Cardinal Health NYSE: CAH CEO Jason Hollar said the company’s fiscal 2026 performance was supported by double-digit earnings growth across each of its five operating segments, while fiscal 2027 guidance reflects continued growth from a more normalized base.
Speaking at a Baird event, Hollar said the company’s results were not driven by a single factor. Strong healthcare utilization, specialty growth, new customer wins, acquisitions and operational execution all contributed, he said. However, Cardinal expects certain drivers of the prior year’s outperformance—including unusually strong specialty growth and customer onboarding—to be less pronounced in fiscal 2027.
“The breadth and the depth of the activities and the opportunities that we see in front of us” were central to the company’s performance, Hollar said. He noted that all five operating segments generated at least double-digit earnings growth, excluding the effects of mergers and acquisitions.
Specialty, at-Home and MSO Strategy
Hollar said Cardinal’s specialty business grew 25% during fiscal 2026, aided by acquisitions, customer gains and service provided to existing customers. He said the company expects growth to moderate from that level as the effects of acquisitions and new customer wins are annualized, though underlying demand remains constructive.
Cardinal is continuing to invest in specialty and at-home healthcare businesses. Hollar said the company has three managed-services organization platforms focused on oncology, urology and gastroenterology. The company is now focused on integrating those platforms while continuing to pursue bolt-on acquisitions; it completed four such acquisitions during the most recent quarter, he said.
Hollar said Cardinal does not currently manage its business in a way that would support separate segment reporting for MSO operations. The company views the operations as part of its larger specialty strategy, where distribution, biopharma services and physician-focused offerings are interconnected.
On recent at-home deals, Hollar said Strive Medical has already closed and provides urology-focused durable medical equipment. He described the acquisition as a fit with Cardinal’s existing urology distribution, MSO, nuclear pharmaceutical and at-home operations.
The acquisition of AdaptHealth’s diabetes business is expected to close in the second half of fiscal 2027, according to Hollar. He said the business complements Cardinal’s Advanced Diabetes Supply, or ADS, acquisition and expands the company’s presence in continuous glucose monitoring.
“Only 35% of people that are eligible for a CGM through insurance coverage actually has a CGM,” Hollar said, adding that the eligible population and use of the products have continued to grow.
Focus on Logistics and Product Mix
Hollar emphasized that Cardinal’s at-home strategy is centered on automated distribution of relatively small, dense and higher-value products through small-parcel shipping rather than entering patients’ homes to provide setup or care services.
He said Cardinal has significant small-parcel freight scale through businesses including OptiFreight and at-Home Solutions, and has built distribution centers using automation designed for this product mix. The company has opened three such distribution centers in recent years and plans three more over the next several years, he said.
Cardinal has also intentionally deprioritized some larger and bulkier products where network capacity needs and profitability have been less favorable, Hollar said.
“We are an expert at freight logistics,” he said. “But when you get into taking care of patients inside of the home, that’s a very different model.”
Pharmaceutical Distribution and Medical Segment Progress
Hollar said the company expects a broadly consistent book of business during fiscal 2027. He explained that fiscal 2026 benefited from onboarding large customers in businesses including Biopharma Solutions and core distribution, creating a comparison headwind as those benefits are annualized.
He also said Cardinal’s customer contracts have evolved to address product-mix changes, particularly the growing role of specialty pharmaceuticals. Utilization requirements in contracts can adjust for differing profitability across product categories, reducing the need for broad contract renegotiations when mix shifts occur, he said.
In the company’s Global Medical Products and Distribution segment, Hollar said Cardinal produced growth even after excluding a tariff refund that benefited fiscal 2026 results. He cited higher Cardinal Health brand volume and ongoing simplification efforts as key contributors to the segment’s improvement.
The company has reduced by more than 50% the number of countries in which its global medical business operates, according to Hollar. He said elevated commodity costs remain a pressure point, and that if such costs remain at elevated levels, segment performance could fall toward the lower end of Cardinal’s guidance range while remaining within that range.
Cash Flow Outlook
Hollar said cash flow was a major positive in fiscal 2026. Based on last year’s results and current-year guidance, Cardinal is already about 90% of the way toward a previously stated $10 billion cash-flow objective, he said.
The company has not provided a new target for fiscal 2028, but Hollar said management will consider its next cash-flow objective and intends to allocate capital responsibly.
About Cardinal Health (NYSE:CAH)
Cardinal Health, Inc is a healthcare services and products company that supports the pharmaceutical and medical industries. Its Pharmaceutical and Specialty Solutions segment distributes branded, generic and specialty pharmaceuticals, over-the-counter products and consumer health items to pharmacies, hospitals, health systems and other healthcare providers. The segment also provides specialty pharmaceutical services, nuclear and radiopharmaceutical products, and related support for manufacturers and providers.
Through its Global Medical Products and Distribution segment, Cardinal Health manufactures, sources and distributes medical and surgical products, including gloves, gowns, syringes, exam-room supplies and other essential equipment.
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