McKesson (MCK) Q1 2025 earnings summary

Executive summary

• First quarter fiscal 2025 revenues reached $79.3 billion, up 6% year-over-year, driven by growth in U.S. Pharmaceutical and International segments, especially specialty and GLP-1 medications.

• Adjusted EPS increased 8% to $7.88, while GAAP EPS was $7.00, down $0.02 from the prior year.

• Full-year adjusted EPS guidance was raised to $31.75–$32.55, reflecting 16%–19% growth and confidence in continued business momentum.

• The board approved a 15% dividend increase to $0.71 per share and a $4 billion boost to share repurchase authorization, bringing total authorization to $9.9–$10 billion.

• Dr. Deborah Dunsire joined the Board as an independent director; recognized by Forbes as a top employer for diversity.

Financial highlights

• Gross profit rose 4% to $3.2 billion, with net income attributable to the company at $915 million, down 4% year-over-year.

• Adjusted operating profit increased 12% to $1.3 billion; adjusted net income was $1.029 billion, up 4% year-over-year.

• Free cash flow was negative $1.5 billion, impacted by tax payment timing, new customer onboarding, and higher capital expenditures.

• Weighted average diluted shares outstanding decreased 4% to 130.7 million.

• Returned $609 million to shareholders in the quarter, including $527 million in share repurchases and $82 million in dividends.

Outlook and guidance

• Fiscal 2025 adjusted EPS guidance raised to $31.75–$32.55, up 16%–19% year-over-year, including $0.62 per share from equity investment gains.

• Revenue growth expected at 13%–15%, operating profit growth at 10%–15%.

• Segment revenue growth guidance: U.S. Pharmaceutical 13%–16%, Prescription Technology Solutions 14%–18%, Medical-Surgical Solutions 3%–7%, International 4%–8%.

• Free cash flow guidance is $4.8–$5.2 billion; share repurchases planned at $2.8 billion.

• Board expects to continue quarterly dividends, subject to earnings and financial condition.