McKesson Corporation

Please stand by. Welcome to McKesson's third quarter fiscal 2026 earnings conference call. Please be advised that today's conference is being recorded. At this time, I would like to turn the call over to Jenny Dominguez, VP of investor relations. Please go ahead.

Thank you, operator. Good afternoon and welcome everyone to McKesson's third quarter fiscal 2026 earnings call. Today I'm joined by Brian Tyler, our Chief Executive Officer, and Britt Vitilone, our Chief Financial Officer. Brian will lead off, followed by Britt, and then we'll move to a question and answer session. Today's discussion will include forward-looking statements, such as forecasts about McKesson's operations and future results. Please refer to the cautionary statements in today's earnings release and presentation slides available on our website at investor.mckesson.com. into the risk factor sections of our most recent annual and periodic SEC filings for additional information concerning risk factors that could cause our actual results to materially differ from those in our forward-looking statements. Information about non-GAAP financial measures that we will discuss during this webcast, including a reconciliation of those measures to GAAP results, can be found in today's earnings release and presentation slides. The presentation slides also include a summary of our results for the quarter and guidance assumptions. With that, let me turn it over to Brian.

Thank you, Jenny. Good afternoon, everyone. Appreciate you joining McKesson's fiscal third quarter earnings call. Today's results, once again, demonstrate the strength and the durability of our business. Revenue and adjusted EPS grew double digits, driven by continued momentum across oncology, biopharma services, and North American distribution. The consistency of this performance gives us the confidence to raise full-year EPS guidance to a range of $38.80 to $39.20, which reflects 17% to 19% year-over-year growth. I want to thank Team McKesson for their unwavering commitment to excellence and to innovation, driving tangible impacts every day for our stakeholders and keeping patients at the center of everything that we do. My remarks will focus on the continued progress of our company priorities and the momentum we are driving across the organization, and of course, recognizing the dedication and engagement across Team McKesson. Then, as is customary, I'll hand it over to Britt for a more detailed review of the financials. So let me start where I usually do with our people and our culture. We aspire to be the best place to work in healthcare, and supporting our employees' growth and success remains a top priority. Our employee resource groups play a critical role in strengthening connections and reinforcing our culture of care and belonging. These employee-led networks empower colleagues to come together to advance the business and to build an environment where everyone can thrive. This year, we're pleased to see membership of more than 30%. Participation in these groups results in increased employee engagement, improved retention, and to better business outcomes. Now let me move on to our two strategic growth pillars, oncology and multispecialty, and biopharma services. Within our oncology and multispecialty business, we continue to support a growing network of providers through a portfolio of services, including distribution, practice management, commercial services, and clinical research. Today, the U.S. Oncology Network has approximately 3,400 providers, And Prism Vision brings together over 200 providers in retina and ophthalmology. During the quarter, we continue to make progress in the integration of Florida cancer specialists and Prism Vision, contributing meaningfully to the strong performance of the segment. Oncology continues to be a compelling growth opportunity, and we're leveraging our scale, leadership, and connectivity in the community space to stay ahead of the market's evolving needs. Recently, we released our Advancing Community Oncology Report, highlighting the central role of community practice in cancer care and the anticipated growth in precision medicine and innovative therapies. These insights underscore the strength of our platform and the opportunity to leverage our solutions to deepen provider and biopharma partnerships, to expand access to next-generation treatments, and to address barriers to care in the community setting. The report highlights our role in helping community providers navigate a dynamic policy environment. We have and we will continue to be actively engaged with lawmakers, patient coalitions, and provider organizations to advocate for changes that will expand patient access and support the growth of community practices. We firmly believe in the unique value of community-based care and the importance of advancing high-quality local cancer care in particular. In November, we hosted our inaugural McKesson Accelerate Conference, an annual event focused on the future of community oncology. With more than 1,500 industry leaders in attendance, the event brought together the people, the insights, and the innovations that will strengthen care delivery and advance patient outcomes. It reinforced the powerful momentum across our oncology platform and the critical role McKesson plays in shaping the future of cancer care together with our many partners. Moving on to our biopharma services platform within our prescription technology solution segment. Our industry-leading platform supports a wide range of brands across all stages of the product lifecycle, from product launch all the way to the loss of exclusivity. During the quarter, we added over 50 new programs across 43 unique brands to our platform, highlighting the strong demand for our access and affordability solutions. With the pace of drug innovation accelerating, we're energized by the tremendous opportunity to bring novel therapies to patients and to enable real-world impact. To achieve this goal, we continue to invest thoughtfully across the business, modernizing and expanding the services we provide to our biopharma partners and building next-generation patient access and affordability solutions. As an example, we're investing in capabilities to simplify the electronic patient enrollment process reducing time from days or weeks to sometimes just minutes, while reducing administrative errors and improving accuracy. Today, we're digitizing enrollment for more than 1,600 specialty medications, creating an opportunity to apply our experience in improving access to retail medications and helping stakeholders navigate through the complex enrollment process for specialty medications. Our evolving suite of solutions will accelerate the patient authorization workflow speed up the process for patients to access medications, introduce transparency with real-time prescription benefit check, and improve affordability with automated searches for financial assistance programs. We're also focused on opportunities that improve our own workflow efficiency. By applying technology automation and enhancing training to streamline our operations and elevate the customer experience, we are improving our efficiency. As an example of this, in our annual verification season, each full-time employee is successfully supporting 120 more patients than we achieved last year. This is a meaningful increase in our productivity. Let's move on to our pharmaceutical distribution business in North America, which I would remind you includes our combined footprint in the U.S. and Canada. We continue to see strong broad-based momentum supported by stable utilization trends strength and specialty, and focus on operational excellence. Our growth is underpinned by the strength of our longstanding strategic partnerships with manufacturers. Together, we're navigating an evolving market, shaping the future of healthcare and advocating for solutions that will improve the access and affordability of care. In January, the Inflation Reduction Act's planned Medicare Part D price changes went into effect. We worked closely with our manufacturer partners to ensure a smooth transition. As a trusted distribution partner, we bring unmatched scale, deep supply chain expertise, and broad channel reach to deliver exceptional quality every day. We're positioning the business for long-term growth by investing in capabilities that meet the evolving needs of our customers and the market. An example of this would be our multi-year plan to expand the refrigerated capacity across our network. We're halfway through this five-year effort, and once completed, We will have increased refrigeration capacity at many of our forward distribution centers by more than 50%. This expansion strengthens our ability to support temperature sensitive products and further strengthens our commitment to meeting customer requirements with operational excellence. Within our North American pharmaceutical business, our teams continue to leverage AI and automation to drive efficiencies. In Canada, we're modernizing our contact center digital operations create a more advanced and simplified customer care experience. It includes capabilities like agent assist and enhanced live chat. Our early pilots are demonstrating strong results with close to 100% service accuracy and reliability while reducing turnaround time. In the U.S., we launched an AI chat tool in November to specifically handle customer inquiries related to the Drug Supply Chain Security Act. By enabling natural language answers to complex DSCSA data questions, we prevented 75% of inquiries from being escalated and materially improved first contact resolution. These are strong examples of how we're using technology to simplify the supply chain at scale while improving customer experience. And last thing I'd like to note in this segment, I'm proud to share with everyone that recently our Health Mart pharmacy franchise was honored as a recipient of the 2026 American Pharmacists Association HAB Dunning Award. With this award, we're joining a prestigious list of chain pharmacies and other industry supporters who are dedicated to advancing the practice of pharmacy. Let me give you a brief update on our portfolio actions. We continue to progress in our separation of the medical surgical business. On January 1st, we reached a major milestone in the separation journey. with transition service agreements now in place across the enterprise. This is an important step as we prepare the medical surgical business to be an independent operation. We continue to focus on the next steps, which include establishing an independent organization and capital structure. We continue the track towards the timeline of an IPO by the second half of calendar 2027, subject of course to market conditions and customary regulatory approvals. In January, We announced the completion of the divestiture of our Norwegian business, marking the final step in our full exit from the European region. Over the past four years, our teams executed this multi-stage initiative with dedication and focus, ensuring a smooth process and a successful outcome. With the invaluable experience we've gained, we're confident in our ability to execute on our current portfolio actions, optimizing our assets, portfolios, and accelerating growth for the enterprise. So let me conclude my remarks. McKesson delivered another strong quarter of results. Our strategy is working and it continues to propel us forward as we advance our mission, as we grow the business, and as we drive meaningful value for our shareholders. Looking ahead, I continue to be confident in our ability to extend the momentum and execute against our strategic priorities. Our broad portfolio and our diversified solutions position us to continue to drive sustained long-term growth. With that, Britt, I'll turn it over to you.