McKesson (MCK) Investor Update summary

Strategic focus and business evolution

• Emphasis on advancing healthcare outcomes through core principles, people, and culture.

• Differentiation in oncology and biopharma platforms, with strong core distribution in the U.S. and Canada.

• Ongoing portfolio optimization through divestitures and targeted investments in digital, automation, and AI.

• Growth pillars include expanding oncology and biopharma platforms, strengthening core businesses, and modernizing the portfolio.

• Capital deployment prioritizes business growth, especially in oncology and biopharma, with disciplined M&A and share repurchases.

Financial performance and guidance update

• Q2 FY25 revenues reached $93.7B, up 21% year-over-year, with adjusted operating profit at $1.3B, up 7%, and adjusted EPS at $7.07, up 13% from $6.23 in Q2 FY24.

• Full-year FY25 revenue growth outlook raised to 15%-17%, driven by a $31B incremental revenue from a new distribution agreement.

• Adjusted operating profit growth guidance increased to 13%-15%, and adjusted EPS growth to 18%-20%, with FY25 EPS now expected at $32.40-$33.00.

• Free cash flow for FY25 is projected at $4.8B-$5.2B, with share repurchase guidance raised by $400M to $3.2B.

• Dividend increased by 15% in July, with accelerated share repurchases and a strong cash balance of $2.5 billion.

Oncology and biopharma platform development

• Oncology platform revenue expected to exceed $35B in FY25, with significant expansion in provider network and clinical trial access.

• US Oncology Network has grown to over 2,700 providers, with Florida Cancer Specialists acquisition expected to add 530 providers.

• Acquisition of 70% of Core Ventures (Florida Cancer Specialists) for $2.49B to enhance oncology value proposition and drive $0.40-$0.60 EPS accretion in the first year post-close.

• Biopharma platform connects 50,000+ pharmacies, 950,000 providers, and supports 650+ brands, focusing on automated workflow and access solutions.

• Access solutions, especially prior authorizations for GLP-1s, are the fastest-growing segment within biopharma services.