Cardinal Health's Q2 2025: Unraveling Contradictions in Specialty Market Growth and Pharma Expectations

These are the key contradictions discussed in Cardinal Health's latest 2025Q2 earnings call, specifically including: Specialty Market Performance and Integration Progress, Medical Utilization Trends, Pharma Segment Growth Expectations, and Specialty Networks Acquisition Strategy:



Strong Pharma Segment Performance:
- Cardinal Health's Pharma segment revenue decreased by 4% to $51 billion due to contract transitions, but increased by 17% when adjusted for these factors.
- Profit grew by 7%, driven by growth from biopharma solutions and specialty networks, offsetting the customer contract expiration impact.

GMPD Business Challenges and Improvements:
- GMPD segment revenue increased by 1% to $3.2 billion, with a segment profit of $18 million, slightly below expectations due to softer-than-expected volume and a WaveMark business write-off.
- The team managed to offset these issues with aggressive SG&A management and cost optimization initiatives, finishing within the reported range.

Specialty Network Expansion:
- The company saw strong performance across specialty distribution, with plans to expand across key therapeutic areas through acquisitions like GI Alliance.
- This strategic focus aims to create value for customers and patients by offering comprehensive support to specialty physicians.

Capital Allocation and Debt Management:
- Cardinal Health is committed to protecting its investment-grade rating, with plans to pay down debt post acquisitions and quickly return to a leverage ratio of 2.75 to 3.25 times adjusted debt to EBITDA.
- The company will continue to invest in the business and return capital to shareholders, with a planned share repurchase of $750 million.