Cardinal Health, Inc.

Hello and welcome to the third quarter fiscal year 2023 Cardinal Health Incorporated earnings conference call. My name is George. I'll be your coordinator for today's event. Please note this conference is being recorded and for the duration of the call your lines will be in a list only mode. However, you will have the opportunity to ask questions at the end of the presentation. This can be done by pressing star 1 on your telephone keypad to answer a question. If you require any assistance during the presentation, Please press star zero and you will be connected to an operator. And now it's time to call over to your host today, Mr. Kevin Moran, Vice President of Investor Relations, speaking at this conference. Please go ahead, sir.

Good morning. Today we will discuss Cardinal Health's third quarter fiscal 2023 results, along with updates to our full year outlook. You can find today's press release and earnings presentation on the IR section of our website at ir.cardinalhealth.com. Joining me today are Jason Holler, our Chief Executive Officer, and Aaron Ault, our Chief Financial Officer. During the call, we will be making forward-looking statements. The matters addressed in the statements are subject to the risks and uncertainties that could cause actual results to differ materially from those projected or implied. Please refer to our FTC filings and the forward-looking statement slide at the beginning of our presentation for a description of these risks and uncertainties. Please note that during the discussion today, our comments will be on a non-GAAP basis unless they are specifically called out as GAAP. GAAP to non-GAAP reconciliations for all relevant periods can be found in the schedules attached to our press release. For the Q&A portion of today's call, we kindly ask to limit yourself to one question so that we can try and give everyone in the queue an opportunity. With that, I'll now turn the call over to Jason.

Thanks, Kevin. Good morning, everyone. Overall, we're pleased to deliver another quarter demonstrating progress against our plans, with our Q3 results led by continued momentum and growth in the pharma segment. With a strong overall performance in the quarter and our increased confidence in the rest of the year, we are raising and narrowing our fiscal 23 EPS and adjusted free cash flow guidance. Our pharma business is a resilient and growing business, where we're well positioned given our critical role in the pharmaceutical supply chain and strong and diverse customer base. We've seen ongoing stability in the underlying fundamentals of the business, including consistent market dynamics in our generics program. We've also seen continued broad-based strength in pharmaceutical demand spanning across product categories and classes of trade. Pharma Team is executing our plans to build upon this growth, both in our core distribution operations and in specialty, where we're focused on capturing the increasing demand for specialty products and services. In short, we're pleased with the resiliency and strength of the business and to be able to raise our pharma outlook for fiscal 23. Medical, we remain confident our medical improvement plan target of at least $650 million of segment profit by fiscal 25, driven by our inflation mitigation and growth initiatives. While we are making progress with the second consecutive quarter of positive segment profit, we remain focused on taking actions to drive more predictable financial performance in line with this business's underlying potential. For several quarters now, we've seen demand for our higher margin Cardinal Health brand products remain generally stagnant, which we've reflected in our updated fiscal 23 outlook. We continue to achieve progress with inflation mitigation, the number one key to returning the business to a more normalized level of profitability. Across enterprise, we are operating with urgency to drive our businesses forward. We're collectively focused on our three key strategic priorities of executing on the medical improvement plan, building on the growth and resiliency of the pharmaceutical segment, and maintaining a relentless focus on maximizing shareholder value. I'll provide some further updates on our continued progress shortly, but first, let me turn it over to Aaron to review our results and updated outlook.