Cencora's Q1 2025 Earnings Call: Contradictions in Specialty Growth, Walgreens Talks, and Revenue Expectations

These are the key contradictions discussed in Cencora's latest 2025Q1 earnings call, specifically including: Specialty Market Growth and MSO Leadership, Walgreens Contract Discussions, Revenue Growth Expectations and Impact of GLP-1 Products, and Strategic Focus on Specialty Business:



Revenue Growth and Specialty Segment Expansion:
- Cencora reported consolidated revenue of $81.5 billion for Q1, up 13%, driven by strong performance in the U.S. Healthcare Solutions segment.
- The growth was attributed to increased sales of GLP-1 products and expansion in specialty services, including the acquisition of RCA.

Operating Income and Margin Impact:
- Consolidated gross profit was $2.5 billion, up 6%, although gross profit margin decreased by 20 basis points due to a higher percentage of low-margin products.
- The decrease in margin was due to increased sales of GLP-1 products and the absence of COVID-19 vaccine sales and exclusive therapies from the previous year.

Earnings Guidance and U.S. Segment Performance:
- Adjusted diluted EPS increased by 14%, and the company raised its full-year adjusted diluted EPS guidance to a range of $15.25 to $15.55.
- The guidance increase was driven by strong performance in the U.S. Healthcare Solutions segment, which outperformed expectations due to prescription utilization trends.

Specialty Services and Acquisition Strategy:
- Cencora's strategy in specialty services includes expanding into managed service organizations, demonstrated by the acquisition of RCA, a leading retina MSO.
- This strategic move aims to enhance services for specialty providers and capitalize on growth in pharmaceutical-centric segments.