McKesson's Q4 2025: Unraveling Contradictions on Medicare Impact, Tariffs, and Revenue Streams

Medicare Part B MFN impact on ASPs, tariff impacts and management strategy, efficiencies and SG&A expenses, GLP-1 access program growth, and HUMIRA contribution impact on revenue profile are the key contradictions discussed in McKesson's latest 2025Q4 earnings call.



Record Financial Performance:
- McKesson Corporation reported adjusted earnings per diluted share of $33.05 for fiscal 2025, exceeding expectations and marking a 20% year-over-year growth.
- The growth was driven by significant momentum in advancing company priorities, strategic acquisitions, and operational excellence.

Strategic Acquisitions and Portfolio Management:
- McKesson made strategic investments, including acquiring controlling interests in PRISM Vision and Core Ventures, to expand its Oncology and Biopharma Services platforms.
- These acquisitions are expected to contribute approximately $0.20 to $0.30 and $0.40 to $0.60 per share to fiscal 2026 adjusted earnings, respectively.

Growth in Pharmaceutical Segment:
- The U.S. Pharmaceutical segment achieved a 17% increase in operating profit and a 21% growth in revenue for the fourth quarter.
- Growth was driven by increased prescription volumes from retail national account customers and a significant increase in GLP-1 medications revenue, which rose by 46% year-over-year.

Strong Cash Flow and Shareholder Returns:
- McKesson generated $5.2 billion in free cash flow for fiscal 2025 and returned $3.5 billion to shareholders.
- The strong cash flow allowed for significant investments in technology and automation, enhancing operational efficiencies and financial profile.