McKesson Corporation (MCK) Q2 2025 Earnings Report

McKesson reported a strong second quarter of fiscal 2025, highlighted by record quarterly revenue of approximately $93.7 billion and a solid cash-generation profile. Management emphasized execution across the enterprise, with the US Pharmaceutical segment driving the majority of the top line through new partnerships, GLP-1 growth, and expanding oncology and biopharma services. Adjusted operating profit rose 7% to about $1.3 billion, and adjusted diluted EPS increased 13% to $7.07, prompting an elevation of full-year guidance to $32.40-$33.00 per share. The company also advanced strategic initiatives, including the formation of InspiroGene for cell & gene therapy commercialization, the acquisition of a controlling interest in Core Ventures to bolster the US Oncology Network, and the planned divestiture of Rexall and Well.ca in Canada to refocus capital and accelerate growth in core pillars.

Key near-term drivers include: (1) continued strength in the US pharmaceutical distribution franchise, supported by ClarusONE and a strategic partner onboarding that added roughly $31 billion of incremental revenue for the full year; (2) robust oncology and biopharma services momentum, with Sarah Cannon Research Institute enrollment growth and 118 new providers added to US Oncology Network year-to-date, expanding access to trials and community-based care; (3) InspiroGene’s launch as a dedicated cell & gene therapy Solutions platform, leveraging McKesson’s end-to-end capabilities in logistics, access, and support; (4) ongoing operational modernization and technology investments to improve customer experience and drive cost efficiency; and (5) disciplined capital deployment including a significant buyback program, dividends, and targeted acquisitions/divestitures.

Financially, GAAP metrics show operating income of about $0.58B for the quarter, while management underscored that non-GAAP adjusted results tell a more meaningful story of ongoing profitability and growth, with adjusted operating profit of ~$1.3B and adjusted EPS of $7.07. The company maintains a robust free cash flow trajectory ($4.8-$5.2B full-year guide) and a strong liquidity position, albeit with leverage influenced by recent acquisitions and held-for-sale activities. Investors should monitor: (a) execution of Core Ventures and impact on US Oncology profitability, (b) the ramp and cadence of RxTS programs and 3PL dynamics, (c) biosimilars and pricing dynamics, (d) the Rexall/Well.ca divestiture timing and accretion, and (e) the pace of SG&A optimization and cost-savings programs in Med/Surg.