McKesson (MCK) Q2 2025 earnings summary

Executive summary

• Quarterly revenue reached $93.7 billion, up 21% year-over-year, driven by strong U.S. Pharmaceutical segment growth and higher specialty product volumes.

• Adjusted EPS rose 13% to $7.07, while GAAP EPS fell to $1.87 due to significant charges related to the sale of Canadian retail businesses and restructuring.

• Strategic actions included acquiring a controlling interest in Core Ventures and announcing the sale of Rexall and Well.ca in Canada.

• Launched InspireGene/InspiroGene to support commercialization of cell and gene therapies.

• Strong cash flow enabled $2.2 billion returned to shareholders in the first half through share repurchases and dividends.

Financial highlights

• Adjusted operating profit grew 7% to $1.3 billion; adjusted net income was $915 million, up 9% year-over-year.

• Gross profit for the quarter was $3.25 billion, up 7% year-over-year; gross margin was 3.47%.

• Net income attributable to the company was $241 million, down 64% year-over-year, mainly due to a $643 million charge for Canadian retail assets and $227 million in restructuring charges.

• Free cash flow for the first six months was $335 million; operating cash flow was $720 million.

• $2.2 billion returned to shareholders in the first half via $2.0 billion in share repurchases and $162 million in dividends.

Outlook and guidance

• Fiscal 2025 Adjusted EPS guidance raised to $32.40–$33.00, representing 18–20% growth over the prior year.

• U.S. Pharmaceutical segment revenue expected to grow 16–19%, Prescription Technology Solutions 8–12%, Medical-Surgical Solutions 1–5%, International 5–9%.

• Share repurchase target for FY25 increased to $3.2 billion.

• Restructuring initiatives expected to incur $650M–$700M in charges, substantially complete by fiscal 2028.

• Canadian retail disposal group sale expected to close in the second half of fiscal 2025, subject to regulatory approvals.