Q2 2025 Cencora Inc Earnings Call

Register a question by pressing star followed by one on your telephone keypad. If you change your mind. Please press star followed by <unk> on your telephone keypad.

Bennett Murphy: Good morning. Good afternoon.

Bennett Murphy: And thank you all for joining us for this conference call to discuss Cencora's fiscal 2025 second quarter results.

Bennett Murphy: I am Bennett Murphy, Senior Vice President, Head of Investor Relations and Treasury.

I'll now hand over to your host Bennett Murphy Senior Vice President head of Investor Relations and Treasury to begin. Please go ahead.

Bennett Murphy: Joining me today are Bob Mauch, President and CEO, and Jim Cleary, Executive Vice President and CFO. On today's call, we'll be discussing non-GAAP financial measures. Reconciliations of these measures to GAAP are provided in today's press release, which is available on our website at investor.cencora.com. We've also posted a slide presentation to accompany today's press release on our investor website.

Speaker Change: Welcome, everyone. The Cencora Fiscal 2025 second quarter results conference call will begin shortly. In the meantime, if you would like to pre-register to ask a question, please press starfollow by one on your telephone keypad. If you change your mind, please press starfollow by two. Thank you.

Bennett Murphy: Thank you good morning, good afternoon, and thank you all for joining US for this conference call to discuss <unk>.

Bennett Murphy: 2025 second quarter results I Am Bennett Murphy Senior Vice President head of Investor Relations and Treasury. Joining me today are Bob <unk>, President and CEO and Jim Cleary Executive Vice President and CFO on today's call, we will be discussing non-GAAP financial measures reconciliations of these measures to GAAP are provided in today's press release, which is available on our website at Investor day.

Bennett Murphy: During this conference call, we will discuss forward-looking statements about our business and financial expectations on an adjusted, non-GAAP basis, including but not limited to EPS, operating income, and income taxes. Forward-looking statements are based on management's current expectations and are subject to uncertain For discussion of key risks and assumptions, we refer to today's press release and our SEC filings, including our most recent 10-Q.

Bennett Murphy: <unk> Dot com.

Bennett Murphy: We've also posted a slide presentation to accompany today's press release on our Investor website. During this conference call. We will discuss forward looking statements about our business and financial expectations on an adjusted non-GAAP basis, including but not limited to EPS operating income and income taxes.

Bennett Murphy: So of course, there's no obligation to update any forward-looking statements, and this call cannot be rebroadcast without the express permission of the You will have the opportunity to ask questions after today's remarks by management. We ask that you limit your questions to one per participant in order for us to get to as many participants as possible within the hour.

Bennett Murphy: Forward looking statements are based on management's current expectations and are subject to uncertainty and change for a discussion of key risks and assumptions, we refer to todays press release, and our SEC filings, including our most recent 10-Q.

Bob Mauch: With that, I'll turn the call over to Bob. Thank you, Bennett. Hi, everyone. And thank you for joining Cencora's fiscal 2025 second quarter earnings call. To begin, I want to thank our global Cencora team. It is due to their purpose-driven execution that I have the privilege of reporting our second quarter performance. In our second quarter, Cencora delivered strong results with revenue growth of 10% and adjusted diluted EPS growth of 16%. We are once again raising our guidance for the fiscal year to reflect our first half results and expectations for continued execution in the second half.

Bennett Murphy: So of course, there's no obligation to update any forward looking statements and this call cannot be rebroadcast without the express permission of the company.

Speaker Change: The opportunity to ask questions. After today's remarks by management, we ask that you limit your questions to one per participant in order for us to get to as many participants as possible within the hour with that I'll turn the call over to Bob.

Bob: Thank you, Brad Hi, everyone and thank you for joining sent course fiscal 2025 second quarter earnings call.

Bob: To begin I want to thank our global Suncor team members. It is due to their purpose driven execution, but I have the privilege of reporting our second quarter performance.

Bob: And our second quarter Suncor delivered strong results with revenue growth of 10%.

Bob Mauch: rooted in our pharmaceutical centric strategy, enabled by active learning and powered by the collective strength of our enterprise. is building on our position as a leading end-to-end healthcare solutions provider. We continue to expand our capabilities in key markets, supporting pharmaceutical innovation and access.

Bob: Adjusted diluted EPS growth of 16%.

Bob: Once again, raising our guidance for the fiscal year to reflect our first half results and expectations for continued execution in the second half.

Steven Valiquette,

Speaker Change: Hello, everyone, and thank you for joining the Cencora Fistball 2025 Second Quarter Results Conference

Lucy: My name is Lucy and I'll be coordinating your call today. Bye.

Bob: Rooted in our pharmaceutical centric strategy enabled by active learning and powered by the collective strength of our enterprise.

Speaker Change: During the presentation, you can register a question by pressing starfully by one on your telephone keypad. If you change your mind, please press starfully by two when your telephone keypad. I will now hand over to your host, Bennett Murphy, Senior Vice President, Head of Investor Relations and Treasury to begin. Please go ahead.

Bob Mauch: Today I will highlight three areas advancing our business to power growth. First, we are creating value by leveraging our expertise and insights to enhance patient care. Second, we are successfully deepening our customer partnerships by actively learning and anticipating their needs. And third, we are strengthening our global leadership and specialty medications by deepening our offering across geographies and customer channels. I'll begin with how we are creating value by leveraging our leading expertise and insights from our end-to-end solutions to support our customers, partners, and patients. Cencora is uniquely and intentionally positioned to support pharmaceutical commercialization and access across the healthcare ecosystem.

Bob: <unk> is building on our position as a leading end to end health care solutions provider.

Bob: We continue to expand our capabilities in key markets supporting pharmaceutical innovation and access.

Speaker Change: Thank you. Good morning, good afternoon, and thank you all for joining us for this conference call to discuss Cencora's fiscal 2025 second quarter results. I am Bennett Murphy, Senior Vice President, Head of Investigations and Treasury, joining me today are Bob Mauch, President CEO , and Jim Cleary, Executive Vice President and CFO . On today's call, we'll be discussing non-GAAP financial measures.

Bob: Today, I will highlight three areas advancing our business to power growth.

Bob: First we are creating value by leveraging our expertise and insights to enhance patient care.

Bob: Second we are successfully deepening our customer partnerships by actively learning and anticipating their needs.

Bob: And third we are strengthening our global leadership in specialty medications by deepening our offering across geographies and customer channels.

Speaker Change: Reconciliation of these measures to gap or provide in today's press release which is available on our website at investor.cencora.com.

Speaker Change: We've also posted a slide presentation to accompany today's press release on our Investor website.

Bob: I'll begin with how we are creating value by leveraging our leading expertise and insights from our end to end solutions to support our customers partners and patients.

Speaker Change: During this conference call, we've discussed four local statements about our business and financial expectations on adjusted non-GAAP basis, including what not limited to, EPS, operating income and income tax.

Bob Mauch: from leading pharmaceutical and biopharma innovators to healthcare providers. The breadth and scale of our services give us access to extensive data that our teams transform into actionable insights, enabling increased efficiency and innovation.

Speaker Change: Four legal statements are based on management's current expectations and are subject to uncertainty and change.

Bob: <unk> is uniquely and intentionally positioned to support pharmaceutical commercialization and access across the health care ecosystem from leading pharmaceutical and Biopharma innovators to health care providers.

Speaker Change: for a discussion of key recent assumptions we refer to today as press release and RSCC piloting including our most recent 10Q.

Bob Mauch: There are two examples I'd like to mention that demonstrate our progress to engage with industry stakeholders and strengthen our partners. First is how we're working to support the resiliency in independent pharmacy space to ensure patient access to care. through our advanced analytics capabilities and leading Good Neighbor pharmacy network of independent pharmacy. We've been able to provide pharmacies with heightened visibility into their communities, allowing them to identify new business opportunities, address populations that may experience gaps in care, and tailor their service offering to specific patient populations. Our work has also highlighted that an estimated 30 million people in the United States live in pharmacy deserts, threatening access to medication, vaccines, screenings, and other services necessary for healthy communities.

Speaker Change: Corson's new obligation to update any four living statements and this call cannot be your broadcast, so I have the express permission of the company.

Bob: The breadth and scale of our services give us access to extensive data that our team's transform into actionable insights, enabling increased efficiency and innovation.

Speaker Change: Do you have the opportunity to ask questions after today's remarks by management? We ask the Elimir questions to one participant in order for us to get to as many participants as possible within the hour. But that will turn the call over to Bob.

Bob: There are two examples I would like to mention that demonstrate our progress to engage with industry stakeholders and strengthen our partnerships.

Bob Mauch: Thank you, Bennett. Hi, everyone, and thank you for joining Cencora's fiscal 2025.

Bob: First is how we're working to support the resiliency in the independent pharmacy space to ensure patient access to care.

Erning's call.

Speaker Change: To begin, I want to thank our global Cencora team members.

Speaker Change: It is due to their purpose-driven execution, but I have the privilege of reporting our second-quarter performance.

Bob: Through our advanced analytics capabilities, and leading good neighbor pharmacy network of independent pharmacies.

Speaker Change: in our second quarter, Cencora delivered strong results with revenue growth of 10% and adjusted diluted EPS growth of 16%.

Bob: We have been able to provide pharmacies with heightened visibility into their communities, allowing them to identify new business opportunities.

Speaker Change: Where once again, raising our guidance for the fiscal year to reflect our first half results and expectations for continued execution in the second half.

Bob: Dress populations that may experience gaps in care and tailor their service offering to specific patient populations.

Bob Mauch: By leveraging these insights, we are better able to advocate on behalf of our customers to ensure community providers remain vital sites of care.

Bob: Our work has also highlighted that an estimated 30 million people in the United States live in pharmacy deserts.

Ruded in our pharmaceutical-centric strategy.

Speaker Change: Enabled by active learning and powered by the collective strength of our enterprise. Cencora is building on our position as a leading entity and healthcare solutions provider.

Bob: <unk> access to medication vaccines screenings and other services necessary for healthy communities.

Bob Mauch: The second example is using dispensing insights from our relationships with providers to inform biopharma partners on key product trends. One recent initiative provided actionable insights into the treatment of bladder cancer, where Cencora combined clinical and market research to show how community oncologists were implementing new treatment paradigms. We are expanding the areas in which we offer these data insights, providing valuable services to our partners as they navigate the ever-changing healthcare landscape.

Bob: By leveraging these insights we are better able to advocate on behalf of our customers to ensure community providers remain vital sites of care.

Thank you.

Speaker Change: Today, I will highlight three areas advancing our business for the rest of our business.

Bob: The second example is using dispensing insights from our relationships with providers to inform Biopharma partners on key product trends.

Speaker Change: First, we are creating value by leveraging the expertise and insights to enhance patient care.

Bob: One recent initiative provided actionable insights into the treatment of bladder cancer, where suncor combined clinical and market research to show how community oncologists were implementing new treatment paradigms.

Speaker Change: Second, we are successfully deepening our customer partnerships by actively learning and anticipating their needs.

Bob Mauch: Next, we are deepening our strategic relationship with customers and partners by taking an active approach to learning from Through Cencora's industry-leading portfolio, we've built a premier customer base, end-to-end, throughout the pharmaceutical supply chain. dedicated to driving positive pharmaceutical outcomes. executing on our strategic priority of leading with market leaders. We are committed to deeply understanding our customer strategy. and in turn, anticipating their needs and enhancing our capability. Just this past week, teams from across Cencora were actively engaged at a number of industry ranging from community pharmacies and oncology practices to the largest chain drug stores as well as biopharmacology.

and third.

Speaker Change: We are strengthening our global leadership and specialty medications by deepening our offering across geographies and customer channels.

Bob: We are expanding the areas in which we offer these data insights providing valuable services to our partners as they navigate the ever changing healthcare landscape.

Speaker Change: All begin with how we are creating value by leveraging our leading expertise and insights from our end-to-end solutions to support our customers, partners and patients.

Bob: Next we are deepening our strategic relationship with customers and partners by taking an active approach to learning from them.

Bob: Through <unk> industry, leading portfolio, we built a premier customer base end to end throughout the pharmaceutical supply chain dedicated to driving positive pharmaceutical outcomes.

Michael Cherny, Sarah

Speaker Change: Cencora is uniquely and intentionally positioned to support pharmaceutical commercialization and access across the healthcare ecosystem.

from leading pharmaceutical and bioform innovators to healthcare providers.

Bob: Executing on our strategic priority of leading with market leaders.

and the breadth and scale of our service.

Speaker Change: Davis, give us access to extensive data that our teams transform into actionable insights, enabling increased efficiency and innovation.

Bob: We are committed to deeply understanding our customer strategies and in turn anticipating their needs and enhancing our capabilities.

Bob Mauch: allowing our team members to return to our offices equipped with insights to share with colleagues. I'm proud of our significant presence at these prominent industry events where the scope of Cencora's capabilities and expansive partnerships were on full display. At a leading conference focused on specialty pharma, our team members spent time actively learning from partners across the health care landscape, while also providing thought leadership through their participation on panels, addressing policy and health care action. We were also highly engaged in the largest gathering of chain pharmacies working to deepen our partnership. In Washington, D.C., a group of our leaders joined community pharmacists from across the country for meetings with legislators to bring attention to the critical role pharmacists play in their local communities as trusted providers of care.

Speaker Change: There are two examples I'd like to mention that demonstrate our progress to engage with industry stakeholders and strengthen our partnerships.

Bob: Just this past week teams from across Suncor, we're actively engaged at a number of industry events, ranging from community pharmacies and oncology practices to the largest chain drug stores as well as biopharma companies, allowing our team members to return to our offices equipped with insights to <unk>.

Speaker Change: First is how we're working to support the resiliency and independent pharmacy space.

to ensure patient access to care.

Speaker Change: Through our advanced analytics capabilities and leading good neighbor pharmacy network of independent pharmacies.

Bob: Share with colleagues.

Bob: I am proud of our significant presence at these prominent industry events for the scope of <unk> capabilities and expansive partnerships were on full display.

Speaker Change: We've been able to provide pharmacies with heightened visibility into their communities.

and I'm putting them to identify new business opportunities.

Bob: At a leading conference focused on specialty pharma. Our team members spent time actively learning for partners across the healthcare landscape. While also providing thought leadership through their participation on panels addressing policy and health care access.

populations that may experience gaps in care.

and Taylor, their service offering specific patient populations.

Speaker Change: Our work is also highlighted to get an estimated 30 million people in the United States live in pharmacy.

Bob: We were also highly engaged in the largest gathering of chain pharmacies working to deepen our partnerships.

Bob Mauch: The teams attended over 100 meetings with legislators. Additionally, we gathered with our community oncology partners, where the focus was on the continuous evolution of care and need for empowered advocates to ensure the best patient outcomes in the community setting. By engaging in these forums, we develop a deeper understanding of our partners needs and gain valuable perspective to allow us to better serve them and their patients.

Speaker Change: Friday, Access to Medication, Vaccines, Screenings, and other services necessary for healthy communities.

Bob: In Washington D. C. A group of our leaders joined community pharmacists from across the country for meetings with legislators to bring attention to the critical role.

Speaker Change: By leveraging these insights, we are better able to advocate on behalf of our customers to ensure community providers remain vital sites of care.

Bob: <unk> play in their local communities is trusted providers of care.

Bob: The teams attended over 100 meetings with legislators.

Speaker Change: The second example is using dispensing data from our relationships with providers to inform bio-file partners to keep product trends.

Bob: Additionally, we gathered with our community oncology partners with a focus was on the continuous evolution of care and need for empowered advocates to ensure the best patient outcomes in the community setting.

Bob Mauch: And finally, we are strengthening our global leadership and specialty medications by deepening our offering across customer channels. Executing our Strategic Imperative of Expanding Leadership and Special our internationally scaled 3PL service. differentiated as we serve pharmaceutical manufacturers who are increasingly seeking partners that can support products across multiple geographies. We've integrated our U.S. and European 3PL business. Creating an Internationally Unified Network. By doing this, we offer manufacturers deep local expertise, along with multinational reach for their products. driving successful launches, and positioning Cencora as the partner of choice. We are increasing our capabilities in key markets in Europe, enhancing our pharmaceutical logistics offering, which will power our leadership and specialty across We're also strengthening our leadership and specialty in the United States.

Speaker Change: One research initiative provided actionable insights into the treatment of bladder cancer, where some core combined clinical and market research to show how community oncologists were implementing new treatment paradigms.

Bob: By engaging in these forums, we develop a deeper understanding of our partners' needs and gain valuable perspective.

Bob: To allow us to better serve them and their patients.

Bob: And finally, we are strengthening our global leadership in specialty medications by deepening our offering across customer channels.

Speaker Change: We are expanding the areas in which we offer these data insights, providing valuable services to our partners as they have the ever changing healthcare landscape.

Bob: Executing our strategic imperative of expanding leadership in specialty.

Speaker Change: Next, we are deepening our strategic relationship with customers and partners by taking an active approach to learning from them.

Bob: Our internationally scale <unk> service is differentiated as we serve pharmaceutical manufacturers, who are increasingly seeking partners that can support products across multiple geographies.

Speaker Change: Anderson Corsair, Steven Portfolio, we've built a premier customer base and to end throughout the pharmaceutical supply chain.

dedicated to driving positive pharmaceutical outcomes.

Bob: We've integrated our U S and European <unk> businesses, creating an internationally unified network by.

Executing on our Strategic Priority.

for the leading with market leaders.

Bob: By doing this we offer manufacturers deep local expertise.

Speaker Change: We are committed to deeply understanding our customer strategies and in turn, anticipating their needs and enhancing our capabilities.

Bob: Along with multinational reach for their products driving successful launches and positioning syncora as the partner of choice.

Bob Mauch: by deepening our offerings across provider channels. One example is our approach with health systems. paving the way for us to build upon our critical role in distribution. and offering an ecosystem of services health systems increasingly require as the use of specialty medications rise. Our teams have developed solutions to address the needs of health systems large and small. Our solutions designed in partnership with leading health systems support comprehensive patient centric care. By investing in end-to-end solutions across sites of care, we strengthen our capabilities to support providers, manufacturers, and patients.

Speaker Change: Just this past week, teams from across Cencora were actively engaged at a number of industry events.

Bob: We are increasing our capabilities in key markets in Europe, enhancing our pharmaceutical logistics offering which will power our leadership in specialty across the continent.

Speaker Change: Ranging from community pharmacies and oncology practices to the largest chain drug stores as well as biopharmacompanies.

Bob: We're also strengthening our leadership in specialty in the United States by.

Speaker Change: allowing our team members to return to our offices equipped with insights to share with colleagues.

Bob: By deepening our offerings across provider channels.

Bob: One example is our approach with health systems paving the way for us to build upon our critical role in distribution and.

Speaker Change: I'm proud of our significant presence at these prominent industry events, where the scope of Cencora's capabilities and expansive partnerships were on full display.

Bob: And offering an ecosystem of services health systems increasingly require has the use of specialty medications rise.

Speaker Change: at a leading conference focused on specialty pharma. Our team members spent time actively learning from partners across the healthcare landscape while also providing thought leadership through their participation on panels, addressing policy and healthcare access.

Bob: Our teams have developed solutions to address the needs of health systems large and small.

Bob: Our solutions designed in partnership with leading health systems support comprehensive patient centric care.

Bob Mauch: In closing, and before I hand it over to Jim. The financial strength we are reporting today. powered by the size and organic growth of our U.S. segment. resulting from many years of strategic investments, strong execution, and leading partners. In our international segment, we are navigating a period of market softness for some of our business. However, we are confident, we are well positioned, and expect to capture opportunities as demand rebounds.

Speaker Change: We were also highly engaged in the largest gathering of chain pharmacies working to deepen our partnerships.

Bob: By investing in end to end solutions across sites of care, we strengthened our capabilities to support providers manufacturers and patients.

Speaker Change: and Washington, D.C., a group of our leaders joined community pharmacists from across the country for meetings with legislators to bring them to the critical role pharmacists play and their local communities has trusted the leaders of care.

Jim Cleary: In closing and before I hand, it over to Jim.

Jim Cleary: The financial strength, we are reporting today is powered by the size and organic growth of our U S segment.

Jim Cleary: Resulting for many years, our strategic investments strong execution and leading partnerships.

The team's attended a 100 meetings with legislators. Thank you very much.

Speaker Change: Additionally, we have a group of community oncology partners where the focus was on the continuous evaluation of care and need for empowered advocates to ensure the best patient outcomes in the community setting.

Bob Mauch: I hope each of you take away from my prepared remarks today. that while we are performing well, there is no complacency at Cencora. While we execute driving performance in the short-term, we are laser-focused on building end-to-end capabilities and partnerships that will enable continued growth over the long-term.

Jim Cleary: In our international segment, we are navigating a period of market softness for some of our businesses. However, we are confident we are well positioned and expect to capture opportunities.

Speaker Change: By engaging in these forms, we develop a deeper understanding of our partners' needs and gain value for the perspective to allow us to better serve them and their patients.

Jim Cleary: As demand rebounds.

Speaker Change: I hope each of you take away from my prepared remarks today.

Bob Mauch: Strategically Deploying Capital, Investing in Talent, Digital Capabilities, and Enterprise Productivity. I want to end with another thank you to the Cencora team members. who guided by our purpose, drive a differentiated customer experience. actively learn and apply insights to drive innovation and deliver value for all of our stakeholders. We are united in our responsibility to create a healthier future.

Jim Cleary: While we are performing well there is no complacency at Syncora.

Jim Cleary: While we execute driving performance in the short term we are laser focused on building end to end capabilities and partnerships that will enable continued growth over the long term.

Speaker Change: And finally, we are strengthening our global leadership and specialty medications by deepening our offering across customer channels.

Exhibition for Strategic Imperative of Expanding Leadership and Specialty

Jim Cleary: Strategically deploying capital investing in talent digital capabilities and enterprise productivity.

International Scale, 3PL Service.

Speaker Change: I want to end with another thank you to the Suncor team members, who guided by our purpose.

Speaker Change: is differentiated as we serve pharmaceutical manufacturers who are increasingly seeking partners that can support products across multiple geographies.

Jim Cleary: With that, I will turn the call over to Jim for an in-depth review of our second quarter results and our updated fiscal 2025 guidance. Jim. Thanks, Bob. Good morning and good afternoon everyone.

Jim Cleary: I've a differentiated customer experience.

Speaker Change: Actively learn and apply insights to drive innovation.

We've been in our U.S. and European 3PL businesses. [inaudible]

Jim Cleary: And deliver value for all of our stakeholders.

Jim Cleary: We are United in our responsibility to create healthier futures.

Jim Cleary: As a reminder, before I turn to my prepared remarks, my remarks today will focus on our adjusted non-GAAP financial results. For a detailed discussion of our GAAP results, please refer to our earnings press release and presentation. In our second fiscal quarter, Cencora delivered strong financial performance as our teams capitalized on our pharmaceutical centric strategy. We benefited from our positioning and continued investment in attractive growing areas of the market like specialty, driving adjusted diluted EPS growth of 16%. To reflect our strong U.S.

creating an internationally unified network. [inaudible]

Speaker Change: By doing this, we offer manufacturers deep local expertise along with multinational reach for their products, driving successful launches and positioning Cencora as the partner of choice.

Jim Cleary: With that I will turn the call over to Jim for an in depth review of our second quarter results and our updated fiscal 2025 guidance Jim.

Speaker Change: Thanks, Bob Good morning, and good afternoon, everyone. As a reminder, before I turn to my prepared remarks, my remarks today will focus on our adjusted non-GAAP financial results for a detailed discussion of our GAAP results. Please refer to our earnings press release and presentation.

Speaker Change: In our second fiscal quarter, and Cora delivered strong financial performance as our teams capitalized on our pharmaceutical centric strategy.

Jim Cleary: healthcare solutions, earnings performance to date, and expectations for continued growth in the second half of the year, we are raising our full year guidance for adjusted operating income and adjusted diluted EPS.

Speaker Change: We benefited from our positioning and continued investment in attractive growing areas of the market like specialty driving adjusted diluted EPS growth of 16%.

Speaker Change: Our teams have developed solutions to address the needs of health systems large and small.

Jim Cleary: Before reviewing the revised guidance details, I'll first turn to a review of our consolidated second quarter results, starting with revenue. Our consolidated revenue was $75.5 billion, up 10%, primarily driven by revenue growth in the US health care solutions segment, as we continue to benefit from volume growth, including continued growth in GLP-1 products. Excluding sales of GLP-1s, our consolidated revenue growth would have been 8%. Turning now to gross profit, consolidated gross profit was $2.9 billion, up 15% due to growth in the U.S. healthcare solutions segment. Consolidated gross profit margin was 3.86%, an increase of 16 basis points, primarily driven by the gross profit contribution from our acquisition of Retina Consultants of America.

Speaker Change: To reflect our strong U S health care solutions earnings performance to date and expectations for continued growth in the second half of the year, we are raising our full year guidance for adjusted operating income and adjusted diluted EPS before reviewing the revised guidance details I'll first turn to a review of <unk>.

Speaker Change: Our solutions designed in partnership with leading health systems support comprehensive patient centric care.

Speaker Change: By investing in end to end solutions across sites of care, we strengthen our capabilities.

Speaker Change: Providers manufacturers and patients.

Speaker Change: Our consolidated second quarter results starting with revenue.

Speaker Change: In closing.

Speaker Change: And before I hand, it over to Jim.

Speaker Change: Our consolidated revenue was 75 $5 billion up 10%, primarily driven by revenue growth in the U S Health care solutions segment as we continued to benefit from volume growth, including continued growth in <unk> products, excluding sales of <unk>.

Speaker Change: The financial strength, we are reporting today.

Speaker Change: Powered by the size and organic.

Speaker Change: Of our U S segment.

Speaker Change: Resulting for many years.

Speaker Change: Our strategic investments and strong execution and leading partnerships.

Speaker Change: In our international segment, we are navigating a period of market softness for some of our businesses. However, we are confident we are well positioned.

Speaker Change: <unk> ones are consolidated revenue growth would have been 8%.

Speaker Change: Turning now to gross profit consolidated gross profit was $2 9 billion up 15% due to growth in the U S Health care solutions segment consolidated gross profit margin was 386% an increase of 16 basis points primarily drill.

Speaker Change: To capture opportunities as.

Speaker Change: As demand rebounds.

Speaker Change: I hope each of you take away from my prepared remarks today.

Jim Cleary: Moving now to operating expenses. In the quarter, consolidated operating expenses were $1.7 billion, up 15%, driven primarily by the RCA acquisition. Excluding RCA, operating expense growth was modest as we continue to focus on identifying and implementing productivity initiatives while also investing in our business and operations to support our customers' growth. The consolidated operating income was $1.2 billion, an increase of 15% compared to the prior year quarter due to excellent performance in our U.S.

Speaker Change: We are performing well there is no complacency at Suncor.

Speaker Change: We execute driving performance in the short term we are laser focused on building end to end capabilities and partnerships that will enable continued growth over the long.

Speaker Change: Given by the gross profit contribution from our acquisition of retina consultants of America.

Speaker Change: Moving now to operating expenses.

Speaker Change: Strategically deploying capital investing in talent digital capabilities and enterprise productivity.

Speaker Change: In the quarter consolidated operating expenses were $1 7 billion up 15% driven primarily by the RCA acquisition, excluding RCA operating expense growth was modest as we continue to focus on identifying and implementing productivity initiatives. While also in.

Speaker Change: I want to end with another thank you to this core team members, who guided by our purpose drive a differentiated customer experience actively learn and apply insights to drive innovation and.

Jim Cleary: healthcare solutions segment, which I will discuss in more detail in the segment-level results.

Speaker Change: Besting in our business and operations to support our customers' growth.

Speaker Change: And deliver value for all of our stakeholders.

Speaker Change: Consolidated operating income was $1 $2 billion, an increase of 15% compared to the prior year quarter due to excellent performance in our U S Health care solutions segment, which I will discuss in more detail in the segment level results.

Jim Cleary: Moving now to our net interest expense and effective tax rate for the second quarter, net interest expense was $104 million, an increase of $40 million versus the prior year quarter. This increase primarily reflects the interest expense associated with the $3.3 billion in recently issued senior notes and a term loan to finance a portion of the RCA acquisition on top of our intra-period short-term borrowings associated with typical seasonal factors minus the repayment of senior notes that matured in March, which we have not yet refinanced. Turning now to income taxes, our effective income tax rate was 20.8%.

Speaker Change: We are United in our responsibility to create healthier futures.

Speaker Change: With that I will turn the call over to Jim for an in depth review of our second quarter results and our updated fiscal 2025 guidance Jim.

Jim Cleary: Thanks, Bob.

Speaker Change: Moving now to our net interest expense and effective tax rate for the second quarter net interest expense was $104 million, an increase of $40 million versus the prior year quarter.

Jim Cleary: Good morning, and good afternoon, everyone.

Jim Cleary: As a reminder, before I turn to my prepared remarks, my remarks today will focus on our adjusted non-GAAP financial results for a detailed discussion of our GAAP results. Please refer to our earnings press release and presentation.

Speaker Change: The increase primarily reflects the interest expense associated with the $3 $3 billion in recently issued senior notes and the term loan to finance a portion of the RCA acquisition on top of our intra period short term borrowings associated with typical seasonal factors minus the re.

Jim Cleary: In our second fiscal quarter.

Jim Cleary: We delivered strong financial performance.

Jim Cleary: As our team capitalized on our pharmaceutical centric strategy.

Jim Cleary: We benefited from our positioning and continued investment in attractive growing areas of the market like specialty driving adjusted diluted EPS.

Jim Cleary: Given our year-to-date effective income tax rate, we would expect our full year tax rate to be slightly below 21%.

Speaker Change: Payment of senior notes that matured in March, which we have not yet refinanced.

Jim Cleary: Finally, our diluted share count was 195.1 million shares, a 3% decrease compared to the prior year quarter, driven by approximately $1.0 billion in opportunistic share repurchases over the past year, including $50 million in February in concurrence with Walgreens Boots Alliance's sale of shares. As we look to the balance of the fiscal year, we do not anticipate further share repurchases as we focus on deleveraging following the RCA acquisition.

Speaker Change: Turning now to income taxes, our effective income tax rate was 28% given our year to date effective income tax rate, we would expect our full year tax rate to be slightly below 21%.

Jim Cleary: 16%.

Jim Cleary: Our strong U S health care solutions earnings performance to date and expectations for continued growth in the second half of the year, we are raising our full year guidance for adjusted operating income and adjusted diluted EPS.

Speaker Change: Our diluted share count was $195 1 million shares at a 3% decrease compared to the prior year quarter, driven by approximately $1.01 billion in opportunistic share repurchases over the past year, including $50 million in February and concurrence with Walgreens Boots Alliance.

Jim Cleary: Before reviewing the revised guidance details I'll first turn.

Jim Cleary: Of our consolidated second quarter results starting with revenue.

Jim Cleary: Consolidated.

Jim Cleary: With $75 $5 billion up 10%, primarily driven by revenue growth in the U S Health care solutions segment.

Jim Cleary: Regarding our cash balance and adjusted free cash flow, we ended March with $2 billion of cash and year-to-date adjusted free cash flow slightly below $200 million as a result of strong adjusted free cash flow in our second quarter. We continue to expect full-year adjusted free cash flow to be in the range of $2 billion to $3 billion.

Speaker Change: <unk> sale of shares.

Speaker Change: As we look to the balance of the fiscal year, we do not anticipate further share repurchases as we focus on deleveraging following the RCA acquisition.

Jim Cleary: We continue to benefit from volume growth, including continued growth in <unk> products, excluding sales of DLP ones.

Speaker Change: Guarding our cash balance and adjusted free cash flow. We ended March with $2 billion of cash and year to date adjusted free cash flow slightly below $200 million as a result of strong adjusted free cash flow in our second quarter. We continue to expect full year adjusted free.

Jim Cleary: Revenue growth would have been 8%.

Jim Cleary: Turning now to gross profit consolidated gross profit was $2 9 billion up 15% due to growth in the U S Health care solutions segment consolidated gross profit margin.

Jim Cleary: This completes the review of our consolidated results.

Jim Cleary: Now I'll turn to our segment results for the second quarter.

Jim Cleary: In the U.S. Healthcare Solutions segment, revenue was $68.3 billion, up 11%, as we continue to see strong utilization trends, including growth in GLP-1s and growth in sales of specialty products to specialty physician practices and health systems, where we are particularly benefiting from our strategy of partnering with market leaders. In the quarter, sales of GLP-1 products increased $2.2 billion, or 36% year-over-year.

Jim Cleary: Right.

Speaker Change: Cash flow to be in the range of $2 billion to $3 billion.

Jim Cleary: 86%.

Jim Cleary: Increase of 16 basis points, primarily driven by the gross profit contribution from our acquisition of retina consultants of America.

Speaker Change: This completes the review of our consolidated results now I will turn to our segment results for the second quarter.

Speaker Change: In the U S Health care solutions segment revenue was $68 3 billion up 11% as we continued to see strong utilization trends, including growth in <unk> and growth in sales of specialty products to specialty physician practices and health systems.

Jim Cleary: Moving now to operating expenses in the quarter consolidated operating expenses were $1 $7 billion up 15% driven primarily by the RCA acquisition, excluding RCA operating expense growth was modest as we continue to focus on identifying and implementing.

Jim Cleary: While this is clearly a significant year-over-year increase, I will note that this represents a 10% sequential decline in GLP-1 sales from the first quarter. Excluding sales of GLP-1 products, U.S. segment revenue growth would have been 9% for the quarter.

Speaker Change: <unk>, where we are particularly benefiting from our strategy of partnering with market leaders.

Jim Cleary: <unk> productivity initiatives, while also investing.

Jim Cleary: And operations to support our customers' growth.

Speaker Change: In the quarter sales of <unk> products increased to $2 billion or 36% year over year.

Jim Cleary: Consolidated operating income was $1 $2 billion, an increase of 15% compared to the prior year quarter due to excellent performance in our U S Health care solutions segment, which I will discuss in more detail in the segment level results.

Speaker Change: While this is clearly a significant year over year increase I will note that this represents a 10% sequential decline in <unk> sales from the first quarter excluding.

Jim Cleary: Separately, I will note that, as previously contemplated, there is no significant increase in U.S. healthcare solutions revenue resulting from the acquisition of RCA, as sales from our specialty physician services business to RCA are now being eliminated in consolidation. U.S. Healthcare Solutions segment operating income increased 23% to $1.0 billion, driven by growth across our human and animal health distribution businesses and the contribution from RCA, offset by a smaller than expected COVID vaccine headwind. In the quarter, we saw particularly strong performance in specialty as utilization across health systems and specialty physician practices was robust, and we benefited from the continued uptake of biosimilars in these customer channels.

Speaker Change: Excluding sales of <unk> products U S segment revenue growth would have been 9% for the quarter separately I will note that as previously contemplated there is no significant increase in U S health care solutions revenue, resulting from the acquisition of RCA as sales from our specialty.

Jim Cleary: Moving now to our net interest expense and effective tax rate for the second quarter net interest expense was $104 million, an increase of $40 million versus the prior year.

Jim Cleary: The quarter. This increase primarily reflects the interest expense associated with it.

Speaker Change: <unk> services business to RCA are now being eliminated in consolidation.

Jim Cleary: $3 billion in recently issued senior notes and the term loan to finance a portion of the RCA acquisition.

Speaker Change: U S health care solutions segment operating income increased 23% to 1.0 billion.

Jim Cleary: On top of the box intra period short term borrowings associated with typical seasonal factors minus the repayment of senior notes that matured in March which we have not yet refinanced.

Speaker Change: Driven by growth across our human and animal health distribution businesses and the contribution from <unk> offset by a smaller than expected COVID-19 vaccine headwind in.

Jim Cleary: Turning now to income taxes, our effective income tax rate was 28%.

Jim Cleary: As it relates to COVID, in the quarter, we saw higher than expected sales of COVID-19 vaccines that resulted in our COVID-related headwind being approximately half the size we indicated on our first quarter earnings call.

Speaker Change: In the quarter, we saw particularly strong performance in specialty at utilization across health systems, and specialty physician practices was robust and we benefited from the continued uptake of Biosimilars and these customer channels.

Jim Cleary: Given our year to date effective.

Jim Cleary: We would expect our full year tax rate to be slightly below 21%.

Jim Cleary: Finally, our diluted share count was $195 1 million shares at 3% decrease compared to the prior year quarter.

Jim Cleary: I will now turn to our International Healthcare Solutions segment. In the quarter, International Healthcare Solutions revenue was $7.2 billion, up approximately 1% on an as-reported basis, and up 6% on a constant currency basis due to our growth at our European distribution business. International Healthcare Solutions operating income was $159 million, down 17% on an as-reported basis, and down 14% on a constant currency basis.

Speaker Change: As it relates to Covid in the quarter, we saw higher than expected sales of COVID-19 vaccines that resulted in our COVID-19 related headwind being approximately half the size, we indicated on our first quarter earnings call.

Jim Cleary: Approximately 1.0 billion.

Jim Cleary: Opportunistic share repurchases over the past year, including.

Jim Cleary: In February.

Speaker Change: I will now turn to our international Health care solutions segment in the quarter International Healthcare solutions revenue was $7 2 billion up approximately 1% on an as reported basis and up 6% on a constant currency basis due to our growth at our European distribution business.

Jim Cleary: Larry and concurrent with <unk>.

Jim Cleary: Boots alliance's sale of shares.

Jim Cleary: As we look to the balance of the fiscal year, we do not.

Jim Cleary: Further share repurchases as we focus on deleveraging following the RCA acquisition.

Jim Cleary: The decline was driven by continued softness for our global specialty logistics business as clinical trial activity remained subdued. And we had a difficult comparison for our European distribution business due to manufacturer's price adjustments in a developing market country in the prior year, which we called out on our second quarter earnings call last year. Excluding the impact of the manufacturer's price adjustments, we saw solid operational performance within our European distribution business, particularly in 3PL.

Jim Cleary: <unk> balanced.

Jim Cleary: Balanced and adjusted free cash flow, we ended March with $2 billion.

Speaker Change: International Health care solutions operating income was $159 million down 17% on an as reported basis and down 14% on a constant currency basis. The decline was driven by continued softness for our global specialty logistics business, that's clinical trial activity remains subdued.

Jim Cleary: And year.

Jim Cleary: Adjusted free cash flow.

Jim Cleary: $200 million has.

Jim Cleary: As a result of strong adjusted free cash flow in our second quarter, we continue to expect full year.

Jim Cleary: Adjusted free cash flow to be in the range of $2 billion to $3 billion.

Speaker Change: Dude.

Speaker Change: And we had a difficult comparison for our European distribution business due to manufacturers price adjustments and a developing market country in the prior year, which we called out on our second quarter earnings call last year, excluding the impact of the manufacturer's price adjustments we saw solid.

Jim Cleary: This completes the review.

Jim Cleary: Solid dated results now I'll turn to our segment results for the second quarter.

Jim Cleary: That completes the review of our segment level results.

Jim Cleary: In the U S Health care solutions segment revenue was $68 3 billion up 11% as we continued to see strong utilization trends, including growth in G. L. P ones.

Jim Cleary: I will now discuss our updated fiscal 2025 guidance expectations. As a reminder, we do not provide forward looking guidance for certain metrics on a gap basis. So the following information is provided on an adjusted non gap basis, except with respect to revenue and share count. I will also provide certain guidance metrics on a constant current. I will start with adjusted diluted EPS guidance and then provide detail on the income statement items contributing to the income. We are raising and narrowing our fiscal 2025 EPS guidance, and now expect EPS to be in the range of $15.70 to $15.95, up from our previous range of $15.30 to $15.60, and representing growth of 14% to 16%.

Speaker Change: Operational performance within our European distribution business, particularly in <unk>.

Speaker Change: That completes the review of our segment level results I will now discuss our updated fiscal 2025 guidance expectations. As a reminder, we do not provide forward looking guidance for certain metrics on a GAAP basis. So the following information is provided on an adjusted non-GAAP basis, except with respect to revenue and share count.

Jim Cleary: Growth in sales of specialty products to specialty physician practices and health systems, where we are particularly benefiting from our strategy.

Jim Cleary: Partnering with market leaders.

Jim Cleary: In the quarter.

Jim Cleary: Sales of <unk> products increased 2.2.

Speaker Change: I will also provide certain guidance metrics on a constant currency basis.

Jim Cleary: Or 36% year over year.

Jim Cleary: While this is clearly a significant year over year increase.

Speaker Change: I will start with adjusted diluted EPS guidance, and then provide detail on the income statement items contributing to the increase.

Jim Cleary: Note that this represents a 10% sequential decline.

Speaker Change: We are raising and narrowing our fiscal 2025, EPS guidance and now expect EPS to be in the range of $15 72.

Jim Cleary: Okay.

Jim Cleary: From the first quarter exclude.

Jim Cleary: Excluding sales of <unk> products U S segment revenue growth.

Jim Cleary: The updated guidance reflects our strong second quarter operating income performance in the U.S. healthcare solution segment and a lower expected contribution from the international healthcare solution segment. Additionally, in connection with consolidating the operating results of RCA, we made the accounting determination that the approximately 15 percent of equity that is owned by RCA positions and management represents a contingent liability to Cencora as opposed to a non-controlling interest. Cencora will be consolidating the entirety of RCA with no non-controlling interest elimination at the net income and EPS level. Our prior guidance assumed a non-controlling interest reduction in EPS.

Jim Cleary: It's been 9% for the quarter.

Speaker Change: To $15 95.

Separately I will note that as previously contemplated.

Speaker Change: Up from our previous range of $15 30 to $15 60.

Jim Cleary: There is no significant increase.

Jim Cleary: Okay.

Speaker Change: And representing growth of 14% to 16%.

Jim Cleary: Solutions revenue, resulting from the acquisition of our CA as sales from our specialty physician services business to RCA are now being eliminated in consolidation.

Speaker Change: The updated guidance reflects our strong second quarter operating income performance in the U S Health care solutions segment, and a lower expected contribution from the international Health care solutions segment. Additionally.

Jim Cleary: U S health care solutions segment operating income increased 20.

Speaker Change: Additionally, in connection with consolidating the operating results of RCA, we made the accounting determination that the approximately 15% of equity that is owned by RCA positions and management represents at contingent liability ticks in Cora as opposed to a noncontrolling interest.

Jim Cleary: Percent to $1.0 billion driven.

Jim Cleary: Driven by growth across our human and animal health.

Jim Cleary: Distribution businesses and the contribution from <unk> offset by a smaller than expected COVID-19 vaccine headwinds.

Jim Cleary: Therefore, this determination will result in a higher than expected EPS contribution from RCA for the fiscal year but has no impact on our operating income results or operating income guidance. We are pleased with the integration progress we are making with the RCA team and are excited about the opportunities we have to drive positive patient outcomes by leveraging our collective. Now moving to revenue, our consolidated revenue guidance is unchanged, and we expect growth to be in the range of 8 to 10 percent. At the segment level, we are updating our international health care solutions segment revenue growth outlook and now expect, as reported, revenue growth to be in the range of 3 to 4 percent, down from our previous range of 4 to 5 percent.

Jim Cleary: In the quarter, we saw particularly strong performance in specialty at utilization.

Speaker Change: Send coral will be consolidating the entirety of RCA with no noncontrolling interest elimination at the net income and EPS level. Our prior guidance assumed a noncontrolling interest reduction in EPS. Therefore, this determination will result in a higher than expected EPS contribution from.

Jim Cleary: Utilization across health systems, and specialty physician practices with road.

Jim Cleary: And we benefited from it.

Jim Cleary: Continued uptake of Biosimilars and these customer channels.

Jim Cleary: As it relates to Covid.

Jim Cleary: However, we saw higher than expected sales of COVID-19 vaccines that resulted in our COVID-19 related headwind being approximately half the size, we indicated on our first quarter earnings call.

Speaker Change: <unk> for the fiscal year, but has no impact on our operating income results or operating income guidance. We are pleased with the integration progress we are making with the <unk> team and are excited about the opportunities we have to drive positive patient outcomes by leveraging our collective strengths.

Jim Cleary: I will now turn to our international Health care solutions segment in the quarter International Healthcare solutions revenue was $7 2 billion.

Speaker Change: Now moving to revenue our consolidated revenue guidance is unchanged and we expect growth to be in the range of 8% to 10% at the segment level. We are updating our international health care solutions segment revenue growth outlook and now expect as reported revenue growth to be in the range of 3% to 4% down from our previous range of 4% to 5%.

Jim Cleary: On a constant currency basis, we now expect international health care solutions segment revenue growth to be in the range of 6 to 8 percent, down from the previous range of 7 to 9 percent. While we are leaving our revenue guidance unchanged at both the consolidated and U.S. health care solution segment level, we anticipate our growth will be at the bottom end of the respective ranges. In the second half of the year, we will see revenue growth impacted by a couple of factors, including beginning to lap tougher GLP-1 growth comparisons in the second half, when the market saw product supply constraints subside in the prior year, and declining sales of high-priced mail-order products, which now have biosimilar competition and PBM formularies.

Jim Cleary: 100% on an as reported basis and up 6% on a constant currency basis due to our growth in our European distribution business.

Jim Cleary: International Healthcare solutions operating income was $159 million.

Speaker Change: On a constant currency basis, we now expect international Health care solutions segment revenue growth to be in the range of 6% to 8% down from the previous range of 7% to 9%.

Jim Cleary: 17% on an as reported basis and down 14% on a constant currency basis.

Jim Cleary: Driven by continued softness.

Speaker Change: While we are leaving our revenue guidance unchanged at both the consolidated and U S Health care solutions segment level, we anticipate our growth will be at the bottom end of their respective ranges in the second half of the year, we will see revenue growth impacted by a couple of factors, including beginning to lap tougher <unk> one growth comparisons.

Jim Cleary: Okay.

Jim Cleary: Business.

Jim Cleary: Clinical trial activity remained subdued.

Jim Cleary: Got it.

Jim Cleary: Comparison for our European distribution business.

Jim Cleary: Demand.

Jim Cleary: Price adjustments and a developing market country.

Jim Cleary: These dynamics contribute to the lower revenue growth expected in the second half of the year, but are positive for our profit. Moving to operating income, we expect consolidated operating income growth to be in the range of 13.5% to 15.5% up from our previous guidance of 11.5% to 13.5%. In the U.S. healthcare solutions segment, we now expect operating income growth to be in the range of 17.5% to 19.5% up from our prior range of 14.5% to 16.5%. The updated guidance reflects our strong business performance to date and continued good pharmaceutical utilization. Turning now to international healthcare solutions segment.

Jim Cleary: Year.

Speaker Change: In the second half when the market soft product supply constraints subside in the prior year and declining sales of high priced mail order products, which now have biosimilar competition in ppm formularies. These dynamics contributed to the lower revenue growth expected in the second half of the year, but are positive for our profit.

Jim Cleary: We called out on our second quarter earnings call.

Jim Cleary: Sure.

Jim Cleary: Excluding the impact of manufacturer price adjustments.

Jim Cleary: We saw solid operational.

Jim Cleary: Okay.

Jim Cleary: Our European distribution business, particularly in <unk>.

Jim Cleary: That completes the review our segment level results.

Speaker Change: <unk>.

Speaker Change: Moving to operating income, we expect consolidated operating income growth to be in the range of $13 five to 15, 5% up from our previous guidance of 11, 5% to 13, 5% in the U S Health care solutions segment, we now expect operating income growth to be in.

Jim Cleary: I will now discuss our updated.

Jim Cleary: 2020 guidance expectations as a reminder, we do not provide forward looking guidance.

Jim Cleary: Okay.

Jim Cleary: Metrics on a GAAP basis. So the following information is provided.

Jim Cleary: Non.

Jim Cleary: Yes.

Speaker Change: The range of 17, 5% to 19, 5% up from our prior range of 14, 5% to 16, 5% the updated.

Jim Cleary: Except with respect to revenue and share count.

Jim Cleary: On an as reported basis, we now expect operating income to be down 4% to down 1% versus our prior expectations for operating income to be flat. The updated guidance range reflects the continued demand softness in the clinical trial and outsourced pharma services markets impacting our full year expectations for our higher margin businesses in this segment. Offset in part by the positive impact of the weakening of the US dollar against other. On a constant currency basis, we now expect segment operating income to be down 3% to flat. Moving to share count, we now expect diluted weighted average shares outstanding to be in the range of $195 million to $195.5 million based on our current share That concludes our updated full year guidance assembly.

Jim Cleary: Also provides certain guidance metrics on a constant currency basis.

Jim Cleary: I will start with adjusted diluted EPS guidance, and then provide detail on.

Speaker Change: Guidance reflects our strong business performance to date and continued good pharmaceutical utilization.

Jim Cleary: Contributing to the increase.

Speaker Change: Turning now to international Health care solutions segment on an as reported basis. We now expect operating income to be down 4% to down 1% versus our prior expectations for operating income to be flat. The updated guidance range reflects the continued demand softness in the clinical trial in <unk>.

Jim Cleary: We are racing.

Jim Cleary: Total 2025 EPS guidance.

Jim Cleary: Now expect.

Jim Cleary: Yes.

Jim Cleary: The range of $15 70.

Jim Cleary: $15 95.

Jim Cleary: From our previous range.

Speaker Change: Outsourcing pharma services markets impacting our full year expectations for our higher margin businesses. In this segment offset in part by the positive impact of the weakening of the U S. Dollar against other currencies on a constant currency basis. We now expect segment operating income to be down 3% to flat moving to.

Jim Cleary: Okay.

Jim Cleary: <unk>.

Jim Cleary: $15 60, and represents growth of 14% to 16%.

Jim Cleary: The updated guidance reflects our strong second quarter operating income performance.

Jim Cleary: Health care solutions segments.

Jim Cleary: Lower expected contribution from the international Health care solutions segment.

Jim Cleary: In closing, the Cencora team has delivered another strong quarter of financial performance as our team members work collaboratively with our customers and partners to drive a differentiated experience through their expertise and solutions-oriented approach. Our team members and our strategic partnerships are foundational to our success. Our continued investment in the team's development, our focus on enhancing capabilities and emphasis on productivity will further enhance our ability to drive value for all our stakeholders.

Speaker Change: Share count, we now expect diluted weighted average shares outstanding to be in the range of 195 million to $195 5 million based on our current share count.

Jim Cleary: Additionally, in connection with consolidating the operating results of RSV.

Jim Cleary: We made.

Jim Cleary: Accounting determination.

Speaker Change: That concludes our updated full year guidance assumptions in.

Jim Cleary: 15%.

Speaker Change: In closing the <unk> team has delivered another strong quarter of financial performance as our team members worked collaboratively with our customers and partners to drive a differentiated experience through their expertise and solutions oriented approach our team members and our strategic <unk>.

Jim Cleary: Owned by ourselves.

Jim Cleary: <unk> and management.

Jim Cleary: Okay.

Jim Cleary: Yes.

Jim Cleary: Okay.

Jim Cleary: As opposed to a noncontrolling interest.

Jim Cleary: Consolidating the entire RCA.

Jim Cleary: Okay.

Jim Cleary: Okay.

Operator: Now I will turn the call over to the operator to open the line for questions.

Jim Cleary: At the net income.

Speaker Change: <unk> ships are foundational to our success.

Jim Cleary: Okay.

Jim Cleary: Our guidance assumes a noncontrolling interest reduction in EPS.

Speaker Change: Our continued investment in the team's development, our focus on enhancing capabilities and emphasis on productivity will further enhance our ability to drive value for all our stakeholders now I will turn the call over to the operator to open the line for questions operator.

Operator: Operator. Thank you. To ask a question, please press star followed by one on your telephone keypad. change your mind please press star followed by preparing to ask your question please ensure your device is unmuted locally.

Jim Cleary: This determination will result.

Jim Cleary: Okay.

Jim Cleary: EPS.

Jim Cleary: From RCA for the fiscal year.

Jim Cleary: No impact on our operating income results core operating income guidance.

Operator: We ask participants to limit their questions to one question per person.

Speaker Change: Thank you to ask a question. Please press star followed by one on your telephone keypad now.

Elizabeth Anderson: first comes from Elizabeth Anderson of Evercore ISI. Your line is now open, please go ahead. Hi guys. Thanks so much for the question and congrats on the quarter. Maybe I just wanted to dig into the strength and the AOI of the U.S. health care business. Given that strength that we saw in the quarter, how do you kind of see that playing out for the rest of the year? And then, you know, if we talk about some of the drivers on a longer term basis, you know, how do we, how do we see the sort of continuation of those over a longer, over the longer period?

Jim Cleary: We are pleased with the integration and progress we are making.

Jim Cleary: <unk>.

Speaker Change: You changed your mind, Please press star followed by.

Jim Cleary: And about the opportunities we have.

Speaker Change: When preparing to ask a question. Please ensure your devices and muted locally.

Jim Cleary: The patient outcomes by leveraging our collective strength.

Speaker Change: We ask participants to limit their questions to one question type Hudson.

Jim Cleary: Moving to revenue our consolidated revenue guidance is unchanged and we expect growth to be in the range of 8% to 10% at the segment level. We are updating our international health care solutions segment revenue growth outlook and now expect.

Speaker Change: Our first comes from and this is the fifth Anderson of Evercore ISI. Your line is now open. Please go ahead.

Speaker Change: Hi, guys. Thanks, so much for the question and congrats on the quarter.

Speaker Change: Maybe I just wanted to dig into the strength in the ally.

Jim Cleary: I think the growth to a range of 3% to 4% down from our previous range of 4% to 5%.

Bob Mauch: Thanks. Hi, Elizabeth. Thanks for the question. This is Bob. I'll take that one.

Speaker Change: The U S healthcare business given the strength that we saw in the quarter. How do you kind of see that playing out for the rest of the year and then if we talk about some of the drivers on a longer term basis.

Jim Cleary: On a constant currency.

Jim Cleary: Now expect international healthcare.

Bob Mauch: And I think you know where you got in your question in terms of the of the drivers are, are how all how I'll answer because when you when you think about Cencora, I think there are three things to think about when you when you're looking at kind of long term performance, and we do believe our strong performance will continue. You know, one is how well we're positioned in the growing parts of the pharmaceutical market. So, you know, obviously, we talked a lot about how well we're positioned in the specialty market. That is where, you know, most of the innovation in the pharmaceutical industry is happening.

Jim Cleary: Okay.

Jim Cleary: Growth to be in the range of 6% to 8%.

Speaker Change: How do we how do we see this sort of continuation of dose over a longer over the.

Jim Cleary: From the previous seven.

Jim Cleary: 7% to 9%.

Speaker Change: The longer period.

Jim Cleary: While we are leaving our guidance unchanged.

Speaker Change: Yeah.

Bob: Hi, Thanks for the question. This is Bob I'll take that one.

Jim Cleary: Consolidated and U S health care solutions segment level, we anticipate our growth will be at the bottom end of their respective ranges.

Bob: And I think where you got in your question in terms of the of the drivers are for how all how I'll answer Chris when you think about Suncor I think there are three things to think about when you when youre looking at kind of long term performance and we do believe our strong performance will continue one is.

Jim Cleary: In the second half of the year, we will see revenue growth impact.

Jim Cleary: Factors, including.

Jim Cleary: To lap tougher.

Jim Cleary: Q1 growth comparisons in the second half.

Bob Mauch: And we're very well positioned there with the biopharma manufacturers. And we certainly expect our position to continue and the innovation to continue. The second piece is how well we're positioned with providers. And, you know, we spend a lot of time, again, talking about our strengths in the independent community specialty practices, which is excellent. And we expect that to continue. But we're also very well positioned, you know, across the continuum of sites of care from, you know, the largest pharmacies to the smallest community pharmacies, to specialty pharmacy, highlighted health systems today, and the prepared remarks. So, we look at the market growth in terms of product innovation and specialty.

Jim Cleary: Supply constraints subside.

Bob: How well we're positioned in the growing parts of the pharmaceutical market. So obviously, we talk a lot about how well we're positioned in the specialty market that is where.

Jim Cleary: Okay.

Jim Cleary: And declining sales of higher priced.

Jim Cleary: Products, which now have biosimilar competition and Pbms formulary.

Bob: Most of the innovation in the pharmaceutical industry.

Jim Cleary: These dynamics contributed to the lower revenue growth expected in the second half of the year, but for.

Bob: Is happening and we're very well positioned there with the Biopharma manufacturers and we certainly expect our positioning to continue and the innovation to continue the second pieces.

Jim Cleary: For our margins.

Jim Cleary: Moving to operating income we expect.

Jim Cleary: Consolidated.

Jim Cleary: Income growth to be in the range.

Jim Cleary: Okay.

Bob: How well, we're positioned with with providers and risk.

Jim Cleary: To 15, 5%.

Jim Cleary: Up from our previous guidance of 11, 5% to 13, 5%.

Bob: We spend.

Bob: A lot of time again talking about our strengths and the independent community specialty practices, which is.

Jim Cleary: Health care solutions.

Jim Cleary: We now expect operating income growth to be in the range of $17 519.

Bob: Excellent and we expect that to continue but we're also very well positioned across.

Bob: The continuum of sites of care from the largest <unk>.

Jim Cleary: <unk>.

Bob Mauch: We're well positioned there. When you think about the provider base, we're very well positioned there.

Jim Cleary: From our prior range of 14, 5% to 16, 5% the updated guidance reflects our strong business performance to date and continued good pharmaceutical utilization.

Bob: Pharmacies to the smallest community pharmacies.

Bob: Specialty pharmacy.

Bob Mauch: And the third and important piece is just the excellent purpose-driven team members that we here at Sancora, who are spending a lot of time, you know, thinking about not just how do we execute in the short term, but how are we going to continue to innovate, you know, build services and build partnerships for the long term. And, you know, also referencing back to my prepared remarks, made a specific point of the amount of time that Sancora leaders are spending out with industry stakeholders, whether that's in Washington, D.C., or our provider customers, once again. And the intention there is to make sure that we're, you know, we're listening carefully, we're learning, we bring that back to the organization that allows us to be meeting the needs and exceeding the needs of those provider customers.

Bob: I highlighted health systems today.

Bob: The prepared remarks, so we look at the market growth in terms of.

Jim Cleary: Turning now to international Health care.

Bob: Product innovation in specialty we are well positioned there when you think about the provider.

Jim Cleary: Okay.

Jim Cleary: On an as reported basis, we now.

Bob: Base, we're very well positioned there in the third.

Jim Cleary: Okay.

Jim Cleary: Operator.

Jim Cleary: Down 4% to down 1% versus our prior expectations for operating income to be flat.

Bob: And important piece is just the excellent purpose driven team members that we have here at Suncor.

Jim Cleary: The updated guidance range reflects the continued demand softness in the clinical trial and outsourced pharma services.

Bob: Who are spending a lot of time thinking about not just how do we execute.

Bob: In the short term, but how are we going to continue to innovate.

Jim Cleary: Okay.

Jim Cleary: Impacting our full year expectations for our higher margin businesses in this segment offset in part by the positive impact from that.

Bob: Build services and build partnerships for the long term and also referencing back to.

Bob: My prepared remarks, maybe a specific point of the amount of time that suncor leaders are spending out.

Jim Cleary: Against other currencies on a constant currency basis, we now expect segment operating income to be down 3% to flat.

Bob: With industry stakeholders, whether that's in Washington, D C or our provider customers once again and the intention there is to make sure that we're we're <unk>.

Bob Mauch: So, I think when you think about the market growth, how well we're positioned, and then the, honestly, the growth mindset that we have at Sancora and our commitment to actively learning and continue to innovate, it's what gives us belief that the performance will continue over the long term.

Jim Cleary: Moving to share count.

Jim Cleary: Our diluted weighted average shares outstanding.

Bob: Listening carefully we're learning we bring that back to the organization that allows us to be meeting the needs and exceeding the needs of those provider customers. So I think when you think about the market growth how well we're positioned in the.

Jim Cleary: And the range of 100.

Jim Cleary: Right.

Jim Cleary: $295 million based on our current accounts.

Jim Cleary: That concludes our updated full year guidance.

Michael Cherny: Michael Cherny of Leroy. Your line is now open, please go ahead. Thanks for taking the question and again, congrats on another strong beat and raise.

Bob: Honestly the growth mindset that we have at Suncor and our commitment to actively learning and continue to innovate. It's what gives us the belief that the performance will continue over the long term.

Jim Cleary: In closing the core team has.

Jim Cleary: Another.

Jim Cleary: Quarter of financial performance.

Jim Cleary: Okay.

Jim Cleary: As our team members working collaboratively with our customers and partners to drive a differentiated experience through their expertise and solutions.

Michael Cherny: Maybe about to parse through Elizabeth's question a little bit more and particularly dive in more on specialty. Cencora has a long history of being a market leader on all things specialty oriented. As you think about the contributors of specialty to growth, how much can you unpack in terms of what you see as market growth versus share gains versus additional value add services and add on being able to build out? We'd agree with the fact that you're in the right place on a go forward basis relative to the markets growing, but curious as the market continues to grow in various different pacing where you see the best opportunities for outperformance beyond that.

Speaker Change: Our next question comes from Michael Cherny of NAREIT <unk>.

Speaker Change: Capital. Your line is now open. Please go ahead.

Jim Cleary: Okay.

Jim Cleary: Approach.

Michael Cherny: Thanks for taking the question and again congrats on another strong beat and raise.

Jim Cleary: Team members and our strategic partnerships are foundational to our success our continued investment in the teens development.

Speaker Change: Maybe the above to parse through Elizabeth question, a little bit more in particularly dive in more on specialty.

Jim Cleary: Focus on enhancing capabilities and emphasis on productivity will further enhance our ability to drive value for all our stakeholders.

Speaker Change: <unk> has a long history of being a market leader on all things specialty oriented as you think about the contributors of specialty to growth how much can you unpack in terms of what you see is market growth versus share gains versus additional value added services and add on being able to build out.

Jim Cleary: Now I will turn the call over to the operator to open the line for questions operator.

Jim Cleary: Okay.

Jim Cleary: Key to ask a question.

Jim Cleary: Okay.

Jim Cleary: One on your telephone keypad now.

Speaker Change: You are very much we would agree with the fact that you're in the right place on a go forward basis relative to the market is growing but curious as the market continues to grow in various different.

Jim Cleary: If you change your mind. Please press star followed by then.

Jim Cleary: Yeah, so thanks a lot for the question, Michael. I'll, I'll take a shot at it. And so, you know, we, we saw terrific results, really extraordinary results in the first half in our US business. In fact, if we, you know, kind of look at our, our Q2 beat, really, all of the US Q2 beat versus our internal expectations is due to organic growth from our core US distribution business. And, you know, of course, we've talked about some time that that's, you know, driven by utilization trends, it's driven by broad based performance. And in particular, it's driven by sales of specialty products to physician practices and health systems. And so I would say, you know, the, as we look at specialty, it's really been, it's been broad based performance.

Speaker Change: When preparing to ask a question. Please ensure your devices Amit.

Jim Cleary: Okay.

Jim Cleary: We ask participants to limit their questions to one question and that passion.

Speaker Change: Pacing, where you see the best opportunities for outperformance beyond that.

Jim Cleary: Our first comes from Elizabeth Anderson.

Speaker Change: Cool ISI. Your line is now open. Please go ahead.

Speaker Change: Yeah. So thanks, a lot for the question Michael.

Speaker Change: Hi, guys.

Speaker Change: I'll take a shot at it and so we we.

Speaker Change: Thanks, so much for the question and congrats on the quarter.

Speaker Change: We saw terrific results really extraordinary results in the first half and our U S business in fact, if we.

Speaker Change: Maybe I just wanted to dig into the strength.

Speaker Change: Hi.

Speaker Change: The U S healthcare business given that strength that we saw in the quarter. How do you kind of see that playing out for the rest of the year and then if we talk about some of the drivers on a longer term basis.

Speaker Change: Look at our.

Speaker Change: Our Q2 beat really all of the U S Q2 beat versus our internal expectations is due to organic growth from our core U S distribution business and of course, we talked about some time that that's driven by utilization trends, it's driven by raw.

Speaker Change: Okay.

Speaker Change: How do we how do we see this sort of continuation of dose over a lot of it.

Speaker Change: Over the longer period.

Speaker Change: Hi, Thanks for the question. This is Bob I'll I'll take that one.

Speaker Change: And I think where you got in your question in terms of the of the drivers are for how all.

Jim Cleary: And it's been, you know, very good results, both with regard to physician practices, and health systems. And then, of course, you know, our recent acquisition of RCA, and our investment in 2023 of One Oncology, we look at that as really the natural evolution of our specialty business, because of course, we're very strong in distribution, we're very strong in wraparound services like GPO. And so we view the MSO space is adding, you know, additional value added services to the same customer base that we've had terrific success with for quite some time. And so thanks a lot for the question.

Speaker Change: Base performance and in particular, it's driven by sales of specialty products to physician practices and health systems, and so I would say.

Speaker Change: How I'll answer Chris when you when you think about Suncor I think there are three.

Speaker Change: Things to think about when you when youre looking at kind of long term performance and we do believe are strong.

As we look at specialty it's really been.

Speaker Change: It's been broad based performance and it's been very good results, both with regard to physician practices and health systems, and then of course, our recent acquisition of <unk>.

Speaker Change: Performance will continue one is.

Speaker Change: How well we're positioned in the growing parts of the pharmaceutical market. So obviously, we talk a lot about how well we're positioned in the specialty market that is where.

Speaker Change: Our CA and dark.

Speaker Change: <unk>.

Speaker Change: Okay.

Speaker Change: <unk> in 2023, one oncology, we'd look at that is really the natural evolution of our specialty business because of course, we're very strong in distribution were very strong and wraparound services like GPO and so we view the MSR space is adding additional.

Speaker Change: In the pharmaceutical industry.

Speaker Change: Is happening and we're very well positioned there.

Speaker Change: With the Biopharma manufacturers.

Speaker Change: Sure.

Bob Mauch: And I think Bob has something he'd like to add. Yeah, thanks, Jim. And Michael, I would just add, you know, our commitment to continue to invest in the strengths that we have, you know, you've seen over a period of time, we're investing in services, the MSO expansion is a good example of that. And we're going to continue to make those investments as we as we move forward to make sure that we're, we're positioned well to support the biopharma manufacturers as well as the provider. So we think that that intention to do that the commitment that we have to do that will allow us to continue to perform well.

Speaker Change: Our positioning to continue.

Speaker Change: Okay.

Speaker Change: Two.

Speaker Change: Continue the second pieces.

Speaker Change: Well, we're positioned with with providers and.

Speaker Change: <unk> added services to the same customer base that we've had terrific success with for quite some time and so thanks, a lot for the question and I think Bob has something he'd like to add yeah. Thanks, Jim and Michael I would just add.

Speaker Change: We spend.

Speaker Change: A lot of time again talking about our strengths and the independent community specialty practices, which is.

Speaker Change: Excellent and we expect that to continue.

Bob: Our commitment to continue to invest in the strengths that we have there you've seen over a period of time, we are investing in services. The MSR expansion is a good exam.

Speaker Change: But we're also very well positioned across.

Speaker Change: The continuum of site of care from the largest.

Speaker Change: Pharmacies to the smaller community pharmacies to specialty pharmacy.

Bob: Example of that and we're going to continue to make those investments as we as we move forward to make sure that we're positioned well to support the biopharma manufacturers as well.

Speaker Change: Highlighted health systems today.

Lisa Gill: Our next question is from Lisa Gill from JP Morgan. Your line is now open. Please go ahead. Great. Thanks very much, and good morning. Congrats on the quarter.

Speaker Change: Prepared remarks.

Speaker Change: So.

Speaker Change: The market growth in terms of.

Bob: As a provider so we think that.

Bob: That intention to do that as a commitment.

Speaker Change: Product innovation.

Speaker Change: Well position there when you think about the <unk>.

Lisa Gill: I wanted to focus on D.C. and, you know, the thoughts around tariffs. It's believed that the Trump administration will come out with something in the next week or so. Can you just remind us on each side of your business, my understanding would be on the branded side, kind of similar to what we saw on the flip side with insulin, when prices go down, your economics kind of stay the same. Is there any variability if we were to think that prices go up? And then there's been a lot of questions on the generic side. If we think back to when there was generic price inflation, and again, a tariff could add some kind of inflationary component to this.

Bob: That we have to do that will allow us to continue to perform well.

Speaker Change: Rider base.

Speaker Change: Base, we're very well.

Speaker Change: Position there in the third.

Speaker Change: Our next question is from Lisa Gill from Jpmorgan. Your line is now open. Please go ahead.

Speaker Change: And important piece is just the excellent purpose driven team members that we have here at Suncor.

Lisa Gill: Great. Thanks, very much and good morning, and congrats on the quarter.

Speaker Change: Spending on.

Speaker Change: I'm thinking.

Lisa Gill: I wanted to focus on DC and the thoughts around tariffs. It is believed that the Trump administration will come out with something in the next week or so can you just remind us on each side of your business my understanding would be on the branded side kind of similar to what we saw in the flip side with insulin when prices go down your economics kind of stay the same is there any variability if we Richard.

Speaker Change: Thinking about not just how do we execute.

Speaker Change: In the short term, but how are we going to continue to innovate.

Speaker Change: Building services and build partnerships for.

Speaker Change: The long term and you're also referencing back to my.

Speaker Change: <unk> prepared remarks.

Lisa Gill: How do we think about each of those components and how it impacts your business and how you're thinking about it for your customer?

Speaker Change: Specific point of the amount of time <unk>.

Lisa Gill: Think that prices go up.

Speaker Change: Okay.

Speaker Change: With industry stakeholders, whether that's in <unk>.

Lisa Gill: And then there's been a lot of questions on the generic side. If we think back to win that race generic price inflation and again Tara could add some kind of inflationary component to that how do we think about each of those components and how it impacts your business and how youre thinking about it for your customer.

Lisa Gill: Yeah, sure. I'll take a stab at that. Lisa, thanks a lot for the question. And of course, we continue to monitor the evolutions around tariffs in the pharmaceutical market. We have teams in place that are analyzing the impact of tariffs on our business and very importantly, on the supply chain. And to answer your question, what I'll say is as it relates to our business, we have not called out any material impacts as a result of tariffs. As a reminder, we're pharmaceutical centric and the manufacturers are the importer of record for pharmaceuticals. Now, to get to part of your question, our main focus is ensuring patients have access to lifesaving medications, and we're supporting our upstream and downstream partners as they navigate the uncertainty.

Speaker Change: Washington D C.

Speaker Change: Correct.

Speaker Change: Our provider customers once again and the intention there is to make sure that we're.

Speaker Change: Carefully we're learning we bring that back to the organization that allows us to be.

Lisa Gill: Yeah.

Lisa Gill: Yes sure it.

Speaker Change: Meeting the needs of patients.

Speaker Change: I'll take a stab at that Lisa Thanks, a lot for the question and of course, we continue to monitor the evolutions around tariffs and the pharmaceutical market. We have teams in place that are analyzing the impact of tariffs on our business and very importantly on the supply chain and to answer your question what I'll say is.

Speaker Change: So thats provider customers. So I think when you think about the market growth, how well we're positioned in them.

Speaker Change: Honestly the growth model.

Speaker Change: We have at Suncor at R. R.

Speaker Change: Barring a continue to innovate.

Speaker Change: So it gives us belief that the performance will continue over the long term.

Speaker Change: As it relates to our business, we have not called out any material impacts as a result of tariffs as a reminder, with pharmaceutical centric and the manufacturers are the importer of record for pharmaceuticals now to get to part of your question. Our main focus is ensuring patients have access to lifesaving medications.

Speaker Change: Yeah.

Michael Cherny: Our next question comes from Michael Cherny Leerink.

Speaker Change: Capital. Your line is now open. Please go ahead.

Jim Cleary: And additionally, we'll continue to advocate on behalf of our customers to ensure that they receive adequate reimbursement for the valuable health care services that they provide. But just to reiterate, as it relates to our business, we haven't called out any material impacts as a result of tariffs. Thank you for the question.

Michael Cherny: Thanks for taking the question and again congrats on another strong beat and raise.

Speaker Change: Maybe.

Speaker Change: Above to parse too.

Speaker Change: And we're supporting our upstream and downstream partners as they navigate the uncertainty and Additionally, we'll continue to advocate on behalf of our customers to ensure that they receive adequate reimbursement for the valuable health care services that they provide but just to reiterate as it.

Speaker Change: Next question, a little bit more in particularly diabetes more on specialty.

Speaker Change: <unk> has a long history of being a market leader.

Speaker Change: T oriented.

Speaker Change: Do you think about the contributors of specialty to growth how much can you unpack in terms of what you see is market growth versus share gains versus additional value add services and add ons.

George Hill: George Hill of Deutsche Bank. George, your line is now open, please go ahead. Yeah, good morning, guys. Thanks for taking the questions. And I've kind of got a two parter.

Speaker Change: Relates to our business, we haven't called out any material impacts as a result of tariffs.

Jim Cleary: Number one, James, if you could kind of quickly walk through the RCA impact on gross margin expansion in the quarter, I think that would be helpful, because there's some moving pieces there relating to the way the equity stub, the non-owned equity stub is being treated, and the eliminations from the sales into the practices. And then my second part would be just kind of the growth where you guys have set yourselves up and specialty is amazing. I was just hoping you might give us any quantitative color on how much of the U.S. drug business is now like the Part B business versus the Part D business, and maybe kind of the growth characteristics you're seeing in each of those, kind of trying to think of the business and kind of the two big segments from a distribution perspective.

Speaker Change: Thank you for the question.

Speaker Change: Okay.

Speaker Change: Very much we would agree with the fact that you're in the right place on a go.

George Hill: Next question comes from George Hill of Deutsche Bank. George Your line is now open. Please go ahead.

Speaker Change: Basis relative to the market is growing but curious as the market continues to grow in various different.

George Hill: Yes. Good morning, guys. Thanks for taking the questions and I've kind of got a two parter number one James if you could kind of quickly walk through the RCA impact on gross margin expansion in the quarter I think that would be helpful. Because there are some moving pieces there relating to the way the equity.

Speaker Change: Where do you see the best opportunities for outperformance beyond that.

Speaker Change: Yes.

Mike: A lot for the question Mike.

Speaker Change: Okay.

George Hill: The non owned equity stub is being treated in the eliminations.

Speaker Change: I'll take a shot at it.

George Hill: The sales into the practices and then my second part would be just kind of the growth where you guys have set yourselves up in specialty is amazing I was just hoping you might give us any quantitative color on how much of the U S. Drug business is now like the part D business versus the part D business and maybe kind of the growth characteristics you are seeing in each of those.

Speaker Change: We saw terrific results really extraordinary results in the first half and our U S business in fact, if we kind of.

Jim Cleary: Okay, well, I'll take the first half of that. And that is on RCA. You asked initially about gross profit. And yeah, the, you know, as we look at our consolidated results, RCA does add meaningfully to gross profit margin and operating margin. And one reason why is that it is a higher margin business than our core distribution business. And then, of course, the other reason why is that now that it is a subsidiary of Cencora, we eliminate the sales from our specialty physician services business to RCA so that we don't double count those sales. And so as a result of that, it adds meaningfully to our gross profit margin and our operating margin.

Speaker Change: Look at our.

Speaker Change: Got it.

Speaker Change: Two things really.

Speaker Change: All of the U S Q2 beat versus our internal expectations is due to organic growth from our core U S distribution business and of course, we talked about some time that that's driven by utilization.

George Hill: Trying to think of the business and kind of the two big segments from a distribution perspective. Thanks.

George Hill: Okay.

George Hill: Take the first half of that and that is on.

Speaker Change: RCA you asked initially about gross profit.

Speaker Change: And it's driven by broad based performance and in particular.

George Hill: Yes.

Speaker Change: Driven by sales of specialty products to physician practices and health systems, and so I would say.

George Hill: As we look at our consolidated results.

George Hill: RCA does add meaningfully to gross profit margin and operating margin and one reason why is that.

Speaker Change: As we look at specialty it's really been.

Speaker Change: And broad based performance and it's been very good results.

George Hill: It is.

George Hill: Higher margin business than our core distribution business and then of course. The other reason why is that now that it is a.

Speaker Change: Both with regard to physician practices.

Speaker Change: Okay.

Speaker Change: Health systems, and then of course, our recent.

George Hill: A subsidiary of <unk> Cora, we eliminate the sales from our specialty physician services business to RCA. So that we don't double count those sales and so as a result of that it adds meaningfully to our gross profit margin and our <unk>.

Jim Cleary: And then I think the second part of the business kind of got to the accounting. And so let me just kind of address that for you also. But as I said in my prepared remarks, after closing and consolidating the RCA business, we made the accounting determination that the approximately 15% of equity that's owned by RCA physicians and management represents a contingent liability to Cencora as opposed to a non-controlling interest. And then the rest is from our core U.S. distribution business. And so if you look at our increase in EPS guidance, the significant majority of the increase in EPS guidance comes from our core U.S.

Speaker Change: Acquisition.

Speaker Change: Our CA and our investment in 2023, one oncology, we'd look at that is really the natural evolution.

Speaker Change: Specialty business because of course, we're very strong in.

George Hill: Operating margin and then I think the second part of the business kind of got to the accounting and so let me just kind of.

Speaker Change: Distribution were very strong and wraparound services like GPO and so we view the MSR space is adding additional <unk>.

George Hill: Address that for you also our prior guidance.

Speaker Change: <unk> added services to the same customer base that we've had terrific success with four.

George Hill: When we talked in February incorporated 100% of the operating income for RCA and contemplated a reduction in EPS due to the due to an expected noncontrolling interest reduction, but as I said in my prepared remarks, after closing and consolidating the RCA business, we made the accounting determination that the approximately.

Speaker Change: Quite some time and so thanks, a lot for the question and I think Bob has something he'd like to add thanks, Jim and Michael I would just add.

Speaker Change: Our committee.

Speaker Change: We continue to invest in the strengths that we have there you've seen over a period of time, where.

George Hill: 15% of equity that's owned by RCA positions and management represents a contingent liability to syncora as opposed to a noncontrolling interest the results.

Speaker Change: Investing in services the MSR expansion.

Speaker Change: Okay.

Speaker Change: Example of that.

Speaker Change: Okay.

Speaker Change: Those investments as we as we move forward to make sure that we're positioned well to support the biopharma manufacturers.

George Hill: Of that is that theres, a higher than expected EPS contribution for the fiscal year, but it has no impact on our operating income results or guidance.

Speaker Change: Okay.

Speaker Change: As a provider so we think that that.

Speaker Change: <unk> intention to do that as a commitment.

Speaker Change: We have to do that will allow us to continue to perform well.

George Hill: And so just to give you a little bit more detail there for EPS.

George Hill: Approximately 14 cents of the increase in EPS guidance is a result of the RCA accounting determination and then the rest is from our core U S distribution business and so if you look at our increase in EPS guidance a significant majority.

Speaker Change: Our next question is from Lisa Gill from Jpmorgan. Your line is now open. Please go ahead.

Jim Cleary: distribution business, which more than offsets a decrease in guidance for international. So the incremental 15% of operating income falls right to pre-tax income. So I think that fully answers your question. And, you know, one one one other thing I will add is that it as it relates to the guidance update, I know everything from the standpoint of revenue, GP and OI for RCA is the same as previously guided. Thank you for the questions.

Lisa Gill: Great. Thanks, very much and good morning, and congrats on the quarter.

Lisa Gill: I wanted to focus on D C and the thoughts around carrier. It is believed that the Trump administration will come out with.

Lisa Gill: Okay.

George Hill: Of the increase in EPS guidance comes from our core U S distribution business, which more than offset a decrease in guidance for international and just one final thing is that the 14th <unk> increase in EPS from the RCA accounting determination and maybe higher than some of you are initially modeling and the reason for.

Lisa Gill: So can you just remind us on each side of your business my understanding would be on the branded side kind of similar.

Lisa Gill: The flip side with insulin when prices go down your economic to kind of stay the same is there any variability Richard think that prices go up.

Speaker Change: <unk> spent a lot of questions on the generic side, if we think back to my number of generic price inflation.

George Hill: That is that the 85% of operating income.

Lisa Gill: And again, a tariff could add yes.

George Hill: Covers all of the interest expense so the incremental 15% of operating income falls right to pre tax income so I think that.

Lisa Gill: I'm kind of inflationary component to that.

Lisa Gill: Okay.

Lisa Gill: So those components, how it impacts your business and how youre thinking about it for your customer.

George Hill: Fully answers your question.

Lisa Gill: Yes sure.

Bob Mauch: I'll take a stab at that Lisa Thanks, a lot for the question and of course, we continue to monitor the evolution around tariffs and the pharmaceutical market we have seen.

George Hill: Okay.

George Hill: And one other thing I will add instead it as it relates to the guidance update.

Owen: Owen. Charles, your line is now open, please. Yeah, thanks for taking the questions and congrats on the quarter, guys. I actually want to ask about international real quickly here. You know, obviously, the guidance is taken down a little bit here and just wanted to maybe dive a little bit into more about your comments about, you know, softness in the especially logistics business. You mentioned that trial activity is subdued. Can you talk a little bit more about what you're seeing here? Obviously, there's a lot going on in the pharma market, particularly with potential tariffs and, you know, a lot of things that the administration is undertaking here currently.

George Hill: Kind of everything from the standpoint of revenue GP and Oi for RCA is the same as previously guided.

Lisa Gill: Like you said are analyzing the impact.

Bob Mauch: Perhaps on our business and very importantly.

Lisa Gill: Okay.

The next question comes from thank you for the question of T D.

Lisa Gill: And to.

Lisa Gill: Answer to your question, what I'll say is as it relates to our business, we have not called out any material impacts as a result of tariffs as a reminder, with pharmaceutical centric and the manufacturers are the importer of record.

Cowen Charles: Cowen Charles Your line has not lessened. Please go ahead.

Speaker Change: Yes, thanks for taking my questions and congrats on the quarter guys.

Speaker Change: I actually wanted to ask about international real quickly here.

Lisa Gill: Difficult now to get to part of your question. Our main focus is ensuring patients have access to lifesaving medications.

Speaker Change: You bet the guidance was taken down a little bit here and just wanted to maybe dive a little bit into more about the comments about.

Lisa Gill: And we're supporting our upstream and downstream partners as they navigate the uncertainty and Additionally, we will continue to advocate on behalf of our customers to ensure that.

Speaker Change: Softness in these specialty logistics business you mentioned that trial activity is subdued can you talk a little bit more about what youre seeing here. Obviously, there is a lot going on in the pharma market, particularly with <unk>.

Charles: Maybe you can give us a sense for what you're hearing from clients, from pharma companies in terms of sort of what they're seeing currently and how they're approaching, you know, sort of, you know, sort of business development here and clinical trial starts in particular. And when you're saying it's subdued, does that mean you're just seeing a lot of delays? You know, maybe you could just kind of give us a little bit more details on that. That'd be great. Thank you. Yeah, thanks a lot for the question. So, as we and other players in the market have been calling out, clinical trial activity has been subdued, which has been, you know, pressuring some of our businesses in the international healthcare solutions segment, particularly demand for global specialty logistics, and earlier stage pharma consulting projects.

Lisa Gill: Keith adequate reimbursement for the valuable healthcare.

Speaker Change: Potential tariffs and.

Speaker Change: Lot of things that the administration is undertaking here.

Lisa Gill: But just to reiterate.

Speaker Change: Currently.

Speaker Change: You can give us a sense for what you're hearing from clients.

Lisa Gill: Yeah.

Lisa Gill: As it relates to our business, we haven't called out any material impacts as a result of tariffs.

Speaker Change: Pharma companies in terms of sort of what Theyre seeing currently and how they are approaching.

Lisa Gill: Thank you for the question.

Speaker Change: Next question comes from George Hill.

Speaker Change: Sort of.

Speaker Change: Sort of business development and clinical trial starts in particular.

Speaker Change: Which bank Julien Your line is now open. Please go ahead.

Speaker Change: When youre, saying is subdued does that mean, you're just seeing a lot of delays.

Speaker Change: Yes. Good morning, guys. Thanks for taking the questions and I've kind of got a two parter.

Speaker Change: Maybe you could just kind of give us a little bit more.

Speaker Change: Okay.

Speaker Change: If you could kind of quickly walk through the RCA impact.

Speaker Change: Details on that that'd be great. Thank you.

Speaker Change: Yes, Thanks, a lot for the question so as we and other players in the market have been calling out clinical trial activity has been subdued.

Speaker Change: Gross margin expansion in the quarter I think that would be helpful. Because there's some moving pieces there.

Jim Cleary: And the rebound's been slower than we would have expected, resulting in segment performance for our global specialty logistics business to be below the expectations we outlined in February. And we really haven't seen demand begin to ramp materially for our consulting business. And so, as a result of the performance to date, and to incorporate a wider range of recovery paths for demand and global specialty logistics, we reduced our international healthcare solutions segment operating income guidance. But I will say that, you know, our end-to-end service offering is resonating with manufacturers, and we feel confident in our ability to capitalize on a rebound in demand when it occurs, given our unique positioning in the market.

Speaker Change: The equities.

Speaker Change: On the equity.

Speaker Change: Which has been pressuring some of our businesses and the international Health care solutions segment, and particularly demand for global specialty logistics and earlier stage pharma consulting projects and the rebound has been slower than we would've expected, resulting in segment performance for our globe.

Speaker Change: And the elimination.

Speaker Change: From the sales into the practices and then my second part was.

Speaker Change: Just kind of the growth for you guys have set yourselves up in specialty is amazing I was just hoping you might give us any quantitative color on how much of the U S drug business now like the part D business versus the part D business.

Speaker Change: Specialty logistics business to be below the expectations, we outlined in February.

Speaker Change: Okay.

Speaker Change: Characteristics you are seeing in each of those.

Speaker Change: And we really haven't seen demand begin to ramp materially for our consulting business and so as a result of the performance to date.

Speaker Change: Trying to think of the business can be kind of the two big segments.

Speaker Change: Dubuque perspective thanks.

Speaker Change: Okay.

Speaker Change: I'll take the first half of that and that is on.

Speaker Change: And to incorporate a wider range of recovery paths for demand in global specialty logistics, we reduced our international health care solutions segment operating income guidance, but I will say that our end to end service offering is resonating with manufacturers and we feel confident in our ability to capitalize on a rebound in demand.

Speaker Change: Our CA.

Speaker Change: Initially about.

Speaker Change: Gross profit.

Speaker Change: Yes.

Speaker Change: As we look at our consolidated data.

Eric Percher: The next question comes from Eric Purcher of Nephron Research. Eric, Thank you. Appreciate the detail on RCA.

Speaker Change: Results.

Speaker Change: RCA.

Speaker Change: Add meaningfully to gross profit margin and operating margin and one reason why is that it is.

Speaker Change: When it occurs given our unique positioning in the market.

Bob Mauch: I'd like to ask a question about the MSO operations more broadly. I know that each of them looks quite different and the share of income can be quite different. But can you help us with your view of the profit stream? And we've talked a lot about the opportunity when we think about how much of that opportunity is tied to drug versus medical or government versus commercial.

Speaker Change: Higher margin business than our core distribution business.

Speaker Change: The next question comes from Eric Percher Nephron Research Eric Your line is now open. Please go ahead.

Speaker Change: Of course, the other reason why is that now that it is a.

Speaker Change: A subsidiary of Cora, we eliminate the sales from our specialty physician services business to RCA, So that we don't cut.

Eric Percher: Thank you.

Speaker Change: <unk> the detail on RCA.

I'd like to ask a question about the <unk>.

Speaker Change: Operations more broadly I know that each of them looks quite different than the share of income can be quite different but can you help us with your view of the profit stream and we've talked a lot about the opportunity when we think about how much of that opportunity is tied to raws versus <unk>.

Speaker Change: Those sales and so as a result of that it adds meaningfully to our.

Speaker Change: Margin and our.

Bob Mauch: Can you provide a general framework for that, both to think about the opportunity and the risk of some of what is occurring in the market?

Speaker Change: Operating.

Speaker Change: Okay and then okay.

Speaker Change: Second part of the business.

Speaker Change: Got to the call.

Speaker Change: Counting king and so let me just kind of.

Bob Mauch: Eric, it's Bob. Thanks for the thanks for the question. You know, I would begin with, we're excited and confident about the, you know, income streams within the MSO spaces. You said they're, you know, they're different and, you know, the services that, you know, an MSO, one oncology would provide to an oncology practice are similar and different than RCA would provide to a retina specialist. But when you put that together, you know, we believe it's a really good fit for our expansion of services in both of those spaces. So as, you know, as we discussed, and as you know well, Eric, you know, the strength that we have in both distribution and the GPO was there.

Speaker Change: Medical or government versus commercial can you provide a general framework for that both to think about the opportunity and the risk of some of what is occurring in the market.

Speaker Change: Address that for you also our prior guidance.

Speaker Change: When we talk in February and corporate.

Speaker Change: As a percent of the operating incomes for RCA and contemplated a.

Speaker Change: A reduction.

Speaker Change: And EPS.

Speaker Change: Due to an expected.

Bob: Sure Eric It's Bob Thanks for the thanks for the question.

Speaker Change: Interest production, but as I said in my prepared remarks, after closing and consolidating the RCA business, we made the accounting determination that the approximately 15%.

Speaker Change: I would.

Speaker Change: Begin with we're excited and confident about the income streams within the <unk>.

Speaker Change: Owned by RCA positions and management represents a contingent liability to suncor.

Speaker Change: MSR space as you said there are different and the services of that.

Speaker Change: And so what oncology would provide you an oncology practice are similar and different than our shared would provide too.

Speaker Change: Noncontrolling interest the results.

Speaker Change: That is that there is a higher than expected EPS contribution for the fiscal year, but it has no impact on our operation.

Speaker Change: A retina specialist, but when you when you put that together.

Bob Mauch: And by adding the MSO services, you know, we're able to build on our capabilities and supporting those physicians.

Speaker Change: Income from results or guidance.

Speaker Change: We.

Speaker Change: I believe it's a really good fit for our expansion of services in both of those spaces. So is there as we've discussed and as you know well Eric.

Speaker Change: And so just to give you a little bit more detail there are for EPS.

Bob Mauch: You know, one thing that, you know, to reinforce is something else that we're excited about in terms of a future growth proposition is the clinical trial services that are provided now at RCA and that will, you know, we believe we can expand into one oncology. And that's another example of how we'll be well-positioned with both the biopharma partners as well as the providers.

Speaker Change: Approximately 14 cents.

Speaker Change: The strength that we have in both distribution and.

Speaker Change: The increase in EPS guidance is a result of the RCA accounting determination and then the rest is from our core.

Speaker Change: In the GPO was there and by adding the MSS services.

Speaker Change: We're able to build on our capabilities in supporting.

Speaker Change: Those those physicians.

Speaker Change: Distribution business and so if you look at our increase in EPS guidance, a significant majority of the increase in EPS guidance comes from our core U S distribution.

Speaker Change: One thing that to reinforce is something else that were.

Speaker Change: We're excited about in terms of of our future.

Speaker Change: Great.

Speaker Change: <unk> growth proposition is the clinical trial services that.

Speaker Change: That's a decrease in guidance for international and just one final thing is that the 14% increase in EPS from the RCA accounting determination and maybe higher than some of you are initially modeling and the reason for that is that the <unk>.

Speaker Change: Our provided now at RCA and that will we believe we can expand into oncology and that's another example of how we will be well positioned with both the biopharma partners as well as the providers.

Stephen Valiquette: Next question comes from Stephen Valiquette of Mizuho Securities open please go ahead. Yeah, thanks. Good morning. Congrats on these results. You had a question that was kind of similar to Charles, just on the, you know, the international solutions and your comments about the clinical trial activity remaining subdued.

Speaker Change: 85% to pop.

Speaker Change: Okay.

Speaker Change: It's all of the interest expense so the incremental 15% of operating income.

Steven: The next question comes from Steven.

Speaker Change: <unk> of Mizuho Securities Steven Your line is now open. Please go ahead.

Jim Cleary: Really, the only kind of follow up questions there were just, I can't recall off the top of my head, just how fragmented versus how concentrated your customer base is in that business. So, were there maybe just, you know, some customers where activity on clinical trials was subdued, or was it definitely widespread phenomenon across the majority of your book? And then, is there any chance you're able to put a number just on the approximate percent decline in clinical trial activity you're seeing across your book? I mean, we're talking single digit decline, double digit, just want to get, you know, just some rough sense for that.

Speaker Change: The pretax income.

Speaker Change: So I think.

Speaker Change: Hum.

Steven: Yeah. Thanks, good morning, Congrats on these results.

Speaker Change: Okay got it answers your question.

Speaker Change: I had a question that was kind of similar to Charles just on the international solutions and your comments about the clinical trial activity remaining subdued.

Speaker Change: And one other thing.

Speaker Change: We'll add instead it as it relates to the guidance update.

Speaker Change: The only kind of follow up questions, there, but just I cant recall at the top of my head just how fragmented versus how concentrated your customer bases in that business. So are there maybe just some customers where activity and clinical trials with subdued or was it definitely widespread phenomenon across the majority of your book and then is there any chance you are able to put a number just on the.

Speaker Change:

Speaker Change: Everything from standpoint of revenue GP and Oi for RCA is the same as previously guided.

Speaker Change: The next question comes from thank you for the question of T D.

Jim Cleary: Yeah, I think, thanks for the question. It's market, it's market-based. So what we're seeing are the very same things that you're seeing across the market from other players. So our customer base is broad. And as we're seeing, there has been a decline in clinical trial starts over the past few years that, you know, we all in the space are eagerly awaiting a bit of a rebound there. And, you know, within our specialty logistics business, You know, it's a part of our end to end service. So when we when we are talking to biopharma companies about commercialization and them bringing services to market, you know, we're talking to them about, you know, lots of different services from from consulting to 3PL services to specialty logistic services that we're talking about here.

Speaker Change: Cowen Charles Your line is now open. Please go ahead.

Speaker Change: <unk>, 8% decline in clinical trial activity Youre seeing across your book I mean, we're talking in the single digit decline double digit just wanted to get some rough sense for that thanks.

Speaker Change: Yes, thanks for.

Speaker Change: Taking the questions.

Speaker Change: Perhaps on the quarter guys.

Speaker Change: I wanted to ask about international real quickly here.

Speaker Change: Yes, I think thanks for the question.

Speaker Change: Okay.

Speaker Change: A little bit here and I just wanted to maybe.

Speaker Change: It's market it's market based so what we're seeing are the very same things that you're seeing across the market from from other players. So are our customer base is broad.

Speaker Change: Into more about the your comments about.

Speaker Change: Softness.

Speaker Change: Logistics business, you mentioned that trial activity.

Speaker Change: <unk> can you talk a little bit more about what youre seeing here. Obviously, there is a lot going on in the pharma market, particularly with potential.

Speaker Change: <unk>.

Speaker Change: As you know as we're seeing there has been.

Speaker Change: A decline in clinical trial starts over the past.

Speaker Change: Potential tariffs and.

Speaker Change: Past few years that we are all in the space are are eagerly awaiting.

Speaker Change: A lot of things that the administration has undertaken here currently.

Speaker Change: Currently.

Speaker Change: Maybe you can give us a sense for what you're hearing from clients.

Speaker Change: A bit of a rebound there.

Speaker Change: And within our specialty logistics business.

Speaker Change: Pharma companies.

Speaker Change: In terms of sort of what theyre seeing currently and how they are approaching.

Speaker Change:

Speaker Change: It's part of our end to end service. So when we when we are talking to bio pharma companies about commercialization and then bringing.

Speaker Change: Sort of.

Bob Mauch: So we wouldn't call it anything different than what, you know, is being observed across the market. And I think, you know, there was a peak in trial activity, you know, during the covid pandemic that, you know, has has been reduced. And so we're all you know, we're working through that. But as as Jim said earlier, as I said in my my prepared remarks, we're we're well positioned with our services, with our partners and customers and expect to be a partner of choice as that market rebounds.

Speaker Change: Development and clinical trial starts in particular.

Speaker Change: Services to market, we're talking to them about.

Speaker Change: Subdued does that mean youre, just seeing a lot of delay days.

Speaker Change: Lots of different services from from consulting to three PL services too.

Speaker Change: Maybe you could just kind of.

Speaker Change: Can you give us a little bit more.

Speaker Change: Details on that that'd be great. Thanks.

Speaker Change: Specialty logistics services that we're talking about here. So we wouldn't call out anything different than what is being observed across the market I think.

Speaker Change: Yes. Thanks.

Speaker Change: So as we and other players in the market have been calling out clinical trial activity has been subdued.

Speaker Change: There was a peak in trial activity during the Covid.

Speaker Change: Which has been pressuring some of our.

Speaker Change: And I make that has has been reduced.

Speaker Change: And so we're all we're working through that but as.

Speaker Change: The International Health care solutions segment.

Allen Lutz: The next question comes from Allen Lutz. Bank of America. Your line is now open. Please go ahead. Good morning, and thanks for taking the question. Congrats on the really strong results here. Bob, you called out really good growth in the specialty provider channel. Can you talk a little bit about growth in your different verticals there? Was there any standout as we think about growth in oncology versus retina? Are there any other specific areas to call out? And then, as you think about the utilization rate from 2024 into the 1st quarter of 2025, was there any deceleration and the acceleration either at the top level or within any of the specific verticals you operate in?

Speaker Change: As Jim said earlier as I said in my prepared remarks.

Speaker Change: Demand for global specialty logistics.

Speaker Change: We're well positioned.

Speaker Change: Earlier.

Speaker Change: With our services with our partners.

Speaker Change: Consulting projects.

Speaker Change: Customers.

Speaker Change: The rebound slower than we would have.

Expect to be a partner of choice, so as that market rebounds.

Speaker Change: Okay.

Speaker Change: Im resulting in segment performance for our global specialty logistics business to be below the expectations, we outlined in February.

Allen Lutz: The next question comes from Allen Lutz.

Speaker Change: Bank of America. Your line is now open.

Speaker Change: Please go ahead.

Speaker Change: And we really haven't seen demand begin to ramp materially for our consulting business.

Speaker Change: Good morning, and thanks for taking the question congrats on the really strong results here, Bob you called out a really good growth in our specialty.

Speaker Change: And as a result of the performance.

Speaker Change: Okay.

Speaker Change: Provider channel can you talk a little bit about growth in your different verticals. There was there any stand out as we think about growth in oncology versus retina are there any other specific areas to call out and then as you think about the utilization rate from 2024 into the first quarter of 2025 was there any deceleration any access.

Speaker Change: And to incorporate a wider range.

Speaker Change: Three paths for demand in global specialty logistics, we reduced our international health care.

Bob Mauch: Thanks.

Speaker Change: Segment operating income guidance, but I will say that our end to end services.

Bob Mauch: Yeah, thanks for the question, Allen. So we don't, we don't break out, you know, the specific, you know, commercial components of the business. But I will say, and Jim mentioned this earlier, the performance is, is broad based. So, you know, we often talk about the community specialty space, for very good reason, but I made a specific point in prepared remarks to talk about the health system space and, and others, because we're well positioned for specialty growth, you know, across all sites of care. So, and we're seeing them all grow. So it's something that we're, again, happy to be well positioned there, we're working hard to make sure that we're adding value to our biopharma partners, as well as the providers, but wouldn't comment specifically on any differences in growth across those segments.

Speaker Change: It's resonating with manufacturers.

Speaker Change: Okay.

Speaker Change: <unk> either at the top level or within any of the specific verticals.

Speaker Change: And our ability to capitalize on a rebound in demand when it occurs.

Speaker Change: You operate in.

Speaker Change: Our unique positioning in the market.

Speaker Change: Yes. Thanks for the question Alan So we don't we don't breakout the specific.

Commercial components of the business, but I will say and Jim mentioned this earlier.

Speaker Change: The next question comes from Eric Percher Nephron Research Eric.

Speaker Change: Please go ahead.

Speaker Change: The performance is broad based so we've often talked about the community specialty space.

Speaker Change: Thank you I appreciate the detail on RCA.

Speaker Change: For very good reason, but I made a specific point in prepared remarks to talk about the health system space.

Speaker Change: Okay.

Speaker Change: About <unk> <unk>.

Speaker Change: Others, because we are well positioned for specialty growth across all sites of care.

Speaker Change: Operations more broadly I know that each of them looks quite different than the share of income can be.

Speaker Change: And we're seeing them all growth. So it's something that we're again happy to be well positioned there we're working hard to make sure that we're.

Speaker Change: But can you help us lift.

Jim Cleary: And, you know, I would, I would, you know, go back to, you know, the reason that we're often focused on specialty physicians and, and oncology is, is the oncology space, you know, continues to be the area of largest growth and largest Bob, and just the only thing I'll add, and this goes, of course, back to our results in our press release and my prepared remarks is, you know, we I mean, we did have just had very strong performance in the first half, and we're just so pleased to be able to increase our operating income guidance for the year, you know, by three percentage points that the at the bottom end of the range in the top end of the range in the US, you know, 17 and a half percent growth and 19 and a half percent growth.

Speaker Change: Sure.

Speaker Change: The profit stream and we've talked a lot about the opportunity when we think about how much of that opportunity is tied to.

Speaker Change: Adding value to our Biopharma partners as well as the.

Providers, but wouldnt call.

Speaker Change: Comment specifically on any differences in growth.

Speaker Change: Drivers versus medical or government versus commercial can you provide a general general framework for that both discuss the opportunity and the risk of some of what is occurring in the market.

Speaker Change: Across those segments.

Speaker Change: I would I would go.

Speaker Change: Go back to the reason that we're often focused on.

Speaker Change: Specialty physicians and.

Speaker Change: In oncology is is the oncology space continues to be the area of largest growth and largest opportunity Bob and just the only thing I'll add and this goes of course back to our results in our press release in my prepared remarks as we.

Speaker Change: Sure Eric it's opex for the banks.

Speaker Change: Okay.

Speaker Change: Yes, I would.

Speaker Change: Beginning with <unk>.

Speaker Change: Excited.

Speaker Change: About the.

Speaker Change: Income streams within the <unk>.

Speaker Change: We did have fun.

Speaker Change: MSR space as you said there are different.

Speaker Change: <unk> had very strong performance in the first half and we're just so pleased to be able to increase our operating income guidance for the year by three percentage points at the end.

Jim Cleary: And really driven by, you know, the things you were asking about utilization and our broad based strength and special.

Speaker Change: Okay.

Speaker Change: Because of that.

Speaker Change: Whenever so while oncology would provide to an oncology practice are similar and.

Speaker Change: The bottom end of the range and the top end of the range in the U S and a 17, 5% growth to 19, 5% growth really driven by the things you were asking about utilization and our broad based strength in specialty.

Speaker Change: Different than our share it would.

Daniel Grosslight: The next question comes from Daniel Grosslight of City. Daniel, your line is now open. Please go ahead. Thanks for taking the question and congrats on the quarter here. I had a similar question to Allen's, but maybe I'll ask it in a bit of a different way. Health systems seems to be getting a lot more airtime this quarter than in previous quarters. So I'm just curious, you know, why that is. Are you seeing anything particularly strong in health systems this quarter on the provider side?

Speaker Change: Provide shoe.

Speaker Change: Our retina.

Speaker Change: Specialist, but when you when you put that together.

Speaker Change: Yeah.

Speaker Change: Believe it's a really good fit for our expansion of services in both of those spaces. So as you know as we've discussed and as you know well Eric.

Speaker Change: Okay.

Speaker Change: The next question comes from Daniel <unk> of City. Daniel Your line is now open. Please go ahead.

Speaker Change: The strike that we havent been both distribution and in the GPO.

Speaker Change: Thanks for taking my question and congrats on the quarter here.

Speaker Change: And by adding the MSS services.

Speaker Change: Similar question to downs, but maybe ill ask it.

Speaker Change: We're able to build on our capabilities in supporting.

Bob Mauch: And as we think about the investments that you need to make to support health systems, is there anything that you would call out as kind of a near-term investment in that channel? Thanks. Yeah, thanks. Thanks for the question. You know, from my perspective, you know, the reason that we're focusing a bit on health systems here is, is for the simple reason that, you know, we want the investor base to understand how well positioned we are for specialty growth across sites of care. And again, for very good reason, we, we focus on the community practices and we're making investments there, but we're also, you know, working very closely with our health systems customers and other customers to make sure that we have a capabilities and a solution set that help them continue to capture the specialty growth that is happening within their site of care.

Speaker Change: Bit of a different way.

Speaker Change: Those dispositions.

Speaker Change: Health systems seems to be getting a lot more airtime this quarter than in previous quarters. So I'm just curious.

Speaker Change: One thing that to reinforce.

Speaker Change: Okay.

Speaker Change: Why that is are you seeing anything, particularly strong in health systems. This quarter on the <unk> side and as we think about the investments that you need to make to support health systems.

Speaker Change: Where.

Speaker Change: We're excited about in terms of.

Speaker Change: Future.

Speaker Change: Growth.

Speaker Change: Proposition is the clinical trial services that.

Speaker Change: Our provided now at RCA and that will we believe we can expand into.

Speaker Change: Is there anything that you would call out.

Speaker Change: It's kind of a near term investment in that channel. Thank you.

Speaker Change: Another example of how we will be well positioned with both.

Speaker Change: Okay. Thanks, Thanks for the question.

Speaker Change: The biopharma.

Speaker Change: From my perspective, the reason that we're <unk>.

Speaker Change: Partners as well as the providers.

Focusing a bit on health systems here is for the simple reason that we want.

Speaker Change: The next question comes from Steven.

Speaker Change: <unk> of Mizuho Securities Steven Your line is now open. Please go ahead.

Speaker Change: The investor base to understand.

Speaker Change: How well positioned we are for specialty growth across sites of care and again for very good reason, we focus on the community practices and we're making investments there, but we're also.

Speaker Change: Yeah. Thanks, good morning, Congrats on these results.

Speaker Change: Okay.

Speaker Change: Similar to Charles just on the International solutions and your comment about the clinical trial activity remaining subdued.

Bob Mauch: So, no, it's not anything in particular. It's not anything that's changed, but it is something that we're trying to explain, which is the broad based positioning that we have for specialty growth. And again, that's what gives us confidence in the, in the continuing growth that we will have.

Speaker Change: We're working very closely with our health systems customers and other customers to make sure that we have a.

Speaker Change: On the kind of follow up questions here, but just I cant recall at the top of my head just how fragmented right.

Speaker Change: Our capabilities and our solution set to help them continue to capture the specialty growth that is happening within their site of care. So no. It's not anything in particular exciting anything that's changed.

Speaker Change: The strategic customer bases in that business further or maybe just some customers for activity.

Speaker Change: Subdued or was it definitely widespread phenomenon across the majority of your book and.

Kevin Caliendo: Our next question comes from Kevin Caliendo of UBS. Kevin, your line is now open. Please go ahead. Thanks. Thanks for taking my question.

Speaker Change: But it is something that we're trying to explain.

Speaker Change: Which is the broad based positioning that we have for specialty growth and again, that's what gives us confidence in the continuing growth that we will have.

Speaker Change: And is there any chance you are able to put a number just on the approximate percent decline in clinical trial activity.

Speaker Change: Youre seeing across your book of <unk> in the segment declined double digits.

Jim Cleary: I just had a quick first one, which is just trying to understand the math on the EPS guide increase. So 14 cents came from HCA and can you just, or RCA, excuse me, and can you remind us when you said that there was a better than, you know, sort of the loss of COVID was passed, what was the expectation? Like, what did that actually mean in terms of EPS? And I apologize, I couldn't find it in my notes.

Speaker Change: Some rough sense for that.

Kevin Caliendo: Our next question comes from Kevin Caliendo of UBS, Kevin. Your line is now open. Please go ahead.

Speaker Change: Yes, I think.

Speaker Change: So the question.

Kevin Caliendo: Thanks, Thanks for taking my question.

Speaker Change: Its market its market base.

Speaker Change: I just had a quick first one which is just trying to understand the math on the EPS guidance increase so 14th came from HCA and can you just RCA excuse me and can you remind us when you said that there was a better than sort of the.

Speaker Change: Seeing are the very same things that you are seeing across the market from from other players. So are our customer base is broad.

Jim Cleary: And then the actual, the real question is of the remaining sort of upside to guidance. I know you keep saying better specialty and like, are you actually getting better economics? anywhere through the portfolio than you had been before? Is it a reflection of your fixed cost and the fact that you've kept your operating expenses X RCA flat? I'm just trying to understand or is it simply mixed? I'm just trying to understand where the upside is coming from. If it's specific to, hey, you know what, we're actually generating better economics on similar drugs, or if it's our cost base is lower and utilization is higher and we're able to run that through, or our overall mix is better such that the margin is better.

Speaker Change: And as you know as we're seeing there has been.

Speaker Change: A decline in clinical trial starts over.

Kevin Caliendo: The loss of Covid with past what was.

Kevin Caliendo: Is the expectation like what does that actually mean in terms of EPS and I apologize I couldn't find it in my notes and then the actual the real question.

Speaker Change: Yes.

Speaker Change: Past few years that would be.

Speaker Change: All in the space or are.

Speaker Change: We really are waiting.

Speaker Change: A bit of a rebound there.

Kevin Caliendo: Is the remaining sort of upside to guidance I know, you keep saying better specialty.

Speaker Change: And within our specialty logistics business.

Kevin Caliendo: And like are you actually.

Speaker Change: <unk>.

Kevin Caliendo: Getting better economics.

Speaker Change: It's part of our end to end service, so when we do well.

Kevin Caliendo: Anywhere through the portfolio that you had been before is it a reflection of your fixed costs and the fact that you've kept your operating expenses ex RCA.

Speaker Change: You are talking to bio pharma companies about commercialization and then bringing.

Speaker Change: Services to market, we're talking to them about.

Kevin Caliendo: I'm, just trying to understand or is it simply mix.

Speaker Change: Lots of different services from from consulting true.

Kevin Caliendo: I'm, just trying to understand where the upside is coming from.

Speaker Change: If you all services too.

Kevin Caliendo: If it's specific to hey, we're actually generating better economics on similar drugs or if it our cost base is lower and utilization is higher and we're able to run that through or our overall mix is better such that the margin is better.

Speaker Change: Our specialty logistics services.

Jim Cleary: Okay, great. Thank you for the question. Let me try to address those things. And, you know, you're asking about the what's impacting the increase in guidance. And of course, our increase in EPS guidance was 40 cents at the bottom end of the range and 35 cents at the top end of the range. You asked about COVID, and the COVID headwind in the most recent quarter was about half of what we had previously expected. And, you know, we had expected a headwind in the $30 million range, and it was a headwind more like in the $15 million range, and so about half of our expectation.

Speaker Change: We're talking about here so we can control.

Speaker Change: Anything different than what.

Speaker Change: Is being observed across.

Speaker Change: Market I think.

Speaker Change: There was a peak.

Speaker Change: Activity during the Covid.

Speaker Change: Pandemic that has has been reduced.

Kevin Caliendo: Okay great.

Speaker Change: And so we're on.

Kevin Caliendo: Thank you for the question, let me try to address those things in.

Speaker Change: We're working through that but as.

Speaker Change: As Jim said earlier as I said in my prepared remarks.

Kevin Caliendo: Youre asking about that what's impacting the increase in guidance and of course, our increase in EPS guidance <unk> 40, <unk> at the bottom end of the range of 35 at the top end of the range and you asked about Covid and the Covid headwind.

Speaker Change: We're well positioned with our services.

Speaker Change: Sure.

Speaker Change: Customers.

Speaker Change: Expect to be a partner of choice, so as that market rebounds.

Headwind in the most recent quarter was about half of what we had previously expected and we had expected a headwind in that $30 million range and it was a headwind more like in the $15 million range and so about half of our expectation and then.

Jim Cleary: And then, you know, you asked a number of questions with regard to, you know, things that are benefiting us. And I would say, you know, mix is one of the things that I see us benefiting from is, you know, we see just the specialty part of our business growing faster, and that's really benefiting us from a mix standpoint. And some of those mixed things and higher margin businesses are benefiting us there. So, you know, we are, of course, very pleased with the increase in guidance that we've put out today, and so thank you very much for asking about that.

Speaker Change: The next question comes from Allen Lutz.

Speaker Change: Bank of America. Your line is now.

Speaker Change: Please go ahead.

Speaker Change: Good morning.

Speaker Change: Thanks for taking them.

Speaker Change: Question Congrats on the really strong pure Bob we called out a really good growth in our specialty provider channel can you talk a little bit about growth in your different verticals. There was there any standout as we think about growth.

Kevin Caliendo: And you asked a number of questions.

Kevin Caliendo: With regard to.

Kevin Caliendo: Things that are benefiting us and I would say.

Kevin Caliendo: Mix is one of the things that I see us benefiting from as we see just the specialty part of our business growing faster and that's really benefiting us from a mix standpoint, we see biosimilar growth and that's benefiting us from a mix standpoint and so.

Speaker Change: Obviously versus retina are there any other specific areas to call out and then as you think about the unit.

Speaker Change: Right from 2024 to the first quarter of 2025.

Speaker Change: Was there any deceleration any acceleration either at the top level or within any of the specific verticals.

Kevin Caliendo: One of the things that you see in our guidance is and there are a couple of different reasons for it one of which we called out earlier on the call but instead.

Speaker Change: Great and thanks.

Speaker Change: Yes. Thanks for the question Alex So we don't we don't breakout.

Kevin Caliendo: What we see.

Speaker Change: Perfect.

Kevin Caliendo: Operating income growth, that's exceeding revenue growth in some of the those mix things and higher margin businesses are benefiting us there so.

Speaker Change: Commercial components of the business, but I will say and Jim mentioned this earlier.

Erin Wright: The last question comes from Erin Wright of Morgan Stanley. Erin, your line is now open. Please go ahead. Great, thanks. I understand you don't have future share buybacks in the guide and the focus on is on deleveraging your term.

Speaker Change: Performance.

Speaker Change: It was broad based so we've often talked about the community specialty space.

Kevin Caliendo: Of course, very pleased with the increase in guidance that we put out today and so thank you very much for asking about it.

Speaker Change: For very good reason, but I made a specific point in prepared remarks to talk about the health system space.

Jim Cleary: But just as you think about the rationale behind RCA and other potential MSO type deals, I guess, will the RCA deal help to explain your future focus from an M&A standpoint as we think about, you know, you're learning so far there? And then a second part of my question, maybe this is somewhat related to Kevin's too, but like in terms of the economics, is there any sort of change from a GLP-1 perspective? I mean, you mentioned the dynamic into the second half, which should be just more of a revenue dynamic from my understanding, but any sort of potential in terms of improved economics or like presumably oral solids could be more favorable for you as well.

Speaker Change: Others, because we are well positioned.

Erin Wright: The last question comes from Erin Wright with Morgan Stanley Aaron Your line is now open. Please go ahead.

Speaker Change: For specialty growth.

Speaker Change: All sites of care, so and were seeing them.

Erin Wright: Great. Thanks, I understand you don't have future share buybacks in the guide and the focus on deleveraging and near term, but just as you think about the rationale behind RCA and other potential MSA would take deals I guess well the RCA deal help to explain your future focus from an M&A.

Speaker Change: So it's something that we're again happy to be well positioned there we're working hard to make sure that works.

Speaker Change: Adding value to our Biopharma partners as well as the.

Speaker Change: Providers.

Speaker Change: I wouldn't.

Speaker Change: Comment specifically on any differences in growth.

Speaker Change: Across those segments.

Erin Wright: Heath standpoint.

Speaker Change: Our.

Erin Wright: As we think about.

Speaker Change: Go back to.

Erin Wright: Learning so far there and then a second part of my question, even if it's not related to Kevin Keith I think in terms of the economics is there any sort of change from a G. L. P. One perspective, and you maintain the dynamic into the second half, which should be just more of a revenue dynamic for my understanding but any sort of potential in terms of improved economics, there like presumably also.

Speaker Change: The reason that we're often focus.

Speaker Change: Specialty physicians in.

Jim Cleary: But how are you thinking about that segment too? Thanks.

In oncology.

Speaker Change: The oncology space continues to be the area of largest growth and largest opportunity.

Jim Cleary: Yeah, and so let me start off with both of those things, MSOs and capital deployment and GLP-1s, you know, we've been very pleased with our entrance into MSOs, both with regard to the investment in One Oncology and the acquisition of RCA. And as you know, we own 35% of One Oncology, but there is a, you know, put call structure with our partners there, which makes it likely that from a capital deployment standpoint, we would own all of that business at some point in time, which speaks to a good deal of our capital deployment over the next few years.

Speaker Change: And then just the only thing I'll add and this goes of course back to art.

Erin Wright: It could be more favorable for you as well, but how are you thinking about that segment Kim thanks.

Speaker Change: Results in our press release.

Speaker Change: Prepared remarks.

Speaker Change: We did have.

Speaker Change: Yes, So let me start off with.

Speaker Change: Just that very strong performance in the first half and we're just so.

Speaker Change: Both of those things Msos and capital deployment and <unk>, we've been very pleased with our entrance into Msos, both with regard to the investment in one oncology and the acquisition of RCA and as you know we own 35% of <unk>.

Speaker Change: You should be able to increase our operating income guidance for the year.

Speaker Change: Three percentage points at the end.

Speaker Change: On the bottom.

Speaker Change: And the top end of the range in the U S.

Speaker Change: 75% growth to 19, 5% growth really driven by the things you were asking about utilization and our broad based strength in specialty.

Speaker Change: Non oncology, but there is a.

Speaker Change: Put call structure with our partners, there, which makes it likely that from a capital deployment standpoint, and we would.

Jim Cleary: And of course, we've been, you know, as I said, very pleased with our experiences thus far. And then on GLP-1s, no, there's really no change from an economic standpoint. It's clearly been a driver of our revenue. And as we've indicated in the past, it is profitable for us. They are profitable for us, but they are minimally profitable for us. And I think that addresses your questions, Erin. Thank you.

Speaker Change: Yeah.

Daniel: The next question comes from Daniel <unk> with City Daniel Your line is now.

Speaker Change: One all of that business at some point in time, which speaks to a good deal of our capital deployment over the next.

Daniel: Go ahead.

Speaker Change: New years and of course, we've been as I said very pleased with our experiences thus far and then on GL P ones.

Speaker Change: Thanks for taking the question and congrats.

Daniel: The quarter here you had a similar question but.

Daniel: But maybe ill ask it.

Daniel: Is that a different way.

Speaker Change: No Theres really no change from an economic standpoint, it's clearly been a driver of our revenue and as we've indicated in the past it is profitable for us they are profitable for us, but they are minimally profitable for us and I think that addresses your questions Aaron Thank you.

Daniel: Health systems seems to be getting a lot more time this quarter than in previous quarters. So I'm just curious.

Bob Mauch: We currently have no further questions, so I will hand back to Bob Mauch, CEO, for closing remarks. Thank you very much. Thanks all for joining the call today. We're very proud of the strong performance and guidance raised that we've been able to announce today. And you can count us, count on us to continue focusing on building on our strength. learning and leading for market leaders, driving efficiency through productivity, investing in our talent, data capabilities, and all of that will further differentiate Cencora to biopharma partners and providers. Thank you very much all.

Daniel: Why that is are you seeing anything, particularly strong in health systems. This quarter on the provider side and as we think about.

Daniel: <unk>.

Daniel: Support.

Speaker Change: We currently have no further questions. So I'll hand back to both watch CEO for closing remarks.

Daniel: Okay.

Daniel: Is there anything that you would call out.

Daniel: Our near term investment in that channel.

Speaker Change: Yeah.

Speaker Change: Thank you very much thanks, all for joining the call today.

Speaker Change: We're very proud of the strong performance.

Speaker Change: Thanks for the question.

Daniel: Okay.

Speaker Change: Our guidance raise.

Daniel: From my perspective.

Daniel: The reason that were.

Speaker Change: We've been able to announce today.

Daniel: Focusing a bit on health systems here is for the simple reason that we.

Speaker Change: You can count us count on us to continued focusing on building on our strengths.

Speaker Change: Warning and leading for market leaders driving efficiency through productivity invest.

Daniel: What.

Daniel: The investor base to understand.

Operator: This concludes today's call. Thank you for joining. You may now disconnect your line.

Daniel: How well positioned we are in perspective.

Speaker Change: Investing in our talent data capabilities.

Daniel: Across sites of care and again for very good reason, we focus on.

Speaker Change: All of that will further differentiates suncor to Biopharma partners and providers.

Daniel: Okay.

Daniel: Practices, and we're making investments there, but we're also.

Speaker Change: You very much all.

Daniel: Yes.

Speaker Change: This concludes today's call. Thank you for joining you may now disconnect your lines.

Daniel: Very closely with our health systems customers and other customers.

Daniel: To make sure that we have a.

Daniel: <unk> capabilities in a solution set that help them continue to capture the specialty growth that is happening within their site of care. So no. It's not anything in particular, but it's not anything that's changed.

Daniel: But it is something that we're trying to explain.

Daniel: Which is the broad base positioning that we have.

Daniel: For specialty growth and again, that's what gives us confidence.

Daniel: And they're continuing growth that we will have.

Kevin Kelly: Our next question comes from Kevin Kelly Ann.

Speaker Change: Yes, Kevin Your line is now open. Please go ahead.

Speaker Change: Thanks, Thanks for taking my question.

Speaker Change: I just had a quick.

Speaker Change: First one which is just trying to understand the math on the EPS guidance increase so.

Speaker Change: 13 came from HCA and can you just Archie excuse me and can you remind us when you said that there was a better.

Speaker Change: Sort of.

Speaker Change: Lots of Covid with path.

Speaker Change: So is the expectation like what does that actually mean.

Speaker Change: Yes, and I apologize I couldn't find it in Miami.

Speaker Change: And then the actual.

Speaker Change: The real question.

Speaker Change: Is the remaining sort of upside to guidance I know you keep saying.

Speaker Change: Specialty.

Speaker Change: And like are you actually getting.

Speaker Change: Getting better economics.

Speaker Change: Anywhere through the portfolio that you had been before or is it a reflection of your fixed costs and the effect.

Speaker Change: Operating expenses ex RCA.

Speaker Change: I'm, just trying to kind of.

Speaker Change: Or is it simply mix.

Speaker Change: I'm, just trying to understand where the upside is coming from.

Speaker Change: If it's specific to what we're actually generating better economics on similar for drugs or if it our cost base is lower and utilization is higher and we're able to run that through or.

Speaker Change: Next is better such that the margin is better.

Speaker Change: Okay great.

Speaker Change: Thank you for the question, let me try and address those things.

Speaker Change: Youre asking about that whats impacting the increase.