamic period of years in the medical segment. One of the things that we're seeing is just give you one example: as we come through this COVID period, there is a significant less demand for COVID-type products, such as COVID test kits and testing in general. And what we have seen is, as we've normalized, begun to normalize in the environment and we've come out of this COVID period, that demand for those test kits and other types of testing related to COVID simply has not come back.

Lisa Gill: We're coming off of a pretty dynamic period of years in the medical segment.

Unknown Executive: And as we think about the rest of the year, we anticipate that we'll have continued growth in those areas, continued strength in our generics program and the 8% to 10% guide for the full year, again, is unchanged from our prior guidance. So we feel good about the position that we have, the customer set that we're serving as well as a continued growth in a key strategic area for us, which is our oncology plan.

Speaker Change: One of the things that we're seeing is just give you. One example is as we've come through this COVID-19 period. There is a significant less demand for COVID-19 type products, such as Covid test kits and testing in general and what we've seen is as we've normalized begun to normalize in the environment and we've come out of this COVID-19 period.

Unknown Executive: Next question, please.

Unknown Executive: That demand for those those test kits and other types of testing related to Covid simply has not come back is just soft.

Lisa Gill: It's just soft. We see good continued good growth within most of our segments, but there are particular product segments, such as testing and test kits and other related COVID services, that have remained soft.

Lisa Gill: We see good.

Lisa Gill: Continued good growth within most of our segments, but there are particular product segments, such as testing and test kits.

Lisa Gill: And next will be Lisa Gill with JP Morgan. Please go ahead. Thanks very much. But just as a follow-up to that, when you talk about the brand of Humera, is it that the price is coming down because of the biosimilar or it's just circumventing your channel altogether? That's just really not a question just to follow-up. And then my real question is just if you can help you or Brian can help us to understand what's happening in the med service business. You talk about product demand mix and primary care and shifts there. You talk about the fact that you're putting a new cost cutting, etc, around that. But what's really shifting and changing in that market? Thanks.

Lisa Gill: Other related Covid services that have remained soft.

Unknown Executive: Next question, please.

Speaker Change: Next question please.

Michael Journey: And next will be Michael Journey with Learning Partners. Please go ahead. Afternoon, thanks for taking the question. Maybe to follow up on Lisa's relative to Med Surge, as you think about the activities you're taking to improve profitability, where specifically within the organization customer area are you focused on those activities? And I guess with the primary care softness, you just give us a little bit more color on what's been going well in Med Surge and as what you think is going to keep trying to even accelerate trend as part of the guidance into the back half of the year.

Unknown Executive: And next will be Michael Cherny with Lear Inc. Partners. Please go ahead.

Lisa Gill: And next will be Michael Cherny with Leerink partners. Please go ahead.

Michael Cherny: Afternoon, Thanks for taking the question.

Michael Cherny: Maybe to follow up on leases.

Michael Cherny: Relative to med surge as you're thinking about the activities you are taking to improve profitability.

Speaker Change: Specifically within the organization customer area are you focused on those activities.

Speaker Change: I guess with the primary care softness can you just give us a little bit more color on whats been going well in med surge in.

Brian Tyler: Thank you, Lisa, for the question. Let me start with your first question. This is simply a formulary change that a customer made shift from brand to to the biosimilar. And so that's the impact that's happening to the revenues is that formulary change to the biosimilar.

Speaker Change: What you think is going to keep trend continued to accelerate trend as part of the guidance into the back half of the year.

Michael Journey: Well, I just remind everybody we've got a very extensive alternate site business that plays in multiple channels: primary care, extended care, surgery center, clinic settings, et cetera. We have, on top of that, a broad product offering, whose core obviously includes commodity medical products, equipment, pharmaceutical, specialty pharmaceutical. We have been seeing some good growth in the pharmaceutical and specialty pharmaceuticals that creates some margin mix challenges for us, but it's a really well-scaled business. I think outstanding customer service and reputation with customers and diversified across the channels. Now, as Brick described, I think quite well. We've been having patient mobility; we called it at one time, you know, demand, utilization in the channel.

Brian Tyler: I'll start on medical. And as we talked about, you know, we're coming off of a pretty dynamic period of years in the medical segment. One of the things that we're seeing is just give you one example is as we come through this COVID period, there is a significant less demand for COVID-type products, such as COVID test kits and testing in general. And what we have seen is as we've normalized, begun to normalize in the environment and we've come out of this COVID period, that demand for those test kits and other types of testing related to COVID simply has not come back. It's just soft. We see good continued good growth within most of our segments, but there are particular product segments, such as testing and test kits and other related COVID services that have remained soft.

Speaker Change: Yeah, well I would just remind everybody we've got a very.

Unknown Executive: Yeah, well, I would just remind everybody, we've got a very extensive alternate site business that plays in multiple channels, primary care, extended care, surgery center, clinic settings, etc. We have on top of that a broad product offering, which is obviously commodity medical products, equipment, pharmaceuticals, and specialty pharmaceuticals. We have been seeing some good growth in the pharmaceutical and specialty pharmaceutical business that creates some margin mix challenges for us, but it's a

Unknown Executive: Next question, please.

Speaker Change: Extensive alternate site business that plays in multiple channels primary care extended care surgery Center clinic settings, et cetera, and we have on top of that broad product offering.

Speaker Change: Core, obviously commodity medical products equipment pharmaceutical specialty pharmaceutical.

Speaker Change: We have been seeing some good growth in the pharmaceutical and specialty pharmaceuticals that that creates some net margin mix challenges for us, but it's a really well scaled business I think.

Unknown Executive: I think, you know, outstanding customer service and reputation with customers, and diversified across the channels. Now, as Britt described, I think quite well, you know, we've been having patient mobility, we called it at one time, demand, and utilization in the channel. And we've just seen it soften over the course of our first quarter.

Speaker Change: No.

Speaker Change: Outstanding customer service and reputation with customers.

Speaker Change: And diversified across the channels now as Brent described it quite well we've been having patient mobility, we called it a one time demand.

Brent: Utilization in the channel and we've just seen it soften over over the course of our first quarter.

Michael Journey: And we've just seen it soften over the course of our first quarter. It could be lots of contributing factors to that, right? It could be impact to the economy and inflation on patients and post-poning care. Could be staffing challenges in healthcare, which I think are quite well known. The reality for us is to just deal with what we see in the marketplace and make sure that we respond in the right way.

Unknown Executive: There could be lots of contributing factors to that, right? There could be impacts of the economy and inflation on patients and postponing care. There could be staffing challenges in healthcare, which I think are quite well known. You know, the reality for us is to just deal with what we see in the marketplace and make sure that we respond in the right way. So stepping back, aligning our go-to-market strategies, aligning our operations, thinking about the way we go to market with this mix of products. And as you would expect, you know, we're taking essentially all of those actions, and that was the program that Britt referred to.

Speaker Change: Lots of contributing factors to that right could be impact to the economy and inflation on patients and postponing care could be staffing challenges in health care, which I think are quite well known the reality for us is.

Michael Journey: And next will be Michael Journey with Learing Partners. Please go ahead. Afternoon, thanks for taking the question. Maybe to follow up on Lisa's relative to Med Surge, as you think about the activities you're taking to improve profitability, where specifically within the organization customer area are you focused on those activities? And I guess with the primary care softness, you just give us a little bit more color on what's been going well in Med Surge and as what you think is going to keep trying to even accelerate trend as part of the guidance into the back half of the year.

Speaker Change: As to just deal with what we see in the marketplace and make sure that we respond in the right way so stepping back aligning our go to market strategies aligning our our operations thinking about the way we go to market with these mix of products and as you would expect we're taking we're taking essentially all of those actions and that was the program.

Michael Journey: So stepping back, aligning our go-to-market strategies, aligning our operations, thinking about the way we go to market with these mix of products. And, as you would expect, we're taking essentially all of those actions, and that was the program that Brick referred to. Yeah, I think maybe just to add on to that as we think about it. As Brian mentioned, as we see these trends, we want to meet the customer where they're at and meet the demands for that are changing within this marketplace or that we see changing in this marketplace. And so we have an opportunity, as we always have, to drive sustainable efficiency through a lot of costs, right?

Brent: That Brent referred to.

Brent: Maybe just to add on to that as we think about it.

Speaker Change: Brian mentioned as we see these trends we want to meet the customer where they are at and meet the demands for that are changing within this marketplace that we see changing in this marketplace and so we have an opportunity.

Michael Journey: Well, I just remind everybody we've got a very extensive alternate site business that plays in multiple channels, primary care, extended care, surgery center, clinic settings, et cetera. We have on top of that broad product offering, who core obviously commodity medical products, equipment, pharmaceutical, specialty pharmaceutical. We have been seeing some good growth in the pharmaceutical and specialty pharmaceuticals that creates some margin mix challenges for us, but it's a really well-scaled business. I think outstanding customer service and reputation with customers and diversified across the channels.

Speaker Change: As we always have to drive sustainable efficiencies throughout our cost structure.

Michael Journey: Doctor, you know, align our organization and align our organization to the customers to drive more velocity, efficiency, as well as aligning our infrastructure, our real-state portfolio, re-engineer the real-state portfolio to also meet these demands. So we just want to be responsive to that. We think that these are the right actions to do that, and we are comfortable that they're going to drive significant benefits in the organization beginning in the second half of the year.

Unknown Executive: You know, align our organization and align our organization to the customers to drive more velocity efficiency, and please. And next will be Allen Lutz with Bank of America. Please go ahead.

Speaker Change: Align our organization and align our organization to the customers to drive more velocity efficiency.

Speaker Change: As well as aligning our infrastructure, our real estate portfolio reengineer, the real estate portfolio to also meet these demands. So we just want to be responsive to that we think that these are the right actions to do that and.

Speaker Change: We are comfortable that they are going to drive significant benefits in the organization beginning in the second half of the year.

Michael Journey: Now as Brick described, I think quite well. We've been having patient mobility, we called it at one time, you know, demand, utilization in the channel. And we've just seen it soften over the course of our first quarter. It could be lots of contributing factors to that, right? It could be impact to the economy and inflation on patients and post-poning care. Could be staffing challenges in healthcare, which I think are quite well known. The reality for us is to just deal with what we see in the marketplace and make sure that we respond in the right way.

Unknown Executive: Next question, please.

Speaker Change: Next question please.

Allen Lutz: Can we please... Good afternoon.

Allen Lutz: And next will be Allen Lutz with Bank of America. Please go ahead. Good afternoon, and thanks for taking the questions. Another one for Britt. I wanted to follow up on Humira. It looked like Gross Prophet at the enterprise level was a few percentage points below the Street.

Speaker Change: And next will be Allen Lutz with Bank of America. Please go ahead.

Allen Lutz: Good afternoon, and thanks for taking the questions. Another one for Brett I wanted to follow up on Humira.

Allen Lutz: It looked like gross profit at the enterprise level was a few percentage points below the street can you talk about how gross profit came in relative to your internal expectations and did the formulary change with Humira impact your gross profit at all thanks.

Britt Vitalone: Can you talk about how Gross Prophet came in relative to your internal expectations, and did the formulary change with Humira impact your Gross Prophet at all? Thanks. Yeah, thanks for that question. You know, if I think about it, the primary driver would be the growth rate and trajectory for GLP-1. So we talked about in the last few quarters that we anticipated that GLP-1s would continue to grow year-over-year, but we had seen a moderation in that growth. As I mentioned in my comments, that what we saw in the first quarters, we actually saw a sequential growth in GLP-1s.

Unknown Executive: Yeah, thanks for that question. You know, as I think about it, the primary driver would be the growth rate and trajectory of GLP-1s. And we talked about in the last few quarters that we anticipated that GLP-1s would continue to grow year over year, but we had seen some moderation in that growth. As I mentioned in my comments, what we saw in the first quarter was that we actually saw sequential growth in GLP-1s.

Speaker Change: Yeah. Thanks for that question as I think about it the primary driver would be the growth rate and trajectory for <unk> and we talked about.

Brian Tyler: So stepping back, aligning our go-to-market strategies, aligning our operations, thinking about the way we go to market with these mix of products. And as you would expect, we're taking essentially all of those actions, and that was the program that Brick referred to. Yeah, I think maybe just to add on to that as we think about it. As Brian mentioned, as we see these trends, we want to meet the customer where they're at and meet the demands for that are changing within this marketplace or that we see changing in this marketplace.

Allen Lutz: In the last few quarters that we anticipated that <unk> would continue to grow year over year, but we had seen a moderation in that growth as I mentioned in my comments that what we saw in the first quarters, we actually saw a sequential growth in <unk>. One. So there was a little bit higher than we had anticipated I think gross profit generally.

Unknown Executive: It was a little bit higher than we had anticipated. I think gross profit generally was pretty much in line with what we anticipated. But there was a little higher growth in GLP-1 distribution transactions than we had anticipated. As I mentioned, we had sequential growth quarter to quarter. That's the primary driver. Next question, please.

Britt Vitalone: It was a little bit higher than we had anticipated. I think Gross Prophet generally was pretty much in line with what we anticipated, but there was a little higher growth in GLP-1 distribution transactions than we had anticipated. As I mentioned, we had sequential growth quarter to quarter. That's the primary driver.

Allen Lutz: <unk> was pretty much in line with what we anticipated.

Brian Tyler: And so we have an opportunity, as we always have, to drive sustainable efficiency through a lot of costs, right? Doctor, you know, align our organization and align our organization to the customers to drive more velocity efficiency as well as aligning our infrastructure, our real-state portfolio, re-engineer, the real-state portfolio to also meet these demands. So we just want to be responsive to that. We think that these are the right actions to do that, and we are comfortable that they're going to drive significant benefits in the organization beginning in the second half of the year.

Allen Lutz: But there was a little higher growth in GOP, one distribution transactions than we had anticipated as I mentioned, we had sequential growth quarter to quarter. That's the primary driver.

Britt Vitalone: Next question, please.

Unknown Executive: Next question, please.

Speaker Change: Next question please.

Stephanie Davis: The next will be Stephanie Davis with Barclays. Please go ahead. Hey guys, thank you for now. I should take my question. I was just hoping to dig in again to some of the prior launched away in prescription tech. I get that at base across, you know, both CTL and access, but given it still early in the year, what gives you confidence that this is a full year push out? Is there any chance that it ends out slowing back in the back after a year or any conservism they did to that or is it a bit more predictable?

Speaker Change: And next will be Stephanie Davis with Barclays. Please go ahead.

Stephanie Davis: And next will be Stephanie Davis with Barclays. Please go ahead.

Stephanie Davis: Hey, guys. Thank you Paris for taking my question.

Stephanie Davis: Just hoping to dig in again just on the product launch delays in prescription pack I get that base across both PPL and asked as well given its still early in the year. What gives you confidence that there isn't a full push out there any chance that it ends up buying back in the back half of the year or any conservatism baked into that or is it.

Allen Lutz: And next will be Allen Lutz with Bank of America. Please go ahead. Good afternoon, and thanks for taking the questions. Another one for Britt. I wanted to follow up on Humira. It looked like Gross Prophet at the enterprise level was a few percentage points below the street. Can you talk about how Gross Prophet came in relative to your internal expectations, and did the formulary change with Humira impact your Gross Prophet at all? Thanks.

Speaker Change: I think more predictable.

Unknown Executive: So we have moderated our full year guidance slightly. So you see that the guidance is down about 1% at the midpoint.

Britt Vitalone: So we have moderated our full year guidance slightly. So you see that the guidance is down about 1% at the midpoint. We have a broad portfolio of services. Beyond prior authorizations, we support specialty drugs through hub and reimbursement programs. We have a portability program. So it is a very broad portfolio of services. The access programs like prior authorization clearly are an important part of that, but again, we have a broad set. We also have an annual verification program in our fourth fiscal quarter that has been very successful over the last two years.

Speaker Change: So we have.

Unknown Executive: We have moderated our full year guidance slightly so you see that the guidance is down about 1% at the midpoint.

Unknown Executive: We have a broad portfolio of services beyond prior authorizations. We support specialty drugs through hub and reimbursement programs. We have affordability programs, so we have a very broad portfolio of services. The access programs like prior authorization clearly are an important part of that, but again, we have a broad set. We also have an annual verification program in our fourth fiscal quarter that has been very successful over the last few years. So, as we step back and look at all of the services and programs that we have, we believe that taking our guide down at the midpoint moderately is the appropriate thing to do at this time, reflective of a slower start to the year than we had anticipated.

Speaker Change: We have a broad portfolio of services beyond prior authorizations, we support specialty drugs through hub and reimbursement programs. We have affordability programs. So it is a very broad portfolio of services. The access programs like prior authorization clearly are an important part of that but.

Britt Vitalone: Yeah, thanks for that question. You know, if I think about it, the primary driver would be the growth rate and trajectory for GLP-1. So we talked about in the last few quarters that we anticipated that GLP-1s would continue to grow year-over-year, but we had seen a moderation in that growth. As I mentioned in my comments that what we saw in the first quarters, we actually saw a sequential growth in GLP-1s. It was a little bit higher than we had anticipated.

Unknown Executive: Again, we have a broad set we also have an annual verification program in our fourth fiscal quarter that has been very successful over the last few years. So as we step back and look at all of the services and programs that we that we have we believe that the <unk>.

Britt Vitalone: So as we step back and look at all of the services and programs that we have, we believe that taking our guide down at the midpoint moderately is the appropriate thing to do at this time, reflective of a slower start to the year than we had anticipated.

Britt Vitalone: I think Gross Prophet generally was pretty much in line with what we anticipated, but there was a little higher growth in GLP-1 distribution transactions than we had anticipated. As I mentioned, we had sequential growth quarter to quarter. That's the primary driver.

Unknown Executive: Taking our guide down into mid point moderately as the appropriate thing to do at this time reflective of a slower start to the year than we had anticipated.

Unknown Executive: Next question please.

Speaker Change: Question. Please.

Daniel Grosslight: Next will be Daniel Grosslight with City. Please go ahead. Hi, thanks for taking the question. You guys mentioned this a couple of times now that the GLP1 growth this quarter was better than expected. It does seem that supply constraints are beating a bit. I'm just curious, as GLP1 to become more widely available and the channel becomes more important to the manufacturers, keeping it out of the mail channel. I'm wondering if there's any opportunity in the near term for you to improve by-side economics there and capture a little more of kind of the operating profit benefit from GLP's.

Unknown Executive: And next will be Daniel gross like with Citi. Please go ahead.

Speaker Change: Hi, Thanks for taking the question you guys mentioned this a couple times now that <unk> one.

Stephanie Davis: The next will be Stephanie Davis with Barclays. Please go ahead. Hey guys, thank you for now.

Speaker Change: Growth this quarter was it was better than expected and it does seem.

Britt Vitalone: I should take my question. I was just hoping to dig in again to some of the the prior launched away in prescription tech. I get that at base across, you know, both CTL and access, but given it still early in the year, what gives you confidence that this is a full year push out? Is there any chance that it ends out slowing back in the back after a year or any conservism they did to that or is it a bit more predictable?

Speaker Change: That supply constraints are abating a bit.

Speaker Change: I'm, just curious as Jesse ones become more widely available and the channel becomes more important to the manufacturers keeping.

Speaker Change: Keeping it out of the mail channel I'm wondering if if theres any opportunity in the near term for you to improve buy side economics therein and capture a little more.

Speaker Change: Operating profit benefit from Jefferies.

Britt Vitalone: So we have we have moderated our full year guidance slightly. So you see that the guidance is down about 1% at the midpoint. We have a broad portfolio of services. Beyond prior authorizations, we support specialty drugs through hub and reimbursement programs. We have a portability program. So it is a very broad portfolio of services. The access programs like prior authorization clearly are an important part of that, but again, we have a broad set.

Brian Tyler: Well, we have seen really, in the last several weeks, I would say improvement in the supply situation. But obviously it relates to our financial relationships with the manufacturers. I mean, we always strive to get fair value for the services that we lend and support of getting these coal chain products to market and to get to the patients and quite proud of the service and the service levels that we do provide in that regard. We are always in ongoing dialogue, a lot of it around access, availability, and what we can do to support the manufacturers and these drugs, which really would have tremendous patient impact and impact on people's lives.

Speaker Change: Well, we have seen really.

Speaker Change: Last several weeks I would say.

Speaker Change: Improvement in the supply situation obviously.

Unknown Executive: <unk> two.

Speaker Change: Our our financial relationships with.

Speaker Change: The manufacturers I mean, we always strive to get fair value for the.

Speaker Change: Services that we landed in support of getting these cold chain products to market and to get to the patients and quite proud of the service and the service levels that we do provide in that regard. We are always an ongoing dialog a lot of it around access availability, what we can do to support the manufacturers and these drugs, which really.

Britt Vitalone: We also have an annual verification program in our fourth fiscal quarter that has been very successful over the last two years. So as we step back and look at all of the services and programs that we that we have, we believe that the taking our guide down at the midpoint moderately is the appropriate thing to do at this time, reflective of a slower start to the year than we had anticipated.

Speaker Change: Would have tremendous patient impact and impact on People's lives. So.

Brian Tyler: So we are continually in discussion; some of those discussions are around the core distribution, while others will be about additional services like we provide through our technology solutions business to support them. But it's all about access and getting access to patients to get the uptake in the product.

Speaker Change: We are continually in discussions some of those discussions around our core distribution and others about additional services like we provide through our technology solutions businesses to support them, but it's all about access and getting access to patients to get uptake in the products.

Daniel Grosslight: Next will be Daniel Grosslight with City.

Unknown Executive: Please go ahead. Hi, thanks for taking the question. You guys mentioned this a couple times now that the GLP1 growth this quarter was better than expected. It does seem that supply constraints are a beating a bit.

Elizabeth Anderson: Next question, please.

Speaker Change: Next question please.

Elizabeth Anderson: Next will be Elizabeth Anderson with Evercore ISI. Please go ahead. Hi guys, thanks for the question. I was wondering if you could comment on some of the changing mix you've talked about in the market. And what impact that has on Claris One and how you guys think about the contribution from Claris One and kind of the new services and things that it can bring as the market continues to evolve from a mixed perspective with biosimilars and oncology and that. Thank you. Thanks for the question. We're really pleased with the performance of Claris One now for several years.

Elizabeth Anderson: And next will be Elizabeth Anderson with Evercore ISI. Please go ahead.

Unknown Executive: And next will be Elizabeth Anderson with Evercore ISI. Please go ahead.

Elizabeth Anderson: This will be Elizabeth Anderson with Evercore ISI. Please go ahead. Hi.

Elizabeth Anderson: Yeah.

Elizabeth Anderson: Yeah.

Brian Tyler: I'm just curious, as GLP1 to become more widely available and the channel becomes more important to the manufacturers, keeping it out of the mail channel. I'm wondering if if there's any opportunity in the near term for you to to improve by side economics there and capture a little more of kind of the operating profit benefit from GLP's. Well, we have seen really in the last several weeks, I would say improvement in the supply situation.

Elizabeth Anderson: Hi.

Elizabeth Anderson: Alright.

Elizabeth Anderson: Hi, guys. Thanks for the question I was wondering if you could comment on sort of some of the changing mix you talked about in the market and what impact that has on claris, one and how you guys think about the contribution from class one on kind of the new services and things that it can bring.

Elizabeth Anderson: The market continues to evolve from a mixed perspective with biosimilars in oncology and that thank you.

Speaker Change: Thanks for the question, we're really pleased with the performance of Claris one now for several years. The partnership that we have with some key customers of ours partnership that we have with you really hundreds of suppliers.

Brian Tyler: But obviously it relates to our financial relationships with the manufacturers. I mean, we always strive to get fair value for the services that we lend and support of getting these coal chain products to market and to get to the patients and quite proud of the service and the service levels that we do provide in that regard. We are always in ongoing dialogue, a lot of it around access, availability, what we can do to support the manufacturers and these drugs, which really would have tremendous patient impact and impact on people's lives.

Britt Vitalone: The partnership that we have with some key customers of ours, the partnership that we have with, you know, really hundreds of suppliers on the by side. We think the Claris one positions us well not only for competitive low cost for our customers, but also they focus really heavily on the availability of support. And we think that Claris One will continue to partner well as we bring on new partners in our distribution business. We believe that they'll continue to partner well on the manufacturer side. And, as I mentioned in my comments, part of the full year guide around non-controlling interest is reflective of strength in Claris One.

Speaker Change: The buy side, we think the claris, one positions us well not only for <unk>.

Speaker Change: Competitive low cost for our customers, but also they focus really heavily on the availability of supply.

Speaker Change: We think the claris, one will continue to partner well as we bring on new partners and our distribution business.

Unknown Executive: We believe that they'll continue to partner well on the manufacturer side. And, as I mentioned in my comments, part of the full-year guidance around non-controlling interest is reflective of strength in CLARIS I. So we're really pleased with how CLARIS I positions us across all generic products. We think that there could be an opportunity to expand those services, but we're really focused on serving our customers with their generic needs from an availability of supply and a low-cost perspective.

Speaker Change: We believe that will continue to partner well.

Unknown Executive: On the manufacturer side and as I mentioned in my comments part of the full full year guide around Noncontrolling interest is reflective of the strength in claris. One so we're really pleased with.

Brian Tyler: So we are continually in discussion, some of those discussions around the core distribution, others will be about additional services like we provide through our technology solutions business to support them. But it's all about access and getting access to patients to get the uptake in the product.

Britt Vitalone: So we're really pleased with how Claris One positions us across all generic products. We think that there could be opportunity to expand those services, but we're really focused on serving our customers with their generic need from an availability of supply and a low cost perspective.

Unknown Executive: How claris one positions us across all generic products, we think <unk>.

Unknown Executive: Could be opportunity to expand those services, but we're really focused on serving our customers with their generic needs.

Elizabeth Anderson: Next question, please.

Unknown Executive: Next will be Elizabeth Anderson with Evercore ISI. Please go ahead. Hi guys, thanks for the question. I was wondering if you could comment on some of the changing mix you've talked about in the market. And what impact that has on Claris one and how you guys think about the contribution from Claris one and kind of the new services and things that it can bring as the market continues to evolve from a mixed perspective with biosimilars and oncology and that. Thank you. Thanks for the question.

Unknown Executive: From an availability of supply in a low cost perspective.

Unknown Executive: As questions, please.

Speaker Change: Next question please.

Brian Tanquilut: The next will be Brian Tanquilut with Jeffrey. Please go ahead. Hey, good afternoon. Britt, maybe just on RxDS, I'm looking at your guidance adjustment, right? And the client operating profit is notably lower than the revenue change. So suggesting that there's better margin and what is in the business left.

Brian <unk>: And next will be Brian <unk> with Jefferies. Please go ahead.

Brian Tanquilut: Next question, please. Next will be Brian Tanquilut with Jeffreys. Please go ahead. Hey, good afternoon. Britt, maybe just on RxDN.

Brian Tanquilut: Next will be Brian Tanquilut with Jeffreys. Please go ahead.

Brian Tanquilut: Hey, good afternoon, Brent maybe just on <unk> I'm looking at your guidance adjustment.

Speaker Change: The decline in operating profit is notably lower than the revenue change so suggesting that there is better margin in what.

Brian Tanquilut: What is in the business. So just curious what does the margin dynamics are that we need to be thinking about.

Britt Vitalone: So just curious what those margins dynamics are that we need to be thinking about that impact is at Delta and the guidance. Yeah, thanks for the question, Brian. As I've talked about before, you look at the revenue composition of this particular segment. More than 50% of the revenue comes from our 3PL business, which is less than 10% of the operating profit contribution. So we anticipate that our other programs are on access and affordability and some of our hearing solutions, which have higher margins for us. We'll drive a lot of that improvement over the second half of the year.

Speaker Change: The impact of the Delta in the guidance.

Brian Tyler: We're really pleased with the performance of Claris one now for several years. The partnership that we have with some key customers of ours, the partnership that we have with, you know, really hundreds of suppliers on the on the by side. We think the Claris one positions us well not only for competitive low cost for our customers, but also they focus really heavily on the availability of support. And we think that Claris one will continue to partner well as we bring on new partners in our distribution business.

Unknown Executive: Thanks for the question, Brian. As I've talked about before, if you look at the revenue composition of this particular segment, more than 50 percent of the revenue comes from our 3PL business, which is less than 10 percent of operating profit. So we anticipate that our other programs around access and affordability and some of our adherence solutions, which have higher margins for us, will drive a lot of that improvement over the second half of the year. Again, the 3PL business, although it has grown sequentially, and we do anticipate that it will grow year over year, the impact that it has on our operating profit is not material.

Speaker Change: Yeah. Thanks for the question, Brian as I've talked about before if you look at the revenue composition of this particular segment more than 50% of the revenue comes from our <unk> business, which is less than 10%.

Unknown Executive: The operating profit contribution so we anticipate that our our other programs around access and affordability in some of our adherence solutions.

Unknown Executive: Which have higher margins for us will drive a lot of that improvement over the second half of the year again, the <unk> business. Although it has grown sequentially and we do anticipate that it will grow year over year.

Britt Vitalone: Again, the 3PL business, although it has grown sequentially, we do anticipate that it will grow year over year. The impact that it has on our operating profit is not material.

Brian Tyler: We believe that they'll continue to partner well on the on the manufacturer side. And as I mentioned in my comments, part of the full year guide around non-controlling interest is reflective of strength in Claris one. So we're really pleased with how Claris one positions us across all generic products. We think that there could be opportunity to expand those services, but we're really focused on serving our customers with their generic need from an availability of supply and a low cost perspective.

Unknown Executive: As questions, please.

Unknown Executive: The impact that it has on your operating profit is not material.

Aaron Ry: Can we have time for one more question, please? Certainly, that question will come from Aaron Ry with Morgan Stanley. Please go ahead. Thanks for taking my question.

Speaker Change: And we have time for one more question. Please.

Unknown Executive: We have time for one more question, please.

Speaker Change: Certainly that question will come from Erin Wright with Morgan Stanley. Please go ahead.

Speaker Change: Thanks for taking my question. So I wanted to switch gears, a little bit to you I think holiday Inn and sort of the specialty offering the needs around Tennessee cancer specialist today, what that had for you and what your appetite for similar deals going forward and just your Africa also that you talked about to consolidate this specialty offering as well.

Unknown Executive: Thanks for taking my question. So I want to switch gears a little bit to US Oncology and in sort of the specialty offering, the news around the Tennessee cancer specialist today, what that adds for you and what your appetite for similar deals is going forward, and also, just your effort also that you talked about to consolidate this specialty offering as well and have this cohesive offering, I guess, will you be breaking out more for us in terms of the disclosure on that front? As that becomes a bigger part of the growth algorithm for you, Thanks.

Brian Tyler: So I want to switch here a little bit to US oncology and in sort of especially offering the news around the Tennessee Cancer Specialist today, what that adds for you and what your appetite for similar deals are going forward. And just your effort also that you talked about to consolidate this specialty offering as well and have this cohesive offering. I guess will you be breaking out more for us in terms of the disclosure on that front? Has that become the bigger part of the growth algorithm for you? Thanks. Great, great question. I appreciate it very much.

Brian Tanquilut: The next will be Brian Tanquilut with Jeffrey. Please go ahead. Hey, good afternoon. Britt, maybe just on RxDS, I'm looking at your guidance adjustment, right? And the client operating profit is notably lower than the revenue change. So suggesting that there's better margin and what is in the business left. So just curious what those margins dynamics are that we need to be thinking about that impact is at Delta and the guidance. Yeah, thanks for the question, Brian.

Unknown Executive: Now this cohesive offering I guess will you be breaking out more for us in terms of the disclosure on that front.

Unknown Executive: That becomes a bigger part of the growth algorithm for you. Thanks.

Speaker Change: Great Great question.

Unknown Executive: Great, great question. I appreciate it very much. We've been very pleased with the growth of the U.S. Oncology Network over the last several years. As we mentioned, we're now in over 600 sites, 31 states, and 2,600 providers. Look, McKesson reported first quarter adjusted earnings per diluted share, which exceeded our expectations. We are very focused on executing against our strategy and our company priorities, which enable us to navigate through a dynamic environment with confidence.

Unknown Executive: Appreciate it very much so we've been very pleased with the growth of the U S oncology network over the last several years. So as we mentioned we're now in.

Brian Tyler: Well, we've been very pleased with the growth of the US Oncology Network over the last several years. As we mentioned, we're now in over 600 sites, 31 states, 2,600 providers. And really, it's been in multiple years of steady growth. And we continue to think that the network has tremendous attraction to community-based oncology providers. We look to add to that network through either acquisition of practices, through managed agreements with them, where we find a practice that has relevant scale in the geography and we think can practice clinical oncology. Consistent with the quality standards we have in the use on network.

Unknown Executive: Over 600 sites 31 states 2600 providers.

Brian Tanquilut: As I've talked about before, you look at the revenue composition of this particular segment more than 50% of the revenue comes from our 3PL business, which is less than 10% of the operating profit contribution. So we anticipate that our other programs are on access and affordability and some of our hearing solutions, which have higher margins for us. We'll drive a lot of that improvement over the second half of the year. Again, the 3PL business, although it has grown sequentially, we do anticipate that it will grow year over year. The impact that it has on our operating profit is not material.

Unknown Executive: And really it's been multiple years of steady growth and we continue to think that the network has tremendous attraction to community based oncology providers, we look to add to that network through either acquisition of practices through managed managed agreements with them, where we find them.

Unknown Executive: Can we have time for one more question, please?

Unknown Executive: Practice that has relevance scale and the geography, and we think in practice clinical oncology consistent with quality standards, we have in <unk> and the <unk> network. So we can acquire practice, we can attract physicians to existing practices, but I think we've consistently demonstrated over the last year is that the key part of our growth strategy.

Brian Tyler: So we can acquire a practice; we can attract physicians to existing practices. But I think we've consistently demonstrated over the last years that that's a key part of our growth strategy. Now, when we've talked for several years about the ecosystem or the complementarity between our various oncology assets, not just the network. It's the unpotidated insights business that we started four years ago. It's the joint venture, the Sarah Cannon, that we entered into a couple of years ago. It's the I Know med EMR system that we have. And I think, as we've just seen these begin to mature, we saw the opportunity to more naturally bring them together under coordinated leadership to just sort of accelerate this ecosystem or this network effect across the businesses.

Unknown Executive: Alan we've talked for several years about the.

Speaker Change: Ecosystem or the you know the.

Aaron Ry: Certainly, that question will come from Aaron Ry with Morgan Stanley. Please go ahead. Thanks for taking my question.

Unknown Executive: The complementarity between our various oncology assets not just the network.

Unknown Executive: The other part of data and insights business that we started four years ago, the joint venture with Sarah Cannon that we entered into a couple of years ago.

Brian Tyler: So I want to switch here a little bit to US oncology and in sort of especially offering the news around the Tennessee Cancer Specialist today, what that adds for you and what your appetite for similar deals are going forward. And just your effort also that you talked about to consolidate this specialty offering as well and have this cohesive offering. I guess will you be breaking out more for us in terms of the disclosure on that front?

Unknown Executive: I know, Matt EMR system that we have and I think as we've just seen these begin to mature.

Speaker Change: So the opportunity to more naturally bring them together under coordinated leadership to just sort of accelerate this this ecosystem more of this network effect across the businesses.

Brian Tyler: Has that become the bigger part of the growth algorithm for you? Thanks. Great, great question. I appreciate it very much. Well, we've been very pleased with the growth of the US oncology network over the last several years, as we mentioned, we're now in over 600 sites, 31 states, 2600 providers. And really, it's been in multiple years of steady growth. And we continue to think that the network has tremendous attraction to community based oncology providers.

Brian Tyler: And I'm very excited about this move. I think it brings more clarity. I think it's going to bring more speed. It's going to bring more focus. So, you know, when we think about where we invest in this company, we want to deploy capital against our strategic priorities, and expanding the network is certainly one of those and will continue to be one.

Speaker Change: I am very excited about this move I think it brings more clarity I think it is going to bring more speed is going to bring more focus so.

Brian Tyler: We look to add to that network through either acquisition of practices, through managed agreements with them, where we find a practice that has relevant scale in the geography and we think can practice clinical oncology. Consistent with the quality standards we have in the use on network. So we can acquire a practice, we can attract physicians to existing practices. But I think we've consistently demonstrated over the last years, that's a key part of our growth strategy.

Unknown Executive: When we think about where we invest in this company, we wanted to deploy capital against our strategic priorities and expanding the network is certainly one of those and we will continue to be one.

Brian Tyler: Okay, well let's thank you everyone again for joining the call. Thank you for the excellent questions. I want to thank Cynthia, our operator, for facilitating the call. Look, McKesson's reported first quarter adjusted earnings per diluted share, which exceeded our expectations. We are very focused on executing against our strategy and our company priorities, which enable us to navigate through a dynamic environment with confidence. Looking ahead, we're confident in the strength of our underlying businesses, the differentiation of our assets, and where they sit in the market in terms of positioning. I cannot in this call without thanking the 51,000-plus McKesson employees for their dedication and contribution to advancing our mission.

Speaker Change: Okay, well. Thank you everyone again for joining our call. Thank you for the excellent questions I want to thank Cynthia our operator for facilitating the call.

Speaker Change: Look the Catherines reported first quarter adjusted earnings per diluted share, which exceeded our expectations. We are very focused on executing against our strategy and our company priorities, which enable us to navigate through a dynamic environment with confidence looking ahead, we're confident in the strength of our underlying businesses.

Unknown Executive: Looking ahead, we're confident in the strength of our underlying businesses, the differentiation of our assets, and where they sit in the market in terms of position. I cannot end this call without thanking the 51,000 plus McKesson employees for their dedication and contribution to advancing our mission. So, to Team McKesson, thank you very much. Yeah, I hope everyone has a terrific evening. Thanks again for joining the call.

Unknown Executive: The differentiation of our assets and where they sit in the market in terms of positioning.

Unknown Executive: I cannot in this call without thanking the 51000, plus mckesson employees for their dedication and contribution to advancing our mission.

Brian Tyler: Now, when we've talked for several years about the ecosystem or the complementarity between our various oncology assets, not just the network. It's the unpotidated insights business that we started four years ago. It's the joint venture, the Sarah Cannon that we entered into a couple of years ago. It's the I know med EMR system that we have. And I think as we've just seen these begin to mature, we saw the opportunity to more naturally bring them together under coordinated leadership to just sort of accelerate this ecosystem or this network effect across the businesses.

Unknown Executive: So, to team McKesson, thank you very much. Okay, I hope everyone has a terrific evening. Thanks again for joining the call. Thank you for joining today's conference call. You may now disconnect and have a great day.

Unknown Executive: <unk> two team Mckesson, Thank you very much.

Unknown Executive: I hope everyone has a terrific evening, thanks again for joining the call.

Unknown Executive: Thank you for joining today's conference call. You may now disconnect and have a great day.

Speaker Change: Thank you for joining today's conference call you may now disconnect and have a great day.

Unknown Executive: Thanks for watching!

Unknown Executive: Okay.

Unknown Executive: Yes.

Brian Tyler: And I'm very excited about this move. I think it brings more clarity. I think it's going to bring more speed. It's going to bring more focus. So, you know, when we think about where we invest in this company, we want to deploy capital against our strategic priorities and expanding the network is certainly one of those and will continue to be one.

Unknown Executive: Yeah.

Unknown Executive: Okay.

Unknown Executive: Yeah.

Brian Tyler: Okay, well let's thank you everyone again for joining the call. Thank you for the excellent questions. I want to thank Cynthia, our operator for facilitating the call. Look, McKesson's reported first quarter adjusted earnings per diluted share, which exceeded our expectations. We are very focused on executing against our strategy and our company priorities, which enable us to navigate through a dynamic environment with confidence. Looking ahead, we're confident in the strength of our underlying businesses, the differentiation of our assets, and where they sit in the market in terms of positioning.

Brian Tyler: I cannot in this call without thanking the 51,000 plus McKesson employees for their dedication and contribution to advancing our mission. So to team McKesson, thank you very much. Okay, I hope everyone has a terrific evening. Thanks again for joining the call.

Operator: Thank you for joining today's conference call. You may now disconnect and have a great day.