Cardinal Health (CAH) Financials

Cardinal Health’s recent results show improving profitability and strong operating cash flow, but the balance sheet remains highly leveraged with negative shareholder equity. The company’s fiscal fourth-quarter 2026 revenue increased to $63.7 billion from $60.2 billion in Q4 2025 and $47.1 billion in Q4 2022. Gross profit also reached a recent high of $2.56 billion, although the business continues to operate on very thin margins.

Profitability has improved meaningfully from the weak results reported in fiscal 2022 and 2023. Q4 2026 operating income was $729 million, compared with $428 million in Q4 2025, while net income attributable to common shareholders rose to $398 million from $239 million. However, quarterly common-stock earnings declined from $450 million in Q1 2026 and $467 million in Q2 2026 to approximately $399 million in Q3 and $398 million in Q4.

Cash generation has been a major strength. Operating cash flow was $1.69 billion in Q4 2026 and remained positive in every 2026 quarter, following positive cash flow in most comparable periods. The latest quarter also produced a $919 million increase in cash after capital spending, acquisitions, dividends, share repurchases and debt payments.

• Revenue growth remains consistent: Quarterly revenue increased from $44.8 billion in Q3 2022 to $63.7 billion in Q4 2026, reflecting continued expansion in Cardinal Health’s distribution operations.
• Profitability has recovered: Q4 2026 operating income of $729 million was about 70% above Q4 2025, and net income attributable to common shareholders increased approximately 67% year over year.
• Gross profit is trending higher: Gross profit rose from $1.54 billion in Q4 2022 to $2.56 billion in Q4 2026. The Q4 gross margin was approximately 4.0%, modestly above the roughly 3.7% reported in Q4 2025.
• Operating cash flow is strong: Cardinal generated $1.69 billion of operating cash flow in Q4 2026 and $5.2 billion across fiscal 2026 based on the quarterly figures provided.
• Shareholder returns remain substantial: The company repurchased $350 million of stock and paid $123 million in dividends during Q4 2026. Quarterly dividends per share increased to $0.5107 from $0.4900 in Q4 2023.
• Debt has recently stabilized: Total short- and long-term debt was approximately $8.9 billion at March 31, 2026, down from approximately $9.0 billion at December 31, 2025, despite ongoing capital returns.
• Working-capital movements drive cash flow: Changes in operating assets and liabilities contributed $857 million to Q4 2026 operating cash flow. This supports liquidity in the near term, but investors should monitor whether future cash generation depends heavily on changes in payables, inventory and receivables.
• Acquisition activity is uneven: Cardinal spent $1.88 billion on acquisitions in Q2 2026, but only $24 million in Q4. This could support future growth, although the benefits and integration costs may take time to appear in earnings.
• Margins remain very thin: Q4 2026 operating income represented only about 1.1% of revenue, leaving earnings vulnerable to reimbursement pressure, cost inflation and relatively small changes in operating expenses.
• Shareholder equity remains negative: At March 31, 2026, total liabilities of $59.4 billion exceeded total assets of $56.7 billion, resulting in negative equity of approximately $2.7 billion. Total current liabilities also exceeded current assets, producing a current ratio of roughly 0.91.

For investors, the key trend is a financially productive but low-margin distribution business: Cardinal Health is generating substantial cash and improving operating income, while acquisitions, dividends and buybacks continue to use that cash. The negative equity position and reliance on working-capital movements make balance-sheet strength and the sustainability of cash flow important areas to watch.