Cardinal Health (CAH) Financials

Cardinal Health (NYSE: CAH) has demonstrated a steady expansion in operating revenue over the last several quarters. From Q3 2022 to Q4 2025, operating revenues increased from approximately $44.8 billion to over $60.1 billion, indicating consistent growth in the company's sales and market reach.

Gross profit has generally increased alongside revenues, with Q4 2025 reporting a gross profit of about $2.2 billion compared to roughly $1.7 billion in Q3 2022. However, gross margin has been under pressure as the cost of revenue has increased nearly in line with revenues.

Operating expenses have been rising as well, with Selling, General & Admin expenses increasing from around $1.14 billion in Q3 2022 to $1.48 billion in Q4 2025. Special charges such as impairment and restructuring expenses have fluctuated, impacting total operating expenses and operating income. Notably, impairment charge has seen some large adjustments in various quarters, reaching large amounts such as $541 million in Q1 2023.

Operating income showed volatility but trended upward in recent periods, reaching $428 million in Q4 2025 from negative or low operating income in early 2023. Interest expense has remained substantial, around $30-$74 million per quarter, indicating significant debt costs.

Net income has followed a similar pattern with losses in early 2023 turning into positive results by 2024 and continuing improvement into 2025, with net income of $243 million in Q4 2025. Earnings per share data also reflect this recovery, moving from losses in Q1 2023 toward positive diluted earnings per share above $1.70 in subsequent periods.

From the balance sheet perspective, Cardinal Health's total assets grew from about $42 billion in Q3 2022 to nearly $50 billion by Q3 2025. Current assets including cash and equivalents increased, but so did current liabilities, particularly accounts payable, which rose substantially reflecting operational scale. The company’s total liabilities also increased to about $51.7 billion by Q3 2025, exceeding total equity and resulting in negative common equity, which is a potential red flag indicating high leverage or accrued losses.

Free cash flow fluctuated considerably with negative cash flow from operating activities seen in early 2023 and large acquisition outflows in Q3 2025. However, net cash from operations improved to over $1.5 billion in Q4 2025. Financing activities demonstrated debt issuances and repayments along with equity repurchases and dividends, reflecting active capital management.

• Consistent revenue growth from ~$44.8 billion in Q3 2022 to $60.1 billion in Q4 2025 suggests strong demand and market expansion.
• Increasing gross profit and improving operating income in recent quarters signal operational improvements.
• Positive net income in last several quarters after previous losses, reaching $243 million in Q4 2025.
• Significant improvement in operating cash flow recently, with $1.5 billion generated in Q4 2025.
• Regular dividend payments maintained and share repurchases completed, indicating shareholder return focus.
• High and fluctuating impairment charges and restructuring expenses contribute to earnings variability.
• Stable but elevated interest expense reflects the company’s leverage and borrowing costs.
• Large acquisition spending, particularly in Q3 2025 (~$1.4 billion), indicates strategic growth but also capital use.
• Negative common equity and total equity position as of recent balance sheets imply elevated leverage or accumulated losses.
• Accounts payable and other liabilities have risen aggressively, raising concern about working capital management and liquidity risks.

In summary, Cardinal Health has steadily grown its revenue base and recently improved profitability and cash flow, although these improvements are offset somewhat by significant impairment charges, elevated debt levels, and a negative equity position. Investors should watch for continued operational efficiency improvements, management’s ability to reduce leverage, and sustain positive earnings to build long-term value.