Q4 2024 Cardinal Health Inc Earnings Call

August 14, 2024

Michael Cherny, Jason Hollar, Sarah [inaudible]

George: Michael Cherny, Lisa Gill, Eric Percher, Jason Hollar Michael Cherny, Lisa Gill, Eric Percher, Jason Hollar, Michael Cherny, Lisa Gill, Eric Percher, Jason Hollar, Good day, and welcome to the fourth quarter FY 2024 Cardinal Health Inc. earnings conference call. My name is George, and I'll be a coordinator for today's event.

Unknown Executive: Your day and welcome to the fourth quarter FY 2024 Cardinal Health Incorporated earnings conference call.

Speaker Change: Good day and welcome to the fourth quarter FY 2024 Cardinal Health Incorporated Earnings Conference Call. My name is George. I'll be your coordinator for today's event.

George: My name is George. I'll be a coordinator for today's event. Please note that this conference is being recorded, and for the duration of the call, realize you've been listening only mode. However, you will have the opportunity to ask questions at the end of the presentation.

Operator: Please note that this conference is being recorded and, for the duration of the call, utilize the listen-only mode. However, you will have the opportunity to ask questions at the end of the presentation. This can be done by pressing star 1 on your telephone keypad to register your question. In order to ask as many people as possible to ask a question, we ask that you limit yourselves to one question each.

Speaker Change: Please note that this conference is being recorded and for the duration of the call utilize the listen-only mode. However, you will have the opportunity to ask questions at the end of the presentation. This can be done by pressing star 1 on your telephone keypad to register your question.

George: This could be done by President Star One. I need to have one key pad to register your question. In order to allow you as many people as possible to ask a question, we ask that you please limit yourselves to one question each.

Speaker Change: In order to allow as many people as possible to ask a question, we ask that you please limit yourselves to one question each. If you require assistance at any point, please press star zero and you will be connected to an operator.

George: If you're aware of assistance at any point, please press star zero, and you will be connected to an operator.

Operator: If you require assistance at any point, please press star zero, and you will be connected to an operator. And I'd like to call over to your host today, Mr. Matt Sims, Vice President of Investor Relations. Please go ahead, sir.

Matt Sims: And I'd like to call Orchia Hose today, Mr. Matt Sims, Vice President of Irresulations.

Speaker Change: And I'd like to call over to your host today, Mr. Matt Sims, Vice President of Interest Relations. Please go ahead, sir.

Matt Sims: Please go ahead, sir.

Jason Hollar: Welcome to this morning's Cardinal Health fourth quarter and fiscal 24 earnings conference call. And thank you for joining us.

Matt Sims: Welcome to this morning's Cardinal Health fourth quarter and fiscal 24 earnings conference call, and thank you for joining us today. With me today are our Cardinal Health CEO, Jason Hollar, and our CFO, Aaron Alt. You can find this morning's earnings press release and investor presentation on the Investor Relations section of our website at ir.cardinalhealth.com. Since we will be making forward-looking statements today, let me remind you that the matters addressed in the statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected or implied.

Speaker Change: Welcome to this morning's Cardinal Health fourth quarter and fiscal 24 earnings conference call, and thank you for joining us.

Jason Hollar: With me today are Cardinal Health CEO Jason Holler and our CFO, are in all. You can find this morning's earnings press release and investor presentation on the Investor Relations section of our website at ir.cardinalhealth.com.

Speaker Change: With me today, our Cardinal Health CEO, Jason Hollar, and our CFO, Aaron Alt.

Speaker Change: You can find this morning's earnings press release and investor presentation on the Investor Relations section of our website at ir.cardinalhealth.com.

Jason Hollar: Since we will be making forward-looking statements today, let me remind you that the matters addressed in the statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected or implied. Please refer to our SEC filings and the forward-looking statement slide at the beginning of our presentation for a description of these risks and uncertainties.

Speaker Change: Since we will be making forward-looking statements today, let me remind you that the matters addressed in the statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected or implied.

Speaker Change: Please refer to our SEC filings and the forward-looking statement slide at the beginning of our presentation for a description of these risks and uncertainties.

Jason Hollar: Please note that during our discussion today, the comments will be on a non-GAAP basis, unless specifically called out as GAAP. Gap to non-GAAP reconciliation for all relevant periods can be found in the supporting schedules attached to our press release.

Speaker Change: Please note that during our discussion today, the comments will be on a non-GAP basis, and less specifically called out as GAP. GAP to non-GAP reconciliations for all relevant periods can be found in the supporting schedules attached to our press release.

Matt Sims: Please refer to our SEC filings and the forward-looking statement slide at the beginning of our presentation for a description of these risks and uncertainties. Please note that during our discussion today, the comments will be on a non-GAAP basis and less specifically called out as GAAP. GAAP to non-GAAP reconciliations for all relevant periods can be found in the supporting schedules attached to our press release. For the Q&A portion of today's call, we kindly ask that you limit questions to one per participant so that we can try and give everyone an opportunity. With that, I will now turn the call over to Jason. Thanks, Matt. Good morning, everyone.

Matt Sims: For the Q&A portion of today's call, we kindly ask that you limit questions to one for each participant so that we can try and give everyone an opportunity.

Speaker Change: For the Q&A portion of today's call, we kindly ask that you limit questions to one per participant so that we can try and give everyone an opportunity. With that, I will now turn the call over to Jason.

Matt Sims: With that, I will now turn the call over to Jason.

Jason Hollar: Thanks, Matt. Good morning, everyone. Fiscal year 24 marked a year of strong operational execution and record financial results for Cardinal Health delivered in tandem with significant strategic progress across the portfolio. On that note, we have three key headlines today. First, we finished the year with momentum, growing EPS 29% in both Q4 and fiscal year 24. Results exceeded guidance, and full year EPS of $7.53 was 96 cents above the midpoint of our original outlook from Investor Day. We also delivered nearly $4 billion of adjusted free cash for the year, positioning us with approximately $5 billion of cash at year end.

Jason Hollar: Fiscal year 24 marked a year of strong operational execution and record financial results for Cardinal Health, delivered in tandem with significant strategic progress across the portfolio. On that note, we have three key headlines. First, we finished the year with momentum, growing EPS 29% in both Q4 and FY24. Results exceeded guidance, and full-year EPS of $7.53 was $0.96 above the midpoint of our original outlook from Investor Day. We also delivered nearly $4 billion of adjusted free cash for the year, positioning us with approximately $5 billion of cash at year end.

Jason Hollar: Thanks, Matt. Good morning, everyone. Fiscal year 24 marked a year of strong operational execution and record financial results for Cardinal Health, delivered in tandem with significant strategic progress across the portfolio. On that note, we have three key headlines today.

Jason Hollar: First, we finished the year with momentum, growing EPS 29% in both Q4 and FY24. Results exceeded guidance, and full year EPS of $7.53 was 96 cents above the midpoint of our original outlook from Investor Day.

Jason Hollar: Even after $1.25 billion of capital returns to shareholders this year and funding our growth and [inaudible] Second, we have managed through the transition of a significant customer and are raising our guidance for fiscal year 25 while also reconfirming our long-term financial targets. And finally, we continue to advance our strategy to build upon the growth and resiliency of pharma and specialty, execute our GMPD improvement plan, and accelerate our growth in key areas while optimizing our portfolio to maximize shareholder value. More on that momentarily, but first, some brief reflection.

Jason Hollar: We also delivered nearly $4 billion of adjusted free cash flow for the year, positioning us with approximately $5 billion of cash at year-end, even after $1.25 billion of capital returned to shareholders this year in funding our growth investments.

Jason Hollar: Even after $1.25 billion of capital returned to shareholders this year and funding our growth investments. Second, we have managed through the transition of a significant customer and are raising our guidance for fiscal year 25 while also reconfirming our long-term financial targets. And finally, we continue to advance our strategy to build upon the growth and resiliency of pharma and specialty, execute our GMPD and Pruma plan, and accelerate our growth in key areas while optimizing our portfolio to maximize shareholder value creation. More on that momentarily, but first, some brief reflections. This year, we continue to take decisive actions to simplify our business and drive performance, highlighted by the reorganization of our operating and segment reporting structure to enhance management focus while enabling efficiencies, accountability, and transparency.

George: Your day and welcome to the fourth quarter FY 2024 Cardinal Health Incorporated Earnings Conference Call. My name is George, I'll be a coordinator for today's event. Please note that this conference is being recorded and for the duration of the call, realize you've been listening only mode. However, you will have the opportunity to ask questions at the end of the presentation. This could be done by President Star One. I need to have one key pad to register your question.

Jason Hollar: Second, we have managed through the transition of a significant customer and are raising our guidance for fiscal year 25, while also reconfirming our long-term financial targets.

Jason Hollar: And finally, we continue to advance our strategy to build upon the growth and resiliency of pharma and specialty, execute our GMPD improvement plan, and accelerate our growth in key areas while optimizing our portfolio to maximize shareholder value creation.

George: In order to allow you as many people as possible to ask a question, we ask that you please them with yourselves to one question each. If you're aware of assistance at any point, please press star zero and you will be connected to an operator.

Jason Hollar: This year, we continue to take decisive actions to simplify our business and drive performance, highlighted by the reorganization of our operating and segment reporting structure to enhance management focus while enabling efficiencies, accountability, and transparency. We grew our largest and most significant business, pharmaceutical and specialty solutions, above our targeted long-term growth. We saw ongoing stability in pharmaceutical demand, strong performance from our generics program, and our specialty business grew revenue 14% for the year.

Jason Hollar: More on that momentarily, but first, some brief reflections.

Jason Hollar: This year we continue to take decisive actions to simplify our business and drive performance, highlighted by the reorganization of our operating and segment reporting structure to enhance management focus while enabling efficiencies, accountability, and transparency.

Matt Sims: And I'd like to call Orchia Hose today, Mr. Matt Sims, Vice President of Irresulations. Please go ahead, sir.

Jason Hollar: Emergency. We grew our largest and most significant business, pharmaceutical and specialty solutions, above our targeted long-term growth rate. We saw ongoing stability and pharmaceutical demand, strong performance from our generic program, and our specialty business grew revenue 14% for the year. As a fiscal year 24, our specialty business is now over 36 billion dollars, and we anticipate continued growth next year despite the large contract expiration. The prioritized key growth areas and specialty with organic investments across therapeutic areas and the acquisition of specialty networks. In GMPD, we executed our Improvement Plan initiatives, returning the business to profitability and delivering approximately 240 million dollars in year-of-year segment profit improvement.

Matt Sims: Welcome to this morning's Cardinal Health fourth quarter and fiscal 24 earnings conference call. And thank you for joining us. With me today are Cardinal Health CEO Jason Holler and our CFO are in all. You can find this morning's earnings press release and investor presentation on the investor relations section of our website at ir.cardinalhealth.com. Since we will be making forward looking statements today, let me remind you that the matters addressed in the statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected or implied.

Jason Hollar: We grew our largest and most significant business, pharmaceutical and specialty solutions, above our targeted long-term growth rate.

Jason Hollar: We saw ongoing stability in pharmaceutical demand, strong performance from our generics program, and our specialty business grew revenue 14% for the year.

Jason Hollar: As of fiscal year 24, our specialty business is now over $36 billion, and we anticipate continued growth next year despite the large contract expiration. We prioritize key growth areas and specialty with organic investments across therapeutic areas and the acquisition of specialty networks. In GMPD, we executed our improvement plan initiatives, returning the business to profitability and delivering approximately $240 million in year-over-year segment profit improvement. Notably, we achieved our year-end inflation mitigation target, a critical milestone for the business. Cross our other operating businesses.

Jason Hollar: As of fiscal year 24, our specialty business is now over $36 billion, and we anticipate continued growth next year despite the large contract expiration.

Jason Hollar: We prioritize key growth areas and specialty with organic investments across therapeutic areas and the acquisition of specialty networks.

Matt Sims: Please refer to our SEC filings and the forward looking statement slide at the beginning of our presentation for a description of these risks and uncertainties. Please note that during our discussion today, the comments will be on a non-gap basis, unless specifically called out as gap. Gap to non-gap reconciliation for all relevant periods can be found in the supporting schedules attached to our press release.

Jason Hollar: In GMPD, we executed our improvement plan initiatives, returning the business to profitability and delivering approximately $240 million in year-over-year segment profit improvement. Notably, we achieved our year-end inflation mitigation target, a critical milestone for the business.

Jason Hollar: Notably, we achieved our year-in-inflation mitigation target, a critical milestone for the business. Across our other operating businesses, we collectively grew revenue 12% and segment profits 7% in fiscal year 24. We've seen strong demand across nuclear, add-on solutions, and opt-free, and our purposeful investments and focus on performance excites us about how these businesses are positioned for the future. Overall, these results were achieved through our team's commitment to execute against the focus set of priorities to create value for shareholders, our customers, and ultimately for millions of patients. As we turn the page to fiscal year 25, our confidence is reinforced by our strong and resilient business, with positive industry trends supporting our growth.

Jason Hollar: We collectively grew revenue 12% and segment profits 7% in fiscal year 24. We've seen strong demand across nuclear, at-home solutions, and optifreight, and our purposeful investments and focus on performance excite us about how these businesses are positioned for the future. Overall, these results were achieved through our team's commitment to execute against the focus set of priorities to create value for our shareholders, our customers, and ultimately, for millions of pages. As we turn the page to fiscal year 25, our confidence is reinforced by our strong and resilient business, with positive industry trends supporting our growth, and we continue to take actions to optimize not only the performance of our businesses but also the financial strength of the broader enterprise.

Jason Hollar: Across our other operating businesses, we collectively grew revenue 12% and segment profit 7% in fiscal year 24.

Matt Sims: For the Q&A portion of today's call, we kindly ask that you limit questions to one for participant so that we can try and give everyone an opportunity.

Jason Hollar: We've seen strong demand across nuclear, at-home solutions, and Optifreight, and our purposeful investments and focus on performance excites us about how these businesses are positioned for the future.

Jason Hollar: With that, I will now turn the call over to Jason. Thanks, Matt. Good morning, everyone, fiscal year 24 marked a year of strong operational execution and record financial results for Cardinal Health delivered in tandem with significant strategic progress across the portfolio.

Jason Hollar: Overall, these results were achieved through our team's commitment to execute against a focused set of priorities to create value for our shareholders, our customers, and ultimately for millions of patients.

Jason Hollar: On that note, we have three key headlines today. First, we finished the year with momentum, growing EPS 29% in both Q4 and fiscal year 24. Results exceeded guidance and full year EPS of $7.53 was 96 cents above the midpoint of our original outlook from investor day. We also delivered nearly $4 billion of adjusted free cash for the year, positioning us with approximately $5 billion of cash at year end. Even after $1.25 billion of capital returned to shareholders this year and funding our growth investments.

Jason Hollar: As we turn the page to fiscal year 25, our confidence is reinforced by our strong and resilient business with positive industry trends supporting our growth. And we continue to take actions to optimize not only the performance of our businesses, but also the financial strength of the broader enterprise.

Jason Hollar: And we continue to take actions to optimize not only the performance of our businesses, but also the financial strength of a broader enterprise. Before I hand the call over to Aaron, let me provide an update on our business and portfolio review, which, as a reminder, kicked off in September of 2022. Last June, we concluded our review of the form of form of segment highlighted an investor day with our enhanced organizational focus on specialty and decision to retain and further invest in our nuclear and precision health solutions business. Then, in January, we finalized a review of the growth businesses within the form of medical segment, determining the best course of action for shareholder value creation was to invest in and further develop add-on solutions and opt-free for long-term growth, while also completing our resegmentation.

Jason Hollar: Before I hand the call over to Aaron, let me provide an update on our business and portfolio review, which, as a reminder, kicked off in September of 2022. Last June, we concluded our review of the Forma Pharma segment, highlighted at Investor Day with our enhanced organizational focus on specialty and decision to retain and further invest in our nuclear and precision health solutions business. Then, in January, we finalized a review of the growth businesses within the former medical segment, determining the best course of action for shareholder value creation was to invest in and further develop at-home solutions in Optifreight for long-term growth while also completing our re-segmentation. All along, management, in collaboration with the Business Review Committee and Board, has been reviewing GMPD from every angle as the team executes our turnaround

Jason Hollar: Before I hand the call over to Aaron, let me provide an update on our business and portfolio review, which, as a reminder, kicked off in September of 2022.

Jason Hollar: Last June, we concluded our review of the Forma Pharma segment highlighted at Investor Day with our enhanced organizational focus on specialty and decision to retain and further invest in our nuclear and precision health solutions business.

Jason Hollar: Second, we have managed through the transition of a significant customer and are raising our guidance for fiscal year 25 while also reconfirming our long term financial targets. And finally, we continue to advance our strategy to build upon the growth and resiliency of pharma and specialty, execute our GMPD and Pruma plan and accelerate our growth in key areas while optimizing our portfolio to maximize shareholder value creation.

Jason Hollar: Then, in January , we finalized a review of the growth businesses within the former medical segment, determining the best course of action for shareholder value creation was to invest in and further develop at-home solutions in Optifreight for long-term growth while also completing our re-segmentation.

Jason Hollar: All along, management, in collaboration with the Business Review Committee and Board, has been reviewing GMPD from every angle as the team executes our turnaround plan. We deeply understand the business's opportunities and complexities, and today have some preliminary conclusions to share through the lens of our portfolio review framework, as seen on slide 20. In short, we remain committed to executing the GMPD and permit plan and our fiscal year 26 target of $300 million in segment profit. We are pleased and unsurprised to see significant interest in GMPD during our review. The business is core to the operations of so many health care providers and features not only our formidable distribution expertise, but a broad set of Cardinal Health brand products that are critical to patient care.

Jason Hollar: All along, management, in collaboration with the Business Review Committee and Board, has been reviewing GMPD from every angle as the team executes our turnaround plan.

Jason Hollar: More on that momentarily, but first, some brief reflections. This year, we continue to take decisive actions to simplify our business and drive performance, highlighted by the reorganization of our operating and segment reporting structure to enhance management focus while enabling efficiencies, accountability and transparency. Emergency. We grew our largest and most significant business pharmaceutical and specialty solutions above our targeted long-term growth rate. We saw ongoing stability and pharmaceutical demand, strong performance from our generic program and our specialty business grew revenue 14% for the year.

Jason Hollar: We deeply understand the business's opportunities and complexities and today have some preliminary conclusions to share through the lens of our portfolio review framework asking on slide. In short, we remain committed to executing the GMPDM permit and our fiscal year 26 target of $300 million in segment profits. We were pleased and unsurprised to see significant interest in GMPD during our review.

Jason Hollar: We deeply understand the business's opportunities and complexities, and today have some preliminary conclusions to share through the lens of our Portfolio Review Framework as seen on slide 20.

Jason Hollar: In short, we remain committed to executing the GMPDM permit plan.

Jason Hollar: and our fiscal year 26 target of $300 million in segment profit. We were pleased and unsurprised to see significant interest in GMPD during our review. The business is core to the operations of so many healthcare providers and features not only our formidable distribution expertise,

Jason Hollar: The business is core to the operations of so many health care providers and features not only our formidable distribution expertise but a broad set of Cardinal Health brand products that are critical to patients. Following our extensive review, we have gained confidence that we are best positioned to continue capitalizing on the meaningful growth and operational opportunities on the horizon for this. Ultimately, we see more value creation potential ahead for our shareholders by continuing to drive the GMPD turnaround plan.

Jason Hollar: As a fiscal year 24, our specialty business is now over 36 billion dollars and we anticipate continued growth next year despite the large contract expiration. The prioritized key growth areas and specialty with organic investments across therapeutic areas and the acquisition of specialty networks. In GMPD, we executed our Improvement Plan initiatives, returning the business to profitability and delivering approximately 240 million dollars in year-of-year segment profit improvement. Notably, we achieved our year-in-inflation mitigation target, a critical milestone for the business.

Jason Hollar: but a broad set of Cardinal Health brand products that are critical to patient care.

Jason Hollar: Following our extensive review, we have gained confidence that we are best positioned to continue capitalizing on the meaningful growth and operational opportunities on the horizon for this. Business. Ultimately, we see more value creation potential ahead for our shareholders by continuing to drive the GMPD turnaround plan. Even more, our analysis uncovered additional opportunities to unlock near-term value through further simplification actions and working capital improvements while continuing to drive the plan. From these initiatives, we plan to generate at least $500 million in cash over the next two years to be deployed according to our disciplined capital allocation framework.

Jason Hollar: Ultimately, we see more value creation potential ahead for our shareholders by continuing to drive the GMPD turnaround plan.

Jason Hollar: Even more, our analysis uncovered additional opportunities to unlock near-term value through further simplification actions and working capital improvements, while continuing to drive the plan. As a result of these initiatives, we plan to generate at least $500 million in cash over the next two years to be deployed according to our disciplined capital allocation framework.

Jason Hollar: Across our other operating businesses, we collectively grew revenue 12% and segment profits 7% in fiscal year 24. We've seen strong demand across nuclear, add-on solutions, and opt-free, and our purposeful investments and focus on performance excites us about how these businesses are positioned for the future. Overall, these results were achieved through our team's commitment to execute against the focus set of priorities to create value for shareholders, our customers, and ultimately for millions of patients.

Jason Hollar: From these initiatives, we plan to generate at least $500 million in cash over the next two years to be deployed according to our disciplined capital allocation framework.

Jason Hollar: In recognition, we're raising our share repurchase expectations for fiscal year 25 to a total of $750 million, which is beyond our $500 million baseline. In terms of mechanics, the future reviews as the business continues to improve, the business review committee of our boards, sunset in July as planned, and the ongoing value creation efforts are now being oversteamed by the board as a whole. As always, we take a thorough, objective, and open-minded approach, focus on maximizing long-term shareholder value creation while continuing to invest in the business to ensure that our customers receive the products and service they expect.

Jason Hollar: In recognition of this, we're raising our share repurchase expectations for fiscal year 25 to a total of $750 million, which is beyond our $500 million baseline. In terms of mechanics, future reviews as the business continues to improve, the business review committee of our boards' sunset in July is planned, and the ongoing value creation efforts are now being overseen by the board as a whole. As always, we take a thorough objective and open-minded approach to maximizing long-term shareholder value creation while continuing to invest in the business to ensure that our customers receive the products and services takes in the business review committee of the business review committee of But first, let me turn it over to Erin to review the results and dice. Thank you, Jason, and good morning.

Jason Hollar: In recognition, we're raising our share repurchase expectations for fiscal year 25 to a total of $750 million, which is beyond our $500 million baseline.

Speaker Change: In terms of mechanics of future reviews as the business continues to improve, the Business Review Committee of our Board's sunset in July is planned.

Speaker Change: and the ongoing value creation efforts are now being overseen by the board as a whole.

Speaker Change: As always, we take a thorough, objective, and open-minded approach focused on maximizing long-term shareholder value creation while continuing to invest in the business to ensure that our customers receive the products and service they expect.

Aaron Alt: I'll go deeper into our strategic plans for a segment later in my remarks, but first, let me turn over to Aaron to review results and guides.

Speaker Change: I'll go deeper into our strategic plans for our segments later in my remarks, but first, let me turn over to Aaron to review our results and guides.

Jason Hollar: Before I hand the call over to Aaron, let me provide an update on our business and portfolio review, which as a reminder, kicked off in September of 2022. Last June, we concluded our review of the form of form of segment highlighted an investor day with our enhanced organizational focus on specialty and decision to retain and further invest in our nuclear and precision health solutions business. Then, in January, we finalized a review of the growth businesses within the form of medical segment, determining the best course of action for shareholder value creation was to invest in and further develop add-on solutions and opt-free for long-term growth, while also completing our resegmentation.

Aaron Alt: Thank you, Jason, and good morning. Before discussing our Q4 success and our raised guidance, I want to highlight that today we are providing revised prior period financials for fiscal year 22 through Q3 fiscal year 24, reflecting slight net increases to non-GAAP EPS.

Aaron Alt: Before discussing our Q4 success and our raised guidance, I want to highlight that today we are providing revised prior-period financials for fiscal year 22 through Q3 fiscal year 24, reflecting slight net increases to non-GAAP EPS. Additionally, during the preparation of our annual financial statements, management identified a longstanding accounting error in part of our at home solutions business related to revenue recognition from third party payers. As a result, we have corrected this item in prior periods and also updated the timing of other previously recognized material out of period items across the full enterprise.

Aaron: Thank you, Jason, and good morning. Before discussing our Q4 success and our raised guidance, I want to highlight that today we are providing revised prior period financials for fiscal year 22 through Q3 fiscal year 24, reflecting slight net increases to non-GAAP EPS.

Aaron Alt: During the preparation of our annual financial statements, management identified a long-standing accounting error in part of our at-home solutions business related to revenue recognition from third-party payers. As a result, we have corrected this item in prior periods and also updated the timing of other previously recognized immaterial out-of-period items across the full enterprise. The net impact of these changes increases non-GAAP EPS by 7 cents in fiscal year 24, 6 cents in fiscal year 23, and 1 cent in fiscal year 22. To be helpful, we've included supplemental schedules in our press release, along with further detail in our fiscal year 2410-K.

Speaker Change: During the preparation of our annual financial statements, management identified a long-standing accounting error in part of our at-home solutions business related to revenue recognition from third-party payers.

Speaker Change: As a result, we have corrected this item in prior periods and also updated the timing of other previously recognized immaterial out-of-period items across the full enterprise.

Jason Hollar: All along management, in collaboration with the Business Review Committee and Board, has been reviewing GMPD from every angle as the team executes our turnaround plan. We deeply understand the business's opportunities and complexities, and today have some preliminary conclusions to share through the lens of our portfolio review framework as seen on slide 20. In short, we remain committed to executing the GMPD and permit plan and our fiscal year 26 target of $300 million in segment profit.

Aaron Alt: The net impact of these changes increases non-GAAP EPS by $0.07 in FY24, $0.06 in FY23, and $0.01 in FY22. To be helpful, we've included supplemental schedules in our press release, along with further detail in our FY24 10-K. Moving to our results, I am pleased to reinforce that Q4 produced a strong finish to a year in which the Cardinal team made tremendous progress against our financial and strategic priorities. For both Q4 and the year, our EPS results reached historical high points with operating profit growth across Pharma, GMPD, and others, also supported by improvements below the line in the form of lower interest costs, better tax rates, and lower share accounts.

Speaker Change: The net impact of these changes increases non-GAAP EPS by $0.07 in FY24, $0.06 in FY23, and $0.01 in FY22.

Speaker Change: To be helpful, we've included supplemental schedules in our press release, along with further detail in our Fiscal Year 24 10-K.

Aaron Alt: Moving to our results, I am pleased to reinforce that Q4 produced a strong finish to a year in which the Cardinal team made tremendous progress against our financial and strategic priorities. For both Q4 and the year, our EPS results reached historical high points, with operating traffic growth across Pharma, GMPD, and other also supported by improvements below the line in the form of lower interest costs, better tax rates, and lower share count. We delivered strong gross margin growth and matched it with well-controlled SG&A, even in an inflationary environment. In Q4, revenue increased 12 percent to 59.9 billion dollars, reflecting revenue growth in the pharmaceutical and specialty solution segment, the GMPD segment, and in all of the businesses making up other.

Speaker Change: Moving to our results, I am pleased to reinforce that Q4 produced a strong finish to a year in which the Cardinal team made tremendous progress against our financial and strategic priorities.

Jason Hollar: We are pleased and unsurprised to see significant interest in GMPD during our review. The business is core to the operations of so many health care providers and features not only our formidable distribution expertise, but a broad set of cardinal health brand products that are critical to patient care. Following our extensive review, we have gained confidence that we are best positioned to continue capitalizing on the meaningful growth and operational opportunities on the horizon for this.

Speaker Change: For both Q4 and the year, our EPS results reached historical high points with operating profit growth across pharma, GMPD, and other, also supported by improvements below the line in the form of lower interest costs, better tax rates, and lower share count.

Aaron Alt: We delivered strong gross margin growth and matched it with well-controlled SG&A, even in an inflationary environment. In Q4, revenue increased 12% to $59.9 billion, reflecting revenue growth in the pharmaceutical and specialty solutions segment, the GMPD segment, and in all of the businesses making up the others. Gross margin grew 5% to $1.9 billion, outpacing consolidated SG&A, which increased only 2% to $1.3 billion in the quarter, reflecting our disciplined cost management.

Speaker Change: We delivered strong gross margin growth and matched it with well-controlled SG&A, even in an inflationary environment.

Jason Hollar: Business. Ultimately, we see more value creation potential ahead for our shareholders by continuing to drive the GMPD turnaround plan. Even more, our analysis uncovered additional opportunities to unlock near-term value through further simplification actions and working capital improvements while continuing to drive the plan. From these initiatives, we plan to generate at least $500 million in cash over the next two years to be deployed according to our disciplined capital allocation framework. In recognition, we're raising our share repurchase expectations for fiscal year 25 to a total of $750 million, which is beyond our $500 million baseline.

Speaker Change: In Q4, revenue increased 12% to $59.9 billion, reflecting revenue growth in the Pharmaceutical and Specialty Solutions segment, the GMPD segment, and in all of the businesses making up OTHER.

Aaron Alt: Gross margin grew 5 percent to 1.9 billion dollars, outpacing consolidated SG&A, which increased only 2 percent to 1.3 billion dollars in the quarter, reflecting our discipline cost management. Dis-translated to total company operating earnings of $605 million, up 14 percent versus last year.

Speaker Change: Gross margin grew 5% to $1.9 billion, outpacing consolidated SG&A, which increased only 2% to $1.3 billion in the quarter, reflecting our disciplined cost management.

Aaron Alt: Dis-translated to total company operating earnings of $605 million, up 14% versus last year. Below the line, interest and other improved $6 million versus the prior year to $10 million, benefiting from the quarter's strong cash out performance. Our fourth quarter effective tax rate finished at 24.6%, 4.5% points lower than the prior year. Fourth quarter average diluted shares outstanding were $245 million.

Speaker Change: This translated to total company operating earnings of $605 million, up 14% versus last year.

Aaron Alt: Miller. Below the line, interest and other improved $6 million versus prior year to $10 million, benefiting from the quarter's strong cash off performance. Our fourth quarter effective tax rate finished at 24.6%, 4.5 percentage points lower than the prior year. Fourth quarter average diluted shares outstanding were $245 million, 4% lower than a year ago due to our previously announced share repurchases. The net result was fourth quarter EPS of $1.84, growth of 29%. Moving into our segment results, beginning with the Pharmaceutical segment on slide 11. Fourth quarter revenue increased 13% to $55.6 billion, driven by brand and specialty pharmaceutical sales growth from existing customers.

Speaker Change: Below the line, interest and other improved $6 million versus prior year to $10 million, benefiting from the quarter's strong cash-out performance.

Jason Hollar: In terms of mechanics, the future reviews as the business continues to improve, the business review committee of our boards, sunset in July as planned, and the ongoing value creation efforts are now being oversteamed by the board as a whole. As always, we take a thorough objective and open-minded approach focus on maximizing long-term shareholder value creation while continuing to invest in the business to ensure that our customers receive the products and service they expect.

Speaker Change: Our fourth quarter effective tax rate finished at 24.6%, 4.5 percentage points lower than the prior year.

Speaker Change: Fourth quarter average diluted shares outstanding were $245 million, 4% lower than a year ago due to our previously announced share repurchases.

Aaron Alt: 4% lower than a year ago due to our previously announced share repurchase. The net result was fourth quarter EPS of $1.84, a growth of 29%. Moving into our segment results, beginning with the pharma segment on slide 11, fourth quarter revenue increased 13% to $55.6 billion, driven by brand and specialty pharmaceutical sales growth from existing customers. We continue to see broad-based strength in pharmaceutical demand spanning across product categories, brand, specialty, consumer health, engineering, and from our largest customers. Excluding GOP1 sales, the segment's Q4 revenue growth would be 9%. As we've commented previously, GLP-1 sales do not meaningfully contribute to the bottom line.

Speaker Change: The net result was fourth quarter EPS of $1.84, growth of 29%.

Aaron Alt: I'll go deeper into our strategic plans for a segment later in my remarks, but first, let me turn over to Aaron to review results and guides.

Speaker Change: Moving into our segment results, beginning with the pharma segment on slide 11.

Aaron Alt: Thank you, Jason and good morning. Before discussing our Q4 success and our raised guidance, I want to highlight that today we are providing revised prior period financials for fiscal year 22 through Q3 fiscal year 24, reflecting slight net increases to non-gap EPS. During the preparation of our annual financial statements, management identified a long-standing accounting error in part of our at-home solutions business related to revenue recognition from third-party payers. As a result, we have corrected this item in prior periods and also updated the timing of other previously recognized immaterial out-of-period items across the full enterprise.

Speaker Change: Fourth quarter revenue increased 13% to $55.6 billion, driven by brand and specialty pharmaceutical sales growth from existing customers.

Aaron Alt: The net impact of these changes increases non-gap EPS by 7 cents in fiscal year 24, 6 cents in fiscal year 23, and 1 cent in fiscal year 22. To be helpful, we've included supplemental schedules in our press release along with further detail in our fiscal year 2410K.

Aaron Alt: We continue to see broad-based strengths in pharmaceutical demand spanning across product categories. Brand, specialty, consumer health, and generics, and from our largest customers. Excluding GLP-1 sales, the segment's Q4 revenue growth would be 9%. As we've commented previously, GLP-1 sales do not meaningfully contribute to the bottom line. Segment profit increased 8% to $482 million in the fourth quarter, driven by positive generics program performance. Within our generics program, we continue to see volume growth and consistent market dynamics, including strong performance from Red Oak. Pharma's second profit growth in the quarter was 8%, despite an approximate $15 million margin headwind related to the unwind of the previously announced large customer transition.

Speaker Change: We continue to see broad-based strength in pharmaceutical demand spanning across product categories, brand, specialty, consumer health, and generics, and from our largest customers.

Speaker Change: Excluding GLP-1 sales, the segment's Q4 revenue growth would be 9%.

Speaker Change: As we've commented previously, GLP-1 sales do not meaningfully contribute to the bottom line.

Aaron Alt: Segment profit increased 8% to $482 million in the fourth quarter, driven by positive generics program performance. Within our generics program, we continue to see volume growth and consistent market dynamics, including strong performance from Red Oak. Pharmaceutical and Profit Growth in the quarter was 8%, despite an approximate $15 million margin headwind related to the unwind of the previously announced large customer transition. This unanticipated impact in the quarter was the primary difference between PhRMA's Q4 results and the midpoint of our prior guidance.

Speaker Change: Segment profit increased 8% to $482 million in the fourth quarter, driven by positive generics program performance.

Speaker Change: Within our generics program, we continue to see volume growth and consistent market dynamics, including strong performance from Red Oak.

Speaker Change: PhRMA's second profit growth in the quarter was 8%, despite an approximate $15 million margin headwind related to the unwind of the previously announced large customer transition. This unanticipated impact in the quarter was the primary difference between PhRMA's Q4 results and the midpoint of our prior guidance.

Aaron Alt: This unanticipated impact in the quarter was the primary difference between Pharma's Q4 results and the midpoint of our prior guidance. Recall that we previously observed that the impact of the contract loss would be offset by new customers, especially networks, and cost controls, as part of our contingency planning. Consistent with these mitigation plans, the team began implementing cost control measures and started to see offsetting savings. We also saw strong growth from bio-pharma solutions in the quarter, including contributions from specialty networks.

Aaron Alt: Recall that we previously observed that the impact of the contract loss would be offset by new customers, specialty networks, and cost controls as part of our contingency planning. Consistent with these mitigation plans, the team began implementing cost control measures and started to see offsetting savings. We also saw strong growth from biopharma solutions in the quarter, including contributions from specialty networks. Turning to the GMPD segment on slide 12,

Speaker Change: Recall that we previously observed that the impact of the contract loss would be offset by new customers, specialty networks, and cost controls as part of our contingency planning.

Speaker Change: Consistent with these mitigation plans, the team began implementing cross-control measures and started to see offsetting savings.

Aaron Alt: We delivered strong gross margin growth and matched it with well-controlled SG&A, even in an inflationary environment. In Q4, revenue increased 12 percent to 59.9 billion dollars reflecting revenue growth in the pharmaceutical and specialty solution segment, the GMPD segment, and in all of the businesses making up other. Gross margin grew 5 percent to 1.9 billion dollars outpacing consolidated SG&A, which increased only 2 percent to 1.3 billion dollars in the quarter, reflecting our discipline cost management.

Speaker Change: We also saw strong growth from biopharma solutions in the quarter, including contributions from specialty networks.

Aaron Alt: Turning to the GMPD segment on slide 12, we are quite pleased by the Q4 GMPD results, which confirmed our team's continued progress against the GMPD improvement plan. Fourth quarter revenue grew 2% to $3.1 billion, driven by volume growth from existing customers. We again saw growth in Cardinal brand volumes during the quarter. GMPD delivered Q4 segment profit of $47 million, generally consistent with our expectations and our prior guidance of approximately $65 million for the year before the prior period revisions. The $40 million year-over-year increase in Q4 was driven by an improvement in net inflationary impacts, including our mitigation issues, as we achieved our target of offsetting the growth impact of inflation by the end of fiscal year 24.

Aaron Alt: We are quite pleased by the Q4 GMPD results, which confirmed our team's continued progress against the GMPD Improvement Plan. Fourth quarter revenue grew 2% to $3.1 billion, driven by vine growth from existing cuss- We again saw growth in Cardinal brand volumes during the quarter. GMPD delivered Q4 segment profit of $47 million, generally consistent with our expectations and our prior guidance of approximately $65 million for the year before the prior period revision.

Speaker Change: Turning to the GMPD segment on slide 12, we are quite pleased by the Q4 GMPD results which confirmed our team's continued progress against the GMPD improvement plan.

Speaker Change: Fourth quarter revenue grew 2% to $3.1 billion, driven by volume growth from existing customers.

Speaker Change: We again saw growth in Cardinal brand volumes during the quarter.

Speaker Change: GMPD delivered Q4 segment profit of $47 million, generally consistent with our expectations and our prior guidance of approximately $65 million for the year before the prior period revisions.

Aaron Alt: Dis-translated to total company operating earnings of $605 million up 14 percent versus last year. Miller. Below the line, interest and other improved $6 million versus prior year to $10 million benefiting from the quarter's strong cash off performance. Our fourth quarter effective tax rate finished at 24.6%, 4.5% points lower than the prior year. Fourth quarter average diluted shares outstanding were $245 million, 4% lower than a year ago due to our previously announced share repurchases. The net result was fourth quarter EPS of $1.84, growth of 29%.

Aaron Alt: The $40 million year-over-year increase in Q4 was driven by an improvement in net inflationary impact, including our mitigation issues, as we achieved our target of offsetting the gross impact of inflation by the end of fiscal year 24. We continue to be encouraged by the tenacity of the team in driving improved execution and customer satisfaction and service levels while identifying additional opportunities to optimize the business. Finishing with the businesses that aggregate into others is seen on slide 13.

Speaker Change: A $40 million dollar year-over-year increase in Q4 was driven by an improvement in net inflationary impacts, including our mitigation initiatives, as we achieved our target of offsetting the gross impact of inflation by the end of fiscal year 24.

Aaron Alt: We continue to be encouraged by the tenacity of the team in driving improved execution and customer satisfaction and service levels while identifying additional opportunities to optimize the business.

Speaker Change: We continue to be encouraged by the tenacity of the team in driving improved execution and customer satisfaction and service levels, while identifying additional opportunities to optimize the business.

Aaron Alt: Finishing with the businesses that aggregate into Other is seen on slide 13. Fourth quarter revenue increased 15% to $1.2 billion driven by growth across all three businesses: at-home solutions, nuclear and precision health solutions, and opt-deferately just 66. Segment profit grew 11% to $111 million, primarily driven by the performance of OptiFrag Logistics. The OptiFrag business continues to hit on all cylinders as increasing customer demand for logistics management services is met with strong execution. In nuclear and at home solutions, we continue to invest strategically to supercharge growth. All three businesses, as key parts of our growth story, have received and will receive, going forward, access to capital for expansion of their business models and support of our customers.

Speaker Change: Finishing with the businesses that aggregate into other is seen on slide 13.

Aaron Alt: Fourth quarter revenue increased 15% to $1.2 billion, driven by growth across all three businesses at home solutions, nuclear and precision health solutions, and Opti Freight logistics. Segment profit grew 11% to $111 million, primarily driven by the performance of OptiFreight logistics.

Aaron Alt: Moving into our segment results, beginning with the pharmaceutical segment on slide 11. Fourth quarter revenue increased 13% to $55.6 billion driven by brand and specialty pharmaceutical sales growth from existing customers. We continue to see broad-based strengths in pharmaceutical demand spanning across product categories. Brand, specialty, consumer health, and generics, and from our largest customers. Excluding GLP-1 sales, the segment's Q4 revenue growth would be 9%. As we've commented previously, GLP-1 sales do not meaningfully contribute to the bottom line.

Speaker Change: Fourth quarter revenue increased 15% to $1.2 billion, driven by growth across all three businesses, at-home solutions, nuclear and precision health solutions, and OptiFreight Logistics.

Speaker Change: Segment profit grew 11% to $111 million, primarily driven by the performance of OptiFreight Logistics.

Aaron Alt: The OptiFreight business continues to hit on all cylinders as increasing customer demand for our logistics management services is met with strong execution. In nuclear and at-home solutions, we continue to invest strategically to supercharge growth. All three businesses, as key parts of our growth story, have received, and will receive going forward, access to capital for expansion of their business models in support of our customers. I will be brief on the financial commentary. Fiscal 24 revenue increased 11% to $227 billion with growth from all five operating seconds.

Speaker Change: The OptiFreight business continues to hit on all cylinders as increasing customer demand for our logistics management services is met with strong execution.

Speaker Change: In nuclear and at-home solutions, we continue to invest strategically to supercharge growth.

Speaker Change: All three businesses, as key parts of our growth story, have received, and will receive going forward, access to capital for expansion of their business models in support of our customers.

Aaron Alt: Segment profit increased 8% to $482 million in the fourth quarter driven by positive generics program performance. Within our generics program, we continue to see volume growth and consistent market dynamics, including strong performance from Red Oak. Pharma second profit growth in the quarter was 8%, despite an approximate $15 million margin headwind related to the unwind of the previously announced large customer transition. This unanticipated impact in the quarter was the primary difference between Pharma's Q4 results and the midpoint of our prior guidance.

Aaron Alt: I will be brief on the failure commentary. Fiscal 24 revenue increased 11% to 227 billion, with growth from all five operating segments. Gross margin increased 8% to $7.4 billion, while SG&A increased a more modest 4% to $5 billion, reflecting our year-long efforts to control costs. Together, this resulted in fiscal 24 total operating earnings growth in 16% to $2.4 billion. All in, it was an excellent year across the business. Below the line, interest in other decreased 52% to $42 million, driven by increased interest income on cash and equivalents. Our annual effective tax rate finished at 21.7%.

Speaker Change: I will be brief on the full year commentary. Fiscal 24 revenue increased 11% to $227 billion, with growth from all five operating segments.

Aaron Alt: Gross margin increased 8% to $7.4 billion, while SG&A increased a more modest 4% to $5 billion, reflecting our year-long efforts to control costs. Together, this resulted in fiscal 24 total operating earnings growth of 16% to $2.4 billion. All in, it was an excellent year across the business. Below the line, interest and other expenses decreased 52% to $42 million, driven by increased interest income on cash and equivalents. Our annual effective tax rate finished at 21.7 percent.

Speaker Change: Gross margin increased 8% to $7.4 billion, while SG&A increased a more modest 4% to $5 billion, reflecting our year-long efforts to control costs.

Speaker Change: Together, this resulted in fiscal 24 total operating earnings growth of 16% to $2.4 billion.

Aaron Alt: Recall that we previously observed that the impact of the contract loss would be offset by new customers, especially networks, and cost controls, as part of our contingency planning. Consistent with these mitigation plans, the team began implementing cost control measures and started to see offsetting savings. We also saw strong growth from bio-pharma solutions in the quarter, including contributions from specialty networks.

Speaker Change: All in, it was an excellent year across the business.

Speaker Change: Below the line, interest and other decreased 52% to $42 million, driven by increased interest income on cash and equivalents.

Aaron Alt: Average diluted shares outstanding were 247 million, 6% lower than a year ago due to share your purchases. The net result was fiscal 24 non-GAT EPS of $7.53, gross of 29%, well above our long-term target of 12 to 14% growth.

Aaron Alt: Average saluted shares outstanding were $247 million, 6% lower than a year ago due to share repurchase. The net result was fiscal 24 non-gap EPS of $7.53. [inaudible] Growth of 29%, well above our long-term target of 12 to 14 percent growth. Now, before I turn to fiscal 25, let's cover the balance. For fiscal 24, our ending cash balance was $5.1 billion.

Speaker Change: Our annual effective tax rate finished at 21.7%.

Speaker Change: Average diluted shares outstanding were $247 million, 6% lower than a year ago due to share repurchases.

Speaker Change: The net result was Fiscal 24 non-GAAP EPS of $7.53, growth of 29%, well above our long-term target of 12-14% growth.

Aaron Alt: Now, before I turn to fiscal 25, let's cover the balance sheet. For fiscal 24, our ending cash balance was $5.1 billion. The cash position includes $200 million earmarked for the November of 2024 debt maturity, with an additional $200 million to be paid through the time deposits held in pre-paid assets and other on the balance sheet. To get there, we generated robust adjusted free cash flow of nearly $4 billion in fiscal year 24. Recall that at our Investor Day last June, I commented that cash flow remained an area of opportunity for us. Our excellent adjusted free cash flow results in 2024 was almost entirely a result of the team's year-long effort to optimize each element of our working capital while remaining focused on our service levels.

Speaker Change: Now before I turn to fiscal 25, let's cover the balance sheet.

Speaker Change: For Fiscal 24, our ending cash balance was $5.1 billion.

Aaron Alt: The cash position includes $200 million earmarked for the November 2024 debt maturity, with an additional $200 million to be paid for the time deposits held in pre-paid assets and other on the balance. To get there, we generated robust, adjusted free cash flow of nearly $4 billion in fiscal year 24. Recall that at our Investor Day last June, I commented that cash flow remained an area of opportunity for us. Our excellent adjusted pre-cash flow results in 2024 were almost entirely a result of the team's year-long effort to optimize each element of our working capital while remaining focused on our service level.

Speaker Change: The cash position includes $200 million earmarked for the November 2024 debt maturity, with an additional $200 million to be paid for the time deposits held in pre-paid assets and other on the balance sheet.

Speaker Change: To get there, we generated robust, adjusted free cash flow, nearly $4 billion in fiscal year 24.

Aaron Alt: The $40 million year over year increase in Q4 was driven by an improvement in net inflationary impacts, including our mitigation issues, as we achieved our target of offsetting the growth-impact of inflation by the end of fiscal year 24. We continue to be encouraged by the tenacity of the team in driving improved execution and customer satisfaction and service levels while identifying additional opportunities to optimize the business.

Speaker Change: Recall that at our Investor Day last June, I commented that cash flow remained an area of opportunity for us. Our excellent adjusted pre-cash flow results in 2024 was almost entirely a result of the team's year-long effort to optimize each element of our working capital while remaining focused on our service levels.

Aaron Alt: To a much lesser degree, the results reflect balanced preparation for the Q1 contract expiration, which has now occurred in July, largely as we expected. We attribute only a couple of $100 million of our fiscal 24 cash flow to beneficial timing related to the large contract unwind. I'll talk about the impact of the contract unwind on cash flow shortly as part of our guidance. Also this year, we strengthened our balance sheet and achieved our targeted leverage ratio, which resulted in three positive outlook updates from the credit rating agencies. We also continue to deploy capital in a shareholder-friendly manner, returning more than our baseline commitment of capital return to shareholders through $750 million of share repurchases and $500 million in dividend payments.

Speaker Change: To a much lesser degree, the results reflect balanced preparation for the Q1 contract expiration, which has now occurred in July , largely as we expected.

Aaron Alt: Finishing with the businesses that aggregate into other is seen on slide 13. Fourth quarter revenue increased 15% to $1.2 billion driven by growth across all three businesses, at-home solutions, nuclear and precision health solutions, and opt-deferately just 66. Segment profit grew 11% to $111 million, primarily driven by the performance of OptiFrag logistics. The OptiFrag business continues to hit on all cylinders as increasing customer demand for logistics management services is met with strong execution.

Speaker Change: We attribute only a couple of hundred million dollars of our fiscal 24 cash flow to beneficial timing related to the large contract unwind. I'll talk about the impact of the contract unwind on cash flow shortly as part of our guidance.

Aaron Alt: I'll talk about the impact of the Chondrica Unwind on cash flow shortly as part of our guidance. Also this year, we strengthened our balance sheet and achieved our targeted leverage ratio, which resulted in three positive outlook updates from the Credit Rating Agency. We also continue to deploy capital in a shareholder-friendly manner, returning more than our baseline commitment of capital return to shareholders through $750 million of share repurchases and $500 million in dividend payments.

Speaker Change: Also, this year, we strengthened our balance sheet and achieved our targeted leverage ratio, which resulted in three positive outlook updates from the credit rating agencies.

Speaker Change: We also continue to deploy capital in a shareholder-friendly manner, returning more than our baseline commitment of capital return to shareholders through $750 million of share repurchases and $500 million in dividend payments.

Aaron Alt: In nuclear and at home solutions, we continue to invest strategically to supercharge growth. All three businesses as key parts of our growth story have received and will receive going forward access to capital for expansion of their business models and support of our customers.

Aaron Alt: And we increased our dividend for the 35th year in a row.

Aaron Alt: And we increased our dividends for the 35th year in a row. Now, let's look forward and discuss our updated fiscal 25 guidance on slide 15. Today, we are increasing our fiscal 25 EPS guidance to a new range of $7.55 to $7.76.

Aaron Alt: Now let's look forward and discuss our updated fiscal 25 guidance on slide 15. Today, we are increasing our fiscal 25 EPS guidance to a new range of $7.55 to $7.70. Decent. This is an increase from the preliminary guidance during our Q3 call of at least $7.50. Slide 16 shows our fiscal 25 outlook for Pharma. On revenue, we expected a decline between 4 and 6 percent, reflecting the nearly $40 billion revenue headwind from the large customer contract expiration. Normalizing for the large customer, fiscal 25 revenue growth would be between 15 percent and 18 percent. This reflects underlying growth generally consistent with our long-term targeted rate of 10 percent due to strong overall pharmaceutical demand, as well as significant growth from the onboarding of new customers and existing customer expansions, primarily in the second half of the year.

Speaker Change: And we increased our dividend for the 35th year in a row.

Speaker Change: Now let's look forward and discuss our updated fiscal 25 guidance on slide 15.

Aaron Alt: I will be brief on the failure commentary, fiscal 24 revenue increased 11% to 227 billion with growth from all five operating segments. Gross margin increased 8% to $7.4 billion, while SGNA increased a more modest 4% to $5 billion, reflecting our year-long efforts to control costs. Together, this resulted in fiscal 24 total operating earnings growth in 16% to $2.4 billion. All in, it was an excellent year across the business. Below the line, interest in other decreased 52% to $42 million, driven by increased interest income on cash and equivalent.

Speaker Change: Today, we are increasing our fiscal 25 EPS guidance to a new range of $7.55 to $7.70.

Aaron Alt: This is an increase from the preliminary guidance during our Q3 call of at least $7.50. Flight 16 shows our fiscal 25 outlook for pharma. On revenue, we expect a decline between 4% and 6%, reflecting the nearly $40 billion revenue headwind from the large customer contract expiration.

Speaker Change: This is an increase from the preliminary guidance during our Q3 call of at least $7.50.

Speaker Change: Slide 16 shows our Fiscal 25 Outlook for PhRMA.

Speaker Change: On revenue, we expect a decline between 4% and 6%, reflecting the nearly $40 billion revenue headwind from the large customer contract expiration.

Aaron Alt: Normalizing for the large customer, fiscal 25 revenue growth would be between 15% and 18%. This reflects underlying growth generally consistent with our long-term targeted rate of 10% due to strong overall pharmaceutical demand, as well as significant growth from the onboarding of new customers and existing customer expansion, primarily in the second half of the year. We are on track to address the segment profit impact of the large contract expiration with this incremental volume, contributions from specialty networks, and additional operational efficiency.

Speaker Change: Normalizing for the large customer, Fiscal 25 revenue growth would be between 15% and 18%.

Speaker Change: This reflects underlying growth generally consistent with our long-term targeted rate of 10% due to strong overall pharmaceutical demand, as well as significant growth from the onboarding of new customers and existing customer expansions, primarily in the second half of the year.

Aaron Alt: Our annual effective tax rate finished at 21.7%. Average diluted shares outstanding were 247 million, 6% lower than a year ago due to share your purchases. The net result was fiscal 24 non-gat EPS of $7.53 gross of 29%, well above our long-term target of 12 to 14% growth.

Aaron Alt: We are on track to address the segment profit impact of the large contract expiration with this incremental volume, contributions from special networks, and additional operational efficiencies. Note that all three of these assets will have some level of a ramp to them throughout our Fiscal 25. We expect consistent market dynamics for our generic program to continue. We also expect increased contributions from brand and specialty products, including biosimilars. We are assuming a modest year-over-year headwind related to the distribution of COVID-19 vaccines. On brand manufacturer price increases, we expect an environment generally consistent with the past several years.

Speaker Change: We are on track to address the segment profit impact of the large contract exploration with this incremental volume, contributions from Stussu Networks, and additional operational efficiencies.

Aaron Alt: Note that all three of these offsets will have some level of a ramp to them throughout our fiscal 25. We expect consistent market dynamics for our generics program to continue. We also expect increased contributions from brand and specialty products, including biosimilars. We are assuming a modest year-over-year headwind related to the distribution of COVID-19 vaccines.

Speaker Change: Note that all three of these offsets will have some level of a ramp to them throughout our Fiscal 25.

Aaron Alt: Now before I turn to fiscal 25, let's cover the balance sheet. For fiscal 24, our ending cash balance was $5.1 billion. The cash position includes $200 million earmarked for the November of 2024 debt maturity with an additional $200 million to be paid through the time deposits held in pre-paid assets and other on the balance sheet. To get there, we generated robust adjusted free cash flow nearly $4 billion in fiscal year 24.

Speaker Change: We expect consistent market dynamics for our generics program to continue.

Speaker Change: We also expect increased contributions from brand and specialty products, including biosimilars.

Speaker Change: We are assuming a modest year-over-year headwind related to the distribution of COVID-19 vaccines.

Aaron Alt: On brand manufacturer price increases, we expect an environment generally consistent with the past several years. Summing it all up, we anticipate pharma segment profit growth in the range of 1 to 3%, testament to the strength and resiliency of this business. It is the case that segment profit growth will be more back half way than usual. We expect first half segment profit to be slightly lower to flat versus the prior year, with profit growth in the back half. Q3 should again be the highest absolute dollar profit quarter for the business. Turning to GMPD on slide 17.

Speaker Change: On brand manufacturer price increases, we expect an environment generally consistent with the past several years.

Aaron Alt: Some of you at all up, we anticipate pharmaceutical growth in the range of 1 to 3 percent, a testament to the strength and resiliency of this business. It is the case that segment profit growth will be more back half-weighted than usual. We expect first half segment profit to be slightly lower to flat versus the prior year, with profit growth in the back half. Q3 should again be the highest absolute dollar profit quarter for the business.

Test Smith: Summing it all up, we anticipate pharma-segment profit growth in the range of 1-3%, a testament to the strength and resiliency of this business.

Aaron Alt: Recall that at our investor day last June, I commented that cash flow remained an area of opportunity for us. Our excellent adjusted free cash flow results in 2024 was almost entirely a result of the team's year-long effort to optimize each element of our working capital while remaining focused on our service levels. To a much lesser degree, the results reflect balanced preparation for the Q1 contract expiration, which has now occurred in July, largely as we expected.

Test Smith: It is the case that segment profit growth will be more back half weighted than usual. We expect first half segment profit to be slightly lower to flat versus the prior year with profit growth in the back half.

Test Smith: Q3 should again be the highest absolute dollar profit quarter for the business.

Aaron Alt: Turning to GNPD on Slide 17. On the top line, we expect growth between 3 percent and 5 percent, aided by low single-digit utilization growth, as well as incremental volume from the onboarding of net new distribution customer wins. On the bottom line, we are reiterating our expectation of approximately $175 million in segment profit for fiscal year 25. On our path to approximately $300 million in segment profit by fiscal year 26 by executing the GNPD improvement plan. The plan is unchanged from what we shared a quarter ago. After successfully offsetting inflation at the end of this year, the annualization of these benefits will be a fiscal year 25 tailwind.

Aaron Alt: [inaudible] On the top line, we expect growth between 3% and 5% aided by low single-digit utilization growth, as well as incremental volume from the onboarding of net new distribution customer wins. On the bottom line, we are reiterating our expectation of approximately $175 million in segment profit for fiscal year 25 on our path to approximately $300 million in segment profit by fiscal year 26 by executing the GMPD improvement plan. The plan is unchanged from what we shared a quarter ago.

Test Smith: Turning to GMPD on slide 17.

Aaron Alt: We attribute only a couple of $100 million of our fiscal 24 cash flow to beneficial timing related to the large contract unwind. I'll talk about the impact of the contract unwind on cash flow shortly as part of our guidance. Also this year, we strengthened our balance sheet and achieved our targeted leverage ratio, which resulted in three positive outlook updates from the credit rating agencies. We also continue to deploy capital on a shareholder-friendly manner, returning more than our baseline commitment of capital return to shareholders through $750 million of sherry purchases and $500 million in dividend payments. And we increased our dividend for the 35th year in a row.

Test Smith: On the top line, we expect growth between 3% and 5% aided by low single-digit utilization growth, as well as incremental volume from the onboarding of net new distribution customer wins.

Test Smith: On the bottom line, we are reiterating our expectation of approximately $175 million in segment profit for FY25, on our path to approximately $300 million in segment profit by FY26 by executing the GMPD Improvement Plan.

Aaron Alt: After successfully offsetting inflation at the end of this year, the annualization of these benefits will be a fiscal year 25 tailwind. The team remains focused on continuing to derive Cardinal Brand growth through our five-point plan. In fiscal year 25, we expect Cardinal Brand sales growth between three and five percent. Simplification and cost optimization also continue, with further opportunities in the pipeline to drive efficiencies and streamline our operation. Recognizing that while GMPD's plan may be simple, that does not make it easy.

Test Smith: The plan is unchanged from what we shared a quarter ago.

Test Smith: After successfully offsetting inflation at the end of this year, the annualization of these benefits will be a fiscal year 25 tailwind.

Aaron Alt: The team remains focused on continuing to derive cardinal brand growth through our five point plan. In fiscal year 25, we expect Cardinal brand sales growth between 3 and 5 percent. Simplification and cost optimization also continue with further opportunities in the pipeline to derive efficiencies and streamline our operations. Recognizing that while GNPD's plan may be simple, that does not make it easy. We once again expect a back half weighted profit year in fiscal 25, just like fiscal 24. The quarterly cadence will be driven by seasonality and the ongoing commercial and operational improvements in the business. Additionally, we expect unfavorable manufacturing cost timing in the first half of the year, which, unlike last year, includes some startup costs and timing associated with expanding production that Cardinal Health owns domestic manufacturing plants to enhance our supply chain resilience.

Test Smith: The team remains focused on continuing to drive Cardinal brand growth through our five-point plan. In fiscal year 25, we expect Cardinal brand sales growth between 3 and 5 percent.

Test Smith: Simplification and cost optimization also continue with further opportunities in the pipeline to drive efficiencies and streamline our operations.

Aaron Alt: Slide 16 shows our fiscal 25 outlook for pharma. On revenue, we expected decline between 4 and 6 percent, reflecting the nearly $40 billion revenue headwind from the large customer contract expiration. Normalizing for the large customer, fiscal 25 revenue growth would be between 15 percent and 18 percent. This reflects underlying growth generally consistent with our long-term targeted rate of 10 percent due to strong overall pharmaceutical demand as well as significant growth from the onboarding of new customers and existing customer expansions, primarily in the second half of the year.

Speaker Change: Recognizing that while GMPD's plan may be simple, that does not make it easy. We once again expect a back-half-weighted profit year in Fiscal 25, just like Fiscal 24.

Aaron Alt: We once again expect a back-half-weighted profit year in fiscal 25, just like fiscal 24. The quarterly cadence will be driven by seasonality and the ongoing commercial and operational improvements in the business. Additionally, we expect unfavorable manufacturing cost timing in the first half of the year, which, unlike last year, includes some startup costs and timing associated with expanding production at Cardinal Health-owned domestic manufacturing plants to enhance our supply chain resilience. Q1 should be the low point of the year due to these factors. Last year's updated Q1 shows $12 million of profit, and this year we expect Q1 to increase to up to $20 million with sequential improvements thereafter. Turning to other on slide eight.

Speaker Change: The quarterly cadence will be driven by seasonality and the ongoing commercial and operational improvements in the business.

Speaker Change: Additionally, we expect unfavorable manufacturing cost timing in the first half of the year, which, unlike last year, includes some startup costs and timing associated with expanding production at Cardinal Health-owned domestic manufacturing plants to enhance our supply chain resiliency.

Aaron Alt: Jesse. Q1 should be the low point of the year due to these factors. Last year's updated Q1 shows $12 million of profit, and this year we expect Q1 to increase to up to $20 million with sequential improvements thereafter.

Speaker Change: Q1 should be the low point of the year due to these factors. Last year's updated Q1 shows $12 million of profit and this year we expect Q1 to increase to up to $20 million with sequential improvements thereafter.

Aaron Alt: We are on track to address the segment profit impact of the large contract expiration with this incremental volume, contributions from special networks and additional operational efficiencies. Note that all three of these assets will have some level of a ramp to them throughout our fiscal 25. We expect consistent market dynamics for our generic program to continue. We also expect increased contributions from brand and specialty products including biosimilars. We are assuming a modest year-over-year headwind related to the distribution of COVID-19 vaccines.

Aaron Alt: Turning to other on slide 18. For each of Nuclear, at-home solutions and Optifrate, we expect profit to be aided by the continued strength and demand, execution of our growth strategies, and benefits from our increased prioritization of these businesses with investments. Collectively, we expect revenue growth in the range of 10% to 12%, and segment profit growth of our approximately 10%, with all three businesses contributing to these targets. Depping back, we are pleased to see anticipated profit growth across all of our operating segments in fiscal year 25.

Aaron Alt: [inaudible] For each of nuclear, at home solutions, and opt-free, we expect profit to be aided by the continued strength and demand, execution of our gross strategies, and benefits from our increased prioritization of these businesses with investments. Collectively, we expect revenue growth in the range of 10% to 12% and segment profit growth of approximately 10%, with all three businesses contributing to these targets. Stepping back, we are pleased to see anticipated profit growth across all of our operating segments in fiscal year 25.

Speaker Change: Turning to other on slide 18.

Speaker Change: For each of Nuclear, At-Home Solutions, and Optifreight, we expect profit to be aided by the continued strength in demand, execution of our growth strategies, and benefits from our increased prioritization of these businesses with investments.

Speaker Change: Collectively, we expect revenue growth in the range of 10% to 12% and segment profit growth of approximately 10% with all three businesses contributing to these targets.

Aaron Alt: On brand manufacturer price increases, we expect an environment generally consistent with the past several years. Some of you at all up, we anticipate pharmaceutical growth in the range of 1 to 3 percent, a testament to the strength and resiliency of this business. It is the case that segment profit growth will be more back half-weighted than usual. We expect first half segment profit to be slightly lower to flat versus the prior year with profit growth in the back half. Q3 should again be the highest absolute dollar profit quarter for the business.

Speaker Change: Stepping back, we are pleased to see anticipated profit growth across all of our operating segments in fiscal year 25.

Aaron Alt: Moving below the line, we expect interest and other in the range of $140 million to $170 million. The large year-over-year increase continues to be driven by lower average cash balances, lower short-term investment rates on our cash, and higher rates on our debt resulting from the refinancing of our calendar 2024 maturities. We continue to expect our fiscal year 25 effective tax rate to be in the range of 23% to 24%. With our near-term GMPD value creation issues, we have increased our fiscal year 25 Sherry purchase expectations beyond our baseline to $750 million on the year, leading to a share count guidance of approximately 243 million shares.

Aaron Alt: Moving below the line, we expect interest and other expenses in the range of $140 million to $170 million. The large year-over-year increase continues to be driven by lower average cash balances, lower short-term investment rates on our cash, and higher rates on our debt resulting from the refinancing of our calendar 2024 maturity. We continue to expect our fiscal year 25 effective tax rate to be in the range of 23% to 24%.

Speaker Change: Moving below the line, we expect interest and other in the range of $140 million to $170 million.

Speaker Change: The large year-over-year increase continues to be driven by lower average cash balances, lower short-term investment rates on our cash, and higher rates on our debt resulting from the refinancing of our calendar 2024 maturities.

Speaker Change: We continue to expect our fiscal year 25 effective tax rate to be in the range of 23% to 24%.

Aaron Alt: With our near-term GNPV value creation issues, we have increased our fiscal year 25 share repurchase expectations beyond our baseline to $750 million in the year, leading to a share count guidance of approximately 243 million shares. Finally, we expect fiscal year 25 to have a just-to-repeat cash flow of approximately $1 billion, reflecting the Q1 negative impacts from the large contract unwind, as well as quarter-end day of the week timing. While these dynamics will significantly affect our cash flow in Q1, our strong investment grade balance sheet positions us as well to manage through these fluctuations and continue making strategic investments in the business consistent with our discipline's capital allocation framework. To close, fiscal year 24 was a standout year filled with notable milestones.

Aaron Alt: Turning to GNPD on slide 17. On the top line, we expect growth between 3 percent and 5 percent aided by low single digit utilization growth, as well as incremental volume from the onboarding of net new distribution customer wins. On the bottom line, we are reiterating our expectation of approximately $175 million in segment profit for fiscal year 25. On our path to approximately $300 million in segment profit by fiscal year 26 by executing the GNPD improvement plan.

Speaker Change: With our near-term GNPV value creation issues, we have increased our fiscal year 2025 share repurchase expectations beyond our baseline to $750 million in the year, leading to a share count guidance of approximately 243 million shares.

Aaron Alt: Finally, we expect fiscal year 25 adjuster pre-cashable of our approximately $1 billion, reflecting the Q1 negative impacts from the large contract unwind, as well as quarter-end day of the week timing. While these dynamics will significantly affect our cash flow in Q1, our strong investment-grade balance sheet positions us to manage through these fluctuations and continue making strategic investments in the business consistent with our discipline's capital allocation framework.

Speaker Change: Finally, we expect fiscal year 25 to adjust to a pre-cash flow of approximately $1 billion, reflecting the Q1 negative impacts from the large contract unwind, as well as quarter-end day of the week timing.

Speaker Change: While these dynamics will significantly affect our cash flow in Q1, our strong investment-grade balance sheet positions us well to manage through these fluctuations and continue making strategic investments in the business consistent with our disciplined capital allocation framework.

Aaron Alt: The plan is unchanged from what we shared a quarter ago. After successfully offsetting inflation at the end of this year, the annualization of these benefits will be a fiscal year 25 tailwind. The team remains focused on continuing to derive cardinal brand growth through our five point plan. In fiscal year 25, we expect cardinal brand sales growth between 3 and 5 percent. Simplification and cost optimization also continue with further opportunities in the pipeline to derive efficiencies and streamline our operations.

Aaron Alt: The close fiscal year 24 was a standout year filled with notable milestones. With adjusted EPS growth at 29% and adjusted pre-cash flow of nearly $4 billion, the cardinal team delivered. With six weeks of fiscal 25 behind us, I'm pleased to say that the team is managing a debt late. Between the leaders we have throughout the organization, our dedicated team working tirelessly to serve our customers, and our clear strategy, we are confident that we will deliver once again.

Speaker Change: To close, fiscal year 24 was a standout year filled with notable milestones.

Jason Hollar: With adjusted EPS growth of 29% and adjusted free cash flow of nearly $4 billion, the Cardinal team delivered. With six weeks of fiscal 25 behind us, I'm pleased to say that the team is managing it deftly; between the leaders we have throughout the organization, our dedicated team working tirelessly to serve our customers, and our clear strategy, we are confident that we will deliver once again. With that, I will turn it back over to Jason. Thanks, Aaron.

Speaker Change: With adjusted EPS growth of 29% and adjusted free cash flow of nearly $4 billion, the Cardinal team delivered.

Speaker Change: With six weeks of fiscal 25 behind us, I'm pleased to say that the team is managing it deftly.

Aaron Alt: Recognizing that while GNPD's plan may be simple, that does not make it easy. We once again expect a back half weighted profit year in fiscal 25 just like fiscal 24. The quarterly cadence will be driven by seasonality and the ongoing commercial and operational improvements in the business. Additionally, we expect unfavorable manufacturing cost timing in the first half of the year, which, unlike last year, includes some startup costs and timing associated with expanding production that cardinal health owns domestic manufacturing plants to enhance our supply chain resilience.

Speaker Change: Between the leaders we have throughout the organization, our dedicated team working tirelessly to serve our customers, and our clear strategy, we are confident that we will deliver once again. With that, I will turn it back over to Jason.

Jason Hollar: With that, I will turn it back over to Jason. Thanks, Aaron. Now go deeper into our strategic priorities, beginning with pharma and specialty solutions, where we remain focused on building upon our strong core foundation and expanding in specialty.

Jason Hollar: Now I'll go deeper into our strategic priorities, beginning with pharma and specialty solutions, where we remain focused on building upon our strong core foundation and expanding in specialty. Everything we do starts with the customer. Recently, we hosted our 32nd Annual Retail Business Conference, the largest in the industry, bringing together 5000 attendees from across the country.

Jason Hollar: Thanks, Aaron. Now I'll go deeper into our strategic priorities, beginning with pharma and specialty solutions, where we remain focused on building upon our strong core foundation and expanding in specialty.

Jason Hollar: Everything we do starts with the customer. Recently, we hosted our 32nd annual retail business conference, the largest in the industry, bringing together 5,000 attendees from across the country. As the trusted partner to retail pharmacy, we understand the critical role retail and dependent pharmacies play in caring for their communities, as they continue to expand their services as community healthcare destinations and demonstrate the remarkable value and resiliency. We continue to invest in our full suite of clinical business and reimbursement solutions to support our customers and provide industry advocacy to empower retail pharmacy now and into the future.

Jason Hollar: Everything we do starts with the customer.

Speaker Change: Recently, we hosted our 32nd Annual Retail Business Conference, the largest in the industry, bringing together 5,000 attendees from across the country.

Jason Hollar: As the trusted partner to retail pharmacy, we understand the critical role retail independent pharmacies play in caring for their communities as they continue to expand their services as community health care destinations and demonstrate their remarkable value and resilience. We continue to invest in our full suite of clinical, business, and reimbursement solutions to support our customers and provide industry advocacy to empower retail pharmacy now and into the future. Our Consumer Health Logistics Center, slated to open in 2025, will offer a comprehensive selection of over-the-counter medications, treatments, and diagnostic solutions.

Speaker Change: As the trusted partner to Retail Pharmacy, we understand the critical role retail-independent pharmacies play in caring for their communities as they continue to expand their services as community health care destinations and demonstrate their remarkable value and resiliency.

Aaron Alt: Turning to other on slide 18. For each of nuclear, at-home solutions and optifrate, we expect profit to be aided by the continued strength and demand, execution of our growth strategies, and benefits from our increased prioritization of these businesses with investments. Collectively, we expect revenue growth in the range of 10% to 12%, and segment profit growth of our approximately 10% with all three businesses contributing to these targets. Depping back, we are pleased to see anticipated profit growth across all over operating segments in fiscal year 25.

Speaker Change: We continue to invest in our full suite of clinical, business, and reimbursement solutions to support our customers and provide industry advocacy to empower retail pharmacy now and into the future.

Jason Hollar: Our Consumer Health Logistics Center, slated to open in 2025, will offer a comprehensive selection of over-the-counter medications, treatments, and diagnostics solutions. Solutions. Additionally, our new Vaccine Alliance program offers cost savings and other benefits from participating manufacturers to help pharmacies engage more patients and expand their immunization programs. We are constantly evaluating ways to bring innovative solutions to our pharmacy and manufacturer partners through the breadth of our offerings and capabilities. As part of that commitment and in collaboration with CVS Health, we have formed Averon, a joint venture to source bile similars. Averon builds upon our company's successful partnerships like Red Oak sourcing with similar overall objectives for bile similars.

Speaker Change: Our Consumer Health Logistics Center, slated to open in 2025, will offer a comprehensive selection of over-the-counter medications, treatments, and diagnostic solutions.

Jason Hollar: Additionally, our new Vaccine Alliance program offers cost savings and other benefits from participating manufacturers to help pharmacies engage more patients and expand their immunization process. We are constantly evaluating ways to bring innovative solutions to our pharmacy and manufacturer partners through the breadth of our offerings and capabilities. As part of that commitment, and in collaboration with CVS Health, we have formed AVRON, a joint venture to source biosimilars... Avron builds upon our company's successful partnerships like Red Oak Sourcing with similar overall objectives for biosimilars.

Speaker Change: Additionally, our new Vaccine Alliance Program offers cost savings and other benefits from participating manufacturers to help pharmacies engage more patients and expand their immunization programs.

Speaker Change: We are constantly evaluating ways to bring innovative solutions to our pharmacy and manufacturer partners through the breadth of our offerings and capabilities.

Speaker Change: As part of that commitment, and in collaboration with CVS Health, we have formed Aviron, a joint venture to source biosimilars.

Speaker Change: Avron builds upon our company's successful partnerships, like Red Oak Sourcing, with similar overall objectives for biosimilars.

Jason Hollar: Simply put, we are increasing access to additional therapy options that will provide more choice for patients at a lower cost. Averon began by contracting a couple of products, including Hemaera bile similars, and we see opportunities for the program to expand over time. Continuing in specialty, we're pleased with how quickly specialty networks have integrated with our business, and we continue to be impressed with the PPS analytics platform's insights generation capabilities and the team's clinical, technology, and operational expertise. As expected, we are leveraging specialty networks' demonstrated capabilities in urology, the largest area of its fully integrated model, to enhance our offering in oncology.

Jason Hollar: Simply put, we are increasing access to additional therapy options that will provide more choice for patients at a lower cost. Aaron began by contracting a couple of products, including Chimera Bial similars, and we see opportunities for the program to expand over time. Continuing in specialty, we're pleased with how quickly specialty networks have integrated with our business, and we continue to be impressed with the PPS Analytics platform's insights generation capabilities and the team's clinical, technology, and operational expertise.

Speaker Change: Simply put, we are increasing access to additional therapy options that will provide more choice for patients at a lower cost.

Speaker Change: Avron began by contracting a couple of products, including Chimera biosimilars, and we see opportunities for the program to expand over time.

Aaron Alt: Finally, we expect fiscal year 25 adjuster pre-cashable of our approximately $1 billion, reflecting the Q1 negative impacts from the large contract unwind, as well as quarter-end day of the week timing. While these dynamics will significantly affect our cash flow in Q1, our strong investment grade balance sheet positions as well to manage through these fluctuations and continue making strategic investments in the business consistent with our discipline's capital allocation framework.

Speaker Change: Continuing in specialty, we're pleased with how quickly specialty networks has integrated with our business and we continue to be impressed with the PPS analytics platforms insights generation capabilities and the team's clinical technology and operational expertise.

Jason Hollar: As expected, we are leveraging Specialty Network's demonstrated capabilities in urology, the largest area of its fully integrated model, to enhance our offering in oncology. The fully integrated Specialty Network's market offer is directly aligned with our strategy for Navista, an oncology practice alliance providing advanced technology and- Over the course of the last year, we've built a world-class NAVISTA team consisting of industry experts, defined our offerings and go-to-market strategy, and completed our foundational technology build. The NAVISTA team is engaging with an active pipeline of customers across the oncology marketplace, demonstrating to community oncologists how NAVISTA can help them remain independent for good.

Speaker Change: As expected, we are leveraging Specialty Network's demonstrated capabilities in urology, the largest area of its fully-integrated model, to enhance our offering in oncology. The fully-integrated Specialty Network's market offering

Jason Hollar: The fully integrated specialty networks market offering is directly aligned with our strategy for Navista, our oncology practice alliance providing advanced technology and services. Over the course of the last year, we built a world-class Navista team consisting of industry experts to find our offerings and go-to-market strategy and completed our foundational technology build. The Navista team is engaging with an active pipeline of customers across the oncology marketplace, demonstrating to community oncologists how Navista can help them remain independent for good. Upstream with manufacturers, our leading specialty 3PL has continued its track record of growing faster than the market, with nearly 20% growth during the year.

Aaron Alt: The close fiscal year 24 was a standout year filled with notable milestones. With adjusted EPS growth at 29% and adjusted pre-cash flow of nearly $4 billion, the cardinal team delivered. With six weeks of fiscal 25 behind us, I'm pleased to say that the team is managing a debt late. Between the leaders we have throughout the organization, our dedicated team working tirelessly to serve our customers and our clear strategy, we are confident that we will deliver once again.

Speaker Change: is directly aligned with our strategy for NAVISTA, our Oncology Practice Alliance providing advanced technology and services.

Speaker Change: Over the course of the last year, we've built a world-class Navista team consisting of industry experts, defined our offerings and go-to-market strategy, and completed our foundational technology build.

Speaker Change: The NAVISTA team is engaging with an active pipeline of customers across the oncology marketplace, demonstrating to community oncologists how NAVISTA can help them remain independent for good.

Jason Hollar: Upstream with Manufacturers, our leading specialty 3PL has continued its track record of growing faster than the market, with nearly 20% growth during the year. We're leveraging these services as part of our comprehensive offering that further facilitates the commercialization and delivery of critical cell and gene therapies to providers and patients. Our new Advanced Therapy Solutions Innovation Center features a specialized deep frozen storage suite to handle the logistical challenges associated with cell and gene therapy.

Speaker Change: Upstream with Manufacturers, our leading specialty 3PL has continued its track record of growing faster than market, with nearly 20% growth during the year.

Jason Hollar: We're leveraging these services as part of our comprehensive offering that further facilitates the commercialization and delivery of critical cell and gene therapies to providers and patients. Our new advanced therapy solutions innovation center features a specialized deep frozen storage suite to handle the logistical challenges associated with cell and gene therapies. Additionally, the dedicated space provides opportunities for collaboration and improved process designs supporting the ordering, invoicing, and accounts receivable process for pharmaceutical products. Across classes of trade, our commitment to service and solutions-oriented commercial approach has resonated with customers. A new health system customer onboarding that we recently completed and a few in the earlier phases of ramp up are going smoothly, and we expect over $10 billion in total incremental revenue in fiscal year 25 from committed customer wins and expansions.

Jason Hollar: Everything we do starts with the customer. Recently, we hosted our 32nd annual retail business conference, the largest in the industry bringing together 5,000 attendees from across the country. As the trusted partner to retail pharmacy, we understand the critical role retail and dependent pharmacies playing, caring for their communities, as they continue to expand their services as community healthcare destinations and demonstrate the remarkable value and resiliency. We continue to invest in our full suite of clinical business and reimbursement solutions to support our customers and provide industry advocacy to empower retail pharmacy now and into the future.

Speaker Change: We're leveraging these services as part of our comprehensive offering that further facilitates the commercialization and delivery of critical cell and gene therapies to providers and patients.

Speaker Change: Our new Advanced Therapy Solutions Innovation Center features a specialized deep frozen storage suite to handle the logistical challenges associated with cell and gene therapies.

Jason Hollar: Additionally, the dedicated space provides opportunities for collaboration and improves process design supporting the ordering, invoicing, and accounts receivable processes for pharmaceutical processes. Across classes of trade, our commitment to service and a solutions-orientated commercial approach has resonated with customers. A new health system customer onboarding that we recently completed and a few in the earlier phases of ramp up are going smoothly, and we expect over $10 billion in total incremental revenue in fiscal year 25 from committed customer wins and the end of the day.

Speaker Change: Additionally, the dedicated space provides opportunities for collaboration and improved process design supporting the ordering, invoicing, and accounts receivable process for pharmaceutical products.

Speaker Change: Across classes of trade, our commitment to service and solutions-oriented commercial approach has resonated with customers.

Jason Hollar: Our Consumer Health Logistics Center, slated open in 2025, will offer a comprehensive selection of over-the-counter medications, treatments, and diagnostics solutions. Solutions. Additionally, our new Vaccine Alliance program offers cost savings and other benefits from participating manufacturers to help pharmacies engage more patients and expand their immunization programs. We are constantly evaluating ways to bring innovative solutions to our pharmacy and manufacturer partners through the breadth of our offerings and capabilities. As part of that commitment and in collaboration with CVS Health, we have formed Averon, a joint venture to source bile similars.

Speaker Change: A new health system customer onboarding that we recently completed and a few in the earlier phases of ramp up are going smoothly and we expect over $10 billion in total incremental revenue in fiscal year 25 from committed customer wins and expansions.

Jason Hollar: Turning to GMPD, when we originally introduced the former medical improvement plan, we consistently highlighted that the first key to turning around the performance of the business was addressing the significant impact of inflation and global supply chain constraints on our business. Our team got to work with urgency, executing various mitigation actions to cover the significant operating losses we incurred. Fast forward to today, after two years of hard work, the GMPD business is on solid ground. We delivered an approximate $240 million year-view improvement in segment profit in fiscal year 20. 24. We exited the year successfully offsetting the gross impact of inflation.

Jason Hollar: Turning to GMPD, when we originally introduced the former medical improvement plan, we consistently highlighted that the first key to turning around the performance of the business was addressing the significant impact of inflation and global supply chain constraints on our business. Our team got to work with urgency, executing various mitigation actions to cover the significant operating losses we... Fast forward to today, and after two years of hard work, the GMPD business is on solid ground.

Speaker Change: Turning to GMPD, when we originally introduced the former medical improvement plan, we consistently highlighted that the first key to turning around the performance of the business was addressing the significant impact of inflation and global supply chain constraints on our business.

Speaker Change: Our team got to work with urgency, executing various mitigation actions to cover the significant operating losses we incurred.

Jason Hollar: Averon builds upon our company's successful partnerships like red oak sourcing with similar overall objectives for bile similars. Simply put, we are increasing access to additional therapy options that will provide more choice for patients at a lower cost. Averon began by contracting a couple of products, including Hemaera bile similars, and we see opportunities for the program to expand over time. Continuing in specialty, we're pleased with how quickly specialty networks have integrated with our business and we continue to be impressed with the PPS analytics platforms insights generation capabilities and the team's clinical, technology, and operational expertise.

Speaker Change: Fast forward to today. After two years of hard work, the GMPD business is on solid ground. We delivered an approximate $240 million year-over-year improvement in segment profit in fiscal year 24.

Jason Hollar: We delivered an approximate $240 million year-over-year improvement in segment profit in fiscal year. We exited the year successfully offsetting the gross impact of inflation. We've seen three consecutive quarters of year-over-year segment revenue growth and four consecutive quarters of Cardinal Health brand volume. We drew Cardinal Health brand revenue 3% overall for the year and 4% in the U.S. The Customer Loyalty Index score for U.S. distribution remains up over 20 points from its pandemic low. And we're successfully retaining key distribution customers along with some recent, As we continue to dive into the business through our portfolio review, it's clear there are still significant opportunities to capture. I'll highlight a few.

Jason Hollar: We've seen three consecutive quarters of year-year segment revenue growth in four consecutive quarters of Cardinal Health brand buying growth. We drew Cardinal Health brand revenue 3% overall for the year and 4% in the US. Our customer loyalty index score for US distribution remains up over 20 points from its pandemic, and we're successfully retaining key distribution customers along with some recent wins. As we continue to dive into the business through our portfolio review, it's clear there are still significant opportunities to capture. I'll highlight a few. First, as Aaron mentioned, our progress on inflation mitigation in fiscal year 24 will annualize and be a significant year-to-year tailwind to our results next year, even with a slight headwind expected from the recent cost increases in international freight.

Speaker Change: We exited the year successfully offsetting the gross impact of inflation.

Speaker Change: We've seen three consecutive quarters of year-over-year segment revenue growth and four consecutive quarters of Cardinal Health brand volume growth.

Speaker Change: We drew Cardinal Health brand revenue 3% overall for the year and 4% in the U.S.

Speaker Change: Our Customer Loyalty Index score for U.S. distribution remains up over 20 points from its pandemic low. And we're successfully retaining key distribution customers along with some recent wins.

Jason Hollar: As expected, we are leveraging specialty networks demonstrated capabilities in urology, the largest area of its fully integrated model to enhance our offering in oncology. The fully integrated specialty networks market offering is directly aligned with our strategy for Navista, our oncology practice alliance providing advanced technology and services. Over the course of the last year, we built a world-class Navista team consisting of industry experts to find our offerings and go to market strategy and completed our foundational technology build.

Speaker Change: As we continue to dive into the business through our portfolio review, it's clear there are still significant opportunities to capture. I'll highlight a few.

Jason Hollar: First, as Aaron mentioned, our progress on inflation mitigation in fiscal year 24 will annualize and be a significant year-over-year tailwind to our results next year, even with a slight headwind expected from the recent cost increases in international freight. Between the actions we've taken to improve our resiliency, the diversity of our global supply chain, and some offsets across our broader portfolio of commodities, we're confident in our ability to continue to effectively mitigate supply chain disruptions. Second, Cardinal Health's leading indicators remain positive and continue to predict an acceleration in growth.

Speaker Change: First, as Aaron mentioned, our progress on inflation mitigation in fiscal year 24 will annualize and be a significant year-over-year tailwind to our results next year, even with a slight headwind expected from the recent cost increases in international freight.

Jason Hollar: Between the actions we've taken to improve our resiliency, the diversity of our global supply chain, and some offsets across our broader portfolio commodities, we're confident in our ability to continue to effectively mitigate supply chain inflation. Second, Cardinal Health brand leading indicators remain positive and continue to predict an acceleration and growth. We've seen a healthy overall utilization environment for a number of quarters now, and our five-point plan continues to produce encouraging results. Third, the discipline execution of our simplification strategy has driven improved operational performance. With the business stabilized and only recently turned free cash flow positive, we see opportunities to drive targeted working capital improvements over the next two years.

Speaker Change: Between the actions we've taken to improve our resiliency, the diversity of our global supply chain, and some offsets across our broader portfolio of commodities, we're confident in our ability to continue to effectively mitigate supply chain inflation.

Jason Hollar: The Navista team is engaging with an active pipeline of customers across the oncology marketplace, demonstrating to community oncologists how Navista can help them remain independent for good. Upstream with manufacturers, our leading specialty 3PL has continued its track record of growing faster the market with nearly 20% growth during the year. We're leveraging these services as part of our comprehensive offering that further facilitates the commercialization and delivery of critical cell and gene therapies to providers and patients.

Speaker Change: Second, Cardinal Health brand leading indicators remain positive and continue to predict an acceleration in growth. We've seen a healthy overall utilization environment for a number of quarters now and our five-point plan continues to produce encouraging results.

Jason Hollar: We've seen a healthy overall utilization environment for a number of quarters now, and our five-point plan continues to produce encouraging results. Third, the disciplined execution of our simplification strategy has driven improved operational efficiency. With the business stabilized and only recently turned free cash flow positive, we see opportunities to drive targeted working capital improvements over the next two years. Additionally, we can broaden our simplification efforts, such as further optimizing our real estate and geographic footprint while always prioritizing the needs of our customers as our North Star.

Speaker Change: Third, the discipline execution of our simplification strategy has driven improved operational performance.

Jason Hollar: Our new advanced therapy solutions innovation center features a specialized deep frozen storage suite to handle the logistical challenges associated with cell and gene therapies. Additionally, the dedicated space provides opportunities for collaboration and improved process designs supporting the ordering, invoicing, and accounts receivable process for pharmaceutical products. Across classes of trade, our commitment to service and solutions-oriented commercial approach has resonated with customers. A new health system customer onboarding that we recently completed and a few in the earlier phases of ramp up are going smoothly and we expect over $10 billion in total incremental revenue in fiscal year 25 from committed customer wins and expansions.

Speaker Change: With the business stabilized and only recently turned free cash flow positive, we see opportunities to drive targeted working capital improvements over the next two years.

Jason Hollar: Additionally, we can broaden our simplification efforts, such as further optimizing our real estate and geographic footprints while always prioritizing the needs of our customers as our North Star.

Speaker Change: Additionally, we can broaden our simplification efforts, such as further optimizing our real estate and geographic footprints, while always prioritizing the needs of our customers as our North Star.

Jason Hollar: Our team is energized to execute on the next phase of the improvement journey, focus on commercial excellence and continued simplification to create additional value for our customers and shareholders. In nuclear and position health solutions are leading positioning with 130 nuclear pharmacies and 30 PET sites across the country. These are differentiated abilities to partner with manufacturers in order to bring cutting-edge therapies to patients exactly when they need them. Our excitement continues to build around the opportunities to improve patient lives through the use of precision medicine, which we have been investing into heavily with our Center for Theranostics Advancement.

Jason Hollar: Our team is energized to execute on the next phase of the improvement journey focused on commercial excellence and continued simplification to create additional value for our customers and shareholders. For Nuclear and Precision Health Solutions, our leading position with 130 nuclear pharmacies and 30 PET sites across the country feeds our differentiated ability to partner with manufacturers in order to bring cutting-edge therapies to patients exactly when they need them.

Speaker Change: Our team is energized to execute on the next phase of the improvement journey, focused on commercial excellence and continued simplification to create additional value for our customers and shareholders.

Speaker Change: In Nuclear and Precision Health Solutions, our leading positioning with 130 nuclear pharmacies and 30 PET sites across the country feeds our differentiated ability to partner with manufacturers in order to bring cutting-edge therapies to patients exactly when they need them.

Jason Hollar: Our excitement continues to build around the opportunities to improve patient lives through the use of precision medicine, which we have been investing in heavily with our Center for Theranostics Advanced. We're seeing results, with our theranostics business growing over 20% in fiscal year 24, driven by strong demand for prostate cancer theranostics products, such as T-Lix and Ellucian. Fiscal year 25, we expect similar thermonastics growth, and we'll continue to invest to meet the growing pipeline of opportunity, which includes cardiology and neurology but is overall largely dominated by uncle. As an example, we will be expanding our support of novel prostate radioligand therapies with Novartis' Plevicto in fiscal year 25.

Speaker Change: Our excitement continues to build around the opportunities to improve patient lives through the use of precision medicine, which we have been investing into heavily with our Center for Theranostics Advancement.

Jason Hollar: We're seeing the results with our Theranostics business growing over 20% in fiscal year 24, driven by strong demand for prostate cancer Theranostics products, such as T-lixes and elusics. In fiscal year 25, we expect similar Theranostics growth and will continue to invest to meet the growing pipeline of opportunities, which includes cardiology and neurology, but overall is largely dominated by oncology. As an example, we will be expanding our support of novel prostate, radio ligand therapies, with Novartis's Plovicto and fiscal year 25. We are also investing in increasing our cyclotron capacity and PET manufacturing geographic footprint to meet increasing demand for PET diagnostics, with the majority of emerging radiotherapeutics requiring a companion PET scan.

Speaker Change: We're seeing the results, with our Theranostics business growing over 20% in FY24, driven by strong demand for prostate cancer Theranostics products, such as Telex's Elusix.

Speaker Change: In fiscal year 25, we expect similar fair analytics growth and will continue to invest to meet the growing pipeline of opportunities.

Jason Hollar: We delivered an approximate $240 million year-view improvement in segment profit in fiscal year 20. 24. We exited the year successfully offsetting the gross impact of inflation. We've seen three consecutive quarters of year-year segment revenue growth in four consecutive quarters of Cardinal Health brand buying growth. We drew Cardinal Health brand revenue 3% overall for the year and 4% in the US. Our customer loyalty index score for US distribution remains up over 20 points from its pandemic and we're successfully retaining key distribution customers along with some recent wins.

Speaker Change: which includes cardiology and neurology, but overall is largely dominated by oncology. As an example, we will be expanding our support of novel prostate radioligand therapies with Novartis' Plevicto in fiscal year 25.

Jason Hollar: We are also investing in increasing our cyclotron capacity and pet manufacturing geographic footprint to meet increasing demand for pet diagnostics, with the majority of emerging radiotherapeutics requiring a companion pet scan. Fiscal year 24 was a foundational year for our $2.9 billion at-home solutions business, as we laid the groundwork for future growth and efficiency. This business continues to grow revenue faster than the market, not only aided by care moving into the home but also due to our team's commercial execution.

Speaker Change: We are also investing in increasing our cyclotron capacity and pet manufacturing geographic footprint to meet increasing demand for pet diagnostics, with the majority of emerging radiotherapeutics requiring a companion pet scan.

Jason Hollar: Fiscal Year 24 was a foundational year for our $2.9 billion at-home solutions business, as we laid the groundwork for future growth and efficiency. This business continues to grow revenue faster than market, not only aided by care moving into the home, but also our team's commercial execution. The drive operating leverage we've been investing in our technology capabilities, such as new warehouses with state-of-the-art automation. Just last month, we opened our brand new 350,000 square foot warehouse in South Carolina, featuring the fastest order fulfillment system in the market. This system is also operational in our central health facility.

Jason Hollar: As we continue to dive into the business through our portfolio review, it's clear there are still significant opportunities to capture. I'll highlight a few. First, as Aaron mentioned, our progress on inflation mitigation in fiscal year 24 will annualize and be a significant year-to-year tailwind to our results next year, even with a slight headwind expected from the recent cost increases in international freight. Between the actions we've taken to improve our resiliency, the diversity of our global supply chain and some offsets across our broader portfolio commodities were confident in our ability to continue to effectively mitigate supply chain inflation.

Speaker Change: Fiscal year 24 was a foundational year for our $2.9 billion at-home solutions business as we laid the groundwork for future growth and efficiency.

Speaker Change: This business continues to grow revenue faster than market, not only aided by care moving into the home, but also our team's commercial execution.

Jason Hollar: At Drive Operating Leverage, we've been investing in our technology capabilities, such as new warehouses with state-of-the-art automation. Just last month, we opened our brand new 350,000 square foot warehouse in South Carolina, featuring the fastest order fulfillment system in the market.

Speaker Change: To drive operating leverage, we've been investing in our technology capabilities, such as new warehouses with state-of-the-art automation.

Speaker Change: Just last month, we opened our brand new 350,000 square foot warehouse in South Carolina, featuring the fastest order fulfillment system in the market.

Jason Hollar: This system is also operational in our central Ohio facility and planned for the new Texas Distribution Center we previously announced and expect to open in 2025. We're seeing fruits from our investments, with our fill rates currently the highest they've been in over three years, and our patient net promoter score up over 16% year over year. The OptiFreight Logistics team delivered this year with exceptional performance. Our TotalView Insights platform continues to help customers uncover shipping inefficiencies and optimize delivery through data-driven As a result, our Customer Loyalty Index is at an all-time high.

Jason Hollar: And plan for the new Texas distribution center we previously announced and expect to open in 2025. We're seeing fruits from our investments, with our fill rates currently the highest they've been in over three years, and our patient net promoter score up over 16% year to year. The Opti Freight Logistics team delivered this year with exceptional performance. Our total view insights platform continues to help customers uncover shipping inefficiencies and optimize delivery through data-driven insights. As a result, our customer loyalty index is at an all-time high. In fiscal year 25, to put it simply, we expect to continue our track record of great execution, helping our customers expand and bringing on new customers to benefit from our program and value.

Speaker Change: This system is also operational in our central Ohio facility and planned for the new Texas Distribution Center we previously announced and expect to open in 2025.

Jason Hollar: Second, Cardinal Health brand leading indicators remain positive and continue to predict an acceleration and growth. We've seen a healthy overall utilization environment for a number of quarters now and our five-point plan continues to produce encouraging results. Third, the discipline execution of our simplification strategy has driven improved operational performance. With the business stabilized and only recently turned free cash flow positive, we see opportunities to drive targeted working capital improvements over the next two years. Additionally, we can broaden our simplification efforts, such as further optimizing our real estate and geographic footprints while always prioritizing the needs of our customers as our North Star.

Speaker Change: We're seeing fruits from our investments, with our fill rates currently the highest they've been in over three years, and our patient net promoter score up over 16% year per year.

Speaker Change: The OptiFreight Logistics team delivered this year with exceptional performance. Our TotalView Insights platform continues to help customers uncover shipping inefficiencies and optimize delivery through data-driven insights.

Speaker Change: As a result, our Customer Loyalty Index is at an all-time high.

Jason Hollar: Fiscal Year 25, to put it simply, we expect to continue our track record of great execution, helping our customers expand and bringing on new customers to benefit from our program and value. Across enterprise, we are confident in the Cardinal team to continue our momentum and deliver our targeted growth in fiscal year 25 and beyond. Before I wrap up, the former CFO and I can't help but to acknowledge our team's tremendous progress on cash flow this year.

Speaker Change: Fiscal year 25, to put it simply, we expect to continue our track record of great execution, helping our customers expand and bringing on new customers to benefit from our program and value.

Jason Hollar: Across the enterprise, we are confident in the Cardinal team to continue our momentum and deliver our targeted growth in fiscal year 25 and beyond.

Jason Hollar: Our team is energized to execute on the next phase of the improvement journey, focus on commercial excellence and continued simplification to create additional value for our customers and shareholders. In nuclear and position health solutions are leading positioning with 130 nuclear pharmacies and 30 pet sites across the country, these are differentiated abilities to partner with manufacturers in order to bring cutting-edge therapies to patients exactly when they need them. Our excitement continues to build around the opportunities to improve patient lives through the use of precision medicine, which we have been investing into heavily with our Center for Theranostics Advancement.

Speaker Change: Across Enterprise, we are confident in the Cardinal team to continue our momentum and deliver our targeted growth in FY25 and beyond.

Jason Hollar: Before I wrap up, the former CFO and I can't help but acknowledge our team's tremendous progress on cash flow this year. With the record results in fiscal year 24, we're positioned to exceed the adjusted free cash flow expectations we outlined at Investor Day with at least $7 billion over the fiscal 24 to 26 period, even despite the large contract expiration. We possess the financial flexibility to continue investing in our business, returning capital to shareholders, and maximizing long-term shareholder value creation.

Speaker Change: Before I wrap up, the former CFO and me can't help but to acknowledge our team's tremendous progress on cash flow this year.

Jason Hollar: With the record results in fiscal year 24, we're positioned to exceed the adjusted free cash flow expectations we outlined at Investor Day with at least $7 billion over the fiscal 24 to 26 period, even despite the large contract expiration. We possess the financial flexibility to continue investing in our business, returning capital to shareholders, and maximizing long-term shareholder value creation. In summary, fiscal year 24 was another great year, and we are excited to continue driving our company and health care forward. I want to thank our dedicated employees who serve our customers and continue our work to be healthcare's most trusted partner. With that, we will take your order. Thank you very much, Mr. Hollar.

Speaker Change: With the record results in fiscal year 24, we're positioned to exceed the adjusted free cash flow expectations we outlined at Investor Day with at least $7 billion over the fiscal 24 to 26 period, even despite the large contract expiration.

Speaker Change: We possess the financial flexibility to continue investing in our business, returning capital to shareholders, and maximizing long-term shareholder value creation.

Jason Hollar: In summary, fiscal year 24 was another great year, and we are excited to continue driving our company and healthcare forward.

Jason Hollar: We're seeing the results with our Theranostics business growing over 20% in fiscal year 24 driven by strong demand for prostate cancer Theranostics products, such as T-lixes and elusics. In fiscal year 25, we expect similar Theranostics growth and will continue to invest to meet the growing pipeline of opportunities, which includes cardiology and neurology, but overall is largely dominated by oncology. As an example, we will be expanding our support of novel prostate, radio ligand therapies, with Novartis's Plovicto and fiscal year 25. We are also investing in increasing our cyclotron capacity and pet manufacturing geographic footprint to meet increasing demand for pet diagnostics, with the majority of emerging radiotherapeutics requiring a companion pet scan.

Speaker Change: In summary, fiscal year 24 was another great year, and we are excited to continue driving our company and healthcare forward. I want to thank our dedicated employees who serve our customers and continue our work to be healthcare's most trusted partner. With that, we will take your questions.

Jason Hollar: I want to thank our dedicated employees to serve our customers and continue our work to be healthcare's most trusted partner.

Jason Hollar: With that, we will take your questions. Thank you very much, Mr. Holler.

George: Ladies and gentlemen, once again, if you wish to ask any questions, please press star one on your top of keypad, and just make sure you live. It's not muted in order to let you see your equipment. And also, please limit yourself to one question each.

Operator: Ladies and gentlemen, once again, if you wish to ask any questions, please press star one on your double keypad, and let's make sure it's not muted in order to let you see your equipment and also please limit yourself to one question each. Today's first question is from Lisa Gill, coming from J.P. Morgan. Please go ahead. Thanks very much.

Speaker Change: Thank you very much, Mr. Hollar.

Speaker Change: Ladies and gentlemen, once again, if you wish to ask any questions, please press star one on your telephone keypad, and just make sure your line is not muted in order to let you see and reach your equipment. And also, please limit yourself to one question each. Today's first question is coming from Lisa Gill, coming from J.P. Morgan. Please go ahead. Thank you.

Lisa Gill: This first question is coming from Lisa Gill, call from JP Morgan. Please go ahead. Thanks very much, and good morning. Thanks for all the detail, Jason. I just want to add better understand just two things. One, a nice driver of the margin going into next year, you had originally said roughly 1%, now you're talking 1 to 3%. I think you called out a couple of things, especially network, new customer, cross mitigation.

Lisa Gill: And good morning. Thanks for all the details, Jason. I just want to better understand just two things.

Jason Hollar: One, a nice driver of the margin going into next year. You had originally said roughly 1%. Now you're talking about one to 3%. I think you call that a couple of things, a specialty network, new customer, and cost mitigation. But I'm just curious, especially with the new customer, is there anything unique about that contract or anything else that you would call out as we think about the margin improvement throughout 25? for the question; happy to talk about it. We are really pleased to present our guide for the pharma business at Cisco 25.

Lisa Gill: Thanks very much and good morning. Thanks for all the details Jason. I just want to better understand just two things. One, a nice driver of the margin going into next year, you had originally said roughly 1%, now you're talking 1-3%. I think you called out a couple of things, the specialty network, new customer, cost mitigation. But I'm just curious, especially in the new customer, is there anything unique about that contract or anything else that you would call out as we think about the margin improvement throughout 25?

Jason Hollar: Fiscal year 24 was a foundational year for our $2.9 billion at-home solutions business, as we laid the groundwork for future growth and Efficiency. This business continues to grow revenue faster than market, not only aided by care moving into the home, but also our team's commercial execution. The drive operating leverage we've been investing in our technology capabilities, such as new warehouses with state of the art automation. Just last month, we opened our brand new 350,000 square foot warehouse in South Carolina, featuring the fastest order fulfillment system in the market.

Jason Hollar: But I'm just curious, especially in the new customer, is there anything unique about that contract or anything else that you would call out as we think about the margin improvement throughout 25? Good morning. Thank you for the question. Happy to talk about it. We are really pleased to raise our guide for the firm of business for fiscal 25. It really reflects our continued confidence in the team and continued confidence and resiliency of that business. We're not understanding some of the puts and takes over that we've been talking about in the last couple of quarters.

Speaker Change: Good morning. Thank you for the question. Happy to talk about it. We are really pleased to raise our guide for the pharma business for Cisco 25. It really reflects our continued confidence in the team and continued confidence in the resiliency of that business, notwithstanding some of the puts and takes that we've been talking about over the last couple of quarters.

Jason Hollar: It really reflects our continued confidence in the team and continued confidence in the resiliency of that business, notwithstanding some of the puts and takes over that we've been talking about in the last couple of quarters. I'll touch on the profile in a second, but I do wanna emphasize the revenue side of the house from a guidance perspective that we guided down four to 6% all in reflecting the $40 billion headwind on the low margin contract non-renewal, but it's really up 15 to 18% on an adjusted basis if you take out the impact of that customer loss. Within that 15 to 18% is $10 billion of new revenue, new customers, and expansions of service with existing customers.

Jason Hollar: This system is also operational in our central health facility. And plan for the new Texas distribution center we previously announced and expect to open in 2025. We're seeing fruits from our investments with our fill rates currently the highest they've been in over three years, and our patient net promoter score up over 16% year to year. The Opti Freight Logistics team delivered this year with exceptional performance. Our total view insights platform continues to help customers uncover shipping inefficiencies and optimize delivery through data driven insights.

Jason Hollar: I'll touch on the profile in a second, but I do want to emphasize on the revenues out of the house from a guidance perspective that we guided down 4 to 6% all in, reflecting the $40 billion headwind on the low margin contract and on renewal. But it's really up 15 to 18% on an adjusted basis if you take out the impact of that customer loss. Within that 15 to 18% is $10 billion of a new revenue, new customers, and expansions of service with existing customers. That's on top of an underlying 10% underlying growth with the existing business.

Speaker Change: I'll touch on the profile in a second, but I do want to emphasize on the revenue side of the house from a guidance perspective that, you know, we guided down four to six percent, you know, all in reflecting the forty billion dollar headwind on the low margin.

Speaker Change: contract non-renewal, but it's really up 15 to 18% on an adjusted basis if you take out the impact of that impact of that customer loss.

Jason Hollar: As a result, our customer loyalty index is at an all time high. In fiscal year 25 to put it simply, we expect to continue our track record of great execution, helping our customers expand and bringing on new customers to benefit from our program and value.

Speaker Change: Within that 15-18% is $10 billion of new revenue, new customers, and expansions of service with existing customers.

Jason Hollar: That's on top of an underlying 10% underlying growth in the existing business. And so from that, you can tell that we are growing the portfolio and doing what we said we were going to do with our existing customers and adding on both new customers and expansions with existing customers to get to that revenue base. That supports the increase in guide, the 1-3% on the profitability side of the house.

Speaker Change: That's on top of an underlying 10% underlying growth with the existing business.

Jason Hollar: Across the enterprise, we are confident in the Cardinal team to continue our momentum and deliver our targeted growth in fiscal year 25 and beyond. Before I wrap up, the former CFO and me can't help but acknowledge our team's tremendous progress on cash flow this year. With the record results in fiscal year 24, we're positioned to exceed the adjusted free cash flow expectations we outlined at investor day with at least $7 billion over the fiscal 24 to 26 period, even despite the large contract expiration. We possess the financial flexibility to continue investing in our business, returning capital to shareholders and maximizing long-term shareholder value creation.

Speaker Change: And so from that, you can tell that we are growing the portfolio and doing what we said we were going to do with our existing customers and adding on both new customers and expansions with existing customers to get to that revenue base.

Jason Hollar: Davis. That supports the increasing guide; the 1% to 3% on the profitability is out of the house. The things we call that during the earnings call, it's the consistent market dynamics. It's the generic volume growing below single digit growth in core, the high single digit growth and specialty is a strong overall Rx demand. There's a lot of things going on, but we are counting our plans as we carry forward.

Speaker Change: That supports the increase in guide, the 1-3% on the profitability side of the house. The things we called out during the earnings call, it's the consistent market dynamics, it's the...

Jason Hollar: The things we called out during the earnings call, it's the consistent market dynamics, generic volume growing, the low single-digit growth in core, the high single-digit growth in specialty, and the strong overall RX demand. There are a lot of things going on, but we are confident in our plans as we carry forward. Now, we don't comment on the margin profile of any particular customer, particularly in the context of a new customer, and we were delighted to announce formally the public's win today in our earnings release.

Speaker Change: You know, generic volume growing, the low single-digit growth and core, the high single-digit growth and specialty, and the strong overall RX demand. There's a lot of things going on, but we are confident in our plans as we carry forward.

Jason Hollar: Now, we don't comment on the margin profile of any particular customer, particularly in the context of a new customer, and we were delighted to announce, formally, the public's, you know, win today in our earnings release. I'm not going to comment on their profitability, but I will observe that we have publicly commented on the low-margin nature of the business that we've lost. And that certainly doesn't hurt us as we carry forward.

Jason Hollar: In summary, fiscal year 24 was another great year, and we are excited to continue driving our company and healthcare forward. I want to thank our dedicated employees to serve our customers and continue our work to be healthcare's most trusted partner.

Speaker Change: Now, we don't comment on the margin profile of any particular customer, particularly in the context of...

Speaker Change: A new customer, and we were delighted to announce formally the public's win today in our earnings release. I'm not going to comment on their profitability, but I will observe that we have publicly commented on the low-margin nature of the business that we've lost, and that certainly doesn't hurt us as we carry forward. Jason, I think you had nothing to add.

Jason Hollar: I'm not going to comment on their profitability, but I will observe that we have publicly commented on the low-margin nature of the business that we've lost, and that certainly doesn't hurt us as we carry forward. Jason, I think you had nothing to add.

Unknown Executive: With that, we will take your questions. Thank you very much, Mr. Holler. Ladies and gentlemen, once again, if you wish to ask any questions, please press star one on your top of keypad, and just make sure you live. It's not muted in order to let you see your equipment. And also, please limit yourself to one question each.

Unknown Executive: Jason, I think you would add nothing, then.

Eric Percher: Thank you. Our next question will be coming from Eric Percher, colleagues from Navron Research. Please go ahead. Thank you.

Operator: Thank you. Our next question will be from Eric Percher, a colleague from Nephron Research. Please go ahead.

Speaker Change: Thank you. Our next lecture will be coming from Eric Percher, calling from Neffron Research. Please go ahead.

Lisa Gill: This first question is coming from Lisa Gill, call from JP Morgan. Please go ahead. Thanks very much and good morning. Thanks for all the detail, Jason. I just want to add better understand just two things. One, a nice driver of the margin going into next year, you had originally said roughly 1%, now you're talking 1 to 3%. I think you called out a couple of things, especially network, new customer, cross mitigation.

Jason Hollar: I think it's fair to say there was some concern coming into the quarter on the increase in macro freight trends and other input costs. And I know you mentioned you were able to offset that. Can you give us a sense of how this looked to you in terms of the size of that increase versus what we've seen in the past wasn't material. And how it looked under the current or new contracts versus legacy contracts and the ability to pass that along to your customers. Sure, thanks for the question, Eric. I think it's important to just go back in time a little bit in the last 12 months, a year ago, when we were sitting here. Certainly, the freight costs had gone all the way back down to historic levels.

Eric Percher: I think it's fair to say there was some concern coming into the quarter on the increase in macro freight trends and other input costs. And I know you mentioned you were able to offset that. Can you give us a sense of how this looked to you in terms of the size of that increase versus what we've seen in the past? Was it material?

Jason Hollar: Thank you.

Speaker Change: I think it's fair to say there was some concern coming into the quarter on the increase in macro freight trends and other input costs. And I know you mentioned you were able to

Speaker Change: I'll set that. Can you give us a sense of how this looked to you in terms of the size of that increase versus what we've seen in the past, wasn't material. And how it looked under the current or new contracts versus legacy contracts and the ability to ask that along to your customers.

Jason Hollar: But I'm just curious, especially in the new customer, is there anything unique about that contract or anything else that you would call out as we think about the margin improvement throughout 25? Good morning, thank you for the question. Happy to talk about it. We are really pleased to raise our guide for the firm of business for fiscal 25. It really reflects our continued confidence in the team and continue confidence and resiliency of that business.

Jason Hollar: And how does it look under the current or new contracts versus legacy contracts and the ability to pass that along to your customers? Sure, thanks for the question, Eric. I think it's important to just go back in time a little bit. In the last 12 months, a year ago when we were sitting here, certainly, the free costs had gone all the way back down to historic levels. So we were enjoying, you know, really the run-up had come all the way back down. And It was at the beginning of the calendar year.

Speaker Change: Sure, thanks for the question, Eric.

Speaker Change: I think it's important to just go back in time a little bit in the last 12 months, a year ago when we were sitting here.

Jason Hollar: So we were enjoying, you know, really the run up had come all the way back down. And it was at the beginning of the calendar year. So in our third quarter, when the Red Sea issues first began, and that's when we saw the first spike. And the reason I remind you of that is that first spike was known come spring time when we gave our initial guidance for GM PD. And so we knew about that first step up already. And that's been factored in from the guidance from day one. Yes, there have been further increases since then.

Speaker Change: Certainly the freight costs had gone all the way back down to historic levels.

Jason Hollar: We're not understanding some of the puts and takes over that we've been talking about in the last couple of quarters. I'll touch on the profile in a second, but I do want to emphasize on the revenues out of the house from a guidance perspective that we guided down 4 to 6% all in reflecting the $40 billion headwind on the low margin contract and on renewal. But it's really up 15 to 18% on an adjusted basis if you take out the impact of that customer loss within that 15 to 18% is $10 billion of a new revenue, new customers and expansions of service with existing customers that's on top of an underlying 10% underlying growth with the existing business.

Speaker Change: So we were enjoying, you know, really the run-up had come all the way back down.

Speaker Change: And it was at the beginning of the calendar year, so in our third quarter, when the Red Sea issues first began, and that's when we saw the first...

Jason Hollar: So in our third quarter, when the Red Sea issues first began, that's when we saw the first spike. And the reason I remind you of that is that the first spike was known come springtime when we gave our initial guidance for GM PD. And so we already knew about that first step up already, and that's been factored in from the guidance from day one. Yes, there have been further increases since then. But when you look at the combined two increases, the two different steps, first and January, then in the spring.

Speaker Change: Spike. And the reason I remind you of that is that first spike was known come springtime when we gave our initial guidance for GMPD. And so we knew about that first step up already.

Speaker Change: and that's been factored in from the guidance from day one.

Jason Hollar: But when you look at the combined two increases, the two different steps, first in January, then in the spring, they still are woefully short of where we were a couple of years ago. So when the whole supply chain was under pressure, where even when we were spending two, three times the current levels, we were having difficulty in actually getting reasonable service. So yes, the costs are higher, but not nearly as high as they used to be. And most importantly, the supply chain is functioning a lot more efficiently than it was before. Long way of saying, Eric, that yeah, there's a little bit of an increase here.

Speaker Change: Yes, there have been further increases since then, but when you look at the combined two increases, the two different steps, first in January, then in the spring, they still are woefully short of where we were a couple of years ago when the whole supply chain was under pressure, where even when we were spending two, three times the current levels, we were having difficulty in actually getting reasonable service.

Jason Hollar: They are still woefully short of where we were a couple of years ago, when the whole supply chain was under pressure, where even when we were spending two, three times the current levels, we were having difficulty in actually getting reasonable service. So yes, the costs are higher, but not nearly as high as they used to be.

Jason Hollar: From that, you can tell that we are growing the portfolio and doing what we said we were going to do with our existing customers and adding on both new customers and expansions with existing customers to get to that revenue base. Davis. That supports the increasing guide, the 1% to 3% on the profitability is out of the house. The things we call that during the earnings call, it's the consistent market dynamics. It's the generic volume growing below single digit growth in core, the high single digit growth and specialty is a strong overall Rx demand. There's a lot of things going on, but we are counting our plans as we carry forward.

Speaker Change: So, yes, the costs are higher, but not nearly as high as they used to be, and most importantly, the supply chain is functioning a lot more efficiently than it was before.

Jason Hollar: And most importantly, the supply chain is functioning a lot more efficiently than it was before. So, long way of saying Eric that yeah, there's a little bit of an increase here. It's something we monitor and manage very, very tightly. But it's not the point where it requires widespread price adjustments accordingly, at least not yet.

Jason Hollar: It's something we monitor and manage very, very tightly. But it's not the point where it requires widespread price adjustments accordingly, at least not yet.

Speaker Change: Long way of saying, Eric, that, yeah, there's a little bit of an increase here. It's something we monitor and manage very, very tightly. But it's not the point where it requires widespread price adjustments accordingly, at least not yet.

Jason Hollar: In addition to that, it's important that we look at the overall inflationary environment. And then we talked about this a couple of years ago. At the peak, we had a lot of oil and petroleum-based products, including fuel and other types of freight that was also a big issue. Those are actually a little bit softer in terms of the cost. So overall, net net, we're managing through it better than we have before. And overall, we have some puts and takes that are all very manageable. We'll continue to evaluate the pricing necessary within that, but at this stage, we haven't had to exercise that lever to near the extent that we did in the past.

Operator: In addition to that, it's important that we look at the overall inflationary environment. And then we talked about this a couple of years ago. At the peak, we had a lot of oil and petroleum-based products, including fuel and other types of freight that was also a big issue. Those are actually a little bit softer in terms of the cost.

Speaker Change: And in addition to that, it's important that we look at the overall inflationary environment. And we talked about this a couple of years ago at the peak. We had a lot of oil and petroleum-based products, including fuel and other type of freight. That was also a big issue. Those are actually a little bit softer in terms of the cost.

Jason Hollar: Now, we don't comment on the margin profile of any particular customer, particularly in the context of a new customer, and we were delighted to announce, formally, the public's, you know, win today in our earnings release. I'm not going to comment on their profitability, but I will observe that we have publicly commented on the low margin nature of the business that we've lost. And that certainly doesn't hurt us as we carry forward.

Jason Hollar: So overall, net net, we're managing through it better than we have before. And overall, we have some puts and takes that are all very manageable. We'll continue to evaluate the pricing necessary within that. But at this stage, we haven't had to exercise that lever to near the extent that we did in the past.

Unknown Executive: Jason, I think you would add nothing then.

Speaker Change: So, overall, net-net, we're managing through it better than we have before, and overall, we have some puts and takes that are all very manageable. We'll continue to evaluate the pricing necessary within that, but at this stage, we haven't had to exercise that lever to near the extent that we did in the past.

Unknown Executive: Yes. Next question, please.

Eric Percher: Thank you, our next question will be coming from Eric Percher, colleagues from Navron Research. Please go ahead. Thank you. I think it's fair to say there was some concern coming into the quarter on the increase in macro freight trends and other input costs. And I know you mentioned you were able to offset that. Can you give us a sense of how this looked to you in terms of the size of that increase versus what we've seen in the past wasn't material. And how it looked under the current or new contracts versus legacy contracts and the ability to pass that along to your customers.

Michael Cherny: Yes, our next question will be from Michael Cherny, calling from Learing Partners. Please go ahead; your line is open. Good morning, and thank you for taking the question.

Operator: Next question, please. Yes, our next question will be from Michael Cherny calling from Lear Inc. Partners. Please go ahead. Your line is open. Good morning.

Speaker Change: Next question, please.

Speaker Change: Yes, our next question will be from Michael Cherny calling from Lear Inc. Partners. Please go ahead, your line is open.

Jason Hollar: Yeah, maybe if I could dive a little bit more into the underlying farmer growth, if you can. You did a good job outlining some of the moving pieces on lost contract versus new. Is there any way you can give us a bit more color on where you expect the profit streams to live from specialty, and then also a bit more color on the COVID hangover, just so that we can have a better understanding? I guess maybe the simple straightforward question is, where will you be on an exit run rate on farmer growth, exiting the year, giving all the moving pieces you have to start the year?

Michael Cherny: Maybe if I could dive a little bit more into the underlying farmer growth, if you can, you did a good job outlining. John Blossett, Is there any way you can give us a bit more color on where you expect the profit streams to lie from specialty, and then also a bit more color on... COVID hangover, just so that we can have a better understanding, I guess, maybe the simple straightforward question. Where will you be on an exit runway? Farma Gross, Eggman.

Michael Cherny: Good morning and thank you for taking the question.

Michael Cherny: Maybe if I could dive a little bit more into the underlying farmer growth, if you can. You did a good job outlining some of the moving pieces on lost contract versus new. Is there any way you can give us a bit more color on where you expect the profit streams to lie from specialty, and then also a bit more color on

Speaker Change: The COVID hangover, just so that we can have a better understanding, I guess, maybe the simple, straightforward question is, where will you be on a exit run rate on pharma growth, exiting the year, given all the moving pieces you have to start the year?

Aaron Alt: Sure, thanks for the question, Eric. I think it's important to just go back in time a little bit in the last 12 months, a year ago, when we were sitting here, certainly the freight costs had gone all the way back down to historic levels. So we were enjoying, you know, really the run up had come all the way back down. And it was at the beginning of the calendar year. So in our third quarter, when the Red Sea issues first began, and that's when we saw the first spike.

Jason Hollar: Yeah, let me try to address a few of those pieces. So specialty is absolutely a key part of this story and why we still anticipate being able to grow this business next year. We highlighted in our comments that in fiscal 24, for the year, we saw another year of 14% growth. You may recall that our investor day last year, especially business cager, over the prior three years was anticipated at that time to be 14% as well. So another year of strong growth driven by the widespread investments that we have made and continue to make. We talk today about a couple of interesting growth drivers for the future, whether it's our advanced therapy solutions business, the new venture with CVS for Averon, focus on biosimilars. Biosimilars in general has been a rising tie type of benefit over the last several years.

Speaker Change: Yeah, let me try to address a few of those pieces. So specialty is absolutely a key part of this story and why we still anticipate being able to grow this business next year. We highlighted in our comments that in fiscal 24 for the year we saw another year of 14% growth. You may recall at our investor day last year, the specialty business Kager over the prior three years was anticipated at that time to be 14% as well.

Aaron Alt: And the reason I remind you of that is that first spike was known come spring time when we gave our initial guidance for GM PD. And so we knew about that first step up already. And that's been factored in from the guidance from day one. Yes, there have been further increases since then. But when you look at the combined two increases, the two different steps, first and January, then in the spring, they still are woefully short of where we were a couple of years ago.

Jason Hollar: So another year of strong growth, driven by the widespread investments that we have made and continue to make. We talked today about a couple of interesting growth drivers for the future, whether it's our advanced therapy solutions business, the new venture with CVS for Averon, and focus on biosimilars. Biosimilars, in general, have been a rising tide type of benefit over the last several years. And of course, then our acquisition, especially networks, which closed in March and has, you know, the eight, nine month type of your benefit, tailwind.

Speaker Change: So, another year of strong growth.

Speaker Change: driven by the widespread investments that we have made and continue to make.

Speaker Change: We talked today about a couple of interesting growth drivers for the future, whether it's our advanced therapy solutions business, the new venture with CVS for Aviron, focused on biosimilars. Biosimilars in general has been a rising tide type of benefit over the last several years.

Aaron Alt: So when the whole supply chain was under pressure, where even when we were spending two, three times the current levels, we were having difficulty in actually getting reasonable service. So yes, the costs are higher, but not nearly as high as they used to be. And most importantly, the supply chain is functioning a lot more efficiently than it was before. Long way of saying, Eric, that yeah, there's a little bit of an increase here.

Jason Hollar: And of course, then our acquisition, especially Networks, which closed in March and has eight, nine month type of year of year benefit tailwind. So these are all areas that are driving our specialty business to some degree in fiscal 24, but they're all examples of where we would expect that to continue to grow over fiscal 25 to help mitigate for that contract non-renueled that we think while that growth will be slower in 25 due to that. I also made the comment in the remarks that even in spite of this overall revenue reduction for the enterprise, for the pharmaceutical segment and the impact of that contract non-renewal, we still expect our specialty business to grow in fiscal 25, in spite of that.

Speaker Change: And, of course, then our acquisition of specialty networks, which closed in March.

Speaker Change: and has an 8-9 month type of year-over-year benefit tailwind.

Aaron Alt: It's something we monitor and manage very, very tightly. But it's not the point where it requires widespread price adjustments accordingly, at least not yet. In addition to that, it's important that we look at the overall inflationary environment. And then we talked about this a couple of years ago, at the peak, we had a lot of oil and petroleum based products, including fuel and other type of freight that was also a big issue.

Speaker Change: So, these are all areas that are driving our specialty business to some degree in Fiscal 24, but they're all examples of where we would expect that to continue to grow over Fiscal 25.

Jason Hollar: So these are all areas that are driving our specialty business to some degree in fiscal 24, but they're all examples of where we would expect that to continue to grow over fiscal 25 to help mitigate that contract non renewal. That we think, you know, while that growth will be slower in fiscal 25 due to that, I also made the comment in the remarks that even in spite of this overall revenue reduction for the enterprise for the pharmaceutical segment and the impact of that contract non renewal, we still expect our specialty business to grow in fiscal 25. In spite of that,

Speaker Change: to help mitigate for that contract non-renewal that we think, you know, while that growth will be slower in 2025 due to that, I also made the comment in the remarks that even in spite of this overall revenue reduction for the enterprise.

Aaron Alt: Those are actually a little bit softer in terms of the cost. So overall net net, we're managing through it better than we have before. And overall, we have some puts and takes that are all very manageable. We'll continue to evaluate the pricing necessary within that, but at this stage, we haven't had to exercise that lever to near the extent that we did in the past. Yes.

Speaker Change: for the pharma segment and the impact of that contract non-renewal. We still expect our specialty business to grow in fiscal 25 in spite of that. So that tells you that our run rate as we lap fiscal 25 and that non-renewal, we would anticipate it

Jason Hollar: So that tells you that our run rate as we lap fiscal 25 and that non renewal, we would anticipate it to be very consistent with the long-term algorithm that we've highlighted in the past, which, you know, from a profit perspective has been defined as a low single-digit type of product, profit growth for our PD core business and double digit growth for specialty. So we'll continue to look at other opportunities to invest organically as well as through an organic route to continue to feed that growth. Next question, please. Our next question today will be coming from Erin Wright, coming from Oregon Stanley. Great, thanks.

Jason Hollar: So that tells you that our run rate as we lap fiscal 25 and that non-renewal, we would anticipate it to be very consistent with the long-term algorithm that we've highlighted in the past, which, you know, from a profit perspective has been defined as low single-digit type of product growth for our PD core business and double-digit growth for specialties. So we'll continue to look at other opportunities to invest organically, as well as organically, to continue to feed that growth.

Speaker Change: with a long-term algorithm that we've highlighted in the past,

Michael Cherny: Next question, please. Yes, our next question will be from Michael Cherny, calling from Learing Partners. Please go ahead, your line is open.

Speaker Change: has been defined as low single-digit type of profit growth for our PD core business and double-digit growth for specialty. So we'll continue to look at other opportunities to invest organically as well as inorganically to continue to feed that growth.

Aaron Wright: Good morning, and thank you for taking the question. Yeah, maybe if I could dive a little bit more into the underlying farmer growth, if you can, you did a good job outlining some of the moving pieces on lost contract versus new, is there any way you can give us a bit more color on where you expect the profit streams to live from specialty, and then also a bit more color on the COVID hangover, just so that we can have a better understanding, I guess, maybe the simple straightforward question is, where will you be on an exit run rate on farmer growth, exiting the year, giving all the moving pieces you have to start the year?

Aaron Wright: Next question, please. Our next question is there, coming from Aaron Wright and from Oregon Stanley. Great. Thanks.

Speaker Change: Next question, please.

Speaker Change: Our next question today will be coming from Erin Wright, calling from Morgan Stanley .

Erin Wright: So in terms of the fiscal 25 guide, are there any changes in terms of how you were thinking about just the optimum unwind in terms of stranded costs or otherwise, and just given the building contributions, whether it's specialty networks or the new customer wins with that optimum offset, I guess, how should we think about that cadence in terms of the split of first half versus second half, or however you want to define it on an EPS perspective, Right? Yeah, Aaron walked through some of the cadence almost to your question.

Aaron Wright: So, in terms of fiscal 25 guide, are there any changes in terms of how you were thinking about just the optimum unwind in terms of stranded costs or otherwise? And just given the building contributions, whether it's specialty networks or the new customer wins with that optimum offset, I guess how should we think about that cadence in terms of the split of first half versus second half or however you want to define it on an EPS perspective, given some of those moving pieces in the first half.

Aaron Wright: Great, thanks. So in terms of the fiscal 25 guide, are there any changes in terms of how you were thinking about just the optimum unwind in terms of stranded costs or otherwise and just

Aaron Wright: Given the building contributions, whether it's specialty networks or the new customer wins, with that often offset, I guess, how should we think about that cadence in terms of the split of first half versus second half, or however you want to define it on an EPS perspective, given some of those moving pieces in the first half? Thanks.

Aaron Wright: Yeah, let me try to address a few of those pieces. So specialty is absolutely a key part of this story and why we still anticipate being able to grow this business next year. We highlighted in our comments that in fiscal 24, for the year, we saw another year of 14% growth. You may recall that our investor day last year, especially business cager, over the prior three years was anticipated at that time to be 14% as well.

Aaron Wright: Yeah, I'll be air and walk through some of the cadence almost to your question, but I wanted to stress just up front, which you should have heard from these messages are very, very similar words and phrases that we use last quarter. The plan is unchanged. Of course, we get a little bit smarter. We sharpen our pencils a little bit, and we get a better understanding of where our exit rate is for 24. But all the factors that we are talking about today with this business are very similar to what we walked through in the past.

Jason Hollar: But I wanted to stress just up front, which you should have heard from these messages are very, very similar words and phrases that we used last quarter, the plan is unchanged. Of course, we get a little bit smarter, we sharpen our pencils a little bit, and we get a better understanding of where our exit rate is for 24. But all the factors that we are talking about today with this business are very similar to what we walked through in the past. And, of course, all the investments that we made this past year. Aaron, a few thoughts on the cadence.

Speaker Change: Yeah, I'll have Aaron walk through some of the cadence elements of your question, but I wanted to stress this up front, which you should have heard from these messages are very, very similar words and phrases that we use last quarter. The plan is unchanged.

Speaker Change: Of course, we get a little bit smarter, we sharpen our pencils a little bit, and we get a better understanding of where our exit rate is for 24. But all the factors that we are talking about today with this business are very similar to what we walked through in the past, and of course, all the investments that we made this last year. Aaron, a few thoughts on that cadence? Absolutely.

Aaron Wright: So another year of strong growth driven by the widespread investments that we have made and continue to make. We talk today about a couple of interesting growth drivers for the future, whether it's our advanced therapy solutions business, the new venture with CVS for Averon, focus on biosimilars, biosimilars in general has been a rising tie type of benefit over the last several years. And of course, then our acquisition, especially networks, which closed in March and has eight, nine month type of year of year benefit tailwind.

Aaron Wright: And, of course, all the investments that we made this last year.

Aaron Alt: Aaron, a few thoughts on the cadence. Sure. So the way to think about it is optimal is an existing customer with us until the end of our Q4. And you can see the results in Q4. We don't need to go deeper on that, but what did also happen in Q4 was us being incredibly planful around the impact to our operations as well as for financials of that customer online. We've talked in the past that we talked during our last earnings call around the three offsetting actions. The company is not reaching a specialty networks. Of course, the new customer wins the expansion with existing customers as well as further cost optimization opportunities.

Aaron Alt: Sure, so the way to think about it is Optum was an existing customer with us until the end of our Q4, and you can see the results in Q4. We don't need to go deeper on that. But what did also happen in Q4 was us being incredibly planful around the impact on our operations as well as to our financials of that customer unwind. We've talked in the past, and we talked during our last earnings call around the three offsetting actions, the contribution of specialty networks, of course, the new customer wind, the expansion with existing customers, as well as further cost optimization opportunities. And we're pleased that the team got on it, got ahead of it, and they've already been executing in that respect.

Aaron: Sure, so the way to think about it is Optum was an existing customer with us until the end of our Q4. And you can see the results in Q4, we don't need to go deeper on that, but what did also happen in Q4 was us being incredibly planful around the impact to our operations as well as to our financials of that customer unwind.

Aaron: We've talked in the past, we talked during our last earnings call around the three offsetting actions, the contribution of specialty networks.

Aaron Wright: So these are all areas that are driving our specialty business to some degree in fiscal 24, but they're all examples of where we would expect that to continue to grow over fiscal 25 to help mitigate for that contract non-renueled that we think while that growth will be slower in 25 due to that. I also made the comment in the remarks that even in spite of this overall revenue reduction for the enterprise, for the pharmaceutical segment and the impact of that contract non-renuel, we still expect our specialty business to grow in fiscal 25, in spite of that.

Aaron: Of course, the new customer wins, the expansion with existing customers, as well as further cost optimization opportunities.

Aaron Alt: And we're pleased that the team got on it, got ahead of it. And they've already been executing in that respect. And so the guidance we're able to provide today. We view as relatively consistent with what we provided in Q3. But with an additional degree of confidence because the plans are behind us, and now we're acting in that way.

Aaron: We're pleased that the team got on it, got ahead of it, and they've already been executing in that respect.

Aaron Alt: And so the guidance we're able to provide today is relatively consistent with what we provided in Q3, but with an additional degree of confidence because the plans are behind us, and now we're acting in that way. The non-renewal will impact our Q1. There's no way to avoid that.

Aaron: The guidance we're able to provide today we view as, you know, relatively consistent with what we provided in Q3, but with an additional degree of confidence because the plans are behind us and now we're acting, you know, in that way.

Aaron Alt: The non-renewable will impact our Q1. There's no way to avoid that. They were a large low-margin customer. And, as we've talked about, the new customers coming on board are largely back half loaded. And so we will have a timing difference relative to prior years. And that will impact certainly our revenue and profitability timing over, of course, the year. There's also a cash impact, right? The unwind of the negative working capital position. There is a Q1 impact for us, and a key reason why we are carefully monitoring.

Aaron Alt: They were a large, low-margin customer. And as we've talked about, the new customers coming on board are largely back half loaded. And so we will have a timing difference relative to prior years, and that will impact, certainly, our revenue and profitability timing over the course of the year. There's also a cash impact, right?

Speaker Change: The non-renewal will impact our Q1. There's no way to avoid that. They were a large, low-margin customer, and as we've talked about, the new customers coming on board are largely back-half loaded, and so we will have a timing difference relative to prior years, and that will impact

Aaron Wright: So that tells you that our run rate as we lap fiscal 25 and that non-renuel, we would anticipate it to be very consistent with the long-term algorithm that we've highlighted in the past, which, you know, from a profit perspective has been defined as low single-digit type of product growth for our PD core business and double-digit growth for specialties. So we'll continue to look at other opportunities to invest organically as well as organically to continue to feed that growth.

Aaron Alt: The unwind of the negative working capital position there has a Q1 impact on us and is a key reason why we are carefully monitoring our cash flow during the first quarter, of course, balanced with the fact that we are delighted with the strong adjusted free cash flow and the strong cash balance at the end of our Q4. So look, on bail, the cost optimization is already in play, the special networks are already in play, and we continue to work on the customer expansions and the new customer onboarding, and we will make that successful as well. Thank you. Our next question today will be coming from Allen Lutz calling from Bank of America. Good morning, and thanks for taking the questions.

Speaker Change: Certainly our revenue and profitability timing over the course of the year. There's also a cash impact, right?

Speaker Change: The unwind of the negative working capital position there is a Q1 impact for us, and a key reason why we are carefully monitoring our cash flow during the first quarter, of course, balanced with the fact that we are delighted with the strong adjusted free cash flow and the strong cash balance at the end of our Q4.

Aaron Alt: Our cash flow and during the first quarter, of course, balance with the fact that we are delighted with the strong adjusted free cash flow and the strong cash balance at the end of our Q4. So look on balance. The cost optimization is already in play. The specialty networks is already in play. And we continue to work on the customer expansions and the new customer onboarding. And we will make that successful as well.

Aaron Alt: Next question, please. Our next question is there, becoming from Aaron Wright and from Oregon Stanley. Great. Thanks. So in terms of fiscal 25 guide, are there any changes in terms of how you were thinking about just the optimum unwind in terms of stranded costs or otherwise? And just given the building contributions, whether it's specialty networks or the new customer wins with that optimum offset, I guess how should we think about that cadence in terms of the split of first half versus second half or however you want to define it on an EPS perspective, given some of those moving pieces in the first half.

Speaker Change: So look, on balance, the cost optimization is already in play, the special networks is already in play, and we continue to work on the customer expansions and the new customer onboarding, and we will make that successful as well.

Unknown Executive: Thank you.

Allen Lutz: Our next question will be coming up.

Unknown Executive: Sorry to interrupt.

Kevin Caliendo: Our next question today will be coming from Allen. Let's call it from Bank of America. Please go ahead. Good morning, and thanks for taking the questions. One for Aaron. Can you talk about how gross profit performed relative to your internal model? And then, are you seeing any impact from insulin pricing changes or humerus shareships to gross profit dollar growth? And then are there any insights or thoughts around the bio similar launch first to Laura? Thanks.

Speaker Change: Thank you. Our next question today will be coming from Allen Lutz, calling from Bank of America. Please go ahead.

Alan Lutz: Good morning and thanks for taking the questions. One for Aaron.

Alan Lutz: Can you talk about how gross profit performed relative to your internal model and then are you seeing any impact from insulin pricing changes or Humira share shifts to gross profit dollar growth and then are there any insights or thoughts around the biosimilar launch for Stellara? Thanks.

Aaron Alt: Yeah, I'll be air and walk through some of the cadence almost to your question, but I wanted to stress just up front, which you should have heard from these messages are very, very similar words and phrases that we use last quarter.

Aaron Alt: We're all start. Look, I would observe that our gross margin progression went largely as we anticipated over the course of the quarter and the year. We have a very complicated business managing between the two the various parts and no real surprises in my from my chair in that way. The second part of the question was. So yeah, let me take that. It was related to I think just the general impact of insulin pricing. And there's also a mayor element there. So probably a couple of different questions. Within the quarter, we did as you was earn an highlighted before we saw, of course, the ongoing benefit of the GLP one growth.

Allen Lutz: One for Erin, can you talk about how gross profit performed relative to your internal model and then are you seeing any impact from insulin pricing changes or cumura shareships on gross profit dollar growth? And then are there any insights or thoughts around the biosimilar launch first to Lara? Thanks. We're all starting. Look, I would observe that our gross margin progression went largely as we anticipated over the course of the quarter and the year.

Aaron Alt: The plan is unchanged. Of course, we get a little bit smarter. We sharpen our pencils a little bit and we get a better understanding of where our exit rate is for 24. But all the factors that we are talking about today with this business are very similar to what we walked through in the past. And of course, all the investments that we made this last year.

Aaron: I'll start. Look, I would observe that our gross margin progression went largely as we anticipated over the course of the quarter and the year. We have a very complicated business managing between the various parts and no real surprises from my chair in that way.

Allen Lutz: We have a very complicated business managing between the two, the various parts, and no real surprises from my chair, you know, in that way. The second part of the question was, so yeah, let me take that it was related to, I think just the general impact of insulin pricing. And there's also a Humira element there.

Aaron Alt: Aaron, a few thoughts on the cadence. Sure. So the way to think about it is is optimal is an existing customer with us until the end of our Q4. And you can see the results in Q4. We don't need to go deeper on that, but what did also happen in Q4 was us being incredibly planful around the impact to our operations as well as for financials of that customer online. We've talked in the past that we talked during our last earnings call around the three offsetting actions.

Aaron: Second part of the question was so yeah, I mean take that it was related to

Aaron: Thanks.

Aaron: And just the general impact of insulin pricing and there's also a HUMERA element there so probably a couple different questions. Within the quarter we did, as you

Aaron Alt: So probably a couple of different questions within the quarter. We did, as you and Erin highlighted before, we saw, of course, the ongoing benefit of GLP-1 growth. But we did have a similar offset as it relates to the pricing change for the WAC insulin adjustments that happened at the beginning of the calendar year. So until we get through the second quarter of fiscal 25, we'd anticipate there to be a bit of an offset related to that price change. There was also a question around Humira, and I assume just the biosimilar type of migration.

Aaron Alt: But we did have a similar offset as it relates to the pricing change for the whack insulin adjustments that happened at the beginning of the calendar year. So until we get through the second quarter of fiscal 25, we didn't anticipate there to be a bit of an offset related to that price change.

Aaron: we saw, of course, the ongoing benefit of the GLP-1 growth.

Aaron: But we did have a similar offset as it relates to the pricing change for the WAC insulin adjustments that happened at the beginning of the calendar year. So until we get through the second quarter of fiscal 25, we'd anticipate there to be a bit of an offset related to that price change.

Aaron Alt: The company is not reaching a specialty networks. Of course, the new customer wins the expansion with existing customers as well as further cost optimization opportunities. And we're pleased that the team got on it, got ahead of it. And they've already been executing in that respect. And so the guidance we're able to provide today. We view as relatively consistent with what we provided in Q3. But with an additional degree of confidence because the plans are behind us and now we're acting in that way.

Aaron Alt: There was also a question around humor, and I assume just the bio similar type of migration. So we see that it started to move a little bit more. Certainly, some of the actions that CVS has done has done more broadly in the marketplace seems to have moved things along a little bit further. It's still fairly low penetration throughout the broad industry. But generally speaking, we have seen that start to pick up a little bit. I wouldn't say meaningfully within the quarter. Maybe a little bit even even afterwards, but it's still at fairly low penetration rates.

Aaron: There was also a question around Humira and I assume just the biosimilar type of migration. So we see that it started to move a little bit more. Certainly some of the actions that CVS has done more broadly in the marketplace seems to have moved things along a little bit further. It's still fairly low penetration throughout the broad industry, but generally speaking, we have seen that start to pick up a little bit. I wouldn't say meaningfully within the quarter, maybe a little bit even afterwards, but it's still at fairly low penetration rates.

Jason Hollar: So we see that it's started to move a little bit more. Certainly, some of the actions that CVS has done more broadly in the marketplace seem to have moved things along a little bit further. It's still fairly low penetration throughout the broad industry, but generally speaking, we have seen that start to pick up a little bit. I wouldn't say meaningfully within the quarter, maybe a little bit even afterwards.

Aaron Alt: The non-renewable will impact our Q1. There's no way to avoid that. They were a large low margin customer. And as we've talked about, the new customers coming on board are largely back half loaded. And so we will have a timing difference relative to prior years. And that will impact certainly our revenue and profitability timing over of course the year. There's also a cash impact, right? The the unwind of the negative working capital position.

Jason Hollar: But it's still at fairly low penetration rates. You know, it's one of the reasons why we're so focused on biosimilars and with our joint venture with Avron is just to continue to look for ways to increase access for patients that need that therapy at an affordable cost. So we'll we'll continue to do our part there. Next question, please. Yes, sir. Our next question today will be from Kevin Caliendo of UBS. Please go ahead.

Aaron Alt: You know, it's one of one of the reasons why we're so focused on biosimilars and with our joint venture with Avron is just to continue to look for ways to increase access for patients that need that therapy at an affordable cost.

Aaron Alt: There is a Q1 impact for us and a key reason why we are carefully monitoring. Our cash flow and during the first quarter, of course, balance with the fact that we are delighted with the strong adjusted free cash flow and the strong cash balance at the end of our Q4. So look on balance. The cost optimization is already in play. The specialty networks is already in play. And we continue to work on the customer expansions and the new customer onboarding. And we will make that successful as well.

Unknown Executive: Thank you.

Aaron: You know, it's one of the reasons why we're so focused on biosimilars and with our joint venture with Avron is just to continue to look for ways to increase access for patients that need that therapy at an affordable cost. So we'll continue to do our part there.

Unknown Executive: So we'll continue to do our part there. Next question, please.

Eric Coldwell: Yes, sir. Our next question today will be coming from Kevin Caliendo of UBS. Please go ahead. Thanks, thanks for taking my question. So I'm just trying to triangulate some of the things we've learned this quarter in about the GM PM GM PD business. You're talking about winning more share of pocket. We're seeing you in make investments in domestic plants. We've seen shipping costs go higher. At the same time, you know, we've seen Owens and Minor and Medline put up stronger than expected results in McKesson and Henry Schein put up worse than expected results and guide lower in the segment.

Speaker Change: Next question, please.

Speaker Change: Yes, sir. Our next question today will be coming from Kevin Caliendo of UBS. Please go ahead.

Kevin Caliendo: Thanks. Thanks for taking my question. So I'm just trying to triangulate some of the things we've learned this quarter about the GM, GMPD business. You're talking about winning more share of pocket. We're seeing you make investments in domestic plants. We've seen shipping costs go higher.

Kevin Caliendo: Thanks. Thanks for taking my question. So I'm just trying to triangulate some of the things we've learned this quarter about the GM...

Allen Lutz: Our next question will be coming up. Sorry to interrupt. Our next question today will be coming from Allen.

Speaker Change: GM PD business. You're talking about winning more share of pocket. We're seeing you make investments in domestic plants. We've seen shipping costs go higher.

Aaron Alt: Let's call it from Bank of America. Please go ahead. Good morning and thanks for taking the questions. One for Aaron. Can you talk about how gross profit performed relative to your internal model? And then are you seeing any impact from insulin pricing changes or humerus shareships to gross profit dollar growth? And then are there any insights or thoughts around the bio similar launch first to Laura? Thanks.

Jason Hollar: At the same time, you know, we've seen Owens & Miner and Medline put up stronger than expected results and McKesson and Henry Schein put up worse than expected results and Guide Lower in those segments. Is it maybe fair to say that you and your peers on the hospital side are moving downstream at all to try to capture a greater percentage of the health system business that's not just in the acute care side? Is that a trend that's happening?

Speaker Change: At the same time, you know, we've seen Owens and Miner and Medline put up stronger than expected results and McKesson and Henry Schein put up worse than expected results in Guide Lower in those segments.

Jason Hollar: Is it maybe fair to say that you and your peers on the hospital side are moving downstream at all to try to capture greater percentage of the health system business that's not just in the acute care side. Is that like, is that a trend that's happening? And I guess the second part of that is the investments in domestic driven by the idea that now you could be more because shipping costs are higher, costs overseas, tariffs are coming, that the domestic manufacturing can be more competitive on price basis versus importing. Yeah, so it is certainly true that GM PD is more acute focused customers, and we do benefit from the migration towards more of an ASC model.

Speaker Change: Is it maybe fair to say that you and your peers on the hospital side are moving downstream at all to try to capture greater percentage of the health system business that's not just in the acute care side? Is that a trend that's happening?

Jason Hollar: And I guess the second part of that is the investments in domestic production driven by the idea that now you could be more because shipping costs are higher, costs overseas, tariffs are coming, that domestic manufacturing can be more competitive on a price basis versus importing. Yeah, so it is certainly true that GMPD is more focused on customers. And we do benefit from the migration towards more of an ASC model. However, we do not participate widely in physician offices.

Speaker Change: Um...

Speaker Change: And I guess the second part of that is the investments in domestic driven by the idea that now you could be more, because shipping costs are higher, costs overseas, tariffs are coming, that the domestic manufacturing can be more competitive on a price basis versus importing.

Aaron Alt: And there's also a mayor element there. So probably a couple of different questions. Within the quarter, we did as you was earn an highlighted before we saw of course the ongoing benefit of the GLP one growth. But we did have a similar offset as it relates to the pricing change for for the whack insulin adjustments that happened at the beginning of the calendar year. So until we get through the second quarter of fiscal 25, we didn't anticipate there to be a bit of an offset related to that price change.

Speaker Change: Yeah.

Speaker Change: So it is certainly true that GMPD is more acute focused customers.

Speaker Change: And we do benefit from the migration towards more of an ASC model.

Jason Hollar: We do not participate widely in position offices. So that's that. is an element. It's nothing that we've called out as broad trends, and so I don't have much more to go on there other than on a same store sale. We're seeing the utilization fairly consistent this past year, generally speaking, that low single digit type of range. So we are seeing that there's life for like growth. What we've highlighted fairly consistently is that this last year was, or the end of last, end of 23, beginning 24, was the inflection point for us. We were not growing with the market at that point. Over the course of 24, we've largely grown with the market, plus or minus a point here or there.

Jason Hollar: So that's, that is an element; it's nothing that we've called out as broad trends. And so I don't have much more to go on there other than on a same-store sale basis. You know, we're seeing utilization fairly consistent this past year, generally speaking, that low single-digit type of range. So we are seeing that there's life for growth. What we've highlighted fairly consistently is that this last year, or the end of last year, end of 23, beginning of 24, was the inflection point for us. We were not growing with the market at all at that point.

Speaker Change: We do not participate widely in physician offices.

Speaker Change: That is an element. It's nothing that we've called out as broad trends, and so I don't have much more to go on there other than on a same-store-sale basis. You know, we're seeing the utilization fairly consistent this past year. Generally speaking, that low single-digit type of range, so we are seeing that there's like-for-like growth.

Aaron Alt: There was also a question around humor and I assume just the bio similar type of migration. So we see that it's it started to move a little bit more. Certainly some of the actions that CVS has done has done more broadly in the marketplace seems to have moved things along a little bit further. It's still fairly low penetration throughout the broad industry. But generally speaking, we have seen that start to pick up a little bit.

Speaker Change: What we've highlighted fairly consistently is that this last year was, or the end of 23, beginning of 24, was the inflection point for us.

Jason Hollar: Over the course of 24, we've largely grown with the market, plus or minus a point here or there. So very consistent with that low single-digit type of growth, especially after our first first quarter. So we don't think there are widespread shifts there.

Speaker Change: We were not growing with the market at this at that point over the course of 24. We've largely grown with the market

Jason Hollar: So very consistent with that low single-digit type of growth over especially after our first quarter. So we don't think there's widespread shifts there, but we definitely have an ASC presence that we do think we benefit from, but I wouldn't call that a main driver of what we're looking at.

Aaron Alt: I wouldn't say meaningfully within the quarter. Maybe a little bit even even afterwards, but it's still at fairly low penetration rates. You know, it's one of one of the reasons why we're so focused on on biosimilars and with our joint venture with Avron is just to continue to to look for ways to to increase access for patients that that need that therapy at an affordable cost.

Speaker Change: Plus or minus a point here or there. So, very consistent with that low single digit type of growth over especially after our first quarter.

Kevin Caliendo: So we'll continue to do our part there next question, please.

Jason Hollar: But we definitely have an ASC presence that we do think we benefit from, but I wouldn't call that a main driver of what we're looking at. In terms of the investments we're making, we did call out some domestic investments, but they're not limited to domestic; we believe in a very diversified, competitive geographic footprint. We've stressed that specifically we don't have manufacturing, or direct manufacturing in China. It's one of the related questions here as relates to the certainly ongoing tariff risk.

Speaker Change: So, we don't think there's widespread shifts there, but we definitely have an ASC presence that we do think we benefit from, but I wouldn't call that a main driver of what we're looking at. In terms of the investments we're making, we did call out some domestic investments, but they're not limited to domestic. We believe in a very diversified, competitive geographic footprint.

Jason Hollar: In terms of the investments we're making, we did call out some domestic investments, but they're not limited to domestic. We believe in a very diversified competitive geographic footprint. We've stressed that specifically we don't have manufacturing direct manufacturing in China. It's one of the related questions here as it relates to certainly the ongoing terrorist. And I can also let you know that we only source less than 10% of our total Cardinal Health branded product in China. So specifically to China we don't have a large exposure, but we do have exposure beyond China and Asia and near shore, Central South America.

Jason Hollar: Yes sir, our next question today will be coming from Kevin Caliendo of UBS, please go ahead. Thanks thanks for taking my question. So I'm just trying to triangulate some of the things we've learned this quarter in about the GM PM GM PD business. You're talking about winning more share of pocket. We're seeing you in make investments in domestic plants. We've seen shipping costs go higher. At the same time, you know, we've seen owns and minor and medline put up stronger than expected results in McKesson and Henry Shine put up worse than expected results and guide lower in the segment.

Speaker Change: We've stressed that specifically we don't have manufacturing, direct manufacturing in China. That's one of the related questions here as it relates to certainly the ongoing tariff risk.

Jason Hollar: And I can also let you know that we only source less than 10% of our total Cardinal Health branded product in China. So specifically in China, we don't have a large exposure, but we do have exposure beyond China and Asia and near shore, Central, and South America.

Speaker Change: And I can also let you know that we only source.

Speaker Change: less than 10% of our total Cardinal Health-branded product in China. So, specifically to China, we don't have a large exposure, but we do have exposure beyond China in Asia, near shore, Central, South America. We believe a diversified, broad supply base is important.

Jason Hollar: We believe a diversified broad supply base is important, as well as a domestic footprint. So we have increased our investments across the supply chain to improve the resiliency, and there are a couple of areas within the US specifically. You've seen that some of the tariffs related to syringes is a specific area of focus, and we happen to have that capability in the United States, and such is one example of where we're really doubling down on that investment. So, yeah, cost and freight are always a consideration. You know, you build a financial model behind all that, and we look at the risk.

Jason Hollar: We believe a diversified, broad supply base is important as well as a domestic footprint. So we have increased our investments across the supply chain to improve the resiliency. And there are a couple of areas within the U.S. specifically where you've seen that some of the tariffs related to syringes are a specific area of focus. And we happen to have that capability in the United States.

Speaker Change: as well as a domestic footprint.

Jason Hollar: Is it maybe fair to say that you and your peers on the hospital side or moving downstream at all to try to capture greater percentage of the health system business that's not just in the acute care side. Is that like is that a trend that's happening? And I guess the second part of that is the investments in domestic driven by the idea that now you could be more because shipping costs are higher costs overseas tariffs are coming that the domestic manufacturing can be more competitive on price basis versus versus importing.

Speaker Change: So...

Speaker Change: We have increased our investments across the supply chain to improve the resiliency, and there's a couple of areas within the U.S. specifically. You've seen that some of the tariffs related to syringes is a specific area of focus. And we happen to have that capability in the United States, and so that's just one example of where we're really doubling down on that investment. So, yeah, cost and freight are always a consideration. You know, we build a financial model behind all that, and we look at the risk.

Jason Hollar: And so that's just one example of where we're really doubling down on that investment. So yeah, cost and freight are always a consideration. We build a financial model behind all that, and we look at the risk. But in this particular example, and one example of where we're really leaning in on that investment, it's more about just ensuring our customers get the products they need. This is more of a volume opportunity than a pure cost and margin opportunity, so you've got to look at all those factors.

Jason Hollar: But on this particular example, and one example where we're really leaning on that investment, that's more about just ensuring our customers get the products they need. This is more of a volume opportunity than a pure cost and margin opportunity. So you got to look at all those factors.

Speaker Change: But on this particular example, and one, you know, example where we're really leaning in on that investment, that's more about just ensuring our customers get the products they need. This is more of a volume opportunity than a pure cost and margin opportunity. So you've got to look at all those factors.

Jason Hollar: Yeah, so it is certainly true that GM PD is more acute focused customers and we do benefit from the migration towards more of an ASC model. We do not participate widely in position offices. So that's that is an element. It's nothing that we've called out as broad trends and so I don't have much more to go on there other than on a same store sale. We're seeing the utilization fairly consistent this past year, generally speaking, that low single digit type of range.

Operator: Next question, please. Yes, sir. The next question will be coming from Eric Coldwell of Bayard. Please go ahead. Thank you very much.

Unknown Executive: Next question, please.

Eric Coldwell: Yes, sir, the next question will be coming from Eric Coldwell of Baird. Please go ahead. Thank you very much.

Speaker Change: Next question, please.

Speaker Change: Yes sir, the next question will be coming from Eric Coldwell of Bayard. Please go ahead.

Eric Coldwell: I wanted to ask quickly about Medicaid disenrollment and, to the extent you've seen impacts on consumer or channel behavior as a result of that, and if so, could you specify where and possibly quantify those impacts? I think specifically, I'm probably tagging on to Kevin's question and wondering if some of the shifts we're seeing in the medical segment could be related to, you know, roughly 25 million people coming off of Medicaid here in the last several months. Thank you very much.

Eric Coldwell: I wanted to ask quickly about Medicaid disenrollment and to the extent you've seen impacts in consumer or channel behavior as a result of that, and if so, could you specify where and impossibly quantify those impacts? I think specifically I'm probably tagging on to Kevin's question and wondering if some of the shifts we're seeing in the medical segment could be related to roughly 25 million people coming off of Medicaid here in the last several months. Thank you very much. Thanks for the question, Eric. Again, I think my answer is going to be fairly similar to what I said before, but in a different context. We have a very broad base of customers, very broad base to payers behind those customers.

Eric Koldwell: Thank you very much. I wanted to ask quickly about Medicaid disenrollment and to the extent you've seen impacts in

Eric Koldwell: Consumer or channel behavior as a result of that? And if so, could you specify where and possibly quantify those impacts? I think specifically, I'm probably tagging on to Kevin's question and

Jason Hollar: So we are seeing that there's life for like growth. What we've highlighted fairly consistently is that this last year was or the end of last end of 23 beginning 24 was the inflection point for us. We were not growing with the market at that point over the course of 24 we've largely grown with the market plus or minus a point here or there. So very consistent with that low single digit type of growth over especially after our first quarter. So we don't think there's widespread shifts there, but we definitely have an ASC presence that we do think we benefit from, but I wouldn't call that a main driver of what we're looking at.

Speaker Change: Wondering if some of the shifts we're seeing in the medical segment could be related to, you know, roughly 25 million people coming off of Medicaid here in the last several months.

Jason Hollar: Yeah, thanks for the question, Eric. You know, again, I think my answer is gonna be fairly similar to what I said before, but in a different context. You know, we have a very broad base of customers, and a very broad base of payers behind those customers. So we don't necessarily even have insight all the time as to where those reimbursements are coming from. The same store sales types of information, what we see more broadly is just not a lot of fluctuations and variations.

Speaker Change: Thank you very much.

Speaker Change: Yeah, thanks for the question, Eric. You know, again, I think my answer is going to be fairly similar to what I said before, but in a different context. You know, we have a very broad base of customers, very broad base of payers behind those customers.

Jason Hollar: So we don't have necessarily even the insight all the time as to where those reimbursements are coming from. The same sort of sales types of information, what we see more broadly is just not a lot of fluctuations in variations. And we're not talking, again, in any type of growth rate above and beyond what we believe that underlying utilization is. So generally speaking, if there are some of those trends at this stage, I'm not seeing that as a meaningful driver to where our business is going.

Speaker Change: So we don't have necessarily even the insight all the time as to where those reimbursements are coming from.

Operator: And we're not talking, again, you know, about any type of growth rate above and beyond what we believe that underlying utilization is. So, generally speaking, if there are some of those trends at this stage, I'm not seeing that as a meaningful driver of where our business is going. Next question, please. Yes, sir. Our next question today will be coming from George Hill calling in from Deutsche Bank. Please go ahead.

Jason Hollar: In terms of the investments we're making, we did call out some domestic investments, but they're not limited to domestic. We believe in a very diversified competitive geographic footprint. We've stressed that specifically we don't have manufacturing direct manufacturing in China. It's one of the related questions here as relates to certainly the ongoing terrorist. And I can also let you know that we only source less than 10% of our total cardinal health branded product in China.

Speaker Change: The same-store-sales types of information, what we see more broadly, is just not a lot of fluctuations and variations.

Speaker Change: And we're not talking, again, on any type of growth rate above and beyond what we believe that underlying utilization is. So generally speaking, if there are some of those trends at this stage, I'm not seeing that as a meaningful driver to where our business is going.

Unknown Executive: Next question, please.

George Hill: Yes, sir.

Aaron Alt: Our next question, though, today we'll be coming from at George Hill, calling it in from Deutsche Bank. Please go ahead. Hey, good morning, guys. Thanks for taking the question. Two-parter is number one, I guess, Aaron.

Speaker Change: Next question, please.

Jason Hollar: So specifically to China we don't have a large exposure, but we do have exposure beyond China and Asia and near shore, central South America. We believe a diversified broad supply base is important as well as a domestic footprint. So we have increased our investments across the supply chain to improve the resiliency, and there's a couple of areas within the US specifically. You've seen that some of the tariffs related to syringes is a specific area of focus and we happen to have that capability in the United States and such is one example of where we're really doubling down on that investment.

Speaker Change: Yes sir, our next question though today will be coming from George Hill calling in from Deutsche Bank. Please go ahead.

George Hill: Hey, good morning, guys. Thanks for taking the question. This two-parter is number one.

Aaron Alt: I guess, Aaron, would you be willing to provide any more color on earnings cadence expectations for the year, particularly Q1 and Q2 versus the back half given the large number of moving pieces? And then a quick one for Jason is, we know you've got the new business coming on. We've got the United Laws.

Aaron Alt: Would you be willing to provide any more color on earnings cadence expectations for the year, particularly Q1 and Q2 versus the back half, giving the large number of moving pieces? And then a quick one for Jason is we know you've got the new business coming on. We've got the United Laws.

George Hill: Hey, good morning guys. Thanks for taking the question. Two-parter, is number one, I guess, Aaron, would you be willing to provide any more color on earnings cadence expectations for the year, particularly Q1 and Q2 versus the back half, given the large number of moving pieces?

Jason Hollar: We just love an update on the competitive environment and drug distribution. This has been a pretty stable, stable space for a while now. Just kind of want to make sure that nothing's changed, or nothing should be changing, in the dynamic that we should be aware of. Thanks. I'll start.

Speaker Change: and then a quick one for Jason is, we know you've got the new business coming on, we've got the United Laws. We just love an update on the competitive environment and drug distribution. This has been a pretty stable space for a while now. Just want to make sure that nothing's changed or nothing's changing in the dynamic that we should be aware of.

Jason Hollar: We just love an update on the competitive environment and drug distribution. This has been a pretty stable, stable space for a while now. Just kind of want to make sure that nothing's changed or nothing should be changing in the dynamic that we should be aware of. Thanks.

Aaron Alt: Well, sir, I would just observe that we're being very thoughtful in the planning we're doing for the year, given the number of moving pieces we have both within the farmer business and within the GMPD business. And of course, keeping an eye on the three growth businesses within other, it was in form of what we've referenced is first half from a cadence perspective will be slightly under flat versus prior year. That's only natural given the customer unwind and the back ended, back ended nature of the new customer onboarding. Largely, the drivers within the farmer business are consistent with what we have been through in previous years.

Aaron Alt: I would just observe that we're being very thoughtful in the planning we're doing for the year, given the number of moving pieces we have both within the pharma business and within the GMPD business. And, of course, keeping an eye on the three growth businesses within other. Within pharma, what we've referenced is that the first half from a cadence perspective will be slightly down to flat versus the prior year. That's only natural given the customer unwind and the back-end nature of new customer onboarding.

Jason Hollar: I would just observe that we're being very thoughtful in the planning we're doing for the year, given the number of moving pieces we have both within the pharma business and within

Jason Hollar: So yeah, cost and freight are always a consideration, you know, you build a financial model behind all that and we look at the risk. But on this particular example, and one example where we're really leaning on that investment, that's more about just ensuring our customers get the products they need. This is more of a volume opportunity than a pure cost and margin opportunity. So you got to look at all those factors.

Unknown Executive: Next question, please.

Speaker Change: The GMPD business and of course keeping an eye on the three growth businesses within

Speaker Change: and other.

Speaker Change: It was in the form of what we've referenced is first half from a cadence perspective will be slightly down to flat versus prior year. That's only natural given the customer unwind and the back-ended nature of the system.

Eric Coldwell: Yes, sir, the next question will be coming from Eric Coldwell of Baird. Please go ahead. Thank you very much.

Aaron Alt: Largely, the drivers within the pharma business are consistent with what have been true in previous years. Q3 will be where we see the branded inflation rolling through. And so, not a lot of new, not a lot of different news there that I would call out.

Speaker Change: of the new customer onboarding.

Speaker Change: Largely, the drivers within the pharma business are consistent with what we have been.

Aaron Alt: Q3 will be where we see the branded inflation rolling through. And so, not a lot of new, not a lot of different news there that I would call out. From a med perspective, we're just very focused on executing against the plan.

Jason Hollar: I wanted to ask quickly about Medicaid disenrollment and to the extent you've seen impacts in consumer or channel behavior as a result of that and if so, could you specify where and impossibly quantify those impacts? I think specifically I'm probably tagging on to Kevin's question and wondering if some of the shifts we're seeing in the medical segment could be related to roughly 25 million people coming off of Medicaid here in the last several months.

Speaker Change: Q3 will be where we see the branded inflation rolling through, and so not a lot of different news there that I would call out.

Aaron Alt: From a medical perspective, we're just very focused on executing against the plan. And we try to be transparent every quarter about how we're doing and where we see it going, which is why we were purposeful in calling out Q1 specifically as we push ahead. We had great success during fiscal year 24 and accomplished what we told you we would do. And we plan to do that again. And I just want to be clear that we are investing in the business, and there are some near-term Q1 drivers that will make that profit number up to $20 million as we carry forward. There's no magic here, though.

Speaker Change: From a med perspective, we're just very focused on executing against the plan. We try to be transparent every quarter about how we're doing and where we see it going, which is why we were purposeful in calling out

Aaron Alt: We tried to be transparent every quarter about how we're doing and where we see it going, which is why we were purposeful, and you're calling out, you know, Q1 specifically. As we push ahead, we had great success in during fiscal year 24 and accomplished what we told you we're going to do. And we plan to do that again, and it's going to be clear that we are investing in the business, and there are some, you know, near-term, Q1 drivers that will make that profit numbering, or what we call the up to, it's $20 million, and you guys are carrying forward.

Speaker Change: Q1, specifically, as we push ahead, we had great success in during fiscal year 24 and accomplished what we told you we're going to do. And we plan to do that again. And just want to be clear that we are investing in the business and there are some, you know, near term.

Jason Hollar: Thank you very much. Thanks for the question, Eric. Again, I think my answer is going to be fairly similar to what I said before, but in a different context, we have a very broad base of customers, very broad base to payers behind those customers. So we don't have necessarily even the insight all the time as to where those reimbursements are coming from. The same sort of sales types of information, what we see more broadly is just not a lot of fluctuations in variations.

Speaker Change: Q1 drivers that will make that make that profit number and what we call the up to 20 million dollars as we carry forward

Aaron Alt: There's no magic there, though. I want to be clear. The plan and the cadence is generally consistent with how we've described the GP, GMPD, rather improvement plan in the past. Of course, we have the benefit of the inflation mitigation now lapping as we push ahead.

Aaron Alt: I want to be clear. The plan and the cadence are generally consistent with how we've described the GMPD improvement plan in the past. Of course, we have the benefit of inflation mitigation now lapping as we push ahead. And, of course, we can't forget the important topic of seasonality from a Q4 to Q1 perspective.

Speaker Change: There's no magic here though, I want to be clear. The plan and the cadence is generally consistent with how we've described the GNPD improvement plan in the past. Of course, we have the benefit of the inflation mitigation now lapping as we push ahead. And of course, we can't forget the important topic of seasonality from a Q4 to Q1 perspective. We've called that out before, and that's why you see a dip from the great results in Q4 into Q1.

Aaron Alt: And of course, we can't forget the important topic of seasonality from a Q4 to Q1 perspective. We've called that out before, and that's why you see a dip from the great results in Q4 into Q1.

Jason Hollar: And we're not talking, again, in any type of growth rate above and beyond what we believe that underlying utilization is. So generally speaking, if there are some of those trends at this stage, I'm not seeing that as a meaningful driver to where our business is going.

Jason Hollar: We've called that out before, and that's why you see a dip from the great results in Q4 into Q1. Yes, to relate to the second question, I'll say what I said before, you know, hey, we're 1% of the industry. So it's competitive, but stable. I would say that the, you know, the vast majority of contracts don't change hands, period to period, you know, these couple of notable ones that have that are more notable, there's been, you know, several that have long-term five-year types of agreements. So every five years, there's the chance, opportunity, or risk for that to occur. But again, I'll just stress that the vast majority don't.

Jason Hollar: Yes, it relates to the second question. I'll say what I said before: you know, hey, we're 1% industry, so it's competitive but stable. I would say that the vast majority of contracts don't change hands, period to period. You know, these couple several that have that are more notable. There's been several that have long-term five-year types of agreements. So every five years there's the chance, opportunity, or risk for that to occur. But again, I'll just stress that the vast majority don't. And we feel really good about our positioning, competitive positioning. We know we're competitive. We know that our message and our work and our results resonate with our customers.

Unknown Executive: Next question, please. Yes, sir.

Speaker Change: Yeah, as it relates to the second question, I'll say what I said before, you know, hey, we're 1% industry, so it's competitive, but stable.

Speaker Change: I would say that the, you know, the vast majority of contracts don't change hands period to period, you know, these couple several that have that are more notable, there's been, you know,

George Hill: Our next question, though, today we'll be coming from at George Hill, calling it in from Deutsche Bank. Please go ahead. Hey, good morning, guys. Thanks for taking the question. Two-parter is number one, I guess, Aaron.

Speaker Change: Several that have long-term, five-year types of agreements, so every five years, there's the chance, opportunity, or risk for that to occur. But again, I'll just stress that the vast majority don't. And we feel really good about our positioning, competitive positioning. We know we're competitive.

Aaron Alt: Would you be willing to provide any more color on earnings cadence expectations for the year, particularly Q1 and Q2 versus the back half giving the large number of moving pieces? And then a quick one for Jason is we know you've got the new business coming on. We've got the United Laws. We just love an update on the competitive environment and drug distribution. This has been a pretty stable, stable space for a while now. Just kind of want to make sure that nothing's changed or nothing should be changing in the dynamic that we should be aware of.

Jason Hollar: And, you know, we feel really good about our positioning, competitive positioning; we know we're competitive. We know that our message and our work, and our results resonate with our customers. We're very much focused on that experience, the service levels, the value initiatives and propositions behind it, the tools and platforms. We've talked about our Intellogix and our Atrix platforms for health systems as one example of not just going at them with price, but going out at them with value and having true value components to those offerings. And we feel really, really good about what that positioning is.

Speaker Change: We know that our message and our work and our results resonate with our customers.

Jason Hollar: We're very much focused on that experience, the service levels, the value initiatives and propositions behind it.

Speaker Change: We're very much focused on that experience, the service levels, the value initiatives and propositions behind it, the tools and platforms. We've talked about our Intellogix and our Atrix platforms for health systems as one example of not just going at them with price, but going at them with value and having...

Jason Hollar: The tools and platforms. We've talked about our anthologics and our A3's platforms for health systems as one example. I'm not just going at them with price but going at them with value and having true. Value components to those offerings. And we feel really, really good about what that positioning is, and that's why we've been able to offset to the degree that we have.

Aaron Alt: Thanks. Well, sir, I would just observe that we're being very thoughtful in the planning we're doing for the year, given the number of moving pieces we have both within the farmer business and within the GMPD business. And of course, keeping an eye on the three growth businesses within other, it was in form of what we've referenced is first half from a cadence perspective will be slightly under flat versus prior year. That's only natural given the customer unwind and the back ended, back ended nature of the new customer onboarding.

Speaker Change: True value components to those offerings and we feel really really good about what that positioning is and that's why we've been able to offset to the degree that we have.

Unknown Executive: Next question, please. Yes, sir.

Operator: And that's why we've been able to offset to the degree that we have. Next question, please. Yes, sir. The next question will be from Stephanie Davis of Barclays. Please go ahead.

Elizabeth Anderson: The next question will be coming from Stephanie Davis of Barclays. Please go ahead.

Speaker Change: Next question, please.

Speaker Change: Yes, sir. The next question will be coming from Stephanie Davis of Barclays. Please go ahead.

Jason Hollar: Hi guys, this is Anna Grzanski on for Stephanie from Grabform Corp. And thank you for taking our questions. I was hoping to hear more about your AI roadmap. You've highlighted AI and machine learning deployments within the intelligence platform, and just wondering how we should think about additional AI use cases to improve efficiency and potential cost savings. Yeah, thanks for the question. It's its broad base. It's varied. You know, we don't call it out in every call in all areas, but it's so broad. It really is everywhere. It's in the core of how we operate. You know, examples of what we talked about today without using the phrase AI, especially networks. You know, their PPS analytics is a great example of taking that data electronic medical records and synthesizing that for many factors, as well as the providers, and getting actual insight.

Stephanie Davis: Hi guys, this is Anna Grudensky on behalf of Stephanie. Congratulations on the quarter and thank you for taking our questions. I was hoping to hear more about your AI roadmap. You've highlighted AI and machine learning deployments within the Intellogix platform, and I was just wondering how we should think about additional AI use cases to improve efficiency and potential cost savings.

Speaker Change: Hi guys, this is Anna Krasinski on for Stephanie, congrats on the quarter and thank you for taking our questions.

Aaron Alt: Largely, the drivers within the farmer business are consistent with what we have been through in previous years. Q3 will be where we see the branded inflation rolling through. And so not a lot of new, not a lot of different news there that I would call out. From a med perspective, we're just very focused on executing against the plan. We tried to be transparent every quarter about how we're doing and where we see it going, which is why we were purposeful and you're calling out, you know, Q1 specifically, as we push ahead, we had great success in during fiscal year 24 and accomplished what we told you we're going to do.

Anna Grasinski: I was hoping to hear more about your AI roadmap. You've highlighted AI and machine learning deployments within the Intellogix platform and just wondering how we should think about additional AI use cases to improve efficiency and potential cost savings.

Jason Hollar: Yeah, thanks for the question. It's broad and varied. You know, we don't call it out on every call in all areas. But it's so broad, it really is everywhere.

Speaker Change: Yeah, thanks for the question. It's broad-based, it's varied, you know, we...

Speaker Change: We don't call it out in every call in all areas, but it's so broad. It really is everywhere. It's in the core of how we operate.

Jason Hollar: It's in the core of how we operate. You know, examples of what we talked about today without using the phrase AI, specialty networks, you know, their PPS analytics is a great example of taking that data, electronic medical records, and synthesizing that for manufacturers, as well as providers, and getting actual insights. I mean, that is AI. When you look at some of the automation I've commented on on our, our at-home solutions network, this is now over 25% of our sites that, in just the last 12 to 18 months, we're launching a new, new footprint that is bringing technology and automation in various forms into the manufacturing or into the distribution setting to be even more innovative, even more efficient, and productive.

Speaker Change: You know, examples of what we talked about today.

Aaron Alt: And we plan to do that again and it's going to be clear that we are investing in the business and there are some, you know, near term, Q1 drivers that will make that, make that profit numbering or what we call the up to, it's $20 million and you guys are carrying forward. There's no magic there though. I want to be clear. The plan and the cadence is generally consistent with how we've described the GP, GMPD rather improvement plan in the past.

Speaker Change: Without using the phrase AI.

Speaker Change: Specialty Networks, you know, their PPS analytics is a great example of taking that data, electronic medical records, and synthesizing that for manufacturers, as well as the providers.

Jason Hollar: I mean, that is AI. When you look at some of the automation I've commented on on our At Home Solutions network. This is now over 25% of our sites, and then just the last 12 to 18 months, we're launching a new new footprint that is bringing in technology and automation in various forms into the manufacturing or into the distribution setting to be even even more innovative, even more efficient and productive. And as you mentioned, you know, those other platforms into Logic's a tricks, you know, working with Palantir and other partners to create value. And then I'm not getting into the more basic use cases like customer service and back office.

Speaker Change: and getting actionable insights. I mean, that is AI. When you look at some of the automation I've commented on on our at-home solutions network, this is now over 25% of our sites in just the last 12 to 18 months.

Aaron Alt: Of course, we have the benefit of the inflation mitigation now lapping as we push ahead. And of course, we can't forget the important topic of seasonality from a Q4 to Q1 perspective. We've called that out before and that's why you see a dip from the great results in Q4 into Q1.

Speaker Change: We're launching a new footprint that is bringing in technology and automation in various forms into the manufacturing, or I'm sorry, into the distribution setting.

Jason Hollar: As you mentioned, you know, those those other platforms Intellogix, Atrix, you know, working with with Palantir and other partners to create value. And then I'm not even getting into the more basic use cases like customer service and back office. You know, I guess I don't want to just hit the same drumbeat everyone else is what we're trying to do in our communication is get beyond the buzzwords and really talk about the essence of where we're driving our business. And we feel really good about that. And it's definitely, Hey, I can't believe this.

Speaker Change: to be even more innovative, even more efficient and productive. As you mentioned, those other platforms, Intellogix, Atrix,

Jason Hollar: Yes, it relates to the second question. I'll say what I said before, you know, hey, we're 1% industry so it's competitive but stable. I would say that the vast majority of contracts don't change hands, period to period. You know, these couple several that have that are more notable. There's been several that have long term five year types of agreements. So every five years there's the chance, opportunity or risk for that to occur.

Speaker Change: working with Palantir and other partners to create value.

Speaker Change: And then I'm not even getting into the more basic use cases like customer service and back office.

Jason Hollar: You know, I guess I don't want to just hit the same drum beat everyone else is. What we're trying to do in our communication is get beyond the buzzwords and really talk about the essence of where we're driving our business, and we feel really good about that. And it's definitely. Okay. Yeah.

Speaker Change: You know, I guess I don't want to just hit the same drumbeat everyone else is what we're trying to do in our communication is get beyond the buzzwords and really talk about the essence of where we're driving our business. And we feel really good about that. And it's definitely.

Jason Hollar: But again, I'll just stress that the vast majority don't. And we feel really good about our positioning, competitive positioning. We know we're competitive. We know that our message and our work and our results resonate with with our customers. We're very much focused on that that experience, the service levels, the value initiatives and propositions behind it. The tools and platforms. We've talked about our anthologics and our A3's platforms for health systems as one example.

Elizabeth Anderson: Crosser, please. Yes, sir. When I move to Elizabeth Anderson, calling from every core, please go ahead. Your line is open. Hey guys, thanks so much for the question. I was wondering if you could maybe expand on on your prior comments about two things. One, you talked about customer expansions a couple of times across the course of the call. Can you talk about sort of what those are, generally speaking? Are they sort of people like moving from farmer to increase it? Medical are they moving across different farmer categories? How do we think about that? And then, if we think about the cost cutting, obviously, there's some right sizing for the contract change that you guys mentioned.

Operator: Question, please. Yes, sir. We'll now move to Elizabeth Anderson calling from Evercore. Please go ahead. Your line is open.

Speaker Change: Any other questions? Question please.

Speaker Change: Yes, sir. We'll now move to Elizabeth Anderson calling from Evercore. Please go ahead, your line is open.

Elizabeth Anderson: Hey guys, thanks so much for the question. I was wondering if you could maybe expand on your prior comments about two things. One, you've talked about customer expansions a couple of times across the course of the call. Can you talk about sort of what those are generally speaking? Are they sort of people like moving from pharma to increase in medical? Are they moving across different pharma categories? How do we think about that? And then if we think about the cost cutting, obviously there's some rightsizing for the contract change that you guys mentioned. But how do we think about some of the more, it sounds like some of those changes you're putting through are sort of more structural. And sort of how do we think about sort of the long-term benefits of those going forward? Thanks.

Jason Hollar: Are they moving across different pharmaceutical categories? What how do we think about that? And then if we think about the cost cutting, obviously there's some right sizing for the contract change that you guys mentioned, but how do we think about some of the more, it sounds like some of those changes you're putting through are sort of more structural, and sort of how do we think about sort of the long-term benefits of those going forward?

Jason Hollar: I'm not just going at them with with price but going at them with with value and having true. Value components to those offerings. And we feel really really good about what that positioning is and that's why we've been able to offset to the degree that we have.

Unknown Executive: Next question, please. Yes, sir.

Jason Hollar: But how do we think about some of the more, it sounds like some of those changes you're putting through are sort of more structural and sort of how do we think about sort of the long term benefits of those going forward? Thanks.

Elizabeth Anderson: The next question will be coming from Stephanie Davis of Barclays.

Jason Hollar: Yeah, I'll start on customer expansion. These are existing customer relationships where we are already a primary distributor for them, and they are expanding their footprint, whether it's acquisitions or just taking on more of the business themselves, and we're supporting their growth. So it's an existing relationship and expanding upon that. So it's committed in that sense where we're already there. And you can use Bio Plus as one of the examples of what I'm talking about there.

Jason Hollar: Yeah, I'll start on the on the customer expansion. These are existing customer relationships where we are already a primary distributor for them. And they are expanding their footprint, whether it's acquisitions or just taking on more of the business themselves. And we're supporting their growth. So it's an existing relationship and expanding upon that. So it's committed in that sense where we're already there. And you can use Bio Plus as one of the examples of what I'm talking about there.

Unknown Executive: Please go ahead. Hi guys, this is Anna Grzanski on for Stephanie from Grabform Corp. And thank you for taking our questions.

Speaker Change: Yeah, I'll start.

Speaker Change: On the customer expansion, these are existing customer relationships where we are already a primary distributor for them.

Jason Hollar: I was hoping to hear more about your AI roadmap. You've highlighted AI and machine learning deployments within the intelligence platform and just wondering how we should think about additional AI use cases to improve efficiency and potential cost savings. Yeah, thanks for the question. It's it's broad base. It's varied. You know, we we don't call it out in every call in all areas, but it's so broad. It really is everywhere. It's in the core of how we operate.

Speaker Change: And they are expanding their footprint, whether it's acquisitions or just taking on more of the business themselves, and we're supporting their growth. So it's a, it's an existing relationship and expanding upon that. So it's, you know, committed in that sense.

Aaron: And you can use BioPlus as one of the examples of what I'm talking about there. Perhaps, Aaron, you can go into a little bit more detail on the cost. Sure. So, as I commented earlier, the team did a great job of...

Aaron Alt: Perhaps Aaron, you can go into a little bit more detail on the cost. Sure. So as I commented earlier, the team did a great job of assessing our opportunities on the face of the customer and on the rule. But I guess I would go back and point out that at the end of the day, we operated 1% operating market business. And so it's important for us to always be mindful of the cost structure around us. But with a North Star, how do we continue to ensure our customer service? And so we've been pleased that the reviews we undertook during Q4; the actions we identified will help us to offset the near term impact of your customer loss.

Jason Hollar: You know, examples of what we talked about today without using the phrase AI, especially networks, you know, their pps analytics is a great example of taking that data electronic medical records and synthesizing that for many factors as well as the providers and getting actual insight. I mean, that is AI. When you look at some of the automation I've commented on on our at home solutions network. This is now over 25% of our sites and then just the last 12 to 18 months, we're launching a new new footprint that is bringing in technology and automation in various forms into the manufacturing or into the distribution setting to to be even even more innovative, even more efficient and productive.

Aaron Alt: Perhaps Aaron, you can go into a little bit more detail on the cost. Sure. So, as I commented earlier, the team did a great job assessing our opportunities in the face of the customer and on the rule. But I guess I would go back and point out that, at the end of the day, we only operated 1% of the operating market and business. And so it's important for us to always be mindful of the cost structure around us. But with doorstep delivery, how do we continue to ensure our customer service?

Aaron: I'm going to go back and point out that at the end of the day, we operate at 1%, you know, operating margin business. And so it's important for us to always be mindful of the cost structure around us.

Speaker Change: But with a doorstep, how do we continue to ensure our customer service?

Speaker Change: and so.

Speaker Change: We've been pleased that the reviews we undertook during Q4, the actions we identified will help us to offset the near-term impact of

Aaron Alt: But more importantly, they create they create a more efficient operational structure for us. And the changes are broad ranging across the enterprise with that North Star; they will be ensuring we continue our customer service focus as we push ahead. Many of the changes have already been implemented. We're operating the new framework already. We continue to assess what are the productive opportunities. And I also would emphasize that the ideas for these changes are coming from our broader teams as they look around and say, okay, how can we operate better in support of our existing customers and the new customers on the one.

Aaron Alt: And so we've been pleased that the reviews we undertook during Q4 and the actions we identified will help us to offset the near-term impact of your customer loss. But more importantly, they create a more efficient operational structure for us. And the changes are broad-ranging across the enterprise. With that North Star, we'll be ensuring we continue our customer service focus as we push ahead. Many of the changes have already been implemented.

Speaker Change: Aaron Alt, CSUSB Aaron Alt, CSUSB

Jason Hollar: And as you mentioned, you know, those other platforms into logic's a tricks, you know, working with with Palantir and other partners to create value. And then I'm not getting into the more basic use cases like customer service and back office. You know, I guess I don't want to just hit the same drum beat everyone else is what we're trying to do in our communication is get beyond the buzzwords and really talk about the essence of where we're driving our business and we feel really good about that. And it's definitely. Okay. Yeah. Crosser, please.

Speaker Change: And the changes are broad ranging across the enterprise with that North Star though of ensuring we continue our customer service.

Speaker Change: You're focused as we push ahead. Many of the changes have already been implemented. We're operating that new framework already. We continue to assess what are the productive opportunities. And I also would emphasize that the ideas for these changes are coming from our broader teams as they look around and say, okay, how can we operate better in support of our existing customers and the new customers on the line.

Unknown Executive: Next question, please.

Operator: We're operating that new framework already. We continue to assess what the productive opportunities are, and I also would emphasize that the ideas for these changes are coming from our broader teams as they look around and say, okay, how can we operate better in support of our existing customers and the new customers on the line. Next question, please. Yes, sir. We'll now move to Stephen Baxter of Wells Fargo. Please go ahead.

Stephen Baxter: Yes sir.

Aaron Alt: We'll now move to Stephen Baxter of Wells Fargo. Please go ahead. Yeah, hi, thanks. I wanted to ask a couple about the restatement to GMPD. It sounds like you're saying the higher GMPD base post-restatement in 2024 doesn't change the run rate because you're removing out of period items. Is that the right way to think about it? So there's no comparability issue with 175 million target on that higher base. I guess that's the first question. And then, based on the statement that you provided, I think the cumulative profit in the business from 2022 to 2024 is $25 or $30 million higher than previous.

Speaker Change: Next question please.

Speaker Change: Yes, sir. We'll now move to Stephen Baxter of Wells Fargo. Please go ahead.

Stephen Baxter: Yeah, hi, thanks. I just wanted to ask a couple of questions about the restatement to GMPD. It sounds like you're saying the higher GMPD base post-restatement in 2024 doesn't change the run rate because you're removing out-of-period items. Is that the right way to think about it so there's no comparability issue with the $175 million target on that higher base? I guess that's the first question. And then, based on the restatement schedule you provided, I think the cumulative profit in the business from 2022 to 2024 is $25 or $30 million higher than before. I'm just trying to understand why those things don't net out if we're thinking about timing issues here.

Stephen Baxter: Yeah, hi, thanks. I just wanted to ask a couple about the restatement to GMPD. It sounds like you're saying the higher GMPD base.

Jason Hollar: Yes, sir, when I move to Elizabeth Anderson calling from every core, please go ahead. Your line is open. Hey guys, thanks so much for the question. I was wondering if you could maybe expand on on your prior comments about two things. One, you talked about customer expansions a couple of times across the course of the call. Can you talk about sort of what those are generally speaking? Are they sort of people like moving from farmer to increase it?

Stephen Baxter: Post restatement in 2024 doesn't change the run rate because you're removing out of period items. Is that the right way to think about it? So there's no Comparability issue with 175 million target on that higher base. I guess that's the first question and then

Stephen Baxter: Based on the restatement schedule you provided, I think the cumulative profit in the business from 2022 to 2024 is $25 or $30 million higher than previous. I'm just trying to understand why those things don't net out if we're thinking about timing issues here. Thank you.

Jason Hollar: Medical are they moving across different farmer categories? How do we think about that? And then if we think about the cost cutting, obviously, there's some right sizing for the contract change that you guys mentioned. But how do we think about some of the more, it sounds like some of those changes you're putting through our sort of more structural and sort of how do we think about sort of the long term benefits of those going forward?

Aaron Alt: I'm trying to understand why those things don't net out if we're thinking about timing issues here. Thank you.

Aaron Alt: Yeah, I'm appreciate the question. The answer is there is no comparability issue. The 175 is unimpacted by the revisions that we've provided to the financials today. The revisions we provided were for the three years, for the three-year period. There will be, there is an impact of shifting of income or expense into the prior periods as well, which is why you're not seeing direct your comparability as prepared forward.

Aaron Alt: Thank you. I appreciate the question. The answer is that there is no comparability issue.

Speaker Change: I appreciate the question. The answer is there is no comparability issue. The 175 is unimpacted by

Aaron Alt: The 175 is unimpacted by the revisions that we've provided to the financials today. The revisions we provided were for the next three years, for the three-year period. There will be, there is an impact of shifting income or expense into the prior periods as well, which is why you're not seeing direct comparability as we carry forward. I do want to emphasize, though, that part of our operation here is building and maintaining a strong control environment.

Speaker Change: The revisions that we've provided to the financials today, the revisions we provided were for the three years, for the three year period, there will be, there is an impact of

Jason Hollar: Thanks. Yeah, I'll start on the on the customer expansion. These are existing customer relationships where we are already a primary distributor for them. And they are expanding their footprint, whether it's acquisitions or just taking on more of the business themselves. And we're supporting their growth. So it's an existing relationship and expanding upon that. So it's committed in that sense where we're already there. And you can use you can use Bio Plus as one of the examples of what I'm talking about there.

Speaker Change #100: shifting of income or expense into the prior periods as well, which is why you're not seeing direct comparability, you know, as we carry forward.

Aaron Alt: I do want to emphasize, though, that part of our operation here is building, maintaining a strong control environment. And as we identified the issue in the edge part of our at-home business, which is part of other, you know, it was a revenue recognition issue tied to a business which does less than a half a percent of our overall revenue base. We were careful to do the right thing and disclose, and at the same time, in partnership with our authors, decided that we would reflect the feedback we've gotten from this community and others around comments through on non-referring adjustments in prior periods, etc.

Speaker Change #100: I do want to emphasize, though, that part of...

Aaron Alt: And as we identified the issue in the Edge Park part of our at-home business, which is part of other, you know, it was a revenue recognition issue tied to a business which accounts for less than a half a percent of our overall revenue base. We were careful to do the right thing and disclose it. And at the same time, in partnership with our auditors, decided that we would reflect the feedback we've gotten from this community and others around comments around nonrecurring adjustments in prior periods, etc.

Speaker Change #101: Our operation here is building and maintaining a strong control environment, and as we identified the issue in the Edge Park part of our at-home business, which is part of other

Speaker Change #101: You know it was a revenue recognition issue tied to a business which does it's less than a half a percent of our overall revenue base.

Jason Hollar: Perhaps Aaron, you can go into a little bit more detail on the cost. Sure. So as I commented earlier, the team did a great job of assessing our opportunities on the face of the customer and on the rule. But I guess I would go back and point out that at the end of the day, we operated 1% operating market business. And so it's important for us to always be mindful of the cost structure around us.

Speaker Change #101: We were careful to do the right thing and disclose, and at the same time, in partnership with our auditors, decided that we would...

Aaron Alt: And so now we walk into fiscal 25, not only with comparability but with a clean set of financials, unimpacted by timing, to be able to talk about our progress as we carry forward. Next question, please. Yes, sir. The next question will be coming from Charles Rhyee of TD Cowan. Please go ahead.

Speaker Change #101: reflect the feedback we've gotten from this community and others around comments around non-recurring adjustments in prior periods, etc. And so now we walk into fiscal 25, not only with comparability, but with a clean set of financials, unimpacted by timing, to be able to talk about our progress as we carry forward.

Aaron Alt: And so now we walk into fiscal 25 not only with comparabilities but with a clean set of financials unimpacted by timing to be able to talk about our progress as we carry forward.

Jason Hollar: But with a North Star, how do we continue to ensure to ensure our customer service? And so we've been pleased that the reviews we undertook during Q4, the actions we identified will help us to offset the near term impact of your customer loss. But more importantly, they create they create a more efficient operational structure for us. And the changes are broad ranging across the enterprise with that North Star, they will be ensuring we continue our customer service focus as we push ahead.

Unknown Executive: Next question, please.

Lucas Romanski: Yes, sir. The next question will be from Charles Roy of TD Cowland. Please go ahead. Hi, this is Lucas Lumpur Charles. Thanks for taking the questions. We're going to ask about the other segment. Can you talk about what's expected from OptiFrate nuclear and at home in fiscal 25 in terms of growth? Should we be thinking about any of these businesses outperforming the 10% segment target that you've set?

Speaker Change #102: Next question please.

Speaker Change #103: Yes, sir. The next question will be coming from Charles Rye of TD Cowan. Please go ahead.

Charles Rhyee: Hi, this is Lucas from for Charles. Thanks for taking the questions. We're going to ask about the other segment. You know, can you talk about what's expected from OptiFreight, nuclear, and at home in terms of growth? Should we be thinking about any of these businesses outperforming the 10% segment target that you've set? Well, from a guidance perspective, we provide guidance for others on an aggregated basis. But I do want you to take away the enthusiasm present in Jason's comments, and it's done a voice around the opportunity.

Lucas Lompert: Hi, this is Lucas Lompert Charles. Thanks for...

Lucas Lompert: Thank you for taking the questions. I wanted to ask about the other segment. Can you talk about what's expected from OptiFreight, Nuclear, and At Home in fiscal 25 in terms of growth? Should we be thinking about any of these businesses outperforming the 10% segment target that you've set?

Aaron Alt: Well, from a guidance perspective, we provide guidance for all their unnegregated basis. But I do want you to take away the enthusiasm, present in Jason's comments and his tone of voice around the opportunity. We think that each of these three businesses presents to Cardinal Health as we carry forward. The businesses are unique. They're managed differently. We aggregate them from a financial perspective. It's also the case that we are investing in each of those businesses. We have in 24 and we are in 25. At home is recently open to the distribution point and is investing in automation.

Aaron Alt: We think that each of these three businesses presents opportunities to Cardinal Health as we carry forward. The businesses are unique; they're managed differently.

Jason Hollar: Many of the changes have already been implemented. We're operating the new framework already. We continue to assess what are the productive opportunities. And I also would emphasize that the ideas for these changes are coming from our broader teams as they look around and say, okay, how can we operate better in support of our existing customers and the new customers on the one.

Unknown Executive: Next question, please. Yes sir.

Speaker Change #105: Well, from a guidance perspective, we provide guidance for other

Speaker Change #106: on an aggregated basis. But I do want you to take away the enthusiasm present in Jason's comments and his tone of voice around the opportunity we think that each of these three businesses presents to Cardinal Health as we carry forward.

Stephen Baxter: We'll now move to Stephen Baxter of Wells Fargo. Please go ahead. Yeah, hi, thanks. I wanted to ask a couple about the restatement to GMPD. It sounds like you're saying the higher GMPD base post-restatement in 2024 doesn't change the run rate because you're removing out of period items. Is that the right way to think about it? So there's no comparability issue with 175 million target on that higher base. I guess that's the first question.

Speaker Change #106: The businesses are unique, they're managed differently, we aggregate them from a financial perspective.

Aaron Alt: We aggregate them from a financial perspective. It's also the case that we are investing in each of those businesses we have in 24 and we are in 25. At home, at home is recently opened its distribution point and is investing in automation.

Speaker Change #106: It's also the case that we are investing in each of those businesses. We have in 24 and we are in 25. At Home has recently opened two new distribution points and is investing in automation. Optifreight has continued to invest in its digital platforms in service of its customer experience. The nuclear business we've talked at length about.

Aaron Alt: OptiFrate has continued to invest in digital platforms and service of its customer experience. The nuclear business we've talked at length about expanding the pet network, as well as our excitement about the thermonostic opportunities that that business presents. And so, again, as I go back to the financial guide, part of what you're seeing in the other bases is we are presenting a consistent picture ag on an aggregated view, which reflects that in some cases will be investing in a year or a month while reaping the benefit in the same year or month from other parts of the portfolio.

Speaker Change #106: expanding the pet network, as well as our excitement about the Theranostic opportunities that that business presents. And so, again, if I go back to the financial guide, part of what you're seeing in the other bases is we are presenting a consistent picture on an aggregated view, which reflects in some cases we'll be investing in a year or a month, while reaping the benefit in the same year or month from other parts of the portfolio.

Stephen Baxter: And then based on the statement that you provided, I think the cumulative profit in the business from 2022 to 2024 is $25 or $30 million higher than previous. I'm trying to understand why those things don't net out if we're thinking about timing issues here. Thank you. Yeah, I'm appreciate the question. The answer is there is no comparability issue. The 175 is unimpacted by the revisions that we've provided to the financials today.

Jason Hollar: Optifrade has continued to invest in digital platforms and the service of its customer experience. The nuclear business, we've talked at length about expanding the pet network as well as our excitement about the thermonostic opportunities that that business presents. And so, again, as I go back to the financial guide, part of what you're seeing on the other basis is we are presenting a consistent picture ag on an aggregated view which reflects, in some cases, will be investing in a year or a month while reaping the benefit in the same year or month from other parts of the portfolio.

Jason Hollar: Yeah, I would say that the one thing we did clarify in the prior comments is that all three businesses are expected to contribute to that growth in fiscal 25. And we are investing, you know; fiscal 24 was an especially heavy investment period. But we are continuing to invest across the range, just one example to put it into perspective, as we talked a lot about our investments in our nuclear and precision health solutions business.

Jason Hollar: Yeah, I would say that the one thing we did clarify in the prior comments is that all three businesses are expected to contribute to that growth in fiscal 25. And we are investing; fiscal 24 was especially heavy investment period, but we are continuing to invest across the range. Just one example to put it into perspective as we talked a lot about our investments in our nuclear and precision health solutions business. This is a business that we've highlighted; there are not sticks. Now, just with our second phase of expansion that we announced about a year ago or this last year.

Speaker Change #106: Jason? Yeah, I would say that the one thing we did clarify in the prior comments is that all three businesses are expected to contribute to that growth in fiscal 25, and we are investing, you know, fiscal 24 was an especially heavy investment period, but we are continuing to invest across the range. Just one example to put it into

Stephen Baxter: The revisions we provided were for the three years, for the three year period. There will be, there is an impact of shifting of income or expense into the prior periods as well, which is why you're not seeing direct your comparability as prepared forward. I do want to emphasize though that part of our operation here is building, maintaining a strong control environment. And as we identified the issue in the edge part of our at home business, which is part of other, you know, it was a revenue recognition issue tied to a business which does less than a half a percent of our overall revenue base.

Speaker Change #106: Perspective is we talked a lot about our investments in our nuclear and precision health solutions business.

Jason Hollar: Yeah, this is a business that we've highlighted there are not six now just with our second phase of expansion that we announced about a year ago or this last year. And then we also have talked about some pet expansion from a 24 fiscal 24 to 26.

Speaker Change #106: This is a business that we've highlighted, Theranostics, now just with our second phase of expansion that we announced about a year ago, or this last year, and then we also have talked about some pet expansion.

Jason Hollar: And then we also have talked about some pet expansion from a 24, fiscal 24 to 26. That's about $100 million. Mainly capital that we're investing into that business, but is representative of the big investments that we're making in addition to the three different distribution centers and at-home solutions that Aaron mentioned are very representative of the inputs that we're putting into these businesses because we deeply believe in their ability to continue to grow, benefit from the secular trends they each enjoy, but then also reflecting the leadership position we have in each. And that is then further bolstered by these very specifics.

Speaker Change #106: From a fiscal 24 to 26, that's about $100 million, mainly capital that we're investing into that business. But it's representative.

Operator: That's about $100 million, mainly capital that we're investing into that business, but it is representative of the big investments that we're making in addition to the three different distribution centers and at-home solutions that Aaron mentioned are very representative of the inputs that we're putting into these businesses because we deeply believe in their ability to continue to grow and benefit from the secular trends they each enjoy. But then also reflecting the leadership position we have in each, and that is then further bolstered by these very specific.

Stephen Baxter: We were careful to do the right thing and disclose and at the same time in partnership with our authors decided that we would reflect the feedback we've gotten from this community and others around comments through on non-referring adjustments in prior periods, etc. And so now we walk into fiscal 25 not only with comparabilities but with a clean set of financials unimpacted by timing to be able to talk about our progress as we carry forward.

Speaker Change #106: of the big investments that we're making in addition to the three different distribution centers and at-home solutions that Aaron had mentioned.

Aaron: are very representative of the inputs that we're putting into these businesses because we deeply believe in their ability to continue to grow, benefit from the secular trends they each enjoy, but then also reflecting the leadership position we have in each, and that is then further bolstered by these very specific investments.

Aaron Alt: Next question, please.

Unknown Executive: Thank you.

Operator: Next question please. Thank you, sir. And ladies and gentlemen, our last question today will be coming from Daniel Grosslight of Citi. Please go ahead. Hi, thanks for taking the question and congrats on a strong quarter. I was hoping to get a bit more detail on Averon. Will that just be serving CVS at this point? And how does that kind of interact with Cordova's?

Daniel Grosslight: Next question, please.

Aaron Alt: Yes sir, the next question will be from Charles Roy of TD Cowland. Please go ahead. Hi, this is Lucas Lumpur Charles. Thanks for taking the questions. We're going to ask about the other segment. Can you talk about what's expected from OptiFrate nuclear and at home in fiscal 25 in terms of growth? Should we be thinking about any of these businesses outperforming the 10% segment target that you've set? Well, from a guidance perspective, we provide guidance for all their unnegregated basis.

Jason Hollar: Thank you, sir.

Jason Hollar: And ladies and gentlemen, our last question today will be coming from Daniel Grosslight of City. Please go ahead. Hi, thanks for taking the question, and congrats on a strong quarter. We're hoping to get a bit more detail on, on Averon. Well, that just be serving CVS at this point. How does that kind interact with Card office? And then, are there any purchase obligations or quarterly payments associated with that? And then lastly, when does that agreement renew? Okay, so you've crammed in about four there. So Averon, the first specific question on Averon was just probably on Miller.

Speaker Change #107: Next question, please.

Speaker Change #108: Thank you, sir. And ladies and gentlemen, our last question today will be coming from Daniel Grossleit of Citi. Please go ahead.

Daniel Grossleit: Hi, thanks for taking the question and congrats on a strong quarter. We're hoping to get a bit more detail on Avron. Will that just be serving CVS at this point? How does that kind of interact with Cardovis?

Daniel Grosslight: And then, are there any purchase obligations or quarterly payments associated with that? And then, lastly, when does that agreement expire? Okay, so you crammed in about four there.

Speaker Change #110: And then, are there any purchase obligations or quarterly payments associated with that? And then lastly, when does that agreement renew?

Aaron Alt: But I do want you to take away the enthusiasm, present in Jason's comments and his tone of voice around the opportunity. We think that each of these three businesses presents to Cardinal Health as we carry forward. The businesses are unique. They're managed differently. We aggregate them from financial perspective. It's also the case that we are investing in each of those businesses. We have in 24 and we are in 25. At home is recently open to the distribution point and is investing in automation.

Jason Hollar: So Avron, the first specific question on Avron was just broadly speaking. Yeah, so, I mentioned it a few different times, so I think maybe there's a more specific question behind it, but I think the question was, is it just service CVS? The answer is no.

Speaker Change #111: Okay, so you crammed in about four there. So, Avron.

Speaker Change #112: The first specific question on Avron was just broadly. Yeah, so well I referenced a few different times, so I think maybe there's a more specific question behind it, but I think the question was, is it just service CVS? The answer is no. It's a consistent concept as what we did with Red Oak Sourcing, reflecting that we both have different needs, different customers, if you will, and can jointly benefit those patients through combining our capabilities in this space.

Jason Hollar: Yeah, so well, I referenced a few different times. So I think there's a more specific question behind it. But it, oh, I think the question was, is it just service CVS? The answer is no. That's it's a consistent concept as what we did with red of sourcing, reflecting that we both have different needs, different customers, if you will, and can jointly benefit those patients through combining our capabilities in this space. So we would expect to operate it in a similar way, where we have different benefits associated with that. There are, I think what you're talking about are there's not the same type of payment structure and schedule that we have for red outsourcing, kind of equalization payments, if you will.

Jason Hollar: It's a consistent concept as what we did with Red Oak Sourcing, that we both have different needs, different customers, if you will, and can jointly benefit those patients through combining our capabilities in this space. So we would expect to operate it in a similar way where we have different benefits associated with that. There are, I think what you're talking about, there's not the same type of payment structure and schedule that we have for Red Oak Sourcing, kind of equalization payments, if you will. So that structure does not exist with this.

Aaron Alt: OptiFrate has continued to invest in digital platforms and service of its customer experience. The nuclear business we've talked at length about expanding the pet network as well as our excitement about the thermonostic opportunities that that business presents. And so, again, as I go back to the financial guide, part of what you're seeing in the other bases is we are presenting a consistent picture ag on an aggregated view which reflects that in some cases will be investing in a year or a month while reaping the benefit in the same year or month from other parts of the portfolio.

Speaker Change #112: So we would expect to operate it in a similar way where we have different benefits associated with that.

Speaker Change #112: There are, I think what you're talking about, there's not the same type of payment structure and schedule that we have for red oak sourcing, kind of equalization payments if you will. So that structure does not exist with this.

Aaron Alt: Yeah, I would say that the one thing we did clarify in the prior comments is that all three businesses are expected to contribute to that growth in fiscal 25. And we are investing, fiscal 24 was especially heavy investment period, but we are continuing to invest across the range. Just one example to put it into perspective as we talked a lot about our investments in our nuclear and precision health solutions business. This is a business that we've highlighted there are not sticks.

Jason Hollar: So that structure does not exist with this. It is structured, you know, quite a bit differently in that regard. So, and then in terms of the, I think there's a renewal question there about CVS, and so the contract goes through the distribution contract goes through 27, and then the Red Oak agreement goes through 29. So this is, you know, certainly outside of those agreements, and it's, you know, very much an example of the type of partnership that, you know, we look to have with any and all of our customers in various ways. To ensure that we're thinking about how better to serve those underlying patients.

Speaker Change #112: It is structured quite a bit differently in that regard.

Jason Hollar: It is structured quite a bit differently in that regard. So, and then we, in terms of the, I think there's a renewal question there about CVS, and so the contract goes through, the distribution contract goes through 27, and then the red oak agreement goes through 29. So this is, you know, certainly outside of those agreements, and it's, you know, very much an example of the type of partnership that we look to have with any and all of our customers in various ways to ensure that we're thinking about how better to serve those underlying patients. Mr. Hollar, we don't have any further questions.

Speaker Change #112: So, and then we've, in terms of the, I think there was a renewal question there about CVS. And so the contract goes through, the distribution contract goes through 27, and then the Red Oak agreement goes through 29. So this is, you know, certainly outside of those agreements. And it's, you know, very much an example of the type of partnership that we look to have with any and all of our customers in various ways to ensure that we're thinking about how better to serve those underlying patients.

Aaron Alt: Now, just with our second phase of expansion that we announced about a year ago or this last year. And then we also have talked about some pet expansion from a 24, fiscal 24 to 26. That's about $100 million. Mainly capital that we're investing into that business, but is representative of the big investments that we're making in addition to the three different distribution centers and at home solutions that Aaron mentioned are very representative of the inputs that we're putting into these businesses because we deeply believe in their ability to continue to grow benefit from the secular trends they each enjoy, but then also reflecting the leadership position we have in each. And that is then further bolstered by these very specifics.

Unknown Executive: Thank you. Next question, please. Thank you, sir.

Jason Hollar: Great.

Jason Hollar: Mr. Haller, we don't have any further questions. I'd like to call back over to you for any additional uploads or remarks. Thank you. Yeah. Thank you. And thank you all for joining us. You know, in addition to the usual pleasantries, I have at this point in the call. I do want to step back for just a minute, reflecting that given it's our year end, as well as additional guidance. I know that there was a lot to digest within this, but I hope that we clarified many of your points today. But I do want to end where I started and just reemphasize those same three key points I had at the very beginning of the commentary today.

Operator: I'd like to call back over to you for any additional or closing remarks. Thank you. Yeah, yeah, thank you.

Speaker Change #112: Great.

Speaker Change #112: Mr. Hollar, we don't have any further questions. I'd like to call back over to you for any additional or closing remarks. Thank you.

Jason Hollar: And thank you all for joining us. You know, in addition to the usual pleasantries I have at this point in the call, I do want to step back for just a minute, reflecting that, given it's our year end, as well as additional guidance, I know that there was a lot to digest within this, but I hope that we clarified many of your points today. But I do want to end where I started and just reemphasize those same three key points I had at the very beginning of this commentary today.

Mr. Hollar: Yeah, yeah, thank you. And thank you all for joining us. In addition to the usual pleasantries I have at this point in the call, I do want to step back for just a minute.

Mr. Hollar: Reflecting that, given it's our year-end, as well as additional guidance, I know that there was a lot to digest within this, but I hope that we clarified many of your points today. But I do want to end where I started and just reemphasize those same three key points I had at the very beginning of the commentary today. First of all, we finished the year with terrific momentum. We grew our earnings per share by 29% for both the quarter and the fiscal year. You add that on top of the growth that we saw last year, that's a nearly 50% increase in our EPS over the last couple of years.

Jason Hollar: First and foremost, you know, we finished the year with terrific momentum. We grew our earnings per share by 29% for both the quarter and the fiscal year. You add that on top of the growth that we saw last year, that's a nearly 50% increase in our EPS over the last couple of years, driven by performance across the board but really strong performance in our largest, most significant business, our pharma segment, growing despite having some of those impacts in the quarter from that contract unwind.

Daniel Grosslight: And ladies and gentlemen, our last question today will be coming from Daniel Grosslight of city. Please go ahead. Hi, thanks for taking the question and congrats on a strong quarter. We're hoping to get a bit more detail on, on Averon. Well, that just be serving CVS at this point. How does that kind of interact with Card office? And then are there any purchase obligations or quarterly payments associated with that? And then lastly, when does that agreement renew?

Jason Hollar: First, first of all, you know, we finished the year with terrific momentum. We grew our earnings per share by 29% for both the quarter end of the fiscal year. You add that on top of the growth that we saw last year. That's a nearly 50% increase in our EPS over the last couple of years. Driven by performance across the board, but really strong performance in our largest, most significant business, our farmers segment growing despite having some of those impacts in the quarter from that contract unwind. But we're also seeing very good utilization across the enterprise, whether it's pharma as well as GM PD.

Daniel Grosslight: Okay, so you've crammed in about four there. So Averon, the first specific question on Averon was just probably on Miller. Yeah, so well, I referenced a few different times. So I think there's a more specific question behind it. But it, oh, I think the question was, is it just service CVS? The answer is no. That's it's a consistent concept as what we did with red of sourcing, reflecting that we both have different needs, different customers, if you will, and can jointly benefit those patients through combining our capabilities in this space.

Mr. Hollar: Driven by performance across the board, but really strong performance in our largest, most significant business, our pharma segment, growing despite having some of those impacts in the quarter from that contract unwind.

Jason Hollar: But we're also seeing very good utilization across the enterprise, whether it's pharma or GMPD. We see that this industry continues to have a lot of need within the marketplace. That, in part, is driving our GMPD business, but really, that $240 million improvement that we saw for that business this year is being driven by the successful mitigation of inflation. It's been a long, hard journey, but we've gotten there, and now we're able to focus on driving the business going forward.

Mr. Hollar: But we're also seeing very good utilization across the enterprise, whether it's pharma as well as GMPD. We see that this industry continues to have a lot of need within the marketplace.

Jason Hollar: We see that this industry continues to have a lot of need within the market. Replace. That in part is driving our GMPD, but really that $240 million improvement that we saw for that business this year is being driven by the successful mitigation of inflation. A long hard journey, but we've gotten there, and now we're able to focus on driving the business going forward. Our other businesses were seeing robust demand across the board, utilization, but secular trends as well. Really excited about the ongoing growth there, double digit 10% growth in 25 while continuing to invest in the business.

Mr. Hollar: That, in part, is driving our GMPD, but really that $240 million improvement that we saw for that business this year is being driven by the successful mitigation of inflation. A long, hard journey, but we've gotten there, and now we're able to focus on driving the business going forward.

Jason Hollar: Our other businesses, we're seeing robust demand across the board, utilization, but secular trends as well. Really excited about the ongoing growth there, double-digit, 10% growth in 2025 while continuing to invest in the business. Cash Flow, really strong, not only $4 billion this year, but when you take last year and this year in combination, that's nearly $7 billion that positions us very well for financial flexibility. All right.

Mr. Hollar: Our other businesses were seeing robust demand across the board, utilization but secular trends as well. Really excited about the ongoing growth there, double digit 10% growth in 25 while continuing to invest in the business.

Jason Hollar: This cash will really strong, not only $4 billion nearly this year, but when you take last year and this year in combination, that's nearly $7 billion that position is thus very well for financial flexibility going forward. The second point was because of that momentum, we feel very confident about our fiscal 25, and that's why we raised our guidance, both in our largest business with pharma, but also driving EPS growth in fiscal 25 despite that customer transition. And then thirdly and lastly, we're doing all that operational and cash flow focus while also driving our strategy going forward, optimizing our portfolio, very consistent, transparent dialogue we've had with you.

Daniel Grosslight: So we would expect to operate it in a similar way where we have different benefits associated with that. There are, I think what you're talking about are there's not the same type of payment structure and schedule that we have for red outsourcing, kind of equalization payments, if you will. So that structure does not exist with this. It is structured, you know, quite a bit differently in that regard. So, and then in terms of the, I think there's a renewal question there about CVS, and so the contract goes through the distribution contract goes through 27, and then the red oak agreement goes through 29.

Mr. Hollar: A cash flow, really strong, not only $4 billion nearly this year, but when you take last year and this year in combination, that's nearly $7 billion that positions us very well for financial flexibility going forward.

Operator: The second point was because of that momentum, we feel very confident about Fiscal 25, and that's why we raised our guidance, both for our largest business with PhRMA but also driving EPS growth in Fiscal 25, despite that customer transition. And then, thirdly and lastly, we're doing all that operational and cash flow focus while also driving our strategy going forward, optimizing our portfolio. Very consistent, transparent dialogue we've had with you. This management team is focused on those key priorities and will continue to communicate.

Mr. Hollar: Alright, the second point was because of that momentum, we feel very confident about our Fiscal 25, and that's why we raised our guidance, both in our largest business with PhRMA, but also driving EPS growth in Fiscal 25, despite that customer transition.

Mr. Hollar: And then thirdly and lastly, we're doing all that operational and cash flow focus while also driving our strategy going forward, optimizing our portfolio. Very consistent, transparent dialogue we've had with you. This management team is focused on those key priorities and will continue to communicate.

Jason Hollar: This management team is focused on those key priorities and will continue to communicate. We're excited about the progress across the number of areas that we talked about, whether it's furthering our partnership with our largest customer or the ongoing integration of our largest acquisition, especially networks that we've done in quite some time. We're well positioned to continue to grow the business even in spite of any type of side ones that we've identified. And of course, behind all that, we will continue to responsibly prioritize shareholder value creation, and we've communicated some additional near-term actions specifically within the GMPD business today, and that is translating to even more opportunistic share repurchases in fiscal year 25.

Operator: We're excited about the progress across the number of areas that we talked about, whether it's furthering our partnership with our largest customer or the ongoing integration of our largest acquisition, especially the networks that we've done in quite some time. We're well positioned to continue to grow the business, even in spite of any type of side ones that we've identified. And of course, behind all that, we will continue to responsibly prioritize shareholder value. And we've communicated some additional near-term actions, specifically within the GMPD business today, and that is translating to even more opportunistic share repurchases in fiscal year 25.

Daniel Grosslight: So this is, you know, certainly outside of those agreements, and it's, you know, very much an example of the type of partnership that, you know, we look to have with with any and all of our customers in various ways. To ensure that we're thinking about how better to serve those underlying patients. Great.

Mr. Hollar: We're excited about the progress across the number of areas that we talked about, whether it's furthering our partnership with our largest customer or the ongoing integration of our largest acquisition, especially networks that we've done in quite some time. We're well positioned to continue to grow the business even in spite of any type of words that we've identified.

Jason Hollar: Mr. Haller, we don't have any further questions. I'd like to call back over to you for any additional uploads or remarks. Thank you. Yeah. Thank you. And thank you all for joining us. You know, in addition to the usual pleasantries, I have at this point in the call. I do want to step back for just a minute, reflecting that given it's our year end as well as additional guidance. I know that there was a lot to digest within this, but I hope that we clarified many of your points today.

Mr. Hollar: And, of course, behind all that, we will continue to responsibly prioritize shareholder value creation.

Mr. Hollar: And we've communicated some additional near-term actions, specifically within the GMPD business today. And that is translating to even more opportunistic share repurchases in fiscal year 25. So a lot there, but a lot to be excited about, and we appreciate your time and attention and look forward to keeping you updated on our progress.

Jason Hollar: So a lot there, but a lot to be excited about, and we appreciate your time and attention and look forward to keeping you updated on our progress.

So, a lot there, but a lot to be excited about, and we appreciate your time and attention and look forward to keeping you updated on our progress. Thank you. Much, sir. Ladies and gentlemen, that will conclude today's conference. We thank you for your attendance. You may now disconnect. Have a good day, and goodbye.

Unknown Executive: Thank you, what's there?

Unknown Executive: Ladies and gentlemen, though, through today's conference, we thank you for your 10 minutes connect.

Jason Hollar: But I do want to end where I started and just reemphasize those same three key points I had at the very beginning of the commentary today. First, first of all, you know, we finished the year with terrific momentum. We grew our earnings per share by 29% for both the quarter end of the fiscal year. You add that on top of the growth that we saw last year. That's a nearly 50% increase in our EPS over the last couple of years.

Speaker Change #114: Thank you very much, sir. Ladies and gentlemen, that will conclude today's conference. We thank you for your attendance. You may now disconnect. Have a good day and goodbye.

Unknown Executive: Have a good day, and goodbye.

Speaker Change #114: [inaudible]

Jason Hollar: Driven by performance across the board, but really strong performance in our largest, most significant business, our farmers segment growing despite having some of those impacts in the quarter from that contract unwind. But we're also seeing very good utilization across the enterprise, whether it's pharma as well as GM PD. We see that this industry continues to have a lot of need within the market. Replace. That in part is driving our GMPD, but really that $240 million improvement that we saw for that business this year is being driven by the successful mitigation of inflation, a long hard journey, but we've gotten there and now we're able to focus on driving the business going forward.

Jason Hollar: Our other businesses were seeing robust demand across the board, utilization, but secular trends as well. Really excited about the ongoing growth there, double digit 10% growth in 25 while continuing to invest in the business. This cash will really strong, not only $4 billion nearly this year, but when you take last year and this year in combination, that's nearly $7 billion that position is thus very well for financial flexibility going forward. The second point was because of that momentum, we feel very confident about our fiscal 25 and that's why we raised our guidance, both in our largest business with pharma, but also driving EPS growth in fiscal 25 despite that customer transition.

Jason Hollar: And then thirdly and lastly, we're doing all that operational and cash flow focus while also driving or strategy going forward optimizing our portfolio, very consistent, transparent dialogue we've had with you. This management team is focused on those key priorities and will continue to communicate. We're excited about the progress across the number of areas that we talked about, whether it's furthering our partnership with our largest customer or the ongoing integration of our largest acquisition, especially networks that we've done in quite some time, we're well positioned to continue to grow the business even in spite of any type of side ones that we've identified.

Jason Hollar: And of course, behind all that, we will continue to responsibly prioritize shareholder value creation and we've communicated some additional near term actions specifically within the GMPD business today and that is translating to even more opportunistic share repurchases in fiscal year 25. So a lot there, but a lot to be excited about and we appreciate your time and attention and look forward to keeping you updated on our progress. Thank you, what's there?

Unknown Executive: Ladies and gentlemen, though, through today's conference, we thank you for your 10 minutes connect.

Unknown Executive: Have a good day and goodbye.

Q4 2024 Cardinal Health Inc Earnings Call

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