McKesson (MCK) Q1 2025 earnings summary

Executive summary

• Revenues for Q1 FY25 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 rose 8% to $7.88, while GAAP EPS was $7.00, down $0.02 from the prior year.

• 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.

• Strategic focus remains on oncology, biopharma services, technology investments, and operational efficiency.

• Recognized by Forbes as a top employer for diversity; Dr. Deborah Dunsire joined the Board.

Financial highlights

• Gross profit increased 4% to $3.2 billion; operating profit rose 12% to $1.3 billion, aided by $110 million in pre-tax gains from equity investments.

• Net income attributable to the company was $915 million, down 4% year-over-year; adjusted net income was $1.029 billion, up 4%.

• Free cash flow was negative $1.5–$1.55 billion, reflecting onboarding of new customers and higher capital expenditures.

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

Outlook and guidance

• Fiscal 2025 Adjusted EPS guidance raised to $31.75–$32.55, representing 16%–19% growth over the prior year.

• 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.